2017
ANNUAL REPORT
ABN 94 088 488 724
30 JUNE 2017
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
9
16
17
18
19
20
21
40
41
45
46
47
48
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•
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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 2017
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 2017 (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 investigation of potential alternative value-add strategies in relation to the development of its Iron
Ore Projects in Peru and the pursuit of the sale of the same;
•
•
the exploration and evaluation of its Burke Graphite Project in Queensland; and
actively seeking to build/acquire a portfolio of new mining projects in commodities that in Strike’s view have
strong market fundamentals and in locations which Strike has significant operating experience – principally,
Australia and South America.
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 2017
$
171,203
(1,319,132)
(1,147,929)
-
(1,147,929)
June 2017
$
(1,051,074)
(607,415)
(1,658,489)
5,308,855
June 2017
$
5,308,855
76,584
381,954
(65,390)
5,702,003
148,439,925
15,184,443
(157,922,365)
5,702,003
June 2016
$
270,629
(899,299)
(628,670)
-
(628,670)
June 2016
$
(1,342,890)
(62,338)
(1,405,228)
6,970,738
June 2016
$
6,970,738
64,740
11,903
(74,062)
6,973,319
148,439,925
15,307,830
(156,774,436)
6,973,319
ANNUAL REPORT | 2
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
REVIEW OF OPERATIONS
Burke Graphite Project (Queensland)
During the financial year, Strike secured an interest in the Burke Graphite Project1 located at Mt Dromedary
in the Cloncurry region in North Central Queensland, where there is access to well-developed transport
infrastructure to an airport at Mt Isa (~122km) and a port in Townsville (~783km).
Strike secured a 60% farm-in interest over two exploration tenements considered highly prospective for large
flake graphite mineralisation. Further details are in Strike’s ASX Announcement dated 9 November 2016:
Strike Secures Graphite Project in Queensland.
The key Burke tenement EPM 25443 (~16km2) comprises two blocks with the northern block (6km2) being
immediately adjacent to the Mt Dromedary Graphite Project, one of highest-grade flake graphite deposits in
the world, located in Australia, being developed by Novonix Limited (formerly Graphitecorp Limited)
(ASX:NVX).
A maiden drilling campaign was completed in April/May 2017 to test the graphite mineralisation extension in
EPM 25443. The results have been released in Strike’s ASX announcements dated:
•
•
•
21 April 2017: Jumbo Flake Graphite Confirmed at Burke Graphite Project;
13 June 2017: High Grade Graphite Intersections at Burke Graphite Project; and
21 June 2017: Further Intersection Encountered at Burke Graphite Project.
In July 2017, Strike completed its earn-in obligations to acquire a 60% interest in the Burke Graphite Project
tenements. All expenditure on the project will now be shared in proportion to the owners’ interests (with an
industry standard dilution to apply if a party elects not to contribute their share).
Update on Iron Ore Projects in Peru
During the financial year, Strike:
•
•
Completed preliminary/conceptual desk-top studies for 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; and
Entered into a conditional sale agreement in December 20162 with a subsidiary of Chinese industrial
and financial group Zhongrong Xinda Group Co. Ltd. (Zhongrong Xinda) to sell Strike’s Apurimac and
Cusco Iron Ore Projects in Peru for US$10 million. Under the terms of the agreement, Zhongrong
Xinda was required to complete its due diligence by 30 April 2017, at which time the parties were also
expected to complete the final documentation relating to the sale. However, on 29 April 2017, Strike
received formal notification from Zhongrong Xinda that it was no longer interested in acquiring the Peru
projects.3
Strike will continue to explore the potential sale of its Peru assets with other interested parties, together with
alternative strategies to realise value from these assets.
1 Refer Strike’s ASX Announcement dated 9 November 2016: Strike Secures Graphite Project in Queensland
2 Refer Strike’s ASX Announcement dated 14 December 2016: Sale of Peru Iron Ore Assets
3 Refer Strike’s ASX release dated 1 May 2017: Quarterly Report – March 2017
ANNUAL REPORT | 3
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
Lithium Tenement Applications (Western Australia)
During the financial year, Strike applied for two exploration licences totaling ~31,000 hectares in the North
Pilbara of Western Australia (WA), that exist within the extent of the known lithium and tantalum mineral fields
in the region, adjacent to licences that have outcropping lithium and tantalum elevated pegmatite occurrences.
Further details are in Strike’s ASX Announcement dated 18 August 2016: New Lithium Projects in Chile and
Western Australia.
In July 2017, Exploration Licence EL 45/4799 (26 blocks or ~8,313 hectares) was granted. Exploration
Licence Application ELA 45/4800 (70 blocks or ~22,489 hectares) is pending grant.
DIVIDENDS
No dividends have been paid or declared during the financial year.
SECURITIES ON ISSUE
The Company has the following total securities on issue as at 30 June 2017 (and as at the date of this report):
Fully paid ordinary shares
$0.30 (17 June 2018) Unlisted Managing Director’s Options4
Quoted on ASX
145,334,268
-
Unlisted
-
3,000,000
Total
145,334,268
3,000,000
Total
145,334,268
3,000,000
148,334,268
The following unlisted options lapsed during the financial year:
Date of Lapse
Description of Options
23 November 2016
23 November 2016
23 November 2016
$0.36 (23 November 2016)
Unlisted Options5
$0.42 (23 November 2016)
Unlisted Options5
$0.56 (23 November 2016)
Unlisted Options5
№ of
Options
1,166,668
Exercise
Price
$0.36
Date of Issue
Expiry Date
24 November 2016 23 November 2016
1,166,666
$0.42
24 November 2011 23 November 2016
1,166,666
$0.56
24 November 2011 23 November 2016
TOTAL
3,500,000
4 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
5 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
ANNUAL REPORT | 4
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
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;
advance its other resource projects through exploration, evaluation and development; and
investigate and pursue other prospective projects in the resources 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.
