Syrah Resources Ltd Annual Report 2015

FY2015 Annual Report · Syrah Resources Ltd
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ANNUAL 
REPORT
2015 

For the 6 month period ended 
31 December 2015

For personal use onlyCORPORATE  
DIRECTORY

COMPANY 
PROFILE

Directors
James Askew  Non-Executive Chairman
Tolga Kumova  Managing Director
Sam Riggall  Non-Executive Director
Rhett Brans  Non-Executive Director
José Manuel Caldeira  Non-Executive Director

Company secretary
Melanie Leydin

Registered and corporate oﬃce
Melbourne oﬃce
Level 9, 356 Collins Street
Melbourne VIC 3000
Telephone: +61 3 9670 7264
Email: enquiries@syrahresources.com.au
Website: www.syrahresources.com.au 
Perth oﬃce
Ground Floor, 10 Kings Park Road
West Perth WA 6005
Mozambique oﬃce
Pemba, Av. 1º Maio, Rua XII, 
Cabo Delgado, Moçambique
Telephone: +285 2722 0713
Email: twigg.admin@syrahresources.com.au

Share registry 
Computershare Investor Services Pty Limited 
Yarra Falls, 452 Johnston Street
Abbotsford Victoria 3067
Telephone: 1300 850 505 (within Australia)

+61 3 9415 4000 (overseas)

Email: web.queries@computershare.com.au 
Website: www.computershare.com.au

Auditors
PricewaterhouseCoopers
Level 19, 2 Southbank Blvd
Southbank  VIC  3006

Solicitors
Gilbert + Tobin
Level 22, 101 Collins Street
Melbourne VIC 3000

Stock exchange listing
Australian Securities Exchange (ASX Code: SYR)
American Depository Receipts (Ticker Symbol: SRHYY) 

OVERVIEW
Syrah Resources Limited is currently developing its world 
class Balama Project in Mozambique and is focussed on its 
vision of becoming the leading supplier of superior quality 
graphite products to industrial and emerging technologies 
globally. 

OUR VISION
Syrah’s vision is to be the leading supplier of superior 
quality graphite products, working closely with our 
customers and supply chain to innovate and bring 
enhanced value to industrial and emerging technology 
markets globally. 

OUR VALUES
Syrah is committed to:

 > WORKING SAFELY at all times

 >

PARTNERING WITH STAKEHOLDERS for community 
and environmental sustainability

INTEGRITY and FAIRNESS in all our business dealings

 >
 > Being ACCOUNTABLE for our decisions and actions

 >

SETTING GOALS and supporting people to  
achieve them

We will work as a team and act like owners.

CONTENTS

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4 

6  

8 

HIGHLIGHTS FOR THE SIX MONTH PERIOD  
ENDED 31 DECEMBER 2015

CHAIRMAN’S LETTER

MANAGING DIRECTORS REPORT

REVIEW OF OPERATIONS

24   DIRECTORS’ REPORT

46  

AUDITOR’S INDEPENDENCE DECLARATION 

47 

FINANCIAL STATEMENTS

93   DIRECTORS’ DECLARATION

94 

INDEPENDENT AUDITOR’S REPORT 

96   SHAREHOLDER INFORMATION

For personal use only 
SYRAH RESOURCES IS AN AUSTRALIAN RESOURCE COMPANY 
COMMITTED TO THE DEVELOPMENT OF THE WORLD CLASS  
BALAMA GRAPHITE PROJECT IN MOZAMBIQUE

BALAMA LOCATION MAP

MONTEPUEZ

BALAMA

NAMPULA

APURA

PEMBA

Morrola Turn

Main Lurio
river crossing

NACALA

LUMBO

Nampula
Junction

AFRAFR
AFRICA
AFRICAARRICA

MOZAZAMBBIQ
MOZAMBIQUE
ZAMB QUE

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HIGHLIGHTS  
FOR THE SIX MONTH PERIOD  
ENDED 31 DECEMBER 2015

Syrah completed a fully underwritten $211 million capital raising 
in August 2015, commenced development and construction of the 
Balama Project and has set the foundation for the successful delivery  
of this world class in early 2017.

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FUNDING
 > Successfully completed a fully underwritten 
$211 million capital raising in August 2015

BALAMA GRAPHITE PROJECT
Commenced the development and construction 
of the Balama Project by: 
 > Commencing detailed engineering and design
 > Commencing pre-stripping of the Balama West 

orebody

 > Placing orders for all principal mechanical 

equipment and long lead items which are now 
in various stages of production

 > Completing bulk earthworks and preparing the 
processing plant site for the commencement of 
concrete work in early 2016

 > Substantially completing the construction of a 

7 km sealed access road into site

 > Commencing with an expansion to the existing 

accommodation camp at Balama

 > Tendering of key operational service contracts 

including laboratory services, product 
transport, fuel supply and bulk storage 
contracts

 > Relocating farm lots from the Mining 
Concession and being recognised in 
Mozambique as a leading example as to how 
such programs should be implemented
 > Progressively recruiting key construction and 
operational staﬀ with a number of positions 
being awarded to highly qualiﬁed Mozambican 
nationals  

Continued product marketing eﬀorts and product 
qualiﬁcation testwork to secure  
 > Statement of sales intent for up to 15,000 tonnes 
per annum of ﬂake graphite with one of the world’s 
largest refractory producers

 > Statement of sales intent for between 25,000 
tonnes and 35,000 tonnes per annum of 
Balama natural graphite recarburisers (Balama 
recarburisers) with Hiller Carbon
Subsequent to 31 December 2015:
 > Three year oﬀtake agreement for 20,000 tonnes 
per annum of ﬂake graphite for Japanese and 
Korean markets with Marubeni Corporation

PROPOSED SPHERICAL  
GRAPHITE PROJECT
 > Securing access to proprietary spherical graphite 
coating technology by entering into a 20 year 
exclusive licensing agreement with Morgan AM&T 
Hairong Co., Ltd (Hairong Morgan)

 > Signing various oﬀtake agreement with Hairong 
Morgan after a period of extensive testwork on 
Balama spherical graphite including: 
•  Three year Product Sales Agreement for 2,000 
tonnes per annum of uncoated spherical 
graphite

•  Three year Marketing Agreement for 5,000 
tonnes per annum of uncoated spherical 
graphite and 2,000 tonnes per annum of 
coated spherical graphite

Subsequent to 31 December 2015:
 > Entered into a Memorandum of Understanding 
with Marubeni Corporation to secure spherical 
graphite oﬀtake agreements with anode and 
battery producers in Japan and Korea by  
30 June 2016 

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OVER

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OF MINE LIFE WITH 
FURTHER 
GROWTH 
OPPORTUNITIES

OVER 

TPA

350K

GRAPHITE 
CONCENTRATE 
PRODUCTION 
OVER THE FIRST  
10 YEARS

COMPLETED 

A$211m
CAPITAL 
RAISING
IN AUGUST 2015

BALAMA PROJECT 
CONSTRUCTION 
ACTIVITIES 
WELL 
UNDERWAY

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CHAIRMAN’S  
LETTER

Your Board and management are strategizing the best ways 
to deliver shareholder value, while preserving a conservative 
balance sheet and capacity to accommodate challenges created 
by the very scale of our endeavour.

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Dear Shareholders,

This report for the “shortened” ﬁnancial period of six 
months to 31 December 2015 is an interim update, 
following the Company’s decision to switch to a calendar 
year reporting period and thus has some brevity of content. 

Your new management team has settled into the mission of 
building the Balama Graphite Project and evaluating ways 
to optimise the project. Few will appreciate that the scale 
of this project is an order of magnitude larger than any 
other graphite project ever constructed. This brings with it 
the advantages of operating cost eﬃciency and capacity 
to produce multiple graphite products, which necessitate 
careful attention to supply chain management and product 
qualiﬁcation, essential to long term satisfaction of our 
global customers. These latter aspects are now being 
addressed in great detail and represent a very substantial 
barrier to entry for many of our competitors striving to 
enter the production supply chain. It is not enough to 
successfully build and operate the worlds’ largest graphite 
project; we must ensure the high grade ore is turned into 
a global brand of premium grade graphite concentrate, 
which redeﬁnes the expectations of customers and is cost-
competitive across all product speciﬁcations.

Syrah is focused on traditional industrial markets and the 
emerging battery industry. Our planned scale of production 
at over 350,000 tonnes of +95% graphite concentrate 
per year will challenge established paradigms of graphite 
consumption and pricing. This excludes the potential of 
further expanding output to match demand from a broader 
customer community. Your Board and management are 
strategizing the best ways to deliver shareholder value, 
while preserving a conservative balance sheet and 
capacity to accommodate challenges created by the very 
scale of our endeavour. This will also require the capacity 
of our markets to appreciate the “game changing” that will 
be created by the scale and quality of Balama planned 
production.

I need to share with you the Board’s appreciation of how 
the management team has developed. Some fourteen 
months ago, when I joined the Board, the management 
team could euphemistically have been described as a 
“skeleton crew”. It is now a fully functional group, with 
a small Melbourne head oﬃce, the technical team and 
Chief Operating Oﬃcer based in Perth, and the Balama 
project team based in Mozambique.  Systems essential 
to the management and construction activities are well 
established. In 2016, we are assembling a marketing, 
quality control and logistics management team to 
compliment the operations contingent.

The culture and values of an organization are key to its’ 
long term success. In this, Syrah is evolving into a high 
performance group with focus on creating and maintaining 
shareholder value, while building a reputation for excellent 
community relations, with transparency. These are 
aspects which are based on real behaviours and are 
earnt, rather than “bought”. Your Board is impressed that 
the management team holds these as key tenets of their 
mission to deliver the production and products which 
global customers demand. 

Sincerely,

James Askew

Chairman

31 March 2016

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MANAGING  
DIRECTOR’S  
REPORT 

The past 6 months has been a transformational period for  
Syrah Resources and its shareholders, following the completion 
of a $211 million capital raising in August 2015 and commencing 
the development of the Balama Project in Mozambique. 

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Dear Shareholders,

Syrah has just completed a “shortened ﬁnancial year” as 
a result of moving its ﬁnancial reporting year to a calendar 
basis, commencing 1 January 2016. As a result, this Annual 
Report covers the six month period from 1 July 2015 to  
31 December 2015.

The past six months has been a transformational period 
for Syrah Resources and its shareholders, following the 
completion of a $211 million capital raising in August 2015 
and commencing the development of the Balama Project  
in Mozambique. 

BALAMA PROJECT
At the start of this shortened ﬁnancial year, Syrah had a 
world class project with a completed feasibility study.  
Today, the development of the project is well underway with 
production targeted to commence in early 2017. 

In terms of development activities at Balama we 
have successfully built the foundations for signiﬁcant 
construction activities during 2016 by recruiting an 
experienced and talented team, progressing detailed 
design, committing to long lead items and commencing 
works on site including pre-stripping, bulk earthworks, 
access road construction and camp expansion projects. 

With an increase in the level of activity at Balama, the team 
continues to focuss on strictly adhering to our core value 
of Working Safely. We have successfully established a 
strong culture of safety awareness and have progressively 
implemented leading health and safety standards, 
management systems and education programs into our 
daily work schedules.

To deliver the Balama Project, we also recognise 
the importance of maintaining strong ties with local 
communities and provincial and national government 
departments. To this end we are committed to local training 
and recruitment, local procurement and local economic 
development. It is satisfying to report that our Company 
and team in Mozambique has been recognised as a leading 
example for the delivery of its farmland resettlement 
program. In addition, we continue to recruit some highly 
qualiﬁed Mozambique employees to join our team.

SALES AND MARKETING
Graphite is an industrial mineral and we understand 
that a key success factor in this market is to develop 
strong relationships with major end users and traders in 
order to thoroughly understand and meet their speciﬁc 
requirements.  

During the ﬁnancial period, the Company signed a 
Statement of Sales Intent with a major global refractory 
producer for 15,000 tpa of ﬂake graphite. Subsequent 
to year end, a Statement of Sales Intent was signed with 
Hiller Carbon for between 25,000 tpa and 35,000 tpa of 
recarburiser, and an oﬀtake ﬁnalised with Marubeni for 
20,000 tpa of ﬂake graphite.

We believe these agreements validate our sales and 
marketing strategy, and the Syrah team are continuing to 
progress and ﬁnalise discussions with various other  
parties globally.

PROPOSED SPHERICAL 
GRAPHITE PROJECT
While our primary focus remains on successfully delivering 
the Balama Project we continue to progress our future 
growth opportunities including a proposed spherical 
graphite project in the USA. The growing global trend 
in the use of lithium ion batteries for energy storage 
and automotive electriﬁcation represents a unique and 
compelling opportunity for the downstream processing of 
Balama natural graphite.   

To ensure that we position ourselves to become a key 
supplier to this growing market, we ﬁnalised an exclusive 
licensing agreement with Hairong Morgan for its proprietary 
spherical graphite coating technology. This will provide us 
with the capacity to operate an integrated supply chain 
from mine to battery anode material and is anticipated to 
provide a signiﬁcant competitive advantage.  

We have also been working extensively with potential 
customers in order ensure that Balama spherical graphite 
satisﬁes their product qualiﬁcation process. We are 
pleased to report that our eﬀorts allowed us secure our 
ﬁrst spherical graphite oﬀtake and marketing agreements 

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with Hairong Morgan. This represents a strong vote of 
conﬁdence for our product in China, which is currently the 
largest and fastest growing lithium ion battery market in 
the world.

We continue to receive positive feedback from potential 
customers and subsequent to year end, a number of major 
global battery material manufacturers have advised that 
they have qualiﬁed Balama spherical graphite for their 
automotive customers’ requirements. Accordingly, we 
have ﬁnalised a Memorandum of Understanding with 
Marubeni Corporation to secure spherical graphite oﬀtake 
agreements with anode and battery producers in Japan 
and Korea prior to 30 June 2016.

Finally, we would like to take the opportunity to thank 
shareholders for their continued support and sharing 
our vision of becoming the leading graphite producer 
globally. We look forward to the exciting year ahead and 
the commencement of commissioning at the Balama 
processing plant in late 2016.  

Tolga Kumova

Managing Director 

31 March 2016

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REVIEW OF  
OPERATIONS

In August 2015, Syrah successfully completed a fully underwritten 
$211 million capital raising which allowed for the development of 
the Balama Project to commence.

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CAPITAL RAISING
During August 2015, Syrah successfully completed  
a fully underwritten capital raising of approximately  
$211 million via an institutional placement and a pro rata 
accelerated renounceable entitlement oﬀer. The proceeds 
from this capital raising will predominantly be used to 
fund the development of the Company’s Balama Project in 
Mozambique as well as general and administrative costs 
and further studies in relation to future potential projects 
including a potential spherical graphite facility in the  
United States. 

The capital raising consisted of the two components and 
resulted in the issuance of 64.9 million new shares:

 >

 >

Institutional Placement at $3.25 per share to raise 
$98 million; and

Pro-rata accelerated renounceable Entitlement Oﬀer 
to eligible shareholders to subscribed for 4 new Syrah 
shares for every 19 existing Syrah shares at an oﬀer 
price of $3.25 per share to raise $113 million.

The completion of this capital raising provided an 
opportunity for a number of new specialist funds and 
institutions to join the register and sees us funded through 
to late 2016.  

BALAMA PROJECT

Development Activities
With the completion of the capital raising, development 
and construction activities are now well underway with 
production targeted to commence in early 2017. 

Key development and construction activities for the 
Balama Project during the period include:   

 > Detailed engineering and design

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Pre-stripping of the Balama West orebody

Placed orders for all principal mechanical equipment 
and long lead items which are now in various stages 
of manufacture. A power station contract has been 
awarded for the delivery of a 10 MW facility that will 
supply power to the processing plant and all other 
infrastructure 

Completed bulk earthworks and prepared the 
processing plant site for the commencement of 
concrete work in early 2016. The ﬁrst signiﬁcant 
concrete pour will be for the run-of-mine ore silo 
foundations

Substantially completed the construction of a 7km 
bitumen access road into site

Commenced an expansion to the existing 
accommodation camp at Balama to increase 
occupancy levels from 70 to 286 people. Progressively 
upgrading on-site medical facilities which included the 
refurbishment of a second on-site ambulance

Tendered key operational service contracts including 
laboratory services, product transport, fuel supply and 
bulk storage contracts

Relocated farm lots from the Mining Concession is now 
substantially complete. This relocation program has 
been recognised in Mozambique as a leading example 
as to how such programs should be implemented

Progressively recruited key construction and 
operational staﬀ with a number of positions being 
awarded to highly qualiﬁed Mozambican nationals

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Figure 1: Cleared processing plant 
site at Balama

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RREEVVIIEEWW OOFF 
OOPPEERRAATTIIOONNSSS
CONTINUED

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DEVELOPMENT AND CONSTRUCTION ACTIVITIES ARE 
NOW WELL UNDERWAY AT BALAMA

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Figure 2: Pre-stripping of 
Balama West orebody

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Figure 3: First excavation for 
ore silo foundations 

Figure 4: Pouring of ﬂoor slab 
for the construction of a larger 
accommodation camp

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REVIEW OF  
OPERATIONS 
CONTINUED

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SALES AND MARKETING
Syrah’s strategy is to partner with major end users or 
key regional commodity traders to leverage oﬀ their 
existing relationships and distribution channels. A three 
year oﬀtake agreement with Chalieco for 80,000 tonnes 
per annum has been signed and a Memorandum of 
Understanding for the sale of nature ﬂake graphite with 
Asmet. 

During November 2015, Syrah signed a Statement of Sales 
Intent with one of the world’s largest refractory producers. 
This leading refractory producers intends to purchase up 
to 15,000 tonnes per annum of natural graphite for its 
production facilities around the world. Initial concentrate 
samples have been provided to this party and have 
satisﬁed their internal product qualiﬁcation process. 
Balama graphite concentrate will be used for refractory 
bricks and parts for industrial high-temperature processes 
exceeding 1,200⁰C. 

Subsequent to the year end, Syrah also ﬁnalised a three 
year oﬀtake agreement with Marubeni for 20,000 tonnes 
per annum. Marubeni will have exclusive rights to import 
and sell Balama graphite in Japan and Korea (Territory), 
and product prices will be negotiated on a quarterly basis 
between the parties with reference to the market prices 
prevailing in the Territory. 

In addition, Syrah also appointed subsequent to year end 
Antonio Assis as General Manager – Sales and Marketing. 
Antonio was previously the Worldwide Sales and Marketing 
Manager for Nacionale de Graﬁte and has 28 years of 
international sales and marketing experience. His in 
depth knowledge of the graphite market and signiﬁcant 
industry networks will be invaluable in assisting Syrah with 
successfully executing its sales and marketing strategies.

SUSTAINABILITY

Health and Safety
Working safely at all times is a core value of Syrah and 
the Company has implemented industry leading health 
and safety standards and systems of work at the Balama 
Project. The Balama medical clinic on site, operated 
by International SOS and licensed in Mozambique, 
is indicative of these standards and is available to all 
employees and contractors working on the project. 
The medical clinic provides primary, occupational and 
emergency evacuation care supported by a Doctor, an 
Advanced Life Support Paramedic, and a Nurse. 

The Company has implemented a Health and Safety 
Management System which is being used to monitor and 
report all health and safety metrics. The management 
team engages with the workforce to ensure a transparent 
reporting culture is maintained. There is also a strong 
emphasis on educating employees to eﬀectively identify 
hazards in the workplace. A total of 18 incidents were 
reported during the six month period ended 31 December 
2015 with minor hand injuries being the most frequently 
reported incident type requiring ﬁrst aid treatment. 

Resettlement Action Plan
During the six month ﬁnancial period ended 31 December 
2015, a total of 201 farms located on the Mining 
Concession were resettled as part of the Resettlement 
Action Plan (RAP). These aﬀected farms consisted farming 
ﬁelds only, with no dwellings impacted. A Resettlement 
Committee was established by the Balama District 
Government and a Technical Working Group (TWG) was 

Figure 5: Ongoing engagement with local communities 
at Balama

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developed consisting of two members from each aﬀected 
village. The TWG’s primary role is to convey grievances to 
the Resettlement Committee and the Company, and to 
oversee the clearing and allocation of 697 hectares of 
resettlement land.

Aﬀected farmers were allocated new farming land, 
provided seeds for the planting of new crops and  
received compensation for the loss of their original farms 
as well as associated economic trees and structures.  
A Compensation Desk consisting of representatives from 
Syrah, the Mozambican government, civil society, the 
Resettlement Committee and community leaders was 
established to ensure all compensation payments were 
administered in accordance with legal requirements.

Due to Syrah’s strong relationship with the local 
communities and associated key stakeholders, the 
Company was able to complete all planned RAP activities 
prior to the planting season. This has resulted in minimal 
disruption to the local food supply and will ensure that 
construction activities commence on schedule.

The RAP Program has been and remains recognised as a 
leading example of industry best practice in Mozambique.

Figure 6: Traditional ceremony performed prior to the 
clearing of resettlement land

Figure 7: Refurbished ambulances 

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REVIEW OF  
OPERATIONS 
CONTINUED

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SYRAH IS COMMITTED TO THE 
DEVELOPMENT OF THE LOCAL 
COMMUNITIES SURROUNDING 
AT THE BALAMA PROJECT

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SUSTAINABILITY (CONTINUED)

Community Development
Syrah is committed to the development of the local 
communities surrounding the Balama Project. The 
Company has identiﬁed eight communities that are the 
focus of all community development and local employment 
initiatives. During the period, numerous projects were 
completed including:

 >

 >

Several solar powered water supply systems were 
constructed and commissioned

Solar panels were installed at a number of schools and 
at a medical clinic

 > Mechanical water boreholes were constructed and 

commissioned.

