ABN 94 088 488 724
2018
ANNUAL REPORT
30 JUNE 2018
CONTENTS
Company Projects
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 Concessions
Annual Mineral Resources Statement
JORC Code Competent Persons’ Statements
Additional ASX Information
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
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STOCK EXCHANGE
Australian Securities Exchange
Perth, Western Australia
ASX CODE
SRK
SHARE REGISTRY
Advanced Share Registry Limited (ASX:ASW)
Main Office:
110 Stirling Highway
Nedlands, Western Australia 6009
Local Telephone:
Telephone:
Facsimile:
Email:
Investor Web:
1300 113 258
(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
The 2018 Corporate Governance Statement
can be found at the following URL
on the Company’s website:
http://strikeresources.com.au/corporate/corporate-governance/
Visit www.strikeresources.com.au for
• Market Announcements
• Financial Reports
• Corporate Governance
• Forms
• Email Subscription
ANNUAL REPORT | 1
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Apurimac Iron Ore Project (Peru)
Between 2006 and 2014, Strike’s primary focus was on the development of its Apurimac Magnetite Iron Ore
Project in Peru, recognised as one of the highest grade, large scale magnetite projects in the world with the
potential to support the establishment of a significant iron ore operation.
Adverse market conditions however led Strike in 2014 to suspend all development activities on this and its
other iron ore projects in Peru.A
In early 2018 the Ministry of Transport and Communications in Peru (MOTC) announced that it is to undertake
a formal study to build a multi-user railway from the inland city of Andahuaylas in southern Peru, to the mineral
export Port of San Juan de Marcona on the west coast of Peru (the Andahuaylas Railway). B
In October 2018, the MOTC awarded a A$13 million tender to an international consortium of engineering
companies to study the feasibility of constructing the Andahuaylas Railway. C The award of the tender is
regarded by Strike as an important step in progressing the Apurimac Project.
Figure 1: Route of proposed Andahuaylas Railway connecting Strike’s Apurimac Project to Port of San Juan de Marcona
Strike’s Apurimac Project is located only 20km from the city of Andahuaylas. The proposed railway
(approximately 570km in length) would provide a direct link from the Project to an established mineral export
port, significantly improving the Project’s development prospects. The preliminary railway route proposed by
the MOTC (refer Figure 1) almost exactly mirrors the railway route proposed by SKM for Strike in 2008.
Strike understands that the primary motivation behind the MOTC Andahuaylas Railway initiative is to provide
economic stimulation to the relatively poorer regions of Ica, Arequipa, Ayacucho and Apurimac. The Apurimac
Region in particular is positioned well inland and has historically suffered from lack of good transport
infrastructure connecting it to the coastal areas and the Peru capital, Lima.
A Refer Strike’s ASX Announcements dated 28 February 2014: Legal Injunction and Suspension of Operations in Peru, 13 March 2014: Lifting of
Injunction and Strategic Review and 14 April 2014: Exit from Peru
B Refer Strike’s ASX Announcement dated 8 February 2018: Peru Government Plans Railway Linking Strike’s Apurimac Iron Ore Project to Port
C Refer Strike’s ASX Announcement dated 24 October 2018: Peru Government Awards $13 Million Tender for Andahuaylas Railway Study Linking
Strike’s Apurimac Iron Ore Project to Port
ANNUAL REPORT | 2
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
The scale of Strike’s Apurimac Project, if it proceeds through the Andahuaylas Railway, is likely to provide for
very significant economic benefits to the Apurimac Province in terms of both direct investment and job
creation. Other mineral projects in the Apurimac and Cusco Regions are also likely to directly benefit from
the Andahuaylas Railway.
A railway has always been considered as the best infrastructure solution for the Apurimac Project, given the
high-grade nature of the iron ore deposit. A railway connecting the Project to a Port will provide Strike the
ability to attract premium pricing for high-grade lump and fines products, compared to a concentrate product
delivered through an alternative slurry pipeline. In addition, a railway will allow for capital and processing
costs at the mine to be substantially reduced, given the considerably simplified process to produce lump and
fines products from Strike’s high grade ore compared to producing a slurry concentrate.
The exceptionally high-grade 57% Fe at Apurimac is almost twice as high as magnetite deposits developed
in Australia; ore bodies are coarse-grained and relatively soft, resulting in potentially cheaper processing costs
once in production:
•
•
•
JORC Indicated and Inferred Mineral Resource at the main Opaban I/III concessions of 269Mt of iron
ore at 57.3% Fe (142 Mt Indicated Resource at 57.84% Fe and 127 Mt Inferred Resource at 56.7%
Fe).
Mineralisation predominantly high-grade, coarse-grained magnetite providing comparatively high mass
recoveries (>60%) at coarse grind size (>500 microns).
Excellent exploration potential within current concessions with several targets containing ironstones
grading >60% Fe in similar geological settings to the main Opaban concessions.
A Pre-Feasibility Study completed in 2008D and updated in 2010E on the Apurimac Project indicated clear
potential for development of a world class iron ore project:
•
•
The 2008 Pre-Feasibility Study undertaken by Snowden Mining Industry Consultants and SKM utilised
a proposed slurry pipeline configuration but considered a range of infrastructure options including a
railway. The concentrate pipeline was the preferred transport solution (under the study) as the
additional capital cost of building a railway compared to a slurry pipeline outweighed the operational
and other benefits of a railway.
For further details, refer to Strike’s ASX Announcement dated 23 July 2008: Prefeasibility Results
Confirm World Class Prospects in Peru.
Further infrastructure studies were undertaken by Ausenco Sandwell and SRK Consulting in 2010,
including a more detailed technical and costing study on building and operating a dedicated railway.
The purpose of these studies was to further compare the economics of the slurry pipeline versus
railway infrastructure solutions at various production levels.
For further details, refer to Strike’s ASX Announcement dated 23 November 2010: Apurimac Project
Update and Strike’s December 2010 Quarterly Report.
Since the completion of the studies referred to above, Strike has continued to evaluate its development
options for the Project. With falling iron ore prices and a global investment climate in recent years not
supportive of large scale iron-ore related infrastructure projects, Strike has acted to minimise its Project-
related costs until market conditions improved.
With spot prices for iron ore strengthening from the lows of approximately US$40 per tonne in December
2015 to approximately US$70/t today (with a 12 month trading range of approximately US$60/t to 80/t)F, the
timing of the MOTC Andahuaylas Railway initiative, being co-incident with strengthening iron ore prices, is
considered by Strike to be extremely positive for the Project.
D Refer Strike’s ASX Announcement dated 23 July 2008: Prefeasibility Results Confirm World Class Prospects in Peru
E Refer Strike’s ASX Announcement dated 23 November 2010: Apurimac Project Update and Strike’s December 2010 Quarterly Report
F Source: https://www.marketindex.com.au/iron-ore- (Industry standard NYMEX traded 62% Fe, CFR China)
ANNUAL REPORT | 3
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
In February 2018, Strike and Dalian Huarui Heavy Industry Group Co. Ltd. (DHHI) from China, executed a
Memorandum of Understanding (MOU) in relation to the development of Strike’s Apurimac Iron Ore Project
and associated rail and port infrastructure in PeruG:
•
•
•
•
•
The MOU documents the mutual understanding between Strike and DHHI to work jointly on the
advancement of the Project, including the proposed Peru Government sponsored multi-user
Andahuaylas Railway which would link Strike’s Apurimac Iron Ore Project with the minerals export Port
of San Juan de Marcona on the west coast of Peru, South America.
DHHI (www.dhhi.com.cn) is a large Chinese manufacturer of bulk material handling machinery,
including large scale iron ore mining, handling and processing machinery as well as large scale port
machinery. DHHI has a long-established history in China and has delivered major projects around the
world, including in Australia where they supplied the bulk handling heavy machinery for the 55 million
tonne per annum (Mtpa) Roy Hill Iron Ore Mine in Western Australia.
The purpose of the MOU is to recognise the intention of both parties to work together to advance
Strike’s Project and the associated rail and port infrastructure.
Joint activities contemplated by the MOU include the development of further studies relating to the
feasibility of Strike’s Project and potentially the creation of a formal joint venture or consortium (to
include other major Chinese infrastructure and funding groups introduced by DHHI).
The MOU is non-binding and does not commit either party to any formal contractual arrangements.
The Company is highly encouraged by the prospect of the Andahuaylas Railway and is currently planning to
re-start project activity in Peru, subject to the development timetable of the railway.
Cusco Iron Ore Project, Peru
The Cusco Project lies approximately 150km to the south - east of Apurimac and forms a potential secondary
development target for Strike in Peru with an initial Inferred Resource estimate of 104Mt at 32.6% Fe.
Like Apurimac, iron ore mineralisation at the project is coarse-grained and dominated by magnetite, with high
grades recorded. Preliminary metallurgical tests indicate a concentrate grade of >65% Fe could be produced
from this ore using conventional grinding and magnetic separation processes.
