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2023 Report2014 Annual Report
CONTENTS
CORPORATE DIRECTORY .............................................................................................................................................. 2
CHAIRMAN’S REPORT .................................................................................................................................................. 3
OPERATIONS REPORT .................................................................................................................................................. 4
DIRECTORS’ REPORT .................................................................................................................................................. 28
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS ............................................................................... 39
CORPORATE GOVERNANCE STATEMENT ................................................................................................................... 40
DIRECTORS’ DECLARATION ........................................................................................................................................ 46
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ............................................................... 47
BALANCE SHEET ......................................................................................................................................................... 48
STATEMENT OF CHANGES IN EQUITY ........................................................................................................................ 49
STATEMENT OF CASH FLOWS .................................................................................................................................... 50
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................................... 51
INDEPENDENT AUDIT REPORT ................................................................................................................................... 68
ADDITIONAL SHAREHOLDER INFORMATION ............................................................................................................. 70
TENEMENT SCHEDULE ............................................................................................................................................... 72
2014 Annual Report | Page 1
CORPORATE DIRECTORY
Directors
William Plyley (Non-Executive Chairman)
Christopher Cairns (Managing Director)
Jennifer Murphy (Technical Director)
Peter Ironside (Non-Executive Director)
Company Secretary
Amanda Sparks
Registered and Principal Office
First Floor, 168 Stirling Highway
Nedlands Western Australia 6009
Telephone: 08 9287 7630
08 9389 1750
Facsimile:
Web Page: www.stavely.com.au
Email: info@stavely.com.au
ABN
33 119 826 907
Share Registry
Computershare Investor Services Pty Ltd
45 St Georges Terrace
Perth Western Australia 6000
Telephone: 1300 850 505
Facsimile: 08 9323 2033
Solicitors
Steinepreis Paganin
Level 4, Next Building
16 Milligan Street
Perth Western Australia 6000
Bankers
ANZ Bank
32 St Quentins Avenue
Claremont Western Australia 6010
Stock Exchange Listing
ASX Limited
Level 40, Central Park, 152-158 St Georges Terrace
Perth Western Australia 6000
ASX Code: SVY
Auditors
BDO Audit (WA) Pty Ltd
Chartered Accountants
38 Station Street
Subiaco Western Australia 6005
2014 Annual Report | Page 2
CHAIRMAN’S REPORT
Dear Shareholders
I am pleased to present Stavely’s 2014 Annual Report and to reflect on what has been an active, successful and
rewarding year for the Company and our shareholders.
In May, Stavely became the first of just a handful of junior resource companies to successfully complete an Initial
Public Offering (IPO) and list on the Australian Securities Exchange (ASX) this year. The success of our $6 million
IPO in the face of the toughest market conditions seen in the resource sector in decades is a reflection not just of
the quality of our assets and our team, but also of the way the IPO was structured.
Importantly, we were able to raise sufficient funds to immediately commence meaningful exploration
programmes at both our key projects – the highly prospective and 100 per cent owned Stavely and Ararat Projects
in western Victoria, both of which have a demonstrated strong endowment of copper and gold mineralisation.
Despite unusually wet weather conditions, Stavely was able to achieve all of the outcomes we had planned for the
year at both these projects.
Field programmes commenced almost immediately after listing to test multiple copper-gold porphyry targets at
the Stavely Project and extensions to a very attractive volcanogenic massive sulphide (VMS) copper-gold deposit
at the Ararat Project.
It was not easy to begin drilling in the mud generated by Victoria’s wet season with twice the average rainfall
recorded in June this year. Notwithstanding this, results have begun to flow with geological observations from the
drilling to date confirming that the models developed by the Stavely Minerals’ team are valid and that the targets
are as exciting as we expected.
Our in-house team – led by our Managing Director Chris Cairns – has substantial expertise and extensive
experience in all aspects of the mineral industry, which has allowed them to achieve more than most. I can’t think
of a more experienced group of individuals to take on the challenge of uncovering potentially one of Australia’s
next significant mineral discoveries.
They have also surrounded themselves with top-ranked consultants to ensure that their exploration strategies
and geological interpretations are correct, and aligned themselves with contractors who will ensure that the plan
is implemented in a timely, and cost-effective manner.
To ensure the business is achieving its goals and that our funds are directed in a prudent and focused manner,
your board has established a corporate governance structure similar to larger companies. This structure is
designed to ensure that, to the maximum extent possible, our resources are applied to field programmes which
have the greatest chance of creating shareholder value, and that we are well prepared to take advantage of future
growth opportunities.
With high quality, 100 per cent owned projects encompassing a strategic mix of exploration targets including both
copper and gold, the expertise and experience to unlock the value of these assets, and a clear strategy to create
shareholder value, I am confident that Stavely Minerals has a very bright future.
In addition, we have been able to hit the ground running – generating encouraging early exploration results that
point to an exciting year ahead.
In conclusion, I would like to thank all the members of our team for their hard work and dedication during the
year. I would also like to thank our shareholders for the support and faith they have put in us.
I have a sense that the next year holds great promise for your Company and look forward to keeping you informed
of our progress.
WILLIAM (BILL) PLYLEY
2014 Annual Report | Page 3
OPERATIONS REPORT
RC Drill Rig at Mt Ararat.
anomaly
represent
review
of
was
chargeability
interpreted
a
to
response from a phyllic silica-
sericite-pyrite alteration zone and
expected to occur spatially above
the
target copper-gold quartz
stockwork zone yet to be drill
Pre-IPO analysis of
tested.
infrared spectral data
HyLogger
confirmed
alteration
clay
assemblages consistent with a
high-level of exposure in a well-
developed porphyry copper-gold
and
system.
A
interpretation
pro-
alteration
grade/retrograde
assemblage and vein types in drill
core by porphyry consultants
Corbett and Menzies Pty Ltd also
is strong
concluded that there
indicate untested
evidence
to
porphyry
style
Cu-Au
mineralisation at depth below the
Thursday Gossan project area.
Further, sulphur
isotope data
provided by Geoscience Australia
in early 2014 demonstrated a
broad zonation from neutral to
mildly negative
isotope values
peripheral to the alteration system
at Thursday’s Gossan to strongly
(-6.4‰ d34
negative
sulphur) proximal to the untested
IP chargeability anomaly. Strongly
values
Overview
EXPLORATION
During the year, pre-IPO, Stavely
Minerals conducted a number of
surface exploration programmes
at both the Ararat and Stavely
Projects with the objective of
having the targets ready to drill
immediately post stock exchange
listing.
At the Ararat Project, the ground
EM survey successfully identified
an EM conductor at the northern
end of the Mount Ararat copper-
gold-zinc VMS deposit with the
conductor modelled to continue
to 500 metres depth, while at
Carroll’s and South Pole
two
further ground EM conductors
were modelled to extend to 800
metres and 500 metres depth
respectively.
Drilling commenced at the Ararat
Project in June 2014 targeting the
northern extensions of the Mount
Ararat
VMS
copper-gold-zinc
deposit. RC drill holes have
intersected variable widths of
pyrite-pyrrhotite-chalcopyrite-
sphalerite sulphide mineralisation
as predicted by ground EM
modelling. RC drilling of ground
EM conductors at the Carroll’s
prospect, located north of the Mt
Ararat
has
intersected magnetite, pyrite,
pyrrhotite and chalcopyrite at the
depths expected in the EM model.
This
very
subsequent
for
encouraging
down-hole EM surveying and
targeting of massive sulphide
mineralisation at depth.
considered
deposit,
VMS
is
At the Stavely Project an IP survey
completed pre-IPO indicated the
presence of a strong chargeability
feature centred at 250 metres
below surface (and unconstrained
at depth) at the Thursday’s Gossan
The
porphyry
prospect.
results
isotope
indicate
negative
an
oxidised magmatic fluid source
with the zonation and strongly
negative
result being
consistent with several known
copper-gold rich ‘alkalic’ porphyry
systems
including Didipio, El
Teniente, Cadia East and the E26
porphyry at North Parkes.
confirmed
contention
The results of pre-IPO exploration
activities conducted by Stavely
the
Minerals had
Company’s
that
previous explorers had failed to
level of
the high
recognise
exposure of the Thursday’s Gossan
porphyry complex and that there
was
for
copper-gold
mineralised
porphyry(s) at depth. The Stavely
area is compared to the Cadia
Valley and North Parkes districts at
an early stage of evaluation.
potential
untested
Deep diamond drill testing of the
Thursday’s Gossan porphyry target
commenced immediately post-IPO
in May 2014, with first hole
completed by year end. The drill
hole was designed to test a
combined geologic target and the
flank
IP
chargeability anomaly.
geophysical
of
a
2014 Annual Report | Page 4
the abundant
The drill core from the first hole at
Thursday’s Gossan was visually
dynamic, demonstrating multiple
phases of alteration and veining
with
sulphides
necessary for a well-mineralised
porphyry system.
is
considered an outstanding success
as it is a major step forward in
vectoring into what should be the
best-developed
copper-gold
mineralisation in the very large
Thursday’s
porphyry
Gossan
system.
The hole
At the end of the year drilling was
in progress with the objective of
providing a vector to the expected
better developed
copper-gold
mineralisation, proximal to the
target potassic alteration zones at
the
and
Thursday’s Gossan
Junction porphyry targets.
CORPORATE
The Initial Public Offering (IPO)
offer closed on 23rd April 2014
without extension, after Stavely
Minerals
(Stavely
Limited
Minerals) accepted subscriptions
for $6.1 million, slightly over the
IPO target of $6 million. The
Company secured over 500 new
shareholders, well above the 350
minimum required for an IPO with
the ownership structure Stavely
Minerals has. Stavely Minerals
listed on the ASX on the 7th May
2014 becoming the only junior
mineral exploration company to
debut on the stock exchange in
the first half of 2014 (excluding
one other company who were
suspended from trading).
Review of
Operations
Background
In January 2013, Stavely Minerals
(previously Northern Platinum Pty
Ltd) agreed to purchase the Ararat
OPERATIONS REPORT
Asset
and Stavely Projects from BCD
Metals Pty Ltd (a subsidiary of
BCD Resources NL) (BCD Metals).
Agreement
Sale
The
between the Company and BCD
Metals
this
acquisition was executed on 25
March 2013 and completion of
the acquisition occurred on 17
May 2013.
respect
of
in
The Ararat and Stavely Projects
are
located approximately 200
kilometres west of Melbourne and
are respectively just west of the
regional centre of Ararat, Victoria
and just east of the regional town
of Glenthompson (Figure 1).
The Projects include exploration
tenements with a total area of 193
square kilometres. The Company
has made applications
for an
additional 583 square kilometres
of tenure of which 490 square
kilometres has been granted,
however, some of the outstanding
applications are
in competition
with applications made by other
companies. The total area owned
and applied for by the Company is
The
776
Projects
excellent
have
infrastructure and access with
paved highways, port connection
by railroad and a 62 MW wind
farm located 8 kilometres from
the Stavely Project. The primary
land use is grazing and broad acre
cropping.
kilometres.
square
Figure 1. Ararat and Stavely Project Location Plan.
2014 Annual Report | Page 5
OPERATIONS REPORT
Regional Geology
The Ararat and Stavely Projects,
while only 40 kilometres apart,
are hosted within materially
different geologic domains (Figure
2).
The Ararat Project is hosted in the
Stawell – Bendigo zone of the
Lachlan Fold Belt and is comprised
of Cambrian mafic volcanic and
pelitic sedimentary units of the
Moornambool
Metamorphics
which were metamorphosed to
greenschist to amphibolite facies
during the Silurian period.
of
by
the
of
The Stavely Project is hosted in
Delamerian
aged
Cambrian
Orogeny submarine mafic and
intermediate volcanics and tuffs
which were overlain by quartz-rich
turbidite
the
sequences
Glenthompson Sandstone. These
sequences were deformed in the
seismic
late-Cambrian. Recent
Victorian
traverses
State
Department
Development,
and
Business
Innovation
in western Victoria
have supported the interpretation
of an Andean-style convergent
margin environment
the
development of the buried Miga
Arc beneath the Stavely Volcanic
Complex and environs (Cayley, in
prep, pers. comm., 2013). This
regional architecture is considered
conducive to the formation of
fertile copper / gold mineralised
porphyry systems (Crawford et al,
2003) as is the case with the
MacQuarie Arc
in New South
Wales, which hosts the Cadia
Valley and North Parkes copper-
gold
porphyry
complexes.
mineralised
for
Lachlan
The
Fold Belt and
Delamerian sequences are in fault
Figure 2. Geology of south-eastern Australia.
through
large-scale
contact
thrusting along the east dipping
Moyston Fault (Cayley and Taylor,
2001).
Unconformably lying on top of
both these domains by low-angle
décollement is a structural outlier
of the younger Silurian fluvial to
to
shallow marine
mudstone
the
Grampians Group.
sequences of
sandstone
Mineral Resources
The Ararat and Stavely Projects
host Mineral Resources reported
in compliance with the 2012 JORC
Code:
(a) Ararat Project Mineral Resource
In the Ararat Project, the Mount
Ararat prospect hosts a Besshi-
style VMS deposit with an
estimated (using a 1% Cu lower
cut-off) – 1.2Mt at 2.0% copper,
0.5 g/t gold, 0.4% zinc and 6 g/t
silver for a contained 24kt of
copper, 18,000 ounces of gold,
4.8kt of zinc and 200,000 ounces
of silver (Table 1).
2014 Annual Report | Page 6
OPERATIONS REPORT
Table 1 The Mount Ararat Inferred Resource Estimate
Reporting Cut
(Cu%)
0.5
1.0
2.0
Mineralisation
Tonnes (KT)
Cu (%)
Au (ppm)
Ag(ppm)
Zn (%)
Oxide/Weathered
Supergene
Primary >=2m
Primary <2m
Total Inferred
Oxide/Weathered
Supergene
Primary >=2m
Primary <2m
Total Inferred
Oxide/Weathered
Supergene
Primary >=2m
Primary <2m
Total Inferred
310
80
290
770
1450
220
80
280
620
1200
70
50
140
160
420
1.5
2.3
2.3
1.7
1.8
1.7
2.5
2.4
1.9
2.0
2.6
2.9
3.1
2.9
2.9
0.4
0.5
0.5
0.4
0.4
0.4
0.5
0.6
0.5
0.5
0.7
0.7
0.8
0.6
0.7
2.9
4.7
6.4
5.7
5.2
3.2
4.9
6.6
6.3
5.7
4.7
5.3
7.3
8.6
7.1
0.2
0.3
0.5
0.4
0.3
0.2
0.3
0.5
0.4
0.4
0.2
0.3
0.5
0.6
0.5
Table shows rounded estimates. This rounding may cause apparent computational discrepancies. Significant
figures do not imply precision. Nominal copper grade reporting cuts applied. Four material types reported as
varied economic factors will be applicable to the deposit base on reported material types.
(b)
Stavely Project Mineral Resource
In the Stavely Project, at the Thursday’s Gossan prospect, a near surface secondary chalcocite enriched blanket
with an estimated (using a 0.2% Cu grade lower cut-off) – 28Mt at 0.4% copper for 110kt of contained copper
(Table 2).
Table 2 The Thursday Gossan Chalcocite Copper Inferred Resource Estimate
Table shows rounded estimates. This rounding may cause apparent computational discrepancies. Significant
figures do not imply precision. Nominal copper grade reporting cuts applied. Three mineralised thicknesses
reported as varied economic factors are likely to be applicable to each.