Syrah is also committed to the employment and 
development of people residing in the local communities 
and ensuring that Mozambique employees occupy 
key leadership roles across the business. Currently, 
Mozambique employees hold senior roles in the following 
disciplines: General Management, Social and Environment; 
Finance; Public Aﬀairs, Procurement; Health & Safety and 
Human Resources.

Figure 9: Mechanical water boreholes 

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Figure 8: Water supply systems

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REVIEW OF  
OPERATIONS 
CONTINUED

SUSTAINABILITY (CONTINUED)

Environment
Syrah has successfully obtained its Environmental  
License and is in the process of implementing an 
Environmental Monitoring Program in line with licence 
requirements. A number of baseline monitoring programs 
have commenced to measure surface and ground water 
quality, ambient noise, dust levels, geo-hydrology and 
background radiation. Air quality monitoring, ichthyofaunal 
and terrestrial fauna surveys will commence in 2016. 

During December 2015, Syrah’s inaugural Annual 
Environmental Management Report was submitted to 
the Ministry of Land, Environment & Rural Development 
(MITADER) in Maputo, Mozambique.

Figure 10: Installation of 
dust bucket at Balama  

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SYRAH IS COMMITTED TO THE ENVIROMENT AND  
IS IMPLEMENTING AN ENVIRONMENTAL MONITORING 
PROGRAM IN LINE WITH LICENCE REQUIREMENTS

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REVIEW OF  
OPERATIONS 
CONTINUED

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GRAPHITE MINERAL RESOURCES AND ORE RESERVES ESTIMATE
A JORC Code (2012 edition) compliant Mineral Resource estimate using a 3% TGC cut-oﬀ  (constrained within  
a pit shell) has been determined by Snowden Mining Industry Consultants (Snowden) as shown in the following table.

CLASSIFICATION 

TONNES  
(MT)

DENSITY  
(T/M3)

TGC (%)

Balama West
Measured
Indicated
Inferred

Balama East
Indicated
Inferred

TOTAL
Measured
Indicated
Inferred

75.0
110.0
460.0

76.0
470.0

75.0
186.0
930.0

2.5
2.6
2.7

2.6
2.7

2.5
2.6
2.7

11.0
8.1
11.0

14.0
10.0

11.0
11.0
11.0

CONTAINED  
GRAPHITE  
(MT)

8.4
9.1
51.0

11.0
49.0

8.4
20.1
100.0

Table 1 – Mineral Resource estimate at 3% TGC cut-oﬀ grade (constrained within a pit shell)

The Proved and Probable Ore Reserve estimated by Snowden is based on, and inclusive of, the above Measured and 
Indicated Mineral Resources only, as Inferred Mineral Resources are not suﬃciently reliable to be used in Ore Reserve 
estimates. 

The Balama Project currently hosts a combined Proved and Probable Reserve of 81.4 Mt at an average grade of  
16.2% TGC (using a 9% TGC cut-oﬀ grade) as shown in the following table. This reserve constitutes 13.2 Mt of contained 
ﬂake graphite. Snowden notes that the deposit is open along strike at both Balama East and Balama West, to the south  
as well as at depth. 

CLASSIFICATION

ORE (MT)

TGC (%)

Balama West
Proved
Probable
SUB TOTAL

Balama East
Probable
SUB TOTAL

TOTAL
Proved
Probable

20.0
2.6
22.5

58.8
58.8

20.0
61.4
81.4

19.2
17.5
19.0

15.1
15.1

19.2
15.2
16.2

CONTAINED  
GRAPHITE 
(MT)

3.8
0.4
4.3

8.9
8.9

3.8
9.3
13.2

Table 2 – Ore Reserve estimate at 9% TGC cut-oﬀ grade

A detailed statement of the Mineral Resources and Ore Reserves for the Balama Project can be found in  
ASX announcement by the company dated 29 May 2015.

For personal use only 
 
 
 
 
 
 
 
Competent Person’s Statement
The information in this annual report that relates to  
Mineral Resources and Ore Reserves is extracted from the 
report titled “Syrah ﬁnalises Balama Graphite study and 
declares maiden ore reserve” released to the ASX on  
29 May 2015 and available to view at www.
syrahresources.com.au and for which Competent Person’s 
consents were obtained. The Competent Person’s consent 
remain in place for subsequent releases by the Company 
of the same information in the same form and context, 
until the consent is withdrawn or replaced by a subsequent 
report and accompanying consent. 

The Company conﬁrms that it is not aware of any new 
information or data that materially aﬀects the information 
included in the original ASX announcement released 
on 29 May 2015, and in the case of estimates of 
Mineral Resources and Ore Reserves, that all material 
assumptions and technical parameters underpinning the 
estimates ion the original ASX announcement continue 
to apply and have not materially changed. 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 ASX announcement. 

Full details are contained in the ASX release dated  
29 May 2015 “Syrah ﬁnalises Balama Graphite study  
and declares maiden ore reserve” available at  
www.syrahresources.com.au. 

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REVIEW OF  
OPERATIONS 
CONTINUED

PROPOSED SPHERICAL 
GRAPHITE PROJECT
Further downstream processing of graphite concentrate 
presents a major potential opportunity to accrue additional 
value for shareholders. Spherical graphite is a high value, 
processed graphite product which is used to manufacture 
anodes for lithium ion batteries. As a result of increasing 
demand from electric vehicle and grid storage applications, 
the lithium ion battery market is expected to see signiﬁcant 
growth over the medium term.

Syrah continues to advance its spherical graphite 
development with the achievement of several signiﬁcant 
milestones during the period. The Company has completed 
an Internal Economic Assessment on a Proposed Spherical 
Graphite Facility in the United States which showed 
encouraging indicative results. Subsequent to year end, 
detailed work has commenced on the technical aspects of 
the Proposed Graphite Facility as well as due diligence on 
the regulatory approvals in the United States.

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Figure 11: Puriﬁed, coated Balama spherical graphite

Technology Licensing Agreement
During November 2015, Syrah signed a 20 year technology 
licensing agreement with Morgan Hairong which grants 
Syrah the exclusive right to use its proprietary spherical 
graphite coating technology globally (excluding China) 
in any potential Spherical Graphite Project developed 
by Syrah. Morgan Hairong is a leading coated spherical 
graphite producer in China, with customers that include 
the largest and fastest growing battery producers in the 
country. The company has been working closely with Syrah 
in regards to its spherical graphite development for over  
10 months.

As consideration, the Company will issue Hairong Morgan 
with US$968,000 of fully paid ordinary shares to be 
issued in two tranches. The ﬁrst tranche was issued during 
December 2015 and the second tranche will be issued 
when the parties agreeing that Syrah is ready to begin 
commercial production of natural spherical graphite 

product. Morgan Hairong will also be entitled to a royalty 
on all future gross sales of coated spherical graphite by the 
Company.

The technology licensing agreement represents a key 
milestone in Syrah’s spherical graphite development by 
providing the Company with the capability of operating 
an integrated supply chain from mine to battery anode 
material. It should also provide Syrah with a signiﬁcant 
competitive advantage in securing oﬀtake agreements with 
lithium ion battery producers.  

Sales and Marketing

Hairong Morgan – Product Sales and  
Marketing Agreement
In addition to the technology licensing agreement, Syrah 
also signed its ﬁrst spherical graphite Product Sales 
Agreement and Marketing Agreement with Hairong Morgan. 
Morgan Hairong has plans for a signiﬁcant expansion 
in production capability in order to satisfy the expected 
future growth in demand for coated spherical graphite. 
The company has the capability to supply coated spherical 
graphite for a wide range of lithium ion battery applications 
including electric vehicles, grid storage and consumer 
electronics.

The Product Sales Agreement has a duration of three years 
and will be for 2,000 tpa of uncoated spherical graphite. 
Morgan Hairong intends to coat Balama spherical graphite 
at its facility for sale domestically in China. Prices will be 
negotiated quarterly between Syrah and Morgan Hairong 
based on market prices which have prevailed in China 
during the preceding three months. 

The Marketing Agreement has a duration of three years 
and will be for a total of 7,000 tpa (consisting of 5,000 tpa 
of uncoated spherical graphite and 2,000 tpa of coated 
spherical graphite). Under this agreement, Morgan Hairong 
will market Balama spherical graphite to lithium ion battery 
producers headquartered in China. Morgan Hairong will 
also receive a commission based on the gross sales price 
of the Balama spherical graphite that it markets.

Hiller Carbon – Statement of Sales Intent
Subsequent to the year end, Syrah also ﬁnalised a 
Statement of Sales Intent with Hiller Carbon, a leading 
supplier of raw materials to North American electric 
arc furnace (EAF) steel producers and other industrial 
customers. 

Hiller Carbon intends to purchase between 25,000 tonnes 
and up to 35,000 tonnes of Balama recarburiser per 
annum for resale. Both parties expect that these volumes 
will continue to grow over time. Hiller Carbon will be granted 
exclusive rights to sell Balama recarburiser in the United 
States, Canada and Mexico. The parties will work together 
towards a binding agreement as development of the 
Balama Project advances. 

For personal use only 
 
 
 
 
 
 
 
 
This agreement supports Syrah’s belief that Balama 
natural graphite is an ideal product for the EAF steel 
industry, which requires a high quality carbon additive 
with low impurities. In addition, this agreement is also 
highly synergistic with Syrah’s Proposed Spherical 
Graphite Facility in the United States, which will produce 
recarburiser manufactured speciﬁcally to exacting 
standards to exacting standards of EAF steel customers. 
The ability to access the North American recarburiser 
market will create another revenue stream for the Proposed 
Spherical Graphite Facility.

Marubeni – Memorandum of Understanding
Subsequent to the year end, Syrah was advised by a 
number of major global battery material manufacturers 
that it has qualiﬁed Balama spherical graphite for 
automotive customers’ requirements. The Company 
has signed a new Memorandum of Understanding for 
Marubeni Corporation to secure spherical graphite oﬀtake 
agreements with anode and battery producers in the 
Territory prior to 30 June 2016.

Figure 12: High quality, low impurity Balama natural 
graphite recarburiser (each approximately 5mm long)

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REVIEW OF  
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CONTINUED

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BALAMA VANADIUM PROJECT
In addition to Balama Project’s substantial graphite Ore Reserves, the deposit also hosts a signiﬁcant  
vanadium resource. The Company has completed a Scoping Study on the Balama Vanadium Project which  
demonstrated the viability of the project.

Due to the technical and processing requirements of vanadium, which is more complex than graphite, Syrah will only 
develop Balama’s vanadium resource after graphite production has commenced. Pilot plant work is currently ongoing in 
preparation for future feasibility studies and 50 kg of 99% and 99.9% V2O5 has been produced to provide samples for 
potential customers around the world. 

Vanadium Mineral Resources Estimate
A JORC Code (2004 edition) compliant Mineral Resource estimate using a 5% TGC cut-oﬀ has been estimated by The MSA 
Group Pty Ltd as shown in the following table.

CLASSIFICATION

Balama West

Inferred

Balama East

Inferred

TOTAL

Inferred

TONNES 
(MT)

V2O5 (%)

CONTAINED V2O5 
(MT)

568

579

1,150

1,150

0.21

0.26

0.24

0.24

1.17

1.49

2.70

2.70

Table 3 – Mineral Resource estimate at 5% TGC cut-oﬀ grade

A detailed statement of the Vanadium Mineral Resources for the Balama Project can be found in ASX announcements by 
the Company dated 23 January 2013 and 27 May 2013.

Competent Person’s Statement
The information in this annual report as it relates to geological, geochemical and geophysical exploration results was 
compiled by Mr Grant McLatchie MAIG, who is a Competent Person pursuant to the requirements of ASX Listing Rules and 
the JORC Code (2012) and a Member of the Australian Institute of Geoscientists. Mr McLatchie has more than 20 years 
of experience in the activities being reported on and has suﬃcient expertise which is relevant to the style of mineralisation 
and type of deposit under consideration. He consents to the inclusion of this information and context in which it appears in 
this presentation.

The information in this annual report as it relates to mineral processing and metallurgical testing was compiled by 
Mr Michael T.N. Chan, MAusIMM, who is a Competent Person and General Manager of Project Development at Syrah 
Resources Ltd and a Member of the Australian Institute of Mining and Metallurgy. Mr Chan has more than 20 years of 
experience in the activities being reported on and has suﬃcient expertise which is relevant to the style of mineralisation 
and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as deﬁned 
in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.  
Mr Chan consents to the inclusion of this information in the form and context in which it appears in this presentation.

For personal use only 
 
 
 
 
 
 
 
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DIRECTORS’  
REPORT

The Directors present their report on Syrah Resources 
Limited (“Syrah”, “the Group”, “the Company” or “the 
consolidated entity”), consisting of Syrah and the entities 
it controlled at the end of, or during, the six month period 
ended 31 December 2015.

The Board of Directors resolved to change the Company’s 
ﬁnancial year end from 30 June to 31 December eﬀective 
from 1 July 2015.  This change was made to align the 
Company’s ﬁnancial year end with that of its wholly owned 
subsidiary, Twigg Exploration and Mining Limitada, which 
holds the Balama Graphite and Vanadium Project in 
Mozambique. This change means that the current reporting 
period is a six month transitional ﬁnancial period beginning 
on 1 July 2015 and ending on 31 December 2015. 
Future ﬁnancial periods will then revert to a twelve month 
ﬁnancial year, commencing on 1 January and ending on 31 
December. 

DIRECTORS
The following persons were directors of Syrah Resources 
Limited during the six month ﬁnancial period and up to the 
date of this report, unless otherwise stated: 

James Askew 

Tolga Kumova 

Sam Riggall 

Rhett Brans 

Jose Caldeira 

Non-Executive Chairman

Managing Director

Non-Executive Director 

Non-Executive Director

Non-Executive Director 

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INFORMATION ON DIRECTORS
The information on Directors in oﬃce as at the date of this 
report is as follows:

James Askew, Non-Executive Chairman
Experience and expertise
Mr Askew is a mining engineer with over 40 years of broad 
international experience as a Director and Chief Executive 
Oﬃcer for a wide range of Australian and international publicly 
listed mining, mining ﬁnance and other mining related 
companies. He has had a continuous involvement with the 
African mining industry since 1985.
Other current directorships
Chairman of OceanaGold Limited 
Chairman of Asia Minerals Resources Limited
Non-Executive Director of Evolution Mining Limited 
Non-Executive Director of Nevada Copper Corporation
Former directorships in last 3 years
Non-Executive Director of Inova Resources Limited (formerly 
Ivanhoe Australia Limited)
Non-Executive Director of Golden Star Resources Limited 
Non-Executive Chairman of PMI Gold Limited
Special responsibilities
Member of the Audit, Financial Risk and Compliance Committee 
Member of the Remuneration and Nomination Committee
Interest in shares and options 
Ordinary shares – SYR 
Options over Ordinary Shares – SYR 
Length of service 

–
600,000
1 year and 5 months

For personal use only 
 
 
 
 
 
 
 
 
 
 
 
 
Tolga Kumova, Managing Director
Experience and expertise
Mr Kumova is one of the founding shareholders of Jacana 
Resources Pty Ltd, which held the Balama Graphite and other 
projects subsequently vended into Syrah in late 2011. He has 
15 years of experience in ﬁnancial markets, corporate advisory 
and stockbroking.

Other current directorships 
Former directorships in last 3 years 
Special responsibilities 
Interest in shares, rights and options 
Ordinary Shares – SYR 
Options over Ordinary Shares – SYR 
Length of service 

None

None
Managing Director

14,522,215
2,000,000
2 years and 10 months  

Rhett Brans, Non-Executive Director
Experience and expertise 
Mr Brans has over 40 years of experience in the design 
and construction of mineral treatment facilities. His 
experience extends across the full spectrum of development 
activities, ranging from mining feasibility studies through 
to commissioning operations. He has also managed the 
development of several gold and base metal projects.
Other current directorships 
Non-Executive Director of Carnavale Resources Limited
Non-Executive Director of RMG Limited
Non-Executive Director of Monument Mining Limited
Former directorships in last 3 years 
Executive Director of Persus Mining Limited 
Special responsibilities 
Chairman of the Remuneration and Nomination Committee 
Member of the Audit, Financial Risk and Compliance Committee
Interest in shares, rights and options 
Ordinary shares – SYR 
Options over ordinary shares – SYR 
Length of service 

–
650,000
2 years and 9 months

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Sam Riggall, Non-Executive Director
Experience and expertise
Mr Riggall was previously Executive Vice-President of Business 
Development and Strategic Planning at Ivanhoe Mines Limited. 
Prior to that he worked in a variety of roles in Rio Tinto Limited for 
over a decade covering industrial minerals, project generation 
and evaluation, business development and capital market 
transactions.
Other current directorships 
Chairman and Chief Executive Oﬃcer of CleanTeq Holdings 
Limited
Former directorships in last 3 years 
Special responsibilities 
Chairman of the Audit, Financial Risk and Compliance 
Committee 
Member of the Remuneration and Nomination Committee
Interest in shares, rights and options 
Ordinary shares – SYR 
Options over ordinary shares – SYR 
Length of service 

–
400,000
1 year and 5 months

None

José Caldeira, Non-Executive Director
Experience and expertise
Mr Caldeira is a highly experienced legal and regulatory 
professional with over 25 years experience in the legal industry. 
He is one of the prominent lawyers in Mozambique. He is 
currently a senior partner at Sal & Caldeira Advogados, Lda in 
Mozambique, one of the leading law ﬁrms in Mozambique. 
Other current directorships 
Former directorships in last 3 years 
Special responsibilities 
Interest in shares, rights and options
Ordinary shares – SYR 
Options over Ordinary Shares – SYR 
Length of service 

–
400,000
1 year and 7 months

None
None
None

For personal use only 
 
 
 
 
 
 
 
 
DIRECTORS’  
REPORT 
CONTINUED

‘Other current directorships’ quoted above are current 
directorships for listed entities only and excludes 
directorships in all other types of entities, unless otherwise 
stated.

REVIEW OF OPERATIONS
Information on the operations of the group is set out on 
pages 8 to 22 of this annual report.

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‘Former directorships in the last 3 years’ quoted above 
are directorships held in the last three years for listed 
entities only and excludes directorships in all other types of 
entities, unless otherwise stated.

COMPANY SECRETARY
Melanie Leydin has over 25 years experience in the 
accounting profession and is a Director and Company 
Secretary for a number of oil and gas, junior mining and 
exploration entities listed on the Australian Securities 
Exchange. She is a Chartered Accountant and a Registered 
Company Auditor. She graduated from Swinburne 
University in 1997, became a Chartered Accountant in 
1999 and since February 2000 has been the principal of 
chartered accounting ﬁrm, Leydin Freyer specialising in 
outsourced company secretarial and ﬁnancial duties for 
the resources and biotechnology sectors.

PRINCIPAL ACTIVITIES
The principal continuing activities of the consolidated entity 
consisted of: 

 >

 >

 >

the development and construction of the Balama 
Graphite Project in Mozambique; 

continued assessment of the use of high quality 
graphite from the Balama Graphite Project as an 
input into the production of spherical graphite and 
recarburiser products; and 

ongoing exploration and evaluation studies, including 
further technical investigations into the potential 
to extract and produce vanadium from the Balama 
Graphite Project ore body. 

DIVIDENDS
There were no dividends paid, recommended or  
declared during the current ﬁnancial period or previous 
ﬁnancial year.

Operating and Financial Review
Statement of comprehensive income
The loss for the consolidated entity after providing for 
income tax amounted to $3.3 million during the six month 
ﬁnancial period ended 31 December 2015 (12 month 
period to 30 June 2015 loss: $11.6 million). The loss for the 
year comprised mainly of corporate oﬃce, compliance and 
employee beneﬁts expenses. 

During the period there was an increase in general business 
activities following the successful completion of a fully 
underwritten $211 million capital raising during August 
2015 and the commencement of the development and 
construction of the Balama Graphite Project in Mozambique. 

The loss for the period included a net foreign exchange gain 
of $6.0 million (12 month period to 30 June 2015: $0.9 
million) associated with proceeds from the equity raising 
that were transferred into United States Dollars to fund the 
development expenditure for the Balama Graphite Project. 

Non-cash items of expenditure included share-based 
payment expenditures of $4.2 million (12 month period 
to 30 June 2015: $5.7 million) associated with issuance 
of shares, options and performance rights to directors, 
executives and selected senior employees; and impairment 
charges of $1.2 million (12 month period to 30 June 2015: 
$0.1 million) comprising a loss on mobile equipment  
($1.1 million) that is no longer expected to be used to the 
extent originally planned, and on available-for-sale ﬁnancial 
assets ($0.1 million) associated with a decline in the fair 
value of shares held in Strandline Resources Limited.   

The consolidated entity also made a non-cash loss of  
$7.1 million recognised in other comprehensive income 
during the six month period ended 31 December 2015 
(12 months to 30 June: $0.3 million gain) on translation 
of foreign subsidiaries, speciﬁcally Syrah Resources and 
Trading DMCC and Twigg Exploration and Mining Limitada.

Statement of ﬁnancial position
The net assets of the consolidated entity increased during 
the six month period ended 31 December 2015 to  
$253.2 million (30 June 2014: $56.4 million) principally as 
a result of the successful completion of a fully underwritten 
A$211 million capital raising in August 2015 by way of the 
following: 

 >

 >

Institutional placement at $3.25 per share which raised 
$97.5 million; and 

Pro-rata accelerated renounceable Entitlement Oﬀer 
to eligible shareholders to subscribe for 4 new Syrah 
shares for every 19 existing Syrah shares at an oﬀer 
price of $3.25 per share which raised $113.3 million 

For personal use only 
 
 
 
 
 
 
 
 
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The consolidated entity’s cash and cash equivalents were 
$191.6 million as at 31 December 2015 (30 June 2014: 
$8.9 million) and working capital, being current assets less 
current liabilities, was $188.1 million (30 June 2014:  
$8.6 million). 

