2015
ANNUAL REPORT
ABN 94 088 488 724
30 JUNE 2015
STRIKE RESOURCES LIMITED
CORPORATE DIRECTORY
CONTENTS
Company Update
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or
Loss and Other Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Consolidated Statement of Cash Flows
Notes to Consolidated Financial
Statements
Directors’ Declaration
Independent Auditor’s Report
List of Mineral Concessions
Annual Mineral Resources Statement
JORC Code Competent Person’s
Statements
Additional ASX Information
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Strike’s 2015
Corporate Governance Statement
can be found at the following
URL on the Company’s website:
www.strikeresources.com.au/corporate-governance •
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www.strikeresources.com.au
Visit our website for:
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BOARD
Malcolm Richmond
William Johnson
Farooq Khan
Matthew Hammond
Victor Ho
Samantha Tough
Chairman
Managing Director
Director
Director
Director
(retiring at 2015 AGM) Director
COMPANY SECRETARY
Victor Ho
PRINCIPAL & REGISTERED OFFICE
Level 2, 23 Ventnor Avenue
West Perth, Western Australia 6005
Telephone:
Facsimile:
Email:
Website:
(08) 9214 9727 / 9214 9700
(08) 9214 9701
info@strikeresources.com.au
www.strikeresources.com.au
STOCK EXCHANGE
Australian Securities Exchange
Perth, Western Australia
ASX CODE
SRK
SHARE REGISTRY
Advanced Share Registry Services
110 Stirling Highway
Telephone:
Facsimile:
(08) 9389 8033
(08) 9262 3723
Level 6, 225 Clarence Street
Sydney, New South Wales 2000
Email:
Investor Web:
admin@advancedshare.com.au
www.advancedshare.com.au
AUDITOR
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco, Western Australia 6008
Telephone:
Facsimile:
Website:
(08) 6382 4600
(08) 6382 4600
www.bdo.com.au/perth
ANNUAL REPORT | 1
30 JUNE 2015
STRIKE RESOURCES LIMITED
COMPANY UPDATE
Update on Company Strategy
Strike continues to examine a range of new strategies for the Company in light of the poor outlook for the iron
ore sector and the resources sector in general.
In this regard, Strike has been investigating a number of technology related ventures which could form the
foundation for a new strategy for the Company.
Any such change will necessarily be subject to Strike shareholder approval and compliance with the ASX Listing
Rules and Corporations Act.
In relation to the Company’s Apurimac and Cusco Iron Ore Projects in Peru, Strike has consolidated its holding of
mineral concessions to the core concessions where JORC Resources have been delineated as well as a number
of neighbouring concessions which have strategic value associated with the projects – this has reduced Strike’s
holding costs in Peru and provides Strike with the flexibility to pursue opportunities to realise value from these iron
ore assets in the future if and when favourable market conditions return.
Financial Position
As at 30 September 2015, Strike had net assets of ~$7.1 million (comprising ~$8.1 million gross cash less
provisions/accruals/trade creditors of ~$1 million) (30 June 2015: ~$7.6 million net assets comprising ~$8.4 million
cash less provisions/accruals/trade creditors of ~$0.8 million).
Bentley Capital’s Takeover Bid for Strike
On 2 September 2015, Bentley completed its off-market 5.5 cent per share cash takeover bid1 for Strike, with
acceptances received totalling 52,553,493 Strike shares (representing a 36.16% relevant interest in Strike).
Board and Corporate Changes
There has been a number of Board and corporate changes recently1:
Farooq Khan was appointed a Director with effect on 1 October 2015 - Farooq Khan was an Alternate
Director to Victor Ho (20 January 2014 to 1 October 2015) and has been previously a Director of Strike
(between 3 September 1999 and 3 February 2011), including as the founding Executive Chairman and
Managing Director after the Company’s IPO in March 2000.
Victor Ho was appointed Company Secretary with effect on 30 September, replacing David Palumbo (a
representative of Mining Corporate) - Victor Ho is currently a Director of Strike (since 20 January 2014) and
has previously been a Company Secretary of Strike (between 9 March 2000 and 30 April 2010).
Mining Corporate’s engagement for the provision of outsourced accounting and company secretarial
services to the Company will cease at the end of October. The Board thanks David Palumbo and Mining
Corporate for their professionalism and support to Strike.
Strike changed its Perth office on 1 October 2015 as a consequence of the transition out of Mining
Corporate.
Samantha Tough has advised the Board that she intends to retire and not seek re-election at the upcoming Annual
General Meeting (to be held on 30 November 2015), to focus on her other non-executive director roles.
For further information, please contact:
William Johnson
Managing Director
Tel: +(61) 8 9214 9727
wjohnson@strikeresources.com.au
Victor Ho
Company Secretary
Tel: +(61) 8 9214 9727
vho@strikeresources.com.au
1 Refer Strike ASX Announcement dated 2 October 2015: Board and Corporate Changes
ANNUAL REPORT | 2
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
Your Directors present their report on the Consolidated Entity consisting of Strike Resources Limited (“Company”
or “Strike”) and the entities it controlled at the end of, or during, the year ended 30 June 2015.
Directors
The following persons were Directors of Strike during the whole of the financial year and up to the date of this report:
Malcolm Richmond
Matthew Hammond
William Johnson
Samantha Tough
Victor Ho
Farooq Khan
Principal Activities
The principal activities of the Consolidated Entity during the financial year were the pursuit of opportunities for
realisation of value from Consolidated Entity’s interest in the Apurimac and Cusco Iron Ore Projects located in Peru,
South America and consideration of alternative business strategies.
Dividends
No dividends have been paid or declared during the financial year. At the date of this report, no dividend has been
recommended for payment in respect of the reporting period.
Review of Operations
During the year, no activity was undertaken on the Company’s iron ore projects in Peru as the Company continued
to examine a range of new strategies for the Company in light of the poor outlook for the iron ore sector and the
resources sector in general.
A number of parties expressed interest in the Company’s Peru assets during the year. One conditional purchase
offer was received, but the commercial terms offered were considered unacceptable by the Board.
A number of non-core mineral concessions in Peru were allowed to lapse on 30 June 2015, significantly reducing
the Company’s annual expenditure commitment in Peru. The Company continues to hold those core concessions
in Peru which contain its JORC Resources of iron ore in Apurimac and Cusco, as well as some neighbouring
concessions which have strategic value associated with the projects.
Whilst some of these core concessions remain the subject of a number of ongoing legal claims in Peru, the
Company remains of the view that these claims are spurious and without merit and the Company’s lawyers in Peru
continue to successfully defend against these claims.
The Company continues to conserve its cash resources, holding a balance of approximately $8.37 million in cash
as of 30 June 2015. All corporate secretarial, compliance and accounting services are outsourced. The Company
has no full time employees (apart from the Managing Director) and the Company holds no long term office lease
commitments.
Significant Changes in the State of Affairs
In July 2014, the Company received an offer to acquire its Peru assets. However, the Company was unable to
reach an agreement with the party making the offer. On 8 August 2014, the offer was withdrawn.
On 8 April 2015, the Company announced that it has received resolutions from the Peruvian Tax Administrator
(“SUNAT”) which have predominately ruled in favour of a claim made by the Company’s subsidiary, Apurimac
Ferrum S.A.C. As a result, the Company was able to reverse A$1.1 million of its A$1.7 million accrual that it has
previously made for withholdings taxes.
On 30 June 2015 the Company received an unsolicited off-market takeover bid by Bentley Capital Limited (ASX:
BEL, “Bentley”) (“the Offer”), whose Chairman, Farooq Khan, is Strike’s Alternative Director to Non-Executive
Director Victor Ho (who is also Company Secretary of Bentley). Strike Managing Director, William Johnson is also
a Non-Executive Director of Bentley.
ANNUAL REPORT | 3
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
Events since the End of the Financial Year
On 2 July 2015 the Company announced that a Takeover Response Committee of Company’s independent
directors, being the Chairman, Mr Malcolm Richmond, Ms Samantha Tough and Mr Matthew Hammond had been
established to respond to the Offer. The Company also announced that following completion of the Offer
(irrespective of the outcome of the Offer), Ms Samantha Tough intended to resign from the Company Board to focus
on her other non-executive director roles.
In July 2015, Bentley Capital Limited lodged its Bidder’s Statement relating to the Offer with ASIC and dispatched
the same to Strike’s shareholders.
In August 2015, the Company lodged its Target Statement in response to the Offer.
The Bid closed on 2 September 2015 and a total of 52,553,493 shares representing 36.16% of the Company’s
issued capital were acquired by Bentley during the bid. Bentley as a consequence is now the Company’s largest
shareholder.
Likely Developments and Expected Results of Operations
The Company will continue to pursue opportunities to realise value from its Peru assets. The Company maintains
legal title to the key mineral concessions in Peru through payment of appropriate annual fees and penalties, with
the next scheduled payments due in June 2016. The Company also continues to ensure that its valuable project
drilling cores and samples in Peru are stored securely.
The Company retains a strong balance with cash of approximately $8.37 million. With outsourced accounting and
company secretarial services and no long term office lease expenses, corporate overhead is relatively low.
The Company is reviewing alternative business strategies in light of the difficult market conditions facing iron ore
and the resources sector in general.
Information on Directors
Malcolm Richmond
Chairman
Appointed
13 July 2011
Previous positions
held
Acting Chairman (3 February 2011 to 13 July 2011)
Non-Executive director (25 October 2006 to 3 February 2011)
Qualifications
BSc Hons (Metallurgy) and B. Comm. Merit (Econs) (New South Wales)
Experience
Professor Richmond has 30 years’ experience with the Rio Tinto and CRA Groups in a number of
positions including: Vice President, Strategy and Acquisitions; Managing Director, Research and
Technology; Managing Director, Development (Hamersley Iron Pty Limited) and Director of Hismelt
Corporation Pty Ltd. He was formerly Deputy Chairman of the Australian Mineral Industries Research
Association and Vice President of the WA Chamber of Minerals and Energy. Professor Richmond has
also served as a Member on the Boards of a number of public and governmental bodies and other
public listed companies.
He is a qualified metallurgist and economist with extensive senior executive and board experience in
the resource and technology industries both in Australia and internationally. His special interests
include corporate strategy and the development of markets for internationally traded minerals and
metals - particularly in Asia.
Professor Richmond served as Visiting Professor at the Graduate School of Management and School
of Engineering, University of Western Australia until January 2012, and is a Fellow of the Australian
Academy of Technological Sciences & Engineering, a Fellow of Australian Institute of Mining and
Metallurgy and a Member of Strategic Planning Institute (US).
Chairman of the Remuneration and Nomination Committee and Chairman of the Audit Committee
Special
responsibilities
Relevant Interests in
shares and options
Nil
Other current
directorships in listed
entities
Non-Executive Director of:
Argonaut Resources Ltd (appointed March 2012)
Former directorships
in other listed entities
in past 3 years
Advanced Braking Technology Ltd (August 2006 – April 2013)
Cuervo Resources Inc (July 2011 – March 2013)
Water Resources Group Ltd (July 2012 – June 2013)
ANNUAL REPORT | 4
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
William Johnson
Managing Director
Appointed
Previous position
held
25 March 2013
Executive Director (January 2013 to March 2013)
Non-Executive Director (April 2010 to January 2013)
Executive Director (July 2006 to April 2010)
Qualifications
MA (Oxon), MBA
Experience
Mr Johnson commenced his career in resource exploration and has held senior management and
executive roles in a number of public companies in Australia, New Zealand and Asia. Most recently,
Mr Johnson has acted as an executive and non-executive director of a number of ASX listed resource
exploration and development companies and brings a considerable depth of experience in business
strategy, investment analysis, finance and execution.
Special
responsibilities
None
Relevant Interests in
shares and options
3,000,000 Unlisted Directors’ Options ($0.30, 17 June 2018)
249,273 Shares
Other current
directorships in listed
entities
Non-Executive Director of:
Bentley Capital Limited (appointed March 2009)
Former directorships
in other listed entities
in past 3 years
Orion Equities Limited (February 2003 – May 2013)
Cuervo Resources Inc (March 2013 – December 2013)
Alara Resources Limited (October 2009 – October 2013)
Matthew Hammond
Non-Executive Director
Appointed
25 September 2009
Qualifications
BA (Hons) (Bristol)
Experience
Mr Hammond is the Group Managing Director of Mail.ru, one of the largest European internet
businesses. Prior to that he was Group Strategist at Metalloinvest Holdings, where he had
responsibility for part of the non-core asset portfolio. Prior to joining Metalloinvest, Mr Hammond was
a director at Credit Suisse, where he worked for 12 years as an investment analyst. During his time
with Credit Suisse Mr. Hammond was ranked number one 8 times in the Extell, Institutional Investor
and Reuters surveys.
Special
responsibilities
Member of the Audit and Remuneration and Nomination Committees
Relevant Interests in
shares and options
Nil
Other current
directorships in listed
entities
Managing Director of:
Mail.Ru. (appointed April 2011)
Non-Executive Director of:
Puricore Inc. (appointed May 2010)
Former directorships
in other listed entities
in past 3 years
Nautilus Minerals Inc (October 2009 – September 2013)
ANNUAL REPORT | 5
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
Samantha Tough
Non-Executive Director
Appointed
23 January 2012
Qualifications
LLB, BJuris (Western Australia), GAICD
Experience
Ms Tough is a professional company director and chairman, with more than 14 years’ experience in
public and private companies, including four positions as Chairman. She has strong, proven strategic
expertise, particularly in identifying and implementing growth strategies for complex and substantial
businesses and early-stage propositions.
Ms Tough has served at senior executive level or on the Board in a wide range of industries, including
metals and mining in particular iron ore, oil and gas, engineering services, infrastructure, energy and
energy efficiency, venture capital, e-commerce, international telecommunications and law. Her
previous executive roles include Senior Vice President, Strategic Counsel – Natural Resources at the
Commonwealth Bank, General Manager North West Shelf at Woodside Energy Ltd and Director
Strategy Hardman Resources Ltd. She also led the Pilbara Power Project on behalf of the Premier's
Department. Samantha's involvement in these industries has given her a sound understanding of
conducting business internationally.
Special
responsibilities
Member of the Audit Committee
Relevant Interests in
shares and options
Nil
Other current
directorships in listed
entities
Non-Executive Director of:
Saracen Mineral Holdings Limited (appointed 1 October 2013)
Synergy (appointed 22 October 2014)
Molopo Energy Limited (appointed 29 December 2014)
Cape Plc (appointed 1 January 2015)
Chairman of:
Aerison Pty Ltd (appointed 2012)
Former directorships
in other listed entities
in past 3 years
Murchison Metals Ltd (May 2011 - Feb 2012)
Southern Cross Goldfields Ltd (July 2007 – 23 September 2013)
Victor P. H. Ho
Non-Executive Director
Appointed
24 January 2014
Qualifications
BCom, LLB (Western Australia), CTA
Experience
Mr Ho is a previous Director and Company Secretary of Strike Resources (2000 to 2010) and has
been in Executive roles with a number of ASX listed companies across the investments, resources
and technology sectors over the past 15+ years. Mr Ho is a Chartered Tax Adviser (CTA) and
previously had 9 years’ experience in the taxation profession with the Australian Tax Office and in a
specialist tax law firm. Mr Ho has been actively involved in the structuring and execution of a number
of corporate, M&A and international joint venture (in South America, Indonesia and the Middle East)
transactions, capital raisings and capital management initiatives and has extensive experience in
law and stock exchange compliance and
public company administration, corporations’
investor/shareholder relations.