2014 Annual Report | Page 7
OPERATIONS REPORT
In accordance with the 2012 JORC
Code, all criteria for sections 1, 2
and 3 of the JORC Code Table 1
and 2 are reported in Appendices 1
and 2.
Ararat Project
The Besshi-style VMS copper-gold-
zinc-silver mineralisation has been
identified over a 350 metre strike
extent (open at depth) at Mount
is at the extreme
Ararat and
southern end of a 4 kilometre long
domain
versatile
time
electromagnetic
(VTEM)
conductivity anomaly (Figure 3).
survey
The Mount Ararat copper deposit,
the Carroll’s prospect and the
South Pole prospect lie on a small
portion of a prospective exhalative
horizon on the contact between
the Carrolls Amphibolite and the
Lexington Schist (Cayley and Taylor,
2001) that includes other historic
copper production occurrences
including the Borbidge and the
Carrolls copper workings, located
approximately 2 kilometres south
and north of the Mount Ararat
copper deposit respectively. This
horizon is interpreted to continue
for approximately 15 kilometres
within
Project
tenements and presents regional
exploration
reconnaissance
opportunities for Stavely Minerals
(Figure 4).
Ararat
the
Stavely Minerals completed a
ground electromagnetic
survey
over
conductivity
the VTEM
anomaly in July 2013. The ground
‘walk-up’
EM survey generated
drill targets along strike to the
the existing Mineral
north of
Resource.
conductivity
Strong
anomalies to the north of the
known deposit are coincident with
soil geochemical anomalies in both
copper and zinc and reported
zones of strongly haematitic and
outcrops
gossanous
limonitic
Figure 3. Mount Ararat VTEM conductivity anomaly and copper soil geochemistry
(coloured dots). Note the blue rectangle contains the extent of the identified
Mineral Resource.
(Cayley and Taylor, 2001) and are
effectively untested by drilling.
The ground EM conductor at the
Mount Ararat Mineral Resource is
modelled
to 500
to continue
metres depth while the untested
Carroll’s and South Pole ground EM
conductors are modelled to extend
to 800 metres and 500 metres
depth respectively (Figure 5).
2014 Annual Report | Page 8
OPERATIONS REPORT
Figure 4. Ararat regional copper prospective horizon.
RC drilling commenced at the
Ararat Project in June 2014 with
two objectives:
1. Test the northern extensions to
the known Mt Ararat copper-
as
gold-zinc mineralisation
indicated
EM
ground
by
conductors extending north.
2. Test previously undrilled EM
conductors at
the Carroll’s
prospect generated by recent
ground EM programmes. The
aim of this component of the
RC
-
comprising 200 metre deep
programme
drilling
-
drill holes at 200 metre
spacings along the 3-kilometre
strike extent of
the EM
is to provide
conductors
access for the systematic use of
down-hole EM surveys which
are expected to identify more
conductive zones at depth.
These conductive zones are
likely to indicate the presence
of well-developed massive
sulphide
copper-gold-zinc
mineralisation which will be
tested by follow-up diamond
drilling.
(i) Mt Ararat Resource
At the end of June 2014 the first
RC drill hole (SARC001) into the
northern extensions to the known
copper-gold-zinc mineralisation
had been completed (Figure 5). RC
pyrite,
intercepted
drilling
pyrrhotite
chalcopyrite
and
(copper sulphide) mineralisation at
the expected depth. Assay results
were pending at the end of June.
(ii) Carroll’s Prospect
Two RC holes (SARC002 – 003) had
been completed at the Carroll’s
prospect at the end of June 2014
(Figure 5). The two drill holes
completed to test the ground EM
conductors intercepted magnetite,
pyrite, pyrrhotite ± chalcopyrite
with minor graphite at the depths
indicated in the EM models. This
has provided confidence that the
extensive EM
conductors are
related to sulphide mineralisation
and not un-mineralised graphitic
sediment. Assay
results were
pending at the end of June.
2014 Annual Report | Page 9
OPERATIONS REPORT
Figure 5. Ararat Project Drill Collar Location Plan on ground EM conductive plates
showing the identified Mineral Resource area (red), the Carroll’s prospect (blue)
and the South Pole prospect (green). Existing drill hole collars are shown as
circles and include traverses of shallow soil auger holes.
Stavely Project
The Stavely Project is centered on
the Mt Stavely Volcanic Complex
(MSVC), a belt of medium-K, calc-
alkaline
and
intrusive rocks of Cambrian age.
volcanics
felsic
The MSVC is tectonically complex.
Most contacts are interpreted to
be faulted, with a strong north-
northwest orientated structural
fabric. The belt is cut by a number
including a
of cross structures,
an
for
area
and may
major NW orientated structure
that passes through the Thursday’s
be
Gossan
apparent
responsible
deviation
in the belt north of
Thursday’s Gossan (Figure 6). A U-
Pb zircon age from the Towanway
Tuff of 495±5Ma (Stuart-Smith and
Black, 1999) correlates closely with
dates for the Mt Read Volcanics
(MRV) in western Tasmania. This,
along with the similar calc-alkaline
composition,
suspected
presence of boninites and similar
rare earth Element (REE) trends
suggest that the MSVC and the
MRV may be correlates of each
other.
the
The Stavely Project is considered
to present opportunities
for
discovery of porphyry copper-gold
and VMS base-metals +/- gold
deposits. For details of
these
exploration targets see ‘‘Stavely
Minerals Limited – Prospectus’
on
17 March
dated
www.stavely.com.au.
2014
the
and
year
analysis
first-time
During
of
processing
HyLogger data for drill core from
11 diamond drill holes from the
Thursday’s Gossan prospect was
conducted. The HyLogger data
clearly demonstrates the high-level
assemblage.
clay
indicates
Interpretation
the
likelihood
a mineralised
porphyry system at depth below
the
with
comparisons to the upper portions
of the Prince Lyell copper-gold
deposit (Halley, 2013).
alteration
current
drilling
of
2014 Annual Report | Page 10
OPERATIONS REPORT
Re-interpretation of the structural
controls on mineralisation indicate
a major
northwest oriented
structure which is likely to have
been a
long-lived control on
porphyry emplacement at depth
and control the distribution of
classical high-grade copper-gold
mineralised ‘D’ veins as leakage on
major structures (Figure 7).
In February 2014 Geoscience
Australia released the results of
their sulphur isotope study on drill
core samples at Thursday’s Gossan.
isotope data
The d34 sulphur
demonstrates a broad zonation
from near neutral isotope values to
mildly negative values from the
peripheral propyllitic alteration to
strongly negative values to -6.4‰
d34 sulphur from 300m depth in
VSTD001
(Geoscience Australia,
2014) (Figure 8). The strongly
negative
indicating an
oxidised magmatic fluid source, is
located proximal to the untested IP
is
chargeability anomaly.
considered a useful vector towards
a potentially well mineralised
copper-gold porphyry
(Holliday
and Cook, 2007).
This
value,
Figure 6. Aeromagnetic image of the Stavely Project. Note the MSVC trending
NNW as a magnetic high through the centre of the tenement with a major NW
structure intersecting the belt in the vicinity of Thursday’s Gossan.
Corbett and Menzies Consulting
were engaged by the Company to
carry out a field base review of the
drill core and an office based
analysis of data for the Thursday’s
Gossan Project. The review and
interpretation
pro-grade/
retrograde alteration assemblages
in drill core
and vein
concluded that there
is strong
evidence indicating that there is
untested porphyry Cu-Au style
mineralisation at depth below the
Thursday Gossan project area
(Corbett and Menzies, 2013).
types
of
to
During the year a dipole-dipole
induced polarisation (IP) survey
was conducted with the objective
of providing information on the
resistivity structure of the MSVC
and
anomalous
identify
chargeable sources associated with
the Thursday’s Gossan, Junction
Stavely porphyry
and Mount
systems. The IP data indicated a
strong
feature,
chargeability
centred at 250 metres and
unconstrained at depth, at the
Thursday’s Gossan prospect which
was untested by drilling.
2014 Annual Report | Page 11
OPERATIONS REPORT
Figure 7. Conceptual interpretation of mineralisation and alteration seen in SNDD001 with inferred copper-gold
mineralised porphyry target at depth.
In June 2014 the first diamond drill
hole SMD001 at the Thursday’s
Gossan prospect was completed to
a depth of 522 metres (Figure 8).
This was the first of four deep
diamond holes planned at the
Thursday’s Gossan porphyry and
the
two holes
Junction
porphyry.
drilling was
designed
test a combined
geologic target and the flank of a
chargeability
geophysical
IP
chargeability
anomaly.
The
anomaly was
interpreted as a
response to phyllic (silica-sericite-
pyrite) alteration likely to occur
above, and as an overprint on, the
at
The
to
main potassic altered core of the
porphyry which is expected to host
the best developed copper-gold
the
mineralisation
Thursday’s
porphyry
system.
Gossan
within
is
SMD001
interpreted to have
progressed from the peripheral
propylitic altered country
rock
comprising altered andesite lavas
and tuffs with occasional sulphidic
pyrite-quartz ± chalcopyrite
‘D’
veins of up to 1 metre widths into
inner-propylitic alteration with
secondary magnetite and epidote
at a depth of 210 metres. From
270 metres to 360 metres depth,
pyrite
propylitic
alteration
comprising
the
is
overprinted by a moderate phyllic
alteration
(silica-sericite-pyrite)
with classical porphyry ‘B’ quartz
sericite
veins
selvedges
±
and
chalcopyrite, bornite and ?covellite
sulphide cores. Massive sulphide-
quartz
‘D’ veins with pyrite ±
chalcopyrite, bornite, molybdenite,
are
sphalerite
common. At 420 metres depth,
the drill hole intersected a fault
and on the other side of this
structure the alteration returned
to being predominantly propylitic
with fracture controlled pyrite and
and hematite
2014 Annual Report | Page 12
OPERATIONS REPORT
lesser
mineralisation.
chalcopyrite
sulphide
The observed phyllic alteration
overprint with abundant ‘D’ and ‘B’
veins is typical of a mineralised
porphyry system. The alteration
and mineralisation observed in this
drill hole is consistent with the IP
chargeability anomaly and
is
considered the best looking hole in
the Thursday’s Gossan prospect to
date. The drill holes in the current
are
intended
programme
to
systematically vector towards the
expected well-developed copper-
gold mineralisation. Assay results
were pending at the end of June.
Figure 8. Stavely Project - Thursday's Gossan Drill Collar Location Plan over PIMA infrared spectrometer clay
mineral mapping and interpreted alteration zonation at the Thursday’s Gossan prospect showing the outline of
the chalcocite-enriched Mineral Resource (red outline) and diamond drill hole collar locations (after Spencer,
1996). Also shown are the Geoscience Australia sulphur isotope data points effectively being near neutral in the
distal holes to the south and gradually becoming more strongly negative towards the north interpreted to be
demonstrating a stronger oxidized magmatic fluid source.
2014 Annual Report | Page 13
OPERATIONS REPORT
JORC Compliance Statement
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore
Reserves is based on information compiled by Mr Chris Cairns, a Competent Person who is a Member of the
Australian Institute of Geoscientists. Mr Cairns is a full-time employee of the Company. Mr Cairns is the Managing
Director of Stavely Minerals Limited, is a substantial shareholder of the Company and is an option holder of the
Company. Mr Cairns has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of
the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Cairns consents
to the inclusion in the report of the matters based on his information in the form and context in which it appears.
With respect to reporting of the Mineral Resources at the Mt Ararat VMS copper-gold-zinc deposit and Thursday’s
Gossan chalcocite copper deposit, the information is extracted from the report entitled “Stavely Minerals Limited –
Prospectus” dated 17 March 2014 and is available to view on www.stavely.com.au. The Company confirms that it is
not aware of any new information or data that materially affects the information included in the original market
announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical
parameters underpinning the estimates in the relevant market announcement continue to apply and have not
materially changed. The Company confirms that the form and context in which the Competent Person’s findings are
presented have not been materially modified from the original market announcement.
Bibliography
Australian Stratigraphic Names Database, 2012, Geoscience Australia.
Bastrakov, E. 2014. Stavely Regional Drilling Project, western Victoria: sulfur isotopic fingerprinting of Cambrian
copper systems. http://www.ga.gov.au/about-us/news-media/minerals-alert.html#e
Cayley, R.A., 1988, The structure and metamorphism of the Mount Ararat region Victoria. B.Sc. (Hons) thesis,
University of Melbourne, Melbourne (unpubl.).
Cayley, R.A and Taylor, D.H., 2001, Ararat: 1:100 000 map area geological report. Geological Survey of Victoria Report
115.
Crawford, A.J., 1988, Cambrian. in J.G. Douglas & J.A. Ferguson (eds.) Geology of Victoria. Geological Society of
Australia, Victorian Division, Melbourne, page 37- 62.
Corbett, G., 2012, Corbett, G. J., 2012 Comments on the potential for the Mount Stavely Volcanics to host porphyry
Cu-Au mineralisation. Unpublished report to the Geological Survey of Victoria, June 2012.
Corbett, G. & Menzies, D., 2013, Review of the Thursdays Gossan Project, Victoria for Northern Platinum Pty Ltd.
Internal company report.
Crawford, A.J., Cayley, R.A., Taylor, D.H., Morand, V.J., Gray, C.M., Kemp. A.I.S., Wohlt, K.E., Vandenberg, A.H.M.,
Moore, D.H., Maher, S., Direen, N.G., Edwards, J., Donaghy, A.G., Anderson, J.A., and Black, L.P., 2003,
Neoproterozoic and Cambrian continental rifting, continent-arc collision and post-collisional magmatism. in
Evolution of the Palaeozoic Basement. Geological Society of Australia, Sydney, Australia, pages 73 -93.
Halley, S., 2013, Interpretation of HyLogger Spectral Data from the Stavely Volcanic Belt, Western Victoria for
Northern Platinum Pty Ltd. Internal company report.
Hackman and Associates Pty Ltd., 2013a, Thursday Gossan Chalcocite Copper Deposit, Victoria, Australia 2013
Resource Estimate Report.
Hackman and Associates Pty Ltd., 2013b, Mount Ararat Copper Deposit, Victoria, Australia 2013 Resource Estimate
Report.
Holliday, J.R., and Cooke, D.R., 2007, Advances in Geological Models and Exploration Methods for Copper ± Gold
Porphyry Deposits. in Proceedings of Exploration 07: Fifth Decennial International Conference on Mineral
Exploration, B Milkereit (ed), pages 791-809.
Spencer, A.A.S., 1996, Geology and Hydrothermal Alteration of Thursdays Gossan Porphyry System, Stavely, Victoria
BSc (Hons) Thesis La Trobe University (Unpublished).
Stuart-Smith, P.G. & Black, L.P., 1999. Willaura, sheet 7422, Victoria, 1:100 000 map geological report. Australian
Geological Survey Organisation Record 1999/38.
2014 Annual Report | Page 14
OPERATIONS REPORT
Appendix 1: Mt Ararat Mineral Resource Estimate
The Mount Ararat May 2013 Inferred Resource Estimate is an inverse distance squared Cu, Au, Ag and Zn estimate of
the planar, steeply dipping VMS style mineralisation of the deposit and is tabulated below. The estimate was
undertaken, classified and reported according to the guidelines set out in The Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserve (the JORC Code, 2012 Edition).
The Mount Ararat Inferred Resource Estimate:
Table shows rounded estimates. This rounding may cause apparent computational discrepancies. Significant
figures do not imply precision. Nominal copper grade reporting cuts applied. Four material types reported
as varied economic factors will be applicable to the deposit base on reported material types.