The completion of the capital raising allowed the 
development and construction of the Balama Graphite 
Project in Mozambique to commence, resulting in project 
expenditures of $19.8 million and further commitments 
of $44.7 million being made during the six month 
period ended 31 December 2015. These investments 
have allowed for a number of key achievements and set 
the foundations for the successful development and 
construction of the Balama Project during 2016, including:  

 >

 >

 >

 >

 >

Commencement of  detailed engineering and design

Placement of orders for all principal mechanical 
equipment and long lead items which are all now in the 
various stages of ﬁnal design and manufacture

Completion of bulk earthworks at the processing plant 
site and signiﬁcant progress on the construction of the 
main access road into site 

Commencement of an expansion to the existing 
accommodation camp at Balama

Commencement of pre-stripping of the Balama West 
orebody

Statement of cash ﬂows

Cash ﬂow from operating activities
Net cash ﬂows used in operating activities were  
$3.7 million during the six month period ended  
31 December 2015 (12 month period to 30 June 2015: 
$6.1 million) and principally consisted of corporate 
oﬃce, compliance and employee beneﬁts expenses. 
Interest received during the period was $0.2 million and 
is increasing as a result of an increase in cash and cash 
equivalents following the successful capital raising in 
August 2015.   

Cash ﬂow from investing activities
Net cash ﬂows used in investing activities were  
$16.2 million during the six month period ended  
31 December 2015 (12 month period to 30 June 2015: 
$18.0 million) and principally consisted of development 
and construction works for the Balama Graphite Project. 

Cash ﬂow from ﬁnancing activities
Net cash inﬂows from ﬁnancing activities were  
$202.2 million during the six month period ended 31 
December 2015 (12 month period to 30 June 2015:  
$4.3 million) and principally consisted of proceeds 
received from the successful capital raising, net of costs,  
in August 2015.   

Future Outlook
The likely developments and outlook in the operations of 
the Group in future ﬁnancial years include: 

Project Development
 >

Continue with the development and construction of 
the Balama Graphite Project, targeting to commence 
commissioning in early 2017 

 >

 >

Conduct further technical work and due diligence for a 
spherical graphite facility in the United States

Progress oﬀtake discussions and arrangements with 
targeted customers and end-users of natural ﬂake and 
spherical graphite products   

Exploration and Evaluation
 >

Further evaluate the vanadium project at Balama, and 
conduct exploration and evaluation activities on other 
tenements as required 

Material Business Risks
The Group continues to assess and manage various 
business risks that could impact the Group’s operating and 
ﬁnancial performance and its ability to successfully deliver 
strategic priorities. The material business risks that may 
have an impact on the Group include:  

Commodity price risk and movements in 
foreign exchange rates
The Group’s operational and ﬁnancial performance, as well 
as the economic viability of its projects, are heavily reliant 
on the prevailing global price of graphite products and the 
US dollar and Mozambique metical foreign exchange rates. 
Volatility in commodity and ﬁnancial markets may therefore 
materially aﬀect proﬁtability and ﬁnancial performance 
and requires careful management to ensure the ability of 
the group to successfully deliver its strategic priorities. 

In addition, any sustained low global price for graphite 
products can also impact operations by requiring a 
reassessment of an exploration or development project 
and possibly limiting the Company’s ability to fund its 
planned capital expenditure commitments and exploration 
and evaluation activities. 

Mineral Resources and Ore Reserves
The JORC Code (2012 Edition) compliant statements 
relating to Ore Reserves and Mineral Resources are 
estimates only. An estimate is an expression of judgement 
based on knowledge, experience and industry practice. 
Estimates which were valid when originally calculated may 
alter signiﬁcantly when new information or techniques 
become available. 

For personal use only 
 
 
 
 
 
 
 
DIRECTORS’  
REPORT 
CONTINUED

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In addition, by their very nature, resource estimates are 
imprecise and depend to some extent on interpretations, 
which may prove to be inaccurate. This may result in 
alterations to development and mining plans or changes 
to the quality or quantity of Ore Reserves and Mineral 
Resources which may, in turn, adversely aﬀect operations 
and ﬁnancial results.

No assurance can be given that the anticipated tonnages 
or grade of minerals will be achieved during exploration or 
production or that the indicated level of recovery rates will 
be realised. Additionally, material price ﬂuctuations, as 
well as increased anticipated production costs or reduced 
anticipated recovery rates, may render any potential 
mineral resources or reserves containing relatively 
lower grades uneconomic and may ultimately result in a 
restatement of such resource or reserve. 

Funding risk
The Company is expected to require additional ﬁnancing, 
in addition to that achieved money raised under the 
capital raising during August 2015, to meet its project 
development and working capital requirements, general 
and administrative expenditure and studies relating to 
future potential projects.

While the Directors believe the Company has a number 
of alternatives to raise the necessary funding (which 
may include both debt and equity sources of funding), 
there can be no guarantee that Syrah will be able to raise 
suﬃcient funding on acceptable terms or at all. An inability 
to obtain ﬁnance on acceptable terms or at all may cause 
substantial delays in, or prevent, the construction and 
development of the Balama Project and/or the pursuit of 
future potential projects.

Counterparty risk
The Company has entered into an oﬀtake agreement 
with Chalieco. Under this agreement Chalieco’s payment 
obligations are subject to the satisfaction of certain 
conditions precedent; including requiring Syrah to give a 
notice of intended commercial production, and requiring 
the parties to execute a written agreement in respect of any 
matters arising after the date of the agreement which the 
parties consider necessary to give eﬀect to the terms and 
principles set out in the agreement.

The Company is also in discussions with a number of 
parties in relation to additional oﬀtake agreements for 
the Balama Project. While some of these discussions 
are well progressed and taking place under non-binding 
memoranda of understanding, there is no guarantee 
that they will result in the execution of formal oﬀtake 
agreements on acceptable terms or at all. There is also 
no guarantee that the conditions precedent under the 
oﬀtake agreement with Chalieco will be satisﬁed.  Failure to 
achieve any of these outcomes would adversely impact the 
Group’s revenue and proﬁtability. 

Development of Balama Project and  
Construction Risk
The Group has commenced the development of the 
Balama Graphite Project. The development of any 
resources project comes with inherent risks, such as the 
risks associated with construction of a mineral processing 
plant and associated infrastructure, the processing 
and separation of heavy mineral concentrate and other 
construction and production related activities. There is no 
guarantee that anticipated or forecast timeframes or the 
anticipated production proﬁle of the Balama Project will 
be met. 

The construction of the Balama Project may be impacted 
by risks associated with the performance of a large-
scale construction project, including but not limited to 
weather, availability of materials, availability of skilled 
and experienced workers and contractors, industrial 
and environmental accidents, industrial disputes and 
unexpected shortages or increases in the costs of labour, 
consumables, spare parts, plant and equipment.

Health and safety
Health and safety regulations aﬀect the Company’s 
activities. Exploration and mining are potentially hazardous 
activities. If any injuries or accidents occur in a mine for 
example, this could have ﬁnancial implications for the 
Company including potential delays or stoppages in 
construction or mining activities.

Remote operating environment
Due to the remoteness of the Balama Graphite Project, 
the Company is subject to an increased number of risks, 
which include a lack of access to key infrastructure, 
unexpected transportation and fuel costs, unexpected 
delays and accidents that could, singly or collectively, 
materially negatively impact upon the Company’s ﬁnancial 
performance and position. Any prolonged interruption to 
access to key infrastructure could have signiﬁcant adverse 
eﬀects on the Company’s ability to sell product and 
therefore generate revenue. 

Environmental and other regulatory 
approvals
Environmental regulation in the jurisdictions in which the 
Company has operations impose signiﬁcant obligations 
on companies that conduct the exploration for and mining 
of commodities. The Company must comply with all 
known standards, existing laws, and regulations in each 
case which may entail greater or lesser costs and delays 
depending on the nature of the activity to be permitted 
and how the regulations are administered by the local 
authorities. In addition, changes in environmental laws 
and regulations or their interpretation or enforcement may 
adversely aﬀect the Company’s operations, including the 
potential proﬁtability of its operations. 

For personal use only 
 
 
 
 
 
 
 
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The maintaining of tenements, obtaining renewals, or 
the grant of tenements or permits (including for both 
construction and mining operations) depends on the 
Company being successful in obtaining statutory approvals 
for its proposed activities. While the Company anticipates 
that all regulatory approvals will be given as and when 
sought, there can be no assurance that such renewals 
or approvals will be given as a matter of course and 
there is no assurance that new conditions or unexpected 
conditions will not be imposed.

Sovereign risk
The Company operations could be adversely aﬀected by 
government actions in Mozambique or other countries 
or jurisdictions in which it has operational exposures 
or investment or exploration interests. The Company’s 
businesses are subject, in each of the countries in 
which it operates, to various national and local laws and 
regulations relating to, among other things, construction 
and mining exploration activities. A change in the laws 
which apply to Company’s businesses or the way in which 
they are regulated could have a material adverse eﬀect on 
the carrying value of material assets or otherwise have a 
material adverse eﬀect on the Company’s businesses and 
ﬁnancial condition.

Risk Management
The Company manages the risks listed above and 
other day-to-day risks using risk reporting and control 
mechanisms which are designed to ensure strategic, 
operational, legal, ﬁnancial, reputational and other risks 
are identiﬁed, assessed and appropriately managed on an 
ongoing basis. 

The Executive Management team, the Audit, Financial Risk 
and Compliance Committee and the Board regularly review 
the Group’s risks and the eﬀectiveness of the Company’s 
management of those risks. 

Signiﬁcant Changes in State of 
Aﬀairs
There were no other signiﬁcant changes in the nature of 
activities or the state of aﬀairs during the current ﬁnancial 
period other than those included in the Operating and 
Financial Review. 

Matters Subsequent to the End of 
the Financial Year
No matter or circumstance has arisen since 31 December 
2015 that has signiﬁcantly aﬀected, or may signiﬁcantly 
aﬀect the consolidated entity’s operations, the results 
of those operations, or the consolidated entity’s state of 
aﬀairs in future ﬁnancial years. 

Likely Developments and Expected 
Results of Operations
Commentary on likely developments and expected results 
of operations is set out in the Operating and Financial 
Review. 

Environmental Regulation 
Syrah’s holdings are subject to environmental regulations 
in the jurisdictions in which it operates; these include 
Mozambique, Australia, Zambia and Botswana. Within 
each jurisdiction the granting of mining and/or exploration 
tenements require the holder to comply with the terms 
of the grant of the tenement and all directions given to it 
under those terms. There have been no known breaches 
of tenement conditions in any jurisdiction in which the 
Company operates and no such breaches have been 
notiﬁed by any Government agency for the period ended  
31 December 2015.

During April 2015, Twigg Exploration and Mining Limitada 
was granted an Environmental Licence (5 year period 
and renewable) for the Balama Project. The regulations 
with which the Company must comply are set out in 
Mozambican Environmental Law No 20/97 and the 
Environmental Impact Study submitted by the Company 
and signed oﬀ by the Mozambican Government. These 
requirements include mitigation measures and monitoring 
programs outlined by the study to comply with relevant 
laws and regulations. The Company has employed an 
Environmental Manager to ensure all programs and 
measures are implemented appropriately and that the 
Company complies with all regulatory requirements under 
the law.

For personal use only 
 
 
 
 
 
 
 
DIRECTORS’  
REPORT 
CONTINUED

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MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and of each Board Committee held during the six month period 
ended 31 December 2015, and the number of meetings attended by each Director was:

BOARD MEETINGS

COMMITTEE MEETINGS 

AUDIT, FINANCIAL RISK AND 
COMPLIANCE COMMITTEE 

REMUNERATION AND 
NOMINATION COMMITTEE 

A

5

5

5

5

3

B

5

5

5

5

5

A

2

-

2

2

-

B

2

-

2

2

-

A

2

-

2

2

-

B

2

-

2

2

-

NAME

J Askew 

T Kumova 

S Riggall

R Brans

J Caldeira 

(A)   Number of meetings attended.

(B)   Number of meetings held during the time the Director held oﬃce or was a member of the committee during the six month  

period ended 31 December 2015.

INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
The relevant interest of each Director in the share capital and options of the Company as at the date of this report is: 

NAME

J Askew

T Kumova

S Riggall

R Brans

J Caldeira

FULLY PAID ORDINARY SHARES

-

14,522,215 (3)

-

-

-

SHARE OPTIONS

600,000  (1)

2,000,000  (2) (3)

400,000  (4)

650,000  (5)

400,000  (6)

(1)  

600,000 unlisted options exercisable at $4.71 and expiring 30 November 2018. 

(2)   2,000,000 unlisted options exercisable at $6.26 and expiring 2 October 2019.

(3) 

The Board of Directors has resolved to issue T Kumova with 142,745 shares and 1,000,000 unlisted options exercisable at  $4.58 and expiring  
three years from the date of grant. The issuance of these shares and options remain subject to shareholder approval and they are therefore not 
included in the above schedule of relevant interests. 

(4)   400,000 unlisted options exercisable at $4.71 and expiring 30 November 2018. 

(5)   250,000 unlisted options exercisable at $2.81 and expiring 12 June 2016 and 400,000 unlisted options exercisable at $6.26 and expiring on  

2 October 2019.

(6)   400,000 unlisted options exercisable at $6.26 and expiring 2 October 2019.

For personal use only 
 
 
 
 
 
 
 
 
 
 
 
 
 
REMUNERATION REPORT
The Remuneration Report contains details of  
remuneration paid to the Non-Executive Directors, 
Executive Directors and Key Management Personnel 
(“KMP”) of the Group as well as the remuneration strategy 
and policies that were applicable in the six month ﬁnancial 
period ended 31 December 2015.

The remuneration report is structured as follows:

a)  Remuneration Governance

b)  Director and Key Management Personnel Details

c)  Remuneration Strategy and Philosophy

d)  Remuneration Components

e)  Details of Remuneration Expenses

f)  Executive Service Agreements 

g)  Terms and Conditions of Share-Based Payment 

Arrangements

h)  Director and Key Management Personnel Equity 

Holdings

i)  Other transactions with Directors and Key 

Management Personnel

j)  Additional information

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a) Remuneration Governance 
Remuneration and Nomination Committee
The Board has established a Remuneration and 
Nomination Committee consisting solely of Non-Executive 
Directors to assist the Board in achieving its objectives in 
relation to the following: 

 >

 >

 >

 >

 >

 >

having a Board of Directors of an eﬀective 
composition, size and commitment to adequately 
discharge its responsibilities and duties;  

having coherent remuneration policies and practices 
to attract and retain executives and directors who will 
create value for shareholders;  

observing those remuneration policies and practices;  

fairly and responsibly rewarding executives 
having regard to the performance of the Group, 
the performance of the executives and industry 
remuneration conditions;  

the preparation of the Remuneration Report to be 
included in the Company’s Annual Report; and   

communicating the Company’s remuneration policy 
to shareholders and any proposed changes to that 
remuneration policy and the Committee’s work on 
behalf of the Board.

The Remuneration and Nomination Committee is 
comprised of Rhett Brans (Committee Chairperson);  
James Askew and Sam Riggall. 

b)  Director and Key Management  
Personnel Details
Directors
The following persons were directors of Syrah Resources 
Limited during the six month period ended 31 December 
2015 and up to the date of this report, unless otherwise 
stated: 

EXECUTIVE AND NON-EXECUTIVE DIRECTORS

NAME

James Askew

Tolga Kumova

Sam Riggall

Rhett Brans

Jose Caldeira

POSITION

Non-Executive Chairman

Managing Director

Non-Executive Director

Non-Executive Director

Non-Executive Director

For personal use only 
 
 
 
 
 
 
 
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REPORT 
CONTINUED

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d) Remuneration Components
Non-Executive Director Fees
Non-Executive Directors receive a Board fee and do not 
receive additional fees for chairing or participating on 
Board Committees. Except for participation in the Share 
Option Plan or Long Term Incentive Plan, Non-Executive 
Directors do not receive performance-based pay or 
retirement allowances.

The annual Non-Executive Director remuneration packages 
(inclusive of superannuation contribution amounts where 
applicable) for the six month ﬁnancial period ended  
31 December 2015 were as follows:

NAME

POSITION

ANNUAL FEES

J Askew

Non-Executive Chairman

$142,350

S Riggall

Non-Executive Director

R Brans

Non-Executive Director

J Caldeira Non-Executive Director

$93,075

$93,075

$93,075

Non-executive Directors’ fees are determined within an 
aggregate Directors’ fee pool limit, which is periodically 
reviewed for adequacy. Any increase to the aggregate 
Directors’ fee pool is submitted to shareholders for 
approval. The maximum currently stands at $750,000 per 
annum and was approved by shareholders at the Annual 
General Meeting on 13 November 2015. 

All Non-Executive Directors enter into a service agreement 
with the Company in the form of a letter of appointment.  
The letter of appointment summarises the Board policies 
and terms, including remuneration, relevant to the oﬃce of 
director of the Company. 

To align the Non-Executive Directors’ interests with 
shareholder interests, the Non-Executive Directors are 
able to participate in the Share Option Plan and Long Term 
Incentive Plan.  

Key Management Personnel 
The following persons were Key Management Personnel 
of Syrah Resources Limited during the six month period 
ended 31 December 2015 and up to the date of this 
report, unless otherwise stated: 

KEY MANAGEMENT PERSONNEL

NAME

POSITION

Darrin Strange

Chief Operating Oﬃcer

David Corr

Chief Financial Oﬃcer

c) Remuneration Strategy and  
Philosophy  
Non-Executive Director Remuneration
The Board policy is to remunerate Non-Executive Directors 
at market rates for time, commitment and responsibilities. 
The Board determines payments to Non-Executive 
Directors and annually reviews their remuneration taking 
into account comparable roles, comparative market data 
and, if required, the advice of independent remuneration 
consultants.  

Executive Remuneration
The Board in consultation with the Remuneration and 
Nomination Committee, reviews the Company’s Executive 
Remuneration Strategy annually to ensure that the 
executive remuneration framework remains appropriate 
and aligned to the business needs. 

The Board aims to ensure the Company’s Remuneration 
Practices are performance based and designed to: 

 > Motivate executives to pursue the Group’s long term 

growth and success; and

 > Demonstrate a clear relationship between the 

Group’s overall performance and the performance of 
executives.  

Remuneration Consultants
The Company engages the services of independent and 
specialist remuneration consultants from time to time to 
provide recommendations on the remuneration of Directors 
and Key Management Personnel. During the six month 
ﬁnancial period ended 31 December 2015 the Company 
did not engage the services of independent and specialist 
remuneration consultants for Directors or Key Management 
Personnel (30 June 2015: NIL).

For personal use only 
 
 
 
 
 
 
 
 
Executive remuneration 
The Company’s remuneration policy for Executives incorporates a Total Fixed Remuneration (“TFR”) component and ‘at risk’ 
performance based short term incentive (‘STI’) and long term incentive (‘LTI’) based components. 

The following table sets out the relative mix of ﬁxed and performance related remuneration for Executive Directors and Key 
Management Personnel for the current and prior ﬁnancial period:  

NAME

Executive Directors

T Kumova (1)

P Kehoe (2)

Key Management Personnel

D Strange

D Corr

TOTAL FIXED 
REMUNERATION

AT RISK REMUNERATION

STI

LTI (3)

DEC-2015

JUN-2015

DEC-2015

JUN-2015

DEC-2015

JUN-2015

100%

-

61%

61%

100%

100%

61%

61%

-

-

11%

11%

-

-

11%

11%

-

-

28%

28%

-

-

28%

28%

(1) 

(2) 

(3) 

T Kumova did not participate in the group’s ‘at risk’ remuneration plans for the year ended 31 December 2015. 

P Kehoe resigned as Managing Director of the Company on 2 October 2014.

The Company’s Long Term Incentive Plan was approved by shareholders at the Annual General Meeting on 13 November 2015 allowing for 
performance rights to be issued to D Strange and D Corr for the year ended 31 December 2015.  

Total Fixed Remuneration
The Remuneration and Nomination Committee annually reviews and determines the ﬁxed remuneration, inclusive of 
superannuation contribution amounts and salary sacriﬁce arrangements, for Executive Directors and Key Management 
Personnel with oversight from the Board of Directors. The process consists of a review of group and individual performance, 
relevant comparative remuneration and, where appropriate, external advice from remuneration consultants. 

Total ﬁxed remuneration for Key Management Personnel for six month period ended 31 December 2015 is set out in 
section (e).

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Performance Based Remuneration

Short Term Incentive
The Board introduced a Short Term Incentive Plan (“STI”) for Executives from 1 January 2015. The objective of the STI is 
to align reward of Executives with the attainment of Key Performance Indicators (“KPI’s”) which drive short to medium 
term outcomes for the business incorporating a mixture of business development; operational and investor relations 
performance indicators. 

The STI is paid in cash. The following table shows details of the STI as a percentage of Total Fixed Remuneration (exclusive 
of the required superannuation contribution), the relative weightings between Company KPIs and Individual KPIs and the 
amounts granted and forfeited for the year ended 31 December 2015:  

NAME

Executive Director

T Kumova (1)

Key Management Personnel

D Strange

D Corr

MAXIMUM AMOUNT

ATTAINMENT WEIGHTINGS

% OF TFR

$ AMOUNT

COMPANY
KPI’S

INDIVIDUAL 
KPI’S

AMOUNT 
GRANTED
%

AMOUNT 
FORFEITED
%

-

20%

20%

-

$64,000

$50,000

-

40%

40%

-

60%

60%

-

100%

100%

-

-

-

(1) 

T Kumova did not participate in the group’s STI plan for the year ended 31 December 2015.

