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2023 Report2016 | Annual Report
CONTENTS
CORPORATE DIRECTORY .............................................................................................................................................. 2
CHAIRMAN’S REPORT .................................................................................................................................................. 3
OPERATIONS REPORT .................................................................................................................................................. 4
DIRECTORS’ REPORT .................................................................................................................................................. 34
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS ............................................................................... 45
CORPORATE GOVERNANCE STATEMENT ................................................................................................................... 46
DIRECTORS’ DECLARATION ........................................................................................................................................ 54
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ..................................... 55
CONSOLIDATED BALANCE SHEET ............................................................................................................................... 56
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .............................................................................................. 57
CONSOLIDATED STATEMENT OF CASH FLOWS .......................................................................................................... 58
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................................... 59
INDEPENDENT AUDIT REPORT ................................................................................................................................... 78
ADDITIONAL SHAREHOLDER INFORMATION ............................................................................................................. 80
TENEMENT SCHEDULE ............................................................................................................................................... 82
2016 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
Level 11
172 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
2016 Annual Report | Page 2
CHAIRMAN’S REPORT
Welcome,
It is my pleasure to present our 2016 Annual Report.
While conducting a fiscally responsible business, looking after our people, looking after the environment and the
needs of the community, the Stavely team has again added value in ways that we might not have expected a year
ago.
The team has continued to expand exploration targets at our Victorian Projects. And, at the same time the team
has been able to gain significant Victorian government co-funding for exploration, has acquired excellent
exploration ground in Queensland and has begun a review of the copper production potential at our mineral
deposits in Victoria.
As you know, one of our key exploration targets has been a Cadia-type gold-copper porphyry at our Stavely and
Yarram Park Projects in Victoria. The targets, along with other high priority targets, formed the basis for seven
joint funding proposals to the Victorian Government. During the proposal review, the Victorian Government
utilised an independent panel of experts. The response was enthusiastic support for Stavely’s proposals, and
resulted in grant of over $1 million of co-funding from the Victorian government. Key, high-priority targets that
could add substantial value to Stavely will now proceed later this year with a much more cost-effective approach
for shareholders.
In February, Stavely acquired Ukalunda Pty Ltd, which held an application for the Ravenswood West gold and
copper exploration project in north Queensland, near the historical Ravenswood mining centre (+4 million ounces
of gold production). The exploration license has now been granted and exploration has begun targeting breccia
pipe mineralisation that could be similar to nearby Mt. Wright (1 million ounces of gold Mineral Resources).
Prompted by indications of additional copper resources at the Stavely project, improved copper price projections,
and the drop in the Australian dollar relative to the US dollar, Stavely recently conducted a conceptual study of
copper production potential from our two flagship projects, Stavely and Ararat. Stavely and Ararat have been a
major attraction as they contain some 130kt of copper in Inferred Mineral Resources. Results from the study
were quite encouraging, and, the results led to plans to conduct a Scoping Study to review mining and processing
options to further improve the potential economics.
Stavely now uses its excellent team to lever off multiple projects that can be run in parallel. The exciting
Ravenswood Project in tropical north Queensland provides a field season during winter months when the western
Victoria field is too wet for meaningful field programmes. So now, with these complimentary projects, exploration
fieldwork on a substantial number of exciting targets can continue throughout the year. Scoping study of copper
production potential will be conducted coincident with exploration.
Our team has placed Stavely in an admirable position with fresh projects for gold and copper in historic mining
areas that have demonstrated stable, supportive communities and governments. At the time of writing, we have
$1.5m cash, no debt and substantial financial support from government co-funding and drilling contractor share
subscription agreements. Additionally, a path to transition Stavely to copper producer may be indicated by our
future Scoping Study of our flagship projects.
While the market is slow to turn positive, our shareholders have been very supportive. We are not in a position to
issue dividends, but we were able to show our thanks as we distributed credits of $748,000 to our shareholders
via a new government EDI program. Thank you for your stellar support.
Our highly qualified and highly capable team is enthusiastic about drilling our high priority projects in Victoria with
potential for discovery of a Cadia-style copper-gold porphyry, drilling new gold and copper Mt. Wright- style gold
mineralised breccia pipe projects in Queensland, and completing a Scoping Study for copper production from our
flagship resources in Victoria. We look forward to reporting our successes in the future.
Thank you
BILL PLYLEY
2016 Annual Report | Page 3
OPERATIONS REPORT
Drill testing at the Forgan’s Find
and Carroll’s VMS prospects did
return narrow intervals of massive
to stringer sulphide zinc and
copper mineralisation,
including
0.2 metres at 1.77% zinc and
0.12% copper. Despite the drill
core at the Cathcart Hill and
prospects
gold
Remington
no
promising,
appearing
significant
were
intercepts
returned.
An
IP survey over the Curtis
Diorite in the Ararat Project, which
hosts a number of historic gold
the
workings
Honeysuckle Mine, has defined a
number of chargeability features
which are considered
to be
worthy of drill testing.
including
for
potential
At
the
the Stavely Project,
Company’s conceptual study on
the
copper
concentrate production from the
chalcocite-enriched
supergene
‘blanket’ at the Thursday’s Gossan
copper deposit demonstrated
sufficient positive outcomes with
respect to net revenue and Net
Present Value, as well as an
attractive Internal Rate of Return,
to proceed to a Scoping Study.
northern
evidence
Additional IP data was collected at
of
the
the
end
Gossan
Thursday’s
Porphyry
prospect, where
copper-gold
strong
on
based
structural kinematic indicators, 3D
modelling,
spatial analysis of
alteration mineralogy, and sulphur
isotopes
from previous deep
diamond drilling as well as
indicates where the
geophysics
‘core’
copper-gold
targeted
potassic zone should be located.
Drill testing of the porphyry target
beneath the low-angle structure
where the better developed gold
and
is
copper mineralisation
expected will be conducted in the
forthcoming year.
Encouraging results were received
from the soil sampling programme
conducted at the Mount Stavely
copper-gold pophyry target. The
NitonTM XRF results produced an
elevated molybdenum response
which coincided with both an
anomalous gold assay and an
induced polarisation chargeability
feature. The geochemical and
geophysical
the
margin of the Mount Stavely
gravity low is consistent with and
possibly
of
mineralisation associated with a
buried porphyry intrusion.
signature on
indicative
Overview
EXPLORATION
The
two
The Company’s assets located in
western Victoria and in northern
Queensland are prospective for
copper-gold mineralisation with
existing VMS-style and porphyry
deposits.
flagship
projects, Ararat and Stavely, host
Inferred Mineral Resources that
contain over 130Kt of copper and
over 19,000 ounces of gold plus
accessory zinc and silver. Stavely
Minerals is targeting a Cadia-type
gold-copper porphyry (Stavely and
Yarram Park Projects), and a
Degrussa-style VMS (volcanogenic
massive sulphide) deposit (Ararat
Project).
Fairview
The
low-sulphidation
mesothermal to epithermal gold
prospect in the Stavely Project is
potentially analogous to a Lake
Cowal gold deposit. There are also
indications of ‘Stawell-style’ and
gold
‘intrusive-related’
mineralisation
the Ararat
Project.
at
VMS
The Ararat Project hosts Besshi-
style
copper-gold-zinc
mineralisation at Mt Ararat with a
Total Mineral Resource of 1.3 Mt
at 2.0% copper, 0.5 g/t gold and
0.4% zinc and 6 g/t silver including
0.25Mt
in
Indicated Mineral Resources with
the remainder of the Total Mineral
Resource classified as
Inferred
Resources.
at 2.2%
copper
Ararat
Goldfield
The
has
significant historic alluvial and
deep
lead production of circa
640,000 ounces of gold but with
no known substantial hard-rock
source.
geochemical
Regional
induced
gravity,
polarisation (IP) geophysics and
soil
sampling
programmes conducted over the
prospective stratigraphy
in the
Ararat Project have identified new
base metal and gold targets.
Drilling at Carroll’s VMS prospect.
2016 Annual Report | Page 4
the
near
licence
exploration
Queensland.
Exploration has commenced on
the recently granted Ravenswood
in
West
The
northern
Ravenswood West Project
is
located
historical
Ravenswood mining centre, which
has +4Moz of combined historical
and modern gold production.
Priority targets include ‘The Bank’
breccia pipe, which
is being
evaluated as a potential drill
target similar to the nearby Mt
Wright Gold Mine (~1Moz) and
the Welcome
pipe
(210koz).
breccia
In addition, it will be a priority to
determine if the high-grade gold
mineralisation, including 6 metres
at 16.7 g/t gold from 14 metres, at
the Podosky’s prospect on an
excised mining lease, extends into
the Ravenswood West Project
area.
CORPORATE
the Company has
The share subscription agreement
between Stavely Minerals and
Titeline Drilling Pty Ltd, under
which
the
option to settle monthly drilling
charges by way of 50% cash
payment and 50% by way of
shares, is still in place. To date
approximately $0.5 million of the
total $2 million facility has been
used as at the end of June.
Pty
In February 2016, Stavely Minerals
acquired Ukalunda
Ltd
(‘Ukalunda’), being the applicant
of EPM26041 in north Queensland
for a purchase cost of $2. The
purchase was a related party
transaction as Ukalunda was
established
in 2007 by Stavely
Minerals’ Director Mr Chris Cairns
and Mr Peter Ironside with the
of
specific
opportunistically
for
exploration permits
in North
Queensland.
applying
purpose
Ukalunda was the vehicle used for
the application as the potential for
rare
(REE’s)
mineralisation is considered to be
element
earth
of
(30%
$748,000
The Company distributed credits
of
the
Company’s eligible 2014- 2015
exploration expenditure of $2.49
million) to Shareholders in June
2016. The exploration credits
were distributed to Shareholders
pro-rata relative to the number of
shares held and the total shares
on
(95,490,593) on the
Record date of 18 May 2016. The
EDI enables eligible exploration
companies to create exploration
credits by giving up a portion of
their carried forward losses from
eligible exploration expenditure
and distributing these exploration
credits to equity shareholders.
issue
investment
The EDI is intended to encourage
in
shareholder
exploration
companies
undertaking greenfields mineral
exploration in Australia.
OPERATIONS REPORT
outside of Stavely’s normal copper
and gold focus, and having a
wholly-owned subsidiary to hold
represent a
the asset could
strategic advantage in the future
should the REE’s potential be
progressed towards any significant
value and be considered for a
possible future asset sale.
In
from
Australia
initiative.
