2017 | Annual Report
CONTENTS
CORPORATE DIRECTORY ..................................................................................................................................... 2
CHAIRMAN’S REPORT .......................................................................................................................................... 3
OPERATIONS REPORT .......................................................................................................................................... 4
DIRECTORS’ REPORT .......................................................................................................................................... 35
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS ....................................................................... 45
DIRECTORS’ DECLARATION ............................................................................................................................... 46
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ............................ 47
CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................................................... 48
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ..................................................................................... 49
CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................................................. 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ................................................................................ 51
INDEPENDENT AUDIT REPORT .......................................................................................................................... 69
ADDITIONAL SHAREHOLDER INFORMATION..................................................................................................... 72
TENEMENT SCHEDULE....................................................................................................................................... 74
2017 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
2017 Annual Report | Page 2
CHAIRMAN’S REPORT
Welcome,
It is my pleasure to present the Stavely Minerals Limited 2017 Annual Report.
Stavely Minerals remained very active in the field during the year. The benefits of the strategy of having quality
mineral exploration projects in both Victoria and Queensland was evidenced by our ability to rapidly advance The
“Bank” prospect in Queensland to drilling just prior to Christmas. While that drilling programme did provide some
very good copper-molybdenum-silver results, it did not provide the gold results Stavely Minerals was hoping for, it
was an excellent undrilled discovery opportunity that was rapidly tested and the Company has moved on to other
prospective areas. That the Company can work in Queensland during the winter rains in Victoria, and in Victoria
during the summer rains in Queensland - both with very high quality exploration opportunities - means that the
seasonality of in-field exploration is negated.
During the year, Stavely Minerals has made very significant progress in its search for copper-gold porphyry-style
mineralisation. Both the Toora West prospect in the Yarram Park Project and the Thursday’s Gossan deposit in the
Stavely Project have been providing some very encouraging results which, your Company believes, provide very
exciting discovery opportunities. At Thursday’s Gossan, recent results have demonstrated conclusively that the
hunt is on for a copper-gold porphyry with broad intervals of high-level copper-gold mineralisation intercepted in
shallow drilling. Much more work is being undertaken to obtain the most information from that drilling to assist our
targeting of deeper holes to be drilled later in the year. Likewise, at Yarram Park, the Toora West prospect is shaping
up as a very exciting drill target with previous drilling confirming porphyry host units and porphyry-style alteration
with new geophysics identifying a large and strong IP chargeability feature located some 800 metres south of
Stavely’s maiden drill holes. Your Company intends pursuing these opportunities with the same diligence, using the
best available technologies and consultants. We will continue to spend shareholders’ money where it counts - in
the ground.
While continuing to provide shareholders exceptional value by running a financially responsible company, Stavely
Minerals has materially progressed its exploration assets in Victoria and Queensland. It is with great pride that we
can boast having 71%1 of expenditure during the year being direct in-the-field expenditure. That non-executive
Directors and the Company Secretary have not received any cash remuneration during the year, and that executive
Directors had accepted a 40% reduction in salaries demonstrates the commitment of Board and Management to
the Company. With market funding for mineral exploration still challenging, despite the improved sentiment
towards copper and gold producers, your Company strives to give you the best value opportunity for material
discovery within the Company’s assets. The management team only attend a very few conferences during the year
that are best suited to promoting the Company’s profile, and fly economy class to get there. Executive Management
spent a significant proportion of time in the field as that is where the skills and experience of the management team
can add greatest value for shareholders.
I sincerely hope you join in our optimism for what is shaping up as a most exciting year for Stavely Minerals.
Thank you
BILL PLYLEY
1 Refer to ASX Release Quarterly Cashflow Report dated 31 July 2017
2017 Annual Report | Page 3
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
low-sulphidation
The
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
‘intrusive-related’
gold
the Ararat
mineralisation
Project.
at
Project
Queensland
The Ravenswood
in
is
northern
prospective for intrusive related
gold mineralisation,
porphyry
hosted copper-molybdenum and
gold mineralisation, as well as rare
earth elements.
In excess of 5,000 metres of
diamond and reverse circulation
(RC) drilling has been conducted at
the Toora West
copper-gold
in the Yarram Park
prospect,
Project, Thursday’s Gossan copper-
gold prospect, Fairview North gold
prospect and Mount Stavely
the
copper-gold prospect,
Stavely Project and at The “Bank”
prospect,
the Ravenswood
Project.
in
in
OPERATIONS REPORT
Polarisation
A total of 54 line kilometres of
Induced
(IP)
geophysics has been completed at
the Honeysuckle gold prospect,
Ararat Project, Fairview north and
south gold prospects, Stavely
Project and at the Toora West
Prospect, Yarram Park Project.
Geophysical
programmes
conducted in the Ararat Project
have identified two new drilling
targets. At the Carroll’s VMS
prospect, which
in previous
diamond drilling returned narrow
intervals of massive to stringer
copper
sulphide
0.2
mineralisation
metres at 1.77% zinc and 0.12%
copper,
downhole
electromagnetic (DHEM) survey
off-hole
has
conductor which warrants drill
testing.
and
including
generated
zinc
the
an
including
IP surveys over the
Follow-up
Curtis Diorite in the Ararat Project,
which hosts a number of historic
gold workings
the
Honeysuckle Mine, has defined a
is
chargeability anomaly which
for drill
considered a priority
low
testing. There are further
amplitude
anomalous
chargeability features beneath the
Honeysuckle gold workings and on
the margin of the Curtis Diorite
which have been recommended
for further work.
on
based
testing
a
Drill
reinterpretation of the structural
controls on gold mineralisation at
the Fairview North gold prospect
has returned a wide mineralised
interval of 30 metres at 1.4 g/t gold
from 47 metres drill depth,
including 11 metres at 2.4 g/t gold.
Deep diamond drilling completed
at the Thursday’s Gossan prospect
in early 2017 confirmed the ‘D’
vein relationship between high-
grade
copper-silver-gold
mineralisation at depth and its
distribution and relationship to the
near-surface chalcocite blanket.
Assay results included 3.1 metres
at 1.72% copper, 1.48 g/t gold and
21 g/t silver including 0.9 metres at
5.17% copper, 4.87 g/t gold and 64
g/t silver.
the potential
drilling
these
specifically
Further
targeting
near-surface
expressions of the sulphide-rich ‘D’
to
veins has
materially increase the grade of
that portion of
the Mineral
Resource where these veins occur,
especially as gold and silver are not
included in the current Mineral
Resource estimate.
the
Strong porphyry-style copper-gold
mineralisation over a 400 metre
strike extent has been intersected
shallow RC drilling
in
completed towards the end of the
year at the Thursday’s Gossan
copper prospect, with several RC
in mineralisation
holes ending
tails
(results
from
pending). Intercepts
include 24
metres at 0.64% copper and 1.2 g/t
gold, 29 metres at 0.53% copper
and 0.30 g/t gold to end of hole
(EoH), 25 metres at 0.52% copper
and 0.37 g/t gold to EoH and 3
metres at 4.14% copper and 0.36
g/t gold.
diamond
The mineralisation is interpreted to
be hosted within the upper-level
phyllic (sericite-pyrite) to argillic
(kaolinite) alteration, meaning that
even
developed
mineralisation should be located at
the
depth within
potassic
feldspar-biotite-
(potassium
magnetite) alteration.
better
2017 Annual Report | Page 4
OPERATIONS REPORT
The funds raised through the
combined Share Placement and
SPP were primarily used
to
accelerate drilling programmes in
Queensland
targeting breccia-
hosted gold mineralisation and in
targeting
Victoria
western
porphyry
copper-gold
mineralisation.
Photo 1. RC Drill rig (foreground) and diamond rig (background) at the Thursday’s
Gossan prospect, May 2017.
Project.
intrusive
An outstanding porphyry drill
target has been generated at the
Toora West prospect in the Yarram
Park
The maiden
drilling programme successfully
confirmed the existence of a
complex
‘blind’
compositionally and
texturally
consistent with a porphyry copper-
gold environment. Petrographic
analysis
confirmed
porphyry-style alteration. A very
large and very strong, up to
50mV/V chargeability anomaly has
been
identified ~800m to the
south of the first two diamond
holes drilled by Stavely Minerals in
early 2017.
core
of
Company’s
Exploration activities carried out at
Ravenswood
the
Project in north Queensland led to
the identification of The “Bank”
breccia target. Diamond drilling at
intercepted strong
The “Bank”
copper-moly-silver
sulphide
mineralisation in one drill hole,
which returned 22.8 metres at
0.60% Copper,
including 12.4
metres at 0.95% Copper, 120ppm
Molybdenum and 8.0 g/t Silver,
and 6.05 metres at 1.31% Copper,
100ppm Molybdenum and 12.4 g/t
Silver.
CORPORATE
to
allow
2016,
Stavely
In November
Minerals completed a capital
raising which was underpinned by
a Share Placement of 13.33 million
shares at 15 cents per share to
sophisticated and
institutional
investors to raise $2 million before
costs. The Share Placement was
oversubscribed. In addition, the
Company completed a Share
Placement Plan (SPP), also at 15
existing
cents
shareholders to participate in the
capital raising on the same terms
as the Share Placement. Stavely
offered eligible shareholders the
opportunity to subscribe for new
shares up to a maximum value of
$15,000 per eligible shareholder.