Whilst no detailed work has been undertaken on a railway route between Strike’s Apurimac and Cusco
Projects, it is clear that if the Andahuaylas Railway proceeds, a ‘spur line’ from Andahuaylas to Strike’s Cusco
Project would (subject to technical and commercial feasibility) be a very sensible consideration, given the
proximity of several other major mining projects nearby Strike’s Cusco Project which would also benefit from
such a rail link.
G Refer Strike’s ASX Announcement dated 19 February 2018: Peru Iron Ore Update – MOU with Chinese Dalian Huarui Heavy Industry Group
ANNUAL REPORT | 4
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Burke Graphite Project, Queensland
Strike’s Burke Graphite Project (in which Strike holds a ~70% interest) is located 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).
Figure 2 - Burke Graphite Project Tenement Location in North Central Queensland
A Mineral Resource Estimate (MRE) for the Project has defined a maiden Inferred Mineral Resource ofH:
•
6.3 million tonnes @ 16.0% Total Graphitic Carbon (TGC) for 1,000,000 tonnes of contained
graphite;
• Within the mineralisation envelope there is included higher grade material of 2.3 million tonnes @
20.6% TGC (with a TGC cut-off grade of 18%) for 464,000 tonnes of contained graphite which will be
investigated further.
These grades place the Burke deposit as one of the highest-grade deposits of graphite in the world held by
an Australian listed company.
H Refer Grade Tonnage Data in Table 2 of CSA Global’s Burke Graphite Project MRE Technical Summary dated 9 November 2017 (attached as
Annexure A of Strike’s ASX Announcement dated 13 November 2017: Maiden Mineral Resource Estimate Confirms Burke Project as One of
the World’s Highest Grade Natural Graphite Deposits).
ANNUAL REPORT | 5
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Based upon the MRE for the Project referred to above, the following Chart illustrates the TGC grades of
published Total JORC Resource/Reserves of selected ASX Listed Graphite Projects relative to the Burke
Project.
Figure 3 - Selected TGC% of Published Total JORC Resource/Reserve* vs. Maiden Burke Mineral Resource Estimates
In addition to the high-grade nature of the deposit, the Burke Graphite Project:
•
•
•
•
Comprises natural graphite that has been demonstrated to be able to be processed by standard
flotation technology to international bench mark product categories. The flotation tests conducted by
Independent Metallurgical Operations Pty Ltd (IMO) have confirmed that a concentrate of purity in
excess of 95% and up to 99% TGC can be produced using a standard flotation process.
Contains graphite from which Graphene Nano Platelets (GNP) have been successfully extracted direct
from the Burke Graphite deposit via Electrochemical Exfoliation (ECE). The ECE process is relatively
low cost and environmentally friendly compared to other processes, yet it can produce very high purity
Graphene products. The ECE process is however not applicable to the vast majority of worldwide
graphite deposits as it requires a TGC of over 20% and accordingly the Burke Deposit has potentially
significant processing advantages over other graphite deposits.
Is located in the relatively safe and mining friendly jurisdiction of Queensland, Australia with well-
developed transport infrastructure and logistics nearby; and
Is potentially amenable to low cost open-pit mining.
ANNUAL REPORT | 6
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
High Grade Intersections from Drilling
A maiden drilling campaign was undertaken by Strike between 24 April 2017 and 14 May 2017 to test the
graphite mineralisation in the key Burke tenement, EPM 25443. Total metres drilled were 735.2m (618m in 9
RC holes and 117.2m in one diamond core hole) spread across four cross-sections over a strike length of
500m.
Drilling confirmed the continuity of high grade (>10%) graphite mineralisation over 500m along strike in the
NE-SW direction and confirmed the presence of extensive zones of very high-grade graphite mineralisation,
commencing at surface and extending to at least 100m in depth (refer Figure 4). Intersections encountered
include:
•
•
Diamond Core Hole BGDD001 : 99.8 Metres @ 21.1% TGC from 9 metres depth; and
RC Hole BGRC001 : 43 Metres @ 18.87% TGC from 21 metres depth.
Figure 4 - Burke Tenement Drilling Cross Section 7830950mN
ANNUAL REPORT | 7
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Ground EM Survey Results
A ground Electro Magnetic (EM) survey was completed during the financial year, covering the south-eastern
corner of Burke tenement EPM 25443 (North) (drilled by Strike in 2017I) and the Corella tenement EPM 25696
(South) (located ~20 km south of EPM 25443).J
The EM survey identified the Corella Prospect as a significant target area for additional high grade
mineralisation as well as identifying new zones of increased conductivity adjacent to previously drilled graphite
mineralisation at the Burke Prospect.
The Corella Prospect (north east corner of EPM 25696 (South)) EM survey was carried out over outcropping
and sub-cropping Geological Survey of Queensland mapped Graphitic Schists - the “Milo beds” - within the
Corella Formation. Graphite grading 5 -10% TGC is widespread throughout the outcropping Milo beds and
the EM survey was carried out to identify higher-grade areas of mineralisation and identify future drill
targets. The survey highlighted an area of approximately 1000m x 500m (refer Figure 5) within which
conductive features similar to those corresponding to high-grade graphite occurring at the Burke EPM 2543
tenement were identified.
Figure 5 - EM Survey - Corella Prospect, Burke Graphite Project
The conductive features identified at the Corella Prospect appear to be shallow to flat-lying and occur in areas
of outcropping and sub-cropping graphite that have rock chips (from previous sampling by Strike) of up to
14.85% TGC. K
I Refer Strike’s ASX announcements dated 13 June 2017: Extended Intersections of High-Grade Graphite Encountered at Burke Graphite Project
and 21 June 2017: Further High-Grade Intersection Encountered at Burke Graphite Project
J Refer Strike’s ASX Announcement dated 26 June 2018: Burke Graphite Project – New Target Area Identified From Ground Electro-Magnetic
Surveys
K Refer Strike’s ASX announcement dated 21 April 2017: Jumbo Flake Graphite Confirmed at Burke Graphite Project, Queensland
ANNUAL REPORT | 8
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
In addition to identifying the new potential at Corella, the EM survey identified minor structural offsets, together
with new zones of increased conductivity at the previously drilled Burke Prospect.
Figure 6 - EM Survey - Burke Prospect, Burke Graphite Project
The EM survey over the south-eastern corner of Burke EPM 2543 (North) was carried out over outcropping
and sub-cropping Geological Survey of Queensland mapped Graphitic Schists of the Corella Formation. The
survey highlighted the high-grade graphite identified in Strike’s maiden drilling programme and identified
minor structural offsets, together with new zones of increased conductivity (refer Figure 6). In addition, the
survey verified the width and dip of the drill intersected high-grade graphite.
Further metallurgical test work has commenced on samples of graphite material taken from the Burke Project
to examine the potential suitability of Burke graphite for use in electric vehicle (EV) batteries.
For further technical details about the Burke Graphite Projects, refer to Strike’s ASX announcements dated:
•
•
•
•
21 April 2017: Jumbo Flake Graphite Confirmed at Burke Graphite Project, Queensland;
13 June 2017: Extended Intersections of High-Grade Graphite Encountered at Burke Graphite Project;
21 June 2017: Further High-Grade Intersection Encountered at Burke Graphite Project;
16 October 2017: Test-work confirms the potential suitability of Burke graphite for Lithium-ion battery
usage and Graphene production;
ANNUAL REPORT | 9
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
•
•
13 November 2017: Maiden Mineral Resource Estimate Confirms Burke Project as One of the World’s
Highest Grade Natural Graphite Deposits; and
26 June 2018: Burke Graphite Project – New Target Area Identified From Ground Electro-Magnetic
Surveys.
Lithium and Gold Exploration Tenements, Western Australia
The North Pilbara hosts a number of lithium and tantalum prospects associated with pegmatites that are
related to the Sisters Supersuite of monzogranites and other high end intrusives that intruded the Archeaen
greenstone terrain of the East Pilbara approximately 3 billion years ago.
Lithium and tantalum mineralisation occurs either within the pegmatite veins or within alluvials draining the
elevated areas containing the pegmatite veins.
Strike holds two exploration licences, EL 45-4799 and EL 45-4800 in the North-West Pilbara totalling ~31,000
hectares 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.
Given the widespread cover of thin wind-blown sands and tertiary laterites/duricrusts, the potential of sub-
cropping and shallow buried lithium and tantalum rich pegmatites and alluvial deposits is considered a strong
possibility.
Strike’s North-West Pilbara tenements are also favourably located close to the Mt York Lithium-Gold Project
and other gold deposits and to adjoining tenements held by Kairos Minerals Limited and De Grey Mining
Limited, in an area of significant activity based upon reported Novo/Artemis discoveries in the Pilbara (refer
Figure 7).