In June 2016, Stavely Minerals
received offers of over $1 million
of exploration co-funding for five
projects
the Victorian
Government under the TARGET
exploration
an
economic and geoscience boost to
Victoria,
Victorian
the
Government offered a total of
almost $2 million in grants to five
recipients for nine projects to
explore for copper, other base
metals and gold in the Stavely
Region. A collaborative geological
the
research programme by
Geological Survey of Victoria and
Geoscience
has
identified the Stavely geological
province in western Victoria as
having potential for copper, other
base
gold
mineralisation. The grant funding
industry-
is provided on an
matched
to mineral
exploration companies to further
enhance the understanding of
in
potential mineral deposits
western Victoria, with the view
that the investment will generate
jobs, economic and other flow-on
region. The
the
benefits
TARGET grants will cover up to
half the cost of eligible exploration
including geophysical
activities,
sample
and
surveys, drilling
analysis, with
the companies
funding the balance by their own
means.
metals
basis
and
to
Major porphyry/ intrusive-related
and VMS copper-gold, as well as
mesothermal to epithermal gold
exploration targets identified by
the Company at its Stavely, Ararat
and Yarram Park Projects will be
tested in the next twelve months
following the receipt of the co-
funding commitments.
2016 Annual Report | Page 5
OPERATIONS REPORT
The Projects have
excellent
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.
The Ravenswood Project is located
90km south of Townsville and
10km south west of Ravenswood
The
in North Queensland.
Mingela- Ravenswood - Burdekin
Dam
the
road passes down
eastern boundary of the project
(Figure 2).
Review of
Operations
Background
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 Victorian projects
include
exploration tenements with a total
area of 392 square kilometres of
100% owned and 72 square
kilometres of joint venture tenure.
an
exploration
The Queensland Project includes a
granted exploration licence with
an area of 241 square kilometres
licence
and
application covering 55 square
kilometres. The
is
made up of rolling hills alternating
with sandy flats. The Burdekin
River parallels
southern
boundary of the project. Access
within the tenements is by 4WD
via station tracks.
topography
the
Figure 1. Stavely, Yarram Park and Ararat Project Location
Plan.
Figure 2. Ravenswood Project Location Plan.
2016 Annual Report | Page 6
OPERATIONS REPORT
Regional
Victoria
Geology Western
The Ararat and Stavely Projects,
while only 40 kilometres apart,
are hosted within materially
different geologic domains (Figure
3).
The Ararat Project is hosted in the
Stawell - Bendigo zone of the
Lachlan Fold Belt and is comprised
of Cambrian age 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
Cambrian
Delamerian
age
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
Economic
Department
Development, Jobs, Transport and
Resources
in western Victoria
have supported the interpretation
of an Andean-style convergent
margin environment
the
development of the buried Stavely
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
Fold Belt and
The
Delamerian sequences are in fault
contact
large-scale
thrusting along the east dipping
Moyston Fault (Cayley and Taylor,
2001).
through
Largely unconformably overlying
both these domains by low-angle
Figure 3. Geology of south-eastern Australia.
décollement is a structural outlier
of the younger Silurian fluvial to
to
shallow marine
mudstone
the
Grampians Group.
sequences of
sandstone
Regional Geology North
Queensland
The dominant rock types within
the Ravenswood Project are
typically I-type calcic hornblende-
biotite granodiorite to tonalite of
the Ravenswood Batholith of
Middle
to Middle
Devonian age (Figure 4).
Silurian
the
cuts
Zone,
A major structure, the Mosgardies
east-west
Shear
through
Ravenswood
Batholith adjacent to three gold
centres. The shear zone is up to
2.5km wide. The main reef at
Ravenswood, the ”Buck Reef”, is
contained within the Mosgardies
Shear Zone. The majority of faults
in the area are transverse to the
Morgardies Shear Zone and trend
30o to 40o either side of north.
The bulk of the auriferous quartz
reefs and leaders are hosted by
shears with NW to NS orientation.
Mineralisation is associated with
shear hosted quartz veins and is
dominated by pyrite-chalcopyrite-
galena-gold.
are
The
generally narrow and of limited
strike
style of
mineralisation is widespread but
of low tonnage.
length. This
veins
chalcopyrite
Copper as
(and
molybdenum-gold) mineralisation
is also associated with quartz
porphyry stocks. Mineralisation is
contained both in sparse quartz
veins and disseminated within the
intrusive.
More widespread phyllic (quartz-
sericite) and potassic
(biotite)
alteration is reported suggestive
of porphyry style alteration and
style of
mineralisation.
deposit offers bulk
tonnage
potential.
This
in
Cu-Au-Mo occurs
intrusive
breccias (“pipes”) at Three Sisters
and Mt Wright outside the project
area. Paleoplacer gold deposits
occur in Quaternary sediments on
the flanks of Tertiary laterites.
2016 Annual Report | Page 7
OPERATIONS REPORT
Figure 4. Ravenswood West Project – Tenement over Geology, Gravity and Magnetics.
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) Total Mineral Resource of
1.3Mt at 2.0% copper, 0.5 g/t
gold, 0.4% zinc and 6 g/t silver for
a contained 26kt of copper,
21,000 ounces of gold, 5.3kt of
zinc and 242,000 ounces of silver
(Table 1).
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.
The Mt Ararat Copper Indicated
and Inferred Resource Estimate,
August 2016, remains unchanged
from
the Mt Ararat Copper
Indicated and Inferred Resource
Estimate, August 2015. There has
been no additional drill data
collected from the deposit and
although economic circumstances
affecting the mining industry have
changed
the
underlying assumptions utilised in
2015 Mineral Resource estimate
remain valid.
2015,
since
The Thursday Gossan Chalcocite
Copper Inferred Mineral Resource
Estimate remains unchanged from
the Thursday Gossan Chalcocite
Copper
Resource
Inferred
Estimate, August 2013. There has
been no additional drill data
collected from the deposit and
although economic circumstances
affecting the mining industry have
changed
the
underlying assumptions utilised in
the
2013 Mineral Resource
estimate remain valid.
2013,
since
(b) Stavely
Project Mineral
Resource
In the Stavely Project, at the
Thursday’s Gossan Prospect, a
near surface secondary chalcocite
enriched
an
estimated (using a 0.2% Cu grade
lower cut-off) – 28Mt at 0.4%
copper for 110kt of contained
copper (Table 2).
blanket with
2016 Annual Report | Page 8
OPERATIONS REPORT
Table 1. The Mount Ararat Resource Estimate
Reporting
Threshold
Classification
Domain
Tonnes: Cu
Resource
(KT)
Cu
Grade
(%)
Tonnes: Au,Ag,Zn
Resource (KT)
Au Grade
(ppm)
Ag Grade
(ppm)
Zn Grade
(%)
1.0% Cu
2.0% Cu
Indicated
Inferred
Total 1% Cu
Indicated
Inferred
Total 2% Cu
Supergene
Fresh
Total
Weathered
Supergene
Fresh
Total
Supergene
Fresh
Total
Weathered
Supergene
Fresh
Total
50
200
250
170
30
870
1070
1320
30
80
110
30
20
230
280
390
2.4
2.2
2.2
1.7
2.2
1.9
1.9
2.0
2.9
2.9
2.9
2.9
3.0
3.0
3.0
2.9
170
80
1070
1320
1320
30
50
310
390
390
0.5
0.4
0.5
0.5
0.5
1.3
0.3
0.6
0.6
0.6
3.1
4.4
6.2
5.7
5.7
7.9
4.2
7.7
7.3
7.3
0.1
0.4
0.4
0.4
0.4
0.2
0.4
0.6
0.5
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. Three material types reported as
varied economic factors will be applicable to the deposit base on reported material types.
Table 2. The Thursday Gossan Chalcocite Copper Inferred Resource Estimate (reviewed in 2016)
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.
2016 Annual Report | Page 9
OPERATIONS REPORT
Ararat Project
The Ararat Project is prospective
for VMS copper-gold-zinc-silver
mineralisation as well as ‘Stawell-
style’ and
intrusion-related gold
mineralisation.
an
Collection of regional gravity data,
together with
induced
polarisation (IP) survey and a soil
geochemical sampling programme
over the prospective stratigraphy
in the Ararat Project successfully
identified new base metal and gold
targets (Figure 5).
28
architecture
approximately
A gravity survey covering an area
of
square
important
kilometres provided
information with respect to the
regional
and
distribution of rock types in the
area. IP data collected over the
prospective horizons highlighted
chargeability
some
anomalies
key prospects.
Diamond drilling was conducted at
the Mt Ararat Footwall, Carroll’s
and Forgan’s Find base metal
prospects and RC drilling with
diamond tails at the Cathcart Hill
gold prospect to ascertain if the
chargeability anomalies are related
to sulphide mineralisation.
significant
at
Exploration was also conducted at
two historic hard
rock gold
in the Ararat Project,
workings
namely
and
Remington
the
Honeysuckle Mines. An IP survey
was conducted at the Honeysuckle
prospect and an RC/ diamond
drilling
the
programme
Remington Mine.
at
The regional soil and rock-chipping
geochemical programme has been
successful in identifying a number
of new targets with the potential
to host both VMS-style copper-
gold-zinc mineralisation
and
‘Stawell-style’ or intrusive related
gold mineralisation.
A strong arsenic anomaly has been
defined in the northern portion of
Figure 5. Ararat Project - Copper and Gold Targets.
the Ararat Project. The +20 ppm
arsenic anomaly extends in excess
is
of
kilometres
2.8
predominantly
the
Minotaur Joint Venture tenement
EL5450 (Figure 6).
and
located on
Several of the soil samples in this
area returned gold values in excess
of 50 ppb, with peak values of 103
ppb (0.10 g/t) and 238 ppb (0.24
g/t). The gold-arsenic anomaly is
coincident with
three primary
historic gold workings, namely the
Plantagenet, New Hope
and
Goldburra Mines.
Anomalous gold values of 1.25 g/t
and 1.41 g/t were returned from
rock
samples previously
collected by Stavely Minerals in
this area. An application has been
chip
made for an exploration licence
(EL6271) immediately to the north
of the Ararat Project to cover the
extension of the anomalous soil
geochemistry
the
Stawell Granite (Figure 6). The
current anomaly
is a southern
mirror image to the Stawell Gold
Mine
located on the northern
margin of the Stawell Granite.
trend
into
The regional sampling over the
Curtis Diorite in the vicinity of the
is
historic Honeysuckle Mine
incomplete but the limited results
received to date have returned
anomalous arsenic values up to
123 ppm.
2016 Annual Report | Page 10
OPERATIONS REPORT
Figure 6. Ararat Project - Regional Soil Sampling over simplified geology.
i. Mt Ararat VMS Deposit
in
smaller
A diamond hole was drilled to a
depth of 375m to test a large and
strong IP (120mV/V) chargeability
Line 156300mN,
anomaly
identified in the footwall to the Mt
Ararat VMS deposit (Figure 7). The
known deposit is associated with a
IP chargeability
much
anomaly
the
footwall anomaly, which was
modelled to extend from 150m
below the surface to more that
400m below surface. Previous
drilling has not tested this position.
