ABN 94 088 488 724
ANNUAL REPORT
2016
30 JUNE 2016
CONTENTS
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss
and 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 Audit Report
List of Mineral Concession
Annual Mineral Resources Statement
JORC Code Competent Person’s
Statements
Additional ASX Information
2
10
17
18
19
20
21
22
42
43
45
46
47
48
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STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CORPORATE DIRECTORY
BOARD
Farooq Khan
William Johnson
Victor Ho
Malcolm Richmond
Matthew Hammond
COMPANY SECRETARY
Victor Ho
Chairman
Managing Director
Director
Non-Executive Director
Non-Executive Director
PRINCIPAL AND REGISTERED OFFICE
Level 2
23 Ventnor Avenue
West Perth, Western Australia 6005
Telephone:
Facsimile:
Email:
Website:
(08) 9214 9700
(08) 9214 9701
info@strikeresources.com.au
www.strikeresources.com.au
AUDITORS
Rothsay Auditing
Chartered Accountants
Level 1, Lincoln House
4 Ventnor Avenue
West Perth, Western Australia 6005
Telephone:
Website:
(08) 9486 7094
www.rothsayresources.com.au
STOCK EXCHANGE
Australian Securities Exchange
Perth, Western Australia
ASX CODE
SRK
SHARE REGISTRY
Advanced Share Registry Services
Main Office:
110 Stirling Highway
Nedlands, Western Australia 6009
Telephone:
Facsimile:
Email:
Investor Web:
(08) 9389 8033
(08) 9262 3723
admin@advancedshare.com.au
www.advancedshare.com.au
Sydney Office
Suite 8H, 325 Pitt Street
Sydney, New South Wales 2000
Telephone:
(02) 8096 3502
Victoria:
Telephone:
Queensland: Telephone:
(03) 9018 7102
(07) 3103 3838
ANNUAL REPORT | 1
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
The Directors present their report on Strike Resources Limited ABN 94 088 488 724 (Company or SRK)
and its controlled entities (the Consolidated Entity or Strike) for the financial year ended 30 June 2016
(Balance Date).
SRK is a company limited by shares that was incorporated in Western Australia and has been listed on the
Australian Securities Exchange (ASX) since 7 March 2000 (ASX Code: SRK).
The Company has prepared a consolidated financial report incorporating the entities that it controlled during
the financial year, being wholly owned subsidiaries.
PRINCIPAL ACTIVITIES
Strike’s principal activities during the financial year were the examination of a range of potential new
strategies for Strike in light of the poor outlook for the iron ore sector and the investigation of potential
alternative value-add strategies in relation to the development of Strike’s Iron Ore Projects in Peru.
OPERATING RESULTS
Consolidated
Total revenue
Total expenses
Loss before tax
Income tax expense
Loss after tax
CASH FLOWS
Consolidated
Net cash flow from operating activities
Net cash flow from investing activities
Net change in cash held
Cash held at year end
FINANCIAL POSITION
Consolidated
Cash
Receivables
Other assets
Liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Total equity
June 2016
$
270,629
(899,299)
(628,670)
-
(628,670)
June 2016
$
(1,342,890)
(62,338)
(1,405,228)
6,970,738
June 2015
$
395,152
(904,248)
(509,096)
(8,768)
(517,864)
June 2015
$
(2,069,478)
92,701
(1,976,777)
8,374,206
June 2016
$
6,970,738
64,740
11,903
June 2015
$
8,374,206
7,739
1,072
(74,062)
(742,914)
6,973,319
7,640,103
148,439,925
15,307,830
148,439,925
15,345,944
(156,774,436)
(156,145,766)
6,973,319
7,640,103
ANNUAL REPORT | 2
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
REVIEW OF OPERATIONS
Update on Iron Ore Projects in Peru
During the financial year, Strike:
Renewed (on an annual basis in June 2016) its Peruvian Apurimac Magnetite Iron Ore Project and
Cusco Magnetite Iron Ore Project mineral concessions - as previously reported, Strike has
consolidated its holding of mineral concessions to the core concessions where JORC Code
compliant Mineral 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; and
Commenced preliminary/conceptual desk-top studies to investigate a potential alternative value-add
strategy in relation to the development of the Apurimac Project – this is consistent with Strike’s
recognition of the project as a potentially strategic asset in Peru which may, when market conditions
improve, provide opportunity for the Strike to recover value.
Update on Company Strategy
During the financial year, Strike continued to examine a range of strategies for the Company in light of the
on-going poor outlook for the iron ore sector. In this regard:
Strike has and is reviewing a number of resource opportunities in sectors (in Australia and overseas)
where the Company believes that the current market conditions may present good buying
opportunities or where there exists positive market sentiment. Strike is actively seeking to
build/acquire a portfolio of mining projects in commodities that in the Company’s view have
strong market fundamentals and in locations which Strike has significant operating experience –
principally, Australia and South America.
Further to the above:
Strike has recently applied for a number exploration licences in the North Pilbara, Western
Australia and exploration concessions in northern Chile considered prospective for lithium1;
and
Strike are in discussions with a number of potential parties to acquire (joint venture and or
farm-in) interests in a range of more advanced lithium and other attractive commodity
resource projects in Australia and overseas.
Whilst Strike has investigated a number of technology related ventures which could form the
foundation for a new strategy for the Company (subject to Strike shareholder approval and
compliance with the ASX Listing Rules and Corporations Act), market sentiment in this sector has
waned of late and Strike is now focusing more on the resource sector (as noted above).
Bentley Capital’s Takeover Bid for Strike
On 2 July 2015, Strike announced that a Takeover Response Committee of the Company’s then
independent Directors (being Mr Malcolm Richmond, Ms Samantha Tough and Mr Matthew Hammond) had
been established to respond to the off-market 5.5 cent per share cash takeover bid for Strike announced2
by Bentley Capital Limited (ASX:BEL) (Bentley) on 30 June 2015 (the Offer).
In July 2015, Bentley lodged its Bidder’s Statement relating to the Offer with ASIC and despatched the
same to Strike’s shareholders.3
In August 2015, the Company lodged its Target’s Statement in response to the Offer.4
1 Refer Strike’s ASX announcement dated 18 August 2016: New Lithium Projects in Chile and Western Australia
2 Refer Bentley’s ASX announcement dated 30 June 2015: Cash Takeover Bid For Strike Resources At 5.5 Cents Per Share
3 Refer Bentley’s ASX announcement dated 31 July 2015: Despatch of Bidders Statement to Holders of Strike Resources Limited
4 Refer Strike’s Target Statement lodged on ASX on 14 August 2015 and despatched to shareholders
ANNUAL REPORT | 3
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
The Offer 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.
Information concerning BEL may be viewed from its website: www.bel.com.au.
BEL’s market announcements may also be viewed from the ASX website (www.asx.com.au) under ASX
code “BEL”.
The Takeover Response Committee incurred a total cost of $319,024 in relation to the Company’s response
to the Offer. This ‘one-off’ cost is reflected in total expenses of $899,299 incurred for the financial year
(June 2015: $904,248).
Board and Corporate Changes
During the financial year, Strike announced a number of Board and corporate changes, as follows:5 & 6:
Farooq Khan’s appointment as 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 previously been 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’s appointment as Company Secretary with effect on 30 September 2015, to replace David
Palumbo (a representative of Mining Corporate) - Victor Ho is also a Director of Strike (since 20
January 2014) and has previously been an Executive Director and Company Secretary of Strike
(Director between 12 October 2000 to 25 September 2009 and Company Secretary between 9
March 2000 and 30 April 2010).
The cessation of Mining Corporate’s engagement for the provision of outsourced accounting and
company secretarial services to the Company at the end of October 2015.
A change in Strike’s Perth registered office and contact details with effect on 1 October 2015, as a
consequence of the transition out of Mining Corporate.
On 30 November 2015, Strike announced that Non-Executive Director, Samantha Tough, had retired at the
Annual General Meeting held that day.7 Ms Tough’s retirement from the Strike Board to focus on her other
non-executive director roles had been previously foreshadowed.8
On 18 December 2015, Strike announced that Farooq Khan had been appointed Chairman of the Board of
Directors with effect on 18 December 2015, replacing Malcolm Richmond, who remains on the Board as
Non-Executive Director.9 Malcolm Richmond had been Chairman since February 2011.
DIVIDENDS
No dividends have been paid or declared during the financial year.
5 Refer Strike’s ASX announcement dated 2 October 2015: Board and Corporate Changes
6 Refer Strike’s ASX announcement dated 18 December 2015: Change of Chairman
7 Refer Strike’s ASX announcement dated 30 November 2015: Retirement of Director
8 Refer Strike’s ASX announcement dated 2 July 2015: Takeover Response Committee Established and Samantha Tough to Resign (Following
Completion of Offer)
9 Refer Strike’s ASX announcement dated 18 December 2015: Change of Chairman
ANNUAL REPORT | 4
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
SECURITIES ON ISSUE
The Company has the following total securities on issue as at 30 June 2016 (and as at the date of this
report):
Fully paid ordinary shares
$0.36 (23 November 2016) Unlisted Options10
$0.42 (23 November 2016) Unlisted Options10
$0.56 (23 November 2016) Unlisted Options10
$0.30 (17 June 2018) Unlisted Managing Director’s Options11
Quoted on ASX
145,334,268
-
-
-
Unlisted
-
1,166,668
1,166,666
1,166,666
3,000,000
Total
145,334,268
1,166,668
1,166,666
1,166,666
3,000,000
Total
145,334,268
6,500,000
151,834,268
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the Consolidated Entity save as otherwise
disclosed in this Directors’ Report or the financial statements and notes thereto.
FUTURE DEVELOPMENTS
The Consolidated Entity will continue to:
maintain its iron ore projects in Peru as potentially strategic assets which may, when market
conditions improve, provide opportunity for the Strike to recover value from the same; and
examine a range of strategies (in the resources and potentially non-resources sector) for the
Company in light of the on-going poor outlook for the iron ore sector.
The likely outcomes of these activities depend on a range of technical and economic factors and also
industry, geographic and other strategy specific issues. In the opinion of the Directors, it is not possible or
appropriate to make a prediction on the results of these activities, the future course of markets or the
forecast of the likely results of the Consolidated Entity’s activities.
ENVIRONMENTAL REGULATION
The Consolidated Entity holds mineral tenement/concession licences issued by the relevant mining and
environmental protection authorities of the various countries in which Strike operates (from time to time). In
the course of its mineral exploration, evaluation and development activities, the Consolidated Entity adheres
to licence conditions and environmental regulations imposed upon it by various authorities (as applicable).
The Consolidated Entity has complied with all licence conditions and environmental requirements (as
applicable) during the financial year and up to the date of this report. There have been no known material
breaches of the Consolidated Entity’s licence conditions and environmental regulations during the financial
year and up to the date of this report.