Applications totalling $1,531,500
were received, and while that total
exceeded the target cap of $1.5
million for the SPP, the Board
decided to accept all applications
without any scale back.
The share subscription agreement
between Stavely Minerals and
Titeline Drilling Pty Ltd, under
which the Company has the option
to settle monthly drilling charges
by way of a cash payment and/or
shares,
place.
still
Approximately $0.78 million of the
total $2 million facility has been
used as at the end of June 2017.
in
is
In
from
initiative.
During the year, the Company
received payments of $300k from
the Victorian Government under
the TARGET exploration 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, the Victorian 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 research programme by
the Geological Survey of Victoria
and Geoscience Australia 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
metals
basis
and
2017 Annual Report | Page 5
enhance the understanding of
potential mineral deposits
in
western Victoria, with the view
that the investment will generate
jobs, economic and other flow-on
benefits to the region. The TARGET
grants cover up to half the cost of
activities,
eligible
exploration
including
surveys,
geophysical
drilling and sample analysis, with
the companies funding the balance
by their own means. To date the
co-funding has been used to
conduct geophysical surveys at the
Yarram Park, Stavely and Ararat
Projects, undertake maiden drilling
at porphyry copper-gold targets on
the Stavely and Yarram Park
the
Projects and
to advance
OPERATIONS REPORT
understanding of the Thursday’s
Gossan porphyry target through
deep diamond drilling.
Company
distributed
The
Exploration
Development
Incentive Scheme (EDI) credits of
$406,000 (28.5% of the Company’s
eligible 2015- 2016 exploration
expenditure of $1.425 million) to
Shareholders in June 2017. The EDI
credits were
to
Shareholders pro-rata relative to
the number of shares held and the
total shares on issue (121,227,119)
on the Record date of 17 May
2017. The EDI enables eligible
exploration companies to create
exploration credits by giving up a
portion of their carried forward
distributed
losses from eligible exploration
expenditure and distributing these
exploration
to equity
credits
shareholders.
investment
The EDI is intended to encourage
shareholder
in
companies
exploration
undertaking greenfields mineral
exploration in Australia.
Stavely Minerals had a total of
$2.54M cash on hand at the end of
June 2017, with a further $1.21M
available pursuant to the Share
Subscription Agreement with
Drilling contractor, Titeline Drilling
Pty Ltd and $0.7M of Victorian
Government co-funding.
Photo 2. Soil Sampling at the Ravenswood Project.
2017 Annual Report | Page 6
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
is grazing and broad acre
use
cropping.
The Ravenswood Project is located
90km south of Townsville and
10km south west of Ravenswood in
north Queensland. The Mingela-
Ravenswood - Burdekin Dam road
passes down the eastern boundary
of the Project (Figure 2).
Review of
Operations
Background
approximately
The Ararat and Stavely Projects are
located
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 29 square kilometres of
100% owned and 72 square
kilometres of joint venture tenure.
topography
The Queensland Project includes
four granted exploration licences
with a total area of 548 square
is
kilometres. The
made up of rolling hills alternating
with sandy flats. The Burdekin
River runs through the Project
area. Access within the tenements
is by 4WD via station tracks.
Figure 1. Ararat, Stavely and Yarram Park Project Location
Plan.
Figure 2. Ravenswood Project Location Plan.
2017 Annual Report | Page 7
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
The Stavely Project is hosted in
Cambrian age Delamerian Orogeny
submarine mafic and intermediate
volcanics and tuffs which were
overlain by quartz-rich turbidite
sequences of the Glenthompson
Sandstone. These sequences were
deformed in the late-Cambrian.
Seismic traverses by the Victorian
Department
Economic
Development, Jobs, Transport and
Resources in western Victoria have
supported the interpretation of an
Andean-style convergent margin
environment for the development
of the buried Stavely Arc beneath
the Stavely Volcanic Complex and
environs (Cayley, in prep, pers.
comm., 2013). This
regional
considered
is
architecture
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
Lachlan
Fold Belt and
The
Delamerian sequences are in fault
contact
large-scale
thrusting along the east dipping
through
Figure 3. Geology of south-eastern Australia.
Moyston Fault (Cayley and Taylor,
2001).
Largely unconformably overlying
both these domains by low-angle
décollement is a structural outlier
of the younger Silurian fluvial to
to
shallow marine
mudstone
the
Grampians Group.
sequences of
sandstone
Regional
Queensland
Geology
North
The dominant rock types within
the Ravenswood Project are
typically I-type calcic hornblende-
biotite granodiorite to tonalite of
the Ravenswood Batholith of
to Middle
Middle
Devonian age (Figure 4).
Silurian
A major structure, the Mosgardies
Shear Zone, cuts east-west through
Ravenswood
Batholith
the
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
2017 Annual Report | Page 8
OPERATIONS REPORT
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
style alteration and
porphyry
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.
Figure 4. Ravenswood West Project – Regional Geology Plan.
2017 Annual Report | Page 9
OPERATIONS REPORT
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).
Refer to ASX release dated 8
September 2015 for all criteria for
sections 1, 2 and 3 of the JORC
Code Table 1 and 2.
The Mt Ararat Copper Indicated
and Inferred Resource Estimate,
August 2017, 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
(b) Stavely
Project Mineral
Resource
In the Stavely Project, at the
Thursday’s Gossan prospect, a
near surface secondary chalcocite
an
enriched
estimated (using a 0.2% Cu grade
lower cut-off) – 28Mt at 0.4%
copper for 110kt of contained
copper (Table 2).
blanket with
The Thursday’s Gossan Chalcocite
Copper Inferred Mineral Resource
Estimate remains unchanged from
the Thursday’s Gossan Chalcocite
Resource
Inferred
Copper
Estimate, August 2013. Although
economic circumstances affecting
the mining industry have changed
since
underlying
assumptions utilised in the 2013
Mineral Resource estimate remain
valid.
2013,
the
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.
2017 Annual Report | Page 10
OPERATIONS REPORT
Table 2. The Thursday’s Gossan Chalcocite Copper Inferred Resource Estimate (reviewed in 2017).
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.
Ararat Project
The Ararat Project is prospective for
VMS
copper-gold-zinc-silver
mineralisation as well as ‘Stawell-
style’ and
intrusion-related gold
mineralisation.
Geophysics, including an IP survey
at the Honeysuckle Gold prospect
and a DHEM survey at the Carroll’s
VMS prospect, where successful in
identifying significant new drill
targets in the Ararat Project (Figure
5). The IP and DHEM programmes
were part of
the Victorian
Government TARGET exploration
initiative co-funding.
The Mount Ararat copper deposit
and the Carroll’s prospect lie within
a small portion of a much more
extensive prospective exhalative
horizon on the contact between the
Carrolls Amphibolite and
the
Lexington Schist.
Figure 5. Ararat Project – Copper and Gold Targets.
2017 Annual Report | Page 11
The Ararat Goldfield has significant
historic alluvial and deep
lead
production of circa 640,000 ounces
of gold but with no known
substantial hard-rock source.
i. Carroll’s Base Metal Prospect
A DHEM survey was completed on
the two diamond holes drilled at
the Carroll’s VMS prospect in late
2015. The diamond holes were
drilled to target strong IP anomalies
the prospective VMS
within
horizon.
The drilling returned
intervals of massive to
narrow
stringer sulphide zinc and copper
mineralisation, including:
OPERATIONS REPORT
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
base
metal
The aim of the DHEM survey was to
ascertain if there were any off-hole
conductors which may be the result
of
sulphide
mineralisation. Drill hole SADD007
returned a small isolated on-hole
response which matched a 5 metre
intersection containing sphalerite
interval within
and a
bearing copper. Drill hole SADD005
returned a distal off-hole response,
which was modelled to establish
thinner
the projected downhole depth.
Simultaneous modelling with the
Fixed Loop Electromagnetic data
indicated a
collected
projected intersection at a depth of
500m. This predicted depth agreed
with independent modelling of only
the DHEM data.
in 2013
Despite the abundant sulphide
mineralisation
intercepted,
selective sampling of the drilling did
not return any significant gold
intercepts or
interesting
any
pathfinder elements.
ii. 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
although
focussed upon
historic mining
narrow, high-grade reefs.
system,
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, IP is likely to be effective
in identifying sulphides potentially
associated
gold
mineralisation.
with
IP data was collected on four lines
over the Curtis Diorite
in the
Honeysuckle Mine area. Processing
of the data and integration with
magnetic and gravity data has led
to the identification of a number of
chargeability features which are
considered worthy of follow-up.
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.
2017 Annual Report | Page 12
Figure 6. Ararat Project – Simplified Geology with Primary Gold Workings and
IP Anomalies.
Stavely Project
opportunities
The Stavely Project hosts several
for
significant
discovery of porphyry copper-gold
and VMS base-metals +/- gold
deposits.
During the year the Company
conducted diamond and RC drilling
at the Thursday’s Gossan porphyry
prospect, Mount Stavely porphyry
prospect and the Fairview North
gold prospect. An extensive
IP
completed at the
survey was
south
and
Fairview
prospects. Three diamond holes at
Thursday’s Gossan
one
diamond hole at Mount Stavely
were co-funded by the Victorian
north
and
OPERATIONS REPORT
Government TARGET exploration
initiative.