The drill hole was disappointing
with no indication of the source of
the IP chargeability anomaly and
was not sampled.
compared with
ii.
Carroll’s and Forgan’s Find
Base Metal Prospects
to
strong
A diamond hole was drilled at the
Carroll’s prospect to a depth of
IP
test a
321m
chargeability anomaly (Figure 7),
which coincided with a 1.5km long
x 500m wide zinc-copper soil
geochemistry anomaly and a
surface
sample which
returned a value of up to 24%
copper, 1.1% zinc and 0.52 g/t
gold.
float
At Forgan’s Find a diamond hole
was drilled to a depth of 359.9m in
November 2015 to test gossanous
mineralisation identified at surface
which fell within the 1.5km long x
500m wide zinc-copper anomaly
(Figure 7). At Forgan’s Find an
rock
gossanous
in-situ
chip
returned assays of 10% copper,
0.4% zinc and 1.5 g/t gold. The
geochemical anomaly is supported
by the strong
IP chargeability
feature which has been modelled
from approximately 100m depth to
250m depth.
intervals of massive to
Narrow
stringer sulphides were intersected
in the two drill holes. Drill sections
are presented in Figures in 8 and 9.
Results include:
o 0.2 metres at 1.77% zinc and
0.12% copper
o 0.25 metres at 0.57% zinc and
0.13% copper
o 0.25 metres at 0.41% zinc
2016 Annual Report | Page 11
OPERATIONS REPORT
v. Honeysuckle Mine
Gold
Prospect
There are a number of historic
mines, including the Honeysuckle
Mine, hosted within a late-phase
in the Ararat
intrusive granite
Project
Field
(Figure
identified
investigations
alteration which may indicate the
presence of a reasonably sized
gold mineralised system, although
focussed upon
historic mining
narrow, high-grade reefs.
have
6).
Gold in the Honeysuckle area was
discovered in 1897 and grades of
7.5 g/t gold were reported. With
the gold being hosted within an
intrusive, Induced Polarisation (IP)
in
is
identifying sulphides potentially
associated
gold
mineralisation.
to be effective
likely
with
Figure 7. Ararat Project - IP Chargeability Profiles Line Locations.
iii.
Cathcart Hill Gold Prospect
to
test
prospect
chargeability
One RC hole drilled to a depth of
200m and two RC holes with
diamond tails, drilled to depths of
305.7m and 302.6m respectively,
were completed at the Cathcart
Hill
IP
chargeability features (Figure 7).
These
anomalies
have a tabular geometry and dip
against the stratigraphy and hence
were considered to be significant
with respect to potential gold
mineralisation. The Cathcart Hill
gold prospect was identified by the
soil
2015
reconnaissance
geochemistry
and
float rock-chip sampling. An 800m
long arsenic-chrome geochemical
anomaly associated with iron-rich
pseudo gossan with
laboratory
assay results of up to 0.45%
arsenic and 0.8 g/t gold was
identified at Cathcart Hill.
programme
Despite the abundant sulphide
mineralisation
intercepted,
selective sampling of the drilling
did not return any significant gold
intercepts or
interesting
any
pathfinder elements.
iv.
Remington
Prospect
Mine
Gold
The hard rock Remington Mine
was discovered in 1895 and was
reported as producing very high-
grade material of up to 23 ounces
per tonne (Figure 5). Six RC holes
were drilled for a total of 686m to
target the down dip extensions of
the Remington Mine reef. Due to
excess water, which would not
have been able to be contained by
the sumps, three of the RC holes
had to have diamond tails to reach
the target depth. The drill holes
targeted
did
Remington Reef and Whitten Reef
however
results were
disappointing with no significant
assay results received.
intercept
the
the
IP data was collected on four lines
in the
over the Curtis Diorite
Mine
Honeysuckle
area.
Processing of
the data and
integration with magnetic and
gravity data has
the
identification of a number of
chargeability features which are
considered worthy of follow-up.
led
to
Previous rock chip sampling by the
Company in the vicinity of the
Honeysuckle Mine returned a gold
value of 5.33 g/t. Additional IP
data will be collected prior to the
selection of drill targets.
2016 Annual Report | Page 12
OPERATIONS REPORT
Figure 8. Ararat Project - Carroll’s Prospect Oblique Drill Section SADD005.
Figure 9. Ararat Project - Forgan’s Find Prospect Oblique Drill Section
SADD007.
2016 Annual Report | Page 13
Stavely Project
opportunities
The Stavely Project hosts several
significant
for
discovery of porphyry copper-gold
and VMS base-metals +/- gold
deposits.
During the year the Company
IP at the
conducted additional
Thursday’s
Porphyry
Gossan
prospect, soil sampling at the
Mount Stavely Porphyry prospect
and a conceptual study on the
potential for copper concentrate
production from the chalcocite-
enriched supergene ‘blanket’ at
the Thursday’s Gossan copper
deposit (Figure 10).
The
study
conceptual
demonstrated sufficient positive
outcomes with respect to net
revenue and Net Present Value, as
well as an attractive Internal Rate
of Return, for Stavely Minerals to
proceed to a scoping study. There
are as not yet reasonable grounds
to support the discussion of the
OPERATIONS REPORT
projected economic outcomes in
detail. The key elements of the
conceptual study including:
o An average feed grade of
0.5% copper;
o A sulphide flotation recovery
on
of
metallurgical testwork); and
(based
87%
o A sulphide concentrate grade
of 27% copper (based on
testwork)
metallurgical
‘clean’
producing a very
concentrate
low
with
deleterious elements.
Financial assumptions included:
o World Bank forecast copper
prices (Figure 11);
o A range of A$/ US$ exchange
rates of A$1 = US$0.60 to
US$0.75
The conceptual study identified a
to
number
enhance
economics
including:
opportunities
project
of
o Increasing the size of the
resource – recent drilling has
identified chalcocite copper
the
mineralisation outside
current Mineral Resource.
Stavely Minerals’ drill hole
SMD004 intersected 52m at
from 39m
0.23% copper
This
depth.
downhole
intercept
located
is
approximately 400m to the
west of the existing Mineral
Resource and illustrates the
potential
material
for
increases;
it
costs
equipment.
o Reducing the assumed mining
and milling
by
investigating the suitability of
surface
using
continuous
The
mining
the mining
attraction of
method
is well
is that
suited to long and wide, flat-
the
lying mineralisation;
oxidized
the
of
nature
mineralisation is well suited
to this mining method; the
is already partially
product
comminuted and reduces the
need for primary crushing;
and this mining method can
the
be very selective
vertical dimension.
in
o Reducing the processing costs
through
reagent
lowering
usage and by streamlining the
processing flowsheet – the
Scoping Study will investigate
the potential to beneficiate
from un-
the mineralised
mineralised clays prior
to
flotation of
sulphide
concentrate amongst other
processing enhancements.
the
Figure 10. Stavely Project – Thursday’s Gossan Long section of the chalcocite-
enriched copper mineralisation ‘blanket’.
Figure 11. World Bank Copper Price, US$/t (June 2016).
2016 Annual Report | Page 14
i.
Thursday’s Gossan Porphyry
Prospect
Additional IP data was collected at
the northern end of the prospect
in order to better resolve targets
beneath the low-angle structural
offset,
in drilling by
identified
The
Stavely Minerals in 2014.
areas to the north and east of
previous
Stavely
Minerals are considered to have
the greatest potential for discovery
copper-gold mineralisation
of
associated
resurgent
with
porphyry intrusion.
drilling
by
system.
porphyry
Deep drilling conducted by Stavely
Minerals and previous explorers
has provided a geological vector to
the metal-rich potassic ‘core’ of
the
Three
diamond drill holes have been
planned at the Thursday’s Gossan
Porphyry prospect to target the
‘core’ where the best developed
copper and gold grades could be
expected and have yet to be
discovered
12).
information gained
Geophysical
from the IP surveys and geological
and
evidence
obtained from the diamond core
including structural investigation,
3D modelling, spatial analysis of
alteration and mineralogy, as well
as sulphur isotopes has been used
to design the drilling programme.
geochemical
(Figure
ii. Mount Stavely Prospect
a
is
The Mount
Stavely porphyry
copper-gold target is reflected as a
‘low’ in the gravity data and as a
‘low’ in the airborne magnetic data
interpreted to reflect
which
porphyry
as
respectively
intrusive at depth and magnetic
fluid
destructive hydrothermal
alteration.
gold
Proximal
mineralisation at the Fairview gold
prospect
to be
mesothermal to epithermal style
gold mineralisation. An IP survey,
conducted in 2014 in the Mount
a
Stavely
chargeability
is
slightly offset to the north-east
from the gravity low.
feature which
interpreted
returned
area
is
OPERATIONS REPORT
Stavely
prospect
Soil samples were collected at the
Mount
for
primary analysis using a NitonTM
portable XRF analysis with gold
analysis through ALS. The NitonTM
results show an arsenic anomaly in
the
immediate vicinity of the
topographic high at Mount Stavely
(Figure 13) possibly indicating a
higher-level within the system.
The NitonTM
results show an
elevated molybdenum response
which
is coincident with an IP
chargeability anomaly (Figure 14).
A coincident anomalous gold value
of 49 ppb was also returned in this
area. As the chargeability feature
with Mo-Au geochemical support
overlies
the Williamson Road
Serpentinite (not expected to have
a
background
signature), they are interpreted to
be associated with a buried
porphyry. A diamond drill hole has
been planned to test for intrusion-
related
gold
mineralisation.
high Mo-Au
copper
and
Yarram Park Project
an
area
the
The Yarram Park Project is located
within
where
regional
interpretation of
aeromagnetic data has identified
the presence of an offset portion
of either the Mount Stavely Belt,
or the Bunnagul Belt, beneath the
Quaternary cover (Figure 15). Both
the Mount Stavely Belt and the
Bunnagul Belt are considered to be
intrusive-
highly prospective for
copper-gold
related
and
gold
mineralisation.
diatreme-hosted
porphyry
IP data was collected at the Toora
West prospect in the Yarram Park
Project.
Figure 12. Stavely Project – Thursday’s Gossan Planned Drilling
and IP Survey.
2016 Annual Report | Page 15
OPERATIONS REPORT
Figur
e 13
Figure 14
Figure 13 & 14. Stavely Project – Mount Stavely Copper Gold Prospect soil geochemistry over gravity draped on
magnetics. Top image arsenic geochemistry, bottom image molybdenum.
2016 Annual Report | Page 16
OPERATIONS REPORT
Figure 15. Yarram Park Project - Aeromagnetic Image.
i.
Toora West Prospect
A coincident gravity
low with
peripheral and central magnetic
highs was
identified within the
Cambrian aged volcanics at the
Toora West prospect.
