ACN 139 308 973
ANNUAL REPORT 2017
CORPORATE DIRECTORY/CONTENTS PAGE
CORPORATE DIRECTORY
Board of Directors
John Prineas ‐ Executive Chairman
Tim Hronsky ‐ Executive Director
Sarah Shipway ‐ Non‐Executive Director
Company Secretary
Sarah Shipway
Registered and Principal Office
Level 1, 115 Cambridge Street
WEST LEEDERVILLE WA 6007
Tel: + 61 8 9322 6600
Fax: + 61 8 9322 6610
Website: www.stgeorgemining.com.au
Email: info@stgeorgemining.com.au
Australian Business Number
ABN 21 139 308 973
Share Register
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
PERTH WA 6000
Tel: 1300 850 505
Int: +61 8 9323 2000
Fax: + 61 8 9323 2033
Stock Exchange Code
SGQ – Ordinary Shares
Auditors
Stantons International
Bankers
Commonwealth Bank
CONTENTS
PAGE
Chairman’s Letter
Review of Operations
Directors’ Report
Consolidated Statement of Profit or
Loss and Other Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
Shareholder Information
Schedule of Tenements
3
4
13
22
23
24
25
26
46
47
48
52
54
St George Mining Limited – Annual Report 2017
P 2
CHAIRMAN’S LETTER
Dear Fellow Shareholders
On behalf of the Board of Directors, I am pleased to present the Annual Report of St George Mining Limited for
the financial year ended 30 June 2017 – a year where the hard work of our team continued to deliver excellent
results for the Company.
Further drilling success at our Mt Alexander Project confirmed its status as one of the most exciting exploration
projects in Western Australia. Drill programmes in the past financial year have achieved the best high grade
intersections to date with multiple discoveries of additional nickel‐copper‐cobalt‐PGE mineralisation within a
3.5km strike length of the Cathedrals Belt.
Initial metallurgical testing has delivered outstanding results with greater than 99% recoveries of nickel and
copper to concentrates. The nickel concentrate graded 18%Ni with 0.55%Co and 13.5g/t PGEs. The copper
concentrate graded 32%Cu. The high grades and excellent recoveries, together with favourable operational
features like shallow depth to mineralisation and proximity to existing processing facilities, suggest attractive
economics for a potential mining operation.
The Company is well positioned for a significant re‐rating as we establish and grow our resource inventory while
the nickel price is recovering from multi‐year lows.
At our East Laverton Project, exploration is focused on systematically testing a portfolio of nickel sulphide and
gold targets. Early results in this highly prospective yet underexplored area are encouraging and exploration is
being escalated in a prudent and technically rigorous manner.
Our commitment to create enduring value for shareholders is unwavering. I look forward to sharing further
success with you in the coming year.
John Prineas
Executive Chairman
St George Mining Limited – Annual Report 2017
P 3
REVIEW OF OPERATIONS
MT ALEXANDER PROJECT
Best Drill Intersections To Date:
Drilling success continued at the Mt Alexander Project during the year with multiple, thick intersections of
high grade nickel‐copper‐cobalt‐PGE mineralisation along a 3.5km section of the Cathedrals Belt including:
MAD56 (Cathedrals Prospect):
7.5m @ 3.90%Ni, 1.74%Cu, 0.12%Co and 3.32g/t total PGEs from 57.8m
including
3.15m @ 6.36%Ni, 2.92%Cu, 0.20%Co and 5.03g/t total PGEs from 61.81m
MAD55 (Cathedrals Prospect):
4.28m @ 2.75%Ni, 1.21%Cu, 0.09%Co and 2.59g/t total PGEs from 60.67m
including
1.05m @ 5.91%Ni, 2.63%Cu, 0.21%Co and 2.57g/t total PGEs from 63.9m
MAD60 (Investigators Prospect):
5.3m @ 4.95%Ni, 2.75%Cu, 0.16%Co and 4.55g/t total PGEs from 157.9m
including
3m @ 6.40%Ni, 3.55%Cu, 0.21%Co and 5.25g/t total PGEs from 159.38m
Figure 1 is a long section of the Cathedrals Prospect showing the numerous intersections of high grade
mineralisation on two surfaces – the Cathedrals ultramafic and the footwall fault below.
Figure 1 ‐ a long section of the Cathedrals Prospect (looking north) showing significant intersections from
both recent and historic drill holes. The Cathedrals ultramafic and footwall fault outlines are also shown.
The Cathedrals ultramafic is interpreted from drill results to extend for a strike length of 400m. The extent
and continuity of the high grade mineralisation along the Cathedrals ultramafic is being tested by ongoing
drilling. There is strong potential for further mineralisation to be identified by extensional and infill drilling.
St George Mining Limited – Annual Report 2017
P 4
REVIEW OF OPERATIONS
Multiple drill holes at Cathedrals have intersected remobilised massive sulphides in the footwall fault. These
sulphides may have been remobilised from the Cathedrals ultramafic above. Further drilling of the footwall
fault is planned to test for additional mineralisation.
Figure 2 – MAD56 intersected 7.5m @ 3.90%Ni, 1.74%Cu, 0.12%Co and 3.32g/t total PGEs from 57.8m.
The core tray above shows the interval between 59.6m to 65.8m which includes the high grade massive
sulphides of 3.15m @ 6.36%Ni, 2.92%Cu, 0.20%Co and 5.03g/t total PGEs from 61.81m
SAMSON EM Survey:
Geophysical surveys continued to be a very successful targeting tool in the Cathedrals Belt with every
electromagnetic (EM) conductor tested being confirmed as massive nickel‐copper sulphides. A high
powered SAMSON EM survey was completed for St George by GAP Geophysics along a section of the
Cathedrals Belt with several new EM conductors detected.
One of these SAMSON EM conductors – Anomaly 7 at the Investigators Prospect – was drilled by MAD60
and resulted in the best ever high grade intersection at the Investigators Prospect. Six additional
intersections of high grade nickel‐copper‐cobalt‐PGE sulphides were made this year at Investigators within
a large 350m x 300m SAMSON EM anomaly.
Several SAMSON EM conductors, as well as downhole EM (DHEM) conductors from surveys in recent drill
holes, remain to be tested and have been prioritised for drilling in future programmes.
St George Mining Limited – Annual Report 2017
P 5
REVIEW OF OPERATIONS
Figure 3 – drill core from MAD60 with large
pentlandite crystals prominent in the core.
The section of core displayed is from an
interval that returned assays of 3m @
6.40%Ni, 3.55%Cu, 0.21%Co and 5.25g/t
total PGEs from 159.38m.
Regional Exploration Supports Exploration Upside:
The Company also initiated some key regional exploration initiatives during the year to investigate the
broader potential at the Project tenements. A moving loop EM (MLEM) survey was completed along the
east‐northeast structural corridor that lies 1km south of the Cathedrals Belt. A prominent EM conductor
was identified – Anomaly 11 (see Figure 4) – which has been prioritised for drilling.
An airborne magnetic survey was completed by St George in October 2016 over all four granted tenements
within the Project area. A total of 4,472 line kilometres were flown in the survey, which was completed
on a 50m line spacing with a sensor height around 40m.
A number of new structures were identified from the high resolution magnetic data generated by the
survey. These structures, in particular the east‐northeast structures, have potential to host mineralised
ultramafics similar to the Cathedrals Belt. Exploration of these new target areas is ongoing.
One area selected for priority exploration is the western extension of the Cathedrals Belt where a new
SAMSON EM survey will be completed (see Figure 4). This area includes the intersection of the Cathedrals
Belt and the Ida Fault which may be an important regional geological control on the mineralised ultramafics
within the Project tenements.
Multiple untested magnetic anomalies have been identified in the SAMSON survey area. Similar magnetic
anomalies along strike in the Belt have been confirmed by drilling to represent mineralised ultramafics
hosting high grade nickel‐copper‐cobalt‐PGE massive sulphides.
St George Mining Limited – Annual Report 2017
P 6
REVIEW OF OPERATIONS
Figure 4 – a map of the Cathedrals Belt (against high resolution Total Magnetic Intensity) showing the
multiple intersections of massive nickel‐copper‐cobalt‐PGE sulphides (“$M”) at Investigators, Stricklands
and Cathedrals which have established recurrent high grade mineralisation over a strike length of 3.5km.
Metallurgical Test Work:
Metallurgical flotation test work was completed in October 2016 on a sample of massive nickel‐copper
sulphide mineralisation from the Cathedrals Prospect. The sample was from drill hole MAD18 and is
considered representative of the ultramafic‐hosted massive sulphide mineralisation at the Cathedrals
Prospect.
The metallurgical test work produced excellent results demonstrating a flowsheet capable of producing
separate saleable copper and nickel concentrates at high recoveries.
The results from the metallurgical test work are summarised as follows:
Selective separate flotation of copper and nickel concentrates was achieved
Recovery of nickel and copper to bulk concentrate exceeded 99%, demonstrating the exceptional
amenability of the Mt Alexander massive sulphide to the flotation process
Nickel recovery of 89.4% produced a nickel concentrate with 18%Ni (>13%Ni is considered saleable
concentrate)
Copper recovery of 85.8% produced a copper concentrate with 32%Cu (>24%Cu is considered
saleable concentrate)
Copper not recovered directly in the copper concentrate is recovered in the nickel concentrate
resulting in an overall copper recovery of 99.7%
St George Mining Limited – Annual Report 2017
P 7
REVIEW OF OPERATIONS
Cobalt is recovered in the nickel concentrate with a grade of 0.55%Co which would attract smelter
credits
Excellent recoveries of Platinum Group Elements (PGEs), with 3.2g/t PGEs + Au in the copper
concentrate and 13.5g/t PGEs + Au in the nickel concentrate. The PGEs in the nickel concentrate
would likely attract significant smelter credits
The levels of deleterious smelter elements in both concentrates are very low
The test work was completed by Strategic Metallurgy Pty Ltd, recognised as leading consultants in nickel
sulphide metallurgy.
Figure 5 – photographs of a metallurgical flotation test on the Mt Alexander massive sulphide. On left:
copper flotation test, with concentrates up to 32%Cu produced. On right: nickel flotation test, with
concentrates up to 18%Ni produced.
About the Mt Alexander Project:
The Mt Alexander Project is located 120km south‐southwest of the Agnew‐Wiluna belt which hosts
numerous world class nickel deposits. The Project comprises four granted exploration licences – E29/638,
E29/548, E29/962 and E29/954.