BOARD OF DIRECTORS
Farooq Khan
Chairman
Appointed
18 December 2015; Director since 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
ANNUAL REPORT | 5
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
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
3,000,000 Unlisted Managing Director’s Options ($0.30, 17 June 2018)11
249,273 Shares (directly)
Other current
directorships in listed
entities
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)
Former directorships
in other listed entities
in past 3 years
Nil
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
ANNUAL REPORT | 6
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
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:
Realm Therapeutics plc (AIM:RLM) (previously known as PureCore plc) (appointed May 2010)
Qiwi plc (NASDAQ:QIWI) (September 2011 to September 2014)
Former directorships
in other listed entities
in past 3 years
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 17+ 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)
Keybridge Capital Limited (ASX:KBC) (since 13 October 2016)
Former position in
other listed entities
in past 3 years
Company Secretary of:
Alara Resources Limited (ASX:AUQ) (4 April 2007 to 31 August 2015)
ANNUAL REPORT | 7
30 JUNE 2017
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
William Johnson
Malcolm Richmond
Matthew Hammond
Victor Ho
6
6
6
6
6
Max. Possible
Meetings
6
6
6
6
6
Attended
2
1(a)
2
2
2(b)
Max. Possible
Meetings
2
-
2
2
-
Attended
-
-
-
-
-
Max. Possible
Meetings
-
-
-
-
-
Notes:
(a)
(b)
Mr Johnson attended one Audit Committee meeting at the invitation of the Audit Committee
Mr Ho attended Audit Committee meetings as Secretary of the Audit Committee
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/.
ANNUAL REPORT | 8
30 JUNE 2017
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 2015; Director since 1 October 2015; 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
2015
Malcolm Richmond
Non-Executive Director Director since 25 October 2006; Previously, Chairman between 3 February
2011 and 18 December 2015
Matthew Hammond Non-Executive Director Since 25 September 2009
(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.
latest version of
The
http://strikeresources.com.au/corporate/corporate-governance/.
the CGS may be downloaded
from
the Company’s website:
ANNUAL REPORT | 9
30 JUNE 2017
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 $550,0006
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 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;
(4) Mr Malcolm Richmond (Non-Executive Director) - a base fee of $45,000 per annum plus
employer superannuation contributions; and
(5) Mr Matthew Hammond (Non-Executive Director) - a base fee of $45,000 per annum.
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 2016/17 financial year or the 2017/18 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 2008 7.
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 20088. The Company has not granted any options to Key
Management Personnel during the financial year.
6 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 2009 and SRK’s ASX Announcement dated 25 November 2009: Results of Annual General Meeting
7 Refer SRK’s ASX announcement dated 6 November 2008: Results of Annual General Meeting
8 Refer SRK’s ASX announcement dated 8 October 2008: Notice of 2008 AGM and Explanatory Statement and Proxy Form
ANNUAL REPORT | 10
30 JUNE 2017
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
2017
(1,147,929)
(0.79)
-
-
-
-
0.05
0.04
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
(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:
2017
Key
Management
Personnel
Short-term Benefits
Post-
Employment
Benefits
Other Long-
term
Benefits
Performance
- related
%
Cash
salary and
fees
$
Non-cash
benefit
$
Superannuation
$
Long
service
leave
$
Equity-
Based
Shares &
options
$
Directors:
William Johnson
Farooq Khan
Malcolm Richmond
Victor Ho
Matthew Hammond
Company Secretary:
Victor Ho
-
-
-
-
-
-
202,400
80,000
45,000
45,000
45,000
50,000
-
-
-
-
-
-
19,228
7,600
4,275
4,275
-
4,750
-
-
-
-
-
-
-
-
-
-
-
-
2016
Key
Management
Personnel
Short-term Benefits
Post-
Employment
Benefits
Other
Long-term
Benefits
Performance
- related
%
Cash
salary and
fees
$
Annual
Leave
$
Superannuation
$
Long
service
leave
$
Equity-
Based
Shares &
options
$
Directors:
William Johnson
Farooq Khan
Malcolm Richmond
Victor Ho
Matthew Hammond
Samantha Tough
Company Secretary:
Victor Ho
-
-
-
-
-
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
-
-
-
-
-
-
Total
$
221,628
87,600
49,275
49,275
45,000
54,750
Total
$
227,760
72,886
60,492
41,902
45,000
36,500
-
-
-
-
-
-
41,062
ANNUAL REPORT | 11
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
Notes to 2017 and 2016 tables:
(a)
(b)
(c)
(d)
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). 9
• 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
to provide remuneration
The Company has not engaged any remuneration consultants
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.
9 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 | 12
30 JUNE 2017
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
Balance at
30 June 2016
750,803
249,273
-
-
-
Received as part
of remuneration
-
-
-
-
-
Net
Change
-
-
-
-
-
Balance at
30 June 2017
750,803
249,273
-
-
-
Notes:
(a)
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:
2017
Key Management
Personnel
William Johnson
Farooq Khan
Victor Ho
Malcolm Richmond
Matthew Hammond
Balance at
30 June
2016
3,000,000(a)
-
-
-
-
Granted
-
-
-
-
-
Exercised
-
-
-
-
-
Lapsed /
Cancelled
-
-
-
-
-
Balance at
30 June
2017
3,000,000
-
-
-
-
Granted
and vested
during year
-
-
-
-
-
Vested and
exercisable
at 30 June
2017
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 10
(9)
Voting and Comments on the Remuneration Report at the 2016 AGM
At the Company’s most recent (2016) AGM, a resolution to adopt the prior year (2016) 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. 11 No comments
were made on the Remuneration Report at the 2016 AGM.
This concludes the audited Remuneration Report.
10 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
11 Refer Strike’s ASX announcement dated 18 November 2016: Results of 2016 Annual General Meeting
ANNUAL REPORT | 13
30 JUNE 2017
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
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
Audit & Review Fees
$
14,000
Non-Audit Services
$
-
Total
$
14,000
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 16. This relates to the Audit Report,
where the Auditors state that they have issued an independence declaration.
ANNUAL REPORT | 14
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
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 21),
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
8 August 2017
William Johnson
Managing Director
ANNUAL REPORT | 15
c9l oTHSAY
Level 1, Lincoln
House,
4 Ventnor
Avenue,
West Perth WA 6005
P.O. Box 8716, Perth Business Centre
WA 6849
Phone (08) 9486 7094 www.rothsayresources.com.au
The Directors
Strike
Resources
Ave
Level 2 23 Ventnor
West Perth WA 6005
Limited
Dear Sirs
In accordance
hereby declare
with Section
that to the best of my knowledge and belief
307C of the Corporations
I
Act 2001 (the "Act")
there have been:
i) no contraventions
independence
to the audit of the 30 June 2017 financial
of the Act in
requirements
and
statements;
of the auditor
relation
ii)no contraventions
of any applicable
code of professional
conduct in relation
to the review.