Mineralisation in porphyry copper-
gold and diatreme-hosted deposits
is
commonly associated with
magnetite that can produce strong
discrete peripheral and central
anomalies. Porphyry
magnetic
intrusions and diatremes are
commonly
less dense than the
surrounding country rocks and
produce a gravity low.
IP
completed over
low
the
The
coincident
and
gravity
magnetic high identified a pair of
chargeability
features on both
survey lines. The IP chargeability
features correlate with the margins
of the small magnetic high at the
core of the gravity low which itself
is enclosed within a magnetic high
annulus and makes this prospect a
very attractive conceptual geologic
target and a priority for drill testing
(Figure 16).
2016 Annual Report | Page 17
OPERATIONS REPORT
Figure 16. Yarram Park Project - Aeromagnetic Image.
Ravenswood Project
The Ravenswood Project is highly
gold-copper
for
prospective
excellent
exploration,
with
and
for
potential
intrusive-related
gold
mineralisation, as well as having
copper-
four
prospects
molybdenum-gold
identified (Figure 17).
porphyry
orogenic
The presence of high-grade gold
mineralisation at the Podosky’s
prospect
(located on a small
excised Mining Lease held by
Kitchener Mining NL) highlights the
area.
gold potential
Significant
drill
intercepts include:
the
in
high-grade
o 6 metres at 16.7 g/t gold
from 14m depth in drill hole
PDR-2
o 6 metres at 13.38 g/t gold
from 26m depth in drill hole
PDR-9
o 5 metres at 12.06 g/t gold
from 29 depth in drill hole
PDR-23.
The Ravenswood West Project has
four identified porphyry copper-
molybdenum-gold prospects – The
Bank, Keane’s, Barrabas and Turkey
Gulley , none of which have been
drilled since the early 1970’s.
Surface rock chip results of up to
19% copper, 0.24 g/t gold, 0.2%
molybdenum and 1,793 g/t silver
have been returned from these
prospects.
Historical drill results from the
prospect
Keane’s molybdenite
include:
o 45 feet 3 inches (13.8m) at
0.26% molybdenum
o 1 foot 7 inches (0.38m) at
2.26 ounces (70.3 g/t) silver
per tonne
o 9
feet
at 9.6
(2.74m)
pennyweight of gold plus
silver (15 g/t) of which 0.58
g/t was gold.
gravity
to
low which
reflect a
The Project area is underlain by a
large
is
interpreted
large
intrusive body at depth, and is
likely to be the source intrusion for
the multiple phases of higher-level
porphyry intrusions (Figure 4).
West
trends,
In conjunction with very strong
the
regional structural
Project
Ravenswood
is
have
excellent potential for porphyry,
diatreme
intrusive-related
and
mineralisation.
considered
to
Early stage rare earths potential
identified with very anomalous
stream sediment sample results up
to 0.25% cerium, 0.14% lanthanum
and other rare earth elements are
yet to be followed up.
2016 Annual Report | Page 18
OPERATIONS REPORT
Figure 17. Ravenswood West Project – Prospect Location Plan.
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 “Mount Ararat 2015 Resource Estimate Report”
dated 24 August 2015 and “Appendix 1, Reporting of Thursday Gossan Chalcocite Copper Resource against criteria in Table 1 JORC
Code 2012” authored by Mr Duncan Hackman of Hackman and Associates Pty Ltd. Mr Hackman 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). Mr Hackman
consented to the inclusion in the Stavely Minerals’ 2015 Annual Report of the matters based on his information in the form and
context in which it appears.
As there has been no new information generated from the Mineral Resource areas, Mr Cairns has reviewed the underlying
assumptions in the 2015 Mineral Resources reports and finds that there have been no material changes and that the underlying
assumptions and technical parameters remain valid. There are therefore no changes to the Mineral Resources estimates from this
annual review.
Stavely Minerals’ policy for Mineral Resources estimates is to have the estimates done by suitably qualified and experienced
external consultants and have these estimates reviewed internally by suitably qualified and experienced Stavely Minerals’
personnel.
2016 Annual Report | Page 19
OPERATIONS REPORT
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.
Hackman and Associates Pty Ltd., 2015, Mount Ararat, Victoria, Australia 2015 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.
2016 Annual Report | Page 20
OPERATIONS REPORT
Appendix 1: Mt Ararat Mineral Resource Estimate
Summary:
The Mount Ararat August 2015 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 Reserves (the JORC Code, 2012 Edition).
The Mount Ararat 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
material types reported as varied economic factors will be applicable to the deposit base on reported
material types.
The estimate:
was based on recent 2014-15 Stavely Minerals drilling and historic drilling data which is of unknown
reliability and quality that tests a discrete steeply dipping body of base metal 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 309 Cu assays from 64 holes (271 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).
2016 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
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
Logging
Sub-sampling
sample preparation
techniques
and
Quality of assay data and
laboratory tests
No detailed information or data:
Historic reports state that diamond holes had relatively low core
recoveries, and RC drilling encountered water in the weathered and
oxidized mineralized zone. Limited data indicates that samples from
this material will be significantly compromised by drilling and sampling
conditions encountered.
lithological drill logs generated by workers but not utilised in generating
resource estimate.
Pennzoil: Half-core samples were taken from core showing visible
mineralisation.
Centaur Mining:
o MA24 to MA38: Half-core samples were taken from core showing
visible mineralisation. Sample reduction process unknown.
o 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.
o M94_1 to M94_4: Half-core samples were taken from core
showing visible mineralisation. Sample reduction process
unknown.
Beaconsfield Gold:
o ARD001 to ARD004: diamond drilling – sampling method and
reduction unknown.
o ARC001 to ARC006: 84mm RC chips. Sample collected by passing
through 3 tiered riffle splitter. Sample reduction process
unknown.
Stavely Minerals:
o SADD001 to SADD003: diamond drilling – ½ HQ core sampled by
core saw. Crush-split and pulverise to 85% passing -75micon
o SARC00[1,2,4 - 9]: RC drilling – cone splitter. Crush-split and
pulverise to 85% passing -75micon
Pennzoil: A base metal suite was assayed via AAS (digestion not
specified) and Au was assayed via fire assay.
Centaur Mining:
o MA24 to MA38: A base metal suite was assayed via AAS (digestion
not specified) and Au was assayed via fire assay.
2016 Annual Report | Page 22
OPERATIONS REPORT
Criteria
Explanation
o MA39A to MA58: A base metal suite was assayed via AAS
(digestion not specified) and Au was assayed via fire assay.
o 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:
o 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.
o 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 historic routine samples
Stavely Minerals:
o SADD00[1 – 3], SARC00[1,2,4 - 9]: Australian Laboratory Services,
Orange. Cu, Ag and Zn by four acid digest (including HF), ICP-AES
determination (ALS code ME-ICP61). Samples >1% Cu re-assayed
by ore grade four acid digest, ICP-AES determination (ALS code
ME-OG62). Au by 30g fire assay, AAS determination (ALS codes
Au-AA23 and Au-AA25). Client and Laboratory QC data inserted
with routine samples and establish acceptable reliability of assays.
sampling and
No available data available for analysis
Verification of
assaying
Location of data
Data spacing and distribution
Orientation of data in relation to
geological structure
Sample security
Audits or reviews
Historic drillholes originally located according to two local grids (details
unknown). Collar coordinates were converted to GDA94 zone 54S (MGA94
54S) by historic workers. Conversion details are unknown. Stavely Minerals
holes located in MGA94 54S. The estimate is undertaken using the supplied
MGA94 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 and Indicated Resources.
Within the central 500m of mineralisation (strike length):
o Oxide mineralisation – drill tested on 50m centred section lines
o Fresh Indicated Resources –tested at nominal 50m centres.
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
Section 2: Reporting of Exploration Results
Criteria
Explanation
Mineral
tenure status
tenement and
land
Mineralisation straddles boundary between exploration licences EL4758
(expired 28/01/2014) and EL3019 (expired 21/12/2014) and is within
Retention Licence application RL2020. SVY’s tenure over the area
covered by expired licences EL4758 and EL3019 remains current
pending the grant of the retention licence.
Tenements currently held by Stavely Minerals Limited
Stavely Minerals have informed HA that the licences are in good
standing.
2016 Annual Report | Page 23
OPERATIONS REPORT
Criteria
Explanation
Exploration done by other parties
Geology
Drill hole Information
Pennzoil: 12 holes drilled into mineralisation.
Centaur Mining: 38 holes drilled into mineralisation.
Beaconsfield Gold: 10 holes drilled into mineralisation
Stavely Minerals: 9 holes drilled into mineralisation
Steeply westerly dipping, single planar massive sulphide horizon
(historically described as VMS)
82 holes drilled in the prospect area, 64 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 32 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]
Assay sample intervals:
Data aggregation methods
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:
o Smearing and/or preferential loss and/or cross-contamination of
samples may be present in RC drill sample assay dataset.
o Preferential loss of friable non-mineralised material may have
biased the DD drill sample assay dataset
o Both the RC and DD datasets may be preferentially weighted by
material with significantly different tenor of in situ grade
Diagrammes
Historic cross sections and plans were reviewed
Long section thickness and drillhole intercept figure:
2016 Annual Report | Page 24
OPERATIONS REPORT
Criteria
Explanation
Balanced reporting
substantive exploration
Other
data
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. Stavely Minerals identified
younger gold only mineralisation proximal to but not genetically related
to the VMS mineralisation.
A further 53 holes have been drilled within the exploration tenements.
Further work
Mineralisation thins but is open at depth and opportunities for defining
drilling targets (thick shoots). Additional resources may be identified by
better definition of the thick mineralisation directly below the Indicated
Resources.
Section 3: Estimation and Reporting of Mineral Resources
Criteria
Explanation
Database integrity
Site visits
Geological interpretation
Dimensions
Estimation
techniques
and
modelling
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
Stavely Minerals’ personnel verify existence of core. CP has viewed photos
of chip trays with mineralisation taken by Stavely Minerals’ 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,
2016 Annual Report | Page 25
OPERATIONS REPORT
Criteria
Explanation
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.
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.
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
2016 Annual Report | Page 26
OPERATIONS REPORT
Appendix 2: Thursday’s Gossan Mineral Resource Estimate
Summary:
The Thursday Gossan Chalcocite Copper Inferred Resource Estimate, remains unchanged from the Thursday Gossan
Chalcocite Copper Inferred Resource Estimate, August 2013. There has been no additional data collected from the
deposit and although economic circumstances affecting the mining industry have changed since 2013 the
assumptions utilised in 2013 remain valid, if not for the current situation but for future situations. Stavely Minerals
have advised that tenure over the Thursday Gossan Chalcocite deposit is in good standing and that there are no
impediments to undertaking further evaluation of the deposit.