Figure 7 – Strike’s North-West Pilbara Tenements (EL 45/4799 and EL 45/4800)
ANNUAL REPORT | 10
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
COMPANY PROJECTS
Strike also holds the Paulsens East tenement, which is located ~7km east of the Paulsens Gold Mine
operated by Northern Star Resources Ltd (ASX:NST) (which has mined over 700k ounces at an average
grade of 7.63 g/t AuL) has been held by Strike for many years for its deposit of high grade hematite.
Strike has historically conducted extensive drilling on the tenement for iron ore.
A review by Strike of the historical data within the tenement for other mineralisation has indicated the
presence of a historical gold occurrence, hosted within conglomerate rocks on a faulted contact between
the Fortescue Group and Ashburton Basin sediments. Strike notes the potential of the Paulsens area,
given the geological setting with mineralised conglomerates is similar to the Novo/Artemis gold
discoveries, with these discoveries having opened up fresh geological models for gold prospectivity
compared with traditional paradigms.
Strike also notes that the Paulsens East tenement directly abuts the southern boundary of Chalice Gold
Mines Limited’s (ASX:CHN) West Pilbara Project tenements, with Novo Resources’ tenements nearby
to the south-east (refer Figure 8).
Figure 8 – Strike’s Paulsens East Tenement (Retention Licence RL 47/7)
Strike is currently evaluating all of its Pilbara tenements and planning further exploration activities to
determine their prospectivity for lithium, tantalum, rare earths and gold.
For further details, please refer to Strike’s ASX announcement dated 20 November 2017: Gold Potential of
Strikes Pilbara Tenements.
L Source: Northern Star Resources Ltd company website: http://www.nsrltd.com/
ANNUAL REPORT | 11
30 JUNE 2018
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 2018
(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 value-adding strategies in relation to the development of its Apurimac
Iron Ore Project in Peru;
•
•
the exploration and evaluation of its Burke Graphite Project in Queensland; and
the exploration and evaluation of its projects in Western Australia.
OPERATING RESULTS
Consolidated
Total revenue
Total expenses
Loss before tax
Income tax expense
Loss after tax
June 2018
$
652,845
(1,334,459)
(681,614)
-
(681,614)
June 2017
$
171,203
(1,319,132)
(1,147,929)
-
(1,147,929)
Revenues included $0.529 million total gains from listed investments comprising $0.279 million realised
gains and $0.25 million unrealised gains (30 June 2017: nil).
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
June 2018
$
(1,697,877)
(1,251,713)
(2,949,590)
2,361,403
June 2017
$
(1,834,293)
175,804
(1,658,489)
5,308,855
In addition, Strike held an investment portfolio of $1.93 million comprising liquid investments in a diversified
portfolio of various ASX 200 listed resource stocks (30 June 2017: $nil).
ANNUAL REPORT | 12
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
FINANCIAL POSITION
Consolidated
Cash
Financial assets at fair value through profit or loss
Receivables
Other assets
Liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Total equity
REVIEW OF OPERATIONS
Apurimac Iron Ore Project (Peru)
June 2018
$
2,361,403
1,932,400
46,221
587,776
(95,097)
4,832,703
148,439,925
14,996,757
(158,603,979)
4,832,703
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
Between 2006 and 2014, Strike’s primary focus was on the development of its Apurimac Magnetite Iron Ore
Project in Peru, recognised as one of the highest grade, large scale magnetite projects in the world with the
potential to support the establishment of a significant iron ore operation.1
Adverse market conditions however led Strike in 2014 to suspend all development activities on this and its
other iron ore projects in Peru.2
In early 2018, the Ministry of Transport and Communications in Peru (MOTC) announced that it would
undertake a formal study to build a multi-user railway from the inland city of Andahuaylas in southern Peru,
to the mineral export Port of San Juan de Marcona on the west coast of Peru (the Andahuaylas Railway). 3
Strike’s Apurimac Project is located only 20km from the city of Andahuaylas. The proposed railway
(approximately 570km in length) would provide a direct link from Strike’s Project to an established mineral
export port, significantly improving the Apurimac Project’s development prospects.
With spot prices for iron ore strengthening from the lows of approximately US$40 per tonne in 2015 to
approximately US$68/t today (with a trading range of approximately US$60/t to 80/t during 2017/2018), the
timing of the MOTC initiative, being co-incident with strengthening iron ore prices, is considered by Strike to
be extremely positive for the Apurimac Project.
Strike is highly encouraged by the prospect of the Andahuaylas Railway and is currently planning to re-start
project activity in Peru, subject to the development timetable of the railway.
1 Refer Strike’s ASX Announcements dated 23 July 2008: Prefeasibility Results Confirm World Class Prospects in Peru, 23 November 2010:
Apurimac Project Update (and Strike’s December 2010 Quarterly Report) and 19 January 2015: Apurimac Mineral Resources Updated to
JORC 2012 Standard
2 Refer Strike’s ASX Announcements dated 28 February 2014: Legal Injunction and Suspension of Operations in Peru, 13 March 2014 Lifting of
Injunction and Strategic Review and14 April 2014: Exit from Peru
3 Refer Strike’s ASX Announcement dated 8 February 2018: Peru Government Plans Railway Linking Strike’s Apurimac Iron Ore Project to Port
4 Market index tracks the industry standard NYMEX traded 62% Fe CFR China (Source www.marketindex.com.au/iron-ore)
ANNUAL REPORT | 13
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
Burke Graphite Project (Queensland)
Strike’s Burke Graphite Project4 (in which Strike holds a ~70% interest 5) is located in the Cloncurry region in
North Central Queensland.
During the financial year:
•
•
•
•
•
Strike reported a maiden JORC Inferred Mineral Resource Estimate (MRE) on its Burke Graphite
Project in Queensland, confirming the project as one of highest grade natural graphite deposits in the
world6.
Strike’s Managing Director met with a number of major lithium-ion battery manufacturers and
graphite companies in China to endeavour to develop strategic relationships with potential graphite
concentrate offtake partners and other parties who are otherwise active in the Chinese
graphite/graphene industry. Strike engaged an experienced Beijing-based Consultant to facilitate
and advance discussions with these and other parties.
Strike had discussions with various Universities and Research Institutions in Australia with regard to
partnering with Strike on researching the development of commercial applications for its graphite,
with a focus on areas with the best near-term commercial potential and where, if possible, Australian
Government funding support can also be secured.
Strike completed ground Electro Magnetic (EM) survey which identified the Corella Prospect as a
significant target area for additional high grade mineralisation as well as identifying new zones of
increased conductivity adjacent to previously drilled graphite mineralisation at the Burke Prospect.
Strike commenced further metallurgical test work on samples of graphite material taken from the
Burke Project to examine the potential suitability of Burke graphite for use in electric vehicle (EV)
batteries.
For further details, refer to Strike’s ASX announcements dated:
•
16 October 2017: Test-work confirms the potential suitability of Burke graphite for Lithium-ion battery
usage and Graphene production
•
•
•
•
13 November 2017: Maiden Mineral Resource Estimate Confirms Burke Project as One of the
World’s Highest Grade Natural Graphite Deposits
22 January 2018: Burke Graphite Project - Update ;
13 June 2017: Extended Intersections of High-Grade Graphite Encountered at Burke Graphite
Project and 21 June 2017: Further High-Grade Intersection Encountered at Burke Graphite Project;
26 June 2018: Burke Graphite Project – New Target Area Identified From Ground Electro-Magnetic
Surveys
4 Refer Strike’s ASX announcement dated 9 November 2016: Strike Secures Graphite Project in Queensland
5
In July 2017, Strike completed its earn-in obligations to acquire a 60% interest in the Burke Graphite Project tenements. All subsequent
expenditure on the project are shared in proportion to the owners’ interests (with an industry standard dilution to apply if a party elects not to
contribute their share).
6 Refer Grade Tonnage Data in Table 2 of CSA Global’s Burke Graphite Project MRE Technical Summary dated 9 November 2017 (attached
as Annexure A of Strike’s ASX Announcement dated 13 November 2017: Maiden Mineral Resource Estimate Confirms Burke Project as One
of the World’s Highest Grade Natural Graphite Deposits)
ANNUAL REPORT | 14
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
Lithium Exploration (Western Australia)
During the financial year, Strike received the grant of Exploration Licences EL 45-4799 and E45-4800
totalling ~31,000 hectares in the North Pilbara of Western Australia7. These tenements 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.
Paulsens-East Project (Western Australia)
Strike’s Paulsens East tenement, which is located ~7km east of the Paulsens Gold Mine operated by
Northern Star Resources Ltd (ASX:NST), has been held by Strike for many years for its deposit of high
grade hematite. Strike has historically conducted extensive drilling on the tenement for iron ore.