Graham Swan FCA (Lead auditor)
Rothsay
Auditing
Dated 8th August 2017
Chartered
Accountants
ANNUAL REPORT | 16
Liability
limited
by the Accountants
Scheme,
approved
under the Professional
Standards
Act 1994 (NSW).
30 JUNE 2017
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 2017
REVENUE
Interest revenue
Other
Other income
TOTAL REVENUE AND INCOME
EXPENSES
Personnel expenses
Corporate expenses
Occupancy expenses
Exploration and evaluation expenses
Reversal of SUNAT provision
Finance expenses
Foreign exchange loss
Administration expenses
Note
2
3
2017
$
2016
$
171,200
268,853
3
1,776
171,203
270,629
(508,330)
(415,262)
(33,281)
(246,426)
-
(5,663)
(17,792)
(92,378)
(522,881)
(572,190)
(26,203)
(282,425)
608,260
(4,887)
-
(98,973)
LOSS BEFORE INCOME TAX
(1,147,929)
(628,670)
Income tax expense
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Other Comprehensive Income, Net of Tax
5
-
-
(1,147,929)
(628,670)
Exchange differences on translation of foreign operations
(123,387)
(38,114)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(1,271,316)
(666,784)
LOSS PER SHARE FOR LOSS ATTRIBUTABLE TO THE
ORDINARY EQUITY HOLDERS OF THE COMPANY:
Basic and diluted loss per share (cents)
6
(0.79)
(0.43)
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 17
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
as at 30 June 2017
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
2017
$
2016
$
5,308,855
6,970,738
76,584
10,230
64,740
9,616
5,395,669
7,045,094
1,822
369,902
2,287
-
371,724
2,287
5,767,393
7,047,381
53,336
12,054
60,643
13,419
65,390
74,062
65,390
74,062
5,702,003
6,973,319
148,439,925
148,439,925
15,184,443
15,307,830
(157,922,365)
(156,774,436)
5,702,003
6,973,319
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 18
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
for the year ended 30 June 2017
Issued capital
Currency
translation
reserve
Share-based
payments
reserve
Accumulated
losses
$
$
$
$
Total
$
BALANCE AT 1 JUL 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
BALANCE AT 1 JUL 2016
148,439,925
2,074,804
13,233,026
(156,774,436)
6,973,319
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
-
-
-
-
(123,387)
(123,387)
-
-
-
-
(1,147,929)
(1,147,929)
-
-
(123,387)
-
(1,147,929)
(1,271,316)
BALANCE AT 30 JUNE 2017
148,439,925
1,951,417
13,233,026
(157,922,365)
5,702,003
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 19
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF CASH FLOWS
for the year ended 30 June 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
2017
$
2016
$
(1,051,074)
(1,342,890)
NET CASH USED IN OPERATING ACTIVITIES
(1,051,074)
(1,342,890)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Payments for exploration and evaluation expenses
Payment for purchases of plant and equipment
176,135
(783,219)
(331)
222,212
(282,426)
(2,124)
NET CASH PROVIDED BY INVESTING ACTIVITIES
(607,415)
(62,338)
NET DECREASE IN CASH HELD
(1,658,489)
(1,405,228)
Cash and cash equivalents at beginning of financial year
6,970,738
8,374,206
Effect of exchange rate changes on cash held
(3,394)
1,760
CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR
5,308,855
6,970,738
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 20
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2017
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.
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 provides
details on the dividends paid by the Company:
Notes
12
13
14
Issued capital
Reserve
Share-based payments
Strike Resources Limited is a company limited by shares
incorporated in Australia and whose shares are publicly traded
on the Australian Securities Exchange (ASX).
These
financial statements have been prepared on a
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.
(e)
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
15
16
17
Parent entity information
Investment in controlled entities
Related party transactions
Information is considered material and relevant if, for example:
(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
Receivables
Exploration and evaluation expenditure
Payables
Other: Provides information on items which require
disclosure to comply with Australian Accounting
Standards and other regulatory pronouncements
however, are not
in
understanding the financial performance or position of
the Consolidated Entity:
considered
significant
Notes
18
19
20
21
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
prepared in accordance with Australian Accounting 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 | 21
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2017
1.3 Principles of Consolidation
The consolidated financial statements incorporate the assets
and liabilities of the Company as at 30 June 2017 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 | 22
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2017
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, and
relevant
amending
standards
AASB 2014-10
AASB 2016-5
Amendments to
Australian
Accounting
Standards – Sale
or Contribution of
Assets between
an Investor and
its Associate or
Joint Venture
Amendments to
Australian
Accounting
Standards –
Classification and
Measurement of
Share-based
Payment
Transactions
Nature of Change
AASB 9 replaces AASB 139 Financial Instruments: Recognition and
Measurement.
Except for certain trade receivables, an entity initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs.
Debt instruments are subsequently measured at fair value through profit or
loss (FVTPL), amortised cost, or fair value through other comprehensive
income (FVOCI), on the basis of their contractual cash flows and the
business model under which the debt instruments are held.
There is a fair value option (FVO) that allows financial assets on initial
recognition to be designated as FVTPL if that eliminates or significantly
reduces an accounting mismatch.
Equity instruments are generally measured at FVTPL. However, entities
have an irrevocable option on an instrument-by-instrument basis to present
changes in the fair value of non-trading instruments in other comprehensive
income (OCI) without subsequent reclassification to profit or loss.
For financial liabilities designated as FVTPL using the FVO, the amount of
change in the fair value of such financial liabilities that is attributable to
changes in credit risk must be presented in OCI. The remainder of the
change in fair value is presented in profit or loss, unless presentation in OCI
of the fair value change in respect of the liability’s credit risk would create or
enlarge an accounting mismatch in profit or loss.
All other AASB 139 classification and measurement requirements for
financial liabilities have been carried forward into AASB 9, including the
embedded derivative separation rules and the criteria for using the FVO.