Details of the 2013 resource estimate have been reported in “Thursday Gossan Copper, Victoria, Australia, 2013
Resource Estimate Report” prepared for Northern Platinum Pty Ltd, a forerunner for Stavely Minerals Limited who
now hold tenure over the project area. The following summary of the 2013 Inferred Resource Estimate applies to
the 2015 resources publically stated by Stavely and is repeated here unchanged to support their statement. The
reader can substitute 2015 for 2013 and Stavely Minerals for Northern Platinum in the text on the following pages.
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.
2016 Annual Report | Page 27
OPERATIONS REPORT
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).
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)
2016 Annual Report | Page 28
OPERATIONS REPORT
Criteria
Explanation
analysed all samples for Cu by aqua regia digest ICP-OES detection and
repeated assays for samples returning greater than 5000ppm Cu by Mixed
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
2016 Annual Report | Page 29
OPERATIONS REPORT
Section 2: Reporting of Exploration Results
Criteria
Explanation
Mineral
tenure status
tenement
and
land
Exploration done by other parties
Geology
Drill hole Information
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.
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.
No obvious association other than, as expected with supergene
mineralisation, globally thicker mineralisation has higher tenor of copper.
Data aggregation methods
Relationship between
mineralisation widths and
intercept lengths
Diagrammes
No historic or client produced diagrammes available for review.
2016 Annual Report | Page 30
OPERATIONS REPORT
Criteria
Explanation
Thickness plan:
Copper grade plan:
Drillhole plan:
2016 Annual Report | Page 31
OPERATIONS REPORT
Criteria
Explanation
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
Geological interpretation
Dimensions
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.
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
2016 Annual Report | Page 32
OPERATIONS REPORT
Criteria
Explanation
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
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.
2016 Annual Report | Page 33
DIRECTORS’ REPORT
Your Directors present their report for the year ended 30 June 2016.
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: None.
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: None.
2016 Annual Report | Page 34
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
30 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).
COMPANY SECRETARY
Amanda Sparks
B.Bus, CA, F.Fin
Appointed 7 November 2013
Ms Amanda Sparks is a Chartered Accountant with over 28 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.
2016 Annual Report | Page 35
DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
During the financial year, five 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
Board of Directors
Audit and Risk Committee
Meetings
Held
5
5
5
5
Meetings
Attended
5
5
5
5
Meetings
Held
2
*
2
2
Meetings
Attended
2
*
2
2
* Not a member of the Audit and Risk Committee
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
22,000
15,007,419
3,467,097
30,157,419
Number of Unlisted
Options at 27 cents,
expiry 31/12/2017
1,000,000
5,032,258
1,561,290
5,032,258
Number of Unlisted
Options at 23 cents,
expiry 1/12/2016
2,500,000
4,500,000
2,000,000
1,000,000
No dividends were paid or declared during the year. The Directors do not recommend payment of a dividend.
ENVIRONMENTAL ISSUES
The Group’s environmental obligations are regulated by the laws of Australia. The Group 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. Stavely Minerals
Limited has prepared a consolidated financial report incorporating the entities that it controlled during the financial year
as follows:
Stavely Minerals Limited
Ukalunda Pty Ltd
-
-
parent entity
100% owned controlled entity
Principal Activity
The Group’s principal activity was mineral exploration for the year ended 30 June 2016. There were no significant
changes in the nature of the principal activities during the year.
Operations review
Refer to the Operations Review on pages 4 to 33.
2016 Annual Report | Page 36
DIRECTORS’ REPORT
Summary of Financial Position, Asset Transactions and Corporate Activities
A summary of key financial indicators for the Group, with prior period comparison, is set out in the following table:
Cash and cash equivalents held at year end
Net loss for the year after tax
Included in loss for the year:
Exploration costs
Equity-based payments
Basic 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 2016
30 June 2015
$
$
1,520,166
1,941,148
(3,002,027)
(3,497,173)
(1,534,337)
(2,815,163)
(884,473)
(3.19)
-
(4.33)
(1,700,195)
(3,490,417)
(48,958)
(116,189)
1,328,171
1,331,037
- On 6 July 2015, Stavely issued 85,700 new shares at an issue price of $0.35 as consideration for the extension of
the Stavely Royalty Option with New Challenge Resources Pty Ltd.
- On 20 July 2015, Stavely issued 6,332,726 new shares at an issue price of $0.25 per share together with
3,166,373 free attaching options pursuant to a Non-Renounceable Entitlement Issue. The options have an
exercise price of $0.30 each and expire 30 June 2016. Gross proceeds raised totalled $1,583,181.
-
In October 2014, Stavely Minerals entered into a $2 million Share Subscription Agreement with its existing
drilling contractor, Titeline Drilling Pty Ltd. Pursuant to this agreement, the drilling contractor has agreed to
subscribe for up to $2 million of shares, with Stavely Minerals having the option to settle monthly drilling charges
by way of cash payment and by way of offset of the price of subscription application for shares.
During the year ended 30 June 2016, 1,961,886 ordinary shares ($266,379) were issued pursuant to this
agreement.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Group during the financial year are detailed on pages 4 to 33 of this
report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group anticipates to continue its exploration activities and consider corporate transactions to ensure further
development of its tenements.
2016 Annual Report | Page 37
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 Group are defined as those persons having authority
and responsibility for planning, directing and controlling the major activities of the Group, 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
–
–
Managing Director (from 23 May 2006)
Technical Director (from 8 March 2013)
B. REMUNERATION GOVERNANCE
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 Group depends upon the quality of its Directors and Executives. To prosper, the Group must
attract, motivate and retain highly skilled Directors and Executives.
To this end, the Group embodies the following principles in its remuneration framework:
provide competitive rewards to attract high calibre Executives;
link Executive rewards to shareholder value; and
in the future, will 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.
2016 Annual Report | Page 38
DIRECTORS’ REPORT
Non-Executive directors’ remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Group 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 Group aims to reward Executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Group 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 Group 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 Group’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 Group 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
2016 Annual Report | Page 39
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 cash 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
Term of agreement
Commenced 22/1/2014. Ongoing, subject to re-
elections
Christopher Cairns
Commenced 22/1/2014. No end date, subject to
termination clauses
Jennifer Murphy
Commenced 22/1/2014. No end date, subject to
termination clauses
Peter Ironside
Ongoing, subject to re-elections
* Salary adjustments were effective from 1 March 2015 and are ongoing.
Base annual salary
exclusive of
superannuation at
30/6/2016
Termination
benefit
Waived to Nil*
(was $75,000)
$150,000*
(Was $250,000,
reduced by 40%)
$90,000*
(Was $150,000,
reduced by 40%)
Waived to Nil*
(Was $30,000)
None
12 months
12 months
None
2016 Annual Report | Page 40
DIRECTORS’ REPORT
E. REMUNERATION OF KEY MANAGEMENT PERSONNEL
Details of the remuneration of each key management personnel of the Group, including their personally-related entities,
during the year were as follows:
Post Employment
Share Based
Cash salary,
directors fees,
consulting fees,
insurances and
movement in
leave provisions
$
Superannuation
$
Total Cash
and
Provisions
$
Options (1)
$
Total
including
share based
payments
$
-
50,000
169,293
239,818
94,832
141,883
-
20,000
-
13,350
264,125
465,051
-
4,750
14,250
20,583
8,550
12,350
-
2,330
-
-
22,800
40,013
-
54,750
183,543
260,401
103,382
154,233
-
22,330
-
13,350
286,925
505,064
170,953
-
307,715
-
136,762
-
68,381
-
-
-
683,811
-
170,953
54,750
491,258
260,401
240,144
154,233
68,381
22,330
-
13,350
970,736
505,064
Directors
W Plyley
C Cairns
J Murphy
P Ironside
Other KMP
A Sparks(2)
TOTAL
Year
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
(1) Equity based payments – options. These represent the amount expensed for options granted and vested in the 2016 year.
(2) Amanda Sparks is an external provider of company secretarial services and is no longer regarded as a KMP from 1 July 2015.
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.
2016 Annual Report | Page 41
DIRECTORS’ REPORT
F. SHARE-BASED COMPENSATION
During the year the following options were granted as equity compensation benefits to Directors and other Key
Management Personnel (2015: none). These options vested at grant date.
Directors
W Plyley
C Cairns
J Murphy
P Ironside
Number of Options
at 23 cents,
expiry 1/12/2016
Value* per option at
grant date
$
2,500,000
4,500,000
2,000,000
1,000,000
0.0684
0.0684
0.0684
0.0684
These options were granted to recognise the efforts of Stavely’s directors and consultants and provide a retention
incentive. It is important to note that in March 2015, all directors and staff agreed to reduce their salaries / fees in order
to maximise cash for exploration expenditure. Issue of these Director options were approved by Shareholders at the
Company’s Annual General Meeting held on 18 November 2015.
* 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 13 of the financial statements.
Shares issued to Key Management Personnel on exercise of compensation options
During the year to 30 June 2016, there were no compensation options exercised by Directors or other Key Management
Personnel.
G. EQUITY HOLDINGS AND MOVEMENTS DURING THE YEAR
(a) Shareholdings of Key Management Personnel
30 June 2016
Balance at
beginning of the year
Net change
during the year
Balance at
end of the year
Directors
W Plyley
C Cairns
J Murphy
P Ironside
20,000
14,687,419
3,407,097
29,677,419
47,791,935
2,000
320,000
60,000
480,000
862,000
22,000
15,007,419
3,467,097
30,157,419
48,653,935
All equity transactions with Key Management Personnel have been entered into under terms and conditions no more
favourable than those the entity would have adopted if dealing at arms-length.
2016 Annual Report | Page 42
DIRECTORS’ REPORT
(b) Option holdings of Key Management Personnel
30 June 2016
Directors
W Plyley
C Cairns
J Murphy
P Ironside
Balance at
beginning of
the year
Granted as
remuneration
Granted as
shareholder
options
Expired
during the
year
Balance at
end of the
year
Exercisable
1,000,000
2,500,000
1,000
(1,000)
3,500,000
3,500,000
5,032,258
4,500,000
160,000
(160,000)
9,532,258
9,532,258
1,561,290
2,000,000
30,000
(30,000)
3,561,290
3,561,290
5,032,258
1,000,000
240,000
(240,000)
6,032,258
6,032,258
12,625,806
10,000,000
431,000
(431,000)
22,625,806
22,625,806
H. OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Mr Peter Ironside, Director, is a shareholder and director of Ironside Pty Ltd. Ironside Pty Ltd is a shareholder of the 168
Stirling Highway Syndicate, the entity which owns the premises the Company occupies in Western Australia. During the
year an amount of $141,375 (net of GST) was paid/payable for office rental and variable outgoings (2015: $123,164 (net
of GST)).