During the financial year, Strike conducted a review of historical data within the tenement for other
mineralisation, which indicated the presence of a historical gold occurrence hosted within conglomerate
rocks. The geological setting with mineralised conglomerates is similar to the Novo Resources Corp. (TSX-
V:NVO) / Artemis Resources Limited (ASX:ARV) gold discoveries, with these discoveries having opened up
fresh geological models for gold prospectivity compared with traditional paradigms
For further details, refer to Strike’s ASX announcement dated 20 November 2017: Gold Potential of Strike's
Pilbara Tenements.
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 2018 (and as at the date of this
report):
Fully paid ordinary shares
Quoted on ASX
145,334,268
Unlisted
-
Total
145,334,268
Total
145,334,268
-
145,334,268
The following unlisted options lapsed during the financial year:
Date of Lapse
17 June 2018
Description of Options
$0.30 (17 June 2018) Unlisted
Managing Director’s Options
№ of
Options
3,000,000
Exercise
Price
$0.30
Date of Issue
18 June 2013
Expiry Date
17 June 2018
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.
7 Refer Strike’s ASX Announcement dated 18 August 2016: New Lithium Projects in Chile and Western Australia
ANNUAL REPORT | 15
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
DIRECTORS’ REPORT
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 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 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
sector. 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 | 16
30 JUNE 2018
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
William 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 mineral exploration and investment
(Australia, Peru, Chile, Saudi Arabia, Oman, North Africa 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 corporate
governance, business strategy and operations, investment analysis, finance and execution.
Special
responsibilities
None
Relevant Interests in
shares and options
Other current
directorships in listed
entities
249,273 shares (directly)
Executive Director of:
Bentley Capital Limited (ASX:BEL) (since 1 January 2016; Director since March 2009)
Non-Executive Director of:
Keybridge Capital Limited (ASX:KBC) (since July 2016)
Yowie Group Ltd (ASX:YOW) (since April 2018)
Molopo Energy Limited (ASX:MPO) (since June 2018)
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 | 17
30 JUNE 2018
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 (LSE:MAIL)
(since April 2011; Director since May 2010; CFO since June 2013);
Former directorships
in other listed entities
in past 3 years
Non-Executive Director of:
Realm Therapeutics plc (formerly PuriCore plc) (LSE:RLM) (May 2010 to 17 November 2017)
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
Victor Ho has been in Executive roles with a number of ASX-listed companies across the
investments, resources and technology sectors over the past 18+ years. Mr Ho is a Chartered Tax
Adviser (CTA) and previously had 9 years’ experience in the taxation profession with the Australian
Tax Office (ATO) and in a specialist tax law firm. Mr Ho has been actively involved in the
investment management of listed investment companies (as an Executive Director and/or a
member of the Investment Committee), 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
None
ANNUAL REPORT | 18
30 JUNE 2018
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
Notes:
5
5
5
5
5
Max. Possible
Meetings
5
5
5
5
5
Attended
2
-
2
1
2(a)
Max. Possible
Meetings
2
-
2
2
2
Attended
1
-
1
1
-
Max. Possible
Meetings
1
-
1
1
-
(a)
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 | 19
30 JUNE 2018
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 (8) 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
Chairman since 18 December 2015; Director since 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.
The latest version of the CGS may be downloaded from the Company’s website:
http://strikeresources.com.au/corporate/corporate-governance/.
ANNUAL REPORT | 20
30 JUNE 2018
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
$550,0008 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 2017/18 financial year or the 2018/19 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
20089. 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 200810. The Company has not
granted any options to Key Management Personnel during the financial year.
8 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
9 Refer SRK’s ASX announcement dated 6 November 2008: Results of Annual General Meeting
10 Refer SRK’s ASX announcement dated 8 October 2008: Notice of 2008 AGM and Explanatory Statement and Proxy Form
ANNUAL REPORT | 21
30 JUNE 2018
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 ($)
2018
(681,614)
(0.60)
-
-
-
-
0.07
0.05
2017
(1,147,929)
(0.79)
-
-
-
-
0.05
0.04
2015
(628,670)
(0.43)
-
-
-
-
0.05
0.04
2014
(517,864)
(0.36)
-
-
-
-
0.05
0.05
2013
(48,761,450)
(33.55)
-
-
-
-
0.05
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:
2018
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
208,000
79,999
45,000
44,999
45,000
50,000
-
-
-
-
-
-
19,760
7,600
4,275
4,275
-
4,750
-
-
-
-
-
-
-
-
-
-
-
-
2017
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
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
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
227,760
87,599
49,275
49,274
45,000
54,750
Total
$
221,628
87,600
49,275
49,275
45,000
54,750
ANNUAL REPORT | 22
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
(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.
• 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 to cash short-term incentive (STI) payments
in respect of up to 30% of annual base salary, as set by
the Board
the
regard
Remuneration and Nomination Committee) – no STI
was defined in respect of the 2017/2018 financial year
and as at the date of this report.
to advice
(having
from
(5) Other Benefits Provided to Key Management Personnel
No Key Management Personnel has during or since the end of the financial year, received or
become entitled to receive a benefit, other than a remuneration benefit as disclosed above, by
reason of a contract made by the Company or a related entity with the Director or with a firm of which
he is a member, or with a Company in which he has a substantial interest.
(6)
Engagement of Remuneration Consultants
The Company has not engaged any remuneration consultants
to provide remuneration
recommendations in relation to Key Management Personnel during the year. The Board has
established a policy for engaging external Key Management Personnel remuneration consultants
which includes, inter alia, that the Non-Executive Directors on the Remuneration Committee be
responsible for approving all engagements of and executing contracts to engage remuneration
consultants and for receiving remuneration recommendations from remuneration consultants
regarding Key Management Personnel. Furthermore, the Company has a policy that remuneration
advice provided by remuneration consultants be quarantined from Management where applicable.
(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 2017
750,803
249,273
-
-
-
Received as part
of remuneration
-
-
-
-
-
Net
Change
-
-
-
-
-
Balance at
30 June 2018
750,803
249,273
-
-
-
Note:
(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)
ANNUAL REPORT | 23
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
REMUNERATION REPORT
(8) Options held by Key Management Personnel
The number of options in the Company held by Key Management Personnel is set below:
2018
Key Management
Personnel
William Johnson
Farooq Khan
Victor Ho
Malcolm
Richmond
Matthew
Hammond
Balance at
30 June
2017
3,000,000(a)
Granted
-
Exercised
-
-
-
-
-
-
-
-
-
-
-
-
-
Lapsed /
Cancelled
3,000,00011
-
-
-
-
Balance at
30 June
2018
-
Granted
and vested
during year
-
Vested and
exercisable
at 30 June
2018
-
-
-
-
-
-
-
-
-
-
-
-
-
Note:
(a)
$0.30 (17 June 2018) Unlisted Managing Director’s Options issued on 18 June 2013 after receipt of shareholder approval 12
(9)
Voting and Comments on the Remuneration Report at the 2017 AGM
At the Company’s most recent (2017) AGM, a resolution to adopt the prior year (2017) Remuneration
Report was put to a vote and passed unanimously on a show of hands with the proxies received also
indicating majority (99.85%) support in favour of adopting the Remuneration Report. 13 No comments
were made on the Remuneration Report at the 2017 AGM.
This concludes the audited Remuneration Report.
11 Refer Strike’s ASX announcement dated 20 June 2018: Lapse of Unlisted Managing Director’s Options
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
13 Refer Strike’s ASX announcement dated 16 November 2017: Results of 2017 Annual General Meeting
ANNUAL REPORT | 24
30 JUNE 2018
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 27. This relates to the Audit Report,
where the Auditors state that they have issued an independence declaration.
ANNUAL REPORT | 25
30 JUNE 2018
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 22),
that have significantly affected or may significantly affect the operations, the results of operations or the
state of affairs of the Company in subsequent financial years.