The estimate:
Is based on historic drilling data of unknown reliability and quality however there are no obvious reasons to
question that the holes were drilled to test a discrete steeply dipping body of basemetal mineralisation.
Extends for a strike length of 830m (towards 335deg), vertically for 350m and ranges mostly between 1m
and 3m thick (total massive + sub-massive + stringer mineralisation). The mineralisation is modelled
between 4m and 14m thick in the upper 50m (this may be real, due to supergene actions or introduced due
to the suspected wet/difficult RC drilling conditions).
Is underpinned by 266 Cu assays from 55 holes (243 nominal 1m composites). High grade restrictions are
applied to the Cu, Au, Ag and Zn grade interpolations (55m radius of influence). A tonnage factor of
3.17g/cc was applied to all mineralised blocks.
Reconciles well both statistically and spatially with the source assay data.
Was undertaken by Duncan Hackman who is a member of the Australian Institute of Geoscientists and has sufficient
experience relevant to the style of mineralisation and type of deposit under consideration and to the activity
undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012 Edition).
2014 Annual Report | Page 15
OPERATIONS REPORT
Sampling Techniques and Data
Criteria
Sampling techniques
Explanation
Resource estimate underpinned by diamond drilling (DD) and reverse
circulation drilling (RC) drilling samples.
Drilling techniques
Drilling details for the Mount Ararat resource drillhole dataset
Drill sample recovery
No detailed information or data:
Historic reports state that diamond holes had relatively low core recoveries
in the weathered and oxidized mineralized zone.
Logging
lithological drill logs utilised.
Sub-sampling
sample preparation
techniques
and
Quality of assay data and
laboratory tests
Pennzoil: Half-core samples were taken from core showing visible
mineralisation.
Centaur Mining:
MA24 to MA38: Half-core samples were taken from core showing visible
mineralisation. Sample reduction process unknown.
MA39A to MA58: 130mm RC chips from drilling configuration utilising back-
end cross-over sub to return sample. Sample collection by splitting (details
unknown) and sample reduction process unknown.
M94_1 to M94_4: Half-core samples were taken from core showing visible
mineralisation. Sample reduction process unknown.
Beaconsfield Gold:
ARD001 to ARD004: diamond drilling – sampling method and reduction
unknown.
ARC001 to ARC006: 84mm RC chips. Sample collected by passing through 3
tiered riffle splitter. Sample reduction process unknown.
Pennzoil: A base metal suite was assayed via AAS (digestion not specified)
and Au was assayed via fire assay.
Centaur Mining:
MA24 to MA38: A base metal suite was assayed via AAS (digestion not
specified) and Au was assayed via fire assay.
MA39A to MA58: A base metal suite was assayed via AAS (digestion not
specified) and Au was assayed via fire assay.
M94_1 to M94_4: A base metal suite was assayed 4 acid digest with AAS
finish and Au was assayed via fire assay.
Beaconsfield Gold:
ARD001 to ARD004: Assay Lab – Onsite Lab Services. Cu initially by method
B101 - AR digest ICP finish. If higher than 5000ppm then A101 - Ore grade
digest (details unknown) with AA finish. Au by PE01S - 25g Fire Assay.
ARC001 to ARC006: Assay Lab – Onsite Lab Services. Cu initially by method
B101 - AR digest ICP finish. If higher than 5000ppm then A101 - Ore grade
digest (details unknown) with AA finish. Au by PE01S - 25g Fire Assay.
No quality control samples submitted with any routine samples
2014 Annual Report | Page 16
OPERATIONS REPORT
Explanation
sampling and
No available data available for analysis
Criteria
Verification of
assaying
Location of data
Drillholes originally located according to two local grids (details unknown).
Collar coordinates were converted to GDA94 zone 54S by historic workers.
Conversion details are unknown. The estimate is undertaken using the
supplied GDA94 54S grid references
GPS checking of 2 Pennzoil, 3 Centaur Mining and 4 Beaconsfield Gold hole
collar locations show holes located with acceptable accuracy for reporting of
Inferred Resources.
Within the central 500m of mineralisation (strike length):
Oxide mineralisation – drill tested on 50m centred section lines
Primary mineralisation – sparsely tested by 12 holes
Other areas and mineralisation extent tested by 8 holes
Holes drilled at 9degrees (Azimuth) to planar mineralisation.
Holes angled mostly between 50 and 70 degrees easterly. Mineralised plane
dips westerly ~60degrees
No available data to assess security
GPS checking of 9 hole collar locations
Basic checking of data integrity
Data spacing and distribution
Orientation of data in relation to
geological structure
Sample security
Audits or reviews
Reporting of Exploration Results
Criteria
Explanation
Mineral
tenure status
tenement
and
land
Exploration done by other parties
Geology
Drill hole Information
Mineralisation straddles boundary between exploration licences EL4758
(expires 28/01/2014) and EL3019 (expires 21/12/2014)
Tenements currently held by by Northern Platinum Pty Ltd
Northern Platinum have submitted an application for a retention licence
over the tenements.
Pennzoil: 12 holes drilled into mineralisation.
Centaur Mining: 38 holes drilled into mineralisation.
Beaconsfield Gold: 10 holes drilled into mineralisation
Northern Platinum: GPS checking of 9 hole collar locations
Steeply westerly dipping, single planar massive sulphide horizon (historically
described as VMS)
60 holes drilled in the prospect, 55 holes intercepted mineralisation, 5 holes
define the strike extent of mineralisation.
Collar locations verified as acceptable through field checking of 9 holes
Downhole surveys for describing hole trace and sample locations available
for 16 holes:
Assaying of those samples logged with visible sulphide mineralisation
Lithology logs available for all holes
Oxidation state available for 34 Centaur Mining holes.
Summary moisture data available for 18 Centaur Mining RC holes.
39 SG measurements taken from 4 Beaconsfield Gold holes ARD[001-004]
2014 Annual Report | Page 17
OPERATIONS REPORT
Criteria
Explanation
Data aggregation methods
Assay sample intervals:
Relationship
mineralisation
intercept lengths
between
and
widths
Composited to 1m intervals for resource estimate.
No apparent association when data assessed by drill type and mineralisation
style breakdown.
Significant relationship differences when assessing DD vs RC holes:
Smearing and/or preferential loss and/or cross-contamination of samples
may be present in RC drill sample assay dataset.
Preferential loss of friable non-mineralised material may have biased the DD
drill sample assay dataset
Both the RC and DD datasets may be preferentially weighted by material
with significantly different tenor of in situ grade
Historic cross sections and plans were reviewed
Long section thickness and drillhole trace figure:
Diagrammes
Balanced reporting
substantive exploration
Other
data
Further work
Selective sampling of holes where mineralisation observed considered
acceptable for estimating sulphide resources. Any gold or silver
mineralisation intercepted by drilling with no associated sulphides will not be
identifiable in the current dataset.
A further 53 holes have been drilled within the exploration tenements.
Mineralisation thins but is open at depth and opportunities for defining
drilling targets (thick shoots)
2014 Annual Report | Page 18
OPERATIONS REPORT
Estimation and Reporting of Mineral Resources
Criteria
Explanation
Database integrity
Site visits
Geological interpretation
Dimensions
Estimation
techniques
and
modelling
Moisture and recovery
Cut-off parameters
Mining factors or assumptions
factors
or
factors
or
Metallurgical
assumptions
Environmental
assumptions
Bulk Density
Data management protocols and provenance unknown
Limited cross checks with paper records of drill hole and assay data
Field verification of 9 hole collar locations.
Relational and spatial integrity assessed and considered acceptable.
Not undertaken by CP
Northern Platinum personnel verify existence of core. CP has viewed photos
of chip trays with mineralisation taken by Northern Platinum Personnel.
Single planar mineralised massive sulphide body interpreted and modelled
for grade interpolation.
Oxide state modelled and utilised for reporting of resource estimate.
Mineralisation extends for a strike length of 830m (towards 335deg),
vertically for 350m and ranges mostly between 1m and 3m thick (total
massive + sub-massive + stringer mineralisation). The mineralisation is
modelled between 4m and 14m thick in the upper 50m (this may be real,
due to supergene actions or introduced due to the suspected wet/difficult
RC drilling conditions)
The block model and grade estimate encompasses the extent of the
mineralisation.
Copper, gold, silver and zinc grades were interpolated into a VulcanTM non-
regular block model with 10x10x10 metre parent blocks – subblocked to
1x1x1 metre minimum block dimensions.
1m composite intervals utilised.
Grades greater than:
6%Cu,
2.50ppmAu,
15ppmAg,
1%Zn,
were restricted to inform blocks within a 55m radius of their location.
Single pass ID2 interpolation run employed utilising 400m sample search
within the plane of mineralisation.
Minimum of 20 and maximum of 40 composites utilised to estimate grade.
The Mt Ararat resource is classified as Inferred under the guidelines set out
in the 2012 JORC Code.
15 of 18 RC holes drilled by Centaur Mining encountered wet drilling through
the mineralisation. Grade profiles suggest down hole smearing of grade
(cross-contamination) in the oxide/supergene mineralisation.
Core recovery averages 85% through the oxide/weathered mineralisation,
down from >97% recorded for the supergene and primary mineralisation.
There is no information or data to assess the affect core loss has on grade.
The resource is reported by mineralisation thickness and oxidation state.
Cuts of 0.5%, 1.0% and 2.0% copper were applied. These breakdowns and
grade tonnage plots are reported to allow differing economic assessment on
the project.
Not applied, however resource is reported at 1m and 2m thicknesses and by
oxidation state to allow for assessment of both underground and open cut
mining methods.
Not evaluated as risks associated with historic data over-riding feature
affecting the confidence of the estimate.
Not evaluated as risks associated with historic data over-riding feature
affecting the confidence of the estimate.
A single tonnage factor of 3.17 tonnes/m3 was applied to all mineralisation.
2014 Annual Report | Page 19
OPERATIONS REPORT
Criteria
Classification
Audits or reviews.
Discussion of relative accuracy/
confidence
Explanation
The estimate is classified as Inferred under the JORC Code (2012 Edition).
Absence of QA/QC and important data for evaluating risk to the estimate
(such as recover and moisture versus grade) are key factors in assigning an
Inferred Classification.
No Audit or Review of estimate undertaken.
Not undertaken other than that stated under the classification section.
2014 Annual Report | Page 20
OPERATIONS REPORT
Appendix 2: Thursday’s Gossan Mineral Resource Estimate
The Thursday Gossan Chalcocite Copper August 2013 Inferred Resource estimate is an inverse distance squared Cu
estimate of the tabular sub-horizontal supergene style mineralisation of the deposit and is tabulated below. The
estimate was undertaken, classified and reported according to the guidelines set out in The Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserve (the JORC Code, 2012 Edition).
The Thursday Gossan Chalcocite Copper Inferred Resource Estimate:
Table shows rounded estimates. This rounding may cause apparent computational discrepancies. Significant
figures do not imply precision. Nominal copper grade reporting cuts applied. Three mineralised thicknesses
reported as varied economic factors are likely to be applicable to each.
The estimate:
Is based on historic drilling data of unknown reliability and quality however there are no obvious reasons to
question that the holes were drilled to test a flat lying supergene copper deposit.
Extends intermittently for a strike length of 4000m (NS) a breadth of 1500m and vertically up to 60m thick.
The model includes prospects known as Thursday Gossan Chalcocite Copper, Junction and Drysdale.
Is underpinned by 2355 Cu assays from 225 holes (1493 nominal 3m composites). Cu grades were
interpolated without any cuts or restrictions. A tonnage factor of 2.10g/cc was applied to all mineralised
blocks.
Reconciles well both statistically and spatially with the source assay data.
Was undertaken by Duncan Hackman who is a member of the Australian Institute of Geoscientists and has
sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to
the activity undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012
Edition).
2014 Annual Report | Page 21
OPERATIONS REPORT
JORC 2012 Table 1, Sections 1,2 and 3 criteria.
Section 1: Sampling Techniques and Data
Criteria
Explanation
Sampling techniques
Drilling techniques
Resource estimate underpinned by diamond drilling (DD), aircore drilling
(AC), reverse air blast drilling (RAB) and reverse circulation drilling (RC)
samples:
Pennzoil (1 RC, 14 RAB holes): 2m Samples selected where mineralisation
observed. 13 RAB holes sampled every alternate 2m intervals. No details on
sampling methods.
North (4 DD, 1 AC, 85 RAB) and Newcrest (3 DD): Diamond holes ½ core
sampled. No details on sampling of RC, RAB and Aircore holes.
Beaconsfield Gold (2 DD, 78 AC): Diamond holes ½ core sampled. Aircore
holes were sampled by spearing of material on 2m or 3m intervals where no
mineralisation was observed and on 1m intervals where mineralisation was
observed.
TGM Group (26 AC): No details.
Drilling details for the TGC resource drillhole dataset
Drill sample recovery
Recovery data available for 2 DD holes.
Logging
Sub-sampling
sample preparation
techniques
and
Quality of assay data and
laboratory tests
Lithology logs through mineralisation available for all holes.
Incomplete oxidation-state and interval colour logging (utilised to determine
base of supergene zone).
Pennzoil (1 RC, 14 RAB holes): No details on sampling and sample
preparation methodology.
North (4 DD, 1 AC, 85 RAB) and Newcrest (3 DD): No details sample
preparation methodology.
Beaconsfield Gold (2 DD, 78 AC): No information on sample preparation
methodology.
TGM Group (26 AC): No details
Pennzoil (1 RC, 14 RAB holes): A base metal suite was assayed via AAS
(digestion not specified) and Au was assayed via fire assay.
North (4 DD, 1 AC, 85 RAB) and Newcrest (3 DD): A base metal suite was
assayed via Mixed Acid digest, AAS detection and Au was assayed via fire
assay.
Beaconsfield Gold (2 DD, 78 AC): OnSite Laboratory Services (Bendigo)
analysed all samples for Cu by aqua regia digest ICP-OES detection and
repeated assays for samples returning greater than 5000ppm Cu by Mixed
2014 Annual Report | Page 22
OPERATIONS REPORT
Criteria
Explanation
Acid Digest ICP-OES detection. Au was assayed via fire assay.
TGM Group (26 AC): No details. “Cherry-picking” of best assays from
reassayed samples (85 of 160 substituted) has introduced a +10% relative
bias for 9 holes used in the resource estimate.
No QC samples were inserted into any of the sample batches from the
Thursday Gossan drilling. No laboratory QC data was made available for
assessment as part of this resource estimate.
Beaconsfield Gold undertook a limited (selective) umpire laboratory
programme (29 samples), entire residual material assaying (94 intervals) and
66 sub-sample assays of residual material (66 intervals). These projects
provide limited insight into sampling and assay reliability. This data indicates
that:
Both significant bias and precision issues are suspected in the Beaconsfield
Gold dataset (OnSite Laboratory) and that there appears to be a period of
instrument malfunction or systems/procedural breakdown at grades greater
than 3000ppm Cu at the laboratory.
The spear vs total sample dataset shows a significant relative bias in favour
of the spear sample, manifesting greatest within samples containing higher
copper grades.
Beaconsfield Gold undertook a limited (selective) umpire laboratory
programme (29 samples), entire residual material assaying (94 intervals) and
66 sub-sample assays of residual material (66 intervals). These projects
provide limited insight into sampling and assay reliability.