Company and Individual KPIs are set and agreed annually by the Remuneration and Nomination Committee with oversight 
from the Board of Directors.

Other discretionary bonuses
The Board in its discretion has resolved to award an additional bonus to selected senior employees in recognition of the 
signiﬁcant contribution made to ensure the ﬁnalisation of the feasibility study, the success of the Company’s fundraising 
activities, the commencement of mine development and the ongoing work to establish key sales and market targets as the 
mine moves towards commissioning. Accordingly, a once-oﬀ bonus of 142,745 shares was awarded to T Kumova (subject 
to shareholder approval), 36,056 shares to D Strange and 28,169 shares to D Corr for the period to 31 December 2015. 

Long Term Incentive
The Group has a Long Term Incentive Plan (“LTI Plan”) and a Share Option Plan (“SOP”) in existence. The SOP is now 
eﬀectively dormant following the approval of the LTI Plan by shareholders at the Annual General Meeting on 13 November 
2015. There will be no new options issued under the SOP. 

A new LTI Plan allows for the issue performance rights, options and shares to directors and employees of the Company 
(or a subsidiary). The grant of performance rights, options and shares is  subject to such conditions (if any) as determined 
by a committee established by the Board to administer the LTI Plan (or, if no such committee has been established, as 
determined by the Board) (“Plan Committee”). Any performance rights, options and shares granted under the LTI Plan may 
be subject to such vesting conditions (if any) as determined by the Plan Committee.

The LTI Plan is part of the Company’s remuneration strategy and is designed to align the interests of management and 
shareholders and assist the Company to attract, motivate and retain Executives. In particular, the LTI Plan is designed 
to provide relevant directors and key employees with an incentive to remain with the Group and contribute to the future 
performance of the Group over the long term.

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a. Performance Rights
Executives are granted performance rights on an annual basis and vesting will be contingent on the achievement of speciﬁc 
performance hurdles over a three year period. The ‘at risk’ value of the annual grant over a three year period represents 
between 20% and 60% of an eligible employees’ total ﬁxed remuneration (exclusive of the required superannuation 
contribution). The performance hurdle involves an assessment of the Company’s Total Shareholder Return (“TSR”) relative 
to a comparative group of companies.

The actual number of performance rights granted each year is calculated by dividing between 20% and 60% of each 
eligible employee’s total ﬁxed remuneration (exclusive of the required superannuation contribution) by the closing volume-
weighted average price (“VWAP”) of the Company’s shares on ASX in the one month preceding the grant date.

Vesting Conditions 
Vesting of performance rights will be subject to the performance hurdle referred to above, which will be tested over a three 
year vesting period. If the performance hurdles are not satisﬁed (or become incapable of being satisﬁed), the performance 
rights will lapse (unless the Plan Committee determines otherwise). 

The number of performance rights that vest will be determined by assessing the performance of the Company, measured 
by TSR as at the date that is three years after the grant date (“Performance Date”), relative to a comparative group of 
companies (the “TSR Hurdle”). The closing VWAP of the Company’s shares on ASX in the month preceding the Performance 
Date, compared against the closing VWAP of the Company’s shares on ASX in the month preceding the grant date of 
the performance rights, will be used to calculate TSR over the three year vesting period. The TSR will incorporate capital 
returns as well as dividends notionally reinvested and, at present, is considered the most appropriate means of measuring 
Company performance. 

The following table provides a summary of the TSR Hurdle and the relationship between Company performance and the 
vesting of performance rights: 

PERFORMANCE AGAINST TSR TARGET

PERCENTAGE OF PERFORMANCE RIGHTS ELIGIBLE 
TO VEST

TSR performance is at or below the median performance of the 
comparator group 

0%

TSR performance of between the median and 75th percentile 
performance of the comparator group

Straight line pro-rata between 0% and 100%

TSR performance is at or above the 75th percentile performance of 
the comparator group

100%

In the event that a participant in the LTI Plan ceases to be a director or employee of the Group, the treatment of any 
performance rights held by the participant will depend on the circumstances surrounding the cessation of his/her 
directorship/employment. In general terms, and subject to the discretion of the Plan Committee, if the participant is a “bad 
leaver”, any unvested performance rights will immediately lapse; whereas if the participant is not a “bad leaver”, he/she 
will be entitled to retain a pro-rata amount of unvested performance rights (based on the proportion of the vesting period 
for which the participant was a director/employee). The Plan Committee also has power to deem that performance rights 
will lapse in a number of scenarios, including if a participant commits an act of fraud, defalcation or gross misconduct, or 
materially breaches his or her duties or brings the Group (or any member thereof) into disrepute. 

In the event of a change of control, all unvested performance rights will vest. 

In the event that vesting conditions attached to performance rights were (or were deemed to have been) satisﬁed due 
to a material misstatement in the Company’s ﬁnancial statements in respect of an applicable vesting period (or another 
event during such vesting period), the holder of those performance rights will cease to be entitled to them and the Plan 
Committee may, among other things, cancel those performance rights for no consideration. 

For personal use only 
 
 
 
 
 
 
 
DIRECTORS’  
REPORT 
CONTINUED

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TSR Comparative Group 
Grant for performance rights will be tested against Syrah’s TSR performance relative to the comparative group on the 
Performance Date. 

The TSR comparative group as selected by the Board of Directors for the performance rights issued for the year ended  
31 December 2015 (for testing as at 31 December 2017) is as follows:

 >

 >

Alkane Resources Limited (ASX: ALK)

 > Metals of Africa Limited (ASX: MTA)

AMG Advanced Metallurgical Group N.V. (XAMSG: AMG)

 > Minerals Deposits Limited (ASX: MDL)

 > Bacanora Minerals Limited (TSX.V: BCN)

 > Orocobre Limited (ASX: ORE)

 >

 >

 >

 >

 >

CleanTeQ Holdings Limited (ASX: CLQ)

Flinders Resources Limited (TSX.V: FDR)

Iluka Resources Limited (ASX: ILU)

Imerys SA (NK: FP)

 >

 >

 >

SGL Carbon SE (FWB: SGL)

Triton Minerals Limited (ASX:TON)

Valence Industries Limited (ASX:VXL)

 > Western Lithium USA Corporation (TSX.V: WLC)

Kenmare Resources Plc (LON: KMR)

 > Wolf Minerals Limited (ASX: WLF)

 > Mason Graphite Inc. (TSX.V: LLG)

The Board reserves the right to adjust the composition and number of the companies in the comparative group from time to 
time to take into account events including, but not limited to, takeovers, mergers and liquidations that might occur during 
the performance period. 

The table below summarises the number and movements in Performance Rights issued during the ﬁnancial period: 

Balance at the beginning of the period 

Granted during the period

Vested during the period

Lapsed/forfeited during the period

Balance at the end of the period

6 MONTHS TO  
31 DECEMBER 2015

NUMBER

-

100,707

-

-

100,707

12 MONTHS TO  
30 JUNE 2015

NUMBER

-

-

-

-

-

For personal use only 
 
 
 
 
 
 
 
b. Share Options 

Share Option Plan
The SOP was established and approved by shareholders at an Annual General Meeting held on 19 November 2013 and 
enables the Company, at the discretion of the Board of Directors, to oﬀer employees and directors options. 

As at 31 December 2015, there were 5,947,000 options outstanding (30 June 2015: 6,622,005 options outstanding) 
under this plan. The table below summarises the number and movements in Options under this plan during the ﬁnancial 
period: 

Balance at the beginning of the period 

Granted during the period

Exercised during the period

Expired during the period

Balance at the end of the period

6 MONTHS TO  
31 DECEMBER 2015

12 MONTHS TO  
30 JUNE 2015

NUMBER

6,622,005

250,000

(925,001)

(4)

NUMBER

4,294,467

5,050,000

(2,722,462)

-

5,947,000

6,622,005

Long Term Incentive Plan
The LTIP was established and approved by shareholders at an Annual General Meeting held on 13 November 2015 and 
enables the Company, at the discretion of the Board of Directors, to oﬀer employees and directors a number of equity 
related interests, including options, performance rights and shares. 

Options issued under this plan are for a speciﬁed period and each option or performance right is convertible into one 
ordinary share. 

There are no voting or dividend rights attached to the options. Voting rights will attach to the ordinary shares when the 
options have been exercised. Unvested options will not be quoted on the ASX.  

As at 31 December 2015, there were 1,000,000 options outstanding (30 June 2015: nil options outstanding) under this 
plan. The table below summarises the number and movements in options under this plan during the ﬁnancial period: 

Balance at the beginning of the period 

Granted during the period

Exercised during the period

Expired during the period

Balance at the end of the period

6 MONTHS TO  
31 DECEMBER 2015

NUMBER

-

1,000,000

-

-

1,000,000

12 MONTHS TO  
30 JUNE 2015

NUMBER

-

-

-

-

-

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DIRECTORS’  
REPORT 
CONTINUED

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e) Details Of Remuneration Expense
The following tables show details of the remuneration expense recognised for the Group’s Non-Executive Directors; 
Executive Directors and Other Key Management Personnel for the current and previous ﬁnancial periods measured in 
accordance with the requirements of the Australian Accounting Standards:

 Table 1: Remuneration for the six month period ended 31 December 2015

FIXED REMUNERATION

VARIABLE REMUNERATION

SALARY & 
FEES
$

LEAVE(4)
$

OTHER
$

POST-
EMPLOYMENT 
BENEFITS
$

CASH 
BONUSES(3)
$

SHARE-BASED 
PAYMENTS(5)
$

TOTAL 
$

Non-Executive 
Directors

J Askew (1)

S Riggall

R Brans

J Caldeira

Sub-total Non-
Executive Directors

Executive Director

71,175

45,978 

42,443 

46,538 

206,134

-   

-   

-   

-   

-   

10,000 (2)

10,000 (2)

-

-

-

4,365

4,032

-

20,000

8,397

-

-

-

-

-

47,540

31,693

163,563

163,563

128,715

92,036

210,038

210,101

406,359

640,890

T Kumova

90,909

1,158

Sub-total Executive 
Director

Key Management 
Personnel

D Strange

D Corr

Sub-total Key 
Management 
Personnel

TOTAL

90,909

1,158

160,000

125,000

4,371

2,021

285,000

582,043

6,392 

7,550 

-

-

-

-

-

20,000

9,091

9,091

- 1,466,814 (6)

1,567,972

-

1,466,814

1,567,972

15,200

11,875

64,000

50,000

571,066 (6)

531,432 (6)

814,637

720,328

27,075

44,563

114,000

1,102,598

1,534,975

114,000

2,975,671

3,743,827

(1)    Directors fees paid to J Askew are paid to International Mining and Finance Corp, a company of which he is a Director.

(2)    Represents consultancy fees paid to J Askew and S Riggall for additional services provided to the Company as members of the Due Diligence 

Committee for the capital raising during August 2015. These consulting fees were in addition to their fees earned as Non-Executive Chairman and 
Non-Executive Director respectively.

(3) 

Represents short term incentive payments for the year ended 31 December 2015 as approved by the Remuneration and Nomination Committee. 

(4)    Represents annual leave and long service leave entitlements, measured on an accrual basis and reﬂects the movement in the entitlements over 

the 6 month period ended 31 December 2015.

(5)    Represents amounts expensed through the Company’s proﬁt and loss for options, shares and performance rights issued under the Company’s 
LTIP and SOP. These amounts are recognised in the Company’s proﬁt and loss over the vesting period in accordance with AASB 2 Share-based 
Payments.

(6)   

Includes a once-oﬀ bonus of 142,745 shares to T Kumova (subject to shareholder approval), 36,056 shares to D Strange and 28,169 shares to  
D Corr in recognition of the signiﬁcant contribution made to ensure the ﬁnalisation of the feasibility study, the success of the Company’s 
fundraising activities, the commencement of mine development and the on-going work to establish key sales and marketing targets as the mine 
moves towards commissioning.

For personal use only 
 
 
 
 
 
 
 
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Table 2: Remuneration for the year ended 30 June 2015

FIXED REMUNERATION

VARIABLE REMUNERATION

SALARY & 
FEES
$

LEAVE(10)
$

OTHER
$

POST-
EMPLOYMENT 
BENEFITS
$

CASH 
BONUSES
$

SHARE-BASED 
PAYMENTS(11)
$

TOTAL 
$

Non-Executive 
Directors

J Askew (1)

S Riggall (2)

R Brans

J Caldeira (3)

T Eadie (4)

Sub-total Non-
Executive Directors

Executive Directors

T Kumova (5)

P Kehoe (6) 

Sub-total Executive 
Directors

Key Management 
Personnel

D Strange (7)

D Corr (8)

M Leydin (9)

Sub-total Key 
Management 
Personnel

109,106

60,046

79,659

82,065

17,787

348,663

-

-

-

-

-

-

181,818

618

82,068

(24,120)

263,886

(23,502)

174,933

125,000

123,950

15,678

10,911

-

423,883

26,589

TOTAL

1,036,432

3,087

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

5,704

7,966

-

1,779

15,449

18,182

6,640

24,822

16,619

11,875

-

28,494

68,765

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

588,037

588,037

-

109,106

65,750

675,662

670,102

19,566

1,176,074

1,540,186

2,790,186

2,990,804

-

64,588

2,790,186

3,055,392

324,192

324,192

-

531,422

471,978

123,950

648,384

1,127,350

4,614,644

5,722,928

(1)   

J Askew was appointed Non-Executive Chairman of the Company from 2 October 2014. Directors fees paid to J Askew are paid to International 
Mining and Finance Corp, a company of which he is a Director.

(2)    S Riggall was appointed Non-Executive Director of the Company from 2 October 2014.

(3) 

(4)   

(5)   

J Caldeira was appointed Non-Executive Director of the Company from 22 July 2014.

T Eadie resigned as a Non-Executive Chairman of the Company on 2 October 2014.

T Kumova was appointed Managing Director of the Company from 2 October 2014 and was previously an Executive Director of the Company. 

(6)    P Kehoe resigned as Managing Director of the Company on 2 October 2014.

(7)   D Strange commenced employment with the Company on 15 December 2014.

(8)   D Corr commenced employment with the Company on 5 January 2015. 

(9)   M Leydin ceased to be classiﬁed as Key Management Personnel from 5 January 2015 following the appointment of the Chief Financial Oﬃcer.  
M Leydin continues in the capacity of Company Secretary as at the date of this report. Fees for Company Secretarial Services and Accounting 
Services provided by M Leydin are charged to Syrah by Leydin Freyer Corp Pty Ltd, a company in which M Leydin has a beneﬁcial interest.   

(10)  Represents annual leave and long service leave entitlements, measured on an accrual basis and reﬂects the movement in the entitlements over the 

12 month period.

(11)  Represents amounts expensed through the Company’s proﬁt and loss for options, performance rights and shares issued under the Company’s LTIP 

and SOP.  These amounts are recognised in the Company’s proﬁt and loss over the vesting period in accordance with AASB 2 Share-based Payments. 

For personal use only 
 
 
 
 
 
 
 
DIRECTORS’  
REPORT 
CONTINUED

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f) Executive Service Agreements
Remuneration and other key terms of employment for Executive Directors and Key Management Personnel as at the date of 
this report are formalised in Employment Agreements and summarised in the following table: 

NAME

POSITION

TERM OF 
AGREEMENT

TOTAL FIXED 
REMUNERATION

NOTICE PERIOD 
BY EXECUTIVE

NOTICE PERIOD 
BY COMPANY

TERMINATION 
PAYMENT

T Kumova (1) Managing 

Ongoing

$492,750(2) 

6 months (3)

Director

D Strange 

Chief Operating 
Officer

D Corr 

Chief Financial 
Officer

Ongoing

$350,400 (2)

3 months (3)

Ongoing

$273,750 (2)

3 months (3)

6 months (or 
payment in lieu 
of notice)

3 months (or 
payment in lieu 
of notice)

3 months (or 
payment in lieu 
of notice)

6 months 
Total Fixed 
Remuneration 

6 months 
Total Fixed 
Remuneration (4)

6 months 
Total Fixed 
Remuneration (4)

(1)  

T Kumova’s entered into a new employment contract eﬀective from 1 January 2016 and will participate in the Group’s ‘at risk’ remuneration plans 
for the year ending 31 December 2016.

(2)  

Total ﬁxed remuneration includes superannuation contributions at the speciﬁed statutory rate which is presently 9.5% of base pay per annum.

(3)   Options will be forfeited upon cessation of employment prior to the conclusion of the vesting period (unless the Board determines otherwise).  

Any options which the holder is entitled to exercise upon cessation of employment are exercisable within 30 days otherwise the options will lapse. 
In the event of cessation of employment by reason of death, any options which the holder is entitled to exercise are exercisable within 3 months 
by a legal representative otherwise the options will lapse. Termination of employment by the Company for serious misconduct or wilful neglect will 
result in the forfeiture of options .

(4)  

In the event of termination of employment by the Company (except for serious misconduct or wilful neglect), any options which the holder is 
entitled to exercise are exercisable within 6 months and any options not exercised during this period will lapse. Termination of employment by the 
Company for serious misconduct or wilful neglect will result in the forfeiture of options. 

Total ﬁxed remuneration as set out above are as at the date of this report. 

g) Terms and Conditions of Share-Based Payment Arrangements
Options 
The terms and conditions of each grant of options aﬀecting the remuneration of Directors and Key Management Personnel 
in the current or a future reporting period are as follows: 

GRANT DATE

VESTING AND 
EXERCISABLE DATE

EXPIRY DATE

EXERCISE PRICE 

NUMBER UNDER 
OPTION

VALUE PER 
OPTION AT 
GRANT DATE

2 October 2014

2 October 2015

2 October 2019

28 January 2015

28 January 2016

28 January 2018

$6.26 (1)

$4.08 (1)

2,800,000 (2) (5)

1,200,000 (3) 

1 December 2015

30 November 2016

30 November 2018

$4.71

1,000,000 (4) (6)

$1.88

$1.29

$0.96

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

Eﬀective from 9 September 2015, the exercise price of these options was reduced by $0.05 (5 cents) per option in accordance with the term of 
the options, ASX Listing Rule 3.11.2 and the formula contained in ASX Listing Rule 7.22.3 as a result of the issuance of shares from a 4 for 19 
accelerated renounceable entitlement oﬀer. 

Consists of 2,000,000 unlisted options issued to T Kumova, Managing Director, 400,000 unlisted options issued to R Brans, Non-Executive 
Director and 400,000 unlisted options issued to J Caldeira, Non-Executive Director.

Consists of 600,000 unlisted options issued to D Strange, Chief Operating Oﬃcer and 600,000 unlisted options issued to D Corr, Chief Financial 
Oﬃcer. 

Consists of 600,000 unlisted options issued to J Askew, Non-Executive Chairman and 400,000 unlisted options issued to S Riggall, Non-
Executive Director. 

In the event a participant of the SOP ceases to be a Director of the Company prior to the conclusion of the vesting period, the options will lapse 
(unless the Board determines otherwise). Any options which the Director is entitled to exercise upon cessation are exercisable within 30 days 
otherwise the options will lapse. In the event of cessation by reason of death, any options which the holder is entitled to exercise are exercisable 
within 3 months by a legal representative otherwise the options will lapse.  Termination for serious misconduct or wilful negligence will result in the 
forfeiture of options. 

In the event a participant of the LTIP ceases to be a Director of the Company the treatment of options will be dependent upon the circumstances 
surrounding the cessation. In general terms (and subject to the discretion of the Plan Committee), if the participant is a “bad leaver” any unvested 
options will be forfeited. If the participant is not a “bad leaver” they will be entitled to a pro-rata amount of unvested options. Any vested options 
which the Non-Executive Director is entitled to exercise upon cessation are exercisable within 60 days otherwise the options will lapse. The 
Plan Committee also has the power to deem that options will lapse in a number of scenarios, including if a participant commits an act of fraud, 
defalcation or gross misconduct, or materially breaches his or her duties or brings the Group (or any member thereof) into disrepute.   

For personal use only 
 
 
 
 
 
 
 
14,522,215 (1)

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h) Director and Key Management Personnel Equity Holdings
Shareholdings
A reconciliation of the number of shares held by Directors and Key Management Personnel, including their personally 
related parties, in the Company is set out below: 

BALANCE
1 JULY 2015

OPTIONS 
EXERCISED

ON MARKET 
PURCHASES

ON MARKET
DISPOSALS

BALANCE
31 DECEMBER 
2015

OTHER

Director

T Kumova

14,522,215

Key Management Personnel 

D Strange

D Corr

-

-

-

-

-

-

-

-

-

-

-

-

-

-

- (2)

- (2)

(1)   

The Board of Directors has resolved to issue 142,745 shares to T Kumova in recognition of the signiﬁcant contribution  made since becoming 
Managing Director. As at 31 December 2015 the issuance of these shares remains subject to shareholder approval and is not included in the 
above reconciliation. 

(2) 

The Board of Directors has resolved to issue 36,056 shares to D Strange and 28,169 shares to D Corr in recognition of the signiﬁcant contribution 
made for the year ended 31 December 2015. These shares were issued on 19 February 2016 and are not included in the above reconciliation.   

Performance Rights 
A reconciliation of the number of Performance Rights held by Directors and Key Management Personnel, including their 
personally related parties, in the Company is set out below: 

BALANCE
1 JULY 2015

GRANTED 
DURING THE 
PERIOD

ISSUED ON 
VESTING

BALANCE  
31 DECEMBER 
2015

VESTED

UNVESTED

Key Management Personnel 

D Strange

D Corr

-

-

56,537

44,170

-

-

56,537

44,170

-

-

56,537

44,170

Details of the Performance Rights Plan and vesting conditions are provided on page 35 of this report. 