Signed for and on behalf of the Directors in accordance with a resolution of the Board,
Farooq Khan
Chairman
25 September 2018
William Johnson
Managing Director
ANNUAL REPORT | 26
30 JUNE 2018
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 2018
REVENUE
Interest revenue
Other
Other income
TOTAL REVENUE AND INCOME
EXPENSES
Exploration and evaluation expenses
Personnel expenses
Corporate expenses
Occupancy expenses
Finance expenses
Foreign exchange loss
Administration expenses
LOSS BEFORE INCOME TAX
Income tax expense
LOSS FOR THE YEAR
OTHER COMPREHENSIVE INCOME
Other Comprehensive Income, Net of Tax
Note
2
3
5
2018
$
2017
$
82,423
171,200
570,422
3
652,845
171,203
(331,421)
(508,047)
(335,782)
(43,618)
(5,510)
13,731
(123,812)
(246,426)
(508,330)
(415,262)
(33,281)
(5,663)
(17,792)
(92,378)
(681,614)
(1,147,929)
-
-
(681,614)
(1,147,929)
Exchange differences on translation of foreign operations
(187,686)
(37,463)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(869,300)
(1,185,392)
LOSS PER SHARE FOR LOSS ATTRIBUTABLE TO THE
ORDINARY EQUITY HOLDERS OF THE COMPANY:
Basic and diluted loss per share (cents)
6
(0.60)
(0.82)
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 28
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
as at 30 June 2018
CURRENT ASSETS
Cash and cash equivalents
Financial assets at fair value through profit or loss
Receivables
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration and evaluation expenditure
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2018
$
2017
$
7
8
10
11
12
13
14
2,361,403
1,932,400
46,221
3,436
5,308,855
-
76,584
10,230
4,343,460
5,395,669
581,433
2,907
369,902
1,822
584,340
371,724
4,927,800
5,767,393
89,610
5,487
53,336
12,054
95,097
65,390
95,097
65,390
4,832,703
5,702,003
148,439,925
148,439,925
14,996,757
15,184,443
(158,603,979)
(157,922,365)
4,832,703
5,702,003
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 29
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
for the year ended 30 June 2018
Issued capital
Currency
translation
reserve
Share-based
payments
reserve
Accumulated
losses
$
$
$
$
Total
$
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 JUN 2017
148,439,925
1,951,417
13,233,026
(157,922,365)
5,702,003
BALANCE AT 1 JUL 2017
148,439,925
1,951,417
13,233,026
(157,922,365)
5,702,003
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
-
-
-
-
(187,686)
(187,686)
-
-
-
-
(681,614)
-
-
(681,614)
(187,686)
-
(681,614)
(869,300)
BALANCE AT 30 JUN 2018
148,439,925
1,763,731
13,233,026
(158,603,979)
4,832,703
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 30
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
CONSOLIDATED STATEMENT
OF CASH FLOWS
for the year ended 30 June 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Payments for exploration and evaluation
2018
$
2017
$
(1,154,925)
(1,051,074)
(542,952)
(783,219)
NET CASH USED IN OPERATING ACTIVITIES
7(a)
(1,697,877)
(1,834,293)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Dividends received
Payment for share investments
Proceeds from share investments
Payment for purchases of plant and equipment
112,176
40,462
(4,237,532)
2,835,092
(1,911)
176,135
-
-
-
(331)
NET CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES
(1,251,713)
175,804
NET DECREASE IN CASH HELD
(2,949,590)
(1,658,489)
Cash and cash equivalents at beginning of financial year
5,308,855
6,970,738
Effect of exchange rate changes on cash held
2,138
(3,394)
CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR
7
2,361,403
5,308,855
The accompanying notes form part of these consolidated financial statements
ANNUAL REPORT | 31
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2018
1.
ABOUT THIS FINANCIAL REPORT
1.1
Background
the consolidated
financial report covers
financial
This
statement of the consolidated entity consisting of Strike
Resources Limited (the Company), its subsidiaries and
investments in associates (the Consolidated Entity or
Strike). The financial report is presented in the Australian
currency.
Strike Resources Limited is a company limited by shares
incorporated in Australia and whose shares are publicly
traded on the Australian Securities Exchange (ASX).
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.
Information
example:
is considered material and relevant
if,
for
(d)
(e)
(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
(f)
it relates to an aspect of the Consolidated Entity’s
operations
future
performance.
that may be
important
to its
Notes
10
11
12
Receivables
Exploration and evaluation expenditure
Payables
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
Company:
the dividends paid by
Notes
13
14
15
Issued capital
Reserve
Share-based payments
Consolidated Entity Structure: Provides details
and disclosures relating to the parent entity of the
Consolidated Entity, controlled entities, investments
in associates and any acquisitions and/or disposals
of businesses in the year. Disclosure on related
parties is also provided in the section:
Notes
16
17
18
Parent entity information
Investment in controlled entities
Related party transactions
Other: Provides information on items which require
disclosure to comply with Australian Accounting
Standards and other regulatory pronouncements
however, are not
in
understanding the financial performance or position
of the Consolidated Entity:
considered
significant
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
9
Cash and cash equivalents
Financial assets at fair value through
profit or loss
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
19
20
21
22
Auditors' remuneration
Commitments
Contingencies
Events occurring after the reporting
period
Significant and other accounting policies that summarise the
measurement basis used and presentation policies and are
relevant to an understanding of the financial statements are
provided throughout the notes to the financial statements.
1.2 Basis of Preparation
These general purpose financial statements have been
in accordance with Australian Accounting
prepared
Standards, other authoritative pronouncements of
the
Australian Accounting Standards Board, Australia Accounting
Interpretations and the Corporations Act 2001 (Cth). The
Company is a for-profit entity for the purpose of preparing the
financial statements.
Compliance with
Standards (IFRS)
International Financial Reporting
The consolidated financial statements of the Consolidated
Entity comply with
International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB).
ANNUAL REPORT | 32
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2018
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.
1.3 Principles of Consolidation
The consolidated financial statements incorporate the assets
and liabilities of the Company as at 30 June 2018 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 | 33
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2018
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
Application
date
Annual reporting
periods beginning
on or after 1
January 2018
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
in other
changes
comprehensive income (OCI) without subsequent reclassification to profit
or loss.
fair value of non-trading
instruments
the
in
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
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.
accounting
approach
hedge
and
to
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.
Annual reporting
periods beginning
on or after 1
January 2018
Annual reporting
periods beginning
on or after 1
January 2018
ANNUAL REPORT | 34
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
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2018
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
Annual
reporting
periods
beginning on or
after 1 January
2018
scope
• AASB 128 Investments in Associates and Joint Ventures – measuring
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 | 35
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
2.
REVENUE
The Consolidated Entity's operating loss before income tax includes the
following items of revenue:
Revenue
Interest revenue
Other
Net gain on financial assets at fair value through profit or loss
Dividend revenue
Other income
2018
$
2017
$
82,423
82,423
529,960
40,462
-
171,200
171,200
-
-
3
652,845
171,203
Accounting policy
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of returns, trade allowances, rebates and amounts collected on behalf of third parties. The Consolidated
Entity recognises revenue when the amount of revenue can be reliably measured. It is probable that future
economic benefits will flow to the entity and specific criteria have been met for each of the Consolidated Entity’s
activities as described below. The Consolidate Entity bases its estimates on historical results,
taking into
consideration the type of customer, the type of transaction and the specifics of each arrangement. Revenue is
recognised for the major business activities as follows:
(i)
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:
Exploration and evaluation expenses
Impairment loss
Other exploration and evaluation expenses
Personnel expenses
2018
$
319,363
12,058
2017
$
205,895
40,531
Salaries, fees and employee benefits
508,047
508,330
Corporate expenses
Professional fees
ASX fees
Accounting, taxation and related administration
Audit
Share registry
Other corporate expenses
Occupancy expenses
138,675
23,215
139,108
14,000
6,331
14,453
43,618
211,419
24,058
154,431
14,000
6,823
4,531
33,281
ANNUAL REPORT | 36
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
3.
EXPENSES (continued)
Finance expenses
Foreign exchange loss
Administration expenses
Insurance
Travel, accommodation and incidentals
Depreciation
Other administration expenses
2018
$
5,510
(13,731)
16,661
44,547
827
61,777
2017
$
5,663
17,792
18,282
43,400
795
29,901
1,334,459
1,319,132
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
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.
2018
Revenue
Other
Total segment revenues
Exploration and evaluation expenses
Personnel expenses
Corporate expenses
Finance expenses
Depreciation expense
Other expenses
Total segment loss
Adjusted EBITDA
Total segment assets
Total segment liabilities
Peru
$
Australia
$
Total
$
-
-
-
238,050
-
72,915
2,918
-
8,247
(322,130)
(322,130)
67,093
83,385
82,423
82,423
570,422
570,422
652,845
93,371
508,047
262,867
2,592
827
652,845
331,421
508,047
335,782
5,510
827
144,625
152,872
(359,484)
(358,273)
(681,614)
(680,403)
4,860,707
4,927,800
11,712
95,097
ANNUAL REPORT | 37
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
4.
SEGMENT INFORMATION (continued)
2017
Revenue
Other
Total segment revenues
Exploration and evaluation expenses
Personnel expenses
Corporate expenses
Finance expenses
Depreciation expense
Other expenses
Total segment loss
Adjusted EBITDA
Total segment assets
Total segment liabilities
Peru
$
-
3
3
205,895
-
193,512
3,563
-
24,181
(427,148)
(427,148)
Australia
$
171,200
-
171,200
40,531
508,330
221,750
2,100
795
118,475
(720,781)
(720,781)
Total
$
171,200
3
171,203
246,426
508,330
415,262
5,663
795
142,656
(1,147,929)
(1,147,929)
70,184
59,190
5,697,209
5,767,393
6,200
65,390
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
2018
$
-
-
-
2017
$
-
-
-
(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%
(2017: 27.5%)
(187,444)
(315,680)
Adjust tax effect of:
Non-deductible expenses
Movement in unrecognised temporary differences
Current year tax losses not recognised
1,131
(89,550)
275,863
12,811
(28,087)
330,956
Income tax attributable to entity
-
-
ANNUAL REPORT | 38
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
5.