The Cathedrals, Stricklands and Investigators nickel‐copper‐PGE discoveries are located on E29/638, which
is held in joint venture by Western Areas Limited (25%) and St George (75%). St George is the Manager of
the Project with Western Areas retaining a 25% non‐contributing interest in the Project (in regard to
E29/638 only) until there is a decision to mine.
St George Mining Limited – Annual Report 2017
P 8
REVIEW OF OPERATIONS
EAST LAVERTON – GOLD TARGETS
St George engaged Dr Walter Witt to review the broader gold potential at East Laverton and to assist in
the assessment of the numerous gold targets at East Laverton. Dr Witt has over 40 years experience in
gold exploration and is recognised as a leading expert on the Yilgarn Craton of Western Australia,
particularly for gold targeting. In addition, Dr Witt is a Research Fellow at the Centre of Exploration
Targeting of Western Australia (CET) where he is compiling a Yilgarn Gold Exploration Atlas for the CET
and Geological Survey of Western Australia.
This technical review has confirmed the strong gold potential at East Laverton, and prioritised the
multiple targets for further exploration. A major reverse circulation (RC) drill programme was completed
during the year to test these and other targets.
A total of 115 drill holes completed for 8,072m of RC drilling. Drilling has demonstrated extensive
hydrothermal alteration across the East Laverton project area. This is indicative of the presence of a large
hydrothermal cell, which is consistent with the fundamental structures that control the earlier nickel
sulphide mineralisation within the project area.
Numerous drill holes have encountered widespread hydrothermal alteration, late felsic porphyry
intrusives and dolerites, and sulphide mineralisation. The presence of a large and long‐lived hydrothermal
systems is favourable for the potential of gold mineralisation.
A follow‐up drill programme for gold targets will be designed once all assay results are reviewed.
Figure 6 ‐ the East Laverton tenements against FVD Bouguer gravity data with priority gold prospects
highlighted.
St George Mining Limited – Annual Report 2017
P 9
REVIEW OF OPERATIONS
Figure 7 – a regional map showing major gold projects and the location of the East Laverton
EAST LAVERTON ‐ NICKEL SULPHIDE
A diamond drilling programme was completed at the Windsor nickel sulphide prospect to test the highly
conductive EM targets which are modelled within 100m from surface on the western contact of the
Windsor ultramafic channel.
DHEM surveys from previous drill holes at Windsor have identified multiple strong off‐hole EM
anomalies, with conductivity of +200,000 Siemens, and which have an electromagnetic signature that is
consistent with massive sulphides.
The latest drilling intersected the Windsor ultramafic unit but did not intersect massive sulphides or any
other material in the drill core that could explain the highly conductive modelled EM plates.
A broad exploration analogue can be drawn between the Silver Swan nickel sulphide deposit in the North‐
Eastern Goldfields and the current exploration target at Windsor.
St George Mining Limited – Annual Report 2017
P 10
REVIEW OF OPERATIONS
The high grade Silver Swan deposit presented as a narrow segmented, steeply dipping, highly conductive
massive nickel sulphide shoot extending from 190m below the surface. Newexco, St George’s geophysical
consultants, were also advisers in the discovery and exploration at Silver Swan and Silver Swan Deeps.
To further explore the prospective Windsor channel for nickel sulphides, a SAMSON EM survey has been
designed for this area. SAMSON uses a high powered transmitter and sensitive receiver that has the
capability to deliver greater EM depth penetration than that achieved by conventional EM systems.
The SAMSON EM survey will search for deep conductors at the basal contact of the Windsor channel and
will also provide further EM data to corroborate modelling of the shallow EM targets at Windsor that have
already been recognised by DHEM surveys.
COMPETENT PERSON STATEMENT:
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or
Ore Reserves regarding the East Laverton Project is based on information compiled by Mr Tim Hronsky, a
Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Tim
Hronsky is employed by Essential Risk Solutions Ltd which has been retained by St George Mining Limited
to provide technical advice on mineral projects.
The information in this report that related to Exploration Targets, Exploration Results, Minerals Resources
or Ore Reserves regarding the Mt Alexander Project is based on information complied by Mr Matthew
McCarthy, a Competent Person who is a Member of The Australian Institute of Geoscientists. Mr McCarthy
is employed by St George Mining Limited.
This ASX announcement contains information extracted from the following reports which are available on
the Company’s website at www.stgm.com.au:
20 October 2016 Strong Results Continue at Mt Alexander
22 November 2016 Compelling Survey Results at Mt Alexander
8 February 2017 SAMSON Survey Lights Up New Targets at Mt Alexander
15 February 2017 Massive Nickel Sulphide Targets at Stricklands
22 February 2017 Priority Targets for Cathedrals Prospect
28 February 2017 EM Survey over New Target Areas at Mt Alexander
14 March 2017 St George Commences Drilling at Mt Alexander
6 April 2017 Drilling Success Continues at Mt Alexander
2 June 2017 Drilling at Nickel Sulphide Target
5 July 2017 High Grade Nickel‐Copper‐Cobalt‐PGEs at Investigators
6 July 2017 Nickel Sulphide Exploration at Windsor is Escalated
19 July 2017 High Grade Nickel‐Copper‐Cobalt‐PGEs at Investigators
27 July 2017 Gold Drilling at East Laverton
The Company confirms that it is not aware of any new information or data that materially affects the
exploration results included in any original market announcements referred to in this report and that no
material change in the results has occurred. The Company confirms that the form and context in which
the Competent Person’s findings are presented have not been materially modified from the original
market announcements.
St George Mining Limited – Annual Report 2017
P 11
REVIEW OF OPERATIONS
CORPORATE UPDATE
Heavily Oversubscribed Capital Raising
St George completed a private placement of ordinary shares in August 2016 that raised $6.47 million.
The Company allotted 43,165,470 fully paid ordinary shares at $0.15 per share with one (1) free attaching
option exercisable at $0.20 on or before 30 June 2017 for every five (5) shares applied for. The options were
part of the option series that traded under ASX code SGQOA.
The shares issued under the private placement were issued pursuant to the Company’s 15% placement
capacity under ASX Listing Rule 7.1 and the Company’s additional 10% placement capacity under ASX Listing
Rule 7.1A.
A General Meeting of the Company was held on 30 September 2016 at which the capital raising was
approved and ratified by shareholders.
R&D Cash Rebate
In October 2016, St George received a cash payment of $2,336,000 pursuant to the Federal Government’s
R&D Tax Incentive Scheme.
The Company’s 2015/2016 financial year tax return was assessed to include research and development
expenditure eligible for the cash rebate under the Scheme, which is administered jointly by AusIndustry
and the Australian Taxation Office.
Exploration Development Incentive (EDI) Tax Credits
The Company announced on 4 May 2017 that shareholders were to receive an EDI tax credit through a
Federal Government initiative. The initiative allows Australian resident shareholders to obtain a
refundable tax offset for greenfields exploration undertaken by Australian junior exploration companies
that do not derive any taxable income.
St George participated in the EDI for the 2016/2017 tax year with $768,164 of tax credits approved by
the Federal Government. The credits were distributed to eligible shareholders of St George who held
ordinary fully paid shares in the Company on 31 May 2017.
St George Mining Limited – Annual Report 2017
P 12
DIRECTORS’ REPORT
The Directors of St George Mining Limited submit the annual financial report of St George Mining Limited from
1 July 2016 to 30 June 2017. In compliance with the provisions of the Corporations Act 2001, the Directors report
as follows:
DIRECTORS
The names and particulars of the directors of the Company as at 30 June 2017, and at the date of this report, are
as follows. Directors were in office for the entire period unless otherwise stated.
JOHN PRINEAS B.EC LL.B F FIN
Executive Chairman
Appointed 19 October 2009
John is a founding shareholder and director of St George Mining Limited. His involvement in the mining sector
spans over 25 years with experience in commercial, legal and finance roles.
Prior to establishing St George Mining, John was Chief Operating Officer and Country Head of Dresdner Bank in
Sydney with a focus on project and acquisition finance for resources and infrastructure projects. John has
Economics and Law degrees from the University of Sydney and commenced his career as a lawyer in Sydney with
Allen, Allen & Hemsley.
During the past 3 years he has held no other listed company directorships.
TIM HRONSKY B.ENG (Geology) MAUSIMM, MSEG
Executive Director
Appointed 25 November 2009
Tim is a geologist with over 26 years international experience in the mineral exploration and mining industry,
including 15 years with Placer Dome Inc. After graduating from the West Australian School of Mines, Tim began
his career in a number of operational roles before being appointed as the Exploration Manager (Asia) for Placer
Dome.
Tim also undertook a number of corporate roles at Placer Dome related to business improvement, risk
management and assurance. Prior to joining St George Mining, Tim provided consulting services to a range of
clients in the global exploration and mining industry.
During the past 3 years he has held no other listed company directorships.
SARAH SHIPWAY CA, B.Com
Non‐Executive Director
Appointed 11 June 2015
Sarah Shipway was appointed Non‐Executive Director on 11 June 2015 and was appointed Company Secretary
of St George Mining on 22 March 2012. Ms Shipway has a Bachelor of Commerce from the Murdoch University
and is a member of the Institute of Chartered Accountants.
During the past 3 years she has also served as a director of the following listed companies:
Company
Beacon Minerals Limited
Argent Minerals Limited
Date of Appointment
11 June 2015
11 June 2015
Date of Resignation
Not applicable
17 September 2015
St George Mining Limited – Annual Report 2017
P 13
DIRECTORS’ REPORT
COMPANY SECRETARY
Sarah Shipway was appointed Company Secretary on 22 March 2012. For details relating to Sarah Shipway,
please refer to the details on directors above.
DIRECTORS’ INTERESTS
At the date of this report the Directors held the following interests in St George Mining.
Name
Ordinary
Shares
Class E Unlisted
Options
John Prineas
Tim Hronsky
Sarah Shipway
10,214,221
1,062,500
‐
‐
300,000
‐
Class A
Performance
Shares
20
15
5
Class B
Performance
Shares
20
15
5
John Prineas and Sarah Shipway have no interest, whether directly or indirectly, in a contract or proposed
contract with St George Mining Limited during the financial year end.