Mr Peter Ironside, Director, is also a shareholder and non-executive director of Zamanco Minerals Limited (“Zamanco”).
Zamanco sub-leases office space in the premises the Company occupies. During the year an amount of $39,416 (net of
GST) was paid/payable by Zamanco to the Company for reimbursement of office rental and associated expenses (2015:
$39,048 (net of GST)).
Mr Chris Cairns and Mr Peter Ironside are directors of Ukalunda Pty Ltd. In February 2016, Stavely Minerals acquired
Ukalunda Pty Ltd (‘Ukalunda’) for a purchase cost of $2. During the year, Ukalunda made loan repayments of $10,000 to
Mr Chris Cairns and $19,040 to related parties of Mr Peter Ironside.
I. USE OF REMUNERATION CONSULTANTS
No remuneration consultants were engaged by the Company during the year.
J. VOTING OF SHAREHOLDERS AT LAST YEAR’S ANNUAL GENERAL MEETING
The Company received 99.69% of ‘yes’ votes for its remuneration report for the 2015 financial year and did not receive
any specific feedback at the AGM or throughout the year on its remuneration practices.
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.
2016 Annual Report | Page 43
DIRECTORS’ REPORT
SHARES UNDER OPTION
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Unlisted Options
Unlisted Options
Unlisted Options
Number
14,400,000
3,000,000
10,000,000
Exercise Price
27 cents
27 cents
23 cents
Expiry Date
31/12/2017
01/12/2016
01/12/2016
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 2016 that have or may significantly affect the
operations, results, or state of affairs of the Group 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 on page 45 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
Signed in accordance with a resolution of the Directors.
2016
$5,700
2015
$4,915
Christopher Cairns
Managing Director
Dated this 2nd day of September 2016
2016 Annual Report | Page 44
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS
2016 Annual Report | Page 45
CORPORATE GOVERNANCE STATEMENT
This statement outlines the main corporate governance practices. 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 Group 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 Group, 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.
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper
functioning of the Board. All directors have direct access to the Company Secretary.
2016 Annual Report | Page 46
CORPORATE GOVERNANCE STATEMENT
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. A summary of these skills and experiences are provided in graph 1.
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.
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.
2016 Annual Report | Page 47
CORPORATE GOVERNANCE STATEMENT
Graph 1: Skills and Experience Matrix of Stavely Directors
Director 4
Director 3
Director 2
Director 1
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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.
2016 Annual Report | Page 48
CORPORATE GOVERNANCE STATEMENT
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.
All new non-executive directors are required to sign a letter of appointment which sets out the key terms and conditions
of their appointment, including roles and responsibilities, time commitments and remuneration. Executive directors and
other senior executives enter into an employment agreement which governs the terms of their appointment.
The Board undertakes appropriate checks prior to nominating a director for election by shareholders. These checks
include a police and reference checks. Shareholders are provided with all material information in its possession
concerning a director standing for election or re-election in the relevant notice of meeting.
An informal induction is provided to all new directors, which includes meeting with technical and financial personnel to
understand Stavely’s business, including strategies, risks, company policies and health and safety.
All directors are required to maintain professional development necessary to maintain their skills and knowledge needed
to perform their duties. In additional to training provided by relevant professional affiliations of the directors, additional
development is provided through attendance at seminars and provision of technical papers on industry related matters
and developments offered by various professional organisations, such as accounting firms and legal advisors.
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 was undertaken in June 2016.
2016 Annual Report | Page 49
CORPORATE GOVERNANCE STATEMENT
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 senior executives was undertaken in June 2016.
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. A copy of Stavely’s Diversity Policy can be found on Stavely’s website at http://www.stavely.com.au/wp-
content/uploads/2014/03/Corporate-Governance-Plan.pdf.
In accordance with this policy and ASX Corporate
Governance Principles, the Board has established the following objectives in relation to gender diversity.
Proportion of Women
Organisation as a whole
Executive Management Team
Board and Company Secretary
REMUNERATION
Actual
44%
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.
2016 Annual Report | Page 50
CORPORATE GOVERNANCE STATEMENT
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.
AUDIT AND RISK 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.
A copy of Stavely’s Audit and Risk Committee Charter can be
http://www.stavely.com.au/wp-content/uploads/2014/03/Corporate-Governance-Plan.pdf.
found on Stavely’s website at
The Committee held two meetings during the year ended June 2016. Details of attendance are disclosed in the Directors’
Report. The Board reviewed the performance of this committee in June 2016.
RISK OVERSIGHT AND MANAGEMENT
The Board determines the Company’s ‘risk profile’ and is responsible overseeing and approving risk management strategy
and policies, internal 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.
The Company’s Risk Register identifies the material risks for the Company. These risks include loss of a significant
tenement, failure to raise future capital, insufficient new reserves converted from resources and the occurrence of a
fatality or permanent disabling injury to persons whom Stavely has a duty of care. The Risk Register records all current
controls in place to minimise the risks, and identifies the overall control effectiveness. The Board and Audit and Risk
Committee review the Risk Register on a regular basis.
The Board reviewed the Risk Management Framework, including the policies, procedures and the Company’s Risk
Register on 21 June 2016.
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.
No internal audit function is currently in place due to the size of the Company, however the Audit and Risk Committee
regularly assess the need for an internal audit function. The Board encourages management accountability for the
Company’s financial reports by ensuring ongoing financial reporting during the year to the Board. Quarterly, the Financial
Controller (or equivalent) and the Managing Director are required to state in writing to the Board that in all material
respects:
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;
2016 Annual Report | Page 51
CORPORATE GOVERNANCE STATEMENT
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 2016 financial year.
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.
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.
2016 Annual Report | Page 52
CORPORATE GOVERNANCE STATEMENT
SHAREHOLDER COMMUNICATIONS STRATEGY
The Company places significant importance on effective communication with shareholders. The Company has adopted a
Shareholder Communications Strategy which can be accessed from Stavely’s website at http://www.stavely.com.au/wp-
content/uploads/2014/03/Corporate-Governance-Plan.pdf.
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. After the Annual General Meeting, the Managing Director
provides shareholders with a presentation. Afterwards all directors are available to meet with any shareholders and
answer questions.
Shareholders are encouraged to contact Stavely through the Contact Us section on Stavely’s website to submit any
questions via email, or call.
Stavely’s website provides communication details for its Share Registry, including an email address for shareholder
enquiries direct to the Share Registry.
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.
Stavely ensures that its external auditor is present at all Annual General Meetings to enable shareholders to ask questions
relevant to the audit directly to the auditor.
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.
2016 Annual Report | Page 53
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 Group’s financial position as at 30 June 2016 and of its performance for
the year then ended; and
ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations), the
Corporations Regulations 2001 and other mandatory professional reporting requirements; 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 2016.
This declaration is signed in accordance with a resolution of the Board of Directors.
Christopher Cairns
Managing Director
Dated this 2nd day of September 2016
2016 Annual Report | Page 54
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Revenue and Income
Interest revenue
Rental sub-lease revenue
Expenses
Administration and corporate expenses
Administration – equity based expenses
Exploration expensed
Total expenses
Consolidated
Year ended
30 June 2016
Year ended
30 June 2015
Note
$
$
51,596
39,416
36,499
42,048
91,012
78,547
2(a)
13
2(b)
(674,229)
(884,473)
(1,534,337)
(760,557)
-
(2,815,163)
(3,093,039)
(3,575,720)
Loss before income tax
(3,002,027)
(3,497,173)
Income tax expense
Loss after income tax attributable to members of
Stavely Minerals Limited
3
-
-
(3,002,027)
(3,497,173)
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 loss for the year
(3,002,027)
(3,497,173)
Loss per share for the year attributable to the members of
Stavely Minerals Limited
Basic loss per share
4
Cents Per
Share
(3.19)
Cents Per
Share
(4.33)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
2016 Annual Report | Page 55
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2016
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
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Consolidated
30 June 2016
$
Note
30 June 2015
$
5
6
6
7
8
9
10
1,520,166
87,281
1,607,447
42,500
85,231
3,006,057
3,133,788
1,941,148
101,948
2,043,096
40,000
101,814
2,982,126
3,123,940
4,741,235
5,167,036
173,730
44,913
218,643
218,643
265,097
31,303
296,400
296,400
4,522,592
4,870,636
11
12
12,325,646
1,168,877
(8,971,931)
10,556,136
284,404
(5,969,904)
4,522,592
4,870,636
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
2016 Annual Report | Page 56
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
At 1 July 2014
Loss for the year
Other comprehensive income/(loss)
Total comprehensive loss for the year, net of tax
Transactions with owners in their capacity as
owners:
Issue of share capital
Cost of issue of share capital
Share based payments
Issued
Capital
$
Reserves
$
Accumulated
Losses
$
Total
Equity
$
9,101,363
284,404
(2,472,731)
6,913,036
-
-
-
1,639,658
(184,885)
-
1,454,773
-
-
-
-
-
-
-
(3,497,173)
(3,497,173)
-
-
(3,497,173)
(3,497,173)
-
-
-
-
1,639,658
(184,885)
-
1,454,773
As at 30 June 2015
10,556,136
284,404
(5,969,904)
4,870,636
At 1 July 2015
Loss for the year
Other comprehensive income/(loss)
Total comprehensive loss for the year, net of tax
Transactions with owners in their capacity as
owners:
Issue of share capital
Cost of issue of share capital
Share based payments
10,556,136
284,404
(5,969,904)
4,870,636
-
-
-
1,879,583
(110,073)
-
1,769,510
-
-
-
-
-
884,473
884,473
(3,002,027)
(3,002,027)
(3,002,027)
(3,002,027)
-
-
-
-
1,879,583
(110,073)
884,473
2,653,983
As at 30 June 2016
12,325,646
1,168,877
(8,971,931)
4,522,592
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
2016 Annual Report | Page 57
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
Consolidated
Year ended
Year ended
30 June 2016
30 June 2015
Note
$
$
Cash flows from operating activities
Receipts in the ordinary course of activities (mostly GST)
Payments to suppliers and employees
Interest received
211,099
(1,962,890)
51,596
402,250
(3,929,166)
36,499
Net cash flows used in operating activities
5(i)
(1,700,195)
(3,490,417)
Cash flows from investing activities
Payments for plant and equipment
Payments for exploration expenditure capitalised
Refunds for exploration expenditure capitalised
Payments for bonds
Investment in subsidiary
Cash acquired upon acquisition of subsidiary
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payment of share issue costs
Repayment of advances / loans from related parties
Net cash flows from financing activities
(51,793)
-
-
(2,500)
(2)
5,337
(64,815)
(5,000)
3,626
(50,000)
-
-
(48,958)
(116,189)
1,583,204
(225,993)
(29,040)
1,328,171
1,400,000
(68,963)
-
1,331,037
Net decrease in cash and cash equivalents held
Add opening cash and cash equivalents brought forward
(420,982)
1,941,148
(2,275,569)
4,216,717
Closing cash and cash equivalents carried forward
5
1,520,166
1,941,148
The above consolidated statement of cashflows should be read in conjunction with the accompanying notes.