10 Refer Strike’s ASX announcement dated 24 November 2011: Appendix 3B - Issue of Personnel Options and Strike’s Notice of AGM lodged
on ASX on 24 October 2011
11 Refer Strike’s ASX announcement dated 18 June 2013: Appendix 3B – Grant of Options and Cancellation of Options and Strike’s Notice of
General Meeting lodged on ASX on 17 May 2013
ANNUAL REPORT | 5
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
BOARD OF DIRECTORS
Farooq Khan
Chairman
Appointed
18 December 2015; Director since 1 October 2015;
previously Alternate Director to Victor Ho (20 January 2014 to 1 October 2015)
Qualifications
BJuris, LLB (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 (September 1999 to February 2011, including
as the founding Executive Chairman and Managing Director after the Company’s IPO in March
2000) 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
Member of the Remuneration and Nomination Committee
Relevant Interests in
shares and options
Other current
directorships in listed
entities
530,010 Shares (directly)
Executive Chairman of:
Orion Equities Limited (ASX:OEQ) (since October 2006)
Bentley Capital Limited (ASX:BEL) (Director since December 2003)
Executive Chairman and Managing Director of:
Queste Communications Ltd (ASX:QUE) (since March 1998)
Former directorships
in other listed entities
in past 3 years
Nil
William Johnson
Managing Director
Appointed
25 March 2013; Director since July 2006
Qualifications
MA (Oxon), MBA
Experience
Mr. Johnson holds a Masters degree in engineering science from Oxford University, England and
an MBA from Victoria University, New Zealand. His 30 year business career spans multiple
industries and countries, with executive/CEO experience in oil and gas exploration (North Africa
and Australia), mineral exploration and investment (Australia, Peru, Chile, Saudi Arabia, Oman
and Indonesia), telecommunications infrastructure investment (New Zealand, India, Thailand and
Malaysia) and information technology and Internet ventures (New Zealand, Philippines and
Australia). Mr Johnson is a highly experienced public company director and has considerable
depth of experience in business strategy, investment analysis, finance and execution.
Special
responsibilities
None
Relevant Interests in
shares and options
Other current
directorships in listed
entities
Former directorships
in other listed entities
in past 3 years
3,000,000 Unlisted Managing Director’s Options ($0.30, 17 June 2018)11
249,273 Shares (directly)
Executive Director of:
Bentley Capital Limited (ASX:BEL) (since 1 January 2016; Director since March 2009)
Director of:
Keybridge Capital Limited (ASX:KBC) (since 29 July 2016)12
Alara Resources Limited (ASX:AUQ) (October 2009 – October 2013)
Cuervo Resources Inc. (CNQ:FE) (March 2013 – December 2013)
12 Refer KBC’s ASX announcement dated 29 July 2016: Results of General Meeting and Board Changes.
ANNUAL REPORT | 6
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
Malcolm Richmond
Non-Executive Director
Appointed
Director since 25 October 2006; previously Chairman (3 February 2011 to 18 December 2015)
Qualifications
BSc Hons (Metallurgy) and B. Comm. Merit (Econs) (New South Wales)
Experience
Mr 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.
Mr 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.
Mr 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).
Special
responsibilities
Chairman of the Audit Committee
Member of the Remuneration and Nomination Committee
Relevant Interests in
shares and options
Nil
Other current
directorships in listed
entities
Former directorships
in other listed entities
in past 3 years
Non-Executive Director of:
Argonaut Resources NL (ASX:ARE) (since 14 March 2012)
Nil
Matthew Hammond
Non-Executive Director
Appointed
25 September 2009
Qualifications
BA (Hons) (Bristol)
Experience
Mr Hammond is Group Managing Director and CFO of Mail.ru, a leading European Internet
communication and entertainment services group, which is listed on the London Stock Exchange.
Prior to that he was Group Strategist for Metalloinvest Holdings, where he had broad-ranging
responsibilities for part of the non-core asset portfolio and advised the Metalloinvest Board on
strategic acquisitions and investments. He began his career at Credit Suisse and was Sector
Head in Equity Research and in Private Bank Ultra High Net Worth Client Advisory advising on
portfolio allocation, strategic M&A and individual investments. As a Technology Analyst at Credit
Suisse, he was ranked #1 in the Extell and Institutional Investor surveys 8 times.
Special
responsibilities
Chairman of the Remuneration and Nomination Committees
Member of the Audit Committee
Relevant Interests in
shares and options
Nil
Other current
directorships in listed
entities
Managing Director and Chief Financial Officer of:
Mail.Ru Group Limited (LSX:MAIL)
(since April 2011; Director since May 2010; CFO since June 2013)
Non-Executive Director of:
PuriCore plc (AIM:PURI) (appointed May 2010)
Nautilus Minerals Inc. (TSE:NUS) (October 2009 to September 2013)
Qiwi plc (NASDAQ:QIWI) (September 2011 to September 2014)
Former directorships
in other listed entities
in past 3 years
ANNUAL REPORT | 7
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
Victor Ho
Director and Company Secretary
Appointed
Director since 24 January 2014; Company Secretary since 30 September 2015
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 public company administration, corporations’ law and stock exchange compliance
and investor/shareholder relations.
Special
responsibilities
Secretary of Audit Committee and Remuneration and Nomination Committee
Relevant Interests in
shares and options
Nil
Other positions held
in listed entities
Executive Director (also Company Secretary) of:
Orion Equities Limited (ASX:OEQ) (Secretary since 2 August 2000 and Director since 4 July 2003)
Queste Communications Ltd (ASX:QUE) (Secretary since 30 August 2000 and Director since 3
April 2013)
Company Secretary of:
Bentley Capital Limited (ASX:BEL) (since 5 February 2004)
Company Secretary of:
Alara Resources Limited (ASX:AUQ) (4 April 2007 to 31 August 2015)
Former position in
other listed entities
in past 3 years
Samantha Tough (appointed 23 January 2012) retired as Non-Executive Director at the Company’s Annual
General Meeting (AGM) held on 30 November 2015.13
Also at the Company’s 2015 AGM14:
Malcolm Richmond retired as a Director (by rotation) pursuant to the Company’s Constitution and
was re-elected a Director at that AGM; and
Farooq Khan retired as a Director (having been appointed by the Board since the last AGM) pursuant
to the Company’s Constitution and was re-elected a Director at that AGM.
David Palumbo (appointed 14 August 2013) retired as Company Secretary on 30 September 2015.15
13 Refer Strike’s ASX announcement dated 30 November 2015: Retirement of Director
14 Refer Strike’s ASX announcement dated 30 November 2015: Results of 2015 Annual General Meeting
15 Refer Strike’s ASX announcement dated 2 October 2015: Board and Corporate Changes
ANNUAL REPORT | 8
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
DIRECTORS' MEETINGS
The following table sets out the numbers of meetings of the Company's Directors held during the financial year
(including Directors’ circulatory resolutions), and the numbers of meetings attended by each Director of the
Company:
Board Meetings
Audit Committee
Remuneration Committee
Name of Director
Attended
Farooq Khan(a)
William Johnson
Malcolm Richmond
Matthew Hammond
Victor Ho
Samantha Tough(e)
Notes:
7
9
9
9
9
5
Max. Possible
Meetings
7
9
9
9
9
5
Attended
2(b)
2(c)
2
1
2(d)
1
Max. Possible
Meetings
2
-
2
2
-
1
Attended
-
-
-
-
-
-
Max. Possible
Meetings
-
-
-
-
-
-
(a)
(b)
(c)
(d)
(e)
Mr Khan was appointed a Director on 1 October 2015 and was previously an Alternate Director to Victor Ho between 20 January 2014 and 1 October
201516
Mr Khan attended one Audit Committee meeting as Alternate Director to Mr Ho; Mr Khan (as an Alternate Director) was appointed to the Audit
Committee in March 2015
Mr Johnson attended Audit Committee meetings at the invitation of the Audit Committee
Mr Ho attended one Audit Committee meeting as Secretary of the Audit Committee and one Audit Committee meeting at the invitation of the Audit
Committee
Ms Tough (appointed 23 January 2012) retired as Non-Executive Director on 30 November 2015 17
Audit Committee
The Audit Committee was established in March 2010 and currently comprises Malcolm Richmond (as
Chairman), Farooq Khan and Matthew Hammond.
The Audit Committee has a formal charter to prescribe its objectives, duties and responsibilities,
access and authority, composition, membership requirements of the Committee and other
administrative matters. Its function includes reviewing and approving the audited annual and
reviewed half-yearly financial reports, ensuring a risk management framework is in place, reviewing
and monitoring compliance issues, reviewing reports from management and matters related to the
external auditor. A copy of the Audit Committee Charter may be downloaded from the Company’s
website: http://strikeresources.com.au/corporate/corporate-governance/.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee was established in August 2010 and currently
comprises Matthew Hammond (as Chairman), Farooq Khan and Malcolm Richmond.
The Remuneration and Nomination Committee has a formal charter to prescribe its purpose, key
responsibilities, composition, membership requirements, powers and other administrative matters.
The Committee has a:
Remuneration function - with key responsibilities to make recommendations to the Board on
policy governing the remuneration benefits of the Managing Director and Executive Directors,
including equity-based remuneration and assist the Managing Director to determine the
remuneration benefits of senior management and advise on those determinations; and a
Nomination function - with key responsibilities to make recommendations to the Board as to
various Board matters including the necessary and desirable qualifications, experience and
competencies of Directors and the extent to which these are reflected in the Board, the
appointment of the Chairman and Managing Director, the development and review of Board
succession plans and addressing Board diversity.
A copy of the Remuneration and Nomination Committee Charter may be downloaded from the
Company’s website: http://strikeresources.com.au/corporate/corporate-governance/.
16 Refer Strike’s ASX announcement dated 2 October 2015: Board and Corporate Changes
17 Refer Strike’s ASX announcement dated 30 November 2015: Retirement of Director
ANNUAL REPORT | 9
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
This Remuneration Report details the nature and amount of remuneration for each Director and Company
Executive (being a company secretary or senior manager) (Key Management Personnel) of the Company.
The information provided under headings (1) to (6) below has been audited for compliance with section
300A of the Corporations Act 2001 (Cth) as required under section 308(3C).
(1)
Key Management Personnel disclosed in this report
Name
Current Position
Tenure
Farooq Khan
Chairman
Since 18 December 201518; Director since 1 October 201519; Previously,
Alternate Director to Victor Ho between 20 January 2014 and 1 October 2015
William Johnson
Managing Director
Since 25 March 2013; Director since July 2006
Victor Ho
Director and Company
Secretary
Director since 24 January 2014; Company Secretary since 30 September
201519
Malcolm Richmond
Non-Executive Director Director since 25 October 2006; Previously, Chairman between 3 February
2011 and 18 December 201518
Matthew Hammond
Non-Executive Director
Since 25 September 2009
Samantha Tough
Non-Executive Director
Between 23 January 2012 and 30 November 201520
(2)
Remuneration Policy
The Board (with guidance from the Remuneration and Nomination Committee) determines the
remuneration structure of all Key Management Personnel having regard to the Consolidated Entity’s
strategic objectives, scale and scope of operations and other relevant factors, including experience
and qualifications,
length of service, market practice (including available data concerning
remuneration paid by other listed companies in particular companies of comparable size and nature
within the resources sector in which the Consolidated Entity operates), the duties and accountability
of Key Management Personnel and the objective of maintaining a balanced Board which has
appropriate expertise and experience, at a reasonable cost to the Company.