Tim Hronsky through Essential Risk Solutions Ltd (“ERS”), of which Tim Hronsky is a Director, provides technical
consulting services to the Company.
PRINCIPAL ACTIVITIES
The principal activity of the Group is mineral exploration in Australia.
RESULTS AND REVIEW OF OPERATIONS
The results of the consolidated entity for the financial year from 1 July 2016 to 30 June 2017 after income tax
was a loss of $4,289,216 (2016: $6,142,617).
A review of operations of the consolidated entity during the year ended 30 June 2017 is provided in the “Review
of the Operations” immediately preceding this Directors’ Report.
LIKELY DEVELOPMENTS
The Group will continue its exploration activities over the next financial year with a focus on its key projects at
the East Laverton Project and Mt Alexander Project. Further commentary on planned activities over the
forthcoming year is provided in the “Review of Operations”.
The Board will continue to focus on creating value from the Group’s existing resource assets, as well as
considering new opportunities in the resources sector to complement the Group’s current projects.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There has not been any significant change in the state of affairs of the Group during the financial year, other
than as noted in this financial report.
ENVIRONMENTAL ISSUES
The Group is aware of its environmental obligations with regards to its exploration activities and ensures that it
complies with all applicable regulations when carrying out exploration work.
St George Mining Limited – Annual Report 2017
P 14
DIRECTORS’ REPORT
DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way
of a dividend to the date of this report.
DIRECTORS’ MEETINGS
The following table sets out the number of meetings held during the year ended 30 June 2017 and the number
of meetings attended by each director.
Name
J Prineas
T Hronsky
S Shipway
Eligible to attend
13
13
13
Attended
13
13
13
REMUNERATION REPORT – AUDITED
Remuneration policy
The remuneration policy of St George Mining Limited has been designed to align directors’ objectives with
shareholder and business objectives by providing a fixed remuneration component, which is assessed on an
annual basis in line with market rates. The Board of St George Mining Limited believes the remuneration policy
to be appropriate and effective in its ability to attract and retain the best directors to run and manage the
Company.
The Board’s policy for determining the nature and amount of remuneration for Board members is as follows:
The remuneration policy and setting the terms and conditions for the Executive directors and other senior
staff members is developed and approved by the Board based on local and international trends among
comparative companies and industry generally. It examines terms and conditions for employee incentive
schemes, benefit plans and share plans. Independent advice is obtained when considered necessary to
confirm that executive remuneration is in line with market practice and is reasonable within Australian
executive reward practices.
All executives receive a base salary (which is based on factors such as length of service and experience) and
superannuation.
The Group is an exploration entity, and therefore speculative in terms of performance. Consistent with
attracting and retaining talented executives, directors and senior executives are paid market rates
associated with individuals in similar positions within the same industry. Options and performance
incentives may be issued particularly as the entity moves from an exploration to a producing entity and key
performance indicators such as profit and production and reserves growth can be used as measurements
for assessing executive performance.
The Board policy is to remunerate non‐executive directors at market rates for comparable companies for
time, commitment and responsibilities. The Executive Directors, in consultation with independent advisors,
determine payments to the non‐executives and review their remuneration annually, based on market
practice, duties and accountability. The maximum aggregate amount of fees that can be paid to non‐
executive directors is subject to approval by shareholders at the Annual General Meeting and is currently
$150,000 per annum. Fees for independent non‐executive directors are not linked to the performance of
the Group. To align Directors’ interests with shareholder interests, the directors are encouraged to hold
shares in the Company.
St George Mining Limited – Annual Report 2017
P 15
DIRECTORS’ REPORT
Remuneration Consultants
The Company engaged BDO during the financial year to provide independent advice on executive
remuneration.
Details of directors and executives
Directors
J Prineas
T Hronsky
S Shipway
Title
Executive Chairman
Executive Director
Non‐Executive Director
Date of Appointment
19 October 2009
25 November 2009
11 June 2015
Date of Retirement
Not Applicable
Not Applicable
Not Applicable
The Company does not have any executives that are not Directors.
Executive Directors’ remuneration and other terms of employment are reviewed annually by the non‐executive
director(s) having regard to performance against goals set at the start of the year, relative comparable
information and independent expert advice.
Except as detailed in the Director’s Report, no director has received or become entitled to receive, during or
since the financial year end, a benefit because of a contract made by the Group or a related body corporate with
a director, a firm of which a director is a member or an entity in which a director has a substantial financial
interest. This statement excludes a benefit included in the aggregate amount of emoluments received or due
and receivable by directors and shown in the Remuneration Report, prepared in accordance with the
Corporations Regulations, or the fixed salary of a full time employee of the Group.
Remuneration of directors and executives
Remuneration for the financial year ended 30 June 2017.
Short‐Term Benefits
Directors
Salary
and Fees
Termination
Payment
Non
Monetary
Post
Employment
Benefits
Superannuation
Long
Term
Benefits
Long
Service
Leave
Equity Settled
Share‐Based
Payments
Shares/Option
s
$
221,677
180,000
231,917
180,000
75,000
93,000
528,594
453,000
$
‐
‐
‐
‐
‐
‐
‐
‐
(i)
$
4,088
3,410
3,906
3,210
1,383
1,675
9,377
8,295
$
21,059
17,100
‐
‐
7,125
3,800
28,184
20,900
$
‐
‐
‐
‐
‐
‐
‐
‐
J Prineas
2017
2016
T Hronsky
2017
2016
S Shipway
2017
2016
Total
2017
2016
(i)
Total
$
246,824
200,510
$
‐
‐
‐
5,550
235,823
188,760
‐
‐
83,508
98,475
‐
5,550
566,155
487,745
Non monetary benefits are for directors’ and officers’ liability and legal expense insurance premiums.
St George Mining Limited – Annual Report 2017
P 16
DIRECTORS’ REPORT
Employment contracts of directors and executives
The terms and conditions under which key management personnel and executives are engaged by the Company
are formalised in contracts between the Company and those individuals.
The Company has entered into an executive services agreement with Mr John Prineas whereby Mr Prineas
receives remuneration of $263,335 per annual plus statutory superannuation. Prior to 1 January 2017 Mr Prineas
received remuneration of $180,000 per annum plus statutory superannuation. Mr Prineas may terminate the
agreement by giving 4 months’ notice. The executive services agreement has no fixed period and continues until
terminated.
The Company has entered into a service agreement with Ms Sarah Shipway whereby Ms Shipway receives
remuneration of $40,000 per annum plus statutory superannuation and $50,000 for Non‐Executive Director and
Company Secretary respectively. Prior to 1 January 2017 Ms Shipway received remuneration of $40,000 per
annum plus statutory superannuation and $48,000 for Non‐Executive Director and Company Secretary
respectively.
The Company has entered into a consultancy contract with Essential Risk Solutions (“ERS”) and Mr Hronsky
whereby a base service fee of $269,000 per annum. Prior to 1 January 2017 Mr Hronsky received a base service
fee of $180,000 per annum and up to 4 economy class trips between Perth and Vancouver may be paid by the
Company on behalf of Mr Hronsky in each calendar year. ERS may terminate the Agreement by giving 3 months’
notice. The consultancy contract with ERS has no fixed period and continues until terminated.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001, every Officer or
agent of the Company shall be indemnified out of the property of the entity against any liability incurred by
him/her in his/her capacity as Officer or agent of the Company or any related corporation in respect of any act
or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.
During the year the Company agreed to pay an annual insurance premium of $9,377 (2016: $8,295) in respect
of directors’ and officers’ liability and legal expenses’ insurance contracts, for directors, officers and employees
of the Company. The insurance premium relates to:
Costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal, and
whatever the outcome.
Other liabilities that may arise from their position, with the exception of conduct involving a willful breach
of duty.
During the year 300,000 Class D Options held by a Director expired on 28 November 2016 unexercised.
During the year 100 Performance Shares were issued, 80 Performance Shares are held by Directors’.
Shareholdings of key management personnel
Directors
John Prineas
Timothy Hronsky
Sarah Shipway
Total
Balance at
1 July 2016
Granted as
remuneration
Net other change
10,214,221
1,062,500
‐
11,276,721
‐
‐
‐
‐
‐
‐
‐
‐
Balance at
30 June 2017
10,214,221
1,062,500
‐
11,276,721
St George Mining Limited – Annual Report 2017
P 17
DIRECTORS’ REPORT
Directors
John Prineas
Timothy Hronsky
Sarah Shipway
Total
Balance at
1 July 2015
Granted as
remuneration
Net other change
10,214,221
1,062,500
‐
11,276,721
‐
‐
‐
‐
‐
‐
‐
‐
Balance at
30 June 2016
10,214,221
1,062,500
‐
11,276,721
Listed Options, exercisable at $0.20 on or before 30 June 2017, holdings of key management personnel
Directors
Balance at
1 July 2016
Granted as
remuneration
Net other change
Balance at
30 June 2017
John Prineas
Timothy Hronsky
Sarah Shipway
Total
(i)
1,021,422
106,250
‐
1,127,672
‐
‐
‐
‐
(1,021,422)
(106,250)
‐
(1,127,672)
‐
‐
‐
‐
Expired on 30 June 2017, these options were issued between the 2016 and 2017 financial years.
Directors
John Prineas
Timothy Hronsky
Sarah Shipway
Total
Balance at
1 July 2015
Granted as
remuneration
Net other change
Balance at
30 June 2016
1,021,422
106,250
‐
1,127,672
‐
‐
‐
‐
‐
‐
‐
‐
1,021,422
106,250
‐
1,127,672
Class C Unlisted Option holdings of key management personnel
Directors
John Prineas
Timothy Hronsky
Sarah Shipway
Total
Directors
John Prineas
Timothy Hronsky
Sarah Shipway
Total
(i)
Balance at
1 July 2016
Granted as
remuneration
Net other change
Balance at
30 June 2017
‐
‐
‐
‐
Balance at
1 July 2015
Granted as
remuneration
‐
400,000
‐
400,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Net other change
(i)
Balance at
30 June 2016
‐
(400,000)
‐
(400,000)
Expired during the year, these options were issued in the 2012 financial year.