The incurred credit loss model in AASB 139 has been replaced with an
expected credit loss model in AASB 9.
The requirements for hedge accounting have been amended to more closely
align hedge accounting with risk management, establish a more principle-
based approach to hedge accounting and address inconsistencies in the
hedge accounting model in AASB 139.
The amendments clarify that a full gain or loss is recognised when a transfer
to an associate or joint venture involves a business as defined in AASB 3
Business Combinations.
Any gain or loss resulting from the sale or contribution of assets that does
not constitute a business, however, is recognised only to the extent of
unrelated investors’ interests in the associate or joint venture.
AASB 2015-10 defers the mandatory effective date (application date) of
AASB 2014-10 so that the amendments are required to be applied for annual
reporting periods beginning on or after 1 January 2018 instead of 1 January
2016.
This Standard amends AASB 2 Share-based Payment, clarifying how to
account for certain types of share-based payment transactions. The
amendments provide requirements on the accounting for:
•
The effects of vesting and non-vesting conditions on the measurement
of cash-settled share-based payments
• Share-based payment transactions with a net settlement feature for
withholding tax obligations
• A modification to the terms and conditions of a share-based payment
that changes the classification of the transaction from cash-settled to
equity-settled.
Application
date
Annual reporting
periods beginning
on or after 1
January 2018
Annual reporting
periods beginning
on or after 1
January 2018
Annual reporting
periods beginning
on or after 1
January 2018
ANNUAL REPORT | 23
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2017
1.6 Summary of Accounting Standards Issued But Not Yet Effective (continued)
AASB
reference
AASB 15, and
relevant
amending
standards
Title and
Affected
Standard(s)
Revenue from
Contracts with
Customers
AASB 2017-1
AASB
Interpretation 22
Amendments to
Australian
Accounting
Standards –
Transfers of
Investments
Property, Annual
Improvements
2014-2016 Cycle
and Other
Amendments
Foreign Currency
Transactions and
Advance
Consideration
AASB 16
Leases
Application
date
Annual
reporting
periods
beginning on or
after 1 January
2018
Nature of Change
AASB 15 replaces all existing revenue requirements in Australian
Accounting Standards (AASB 111 Construction Contracts, AASB 118
Revenue, AASB Interpretation 13 Customer Loyalty Programmes, AASB
Interpretation 15 Agreements for the Construction of Real Estate, AASB
from Customers and AASB
Interpretation 18 Transfers of Assets
Interpretation 131 Revenue – Barter Transactions Involving Advertising
Services) and applies to all revenue arising from contracts with customers,
unless the contracts are in the scope of other standards, such as AASB 117
(or AASB 16 Leases, once applied).
The core principle of AASB 15 is that an entity recognises revenue to depict
the transfer of promised goods or services to customers in an amount that
reflects the consideration to which an entity expects to be entitled in
exchange for those goods or services. An entity recognises revenue in
accordance with the core principle by applying the following steps:
• Step 1: Identify the contract(s) with a customer
• Step 2: Identify the performance obligations in the contract
• Step 3: Determine the transaction price
• Step 4: Allocate the transaction price to the performance obligations in
the contract
• Step 5: Recognise revenue when (or as) the entity satisfies a
performance obligation
The amendments clarify certain requirements in:
• AASB 1 First-time Adoption of Australian Accounting Standards –
deletion of exemptions for first-time adopters and addition of an
exemption arising from AASB Interpretation 22 Foreign Currency
Transactions and Advance Consideration
• AASB 12 Disclosure of Interests in Other Entities – clarification of scope
• AASB 128 Investments in Associates and Joint Ventures – measuring
Annual
reporting
periods
beginning on or
after 1 January
2018
an associate or joint venture at fair value
• AASB 140 Investment Property – change in use.
Annual
reporting
periods
beginning on or
after 1 January
2018
Annual
reporting
periods
beginning on or
after 1 January
2019
The Interpretation clarifies that in determining the spot exchange rate to use
on initial recognition of the related asset, expense or income (or part of it)
on the derecognition of a non-monetary asset or non-monetary liability
relating to advance consideration, the date of the transaction is the date on
which an entity initially recognises the non-monetary asset or non-monetary
liability arising from the advance consideration. If there are multiple
payments or receipts in advance, then the entity must determine a date of
the transactions for each payment or receipt of advance consideration.
AASB 16 requires lessees to account for all leases under a single on-
balance sheet model in a similar way to finance leases under AASB 117
Leases. The standard includes two recognition exemptions for lessees –
leases of ’low-value’ assets (e.g., personal computers) and short-term
leases (i.e., leases with a lease term of 12 months or less). At the
commencement date of a lease, a lessee will recognise a liability to make
lease payments (i.e., the lease liability) and an asset representing the right
to use the underlying asset during the lease term (i.e., the right-of-use
asset).
Lessees will be required to separately recognise the interest expense on the
lease liability and the depreciation expense on the right-of-use asset.
Lessees will be required to remeasure the lease liability upon the occurrence
of certain events (e.g., a change in the lease term, a change in future lease
payments resulting from a change in an index or rate used to determine
those payments). The lessee will generally recognise the amount of the
remeasurement of the lease liability as an adjustment to the right-of-use
asset.
Lessor accounting is substantially unchanged from today’s accounting under
AASB 117. Lessors will continue to classify all leases using the same
classification principle as in AASB 117 and distinguish between two types of
leases: operating and finance leases.
ANNUAL REPORT | 24
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
2.
REVENUE
The Consolidated Entity's operating loss before income tax includes the
following items of revenue:
Revenue
Interest revenue
Other
Foreign exchange gain
Other income
2017
$
2016
$
171,200
171,200
-
3
268,853
268,853
1,760
16
171,203
270,629
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
taking into
activities as described below. The Consolidate Entity bases its estimates on historical results,
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)
Interest revenue
income is recognised using the effective interest method. When a receivable is impaired,
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) Other revenues
Other revenues are recognised on a receipts basis.
3.