Special
responsibilities
None
Relevant Interests in
shares and options
Nil
Other current
directorships in listed
entities
Former directorships
in other listed entities
in past 3 years
Executive Director of:
Orion Equities Limited (appointed July 2003)
Queste Communications Ltd (appointed April 2013)
None
ANNUAL REPORT | 6
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
Farooq Khan
Alternate Director for Mr Victor Ho
Appointed
24 January 2014
Qualifications
LLB, BJuris (Western Australia)
Experience
Mr Khan is a qualified lawyer having previously practised principally in the field of corporate law. Mr
Khan is a previous Director of Strike Resources (1999 to 2011) and has extensive experience in the
securities industry, capital markets and the executive management of ASX-listed companies.
In particular, Mr Khan has guided the establishment and growth of a number of public listed companies
in the investment, mining and financial services sectors. He has considerable experience in the fields
of capital raisings, mergers and acquisitions and investments.
Special responsibilities
Member of the Audit Committee (appointed on 11 March 2015)
Relevant Interests in
shares and options
Other current
directorships in listed
entities
Former directorships
in other listed entities
in past 3 years
530,010 Shares (directly)
Executive Chairman of:
Orion Equities Limited (appointed October 2006)
Bentley Capital Limited (appointed December 2003)
Executive Chairman and Managing Director of:
Queste Communications Ltd (appointed March 1998)
Alara Resources Limited (May 2007 – August 2012)
Company Secretary
David Palumbo
Company Secretary
Appointed
14 August 2013
Qualifications
BCom, CA
Experience
Mr Palumbo is a Chartered Accountant with over six years’ experience in the auditing and financial
reporting of ASX listed and unlisted companies. Mr Palumbo has been involved in the listing of
junior explorer companies on the ASX and has experience in corporate advisory and company
secretarial services. Mr Palumbo is currently Company Secretary of Krakatoa Resources Limited.
Mr Palumbo is a Corporate Compliance & Accounting Manager at Mining Corporate.
Meetings of Directors
The numbers of meetings of the Company’s Board of Directors and of each Board Committee held during the year
ended 30 June 2015, and the numbers of meetings attended by each director were:
Name of Director
Board Meetings
Committee Meetings
(Audit)
Committee Meetings
(Remuneration/
Nomination)
M Richmond
W Johnson
M Hammond
S Tough
V Ho
F Khan ***
Attended
3
4
3
4
-
4
Meetings
Held
4
4
4
4
4
4
Attended
-
*
-
1
-
1
Meetings
held
1
*
1
1
-
1
Attended
-
-
-
**
-
-
Meetings
held
-
-
-
**
-
-
*
**
***
Attended by invitation, not a member of the relevant committee
Not a member of the relevant committee
Attended 4 Board Meetings as an alternate director for Mr Ho. Mr Khan was appointed to the Audit Committee on 11 March 2015.
Retirement, Election and Continuance in Office of Directors
Mr Hammond retired as Director by rotation under the Company’s Constitution at the November 2014 AGM and
was re-elected at that meeting.
Mr Ho was elected as Non-Executive Director at the November 2014 AGM.
ANNUAL REPORT | 7
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
Remuneration Report (Audited)
The Directors are pleased to present the Company’s 2015 remuneration report which sets out remuneration
information for Strike Resources Limited’s Non-Executive Directors, Executive Director and other key management
personnel.
Key management personnel disclosed in this report
Non-Executive and Executive Directors (see pages 4 to 7 for details about each director)
M Richmond
W Johnson
M Hammond
S Tough
V Ho
F Khan
Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Alternate Director for Mr Ho
Remuneration Governance (under which details of remuneration committee is
disclosed)
The Remuneration and Nomination Committee is a committee of the Board. It is primarily responsible for making
recommendations to the Board on:
the necessary and desirable competencies of Directors and the extent to which these are reflected
in the Board
suitable candidates for the position of Managing Director, when required
the development and review of Board succession plans
the appointment and re-election of Directors
making recommendations to the Board on policy governing the benefits of the Managing Director and
any other Executive Director, including equity-based remuneration
making recommendations to the Board on the specific benefits to be provided to the Managing
Director within the policy
conducting an annual review of Non-Executive Directors’ fees and determining whether the limit on
the Non-Executive Directors’ fee pool remains appropriate, and
assisting
remuneration) of Senior Management and advise on those determinations
the Managing Director
to determine
the remuneration (including equity- based
The purposes of the Remuneration and Nomination Committee are to:
assist the Managing Director and the Board to adopt and implement a remuneration system that is
required to attract, retain and motivate the personnel who will enable the Company to achieve long-
term success; and
identify appropriate candidates for membership of the Board and, when necessary, identify suitable
candidates for the role of Managing Director.
In doing this, the Remuneration and Nomination Committee seeks advice from independent remuneration
consultants and consults market and industry surveys. There was no advice received during the current financial
year.
Ultimate responsibility for the Company’s remuneration and nomination policies and practices remains with the full
Board.
The Corporate Governance Statement provides further information on the role of this Committee.
A copy of Strike’s Remuneration and Nomination Committee Charter can be found on the Company’s website at
www.strikeresources.com.au.
Non-Executive Director Remuneration Policy
Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of,
the directors. The Remuneration and Nomination Committee is responsible to review Non-Executive Directors’ fees
annually and makes recommendation to the Board. The Board has also considered the advice of independent
market consultants to ensure Non-Executive Directors’ fees and payments are appropriate and in line with the
market. The Chair’s fees are determined independently to the fees of Non-Executive Directors’ based on
comparative roles in the external market.
ANNUAL REPORT | 8
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
Pursuant to the Company’s Constitution, each Director is entitled to receive:
Payment for the performance of extra services and the undertaking of any executive or other work
for the Company beyond his or her general duties; and
Payment for travelling and other expenses properly incurred by a Director in attending meetings of
the Company or the Board or in connection with the Company’s business.
Historically the Board had resolved to remunerate Non-Executive Directors for work over and above that included
in their base Director’s fee under a Special Exertion Policy. Where additional services are approved by the Board
the Non-Executive Director is entitled to receive $350 per hour plus reimbursement of expenses.
With the exception of the above Special Exertion Policy, Non-Executive Directors do not receive performance-
based pay. The Board had also previously resolved and issued Non-Executive Directors with options at various
exercise prices and maturity dates as deemed appropriate at that time, however, in line with Corporate Governance
Principles and Recommendations this is no longer the practice.
Directors’ fees
Non-executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically
recommended for approval by shareholders. The maximum currently stands at $500,000 per annum and was
approved by shareholders at the annual general meeting on 25 November 2009.
The Chair’s remuneration was reviewed upon his appointment, in February 2011.
Each Non-Executive Director receives $45,000 per year, except for Ms Tough. Ms Tough receives a higher fee,
being the market rate that the Company determined was appropriate at the time she was appointed.
During the year the aggregate fees paid or due to be paid to Non-Executive Directors of the Company were as
follows:
Director
Office held
Gross Salary/fees and Superannuation for the Period
Total
Superannuation
Fees
Special
exertions
M Richmond
M Hammond1
S Tough 2
V Ho3
F Khan4
Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Alternate Director for Mr Ho
$
70,000
45,000
80,000
11,250
33,750
$
$
-
-
-
-
-
6,650
-
7,600
1,069
3,206
$
76,650
45,000
87,600
12,319
36,956
1.
2.
3.
4.
The Director’s fee for Mr Hammond was reviewed in October 2010.
Ms Tough was appointed as a Non-Executive Director on 23 January 2012. Her Director’s fee was approved upon appointment.
Mr Ho was appointed as a Non-Executive Director on 20 January 2014. His Director’s fee was approved upon appointment.
Mr Khan was appointed as an alternate Director for Mr Ho on 20 January 2014.
Retirement Allowances for Non-Executive Directors
In line with the guidance from the ASX Corporate Governance Council on Non-Executive Directors’ remuneration,
no Non-Executive Directors receive retirement allowances. Superannuation contributions required under the
Australian superannuation guarantee legislation continue to be made and are deducted from the directors’ overall
fee entitlements.
Executive Remuneration Policy and Framework
In determining executive remuneration, the Board aims to ensure that remuneration practices are:
competitive and reasonable, enabling the Company to attract and retain key talent
aligned to the Company’s strategic and business objectives and the creation of shareholder value
transparent, and
acceptable to shareholders.
The executive remuneration framework has three components:
base pay and benefits, including superannuation
short-term performance incentives, and
long-term incentives through participation in the Strike Resources Limited Employee Option Plan.
ANNUAL REPORT | 9
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
Base Pay and Benefits
Executives receive their base pay and benefits structured as a total employment cost (TEC) package which may
be delivered as a combination of cash and prescribed non-financial benefits at the executive’s discretion.
Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Independent
remuneration consultants and/or reports provide analysis and advice to ensure base pay is set to reflect the market
for a comparable role. Base pay for executives is also reviewed on promotion.
The Managing Director’s contract was amended during the financial year resulting in a reduction of base pay to
$208,000 per annum effective 1 May 2015 and the termination notice period changed from 6 months to 1 month.
There are no guaranteed base pay increases included in the executives’ contracts.
Short-term Incentives
The Managing Director has the opportunity to earn an annual short-term incentive (STI) if predefined targets are
achieved. The targets are reviewed annually.
There were no STI targets set by the Remuneration Committee for the Managing Director during 2015 financial
year.
The Remuneration and Nomination Committee is responsible for assessing whether the KPIs are met. To assist in
this assessment, the Committee receives detailed reports on performance from management which are verified by
industry surveys and, where deemed appropriate, independent remuneration consultants. The Committee will make
recommendations to the Board to adjust short-term incentives downwards in light of unexpected or unintended
circumstances. Other senior executives currently do not have any short term incentives such as cash bonuses
included in their employment contracts. The executives’ performance is assessed on an annual basis and bonuses
may be awarded on achievement of key performance objectives by recommendation of the Managing Director and
at the discretion of the Board.
Long-term Incentives
Long-term incentives are provided to certain employees via the Strike Resources Limited Employee Option Plan
which was approved by shareholders at the 6 November 2008 annual general meeting. The Employee Option Plan
was subsequently amended on 8 November 2011.
The Strike Resources Limited Employee Option Plan is designed to provide long-term incentives for executives to
deliver long-term shareholder returns. Under the plan, participants are granted options which are vested on issue.
The Board has discretion to determine the exercise price and maturity date. Participation in the plan is at Board
discretion and will often form part of an employment contract.
Director options were granted during the 2013 financial year which contributed to the Managing Director’s long-term
incentives.
Share Trading Policy
The Company’s Share Trading Policy regulates all Directors’ and, employees’ of Strike Resources Limited and its
subsidiaries, and certain contractors’, dealings in the Company’s securities. The Policy prohibits:
subscribing for, purchasing or selling Company securities or entering into an agreement to do any of
those things; and
advising, procuring or encouraging another person (including a family member, friend, associate,
colleague, family company or family trust) to trade in Company securities,
whilst in possession of market-sensitive information, prior to disclosure of that information to the market and
thereafter until adequate time has elapsed for this to be reflected in the security’s price, in accordance with the
Corporations Act 2001. The Policy also prohibits communicating inside information to any other person when
directors, employees of Strike Resources Limited and its subsidiaries, and certain contractors should reasonably
know that they may deal in the Company’s securities or encourage another person to do so.
In order to further reduce the risk of inappropriate securities dealing, directors, employees of Strike Resources
Limited and its subsidiaries, and certain contractors, must not deal in Company securities without the written
consent of the “Trading Officers” nominated in the Company’s Share Trading Policy. Consent will not be given
during certain “Prohibited Periods” before key reporting dates or while inside information exists.
Directors, employees of Strike Resources Limited and its subsidiaries, and certain contractors must inform the
Company Secretary of all transactions they enter into involving the Company’s securities to enable disclosure to
the market, where required.
A copy of Strike’s Share Trading Policy can be found on the Company’s website as www.strikeresources.com.au.
ANNUAL REPORT | 10
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
Voting and Comments Made at the Company’s 2014 Annual General Meeting
Strike Resources Limited received more than 98% (2013: 99%) of “yes” votes on its remuneration report for the
2014 financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its
remuneration practices.
Detail of Remuneration
The following tables show details of the remuneration received or due to be received by the Directors and the key
management personnel of the Consolidated Entity for the current and previous financial years.
Short-term employee benefits
Cash
salary
and fees
$
Cash
bonus
$
Non-
monetary
benefit
$
Post-
employment
benefits
Super-
annuation
Annual
Leave
$
$
Long-
term
benefits
Long-
service
leave
$
Total
Share-
based
payments
Options
Termination
benefits
$
$
$
70,000
45,000
80,000
11,250
33,750
376,308
616,308
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,650
-
7,600
1,069
3,206
33,261
33,261
35,749
54,274
-
-
-
-
-
-
-
Short-term employee benefits
Cash
salary
and fees
$
Cash
bonus
$
Non-
monetary
benefit
$
Post-
employment
benefits
Super-
annuation
Annual
Leave
$
$
Long-
term
benefits
Long-
service
leave
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Share-
based
payments
Options
Termination
benefits
76,650
45,000
87,600
12,319
36,956
445,318
703,843
Total
$
$
$
70,000
45,000
80,000
5,050
15,151
400,000
615,201
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,475
-
7,200
480
1,439
33,187
33,187
37,000
52,594
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
76,475
45,000
87,200
5,530
16,590
470,187
700,982
2015
Non-Executive
Directors:
M Richmond
M Hammond
S Tough
V Ho
F Khan
Executive
Director:
W Johnson
Total
2014
Non-Executive
Directors:
M Richmond
M Hammond
S Tough
V Ho1
F Khan1
Executive
Director:
W Johnson
Total
1. Mr Ho was appointed as a Non-Executive Director and Mr Khan was appointed as an Alternate Director for Mr Ho on 20 January 2014.
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Executive Director
W Johnson
Fixed remuneration
At risk - STI
At risk – LTI #
2015
2014
2015
2014
2015
2014
100%
100%
-
-
-
-
#
Long-term incentives are provided exclusively by way of options, the percentages disclosed also reflect the value of remuneration
consisting of options, based on the value of options expensed during the year. Negative amounts indicate expenses reversed during the
year due to a failure to satisfy the vesting conditions.