2016 Annual Report | Page 58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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 Group’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 2016 was authorised for issue in
accordance with a resolution of the Directors on 2 September 2016.
(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 and Change in Accounting Standards
Early adoption of accounting standards
The Group has not elected to apply any pronouncements before their operative date in the annual reporting year
beginning 1 July 2015.
New and amended standards adopted by the Group
None of the new standards and amendments to standards that are mandatory for the first time for the financial
year beginning 1 July 2015 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
2016 reporting year. The Group’s assessment of the impact of these new standards and interpretations that may
have an impact on the Group is set out below:
AASB 9 Financial Instruments
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 2018.
AASB 16 Leases
AASB 16 requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months.
Stavely has not yet determined the impact on the group accounts. This standard is not applicable until the
financial year commencing 1 July 2019.
(d)
Significant accounting estimates and judgments
Significant accounting judgments
In the process of applying the Group’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.
2016 Annual Report | Page 59
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
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 acquisition 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 profit or
loss.
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 Group 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 Group 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)
Basis of consolidation and Business Combinations
The consolidated financial statements comprise the financial statements of Stavely Minerals limited (“Company”
or “Parent Entity”) and its subsidiaries as at 30 June each year (the Group). Subsidiaries are all entities over which
the group has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:
-
-
-
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities
of the investee),
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns
The financial statements of the subsidiaries are prepared for the same period as the parent entity, using consistent
accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries
are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated
from the date on which control is transferred out of the Group. Control exists where the company has the power
to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The purchase
method of accounting involves allocating the cost of the business combination to the fair value of the assets
acquired and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the
consolidated financial statements include the results of subsidiaries for the period from their acquisition.
2016 Annual Report | Page 60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
The purchase method of accounting is used to account for all business combinations regardless of whether equity
instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or
liabilities incurred or assumed at the date of exchange plus costs directly attributable to the combination. Where
equity instruments are issued in a business combination, the fair value of the instruments is their published
market price as at the date of exchange, adjusted for any conditions imposed on those shares. Transaction costs
arising on the issue of equity instruments are recognised directly in equity.
All identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. The excess of the cost of the business combination
over the net fair value of the Group's share of the identifiable net assets acquired is recognised as goodwill. If the
cost of acquisition is less than the Group's share of the net fair value of the identifiable net assets of the
subsidiary, the difference is recognised as a gain in the statement of profit or loss and other comprehensive
income, but only after a reassessment of the identification and measurement of the net assets acquired.
(f)
Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as
described above, net of outstanding bank overdrafts.
(g)
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.
(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.
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.
2016 Annual Report | Page 61
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
(i)
Exploration and evaluation expenditure
Exploration expenditure is expensed to the statement of profit or loss and other comprehensive income as and
when it is incurred and included as part of cash flows from operating activities. Exploration costs are only
capitalised to the balance sheet if they result from an acquisition.
Evaluation expenditure is capitalised to the balance sheet. Evaluation is deemed to be activities undertaken from
the beginning of the pre-feasibility study conducted to assess the technical and commercial viability of extracting a
mineral resource before moving into the Development phase. The criteria for carrying forward the costs are:
-
-
Such costs are expected to be recouped through successful development and exploitation of the area of
interest, or alternatively by its sale; or
evaluation activities in the area of interest which has not yet reached a state which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to, the area are continuing.
Costs carried forward in respect of an area of interest which is abandoned are written off in the year in which the
abandonment decision is made.
(j)
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. Where
an indicator of impairment exists, the Group 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.
2016 Annual Report | Page 62
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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 Group 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
Group 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 Group 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 Group prior to the end of the financial year that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services.
Provisions
Provisions are recognised when the Group 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 corporate 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 Group 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)
2016 Annual Report | Page 63
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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 Group 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 Group 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 Group provides benefits to executive directors, employees and consultants of the Group 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.
2016 Annual Report | Page 64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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 Group will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by
the law.
2016 Annual Report | Page 65
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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.
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.
(u)
(v)
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.
(w)
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. 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 Group 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.
2016 Annual Report | Page 66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 2 - EXPENSES
(a) Administration and Corporate Expenses
Administration and corporate expenses include:
Depreciation - administration
Operating lease rental expense
Equity based expense – refer note 13
Other administration and corporate expenses
(b) Exploration Costs Expensed
Exploration costs expensed include:
Depreciation - exploration
Exploration drilling – non-cash - refer note 11
Exploration other – non-cash – refer note 5(ii)
Other exploration costs expensed
NOTE 3 - INCOME TAX EXPENSE
(a) Income Tax Expense
The reconciliation between tax expense and the product of
accounting loss before income tax multiplied by the Group’s
applicable income tax rate is as follows:
Loss for year
Prima facie income tax (benefit) @ 30%
Tax effect of non-deductible 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, net
Year ended
30 June 2016
Year ended
30 June 2015
$
$
1,926
146,224
884,473
526,079
1,558,702
66,450
266,379
30,000
1,171,508
1,534,337
1,396
123,848
-
635,313
760,557
43,925
239,658
-
2,531,580
2,815,163
(3,002,027)
(3,497,173)
(900,608)
(1,049,152)
276,142
624,466
-
-
1,049,152
-
2,635,978
(132,665)
2,629,834
(879,960)
2,503,313
1,749,874
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 (2015: $nil).
2016 Annual Report | Page 67
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 4 - EARNINGS PER SHARE
Basic loss per share
Year ended
30 June 2016
Year ended
30 June 2015
Cents
(3.19)
Cents
(4.33)
$
$
Loss attributable to ordinary equity holders of the Company used in
calculating:
- basic loss per share
(3,002,027)
(3,497,173)
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
94,135,661
80,761,349
For the year ended 30 June 2016, 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
1,520,166
1,941,148
(i) Reconciliation of loss for the period to net cash flows used in operating
activities
Loss after income tax
Non-Cash Items:
Depreciation
Share-based payments expensed - options
Exploration drilling – non-cash*
Exploration other – non-cash – refer note 5(ii)
Change in assets and liabilities:
(Increase)/decrease in receivables
Increase/(decrease) in payables
Increase/(decrease) in provisions
(3,002,027)
(3,497,173)
68,376
884,473
266,379
30,000
14,688
24,307
13,609
45,321
-
239,658
-
88,910
(393,794)
26,661
Net cash flows used in operating activities
(1,700,195)
(3,490,417)
* 1,961,886 ordinary shares ($266,379) were issued pursuant to the Share Subscription Agreement with
Titeline Drilling Pty Ltd and Greenstone Property Pty Ltd. Refer to note 11.
(ii) Non-Cash Financing and Investing Activities
The following non-cash financing and investing activities were undertaken:
2016 - In Jul 2015, the Company issued 85,700 ordinary shares ($30,000) to New Challenge Resources Pty Ltd
as consideration for extension of the Stavely Royalty Agreement.
2016 Annual Report | Page 68
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 6 – TRADE AND OTHER RECEIVABLES
Current
GST refundable
Bonds – credit card
Other
Total current receivables
Non-Current
Cash on deposit - security bonds
Fair Value and Risk Exposures:
30 June 2016
$
30 June 2015
$
45,961
40,000
1,320
87,281
59,690
40,000
2,258
101,948
42,500
40,000
(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 18.
(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 2016 (2015: none).
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT
Motor vehicles- at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
28,273
(21,204)
7,069
182,977
(104,815)
78,162
28,273
(12,723)
15,550
134,294
(48,030)
86,264
Total property, plant and equipment
85,231
101,814
Reconciliation of property, plant and equipment:
Motor Vehicles
Carrying amount at beginning of year
Depreciation
Carrying amount at end of year
Plant and Equipment
Carrying amount at beginning of year
Additions
Depreciation
Carrying amount at end of year
15,550
(8,481)
7,069
86,264
51,793
(59,895)
78,162
24,032
(8,482)
15,550
63,409
59,694
(36,839)
86,264
2016 Annual Report | Page 69
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
30 June 2016
$
30 June 2015
$
NOTE 8 - DEFERRED EXPLORATION EXPENDITURE
Deferred exploration acquisition costs brought forward
Capitalised acquisition expenditure incurred during the year, net
Deferred exploration costs carried forward
2,982,126
2,980,752
23,931
1,374
3,006,057
2,982,126
Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful
development and commercial exploitation or, alternatively, sale of the respective areas.
NOTE 9 - TRADE AND OTHER PAYABLES
Current
Trade creditors
Accruals
Fair Value and Risk Exposures
141,997
31,733
173,730
232,779
32,318
265,097
(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.
NOTE 10 – PROVISIONS
Current
Employee entitlements
44,913
31,303
2016 Annual Report | Page 70
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 11 – ISSUED CAPITAL
(a)
Issued Capital
95,490,593 (2015: 87,110,206) ordinary shares fully paid
12,325,646
10,556,136
30 June 2016
$
30 June 2015
$
(b) Movements in Ordinary Share Capital
80,432,000 Opening balance at 1 July 2014
169,194 Issue of shares – Share Subscription Agreement 5 Dec 2014
176,528 Issue of shares – Share Subscription Agreement 18 Dec 2014
472,891 Issue of shares – Share Subscription Agreement 21 April 2015
259,593 Issue of shares – Share Subscription Agreement 18 May 2015
5,600,000 Issue of shares – Placement 30 June 2015
Costs of equity issues
87,110,206 Closing Balance at 30 June 2015
87,110,206 Opening balance at 1 July 2015
85,700
6,332,726
75
232,811
1,378,672
350,403
Issue of shares – New Challenge Royalty 6 July 2015
Issue of shares – Rights Issue 20 July 2015
Issue of shares – Exercise of Options 6 August 2015
Issue of shares – Share Subscription Agreement 13 November 2015
Issue of shares – Share Subscription Agreement 17 December 2015
Issue of shares – Share Subscription Agreement 12 May 2016
Costs of equity issues
95,490,593 Closing Balance at 30 June 2016
9,101,363
56,172
42,190
89,377
51,919
1,400,000
(184,885)
10,556,136
10,556,136
30,000
1,583,181
23
42,605
176,470
47,304
(110,073)
12,325,646
Rights Issue
On 20 July 2015, Stavely issued 6,332,726 fully-paid ordinary shares at 25c a share and 3,166,373 free
attaching options (on a one-for-two basis) with an exercise price of 30 cents and expiry date of 30 June
2016 under a non-renounceable rights issue to shareholders. Gross proceeds were $1,583,181.