Holes within the Thursday Gossan area are recorded as being surveyed
under three systems: AMG66 zone 54S, MGA zone 54 and GDA94 zone 54S.
All coordinates were converted to GDA94 zone 54S by previous workers.
These conversions have not been checked by NPT or HA. The August 2013
estimate is undertaken using the supplied GDA94 54S grid references.
Beaconsfield Gold holes were located by hand held GPS. No information on
survey methods for other workers.
Area showing the thickest and highest tenor of mineralisation tested at
nominal 50m centres by predominantly vertical holes.
Areas less well mineralised tested mostly at 100m centres by vertical
drillholes
Drill orientation appropriate for testing of flat-lying mineralisation
Underlying geology indicates that primary mineralisation may be sub
vertical. Supergene mineralisation is controlled by pre-existing geology,
groundwater movement and surface/weathering events. It is unknown from
the current dataset if there is any sub-vertical fabric within the supergene
mineralisation and if so then vertical holes will not adequately sample this
feature of the mineralisation.
No available data to assess security
Basic checking of data integrity
Verification of
assaying
sampling and
Location of data
Data spacing and distribution
Orientation of data in relation to
geological structure
Sample security
Audits or reviews
Section 2: Reporting of Exploration Results
Criteria
Explanation
Mineral
tenure status
tenement
and
land
The mineralisation is situated within exploration licence EL4556 (expires
05/04/2014) which is currently held by Northern Platinum Pty Ltd. Northern
Platinum advises that the tenement is considered in good standing by the
Victorian Department of Environment and Primary Industries and that they
cannot foresee any reasons that would inhibit the tenement being renewed
for a further term in 2014.
2014 Annual Report | Page 23
OPERATIONS REPORT
Criteria
Explanation
Exploration done by other parties
Geology
Drill hole Information
Pennzoil: 1 RC, 14 RAB holes
North: 4 DD, 1 AC, 85 RAB holes
TGM Group: 26 AC holes
Beaconsfield Gold: 2 DD, 78 AC holes
Beaconsfield Gold: Resource Estimate undertaken by Coffey Mining Pty Ltd
(2008)
Supergene enrichment of hydrothermally altered host rocks, where fine
grained chalcocite and covellite have partially replaced pyrite and
chalcopyrite grains.
225 holes drilled in the prospect.
Collar locations not verified however plot within acceptable levels from
SRTM derived topographic surface.
Downhole surveys for describing hole trace and sample locations available
for 4 of 40 angled holes. 185 vertical holes drilled.
Pennzoil assayed intervals logged with visible sulphide mineralisation.
Sampling interval breakdown:
Lithology logs through mineralisation available for all holes.
Incomplete oxidation-state and interval colour logging (utilised to determine
base of supergene zone).
Summary moisture data available for 28 AC/RC holes show that all bar one
hole encountered water through the mineralised interval.
Recovery data available for 2 DD holes.
SG measurements taken from Beaconsfield Gold hole TGDD46. No mention
of drying samples. May be more akin to bulk density measurements than
dry bulk density measurements.
Assays composited to 3m for resource estimation.
Data aggregation methods
Relationship
mineralisation
intercept lengths
Diagrammes
between
and
widths
No obvious association other than, as expected with supergene
mineralisation, globally thicker mineralisation has higher tenor of copper.
No historic or client produced diagrammes available for review.
Thickness plan:
2014 Annual Report | Page 24
OPERATIONS REPORT
Criteria
Explanation
Copper grade plan:
2014 Annual Report | Page 25
OPERATIONS REPORT
Criteria
Explanation
Drillhole plan:
Balanced reporting
substantive exploration
Other
data
Further work
Selective sampling of holes where mineralisation observed considered
acceptable for estimating sulphide resources.
Alternative sampling and “cherry picking” practices assessed as having
negligible effect on global estimate but will be a limiting factor in lifting local
resources to higher than Inferred classification under the JORC Code (2012
Edition)
66 of the 225 holes terminate within mineralisation; however surrounding
holes adequately define the base of mineralisation.
A further 683 holes within and surrounding the prospect area were utilised
for defining the resource mineralisation.
Evaluation of area for discovery of styles of mineralisation other than the
defined supergene mineralisation.
Section 3: Estimation and Reporting of Mineral Resources
Criteria
Explanation
Database integrity
Site visits
Data management protocols and provenance unknown.
Limited cross checks with paper records of drill hole and assay data.
Relational and spatial integrity assessed and considered acceptable.
Not undertaken by CP
CP has viewed photos of chip trays with mineralisation taken by Northern
Platinum Personnel.
2014 Annual Report | Page 26
OPERATIONS REPORT
Criteria
Explanation
Geological interpretation
Dimensions
Estimation
techniques
and
modelling
Moisture and Recovery
Cut-off parameters
Mining factors or assumptions
factors
or
factors
or
Metallurgical
assumptions
Environmental
assumptions
Bulk Density
Classification
Audits or reviews.
Discussion of relative accuracy/
confidence
Single planar flat-lying horizon of supergene mineralisation containing areas
where mineralisation thickens and copper grade tenor increases. A 0.2%Cu
cut was utilised to domain the extents of the better mineralisation and this
domain used as a hard boundary for grade interpolation.
Extends intermittently for a strike length of 4000m (NS) a breadth of 1500m
and vertically up to 60m thick. The model includes prospects known as
Thursday Gossan Chalcocite Copper, Junction and Drysdale.
The block model and grade estimate encompasses the extent of the
mineralisation.
Copper grades were interpolated into a VulcanTM non-regular block model
with 20x20x10 metre parent blocks – subblocked to 2.5x2.5x2.5 metre
minimum block dimensions.
3m composite intervals utilised.
No high grade sample treatment applied.
Single pass ID2 interpolation run employed utilising 200m sample search
within the plane of mineralisation (97.8% of blocks within the TIN domain
estimated).
Minimum of 10 and maximum of 20 composites utilised to estimate grade.
The Mt Ararat resource is classified as Inferred under the guidelines set out
in the 2012 JORC Code.
27 of 28 AC/RC holes with moisture information recorded wet drilling
conditions through the mineralisation. It is unknown if the wet conditions
has introduced bias or contamination into the dataset as relevant/detailed
information is not available.
Available core recovery data suggests that biases caused by both loss and
enrichment may be affecting the resource dataset.
The resource estimate is reported at 0.2%, 0.3% and 0.5% Cu cuts and by
three mineralised thicknesses domains - <10m, 10-20m and >20m thick.
These breakdowns and grade tonnage plots are reported to allow differing
economic assessment on the project.
Not applied, however resource is reported at three thicknesses for input into
this discipline.
Not evaluated as risks associated with historic data over-riding feature
affecting the confidence of the estimate.
Not evaluated as risks associated with historic data over-riding feature
affecting the confidence of the estimate.
A single tonnage factor of 2.10 tonnes/m3 was applied to all mineralisation.
The estimate is classified as Inferred under the JORC Code (2012 Edition).
Absence of QA/QC, the indicated sampling and assaying issues and absence
of important data for evaluating other risks to the estimate (such as recover
and moisture versus grade) are key factors in assigning an Inferred
Classification.
No Audit or Review of estimate undertaken
Not undertaken other than that stated under the classification section.
2014 Annual Report | Page 27
DIRECTORS’ REPORT
Your Directors present their report for the year ended 30 June 2014.
DIRECTORS
The names and particulars of the Directors of the Company in office during the financial year and up to the date of this
report were as follows. Directors were in office for the entire year unless otherwise stated.
William Plyley
B.Sc (Metallurgical Engineering)
Non Executive Chairman (appointed 6 December 2013)
Mr William Plyley is a mining executive with over 35 years operational experience in exploration, mining, processing, and
management with substantial resources companies such as Placer Dome Inc, Normandy Mining Limited and Red Back
Mining Inc. He has been responsible for major mine developments in Ghana, West Africa and Australia. He has also had
significant roles in development and expansion of mines in Papua New Guinea and Australia. Mr Plyley retired, in late
2010, from a role as Chief Operating Officer of La Mancha Resources where he was responsible for the development of
the Frog’s Leg and White Foil mines near Kalgoorlie, Western Australia and the operation of mines in Sudan and Cote
d’Ivoire, Africa. Recently, Mr Plyley was a Director of Integra Mining Limited from November 2011 until the take over of
Integra by Silver Lake Resources Limited in January 2013.
Mr Plyley has a B.Sc. in Metallurgical Engineering from Mackay School of Mines, University of Nevada. He is a member of
Australian Institute of Mining and Metallurgy (MAusIMM) and Graduate of Australian Institute of Company Directors
(GAICD).
Mr Plyley is a member of the Company’s Audit and Risk Committee.
Other directorships of listed companies in the last three years: Integra Mining Limited (until 1 January 2013).
Christopher Cairns
B.Sc (Hons)
Executive Managing Director (Appointed 23 May 2006)
Mr Christopher Cairns completed a First Class Honours degree in Economic Geology from the University of Canberra in
1992. Mr Cairns has extensive experience having worked for:
BHP Minerals as Exploration Geologist / Supervising Geologist in Queensland and the Philippines
Aurora Gold as Exploration Manager at the Mt Muro Gold Mine in Borneo
LionOre as Supervising Geologist for the Thunderbox Gold Mine and Emily Anne Nickel Mine drill outs
Sino Gold as Geology Manager responsible for the Jinfeng Gold Deposit feasibility drillout and was responsible
for the discovery of the stratabound gold mineralisation taking the deposit from 1.5Moz to 3.5Moz in 14
months.
Mr Cairns joined Integra Mining Limited in March 2004 and as Managing Director oversaw the discovery of three gold
deposits, the funding and construction of a new processing facility east of Kalgoorlie transforming the company from
explorer to gold producer with first gold poured in September 2010. In 2008 Integra was awarded the Australian Explorer
of the Year by Resources Stocks Magazine and in 2011 was awarded Gold Miner of the Year by Paydirt Magazine and the
Gold Mining Journal.
In January 2013, Integra was taken over by Silver Lake Resources Limited for $426 million (at time of bid) at which time
Mr Cairns resigned along with the whole Integra Board after having successfully recommended shareholders accept the
Silver Lake offer.
Mr Cairns is a member of the Australian Institute of Geoscientists, a member of the JORC Committee and a Board
member of the Australian Prospectors and Miners Hall of Fame.
Other directorships of listed companies in the last three years: Integra Mining Limited (until 1 January 2013).
2014 Annual Report | Page 28
DIRECTORS’ REPORT
Jennifer Murphy
B.Sc(Hons), M.Sc
Executive Technical Director (Appointed 8 March 2013)
Ms Jennifer Murphy completed a First Class Honours Degree in Geology in 1989, and subsequently a Master of Science
Degree in 1993 at the University of Witwatersrand in South Africa. Ms Murphy joined Anglo American Corporation in
1993 as an exploration geologist working in Tanzania and Mali. In 1996, she immigrated to Australia and joined
Normandy Mining Limited, working initially as a project geologist in the Eastern Goldfields and Murchison Greenstone
Provinces and afterwards was responsible for the development and management of the GIS and administration of the
exploration database.
Between 2004 and 2007, Ms Murphy provided contract geological services to a range of junior exploration companies.
Ms Murphy joined Integra Mining Limited in 2007, initially as an administration geologist, and in 2010 the role was
expanded to that of corporate geologist. In 2013 Ms Murphy joined Stavely Minerals as part of the management team to
provide technical and geological expertise. Ms Murphy is a member of the Australian Institute of Geoscientists and has a
broad range of geological experience ranging from exploration program planning and implementation, GIS and database
management, business development, technical and statutory, and ASX reporting, as well as corporate research and
analysis and investor liaison.
Ms Murphy is a member of the Company’s Audit and Risk Committee.
Other directorships of listed companies in the last three years: Nil.
Peter Ironside
B.Com, CA
Non Executive Director (appointed 23 May 2006)
Mr Peter Ironside has a Bachelor of Commerce Degree and is a Chartered Accountant and business consultant with over
28 years experience in the exploration and mining industry. Mr Ironside has a significant level of accounting, financial
compliance and corporate governance experience including corporate initiatives and capital raisings. Mr Ironside has
been a Director and/or Company Secretary of several ASX listed companies including Integra Mining Limited and Extract
Resources Limited (before $2.18Bn takeover) and is currently a non-executive director of Zamanco Minerals Limited.
Mr Ironside is Chair of the Company’s Audit and Risk Committee.
Other directorships of listed companies in the last three years: Zamanco Minerals Limited (current) and Integra Mining
Limited (until 1 January 2013).
COMPANY SECRETARY
Amanda Sparks
B.Bus, CA, F.Fin
Appointed 7 November 2013
Ms Amanda Sparks is a Chartered Accountant with over 25 years of resources related financial experience, both with
explorers and producers. Ms Sparks has extensive experience in financial management, corporate governance and
compliance for listed companies.
2014 Annual Report | Page 29
DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
During the financial year, four meetings of directors were held. The number of meetings attended by each director
during the year is as follows:
W Plyley
C Cairns
J Murphy
P Ironside
Meetings
Held
3
4
4
4
Meetings
Attended
3
4
4
4
There were no Audit Committee meetings during the year ended June 2014. The first meeting was held subsequent to
year end on 18 September 2014.
DIRECTORS’ INTERESTS IN SHARES AND OPTIONS
The following table sets out each director’s relevant interest in shares and options in shares of the Company as at the
date of this report.
Name of Director
Number of Shares
(direct and indirect)
W Plyley
C Cairns
J Murphy
P Ironside
DIVIDENDS
20,000
14,687,419
3,407,097
29,677,419
Number of Options
at 27 cents,
expiry 31/12/2017
1,000,000
5,032,258
1,561,290
5,032,258
No dividends were paid or declared during the year. The Directors do not recommend payment of a dividend.
ENVIRONMENTAL ISSUES
The Company’s environmental obligations are regulated by the laws of Australia. The Company has a policy to either
meet or where possible, exceed its environmental obligations. No environmental breaches have been notified by any
governmental agency as at the date of this report.
The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires
entities to report annual greenhouse gas emissions and energy use. The Directors have assessed that there are no
current reporting requirements, but may be required to do so in the future.
CORPORATE INFORMATION
Corporate Structure
Stavely Minerals Limited is a limited liability company that is incorporated and domiciled in Australia.
Principal Activity
The Company’s principal activity was mineral exploration for the year ended 30 June 2014. There were no significant
changes in the nature of the principal activities during the year.
Operations review
Refer to the Operations Review preceding this report.
2014 Annual Report | Page 30
DIRECTORS’ REPORT
Summary of Financial Position, Asset Transactions and Corporate Activities
A summary of key financial indicators for Stavely, with prior period comparison, is set out in the following table:
Cash and cash equivalents held at year end
Net profit/(loss) for the year after tax
Included in loss for the year:
Equity-based payments
Interest expense
Basic profit/(loss) per share (cents) from continuing operations
Net cash (used in) operating activities
Net cash (used in) investing activities
Net cash from financing activities
During the year:
Year
Year
30 June 2014
30 June 2013
$
$
4,216,717
34,427
(961,133)
(124,333)
(284,404)
(72,548)
(2.42)
-
-
(1.10)
(388,448)
(404,968)
(2,980,603)
(1,112,658)
7,551,341
1,550,015
- On 31 July 2013, Stavely issued 2 million shares to raise $200,000.
- On 13 March 2014, Stavely granted 12,000,000 options to its shareholders, with an exercise price of 27 cents
and expiry date of 31/12/2017 (after cancelling previous options with a lower exercise price).