Service Agreements
Appointment to the Board as a Director is via resolution which outlines the Director’s agreed remuneration. The
appointment is later ratified by shareholders at the next general meeting. No formal service agreements are
executed for Non-Executive Directors. On the appointment to the Board, the Company enters into a deed with each
Non-Executive Director to regulate certain matters between the Company and that Non-Executive Director, however
Matthew Hammond has not executed such a deed.
ANNUAL REPORT | 11
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
Remuneration and other terms of employment for the Managing Director and other key management personnel are
formalised in Employment Agreements. The Employment Agreement of the Managing Director provides for the
provision of performance-related cash bonuses, which are reviewed annually by the Remuneration and Nomination
Committee. No specific cash bonuses are provided in the Employment Agreements of other key management
personnel.
The Employment Agreement with the Managing Director may be terminated early by either party with notice period
of 1 month. There are no other termination benefits.
Share-based Compensation
There were no options granted to Directors’ or key management person as part of their remuneration during the
current year (2014: nil).
Options granted under the plan carry no dividend or voting rights.
When exercisable, each option is convertible into one ordinary share within 5 business days after the exercise.
Shares Provided on Exercise of Remuneration Options
There were no shares issued as a result of the exercise of Directors’ or employee options which were issued as
part of remuneration during the current year (2014: nil).
Details of Remuneration: Bonuses and Share-based Compensation Benefits
There were no cash bonuses or share based compensation benefits paid or granted during the current year (2014:
nil).
Equity instrument disclosures relating to key management personnel
i. Options holdings
The numbers of options over ordinary shares in the Company held during the financial year by each
director of Strike Resources Limited and other key management personnel of the Consolidated Entity,
including their personally related parties, are set out below:
Balance at
1 July 2014
Balance at
appointment
Granted as
compensation
Net change
other1
Balance at
30 June 2015
Vested and
exercisable
Unvested
2015
M Richmond
M Hammond
W Johnson
S Tough
V Ho
F Khan
Total
1.
ii.
-
-
3,000,000
-
-
-
3,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
-
-
-
3,000,000
-
-
3,000,000
-
-
-
3,000,000
-
-
-
-
-
-
-
Figures in “net change other” column represent final holding when the options have been cancelled or have lapsed.
Share holdings 2
The numbers of shares in the Company held during the financial year by each director of Strike Resources
Limited and other key management personnel of the Consolidated Entity are set out below. There were no
shares granted during the reporting period as compensation.
Balance at beginning of
year
Received during the year on the exercise
of options
Net change
other
Balance at the end of the
year
2015
M
Richmond
M
Hammond
W Johnson
S Tough
V Ho
F Khan
Total
100,000
-
249,273
-
116,001
17,441,605
17,906,879
-
-
-
-
-
-
-
-
-
-
-
-
(16 690 802)3
(16,690,802)
100,000
-
249,273
-
116,001
750,803
1,216,077
2 The disclosures of shareholdings above are in accordance with the accounting standards which require disclosure of shares held directly,
indirectly or beneficially by each key management person, a close member of the family of that person, or an entity over which either of these
persons have, directly or indirectly control, joint control or significant influence (as defined under Accounting Standard AASB 124 Related Party
Disclosures).
3 Refer Appendix 3Y Change of Director’s Interest Notice dated 20 November 2014
ANNUAL REPORT | 12
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
Loans to Key Management Personnel
There were no loans to Key Management Personnel (or their personally-related entities) during the financial year.
Other Transactions with Key Management Personnel
There were no transactions with Key Management Personnel (or their personally-related entities) during the
financial year.
This concludes the Audit Remuneration Report
Shares under Options
Unissued ordinary shares of Strike Resources Limited under option at the date of this report are as follows:
Date of options granted
Expiry date
Issue price of shares
Number under option
24 November 2011
24 November 2011
24 November 2011
5 April 2012
5 April 2012
5 April 2012
18 June 2013
23 November 2016
23 November 2016
23 November 2016
23 November 2016
23 November 2016
23 November 2016
17 June 2018
$0.36
$0.42
$0.56
$0.36
$0.42
$0.56
$0.30
833,334
833,333
833,333
333,334
333,333
333,333
3,000,000
No option holder has any right under the options to participate in any other share issue of the Company.
Insurance of Officer
The Directors have not included details of the nature of the liabilities covered or the amount of premiums paid in
respect of a Directors’ and Officers’ liability and legal expenses insurance contract, as such disclosure is prohibited
under the terms of the contract.
The Company has entered into deeds of indemnity with each director whereby, to the extent permitted by the
Corporations Act 2001, the Company agreed to indemnify each director against all loss and liability incurred as an
officer of the Company, including all liability in defending any relevant proceedings.
Environmental Regulation
The Consolidated Entity notes the reporting requirements of both the Energy Efficiency Opportunities Act 2006
(“EEOA”) and the National Greenhouse and Energy Reporting Act 2007 (“NGERA”).
The Energy Efficiency Opportunities Act 2006 requires an affected company to assess its energy usage, including
the identification, investigation and evaluation of energy saving opportunities, and to report publicly on the
assessments undertaken, including what action the company intends to take as a result.
The Consolidated Entity has determined that it does not operate a recognised facility requiring registration and
reporting under the NGERA and, in any event it would fall under the threshold of greenhouse gas emissions required
for registration and reporting. Similarly, the Consolidated Entity’s energy consumption would fall under the threshold
required for registration and reporting under the EEOA.
The Consolidated Entity is not otherwise subject to any particular or significant environmental regulation under
either Commonwealth or State legislation. To the extent that any environmental regulations may have an incidental
impact on the Consolidated Entity's operations, the Directors are not aware of any breach by the Consolidated
Entity of those regulations.
Proceedings on Behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company or to intervene in any proceedings to which the Company is a party, for the purpose of
taking responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section
237 of the Corporations Act 2001.
ANNUAL REPORT | 13
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ REPORT
Non-audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or the Consolidated Entity are important. Details of the
amounts paid or payable to the auditor (BDO Audit (WA) Pty Ltd) and to other parties for work performed on behalf
of the auditor, for audit and non-audit services provided during the year are set out below.
Auditors of the Consolidated Entity
Audit and review of financial statements
- BDO Audit (WA) Pty Ltd
Auditors of the Peruvian subsidiaries
Audit and review of financial statements
- BDO Pazos, Lopez de Romana, Rodriguez
BDO Tax (WA) Pty Ltd – ITR and FBT
$
37,500
4,974
17,085
59,559
During the year the $17,085 was paid or payable for services provided by related practices of the auditor of the
parent entity.
The Board of Directors has considered the position and, in accordance with advice received from the Audit
Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of
non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of
the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed by the Audit Committee to ensure they do not impact the
impartially and objectivity of the auditor.
none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
During the year there were $17,085 non-audit fees paid or payable for the services provided by the auditor of the
Company, its related practices and non-related audit firms.
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is
set out on page 15.
Auditor
BDO Audit (WA) Pty Ltd continues in office in accordance with section 327 of the Corporation Act 2001.
This report is made in accordance with a resolution of directors.
William Johnson
Managing Director
25 September 2015
ANNUAL REPORT | 14
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY WAYNE BASFORD TO THE DIRECTORS OF STRIKE RESOURCES
LIMITED
As lead auditor of Strike Resources Limited for the year ended 30 June 2015, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Strike Resources Limited and the entities it controlled during the
period.
Wayne Basford
Director
BDO Audit (WA) Pty Ltd
Perth, 25 September 2015
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110
275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by
guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation other than for the acts or omissions of financial services licensees
30 JUNE 2015
STRIKE RESOURCES LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
for the year ended 30 June 2015
Revenue
Reversal of legal accrual
Reversal of SUNAT provision
Fair value adjustment -financial assets held as fair
value through profit and loss
Foreign exchange loss
Impairment expense
Loss on sale of fixed assets
Operating expenses
Other corporate costs
Personnel costs
Gain on loss of control of subsidiary
Profit/(loss) before income tax
Income tax expense
Note
2015
$
2014
$
5
5
5
5
5
6
251,077
609,339
235,841
1,097,982
-
(24,647)
(720,953)
-
(31,314)
(845,969)
(615,188)
144,075
(509,096)
(8,768)
-
-
(109,616)
-
(44,077,886)
(14,411)
(241,090)
(3,346,285)
(1,504,730)
-
(48,684,679)
(76,771)
Profit/(loss) after income tax for the year
(517,864)
(48,761,450)
Profit/(loss) is attributable to:
Equity holders of Strike Resources Limited
Other comprehensive income
Items that may be reclassified subsequently to Profit or
Loss
Exchange differences on translation of foreign
operations
Other comprehensive income/(loss) net of tax
Total comprehensive income/(loss) for the year
Total comprehensive income/(loss) for the year is
attributable to:
Equity holders of Strike Resources Limited
Earnings / (Loss) per share for the year attributable
to the members of Strike Resources Limited
Basic earnings/(loss) per share (cents)
Diluted earnings/(loss) per share (cents)
(517,864)
(48,761,450)
(281,270)
(281,270)
(799,134)
494,292
494,292
(48,267,158)
(799,134)
(48,267,158)
24
24
(0.36)
(0.36)
(33.55)
(33.55)
This consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
ANNUAL REPORT | 16
30 JUNE 2015
STRIKE RESOURCES LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2015
Current assets
Cash and cash equivalents
Trade and other receivables
Non-Current assets held for sale
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation expenditure
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
7
8
9
10
11
12
13
14
15
2015
$
8,374,206
7,739
-
8,381,945
1,072
-
1,072
2014
$
10,350,983
74,328
498,992
10,924,303
-
-
-
8,383,017
10,924,303
734,214
8,700
742,914
2,414,711
70,355
2,485,066
742,914
2,485,066
7,640,103
8,439,237
148,439,925
15,345,944
(156,145,766)
148,439,925
15,627,214
(155,627,902)
7,640,103
8,439,237
This consolidated statement of financial position should be read in conjunction with the accompanying notes
ANNUAL REPORT | 17
30 JUNE 2015
STRIKE RESOURCES LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2015
Contributed
Equity
$
Currency
Translation
Reserve
$
Share-based
Payments
Reserve
$
Accumulated
Losses
$
Total Equity
$
Balance as at 30 June 2013
148,439,925
1,899,896
13,233,026
(106,866,452)
56,706,395
Total income for the period
Current period income/(loss)
Other comprehensive income
Exchange differences on translation
of foreign operations
Total comprehensive income/(loss)
for the year
Transactions with owners in their
capacity as owners:
Ordinary shares
Balance as at 30 June 2014
Total income for the period
Current period income/(loss)
Other comprehensive income
Exchange differences on translation
of foreign operations
Total comprehensive income/(loss)
for the year
Transactions with owners in their
capacity as owners:
Ordinary shares
Balance as at 30 June 2015
-
-
-
-
-
(48,761,450)
(48,761,450)
-
494,292
(48,761,450)
(48,267,158)
494,292
494,292
-
-
-
-
-
148,439,925
2,394,188
13,233,026
-
(155,627,902)
-
8,439,237
-
-
-
-
(281,270)
(281,270)
-
-
-
-
-
(517,864)
(517,864)
-
(281,270)
(517,864)
(799,134)
-
148,439,925
2,112,918
13,233,026
-
(156,145,766)
-
7,640,103
This consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
ANNUAL REPORT | 18
30 JUNE 2015
STRIKE RESOURCES LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2015
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Note
2015
$
-
(2,069,478)
265,051
2014
$
161,724
(3,247,511)
467,326
Net cash outflow from operating activities
23
(1,804,427)
(2,618,461)
Cash flows from investing activities
Exploration and evaluation expenditure
Proceeds from disposal of fixed assets
Payments for property, plant and equipment
(194,771)
24,029
(1,608)
(1,439,803)
-
(5,586)
Net cash outflow from investing activities
(172,350)
(1,445,389)
Cash flows from financing activities
Payments for share issue cost
Net cash inflow from financing activities
-
-
-
-
Net decrease in cash and cash equivalents
(1,976,777)
(4,063,850)
Cash and cash equivalents at beginning of the year
Effect of exchange rate changes on cash balance
10,350,983
-
14,414,971
(138)
Cash and cash equivalents at year end
7
8,374,206
10,350,983
This consolidated statement of cash flows should be read in conjunction with the accompanying notes.
ANNUAL REPORT | 19
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
The principal accounting policies adopted in the preparation
of these consolidated financial statements are set out
below. These policies have been consistently applied to all
years presented, unless otherwise stated. The financial
statements are for the consolidated entity consisting of
Strike Resources Limited and its subsidiaries.
a. Basis of Preparation
These general purpose financial statements have been
prepared
in accordance with Australian Accounting
Standards and Interpretations issued by the Australian
Accounting Standards Board and the Corporations Act
2001. Strike Resources Limited is a for-profit entity for the
purpose of preparing the financial statements.
i. Compliance with IFRS
The consolidated financial statements of Strike Resources
Limited also comply with International Financial Reporting
(“IFRS”) as
International
Standards
Accounting Standards Board (IASB).
issued by
the
ii. New and amended standards adopted by the
Consolidated Entity
The consolidated entity has applied the following standards
and amendments for the first time for their annual reporting
period commencing 1 July 2014:
Interpretation 21 Accounting for Levies
AASB 2013-3 Amendments
to AASB 136 –
Recoverable Amount Disclosures for Non-Financial
Assets
AASB 2013-4 Amendments to Australian Accounting
Standards – Novation of Derivatives and Continuation
of Hedge Accounting
AASB 2014-1 Amendments to Australia Accounting
Standards
The consolidated entity also elected to adopt the following
standards early:
AASB2014-3 Amendments to Australian Accounting
Standards – Accounting for Acquisition of Interests in
Joint Operations
AASB 2014-4 Clarification of Acceptable Methods of
Depreciation and Amortisation
AASB 2014-10 Amendments to Australian Accounting
Standards – Sale or Contribution of Assets between an
investor and its Associate or Joint Venture
AASB 2015-1 Amendments to Australian Accounting
to Australian
Standards – Annual
Improvements
Accounting Standards 2012-2014 Cycle
AASB 2015-3 Amendments to Australian Accounting
Standards arising from the withdrawal of AASB 1031
Materiality
AASB 2013-9 Amendments to Australian Accounting
Standards – Conceptual Framework, Materiality and
Financial Instruments
None of the new Standards and amendments to Standards
that are mandatory or early adopted for the first time for the
financial year beginning 1 July 2014 affected any of the
amounts recognised in the current period or any prior period
and are not likely to affect future periods. Additionally, they
did not significantly affect the Group’s accounting policies or
any of the disclosures.
iii. Early adoption of standards
The Consolidated Entity has not elected to apply any
pronouncements before their operative date in the annual
reporting period beginning 1 July 2014 apart from the early
adoption of AASB 9 ‘Financial Instruments’.
iv. Historical cost convention
These financial statements have been prepared under the
historical cost convention, as modified by the revaluation of
financial assets and liabilities at fair value though profit or
loss, assets of disposal group held for sale and capitalised
exploration and evaluation expenditure.
v. Critical accounting estimates
The preparation of financial statements requires the use of
certain critical accounting estimates. It also requires
management to exercise its judgement in the process of
applying the Consolidated Entity’s accounting policies. The
area involving a higher degree of judgement or complexity,
or area where assumptions and estimates are significant to
the financial statements, are disclosed in note 3.
b. Principles of Consolidation
i. Subsidiaries
The consolidated financial statements incorporate the
assets and liabilities of all subsidiaries of Strike Resources
Limited (“Company” or “Strike”) as at 30 June 2015 and the
results of all subsidiaries for the year then ended. Strike
Resources Limited and its subsidiaries together are referred
to in this financial report as Consolidated Entity.