Share Subscription Agreement
In October 2014, Stavely Minerals entered into a $2 million Share Subscription Agreement with its existing
drilling contractor, Titeline Drilling Pty Ltd. Pursuant to this agreement, the drilling contractor has agreed to
subscribe for up to $2 million of shares, with Stavely Minerals having the option to settle monthly drilling
charges by way of cash payment and by way of offset of the price of subscription application for shares.
During the year ended 30 June 2016, 1,961,886 ordinary shares ($266,379) were issued pursuant to the
Share Subscription Agreement with Titeline Drilling Pty Ltd and Greenstone Property Pty Ltd as trustee for
the Titeline Property Trust. As at 30 June 2016, cumulative subscriptions totalled $506,036 (2015:
$239,658).
2016 Annual Report | Page 71
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 11 – ISSUED CAPITAL - continued
(c) Options on issue at 30 June 2016
Unlisted Options
Unlisted Options
Unlisted Options
During the year:
Number
14,400,000
3,000,000
10,000,000
27,400,000
Exercise Price
27 cents
27 cents
23 cents
Expiry Date
31 December 2017
1 December 2016
1 December 2016
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
3,166,373 listed options were granted pursuant to the non-renounceable rights on 20 July 2015;
75 listed options were exercised (2015: nil)
5,966,298 listed options expired (2015: nil)
No unlisted options were granted to shareholders (2015: nil);
13,000,000 unlisted options were granted as share-based payments (2015: nil);
No unlisted options expired (2015: nil); and
No unlisted options were exercised (2015: nil).
(d) Terms and conditions of issued capital
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.
NOTE 12 - RESERVES
Equity-based payments reserve
1,168,877
284,404
30 June 2016
$
30 June 2015
$
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.
284,404
884,473
1,168,877
284,404
-
284,404
2016 Annual Report | Page 72
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 13 – EQUITY-BASED PAYMENTS (Recognised as Remuneration Expenses)
(a) Value of equity based payments in the financial statements
Expensed in the profit or loss:
Equity-based payments- options
30 June 2016
30 June 2015
$
884,473
$
-
(b) Summary of equity-based payments granted during the year:
Year ended 30 June 2016:
Granted to key management personnel and consultants as equity compensation:
3,000,000 options expiring 31 December 2016, exercisable at 27 cents each; and
10,000,000 options expiring 1 December 2016, exercisable at 23 cents.
Year ended 30 June 2015: None.
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 ($)
25/08/2015
30/11/2015
0.27
1.27
-
111.95
1.73
0.18
0.0669
0.23
1.01
-
112.09
1.98
0.185
0.0684
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.
(c) Weighted average fair value
The weighted average fair value of equity-based payment options granted during the year was $0.06804 (2015: 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 $0.23 to
$0.27 (2015: $0.27).
(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 0.59 years (2015: 2.5 years).
2016 Annual Report | Page 73
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 13 – EQUITY-BASED PAYMENTS - continued
(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 2016
Number
12 Months to
30 June 2016
WAEP $
12 Months to
30 June 2015
Number
12 Months to
30 June 2015
WAEP $
Outstanding at the beginning of year
Granted during the year
Outstanding at the end of the year
2,400,000
3,000,000
10,000,000
15,400,000
0.27
0.27
0.23
0.24
2,400,000
-
-
2,400,000
Exercisable at year end
15,400,000
0.24
1,000,000
The weighted average share price for options exercised during the year was nil (2015: nil).
0.27
-
-
0.27
0.27
NOTE 14 – COMMITMENTS AND CONTINGENCIES
Operating leases (non-cancellable):
(a)
Within one year
More than one year but not later than five years
30 June 2016
$
30 June 2015
$
140,198
7,140
147,338
125,376
103,820
229,196
These non-cancellable operating leases are primarily for office premises, residential premises at site and a ground lease.
(b)
Exploration Commitments
Tenement Expenditure Commitments:
The Group is required to maintain current rights of tenure to tenements,
which require outlays of expenditure in 2016/2017. 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.
442,900
375,400
Contingencies
(c)
The Company is party to a Deed of Option and Royalty relating to the Stavely tenement EL 4556. The Group had no
other contingent liabilities at year end (2015: same).
2016 Annual Report | Page 74
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 15 – RELATED PARTIES
(a) Compensation of Key Management Personnel
Short-term employment benefits
Post-employment benefits
Equity-based payment
30 June 2016
$
30 June 2015
$
264,125
22,800
683,811
970,736
465,051
40,013
-
505,064
(b) Other transactions and balances with Key Management Personnel
Other Transactions with Key Management Personnel
Mr Peter Ironside, Director, is a shareholder and director of Ironside Pty Ltd. Ironside Pty Ltd is a shareholder of the 168
Stirling Highway Syndicate, the entity which owns the premises the Company occupies in Western Australia. During the
year an amount of $141,375 (net of GST) was paid/payable for office rental and variable outgoings (2015: $123,164 (net
of GST)).
Mr Peter Ironside, Director, is also a shareholder and non-executive director of Zamanco Minerals Limited (“Zamanco”).
Zamanco sub-leases office space in the premises the Company occupies. During the year an amount of $39,416 (net of
GST) was paid/payable by Zamanco to the Company for reimbursement of office rental and associated expenses (2015:
$39,048 (net of GST)).
Mr Chris Cairns and Mr Peter Ironside are directors of Ukalunda Pty Ltd. In February 2016, Stavely Minerals acquired
Ukalunda Pty Ltd (‘Ukalunda’) for a purchase cost of $2. During the year, Ukalunda made loan repayments of $10,000 to
Mr Chris Cairns and $19,040 to related parties of Mr Peter Ironside. Refer to note 20.
(c) Transactions with Other Related Parties
There were no transactions with other related parties (2015: none).
NOTE 16 - AUDITORS' REMUNERATION
Amount received or due and receivable by the auditor for:
Auditing the financial statements, including audit review - current year audits
Other services – taxation and corporate advisory
Total remuneration of auditors
NOTE 17 – SEGMENT INFORMATION
30 June 2016
$
30 June 2015
$
36,565
5,700
42,265
45,969
4,915
50,884
Management has determined the operating segments based on the reports reviewed by the board of directors that are
used to make strategic decisions. The Group does not have any material operating segments with discrete financial
information. The Group does not have any customers and all its’ assets and liabilities are primarily related to the mining
industry and are located within Australia. 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.
2016 Annual Report | Page 75
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 18 – FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instrument comprises cash. The main purpose of this financial instrument is to provide
working capital for the Group’s operations.
The Group 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 Group’s policy that no trading in financial instruments shall be
undertaken.
The main risk arising from the Group’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 Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s cash
and bonds. The Group 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 Group 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 2016
$
30 June 2015
$
1,372,318
80,000
1,452,318
478,927
80,000
558,927
Sensitivity
At 30 June 2016, 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 Group would have been $7,261 higher (2015: changes of 0.5% $2,795 higher).
The 0.5% (2015: 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.
Liquidity risk
The Group has no significant exposure to liquidity risk as there is effectively no debt. The Group 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
Group. The Group 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 Group
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 Group does not have any other significant credit risk exposure to a single counterparty or any group of
counterparties having similar characteristics.
2016 Annual Report | Page 76
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
NOTE 19 – PARENT ENTITY INFORMATION
Balance sheet information
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net Assets
Issued capital
Reserves
Accumulated losses
Profit or loss information
Loss for the year
Comprehensive loss for the year
Commitments and contingencies
Company
30 June 2016
$
30 June 2015
$
1,602,611
3,131,197
(212,453)
-
2,043,096
3,123,940
(296,400)
-
4,521,355
4,870,636
12,325,646
10,556,136
1,168,877
284,404
(8,973,168)
(5,969,904)
4,521,355
4,870,636
(3,003,264)
(3,497,173)
(3,003,264)
(3,497,173)
There are no commitments or contingencies, including any guarantees entered into by Stavely Minerals Limited
on behalf of its subsidiaries.
Subsidiaries
30 June 2016
30 June 2015
Name of Controlled Entity
Class of Share
Place of Incorporation
% Held by Parent Entity
Ukalunda Pty Ltd
Ordinary
Australia
100%
-
NOTE 20 – ACQUISITION OF SUBSIDIARY
On 15 February 2016, Stavely Minerals Limited acquired Ukalunda Pty Ltd (‘Ukalunda’). Ukalunda was established in
2007 by Stavely Minerals’ Directors Mr Chris Cairns and Mr Peter Ironside with the specific purpose of opportunistically
applying for exploration permits in north Queensland. Cash consideration for the acquisition was $2. At the date of
acquisition, Ukalunda had loans totalling $29,040 outstanding to Mr Cairns and Mr Ironside for company establishment
fees, tenement application fees and compliance costs etc. but does not include any costs for Mr Cairns’ or Mr Ironside’s
time and efforts. The loans were discharged by Stavely Minerals after acquisition.
The following table summarises the assets and liabilities acquired:
Cash and cash equivalents
Receivables
Exploration asset
Trade payables
Loans payable
Net Assets
$
5,337
22
23,931
(248)
(29,040)
2
NOTE 21 – SUBSEQUENT EVENTS
There are no matters or circumstances that have arisen since 30 June 2016 that have or may significantly affect the
operations, results, or state of affairs of the Group in future financial years.
2016 Annual Report | Page 77
INDEPENDENT AUDIT REPORT
.
2016 Annual Report | Page 78
INDEPENDENT AUDIT REPORT
2016 Annual Report | Page 79
ADDITIONAL SHAREHOLDER INFORMATION
Information as at 1 September 2016
a) Substantial Shareholders (who have lodged notices with Stavely Minerals Limited)
Number of
Ordinary Shares
30,157,419
15,007,419
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
Number of shareholders holding less
than a marketable parcel
c) Voting Rights
Number of
Shareholders
24
95
146
295
86
646
70
(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
The following restricted securities were released from escrow on 7 May 2016:
31,499,903 Fully Paid ordinary shares; and
13,400,000 Unlisted options.
2016 Annual Report | Page 80
Number of
Ordinary
Shares
14,677,419
10,480,000
9,759,032
5,238,387
5,000,000
3,891,762
3,427,097
3,040,092
2,600,000
2,258,065
1,250,000
1,250,000
1,250,000
1,250,000
1,233,000
1,225,000
940,000
870,000
610,000
586,674
70,836,528
95,760,863
% of Issued
Capital
15.33
10.94
10.19
5.47
5.22
4.06
3.58
3.17
2.72
2.36
1.31
1.31
1.31
1.31
1.29
1.28
0.98
0.91
0.64
0.61
73.99
ADDITIONAL SHAREHOLDER INFORMATION
e)
Twenty largest shareholders:
Name
1
2
3
4
5
6
7
8
9
Ironside Pty Ltd
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