EXPENSES
The Consolidated Entity's operating loss before income tax includes the
following items of expenses:
2017
$
2016
$
Personnel expenses
Salaries, fees and employee benefits
508,330
522,881
Corporate expenses
Professional fees
Takeover response cost
ASX fees
Accounting, taxation and related administration
Audit
Share registry
Other corporate expenses
Reversal of provision for legal fees
Occupancy expenses
211,419
-
24,058
154,431
14,000
6,823
4,531
-
33,281
123,307
319,024
21,278
77,007
36,630
33,133
3,386
(41,575)
26,203
ANNUAL REPORT | 25
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
3.
EXPENSES (continued)
Exploration and evaluation expenses
Impairment loss
Other exploration and evaluation expenses
Reversal of SUNAT provision
Finance expenses
Foreign exchange loss
Administration expenses
Insurance
Travel, accommodation and incidentals
Depreciation
Other administration expenses
2017
$
2016
$
205,895
40,531
-
5,663
17,792
18,282
43,400
795
29,901
271,844
10,581
(608,260)
4,887
-
22,206
16,280
909
59,578
1,319,132
899,299
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.
4.
SEGMENT INFORMATION
2017
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
$
-
-
3
3
193,512
3,563
205,895
-
24,181
(427,148)
(426,353)
70,184
59,190
Australia
$
171,200
-
171,200
508,330
221,750
2,100
40,531
795
118,475
(720,781)
(719,476)
Total
$
171,200
3
171,203
508,330
415,262
5,663
246,426
795
142,656
(1,147,929)
(1,145,829)
5,697,209
5,767,393
6,200
65,390
ANNUAL REPORT | 26
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
4.
SEGMENT INFORMATION (continued)
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
Peru
$
-
1,776
1,776
-
64,582
3,129
271,844
-
(674,070)
336,291
608,135
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)
74,217
36,985
6,973,164
7,047,381
37,077
74,062
Accounting policy
The operating segments are reported in a manner consistent with the internal reporting provided to the Managing
Director. The Managing Director is responsible for allocating resources and assessing performance of
the
operating segments and has considered the business and geographical perspectives of the operating results and
determined that the Consolidated Entity operates only in Australia and Peru.
5.
INCOME TAX EXPENSE
(a) The components of tax expense comprise:
Current tax
Deferred tax
2017
$
-
-
-
2016
$
-
-
-
(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 27.5%
(2016: 30%)
(315,680)
(179,171)
Adjust tax effect of:
Non-deductible expenses
Movement in unrecognised temporary differences
Foreign tax rates differential
Current year tax losses not recognised
Prior year tax losses brought to account
Income tax attributable to entity
12,811
(28,087)
-
87,351
(204,047)
(502)
330,956
296,369
-
-
-
ANNUAL REPORT | 27
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
5.
INCOME TAX EXPENSE (continued)
(c) Unrecognised deferred tax balances
Unrecognised deferred tax asset - revenue losses
Unrecognised deferred tax asset - other
2017
$
2016
$
7,729,462
9,853,788
17,583,250
9,194,441
10,760,443
19,954,884
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.
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.
ANNUAL REPORT | 28
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
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
2017
cents
(0.79)
2017
$
2016
cents
(0.43)
2016
$
(1,147,929)
(628,670)
Shares
Shares
145,334,268
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
2017
$
883,855
4,425,000
5,308,855
2016
$
245,738
6,725,000
6,970,738
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.
(a)
Reconciliation of operating loss after income tax to net cash used in
operating activities
Loss after income tax
Add non-cash items:
Depreciation
Adjustment for movement in foreign exchange
Changes in assets and liabilities:
Receivables
Other current assets
Exploration and evaluation expenditure
Payables
Provisions
2017
$
2016
$
(1,147,929)
(628,670)
795
(119,993)
(186,741)
(1,851)
413,318
(7,353)
(1,320)
909
(39,874)
(271,468)
(17,362)
-
(391,144)
4,719
(1,051,074)
(1,342,890)
ANNUAL REPORT | 29
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
8.
FINANCIAL RISK MANAGEMENT
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
2017
$
2016
$
5,308,855
6,970,738
76,584
64,740
5,385,439
7,035,478
(53,336)
(60,643)
5,332,103
6,974,835
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.
(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/(liabilities)
2017
USD
25,438
(45,013)
(19,575)
2016
USD
26,587
(19,939)
6,648
ANNUAL REPORT | 30
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
8.
FINANCIAL RISK MANAGEMENT (continued)
(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
2017
$
(1,958)
1,958
2016
$
665
(665)
2017
$
-
-
2016
$
-
-
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 2.86% (2016: 2.90%).
Cash at bank
Term deposit
2017
$
883,855
4,425,000
5,308,855
2016
$
245,738
6,725,000
6,970,738
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
2017
$
13,272
(13,272)
2016
$
17,427
(17,427)
2017
$
-
-
2016
$
-
-
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
liabilities. The Consolidated Entity has no borrowings. The Consolidated Entity's non-cash
with financial
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.
ANNUAL REPORT | 31
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
8.
FINANCIAL RISK MANAGEMENT (continued)
(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
2017
$
2016
$
5,253,553
6,909,896
55,302
60,842
5,308,855
6,970,738
76,584
64,740
41,725
34,859
76,584
46,657
18,083
64,740
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
nonrecoverable.
10. EXPLORATION AND EVALUATION EXPENDITURE
Opening balance
Exploration and evaluation costs
Impairment loss
Closing balance
2017
$
-
575,797
(205,895)
369,902
2016
$
-
271,844
(271,844)
-
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
$205,895 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.
ANNUAL REPORT | 32
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
10. EXPLORATION AND EVALUATION EXPENDITURE (continued)
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
2017
$
22,692
30,197
447
53,336
2016
$
21,947
38,295
401
60,643
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.
ISSUED CAPITAL
2017
$
2016
$
145,334,268 (2016: 145,334,268) fully paid ordinary shares
148,439,925
148,439,925
There has been no movement in issued capital from 1 July 2015.
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 14.
ANNUAL REPORT | 33
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
12.
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.