INCOME TAX EXPENSE (continued)
(c) Unrecognised deferred tax balances
Unrecognised deferred tax asset - revenue losses
Unrecognised deferred tax asset - other
2018
$
2017
$
8,103,922
4,238,211
7,729,462
9,853,788
12,342,133
17,583,250
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 | 39
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
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
2018
cents
(0.60)
2018
$
2017
cents
(0.82)
2017
$
(869,300)
(1,185,392)
Shares
Shares
145,334,268
145,334,268
Accounting policy
Basic earnings/loss 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/loss per share adjusts the figures used in the determination of basic earnings/loss per share by
taking into account amounts unpaid on ordinary shares and any reduction in earnings/loss 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
(a)
Reconciliation of operating loss after income tax to
net cash used in operating activities
Loss after income tax
Add non-cash items:
Depreciation
Impairment loss
Unrealised movement in financial assets
Adjustment for movement in foreign exchange
Changes in assets and liabilities:
Receivables
Other current assets
Financial assets at fair value through profit or loss
Exploration and evaluation expenditure
Payables
Provisions
2018
$
335,649
2,025,754
2,361,403
2018
$
2017
$
883,855
4,425,000
5,308,855
2017
$
(681,614)
(1,147,929)
827
795
319,363
205,895
(250,707) -
(189,825)
(119,993)
(113,629)
(186,741)
(1,853)
(279,253)
(530,894)
36,268
(6,560)
(1,851)
-
(575,796)
(7,353)
(1,320)
(1,697,877)
(1,834,293)
Accounting policy
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less and bank overdrafts. Bank overdrafts (if any) are shown
within short-term borrowings in current liabilities on the Statement of Financial Position.
ANNUAL REPORT | 40
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
8.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Listed securities at fair value
2018
$
1,932,400
2017
$
-
Accounting policy
instruments are initially measured at cost on trade date, which includes transaction costs, when the
Financial
related contractual rights or obligations exist. Subsequent to initial recognition, financial assets at fair value
through profit and loss acquired principally for the purpose of selling in the short term or if so designated by
management and within the requirements of AASB 139: (Recognition and Measurement of Financial Instruments)
will recognise its realised and unrealised gains and losses arising from changes in the fair value of these assets in
the Statement of Profit or Loss and Other Comprehensive Income in the period in which they arise.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and
available-for-sale securities) is based on quoted market prices at the balance sheet date which is the current bid
price.
9.
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
10
12
2018
$
2017
$
2,361,403
5,308,855
46,221
76,584
2,407,624
5,385,439
(89,610)
(53,336)
2,318,014
5,332,103
Market risk is the risk that the fair value and/or future cash flows from a financial instrument will fluctuate as a
result of changes in market factors. Market risk comprises of foreign exchange risk from fluctuations in foreign
currencies and interest rate risk from fluctuations in market interest rates.
ANNUAL REPORT | 41
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
9.
FINANCIAL RISK MANAGEMENT (continued)
(i)
Foreign exchange risk
The Consolidated Entity operates internationally and is exposed to foreign exchange risk arising from
various currency exposures, primarily with respect to the US dollar and Peruvian Nuevo Soles.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the Consolidated Entity's functional currency. The risk is measured
using sensitivity analysis and cash flow forecasting.
The Consolidated Entity has a policy of not hedging foreign exchange risk and therefore has not entered
into any hedging against movements in foreign currencies against
including
forward exchange contracts, as at the reporting date and is currently fully exposed to foreign exchange
risk.
the Australian dollar,
The Consolidated Entity's exposure to foreign exchange risk expressed in US dollars at the reporting
date are as follows:
Cash and cash equivalents
Payables
Net financial assets/(liabilities)
2018
USD
36,742
(58,970)
(22,228)
2017
USD
25,438
(45,013)
(19,575)
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
2018
$
(2,223)
2,223
2017
$
(1,958)
1,958
2018
$
-
-
2017
$
-
-
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 2.44% (2017: 2.86%).
Cash at bank
Term deposit
2018
$
335,649
2,025,754
2,361,403
2017
$
883,855
4,425,000
5,308,855
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.
ANNUAL REPORT | 42
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
9.
FINANCIAL RISK MANAGEMENT (continued)
Impact on post-tax profit
Impact on other components of
equity
2018
$
5,904
(5,904)
2017
$
13,272
(13,272)
2018
$
-
-
2017
$
-
-
Increase by 25bps
Decrease by 25bps
(b)
Liquidity risk
Liquidity risk is the risk that the Consolidated Entity will encounter difficulty in meeting obligations associated
with financial
liabilities. The Consolidated Entity has no borrowings. The Consolidated Entity's non-cash
investments can be realised to meet trade and other payables arising in the normal course of business. The
financial liabilities disclosed in the above table have a maturity obligation of not more than 30 days.
(c) Credit risk
Credit risk refers to the risk that a counterparty under a financial instrument will default (in whole or in part) on
its contractual obligations resulting in financial loss to the Consolidated Entity. Credit risk arises from cash
and cash equivalents and deposits with banks and financial institutions, including outstanding receivables and
committed transactions. Concentrations of credit risk are minimised primarily by the management carrying out
all market
transactions through recognised and creditworthy brokers and the monitoring of receivable
balances. The Consolidated Entity's business activities do not necessitate the requirement for collateral as a
means of mitigating the risk of financial loss from defaults.
The credit quality of the financial assets are neither past due nor impaired and can be assessed by reference
to external credit ratings (if available with Standard & Poor's) or to historical information about counterparty
default rates. The maximum exposure to credit risk at reporting date is the carrying amount of the financial
assets as summarised below:
Cash and cash equivalents
AA-
No external credit rating available
Receivables (due within 30 days)
No external credit rating available
10. RECEIVABLES
Interest receivable
Other receivables
2018
$
2017
$
2,311,184
5,253,553
49,465
55,302
2,360,649
5,308,855
46,221
76,584
11,973
34,248
46,221
41,725
34,859
76,584
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.
ANNUAL REPORT | 43
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
11. EXPLORATION AND EVALUATION EXPENDITURE
Opening balance
Exploration and evaluation costs
Impairment loss
Closing balance
2018
$
369,902
530,894
(319,363)
581,433
2017
$
-
575,797
(205,895)
369,902
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
$319,363 during the current financial year. The ultimate recoverability of deferred exploration and evaluation
expenditure is dependent on the successful development or sale of the relevant area of interest.
Accounting policy
Exploration and evaluation expenditure incurred is initially capitalised in respect of each identifiable area of interest
where the Consolidated Entity has right of tenure. These costs are only carried forward to the extent that they are
expected to be recouped through the successful development of the area or where activities in the area have not
yet reached a stage that permits reasonable assessment of the existence or otherwise of economically-recoverable
reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in
which the decision to abandon the area is made.
Under AASB 6 (Exploration for and Evaluation of Mineral Resources), if facts and circumstances suggest that the
carrying amount of any recognised exploration and evaluation assets may be impaired, the Consolidated Entity
must perform impairment tests on those assets and measure any impairment in accordance with AASB 136
(Impairment of Assets). Any impairment loss is to be recognised as an expense. A regular review is undertaken of
each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area
of interest.
12. PAYABLES
Trade payables
Other creditors and accruals
Withholding tax
2018
$
62,043
27,114
453
89,610
2017
$
22,692
30,197
447
53,336
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.
13.
ISSUED CAPITAL
2018
$
2017
$
145,334,268 (2017: 145,334,268) fully paid ordinary shares
148,439,925
148,439,925
There has been no movement in issued capital since 1 July 2016.
ANNUAL REPORT | 44
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
13.
ISSUED CAPITAL (continued)
Accounting policy
Ordinary shares are classified as equity. Fully paid ordinary shares carry one vote per share and the right to
dividends.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the
acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
(a) Options
Information relating to unlisted options issued to Directors and options issued under the Strike Resources
Limited Employee Share Option Plan, including details of options issued, exercised and lapsed during the
financial year and options outstanding at the end of the reporting period, is set out in Note 15.
(b)
Capital risk management
The Company's objectives when managing its capital are to safeguard its ability to continue as a going
concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and
to maintain a capital structure balancing the interests of all shareholders.
The Board will consider capital management initiatives as is appropriate and in the best interests of the
Company and shareholders from time to time, including undertaking capital raisings, share buy-backs, capital
reductions and selling assets to reduce debt.
The Consolidated Entity has no external borrowings.