Class D Unlisted Option holdings of key management personnel
Directors
John Prineas
Timothy Hronsky
Sarah Shipway
Total
Balance at
1 July 2016
‐
300,000
‐
300,000
Granted as
remuneration
‐
‐
‐
‐
Net other change
(i)
Balance at
30 June 2017
‐
(300,000)
‐
(300,000)
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
St George Mining Limited – Annual Report 2017
P 18
John Prineas
Timothy Hronsky
Sarah Shipway
Total
(i)
(ii)
Directors
John Prineas
Timothy Hronsky
Sarah Shipway
Total
Directors
John Prineas
Timothy Hronsky
Sarah Shipway
Total
(i)
John Prineas
Timothy Hronsky
Sarah Shipway
Total
(i)
DIRECTORS’ REPORT
Directors
Balance at
1 July 2015
Granted as
remuneration
(ii)
‐
300,000
‐
300,000
‐
‐
‐
‐
Net other change
Balance at
30 June 2016
‐
‐
‐
‐
‐
300,000
‐
300,000
Expired during the year
The Class D Unlisted Options were granted on 27 November 2015 and will vest 12 months from the date
of issue.
The value of the Class D Unlisted Options granted to a Director was $3,840. The full amount was expensed
in the year ended 30 June 2016.
(iii)
Class E Unlisted Option holdings of key management personnel
Balance at
1 July 2016
‐
300,000
‐
300,000
Balance at
1 July 2015
‐
‐
‐
‐
Granted as
remuneration
‐
‐
‐
‐
Granted as
remuneration
(i)
‐
300,000
‐
300,000
Net other change
Balance at
30 June 2017
‐
‐
‐
‐
‐
300,000
‐
300,000
Net other change
Balance at
30 June 2016
‐
‐
‐
‐
‐
300,000
‐
300,000
The Class E Unlisted options were granted on 27 November 2015 and will vest 12 months from the date
of issue.
The value of the Class E Unlisted Options granted to a Director was $7,260. The full amount was expensed
in the year ended 30 June 2016.
(ii)
Performance Shareholdings of key management personnel
Directors
Balance at
1 July 2016
Granted as
remuneration
(i)
Net other change
Balance at
30 June 2017
‐
‐
‐
‐
40
30
10
80
‐
‐
‐
‐
40
30
10
80
On satisfaction of certain milestone events, each Performance Share converts into 50,000 ordinary
shares in which case John Prineas would become entitled to a further 2,000,000 ordinary shares,
Timothy Hronsky a further 1,500,000 ordinary shares and Sarah Shipway a further 500,000 ordinary
shares.
END OF REMUNERATION REPORT
St George Mining Limited – Annual Report 2017
P 19
DIRECTORS’ REPORT
SHARE OPTIONS
Unissued shares
At the date of this report the Company had no listed options on issue. During the financial year ended 30 June
2017, 1,100 options had been converted into fully paid ordinary shares.
At the date of this report the Company had on issue the below unlisted options:
Unlisted Options Class Number of Options
Class E Options
Unlisted Options
600,000
3,500,000
Exercise Price $ Expiry Date
$0.50
$0.25
On or before 28 November 2017
On or before 2 December 2019
During the financial year ended 30 June 2017, and at the date of this report, none of these unlisted options were
converted into fully paid ordinary shares.
Option holders do not have any rights to participate in any issues of shares of other interests in the Company or
any other entity.
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.
CORPORATE GOVERNANCE STATEMENT
St George Mining is committed to ensuring that its policies and practices reflect a high standard of corporate
governance. The Board has adopted a comprehensive framework of Corporate Governance Guidelines.
Throughout the 2017 financial year the Company’s governance was consistent with the Corporate Governance
Principles and Recommendations (3rd edition) published by the ASX Corporate Governance Council.
The Group’s Corporate Governance Statement can be viewed at www.stgm.com.au.
EVENTS SUBSEQUENT TO BALANCE DATE
On 29 August 2017 the Company announced a bonus issue of options to its shareholders to recognise their
loyalty as the Company continues to advance its exciting exploration projects in Western Australia. The
entitlement is to be issued on a pro‐rata basis of one (1) new option for every ten (10) ordinary shares held by
shareholders as at the record date of 19 September 2017. The option entitlement will be issued for nil
consideration.
Except for the above no other matters or circumstances have arisen since the end of the financial year which
significantly affected or could significantly affect the operations of the consolidated entity, the results of those
operations, or the state of affairs of the consolidated entity in future financial years.
St George Mining Limited – Annual Report 2017
P 20
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2017 has been received and can be found
on page 47 of the financial report.
Non Audit Services
The Company’s auditor, Stantons International, did not provide any non‐audit services to the Company during
the financial year ended 30 June 2017.
Signed in accordance with a resolution of the directors made pursuant to s 298(2) of the Corporations Act 2001.
On behalf of the directors
JOHN PRINEAS
Executive Chairman
St George Mining Limited
Dated 20 September 2017
St George Mining Limited – Annual Report 2017
P 21
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2017
Australian Dollar ($)
Note
30 JUNE 2017
$
30 JUNE 2016
$
REVENUE
Interest
Other income – Research and Development Tax
Incentive
EXPENDITURE
Administration expenses
Exploration expenditure written off
LOSS BEFORE INCOME TAX
3
3
4
5
90,170
18,003
2,339,861
1,326,267
(1,058,950)
(5,660,297)
(4,289,216)
(1,023,258)
(6,463,629)
(6,142,617)
Income Tax
6(a)
‐
‐
NET LOSS ATTRIBUTABLE TO MEMBERS OF THE
COMPANY
(4,289,216)
(6,142,617)
Other comprehensive income
TOTAL COMPREHENSIVE INCOME (LOSS)
‐
(4,289,216)
‐
(6,142,617)
TOTAL COMPREHENSIVE INCOME (LOSS)
ATTRIBUTABLE TO MEMBERS OF THE
COMPANY
LOSS PER SHARE
Basic and diluted – cents per share
(4,289,216)
(6,142,617)
15
(1.75)
(3.77)
The above consolidated statement of profit or loss and other comprehensive
income should be read in conjunction with the accompanying notes
St George Mining Limited – Annual Report 2017
P 22
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
Australian Dollar ($)
Note
30 JUNE 2017
$
30 JUNE 2016
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Security bond
Plant and equipment
Exploration and evaluation expenditure
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
16(a)
9(a)
9(b)
10
11
12
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
4,773,546
85,543
169,425
5,028,514
1,000
24,685
‐
25,685
1,437,025
66,786
52,174
1,555,985
1,000
34,431
482,581
518,012
5,054,199
2,073,997
2,225,921
26,089
2,252,010
1,106,980
10,577
1,117,557
2,252,010
1,117,557
2,802,189
956,440
13(a)
13(b)
14
24,142,945
430,876
(21,771,632)
2,802,189
18,277,130
352,841
(17,673,531)
956,440
The above consolidated statement of financial position should be
read in conjunction with the accompanying notes
St George Mining Limited – Annual Report 2017
P 23
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Australian ($)
BALANCE AT 1 JULY 2016
Loss for the year
Other comprehensive income
Total comprehensive loss
Shares issued during the year
Option based payments
Options exercised during the year
Expiry of options
Share and option issue expenses
BALANCE AT 30 JUNE 2017
BALANCE AT 1 JULY 2015
Loss for the year
Other comprehensive income
Total comprehensive loss
Shares issued during the year
Share and Option based payments
Options exercised during the year
Expiry of options
Share and option issue expenses
BALANCE AT 30 JUNE 2016
SHARE CAPITAL
$
18,277,130
‐
‐
‐
6,474,821
‐
220
‐
(609,226)
24,142,945
12,373,816
‐
‐
‐
6,022,165
308,000
232
‐
(427,083)
18,277,130
ACCUMULATED
LOSSES
$
(17,673,531)
(4,289,216)
‐
(4,289,216)
‐
‐
‐
191,115
‐
(21,771,632)
(11,563,110)
(6,142,617)
‐
(6,142,617)
‐
‐
‐
32,196
‐
(17,673,531)
SHARE OPTION
RESERVE
$
352,841
‐
‐
‐
‐
269,150
‐
(191,115)
‐
430,876
222,933
‐
‐
‐
‐
162,104
‐
(32,196)
‐
352,841
TOTAL EQUITY
$
956,440
(4,289,216)
‐
(4,289,216)
6,474,821
269,150
220
‐
(609,226)
2,802,189
1,033,639
(6,142,617)
‐
(6,142,617)
6,022,165
470,104
232
‐
(427,083)
956,440
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
St George Mining Limited – Annual Report 2017
P 24
FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Australian Dollar ($)
CASH FLOWS FROM OPERATING ACTIVITIES
Expenditure on mining interests
Payments to suppliers and employees
Interest received
Other – GST
Research and Development Incentive Grant
Net cash outflow from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of tenements
Purchase of plant and equipment
Net cash outflow from investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares and options net of
capital raising costs
Net cash flows from financing activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of
the financial year
CASH AND CASH EQUIVALENTS AT THE END
OF THE FINANCIAL YEAR
Note
30 JUNE 2017
$
30 JUNE 2016
$
16(b)
(4,223,279)
(970,772)
84,134
(24,492)
2,339,861
(2,794,548)
‐
(3,896)
(3,896)
(5,854,948)
(1,028,738)
17,181
30,585
1,326,267
(5,509,653)
(353,680)
(18,110)
(371,790)
6,134,965
6,134,965
5,749,268
5,749,268
3,336,521
(132,175)
1,437,025
1,569,200
16(a)
4,773,546
1,437,025
The above consolidated statement of cash flows should be
read in conjunction with the accompanying notes
St George Mining Limited – Annual Report 2017
P 25
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
1
CORPORATE INFORMATION
The financial report of St George Mining Limited (”St George Mining” or “the Company”) for the year ended 30
June 2017 was authorised for issue in accordance with a resolution of the directors on 20 September 2017.
St George Mining Limited is a company limited by shares, incorporated in Australia on 19 October 2009. The
consolidated financial statements of the Company for year ended 30 June 2017 comprise of the Company and its
subsidiaries together referred to as the Group or consolidated entity.
The nature of the operations and principal activity of the Group is mineral exploration.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Statement of compliance
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (“AIFRS”). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial Reporting Standards
(“IFRS”).
(b)
Basis of Preparation of the Financial Report
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other
requirements of the law. The financial report also complies with the International Financial Reporting Standards.
The financial report has also been prepared on a historical cost basis.
The financial report is presented in Australian dollars. The following accounting policies have been approved by
the consolidated entity, except as noted below.