13. RESERVE
Share-based payments reserve
Foreign currency translation reserve
(a) Share-based payments reserve
2017
$
2016
$
13,233,026
13,233,026
1,951,417
2,074,804
15,184,443
15,307,830
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
economy) that have a functional currency different
from the presentation currency are translated into the
presentation currency as follows:
(i)
(ii)
assets and liabilities for each statement of financial position presented are translated at the closing rate at the
date of that statement of financial position;
income and expenses for Consolidated Statement of Profit or Loss and Other Comprehensive Income are
translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case income and expenses are translated at the
dates of the transactions), and
(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 | 34
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
14. SHARE-BASED PAYMENTS
The Company has the following options on issue at balance date:
Grant
date
Expiry
date
Financial year 2017
18-Jun-13
17-Jun-18
Exercise
price ($)
0.30
Weighted average exercise price
Financial year 2016
24-Nov-11
23-Nov-16
24-Nov-11
23-Nov-16
24-Nov-11
23-Nov-16
05-Apr-12
05-Apr-12
05-Apr-12
23-Nov-16
23-Nov-16
23-Nov-16
18-Jun-13
17-Jun-18
Weighted average exercise price
0.36
0.42
0.56
0.36
0.42
0.56
0.30
Opening
During the year
Closing
exercisable
balance Granted
Exercised Forfeited
balance
at year end
Vested and
3,000,000
3,000,000
0.30
833,334
833,333
833,333
333,334
333,333
333,333
3,000,000
6,500,000
0.38
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
3,000,000
3,000,000
3,000,000
0.30
0.30
833,334
833,333
833,333
333,334
333,333
333,333
833,334
833,333
833,333
333,334
333,333
333,333
3,000,000
6,500,000
3,000,000
6,500,000
0.38
0.38
3,500,000 options expired on 23 November 2016 without being exercised. No other options were exercised during
the year. The weighted average remaining contractual life of share options outstanding at the end of the period was
0.96 years (2016: 0.62 years).
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 | 35
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
15. PARENT ENTITY INFORMATION
The following information provided relates to the Company, Strike Resources Limited, as at 30 June 2017.
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
The parent entity does not have any contingent assets or liabilities.
16.
INVESTMENT IN CONTROLLED ENTITIES
Investment in controlled entities
Incorporated
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
Australia
Australia
Australia
British Anguilla
Peru
Peru
Peru
2017
$
2016
$
(720,039)
(964,715)
-
-
(720,039)
(964,715)
5,253,552
6,909,896
71,931
1,203,874
6,529,357
60,982
309,396
7,280,274
6,199
6,199
37,077
37,077
6,523,158
7,243,197
148,439,925
148,439,925
13,233,025
13,233,025
(155,149,792)
(154,429,753)
6,523,158
7,243,197
Ownership interest
2017
100%
100%
100%
100%
100%
100%
100%
2016
100%
100%
100%
100%
100%
100%
100%
ANNUAL REPORT | 36
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2017
16.
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.
17. RELATED PARTY TRANSACTIONS
(a) Transactions with key management personnel
Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration paid or
payable to each member of the Consolidated Entity's KMP for the year ended 30 June 2017. 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
2017
$
417,400
35,378
50,000
4,750
507,528
2016
$
446,390
38,150
37,500
3,562
525,602
(b) Transactions with other related parties
No other related party transactions have been identified other than those disclosed above.
18. AUDITORS' REMUNERATION
During the year the following fees were paid 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
2017
$
14,000
-
-
-
14,000
2016
$
14,000
17,477
5,382
9,945
46,804
ANNUAL REPORT | 37
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2017
19.
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.
20.
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 | 38
30 JUNE 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2017
20.
CONTINGENCIES (continued)
(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 (which the Consolidated Entity believes it has historically complied with) 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. SUNAT has previously advised
that it may undertake a new audit of some historical WHT obligations and payments of AF. Given
the lack of any such action by SUNAT since April 2015 and after receipt of advice from its Peruvian
tax advisors, the Consolidated Entity has determined not to recognise any provision for any potential
future findings by SUNAT. If SUNAT was to undertake a new audit as above and claim that additional
WHT was payable by AF on its historical payments to overseas suppliers, the Consolidated Entity
will appeal any final WHT determination by SUNAT to the Tax Administration Court (as applicable).
21.
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 | 39
30 JUNE 2017
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 17 to 39 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 2017 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
8 August 2017
William Johnson
Managing Director
ANNUAL REPORT | 40
c9loTHS AY
Level 1, Lincoln
House, 4 Ventnor
P.O. Box 8716, Perth Business
Avenue,
Centre
Phone (08) 9486 7094 www.rothsayresources.com.au
WA 6849
West Perth WA 6005
INDEPENDENT
STRIKE RESOURCES LTD
AUDIT REPORT TO THE MEMBERS OF
Report on the Audit of the Financial
Report
Opinion
the financial
report
which comprises
We have audited
("the Group")
2017, the consolidated
of changes
consolidated
year then ended on that date
accounting
significant
statement
policies
of Strike Resources
the consolidated
Ltd ("the Company")
of financial
as at 30 June
of profit or Joss and other comprehensive
the
income,
of cash flows for the
a summary of
and the consolidated
including
statement
position
statement
statements,
of the Company.
and notes to the financial
and the directors'
declaration
statement
in equity
and its subsidiaries
In our opinion
including:
the financial
report
of the Group is in accordance
Act 2001,
with the Corporations
(i)giving
financial
performance
for the year ended on that date; and
a true and fair view of the Group's
financial
position
as at 30 June 2017 and of its
(ii)complying
with Australian
Accounting
Standards
and the Corporations
Regulations
2001.
Basis for Opinion
are further described
our audit in accordance
We conducted
under these standards
section
Report
Financial
auditor
the Accounting
Professional
Australia.
Accountants
We have also fulfilled
independence
of this report.
requirements
and Ethical
Professional
(the "Code")
of the Corporations
Act 2001 and the ethical
Standards
Board's
that are relevant
of
requirements
for
APES 110 Code of Ethics
in
with the Code.
to our audit of the financial
in accordance
responsibilities
report
our other ethical
with Australian
Auditing
in the Auditor's
We are independent
Standards.