- On 28 April 2014, Stavely granted 2.4 million options to selected directors and consultants. These options have
an exercise price of 27 cents and expiry date of 31/12/2017. Further details are provided in the notes to the
financial statements (note 14). The value expensed in the accounts was $284,404 (determined in accordance
with a Blacks-Scholes option pricing model).
- On 29 April 2014, , the Company issued 15,000,000 shares in satisfaction of the repayment of $2,000,000 loan
facility from Chaka Investments Pty Ltd, a company of which Mr Peter Ironside (Stavely Director) is the sole
director and Mr Ironside’s wife is shareholder. Further details are provided in the notes to the financial
statements (note 16).
-
-
Stavely successfully completed its IPO and listed on the ASX on 7 May 2014. Gross proceeds raised from the IPO
were $6,086,400 with costs of $685,059.
Expenditure on capitalised exploration assets was $1,210,306 for the year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Company during the financial year are detailed in the Operations Review
and Financial Summary in this report.
FUTURE DEVELOPMENTS
The Company anticipates to continue its exploration activities and consider corporate transactions to ensure further
development of its tenements.
2014 Annual Report | Page 31
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
A. INTRODUCTION
This report details the nature and amount of remuneration for each Director and Executive of Stavely Minerals Limited.
The information provided in the remuneration report includes remuneration disclosures that are audited as required by
section 308(3C) of the Corporations Act 2001.
For the purposes of this report key management personnel of the Company are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Company, directly or
indirectly, including any Director (whether Executive or otherwise).
For the purposes of this report the term “Executive” includes those key management personnel who are not directors.
Details of Key Management Personnel During the Year
Non-Executive Directors
William Plyley
Peter Ironside
–
–
Non-executive Chairman (from 6 December 2013)
Director (from 23 May 2006)
Executive Directors
Christopher Cairns
Jennifer Murphy
Other Key Management Personnel
Amanda Sparks
B. REMUNERATION GOVERNANCE
–
–
–
Managing Director (from 23 May 2006)
Technical Director (from 8 March 2013)
Company Secretary (from 7 November 2013)
The Board is responsible for ensuring that the Company’s remuneration structures are aligned with the long-term
interests of Stavely and its shareholders
Once the Board is of a sufficient size and structure, and the Company’s operations are of a sufficient magnitude, to assist
the Board in fulfilling its duties, the Board will establish a Remuneration Committee. Until that time, the Board has taken
a view that the full Board will hold special meetings or sessions as required. The Board are confident that this process is
stringent and full details of remuneration policies and payments are provided to shareholders in the annual report and
on the web. The Board has adopted the following policies for Directors’ and executives’ remuneration.
C. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
Remuneration Philosophy
The performance of the Company depends upon the quality of its Directors and Executives. To prosper, the Company
must attract, motivate and retain highly skilled Directors and Executives.
To this end, the Company embodies the following principles in its remuneration framework:
provide competitive rewards to attract high calibre Executives;
link Executive rewards to shareholder value; and
establish appropriate, demanding performance hurdles in relation to variable Executive remuneration.
In accordance with best practice corporate governance, the structure of non-executive director and executive
compensation is separate and distinct.
2014 Annual Report | Page 32
DIRECTORS’ REPORT
Non-Executive directors’ remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and
retain Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
Non-executive Directors’ fees are paid within an aggregate limit which is approved by the shareholders from time to
time. Retirement payments, if any, are agreed to be determined in accordance with the rules set out in the Corporations
Act as at the time of the Director’s retirement or termination. Non-executive Directors’ remuneration may include an
incentive portion consisting of options, as considered appropriate by the Board, which may be subject to shareholder
approval in accordance with ASX listing rules. The option incentive portion is targeted to add to shareholder value by
having a strike price considerably greater than the market price at the time of granting.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned amongst Directors is reviewed annually. The Board considers the amount of Director fees being paid by
comparable companies with similar responsibilities and the experience of the Non-executive Directors when undertaking
the annual review process.
Executive Director Remuneration
Objective
The Company aims to reward Executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Company and so as to:
reward Executives for company, and individual performance;
ensure continued availability of experienced and effective management; and
ensure total remuneration is competitive by market standards.
Structure
In determining the level and make-up of Executive remuneration, the Board negotiates a remuneration to reflect the
market salary for a position and individual of comparable responsibility and experience. Remuneration is regularly
compared with the external market by participation in industry salary surveys and during recruitment activities generally.
If required, the Board may engage an external consultant to provide independent advice in the form of a written report
detailing market levels of remuneration for comparable Executive roles.
Remuneration consists of a fixed remuneration and a long term incentive portion as considered appropriate.
Fixed Remuneration - Objective
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the
position and is competitive in the market. Fixed remuneration is reviewed annually by the Board and the process consists
of a review of Company and individual performance, and relevant comparative remuneration in the market. As noted
above, the Board may engage an external consultant to provide independent advice.
Fixed Remuneration - Structure
The fixed remuneration is a base salary or monthly consulting fee.
Variable Pay — Long Term Incentives - Objective
The objective of long term incentives is to reward Executives in a manner which aligns this element of remuneration with
the creation of shareholder wealth. The incentive portion is payable based upon attainment of objectives related to the
Executive’s job responsibilities. The objectives vary, but all are targeted to relate directly to the Company’s business and
financial performance and thus to shareholder value.
Variable Pay — Long Term Incentives – Structure
Long term incentives granted to Executives are delivered in the form of options. The option incentives granted are aimed
to motivate Executives to pursue the long term growth and success of the Company within an appropriate control
framework and demonstrate a clear relationship between key Executive performance and remuneration. Director
options are granted at the discretion of the Board and approved by shareholders. Other key management employees
2014 Annual Report | Page 33
DIRECTORS’ REPORT
may be granted options. Performance hurdles are not attached to vesting periods; however the Board determines
appropriate vesting periods to provide rewards over a period of time to key management personnel.
During the year, no performance related payments were made.
D. SERVICE AGREEMENTS
On appointment to the board, all non-executive directors enter into a service agreement with the Company in the form
of a letter of appointment. The letter summarises the board policies and terms, including compensation, relevant to the
office of director.
Remuneration and other terms of employment for the executive directors and the other key management personnel are
also formalised in service agreements. The major provisions of the agreements relating to remuneration are set out
below.
Name
Directors
William Plyley
Christopher Cairns
Jennifer Murphy
Term of agreement
Base annual salary
exclusive of
superannuation at
30/6/2014
Termination
benefit
Commenced 22/1/2014. Ongoing, subject to re-
elections
Commenced 22/1/2014. No end date, subject to
termination clauses
Commenced 22/1/2014. No end date, subject to
termination clauses
$75,000
None
$250,000
12 months
$150,000
12 months
Peter Ironside
Ongoing, subject to re-elections
$30,000
None
Company Secretary
Amanda Sparks
No formal agreement
Fees for all directors commenced upon ASX listing on 7 May 2014.
2014 Annual Report | Page 34
DIRECTORS’ REPORT
E. REMUNERATION OF KEY MANAGEMENT PERSONNEL
Details of the remuneration of each key management personnel of the Company, including their personally-related
entities, during the year were as follows:
Post Employment
Share Based
Superannuation
$
Total Cash
$
Options (1)
$
Cash salary,
directors fees,
consulting fees
and movement in
leave provisions
$
Total
including
share based
payments
$
Remuneration
consisting of
options during
the year
%
11,313
40,610
81,291
4,525
23,175
160,914
-
25,185
-
25,185
1,046
3,488
2,093
-
12,359
44,098
83,384
4,525
118,500
-
47,400
-
-
23,175
88,876
6,627
167,541
254,776
130,859
44,098
130,784
4,525
112,051
422,317
-
-
-
-
-
25,185
-
25,185
-
-
-
-
-
-
-
-
90.6%
-
36.2%
-
79.3%
-
-
-
2014
Directors
W Plyley(2)
C Cairns
J Murphy
P Ironside
Other KMP
A Sparks(4)
TOTAL
2013
Directors
C Cairns
J Murphy(3)
P Ironside
Other KMP
None
TOTAL
(1) Equity based payments – options. These represent the amount expensed in the year for options granted in the current
year and/or in prior years.
(2) Appointed 6 December 2013.
(3) Appointed 8 March 2013.
(4) Appointed 7 November 2013.
There were no performance related payments made during the year. Performance hurdles are not attached to
remuneration options; however the Board determines appropriate vesting periods to provide rewards over a period of
time to key management personnel.
2014 Annual Report | Page 35
DIRECTORS’ REPORT
F. SHARE-BASED COMPENSATION
On 28 April 2014, the following options were granted as equity compensation benefits to Directors and other Key
Management Personnel (2013: none). These options vested at grant date.
Directors
W Plyley
J Murphy
Other KMPs
A Sparks
Number of Options
at 27 cents,
expiry 31/12/2017
Value* per option
at grant date
$
1,000,000
400,000
750,000
0.1185
0.1185
0.1185
The options provided to William Plyley were granted to encourage share ownership in Stavely. The options provided to
Jennifer Murphy and Amanda Sparks were granted as additional compensation for the services provided during 2013 and
2014.
* Value at grant date has been calculated in accordance with AASB 2 Share-based Payment. Stavely used a Black Scholes
option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share
price at grant date and the expected volatility of the underlying share, the expected dividend yield and the risk-free
interest rate for the term of the option. Further details are in note 14 of the financial statements.
Shares issued to Key Management Personnel on exercise of compensation options
During the year to 30 June 2014, there were no compensation options exercised by Directors or other Key Management
Personnel (2013: nil).
G. EQUITY HOLDINGS AND MOVEMENTS DURING THE YEAR
(a) Shareholdings of Key Management Personnel
30 June 2014
Balance at
beginning of the year
Share split
Net change other
Balance at
end of the year
Directors
W Plyley
C Cairns
J Murphy
P Ironside
Other KMP
A Sparks
-
12,000,000
3,000,000
12,000,000
-
1,677,419
387,097
1,677,419
20,000
1,010,000
20,000
16,000,000
20,000
14,687,419
3,407,097
29,677,419
-
-
250,000
250,000
27,000,000
3,741,935
17,300,000
48,041,935
All equity transactions with Key Management Personnel other than those arising from the exercise of remuneration
options have been entered into under terms and conditions no more favourable than those the entity would have
adopted if dealing at arms-length.
2014 Annual Report | Page 36
DIRECTORS’ REPORT
(b) Option holdings of Key Management Personnel
30 June 2014
Directors
W Plyley
C Cairns
J Murphy
P Ironside
Other KMP
A Sparks
Balance at
beginning of
the year
Granted as
remuneration
Granted as
shareholder
options
Balance at
end of the
year
Not
Exercisable*
Exercisable
-
-
-
-
-
-
1,000,000
-
1,000,000
1,000,000
-
5,032,258
5,032,258
5,032,258
400,000
1,161,290
1,561,290
1,561,290
-
5,032,258
5,032,258
5,032,258
-
-
-
-
750,000
-
750,000
-
750,000
2,150,000
11,225,806
13,375,806
12,625,806
750,000
* Escrowed for 24 Months until 7 May 2016.
H. OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
In the prior year, the Company entered into a loan facility with Chaka Investments Pty Ltd, a company associated with
director Mr Peter Ironside. The facility was for an amount of $2,500,000 with interest at 7%. Interest and the principal
were to be repaid by 30 June 2014. During the year, drawdowns of $2,050,000 were made. In April 2014, the Company
issued 15,000,000 shares in satisfaction of the repayment of $2,000,000 loan facility from Chaka Investments Pty Ltd, a
company of which Mr Peter Ironside (Stavely Director) is the sole director and Mr Ironside’s wife is shareholder. The
remaining $50,000 was repaid in cash on 14 May 2014. Interest paid on these loans of $72,301 was paid on 30 June
2014.
During the year, cash advances were made by Mr Christopher Cairns to Stavely totalling $50,000. These advances were
repaid by the Company on 14 May 2014. Ironside Pty Ltd, a company of which Mr Peter Ironside is a director and
shareholder, made advances totalling $255,000 during the year to the Company. The Company repaid these advances
during the year.
No loans or advances from related parties were outstanding at year end (2013: $50,000).
Mr Peter Ironside, Director, is a shareholder and director of Ironside Pty Ltd. During the year an amount of $200,162
(net of GST) was paid to Ironside Pty Ltd for reimbursement of office rental, server costs and other expenses.
I.USE OF REMUNERATION CONSULTANTS
No remuneration consultants were engaged by Stavely during the year.
End of Audited Remuneration Report.
INDEMNIFICATION AND INSURANCE OF OFFICERS
The Company has paid a premium to insure the Directors and Officers of the Company and its controlled entities. Details
of the premium are subject to a confidentiality clause under the contract of insurance.
The liabilities insured are costs and expenses that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of entities in the Company.
2014 Annual Report | Page 37
DIRECTORS’ REPORT
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Number
Issue Price of
Shares
Expiry Date
Unlisted Options
14,400,000
27 cents
31/12/2017
No option holder has any right under the options to participate in any other share issue of the Company or any other
related entity.
No share options were exercised by employees or Key Management Personnel during the year.
SUBSEQUENT EVENTS
There are no matters or circumstances that have arisen since 30 June 2014 that have or may significantly affect the
operations, results, or state of affairs of the Company in future financial years.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Stavely
Minerals Limited support and adhere to the principles of corporate governance. The Company’s Corporate Governance
Statement is contained in this annual report.
AUDIT INDEPENDENCE AND NON-AUDIT SERVICES
Auditors' independence - section 307C
The Auditor’s Independence Declaration is included in the next page of this report.
Non-Audit Services
The following non-audit services were provided by the entity’s auditor, BDO. The Directors are satisfied that the
provision of non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act. The nature and scope of each type of non-audit service provided means that auditor independence
was not compromised. BDO received, or are due to receive, the following amounts for the provision of non-audit
services:
Taxation and Corporate advice services
2014
$18,956
2013
-
Signed in accordance with a resolution of the Directors.
Christopher Cairns
Managing Director
Dated this 22nd day of September 2014
2014 Annual Report | Page 38
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF STAVELY MINERALS
LIMITED
As lead auditor of Stavely Minerals Limited for the year ended 30 June 2014, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
Glyn O'Brien
Director
BDO Audit (WA) Pty Ltd
Perth, 22 September 2014
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an
Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form
part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or
omissions of financial services licensees) in each State or Territory other than Tasmania.
2014 Annual Report | Page 39
CORPORATE GOVERNANCE STATEMENT
This statement outlines the main corporate governance practices that were formally in place from 16 January 2014
onwards. These corporate governance practices comply with the ASX Corporate Governance Council recommendations
unless otherwise stated.
BOARD OF DIRECTORS
The Board operates in accordance with the broad principles set out in its charter, which is available from the corporate
governance information section of the Company website at www.stavely.com.au.
ROLE AND RESPONSIBILITIES OF THE BOARD
The Board is responsible for ensuring that the Company is managed in a manner which protects and enhances the
interests of its shareholders and takes into account the interests of all stakeholders. This includes setting the strategic
directions for the company, establishing goals for management and monitoring the achievement of these goals.
A summary of the key responsibilities of the Board include:
1.
2.
3.
4.
5.
6.
7.