Going Concern
The directors have prepared the financial statements on a going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of
business.
The Consolidated Entity has recorded a net accounting loss of $4,289,216 and net operating cash outflows of
$2,794,548 for the year ended 30 June 2017.
The Board is confident that the Group will have sufficient funds to finance its operations in the 2017/2018 Financial
Year.
(c)
Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent St George
Mining Limited and all of the subsidiaries (including any structured entities). Subsidiaries are entities the parent
controls. The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries
is provided in Note 21.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group
from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from
the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions
between Group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been
St George Mining Limited – Annual Report 2017
P 26
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the
Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non
controlling interests". The Group initially recognises non‐controlling interests that are present ownership interests
in subsidiaries and are entitled to a proportionate share of the subsidiary's net assets on liquidation at either fair
value or at the non‐controlling interests' proportionate share of the subsidiary's net assets. Subsequent to initial
recognition, non‐controlling interests are attributed their share of profit or loss and each component of other
comprehensive income. Non‐controlling interests are shown separately within the equity section of the statement
of financial position and statement of comprehensive income.
(d)
Significant accounting estimates and judgements
The carrying amount of certain assets and liabilities are often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of certain assets and liabilities within the next annual reporting period are:
Deferred taxation
The potential deferred tax asset arising from the tax losses and temporary differences have not been recognised
as an asset because recovery of the tax losses is not yet considered probable (refer note 6).
Capitalised exploration costs
The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement
in determining whether it is likely that future economic benefits are likely, either from future exploration or sale,
or where activities have not reached a stage which permits reasonable assessment.
Subsidiary Loans
Provision has been made for all unsecured loans with subsidiaries as it is uncertain if and when the loans will be
recovered. All inter‐company loans have been eliminated on consolidation.
(e)
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised:
Interest
Interest revenue is recognised using the effective interest method.
(f)
Employee benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to
balance date. Employee benefits expected to be settled within one year together with entitlements arising from
wages and salaries and annual leave which will be settled after one year, have been measured at the amounts
expected to be paid when the liability is settled, plus related on‐costs. Other employee benefits payable later than
one year have been measured at the present value of the estimated cash outflows to be made to those benefits.
Contributions are made by the Group to employee superannuation funds and are charged as expenses when
incurred.
St George Mining Limited – Annual Report 2017
P 27
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
(g)
Research & Development Tax Incentives
Refundable tax incentives are accounted for as a government grant under AASB 120 Accounting for Government
Grants and Disclosure of Government Assistance.
(h)
Exploration and evaluation expenditure
Exploration and evaluation expenditure on areas of interest are expensed as incurred. Costs of acquisition will
normally be expensed but will be assessed on a case by case basis and may be capitalised to areas of interest and
carried forward where right of tenure of the area of interest is current and they are expected to be recouped
through sale or successful development and exploitation of the area of interest or, where exploration and
evaluation activities in the area of interest have not yet reached a stage that permits reasonable assessment of
the existence of economically recoverable reserves.
When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated
acquisition costs in respect of that area are written off in the financial period the decision is made. Each area of
interest is also reviewed at the end of each accounting period and accumulated costs written off to the extent that
they will not be recoverable in the future. Where projects have advanced to the stage that directors have made a
decision to mine, they are classified as development properties. When further development expenditure is
incurred in respect of a development property, such expenditure is carried forward as part of the cost of that
development property only when substantial future economic benefits are established. Otherwise such
expenditure is classified as part of the cost of production or written off where production has not commenced.
(i)
Income Tax
Current income tax refunded/(expensed) charged to profit or loss is tax refundable/(payable). Those amounts
recognised are expected to be recovered from/(paid to) the relevant taxation authority.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
except where the deferred income tax liability arises from the initial recognition of an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects neither that
accounting profit nor taxable profit or loss; and,
in respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, except where the timing of the reversal of the temporary differences will not
reverse in the foreseeable future.
Deferred income tax assets are recognised for all the deductible temporary differences, carry‐forward of unused
tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences, and the carry‐forward of unused tax assets and unused tax losses can be
utilised:
except where the deferred income tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss; and,
in respect of deductible temporary differences with investments in subsidiaries, associates and interest in
joint ventures, deferred tax assets in the foreseeable future and taxable profit will be available against
which the temporary differences can be utilised.
St George Mining Limited – Annual Report 2017
P 28
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
The carrying amount of deferred income tax is reviewed at each balance sheet date and reduced to the extent
that is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income
tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are not in the income statement.
(j)
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Taxation Office (“ATO”). In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
consolidated Statement of Financial Position are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the
Consolidated Statement of Financial Position.
Cash Flows are included in the Consolidated Statement of Cash Flows net of GST. The GST components of cash
flows arising from investing and financial activities which are recoverable from, or payable to, the ATO are
classified as operating cash flows.
(k)
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a diminishing value basis over the estimated useful life of the assets as follows:
Class of Fixed Asset
Plant and Equipment
‐ Year 1
‐ Subsequent Years
Depreciation Rate
18.75%
37.50%
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each financial year end.
(l)
Earnings per share
Basic earnings per share is calculated as net loss attributable to members of the Company, adjusted to exclude
any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted
average number of ordinary shares, adjusted for any bonus element.
(m)
Cash and cash equivalents
Cash and short‐term deposits in the consolidated Statement of Financial Position comprise cash at bank and in
hand and short‐term deposits with an original maturity of three months or less.
For the purposes of the consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
St George Mining Limited – Annual Report 2017
P 29
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
(n)
Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate
of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value; less costs to sell
and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be
estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash‐
generating unit to which it belongs. When the carrying amount of an asset or cash‐generating unit exceeds its
recoverable amount, the asset or cash‐generating unit is considered impaired and it is written down to its
recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre‐tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent
with the function of the impaired asset unless the asset is carried at revalued amount (in which case the
impairment loss is treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount
is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the
case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at
revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the
depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual
value, on a systemic basis over its remaining useful life.
(o)
Contributed equity
Ordinary shares and options are classified as contributed equity. Incremental costs directly attributable to the
issue of new shares or options are shown in equity as a deduction, net of GST, from the proceeds.
(p)
Investments
All investments are initially recognised at cost, being the fair value of the consideration given and including
acquisition charges associated with the investment.
After initial recognition, investments, which are classified as held for trading and available‐for‐sale, are measured
at fair value. Gains or losses on investments held for trading are recognised in the consolidated profit or loss.
Gains or losses on available‐for‐sale investments are recognised as a separate component of equity until the
investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at
which time the cumulative gain or loss previously reported in equity is included in the profit or loss.
(q)
Financial assets
Financial assets and financial liabilities are recognised in the Consolidated Statement of Financial Position when
the Group becomes party to the contractual provisions of the financial instrument. A financial asset is
derecognised when the contractual rights to the Consolidated Statement of Cash Flows from the financial assets
expire or are transferred and no longer controlled by the entity. A financial liability is removed from the
Consolidated Statement of Financial Position when the obligation specified in the contract is discharged or
cancelled or expires.
St George Mining Limited – Annual Report 2017
P 30
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
Financial assets and financial liabilities classified as held for trading are measured at fair value through the profit
or loss.
Upon initial recognition a financial asset or financial liability is designated as at fair value through the profit or loss
when:
(a)
(b)
an entire contract containing one or more embedded derivatives is designated as a financial asset or
financial liability at fair value through the profit or loss;
doing so results in more relevant information, because either:
(i)
(ii)
it eliminates or significantly reduces a measurement or recognition inconsistency that would
otherwise arise from measuring assets or liabilities or recognizing gains or losses on them on
different bases; or
a group of financial assets, financial liabilities or both is managed and its performance is evaluated
on a fair value basis, in accordance with a documented risk management or investment strategy,
and information about the group is provided internally on that basis to key management
personnel.
Investments in equity instruments that do not have a quoted market price in an active market, and whose fair
value cannot be reliably measured are not designated as at fair value through the profit or loss.
A gain or loss arising from a change in the fair value of a financial asset or financial liability classified as at fair value
through the profit or loss is recognised in the profit or loss.
Financial assets not measured at fair value comprise:
a)
loans and receivables being non‐derivative financial assets with fixed or determinable payments that are
not quoted in an active market. These are measured at amortised cost using the effective interest rate
method;
held‐to‐maturity investments being non‐derivative financial assets with fixed or determinable payments
and fixed maturity that will be held to maturity. These are measured at amortised cost using the effective
interest method; and
investments in equity instruments that do not have a quoted market price in an active market and the
fair value of which cannot be reliably measured. These are measured at cost together with derivatives
that are linked to and must be settled by the delivery of such investments.
(b)
(c)
Available‐for‐sale financial assets are non‐derivative financial assets, which are designated as available‐for‐sale or
that are not classified as loans and receivables, held‐to‐maturity investments or financial assets as at fair value
through the profit and loss.
A gain or loss arising from a change in the fair value of an available‐for‐sale financial asset is recognised directly in
equity, through the Consolidated Statement of Changes in Equity (except for impairment losses and foreign
exchange gains or losses) until the financial asset is derecognised at which time the cumulative gain or loss
previously recognised in equity is recognised in the profit or loss.
Regular way purchases of financial assets are accounted for as follows:
financial assets held for trading – at trade date
held‐to‐maturity investments – at trade date
loans and receivables – at trade date
available‐for‐sale financial assets – at trade date
Except for the following all financial liabilities are measured at amortised cost using the effective interest rate
method:
St George Mining Limited – Annual Report 2017
P 31
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
(a)
(b)
financial liabilities at fair value through the profit and loss and derivatives that are liabilities measured at
fair value;
financial liabilities that arise when a transfer of financial asset does not qualify for de‐recognition or are
accounted for using the continuing involvement approach.
The amortised cost of a financial asset or a financial liability is the amount initially recognised minus principal
repayments, plus or minus cumulative amortisation of any difference between the initial amount and maturity
amount and minus any write‐down for impairment or un‐collectability.
(r)
Business combinations
Business combinations occur where an acquirer obtains control over one or more businesses and results in the
consolidation of its assets and liabilities.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving
entities or businesses under common control. The acquisition method requires that for each business combination
one of the combining entities must be identified as the acquirer (i.e. parent entity). The business combination will
be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the
parent entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to certain limited
exceptions, the fair value of the identifiable assets acquired and liabilities assumed. In addition, contingent
liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be
reliably measured.