The Remuneration and Nomination Committee: A purpose of the Committee is 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. In carrying out this ‘remuneration function’, the Committee’s key responsibilities are to:
make recommendations to the Board on the specific benefits to be provided to the Managing
Director within the policy
conduct an annual review of Non-Executive Directors’ fees and determining whether the limit
on the Non-Executive Directors’ fee pool remains appropriate, and
assist the Managing Director to determine the remuneration (including equity-based
remuneration) of ‘Senior Management’ (being executive direct reports to the Managing
Director and other senior employees) and advise on those determinations.
A copy of the Remuneration and Nomination Committee Charter may be downloaded from the
Company’s website: http://strikeresources.com.au/corporate/corporate-governance/.
Corporate Governance Principles: The Company’s Corporate Governance Statement (CGS) also
addresses matters pertaining to the Board, Senior Management and Remuneration. The latest
version
the Company’s website:
http://strikeresources.com.au/corporate/corporate-governance/.
the CGS may
downloaded
from
be
of
18 Refer Strike’s ASX announcement dated 18 December 2015: Change of Chairman
19 Refer Strike’s ASX announcement dated 2 October 2015: Board and Corporate Changes
20 Refer Strike’s ASX announcement dated 30 November 2015: Retirement of Director
ANNUAL REPORT | 10
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
Fixed Cash Short-term Employment Benefits: The Key Management Personnel of the Company
are paid a fixed amount per annum plus applicable employer superannuation contributions. The
Non-Executive Directors of the Company are paid a maximum aggregate base remuneration of
$550,00021 per annum inclusive of employer superannuation contributions where applicable, to be
divided as the Board determines appropriate.
The Board has determined the following fixed cash remuneration for current Key Management
Personnel as follows:
(1) Mr Farooq Khan (Chairman) - a base fee of $80,000 per annum plus employer superannuation
contributions;
(2) Mr William Johnson (Managing Director) - a base fee of $208,000 per annum plus employer
superannuation contributions;
(3) Mr Malcolm Richmond (Non-Executive Director) - a base fee of $45,000 per annum plus
employer superannuation contributions;
(4) Mr Matthew Hammond (Non-Executive Director) - a base fee of $45,000 per annum; and
(5) Mr Victor Ho (Director and Company Secretary) - a base fee of $95,000 (comprising $45,000
fees) per annum plus employer
fees and $50,000 Company Secretarial
Director’s
superannuation contributions.
Special Exertions and Reimbursements: Pursuant to the Company’s Constitution, each Director is
also entitled to receive:
(a)
(b)
Payment for reimbursement of all travelling, hotel and other expenses reasonably incurred by
a Director for the purpose of attending meetings of the Board or otherwise in and about the
business of the Company; and
In respect of Non-Executive Directors, payment for the performance of extra services or the
making of special exertions for the benefit of the Company (at the request of and with the
concurrence of the Board).
Short-Term Benefits: The Managing Director has the opportunity to earn an annual short-term
incentive (STI) cash amount if predefined key performance indicators (KPI’s) are achieved. The
STI/KPI’s are reviewed annually (where applicable). There were no STI KPI’s set for the Managing
Director in respect of the past 2015/16 financial year or the 2016/17 financial year.
Long-Term Benefits: Other than early termination benefits disclosed in ‘Employment Agreements’
below, Key Management Personnel have no right to termination payments save for payment of
accrued unused annual and long service leave (where applicable) (other than Non-Executive
Directors).
Equity-Based Benefits: The Company has not provided equity based benefits (e.g. grant of shares
or options) to Key Management Personnel during the financial year. The Company has previously
granted unlisted options to Key Management Personnel (refer ‘Options Held By Key Management
Personnel’ below). There were no shares issued as a result of the exercise of options previously
issued to Key Management Personnel during the financial year.
Employee Share Option Plan: The Company has an Employee Share Option Plan (the ESOP)
which was last approved by shareholders at the 2008 Annual General Meeting held on 6 November
200822. The ESOP was developed to assist in the recruitment, reward, retention and motivation of
employees (and potentially Executive Directors). Under the ESOP, the Board will nominate personnel
to participate and will offer options to subscribe for shares in the Company to those personnel. A
summary of the terms of ESOP is set out in Annexure B to the Company’s Notice of Annual General
Meeting and Explanatory Statement dated 8 October 200823. The Company has not granted any
options to Key Management Personnel during the financial year.
21 As approved by shareholders at the Annual General Meeting held on 25 November 2009; refer SRK’s Notice of Annual General Meeting
released on ASX on 27 October 2019 and SRK’s ASX Announcement dated 25 November 2009: Results of Annual General Meeting
22 Refer SRK’s ASX announcement dated 6 November 2008: Results of Annual General Meeting
23 Refer SRK’s ASX announcement dated 8 October 2008: Notice of 2008 AGM and Explanatory Statement and Proxy Form
ANNUAL REPORT | 11
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
Post-Employment Benefits: The Company does not presently provide retirement benefits to Key
Management Personnel. The Company notes that shareholder approval is required where a
Company proposes to make a “termination payment” (for example, a payment in lieu of notice, a
payment for a post-employment restraint and payments made as a result of the automatic or
accelerated vesting of share based payments) in excess of one year’s “base salary” (defined as the
average base salary over the previous 3 years) to a director or any person who holds a managerial
or executive office.
Performance-Related Benefits and Financial Performance of Company: Save for any applicable
STI(s) in place for the Managing Director or any applicable equity-benefits that may be provided to
Key Management Personnel, the current remuneration of Key Management Personnel is fixed, is not
dependent on the satisfaction of a performance condition and is unrelated to the Company’s
performance.
In considering the Company's performance and its effects on shareholder wealth, Directors have had
regard to the data set out below for the latest financial year and the previous four financial years.
Profit/(Loss) Before Income Tax
Basic Earnings/(Loss) per share (cents)
Dividends Paid (total)
Dividends Paid (per share)
Capital Returns Paid (total)
Capital Returns Paid (per share)
VWAP Share Price on ASX for financial year
Closing Bid Share Price on ASX at 30 June
2016
(628,670)
(0.43)
-
-
-
-
0.05
0.04
2015
(517,864)
(0.36)
-
-
-
-
0.05
0.05
2014
(48,761,450)
(33.55)
-
-
-
-
0.05
0.04
2013
23,694,319
16.44
-
-
-
-
0.13
0.04
2012
(12,836,822)
(9.20)
-
-
-
-
0.20
0.11
(3)
Details of Remuneration of Key Management Personnel
Details of the nature and amount of each element of remuneration of each Key Management
Personnel paid or payable by the Company during the financial year are as follows:
2016
Key Management
Personnel
Directors:
William Johnson
Farooq Khan
Malcolm Richmond
Victor Ho
Matthew Hammond
Samantha Tough
Company Secretary:
Victor Ho
Short-term Benefits
Post-
Employment
Benefits
Other Long-
term
Benefits
Performa
nce-
related
%
Cash
salary and
fees
$
Non-cash
benefit
$
Superannuation
$
Long
service
leave
$
Equity-
Based
Shares &
options
$
-
-
-
-
-
208,000
66,563
55,244
38,250
45,000
33,333
37,500
-
-
-
-
-
19,760
6,323
5,248
3,652
-
3,167
3,562
-
-
-
-
-
-
-
-
-
-
-
-
2015
Short-term Benefits
Key Management
Personnel
Directors:
William Johnson
Samantha Tough
Malcolm Richmond
Matthew Hammond
Farooq Khan
Victor Ho
Performa
nce-
related
%
Cash salary
and fees
$
-
-
-
-
-
-
376,308
80,000
70,000
45,000
33,750
11,250
Annual
Leave
$
33,261
-
-
-
-
Post-
Employment
Benefits
Other Long-
term
Benefits
Superannuation
$
Long
service
leave
$
Equity-
Based
Shares &
options
$
35,749
7,600
6,650
3,206
1,069
-
-
-
-
-
-
-
-
-
-
Total
$
227,760
72,886
60,492
41,902
45,000
36,500
41,062
Total
$
445,318
87,600
76,650
45,000
36,956
12,319
ANNUAL REPORT | 12
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
Notes to 2016 and 2015 tables:
(a)
(b)
(c)
(d)
(e)
Mr Johnson’s Managing Director’s Employment Agreement was reviewed and amended with effect on 1 May 2015
Mr Khan was appointed a Director on 1 October 2015 and Chairman with effect on 18 December 2015 and was previously an
Alternate Director to Mr Ho between 20 January 2014 and 1 October 2015
Mr Ho was appointed Company Secretary with effect on 30 September 2015
Mr Richmond transitioned from Chairman to Non-Executive Director with effect on 18 December 2015
Ms Tough retired as a Director on 30 November 2015
(4)
Employment Agreements
Details of the material terms of employment agreements entered by the Company with Key
Management Personnel are as follows:
Key
Management
Personnel and
Position Held
William Johnson
(Managing
Director)
Current Base
Salary/Fees per
annum
$208,000
plus employer
superannuation
contributions
(currently 9.5%
of base salary)
Relevant
Date(s)
22 April 2013
(date of
employment
agreement)
11 March 2013
(commencement
date)
1 May 2015
(date of effect of
current
remuneration)
Other Current Terms
Standard annual leave (20 days) and personal/sick
leave (10 days paid) entitlements plus entitlement to
long service leave of 60 days after 7 years of service
with an additional 5 days after each year of service
thereafter.
One month’s notice of termination by the Company or
employee. Immediate termination without notice if
employee commits any serious act of misconduct.
Entitlement to unlisted options, being the 3,000,000
$0.30 (17 June 2018) Unlisted Managing Director’s
Options issued on 18 June 2013 (after receipt of
shareholder approval). 24
Permitted to be a Non-Executive Director of no more
than 2 public companies provided that it does not
compromise ability to devote the care and attention to
the Company’s affairs required by the position.
Entitlement
incentive
to cash short-term
(STI)
payments in respect of up to 30% of annual base
salary, as set by the Board (having regard to advice
from the Remuneration and Nomination Committee) –
no STI was defined in respect of the 2015/2016
financial year and as at the date of this report.
(5) Other Benefits Provided to Key Management Personnel
No Key Management Personnel has during or since the end of the financial year, received or
become entitled to receive a benefit, other than a remuneration benefit as disclosed above, by
reason of a contract made by the Company or a related entity with the Director or with a firm of which
he is a member, or with a Company in which he has a substantial interest.