Strategy - Providing strategic guidance to the Company, including contributing to the development of and
approving the corporate strategy;
Financial performance - Approving budgets, monitoring management and financial performance;
Financial reporting and audits - Monitoring financial performance including approval of the annual and half-year
financial reports and liaison with the external auditors;
Leadership selection and performance - Appointment, performance assessment and removal of the Managing
Director. Ratifying the appointment and/or removal of other senior management, including the Company
Secretary and other Board members;
Remuneration - Management of the remuneration and reward systems and structures for Executive management
and staff;
Risk management - Ensuring that appropriate risk management systems and internal controls are in place; and
Relationships with the exchanges, regulators and continuous disclosure - Ensuring that the capital markets are
kept informed of all relevant and material matters and ensuring effective communications with shareholders.
The Board has delegated to management responsibility for:
Strategies - Assisting in developing and implementing corporate strategies and making recommendations where
necessary;
Leadership selection and performance - Appointing management where applicable and setting terms of appointment
and evaluating performance;
Budgets - Developing the annual budget and managing day-to-day operations within budget;
Risk Management - Maintaining risk management frameworks; and
Communication - Keeping the Board and market informed of material events.
COMPOSITION OF THE BOARD
The names, skills, experiences and period of office of the Directors of the Company in office at the date of this Statement
are set out in the Director’s Report.
The composition of the Board is determined using the following principles:
Persons nominated as Non-executive Directors shall be expected to have qualifications, experience and expertise of
benefit to the Company and to bring an independent view to the Board’s deliberations. Persons nominated as
Executive Directors must be of sufficient stature and security of employment to express independent views on any
matter.
2014 Annual Report | Page 40
CORPORATE GOVERNANCE STATEMENT
The Chairperson should ideally be independent, but in any case be Non-executive and be elected by the Board based
on his/her suitability for the position.
The roles of Chairperson and Managing Director should not be held by the same individual.
All Non-executive Directors are expected voluntarily to review their membership of the Board from time-to-time
taking into account length of service, age, qualifications and expertise relevant to the Company’s then current policy
and programme, together with the other criteria considered desirable for composition of a balanced board and the
overall interests of the Company.
The Company considers that the Board should have at least three Directors (minimum required under the Company's
Constitution) and to have a majority of independent Directors but acknowledges that this may not be possible at all
times due to the size of the Company. Currently the Board has four Directors, with only Mr William Plyley as
independent. The number of Directors is maintained at a level which will enable effective spreading of workload and
efficient decision making.
The Board has accepted the following definition of an independent Director:
An independent Director is a Director who is not a member of management (a Non-executive Director) and who:
(a) holds less than 5% of the voting shares of the Company and is not an officer of, or otherwise associated directly or
indirectly with, a shareholder of more than 5% of the voting shares of the Company;
(b) within the last three years has not been employed in an executive capacity by the Company or another group
member, or been a Director after ceasing to hold any such employment;
(c) within the last three years has not been a principal of a material professional adviser or a material consultant to the
Company or another group member, or an employee materially associated with the service provided;
(d) is not a material supplier or customer of the Company or other group member, or an officer of or otherwise
associated directly or indirectly with a material supplier or customer;
(e) has no material contractual relationship with the Company or another group member other than as a Director of the
Company;
(f) has not served on the board for a period which could, or could reasonably be perceived to, materially interfere with
the Director’s ability to act in the best interests of the Company; and
(g) is free from any interest and any business or other relationship which could, or could reasonably be perceived to,
materially interfere with the Director’s ability to act in the best interests of the Company.
The materiality thresholds are assessed on a case-by-case basis, taking into account the relevant Director’s specific
circumstances, rather than referring to a general materiality threshold.
INDEPENDENT PROFESSIONAL ADVICE AND ACCESS TO COMPANY INFORMATION
Each Director has the right of access to all relevant Company information and to the Company’s Executives and, subject to
prior consultation with the Chairperson, may seek independent professional advice at the Company’s expense. A copy of
advice received by the Director is made available to all other members of the Board.
NOMINATION COMMITTEE / APPOINTMENT OF NEW DIRECTORS
Because of the size of the Company and the size of the Board, the Directors do not believe it is appropriate to establish a
separate Nomination Committee. The Board has taken a view that the full Board will hold special meetings or sessions as
required. The Board are confident that this process for selection and review is stringent and full details of all Directors are
provided to shareholders in the annual report and on the web.
The composition of the Board is reviewed on an annual basis to ensure the Board has the appropriate mix of expertise
and experience. Where a vacancy exists, through whatever cause, or where it is considered that the Board would benefit
from the services of a new Director with particular skills, the Board determines the selection criteria for the position
based on the skills deemed necessary for the Board to best carry out its responsibilities and then appoints the most
suitable candidate who must stand for election at the next general meeting of shareholders.
2014 Annual Report | Page 41
CORPORATE GOVERNANCE STATEMENT
TERM OF OFFICE
Under the Company's Constitution, the minimum number of Directors is three. At each Annual General Meeting, one
third of the Directors (excluding the Managing Director) must resign, with Directors resigning by rotation based on the
date of their appointment. Directors resigning by rotation may offer themselves for re-election.
PERFORMANCE OF DIRECTORS AND MANAGING DIRECTOR
The performance of all Directors, the Board as a whole and the Managing Director is reviewed annually.
The Board meets once a year with the specific purpose of conducting a review of its composition and performance. This
review includes:
Determining the appropriate balance of skills and experience required to suit the Company’s current and future
strategies;
Comparing the requirements above against the skills and experience of current Directors and Executives;
Assessing the independence of each Director;
Measuring the contribution and performance of each Director;
Assessing any education requirements or opportunities; and
Recommending any changes to Board procedures, Committees or the Board composition.
A review will be undertaken in 2015.
PERFORMANCE OF SENIOR EXECUTIVES
The Board meets at least annually to review the performance of senior Executives, considerations include the following:
The performance of the senior Executive in supplying the Board with information in a form, timeframe and quality
that enables the Board to effectively discharge its duties;
Feedback from other senior Executives; and
Any particular concerns regarding the senior Executive.
A review of any senior executives will be undertaken in 2015.
CONFLICT OF INTEREST
In accordance with the Corporations Act 2001 and the Company’s constitution, Directors must keep the Board advised, on
an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes a
significant conflict exists, the Director concerned does not receive the relevant Board papers and is not present at the
Board meeting whilst the item is considered. Details of Directors related entity transactions with the Company are set out
in the related parties note in the financial statements.
DIVERSITY
Stavely recognises the benefits arising from employee and Board diversity, including a broader pool of high quality
employees, improving employee retention, accessing different perspectives and ideas and benefiting from all available
talent.
Diversity includes, but is not limited to, gender, age, ethnicity and cultural background.
Stavely’s Diversity Policy defines the initiatives which assist Stavely with maintaining and improving the diversity of its
workforce. In accordance with this policy and ASX Corporate Governance Principles, the Board has established the
following objectives in relation to gender diversity.
2014 Annual Report | Page 42
CORPORATE GOVERNANCE STATEMENT
Proportion of Women
Organisation as a whole
Executive Management Team
Board and Company Secretary
REMUNERATION
Actual
57%
67%
40%
Objective
40%
40%
40%
The performance of the Company depends upon the quality of its Directors and Executives. To prosper, the Company
must attract, motivate and retain highly skilled Directors and Executives.
To this end, the Company embodies the following principles in its remuneration framework:
Provide competitive rewards to attract high calibre Executives;
Link Executive rewards to shareholder value; and
Establish appropriate performance hurdles in relation to variable Executive remuneration.
A full discussion of the Company’s remuneration philosophy and framework and the remuneration received by Directors
and Executives in the current year is included in the remuneration report, which is contained within the Report of the
Directors.
There are no schemes for retirement benefits for Non-executive Directors, other than superannuation.
BOARD REMUNERATION COMMITTEE
Once the Board is of a sufficient size and structure, and the Company’s operations are of a sufficient magnitude, to assist
the Board in fulfilling its duties, the Board will establish a Remuneration Committee. Until that time, the Board has taken
a view that the full Board will hold special meetings or sessions as required. The Board are confident that this process is
stringent and full details of remuneration policies and payments are provided to shareholders in the annual report and
on the web.
RISK OVERSIGHT AND MANAGEMENT
The Board is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal
control systems. In summary, the Company policies are designed to ensure strategic, operational, legal, reputation and
financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the
Company’s business objectives.
A summary of Stavely’s Risk Management review procedures can be found in the corporate governance information
section of the Company website at www.stavely.com.au.
Considerable importance is placed on maintaining a strong control environment. The Board actively promotes a culture of
quality and integrity.
Control procedures cover management accounting, financial reporting, compliance and other risk management issues.
The Board encourages management accountability for the Company’s financial reports by ensuring ongoing financial
reporting during the year to the Board. Six-monthly, the Financial Controller (or equivalent) and the Managing Director
are required to state in writing to the Board that in all material respects:
2014 Annual Report | Page 43
CORPORATE GOVERNANCE STATEMENT
Declaration required under s295A of the Corporations Act 2001 -
the financial records of the Company for the financial period have been properly maintained;
the financial statements and notes comply with the accounting standards;
the financial statements and notes for the financial year give a true and fair view; and
any other matters that are prescribed by the Corporations Act regulations as they relate to the financial
statements and notes for the financial year are satisfied.
Additional declaration required as part of corporate governance -
the risk management and internal compliance and control systems in relation to financial risks are sound,
appropriate and operating efficiently and effectively.
These declarations were received for the June 2014 financial year.
AUDIT COMMITTEE
The Audit and Risk Committee consists of the following directors:
Mr Peter Ironside (non-executive director). Chairman of the Committee. Appointed 16 January 2014.
Ms Jennifer Murphy (technical executive director). Appointed 16 January 2014.
Mr William Plyley (non-executive director). Appointed 16 January 2014.
Full details of the qualifications of the Committee members can be found in the Report of the Directors.
The Committee held no meetings during the year ended June 2014. The first meeting was held subsequent to year end
on 18 September 2014.
CODE OF CONDUCT
The Company has developed a Code of Conduct (the Code) which has been fully endorsed by the Board and applies to all
directors and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest
standards of behaviour and professionalism and the practices necessary to maintain confidence in the Company’s
integrity.
The Code of Conduct embraces the values of:
Integrity
Excellence
Commercial Discipline
The Board encourages all stakeholders to report unlawful/unethical behaviour and actively promotes ethical behaviour
and protection for those who report potential violations in good faith.
TRADING IN STAVELY SECURITIES BY DIRECTORS, OFFICERS AND EMPLOYEES
The Board has adopted a specific policy in relation to Directors and officers, employees and other potential insiders
buying and selling shares.
Directors, officers, consultants, management and other employees are prohibited from trading in the Company’s shares,
options and other securities if they are in possession of price-sensitive information.
The Company's Security Trading Policy is provided to each new employee as part of their induction training. Stavely
personnel must receive written approval prior to any dealing in Stavely securities.
The Directors are satisfied that the Company has complied with its policies on ethical standards, including trading in
securities.
2014 Annual Report | Page 44
CORPORATE GOVERNANCE STATEMENT
CONTINUOUS DISCLOSURE
The Board has a Market Disclosure Policy to ensure the compliance of the Company with the various laws and ASX Listing
Rule obligations in relation to disclosure of information to the market. The Managing Director is responsible for ensuring
that all employees are familiar with and comply with the policy.
Stavely is committed to:
(a)
(b)
(c)
ensuring that shareholders and the market are provided with timely and balanced information about its
activities;
complying with the general and continuous disclosure principles contained in the ASX Limited (“ASX”)
Listing Rules and the Corporations Act 2001; and
ensuring that all market participants have equal opportunities to receive externally available information
issued by Stavely.
SHAREHOLDER COMMUNICATIONS STRATEGY
The Company places significant importance on effective communication with shareholders.
Information is communicated to shareholders through the annual and half yearly financial reports, quarterly reports on
activities, announcements through the Australian Stock Exchange and the media, on the Company’s web site and through
the Chairman’s address at the annual general meeting.
In addition, news announcements and other information are sent by email to all persons who have requested their name
to be added to the email list. If requested, the Company will provide general information by email.
The Company will, wherever practicable, take advantage of new technologies that provide greater opportunities for more
effective communications with shareholders.
COMPANY WEBSITE
Stavely has made available details of all its corporate governance principles, which can be found in the corporate
governance information section of the Company website at www.stavely.com.au.
2014 Annual Report | Page 45
DIRECTORS’ DECLARATION
1.
In the opinion of the directors:
a) The financial statements and notes are in accordance with the Corporations Act 2001, including:
i)
giving a true and fair view of the Company’s financial position as at 30 June 2014 and of its performance
for the year then ended; and
ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001; and
iii) complying with International Financial Reporting Standards (IFRS) as stated in note 1 of the financial
statements; and
b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
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 2014.
This declaration is signed in accordance with a resolution of the Board of Directors.
Christopher Cairns
Managing Director
Dated this 22nd day of September 2014
2014 Annual Report | Page 46
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Revenue and Income
Interest revenue
Expenses
Administration and corporate expenses
Administration – equity based expenses
Exploration expensed
Finance costs
Year ended
30 June 2014
Year ended
30 June 2013
Note
$
22,594
(553,187)
(284,404)
(73,588)
(72,548)
2(a)
13
2(b)
2(c)
$
42
(109,483)
-
(14,892)
-
Total expenses
(983,727)
(124,375)
Profit/(loss) before income tax
(961,133)
(124,333)
Income tax expense
Profit/(loss) after income tax attributable to members of
Stavely Minerals Limited
3
-
-
(961,133)
(124,333)
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss:
Other
Other comprehensive income/(loss) for the year, net of tax
-
-
-
-
Total comprehensive profit/(loss) for the year
(961,133)
(124,333)
Loss per share for the year attributable to the members of
Stavely Minerals Limited
Basic earnings/(loss) per share
4
Cents Per
Share
(2.42)
Cents Per
Share
(1.10)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
2014 Annual Report | Page 47
BALANCE SHEET
AS AT 30 JUNE 2014
ASSETS
Current Assets
Cash and cash equivalents
Other receivables
Total Current Assets
Non-Current Assets
Receivables
Property, plant and equipment
Deferred exploration expenditure
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Other payables – advances from related parties
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
30 June 2014
$
Note
30 June 2013
$
5
6
6
7
8
9
10
11
4,216,717
150,857
4,367,574
30,000
87,441
4,369,822
4,487,263
34,427
310,491
344,918
30,000
647
3,159,516
3,190,163
8,854,837
3,535,081
548,089
-
4,642
552,731
2,107,587
50,000
-
2,157,587
552,731
2,157,587
8,302,106
1,377,494
12
13
9,101,363
284,404
(1,083,661)
1,500,022
-
(122,528)
8,302,106
1,377,494
The above statement of financial position should be read in conjunction with the accompanying notes.
2014 Annual Report | Page 48
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2014
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Total
Equity
$
At 1 July 2012
Profit/(loss) for the year
Other comprehensive income/(loss)
Total comprehensive loss for the year, net of tax
8
-
-
-
Transactions with owners in their capacity as
owners:
Issue of share capital
As at 30 June 2013
1,500,014
1,500,022
At 1 July 2013
1,500,022
Profit/(loss) for the year
Other comprehensive income/(loss)
Total comprehensive loss for the year, net of tax
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,805
1,813
(124,333)
(124,333)
-
-
(124,333)
(124,333)
-
1,500,014
(122,528)
1,377,494
(122,528)
1,377,494
(961,133)
(961,133)
-
-
(961,133)
(961,133)
-
-
-
-
8,286,400
(685,059)
284,404
7,885,745
Transactions with owners in their capacity as
owners:
Issue of share capital
Cost of issue of share capital
Share based payments
8,286,400
(685,059)
-
284,404
7,601,341
284,404
As at 30 June 2014
9,101,363
284,404
(1,083,661)
8,302,106
The above statement of changes in equity should be read in conjunction with the accompanying notes.