Our responsibilities
Responsibilities
for the Audit of the
with the
of the Group in accordance
We confirm that the independence
been given to the directors
of this auditor's
at the time
of the Company,
report.
declaration
required
by the Corporations
Act 2001, which has
would be in the same terms if given to the directors
as
We believe
basis for our opinion.
that the audit evidence
we have obtained
is sufficient
and appropriate
to provide
a
Key Audit Matters
Key audit matters
in our audit of the financial
context
do not provide
that,
of the current
as a whole,
report
on these matters.
are those matters
report
a separate opinion
of our audit of the financial
in our professional
period.
judgement,
These matters
and in forming our opinion
in the
and we
thereon,
were addressed
were of most significance
Liability
limited
by the Accountants
Scheme,
approved
under the Professional
Standards
Chartered
Accountants
ANNUAL REPORT | 41
Act 1994 (NSW).
Key Audit Matter
Cash and cash equivalents
The Group's cash
be the key driver
and cash equivalents
significant
statements
overall
strategy
and cash equivalents
of the Group's
operations
make up 92% of total assets
and exploration
to be at a high risk of significant
activities.
misstatement,
by value and is considered
to
We do not consider
cash
or to be subject
to a
of the financial
in the context
level of judgement.
as a whole,
However
they are considered
due to the materiality
to be the area which had the greatest
effect on our
and allocation
of resources
in planning
and completing our
audit.
Our procedures
but were not limited
to:
over the existence of
the Group's
portfolio
of cash and cash equivalents
included
);:> Documenting
and assessing
the processes
and controls
in place to record
cash
transactions;
� Testing a
properly
sample
authorised
of cash payments
and recorded
to determine
they were bona fide payments,
ledger;
were
and
in the general
� Agreeing l
00% of cash holdings
to independent
third party confirmations.
We have also assessed
report.
financial
the appropriateness
of the disclosures
included
in notes l and 7 to the
Other Information
The directors
information
include
are responsible
in the Group's
report
for the other information.
report
report
included
the financial
and our auditor's
for the year ended 30 June 2017,
thereon.
The other information
comprises
the
but does not
annual
Our opinion
not express
on the financial
any form of assurance
report
conclusion
thereon.
does not cover the other information and accordingly
we do
In connection
information
with the financial
materially
report
misstated.
and, in doing so, consider
whether
with our audit of the financial
or our knowledge
obtained
in the audit or otherwise
our responsibility
is to read the other
report,
the other information
inconsistent
is materially
appears
to be
If based on the work we have performed
information,
we are required
to report
there is a material misstatement
in this regard.
of this other
to report
that fact. We have nothing
we conclude
Directors
' Responsibility
for the Financial
Report
of the Company are responsible for
the preparat
The directors
a true and fair view in accordanc
Act 2001 and for such internal
e with the Australian
as the directors
Accounting
determine
control
ion of the financial
Standards
is necessary
that gives
and the Corporations
to enable
the
report
Chartered
Accountants
Liability
Limited
by the Accountants
Scheme,
approved
under the Professional
Standards
Act 1994 (NSW).
ANNUAL REPORT | 42
preparation
whether
misstatement
report
due to fraud or error.
of the financial
that gives a true and fair view and is free from material
as a going concern,
disclosing,
the directors
are responsible
as applicable,
for assessing
matters
of the
the ability
to going concern
related
report,
the financial
In preparing
Group to continue
and using the going
concern basis of accounting
operations,
unless
alternative
or have no realistic
the directors
but to do so.
either
intend
to liquidate
the Group or cease
Auditor's
Responsibility
for the Audit of the Financial
Report
assurance
about whether
due to fraud or error,
report
the financial
and to issue an auditor's
as a whole is
report
whether
are to obtain
reasonable
misstatementt,
Our objectives
free from material
that includes
that an audit conducted
material
considered
they could reasonably
of this financial report.
in accordance
when it exists.
if individually
misstatement
be expected
material
our opinion. Reasonable
assurance
is a high level of assurance,
with Australian
Misstatements
Auditing
can arise from fraud or error and are
Standards
but is not a guarantee
will always detect
a
or in the aggregate,
to influence
the economic
decisions
of users taken on the basis
A further
the Auditing
description
of our responsibilities
for the audit of the financial
report
is located
at
Board website
and Assurance Standards
at: www.auasb.gov.au/Home.aspx
We communicate
timing
control
of the audit and significant
that we identify
with the directors
our audit.
during
regarding,
amongst
including
other matters,
any significant
the planned
deficiencies
scope and
in internal
audit findings,
the directors
We also provide
requirements
matters
safeguards.
regarding
that may reasonably
independence,
with a statement
that we have complied
and to communicate
to bear on our independence
ethical
with them all relationships
related
and where applicable,
with relevant
and other
be thought
communicated
with the directors,
From the matters
significance
matters.
public
matter
would reasonably
in the audit of the financial report
of the current
report
in our auditor's
or when, in extremely
because
the public
not be communicated
to outweigh
disclosure
should
about the matter
We describe
those matters
be expected
in our report
the adverse
benefits
interest
unless
period
rare circumstances,
and are
the key audit
precludes
therefore
law or regulation
that a
of doing so
consequences
we determine
we determine
those matters
that were of most
of such communications.
Report
Report on the Remuneration
Opinion
on the Remuneration
Report
We have audited
June 2017.
report
the remuneration
included
report
in the directors'
for the year ended 30
In our opinion
complies
the remuneration
report
300A of the Corporations
with section
Act 2001.
of Strike Resources
Ltd for the year ended 30 June 2017
Chartered
Accountants
Liability
Limited
by the Accountants
Scheme,
approved
under the Professional
Standards
Act 1994 (NSW).
ANNUAL REPORT | 43
Responsibilities
of the Company are responsible
Report in accordance
The directors
Remuneration
responsibility
in accordance
is to express
with Australian
with section
on the Remuneration
Standards.
an opinion
Auditing
for the preparation
and presentation
of the
Act 2001. Our
300A of the Corporations
Report,
based on our audit conducted
Rothsay
Auditing
Dated 8th August 2017
Graham Swan FCA
Partner
Chartered
Accountants
Liability Limited
by the Accountants
Scheme,
approved
under the Professional Standards
Act 1994 (NSW).