Subsidiaries are all entities (including structured entities)
over which the group has control. The group controls an
entity when the group is exposed to, or has rights to,
variable returns from its involvement with the entity and has
the ability to affect those returns through its power to direct
the activities of the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the group.
They are deconsolidated from the date that control ceases.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Consolidated Entity. They are
de-consolidated from the date that control ceases.
The acquisition method of accounting is used to account for
business combinations by
the Consolidated Entity.
Intercompany transactions, balances and unrealised gains
on transactions between group companies are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of
the assets
transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the
policies adopted by the group.
impairment of
the
Non-controlling interests in the results and equity of
subsidiaries are shown separately in the Consolidated
Statement of Profit or Loss and Other Comprehensive
Income, Statement of Changes in Equity, and Consolidated
Statement of Financial Position respectively.
ii. Changes in ownership interests
The Consolidated Entity treats transactions with non-
controlling interests that do not result in a loss of control as
transactions with equity owners of the Consolidated Entity.
A change in ownership interest results in an adjustment
between the carrying amounts of the controlling and non-
controlling interests to reflect their relative interests in the
subsidiary. Any difference between the amount of the
interests and any
adjustment
consideration paid or received is recognised in a separate
reserve within equity attributable to owners of Strike
Resources Limited.
to non-controlling
When the Consolidated Entity ceases to have control or
significant influence, any retained interest in the entity is
remeasured to its fair value with the change in carrying
amount recognised in profit or loss. The fair value is the
initial carrying amount for the purposes of subsequently
accounting for retained interest as an associate. In addition,
in Other
any
recognised
previously
amounts
ANNUAL REPORT | 20
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Comprehensive Income in respect of that entity are
accounted for as if the Consolidated Entity had directly
disposed of the related assets or liabilities. This may mean
that
in Other
Comprehensive Income are reclassified to profit or loss.
recognised
previously
amounts
If the ownership interest in an associate is reduced but
significant influence is retained, only a proportionate share of the
amounts previously recognised in Other Comprehensive
Income are reclassified to profit or loss where appropriate.
c. Segment Reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the Managing
Director. The Managing Director is responsible for allocating
resources and assessing performance of the operating
segments.
d. Foreign Currency Translation
i. Functional and presentation currency
Items included in the financial statements of each company
in the Consolidated Entity are measured using the currency
of the primary economic environment in which the entity
operates (“the functional currency”). The consolidated
financial statements are presented in Australian dollars,
which
functional and
presentation currency.
is Strike Resources Limited’s
ii. Transactions and balances
Foreign currency transactions are translated into functional
currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from
the translation at the year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are
recognised in the Consolidated Statement of Profit or Loss
and Other Comprehensive Income, except when they are
deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges or are attributable to part
of the net investment in a foreign operation. Foreign
exchange gains or losses that relate to borrowings are
presented in the Consolidated Statement of Profit or Loss
and Other Comprehensive Income within finance costs. All
other foreign exchange gains and losses are presented in
the Consolidated Statement of Profit or Loss and Other
Comprehensive Income on a net basis within other income
or operating expenses.
Non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates at
the date when the fair value was determined. Translation
differences on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss.
iii. Group companies
The results and financial position of foreign operations
(none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the
presentation currency are translated into the presentation
currency as follows:
assets and liabilities for each statement of financial
position presented are translated at the closing rate at
the date of that statement of financial position
income and expenses for Consolidated Statement of
Profit or Loss and Other Comprehensive Income are
translated at average exchange rates (unless this is not
a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates
of the transactions), and
all resulting exchange differences are recognised in
Other Comprehensive Income.
On consolidation, exchange differences arising from the
translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as
hedges of such investments, are recognised in Other
Comprehensive Income. When a foreign operation is sold
or any borrowings forming part of the net investment are
repaid,
the associated exchange differences are
reclassified to profit or loss, as part of the gain or loss on
sale.
fair value adjustments arising on
Goodwill and
the
acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and translated at the
closing rate.
e. Revenue Recognition
Revenue is measured at the fair value of the consideration
received or receivable. Amounts disclosed as revenue are
net of returns, trade allowances, rebates and amounts
collected on behalf of third parties.
The Consolidated Entity recognises revenue when the
amount of revenue can be reliably measured. It is probable
that future economic benefits will flow to the entity and
specific criteria have been met for each of the Consolidated
Entity’s activities as described below. The Consolidate
Entity bases its estimates on historical results, taking into
consideration the type of customer, the type of transaction
and the specifics of each arrangement.
Revenue is recognised for the major business activities as
follows:
i. Consultancy fees
Revenue
accounting period in which the services are rendered.
from consulting services
is recognised
in
the
ii. Sale of goods and disposal of assets
Revenue from the sale of goods and disposal of other assets is
recognised when the Consolidated Entity has passed control
and the risks and rewards of ownership of the goods/assets
to the buyer.
iii. Interest income
Interest income is recognised using the effective interest
method. When a receivable is impaired, the Consolidated
Entity reduces the carrying amount to its recoverable
amount, being the estimated future cash flow discounted at
the original effective interest rate of the instrument, and
continues unwinding the discount as interest income.
Interest income on impaired loans is recognised using the
original effective interest rate.
iv. Dividends
Dividends are recognised as revenue when the right to
receive payment is established. This applies even if they are
paid out of pre-acquisition profits. However, the investment
may need to be tested for impairment as a consequence,
refer note 1(k).
v. Other revenues
Other revenues are recognised on a receipts basis.
Income Tax
f.
The income tax expense or revenue for the period is the tax
payable on the current period’s taxable income based on
the applicable income tax rate for each jurisdiction adjusted
by changes in deferred tax assets and liabilities attributable
to temporary differences and for unused tax losses. The
current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company’s
subsidiaries and associates operate and generate taxable
income. Management periodically evaluates positions taken
in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
ANNUAL REPORT | 21
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in
the consolidated financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial
recognition of goodwill. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset
or
than a business
transaction other
combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by the end of
the reporting period and are expected to apply when the
related deferred income tax asset is realised or the deferred
income tax liability is settled.
liability
in a
recognised
tax assets are
for deductible
Deferred
temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to
utilise those temporary differences and losses. Deferred tax
assets and liabilities are not recognised for temporary
differences between the carrying amount and tax bases of
investments in foreign operations where the Company is
able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not
reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets and
liabilities, and when the deferred tax balances relate to the
same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to
offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in
Other Comprehensive Income or directly in equity. In this
case, the tax is also recognised in Other Comprehensive
Income or directly in equity, respectively.
g. Leases
Leases in which a significant portion of the risks and
rewards of ownership are not transferred to the
Consolidated Entity as lessee are classified as operating
leases. Payments made under operating leases (net of
any incentives received from the lessor) are charged to the
Consolidated Statement of Profit or Loss and Other
Comprehensive Income on a straight-line basis over the
period of the lease.
h. Impairment of Assets
Goodwill and intangible assets that have an indefinite useful
life are not subject to amortisation and are tested annually
for impairment or more frequently if events or changes in
circumstances indicate that they might be impaired. Other
assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised
for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s fair value less costs to sell and
value in use. For the purpose of assessing impairment,
assets are grouped at the lowest levels for which they are
separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or group
of assets (cash-generating units). Non-financial assets
other than goodwill that suffered impairment are reviewed
for possible reversal of the impairment at the end of each
reporting period.
the purpose of presentation
i. Cash and Cash Equivalents
For
in the Consolidate
Statement of Cash Flows, cash and cash equivalents
includes cash on hand, deposits held at call with financial
institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value, and bank
overdrafts. Bank overdrafts are shown within borrowings in
current liabilities in the Consolidated Statement of Financial
Position.
j. Trade Receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
Trade receivables are generally due for settlement within
30 days. They are presented as current assets unless
collection is not expected for more than 12 months after the
reporting date.
Collectability of trade receivables is reviewed on an ongoing
basis. Debts which are known to be uncollectible are written
off by reducing the carrying amount directly. An allowance
account (provision for impairment of trade receivables) is
used when there is objective evidence that the Consolidated
Entity will not be able to collect all amounts due according
to the original terms of the receivables. Significant financial
difficulties of the debtor, probability that the debtor will enter
bankruptcy or financial reorganisation, and default or
delinquency in payments (more than 30 days overdue) are
considered indicators that the trade receivable is impaired.
The amount of the impairment allowance is the difference
between the asset’s carrying amount and the present value
of estimated future cash flows, discounted at the original
effective interest rate. Cash flows relating to short-term
receivables are not discounted if the effect of discounting is
immaterial.
The amount of impairment loss is recognised in the
Consolidated Statement of Profit or Loss and Other
Comprehensive Income within other expenses. When a
trade receivable for which an impairment allowance had
been recognised becomes uncollectable in a subsequent
period, it is written off against the allowance account.
Subsequent recoveries of amounts previously written off are
credited against other expenses in profit or loss.
k. Investments
and Other
Financial Assets
Classification
The Consolidated Entity classifies its financial assets in the
following categories: financial assets at fair value through
profit or loss, and loans and receivables. The classification
depends on the purpose for which the investments were
acquired. Management determines the classification of its
investment at initial recognition.
i. Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are
financial assets held for trading. A financial asset is
classified in this category if acquired principally for the
purpose of selling in the short term. Assets in this category
are classified as current assets if they are expected to be
settled within 12 months; otherwise they are classified as
non-current.
ii. Loans and receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in
an active market. They are included in current assets,
except for those with maturities greater than 12 months after
the reporting period which are classified as non-current
assets.
Financial assets-reclassification
The Consolidated Entity may choose to reclassify non-
derivative trading financial assets out of the held for trading
category if the financial asset is no longer held for the
purpose of selling it in the near term. Financial assets other
than loans and receivables are permitted to be reclassified
out of
in rare
circumstances arising from a single event that is unusual
and highly unlikely to recur in the near term. In addition, the
trading category only
the held
for
ANNUAL REPORT | 22
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Entity may choose to reclassify financial
assets that would meet the definition of loans and
receivables out of held for trading if the Consolidated Entity
has the intention and ability to hold these financial assets
for the foreseeable future or until maturity at the date of
reclassification.
fair value as of
Reclassifications are made at
the
reclassification date. Fair value becomes the new cost or
amortised cost as applicable, and no reversals of fair value
gains or losses recorded before reclassification date are
subsequently made. Effective interest rates for financial
assets reclassified to loans and receivables are determined
at the reclassification date. Further increases in estimates
of cash flows adjust effective interest rates prospectively.
Recognition and de-recognition
trade-date -
the date on which
Regular way purchases and sales of financial assets are
recognised on
the
Consolidated Entity commits to purchase or sell the asset.
Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or
have been transferred and the Consolidated Entity has
transferred substantially all the risks and rewards of
ownership.
Measurement
At initial recognition, the Consolidated Entity measures a
financial asset at its fair value plus, in case of a financial
asset not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried
at fair value through profit or loss are expensed in the profit
or loss.
Loans and receivables are subsequently carried at
amortised cost using the effective interest method.
Financial assets at fair value through profit or loss are
subsequently carried at fair value. Gains or losses arising
from changes in the fair value of the “financial asset at fair
value through profit or loss” category are presented in profit
or loss within Other Comprehensive Income or Other
Operating Expenses in the period in which they arise.
Dividend income from financial assets at fair value through
profit or loss is recognised in the Consolidated Statement of
Profit or Loss and Other Comprehensive Income as part of
revenue from continuing operations when the Consolidated
Entity’s right to receive payments is established. Interest
income from these financial assets is included in the net
gains/(losses).
Details on how the fair value of financial instruments is
determined are disclosed in note 2.
Impairment
The Consolidated Entity assesses at the end of each
reporting period whether there is objective evidence that a
financial asset or group of financial assets is impaired. A
financial asset (or a group of financial assets) is impaired
and the impairment losses are incurred only if there is
objective evidence of impairment as a result of one or more
events that occurred after the initial recognition of the asset
(a “loss event”) and that loss event (or events) has an
impact on the estimated future cash flows of the financial
asset or group of financial assets that can be reliably
estimated.
(i) Financial Assets carried at amortised cost
For loans and receivables, the amount of loss is measured
as the difference between the asset’s carrying amount and
the present value of estimated future cash flows (excluding
future credit losses that have not been incurred)
discounted at the financial asset’s original effective interest
rate. The carrying amount of the asset is reduced and the
amount of the loss is recognised in the profit or loss.
If, in a subsequent period, the amount of the impairment
loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised
(such as an improvement in the debtor’s credit rating), the
reversal of the previously recognised impairment loss is
recognised in profit or loss.
l. Property, Plant and Equipment
All items of property, plant and equipment are stated at
historical cost less accumulated depreciation and impairment
losses. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with
the item will flow to the Consolidated Entity and the cost of the
item can be measured reliably. The carrying amount of any
component accounted for as a separate asset is derecognised
when replaced. All other repairs and maintenance are charged
to profit or loss during the reporting period in which they are
incurred.
Land is not depreciated. Depreciation on other assets is
calculated using the straight-line method to allocate their
cost or re-valued amounts, net of their residual values, over
their estimated useful lives or, in the case of leasehold
improvements, the shorter lease term as follows:
Computer equipment
Plant & equipment
33.33% to 66.67%
12.5%
The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount note 1(n).
Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in profit
or loss.
m. Mineral exploration and evaluation expenditure
to be
Exploration and evaluation expenditure incurred is initially
capitalised in respect of each identifiable area of interest
where the Consolidated Entity has right of tenure. These
costs are only carried forward to the extent that they are
expected
the successful
development of the area or where activities in the area have
reasonable
not yet
assessment of the existence or otherwise of economically-
recoverable reserves. Accumulated costs in relation to an
abandoned area are written off in full against profit in the
year in which the decision to abandon the area is made.
reached a stage
that permits
recouped
through
Under AASB 6 Exploration for and Evaluation of Mineral
Resources, if facts and circumstances suggest that the
carrying amount of any recognised exploration and
evaluation assets may be impaired, the Consolidated Entity
must perform impairment tests on those assets and
measure any impairment in accordance with AASB 136
Impairment of Assets. Any impairment loss is to be
recognised as an expense. A regular review is undertaken
of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of
interest.
n. Trade and Other Payables
These amounts represent liabilities for goods and services
provided to the Consolidated Entity prior to the end of the
financial year which are unpaid. The amounts are
unsecured and are usually paid within 30 days of
recognition. Trade and other payables are presented as
current liabilities unless payment is not due within 12
months from the reporting date. They are recognised initially
at their fair value and subsequently measured at amortised
cost using the effective interest method.
ANNUAL REPORT | 23
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
o. Employee Benefits
i. Short-term obligations
Liabilities for wages and salaries, including non-monetary
benefits and annual leave expected to be settled within 12
months after the end of the period in which the employees
render the related service are recognised in respect of
employees’ services up to the end of the reporting period
and are measured at the amounts expected to be paid when
the liabilities are settled. The liability for annual leave is
recognised in the provision for employee benefits. All other
short-term employee benefit obligations are presented as
payables.
ii. Other long-term employee benefit obligations
The liability for long service leave and annual leave which
is not expected to be settled within 12 months after the end
of the period in which the employees render the related
service is 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 end of the reporting period using the
projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of
employee departures and periods of service. Expected
future payments are discounted using market yields at the
end of the reporting period on corporate bond rate with
terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
The obligations are presented as current liabilities in the
Consolidated Statement of Financial Position if the entity
does not have an unconditional right to defer settlement for
at least twelve months after the reporting date, regardless
of when the actual settlement is expected to occur.
iii. Share-based payments
Shared-based compensation benefits are provided to
employees via the Strike Resources Limited Employee
Option Plan. Information on these schemes is set out in
note 25.
p. Employee Benefits (continued)
The fair value of options granted under Strike Resources
Limited Employee Option Plan is recognised as an
employee benefits expense with a corresponding increase
in equity. The total amount to be expensed is determined by
reference to the fair value of the options granted, which
includes any market performance conditions and the impact
of any non-vesting conditions but excludes the impact of
any service and non-market performance vesting
conditions.
r. Dividends
Provision is made for the amount of any dividend declared,
being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the reporting
period but not distributed at the end of the reporting period.
s. Earnings per Share
i. Basic earnings per share
Basic earnings per share is calculated by dividing:
the profit attributable to owners of the Company,
excluding any costs of servicing equity other than
ordinary shares.
by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the
year and excluding treasury shares.
ii. Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into
account:
the after income tax effect of interest and other
financing costs associated with dilutive potential
ordinary shares, and
the weighted average number of additional shares that
would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
t. Goods and Services Tax (“GST”) (including Value
Added Tax – “VAT”)
Revenues, expenses and assets are recognised net of the
amount of any associated GST (VAT), unless the GST
(VAT) incurred is not recoverable from the taxation
authority. In this case it is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the
amount of GST (VAT) receivable or payable. The net
amount of GST recoverable from, or payable to, the taxation
authority is included with other receivables or payables in
the statement of financial position.
Cash flows are presented on a gross basis. The GST (VAT)
components of cash flows arising from investing or
financing activities which are recoverable from, or payable
to the taxation authority, are presented as operating cash
flows.
Non-market vesting conditions are included in assumptions
about the number of options that are expected to vest. The
total expense is recognised over the vesting period, which
is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period, the
entity revises its estimates of the number of options that are
expected to vest based on the non-marketing vesting
conditions. It recognises the impact of the revision to
original estimates,
loss with a
corresponding adjustment to equity.
in profit or
if any,
q. Contributed equity
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.
Incremental costs directly attributable to the issue of new
shares or options for the acquisition of a business are included
in the cost of the acquisition as part of the purchase
consideration.
ANNUAL REPORT | 24
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
u. New Accounting Standards and Interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2015 reporting
periods. The Consolidated Entity has elected not to early adopt any Standards or Interpretations.
The Consolidated Entity’s assessment of the impact of these new standards and interpretations is set out below:
Standard / Interpretation
AASB 15 ‘Revenue from Contracts with Customers’ and AASB 2014-5
‘Amendments to Australian Accounting Standards arising from AASB 15’
AASB 2014-3 ‘Amendments to Australian Accounting Standards –
Accounting for Acquisitions of Interests in Joint Operations’
AASB 2014-4 ‘Amendments to Australian Accounting Standards –
Clarifications of Acceptable Methods of Depreciation and Amortisation’
AASB 2014-6 ‘Amendments to Australian Accounting Standards –
Agriculture: Bearer Plants’
AASB 2014-9 ‘Amendments to Australian Accounting Standards – Equity
Method in Separate Financial Statements’
AASB 2014-10 ‘Amendments to Australian Accounting Standards – Sale
or Contribution of Assets between an Investor and its Associate or Joint
Venture’
AASB 2015-1 ‘Amendments to Australian Accounting Standards – Annual
improvements to Australian Accounting Standards 2012-2014 Cycle’
AASB 2015-2 ‘Amendments to Australian Accounting Standards –
Disclosure Initiative: Amendments to AASB 101’
AASB 2015-3 ‘Amendments to Australian Accounting Standards arising
from the Withdrawal of AASB 1031 Materiality’
AASB 2015-4 ‘Amendments to Australian Accounting Standards –
Financial Reporting Requirements for Australian Groups with a Foreign
Parent’
AASB 2015-5 ‘Amendments to Australian Accounting Standards –
Investment Entities: Applying the Consolidation Exception’
Effective for annual
reporting periods
beginning on or after
1 January 2017
Expected to be
initially applied in
the financial year
ending
30 June 2018
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 July 2015
30 June 2016
1 July 2015
30 June 2016
1 January 2016
30 June 2017
There are no other standards that are not yet effective and that are expected to have material impact on the entity in the current
or future reporting periods and on foreseeable future transactions.
v. Parent Entity Financial Information
The financial information for the parent entity, Strike Resources Limited, disclosed in Note 26 has been prepared on the same
basis as the consolidated financial statements.
2. Financial Risk Management
Financial Risk Management Objectives and Policies
The Consolidated Entity's financial instruments mainly consist of deposits with banks, accounts receivable and
payable. The main risks arising from the Consolidated Entity's financial instruments are interest rate risk, foreign
exchange risk, credit risk, equity price risk and liquidity risk.
The Board of Directors’ is responsible for the overall internal control framework (which includes risk management)
but no cost-effective internal control system will preclude all errors and irregularities. The system is based, in part,
on the appointment of suitably-qualified management personnel in conjunction with a range of policies and
procedures, which incorporate monitoring and reporting mechanisms, to assist in the management of the various
risks to which the business is exposed. The effectiveness of the system is continually reviewed by management
and at least annually by the Board.
The Consolidated Entity holds the following instruments.
Variable interest rate
Fixed interest rate
Non-interest bearing
Total
Financial
assets
Cash
Receivables
Loan receivable
Financial assets
Financial
liabilities
Payables
Net financial
assets
2015
$
2014
$
2015
$
2014
$
2015
$
2014
$
2015
$
2014
$
195,800
-
-
-
195,800
190,525
-
-
-
190,525
8,075,000 9,850,000
-
-
-
9,850,000
-
-
-
8,075,000
310,458
103,406
-
-
-
- -
372,350
103,406
61,892
8,374,206
-
-
-
8,374,206
10,350,983
61,892
-
-
10,412,875
-
-
-
-
(84,109)
(1,014,613)
(84,109)
(1,014,613)
195,800
190,525
8,075,000
9,850,000
19,297
(642,263)
8,290,097
9,398,262
ANNUAL REPORT | 25
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
a. Market Risk
i. Foreign Exchange Risk
The Consolidated Entity operates internationally and is exposed to foreign exchange risk arising from various
currency exposures, primarily with respect to the US dollar, Peruvian Nuevo Soles and Canadian dollar.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis
and cash flow forecasting.
The Consolidated Entity has a policy of not hedging foreign exchange risk and therefore has not entered into any
hedging against movements in foreign currencies against the Australian dollar, including forward exchange
contracts, as at the reporting date and is currently fully exposed to foreign exchange risk.
i. Foreign Exchange Risk
The Consolidated Entity's exposure to foreign exchange risk expressed in Australian dollar at the reporting date
was as follows:
Financial assets
Cash at bank
Receivables
Financial assets at fair value
through profit or loss
Loan receivable
Financial liabilities
Payables
Sensitivity
USD
Others
2015
2014
2015
2014
74,044
-
189,495
47,918
-
-
-
-
(60,338)
13,706
(512,303)
(274,890)
-
-
-
-
-
-
-
-
-
-
-
-
The Consolidated Entity has performed a sensitivity analysis on its exposure to exchange risk. The management
assessment is based upon an analysis of current and future market position. The analysis demonstrates the effect
on the current-year results and equity when the Australian dollar strengthened or weakened by 10% (2014: 10%)
against the foreign currencies detailed above, with all the other variables held constant.
Change in profit
increase by 10%
decrease by 10%
Change in equity
increase by 10%
decrease by 10%
a. Market Risk (continued)
i. Interest Rate Risk
2015
$
2014
$
1,371
(1,371)
27,489
(27,489)
-
-
-
-
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest
rates. The Consolidated Entity's exposure to market risk for changes in interest rates relate primarily to investments
held in interest-bearing cash deposits.
Cash at bank
Term deposit
2015
$
299,206
8,075,000
8,374,206
2014
$
500,983
9,850,000
10,350,983
Weighted average interest rates
2.84%
3.51%
ANNUAL REPORT | 26
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Entity has performed a sensitivity analysis on its exposure to interest rate risk at the reporting
date. The management assessment is based upon an analysis of current and future market conditions, in particular
comments from the Reserve Bank of Australia on the likely movement of interest rates. The analysis demonstrates
the potential effect on the current year results and equity which could result from a change in these risks.
Change in profit
increase by 25bps (2014: 25bps)
decrease by 25bps (2014: 25bps)
Change in equity
increase by 25bps (2014: 25bps)
decrease by 25bps (2014: 25bps)
2015
$
2014
$
20,369
(20,369)
25,101
(25,101)
-
-
-
-
b. Credit Risk
Credit risk refers to the risk that a counterparty under a financial instrument will default (in whole or in part) on its
contractual obligations resulting in financial loss to the Consolidated Entity. Concentrations of credit risk are
minimised primarily by undertaking appropriate due diligence on potential investments, carrying out all market
transactions through approved brokers, settling non-market transactions with the involvement of suitably qualified
legal and accounting personnel (both internal and external), and obtaining sufficient collateral or other security
(where appropriate) as a means of mitigating the risk of financial loss from defaults.
Pursuant to the Cuervo Investment Agreement, the Company holds a pledge over the shares of Minera Cuervo
S.A.C., which pledge is exercisable if Cuervo defaults under the Investment Agreement.
The credit quality of the financial assets are neither past due nor impaired and can be assessed by reference to
external credit ratings (if available with Standard & Poor's) or to historical information about counterparty default
rates:
Cash and cash equivalents
AA
A+
No external credit rating available
2015
$
8,270,800
-
103,406
8,374,206
2014
$
6,981,246
3,100,000
269,737
10,350,983
Receivables and loans
AA
A+
No external credit rating available
58,215
3,116
12,997
10,425,311
The Consolidated Entity measures credit risk on a fair-value basis. The carrying amount of financial assets recorded
in the financial statements, net of any provision for losses, represents the Consolidated Entity’s maximum exposure
to credit risk. All receivables noted above, except interest on term deposits, are due within 30 days. None of the
above receivables are past due.
-
-
-
8,374,206
c. Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet obligations
when due and to close out the market positions. At the end of the reporting period the Consolidated Entity held
deposits of $8,075,000 (2014: $9,850,000) that mature within the next 3 months after 30 June 2015 that are
expected to readily generate cash inflows for managing liquidity risk.
The financial liabilities disclosed have the following maturity obligation:
Non-interest bearing
less than 6 months
6 to 12 months
more than 12 months
Carrying Amount
Contractual Amount
2015
$
84,109
-
-
84,109
2014
$
276,184
738,429
-
1,014,613
2015
$
84,109
-
-
84,109
2014
$
276,184
738,429
-
1,014,613
d. Net Fair Value of Financial Assets and Liabilities
The carrying amounts of financial instruments recorded in the financial statements approximates their fair value
determined in accordance with the accounting policies disclosed in Note 3.
ANNUAL REPORT | 27
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
e. Fair Value Measurements
The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the
reporting period. The quoted market price used for financial assets held by the Consolidated Entity is the current
bid price. These instruments are included in level 1.
The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques. These valuation techniques maximise the use of observable market data where it is available and rely
as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level
3. Techniques such as discounted cash flow analysis, are used to determine fair value for the remaining financial
instruments.
The fair value of financial instruments must be estimated for recognition and measurement or for disclosure
purposes.
AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following
fair value measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
(b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (level 2); and
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
3. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the entity and that are believed to be
reasonable under the circumstances.
Impairment of Capitalised Exploration and Evaluation expenditure
a.
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors,
including the Consolidated Entity’s ability to develop the relevant area of interest itself or, if not, whether it can
successfully recover the capitalised exploration and evaluation asset through sale.
Factors that could impact the future recoverability include the grade and quantity of mineral resources, future
technological changes which impact the cost of mining, future legal changes (including changes to environmental
restoration obligations), changes to commodity prices, right of tenure and community approvals or access.
b. SUNAT tax
In June 2014, The Peruvian Tax Administration (“SUNAT”) completed an audit on Apurimac Ferrum S.A (“AF”)
relating to Non Resident Income Tax Withholding for the fiscal years 2010 and 2011.
The SUNAT notified AF a set of Resolutions that determine a debt for Non Domiciled Income Tax Withholding and
Fine Resolutions as a result of the Audit process.
AF has obtained independent advice in respect to the SUNAT findings identifying that the Company has strong
arguments in its defence. As a result, AF has officially lodged a claim against the SUNAT findings.
In April 2015, AF received resolutions from SUNAT which have predominantly ruled in favour of a claim made by
AF. As a result, AF was able to reverse A$1.1 million of its A$1.7 million accrual that is has previously recognised
for SUNAT withholding taxes.
SUNAT has requested its audit area to complete a re-audit on several of initial findings believing that insufficient
evidence was compiled to support its position. AF plans to appeal this matter to the Tax Administrative Court but
will continue to recognise an accrual of A$610,878 for the resolutions subject to further investigation until the dispute
is completely resolved.
4. Segment Information
a. Description of segments
Management has determined the operating segments based on the reports reviewed by the Board of Directors that
are used to make strategic decisions.