The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted
for the measurement of goodwill will impact on the measurement of any non‐controlling interest to be recognised
in the acquiree where less than 100% ownership interest is held in the acquiree.
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition
date fair value of any previously held equity interest shall form the cost of the investment in the separate financial
statements. Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by
the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.
Fair value uplifts in the value of pre‐existing holdings are taken to the statement of comprehensive income. Where
changes in the value of such equity holdings had previously been recognised in other comprehensive income, such
amounts are recycled to profit or loss.
Included in the measurement of consideration transferred is any asset or liability resulting from a contingent
consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a
financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of
consideration previously paid are recognised as a receivable. Subsequent to initial recognition, contingent
consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
Contingent consideration classified as an asset or a liability is remeasured each reporting period to fair value
through the statement of comprehensive income unless the change in value can be identified as existing at
acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the statement of
comprehensive income.
(s)
Adoption of new and revised standards
The Group has consistently applied the following accounting policies to all periods presented in the financial
statements. The Group has considered the implications of new and amended Accounting Standards applicable for
St George Mining Limited – Annual Report 2017
P 32
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
annual reporting periods beginning after 1 January 2016 but determined that their application to the financial
statements is either not relevant or not material.
(t)
Comparative information
Comparative information is amended where appropriate to ensure consistency in presentation with the current
year.
3
REVENUE
CONSOLIDATED
30 JUNE 2017
$
CONSOLIDATED
30 JUNE 2016
$
Interest income
Research and Development Tax Incentive (i)
90,170
2,339,861
18,003
1,326,267
(i)
The Research and Development rebate $2,339,861 is in relation to the year ended 30 June 2016 (2016:
$1,326,267 in relation to the year ended 30 June 2015).
4
EXPENSES
Administration expenses include the following expenses:
CONSOLIDATED
30 JUNE 2017
$
CONSOLIDATED
30 JUNE 2016
$
Employee benefit expense
Wages and salaries
Accrued annual leave
Employee share based payments
Defined contribution superannuation expense
Other administration costs
Accounting fees
Research and Development consulting fees
Administrative fees
Legal fees
Publications and subscriptions
Presentations and seminars
Share registry costs
Travel expenses
316,678
15,512
‐
30,084
362,274
29,655
27,110
34,613
40,498
48,604
69,653
51,131
129,278
430,542
352,500
10,577
11,100
33,488
407,665
25,064
10,100
48,776
18,187
140,862
71,156
44,076
108,326
466,547
St George Mining Limited – Annual Report 2017
P 33
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
5
EXPLORATION EXPENDITURE WRITTEN OFF
Exploration expenditure written off
Tenement acquisition costs
6
INCOME TAX
CONSOLIDATED
30 JUNE 2017
$
5,177,716
482,581
5,660,297
CONSOLIDATED
30 JUNE 2016
$
5,801,949
661,680
6,463,629
(a)
Prima facie income tax benefit at 27.5% (2016: 28.5%) on loss from ordinary activities is reconciled to
the income tax provided in the financial statements
Loss before income tax
Income tax calculated at 27.5% (2016: 28.5%) (i)
Tax effect of;‐
Sundry – temporary differences
Section 40‐880 deduction
Future income tax benefit not brought to account
Income tax benefit
CONSOLIDATED
30 JUNE 2017
$
(4,289,216)
(1,179,534)
(19,371)
(96,189)
1,295,094
‐
RESTATED
CONSOLIDATED
30 JUNE 2016
$
(6,142,617)
(1,750,645)
4,687
(71,413)
1,817,371
‐
(i)
The income tax reconciliation for 2016 has been restated to reflect the reduced tax rates for small business
entities from 30% to 28.5% in the 2016 financial year.
(b)
Deferred tax assets
The potential deferred tax asset arising from the tax losses and temporary differences have not been recognised
as an asset because recovery of tax losses is not yet probable.
Australian accumulated tax losses (i)
Provisions ‐ net of prepayments
Exploration and evaluation expenditure
Section 40‐880 deduction
Unrecognised deferred tax assets relating
to the above temporary differences
CONSOLIDATED
30 JUNE 2017
$
3,538,257
(12,652)
‐
260,823
CONSOLIDATED
30 JUNE 2016
$
2,325,077
(4,021)
(137,536)
196,365
3,786,428
2,379,885
(i)
The Australian accumulated tax losses opening balance at 30 June 2016 has been restated due to the 30
June 2016 Research and Development rebate $2,339,861 being received during the 2016/2017 financial
year.
St George Mining Limited – Annual Report 2017
P 34
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
The benefits will only be obtained if:
(i)
(ii)
(iii)
The Group derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deduction for the losses to be realised;
The Group continues to comply with the conditions in deductibility imposed by the Law; and
No change in tax legislation adversely affect the Group in realising the benefits from the deductions or
the losses.
7
AUDITOR’S REMUNERATION
Auditing and review of the Group’s financial statements
8
(a)
KEY MANAGEMENT PERSONNEL
Details of key management personnel
Directors
John Prineas
Timothy Hronsky
Sarah Shipway
Executive
John Prineas – Executive Chairman
Timothy Hronsky – Executive Director
(b)
Compensation of key management personnel
Salaries and fees
Non‐monetary
Post employment benefits – superannuation
Equity settled option based payment
9
CURRENT ASSETS
(a)
Trade and Other Receivables
Current
CONSOLIDATED
30 JUNE 2017
$
25,133
25,133
CONSOLIDATED
30 JUNE 2016
$
25,084
25,084
CONSOLIDATED
30 JUNE 2017
$
CONSOLIDATED
30 JUNE 2016
$
528,594
9,377
28,184
‐
566,155
453,000
8,295
20,900
5,550
487,745
CONSOLIDATED
30 JUNE 2017
$
85,543
85,543
CONSOLIDATED
30 JUNE 2016
$
66,786
66,786
Other receivables include amounts outstanding for goods and services tax (GST) of $78,297 (2016: $53,807) and
interest receivable of $7,246 (2016: $1,208) and other receivables of $0 (2016: $11,771).
GST amounts are non‐interest bearing and have repayment terms applicable under the relevant government
authorities. No trade and other receivables are impaired or past due.
St George Mining Limited – Annual Report 2017
P 35
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
(b)
Other Assets
Prepayments
Deposit
10
PLANT AND EQUIPMENT
Plant and Equipment
At Cost
Accumulated depreciation
Total plant and equipment
Plant and Equipment
Carrying amount at the beginning of the year
Additions
Disposals
Depreciation expense
Total carrying amount at end of year
CONSOLIDATED
30 JUNE 2017
$
149,425
20,000
169,425
CONSOLIDATED
30 JUNE 2016
$
32,174
20,000
52,174
CONSOLIDATED
30 JUNE 2017
$
CONSOLIDATED
30 JUNE 2016
$
82,518
(57,833)
24,685
34,431
3,896
‐
(13,642)
24,685
78,622
(44,191)
34,431
37,577
16,255
(2,262)
(17,139)
34,431
11
EXPLORATION, EVALUATION AND ACQUISITION EXPENDITURE
The Group has capitalised acquisition expenditure on the basis that either the expenditure is expected to be
recouped through future successful development (or alternatively sale) of the areas of interest concerned or on
the basis that it is not yet possible to assess whether it will be recouped.
Balance at the beginning of the year
Additions/(write‐off)
Balance at the end of the year
12
CURRENT LIABILITIES
Trade and other payables
CONSOLIDATED
30 JUNE 2017
$
482,581
(482,581)
‐
CONSOLIDATED
30 JUNE 2017
$
2,225,921
2,225,921
CONSOLIDATED
30 JUNE 2016
$
482,581
‐
482,581
CONSOLIDATED
30 JUNE 2016
$
1,106,980
1,106,980
Trade payables are non‐interest bearing and are settled on normal commercial trade terms.
St George Mining Limited – Annual Report 2017
P 36
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
13
ISSUED CAPITAL
Australian Dollar $
Issued and paid up capital
(a)
At the beginning of the reporting period
August 2016: 43,165,470 shares issued at $0.15 per share
June 2017: 1,100 shares issued at $0.20 per share
July 2015: 5,555,556 shares issued at $0.09 per share
November 2015: 22,630,631 shares issued at $0.08 per share
January 2016: 3,500,000 shares issued at $0.088 per share
March 2016: 27,169,591 shares issued at $0.085 per share
April 2016: 16,497,647 shares issued at $0.085 per share
May 2016: 1,160 shares issued at $0.20 per share
Transactions costs arising from issue of shares
At reporting date 250,360,825 (30 June 2016: 207,194,255)
fully paid ordinary shares
Movements in Ordinary Shares
At the beginning of the reporting period
Shares issued during the year
Options exercised during the year
At reporting date
Movements in Performance Shares
At the beginning of the reporting period
Changes to performance shares issued during the year (i)
Issued during the year (ii)
At reporting date
(i)
(ii)
100 Performance shares expired on 28 November 2015.
100 Performance shares issued on 2 December 2016.
(b) Option Reserve
Movements in options reserve
CONSOLIDATED
30 JUNE 2017
$
CONSOLIDATED
30 JUNE 2016
$
18,277,130
6,474,821
220
‐
‐
‐
‐
‐
‐
(609,226)
12,373,816
‐
‐
500,000
1,810,450
308,000
2,309,415
1,402,300
232
(427,083)
24,142,945
18,277,130
Number
207,194,255
43,165,470
1,100
250,360,825
Number
131,839,670
75,353,425
1,160
207,194,255
Number
Number
‐
‐
100
100
100
(100)
‐
‐
CONSOLIDATED
30 JUNE 2017
$
CONSOLIDATED
30 JUNE 2016
$
At the beginning of the year
Options expensed over the vesting period
Listed options
Expiry of options transferred to accumulated losses (i)
Option based payments (ii)
Options issue expense
At reporting date
352,841
‐
‐
(191,115)
269,150
‐
430,876
222,933
11,100
151,004
(32,196)
‐
‐
352,841
(i)
(ii)
The Company had on issue 600,000 Class D Options under the Company’s Employee Incentive Option Plan.
On 28 November 2016 600,000 Class D Options expired, unexercised.