2014 Annual Report | Page 49
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2014
Year ended
Year ended
30 June 2014
30 June 2013
Note
$
$
Cash flows from operating activities
Receipts in the ordinary course of activities (mostly GST)
Payments to suppliers and employees
Interest received
Interest paid
Net cash flows used in operating activities
5(i)
385,652
(724,146)
22,594
(72,548)
(388,448)
-
(405,010)
42
-
(404,968)
Cash flows from investing activities
Payments for plant and equipment
Payments for exploration expenditure capitalised
Payments for bonds
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares and options
Payment of share issue costs
Advances / loans from related parties
Repayment of advances / loans from related parties
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
held
Add opening cash and cash equivalents brought forward
(102,225)
(647)
(2,878,378)
(1,082,011)
-
(30,000)
(2,980,603)
(1,112,658)
6,286,400
(685,059)
2,355,000
(405,000)
7,551,341
4,182,290
34,427
1,500,014
-
50,000
-
1,550,014
32,388
2,039
34,427
Closing cash and cash equivalents carried forward
5
4,216,717
The above statement of cashflows should be read in conjunction with the accompanying notes.
2014 Annual Report | Page 50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of Preparation
These financial statements are general purpose financial statements, which have been prepared in accordance
with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared on a
historical cost basis.
The financial report is presented in Australian dollars, which is the Company’s functional and presentation
currency.
Stavely Minerals Limited is a for-profit entity for the purpose of preparing the financial statements.
The annual report of Stavely Minerals Limited for the year ended 30 June 2014 was authorised for issue in
accordance with a resolution of the Directors on 22 September 2014.
(b)
Statement of Compliance
These financial statements comply with Australian Accounting Standards and International Financial Reporting
Standards (IFRS).
(c)
Adoption of new and revised standards
Early adoption of accounting standards
The Company has not elected to apply any pronouncements before their operative date in the annual reporting
year beginning 1 July 2014.
New and amended standards adopted by the Company
None of the new standards and amendments to standards that are mandatory for the first time for the financial
year beginning 1 July 2013 affected any of the amounts recognised in the current year or any prior period and are
not likely to affect future periods.
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2014 reporting year. The Company’s assessment of the impact of these new standards and interpretations that
may have an impact on the Company is set out below:
AASB 9 Financial Instruments (effective from 1 January 2015)
AASB 9 includes requirements for the classification and measurement of financial assets. There is no material
impact for Stavely. This standard is not applicable until the financial year commencing 1 July 2017.
(d)
Significant accounting estimates and judgments
Significant accounting judgments
In the process of applying the Company’s accounting policies, management has made the following judgments,
apart from those involving estimations, which have the most significant effect on the amounts recognised in the
financial statements.
Exploration assets
The Company’s accounting policy for exploration expenditure is set out at Note 1(i). The application of this policy
necessarily requires management to make certain estimates and assumptions as to future events and
circumstances. Any such estimates and assumptions may change as new information becomes available. If, after
having capitalised expenditure under the policy, it is concluded that the expenditures are unlikely to be recovered
by future exploitation or sale, then the relevant capitalised amount will be written off to the income statement.
2014 Annual Report | Page 51
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Significant accounting estimates and assumptions
The carrying amounts 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 year are:
Impairment of assets
In determining the recoverable amount of assets, in the absence of quoted market prices, estimations are made
regarding the present value of future cash flows using asset-specific discount rates and the recoverable amount of
the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a
number of key estimates.
Share-based payment transactions
The Company measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined using a Black-Scholes model.
Commitments - Exploration
The Company has certain minimum exploration commitments to maintain its right of tenure to exploration
permits. These commitments require estimates of the cost to perform exploration work required under these
permits.
(e)
Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(f)
(g)
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as
described above, net of outstanding bank overdrafts.
Trade and other receivables
Receivables are initially recognised at fair value and subsequently measured at amortised cost, less provision for
doubtful debts. Current receivables for GST are due for settlement within 30 days and other current receivables
within 12 months. Cash on deposit is not due for settlement until rights of tenure are forfeited or performance
obligations are met.
Impairment of financial assets
The Company assesses at each balance sheet date whether a financial asset or Company of financial assets is
impaired. If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost
has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and
the present value of estimated future cash flows (excluding future credit losses that have not been incurred)
discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial
recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account.
The amount of the loss is recognised in profit or loss.
(h)
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment
losses. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Plant and equipment - 2 to 5 years
- 2 to 5 years
Motor vehicles
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at
each financial year end.
2014 Annual Report | Page 52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as
the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or
loss in the year the asset is derecognised.
(i)
Exploration and evaluation expenditure
Costs related to the acquisition of properties that contain resources and costs incurred for ongoing exploration
and evaluation activities are allocated separately to specific areas of interest. These costs are capitalised until the
viability of the area of interest is determined. Any exploration costs that cannot be allocated to a specific area of
interest are expensed as incurred.
Exploration and evaluation expenditure is stated at cost and is accumulated in respect of each identifiable area of
interest.
Such costs are only carried forward to the extent that they are expected to be recouped through the successful
development of the area of interest (or alternatively by its sale), or where activities in the area have not yet
reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves, and active operations are continuing. Accumulated costs in relation to an abandoned area are written off
to the income statement in the period in which the decision to abandon the area is made.
The Directors review the carrying value of each area of interest as at the balance date and any exploration
expenditure which no longer satisfies the above policy is written off.
Once an area of interest enters the development phase, all capitalised acquisition, exploration and evaluation
expenditures will be transferred to mineral development or oil and gas properties, as appropriate.
(j)
Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired.
Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount. Where
the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written
down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual
asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does
not generate cash inflows that are largely independent of those from other assets or groups of assets, in which
case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss been recognised for the asset in prior
years.
2014 Annual Report | Page 53
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
(k)
Other financial assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as
either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or
available-for-sale investments, as appropriate. When financial assets are recognised initially, they are measured at
fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transactions
costs. The Company determines the classification of its financial assets after initial recognition and, when allowed
and appropriate, re-evaluates this designation at each financial year-end.
All regular way purchases and sales of financial assets are recognised on the trade date, i.e. the date that the
Company commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets
under contracts that require delivery of the assets within the period established generally by regulation or
convention in the marketplace.
(i) Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category ‘financial assets at fair value through
profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the
near term. Gains or losses on investments held for trading are recognised in profit or loss. The fair values of quoted
investments are based on last trade prices. If the market for financial assets is not active (and for unlisted
securities), the Company establishes fair value by using valuation techniques.
Loans and receivables
(ii)
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses
are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through
the amortisation process.
Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services
provided to the Company prior to the end of the financial year that are unpaid and arise when the Company
becomes obliged to make future payments in respect of the purchase of these goods and services.
Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
Wages, salaries and, annual leave
Employee leave benefits
(i)
Liabilities for wages and salaries, including non-monetary benefits and annual leave and expected to be settled
wholly within 12 months of the reporting date are recognised in other payables in respect of employees’ services
up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Other long-term employee benefit obligations
The liability for long service leave and annual leave not expected to be settled wholly within 12 months of the
reporting date are recognised in the provision for employee benefits and measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date using
the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of
employee departures, and period of service. Expected future payments are discounted using market yields at the
reporting date on national government bonds with terms to maturity and currencies that match, as closely as
possible, the estimated future cash outflows. The obligations are presented as current liabilities if the Company
does not have an unconditional right to defer settlement for at least 12 months of the reporting date, regardless of
when actual settlement is expected to occur.
(l)
(m)
(n)
2014 Annual Report | Page 54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
(o)
(p)
(q)
(r)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
Leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the company as
lessee are classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and
the revenue can be reliably measured.
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
Share-based payment transactions
Equity settled transactions:
The Company provides benefits to executive directors, employees and consultants of the Company in the form of
share-based payments, whereby those individuals render services in exchange for shares or rights over shares
(equity-settled transactions).
When provided, the cost of these equity-settled transactions with these individuals is measured by reference to
the fair value of the equity instruments at the date at which they are granted. The fair value of options is
determined using a Black-Scholes model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of Stavely Minerals Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant
individuals become fully entitled to the award (the vesting date).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects:
(i)
(ii)
(iii)
the grant date fair value of the award;
the extent to which the vesting period has expired; and
the number of awards that, in the opinion of the Directors of the Company, will ultimately vest taking into
account such factors as the likelihood of non-market performance conditions being met.
This opinion is formed based on the best available information at balance date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. If an equity-settled award is forfeited, any expense
previously recognised for the award is reversed. However, if a new award is substituted for a cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if
they were a modification of the original award, as described in the previous paragraph.
2014 Annual Report | Page 55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
(s)
Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance sheet date.
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:
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests
in joint operations, and the timing of the reversal of the temporary difference can be controlled and it is
probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be
utilised, except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint operations, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that
no adverse change will occur in income legislation and the anticipation that the Company will derive sufficient
future assessable income to enable the benefit to be realised and comply with the conditions of deductibility
imposed by the law.
2014 Annual Report | Page 56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
(t)
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item
as applicable; and
receivables and payables, which are stated with the amount of GST included.
(u)
(v)
(w)
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the balance sheet. Cash flows are included in the Cash Flow Statement on a gross basis and the GST
component of cash flows arising from investing and financing activities, which is recoverable from, or payable to,
the taxation authority, are classified as operating cash flows. Commitments and contingencies are disclosed net
of the amount of GST recoverable from, or payable to, the taxation authority.
Borrowing Costs
Borrowing costs are expensed in the period in which they are incurred except borrowing costs that are directly
attributable to the acquisition, construction, or production of a qualifying asset that necessarily takes a substantial
period to get ready for its intended use or sale. In this case, borrowing costs are capitalised as part of the cost of
such a qualifying asset.
Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any
costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution
of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element.
Segment reporting
An operating segment is a component of an entity that engages in business activities from which it may earn
revenues and incur expenses (including revenues and expenses relating to transactions with other components of
the same entity), whose operating results are regularly reviewed by the entity's chief operating decision maker to
make decisions about resources to be allocated to the segment and assess its performance and for which discrete
financial information is available. This includes start up operations which are yet to earn revenues. Management
will also consider other factors in determining operating segments such as the existence of a line manager and the
level of segment information presented to the board of Directors.
Operating segments have been identified based on the information provided to the chief operating decision
makers – being the executive management team.
The Company aggregates two or more operating segments when they have similar economic characteristics, and
the segments are similar in each of the following respects:
- Nature of the products and services,
- Type or class of customer for the products and services,
- Methods used to distribute the products or provide the services, and if applicable
- Nature of the regulatory environment.
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately.
However, an operating segment that does not meet the quantitative criteria is still reported separately where
information about the segment would be useful to users of the Financial Statements.
2014 Annual Report | Page 57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 2 - EXPENSES
(a) Administration and Corporate Expenses
Administration and corporate expenses include:
Depreciation - administration
Operating lease rental expense
Other administration and corporate expenses
(b) Exploration Costs Expensed
Exploration costs expensed include:
Depreciation - exploration
Other exploration costs expensed
(c) Finance Costs
Interest paid to related parties – refer note 16
Other
NOTE 3 - INCOME TAX EXPENSE
(a) Income Tax Expense
The reconciliation between tax expense and the product of
accounting profit/(loss) before income tax multiplied by the
Company’s applicable income tax rate is as follows:
Profit/(loss) for year
Prima facie income tax (benefit) @ 30%
Tax effect of non-deductible items
Other items
Net deferred tax assets not brought to account
Income tax attributable to operating loss
(b) Net deferred tax assets not recognised relate to the following:
DTA - Tax losses
DTL - Other Timing Differences
Year ended
30 June 2014
Year ended
30 June 2013
$
$
699
164,177
388,311
553,187
14,732
58,856
73,588
72,301
247
72,548
-
22,639
86,844
109,483
-
14,892
14,892
-
-
-
(961,133)
(288,340)
97,321
-
191,019
-
(124,333)
(37,300)
1,307
(261)
36,254
-
1,538,219
(1,310,946)
984,109
(947,855)
227,273
36,254
These deferred tax assets have not been brought to account as it is not probable that tax profits will be available
against which deductible temporary differences can be utilised.
(c) Franking Credits
The franking account balance at year end was $nil (2013: $nil).
2014 Annual Report | Page 58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 4 - EARNINGS PER SHARE
Basic earnings/(loss) per share
Year ended
30 June 2014
Year ended
30 June 2013
$
Cents
(2.42)
$
Cents
(1.10)
$
$
Profit/(loss) attributable to ordinary equity holders of the Company used in
calculating:
- basic loss per share
(961,133)
(124,333)
Weighted average number of ordinary shares outstanding during the year
used in the calculation of basic earnings per share
Number
of shares
Number
of shares
39,663,978
11,339,726
For the year ended 30 June 2014, diluted earnings per share was not disclosed because potential ordinary
shares, being options granted, are not dilutive and their conversion to ordinary shares would not demonstrate
an inferior view of the earnings performance of the Company.
NOTE 5 - CASH AND CASH EQUIVALENTS
Cash at bank and on hand
4,216,717
34,427
(i) Reconciliation of loss for the period to net cash flows used in operating
activities
Profit/(loss) after income tax
Non-Cash Items:
Depreciation
Share-based payments expensed - options
Change in assets and liabilities:
(Increase)/decrease in receivables
Increase/(decrease) in payables
Increase/(decrease) in provisions
(961,133)
(124,333)
15,431
284,404
170,444
97,764
4,642
-
-
(299,681)
19,046
-
Net cash flows used in operating activities
(388,448)
(404,968)
(ii) Non-Cash Financing and Investing Activities
The following non-cash financing and investing activities were undertaken:
2014 - In April 2014, the Company issued 15,000,000 shares in satisfaction of the repayment of $2,000,000
loan facility from Chaka Investments Pty Ltd, a company of which Mr Peter Ironside (Stavely Director) is the
sole director and Mr Ironside’s wife is shareholder. Refer to note 16.
2013 - None.
2014 Annual Report | Page 59
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 6 – TRADE AND OTHER RECEIVABLES
Current
GST refundable
Other
Total current receivables
Non-Current
Cash on deposit - security bonds
Fair Value and Risk Exposures:
30 June 2014
$
30 June 2013
$
149,537
1,320
150,857
310,491
-
310,491
30,000
30,000
(i) Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair
value.
(ii) The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security.
(iii) Details regarding interest rate risk exposure are disclosed in note 19.
(iv) Other current receivables generally have repayments between 30 and 90 days.
Receivables do not contain past due or impaired assets as at 30 June 2014 (2013: none).
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT
Motor vehicles- at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Total property, plant and equipment
Reconciliation of property, plant and equipment:
Motor Vehicles
Carrying amount at beginning of year
Additions
Depreciation
Carrying amount at end of year
Plant and Equipment
Carrying amount at beginning of year
Additions
Depreciation
Carrying amount at end of year
28,273
(4,241)
24,032
74,599
(11,190)
63,409
87,441
-
28,273
(4,241)
24,032
647
73,952
(11,190)
63,409
-
-
-
647
-
647
647
-
-
-
-
-
647
-
647
2014 Annual Report | Page 60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 8 - DEFERRED EXPLORATION EXPENDITURE
Deferred exploration costs brought forward
Acquisition of Stavely and Ararat Projects
Capitalised expenditure incurred during the year
Deferred exploration costs carried forward
30 June 2014
$
30 June 2013
$
3,159,516
-
1,210,306
-
2,969,400
190,116
4,369,822
3,159,516
Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful
development and commercial exploitation or, alternatively, sale of the respective areas.