Diamond drill testing based on a
reinterpretation of the structural
controls on gold mineralisation at
the Fairview North gold prospect
returned a thick zone of strong near
surface gold mineralisation with a
mineralised interval of 30 metres at
1.4 g/t gold from 47 metres drill
Subsequent RC drilling
depth.
returned mineralised
intervals
including 17 metres at 1.23 g/t gold
a
from
mineralised envelope of 57 metres
at 0.57 g/t gold from surface.
23 metres within
Exploration during the year has led
to Stavely Minerals’ exploration
team developing a conceptual
model that there were two phases
of mineralisation at Thursday’s
Gossan. The early porphyry phase is
a low-grade copper-only phase that
previous explorers had identified
and is of little economic interest.
Stavely’s original interest in the
Project was based on
the
recognition, in previous explorer’s
drill core, of evidence of intense
high-level alteration associated
with
copper-gold
mineralisation. The Company’s
belief was that these attributes
were indications that a second-
phase
porphyry
existed at depth that had not yet
been seen in the historical drilling
(Figure 7).
copper-gold
strong
Figure 7. Thursday’s Gossan Prospect Conceptual Model.
2017 Annual Report | Page 13
OPERATIONS REPORT
zone.
This was mainly because previous
explorers had not assayed for gold
or silver in many drill holes within
results
this
conclusively demonstrate
that
significant gold and silver grades
are hosted within the Mineral
Resource area.
These
on
Study
Scoping
A
the
development of the chalcocite
resource has been progressing well
with some very positive outcomes
achieved to date. However, the
the
believes
Company
relationship between the higher
copper grades and the distribution
of silver and gold grades as they
relate to the porphyry ‘D’ veins
requires further investigation as a
priority before the Scoping Study is
finalised.
that
i. Thursday’s Gossan Porphyry
Prospect
deep
initiative
diamond
holes
Three
(SMD006, SMD007 and SMD008)
for a total of 950 metres were
drilled at the Thursday’s Gossan
Porphyry prospect as part of the
Victorian Government TARGET co-
funded exploration
in
early 2017 (Figure 8). This drilling
resulted in a major advance in the
understanding of the controls on
the near-surface, high
grade
gold
and
copper,
mineralisation as well as assisting
with vectoring towards the potassic
‘core’ to the porphyry
altered
system.
silver
from
results
This theory is supported by initial
assay
the deep
diamond drilling at the Thursday’s
Gossan copper prospect which
confirmed the ‘D’ vein relationship
between high-grade copper-silver-
gold mineralisation at depth and its
distribution and relationship to the
near-surface chalcocite blanket.
Assays confirming the high-grade
at
mineralisation
Thursday’s Gossan include results
of up to 4.87 g/t gold, 64 g/t silver
and 5.17% copper.
controls
In addition, very encouraging
results
including 24 metres at
0.64% copper and 1.2 g/t gold have
been received from the RC drilling
programme designed to follow-up
the new
interpretation of the
controls on high-grade copper-gold
mineralisation in the near-surface
chalcocite-enriched
copper
‘blanket’.
are
the
intercepts
for
These shallow copper-gold (and
silver)
very
significant
potential
development of the near-surface
chalcocite enriched
‘blanket’ at
Thursday’s Gossan, demonstrating
that significant gold and silver
values exist within this zone. All
Resource
Mineral
previous
estimates
the Thursday’s
for
Gossan chalcocite blanket (28Mt at
0.4% copper in Inferred Resources,
see ASX release dated 8 September
2015) to date have only estimated
the copper within the deposit,
silver.
excluding
gold
and
Figure 8. Stavely Project – Thursday’s Gossan Drill Hole Location Plan.
2017 Annual Report | Page 14
zone
to
SMD006 intercepted a deeper than
of
average
supergene
enrichment
a depth of
approximately 100 metres. This
zone hosts multiple
‘D’ veins
including a 12 metre wide ‘D’ vein
which is believed to occur at a low
angle fault contact. A number of
sulphide
‘D’ veins were
intersected from 27 to 83 metres
and 137 to 237 metres in drill hole
SMD007.
rich
Previously recognised porphyry ‘D’
veins noted in drilling at depth are
now believed to be responsible for
the higher tenor copper, gold and
silver results close to surface,
including:
o 7.7 metres at 4.1% copper and
1.1 g/t gold from 94.7 metres;
and
o 9.5 metres at 25.9% copper
and 0.4 g/t gold from 154.6
metres in drill hole SNDD001;
o 6 metres at 4.23% copper, 50
g/t silver and 0.42 g/t gold
from 32 metres in drill hole
TGAC016;
o 33 metres at 0.6 g/t gold from
23 metres, including 9 metres
at 1.76 g/t gold from 26
metres in drill hole TGAC013;
o 12 metres at 1.08% copper
and 0.24 g/t gold from 30
metres in drill hole TGAC004;
and
o 32 metres at 0.8% copper and
0.4 g/t gold from 22 metres in
drill hole VSTD001.
These intercepts are located within
the existing
and adjacent
to
chalcocite
Mineral
blanket
Resource of 28 Mt at 0.4% copper.
At least two distinct north-west
striking trends are evident in the
near-surface expression of these
OPERATIONS REPORT
zones
two
sulphide-rich
of
porphyry ‘D’ veins, both of which
were originally recognised in the
Company’s earlier deep diamond
drill holes, SMD001 and SMD003
(Figure 9).
Results from drill hole SMD007
confirm the ‘D’ vein relationship
with high-grade copper-silver-gold
mineralisation with assay results
including:
o 3.1 metres at 1.48 g/t gold, 21
g/t silver and 1.72% copper
from 216.9 metres depth,
including 0.9 metres at 4.87
g/t gold, 64 g/t silver and
5.17% copper
o 4.3 metres at 0.44 g/t gold, 6
g/t silver and 1.66% copper
from 237 metres depth,
including 1.3 metres at 0.16
g/t gold, 16 g/t silver and
5.16% copper.
Processing and sampling of drill
holes SMD006 and SMD008 and
the remainder of SMD007 has been
the assay
completed however
results were outstanding at the end
of the year.
Four sections of five holes each for
a total of 20 RC holes were drilled
to confirm an interpretation that
copper-gold
high-grade
mineralisation near surface at
Thursday’s Gossan is hosted by
sulphide-rich veins
in structures
‘leaking’ from a porphyry intrusion
at depth (Figure 10).
The shallow drilling has intersected
thick zones of strong porphyry-style
copper-gold
mineralisation.
Selected results from this highly
successful
campaign
drilling
include:
o 24 metres at 0.64% copper
and 1.2 g/t gold, including
14 metres at 0.82% copper
and 1.99 g/t gold, including 1
metre at 0.84% copper and
22.2 g/t gold
o 29 metres at 0.53% copper
and 0.30 g/t gold to end of
hole (EoH), including 4 metres
at 1.39% copper, 0.5 g/t gold
and 55 g/t silver
o 25 metres at 0.52% copper
and 0.37 g/t gold to EoH
o 3 metres at 4.14% copper,
0.36 g/t gold and 59 g/t silver
o 43 metres at 0.55% copper
and 0.11 g/t gold
o 28 metres at 0.59% copper
and 0.19 g/t gold
o 8 metres at 0.74% copper and
0.17 g/t gold
o 25 metres at 0.30% copper
and 0.29 g/t gold to EoH,
including 3 metres at 1.24%
copper and 1.31 g/t gold.
Selected significant intercepts from
the RC drilling is presented in Figure
10 and the drill sections are
provided in Figures 11 to 14.
Selected RC drill holes have been
extended with diamond drill hole
“tails” and while assays were still
pending at year end for these
intersections, they are visually very
impressive.
2017 Annual Report | Page 15
OPERATIONS REPORT
Figure 9. Thursday’s Gossan drill collar plan showing the two NW trends of drill holes with +0.1 g/t gold
interpreted to coincide with the near-surface expression of the sulphidic ‘D’ veins.
2017 Annual Report | Page 16
OPERATIONS REPORT
Figure 10. Thursday’s Gossan Chalcocite Deposit – Drill Hole Location Plan with selected significant
intercepts from RC drilling.
2017 Annual Report | Page 17
OPERATIONS REPORT
Figure 11. Thursday’s Gossan Prospect Schematic Cross Section STRC009 – STRC001D.
2017 Annual Report | Page 18
OPERATIONS REPORT
Figure 12. Thursday’s Gossan Prospect Schematic Cross Section STRC010 – STRC004.
2017 Annual Report | Page 19
OPERATIONS REPORT
Figure 13. Thursday’s Gossan Prospect Schematic Cross Section STRC020 – STRC016.
2017 Annual Report | Page 20
OPERATIONS REPORT
Figure 14. Thursday’s Gossan Prospect Schematic Cross Section STRC015 – STRC011.
2017 Annual Report | Page 21
ii. Fairview Gold Prospect
with
During the year an IP survey and
diamond and RC drilling were
conducted at the Fairview gold
prospect, where a 4.8 kilometre
long mesothermal to epithermal
gold anomalism was originally
in soil sampling and
identified
followed-up
shallow
reconnaissance aircore, RC and
limited diamond drilling.