14. RESERVE
Share-based payments reserve
Foreign currency translation reserve
(a) Share-based payments reserve
2018
$
2017
$
13,233,026
13,233,026
1,763,731
1,951,417
14,996,757
15,184,443
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:
ANNUAL REPORT | 45
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
14. RESERVES (continued)
Accounting policy (continued)
(i)
assets and liabilities for each statement of financial position presented are translated at the closing rate at the
date of that statement of financial position;
(ii)
income and expenses for Consolidated Statement of Profit or Loss and Other Comprehensive Income are
translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case income and expenses are translated at the
dates of the transactions), and
(iii) all resulting exchange differences are recognised in Other Comprehensive Income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in Other
Comprehensive Income.
15. SHARE-BASED PAYMENTS
The Company has the following options on issue at balance date:
Grant
date
Expiry
date
Financial year 2018
18-Jun-13
17-Jun-18
Exercise
price ($)
0.30
Weighted average exercise price
Financial year 2017
18-Jun-13
17-Jun-18
0.30
Weighted average exercise price
Opening
During the year
Closing
Vested and
exercisable
balance GrantedExercised
Lapsed
balance
at year end
3,000,000
3,000,000
0.30
3,000,000
3,000,000
0.30
-
-
-
-
-
-
-
-
(3,000,000)
(3,000,000)
-
-
-
-
-
-
-
-
3,000,000
3,000,000
3,000,000
3,000,000
0.30
0.30
The options lapsed and were cancelled on 17 June 2018.
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 | 46
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
16. PARENT ENTITY INFORMATION
The following information provided relates to the Company, Strike Resources Limited, as at 30 June 2018.
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
2018
$
2017
$
(349,906)
(720,039)
-
-
(349,906)
(720,039)
2,311,937
5,253,552
32,029
3,840,997
6,184,963
71,931
1,203,874
6,529,357
11,712
11,712
6,199
6,199
6,173,251
6,523,158
148,439,924
148,439,925
13,233,025
13,233,025
(155,499,698)
(155,149,792)
6,173,251
6,523,158
The parent entity does not have any contingent assets or liabilities.
17.
INVESTMENT IN CONTROLLED ENTITIES
Investment in controlled entities
Incorporated
Strike Finance Pty Ltd
Strike Australian Operations Pty Ltd
Strike Operations Pty Ltd
Strike Resources Peru S.A.C.
Apurimac Ferrum S.A.C.
Ferrum Trading S.A.C
Australia
Australia
Australia
Peru
Peru
Peru
Ownership interest
2018
100%
100%
100%
100%
100%
100%
2017
100%
100%
100%
100%
100%
100%
ANNUAL REPORT | 47
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the year ended 30 June 2018
17.
INVESTMENT IN CONTROLLED ENTITIES (continued)
Accounting policy
Subsidiaries are all entities (including structured entities) over which the Consolidated Entity has control. The
Consolidated Entity controls an entity when the group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the activities of the
entity. Subsidiaries are fully consolidated from the date on which control
is transferred to the group. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Consolidated Entity.
Intercompany transactions, balances and unrealised gains on transactions in the Consolidated Entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
assets transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Consolidated Entity.
18. RELATED PARTY TRANSACTIONS
(a) Transactions with key management personnel
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 2018. 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
2018
$
422,998
35,910
50,000
4,750
513,658
2017
$
417,400
35,378
50,000
4,750
507,528
(b) Transactions with other related parties
No other related party transactions have been identified other than those disclosed above.
19. AUDITORS' REMUNERATION
During the year the following fees were paid 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
2018
$
14,000
2017
$
14,000
ANNUAL REPORT | 48
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2018
20.
COMMITMENTS
(a)
Lease Commitments
On 1 February 2018, the Consolidated Entity entered into a non-cancellable operating lease
agreement for shared office accommodation. The lease was for a further 12 month term expiring
on or about 30 January 2019. The lease commitment is the Consolidated Entity's share of the
lease costs and includes all outgoings (inclusive of GST).
(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.
21.
CONTINGENCIES
(a)
Australian Native Title
The Consolidated Entity's tenements in Australia may be subject to native title applications in the
future. At this stage, it is not possible to quantify the impact (if any) that native title may have on the
operations of the Consolidated Entity.
(b)
Government Royalties
The Consolidated Entity is liable to pay royalties on production obtained from its mineral
tenements/concessions.
(c)
Directors' Deeds
The Consolidated Entity has entered into deeds of indemnity with Strike Resources Limited
Directors, indemnifying them against liability incurred in discharging their duties as Directors/officers
of the Consolidated Entity. As at the reporting date, no claims have been made under any such
indemnities and, accordingly, it is not possible to quantify the potential financial obligation of the
Consolidated Entity under these indemnities.
(d)
Deferred Payments from Settlement Agreement Relating to Apurimac Ferrum SAC
Pursuant to a settlement agreement dated 30 December 2012 whereby the Consolidated Entity
acquired the (50%) balance of equity interest in Apurimac Ferrum SAC (AF) (the holder of the
Apurimac and Cusco Projects) from D&C Pesca SAC, the Consolidated Entity has a series of
deferred payment obligations as outlined below.
The Consolidated Entity has payment obligations if certain milestones are achieved as follows:
(i)
(ii)
Resource Milestone Payment: US$2 million on the delineation of at least 500 Mt of JORC
Mineral Resources at an average grade of at least 55% Fe with at least 275 Mt of contained
iron having an average grade of at least 52.5% Fe, on the Apurimac Project mineral
concessions.
Approvals Milestone Payment: Up to US$3 million on AF receiving all formal government
environmental and community approvals for the construction and operation of an iron ore
mine and required infrastructure with a design capacity of at least 10Mtpa of iron ore
product, relating to the Apurimac Project mineral concessions.
ANNUAL REPORT | 49
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
for the financial year ended 30 June 2018
21.
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
22.
EVENTS OCCURRING AFTER THE REPORTING PERIOD
No matter or circumstance has arisen since the end of the financial year that significantly affected, or may
significantly affect, the operations of the Consolidated Entity, the results of those operations, or the state of
affairs of the Consolidated Entity in future financial periods.
ANNUAL REPORT | 50
30 JUNE 2018
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 28 to 50 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 2018 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
25 September 2018
William Johnson
Managing Director
ANNUAL REPORT | 51
30 JUNE 2018
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 2018) 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
Pilbara Tenements (Western Australia)
(Strike – 100%)
Tenement No
EL 45/4799
EL 45/4800
Status
Granted
Granted
Grant Date
Expiry Date
Area (blocks/Ha)
Area (km²)
4 July 2017
3 July 2022
26 blocks
10 August 2017
9 August 2022
70 blocks
~83
~225
Paulsens East Tenement (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 – ~70%)
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 | 56
30 JUNE 2018
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 2018) 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.
Burke Graphite Project (Australia)
(Strike – ~70%)
The Burke Graphite Project has a JORC Code (2012 Edition) compliant Mineral Resources Estimate (MRE):
Category Weathering State
Oxide
Inferred
Fresh
Inferred
Total Oxide + Fresh
Mt
0.5
5.8
6.3
TGC (%)
14.0
Contained Graphite (Mt)
0.1
Density (t/m)
2.5
16.2
16.0
0.9
1.0
2.4
2.4
Note: The Mineral Resource was estimated within constraining wireframe solids defined above a nominal 5% TGC cut-off. The
Mineral Resource is reported from all blocks within these wireframe solids. Differences may occur due to rounding. Refer also
Grade Tonnage Data in Table 2 of CSA Global Pty Ltd’s Burke Graphite Project MRE Technical Summary dated 9 November
2017 (attached as Annexure A of Strike’s ASX Announcement dated 13 November 2017: Maiden Mineral Resource Estimate
Confirms Burke Project as One of the World’s Highest Grade Natural Graphite Deposits).
ANNUAL REPORT | 57
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ANNUAL MINERAL RESOURCES
STATEMENT
Compliance
•
The Mineral Resources estimates in respect of the Apurimac and Cusco Iron Ore Projects (above) have not
changed since reported in last year’s Annual Report.
•
•
•
•
•
•
The Mineral Resources estimate in respect of the Burke Graphite Project (above) was prepared and first
disclosed during the financial year ended 30 June 2018.
The Mineral Resources estimates (above) are based on, and fairly represents, information and supporting
documentation prepared by a Competent Person (recognised under the JORC Codes (2004 and 2012, as
the case may be)).
The Annual Mineral Resources Statement as a whole (in respect of each of the Apurimac/Cusco Iron Ore
Projects and the Burke Graphite Project) has been approved by the Competent Persons named in the JORC
Code Competent Persons’ Statements section of this Annual Report (at pages 59 and 60) where further
information concerning their qualifications and professional memberships are 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 | 58
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
JORC CODE COMPETENT PERSONS’
STATEMENTS
JORC Code (2012) Competent Person Statement - Apurimac Project Mineral Resources
The information in this document that relates to Mineral Resources in relation to the Apurimac Iron Ore Project
(Peru) is extracted from the following ASX market announcement made by the Strike Resources Limited on:
•
19 January 2015: Apurimac Mineral Resources Updated to JORC 2012 Standard
The information in the original announcement 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 (AusIMM). 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). The
Company confirms that it is not aware of any new information or data that materially affects the information included
in the original market announcement. The Company confirms that the form and context in which the Competent
Person’s findings are presented have not been materially modified from the original market announcement.