(6)
Engagement of Remuneration Consultants
The Company has not engaged any remuneration consultants
to provide remuneration
recommendations in relation to Key Management Personnel during the year. The Board has
established a policy for engaging external Key Management Personnel remuneration consultants
which includes, inter alia, that the Non-Executive Directors on the Remuneration Committee be
responsible for approving all engagements of and executing contracts to engage remuneration
consultants and for receiving remuneration recommendations from remuneration consultants
regarding Key Management Personnel. Furthermore, the Company has a policy that remuneration
advice provided by remuneration consultants be quarantined from Management where applicable.
24 Refer Strike’s ASX announcement dated 18 June 2013: Appendix 3B – Grant of Options and Cancellation of Options and Strike’s Notice of
General Meeting lodged on ASX on 17 May 2013
ANNUAL REPORT | 13
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
(7)
Shares held by Key Management Personnel
The number of ordinary shares in the Company held by Key Management Personnel is set below:
Key Management Personnel
Farooq Khan
William Johnson
Victor Ho
Malcolm Richmond
Matthew Hammond
Samantha Tough
Balance at
30 June 2015
750,803
249,273
116,001
100,000
-
-
Received as part
of remuneration
-
-
-
-
-
-
Net
Change
-
-
(116,101)
(100,000)25
-
-
Balance at Cessation /
30 June 2016
750,803
249,273
-
-
-
-
Notes:
(a)
(b)
Ms Tough retired as a Director on 30 November 2015
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)
(8) Options held by Key Management Personnel
The number of options in the Company held by Key Management Personnel is set below:
2016
Key
Management
Personnel
William Johnson
Farooq Khan
Victor Ho
Malcolm
Richmond
Matthew
Hammond
Samantha Tough
Balance at
30 June
2015
3,000,000(a)
-
-
-
-
-
Granted Exercised
-
-
-
-
-
-
-
-
-
-
-
-
Lapsed /
Cancelled
-
-
-
-
Balance at
Cessation / 30
June 2016
3,000,000
-
-
-
Granted
and vested
during year
-
-
-
-
-
-
-
-
-
-
Vested and
exercisable at
30 June 2016
3,000,000
-
-
-
-
Note:
(a)
$0.30 (17 June 2018) Unlisted Managing Director’s Options issued on 18 June 2013 after receipt of shareholder approval 26
(9)
Voting and Comments on the Remuneration Report at the 2015 AGM
At the Company’s most recent (2015) AGM, a resolution to adopt the prior year (2015) Remuneration
Report was put to a vote and passed unanimously on a show of hands with the proxies received also
indicating majority (99%) support in favour of adopting the Remuneration Report.27 No comments
were made on the Remuneration Report at the 2015 AGM.
This concludes the audited Remuneration Report.
25 Refer to Malcolm Richmond’s Change of Director’s Interest Notice dated 4 September 2015
26 Refer Strike’s ASX announcement dated 18 June 2013: Appendix 3B – Grant of Options and Cancellation of Options and Strike’s Notice of
General Meeting lodged on ASX on 17 May 2013
27 Refer Strike’s ASX announcement dated 30 November 2015: Results of 2015 Annual General Meeting
ANNUAL REPORT | 14
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
DIRECTORS’ AND OFFICERS’ INSURANCE
The Company insures Directors and Officers against liability they may incur in respect of any wrongful acts
or omissions made by them in such capacity (to the extent permitted by the Corporations Act 2001 (Cth))
(D&O Policy). Details of the amount of the premium paid in respect of the insurance policies are not
disclosed as such disclosure is prohibited under the terms of the contract.
DIRECTORS’ AND OFFICERS’ DEEDS
In addition to the rights of indemnity provided under the Company’s Constitution (to the extent permitted by
the Corporations Act 2001 (Cth)), the Company has also entered into a deed with each of the Directors and
the Company Secretary (Officer) to regulate certain matters between the Company and each Officer, both
during the time the Officer holds office and after the Officer ceases to be an officer of the Company,
including the following matters:
(a)
(b)
The Company’s obligation to indemnify an Officer for liabilities or legal costs incurred as an officer of
the Company (to the extent permitted by the Corporations Act 2001 (Cth)); and
Subject to the terms of the deed and the Corporations Act 2001 (Cth), the Company may advance
monies to the Officer to meet any costs or expenses of the Officer incurred in circumstances relating
to the indemnities provided under the deed and prior to the outcome of any legal proceedings
brought against the Officer.
LEGAL PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of a court to bring proceedings on behalf of the Company or intervene in
any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of such proceedings. The Company was not a party to any such proceedings
during and since the financial year.
AUDITORS
Strike has changed its Auditors from BDO to Rothsay Auditing (a firm of Chartered Accountants with offices
in Perth and Sydney), with effect on 12 February 2016.28 The transition of Auditors occurred as part of a
review of the Company’s corporate administration costs – Rothsay was selected after considering proposals
received from BDO and a number of other audit firms. Rothsay will hold office as Auditor until the next
annual general meeting of the Company, at which time shareholder approval will be sought for their re-
appointment and continuation as Auditor.
Details of the amounts paid or payable to the Auditors for audit and non-audit services provided during the
financial year are set out below:
Auditor
Rothsay Auditing
BDO Audit (WA) Pty Ltd
BDO Pazos, Lopez de
Romana, Rodriguez(a)
Audit & Review Fees
$
14,000
17,478
5,382
Non-Audit Services
$
-
9,945
-
Total
$
14,000
27,423
5,382
Note:
(a)
(b)
Local Peruvian Auditors of Strike’s Peruvian subsidiary, Apurimac Ferrum SAC
BDO Audit (WA) Pty Ltd’s charges relate to the 30 June 2015 audit and represents costs incurred after the last balance date –
this amount is in addition to the $20,583 already provided for and expensed in the 30 June 2015 accounts in this regard.
28 Refer Strike’s ASX announcement dated 12 February 2016: Change of Auditors
ANNUAL REPORT | 15
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
The Board is satisfied that the provision of non-audit services by the Auditors during the year is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001 (Cth). The
Board is satisfied that the nature of the non-audit services disclosed above did not compromise the general
principles relating to auditor independence as set out in the Institute of Chartered Accountants in Australia
and APES 110 Code of Ethics for Professional Accountants: Professional Independence, including
reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the
Company, acting as advocate for the Company or jointly sharing economic risk and rewards.
Rothsay Auditing continues in office in accordance with Section 327 of the Corporations Act 2001 (Cth).
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act
2001 (Cth) forms part of this Directors Report and is set out on page 17. This relates to the Audit Report,
where the Auditors state that they have issued an independence declaration.
EVENTS SUBSEQUENT TO BALANCE DATE
The Directors are not aware of any matters or circumstances at the date of this Directors’ Report, other than
those referred to in this Directors’ Report or the financial statements or notes thereto (in particular Note 22),
that have significantly affected or may significantly affect the operations, the results of operations or the
state of affairs of the Company in subsequent financial years.
Signed for and on behalf of the Directors in accordance with a resolution of the Board,
Farooq Khan
Chairman
31 August 2016
William Johnson
Managing Director
ANNUAL REPORT | 16
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
for the year ended 30 June 2016
REVENUE
Interest revenue
Other
Other income
TOTAL REVENUE AND INCOME
EXPENSES
Personnel expenses
Occupancy expenses
Exploration and evaluation expenses
Reversal of SUNAT provision
Corporate expenses
Finance expenses
Foreign exchange loss/(gain)
Administration expenses
LOSS BEFORE INCOME TAX
Income tax expense
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Other Comprehensive Income, Net of Tax
Exchange differences on translation of foreign operations
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
LOSS PER SHARE FOR LOSS ATTRIBUTABLE TO THE
ORDINARY EQUITY HOLDERS OF THE COMPANY:
Basic and diluted loss per share (cents)
Note
2
3
5
6
2016
$
268,853
2015
$
251,077
1,776
144,075
270,629
395,152
(583,457)
(26,203)
(282,425)
(615,188)
(15,000)
(720,953)
608,260
1,097,982
(511,614)
(242,621)
(4,887)
-
(7,830)
(24,647)
(98,973)
(375,991)
(628,670)
(509,096)
-
(8,768)
(628,670)
(517,864)
(38,114)
(281,270)
(666,784)
(799,134)
(0.43)
(0.36)
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 18
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
as at 30 June 2016
CURRENT ASSETS
Cash and cash equivalents
Receivables
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Exploration and evaluation expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserve
Accumulated losses
TOTAL EQUITY
Note
7
9
10
11
12
13
14
2016
$
2015
$
6,970,738
8,374,206
64,740
9,616
7,739
-
7,045,094
8,381,945
2,287
-
1,072
-
2,287
1,072
7,047,381
8,383,017
60,643
13,419
734,214
8,700
74,062
742,914
74,062
742,914
6,973,319
7,640,103
148,439,925
148,439,925
15,307,830
15,345,944
(156,774,436)
(156,145,766)
6,973,319
7,640,103
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 19
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
for the year ended 30 June 2016
Issued capital
Currency
translation
reserve
Share-based
payments
reserve
Accumulated
losses
$
$
$
$
Total
$
BALANCE AT 1 JULY 2014
148,439,925
2,394,188
13,233,026
(155,627,902)
8,439,237
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
-
-
-
-
(281,270)
(281,270)
-
-
-
(517,864)
-
(517,864)
(281,270)
(517,864)
(799,134)
BALANCE AT 30 JUNE 2015
148,439,925
2,112,918
13,233,026
(156,145,766)
7,640,103
BALANCE AT 1 JULY 2015
148,439,925
2,112,918
13,233,026
(156,145,766)
7,640,103
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
-
-
-
-
(38,114)
(38,114)
-
-
-
(628,670)
-
(628,670)
(38,114)
(628,670)
(666,784)
BALANCE AT 30 JUNE 2016
148,439,925
2,074,804
13,233,026
(156,774,436)
6,973,319
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 20
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF CASH FLOWS
for the year ended 30 June 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
2016
$
2015
$
(1,342,890)
(2,069,478)
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES
(1,342,890)
(2,069,478)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Payments for exploration and evaluation expenses
Payment for purchases of plant and equipment
Proceeds from disposal of plant and equipment
222,212
(282,426)
(2,124)
-
265,051
(194,771)
(1,608)
24,029
NET CASH USED IN INVESTING ACTIVITIES
(62,338)
92,701
NET DECREASE IN CASH HELD
(1,405,228)
(1,976,777)
Cash and cash equivalents at beginning of financial year
8,374,206
10,350,983
Effect of exchange rate changes on cash held
1,760
-
CASH AND CASH EQUIVALENTS AT END OF FINANCIAL PERIOD
6,970,738
8,374,206
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 21
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2016
1. ABOUT THIS FINANCIAL REPORT
(d)
1.1 Background
the consolidated
financial report covers
financial
This
statement of the consolidated entity consisting of Strike
Resources Limited (the Company), its subsidiaries and
investments in associates (the Consolidated Entity or
Strike). The financial report is presented in the Australian
currency.