The
drilling conducted by Beaconsfield
Gold Mines Pty Limited between
2006 and 2010 returned numerous
anomalous
intercepts,
gold
including 2.5 metres at 17.44 g/t
gold; 2 metres at 16.06 g/t gold and
4 metres @ 6.69 g/t gold. However
previous drilling has
failed to
provide a focus for further drilling
which could potentially lead to the
discovery of a Lake Cowal-style gold
deposit.
A total of 29 line kilometres of IP
data was collected over a strike of
4.5 kilometres at the Fairview
North and South gold prospects.
The IP programme was co-funded
the Victorian Government
by
TARGET
initiative.
exploration
Interpretation of the IP data has
been disadvantaged by the limited
direct
information
available due to the shallow depths
of historical drilling which rarely
penetrated
IP
below
interpreted base of oxidation as
well as the drilling being restricted
to the central corridor of the survey
area.
geological
the
Previous explorers have tested the
Fairview North gold prospect with a
large number of aircore drill holes,
eleven RC holes and two diamond
drill holes (Figure 15). Strong near-
surface gold grades up to 1 metre
at 28 g/t gold were achieved but
inconsistent along
had proven
OPERATIONS REPORT
section and between sections. A
new
interpreted orientation of
shallowly NW dipping mineralised
vein arrays at Fairview North was
drill tested by drill hole SMD011,
which intersected:
o 30 metres at 1.4 g/t gold from
47 metres
depth,
including 11 metres at 2.4 g/t
gold,
drill
The newly interpreted shallow NW
plunge of the vein arrays would
account for the inconsistency of the
previous drill sections oriented to
070 degrees magnetic given that
these drill sections would have
been approximately parallel to the
strike of the mineralised veins.
Diamond drill hole SMD011 was
drilled at -55 degrees dip to 155
degrees azimuth – almost at right-
angles to previous drilling. The
mineralisation is associated with
fine quartz veins with central
terminations, within which are
hosted
sulphides
sphalerite (zinc), galena (lead) and
minor chalcopyrite (copper). The
sphalerite is a pale yellow to honey-
coloured
species,
low-iron
indicating a low temperature of
typical of a distal
formation
porphyry environment.
base-metal
The high angle of incidence of most
of the veins to the drill core does
indicate that SMD011 was drilled
perpendicular to the mineralised
veins. The Fairview North and
Fairview South prospects are
marginal to the interpreted Mount
Stavely porphyry at depth, as
indicated by a distinct gravity low
(Figure 15).
Late in the year, RC drilling was
conducted to specifically target the
revised geometry interpretation of
the gold mineralised veins. Broad
zones of low grade mineralisation
16
17).
intercepted
was
from surface,
including 57 metres at 0.57 g/t gold
and 68 metres at 0.42 g/t gold
These
and
(Figure
mineralised envelopes included
higher grade
intercepts of 17
metres at 1.23 g/t gold from 23
metres and 16 metres at 1.04 g/t
gold from 6 metres. These RC drill
results appear to confirm the
shallow NNW dip to the structurally
controlled gold mineralisation.
low-grade gold
Given that the
intervals commence
mineralised
from
surface, composite bulk
samples are being collected for
metallurgical
to
the
determine
mineralisation may be amenable to
low-cost
gold
production.
test work
whether
leach
heap
2017 Annual Report | Page 22
OPERATIONS REPORT
Figure 15. Fairview North Gold Prospect – Drill Hole Collar Plan over Gravity draped on magnetics.
2017 Annual Report | Page 23
OPERATIONS REPORT
Figure 17. Fairview North Gold Prospect – SFRC001 – SFRC004 Oblique Section.
Figure 16. Fairview North Gold Prospect – SFRC002 – SFRC003 Oblique Section.
2017 Annual Report | Page 24
iii. Mount
Stavely
Porphyry
Prospect
is
Two diamond drill holes have been
completed at the Mount Stavely
porphyry copper-gold target. The
Mt Stavely porphyry target
is
reflected as a ‘low’ in gravity data
and as a ‘low’ in the airborne
magnetic data which is interpreted
to reflect magnetite destructive
hydrothermal fluid alteration. A
porphyry is inferred to exist at
depth and
in proximity to
marginal gold mineralisation at the
Fairview gold prospect, which itself
low-
is
sulphidation
style
mineralisation. An IP survey in the
Mt Stavely area
returned a
chargeability feature which was
slightly offset from the gravity low.
Geochemical soil sampling over the
Mount Stavely prospect returned
anomalous arsenic, molybdenum
and gold values.
interpreted
epithermal
to be a
geochemical
Drill hole SMD009, was drilled to a
depth of 321 metres as part of the
co-funded exploration
TARGET
initiative and was designed to test a
co-incident IP chargeability feature
anomalism
and
(Figure 18). Drilling did intercept a
sulphide- mineralised polymict
breccia which displayed four to five
sulphide
recognisable
mineralisation events but did not
return any gold or base metal
results.
of
magnetite both as pervasive
magnetite
and
numerous magnetite veins are now
considered to be responsible for
the IP chargeability anomaly.
abundance
alteration
The
OPERATIONS REPORT
A second hole
(SMD010) was
drilled to a depth of 230.9 metres
to target a smaller IP anomaly and
and
coincident molybdenum
arsenic soil geochemical anomaly
to the north-west of the Mount
low (Figure 18).
Stavely gravity
Apart from a shear zone near the
end of the hole which quartz-
carbonate veining with sphalerite-
chalcopyrite was
galena and
encountered,
sulphide
mineralisation is largely restricted
the
to diagenetic pyrite
mudstones.
in
Figure 18. Mount Stavely Copper-Gold Prospect – Soil Sampling (Mo) over Gravity
Draped on Magnetics.
2017 Annual Report | Page 25
OPERATIONS REPORT
Yarram Park Project
The Yarram Park Project is located
within an area where interpretation
of the regional 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 19). Both the Mount Stavely
Belt and the Bunnagul Belt are
considered to be highly prospective
for
porphyry
copper-gold and diatreme-hosted
gold mineralisation.
intrusive-related
Two phases of IP and a diamond
drilling programme was conducted
at
the Toora West porphyry
prospect in the Yarram Park Project.
The first phase of IP and the two
diamond holes were co-funded by
the Victorian Government TARGET
exploration initiative.
An outstanding porphyry drill target
has been generated at the Toora
West prospect. Maiden drilling in
early 2017, confirmed the existence
of the right host rocks with the
presence of distal porphyry-style
alteration. A very large and very
strong, up to 50mV/V chargeability
anomaly has been identified from
IP
the recent
anomaly is located approximately
800m to the south of the previous
drilling and is a Priority 1 drill target
for Stavely Minerals.
IP survey. This
i. Toora West Prospect
low with peripheral
The Toora West target comprises a
coincident magnetic high and
gravity
IP
chargeability features within the
prospective Mount Stavely Volcanic
Complex (Figure 20). Two diamond
drill holes for a total of 650 metres
IP
were completed to test an
chargeability
initially
identified from a survey conducted
in 2015.
anomaly
strong
Analysis of the additional IP data
collected towards the end of the
year has identified a very large and
chargeability
IP
very
anomaly being some 500 metres in
diameter and the 20mV/V anomaly
being in excess of 1km in diameter
in an NW/SE orientation (Figure
21).
confirmed
The maiden drilling programme at
Toora West
the
existence of a previously un-known
complex,
intrusive
‘blind’
the correct
to be
considered
composition to host a porphyry
copper ± gold deposit.
Petrographic description of the
intrusive units intersected in the
indicates that, texturally
drilling
and compositionally,
they are
typical of those found in some low-
K calc-alkaline porphyry copper-
gold systems.
2017 Annual Report | Page 26
Figure 19. Yarram Park Project – Aeromagnetic Image.
OPERATIONS REPORT
the
Further,
petrographic
description of the intrusive and
metamorphic units describes a
weak-to-moderate
widespread
early and hot potassic alteration,
expressed as biotite and K-spar
alteration of mafic minerals and K-
spar alteration of plagioclase
feldspars. Also observed was a later
moderate
alteration
propylitic
overprint expressed as a chlorite
alteration of mafic minerals.
The intrusive phases intersected in
the drilling hosted both early and
later porphyry-style
alteration,
albeit likely distal to a potentially
mineralised
gold
copper
porphyry. Recently completed IP
geophysics has identified a very
large and very strong chargeability
anomaly
located approximately
800 metres to the south of the
maiden drill hole locations.
±
There is strong potential that this
chargeability anomaly may be
caused by disseminated sulphides
copper-gold
with
associated
mineralisation.
now
considered a Priority 1 drill target,
which is being prepared for drill
testing.
This
is
Figure 20. Yarram Park – Gravity Draped on Magnetics.
2017 Annual Report | Page 27
OPERATIONS REPORT
Figure 21. Yarram Park – Toora West IP Chargeability Anomaly on Magnetics.
2017 Annual Report | Page 28
OPERATIONS REPORT
programmes
exploration
The
to
led
the
during
the year
identification of
“Bank”
The
breccia-hosted gold target (Figure
23).
The “Bank” breccia was
interpreted to be a sub-volcanic
formed by deep-
breccia pipe
seated explosive fracturing of a
column of rock above a porphyry
intrusion.