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 (AusIMM). 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.
JORC Code (2012) Competent Person Statement - Burke Graphite Project Mineral Resources
(a)
The information in this document that relates to Mineral Resources is extracted from the following ASX
market announcement made by the Strike Resources Limited on:
•
13 November 2017: Maiden Mineral Resource Estimate Confirms Burke Project as One of the
World’s Highest Grade Natural Graphite Deposits
The information in the original announcement (including the CSA Global MRE Technical Summary in
Annexure A) that relates to in-situ Mineral Resources for the Burke Graphite Project is based on information
compiled by Mr Grant Louw under the direction and supervision of Dr Andrew Scogings, who are both full-
time employees of CSA Global Pty Ltd. Dr Scogings takes overall responsibility for this information. Dr
Scogings is a Member of the Australian Institute of Geoscientists (AIG) and the Australasian Institute of
Mining and Metallurgy (AusIMM) and 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). The Company confirms that it is not aware of any new information or data that
materially affects the information included in the original market announcement. The Company confirms
that the form and context in which the Competent Person’s findings are presented have not been materially
modified from the original market announcement.
(b)
The information in this document that relates to metallurgical test work is extracted from the following ASX
market announcements made by the Strike Resources Limited on:
•
16 October 2017: Test-work confirms the potential suitability of Burke graphite for Lithium-ion battery
usage and Graphene production
•
13 November 2017: Maiden Mineral Resource Estimate Confirms Burke Project as One of the
World’s Highest Grade Natural Graphite Deposits
ANNUAL REPORT | 59
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
JORC CODE COMPETENT PERSONS’
STATEMENTS
The information in the original announcements that relates to metallurgical test work is based on, and fairly
represents, information and supporting documentation prepared by Mr Peter Adamini, BSc (Mineral Science
and Chemistry), who is a Member of The Australasian Institute of Mining and Metallurgy (AusIMM). Mr
Adamini is a full-time employee of Independent Metallurgical Operations Pty Ltd, who has been engaged by
Strike Resources Limited to provide metallurgical consulting services. The Company confirms that it is not
aware of any new information or data that materially affects the information included in the original market
announcements. The Company confirms that the form and context in which the Competent Person’s findings
are presented have not been materially modified from the original market announcements.
(c)
21 April 2017: Jumbo Flake Graphite Confirmed at Burke Graphite Project, Queensland
The information in this document that relates to Exploration Results in relation to the ground Electro-
Magnetic (EM) survey and other Exploration Results is extracted from the following ASX market
announcements made by the Strike Resources Limited on:
•
•
•
•
13 June 2017: Extended Intersections of High-Grade Graphite Encountered at Burke Graphite Project
16 October 2017: Test-work confirms the potential suitability of Burke graphite for Lithium-ion battery
usage and Graphene production
21 June 2017: Further High-Grade Intersection Encountered at Burke Graphite Project
•
•
13 November 2017: Maiden Mineral Resource Estimate Confirms Burke Project as One of the
World’s Highest Grade Natural Graphite Deposits
26 June 2018: Burke Graphite Project – New Target Area Identified From Ground Electro-Magnetic
Surveys
The information in the original announcements that relates to Exploration Results in relation to the ground
Electro-Magnetic (EM) survey and other Exploration Results is based on, and fairly represents, information
and supporting documentation prepared by Mr Peter Smith, BSc (Geophysics) (Sydney) AIG ASEG, who is
a Member of The Australasian Institute of Geoscientists (AIG). Mr Smith is a consultant to Strike Resources
Limited. Mr Smith 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). The Company confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcements. The Company confirms that the form and
context in which the Competent Person’s findings are presented have not been materially modified from the
original market announcements.
The Strike ASX market announcements referred to above may be viewed and downloaded from the Company’s
website: www.strikeresources.com.au or the ASX website: www.asx.com.au under ASX code “SRK”.
FORWARD LOOKING STATEMENTS
This documents 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 | 60
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ADDITIONAL ASX INFORMATION
as at 23 October 2018
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 2018.
Pursuant to ASX Listing Rule 4.10.3, the Company’s 2018 Corporate Governance Statement (dated on or about 24
October 2018) 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
Quoted on ASX
145,334,268
Unlisted
-
Total
145,334,268
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
358
593
256
333
85
1,625
UNMARKETABLE PARCELS
Spread
1
10,000
TOTAL
of Holdings
9,999
-
over
-
Number of
Holders
1,130
495
1,625
Number of
Shares
147,516
1,753,643
2,072,941
10,805,791
130,554,377
145,334,268
Number of
Shares
3,204,100
142,130,168
145,334,268
% of Total
Issued Capital
0.102%
1.207%
1.426%
7.435%
89.830%
100%
% of Total
Issued Capital
2.205%
97.795%
100.00%
An unmarketable parcel is considered, for the purposes of the above table, to be a shareholding of 9,999 shares or less
(being a value of $500 or less in total), based upon the Company’s closing share price of $0.05 on 23 October 2018.
VOTING RIGHTS
Subject to any rights or restrictions for the time being attached to any class or classes of shares (at present there
are none), at meetings of shareholders of the Company:
• Each shareholder entitled to vote may vote in person or by proxy or by power of attorney or, in the case of a
shareholder which is a corporation, by representative;
• Every person who is present in the capacity of shareholder or the representative of a corporate shareholder
shall, on a show of hands, have one vote; and
• Every shareholder who is present in person, by proxy, by power of attorney or by corporate representative
shall, on a poll, have one vote in respect of every fully paid share held by him.
ANNUAL REPORT | 61
30 JUNE 2018
STRIKE RESOURCES LIMITED
A.B.N. 94 088 488 724
ADDITIONAL ASX INFORMATION
as at 23 October 2018
TOP 20 ORDINARY FULLY PAID SHAREHOLDERS
Rank Holder name
Shares Held % Issued Capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
BENTLEY CAPITAL LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
DATABASE SYSTEMS LTD
ORION EQUITIES LIMITED
ACN 139 886 025 PTY LTD
JP MORGAN NOMINEES AUSTRALIA LIMITED
MR JOHN FAZZALORI
MR IANAKI SEMERDZIEV
D&C PESCA S.A.C.
MRS LILIANA TEOFILOVA
MR CHI MAU PHUONG
MR VU QUANG MINH DANG & MRS THI KIM DAU NGUYEN
IRIS SYDNEY HOLDINGS PTY LTD
EMPIRE HOLDINGS WA PTY LTD
TADMARO PTY LIMITED
PRINT LOGIC WA PTY LTD
CLASSIC CAPITAL PTY LTD
MR MARK REX KOZEL & MRS KRISTINE ANNE PATTISON
MR FAROOQ KHAN
CONCORDE SECURITIES PTY LTD
TOTAL
SUBSTANTIAL SHAREHOLDERS
52,553,493
26,507,581
12,537,090
10,000,000
2,110,261
1,863,855
1,649,879
1,379,000
1,081,027
947,000
923,437
892,319
800,237
700,000
623,195
600,000
600,000
534,552
530,010
500,000
36.160%
18.239%
8.626%
6.881%
1.452%
1.282%
1.135%
0.949%
0.744%
0.652%
0.635%
0.614%
0.551%
0.482%
0.429%
0.413%
0.413%
0.368%
0.365%
0.344%
117,332,936
80.73%
Substantial Shareholders
Registered Shareholder
Shares Held
% Voting Power
Bentley Capital LimitedI
Bentley Capital Limited
ABU Holding International Limited
and Associates II
HSBC Custody Nominees
(Australia) Limited
52,553,493
25,825,000
Database Systems Ltd
and Ambreen Chaudhri III
Orion Equities LimitedIV
Queste Communications LtdV
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%
I Refer Bentley’s ASX announcement dated 4 September 2015 Notice of Change in Interests of Substantial Holder
II Refer Notice of Initial Substantial Holder dated 21 December 2012
III Based on Notice of Change in Interests of Substantial Holder dated 4 June 2013
IV Refer Orion’s ASX announcement dated 4 September 2015: Notice of Change in Interests of Substantial Holder
V 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 | 62
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 Limited
Western Australia – Main Office
110 Stirling Highway
Nedlands, Western Australia 6009
PO Box 1156, Nedlands
Western Australia 6909
Local T | 1300 113 258
T | (08) 9389 8033
F | (08) 9262 3723
E | admin@advancedshare.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
W | www.advancedshare.com.au