The Board of Directors considers the business from both a product and a geographic perspective and has identified
two reportable segments as follows:
Australia
Peru (Iron Ore)
ANNUAL REPORT | 28
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In April 2014, the Company announced that it was undertaking a full strategic review of all of its assets and has
determined to close its office and operations in Peru.
b. Segment information provided to the Board of Directors
The segment information provided to the Board of Directors for the reportable segments for the year ended 30 June
2014 and 30 June 2015 are as follows:
2015
Interest revenue
Sale of iron ore
Other income
Inter-segment revenue
Other income
Adjusted EBITDA
Depreciation and amortisation
Personnel costs
Impairment losses:
- Exploration & Evaluation expenditure
- Land
Total segment assets
Total segment liabilities
2014
Interest revenue
Sale of iron ore
Other income
Inter-segment revenue
Other income
Adjusted EBITDA
Depreciation and amortisation
Personnel costs
Impairment losses:
- Loan to Cuervo Resources Inc.
- Exploration & Evaluation expenditure
Fair value adjustment – financial assets held at fair value
through profit or loss
Total segment assets
Total segment liabilities
c. Other segment information
(i) Segment revenue
Peru
Australia
Total
-
-
-
-
-
116,555
-
21,744
251,077
-
-
-
251,077
(1,371,162)
251,077
-
-
-
251,077
(1,254,607)
(536)
(636,932)
(536)
(615,188)
(222,194)
(470,129)
1,583
-
(220,611)
(470,129)
103,406
(834,274)
8,279,611
(38,498,846)
8,383,017
(39,333,120)
Peru
Australia
Total
-
129,865
-
-
129,865
(49,206,548)
418,462
-
61,012
-
479,524
(4,942,921)
418,462
129,865
61,012
-
609,339
(54,149,469)
(37,721)
(880,803)
(2,395)
(623,927)
(40,116)
(1,504,730)
-
(43,242,933)
(827,641)
(7,312)
(827,641)
(43,250,245)
-
(109,616)
(109,616)
1,641,801
(3,329,012)
10,233,180
(39,081,374)
11,874,981
(42,410,386)
Segment revenue reconciles to total revenue as per the Consolidated Statement of Profit or Loss and Other
Comprehensive Income:
Other income
Interest revenue
Other income
2015
$
251,077
-
251,077
2014
$
418,462
190,877
609,339
ANNUAL REPORT | 29
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(ii) Adjusted EBITDA
A reconciliation of adjusted EBITDA to operating profit before income tax is provided as follows:
Adjusted EBITDA
Intersegment eliminations
Depreciation
Profit/(loss) before tax from continuing operations
2015
$
(1,254,607)
746,047
(536)
(509,096)
2014
$
(54,149,469)
5,504,906
(40,116)
(48,684,679)
(iii) Segment assets and segment liabilities
Reportable segments’ assets and liabilities are reconciled to total assets and liabilities respectively as follows:
Segment assets
Intersegment eliminations
Total assets as per the Consolidated Statement of Financial
Position
2015
$
2014
$
8,383,017
-
11,874,981
(950,678)
8,383,017
10,924,303
Segment liabilities
Intersegment eliminations
Total liabilities as per the Consolidated Statement of Financial
Position
(39,333,120)
38,590,206
(42,410,386)
39,925,320
(742,914)
(2,485,066)
5. Profit/(Loss) for the Year
(a)
Revenue
Revenue
Interest received – Cash on deposit
Foreign exchange gain
Sale of iron ore
Total revenue and other income
(b)
Expenses
Personnel costs
Cash remuneration
Annual leave provision
Superannuation expense
Administration costs
Consultancy fees
Professional fees
Depreciation
Other corporate expenses
(b) Expenses (continued)
Impairment losses
Exploration and evaluation
Loan to Cuervo Resources Inc.
Non-Current assets held for sale
2015
$
2014
$
$
251,077
-
-
251,077
613,232
(54,237)
56,193
615,188
245,220
233,044
536
367,169
845,949
220,611
-
500,342
720,953
$
418,462
61,012
129,865
609,339
1,454,462
50,268
1,504,730
370,297
1,035,545
40,116
1,900,327
3,346,285
43,250,245
827,641
-
44,077,886
Reversal of SUNAT provision*
*Refer to Note 12 for details on SUNAT provision.
1,097,982
-
ANNUAL REPORT | 30
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. Income Tax Expense
(a)
(b)
(c)
(d)
Income tax expense
Current tax
Deferred tax
Numerical reconciliation between tax expense and pre-tax
net profit/(loss)
Profit/(loss) from continuing operations before income tax
Income-tax expense/(benefit) on above at 30%
Increase in income tax due to:
Non-deductible expenses and foreign losses
Current year tax losses not recognised
Movement in unrecognised temporary differences
Decrease in income tax expenses due to:
Non assessable income
Utilisation of prior year tax loss
Foreign tax rates differential
Foreign jurisdiction withholding tax
Income-tax expense attributable to operating profit
Deferred tax assets not brought to account
On income-tax account
Carry-forward tax losses
Other
Total deferred tax assets not brought to account
Deferred tax liability not brought to account
On income-tax account
Carry-forward tax losses
Other
Total deferred tax losses not brought to account
2015
$
2014
$
8,768
-
8,768
76,771
-
76,771
(509,096)
(48,684,679)
(152,729)
(14,605,403)
(9,287)
210,308
62,993
1,704,579
1,417,202
11,485,101
-
(108,779)
(2,506)
8,768
8,768
(1,479)
-
-
76,771
76,771
9,102,300
12,506,259
21,608,560
9,467,078
12,161,566
21,628,644
-
-
-
-
-
-
-
-
The deferred tax asset not brought to account for the 2015 and 2014 years will only be obtained if:
i.
ii.
iii.
the Consolidated Entity derives future assessable income of a nature and of an amount sufficient to
enable the benefit to be realised;
the Consolidated Entity continues to comply with the conditions for deductibility imposed by tax
legislation; and
in relation to Australian carry forward income tax losses the Consolidated Entity is able to meet the
continuity of ownership and/or continuity of business tests.
The Company and controlled entities of the Company have not elected to consolidate for taxation purposes and
have not entered into a tax sharing and funding agreement in respect of such arrangements.
7. Cash and Cash Equivalents
Cash at bank
Term deposits
2015
$
299,206
8,075,000
8,374,206
2014
$
500,983
9,850,000
10,350,983
ANNUAL REPORT | 31
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Risk exposure
The Consolidated Entity’s exposure to interest rate risk is discussed in note 2. The maximum exposure to credit risk
at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned
above.
8. Trade and Other Receivables
Current:
Loan to Cuervo Resources Inc.
Provision for impairment
Goods and service tax (GST) recoverable in Australia
VAT credit & Income Tax Credit
Amounts receivable from sundry debtors
2015
$
2014
$
5,216,470
(5,216,470)
-
7,739
-
-
7,739
5,216,470
(5,216,470)
-
12,436
1,053
60,839
74,328
On December 11, 2013 Strike announced it had issued a demand notice for C$5,250,000 plus applicable interest
to Cuervo in respect of the Investment Agreement between the two companies, relating to the financing of the Cerro
Ccopane project. The demand notice was issued following Strike's concerns regarding the solvency of Cuervo and
events of default occurring under the current agreements between the companies. Strike also issued a notice of its
intention to enforce its security held over 90% of the shares of the Peruvian company holding the key assets of the
project, if the full amount owed to Strike was not paid by December 16, 2013. To date no further action has been
undertaken.
Strike is aware that all of the Canadian directors of Cuervo have resigned and the company has been delisted from
the Canadian Securities Exchange. Strike is examining its options to recover value as a secured creditor of Cuervo.
In this regard, Strike has been advised that the legal and court costs of actively pursuing its claims in Canada and
Peru could be considerable. In light of this and the fact that the recoverable value of the Cuervo assets in Peru is
questionable under current market conditions, Strike is considering whether to actively pursue its claims.
Refer to Note 2 for the Consolidated Entity’s exposure to credit risk, foreign exchange risk and interest rate risk.
9. Non-Current Assets Held for Sale
Land
Property, plant and equipment
2015
$
2014
$
-
-
-
428,912
70,080
498,992
On 14 April 2014, following a strategic review the Company decided to close its office and operations in Peru. Since
determining to suspend its operations in Peru, the Company is actively looking to dispose of its assets in Peru.
During the financial year, the Company impaired all property, plant and equipment which was unable to be sold.
The Company continues to hold 886ha block of land in Cusco. An independent valuation of the land determined
that the current market in the mining sector limits any probability of value realisation. As such, the directors have
impaired the land held to a value of nil.
ANNUAL REPORT | 32
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. Property, Plant and Equipment
Capital WIP
Land
Plant and
equipment
Leasehold
improvements
At 30 June 2013
Cost or fair value
Accumulated
depreciation and
impairment
Net carrying amount
2014 Consolidated
Carrying value at 1
July 2013
Foreign exchange
adjustment
Cost of asset
additions
Depreciation expense
Cost of asset
disposals
Accumulated
depreciation on
disposed assets
Reclassification of
property, plant and
equipment held for
sale
Carrying value at 30
June 2014
At 30 June 2014
Cost or fair value
Accumulated
depreciation and
impairment
Reclassification of
property, plant and
equipment held for
sale
Net carrying amount
2015 Consolidated
Carrying value at 1
July 2014
Cost of asset
additions
Depreciation expense
Carrying value at 30
June 2015
At 30 June 2015
Cost or fair value
Accumulated
depreciation and
impairment
Net carrying amount
280
453,167
460,031
-
280
-
453,167
(320,906)
139,125
280
453,167
139,125
-
-
-
-
Total
913,478
(320,906)
592,572
592,572
-
-
-
-
-
(24,255)
7,479 -
(16,776)
-
-
-
-
5,786
(40,116)
-
-
5,786
(40,116)
(166,669)
-
(166,669)
124,195
-
124,195
(280)
(428,912)
(69,800)
-
-
-
280
428,912
299,148
-
-
(229,348)
(280)
-
(428,912)
-
(69,800)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,608
(536)
1,072
1,608
(536)
1,072
-
-
-
-
-
-
-
-
-
-
-
-
-
(498,992)
-
728,340
(229,348)
(498,992)
-
-
1,608
(536)
1,072
1,608
(536)
1,072
ANNUAL REPORT | 33
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
11. Exploration and Evaluation Expenditure
Balance at the beginning of the year
Foreign exchange adjustment
Exploration and evaluation expenditure additions
Impairment loss – exploration and evaluation*
Balance at the end of the year
2015
$
-
-
220,611
(220,611)
-
2014
$
41,842,078
158,264
1,249,903
(43,250,245)
-
*The Consolidated Entity has assessed the carrying amount of the exploration and evaluation in accordance with
AASB 6 Exploration for and Evaluation of Mineral Resources and has recognised an impairment expense of
$220,611 during the current financial year following the decision to review its commitment to continue sole funding
the advancement of its projects in Peru. On 14 April 2014, the Group announced that it was undertaking a full
strategic review of all of its assets and due to this it was closing AF’s office and operations in Peru.
The ultimate recoverability of deferred exploration and evaluation expenditure is dependent on the successful
development or sale of the relevant area of interest. Refer to Note 1(m) & 3(a).
12. Trade and Other Payables
Current
Trade creditors
Other creditors and accruals
Withholding Tax1
2015
$
2014
$
23,771
99,565
610,878
734,214
182,590
761,668
1,470,453
2,414,711
1 Withholding tax accrual of $610,878 arising from the Peruvian Tax Administration (“SUNAT”) audit on Apurimac
Ferrum S.A (“AF”) relating to Non Resident Income Tax Withholding for the fiscal years 2010 and 2011. In June
2014, The Peruvian Tax Administration (“SUNAT”) completed an audit on Apurimac Ferrum S.A (“AF”) relating to
Non Resident Income Tax Withholding for the fiscal years 2010 and 2011.
The SUNAT notified AF a set of Resolutions that determine a debt for Non Domiciled Income Tax Withholding and
Fine Resolutions as a result of the Audit process.
AF has obtained independent advice in respect to the SUNAT findings identifying that the Company has strong
arguments in its defence. As a result, AF has officially lodged a claim against the SUNAT findings.
In April 2015, AF received resolutions from SUNAT which have predominantly ruled in favour of a claim made by
AF. As a result, AF was able to reverse A$1.1 million of its A$1.7 million accrual that it has previously recognised
for SUNAT withholding taxes.
SUNAT has requested its audit area to complete a re-audit on several of initial findings believing that insufficient
evidence was compiled to support its position. AF plans to appeal this matter to the Tax Administrative Court but
will continue to recognise an accrual of A$610,878 for the resolutions subject to further investigation until the dispute
is completely resolved.
Details of the Consolidated Entity's exposure to risks arising from current payables are set out in Note 2.
13. Provisions
Current
Provision for employee entitlements – annual leave
Other
2015
$
2014
$
8,700
-
8,700
53,266
17,089
70,355
ANNUAL REPORT | 34
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. Issued Capital
145,334,268 (2014: 145,334,268) fully-paid ordinary shares
148,439,925
148,439,925
Each fully-paid, ordinary share carries one vote per share and the right to participate in dividends.
2015
$
2014
$
Movement in ordinary share capital
At 1 July 2013
Share issued
At 30 June 2014
Share issued
At 30 June 2015
Date of
movement
No.
$
145,334,268
-
145,334,268
-
145,334,268
148,439,925
-
148,439,925
-
148,439,925
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one
vote, and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
Options
Information relating to the Strike Resources Limited Employee Option Plan, including details of options issued,
exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out
in note 25.
Capital risk management
The Consolidated Entity's objectives when managing capital are to safeguard their ability to continue as a going
concern so that they can continue to provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure the Consolidated Entity may return capital to shareholders, issue
new shares or sell assets to reduce debt. The Consolidated Entity's non-cash investments can be realised to meet
accounts payable arising in the normal course of business.
15. Reserves
Foreign currency translation reserve
Share-based payments reserve
2015
$
2014
$
2,112,918
13,233,026
15,345,944
2,394,188
13,233,026
15,627,214
Nature and Purpose of Other Reserves
i. Share-Based Payment
The share-based payments reserve records the consideration (net of expenses) received by the Company on the
issue of options. In relation to options issued to Directors and employees for nil consideration, the fair values of
these options are included in the share-based payments reserve.
ii. Foreign Currency Translation
Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency
translation reserve as described in Note 1(d) and accumulate in a separate reserve within equity. The cumulative
amount is reclassified to profit or loss when the net investment is disposed of.
ANNUAL REPORT | 35
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. Key Management Personnel Disclosures
a. Compensation of Key Management Personnel
Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or payable to
each member of the Company’s key management personnel for the year ended 30 June 2015.