In north-east Queensland these
breccia pipes are often associated
with porphyritic rhyolite intrusions
and, due to the additional porosity
induced by the often multiple
brecciation events, present ideal
Intrusive-Related
hosts for
Gold System
(IRGS) style gold
mineralisation.
later
Ravenswood Project
orogenic
The Ravenswood Project is highly
gold-copper
for
prospective
excellent
mineralisation, with
and
potential
for
intrusive-related
gold
mineralisation, as well as having
copper-
four
molybdenum-gold
prospects
identified (Figure 22).
porphyry
Figure 22. Ravenswood Project – Prospect Location Plan.
2017 Annual Report | Page 29
OPERATIONS REPORT
Figure 23. Ravenswood West Project (EPM26041) – Prospect Location Plan.
Other notable IRGS gold deposits in
north-east Queensland include:
Kidston- 5.0 million ounces of gold
(breccia-hosted),
Ravenswood - 4.8 million ounces of
gold,
Mount Leyshon - 3.5 million
ounces of gold (breccia-hosted),
Red Dome - 2.1 million ounces of
gold,
Mungana - 1.1 million ounces of
gold,
Mount Wright - 1.0 million ounces
of gold (breccia-hosted), and
Welcome - 0.21 million ounces of
gold (breccia-hosted)
During the year five diamond holes
were drilled to test The “Bank”. One
hole returned strong copper-moly-
silver sulphide mineralisation with
a broad interval of 22.8 metres at
0.60% copper.
A review of the drill core led to the
conclusion that all the Cu-Mo + Ag
mineralisation is associated with an
equigranular intrusion interpreted
as
Barrabas
Adamellite and is not a prospective
target.
the Ordovician
i. The “Bank” Breccia Prospect
During the year, field mapping, rock
chip and soil sampling conducted at
the Ravenswood West Project lead
to the identification of The “Bank”
breccia-hosted gold target. At The
“Bank” breccia there is evidence of
poly-phase brecciation, quartz
veining and sulphide mineralisation
both as disseminations and as fill in
the core of dog’s tooth and banded
quartz veins. The breccia system
appears to encompass three low
hills including The “Bank” breccia to
the south, Hamish’s Hill to the
north and Chalcedony Hill to the
2017 Annual Report | Page 30
(Figure 24).
east
Rock-chip
sampling confirms the ‘spotty’ gold
anomalism with more consistent
anomalism in elements considered
to reflect the very high level of
exposure of the breccia pipe system
including lead, silver, arsenic and
antimony. Rock-chips up to 0.5 g/t
gold and high silver to 28.5 g/t with
associated high lead values to 7,740
ppm characterise Hamish’s Hill
(Figure 24). At The “Bank” breccia,
rock-chip results have returned
gold up to 0.25 g/t with high silver
to 45.7 g/t associated with strong
arsenic and antimony anomalism to
4,310 ppm and 1,720 ppm
respectively (Figure 24).
In late 2016 five diamond holes
were drilled for a total of 1838
metres (Figure 24). Encouraging
zones of vein-hosted and breccia-
hosted quartz-carbonate-sulphide
OPERATIONS REPORT
mineralisation was intersected in all
five holes and strong copper-moly-
silver sulphide mineralisation was
intercepted in drill hole SRD002
(Figure 25) within a broad interval
of 22.8 metres at 0.60% copper
there are higher grade intervals
including:
o 12.4 metres at 0.95%, 120
ppm molybdenum and 8.0 g/t
silver, including 6.05 metres at
1.31%
copper, 100 ppm
molybdenum and 14.4 g/t
silver.
A subsequent review of the drill
core led to the conclusion that all
the copper-moly-silver sulphide
is typical of that
mineralisation
which might be expected
in
association with a larger batholitic
intrusion body. No tuffisites, which
would have provided analogies to a
Mt Leyshon target, or rhyolite
In
addition,
is apparent
dykes, which would be analogous
to a Kidston style breccia pipe, were
recognised.
the
sheeted veins intersected in the
drilling were barren. While some
concentration of metals (copper-
in the
moly-silver)
structurally controlled greisens, it
was considered that these are small
and unlikely to lead to significant
targets. Consequently, the target as
defined from surface features has
been tested and does not fit the
It was
exploration
concluded that The “Bank” breccia
prospect does not warrant further
work.
concept.
Figure 24. Ravenswood West Project – The “Bank” Breccia Prospect Drill Hole Location Plan.
2017 Annual Report | Page 31
OPERATIONS REPORT
Figure 25. Ravenswood West Project – The “Bank” Breccia Prospect Cross Section SRD002.
ii. Rare Earth Element Target
element
sediment
stream
Follow-up
sampling was conducted within the
Ravenswood West project area to
find the source of the strong rare
earths
anomalism
identified in a stream sediment
sample taken by BHP Minerals in
The sample
the mid 1990’s.
returned results up
to 0.25%
cerium, 0.14% lanthanum, 768 ppm
neodymium,
ppm
praseodymium and 102 ppm
samarium, and other rare earth
elements which to date have not
These
been
followed
218
up.
rare
‘Lanthanide’
earth
light
elements are characteristic of a rare
intrusive rock called a carbonatite
which globally host the largest and
highest grade rare earth deposits
(eg. Mt Weld, in Western Australia).
The first phase of stream sediment
sampling conducted along
the
Barrabas Creek and its’ tributaries
returned more anomalous results
than the historical samples with up
to 0.63% cerium, 0.34% lanthanum,
2,270 ppm neodymium, 672 ppm
praseodymium and 345 ppm
samarium.
in
taken
stream
sediment
Follow-up
the
samples were
tributaries of the Barrabas Creek as
well as in the tributaries of the
Elphinstone Creek. These samples
also returned highly anomalous
rare earth element results, with
one sample assaying 0.91% cerium,
lanthanum, 3,130 ppm
0.43%
neodymium,
ppm
926
praseodymium and 514 ppm
samarium.
the
anomalous rare earth assays, a
number of samples assayed
in
excess of 0.1 g/t gold with a peak
value of 1.1 g/t gold.
In addition
to
2017 Annual Report | Page 32
OPERATIONS REPORT
JORC Compliance Statement
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based
on information compiled by Mr Chris Cairns, a Competent Person who is a Member of the Australian Institute of Geoscientists. Mr
Cairns is a full-time employee of the Company. Mr Cairns is the Managing Director of Stavely Minerals Limited, is a substantial
shareholder of the Company and is an option holder of the Company. Mr Cairns has sufficient experience that is relevant to the style
of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as
defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr
Cairns consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
With respect to reporting of the Mineral Resources at the Mt Ararat VMS copper-gold-zinc deposit and Thursday’s Gossan chalcocite
copper deposit, the information is extracted from the report entitled “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).
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.
2017 Annual Report | Page 33
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.
2017 Annual Report | Page 34
DIRECTORS’ REPORT
Your Directors present their report for the year ended 30 June 2017.
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 36 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.
2017 Annual Report | Page 35
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: None.
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.
2017 Annual Report | Page 36
DIRECTORS’ REPORT
MEETINGS OF DIRECTORS
During the financial year, 4 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
4
4
4
4
Meetings
Attended
4
4
4
4
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
3,497,097
30,257,419
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 26 cents,
expiry 31/12/2017
2,500,000
3,500,000
2,100,000
1,000,000
No dividends were paid or declared during the year. The Directors do not recommend payment of a dividend.
ENVIRONMENTAL REGULATIONS
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 2017. 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 34.
2017 Annual Report | Page 37
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
Year
Year
30 June 2017
30 June 2016
$
$
2,539,101
1,520,166
(3,915,242)
(3,002,027)
(2,394,120)
(1,534,337)
(1,020,234)
(884,473)
Basic loss per share (cents) from continuing operations
(3.54)
(3.19)
Net cash used in operating activities
Net cash used in investing activities
Net cash from financing activities
(2,294,238)
(1,700,195)
(29,090)
(48,958)
3,342,263
1,328,171
During the year:
- On 5 July 2016, Stavely issued 270,270 new shares at an issue price of 11.1 cents per share as consideration for
the extension of the Stavely Royalty Option with New Challenge Resources Pty Ltd.
- On 16 November 2016, Stavely issued 13,333,334 fully-paid ordinary shares at 15 cents per share pursuant to a
placement to sophisticated and institutional investors. Gross proceeds were $2,000,000.
- On 8 December 2016, Stavely issued 10,210,000 fully-paid ordinary shares at 15 cents per share pursuant to a
Share Purchase Plan. Gross proceeds were $1,531,500.
-
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 2017, 1,922,922 ordinary shares ($279,653) 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 34 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.
2017 Annual Report | Page 38
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The Directors present the 2017 Remuneration Report, outlining key aspects of Stavely’s remuneration policy and
framework, together with remuneration awarded this year.
The report is structured as follows:
A. Key management personnel (KMP) covered in this report
B. Remuneration policy, link to performance and elements of remuneration
C. Contractual arrangements of KMP remuneration
D. Remuneration of key management personnel
E.
Equity holdings and movements during the year
F. Other transactions with key management personnel
G. Use of remuneration consultants
H. Voting of shareholders at last year’s annual general meeting
A. KEY MANAGEMENT PERSONNEL (KMP) COVERED IN THIS REPORT
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).
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 POLICY, LINK TO PERFORMANCE AND ELEMENTS OF REMUNERATION
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.