Strike Resources Limited is a company limited by shares
incorporated in Australia and whose shares are publicly
traded on the Australian Securities Exchange (ASX).
(e)
financial statements have been prepared on a
These
streamlined basis where key information is grouped together
for ease of understanding and readability. The notes include
information which is required to understand the financial
statements and is material and relevant to the operations,
financial position and performance of the Consolidated Entity.
Information
example:
is considered material and relevant
if,
for
(f)
(a)
(b)
(c)
(d)
the amount in question is significant because of its
size or nature;
it is important for understanding the results of the
Consolidated Entity;
it helps to explain the impact of significant changes in
the Consolidated Entity’s business; or
it relates to an aspect of the Consolidated Entity’s
operations
future
performance.
that may be
important
to its
The notes to the financial statements are organised into the
following sections:
(a)
line
Key Performance: Provides a breakdown of the key
individual
statement of
comprehensive income that is most relevant to
understanding performance and shareholder returns
for the year:
items
the
in
Notes
2
3
4
5
6
Revenue
Expenses
Segment information
Income tax expense
Loss per share
(b)
Financial Risk Management: Provides information
about
the Consolidated Entity’s exposure and
management of various financial risks and explains
how these affect the Consolidated Entity’s financial
position and performance:
Notes
7
8
Cash and cash equivalents
Financial risk management
(c)
Other Assets and Liabilities: Provides information
on other balance sheet assets and liabilities that do
not materially affect performance or give rise to
material financial risk:
Notes
9
10
11
12
Receivables
Exploration and evaluation expenditure
Payables
Provisions
Capital Structure: This section outlines how the
Consolidated Entity manages its capital structure
and related financing costs (where applicable), as
well as capital adequacy and reserves. It also
the
provides details on
Company:
the dividends paid by
Notes
13
14
15
Issued capital
Reserve
Share-based payments
Consolidated Entity Structure: Provides details
and disclosures relating to the parent entity of the
Consolidated Entity, controlled entities, investments
in associates and any acquisitions and/or disposals
of businesses in the year. Disclosure on related
parties is also provided in the section:
Notes
16
17
18
Parent entity information
Investment in controlled entities
Related party transactions
Other: Provides information on items which require
disclosure to comply with Australian Accounting
Standards and other regulatory pronouncements
in
however, are not
understanding the financial performance or position
of the Consolidated Entity:
considered
significant
Notes
19
20
21
22
Auditors' remuneration
Commitments
Contingencies
Events occurring after the reporting
period
Significant and other accounting policies that summarise the
measurement basis used and presentation policies and are
relevant to an understanding of the financial statements are
provided throughout the notes to the financial statements.
1.2 Basis of Preparation
These general purpose financial statements have been
in accordance with Australian Accounting
prepared
Standards, other authoritative pronouncements of
the
Australian Accounting Standards Board, Australia Accounting
Interpretations and the Corporations Act 2001 (Cth). The
Company is a for-profit entity for the purpose of preparing the
financial statements.
Compliance with
Standards (IFRS)
International Financial Reporting
The consolidated financial statements of the Consolidated
Entity comply with
International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB).
Reporting Basis and Financial Statement Presentation
The financial report has been prepared on a going concern
basis and is based on historical costs modified by the
revaluation of financial assets and financial liabilities for
which the fair value basis of accounting has been applied.
The principal accounting policies adopted in the preparation
of these financial statements have been consistently applied
to all the years presented, unless otherwise stated.
ANNUAL REPORT | 22
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2016
1.3 Principles of Consolidation
The consolidated financial statements incorporate the assets
and liabilities of the Company as at 30 June 2016 and the
results of its subsidiaries for the year then ended. The
Company and its subsidiaries are referred to in this financial
report as Strike or the Consolidated Entity.
All inter-company balances and transactions between entities
in the Consolidated Entity, including any unrealised profits or
losses, have been eliminated on consolidation.
1.4 Comparative Figures
Where required by the Accounting Standards, comparative
figures have been adjusted to conform to changes in
presentation for the current financial period.
1.5 Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the
amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Tax Office. In these
circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense.
Receivables and payables in the balance sheet are shown
inclusive of GST. Cash flows are presented in the Statement
of Cash Flows on a gross basis, except for the GST
component of investing and financing activities, which are
disclosed as operating cash flows.
ANNUAL REPORT | 23
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2016
1.6 Summary of Accounting Standards Issued But Not Yet Effective
The following new Accounting Standards and Interpretations (which have been released but not yet adopted) have no material
impact on the Consolidated Entity’s financial statements or the associated notes therein.
Title and
Affected
Standard(s)
Financial
Instruments
AASB
reference
AASB 9
(issued
December
2014)
Application date
Annual reporting
periods beginning on
or after 1 January
2018
Nature of Change
Classification and measurement
AASB 9 amendments the classification and measurement of
financial assets:
Financial assets will either be measured at amortised cost,
fair value through other comprehensive income (FVTOCI)
or fair value through profit or loss (FVTPL).
Financial assets are measured at amortised cost or
FVTOCI if certain restrictive conditions are met. All other
financial assets are measured at FVTPL.
All investments in equity instruments will be measured at
fair value. For those investments in equity instruments that
are not held for trading, there is an irrevocable election to
present gains and losses in OCI. Dividends will be
recognised in profit or loss
following requirements have generally been carried
The
forward unchanged from AASB 139 Financial Instruments:
Recognition and Measurement into AASB 9:
Classification and measurement of financial liabilities, and
Derecognition
liabilities.
requirements
for
financial assets and
However, AASB 9 requires that gains or losses on financial
liabilities measured at fair value are recognised in profit or loss,
except that the effects of changes in the liability’s credit risk are
recognised in other comprehensive income.
Impairment
The new impairment model in AASB 9 is now based on an
‘expected loss’ model rather than an ‘incurred loss’ model. A
complex three stage model applies to debt instruments at
amortised cost or at fair value through other comprehensive
income for recognising impairment losses.
A simplified impairment model applies to trade receivables and
lease receivables with maturities that are less than 12 months.
For trade receivables and lease receivables with maturity longer
than 12 months, entities have a choice of applying the complex
three stage model or the simplified model.
AASB 2014-3
Amendments to
Australian
Standards –
Accounting for
Acquisitions of
Interests in
Joint
Operations
AASB 1 & 11
AASB 2014-3 amends AASB 11 Joint Arrangements to provide
guidance on the accounting for acquisitions of interests in joint
operations in which the activity constitutes a business. The
amendments require:
Annual reporting
periods beginning on
or after 1 January
2016
the acquirer of an interest in a joint operation in which the
activity constitutes a business, as defined in AASB 3
Business Combinations, to apply all of the principles on
business combinations accounting in AASB 3 and other
Australian Accounting Standards except for those principles
that conflict with the guidance in AASB 11
the acquirer to disclose the information required by AASB 3
and other Australian Accounting Standards for business
combinations
ANNUAL REPORT | 24
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2016
1.6 Summary of Accounting Standards Issued But Not Yet Effective (continued)
AASB
reference
AASB 2014-4
AASB 2015-1
Title and
Affected
Standard(s)
Clarification of
Acceptable
Methods of
Depreciation
and
Amortisation
(Amendments to
AASB 116 and
AASB 138)
Amendments to
Australian
Accounting
Standards –
Annual
Improvements
to Australian
Accounting
Standards 2012
– 2014 Cycle
Nature of Change
Application date
AASB 116 Property Plant and Equipment and AASB 138
Intangible Assets both establish the principle for the basis of
depreciation and amortisation as being the expected pattern of
consumption of the future economic benefits of an asset.
Annual reporting
periods beginning on
or after 1 January
2016
The IASB has clarified that the use of revenue-based methods
to calculate the depreciation of an asset is not appropriate
because revenue generated by an activity that includes the use
of an asset generally reflects factors other than the consumption
of the economic benefits embodied in the asset.
The amendment also clarified
is generally
presumed to be an inappropriate basis for measuring the
consumption of
in an
intangible asset. This presumption, however, can be rebutted in
certain limited circumstances.
the economic benefits embodied
that revenue
Annual reporting
periods beginning on
or after 1 January
2016
The subjects of the principal amendments to the Standards are
set out below:
AASB 5 Non-current Assets Held for Sale and Discontinued
Operations:
Changes in methods of disposal – where an entity
reclassifies an asset (or disposal group) directly from being
held for distribution to being held for sale (or vice versa), an
entity shall not follow the guidance in paragraphs 27–29 to
account for this change.
AASB 7 Financial Instruments: Disclosures:
Servicing contracts - clarifies how an entity should apply
the guidance in paragraph 42C of AASB 7 to a servicing
contract
is
‘continuing involvement’ for the purposes of applying the
disclosure requirements in paragraphs 42E–42H of AASB
7.
to decide whether a servicing contract
the amendments
Applicability of the amendments to AASB 7 to condensed
interim financial statements - clarify that the additional
disclosure required by
to AASB 7
Disclosure–Offsetting Financial Assets and Financial
Liabilities is not specifically required for all interim periods.
However, the additional disclosure is required to be given in
condensed interim financial statements that are prepared in
accordance with AASB 134 Interim Financial Reporting
when its inclusion would be required by the requirements of
AASB 134.
AASB 119 Employee Benefits:
Discount rate: regional market issue - clarifies that the high
quality corporate bonds used to estimate the discount rate
for post-employment benefit obligations should be
denominated in the same currency as the liability. Further it
clarifies that the depth of the market for high quality
corporate bonds should be assessed at the currency level.
AASB 134 Interim Financial Reporting:
Disclosure of information ‘elsewhere in the interim financial
report’ - amends AASB 134 to clarify the meaning of
disclosure of information ‘elsewhere in the interim financial
report’ and to require the inclusion of a cross-reference from
the interim financial statements to the location of this
information.
ANNUAL REPORT | 25
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
2.
REVENUE
The Consolidated Entity's operating loss before income tax includes the following items of revenue:
Revenue
Interest revenue
Other
Gain on loss of control of subsidiary
Foreign exchange gain
Other income
2016
$
268,853
268,853
-
1,760
16
2015
$
251,077
251,077
144,075
-
-
270,629
395,152
Accounting policy
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)
income is recognised using the effective interest method. When a receivable is impaired,
Interest revenue
Interest
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.
(ii) Gain on loss of control of subsidiary
When the Consolidated Entity ceases to have control, any retained interest in the entity is remeasured to its
fair value with the change in carrying amount recognised in profit or loss. Any amounts previously recognised
in Other 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 amounts previously recognised in
Other Comprehensive Income are reclassified to profit or loss.
(iii) Other revenues
Other revenues are recognised on a receipts basis.
ANNUAL REPORT | 26
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
3.