Options
A reconciliation of the number of Options held by Directors and Key Management Personnel, including their personally 
related parties, over unissued ordinary shares in the Company is set out below: 

BALANCE
1 JULY 2015

GRANTED 
DURING THE 
PERIOD

OPTIONS 
EXERCISED

NET CHANGE 
OTHER

BALANCE  
31 DECEMBER 
2015

VESTED

UNVESTED

Directors

J Askew

T Kumova

S Riggall

R Brans

J Caldeira

-

600,000

2,000,000

-

-

400,000

650,000

400,000

-

-

-

-

Key Management Personnel 

D Strange

D Corr

600,000

600,000

-

-

-

-

-

-

-

-

-

-

-

-

-

-

600,000

-

600,000

2,000,000 (1)

2,000,000

-

400,000

-

400,000

650,000

650,000

400,000

400,000

-

-

600,000

600,000

-

-

600,000

600,000

(1)   

The Board of Directors has resolved to issue T Komova with 1,000,000 unlisted options exercisable at $4.58 and expiring three years from the 
date of grant.  As at 31 December 2015 the issuance of these share options remains subject to shareholder approval and is not included in the 
above reconciliation. 

For personal use only 
 
 
 
 
 
 
 
 
DIRECTORS’  
REPORT 
CONTINUED

i) Other Transactions with Directors and Key Management Personnel
Aggregate amounts of other transactions with Directors and Key Management Personnel is set out below:

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Amounts recognised as an expense

Accounting and company secretarial fees (1)

Consultancy fees (2)

Office lease charges (3)

Amounts recognised as mine, properties and development

Legal services (4) 

Consultancy fees (5)

Amounts recognised as exploration and evaluation asset

Legal services (4)

Consultancy services (5)

6 MONTHS TO  
31 DECEMBER 2015
$

12 MONTHS TO 
30 JUNE 2015
$

-

-

-

-

513,547

27,500

541,047

-

-

-

123,950

99,000

100,184

323,134

-

-

-

310,142

62,500

372,642

(1)   Represents accounting and company secretarial services provided to the Company by Leydin Freyer Pty Ltd. M Leydin, Company Secretary, is a 
principal and has a beneﬁcial interest in Leydin Freyer Pty Ltd. M Leydin ceased to be classiﬁed as Key Management Personnel from 5 January 
2015 following the appointment of the Chief Financial Oﬃcer. M Leydin continues in the capacity of Company Secretary as at the date of this 
report. 

(2)   Represents consultancy services provide to the Company by T Eadie as part of the demerger of Jacana Minerals Limited. T Eadie was Non-

Executive Chairman of the Company until his resignation on 2 October 2014.  

(3) 

Represents oﬃce lease charges paid to Copper Strike Limited a shareholder of Syrah Resources Limited. T Eadie who was Non-Executive 
Chairman of the Company until his resignation on 2 October 2014 is also Non-Executive Chairman of Copper Strike Limited.  

(4)   Represents legal services provided to the Company by Sal & Caldeira Advogados, Lda. J Caldeira was appointed Non-Executive Director of the 

Company from 22 July 2014 as is a senior partner of Sal & Caldeira Advogados, Lda. 

(5)   Represents consultancy services provided to the Company by Proman Consulting Engineers Pty Ltd. R Brans, Non-Executive Director, provided 

these services and has a beneﬁcial interest in Proman Consulting Engineers Pty Ltd. 

These services are provided on normal commercial terms and conditions.

The following balances were outstanding at the end of the period in relation to the above transactions:

Trade and other payables

31 DECEMBER 2015
$

82,266

30 JUNE 2015
$

73,201

For personal use only 
 
 
 
 
 
 
 
  
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j) Additional Information 
The Company aims to align executive remuneration to drive short, medium and long term outcomes for the business which 
create shareholder value. The table below shows the Group’s performance over the past ﬁve years. These performance 
measures may not necessarily be consistent with the measures used in determining performance based remuneration and 
accordingly there may not always be a direct correlation between these measures and the variable remuneration awarded.  

31 DECEMBER 
2015

30 JUNE 
2015

Market capitalisation ($’000)

900,946

606,089

Closing share price ($)

Loss after income tax for the period ($’000)

Basic earnings per share (cents) (1)

3.90

(3,258)

(1.51)

3.66

(11,633)

(6.99)

30 JUNE 
2014

672,753

4.14

(6,751)

(4.29)

30 JUNE 
2013

301,446

2.04

(4,759)

(3.47)

30 JUNE 
2012

291,727

2.33

(2,062)

(2.48)

(1) 

Basic earnings per share for the 12 months to 30 June 2015 has been adjusted as a result of the pro-rata accelerated renounceable Entitlement Oﬀer 
as announced on 3 August 2015 where eligible shareholders were able to subscribe for 4 new Syrah shares for every 19 existing shares.   

Shares options and performance rights

Unissued ordinary shares 
Unissued ordinary shares of Syrah Resources Limited under option and performance rights as at the date of this report are as 
follows: 

GRANT DATE

SHARE OPTIONS
16 July 2012

VESTING AND 
EXERCISABLE DATE

EXPIRY DATE

EXERCISE 
PRICE 

16 July 2013

16 July 2016

   $2.12  (1) (3)

12 June 2013

12 June 2014

12 June 2016

  $2.81  (1) (3) 

19 May 2014

19 May 2015

19 May 2019

  $5.41  (1) (3) 

2 October 2014

2 October 2015

2 October 2019

  $6.26  (1) (3) 

28 January 2015

28 January 2016

28 January 2018

  $4.08  (3) 

27 April 2015

- (2)

7 May 2015

9 June 2015

7 May 2016

9 June 2016

27 April 2017

7 May 2018

9 June 2018

-  (2)

  $5.40  (3) 

  $4.99  (3) 

26 October 2015

26 October 2016

26 October 2020

  $4.38

1 December 2015

1 December 2016

1 December 2018

  $4.71

Total Options

PERFORMANCE RIGHTS
1 December 2015

31 December 2017

Total performance rights

1 January 2018 (5)

- 

NUMBER OF 
SHARES UNDER 
OPTION / 
PERFORMANCE 
RIGHTS

VALUE PER 
OPTION/ 
PERFORMANCE 
RIGHT AT GRANT 
DATE 

22,000

250,000

500,000

2,800,000

1,200,000

125,000

500,000

300,000

250,000

1,000,000

6,947,000

100,707

100,707

$1.81

$1.06

$2.24

$1.88

$1.29

$3.80

$1.24

$1.22

$1.18

$0.96

$2.83

(1) 

(2) 

(3) 

(4) 

On 15 October 2014, the exercise price of the above options were reduced by $0.04 (4 cents) per option in accordance with the terms of the  
options, ASX Listing Rules 3.11.2 and the formula contained in ASX Listing Rule 7.22.3 as a result of the demerger of Jacana Minerals Limited  
and the 3 for 10 Jacana Minerals Limited share distribution. 

Represents options that were granted to a selected senior employee for nil consideration with exercise conditional on the achievement of certain 
performance hurdles that are aligned with the creation of shareholder value.

Eﬀective from 9 September 2015, the exercise price of options were reduced by $0.05 (5 cents) per option in accordance with the terms of 
the options, ASX Listing Rule 3.11.2 and the formula contained in ASX Listing Rule 7.22.3 as a result of the issuance of shares from a 4 for 19 
accelerated renounceable entitlement oﬀer. 

Performance rights granted to selected senior employees following the approval of the LTIP by shareholders at an Annual General Meeting held 
on 13 November 2015. The performance rights were issued for the year ended 31 December 2015 (for testing as at 31 December 2017). If the 
performance hurdles are not satisﬁed (or incapable of being satisﬁed), the performance rights will lapse on this date (unless the Plan Committee 
determines otherwise).

No option holder has any right under the options to participate in any share issue of the Company. 

For personal use only 
 
 
 
 
 
 
 
 
DIRECTORS’  
REPORT 
CONTINUED

44

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Shares issued on exercise of options 
Ordinary shares of Syrah Resources Limited issued during the six month ﬁnancial period and up to the date of this report on 
the exercise of options under the Share Option Plan were as follows:  

GRANT DATE

SHARE ISSUANCE DATE

EXERCISE PRICE

NUMBER OF SHARES ISSUED

15 December 2011

31 July 2015

27 April 2015

15 December 2011

15 December 2011

24 November 2015

1 December 2015

8 December 2015

$0.22

-

$0.17

$0.17

375,000

125,000

125,000

300,001

INDEMNIFICATION OF OFFICERS 
During the ﬁnancial year the Company paid a premium in respect of a contract insuring the Directors of the Company, the 
company secretaries and all executive oﬃcers of the Company and of any related body corporate against a liability incurred 
as such a Director, secretary or executive oﬃcer to the extent permitted by the Corporations Act 2001. The contract of 
insurance prohibits disclosure of the nature of the liability and the amount of the premium. 

The Company has entered into a Deed of Indemnity, Insurance and Access with each Director. In summary the Deed 
provides for: 

 >

 >

 >

Access to corporate records for each Director for a period after ceasing to hold oﬃce in the Company; 

The provision of Directors and Oﬃcers Liability Insurance; and   

Indemnity for legal costs incurred by Directors in carrying out the business aﬀairs of the Company. 

INDEMNITY OF AUDITORS
The Company has entered into an agreement to indemnify its auditor, PricewaterhouseCoopers Australia, against any 
claims or liabilities (including legal costs) asserted by third parties arising out of their services as auditor of the Company, 
where the liabilities arise as a direct result of the Company’s breach of its obligations to the Auditors, unless prohibited by 
the Corporations Act 2001.

AUDIT AND NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for audit and non-audit services provided during the period are set out 
below: 

The Board of Directors has considered the position and, in accordance with advice received from the Audit, Risk and 
Compliance Committee, is satisﬁed that the provision of the non-audit services is compatible with the general standard 
of independence for auditors imposed by the Corporations Act 2001. The Directors are satisﬁed that the provision of 
non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the 
Corporations Act 2001 for the following reasons:

 >

 >

all non-audit services have been reviewed by the Audit, Risk and Compliance Committee to ensure they do not impact 
the impartiality and objectivity of the auditor; and

none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of 
Ethics for Professional Accountants.

For personal use only 
 
 
 
 
 
 
 
During the period the following fees were paid or payable for services provided by the auditors of the parent entity, its 
related practices and non-related audit ﬁrms:  

6 MONTHS TO  
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015
$’000

(a) PricewaterhouseCoopers Australia

Audit of group financial statements:

PwC Australian firm

Network firms of PwC Australian firm 

Total remuneration for audit services

Non-assurance services

Taxation compliance services

Taxation consulting services

Total remuneration for non-assurance services

Total remuneration paid to PricewaterhouseCoopers

(b) Grant Thornton Audit Pty Ltd

Audit and review of financial reports

Total remuneration of Grant Thornton

82

43

125

23

308

331

446

-

-

-

-

-

-

-

-

-

72

72

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It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to their statutory audit duties where 
PricewaterhouseCoopers expertise and experience with the Group are important. These assignments are principally tax 
consulting and advice or where PricewaterhouseCoopers is awarded assignments on a competitive basis. It is the Group’s 
policy to seek competitive tenders for all major consulting assignments. Group policy also requires the Chairperson of the 
Audit, Risk and Compliance Committee to approve all individual assignments performed by PricewaterhouseCoopers with 
total fees of greater than $20,000. 

AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out 
on page 46.

ROUNDING OF AMOUNTS
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments 
Commission, relating to the “rounding oﬀ” of amounts in the Directors’ Report. Amounts in the Directors’ Report have been 
rounded oﬀ in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar. 

AUDITOR
PricewaterhouseCoopers continues in oﬃce in accordance with section 327 of the Corporations Act 2001. 

The report is made in accordance with a resolution of Directors. 

James Askew 
A k
J
Chairman 

Melbourne, Australia 
31 March 2016 

Tolga Kumova 
Managing Director

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AUDITOR’S  
INDEPENDENCE  
DECLARATION

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FINANCIAL 
REPORT
2015 

For the 6 month period ended 
31 December 2015

These ﬁnancial statements are the consolidated ﬁnancial 
statements of the consolidated entity consisting of Syrah 
Resources Limited and its subsidiaries. The ﬁnancial statements 
are presented in Australian currency.

Syrah Resources Limited is a company limited by shares, 
incorporated and domiciled in Australia. Its registered oﬃce and 
principal place of business is:

Level 9, 356 Collins Street, Melbourne VIC 3000

A description of the nature of the consolidated entity’s operations 
and its principal activities is included in the Directors’ Report on 
pages 24 to 45, which is not part of these ﬁnancial statements.  

All press releases, ﬁnancial reports and other information are 
available on our website:  www.syrahresources.com.au

For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2015

Revenue from continuing operations

Other income

Expenses

Legal and consulting expenses

Administration expenses

Employee benefits expense

Depreciation and amortisation expense

Exploration and evaluation costs written off

Impairment of assets

Loss before income tax expense from continuing operations

Income tax expense

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

NOTES

6

7

8

8

8

9

402

5,995

6,397

(1,234)

(1,497)

(5,443)

(328)

(2)

(1,151)

296

868

1,164

(1,456)

(2,254)

(8,594)

(653)

(151)

 (132)

(3,258)

(12,076)

-

-

Loss after income tax expense from continuing operations

(3,258)

(12,076)

Profit/(loss) after income tax (expense)/benefit from discontinued 
operations

10

-

443

Loss after income tax expense for the period attributable to the 
owners of Syrah Resources Limited

(3,258)

(11,633) 

Other comprehensive income

Items that may be reclassified subsequently to the profit or loss

Exchange differences on translation of foreign subsidiaries

Reserves released to profit on demerger of Jacana Minerals Limited

21

21

Other comprehensive income for the period, net of tax

(7,066)

-

(7,066)

323

(790)

(467) 

Total comprehensive income for the period attributable to the 
owners of Syrah Resources Limited

(10,324)

(12,100) 

Total comprehensive income for the year is attributable to:

Continuing operations

Discontinued operations

(10,324)

-

(10,324)

(11,753)

(347)

(12,100)    

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

For personal use only 
 
 
 
 
 
 
 
 
  
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (CONT) 
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2015

6 MONTHS TO
31 DECEMBER 2015
CENTS

NOTES

12 MONTHS TO  
30 JUNE 2015 
(ADJUSTED) 
CENTS

Earnings per share for loss from continuing operations 
attributable to the owners of Syrah Resources Limited

Basic earnings per share

Diluted earnings per share

Earnings per share for loss from discontinued operations 
attributable to the owners of Syrah Resources Limited

Basic earnings per share

Diluted earnings per share

Earnings per share for loss attributable to the owners of  
Syrah Resources Limited

Basic earnings per share

Diluted earnings per share

30

30

30

30

30

30

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

(1.51)

(1.51)

-

-

(1.51)

(1.51)

(7.26)

(7.26)

0.27

0.27

(6.99)

(6.99)

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FINANCIAL  
STATEMENTS  
CONTINUED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
AS AT 31 DECEMBER 2015

NOTES

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

50

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Assets

Current assets

Cash and cash equivalents

Trade and other receivables

Available-for-sale financial assets

Total current assets

Non-current assets

Property, plant and equipment

Mine properties and development

Intangibles

Exploration and evaluation

Total non-current assets

Total assets

Liabilities

Current liabilities

Trade and other payables

Provisions

Total current liabilities

Non-current liabilities

Provisions

Total non-current liabilities

Total liabilities

Net assets

Equity

Issued capital

Reserves

Accumulated losses

Total equity

11

12

13

14

15

16

17

18

19

19

20

21

22

191,594

4,598

163

196,355

3,419

61,679

139

1,218

66,455

8,931

2,323

33

11,287

4,901

41,918

185

811

47,815

262,810

59,102

8,032

182

8,214

1,423

1,423

9,637

2,547

141

2,688

9

9

2,697

253,173

56,405

284,430

1,836

(33,093)

80,910

5,330

(29,835)

253,173

56,405

The above statement of ﬁnancial position should be read in conjunction with the accompanying notes.

For personal use only 
 
 
 
 
 
 
 
 
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY  
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2015

CONTRIBUTED 
EQUITY
$’000

ACCUMULATED 
LOSSES
$’000

RESERVES
$’000

TOTAL
EQUITY
$’000

Balance at 1 July 2015

80,910

(29,835)

5,330

56,405

Loss after income tax expense for the period

Other comprehensive income for the period,  
net of tax

Total comprehensive income for the period

-

-

-

(3,258)

-

(3,258)

-

(3,258)

(7,066)

(7,066)

(7,066)

(10,324)

Transactions with owners in their capacity as 
owners:

Contributions of equity, net of transaction costs

202,915

Share-based payments (note 31)

Exercise of options

-

605

203,520

-

-

-

-

-

4,177

(605)

3,572

202,915

4,177

-

207,092

Balance at 31 December 2015

284,430

(33,093)

1,836

253,173

Balance at 1 July 2014

81,444

(18,670)

1,768

64,542

Loss after income tax expense for the period

Other comprehensive income for the period,  
net of tax

Total comprehensive increase for the period

Transactions with owners in their capacity as 
owners:

Contributions of equity, net of transaction costs

Demerger distributions (note 10)

Share-based payments (note 31)

Exercise of options

-

-

-

(11,633)

-

(11,633)

-

(11,633)

(467)

(467)

(467)

(12,100)

4,313

(6,559)

-

1,712

(534)

-

468

-

-

468

-

-

5,741

(1,712)

4,029

4,313

(6,091)

5,741

-

3,963

Balance at 30 June 2015

80,910

(29,835)

5,330

56,405

The above statement of changes in equity should be read in conjunction with the accompanying notes.

For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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CONSOLIDATED STATEMENT OF CASH FLOWS   
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2015

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

NOTES

Cash flows from operating activities

Payments to suppliers and employees (inclusive of goods and 
services tax)

Interest received

Net cash inflow / (outflow) from operating activities

29

Cash flows from investing activities

Payments for property, plant and equipment

Payments for mine properties and development

Payments for intangibles

Payments for exploration and evaluation

Loan recovered from/(provided to) other parties

Net cash inflow / (outflow) from investing activities

Cash flows from financing activities

Proceeds from issue of shares

Share issue transaction costs

Net cash inflow / (outflow) from financing activities

Net increase / (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of the period

Effects of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at end of the period 

11

The above statement of cash ﬂows should be read in conjunction with the accompanying notes.

(3,897)

188

(3,709)

(95)

(15,992)

-

(407)

300

(16,194)

210,963

(8,714)

202,249

182,346

8,931

317

191,594

(6,436)

331

(6,105)

(3,747)

-

(235)

(13,472)

(500)

(17,954)

4,339

(24)

4,315

(19,744)

28,571

104

8,931

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 The principal accounting policies adopted in the 
preparation of the consolidated ﬁnancial statements 
are set out below. These policies have been consistently 
applied for all the periods presented, unless otherwise 
stated.

The ﬁnancial statements are for the consolidated entity 
consisting of Syrah Resources Limited and its subsidiaries. 
Syrah Resources Limited and its subsidiaries together are 
referred to in these ﬁnancial statements as the Group or 
the ‘consolidated entity’. 

(a)  Basis of preparation
This general purpose ﬁnancial report has been prepared 
in accordance with Australian Accounting Standards 
and Interpretations issued by the Australian Accounting 
Standards Board and the Corporations Act 2001. Syrah 
Resources Limited is a for-proﬁt entity for the purpose of 
preparing the ﬁnancial statements. 
Compliance with IFRS
 The consolidated ﬁnancial statements of the Syrah 
Resources Limited group also comply with International 
Financial Reporting Standards (IFRS) as issued by the 
International Accounting Standards Board (IASB).
Historical cost convention
These ﬁnancial statements have been prepared under the 
historical cost convention, except for certain assets which, 
as noted, are at fair value.
Critical accounting estimates
The preparation of ﬁnancial statements requires the use 
of certain critical accounting estimates. It also requires 
management to exercise its judgement in the process 
of applying the Group’s accounting policies. The areas 
involving a higher degree of judgement or complexity, or 
areas where assumptions and estimates are signiﬁcant to 
the ﬁnancial statements, are disclosed in Note 4.
Parent entity information
In accordance with the Corporations Act 2001, 
these ﬁnancial statements present the results of the 
consolidated entity only. Supplementary information about 
the parent entity is disclosed in Note 32.

(b)  Principles of consolidation
The consolidated financial statements incorporate the assets 
and liabilities of all subsidiaries of Syrah Resources Limited 
(‘company’ or ‘parent entity’) as at 31 December 2015 and 
the results of all subsidiaries for the six months then ended.

Subsidiaries are all those entities over which the consolidated 
entity has control. The consolidated entity controls an entity 
when the consolidated entity 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 relevant activities of the entity. Subsidiaries are fully 
consolidated from the date on which control is transferred to 
the consolidated entity. They are de-consolidated from the 
date that control ceases. Details of subsidiaries are set out 
in Note 27. 

The acquisition of subsidiaries is accounted for using the 
acquisition method of accounting. A change in ownership 
interest, without the loss of control, is accounted for as 
an equity transaction, where the difference between the 
consideration transferred and the book value of the share of 
the non-controlling interest acquired is recognised directly in 
equity attributable to the parent.

Where the consolidated entity loses control over a subsidiary, 
it derecognises the assets including goodwill, liabilities and 
non-controlling interest in the subsidiary together with any 
cumulative translation differences recognised in equity. 
The consolidated entity recognises the fair value of the 
consideration received and the fair value of any investment 
retained together with any gain or loss in the profit and loss.