2017 Annual Report | Page 39
DIRECTORS’ REPORT
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.
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.
2017 Annual Report | Page 40
DIRECTORS’ REPORT
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 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.
C. CONTRACTUAL ARRANGEMENTS OF KMP REMUNERATION
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
30/6/2017
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
2017 Annual Report | Page 41
DIRECTORS’ REPORT
D. 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:
Cash salary,
directors fees,
consulting fees,
insurances and
movement in
leave provisions
$
-
-
168,112
169,293
96,719
94,832
-
-
264,831
264,125
Year
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
Post Employment
Share Based
Superannuation
$
Total Cash
and
Provisions
$
Options (1)
$
Total
including
share based
payments
$
-
-
14,250
14,250
8,550
8,550
-
-
22,800
22,800
-
-
182,362
183,543
105,269
103,382
-
-
287,631
286,925
175,911
170,953
246,276
307,715
147,766
136,762
70,365
68,381
640,318
683,811
175,911
170,953
428,638
491,258
253,035
240,144
70,365
68,381
927,949
970,736
Directors
W Plyley
C Cairns
J Murphy
P Ironside
TOTAL
(1) Equity based payments – options. These represent the amount expensed for options granted and vested in the year.
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.
Share-based Compensation
During the year the following options were granted as equity compensation benefits to Directors and other Key
Management Personnel. These options vested at grant date.
2017
Directors
W Plyley
C Cairns
J Murphy
P Ironside
Number of Options
at 26 cents,
expiry 31/12/2017
Value* per option at
grant date
$
2,500,000
3,500,000
2,100,000
1,000,000
0.0704
0.0704
0.0704
0.0704
These options were granted to recognise the efforts of Stavely’s directors 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 30 November 2016.
* 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 3 of the financial statements.
Shares issued to Key Management Personnel on exercise of compensation options
During the year to 30 June 2017, there were no compensation options exercised by Directors or other Key Management
Personnel.
2017 Annual Report | Page 42
DIRECTORS’ REPORT
E.. EQUITY HOLDINGS AND MOVEMENTS DURING THE YEAR
(a) Shareholdings of Key Management Personnel
30 June 2017
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
22,000
15,007,419
3,467,097
30,157,419
48,653,935
-
-
30,000
100,000
130,000
22,000
15,007,419
3,497,097
30,257,419
48,783,935
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.
(b) Option holdings of Key Management Personnel
30 June 2017
Directors
W Plyley
C Cairns
J Murphy
P Ironside
Balance at
beginning of
the year
Granted as
remuneration
Expired
during the
year
Balance at
end of the
year
Exercisable
3,500,000
2,500,000
(2,500,000)
3,500,000
3,500,000
9,532,258
3,500,000
(4,500,000)
8,532,258
8,532,258
3,561,290
2,100,000
(2,000,000)
3,661,290
3,661,290
6,032,258
1,000,000
(1,000,000)
6,032,258
6,032,258
22,625,806
9,100,000
(10,000,000)
21,725,806
21,725,806
F. 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 $149,310 (net of GST) was paid/payable for office rental and variable outgoings (2016: $141,375 (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 $40,326 (net of
GST) was paid/payable by Zamanco to the Company for reimbursement of office rental and associated expenses (2016:
$39,416 (net of GST)).
G. USE OF REMUNERATION CONSULTANTS
No remuneration consultants were engaged by the Company during the year.
H. VOTING OF SHAREHOLDERS AT LAST YEAR’S ANNUAL GENERAL MEETING
The Company received 99.89% of ‘yes’ votes for its remuneration report for the 2016 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.
2017 Annual Report | Page 43
DIRECTORS’ 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.
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
Unlisted Options
Number
14,400,000
5,150,000
9,100,000
500,000
Exercise Price
27 cents
21 cents
26 cents
19 cents
Expiry Date
31/12/2017
31/12/2017
31/12/2017
30/06/2018
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.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
There are no matters or circumstances that have arisen since 30 June 2017 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. Please refer to the Company’s website for
details of corporate governance policies: http://www.stavely.com.au/about-stavely-minerals/corporate-governance/.
AUDIT INDEPENDENCE AND NON-AUDIT SERVICES
Auditor’s 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.
2017
$19,116
2016
$5,700
Christopher Cairns
Managing Director
Dated this 18th day of August 2017
2017 Annual Report | Page 44
AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS
2017 Annual Report | Page 45
DIRECTORS’ DECLARATION
1.
In the opinion of the directors:
a) The financial statements and notes are in accordance with the Corporations Act 2001, including:
i)
giving a true and fair view of the Group’s financial position as at 30 June 2017 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 2017.
This declaration is signed in accordance with a resolution of the Board of Directors.
Christopher Cairns
Managing Director
Dated this 18th day of August 2017
2017 Annual Report | Page 46
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
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 2017
Year ended
30 June 2016
Note
$
$
45,875
40,326
51,596
39,416
86,201
91,012
2(a)
3
2(b)
(587,089)
(1,020,234)
(2,394,120)
(674,229)
(884,473)
(1,534,337)
(4,001,443)
(3,093,039)
Loss before income tax
(3,915,242)
(3,002,027)
Income tax expense
Loss after income tax attributable to members of
Stavely Minerals Limited
4
-
-
(3,915,242)
(3,002,027)
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
(3,915,242)
(3,002,027)
Loss per share for the year attributable to the members of
Stavely Minerals Limited
Basic loss per share
5
Cents Per
Share
(3.54)
Cents Per
Share
(3.19)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
2017 Annual Report | Page 47
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
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 2017
$
Note
30 June 2016
$
6
7
7
8
9
10
11
2,539,101
113,034
2,652,135
42,500
51,768
3,006,057
3,100,325
1,520,166
87,281
1,607,447
42,500
85,231
3,006,057
3,133,788
5,752,460
4,741,235
415,014
57,946
472,960
472,960
173,730
44,913
218,643
218,643
5,279,500
4,522,592
12
13
15,977,562
2,189,111
(12,887,173)
12,325,646
1,168,877
(8,971,931)
5,279,500
4,522,592
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
2017 Annual Report | Page 48
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
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
As at 30 June 2016
At 1 July 2016
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
$
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
12,325,646
1,168,877
(8,971,931)
4,522,592
12,325,646
1,168,877
(8,971,931)
4,522,592
-
-
-
3,841,153
(189,237)
-
-
-
-
-
-
1,020,234
3,651,916
1,020,234
(3,915,242)
(3,915,242)
-
-
(3,915,242)
(3,915,242)
-
-
-
-
3,841,153
(189,237)
1,020,234
4,672,150
As at 30 June 2017
15,977,562
2,189,111
(12,887,173)
5,279,500
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
2017 Annual Report | Page 49
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Consolidated
Year ended
Year ended
30 June 2017
30 June 2016
Note
$
$
Cash flows from operating activities
Receipts in the ordinary course of activities (mostly GST
and Victorian Government Co-Funding)
Payments to suppliers and employees
Interest received
561,044
211,099
(2,901,157)
(1,962,890)
45,875
51,596
Net cash flows used in operating activities
6(i)
(2,294,238)
(1,700,195)
Cash flows from investing activities
Payments for plant and equipment
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
(29,090)
-
-
-
(29,090)
3,531,500
(189,237)
-
3,342,263
(51,793)
(2,500)
(2)
5,337
(48,958)
1,583,204
(225,993)
(29,040)
1,328,171
Net increase/(decrease) in cash and cash equivalents
held
1,018,935
(420,982)
Add opening cash and cash equivalents brought forward
1,520,166
1,941,148
Closing cash and cash equivalents carried forward
6
2,539,101
1,520,166
The above consolidated statement of cashflows should be read in conjunction with the accompanying notes.
2017 Annual Report | Page 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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 2017 was authorised for issue in
accordance with a resolution of the Directors on 18 August 2017.
(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 2017.
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 2017 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
2017 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 15 Revenue from Contracts with Customers
AASB 15 deals with revenue recognition and establishes principles for reporting useful information to users of
financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an
entity’s contracts with customers. It also introduces new cost guidance which requires certain costs of obtaining
and fulfilling contracts to be recognised as separate assets when specified criteria are met. This standard is not
applicable until the financial year commencing 1 July 2018, and there will be no material impact on Stavely’s
financial statements.
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, however it is likely that the rental of office
premises in WA, residential premises used for site-based staff in Victoria and miscellaneous items such as a
photocopier will require Stavely to recognise lease liabilities and right-of-use assets on its’ statement of financial
position. This standard is not applicable until the financial year commencing 1 July 2019.
2017 Annual Report | Page 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
(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.
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.
2017 Annual Report | Page 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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.
NOTE 2 - EXPENSES
(a) Administration and Corporate Expenses
Administration and corporate expenses include:
Depreciation - administration
Operating lease rental expense
Other administration and corporate expenses
Equity based payments expense – refer note 3
(b) Exploration Costs Expensed
Exploration costs expensed include:
Depreciation - exploration
Exploration drilling – non-cash - refer note 12
Exploration other – non-cash – refer note 6(ii)
Other exploration costs expensed
Victorian Government Co-Funding for exploration
Year ended
30 June 2017
Year ended
30 June 2016
$
$
2,437
150,056
434,596
587,089
1,020,234
1,607,323
60,115
279,653
30,000
2,319,067
(294,715)
2,394,120
1,926
146,224
526,079
674,229
884,473
1,558,702
66,450
266,379
30,000
1,171,508
-
1,534,337
NOTE 3 – EQUITY-BASED PAYMENTS (Recognised as Remuneration Expenses)
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.