EXPENSES
The Consolidated Entity's operating loss before income tax includes the following items of expenses:
Personnel expenses
Salaries, fees and employee benefits
Occupancy expenses
Exploration and evaluation expenses
Impairment loss
Other exploration and evaluation expenses
Reversal of SUNAT provision
Corporate expenses
Professional fees
Takeover response cost
Legal fees - reversal of provision
Audit
Accounting, taxation and related administration
ASX fees
Share registry
Other corporate expenses
Finance expenses
Foreign exchange loss
Administration expenses
Travel, accommodation and incidentals
Depreciation
Insurance
Other administration expenses
2016
$
583,457
26,203
271,844
10,581
2015
$
615,188
15,000
720,953
-
(608,260)
(1,097,982)
123,307
319,024
(41,575)
36,630
16,431
21,278
33,133
3,386
4,887
-
16,280
909
22,206
59,578
899,299
342,529
-
(235,841)
54,147
39,001
19,179
11,373
12,233
7,830
24,647
48,140
536
31,957
295,358
904,248
Accounting policy
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.
ANNUAL REPORT | 27
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
4.
SEGMENT INFORMATION
2016
Revenue
Other
Total segment revenues
Personnel expenses
Corporate expenses
Finance expenses
Exploration and evaluation expenses
Depreciation expense
Other expenses
Total segment profit/(loss)
Adjusted EBITDA
Total segment assets
Total segment liabilities
2015
Revenue
Other
Total segment revenues
Personnel expenses
Corporate expenses
Finance expenses
Exploration and evaluation expenses
Depreciation expense
Other expenses
Total segment profit/(loss)
Adjusted EBITDA
Total segment assets
Total segment liabilities
Peru
$
-
1,776
1,776
-
64,582
3,129
271,844
-
(674,070)
336,291
608,135
74,217
36,985
-
-
-
(21,744)
(124,921)
5,397
722,536
-
(804,676)
223,408
116,555
Australia
$
268,853
-
268,853
583,457
447,032
1,758
10,581
909
190,077
(964,961)
(964,046)
Total
$
268,853
1,776
270,629
583,457
511,614
4,887
282,425
909
(483,993)
(628,670)
(355,911)
6,973,164
7,047,381
37,077
74,062
251,077
144,075
395,152
636,932
367,542
2,433
(1,583)
536
121,796
(732,504)
251,077
144,075
395,152
615,188
242,621
7,830
720,953
536
(682,880)
(509,096)
(1,371,162)
(1,254,607)
103,406
71,698
8,279,611
8,383,017
671,216
742,914
Accounting policy
The operating segments are reported in a manner consistent with the internal reporting provided to the Managing
the
Director. The Managing Director is responsible for allocating resources and assessing performance of
operating segments and has considered the business and geographical perspectives of the operating results and
determined that the Consolidated Entity operates only in Australia and Peru.
ANNUAL REPORT | 28
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
5.
INCOME TAX EXPENSE
(a) The components of tax expense comprise:
Current tax
Deferred tax
2016
$
-
-
-
2015
$
8,768
-
8,768
(b)
The prima facie tax on operating loss before income tax is reconciled
to the income tax as follows:
Prima facie tax payable on operating loss before income tax at 28.5%
(2015: 30%)
(179,171)
(152,729)
Adjust tax effect of:
Non-deductible expenses
Movement in unrecognised temporary differences
Foreign tax rates differential
Foreign jurisdiction withholding tax
Current year tax losses not recognised
Prior year tax losses brought to account
Income tax attributable to entity
(c) Unrecognised deferred tax balances
Unrecognised deferred tax asset - revenue losses
Unrecognised deferred tax asset - other
87,351
(204,047)
(502)
-
296,369
-
-
(9,287)
62,993
(2,506)
8,768
210,308
(108,779)
8,768
9,194,441
9,102,300
10,760,443
12,506,259
19,954,884
21,608,559
Critical accounting judgement and estimate
Deferred tax assets have not been recognised as, in the Directors' opinion, it is not probable that future taxable
profit will be available against which the Consolidated Entity can utilise the benefits. The utilisation of revenue and
capital tax losses are subject to compliance with taxation legislation.
Accounting policy
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.
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 liability in a transaction other than a
business 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.
ANNUAL REPORT | 29
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
5.
INCOME TAX EXPENSE (continued)
Accounting policy (continued)
Deferred tax assets are recognised for deductible 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.
6.
LOSS PER SHARE
Basic and diluted loss per share
The following represents the loss and weighted average number of shares used
in the EPS calculations:
Net loss after income tax
Weighted average number of ordinary shares
2016
cents
(0.43)
2015
cents
(0.36)
2016
2015
$
(628,670)
Number of
Shares
145,334,268
$
(517,864)
Number of
Shares
145,334,268
Under AASB113 (Earnings per share), potential ordinary shares such as options will only be treated as dilutive
when their conversion to ordinary shares would increase the loss per share from continuing operations. Diluted
loss per share has not been calculated as the Company's options do not increase the basic loss per share.
Accounting policy
Basic earnings per share is determined by dividing the operating result after income tax by the weighted average
number of ordinary shares on issue during the financial period.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking into
account amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise from
the exercise of options outstanding during the financial period
7.
CASH AND CASH EQUIVALENTS
Cash at bank
Term deposits
2016
$
245,738
6,725,000
6,970,738
2015
$
299,206
8,075,000
8,374,206
Accounting policy
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less and bank overdrafts. Bank overdrafts (if any) are shown
within short-term borrowings in current liabilities on the Statement of Financial Position.
ANNUAL REPORT | 30
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
7.
CASH AND CASH EQUIVALENTS (continued)
(a)
Reconciliation of operating loss after income tax to net cash used in
operating activities
Loss after income tax
Add non-cash items:
Depreciation
Gain on loss of control of subsidiary
Adjustment for movement in foreign exchange
Non-Current assets held for sale impairment
Changes in assets and liabilities:
Receivables
Other current assets
Payables
Provisions
8.
FINANCIAL RISK MANAGEMENT
2016
$
2015
$
(628,670)
(517,864)
909
536
-
(39,874)
-
(144,075)
(141,682)
500,342
(271,468)
(17,362)
22,149
-
(391,144)
(1,727,229)
4,719
(61,655)
(1,342,890)
(2,069,478)
The Consolidated Entity's financial
instruments consist of deposits with banks, receivables and payables. The
Consolidated Entity's financial instruments are subject to market (which includes interest rate and foreign exchange
risk), credit and liquidity risks.
The Board 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. The effectiveness of the system is continually reviewed
by management and at least annually by the Board.
The financial receivables and payables of the Consolidated Entity in the table below are due or payable within 30
days. The Consolidated Entity holds the following financial assets and liabilities
Cash and cash equivalents
Receivables
Payables
Net financial assets
(a) Market risk
Note
7
9
11
2016
2015
$
6,970,738
64,740
7,035,478
(60,643)
$
8,374,206
7,739
8,381,945
(734,214)
6,974,835
7,647,731
Market risk is the risk that the fair value and/or future cash flows from a financial instrument will fluctuate as a
result of changes in market factors. Market risk comprises of foreign exchange risk from fluctuations in foreign
currencies and interest rate risk from fluctuations in market interest rates.
ANNUAL REPORT | 31
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
8.
FINANCIAL RISK MANAGEMENT (continued)
(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 and Peruvian Nuevo Soles.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the Consolidated 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
including
forward exchange contracts, as at the reporting date and is currently fully exposed to foreign exchange
risk.
the Australian dollar,
The Consolidated Entity's exposure to foreign exchange risk expressed in US dollars at the reporting
date are as follows:
Cash and cash equivalents
Payables
Net financial assets
2016
USD
26,587
(19,939)
6,648
2015
USD
74,044
(60,338)
13,706
(i)
Foreign exchange risk (continued)
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% against the foreign currencies detailed above.
Impact on post-tax profit
Impact on other components of
equity
2016
$
665
(665)
2015
$
1,371
(1,371)
2016
$
-
-
2015
$
-
-
Increase 10%
Decrease 10%
(ii)
Interest rate risk
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 instruments. The weighted average interest rate of the
cash at bank for the year for the table below is 2.90% (2015: 2.84%)
Cash at bank
Term deposit
2016
$
245,738
6,725,000
6,970,738
2015
$
299,206
8,075,000
8,374,206
ANNUAL REPORT | 32
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
8.
FINANCIAL RISK MANAGEMENT (continued)
(ii)
Interest rate risk (continued)
The following table illustrates the sensitivity of profit and equity to a reasonably possible change in
interest rates based on observation of current market conditions. The calculations are based on a
change in the average market interest rate and the financial instruments that are sensitive to changes in
interest rates.
Impact on post-tax profit
Impact on other components of
equity
2016
$
17,427
(17,427)
2015
$
20,936
(20,936)
2016
$
-
-
2015
$
-
-
Increase by 25bps
Decrease by 25bps
(b)
Liquidity risk
Liquidity risk is the risk that the Consolidated Entity will encounter difficulty in meeting obligations associated
with financial
liabilities. The Consolidated Entity has no borrowings. The Consolidated Entity's non-cash
investments can be realised to meet trade and other payables arising in the normal course of business. The
financial liabilities disclosed in the above table have a maturity obligation of not more than 30 days.
(c) 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. Credit risk arises from cash
and cash equivalents and deposits with banks and financial institutions, including outstanding receivables and
committed transactions. Concentrations of credit risk are minimised primarily by the management carrying out
all market
transactions through recognised and creditworthy brokers and the monitoring of receivable
balances. The Consolidated Entity's business activities do not necessitate the requirement for collateral as a
means of mitigating the risk of financial loss from defaults.
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. The maximum exposure to credit risk at reporting date is the carrying amount of the financial
assets as summarised below:
Cash and cash equivalents
AA-
No external credit rating available
Receivables (due within 30 days)
No external credit rating available
9.
RECEIVABLES
Interest receivable
Other receivables
2016
2015
$
6,909,896
60,842
$
8,270,800
103,406
6,970,738
8,374,206
64,740
7,739
46,657
18,083
64,740
-
7,739
7,739
Accounting policy
Receivables are recorded at amounts due less any provision for doubtful debts. An estimate for doubtful debts is
made when collection of the full amount is no longer probable. Bad debts are written off when considered non-
recoverable.
ANNUAL REPORT | 33
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
10. EXPLORATION AND EVALUATION EXPENDITURE
Opening balance
Exploration and evaluation costs
Impairment loss
Closing balance
2016
$
-
(271,844)
271,844
-
2015
$
-
220,611
(220,611)
-
Critical accounting estimates and judgements
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
$271,844 during the current financial year. The ultimate recoverability of deferred exploration and evaluation
expenditure is dependent on the successful development or sale of the relevant area of interest.
Accounting policy
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 to be recouped through the successful development of the area or where activities in the area have not
yet reached a stage that permits reasonable 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.
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.