The Company issued 3,500,000 Unlisted Options as consideration for advisory services. Using the Black &
Scholes option mode and based on the assumptions below, the Unlisted Options were ascribed the
following value. The fair value of these options has been charged to capital raising costs.
St George Mining Limited – Annual Report 2017
P 37
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
Class of Option
Number
of
Options
Valuation
Date
Unlisted Options 3,500,000 02.12.2016
Market
Price
of
Shares
$0.14
Exercise
Price
Expiry
Date
$0.25
02.12.2019
Risk
Free
Interest
Rate
1.98%
Volatility
(discount)
Indicative
Value per
Option
107%
$0.077
A summary of the outstanding options at 30 June 2017 in the Company is listed below:
Class
Class E Unlisted Options
Unlisted Options
Number of Options
600,000
3,500,000
Exercise Price
$0.50
$0.25
Expiry Date
28 November 2017
2 December 2019
14
ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Loss for the year
Expiry of options
Accumulated losses at the end of the year
15
LOSS PER SHARE
Basic loss per share after income tax attributable to
members of the Company (cents per share)
Diluted loss per share (cents per share)
Weighted average number of shares on issue during the
financial year used in the calculation of basic earnings
per share
Weighted average number of ordinary shares for
diluted earnings per share
CONSOLIDATED
30 JUNE 2017
$
(17,673,531)
(4,289,215)
191,115
(21,771,631)
CONSOLIDATED
30 JUNE 2016
$
(11,563,110)
(6,142,617)
32,196
(17,673,531)
CONSOLIDATED
30 JUNE 2017
$
CONSOLIDATED
30 JUNE 2016
$
(1.75)
(1.75)
(3.77)
(3.77)
2017
Number
2016
Number
244,564,911
163,005,341
244,564,911
163,005,341
16
NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
(a)
Reconciliation of cash and cash equivalents
For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash at bank
and in hand and short‐term deposits with an original maturity of three months or less, net of outstanding bank
overdrafts.
Current – cash at bank
CONSOLIDATED
30 JUNE 2017
$
4,773,546
4,773,546
CONSOLIDATED
30 JUNE 2016
$
1,437,025
1,437,025
St George Mining Limited – Annual Report 2017
P 38
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
(b)
Reconciliation of loss after tax to net cash flows from operations
Loss after income tax
Share based payments
Depreciation expense
Tenement acquisition expense
(Increase)/decrease in assets
Trade and other receivables
Other assets
Increase/(decrease) in liabilities
Trade and other payables
Provisions
CONSOLIDATED
30 JUNE 2017
$
(4,289,216)
‐
13,642
‐
(22,490)
369,063
1,118,941
15,512
(2,794,548)
CONSOLIDATED
30 JUNE 2016
$
(6,142,617)
319,100
17,139
357,797
29,763
(21,622)
(79,789)
10,576
(5,509,653)
(c)
(i)
17
(i)
Non cash financing and investing activities
On 2 December 2016 the Company issued 3,500,000 Unlisted Options exercisable at $0.25 on or before 2
December 2019 as consideration for advisory services.
SHARE BASED PAYMENTS
On 2 December 2016 the Company issued 3,500,000 Unlisted Options as consideration for advisory
services. Using the Black & Scholes option mode and based on the assumptions below, the Unlisted
Options were ascribed the following value:
Class of Option
Number
of
Options
Valuation
Date
Unlisted Options 3,500,000 02.12.2016
Market
Price
of
Shares
$0.14
Exercise
Price
Expiry
Date
$0.25
02.12.2019
Risk
Free
Interest
Rate
1.98%
Volatility
(discount)
Indicative
Value per
Option
107%
$0.077
(ii)
The Company agreed and Shareholders approved at the Company’s Annual General Meeting held on 27
November 2015 to allot and issue a total 600,000 Class E Options to Mr Timothy Hronsky and Mr Matthew
McCarthy.
The terms and conditions of the options are detailed in the Notice of Annual General Meeting dated 27
October 2015.
Using the Black & Scholes option model and based on the assumption below, the Class E Options were
ascribed the following value:
Class of
Options
Number
Options
Valuation
Date
Class E
Options
600,000 27.11.2015
Market
Price of
Shares
$0.07
Exercise
Price
Expiry Date Risk Free
Interest
Rate
2.09%
Volatility
(discount)
110%
Indicative
Value per
Option
$0.01210
$0.50
28.11.2017
Of the above options granted, the following were issued to Mr Timothy Hronsky (key management
personnel):
St George Mining Limited – Annual Report 2017
P 39
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
Grant Date
27 November 2015
Class
Class E Unlisted Options
Number
300,000
A summary of the movements of all the Company options issued as share based payments is as follows:
Options outstanding as at 1 July 2015
Granted
Forfeited
Exercised
Expired
Options outstanding as at 1 July 2016
Granted
Forfeited
Exercised
Expired
Options outstanding as at 30 June 2017
Options exercisable as at 30 June 2017
Options exercisable as at 30 June 2016
Number
5,182,382
7,750,194
‐
‐
(1,000,000)
11,932,576
3,500,000
‐
‐
(11,332,576)
4,100,000
4,100,000
11,932,576
Weighted
Average Exercise
Price $
0.297
0.230
‐
‐
‐
0.245
0.25
‐
‐
‐
0.289
‐
‐
The weighted average remaining contractual life of options outstanding at the year‐end was 0.17 years (2016:
0.74 years). The weighted average exercise price of outstanding options at the end of the report period was $0.289
(2016: $0.245).
18
(a)
COMMITMENTS AND CONTINGENCIES
Commitment
Mineral exploration commitments
The Group has the following minimum exploration expenditure requirements in connection with its exploration
tenements.
Not later than one year
Later than one year but not later than two years
(b)
Contingent liabilities and commitments
2017
$
386,429
526,048
912,477
2016
$
523,338
‐
523,338
The Group fully owns two subsidiaries, Desert Fox Resources Pty Ltd and Blue Thunder Resources Pty Ltd, the main
activities of which are exploration. The effect of these subsidiaries is to make the St George Mining owned
subsidiaries contractually responsible for any transactions undertaken by the subsidiary. The parent entity has
provided certain guarantees to third parties whereby certain liabilities of the subsidiary are guaranteed. The Group
has not made guarantees to third parties at 30 June 2017.
St George Mining Limited – Annual Report 2017
P 40
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
19
EVENTS SUBSEQUENT TO BALANCE DATE
On 29 August 2017 the Company announced a bonus issue of options to its shareholders to recognise their loyalty
as the Company continues to advance its exciting exploration projects in Western Australia. The entitlement is to
be issued on a pro‐rata basis of one (1) new option for every ten (10) ordinary shares held by shareholders as at
the record date of 19 September 2017. The option entitlement will be issued for nil consideration.
Except for the above no other matters or circumstances have arisen since the end of the financial year which
significantly affected or could significantly affect the operations of the consolidated entity, the results of those
operations, or the state of affairs of the consolidated entity in future financial years.
20
(a)
FINANCIAL INSTRUMENTS
Interest Rate Risk
The Group’s exposure to interest rate risk, which is the risk that the financial instrument’s value will fluctuate as a
result of changes in market interest rates and the effective weighted average interest rates on those financial
assets and financial liabilities, is as follows:
2017
Note
Financial assets
Cash and cash equivalents
Trade and other receivables
Other assets
Security bond
Financial liabilities
Trade and other payables
2016
16(a)
9(a)
9(b)
12
Note
Floating
interest
rate
Fixed
interest
rate
Non‐
interest
bearing
Total
Weighted
average
interest
rate
$
$
$
$
%
4,704,961
‐
‐
‐
‐
‐
‐
‐
68,585
85,543
20,000
1,000
4,773,546
85,543
20,000
1,000
1.92%
‐
‐
‐
‐
‐
2,225,921
2,225,921
‐
Floating
interest
rate
Fixed
interest
rate
Non‐
interest
bearing
Total
Weighted
average
interest
rate
$
$
$
$
%
Financial assets
Cash and cash equivalents
Trade and other receivables
Deposit
Security bond
16(a)
9(a)
9(b)
1,044,057
‐
‐
‐
‐
‐
‐
‐
392,968
66,786
20,000
1,000
1,437,025
66,786
20,000
1,000
1.72%
‐
‐
‐
Financial liabilities
Trade and other payables
12
‐
‐
1,106,980
1,106,980
‐
Based on the balances at 30 June 2017 a 1% movement in interest rates would increase/decrease the loss for the
year before taxation by $47,049 (2016: $10,440).
St George Mining Limited – Annual Report 2017
P 41
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
(b)
Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to
recognised financial assets is the carrying amount of those assets, net of any allowance for doubtful debts, as
disclosed in the statement of financial position and notes to the financial report.
The Group does not have any material credit risk exposure to any single debtor or group of debtors under financial
instruments entered into by the Group.
(c)
Net Fair Values
The carrying amount of financial assets and financial liabilities recorded in the financial statements represent their
respective net fair value and is determined in accordance with the accounting policies disclosed in note 2 to the
financial statements.
(d)
Financial Risk Management
The Group’s financial instruments consist mainly of deposits with recognised banks, investment in bank bills up to
90 days, accounts receivable and accounts payable. Liquidity is managed, when sufficient funds are available, by
holding sufficient funds in a current account to service current obligations and surplus funds invested in bank bills.
The directors analyse interest rate exposure and evaluate treasury management strategies in the context of the
most recent economic conditions and forecasts. The main risks the Group is exposed to is through its financial
instruments is the depository banking institution itself, holding the funds, and interest rates. The Group's credit
risk is minimal as being an exploration Company, it has no significant financial assets other than cash and term
deposits.
(e)
Foreign Currency Risk
The Group is not exposed to any foreign currency risk as at 30 June 2017.
(f)
Market Price Risk
The Group is not exposed to market price risk as it does not have any investments other than an interest in the
subsidiaries.
21
RELATED PARTIES
The Group has no related parties other than the 100% owned subsidiaries Blue Thunder Resources Pty Ltd and
Desert Fox Resources Pty Ltd.
At 30 June 2017 balances due from the subsidiaries were:
Australian Dollar ($)
Blue Thunder Resources Pty Ltd
Desert Fox Resources Pty Ltd
30 JUNE 2017
$
5,322,115
18,412,177
23,734,292
30 JUNE 2016
$
2,743,088
15,830,354
18,573,442
These amounts comprise of funds provided by the parent company for exploration activities. The amounts were
fully provided for as at 30 June 2017.