Intercompany transactions, balances and unrealised gains 
on transactions between Group entities are eliminated. 
Unrealised losses are also eliminated unless the transaction 
provides evidence of the impairment of the asset transferred. 
Accounting policies of subsidiaries have been changed where 
necessary to ensure consistency with the policies adopted by 
the Group. 

Investments in subsidiaries are accounted for at cost in the 
individual financial statements of Syrah Resources Limited. 

(c)  Segment Reporting
Operating segments are presented using the ‘management 
approach’, where the information presented is on the same 
basis as the internal reports provided to the Chief Operating 
Decision Maker (‘CODM’). The CODM is responsible for the 
allocation of resources to operating segments and assessing 
their performance. Refer to Note 5 for further information on 
segment descriptions.

(d)  Foreign currency translation
Functional and presentation currency
Items included in the ﬁnancial statements of each of the 
Group’s entities are measured using the currency of the 
primary economic environment in which the entity operates 
(‘the functional currency’). The consolidated ﬁnancial 
statements are presented in Australian dollars, which is 
Syrah Resources Limited’s functional and presentation 
currency. 

For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
(CONTINUED)

Transactions and balances
All foreign currency transactions during the ﬁnancial 
period are translated into the functional currency using the 
exchange rate prevailing at the dates of the transactions. 
Foreign exchange gains and losses resulting from the 
settlement of such transactions and from the translation 
at period end exchange rates of monetary assets and 
liabilities denominated in foreign currencies are recognised 
in the proﬁt and loss, 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. 

Non-monetary items that are measured in terms of 
historical cost in foreign currency are translated using the 
exchange rate as at the date of the initial transaction. Non-
monetary items measured at fair value in a foreign currency 
are translated using the exchange rates at the date when 
the fair value was determined.

Foreign exchange gains and losses that relate 
to borrowings are presented in the statement of 
comprehensive income within ﬁnance costs. All other 
foreign exchange gains and losses are presented in the 
statement of comprehensive income on a net basis within 
other income or other expenses.
Group companies
The results and ﬁnancial position of all the Group entities 
(none of which has the currency of a hyperinﬂationary 
economy) that have a functional currency diﬀerent from the 
presentation currency are translated into the presentation 
currency as follows:

 >

 >

assets and liabilities for each balance sheet presented 
are translated at the closing rate at the date of that 
balance sheet,

income and expenses for each statement of 
comprehensive income are translated at average 
exchange rates (unless this is not a reasonable 
approximation of the cumulative eﬀect of the rates 
prevailing on the transaction dates, in which case 
income and expenses are translated at the dates of 
the transactions), and

 >

all resulting exchange diﬀerences are recognised as a 
separate component of equity.

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 taken to 
shareholders’ equity. When a foreign operation is sold 
or any borrowings forming part of the net investment are 
repaid, a proportionate share of such exchange diﬀerences 
are recognised in the proﬁt and loss, as part of the gain 

or loss on sale where applicable. Goodwill and fair value 
adjustments arising on the acquisition of a foreign entity 
are treated as assets and liabilities of the foreign entities 
and translated at the closing rate.

(e)  Revenue recognition
Revenue is recognised when it is probable that the economic 
benefit will flow to the consolidated entity and the revenue 
can be reliably measured. Revenue is measured at the fair 
value of the consideration received or receivable.

Revenue is recognised for the major business transactions 
as follows: 
Interest
Interest revenue is recognised as interest accrues using the 
eﬀective interest method. This is a method of calculating 
the amortised cost of a ﬁnancial asset and allocating the 
interest income over the relevant period using the eﬀective 
interest rate, which is the rate that exactly discounts 
estimated future cash receipts through the expected life 
of the ﬁnancial asset to the net carrying amount of the 
ﬁnancial asset.
Other revenue
Other revenue is recognised when it is received or when the 
right to receive payment is established.

Income tax

(f) 
The income tax expense or beneﬁt 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, unused tax losses 
and the adjustment recognised for prior periods, where 
applicable.

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 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 

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
(CONTINUED)

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, including unused tax losses, only if 
it is probable that future taxable amounts will be available 
to utilise those temporary diﬀerences and losses. 

Deferred tax liabilities and assets are not recognised for 
temporary diﬀerences between the carrying amount and 
the 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. 
Tax Consolidation Legislation
Syrah Resources Limited (the “head entity”) and its 
wholly-owned Australian subsidiaries formed an income 
tax consolidated group on 1 July 2014. The head entity and 
each subsidiary in the tax consolidated group continue to 
account for their own current and deferred tax amounts. 
The tax consolidated group has applied the ‘separate 
taxpayer within group’ approach in determining the 
appropriate amount of taxes to allocate to members of the 
tax consolidated group. 

In addition to its own current and deferred tax amounts, 
the head entity also recognises the current tax liabilities (or 
assets) and the deferred tax assets arising from unused 
tax losses and unused tax credits assumed from each 
subsidiary in the tax consolidated group. 

Assets or liabilities arising under tax funding agreements 
within the tax consolidated entities are recognised as 
amounts receivable from or payable to other entities in 
the tax consolidated group. The tax funding arrangement 
ensures that the intercompany charge equals the 
current tax liability or beneﬁt of each tax consolidated 
group member, resulting in neither a contribution by the 
head entity to the subsidiaries nor a distribution by the 
subsidiaries to the head entity.  

(g)  Leases
Leases of property, plant and equipment where the Group, 
as lessee, has substantially all the risks and rewards of 
ownership are classiﬁed as ﬁnance leases. Finance leases 
are capitalised at the lease’s inception at the fair value 
of the leased property or, if lower, the present value of 
the minimum lease payments. The corresponding rental 
obligations, net of ﬁnance charges, are included in current 
liabilities and non-current liabilities. Each lease payment 
is allocated between the liability and ﬁnance cost. The 
ﬁnance cost is charged to the proﬁt and loss over the lease 
period so as to produce a constant periodic rate of interest 
on the remaining balance of the liability for each period. 
The property, plant and equipment acquired under ﬁnance 
leases is depreciated over the asset’s useful life or over 
the shorter of the assets useful life and the lease term if 
there is no reasonable certainty that the group will obtain 
ownership at the end of the lease term. 

Leases in which a signiﬁcant portion of the risks and 
rewards of ownership are not transferred to the Group, as 
lessee, are classiﬁed as operating leases. Payment made 
under operating leases (net of incentives received from the 
lessor) are charged to the proﬁt and loss on a straight-line 
basis over the period of the lease.  

(h)  Discontinued operations
A discontinued operation is a component of the Group 
that has been disposed of or is classiﬁed as held for sale 
and that represents a separate major line of business or 
geographical area of operations, is part of a single co-
ordinated plan to dispose of such a line of business or area 
of operations, or is a subsidiary acquired exclusively with a 
view to resale. The results of discontinued operations are 
presented separately on the face of the statement of other 
comprehensive income.

(i)  Current and non-current classiﬁcation
Assets and liabilities are presented in the balance sheet 
based on current and non-current classiﬁcation.

An asset is current when: it is expected to be realised or 
intended to be sold or consumed in normal operating cycle; 
it is held primarily for the purpose of trading; it is expected 
to be realised within 12 months after the reporting period; 
or the asset is cash or cash equivalent unless restricted 
from being exchanged or used to settle a liability for at least 
12 months after the reporting period. All other assets are 
classiﬁed as non-current.

A liability is current when: it is expected to be settled in 
normal operating cycle; it is held primarily for the purpose 
of trading; it is due to be settled within 12 months after the 
reporting period; or there is no unconditional right to defer 

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
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the settlement of the liability for at least 12 months after 
the reporting period. All other liabilities are classiﬁed as 
non-current. 

The assets residual values, useful lives and amortisation 
methods are reviewed and adjusted if appropriate, at each 
ﬁnancial period end.

Deferred tax assets and liabilities are always classiﬁed as 
non-current.

(j)  Cash and cash equivalents
For the purpose of presentation in the statement of cash 
ﬂows, cash and cash equivalents comprises cash on hand, 
deposits held at call with ﬁnancial institutions, other short-
term, highly liquid investments with original maturities 
of three months or less that are readily convertible to 
amounts of cash and which are subject to an insigniﬁcant 
risk of changes in value, and bank overdrafts. Bank 
overdrafts are shown within borrowings in current liabilities 
on the balance sheet.

(k)  Trade and other receivables
Other receivables are recognised at amortised cost, less 
any provision for impairment.

 Property, plant and equipment

(l) 
Plant and equipment is stated at historical cost less, where 
applicable, any accumulated depreciation, amortisation or 
impairment in value. Historical cost includes expenditure 
that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying 
amount or recognised as a separate asset, as appropriate, 
only when it is probable that future economic beneﬁts 
associated with the item will ﬂow to the Group and the 
cost of the item can be measured reliably. The carrying 
amount of any component accounted for as a separate 
asset is derecognised when replaced. All other repairs 
and maintenance are charged to proﬁt and loss during the 
reporting period in which they are incurred. 

Land is not depreciated. Assets under construction are 
measured at cost and are not depreciated until they are 
ready and available for use.  Depreciation on assets is 
calculated using either a straight-line or diminishing value 
method to allocate the cost, net of their residual values, 
over the estimated useful lives or the life of the mine, 
whichever is shorter.  Leasehold improvements and certain 
leased plant and equipment are depreciated over the 
shorter lease term. 

Other non-mine plant and equipment typically has the 
following estimated useful lives:

Buildings 

Plant and Equipment 

Computer Equipment 

20 years

2 to 10 years

4 to 5 years

An item of property, plant and equipment is derecognised 
upon disposal or when no further economic beneﬁts are 
expected from its use or disposal.

Any gain or loss arising on de-recognition of the asset 
(calculated as the diﬀerence between the net disposal 
proceeds and the carrying amount of the asset) is 
included in the proﬁt and loss in the period the asset is 
derecognised.

(m)  Intangible assets
Intangible assets acquired as part of a business 
combination, other than goodwill, are initially measured 
at their fair value at the date of the acquisition. Intangible 
assets acquired separately are initially recognised at cost. 
Indeﬁnite life intangible assets are not amortised and 
are subsequently measured at cost less any impairment 
in value. Finite life intangible assets are subsequently 
measured at cost less amortisation and any impairment 
in value. The gains or losses recognised in proﬁt and 
loss arising from the de-recognition of intangible assets 
are measured as the diﬀerence between net disposal 
proceeds and the carrying amount of the intangible asset. 
The method and useful lives of ﬁnite life intangible assets 
are reviewed annually. Changes in the expected pattern of 
consumption or useful life are accounted for prospectively 
by changing the amortisation method or period.
Software
Signiﬁcant costs associated with software are deferred 
and amortised on either a straight-line or diminishing value 
method over the estimated useful life, being a ﬁnite life not 
exceeding ﬁve years.  

(n)  Mine properties and development
Mine properties and development
Mine properties and development represents the 
accumulation of all exploration, evaluation and 
development expenditure incurred by, or on behalf 
of, the entity in relation to areas of interest in which 
construction or development has commenced and/or 
mining of a mineral resource has commenced. Where 
further development expenditure is incurred in respect 
of a production property after the commencement of 
production, such expenditure is carried as part of the cost 
of that production property only when substantial future 
economic beneﬁts arise, otherwise such expenditure is 
classiﬁed as part of the cost of production. 

Mine development costs for production properties in which 
the Group has an interest are amortised over the life of 
the area of interest to which the costs relates on a units of 

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
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production basis over the estimated proved and probable 
ore reserves and a proportion of other measured and 
indicated mineral resources where there is a higher degree 
of conﬁdence that they can be extracted economically. 
Changes in the life of the area of interest and/or or ore 
reserves and other mineral resources are accounted for 
prospectively. 
Mines under construction
Expenditure incurred in constructing a mine is accumulated 
separately for each area of interest. This expenditure includes 
all direct costs of construction, borrowing costs capitalised 
during construction and an appropriate allocation of 
attributable overheads up to the time of commissioning the 
project. Upon successful commissioning of the project the 
aggregated costs of construction are transferred to non-
current assets as either mine properties and development or 
property, plant and equipment as appropriate. 

The carrying value of mine properties and development for 
each area of interest is assessed annually for impairment in 
accordance with Note 1(p).

(o)  Exploration and evaluation
Exploration and evaluation expenditure comprises costs 
which are directly attributable to: 

 >

 >

 >

research and analysing exploration data

conducting geological studies, exploratory drilling and 
sampling

examining and testing extraction and treatment 
methods

 >

compiling scoping and feasibility studies

Exploration and evaluation expenditure in relation to 
separate areas of interest for which rights of tenure are 
current is carried forward as an asset in the balance sheet 
where it is expected that expenditure will be recovered 
through the successful development and exploitation of an 
area or interest, or by its sale; or exploration and evaluation 
activities are continuing in an area of interest and those 
activities have not reached a stage which permits a 
reasonable estimate of the existence or otherwise of 
economically recoverable reserves. Where a project or 
an area of interest has been abandoned, the expenditure 
incurred thereon is written oﬀ to the proﬁt and loss in the 
ﬁnancial period in which the decision is made. 

Exploration and evaluation expenditure is reclassiﬁed to 
mine properties and development in the ﬁnancial period 
when the technical feasibility and commercial viability of 
extracting a mineral resource is demonstrated. The carrying 
value of the exploration and evaluation expenditure is 
assessed for impairment prior to reclassiﬁcation (Refer to 
Note 17). 

(p)  Impairment of assets
Goodwill and other intangible assets that have an indeﬁnite 
useful life are not subject to amortisation and are tested 
annually for impairment, or more frequently if events or 
changes in circumstances indicate that they might be 
impaired. 

At each reporting date, the Group assesses whether there 
is any indication that other non-ﬁnancial assets may 
be impaired. Where an indicator of impairment exists, 
the Group makes a formal estimate of the recoverable 
amount. Where the carrying amount of an asset exceeds 
its recoverable amount the asset is considered impaired 
and is written down to its recoverable amount. Impairment 
losses are recognised in proﬁt and loss.  

Recoverable amount is the greater of fair value less costs of 
disposal and value-in-use. For the purposes of assessing 
impairment, assets are grouped at the lowest levels for 
which there are separately identiﬁable cash inﬂows which 
are largely independent of the cash inﬂows from other 
assets or groups of assets (cash generating units). 

Where there is no binding sale agreement or active market, 
fair value less costs of disposal is based on the best 
information available to reﬂect the amount the Group could 
receive for the cash generating unit in an arm’s length 
transaction. In assessing value in use, the estimated 
future cash ﬂows are discounted to their present value 
using a post-tax discount rate that reﬂects current market 
assessments of the time value of money and the risks 
speciﬁc to the asset. 

An assessment is also made at each reporting date as to 
whether there is any indication that previously recognised 
impairment losses may no longer exist or may have 
decreased. If such indication exists, the recoverable 
amount is estimated. A previously recognised impairment 
loss is reversed only if there has been a change in the 
estimates used to determine the asset’s recoverable 
amount since the last impairment loss was recognised. 
If that is the case the carrying amount of the asset is 
increased to its recoverable amount. That increased 
amount cannot exceed the pre-impairment value, adjusted 
for any depreciation that would have been recognised on 
the asset had the initial impairment loss not occurred. 
Such reversal is recognised in proﬁt or loss. 

After such a reversal the depreciation charge is adjusted 
in future periods to allocate the asset’s revised carrying 
amount, less any residual value, on a systematic basis over 
its remaining useful life.  

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
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(q)  Ore Reserves
The Company estimates its mineral resources and ore 
reserves based on information compiled by Competent 
Persons as deﬁned in accordance with the Australasian 
Code for Reporting of Exploration Results, Mineral 
Resources and Ore Reserves of December 2012 (the JORC 
2012 code). Reserves, and for certain mineral resources, 
determined in this way are used in the calculation of 
depreciation, amortisation and impairment charges. 

In assessing the life of a mine for accounting purposes, 
mineral resources are only taken into account where there 
is a high degree of conﬁdence of economic extraction.

Investments and other ﬁnancial assets

(r) 
Classiﬁcation
The Group classiﬁes its ﬁnancial assets in the following 
categories: ﬁnancial assets at fair value through proﬁt 
and loss, loans and receivables, held-to-maturity 
ﬁnancial assets and available-for-sale ﬁnancial assets. 
The classiﬁcation depends on the purpose for which the 
investments were acquired. Management determines the 
classiﬁcation of its investments at initial recognition, and 
in the case of assets classiﬁed as held-to-maturity, re-
evaluates this designation at each reporting date. 
Financial assets at fair value through proﬁt or loss
Financial assets classiﬁed as held for trading purposes 
are included in the category ‘ﬁnancial assets at fair value 
through proﬁt or loss’. Financial assets are classiﬁed as 
held for trading if they are acquired for the purpose of 
selling in the near term. Derivatives are also classiﬁed as 
held for trading unless they are designated as eﬀective 
hedging instruments. Gains or losses on investments held 
for trading are recognised in proﬁt or loss.
Loans and receivables
Loans and receivables are non-derivative ﬁnancial assets 
with ﬁxed or determinable payments that are not quoted 
in an active market. Such assets are carried at amortised 
cost using the eﬀective interest method. Gains and losses 
are recognised in the proﬁt and loss when the loans and 
receivables are derecognised or impaired, as well as 
through the amortisation process.
Held-to-maturity investments
Bills of exchange and debentures are recorded at 
amortised cost using the eﬀective interest method less 
impairment, with revenue recognised on an eﬀective yield 
basis.

The eﬀective interest method is a method of calculating 
the amortised cost of a ﬁnancial asset and of allocating 
interest income over the relevant period. The eﬀective 
interest rate is the rate that exactly discounts estimated 
future cash receipts through the expected life of the 
ﬁnancial asset, or, where appropriate, a shorter period. 
Available-for-sale ﬁnancial assets
Financial assets that are available-for-sale are stated 
at fair value with gains and losses arising from changes 
in fair value recognised directly in the available-for-sale 
revaluation reserve, until the investment is disposed of or 
is determined to be impaired, at which time the cumulative 
gain or loss previously recognised in the available-for-sale 
revaluation reserve is included in proﬁt and loss for the 
period.
Impairment of ﬁnancial assets
The Group assess at the end of each reporting period 
whether there is objective evidence that a ﬁnancial asset 
or group of ﬁnancial assets is impaired. A ﬁnancial asset 
or group of ﬁnancial assets is impaired and an impairment 
loss is recognised in proﬁt or loss only if there is evidence 
of a ‘loss event’ after initial recognition that has an impact 
on the estimated future cash ﬂows of the ﬁnancial asset. In 
the case of equity instruments classiﬁed as available-for-
sale, a signiﬁcant or prolonged decline in the fair value of 
the security below its cost is considered an indicator that 
the assets are impaired. 

Impairment losses on an equity instrument that were 
recognised in proﬁt or loss are not reversed through proﬁt 
or loss in subsequent periods.

(s)  Trade and other payables
Trade and other payables are carried at amortised cost 
and represent liabilities for goods and services provided to 
the Group prior to the end of the ﬁnancial period that are 
unpaid. They arise when the Group becomes obliged to 
make future payments in respect of the purchase of these 
goods and services. The amounts are unsecured and are 
usually paid within 30 days of recognition.

(t)  Provisions
Provisions are recognised when the Group has a present 
obligation, it is probable that there will be a future sacriﬁce 
of economic beneﬁts and a reliable estimate can be made 
of the amount of the obligation.

When the Group expects some or all of a provision to 
be recovered from a third party, for example under an 
insurance contract, the receivable is recognised as a 
separate asset but only when the reimbursement is virtually 
certain and it can be measured reliably. The expense 
relating to any provision is presented in the proﬁt or loss net 
of any reimbursement. 

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
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If the eﬀect of the time value of money is material, 
provisions are discounted using a pre-tax rate that reﬂects 
the current market assessment of the time value of 
money. Where this is the case, its carrying amount is the 
present value of these estimated future cash ﬂows. When 
discounting is used, the increase in the provision due to the 
passage of time is recognised as a ﬁnance cost.
Decommissioning and restoration provision
Decommissioning and restoration provisions include 
the dismantling and demolition of infrastructure and the 
removal of residual materials and remediation of disturbed 
areas. The provision is recognised in the accounting period 
when the obligation arising from the related disturbance 
occurs, whether this occurs during the mine development 
or during the production phase, based on the net present 
value of estimated future costs. The costs are estimated 
on the basis of a closure plan drawn in accordance with 
the business plan and environmental regulations. The cost 
estimates are calculated annually during the life of the 
operation to reﬂect known developments and are subject 
to formal review at regular intervals.

The amortisation or ‘unwinding’ of the discount applied 
in establishing the net present value of provisions is 
charged to the proﬁt or loss in each accounting period as a 
ﬁnance cost. Any changes in the provision, including those 
resulting from new disturbances, updated cost estimates, 
changes to the lives of operations and revisions to discount 
rates, are accounted for prospectively.

On initial recognition of the provision and for prospective 
changes in estimates, an equivalent amount is capitalised 
as part of mine properties and development, or the 
respective asset or area of interest that the restoration 
obligation relates to. Capitalised decommissioning and 
restoration provision costs are depreciated over the life 
of the respective assets. Where future changes in the 
provision result in a signiﬁcant addition to the cost of the 
related asset, consideration will be given to whether an 
indication of impairment exists and the impairment policy 
will apply.

(u)  Employee entitlements
Short-term employee beneﬁts
Liabilities for wages and salaries, including non-monetary 
beneﬁts, annual leave and long service leave expected 
to be settled within 12 months of the reporting date are 
recognised in current liabilities in respect of employees’ 
services up to the reporting date and are measured at 
the amounts expected to be paid when the liabilities are 
settled.