2017 Annual Report | Page 53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 3 – EQUITY-BASED PAYMENTS (Recognised as Remuneration Expenses) – continued
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 reporting 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.
(a) Value of equity based payments in the financial statements
Expensed in the profit or loss:
Equity-based payments- options
30 June 2017
30 June 2016
$
$
1,020,234
884,473
(b) Summary of equity-based payments granted during the year:
Granted to key management personnel and consultants as equity compensation:
Grant Date Number
Options
of
Terms
2017
24/11/16
5,150,000
Expire 31/12/2017 at 21c exercise price
30/11/16
9,100,000
Expire 31/12/2017 at 26c exercise price
14/03/17
500,000
Expire 30/6/2017 at 19c exercise price
2016
25/08/15
3,000,000
Expire 31/12/2016 at 27c exercise price
30/11/15
10,000,000
Expire 1/12/2016 at 23c exercise price
Granted to Company Secretary,
employees and consultants as
incentives.
Granted to Directors as approved
by Shareholders on 30/11/2016.
Granted
as
incentives.
consultants
to
Granted to Company Secretary,
employees and consultants as
incentives.
Granted to Directors as approved
by Shareholders on 18/11/2015.
2017 Annual Report | Page 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 3 – EQUITY-BASED PAYMENTS (Recognised as Remuneration Expenses) – continued
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 ($)
24/11/2016
30/11/2016
14/03/2017
0.21
1.10
-
111.56
1.72
0.175
0.0695
0.26
1.08
-
110.71
1.73
0.195
0.0704
0.19
1.30
-
102.39
1.86
0.13
0.0445
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 $0.0692 (2016: $0.06804).
(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 $0.19 to
$0.27 (2016: $0.23 to $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 0.51 years (2016: 0.59 years).
(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 2017
Number
12 Months to
30 June 2017
WAEP $
12 Months to
30 June 2016
Number
12 Months to
30 June 2016
WAEP $
Outstanding at the beginning of year
15,400,000
Granted during the year
Lapsed during the year
Outstanding at the end of the year
Exercisable at year end
5,150,000
9,100,000
500,000
(3,000,000)
(10,000,000)
17,150,000
17,150,000
0.27
0.21
0.26
0.19
-
-
0.24
0.24
2,400,000
3,000,000
10,000,000
-
-
-
15,400,000
15,400,000
0.27
0.27
0.23
-
-
-
0.24
0.24
The weighted average share price for options exercised during the year was nil (2016: nil).
2017 Annual Report | Page 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 4 - INCOME TAX EXPENSE
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 reporting date.
Deferred income tax is provided on all temporary differences at the reporting 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 reporting 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 reporting 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 reporting 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.
2017 Annual Report | Page 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 4 - INCOME TAX EXPENSE - continued
(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) @ 27.5% (2016: 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 2017
Year ended
30 June 2016
$
$
(3,915,242)
(3,002,027)
(1,076,692)
(900,608)
290,906
785,786
-
276,142
624,466
-
2,841,723
(124,572)
2,635,978
(132,665)
2,717,151
2,503,313
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.
Tax Consolidation
The Company and its 100% owned subsidiary have formed a tax consolidated group. Members of the Group have entered
into a tax sharing arrangement in order to allocate income tax expense to the wholly owned controlled entities on a pro-
rata basis. The agreement provides for the allocation of income tax liabilities between the entities should the head entity
default on its tax payment obligations. At reporting date, the possibility of default is remote. The head entity of the tax
consolidated group is Stavely Minerals Limited.
Tax effect accounting by members of the tax consolidated group
Members of the tax consolidated group have entered into a tax funding agreement. The tax funding agreement provides
for the allocation of current taxes to members of the tax consolidated group. Deferred taxes are allocated to members of
the tax consolidated group in accordance with a group allocation approach which is consistent with the principles of AASB
112 Income Taxes. The allocation of taxes under the tax funding agreement is recognised as an increase/decrease in the
controlled entities intercompany accounts with the tax consolidated group head company, Stavely Minerals Limited.
(c) Franking Credits
The franking account balance at year end was $nil (2016: $nil).
2017 Annual Report | Page 57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 5 - EARNINGS PER SHARE
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of
servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus
element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
▪
▪
▪
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element.
Basic loss per share
Year ended
30 June 2017
Year ended
30 June 2016
Cents
(3.54)
Cents
(3.19)
$
$
Loss attributable to ordinary equity holders of the Company used in
calculating:
- basic loss per share
(3,915,242)
(3,002,027)
Weighted average number of ordinary shares outstanding during the year
used in the calculation of basic earnings per share
110,562,327
94,135,661
For the year ended 30 June 2017, 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.
Number
of shares
Number
of shares
2017 Annual Report | Page 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 6 - 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.
Cash at bank and on hand
(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 **
Change in assets and liabilities:
(Increase)/decrease in receivables
Increase/(decrease) in payables
Increase/(decrease) in provisions
Year ended
30 June 2017
$
Year ended
30 June 2016
$
2,539,101
1,520,166
(3,915,242)
(3,002,027)
62,554
1,020,234
279,653
30,000
(15,331)
230,861
13,033
68,376
884,473
266,379
30,000
14,688
24,307
13,609
Net cash flows used in operating activities
(2,294,238)
(1,700,195)
* 1,922,922 ordinary shares ($279,653) were issued pursuant to the Share Subscription Agreement with Titeline
Drilling Pty Ltd and Greenstone Property Pty Ltd. Refer to note 12.
** In July 2016, the Company issued 270,270 ordinary shares ($30,000) to New Challenge Resources Pty Ltd as
consideration for extension of the Stavely Royalty Agreement.
(ii) Non-Cash Financing and Investing Activities
No non-cash financing and investing activities were undertaken during the year (2016: none).
NOTE 7 – 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.
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.
▪
2017 Annual Report | Page 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 7 – TRADE AND OTHER RECEIVABLES - continued
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the statement of financial position. Cash flows are included in the 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.
Current
GST refundable
Bonds – credit card
Other
Total current receivables
Non-Current
Cash on deposit - security bonds
Fair Value and Risk Exposures:
30 June 2017
$
30 June 2016
$
55,112
40,000
17,922
113,034
45,961
40,000
1,320
87,281
42,500
42,500
(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 2017 (2016: none).
NOTE 8 - 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
Motor vehicles
- 0 to 4 years
- 3 to 5 years
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.
2017 Annual Report | Page 60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 8 - PROPERTY, PLANT AND EQUIPMENT - continued
Motor vehicles- at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
30 June 2017
30 June 2016
$
57,364
(35,909)
21,455
182,977
(152,664)
30,313
$
28,273
(21,204)
7,069
182,977
(104,815)
78,162
Total property, plant and equipment
51,768
85,231
Reconciliation of property, plant and equipment:
Motor Vehicles
Carrying amount at beginning of year
Additions
Depreciation
Carrying amount at end of year
Plant and Equipment
Carrying amount at beginning of year
Additions
Depreciation
Carrying amount at end of year
NOTE 9 - DEFERRED EXPLORATION EXPENDITURE
7,069
29,091
(14,705)
21,455
78,162
-
(47,849)
30,313
15,550
-
(8,481)
7,069
86,264
51,793
(59,895)
78,162
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
statement of financial position if they result from an acquisition.
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.
30 June 2017
$
30 June 2016
$
Deferred exploration acquisition costs brought forward
Capitalised acquisition expenditure incurred during the year, net
Deferred exploration costs carried forward
3,006,057
2,982,126
-
23,931
3,006,057
3,006,057
Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful
development and commercial exploitation or, alternatively, sale of the respective areas.
2017 Annual Report | Page 61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 10 - 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.
Trade creditors
Accruals
30 June 2017
30 June 2016
$
396,295
18,719
415,014
$
141,997
31,733
173,730
Fair Value and Risk Exposures
(i) Due to the short term nature of these payables, their carrying value is assumed to approximate their fair
value.
(ii) Trade and other payables are unsecured and usually paid within 60 days of recognition.
NOTE 11 – 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
(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.
Other long-term employee benefit obligations
(ii)
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.
Current
Employee entitlements
30 June 2017
30 June 2016
$
$
57,946
44,913
2017 Annual Report | Page 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 12 – 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.
(a)
Issued Capital
121,227,119 (2016: 95,490,593) ordinary shares fully paid
(b) Movements in Ordinary Share Capital
30 June 2017
$
30 June 2016
$
15,977,562
12,325,646
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
95,490,593 Opening balance at 1 July 2016
270,270
13,333,334
10,210,000
895,180
1,027,742
Issue of shares – New Challenge Royalty 5 July 2016
Issue of shares – Placement 16 November 2016
Issue of shares – Share Purchase Plan 8 December 2016
Issue of shares – Share Subscription Agreement 21 December 2016
Issue of shares – Share Subscription Agreement 4 March 2017
Costs of equity issues
121,227,119 Closing Balance at 30 June 2017
10,556,136
30,000
1,583,181
23
42,605
176,470
47,304
(110,073)
12,325,646
12,325,646
30,000
2,000,000
1,531,500
145,019
134,634
(189,237)
15,977,562
New Challenge Royalty
On 5 July 2016, Stavely issued 270,270 fully paid ordinary shares at 11.1c a share as consideration for the
extension of the Stavely Royalty Option with New Challenge Resources Pty Ltd.