St George Mining Limited – Annual Report 2017
P 42
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
22
SEGMENT REPORTING
For management purposes, the Group is organised into one main operating segment, which involves the
exploration of minerals in Australia. All of the Group’s activities are interrelated, and discrete financial information
is reported to the Board as a single segment. Accordingly, all significant operating decisions are based upon
analysis of the Group as one segment.
The financial results from this segment are equivalent to the financial statements of the Group as a whole.
The accounting policies applied for internal reporting purposes are consistent with those applied in the
preparation of these financial statements.
23
JOINT VENTURES
The Group recognises that joint ventures are a key mechanism for sharing of risk on individual exploration projects.
Where appropriate for a particular project, the Group will consider a joint venture with a suitable party in order
to share the exploration risk. Those funds otherwise set aside for the project will be employed to advance another
project.
24
(a)
PARENT COMPANY DISCLOSURE
Financial Position as at 30 June 2017
Australian Dollar ($)
Assets
Current assets
Non‐current assets
Total assets
Liabilities
Current liabilities
Non‐current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
(b)
Financial Performance for the year ended 30 June 2017
Australian Dollar $
Profit (loss) for the year
Other comprehensive income
Total comprehensive income (loss)
30 JUNE 2017
$
30 JUNE 2016
$
4,925,854
24,687
4,950,541
2,252,009
‐
2,252,009
2,698,532
1,536,053
34,431
1,570,484
1,117,557
‐
1,117,557
452,927
24,142,945
430,876
(21,875,289)
2,698,532
18,277,128
352,841
(18,177,042)
452,927
30 JUNE 2017
$
(3,889,361)
‐
(3,889,361)
30 JUNE 2016
$
(6,162,547)
‐
(6,162,547)
St George Mining Limited – Annual Report 2017
P 43
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
(c)
Guarantees entered into by the Parent Entity
The parent entity has not provided guarantees to third parties as at 30 June 2017.
25
NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS
Accounting Standards issued by the AASB that are not yet mandatorily applicable to the Group, together with an
assessment of the potential impact of such pronouncements on the Group when adopted in future periods, are
discussed below:
AASB 9: Financial Instruments and associated Amending Standards (applicable for annual reporting period
commencing 1 January 2018)
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined
below) and includes revised requirements for the classification and measurement of financial instruments,
revised recognition and derecognition requirements for financial instruments and simplified requirements
for hedge accounting.
The key changes that may affect the Group on initial application include certain simplifications to the
classification of financial assets, simplifications to the accounting of embedded derivatives, upfront
accounting for expected credit loss, and the irrevocable election to recognise gains and losses on
investments in equity instruments that are not held for trading in other comprehensive income. AASB 9
also introduces a new model for hedge accounting that will allow greater flexibility in the ability to hedge
risk, particularly with respect to hedges of non‐financial items. Should the entity elect to change its hedge
policies in line with the new hedge accounting requirements of the Standard, the application of such
accounting would be largely prospective.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial
instruments it is impractical at this stage to provide a reasonable estimate of such impact.
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing on
or after 1 January 2018).
When effective, this Standard will replace the current accounting requirements applicable to revenue with
a single, principles‐based model. Apart from a limited number of exceptions, including leases, the new
revenue model in AASB 15 will apply to all contracts with customers as well as non‐monetary exchanges
between entities in the same line of business to facilitate sales to customers and potential customers.
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 the goods or services. To achieve this objective, AASB 15 provides the following
five‐step process:
‐
‐
‐
‐
‐
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
determine the transaction price;
allocate the transaction price to the performance obligations in the contract(s); and
recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group's financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
St George Mining Limited – Annual Report 2017
P 44
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017
AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB
117: Leases and related interpretations. AASB 16 introduces a single lessee accounting model that
eliminates the requirement for leases to be classified as either operating leases or finance leases. Lessor
accounting remains similar to current practice.
The main changes introduced by the new Standard are as follows:
‐
‐
‐
‐
‐
recognition of the right‐to‐use asset and liability for all leases (excluding short term leases with less
than 12 months of tenure and leases relating to low value assets);
depreciating the right‐to‐use assets in line with AASB 116: Property, Plant and Equipment in profit or
loss and unwinding of the liability in principal and interest components;
inclusion of variable lease payments that depend on an index or a rate in the initial measurement of
the lease liability using the index or rate at the commencement date;
application of a practical expedient to permit a lessee to elect not to separate non‐lease components
and instead account for all components as a lease; and
additional disclosure requirements.
The transitional provisions of AASB 16 allow a lease to either retrospectively apply the Standard to
comparatives in line with AASB 108 or recognise the cumulative effect of retrospective application as an
adjustment to opening equity at the date of initial application.
Although the directors anticipate that the adoption of AASB 16 may have an impact on the Group's financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
AASB 2014‐10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets between
an Investor and its Associate or Joint Venture (applicable to annual reporting periods commencing on or
after 1 January 2018).
This Standard amends AASB 10: Consolidated Financial Statements with regards to a parent losing control
over a subsidiary that is not a “business” as defined in AASB 3: Business Combinations to an associate or
joint venture and requires that:
‐
‐
‐
a gain or loss (including any amounts in other comprehensive income (OCI)) be recognised only to the
extent of the unrelated investor’s interest in that associate or joint venture;
the remaining gain or loss be eliminated against the carrying amount of the investment in that
associate or joint venture; and
any gain or loss from remeasuring the remaining investment in the former subsidiary at fair value also
be recognised only to the extent of the unrelated investor’s interest in the associate or joint venture.
The remaining gain or loss should be eliminated against the carrying amount of the remaining
investment.
Although the directors anticipate that the adoption of AASB 2014‐10 may have an impact on the Group's
financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
St George Mining Limited – Annual Report 2017
P 45
DIRECTOR’S DECLARATION
In the opinion of the Directors of St George Mining Limited (“the Company”)
(a)
The financial statements and the notes and the additional disclosures included in the directors’ report
designated as audited of the Group are 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 2017 and of its
performance for the year ended that date; and
(ii)
Complying with Accounting Standards and Corporations Regulations 2001, and:
(b)
(c)
There are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
The financial statements and notes comply with International Financial Reporting Standards as disclosed
in note 2.
This declaration has been made after receiving the declarations required to be made to the directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2017.
Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act
2001.
On behalf of the Board
John Prineas
Executive Chairman
Dated: 20 September 2017
Perth, Western Australia
St George Mining Limited – Annual Report 2017
P 46
P 47 P 48 P 49 P 50 P 51 SHAREHOLDER INFORMATION
1
Distribution of holders
As at 20 September 2017 the distribution of shareholders was as follows:
Ordinary shares
Size of holding
1 – 1,000
1,001 –5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
2
Voting rights
Number of holders
148
426
625
1,479
388
3,066
There are no restrictions to voting rights attached to the ordinary shares. On a show of hands every member
present in person will have one vote and upon a poll, every member present or by proxy will have one vote each
share held.
3
Substantial shareholders
The company has no substantial shareholders who have notified the Company in accordance with Section 671B
of the Corporation Act 2001.
4
Top 20 shareholders
The names of the 20 largest shareholders on the share register as at 20 September 2017, who hold 27.40% of
the ordinary shares of the Company, were as follows;
Shareholder
HSBC Custody Nominees (Australia) Limited
John Prineas
Impulzive Pty Ltd
Mr Paul Sumade Lee
Oceanic Capital Pty Ltd
AWD Consultants Pty Ltd
Mrs Karen Dawson
Impulzive Pty Ltd
Mr Christopher Bell + Mrs Jennifer Bell
Citicorp Nominees Pty Ltd
Allcap Pty Ltd
Yarandi Investments Pty Ltd
Mr Brendan James Warner
Chaos Investments Pty Limited
Gold Elegant (HK) Investment Limited
Northmead Holdings Pty Ltd
Mr Jeremy James Coleman
Mr Paul Malcolm Koshy
Payzone Pty Ltd
Riverfront Nominees Pty Ltd
Number
8,816,096
8,355,021
8,354,990
4,770,833
4,200,000
3,500,000
3,144,470
3,096,480
2,913,839
2,528,940
2,385,433
2,325,000
2,100,700
2,000,000
2,000,000
2,000,000
1,796,540
1,488,485
1,430,000
1,400,000
St George Mining Limited – Annual Report 2017
P 52
SHAREHOLDER INFORMATION
5
Consistency with business objectives
The Company has used its cash and assets in a form readily convertible to cash that it had at the time of listing
in a way the consistent with its stated objectives.
St George Mining Limited – Annual Report 2017
P 53
TENEMENT INFORMATION
St George Mining Limited mineral interests as at 20 September 2017
TENEMENT SCHEDULE – EAST LAVERTON/LAKE MINIGWAL:
Tenement ID
Registered Holder
Location
E39/0981
E39/0982
E39/0985
E39/1064
E39/1066
E39/1229
E39/1461
E39/1472
E39/1473
E39/1474
E39/1475
E39/1476
E39/1467
E39/1492
E39/1518
E39/1519
E39/1520
E39/1521
E39/1549
E39/1572
E39/1608
E39/1666
E39/1667
E39/1722
E39/1779
E39/1852
E39/1677
E39/1678
E39/1877
Desert Fox Resources Pty Ltd
East Laverton Property
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
Desert Fox Resources Pty Ltd
St George Mining Limited
St George Mining Limited
St George Mining Limited
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
East Laverton Property
Lake Minigwal Project
Lake Minigwal Project
Lake Minigwal Project
St George Mining Limited – Annual Report 2017
P 54
TENEMENT INFORMATION
TENEMENT SCHEDULE – MT ALEXANDER/HAWAII:
Tenement ID
Registered Holder
Location
E29/638
E29/548
E29/954
E29/962
ELA29/972
ELA29/1026
E36/741
E39/851
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Blue Thunder Resources Pty Ltd
Mt Alexander
Mt Alexander
Mt Alexander
Mt Alexander
Mt Alexander
Mt Alexander
Hawaii
Hawaii
St George Mining Limited – Annual Report 2017
P 55
St George Mining Limited ACN 139 308 973 Level 1, 115 Cambridge Street, PO Box 1305, West Leederville WA 6007
www.stgeorgemining.com.au P 08 9322 6600 F 08 9322 6610
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