Other long-term employee beneﬁts
The liability for annual leave and long service leave not 
expected to be settled within 12 months of the reporting 
date are recognised in non-current liabilities, provided there 
is an unconditional right to defer settlement of the liability. 
The liability is measured as the present value of expected 
future payments to be made in respect of services provided 
by employees up to the reporting date using the projected 
unit credit method. Consideration is given to expected future 
wage and salary levels, experience of employee departures 
and periods of service. Expected future payments are 
discounted using market yields at the reporting date on 
corporate bonds with terms to maturity and currency that 
match, as closely as possible, the estimated future cash 
outﬂows.
Deﬁned contribution superannuation expense
Contributions to deﬁned contribution superannuation plans 
are expensed in the period in which they are incurred.
Share-based payments
Equity-settled and cash-settled share-based compensation 
beneﬁts are provided to employees.

Equity-settled transactions are awards of shares, or options 
over shares that are provided to employees in exchange 
for the rendering of services. Cash-settled transactions 
are awards of cash for the exchange of services, where the 
amount of cash is determined by reference to the share 
price.

The cost of equity-settled transactions is measured at 
fair value on grant date. Fair value is determined using 
either the Binomial or Black-Scholes option pricing model 
that takes into account the exercise price, the term of the 
option, the impact of dilution, the share price at grant date 
and expected price volatility of the underlying share, the 
expected dividend yield and the risk free interest rate for the 
term of the option, together with non-vesting conditions that 
do not determine whether the consolidated entity receives 
the services that entitle the employees to receive payment. 
No account is taken of any other vesting conditions.

The cost of equity-settled transactions are recognised as 
an expense with a corresponding increase in equity over the 
vesting period. The cumulative charge to proﬁt and loss is 
calculated based on the grant date fair value of the award, 
the best estimate of the number of awards that are likely 
to vest and the expired portion of the vesting period. The 
amount recognised in proﬁt and loss for the period is the 
cumulative amount calculated at each reporting date less 
amounts already recognised in previous periods.

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
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The cost of cash-settled transactions is initially, and at 
each reporting date until vested, determined by applying 
either the Binomial or Black-Scholes option pricing model, 
taking into consideration the terms and conditions on 
which the award was granted. The cumulative charge to 
proﬁt or loss until settlement of the liability is calculated as 
follows:

 >

 >

during the vesting period, the liability at each reporting 
date is the fair value of the award at that date 
multiplied by the expired portion of the vesting period

from the end of the vesting period until settlement of 
the award, the liability is the full fair value of the liability 
at the reporting date.

All changes in the liability are recognised in proﬁt and loss. 
The ultimate cost of cash-settled transactions is the cash 
paid to settle the liability.

Market conditions are taken into consideration in 
determining fair value. Therefore any awards subject to 
market conditions are considered to vest irrespective 
of whether or not that market condition has been met, 
provided all other conditions are satisﬁed.

If equity-settled awards are modiﬁed, as a minimum 
an expense is recognised as if the modiﬁcation has 
not been made. An additional expense is recognised, 
over the remaining vesting period, for any modiﬁcation 
that increases the total fair value of the share-based 
compensation beneﬁt as at the date of modiﬁcation.

If the non-vesting condition is within the control of the 
consolidated entity or employee, the failure to satisfy the 
condition is treated as a cancellation. If the condition is not 
within the control of the consolidated entity or employee 
and is not satisﬁed during the vesting period, any remaining 
expense for the award is recognised over the remaining 
vesting period, unless the award is forfeited.

If equity-settled awards are cancelled, it is treated as if it 
has vested on the date of cancellation, and any remaining 
expense is recognised immediately. If a new replacement 
award is substituted for the cancelled award, the cancelled 
and new award are treated as if they were a modiﬁcation.

The dilutive eﬀect, if any, of outstanding options is reﬂected 
as additional share dilution in the computation of earnings 
per share. 

(v)  Contributed equity
Ordinary shares are classiﬁed as equity and recognised 
at the fair value of the consideration received by the 
Company. 

Incremental costs directly attributable to the issue of new 
shares or options are shown in equity as a deduction, net of 
tax, of the share proceeds received.

(w)  Fair value measurement
When an asset or liability, ﬁnancial or non-ﬁnancial, 
is measured at fair value for recognition or disclosure 
purposes, the fair value is based on the price that would 
be received to sell an asset or paid to transfer a liability in 
an orderly transaction between market participants at the 
measurement date; and assumes that the transaction will 
take place either: in the principal market; or in the absence 
of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market 
participants would use when pricing the asset or liability, 
assuming they act in their economic best interest. For 
non-ﬁnancial assets, the fair value measurement is 
based on its highest and best use. Valuation techniques 
that are appropriate in the circumstances and for which 
suﬃcient data are available to measure fair value, are 
used, maximising the use of relevant observable inputs and 
minimising the use of unobservable inputs.

(x)  Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing: 

 >

 >

the proﬁt attributable to equity holders of the 
Company, excluding any costs of servicing equity other 
than ordinary shares; 

by the weighted average number of ordinary shares 
outstanding during the ﬁnancial period, adjusted for 
bonus elements in ordinary shares issued during the 
period and excluding treasury shares. 

Diluted earnings per share
Diluted earnings per share adjusts the ﬁgures used in the 
determination of basic earnings per share to take into 
account: 

 >

 >

the after income tax eﬀect of interest and other 
ﬁnancing costs associated with dilutive potential 
ordinary shares; and  

the weighted average number of additional ordinary 
shares that would have been outstanding assuming 
the conversion of all dilutive potential ordinary shares. 

(y)  Goods and services tax (‘GST’) and other 

similar taxes

Revenues, expenses and assets are recognised net of 
the amount of associated GST, unless the GST incurred 
is not recoverable from the tax authority. In this case it 
is recognised as part of the cost of the acquisition of the 
asset or as part of the expense.

Receivables and payables are stated inclusive of the 
amount of GST receivable or payable. The net amount 
of GST recoverable from, or payable to, the tax authority 
is included in other receivables or other payables in the 
statement of ﬁnancial position.

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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
(CONTINUED)

Cash ﬂows are presented on a gross basis. The GST 
components of cash ﬂows arising from investing or 
ﬁnancing activities which are recoverable from, or payable 
to the tax authority, are presented as operating cash ﬂows.

Commitments and contingencies are disclosed net of the 
amount of GST recoverable from, or payable to, the tax 
authority. 

(z)  Comparative ﬁgures
Where necessary, comparative ﬁgures have been adjusted 
to conform to changes in the presentation in the current 
period.

(aa) Rounding of amounts
The Company is a kind referred to in Class Order 98/100, 
issued by the Australian Securities and Investments 
Commission, relating to the “rounding oﬀ” of amounts in 
the ﬁnancial report. Amounts in the ﬁnancial report have 
been rounded oﬀ in accordance with that Class Order 
to the nearest thousand dollars, or in certain cases, the 
nearest dollar. 

(ab) New accounting standards and 

interpretations

There were no new or amended accounting standards and 
interpretations applicable for the ﬁrst time for the reporting 
period commencing 1 July 2015.

Certain new accounting standards and interpretations have 
been published that are not mandatory for 31 December 
2015 reporting periods. The Group’s assessment of the 
impact of these new standards and interpretations is set 
out below: 

(i)  AASB 2015-1 Amendments to Australian Accounting 
Standards – Annual Improvements to Australian 
Accounting Standards 2012-2014 Cycle (eﬀective from  
1 January 2016)

AASB 2015-1 Amendments to Australian Accounting 
Standards – Annual Improvements to Australian 
Accounting Standards 2012-2014 Cycle merely clariﬁes 
existing requirements and therefore does not aﬀect the 
Group’s amendments to AASB 101 

(ii) AASB 2015-2 Amendments to Australian Accounting 
Standards – Disclosure Initiative: Amendments to AASB 
101 (eﬀective from 1 January 2016)

AASB 2015-2 Amendments to Australian Accounting 
Standards – Disclosure Initiative: Amendments to AASB 
101 merely clariﬁes existing requirements and therefore 
does not aﬀect the Group’s amendments to AASB 101. 

(iii)  AASB 9 Financial Instruments, AASB 2009-11 
Amendments to Australian Accounting Standards 
arising from AASB 9 and AASB 2010-7 Amendments to 
Australian Accounting Standards arising from AASB 9 
(December 2010) and AASB 2012-6 Amendments to 
Australian Accounting Standards – Mandatory Eﬀective 
Date of AASB 9 and Transition Disclosures (eﬀective from 
1 January 2018)

AASB 9 Financial Instruments addresses the classiﬁcation, 
measurement and derecognition of ﬁnancial assets and 
liabilities as well as impairment and hedge accounting. 
The standard is not applicable until 1 January 2018 but 
is available for early adoption. The Company intends to 
apply the standard from 1 January 2018. The Company 
is yet to undertake a detailed assessment of the impact 
of AASB 9. However, based on the Company’s preliminary 
assessment, the standard is not expected to have a 
material impact on the transactions and balances 
recognised in the ﬁnancial statement when it is ﬁrst 
adopted for the year ended 31 December 2018. 

(iv) AASB 15 Revenue from Contracts with Customers 
(eﬀective from 1 January 2017)

AASB 15 Revenue from Contracts with Customers will 
replace AASB 118 which covers contracts for goods 
and services and AASB 111 which covers construction 
contracts (and related interpretations). This standard 
is applicable from 1 January 2018. The Company is yet 
to undertake a detailed assessment of the impact of 
AASB 15. However, based on the Company’s preliminary 
assessment, the standard is not expected to have a 
material impact on the transactions and balances 
recognised in the ﬁnancial statements when it is ﬁrst 
applied. 

(v) IFRS 16 Leases (eﬀective from 1 January 2019)

IFRS 16 Leases will replace the current guidance in IAS 
17 and requires all operating leases to be recognised 
on the balance sheet. The Group is applicable from 1 
January 2019. The Company is yet to undertake a detailed 
assessment of the impact of AASB 15. However, based on 
the Company’s preliminary assessment, the standard is 
not expected to have a material impact on the transactions 
and balances recognised in the ﬁnancial statements when  
it is ﬁrst applied.

There are no other standards that are not yet eﬀective 
and that would be expected to have a material impact on 
the entity in the current or future reporting periods and on 
foreseeable future transactions.

For personal use only 
 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 2. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of ﬁnancial risks: market risk (including currency risk, interest rate risk and price 
risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of ﬁnancial 
markets and seeks to minimise potential adverse eﬀects on the ﬁnancial performance of the Group. The Group uses 
diﬀerent methods to measure diﬀerent types of risks to which it is exposed. These methods include sensitivity analysis in 
the case of interest rate risk, foreign exchange risk and aging analysis for credit risk.

Financial risk management is carried out by Audit, Risk and Compliance Committee under guidelines established by the 
Board. The policies employed by the Company identify and analyse ﬁnancial risks and establish appropriate procedures 
and controls to mitigate identiﬁed ﬁnancial risks which includes foreign exchange risk, credit risk, use of derivate ﬁnancial 
instruments and non-derivative ﬁnancial instruments and investment of surplus cash reserves.The Group holds the 
following ﬁnancial instruments: 

Financial Assets

Cash and cash equivalents

Trade and other receivables

Available-for-sale financial assets

Financial Liabilities

Trade and other payables

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

191,594

2,879

163

194,636

8,032

8,032

8,931

2,323

33

11,287

2,547

2,547

(a)  Market Risk
(i)  Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, 
primarily with respect to the United States Dollar (USD). 

Foreign exchange risk arises from recognised ﬁnancial assets and ﬁnancial liabilities denominated in a currency that is not 
the entity’s functional currency. The risk is measured using sensitivity analysis and cash ﬂow forecasting.  

At this time the Group does not manage its prospective foreign exchange risk with currency hedges.

For personal use only 
 
 
 
 
 
 
 
NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
The Group’s exposure to foreign currency risk at the reporting date, expressed in Australian dollars, was as follows: 

Assets

- US Dollars

- Saudi Riyals

Liabilities

-  US Dollars

- South African Rand

Net (deficit)/surplus position

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

718 (1)

-

718

4,008

433

4,441

(3,723)

1,115

3

1,118

-

-

-

1,118

(1) 

The Group held an additional $143,7 million in US Dollars (US$105.0 million) as at 31 December 2015 (30 June 2015: Nil), through a subsidiary 
with a US Dollar functional currency. The US Dollars will be used to fund the development expenditure for the Balama Project. 

Group sensitivity 
Based on the ﬁnancial instruments held at 31 December 2015, had the Australian dollar strengthened/weakened by 5% 
against the above currencies with all other variables held constant, the Group’s post tax loss for the ﬁnancial period would 
have been $177,323 lower / $195,989 higher  (30 June 2015: $100,476 higher  / $111,052 lower /). 
(ii) Cash ﬂow and fair value interest rate risk
The Group’s main interest rate risk relates to interest income on cash and cash equivalents. The consolidated entity does 
not hold any ﬁnancial assets or liabilities whose fair value would be impacted by interest rates.

(b)  Credit Risk
Credit risk is managed on a Group basis.  Credit risk arises from cash and cash equivalents and deposits with banks and 
ﬁnancial institutions.  

The Group has no receivables past due as at 31 December 2015 (30 June 2015: Nil).

(c)  Liquidity Risk
Prudent liquidity risk management implies maintaining suﬃcient cash and marketable securities, the availability of 
funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group 
manages liquidity risk by continuously monitoring forecast and actual cash ﬂows and matching the maturity proﬁles of 
ﬁnancial assets and liabilities.  

The Company is expected to require additional ﬁnancing, in addition to that achieved money raised under the capital 
raising during August 2015, to meet its project development and working capital requirements, general and administrative 
expenditure and studies relating to future potential projects. The Company has a number of alternatives to raise the 
necessary funding which may include both debt and equity sources of funding.  

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FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 2. FINANCIAL RISK MANAGEMENT (CONTINUED)
Maturities of ﬁnancial liabilities
The table below analyses the Group’s ﬁnancial liabilities into relevant maturity groupings based on the remaining period as 
at the reporting date to the contractual maturity date.  The amounts disclosed in the table are the contractual undiscounted 
cash ﬂows. 

31 DECEMBER 2015

Non-derivatives

Non-interest bearing

Trade and other 
payables 

Total non-derivatives

30 JUNE 2015

Non-derivatives

Non-interest bearing

Trade and other 
payables 

Total non-derivatives

LESS THAN 
6 MONTHS
$’000

BETWEEN 
6 AND 12 
MONTHS
$’000

BETWEEN 
1 AND 2 
YEARS
$’000

BETWEEN 
2 AND 5 
YEARS
$’000

TOTAL 
CONTRACT-
UAL CASH 
FLOWS
$’000

CARRYING 
AMOUNT 
LIABILITIES
$’000

OVER 5 
YEARS
$’000

8,032

8,032

-

-

-

-

-

-

-

-

8,032

8,032

8,032

8,032

LESS THAN 
6 MONTHS
$’000

BETWEEN 
6 AND 12 
MONTHS
$’000

BETWEEN 
1 AND 2 
YEARS
$’000

BETWEEN 
2 AND 5 
YEARS
$’000

TOTAL 
CONTRACT-
UAL CASH 
FLOWS
$’000

CARRYING 
AMOUNT 
LIABILITIES
$’000

OVER 5 
YEARS
$’000

2,547

2,547

-

-

-

-

-

-

-

-

2,547

2,547

2,547

2,547

(d)  Capital Risk Management 
When managing capital, the Group’s objective is to safeguard the ability to continue as a going concern so that the Group 
continues to provide returns for shareholders and beneﬁts for other stakeholders, and to maintain an optimal capital 
structure to reduce the cost of capital. 

Management is constantly reviewing and adjusting, where necessary, the capital structure. This involves the use of 
corporate forecasting models which enable analysis of the Group’s ﬁnancial position including cash ﬂow forecasts to 
determine future capital management requirements. To ensure suﬃcient funding, a range of assumptions are modeled to 
determine sensitivities of the Group’s ﬁnancial position and capital requirements under diﬀerent circumstances or potential 
outcomes.

NOTE 3. FAIR VALUE MEASUREMENT
In accordance with AASB 13, Fair Value Measurement, the Company has classiﬁed, according to the fair value hierarchy, 
the Group’s available-for-sale ﬁnancial assets as Level 1 assets. The available-for-sale ﬁnancial assets comprises listed 
securities whose fair value is based on quoted prices as at 31 December 2015. There are no Level 2 or 3 assets or liabilities 
as at 31 December 2015. 

The Group did not transfer any fair value amounts between the fair value hierarchies during the six month period ended  
31 December 2015.   

Due to their short-term nature, the carrying amounts of current receivables and current payables are assumed to 
approximate their fair value. 

For personal use only 
 
 
 
 
 
 
 
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NOTE 4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the ﬁnancial statements requires management to make estimates and judgements that aﬀect the 
reported amounts in the ﬁnancial statements. 

Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, 
revenues and expenses. Management bases judgements, estimates and assumptions on historical experience and 
other various factors, including expectations of future events which management believes to be reasonable under the 
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The 
judgements, estimates and assumptions that have a higher degree of risk of causing a material adjustment to the carrying 
amounts of assets and liabilities (refer to the respective notes) within the next ﬁnancial year are discussed below: 
(i) 
Impairment of property, plant and equipment and mine properties and development
The Group performs an impairment assessment where there is an indication of possible impairment. Impairment 
assessments are performed using information from the Feasibility Study as well as external sources, including industry 
analysts and analysis performed by external parties. 

The recoverable amount of each cash generating unit is considered to be the higher of fair value less costs of disposal or 
value-in-use. The Group undertakes cash ﬂow calculations based on a number of critical estimates, assumptions and 
forward estimates including commodity price expectations, foreign exchange rates, discount rates, reserves and resources 
and expectations regarding future development costs as well as production, sales and operating costs which are subject to 
risk and uncertainty.  

Variations to expected future cash ﬂows, and timing thereof, could result in signiﬁcant changes to the impairment test 
results, which in turn could impact future ﬁnancial results.
(ii)  Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, 
plant and equipment and ﬁnite life intangible assets. The useful lives could change signiﬁcantly as a result of technical 
innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less 
than previously estimated lives, or technically obsolete or non-strategic assets are abandoned or sold and written oﬀ or 
written down. 
(iii)  Determination of mineral resources and ore reserves 
Mineral resources and ore reserves are based on information compiled by a Competent Person as deﬁned in accordance 
with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves of December 2012 
(the JORC 2012 code). There are numerous uncertainties inherent in estimating ore reserves and assumptions that are 
valid at the time of estimation may change signiﬁcantly when new information becomes available. Changes in forecast 
prices of commodities, exchange rates, production costs or recovery rates may change the economic status of ore reserves 
and may, ultimately, result in the reserves being restated. Such changes in reserves could impact on depreciation and 
amortisation rates, asset carrying values and provisions for decommissioning and restoration. 
(iv) 
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, 
including whether the Group decides to develop and exploit an area of interest or, if not, whether it recovers the related 
exploration and evaluation asset through sale.

Impairment of exploration and evaluation expenditure

Factors that could impact the future recoverability include; the level of reserves and resources, future technological 
changes, which could impact the cost of mining, future legal changes and changes to commodity prices and foreign 
exchange rates. 

To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, 
proﬁts and net assets will be reduced in the period this determination is made.

In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a 
stage that permits a reasonable assessment of the existence, or otherwise, of economically recoverable reserves. To the 
extent it is determined in the future that this capitalised expenditure should be written oﬀ, proﬁts and net assets will be 
reduced in the period in which this determination is made.

For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS 
(CONTINUED)
(v)  Taxation
The Group’s accounting policy for taxation requires management judgment in relation to the application of income tax 
legislation. There are many transactions and calculations undertaken during the ordinary course of business where the 
ultimate tax determination is uncertain. The Group recognises liabilities for tax, and if applicable taxation investigation or 
audit issues, based on whether tax will be due and payable. Where the taxation outcome of such matters is diﬀerent from 
the amount initially recorded, such diﬀerence will impact the current and deferred tax positions during the period in which 
the assessment is made. 

Judgement is required in assessing whether deferred tax assets and liabilities are recognised on the balance sheet. 
Deferred tax assets, including those arising from temporary diﬀerences, are recognised only when it is considered more 
likely than not that they will be recovered, which is dependent upon the generation of future assessable income of a nature 
and of an amount suﬃcient to enable the beneﬁts to be utilised. In addition, the utilisation of taxation losses also depends 
on the ability of the tax consolidated entities to satisfy certain tests at the time the losses are recouped. The Group’s 
unrecognised tax losses are disclosed in Note 9.

Certain input tax credits in overseas subsidiaries amounting to $1,611,936 (30 June 2015: $895,699) have been 
recognised at cost in other receivables (Note 12). The Group views these input tax credits as recoverable through a refund 
or tax credits based on interpretation of the relevant tax and investment laws. Should management determine that some 
of these input tax credits are not recoverable in future, the Group will reclassify those amounts to the cost base of related 
assets, or recognise an expense in the proﬁt or loss in the period the determination is made where these costs are in 
relation to expenses recognised in proﬁt or loss.
(vi)  Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value 
of the equity instruments at the date at which they are granted. The fair value of options granted is determined by using 
either the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments 
were granted and based upon the assumptions detailed in Note 31. The accounting estimates and assumptions relating 
to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the 
next annual reporting period but may impact proﬁt or loss and equity.
(vii)  Provision for decommissioning and restoration costs 
Decommissioning, dismantling of property, plant and equipment and restoration are a normal consequence of mining, 
and the majority of this expenditure is incurred at the end of a mine’s life. In determining an appropriate level of provision, 
consideration is given to the expected future costs to be incurred, the timing of these expected future costs (largely 
dependent on the life of the mine), and the estimated future level of inﬂation. 