Placement
On 16 November 2016, Stavely issued 13,333,334 fully-paid ordinary shares at 15c a share pursuant to a
placement to sophisticated and institutional investors. Gross proceeds were $2,000,000.
Share Purchase Plan
On 8 December 2016, Stavely issued 10,210,000 fully-paid ordinary shares at 15c a share pursuant to a Share
Purchase Plan. Gross proceeds were $1,531,500.
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 2017, 1,922,922 ordinary shares ($279,653) 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 2017, cumulative subscriptions totalled $785,689 (2016: $506,036).
2017 Annual Report | Page 63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 12 – ISSUED CAPITAL - continued
(c) Options on issue at 30 June 2017
Exercise Price
27 cents
21 cents
26 cents
19 cents
Expiry Date
31/12/2017
31/12/2017
31/12/2017
30/06/2018
Number
14,400,000
5,150,000
9,100,000
500,000
29,150,000
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
During the year:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
No listed options were issued (2016: 3,166,373);
No listed options were exercised (2016: 75);
No listed options expired (2016: 5,966,298);
14,750,000 unlisted options were granted as share-based payments (2016: 13,000,000);
13,000,000 unlisted options expired (2016: nil); and
No unlisted options were exercised (2016: 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 13 - RESERVES
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.
Equity-based payments reserve
Balance at the beginning of the year
Equity-based payments expense
Balance at the end of the year
30 June 2017
$
30 June 2016
$
1,168,877
1,020,234
2,189,111
284,404
884,473
1,168,877
Nature and purpose of the reserve: The Equity-based payments reserve is used to recognise the fair value of options
issued but not exercised.
2017 Annual Report | Page 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 14 – COMMITMENTS AND CONTINGENCIES
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.
Operating leases (non-cancellable):
(a)
Within one year
More than one year but not later than five years
30 June 2017
$
30 June 2016
$
115,331
8,028
123,359
140,198
7,140
147,338
These non-cancellable operating leases are primarily for office premises, residential premises at site and a ground lease.
Exploration Commitments
(b)
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.
Tenement Expenditure Commitments:
The Group is required to maintain current rights of tenure to tenements,
which require outlays of expenditure in 2017/2018. 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.
561,700
442,900
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 (2016: same).
NOTE 15 – RELATED PARTIES
(a) Compensation of Key Management Personnel
Short-term employment benefits
Post-employment benefits
Equity-based payment
30 June 2017
$
30 June 2016
$
264,831
22,800
640,318
927,949
264,125
22,800
683,811
970,736
(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 $149,310 (net of GST) was paid/payable for office rental and variable outgoings (2016: $141,375 (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 $40,325 (net of
GST) was paid/payable by Zamanco to the Company for reimbursement of office rental and associated expenses (2016:
$39,416 (net of GST)).
NOTE 15 – RELATED PARTIES - continued
2017 Annual Report | Page 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 15 – RELATED PARTIES - continued
(c) Transactions with Other Related Parties
There were no transactions with other related parties (2016: 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 2017
$
30 June 2016
$
33,923
19,116
53,039
36,565
5,700
42,265
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.
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,
statement of financial position 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.
2017 Annual Report | Page 66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 18 – FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Interest revenue
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
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 reporting 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 reporting 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 2017
$
30 June 2016
$
2,435,603
80,000
2,515,603
1,372,318
80,000
1,452,318
Sensitivity
At 30 June 2017, 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 $12,577 higher (2016: changes of 0.5% $7,261 higher).
The 0.5% (2016: 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.
2017 Annual Report | Page 67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
NOTE 19 – PARENT ENTITY INFORMATION
Statement of Financial Position 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 2017
$
30 June 2016
$
2,647,469
3,073,896
(472,961)
-
1,602,611
3,131,197
(212,453)
-
5,248,404
4,521,355
15,977,562
12,325,646
2,189,111
1,168,877
(12,918,269)
5,248,404
(8,973,168)
4,521,355
(3,945,101)
(3,945,101)
(3,003,264)
(3,003,264)
There are no commitments or contingencies, including any guarantees entered into by Stavely Minerals Limited
on behalf of its subsidiaries.
Subsidiaries
30 June 2017
30 June 2016
Name of Controlled Entity
Class of Share
Place of Incorporation
% Held by Parent Entity
Ukalunda Pty Ltd
Ordinary
Australia
100%
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
30 June 2017
30 June 2016
$
-
-
-
-
-
-
$
5,337
22
23,931
(248)
(29,040)
2
NOTE 21 – EVENTS OCCURRING AFTER THE REPORTING PERIOD
There are no matters or circumstances that have arisen since 30 June 2017 that have or may significantly affect the
operations, results, or state of affairs of the Group in future financial years.
2017 Annual Report | Page 68
INDEPENDENT AUDIT REPORT
.
2017 Annual Report | Page 69
INDEPENDENT AUDIT REPORT
2017 Annual Report | Page 70
INDEPENDENT AUDIT REPORT
2017 Annual Report | Page 71
ADDITIONAL SHAREHOLDER INFORMATION
Information as at 11 August 2017
a) Substantial Shareholders (who have lodged notices with Stavely Minerals Limited)
Number of
Ordinary Shares
30,157,419
15,007,419
7,566,014
Name
Peter Reynold Ironside
Christopher John Cairns
Greenstone Property Pty Ltd and Associates
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
56
102
152
326
142
778
101
(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.
2017 Annual Report | Page 72
ADDITIONAL SHAREHOLDER INFORMATION
d)
Twenty largest shareholders:
Name
1
2
3
4
5
6
7
8
9
Chaka Investments Pty Ltd
Goldwork Asset Pty Ltd
BNP Paribas Nominees Pty Ltd
Ironside Pty Ltd
Greenstone Property Pty Ltd
Goldwork Asset Pty Ltd
Ironside Pty Ltd
Citicorp Nominees Pty Limited
Jennifer Elaine Murphy
10 Dr Anthony Cairns
11 Michelle Maria Skinner
12 McNeil Nominees Pty Limited
13 DK & SJ Pty Ltd
14
JC Holdings Pty Ltd
15 Mick Ashton Nominees Pty Ltd
16
17
Trading Pursuits Group Pty Ltd
Sanluri Pty Ltd
18 Mr Harle John Mossman
19
Elphick Superannuation Pty Ltd
20 National Nominees Limited
Shares on issue at 11 August 2017
e) Unlisted Options
Number of
Ordinary
Shares
19,580,000
% of Issued
Capital
16.03
9,759,032
5,863,389
5,677,419
5,586,859
5,238,387
5,000,000
4,377,479
3,427,097
2,700,000
2,358,065
2,028,262
1,250,000
1,250,000
1,250,000
1,250,000
1,233,000
1,225,000
970,000
845,000
80,868,989
122,133,983
7.99
4.80
4.65
4.57
4.29
4.09
3.58
2.81
2.21
1.93
1.66
1.02
1.02
1.02
1.02
1.01
1.00
0.79
0.69
66.18
Name
Directors:
W Plyley
C Cairns
J Murphy
P Ironside
Others:
H Forgan
M Skinner
A Sparks
Q Te Tai
B Nijhof
P Van Luyt
R McBeath
31/12/2017
27 cents
31/12/2017
21 cents
31/12/2017
26 cents
30/06/2018
19 cents
1,000,000
5,032,258
1,561,290
5,032,258
-
774,194
750,000
250,000
-
-
14,400,000
-
-
-
-
1,100,000
1,100,000
1,600,000
1,100,000
250,000
-
-
5,150,000
2,500,000
3,500,000
2,100,000
1,000,000
-
-
-
-
-
-
-
9,100,000
-
-
-
-
-
-
-
-
-
250,000
250,000
500,000
2017 Annual Report | Page 73
TENEMENT SCHEDULE
Tenement Portfolio - Victoria
Area Name
Tenement
Mt Ararat
Ararat
Stavely
Yarram Park
Mortlake
Ararat
Ararat
Ararat
Ararat
Stavely
Ararat
Ararat
EL 3019
EL 4758
EL 4556
EL 5478
EL 5470
EL 5486
ELA 5487
EL 6271
RLA 2020
RLA 2017
EL 5403
EL 5450
Grant Date/
(Application Date)
21 December 1989
29 January 2004
5 April 2001
26 July 2013
17 June 2013
10 July 2014
(21 June 2013)
21 July 2016
(12 June 2014)
(20 May 2014)
25 January 2012
21 February 2013
Tenement Portfolio - Queensland
Area Name
Tenement
Grant Date/
(Application Date)
Ravenswood West
EPM26041
24 May 2016
Ravenswood North Application
EPM26152
15 September 2016
Dreghorn
Kirk North
EPM26303
EPM26304
23 March 2017
23 March 2017
Size
(Km2)
42
12
139
99
110
1
5
6
28
139
68
4
Size
(Km2)
241
48
137
81
2017 Annual Report | Page 74
STAVELY MINERALS LIMITED
ABN 33 119 826 907
www.stavely.com.au