ANNUAL REPORT | 44
30 JUNE 2017
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 2017) 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/
010298604
No 00230-2005-INACC/J Jan 19, 2005
Aymaraes
File No
20001465
20001464
11053798
11053810
(5) Ferrum 8
900 Andahuaylas
010299004
No 00232-2005-INACC/J Jan 19, 2005
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
Status
Grant Date
Expiry Date
Area (blocks/Ha)
Area (km²)
Retention Licence RL 47/7
Granted
4 December 2014
4 December 2019
~381 Ha
~3.81
Burke Graphite Project (Queensland)
(Strike – 60%)
Tenement No
Burke EPM 25443
Corella EPM 25696
Status
Granted
Granted
Grant Date
Expiry Date
Area (blocks/Ha)
Area (km²)
4 September 2014
3 September 2019
51 sub-blocks
2 April 2015
1 April 2020
11 sub-blocks
~16
~36
ANNUAL REPORT | 45
30 JUNE 2017
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 2017) 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
Total Indicated and Inferred
4
4
4
133.71
57.57
8.53
62.08
127.19
56.7
269.4
57.3
9.46
4.58
9.66
9.4
2.54
1.37
2.7
0.04
0.12
0.07
0.25
0.04
0.2
2.56
0.04
0.16
The information in this JORC Resource table was prepared and first disclosed under the 2004 JORC Code (in
Strike’s ASX announcement dated 11 February 2010: Peruvian Apurimac Iron Ore Project Resource Increased to
269 Million Tonnes) and has subsequently been upgraded to comply with the 2012 JORC Code and disclosed in
Strike’s ASX Announcement dated 19 January 2015: Apurimac Mineral Resources Updated to JORC 2012
Standard.
Cusco Iron Ore Project (Peru)
(Strike – 100%)
The Cusco Project has a JORC Code (2004 Edition) compliant Mineral Resource of 104.4 Mt Inferred Mineral
Resource at 32.62% Fe.
Category
Concession
Density t/m3
Mt*
Fe%
SiO2%
Al2O3%
P%
S%
Inferred
Santo Tomas
4
104.4
32.62
0.53
3.19
0.035
0.53
The information in this JORC Resource table was prepared and first disclosed under the 2004 JORC Code (in
Strike’s ASX announcement dated 17 June 2011: Cusco Project – Resource Estimate). It has not been updated
since to comply with the 2012 JORC Code on the basis that the information has not materially changed since it was
last reported.
Compliance
•
The Mineral Resources estimates (above) have not changed since reported in last year’s Annual Report.
•
•
•
•
•
The Mineral Resources estimates (above) is based on, and fairly represents, information and supporting
documentation prepared by a Competent Person (recognised under the JORC 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 2017
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 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ADDITIONAL ASX INFORMATION
as at 12 October 2017
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 2017. Pursuant
to ASX Listing Rule 4.10.3, the Company’s 2017 Corporate Governance Statement (dated on or about 17 October
2017) and ASX Appendix 4G (Key to Disclosures of Corporate Governance Principles and Recommendations) can
be found at the following URL on the Company’s Internet website:
http://strikeresources.com.au/corporate/corporate-governance/
ISSUED CAPITAL
Class of Security
Fully paid ordinary shares
$0.30 (17 June 2018) Unlisted Managing Director’s Options12
TOTAL
Quoted on ASX
Unlisted
Total
145,334,268
-
145,334,268
-
3,000,000
3,000,000
145,334,268
3,000,000
148,334,268
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
360
627
265
334
73
1,659
UNMARKETABLE PARCELS
Spread
1
12,500
TOTAL
of Holdings
-
-
12,499
over
Number of
Holders
1,306
353
1,659
Number of
Shares
150,162
1,865,493
2,138,343
10,391,840
130,788,430
145,334,268
Number of
Shares
4,761,078
140,573,190
145,334,268
% of Total
Issued Capital
0.103%
1.284%
1.471%
7.150%
89.991%
100.00%
% of Total
Issued Capital
3.276%
96.724%
100.00%
An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of 12,500 shares or less
(being a value of $500 or less in total), based upon the Company’s closing share price of $0.04 on 12 October 2017.
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.
12 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 2017
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ADDITIONAL ASX INFORMATION
as at 12 October 2017
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
JP MORGAN NOMINEES AUSTRALIA LIMITED
ACN 139 886 025 PTY LTD
TCH HOLDINGS PTY LTD
MR IANAKI SEMERDZIEV
CONCORDE SECURITIES PTY LTD
MR CHI MAU PHUONG
D&C PESCA S.A.C.
MRS LILIANA TEOFILOVA
BONTOWN PTY LTD
CLASSIC CAPITAL PTY LTD
EMPIRE HOLDINGS WA PTY LTD
MR JOHN FAZZALORI
TADMARO PTY LIMITED
MR VU QUANG MINH DANG + MRS THI KIM DAU NGUYEN
MR FAROOQ KHAN
MR TRAVIS CHRISTIAN HANSEN & MISS CARYSS FRANCES BIDESI
52,553,493
26,609,077
12,537,090
10,000,000
2,840,605
2,110,261
1,500,000
1,379,000
1,200,000
1,137,437
1,081,027
947,000
900,000
750,000
700,000
619,479
601,828
591,210
530,010
500,000
36.16
18.32
8.63
6.88
1.95
1.45
1.03
0.95
0.83
0.78
0.74
0.65
0.62
0.52
0.48
0.43
0.41
0.41
0.36
0.34
TOTAL
119,087,517
81.94%
SUBSTANTIAL SHAREHOLDERS
Substantial Shareholders
Registered Shareholder
Shares Held
% Voting Power
Bentley Capital Limited13
Bentley Capital Limited
ABU Holding International Limited
and Associates 14
HSBC Custody Nominees
(Australia) Limited
52,553,493
25,825,000
Database Systems Ltd
and Ambreen Chaudhri 15
Orion Equities Limited16
Queste Communications Ltd17
Database Systems Ltd
12,537,090
Orion Equities Limited
Orion Equities Limited
10,000,000
10,000,000
36.16%
17.77%
8.63%
6.88%
6.88%
13 Refer Bentley’s ASX announcement dated 4 September 2015 Notice of Change in Interests of Substantial Holder
14 Refer Notice of Initial Substantial Holder dated 21 December 2012
15 Based on Notice of Change in Interests of Substantial Holder dated 4 June 2013
16 Refer Orion’s ASX announcement dated 4 September 2015: Notice of Change in Interests of Substantial Holder
17 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