The totals of remuneration paid to KMP of the Company during the year are as follows:
Short-term employee benefits
Post-employment benefits
17. Auditors’ Remuneration
Auditors of the Consolidated Entity
Audit and review of financial statements
- BDO Audit (WA) Pty Ltd
Auditors of the Peruvian subsidiaries
Audit and review of financial statements
- BDO Pazos, Lopez de Romana, Rodriguez
BDO Tax (WA) Pty Ltd – ITR and FBT
2015
$
2014
$
649,569
54,274
703,843
615,201
52,594
667,795
2015
$
2014
$
37,500
41,000
4,974
17,085
59,559
4,000
24,021
69,021
During the year the $17,085 was paid or payable for services provided by related practices of the auditor of the
parent entity.
18. Contingent Assets and Liabilities
a. Native Title
The Consolidated Entity's tenements in Australia may be subject to native title applications in the future. At this
stage it is not possible to quantify the impact (if any) that native title may have on the operations of the Consolidated
Entity.
b. Government Royalties
The Consolidated Entity is liable to pay royalties on production obtained from its mineral tenements/concessions.
c. Directors' Deeds
The Consolidated Entity has entered into deeds of indemnity with Strike Resources Limited Directors, indemnifying
them against liability incurred in discharging their duties as Directors/officers of the Consolidated Entity. As at the
reporting date, no claims have been made under any such indemnities and, accordingly, it is not possible to quantify
the potential financial obligation of the Consolidated Entity under these indemnities.
d. Deferred Consideration to D&C
D&C Group receives the following deferred payments if certain milestones are achieved:
a. US$2 million on Apurimac Ferrum defining a JORC Resource at the Apurimac project of 500 Mt of iron ore
with an average grade of at least 55% iron (Fe) or 275 Mt of contained iron at an average grade of 52.5% Fe
or above.
b. US$3 million on Apurimac Ferrum S.A achieving environmental and community approvals for the construction
of an iron ore mine and associated infrastructure with a design capacity of at least 10Mtpa of iron ore product.
c. US$5 million on formal Apurimac Ferrum Board approval to commence construction of an iron ore project, or
the commencement of bulk earthworks for an iron ore processing plant, with a design capacity of at least
10Mtpa of iron ore product (Construction Milestone).
Under the terms of Shootout Settlement Agreement, Apurimac Ferrum S.A will also pay D&C Group the following
royalties:
1.5% of the net profits from sales of iron ore.
2% of the proceeds of sales of other metals (on a net smelter return basis).
ANNUAL REPORT | 36
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Or Apurimac Ferrum S.A may extinguish the royalties by paying D&C Group any one of the following amounts
(Extinguishment Payment):
US$13 million within 2 years from 20 December 2012, or
US$15 million between 2 and 3 years from 20 December 2012, or
US$20 million between 3 and 4 years from 20 December 2012, or
US$30 million after 4 years from 20 December 2012 but before the Construction Milestone occurs or the
15th anniversary of the agreement (whichever is sooner).
Due to the inherent uncertainty surrounding the achievement and timing of the above milestones, as at 30 June the
Company treated the deferred consideration as a contingent liability.
e. Millenium legal dispute
Strike is the defendant to a number of legal disputes that have been initiated by the original vendor and/or related
parties to the vendor of the Apurimac Project. A number of these disputes have already either passed through
arbitration or the judicial system in Peru and been awarded in favour of Strike. However, the vendor and/or related
parties to the vendor continue to pursue a number of legal avenues (including appeals on previous decisions) in
order to frustrate Strike and potentially regain ownership or the Apurimac and Cusco Projects.
Strike does not consider any of the legal actions brought by the vendor and/or related parties to the vendor to have
any reasonable basis for success and will continue to defend all claims raised against it.
19. Commitments
b. Lease Commitments
The Company has no lease commitments as at 30 June 2015.
c. Mineral Tenement/Concession/Mining Rights - Commitments for Expenditure
Australian tenements
In order to maintain current rights of tenure to exploration tenements, the holders of Australian mineral tenements
are required to outlay lease rentals and meet minimum expenditure commitments. The Company does not currently
have any material commitments for expenditure relating to Australian tenements.
Peruvian concessions
The Consolidated Entity is required to pay annual licence fees by 30 June of each year, at rates which vary on an
amount per-hectare basis. The total amount of this commitment will depend upon the area of concessions
relinquished (if any) and the area of new concessions granted (if any) and therefore cannot be reliably estimated.
As a result of finalising the arbitration process with the shareholders of Apurimac Ferrum S.A.(“AF”), the
Consolidated Entity granted on option over Peruvian tenements held by its subsidiary, Strike Resources Peru S.A.C.
Under the terms of the AF Settlement Agreement AF is obliged to make all necessary payments to keep the
concessions in good standing. Financial commitments for subsequent periods are contingent upon the continuity of
the agreement with AF, future exploration and evaluation results, and as such cannot be reliably estimated.
A number of non-core mineral concessions in Peru were allowed to lapse on 30 June 2015, significantly reducing
the Company’s annual expenditure in Peru. The Company continues to hold 14 core concessions in Peru which
contain its JORC Resources of iron ore in Apurimac and Cusco, as well as some neighbouring concessions which
have strategic value associated with the projects.
Australian heritage protection agreements
These agreements facilitate the preservation of Aboriginal heritage through the protection of Aboriginal sites and
objects upon the grant of mining tenements in Western Australia. The Heritage Protection Agreements require the
Consolidated Entity to conduct Aboriginal heritage surveys prior to conducting exploration that is not low-impact in
nature and detail procedures to be followed if an Aboriginal site is identified.
Agreements with Peruvian landowners and community groups
The Company notes that holding a mineral concession in Peru does not grant automatic access to the surface land.
Notwithstanding an easement procedure is contemplated in Peruvian law, in practice, mining companies have to
negotiate and enter into private agreements with landowners/community groups in order to have access to their
land for the purposes of conducting mining activities (exploration, evaluation, development and mining). Multiple
landowners/community groups are affected by the Consolidated Entity’s proposed mining activities on a majority of
the Consolidated Entity's Peruvian concessions. To date, approvals have been sought and obtained for drilling on
a programme by programme basis.
Obtaining approvals from landowners/community groups can be a complicated and lengthy process. The
Consolidated Entity will have to commit funds to community groups and/or landowners to secure land access
agreements to develop its Peruvian projects. There can be no guarantees that such approvals will be obtained, or
as to the terms upon which they will be obtained. At this stage it is not possible to quantify the potential financial
obligation of the Consolidated Entity in this regard.
ANNUAL REPORT | 37
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. Related-Party Disclosures
Subsidiaries
Interests in subsidiaries are set out in Note 21.
During the year $1,318,656 (2014: $2,811,122) was loaned to subsidiaries to fund exploration activities and
concession fees, and for closure costs of Peru office.
21. Investment in Controlled Entities
Strike Finance Pty Ltd
Strike Australian Operations Pty Ltd
Strike Operations Pty Ltd (“SOPL”)
Strike Indo Operations Pty Ltd (“SIOPL”)*
Ferrum Holdings Limited
Strike Resources Peru S.A.C.
Apurimac Ferrum S.A.
Ferrum Trading S.A.C
* Strike Indo Operations Pty Ltd was de-registered on 12 November 2014.
Country of
Incorporation
Percentage of
Ownership
2015
2014
Australia
Australia
Australia
Australia
British Anguilla
Peru
Peru
Peru
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
22. Events Occurring after the Reporting Period
On 2 July 2015 the Company announced that a Takeover Response Committee of the Company’s independent
directors, being the Chairman, Mr Malcolm Richmond, Ms Samantha Tough and Mr Matthew Hammond had been
established to respond to the takeover bid offer made by Bentley Capital Limited as announced on 30 June 2015
(the “Offer”). The Company also announced that following completion of the Offer (irrespective of the outcome of
the Offer), Ms Samantha Tough intended to resign from the Company Board to focus on her other non-executive
director roles.
In July 2015, Bentley Capital Limited lodged its Bidder’s Statement relating to the Offer with ASIC and dispatched
the same to Strike’s shareholders.
In August 2015, the Company lodged its Target’s Statement in response to the Offer.
The Bid closed on 2 September 2015 and a total of 52,553,493 shares representing 36.16% of the Company’s
issued capital were acquired by Bentley during the bid. Bentley as a consequence is now the Company’s largest
shareholder.
The Takeover Response Committee has incurred a total cost of approximately $300,000 - $350,000 in relation to
the Company’s response to the Offer.
There have been no further changes of significance since then.
23. Reconciliation of Profit after Income Tax to Net Cash Inflow from
Operating Activities
(a)
Operating (loss) after tax
Consulting fees
Non cash flows in profit/(loss) from ordinary activities:
Depreciation - plant & equipment
Gain on loss of control of subsidiary
Adjustment for movement in foreign exchange
Fair value adjustments
Loan to Cuervo Resources Inc. impairment
Fair value through profit and loss financial assets
Exploration and evaluation impairment
Non-Current assets held for sale impairment
Loss on sale of fixed assets
Loss on sale of held for sale assets
Decrease/(increase) in assets:
Receivables
Increase/(decrease) in liabilities:
Trade creditors and accruals
Provisions
Net cash outflows from operating activities
2015
$
(517,864)
-
536
(144,075)
(141,682)
-
-
220,611
500,342
-
-
2014
$
(48,761,450)
-
40,116
-
348,753
827,641
109,616
43,250,245
-
14,411
-
66,589
299,070
(1,727,229)
(61,655)
(1,804,427)
933,382
319,755
(2,618,461)
ANNUAL REPORT | 38
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(b) Non-cash investing and financing activities
There were no non-cash investing and financing activities during the current or previous year.
24. Earnings/(Loss) per Share
(a) Basic earnings/(loss) per share
From continuing operations attributable to the ordinary equity holders of
the Company
(b) Diluted earnings/(loss) per share
From continuing operations attributable to the ordinary equity holders of
the Company
2015
cents
2014
cents
(0.36)
(33.55)
(0.36)
(33.55)
(c) Reconciliations of earnings/(Losses) used in calculating earnings/(Loss) per share
Loss attributable to the ordinary equity holders of the Company used in
Calculating basic earnings/(loss) per share:
From continuing operations
(517,864)
(48,761,450)
(d) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator
in calculating basic and diluted earnings/(loss) per share
145,334,268
145,334,268
25. Share-Based Payments
The Company has the following options on issue at balance date:
Grant
date
Expiry
date
Exercise
price
$
Balance at
start of year
Granted
during the
year
Exercised
during the
year
Forfeited
during the
year
Balance
at end of
the year
Vested and
exercisable
at end of
year
Consolidated entity - 2015
24 Nov 11
24 Nov 11
24 Nov 11
5 Apr 12
5 Apr 12
5 Apr 12
18 Jun 13
23 Nov 16
23 Nov 16
23 Nov 16
23 Nov 16
23 Nov 16
23 Nov 16
17 Jun 18
0.36
0.42
0.56
0.36
0.42
0.56
0.30
Weighted-average exercise price
833,334
833,333
833,333
333,334
333,333
333,333
3,000,000
6,500,000
0.38
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
833,334
833,333
833,333
333,334
333,333
333,333
3,000,000
6,500,000
0.38
833,334
833,333
833,333
333,334
333,333
333,333
3,000,000
6,500,000
0.38
Grant date
Expiry
date
Exercise
price
$
Balance at
start of year
Granted
during
the year
Exercised
during the
year
Forfeited
during the
year
Balance at
end of the
year
Consolidated entity - 2014
24 Nov 11
24 Nov 11
24 Nov 11
5 Apr 12
5 Apr 12
5 Apr 12
18 Jun 13
23 Nov 16
23 Nov 16
23 Nov 16
23 Nov 16
23 Nov 16
23 Nov 16
17 Jun 18
0.36
0.42
0.56
0.36
0.42
0.56
0.30
Weighted-average exercise price
833,334
833,333
833,333
333,334
333,333
333,333
3,000,000
6,500,000
0.38
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
833,334
833,333
833,333
333,334
333,333
333,333
3,000,000
6,500,000
0.38
Vested and
exercisable
at end of
year
833,334
833,333
833,333
333,334
333,333
333,333
3,000,000
6,500,000
0.38
No options were exercised during the period.
The weighted-average remaining contractual life of share options outstanding at the end of the period was 1.63
years (2014: 2.63 years).
ANNUAL REPORT | 39
30 JUNE 2015
STRIKE RESOURCES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26. Parent Entity Information
The following details information related to the parent entity, Strike Resources Limited, at 30 June 2015 and 30
June 2014. The information presented here has been prepared using consistent accounting policies as presented
in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Contributed equity
Accumulated losses
Option reserve
Total equity
(Loss) for the year
Other comprehensive income/(loss) for the year
Total comprehensive (loss) for the year
The parent entity does not have any contingent assets or liabilities.
2015
$
8,278,539
1,072
8,279,611
71,698
-
71,698
8,207,913
148,439,925
(153,465,037)
13,233,025
8,207,913
(1,522,957)
-
(1,522,957)
2014
$
10,231,293
1,887
10,233,180
502,310
-
502,310
9,730,870
148,439,925
(151,942,080)
13,233,025
9,730,870
(4,945,316)
-
(4,945,316)
ANNUAL REPORT | 40
30 JUNE 2015
STRIKE RESOURCES LIMITED
DIRECTORS’ DECLARATION
In the Directors’ opinion:
(a)
The Financial Statements, comprising the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes
in Equity and Consolidated Statement of Cash Flows and accompanying notes as set out on pages 16-40
above, are in accordance with the Corporations Act 2001, and:
(i)
(ii)
comply with Accounting Standards and the Corporations Regulations 2001 and other mandatory
professional reporting requirements;
give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2015 and of its
performance for the financial year ended on that date; 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; and
Note 1 confirms that the Financial Statements also comply with the International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director (the person who performs the chief
executive function) and the Company Secretary (the person who performs the Chief Financial Officer function) as
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
William Johnson
Managing Director
25 September 2015
ANNUAL REPORT | 41
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of Strike Resources Limited
Report on the Financial Report
We have audited the accompanying financial report of Strike Resources Limited, which comprises the
consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation of the financial report that gives a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110
275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by
guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards
Legislation other than for the acts or omissions of financial services licensees
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of Strike Resources Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a)
the financial report of Strike Resources Limited is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2015. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Strike Resources Limited for the year ended 30 June 2015
complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Wayne Basford
Director
Perth, 25 September 2015
30 JUNE 2015
STRIKE RESOURCES LIMITED
LIST OF MINERAL CONCESSIONS
The following mineral concessions were held as at the end of the financial year (30 June 2015) and currently:
Apurimac Iron Ore Project (Peru)
(Strike – 100%)
Name
(1) Opaban I
(2) Opaban III
(3) Ferrum 1
(4) Ferrum 4
Area
(Ha)
Province
Code Title
999 Andahuaylas
5006349X01 No 8625-94/RPM Dec 16, 1994
990 Andahuaylas
5006351X01 No 8623-94/RPM Dec 16, 1994
965 Andahuaylas
010298304 No 00228-2005-INACC/J Jan 19, 2005
1,000
Andahuaylas/
Aymaraes
010298604 No 00230-2005-INACC/J Jan 19, 2005
(5) Ferrum 8
900 Andahuaylas
010299004 No 00232-2005-INACC/J Jan 19, 2005
(6) Cristoforo 22
379 Andahuaylas
010165602 RP2849-2007-INGEMMET/PCD/PM Dec 13, 2007
File No
20001465
20001464
11053798
11053810
11053827
11067786
(7) Ferrum 31
(8) Ferrum 37
(9) Wanka 01
327 Andahuaylas
010552807 RP 1266-2008-INGEMMET/PCD/PM May 12, 2008
11076509
695 Andahuaylas
010621507 RP 1164-2008-INGEMMET/PCD/PM May 12, 2008
11076534
100 Andahuaylas
010208110
TBA
TBA
(10) Sillaccassa 1
700 Andahuaylas
010212508 RP 5088-2008-INGEMMET/PCD/PM Nov 19, 2008
11084877
(11) Sillaccasa 2
400 Andahuaylas
010212608 RP 3183-2008-INGEMMET/PCD/PM Sept 8, 2008
11081449
Cusco Iron Ore Project (Peru)
(Strike – 100%)
Name
(1) Flor de María
Area
(Ha) Province
907 Chumbivilcas
Code Title
05006521X01 No 7078-95-RPM Dec 29, 1995
(2) Delia Esperanza
1,000 Chumbivilcas
05006522X01 No 0686-95-RPM Mar 31, 1995
(3) El Pacífico II
1,000 Chumbivilcas
05006524X01 No 7886-94/RPM Nov 25, 1994
File No.