11. PAYABLES
Trade payables
Other creditors and accruals
Withholding tax *
2016
$
21,947
38,295
401
60,643
2015
$
23,771
99,565
610,878
734,214
* Withholding tax (2015) comprises an accrual/provision of 1,472,822 Peruvian Soles in respect of Non-Resident
Income Tax Withholding Tax (WHT) pertaining to Peruvian subsidiary, Apurimac Ferrum SAC (AF) – this relates to
a SUNAT (the Peruvian Tax Administration) determination following an audit of AF's WHT obligations for the 2010
and 2011 fiscal years completed in June 2014.
SUNAT’s original WHT determination was for 3,693,580 Soles ($1,470,453 as accrued/provided for in the 30 June
2014 Consolidated Entity’s accounts), which AF sought to formally review.
In April 2015, SUNAT confirmed the
legitimacy of a minor amount of ($10,918) in WHT liabilities (and late payment penalties) and requested a re-audit
of a number of matters as it believed that there was insufficient evidence compiled to support its initial findings. As
a consequence of this decision, the Consolidated Entity reduced its accrual/provision to 1,472,822 Soles ($610,446
as at 30 June 2015).
SUNAT has not advised the Consolidated Entity as to the status of commencement/completion of their re-audit.
Given the lack of action by SUNAT since April 2015, the Directors have reviewed the previous decision to
recognise the WHT accrual/provision and after receipt of advice from its Peruvian tax advisors, have determined to
reverse this WHT accrual/provision. The Consolidated Entity reiterates that it intends to appeal any final WHT
determination by SUNAT to the Tax Administration Court (where applicable). The Consolidated Entity has
disclosed this matter as a contingent liability in Note 21(f).
ANNUAL REPORT | 34
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
11. PAYABLES (continued)
Accounting policy
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.
12. PROVISIONS
Employee benefits - annual leave
Other
2016
$
4,251
9,168
13,419
2015
$
8,700
-
8,700
Accounting policy
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.
Provisions for legal claims, service warranties and make good obligations are made where the Consolidated Entity
has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources
will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised
for future operating losses.
13.
ISSUED CAPITAL
145,334,268 (2015: 145,334,268) fully paid ordinary shares
There has been no movement in issued capital from 1 July 2014.
2016
$
2015
$
148,439,925
148,439,925
Accounting policy
Ordinary shares are classified as equity. Fully paid ordinary shares carry one vote per share and the right to
dividends.
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 not included in the cost of the acquisition as part of the purchase consideration.
(a) Options
Information relating to unlisted options issued to Directors and options issued under the Strike Resources
Limited Employee Share 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 15.
ANNUAL REPORT | 35
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
13.
ISSUED CAPITAL (continued)
(b)
Capital risk management
The Company's objectives when managing its capital are to safeguard its 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 a capital structure balancing the interests of all shareholders.
The Board will consider capital management initiatives as is appropriate and in the best interests of the
Company and shareholders from time to time, including undertaking capital raisings, share buy-backs, capital
reductions and selling assets to reduce debt.
The Consolidated Entity has no external borrowings.
14. RESERVE
Share-based payments reserve
Foreign currency translation reserve
(a) Share-based payments reserve
2016
2015
$
13,233,026
$
13,233,026
2,074,804
2,112,918
15,307,830
15,345,944
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.
(b) Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency
translation reserve as described in the accounting policy note below and accumulate in a separate reserve
within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of.
Accounting policy
Foreign currency translation reserve
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
from the presentation currency are translated into the
economy) that have a functional currency different
presentation currency as follows:
(i)
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
(ii)
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
(iii) 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.
ANNUAL REPORT | 36
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
15. SHARE-BASED PAYMENTS
The Company has the following options on issue at balance date:
No options were exercised during the year. The weighted average remaining contractual
outstanding at the end of the period was 0.62 year (2015: 1.63 years)
life of share options
Accounting policy
Shared-based compensation benefits are provided to Directors (after receipt of shareholder approval) and to
employees via the Strike Resources Limited Employee Share Option Plan.
The fair value of options granted 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.
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, if any, in profit or loss with a corresponding adjustment to equity.
ANNUAL REPORT | 37
Vested andGrant ExpiryExerciseOpeningClosingexercisable datedateprice ($)balanceGrantedExercised Forfeitedbalanceat year endFinancial year 201624-Nov-1123-Nov-160.36833,334 - - - 833,334 833,334 24-Nov-1123-Nov-160.42833,333 - - - 833,333 833,333 24-Nov-1123-Nov-160.56833,333 - - - 833,333 833,333 05-Apr-1223-Nov-160.36333,334 - - - 333,334 333,334 05-Apr-1223-Nov-160.42333,333 - - - 333,333 333,333 05-Apr-1223-Nov-160.56333,333 - - - 333,333 333,333 18-Jun-1317-Jun-180.303,000,000 - - - 3,000,000 3,000,000 6,500,000 - - - 6,500,000 6,500,000 Weighted average exercise price0.38 0.38 0.38 Financial year 201524-Nov-1123-Nov-160.36833,334 - - - 833,334 833,334 24-Nov-1123-Nov-160.42833,333 - - - 833,333 833,333 24-Nov-1123-Nov-160.56833,333 - - - 833,333 833,333 05-Apr-1223-Nov-160.36333,334 - - - 333,334 333,334 05-Apr-1223-Nov-160.42333,333 - - - 333,333 333,333 05-Apr-1223-Nov-160.56333,333 - - - 333,333 333,333 18-Jun-1317-Jun-180.303,000,000 - - - 3,000,000 3,000,000 6,500,000 - - - 6,500,000 6,500,000 Weighted average exercise price0.38 0.38 0.38 During the year 30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
16. PARENT ENTITY INFORMATION
The following information provided relates to the Company, Strike Resources Limited, as at 30 June 2016.
Statement of profit or loss and other comprehensive income
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Statement of financial position
Current assets
Cash and cash equivalents
Other
Non current assets
Total assets
Current liabilities *
Total liabilities
Net assets
Issued capital
Option reserve
Accumulated losses
Equity
2016
$
(964,715)
-
2015
$
(1,522,957)
-
(964,715)
(1,522,957)
6,909,896
8,270,800
60,982
309,396
7,739
1,072
7,280,274
8,279,611
37,077
37,077
71,698
71,698
7,243,197
8,207,913
148,439,925
148,439,925
13,233,025
13,233,025
(154,429,753)
(153,465,037)
7,243,197
8,207,913
* inter-company loans within the Consolidated Entity (fully impaired)
The parent entity does not have any material contingent assets or liabilities.
17.
INVESTMENT IN CONTROLLED ENTITIES
Investment in controlled entities
Strike Finance Pty Ltd
Strike Australian Operations Pty Ltd
Strike Operations Pty Ltd
Ferrum Holdings Limited
Strike Resources Peru S.A.C.
Apurimac Ferrum S.A.C.
Ferrum Trading S.A.C
Incorporated
Australia
Australia
Australia
British Anguilla
Peru
Peru
Peru
Ownership interest
2016
100%
100%
100%
100%
100%
100%
100%
2015
100%
100%
100%
100%
100%
100%
100%
ANNUAL REPORT | 38
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2016
17.
INVESTMENT IN CONTROLLED ENTITIES (continued)
Accounting policy
Subsidiaries are all entities (including structured entities) over which the Consolidated Entity has control. The
Consolidated Entity 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.
The acquisition method of accounting is used to account for business combinations by the Consolidated Entity.
Intercompany transactions, balances and unrealised gains on transactions in the Consolidated Entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
assets transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Consolidated Entity.
18. RELATED PARTY TRANSACTIONS
(a) Transactions with key management personnel (KMP)
Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration paid or
payable to each member of the Consolidated Entity's KMP for the year ended 30 June 2016. The total
remuneration paid to KMP of the Consolidated Entity during the year is as follows:
Directors
Short-term employee benefits
Post-employment benefits
Other KMP
Short-term employee benefits
Post-employment benefits
2016
$
446,390
38,150
37,500
3,562
525,602
2015
$
649,569
54,274
-
-
703,843
(b) Transactions with other related parties
No other related party transactions have been identified other than those disclosed above.
19. AUDITORS' REMUNERATION
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its
related practices and non-related audit firms:
Audit and review of financial statements
Rothsay Auditing
BDO Audit (WA) Pty Ltd
BDO Pazos, Lopez de Romana, Rodriguez
Taxation services
BDO Tax (WA) Pty Ltd
2016
$
14,000
17,477
5,382
9,945
46,804
2015
$
-
37,500
4,974
17,085
59,559
The Company changed its Auditors from BDO Audit (WA) Pty Ltd to Rothsay Auditing, with effect on 12 February
2016.
ANNUAL REPORT | 39
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2016
20.
COMMITMENTS
(a)
Lease Commitments
The Consolidated Entity has no lease commitments.
(b) Mineral Tenements/Concessions - Commitments for Expenditure
(i)
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 Consolidated Entity does
not currently have any material commitments for expenditure relating to Australian tenements.
(ii) Peruvian Mineral 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 number and area of
concessions retained, relinquished or granted (if any) and cannot therefore be reliably estimated.
A number of non-core mineral concessions in Peru were allowed to lapse on 30 June 2015, significantly reducing
the Consolidated Entity’s annual expenditure in Peru. The Consolidated Entity continues to hold 14 core
Apurimac and Cusco Project mineral concessions where JORC Mineral Resources of iron ore have been
delineated (and neighbouring areas which have strategic value associated with the projects).
21.
CONTINGENCIES
(a)
Australian 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 Payments from Settlement Agreement Relating to Apurimac Ferrum SAC
Pursuant to a settlement agreement dated 30 December 2012 whereby the Consolidated Entity acquired the
(50%) balance of equity interest in Apurimac Ferrum SAC (AF) (the holder of the Apurimac and Cusco Projects)
from D&C Pesca SAC, the Consolidated Entity has a series of deferred payment obligations as outlined below.
The Consolidated Entity has payment obligations if certain milestones are achieved as follows:
(i)
(ii)
Resource Milestone Payment: US$2 million on the delineation of at least 500 Mt of JORC Mineral
Resources at an average grade of at least 55% Fe with at least 275 Mt of contained iron having an
average grade of at least 52.5% Fe, on the Apurimac Project mineral concessions.
Approvals Milestone Payment: Up to US$3 million on AF receiving all formal government environmental
and community approvals for the construction and operation of an iron ore mine and required infrastructure
with a design capacity of at least 10Mtpa of iron ore product, relating to the Apurimac Project mineral
concessions.
ANNUAL REPORT | 40
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2016
21.
CONTINGENCIES
(d)
Deferred Payments from Settlement Agreement Relating to Apurimac Ferrum SAC (continued)
(iii)
Construction Milestone Payment: Up to US$5 million on formal approval of the AF Board to commence
construction of an iron ore project or the commencement of bulk earthworks for an iron ore mine or
processing plant, in either case with a design capacity of at least 10Mtpa of iron ore product, relating to the
Apurimac Project mineral concessions.