Asset Acquisitions
On the 25th March 2013, Stavely Minerals agreed to purchase the Stavely and Ararat Projects from BCD Resources for
total consideration of $2,800,000. The consideration was payable in instalments as follows:
-
-
-
-
-
$1 million paid as deposit on 17 May 2013
$300,000 payable 90 days after completion (paid August 2013)
$500,000 payable 180 days after completion (paid November 2013)
$500,000 payable 270 days after completion (paid February 2014); and
$500,000 payable as cash or shares 360 days after completion (paid April 2014).
NOTE 9 – TRADE AND OTHER PAYABLES
Current
Trade creditors
Deferred payments for tenement acquisitions
Accruals
483,118
135,312
-
1,800,000
64,971
548,089
172,275
2,107,587
Fair Value and Risk Exposures
(i) Due to the short term nature of these payables, their carrying value is assumed to approximate their fair
value.
(ii) Trade and other payables are unsecured and usually paid within 60 days of recognition. The deferred
payments for tenement acquisitions were paid in instalments from August 2013 until April 2014.
NOTE 10 – OTHER PAYABLES – ADVANCES
Current
Advance from related parties – interest free – refer note 16
-
50,000
NOTE 11 – PROVISIONS
Current
Employee entitlements
4,642
-
2014 Annual Report | Page 61
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 12 – ISSUED CAPITAL
(a)
Issued Capital
80,432,000 (2013: 29,000,000) ordinary shares fully paid
9,101,363
1,500,022
30 June 2014
$
30 June 2013
$
(b) Movements in Ordinary Share Capital
Number of
Shares
Summary of Movements
8 Opening balance at 1 July 2012
4,999,992 Conversion of shares 625,000:1
24,000,000 Issue of Shares – March to May 2013
29,000,000 Closing Balance at 30 June 2013
29,000,000 Opening balance at 1 July 2013
2,000,000 Issue of shares on 31 July 2013
4,000,000 Share split on 13 March 2014
15,000,000 Issue of shares on conversion of loans – refer note 16
30,432,000 Initial public offering
- Costs of placement - cash
80,432,000 Closing Balance at 30 June 2014
(c) Options on issue at 30 June 2014
$
8
-
1,500,014
1,500,022
1,500,022
200,000
-
2,000,000
6,086,400
(685,059)
9,101,363
Number
14,400,000
Issue Price of
Shares
27 cents
Exercise Date
31 December 2017
Unlisted Options
During the year:
(i)
(ii)
(iii)
(iv)
12,000,000 unlisted options were granted to shareholders (2013: nil);
2,400,000 unlisted options were granted as share-based payments (2013: nil);
No unlisted options expired (2013: nil); and
No unlisted options were exercised (2013: nil).
(d) Terms and conditions of contributed equity
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank
after all other shareholders and creditors are fully entitled to any proceeds of liquidations.
(e) Capital management
When managing capital, management's objective is to ensure the entity continues as a going concern as well as
maintains optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a
capital structure that ensures the lowest cost of capital available to the entity.
Management may in the future adjust the capital structure to take advantage of favourable costs of capital and issue
further shares in the market. Management has no current plans to adjust the capital structure. There are no plans to
distribute dividends in the next year.
2014 Annual Report | Page 62
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
30 June 2014
$
30 June 2013
$
284,404
-
284,404
284,404
-
-
-
-
NOTE 13 - RESERVES
Equity-based payments reserve
Equity-based payments reserve
Balance at the beginning of the year
Equity-based payments expense
Balance at the end of the year
Nature and purpose of the reserve:
The Equity-based payments reserve is used to recognise the fair value of
options issued but not exercised.
NOTE 14 – EQUITY-BASED PAYMENTS
(a) Value of equity based payments in the financial statements
Expensed in the profit and loss:
Equity-based payments- options
284,404
-
(b) Summary of equity-based payments granted during the year:
Year ended 30 June 2014 (2013: None).
Granted to key management personnel and a consultant as equity compensation:
2,400,000 options expiring 31 December 2017, exercisable at 27 cents each.
The assessed fair values of the options were determined using a Black-Scholes option pricing model, taking into account
the exercise price, term of option, the share price at grant date and expected price volatility of the underlying share,
expected dividend yield and the risk-free interest rate for the term of the option. The inputs to the model used were:
Grant date
Option exercise price ($)
Expected life of options (years)
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Underlying share price ($)
Value of Option ($)
28/4/2014
0.27
3.68
-
97
2.47
0.20
0.1185
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may
occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may
also not necessarily be the actual outcome. No other features of options granted were incorporated into the
measurement of fair value.
2014 Annual Report | Page 63
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 14 – EQUITY-BASED PAYMENTS - continued
(c) Weighted average fair value
The weighted average fair value of equity-based payment options granted during the year was $0.1185 (2013: nil).
(d) Range of exercise price
The range of exercise price for options granted as share based payments outstanding at the end of the year was $0.27
(2013: nil).
(e) Weighted average remaining contractual life
The weighted average remaining contractual life of share based payment options that were outstanding as at the end of
the year was 3.5 years (2013: nil).
(f) Weighted average exercise price
The following table shows the number and weighted average exercise price (“WAEP”) of share options granted as share
based payments.
12 Months to
30 June 2014
Number
12 Months to
30 June 2014
WAEP $
12 Months to
30 June 2013
Number
12 Months to
30 June 2013
WAEP $
Outstanding at the beginning of year
Granted during the year
Exercised during the year
-
2,400,000
-
Outstanding at the end of the year
2,400,000
Exercisable at year end
1,000,000
-
0.27
-
0.27
0.27
The weighted average share price for options exercised during the year was nil (2013: nil).
-
-
-
-
-
-
-
-
NOTE 15 – COMMITMENTS AND CONTINGENCIES
Operating leases (non-cancellable):
(a)
Within one year
More than one year but not later than five years
30 June 2014
$
30 June 2013
$
26,998
4,695
31,693
11,006
-
11,006
These non-cancellable operating leases are primarily for residential premises and a ground lease.
(b)
Exploration Commitments
Tenement Expenditure Commitments:
The Company is required to maintain current rights of tenure to
tenements, which require outlays of expenditure in 2014/2015. Under
certain circumstances these commitments are subject to the possibility of
adjustment to the amount and/or timing of such obligations, however, they
are expected to be fulfilled in the normal course of operations.
375,300
335,500
Contingencies
(c)
The Company is party to a Deed of Option and Royalty relating to the Stavely tenement EL 4556. The Company had no
other contingent liabilities at year end (2013: same).
2014 Annual Report | Page 64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 16 – RELATED PARTIES
(a) Compensation of Key Management Personnel
Short-term employment benefits
Post-employment benefits
Equity-based payment
(b) Other transactions and balances with Key Management Personnel
Loans from Key Management Personnel
Balance at beginning of the year
Loans advanced
Loans repaid by equity
Loans repaid by cash
Interest charged
Interest paid
Balance at end of the year
30 June 2014
$
30 June 2013
$
160,914
6,627
254,776
422,317
25,185
-
-
25,185
-
2,050,000
(2,000,000)
(50,000)
72,301
(72,301)
-
-
-
-
-
-
-
-
In the prior year, the Company entered into a loan facility with Chaka Investments Pty Ltd, a company associated with
director Mr Peter Ironside. The facility was for an amount of $2,500,000 with interest at 7%. Interest and the principal
were to be repaid by 30 June 2014. During the year, drawdowns of $2,050,000 were made. In April 2014, the Company
issued 15,000,000 shares in satisfaction of the repayment of $2,000,000 loan facility from Chaka Investments Pty Ltd, a
company of which Mr Peter Ironside (Stavely Director) is the sole director and Mr Ironside’s wife is shareholder. The
remaining $50,000 was repaid in cash on 14 May 2014. Interest paid on these loans of $72,301 was paid on 30 June
2014.
Cash Advances from Key Management Personnel
Balance at beginning of the year
Loans advanced
Loans repaid by cash
Interest charged
Balance at end of the year
50,000
305,000
(355,000)
-
-
-
50,000
-
-
50,000
During the year, cash advances were made by Mr Christopher Cairns to Stavely totalling $50,000. These advances were
repaid by the Company on 14 May 2014. Ironside Pty Ltd, a company of which Mr Peter Ironside is a director and
shareholder, made advances totalling $255,000 during the year to the Company. The Company repaid these advances
during the year.
Other Transactions with Key Management Personnel
Mr Peter Ironside, Director, is a shareholder and director of Ironside Pty Ltd. During the year an amount of $200,162
(net of GST) was paid/payable to Ironside Pty Ltd for reimbursement of office rental, server costs and other expenses.
(c) Transactions with Other Related Parties
There were no transactions with other related parties (2013: none).
2014 Annual Report | Page 65
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 17 - AUDITORS' REMUNERATION
Amount received or due and receivable by the auditor for:
Auditing the financial statements, including audit review - current year audits
Other services
Total remuneration of auditors
NOTE 18 – SEGMENT INFORMATION
30 June 2014
$
30 June 2013
$
15,855
18,956
34,811
6,000
-
6,000
Management has determined the operating segments based on the reports reviewed by the board of directors that are
used to make strategic decisions. The Company does not have any material operating segments with discrete financial
information. The Company does not have any customers and all its’ assets and liabilities are primarily related to the
mining industry and are located within Victoria. The Board of Directors review internal management reports on a
regular basis that is consistent with the information provided in the statement of profit or loss and other
comprehensive income, balance sheet and statement of cash flows. As a result no reconciliation is required because
the information as presented is what is used by the Board to make strategic decisions.
NOTE 19 – FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company’s principal financial instrument comprises cash. The main purpose of this financial instrument is to provide
working capital for the Company’s operations.
The Company has various other financial instruments such as sundry debtors, security bonds and trade creditors, which
arise directly from its operations.
It is, and has been throughout the year under review, the Company’s policy that no trading in financial instruments shall
be undertaken.
The main risk arising from the Company’s financial instruments is interest rate risk. The Board reviews and agrees on
policies for managing each of these risks and they are summarised below.
Interest rate risk
At balance date the Company’s exposure to market risk for changes in interest rates relates primarily to the Company’s
cash and bonds. The Company constantly analyses its exposure to interest rates, with consideration given to potential
renewal of existing positions, the mix of fixed and variable interest rates and the period to which deposits may be fixed.
At balance date, the Company had the following financial assets exposed to variable interest rates that are not
designated in cash flow hedges:
Financial Assets:
Cash and cash equivalents - interest bearing
Trade and other receivables - bonds
Net exposure
30 June 2014
$
30 June 2013
$
4,203,309
30,000
4,233,309
-
30,000
30,000
Sensitivity
At 30 June 2014, if interest rates had increased by 0.5% from the year end variable rates with all other variables held
constant, post tax profit and equity for the Company would have been $21,166 higher (2013: changes of 0.5% $750
higher). The 0.5% (2013: 0.5%) sensitivity is based on reasonably possible changes, over a financial year, using an
observed range of historical RBA movements over the last year.
2014 Annual Report | Page 66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 19 – FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES - continued
Liquidity risk
The Company has no significant exposure to liquidity risk as there is effectively no debt. The Company manages liquidity
risk by monitoring immediate and forecast cash requirements and ensuring adequate cash reserves are maintained.
Credit risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the
Company. The Company has adopted the policy of dealing with creditworthy counterparties and obtaining sufficient
collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The
Company measures credit risk on a fair value basis.
Significant cash deposits are with institutions with a minimum credit rating of AA (or equivalent) as determined by a
reputable credit rating agency e.g. Standard & Poor.
The Company does not have any other significant credit risk exposure to a single counterparty or any group of
counterparties having similar characteristics.
Fair value
Disclosure of fair value measurements by level are as follows:
• Level 1 – the fair value is calculated using quoted prices in active markets
• Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for
the asset or liability, either directly (as prices) or indirectly (derived from prices)
• Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market data
The Company has no assets or liabilities measured at fair value.
NOTE 20 – SUBSEQUENT EVENTS
There are no matters or circumstances that have arisen since 30 June 2014 that have or may significantly affect the
operations, results, or state of affairs of the Company in future financial years.
2014 Annual Report | Page 67
INDEPENDENT AUDIT REPORT
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of Stavely Minerals Limited
Report on the Financial Report
We have audited the accompanying financial report of Stavely Minerals Limited, which comprises the balance
sheet as at 30 June 2014, the statement of profit or loss and other comprehensive income, statement of
changes in equity and statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1,
the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial statements comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit
in accordance with Australian Auditing Standards. Those standards require that we comply with relevant
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgement, including the assessment of
the risks of material misstatement of the financial report, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the company’s preparation of the
financial report that gives a true and fair view in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation
of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an
Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of
the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of
financial services licensees) in each State or Territory other than Tasmania.
2014 Annual Report | Page 68
INDEPENDENT AUDIT REPORT
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of Stavely Minerals Limited, would be in the same terms if given to the directors as at
the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of Stavely Minerals Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the company’s financial position as at 30 June 2014 and of its
performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note
1.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2014.
The directors of the company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Opinion
In our opinion, the Remuneration Report of Stavely Minerals Limited for the year ended 30 June 2014
complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Glyn O’Brien
Director
Perth, 22 September 2014
2014 Annual Report | Page 69
ADDITIONAL SHAREHOLDER INFORMATION
Information as at 10 September 2014
a) Substantial Shareholders (who have lodged notices with Stavely Minerals Limited)
Name
Peter Reynold Ironside
Christopher John Cairns
b) Shareholder Distribution Schedule
Size of Holding
1 -
1,001 -
5,001 -
10,001 -
1,000
5,000
10,000
100,000
100,001 and over
Total Shareholders
Number of shareholders holding less
than a marketable parcel
c) Voting Rights
Number of
Ordinary Shares
29,677,419
Percentage of
Issued Capital
36.90%
14,687,419
18.26%
Number of
Shareholders
11
100
194
185
61
Number of
Ordinary Shares
8,616
339,113
1,879,994
6,739,876
71,467,401
Percentage of
Issued Capital
0.01
0.42
2.34
8.38
88.85
80,432,000
100.00
551
15
(i)
at meetings of members entitled to vote each member may vote in person or by proxy or attorney, or in the
case of a member which is a body corporate, by representative duly appointed under section 250D;
(ii) on a show of hands every member entitled to vote and present in person or by proxy or attorney or
representative duly authorised shall have one (1) vote;
(iii) on a poll every member entitled to vote and present in person or by proxy or attorney or representative duly
authorised shall have one (1) vote for each fully paid share of which he is the holder and in the case of
contributing shares until fully paid shall have voting rights pro rata to the amount paid up or credited as paid
up on each such share; and
(iv) a member shall not be entitled to vote at general meeting or be reckoned in a quorum in respect of any shares
upon which any call or other sum presently payable by him is unpaid.
d) Restricted Securities
31,499,903 Fully Paid ordinary shares
13,400,000 Unlisted options
Escrowed for 24 months from date of listing (7 May 2014 to 7 May 2016)
2014 Annual Report | Page 70
ADDITIONAL SHAREHOLDER INFORMATION
e)
Twenty largest shareholders:
Name
1
2
3
4
5
6
7
Ironside Pty Ltd
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