20001742
20001743
20001746
Paulsens East Iron-Ore Project (Western Australia)
(Strike – 100%)
Tenement No
Retention Licence RL 47/7
Status
Granted
Grant Date
4/12/14
Expiry Date
4/12/19
Area (blocks/Ha)
~381 Ha
Area (km²)
~3.81
ANNUAL REPORT | 44
30 JUNE 2015
STRIKE RESOURCES LIMITED
ANNUAL MINERAL RESOURCES STATEMENT
The following JORC Code compliant (2004 and 2012) Mineral Resources estimates are as at the end of the financial
year (30 June 2015) and currently:
Apurimac Iron Ore Project (Peru)
(Strike – 100%)
The Apurimac Project has a JORC Code (2012 Edition) compliant Mineral Resource of 269.4 Mt, consisting of:
a 142.2 Mt Indicated Mineral Resource at 57.8% Fe; and
a 127.2 Mt Inferred Mineral Resource at 56.7% Fe.
Category Concession
Density t/m3
Mt
Fe%
SiO2% Al2O3%
P%
S%
Indicated Opaban 1
Indicated Opaban 3
Inferred
Opaban 1
4
4
4
133.71
57.57
9.46
8.53
62.08
4.58
2.54
1.37
0.04 0.12
0.07 0.25
127.19
56.7
9.66
2.7
0.04
0.2
Total Indicated and Inferred
269.4
57.3
9.4
2.56
0.04 0.16
The information in this JORC Resource table was prepared and first disclosed under the 2004 JORC Code (in
Strike’s ASX announcement dated 11 February 2010: Peruvian Apurimac Iron Ore Project Resource Increased to
269 Million Tonnes) and has subsequently been upgraded to comply with the 2012 JORC Code and disclosed in
Strike’s ASX Announcement dated 19 January 2015: Apurimac Mineral Resources Updated to JORC 2012
Standard.
Cusco Iron Ore Project (Peru)
(Strike – 100%)
The Cusco Project has a JORC Code (2004 Edition) compliant Mineral Resource of 104.4 Mt Inferred Mineral
Resource at 32.62% Fe.
Category Concession
Density t/m3
Mt*
Fe%
SiO2% Al2O3%
P%
S%
Inferred
Santo Tomas
4
104.4 32.62
0.53
3.19
0.035 0.53
The information in this JORC Resource table was prepared and first disclosed under the 2004 JORC Code (in
Strike’s ASX announcement dated 17 June 2011: Cusco Project – Resource Estimate). It has not been updated
since to comply with the 2012 JORC Code on the basis that the information has not materially changed since it was
last reported.
Compliance
The Mineral Resources estimates (above) have not changed since reported in last year’s Annual Report.
The Mineral Resources estimates (above) is based on, and fairly represents, information and supporting
documentation prepared by a Competent Person (recognised under the JORC Code).
The Annual Mineral Resources Statement as a whole has been approved by the Competent Person named
in the JORC Code Competent Person’s Statements section of this Annual Report (at page 46) where further
information concerning his qualifications and professional membership is also disclosed.
Due to the nature, stage and size of the Company’s existing operations, Strike believes there would be no
efficiencies gained by establishing a separate Mineral Reserves/Resources Committee responsible for
reviewing and monitoring the Company’s processes for calculating JORC Code compliant Mineral
Reserves/Resources. The Board as a whole has responsibility in this regard (with assistance from external
advisers as appropriate) including ensuring that appropriate internal controls are applied to such
calculations.
The Company ensures that any Mineral Reserve/Resource calculations are prepared by Competent Persons
and where appropriate, reviewed independently and verified (including estimation methodology, sampling,
analytical and test data).
The Company will report any future Mineral Reserves/Resources estimates in accordance with the 2012
JORC Code.
ANNUAL REPORT | 45
30 JUNE 2015
STRIKE RESOURCES LIMITED
JORC CODE COMPETENT PERSON’S STATEMENTS
JORC Code (2012) Competent Person Statement - Apurimac Project Mineral Resources
The information in this document that relates to Mineral Resources and other Exploration Results (as applicable)
in relation to the Apurimac Iron Ore Project (Peru) is based on, and fairly represents, information and supporting
documentation prepared by Mr Ken Hellsten, B.Sc. (Geology), who is a Fellow of the Australasian Institute of
Mining and Metallurgy. Mr Hellsten was a principal consultant to Strike Resources Limited and was also formerly
the Managing Director of Strike Resources Limited (between 24 March 2010 and 19 January 2013). Mr Hellsten
has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration
and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of
the “Australasian Code for Reporting of Mineral Resources and Ore Reserves” (JORC Code). Mr Hellsten has
approved and consented to the inclusion in this document of the matters based on his information in the form
and context in which it appears.
JORC Code (2004) Competent Person Statement – Cusco Project Mineral Resources
The information in this document that relates to Mineral Resources and other Exploration Results (as applicable)
in relation to the Cusco Iron Ore Project (Peru) is based on, and fairly represents, information and supporting
documentation prepared by Mr Ken Hellsten, B.Sc. (Geology), who is a Fellow of the Australasian Institute of
Mining and Metallurgy. Mr Hellsten was a principal consultant to Strike Resources Limited and was also formerly
the Managing Director of Strike Resources Limited (between 24 March 2010 and 19 January 2013). Mr Hellsten
has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration
and to the activity which he is undertaking to qualify as a Competent Person as defined in the 204 Edition of the
JORC Code. Mr Hellsten approves and consents to the inclusion in this document of the matters based on this
information in the form and context in which it appears.
FORWARD LOOKING STATEMENTS
This report contains “forward-looking statements” and “forward-looking information”, including statements and
forecasts which include without limitation, expectations regarding future performance, costs, production levels or
rates, mineral reserves and resources, the financial position of Strike, industry growth and other trend projections.
Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”,
“is expected”, “is expecting”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes”,
or variations (including negative variations) of such words and phrases, or state that certain actions, events or
results “may”, “could”, “would”, “might”, or “will” be taken, occur or be achieved. Such information is based on
assumptions and judgements of management regarding future events and results. The purpose of forward-looking
information is to provide the audience with information about management’s expectations and plans. Readers are
cautioned that forward-looking information involves known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements of Strike and/or its subsidiaries to be materially different
from any future results, performance or achievements expressed or implied by the forward-looking information.
Such factors include, among others, changes in market conditions, future prices of minerals/commodities, the actual
results of current production, development and/or exploration activities, changes in project parameters as plans
continue to be refined, variations in grade or recovery rates, plant and/or equipment failure and the possibility of
cost overruns.
Forward-looking information and statements are based on the reasonable assumptions, estimates, analysis and
opinions of management made in light of its experience and its perception of trends, current conditions and expected
developments, as well as other factors that management believes to be relevant and reasonable in the
circumstances at the date such statements are made, but which may prove to be incorrect. Strike believes that the
assumptions and expectations reflected in such forward-looking statements and information are reasonable.
Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been
used. Strike does not undertake to update any forward-looking information or statements, except in accordance
with applicable securities laws.
ANNUAL REPORT | 46
30 JUNE 2015
STRIKE RESOURCES LIMITED
ADDITIONAL ASX INFORMATION
as at 23 October 2015
Corporate Governance Statement
The Company has adopted the Corporate Governance Principles and Recommendations (3rd Edition, March 2014)
issued by the ASX Corporate Governance Council in respect of the financial year ended 30 June 2015.
Pursuant to ASX Listing Rule 4.10.3, the Company’s 2015 Corporate Governance Statement (dated on or about 27
October 2015) and ASX Appendix 4G (Key to Disclosures of Corporate Governance Principles and
Internet website:
Recommendations) can be
http://strikeresources.com.au/corporate/corporate-governance/
following URL on
the Company’s
found at
the
Issued Capital
Class of Security
Fully paid ordinary shares
Quoted on ASX
Unlisted
Total
145,334,268
-
145,334,268
$0.36 Options exercisable on or before 23 November 2016
$0.42 Options exercisable on or before 23 November 2016
$0.56 Options exercisable on or before 23 November 2016
$0.30 Options exercisable on or before 17 June 2018
-
-
-
-
1,166,668
1,166,668
1,166,666
1,166,666
1,166,666
1,166,666
3,000,000
3,000,000
TOTAL
145,334,268
6,500,000
151,834,268
Distribution of Fully Paid Ordinary Shares
Spread
of Holdings
1
1,001
5,001
10,001
100,001
Total
-
-
-
-
-
1,000
5,000
10,000
100,000
and over
Unmarketable Parcels
Spread
of Holdings
1
10,204
TOTAL
-
-
10,203
over
Number of
Holders
379
688
293
387
77
1,824
Number of
Shares
163,241
2,058,117
2,377,536
12,516,940
128,218,434
145,334,268
% of Total Issued
Capital
0.112
1.416
1.636
8.613
88.223
100%
Number of
Holders
1,365
459
1,824
Number of
Shares
4,649,190
140,685,078
145,334,268
% of Total Issued
Capital
3.20%
96.80%
100.00%
An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of 10,203 shares or less
(being a value of $500 or less in total), based upon the Company’s closing share price of $0.049 on 22 October 2015.
Voting Rights
Subject to any rights or restrictions for the time being attached to any class or classes of shares (at present there
are none), at meetings of shareholders of the Company:
Each shareholder entitled to vote may vote in person or by proxy or by power of attorney or, in the case of
a shareholder which is a corporation, by representative;
Every person who is present in the capacity of shareholder or the representative of a corporate shareholder
shall, on a show of hands, have one vote; and
Every shareholder who is present in person, by proxy, by power of attorney or by corporate representative
shall, on a poll, have one vote in respect of every fully paid share held by him.
ANNUAL REPORT | 47
30 JUNE 2015
STRIKE RESOURCES LIMITED
ADDITIONAL ASX INFORMATION
as at 23 October 2015
Top Twenty Ordinary, Fully Paid Shareholders
Rank
Holder name
Shares Held
% Issued Capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Bentley Capital Limited
HSBC Custody Nominees (Australia) Limited
Database Systems Ltd
Orion Equities Limited
Ausinca Peru SA
ACN 139 886 025 Pty Ltd
JP Morgan Nominees Australia Limited
National Nominees Limited
Mr Ianaki Semerdziev
Mr Chi Mau Phuong
D&C Pesca S.A.C.
Mr Gordon Anthony
Classic Capital Pty Ltd
Empire Holdings WA Pty Ltd
Citicorp Nominees Pty Limited
Mr Colin Vaughan & Mrs Robin Vaughan
Mr John Fazzalori
Tadmaro Pty Limited
Mr Farooq Khan
Mrs Liliana Teofilova
Total
Substantial Shareholders
52,553,493
26,214,841
12,537,090
10,000,000
1,718,973
1,536,471
1,340,402
1,267,251
1,149,000
1,088,657
1,081,027
800,000
750,000
700,000
648,371
634,099
579,479
559,817
530,010
497,000
36.160
18.038
8.626
6.881
1.183
1.057
0.922
0.872
0.791
0.749
0.744
0.550
0.516
0.482
0.446
0.436
0.399
0.385
0.365
0.342
116,185,981
79.944%
Substantial Shareholders
Registered Shareholder
Shares Held
Voting Power
Bentley Capital Limited4
Bentley Capital Limited
ABU Holding International Limited
and Associates5
HSBC Custody Nominees
(Australia) Limited
52,553,493
25,825,000
Database Systems Ltd
12,537,090
Database Systems Ltd
and Ambreen Chaudhri6
Orion Equities Limited7
Queste Communications Ltd8
Orion Equities Limited
Orion Equities Limited
10,000,000
10,000,000
36.16%
17.8%
8.63%
6.88%
6.88%
4 Refer Bentley’s Notice of Change in Interests of Substantial Holder dated 4 September 2015
5 Refer Notice of Initial Substantial Holder dated 21 December 2012
6 Based on Notice of Change in Interests of Substantial Holder dated 4 June 2013
7 Refer Orion’s Notice of Change in Interests of Substantial Holder dated 4 September 2015
8 Refer Queste’s Notice of Change in Interests of Substantial Holder dated 4 September 2015; Orion is the registered holder of Strike Shares
and Queste is taken under section 608(3)(b) of the Corporations Act to have a Relevant Interest in securities in which Orion has a relevant
interest by reason of having control of Orion
ANNUAL REPORT | 48
ASX Code: SRK
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REGISTERED AND PRINCIPAL OFFICE:
Level 2, 23 Ventnor Avenue
West Perth, Western Australia 6005
T | (08) 9214 9727 / (08) 9214 9700
F | (08) 9214 9701
E | info@strikeresources.com.au
W | www.strikeresources.com.au
SHARE REGISTRY:
Advanced Share Registry Services
110 Stirling Highway
Nedlands, Western Australia 6009
PO Box 1156, Nedlands, WA 6909
T | (08) 9389 8033
F | (08) 9262 3723
E | admin@advancedshare.com.au
W | www.advancedshare.com.au
Level 6, 225 Clarence Street
Sydney, New South Wales 2000
PO Box Q1736, Queen Victoria
Building, NSW 1230
T | (02) 8096 3502