The Consolidated Entity has royalty payment obligations as follows:
(i)
(ii)
1.5% of the net profits from sales of iron ore mined and iron ore products produced from the Apurimac and
Cusco Project mineral concessions.
2% of the proceeds of sales of other metals (on a net smelter return basis) mined from the Apurimac and
Cusco Project mineral concessions.
AF may extinguish the royalties (save for royalties on other metals up to a cap of US$0.5 million per annum) by
making an Extinguishment Payment as follows - US$30 million, if paid 4 years from 20 December 2012 but before
the Construction Milestone occurs or the 15th anniversary of the settlement agreement (whichever is sooner).
Due to the inherent uncertainty surrounding the achievement and timing of the above milestones/royalty triggers,
the Consolidated Entity regards these future payment obligations as contingencies.
For further background details, refer also to Strike’s ASX Announcement dated 31 December 2012: Strike Moves
to 100% Ownership of AF
(e)
Legal Disputes Over Peru Mineral Concessions
The Consolidated Entity has successfully defended against a number of legal actions and claims made by several
Peruvian parties (that have had a contractual relationship with AF) relating to the Consolidated Entity’s mineral
concessions in Peru. Whilst there still remain some outstanding claims and appeals, the Consolidated Entity
believes that they will all eventually be dismissed, consistent with previous decisions by the relevant Peruvian
authorities.
For further background details, refer also to Strike’s ASX Announcement dated 1 May 2014: Strike Wins
Millenium Arbitration Case in Peru
(f) Peruvian Withholding Tax Matter
AF has an obligation to withhold and remit Non-Resident Income Tax Withholding Tax (WHT) to SUNAT (the
Peruvian Tax Administration) in respect of certain payments to overseas suppliers. Refer Note 11 (Payables) for
further information in relation to a potential WHT liability for AF in this regard, which is currently awaiting SUNAT
re-audit (since April 2015).
22.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
No matter or circumstance has arisen since the end of the financial year that significantly affected, or may
significantly affect, the operations of the Consolidated Entity, the results of those operations, or the state of affairs
of the Consolidated Entity in future financial periods.
ANNUAL REPORT | 41
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
(1)
The financial statements, comprising the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of
Cash Flows, Consolidated Statement of Changes in Equity, and accompanying notes as set out on
pages 18 to 41 are in accordance with the Corporations Act 2001 (Cth) and:
(a)
(b)
comply with Australian Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting; and
give a true and fair view of the Consolidated Entity’s financial position as at 30 June 2016 and
of their performance for the year ended on that date;
(2)
(3)
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to
pay its debts as and when they become due and payable;
The Directors have been given the declarations required by section 295A of the Corporations Act
2001 (Cth) by the Managing Director (the person who, in the opinion of the Directors, performs the
Chief Executive Officer function) and Company Secretary (the person who, in the opinion of the
Directors, performs the Chief Financial Officer function); and
(4)
The Company has included in the notes to the Financial Statements an explicit and unreserved
statement of compliance with the International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Directors made pursuant to section 295(5) of
the Corporations Act 2001 (Cth).
Farooq Khan
Chairman
31 August 2016
William Johnson
Managing Director
ANNUAL REPORT | 42
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
LIST OF MINERAL CONCESSIONS
The following mineral concessions were held as at the end of the financial year (30 June 2016) and currently:
Apurimac Iron Ore Project (Peru)
(Strike – 100%)
Name
Area
(Ha) Province
Code
Title
(1) Opaban I
999 Andahuaylas
5006349X01
No 8625-94/RPM Dec 16, 1994
(2) Opaban III
990 Andahuaylas
5006351X01
No 8623-94/RPM Dec 16, 1994
(3) Ferrum 1
965 Andahuaylas
010298304
No 00228-2005-INACC/J Jan 19, 2005
(4) Ferrum 4
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
File No
20001465
20001464
11053798
11053810
11053827
(6) Cristoforo 22
379 Andahuaylas
010165602
RP2849-2007-INGEMMET/PCD/PM Dec 13, 2007
11067786
(7) Ferrum 31
327 Andahuaylas
010552807
RP 1266-2008-INGEMMET/PCD/PM May 12, 2008
11076509
(8) Ferrum 37
695 Andahuaylas
010621507
RP 1164-2008-INGEMMET/PCD/PM May 12, 2008
11076534
(9) Wanka 01
100 Andahuaylas
010208110
RP 3445-2010-INGEMMET/PCD/PM Oct 18,2010
11102187
(10) Sillaccassa 1
700 Andahuaylas
010212508
RP 5088-2008-INGEMMET/PCD/PM Nov 19, 2008
11084877
(11) Sillaccassa 2
400 Andahuaylas
010212608
RP 3183-2008-INGEMMET/PCD/PM Sept 8, 2008
11081449
Cusco Iron Ore Project (Peru)
(Strike – 100%)
Name
Area
(Ha) Province
Code
Title
(1) Flor de María
907 Chumbivilcas
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
Expiry Date
Area (blocks/Ha)
Area (km²)
4/12/14
4/12/19
~381 Ha
~3.81
ANNUAL REPORT | 45
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
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
8.53
62.08
127.19
56.7
9.46
4.58
9.66
Total Indicated and Inferred
269.4
57.3
9.4
2.54
1.37
2.7
2.56
0.04
0.12
0.07
0.25
0.04
0.2
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 Codes (2004 and 2012)).
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 47)
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 | 46
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
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 2004 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 | 47
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ADDITIONAL ASX INFORMATION
as at 13 October 2016
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 2016.
Pursuant to ASX Listing Rule 4.10.3, the Company’s 2016 Corporate Governance Statement (dated on or about
18 October 2016) and ASX Appendix 4G (Key to Disclosures of Corporate Governance Principles and
Recommendations) can be
Internet website:
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
$0.36 (23 November 2016) Unlisted Options29
$0.42 (23 November 2016) Unlisted Options29
$0.56 (23 November 2016) Unlisted Options29
$0.30 (17 June 2018) Unlisted Managing Director’s Options30
Quoted on ASX
145,334,268
-
-
-
-
Unlisted
-
3,000,000
1,166,668
1,166,666
1,166,666
Total
145,334,268
3,000,000
1,166,668
1,166,666
1,166,666
TOTAL
145,334,268
6,500,000
151,834,268
DISTRIBUTION OF FULLY PAID ORDINARY SHARES
Spread
1
1,001
5,001
10,001
100,001
TOTAL
of Holdings
1,000
5,000
10,000
100,000
and over
-
-
-
-
-
Number of
Holders
367
651
282
363
79
1,742
UNMARKETABLE PARCELS
Spread
1
10,870
TOTAL
of Holdings
-
-
10,869
over
Number of
Holders
1,315
427
1,755
Number of
Shares
154,106
1,938,604
2,284,769
11,571,273
129,385,516
145,334,268
Number of
Shares
4,532,922
140,801,346
145,334,268
% of Total
Issued Capital
0.106%
1.334%
1.572%
7.962%
89.026%
100.00%
% of Total
Issued Capital
3.119%
96.881%
100.00%
An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of 10,869 shares or
less (being a value of $500 or less in total), based upon the Company’s closing share price of $0.046 on 13 October
2016.
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.
29 Refer Strike’s ASX announcement dated 24 November 2011: Appendix 3B - Issue of Personnel Options and Strike’s Notice of AGM lodged
on ASX on 24 October 2011
30 Refer Strike’s ASX announcement dated 18 June 2013: Appendix 3B – Grant of Options and Cancellation of Options and Strike’s Notice of
General Meeting lodged on ASX on 17 May 2013
ANNUAL REPORT | 48
30 JUNE 2016
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ADDITIONAL ASX INFORMATION
as at 13 October 2016
TOP 20 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
ACN 139 886 025 PTY LTD
AUSINCA PERU S.A.
TCH HOLDINGS PTY LTD
MR IANAKI SEMERDZIEV
JP MORGAN NOMINEES AUSTRALIA LIMITED
CONCORDE SECURITIES PTY LTD
MR CHI MAU PHUONG
D&C PESCA S.A.C.
CLASSIC CAPITAL PTY LTD
EMPIRE HOLDINGS WA PTY LTD
MR JOHN FAZZALORI
MR FAROOQ KHAN
MR TRAVIS CHRISTIAN HANSEN & MISS CARYSS FRANCES BIDESI
MRS LILIANA TEOFILOVA
RENMUIR HOLDINGS LIMITED
MR COLIN VAUGHAN & MRS ROBIN VAUGHAN
52,553,493
26,580,181
12,537,090
10,000,000
1,744,804
1,718,973
1,500,000
1,379,000
1,206,202
1,200,000
1,137,437
1,081,027
750,000
700,000
619,479
530,010
500,000
497,000
487,000
450,000
36.160
18.289
8.626
6.881
1.201
1.183
1.032
0.949
0.830
0.826
0.783
0.744
0.516
0.482
0.426
0.365
0.344
0.342
0.335
0.310
TOTAL
117,171,696
80.624%
SUBSTANTIAL SHAREHOLDERS
Substantial Shareholders
Registered Shareholder
Shares Held
% Voting Power
Bentley Capital Limited (ASX:BEL)31
Bentley Capital Limited
ABU Holding International Limited
and Associates32
HSBC Custody Nominees
(Australia) Limited
52,553,493
25,825,000
Database Systems Ltd
and Ambreen Chaudhri33
Database Systems Ltd
12,537,090
Orion Equities Limited (ASX:OEQ)34
Orion Equities Limited
Queste Communications Ltd (ASX:QUE)35
Orion Equities Limited
10,000,000
10,000,000
36.16%
17.77%
8.63%
6.88%
6.88%
31 Refer Bentley’s ASX announcement dated 4 September 2015 Notice of Change in Interests of Substantial Holder
32 Refer Notice of Initial Substantial Holder dated 21 December 2012
33 Based on Notice of Change in Interests of Substantial Holder dated 4 June 2013
34 Refer Orion’s ASX announcement dated 4 September 2015: Notice of Change in Interests of Substantial Holder
35 Refer Queste’s ASX announcement dated 4 September 2015: Notice of Change in Interests of Substantial Holder; 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 | 49
ASX Code: SRK
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
PRINCIPAL & REGISTERED OFFICE
Level 2
23 Ventnor Avenue
West Perth, Western Australia 6005
T | (08) 9214 9700
F | (08) 9214 9701
E | info@strikeresources.com.au
W | www.strikeresources.com.au
SHARE REGISTRY
Advanced Share Registry Services
Western Australia – Main Office
110 Stirling Highway
Nedlands, Western Australia 6009
PO Box 1156
Nedlands WA 6909
T | (08) 9389 8033
F | (08) 9262 3723
E | info@strikeresources.com.au
W | www.strikeresources.com.au
New South Wales – Branch Office
Suite 8H, 325 Pitt Street
Sydney, New South Wales 2000
PO Box Q1736
Queen Victoria Building NSW 1230
T | (02) 8096 3502
T | (03) 9018 7102
T | (07) 3103 3838
Victoria
Queensland