The ultimate cost of decommissioning and restoration is uncertain and costs can vary in response to many factors 
including progression of construction/development activities, changes to the relevant legal requirements, the emergence 
of new restoration techniques or experience at other mine sites. The expected timing of expenditure can also change, for 
example in response to changes in reserves or to production rates. 

Changes to any of the estimates could result in signiﬁcant changes to the level of provisioning required, which would in turn 
impact future ﬁnancial results. These estimates are reviewed annually and adjusted where necessary to ensure that the 
most up to date data is used.

For personal use only 
 
 
 
 
 
 
 
NOTE 5. SEGMENT INFORMATION

(a)  Description of segments 
Management has determined and presented operating segments based on the reports reviewed by the Executive 
Management Team, who are the Group’s chief operating decision makers in terms of assessing performance and allocating 
resources. The Board of Directors reviews the performance of the Group on a similar basis.  

The Group has one operating segment in Mozambique but primarily monitors performance according to the following two 
geographical locations: 

Australia 

Mozambique    

- 

- 

Investing activities and corporate management

Mining, mineral exploration, evaluation and development activities

(b)  Geographical information provided to the Executive Management Team

6 MONTHS TO 31 DECEMBER 2015

Revenues

Interest received / receivable

Other income

Total revenues

AUSTRALIA
$’000

MOZAMBIQUE
$’000

CONSOLIDATED
$’000

402

5,914

6,316

-

81

81

402

5,995

6,397

Loss after income tax expense

(1,562)

(1,696)

(3,258)

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Included within geographical results:

Legal and consulting expenses

Other administration expenses

Share-based payments expense

Other employee benefits expense

Depreciation and amortisation expense

Exploration and evaluation costs written off

Impairment of assets

AS AT 31 DECEMBER 2015

Assets

Geographical assets

Total assets

Liabilities

Geographical liabilities

Total liabilities

(1,103)

(1,218)

(4,177)

(1,249)

(54)

(2)

(70)

236,790

236,790

5,934

5,934

(131)

(279)

-

(17)

(274)

-

(1,081)

26,020

26,020

3,703

3,703

(1,234)

(1,497)

(4,177)

(1,266)

(328)

(2)

(1,151)

262,810

262,810

9,637

9,637

For personal use only 
 
 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 5. SEGMENT INFORMATION (CONTINUED)

(b)  Geographical information provided to the Executive Management Team (continued)

12 MONTHS TO 30 JUNE 2015

Revenues

Interest received / receivable

Other income

Total revenues

Results

AUSTRALIA
$’000

MOZAMBIQUE
$’000

CONSOLIDATED
$’000

290

868

1,158

6

-

6

296

868

1,164

Loss after income tax expense

(10,397)

(1,236)

(11,633)

Included within geographical results:

Legal and consulting expenses

Other administration expenses

Share-based payments expense

Other employee benefits expense

Depreciation and amortisation expense

Exploration and evaluation costs written off

Discontinued operations

AS AT 30 JUNE 2015

Assets

Geographical assets

Total assets

Liabilities

Geographical liabilities

Total liabilities

NOTE 6. REVENUE

From continuing operations

Interest income

(1,256)

(1,990)

(5,741)

(2,314)

(414)

(151)

(132)

443

43,241

43,241

2,218

2,218

(200)

(264)

-

(539)

(239)

-

-

-

15,861

15,861

479

479

(1,456)

(2,254)

(5,741)

(2,853)

(653)

(151)

(132)

443

59,102

59,102

2,697

2,697

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

402

402

296

296

For personal use only 
 
 
 
 
 
 
 
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NOTE 7. OTHER INCOME

Net foreign exchange gain

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

5,995

5,995

868

868

NOTE 8. EXPENSES
Loss before income tax from continuing operations includes the following speciﬁc expenses:

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

Depreciation 

Land and buildings

Computer equipment

Plant and equipment

Total depreciation

Amortisation

Software

Total depreciation and amortisation

Impairment of assets

Plant and equipment

Available-for-sale financial assets

Total impairment charges

Employee benefits expense

Salaries and wages

Share-based payments

Employee entitlements

Defined contribution superannuation expense

Total employee benefits expenses

Other expenses

Legal expenses

Consulting expenses

43

12

236

291

37

328

1,081

70

1,151

1,116

4,177

71

79

5,443

491

743

22

- 

562

584

69

653

-

132

132

2,639

5,741

59

155

8,594

573

883

For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 9. INCOME TAX EXPENSE 

(a) Numerical reconciliation of income tax expense to prima facie  
tax payable 

Loss before income tax expense from continuing operations

Profit/(loss) before income tax (expense) / benefit from discontinued 
operations

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

(3,258)

-

(3,258)

(12,076)

443

(11,633)

Tax at the Australian tax rate of 30%

(977)

(3,490)

Tax effect amounts which are not deductible/(taxable)  
in calculating taxable income:

- Share-based payments

- Reserves released to proﬁt on demerger of Jacana Minerals Limited

- Other non-deductible expenses

- Losses incurred by foreign controlled entities

- Movement in unrecognised temporary diﬀerences

- Under/(Over) provision in the prior period

- Current period taxation losses not recognised as deferred tax assets

- Utilisation of previously unrecognised taxation losses

Income tax expense

(b) Taxation losses and temporary differences not recognised

Unused taxation losses for which no deferred tax asset has been recognised

Potential taxation benefit at 30%

Net temporary differences not bought to account

1,253

-

88

513

(659)

55

-

(273)

-

16,668

5,000

2,305

1,722

(237)

9

302

(130)

-

1,824

-

-

16,914

5,074

372

The taxation beneﬁts of taxation losses and temporary diﬀerences not brought to account will only be obtained if:

 >

 >

 >

the consolidated entity derives future assessable income of a nature and of an amount suﬃcient to enable the beneﬁt 
from the deductions for the losses to be realised; 

the consolidated entity continues to comply with the conditions for deductibility imposed by law; and

no change in tax legislation adversely aﬀects the consolidated entity in realising the beneﬁts from deducting the 
losses. 

For personal use only 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTE 10. DISCONTINUED OPERATIONS 

(a)  Demerger of Jacana Minerals Limited 
On 15 October 2014, Syrah Resources Limited demerged Jacana Minerals Limited and its wholly owned subsidiary Jacana 
Resources (Tanzania) Limited. That business is now owned and operated by Jacana Minerals Limited as a separate and 
independent holding Company, which is unlisted.

The demerger of Jacana Minerals Limited and steps to implement the demerger were approved by Syrah shareholders at a 
general meeting held on 1 October 2014. Following the successful outcome of this shareholder vote, the ﬁnal separation of 
Jacana Minerals Limited occurred on 15 October 2014. As a consequence of the demerger, Jacana Minerals is presented 
in discontinued operations in the comparative results for the ﬁnancial year ended 30 June 2015.

The demerger was done by way of an in-specie distribution of shares in Jacana Minerals Limited to the shareholders of 
Syrah Resources Limited.

(b)  Financial information
Financial information for the Group’s discontinued operations for the reporting period is summarised in the tables below.

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

Financial performance information

Administration costs

Employee benefits expense

Legal and consulting expense

Depreciation and amortisation expense

Total expenses

Loss before income tax expense

Income tax expense

Loss after income tax expense

Profit on demerger

Income tax expense

Profit on demerger after income tax expense

Profit/(loss) after income tax expense from discontinued operations 

Cash flow information

Net cash used in operating activities

-

-

-

-

-

-

-

-

-

-

-

-

-

(50)

(108)

(185)

(4)

(347)

(347)

-

(347)

790

-

790

443

(343)

71

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For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

NOTE 10. DISCONTINUED OPERATIONS (CONTINUED)

(b)  

Financial information (continued)

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

72

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Carrying amounts of assets and liabilities demerged

Cash and cash equivalents

Trade and other receivables

Property, plant and equipment

Exploration and evaluation

Total assets

Net assets

Details of the demerger

Total amount attributed to demerger distribution

Add: Investment retained in Jacana Minerals Limited

Sub-total

Less: Carrying amount of net assets demerged

Add: foreign exchange gains released to profit on demerger

Profit on demerger before tax income

Income tax expense

Profit on demerger after income tax

-

-

-

-

-

-

-

-

-

-

-

-

-

-

61

13

86

6,096

6,256

6,256

6,091

165

6,256

(6,256)

790

790

-

790

NOTE 11. CASH AND CASH EQUIVALENTS

Cash at bank and in hand

Deposit at call

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

151,554

40,040

191,594

8,891

40

8,931

Total cash is held in trading accounts or term deposits with major ﬁnancial institutions under normal terms and conditions 
appropriate to the operation of the accounts.  These deposits earn interest at rates set by these institutions. As at 31 
December 2015 the weighted average interest rate on the Australian dollar accounts and deposits was 2.7% (30 June 
2015: 1.3%) and the weighted average interest rate on the United States dollar accounts was 0.1% (30 June 2015: 0.0%).

(a)  Risk exposure
The Group’s exposure to foreign exchange and interest rate risk is discussed in Note 2. The maximum exposure to credit risk 
at the reporting date is the carrying amount of each class of cash and cash equivalents mentioned above. 

For personal use only 
 
 
 
 
 
 
 
NOTE 12. TRADE AND OTHER RECEIVABLES

Other receivables

Prepayments

Security deposits (1)

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

2,792

1,719

87

4,598

2,091

125

107

2,323

(1) 

Security deposits consists of restricted deposits that are used for monetary backing for performance guarantees.

(a)  Impairment of receivables
The Group has no receivables past due as at 31 December 2015, nor does it consider there to be any potential impairment 
loss on these receivables. 

(b)  Foreign exchange and interest rate risk
Information about the Group’s exposure to foreign currency risk and interest rate risk in relation to trade and other 
receivables is provided in Note 2. 

(c)  Fair value and credit risk
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value.

The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of receivables 
mentioned above.  Refer to Note 2 for more information on the credit quality of the Group’s trade and other receivables.

NOTE 13. AVAILABLE-FOR-SALE FINANCIAL ASSETS 

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

Listed securities

- Australian listed securities

Movements in available-for-sale financial assets

Movements in available-for-sale financial assets are set out below: 

Balance at the beginning of year

Additions

Impairment expense

Balance at the end of year

163

163

33

200

(70)

163

33

33

-

165

(132)

33

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For personal use only 
 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 14. PROPERTY, PLANT AND EQUIPMENT

LAND 
AND BUILDINGS 
$’000

PLANT AND 
EQUIPMENT 
$’000

COMPUTER 
EQUIPMENT 
$’000

At 1 July 2015

Cost

Accumulated depreciation

Net book amount

6 months to 31 December 2015

Balance at beginning of period

Additions (see note (a))

Disposals (at net book value)

Depreciation charge

Impairment charge

Exchange differences

Balance at end of period

At 31 December 2015

Cost 

Accumulated depreciation and impairment

Net book amount

At 1 July 2014

Cost

Accumulated depreciation

Net book amount

12 months to 30 June 2015

Balance at beginning of period

Additions

Disposals (at net book value)

Depreciation charge

Transfers (at net book value)

Exchange differences

Balance at end of period

At 30 June 2015

Cost 

Accumulated depreciation 

Net book amount

1,690

(21)

1,669

1,669

208

-

(43)

-

(182)

1,652

1,712

(60)

1,652

336

(73)

263

263

1,518

-

(22)

-

(90)

1,669

1,690

(21)

1,669

4,037

(862)

3,175

3,175

-

(9)

(388)

(1,081)

(178)

1,519

3,745

(2,226)

1,519

2,040

(385)

1,655

1,655

2,229

(86)

(565)

(57)

(1)

3,175

4,037

(862)

3,175

108

(51)

57

57

215

(3)

(12)

-

(9)

248

284

(36)

248

-

-

-

-

-

-

-

57

-

57

108

(51)

57

TOTAL 
$’000

5,835

(934)

4,901

4,901

423

(12)

(443)

(1,081)

(369)

3,419

5,741

(2,322)

3,419

2,376

(458)

1,918

1,918

3,747

(86)

(587)

-

(91)

4,901

5,835

(934)

4,901

For personal use only 
 
 
 
 
 
 
 
NOTE 14. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

(a)  Assets under construction
Capitalised costs in relation to construction of the Balama Graphite Project at 31 December 2015 are included in mine 
properties and development. 

(b)  Depreciation charge
Of the total depreciation charge for the period ending 31 December 2015, $236,359 was charged to proﬁt or loss, and 
$152,120 was capitalised to mine properties and development. For the ﬁnancial year ended 30 June 2015 all depreciation 
was charged to proﬁt or loss.

(c)  Impairment of assets
The impairment expense of $1,081,377 (30 June 2015: NIL) relates to the write-oﬀ of mobile equipment that is no longer 
expected to be used in the manner and to the extent originally planned. The recoverable value of these assets has been 
determined by reference to the fair value less costs of disposal.

NOTE 15. MINE PROPERTIES AND DEVELOPMENT

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

Mine properties and development (at cost)

Mines under construction

Total mine properties and development

42,972

18,707

61,679

Movements in mine properties and development are set out below:

MINE PROPERTIES 
AND DEVELOPMENT
$’000

MINES UNDER 
CONSTRUCTION 
$’000

6 months to 31 December 2015

Balance at beginning of period

Current period expenditure capitalised

Provision for decommissioning and restoration

Exchange differences

Balance at end of period

12 months to 30 June 2015

Balance at beginning of period

Transfer from exploration and evaluation

Balance at end of period

41,918

2,139

-

(1,085)

42,972

-

41,918

41,918

-

17,688

1,411

(392)

18,707

-

-

-

41,918

-

41,918

TOTAL
$’000

41,918

19,827

1,411

(1,477)

61,679

-

41,918

41,918

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For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 16. INTANGIBLES 

Software (at cost)

Accumulated amortisation

Net book amount

Movements in intangibles are set out below:

Balance at beginning of period

Current period expenditure

Disposals (at net book value)

Amortisation expense

Balance at end of period

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

236

(97)

139

185

-

(9)

(37)

139

310

(125)

185

19

235

-

(69)

185

NOTE 17. EXPLORATION AND EVALUATION 

Exploration & evaluation properties (at cost)

Movements in exploration and evaluation expenditure are set out below:

Balance at beginning of period

Current period expenditure capitalised

Transfer to mine properties and development

Demerger of Jacana Minerals Limited

Expenditure written-off 

Exchange differences

Balance at end of period

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

1,218

1,218

811

407

-

-

-

-

1,218

811

811

33,149

15,104

(41,918)

(6,096)

(151)

723

811

The ultimate recoupment of exploration and evaluation expenditure is dependent upon successful development and 
commercial exploitation or alternatively the sale of the respective areas of interest at an amount at least equal to book value.

The Directors concluded that the technical feasibility and commercial viability of the Balama Graphite Project was 
demonstrable and accordingly the carried forward capitalised exploration and evaluation expenditures were reclassiﬁed 
to mine properties and development as at 30 June 2015. The remaining balance of exploration and evaluation relates to 
the vanadium project at Balama and continues to be carried forward in accordance with the exploration and evaluation 
accounting policy.

For personal use only 
 
 
 
 
 
 
 
NOTE 18. TRADE AND OTHER PAYABLES

Trade payables and accruals

Other payables

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

7,664

368

8,032

2,089

458

2,547

(a)  Risk exposure
Trade payables are non-interest bearing and are normally settled on repayment terms between 7 and 30 days. Information 
about the Group’s exposure to foreign exchange risk is provided in Note 2.

NOTE 19. PROVISIONS

Current

Employee benefits

Non-current

Decommissioning and restoration

Employee benefits

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

182

182

1,411

12

1,423

141

141

-

9

9

(a)  Information regarding provisions and signiﬁcant estimates
Employee beneﬁts
Employee beneﬁts provisions relate to employee entitlements such as annual leave and long service leave.
Decommissioning and restoration
Provision is made for mine site restoration costs, including dismantling and removal of plant and buildings, and environmental 
rehabilitation costs at the end of mine operations in accordance with the mining permit requirements for the Balama project.  
The provision is the present value of estimated future expenditure to restore the current level of disturbance during the 
development phase. These costs have been capitalised as part of mine properties and development and will be amortised over 
the estimated life of the mine. 

Additional decommissioning and restoration provisions required as a result of continuing development activities or future 
operations will be recognised in the future as and when new areas are disturbed or new structures built, and the obligation to 
remediate the aﬀected areas arises.

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For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

NOTE 19.  PROVISIONS (CONTINUED)

(b)  Movements in provisions

78

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6 months to 31 December 2015

Balance at beginning of period

Additional provisions recognised: 

-   Capitalised to mine properties and development

-   Net increase in employee benefits charged to profit or loss

Balance at end of period

12 months to 30 June 2015

Balance at beginning of period

Additional provisions recognised: 

-   Net increase in employee benefits charged to profit or loss

Balance at end of period

NOTE 20. ISSUED CAPITAL

DECOMMISSIONING 
AND RESTORATION
$’000

EMPLOYEE 
BENEFITS
$’000

-

1,411

-

1,411

-

-

-

150

-

44

194

99

51

150

31 DECEMBER 
2015
SHARES

30 JUNE  
2015
SHARES

31 DECEMBER 
2015
$’000

Issued and fully paid ordinary shares

231,267,154

165,223,076

231,267,154

165,223,076

(a)  Movements in ordinary share capital

DETAILS

DATE

6 months to 31 December 2015

Balance at beginning of period

31 July 2015

13 August 2015

2 September 2015

24 November 2015

1 December 2015

8 December 2015

17 December 2015

Exercise of options

Share issue

Share issue

Exercise of options

Exercise of options

Exercise of options

Share issue

Transfers from share based payment 
reserve on conversion of options

Capital raising costs

Balance at end of period

NUMBER OF 
SHARES

165,223,076

375,000

50,726,039

14,137,746

125,000

125,000

300,001

255,292

 231,267,154

284,430

284,430

ISSUE 
PRICE

 -

$0.22

$3.25

$3.25

-

$0.17

$0.17

$2.61

TOTAL
$’000

150

1,411

44

1,605

99

51

150

30 JUNE  
2015
$’000

80,910

80,910

$’000

80,910

83

164,860

45,948

-

21

51

666

605

(8,714)

284,430

For personal use only 
 
 
 
 
 
 
 
 
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NOTE 20. ISSUED CAPITAL (CONTINUED)

(a)  Movements in ordinary share capital (continued)

DETAILS

DATE

12 months to 30 June 2015

Balance at beginning of period

15 July 2014

15 July 2014

18 July 2014

29 July 2014

8 August 2014

1 September 2014

3 October 2014

15 October 2014

27 January 2015

19 March 2015

23 March 2015

Exercise of options

Exercise of options

Exercise of options

Exercise of options

Exercise of options

Exercise of options

Exercise of options

Demerger distribution

Exercise of options

Exercise of options

Exercise of options

Transfers from share-based payments 
reserve on conversion of options

Capital raising costs

Balance at end of period

NUMBER OF 
SHARES

ISSUE 
PRICE

 -

$0.26

$2.21

$0.26

$0.26

$0.26

$2.21

$0.26

-

$0.22

$2.17

$3.83

162,500,614

75,000

5,000

425,000

10,000

454,462

15,000

650,000

-

75,000

13,000

1,000,000

165,223,076

$’000

81,444

19

11

110

3

118

33

169

(6,559)

16

28

3,830

1,712

(24)

80,910

(b)  Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds of winding up of the Company in proportion 
to the number of and amounts paid on the shares held.

Ordinary shares entitle their holder to one vote per share, either in person or by proxy, at a meeting of the Company.

Ordinary shares have no par value and the Company does not have a limited amount of authorised share capital.

(c)  Share options 
The Company has a share-based payment scheme under which options to subscribe for the Company’s shares have been 
granted to Non-executive Directors, Executives and selected Senior Employees. Information in relation to the Group’s Long 
Term Incentive Plan and Share Option Plan including details of options issued and exercised during the ﬁnancial period and 
options outstanding at the end of the ﬁnancial period are set out in Note 31.

There are no voting or dividend rights attached to share options. Voting and dividend rights will attach to the ordinary 
shares when the options have been exercised. 

(d)  Share buy-back
There is no current on-market share buy-back.

(e)  Capital risk management
The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it 
can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce 
the cost of capital.

In order to maintain or adjust the capital structure, the consolidated entity may return capital to shareholders, or issue new 
shares.

For personal use only 
 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 21. RESERVES 

Foreign currency reserve

Share-based payments reserve

(a)  Movements in reserves
Movements in each class of reserve are set out below:

6 months to 31 December 2015

Balance at beginning of period

Foreign currency translation

Share-based payments 

Exercise of options

Balance at end of period

12 months to 30 June 2015

Balance at beginning of period

Foreign currency translation

Share-based payments 

Exercise of options

Recognition of options issued on the Jacana acquisition

Balance at end of period

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

(8,041)

9,877

1,836

FOREIGN 
CURRENCY 
RESERVE
$’000

SHARE-BASED 
PAYMENTS 
RESERVE
$’000

(975)

(7,066)

-

-

(8,041)

(508)

323

-

-

(790)

(975)

6,305

-

4,177

(605)

9,877

2,276

-

5,741

(1,712)

-

6,305

(975)

6,305

5,330

TOTAL
$’000

5,330

(7,066)

4,177

(605)

1,836

1,768

323

5,741

(1,712)

(790)

5,330

(b)  Nature and purpose of reserves
Foreign currency reserve
Exchange diﬀerences arising on translation of a foreign controlled entity are recognised in other comprehensive income and 
accumulated in a separate reserve within equity. The cumulative amount is reclassiﬁed to the proﬁt and loss when the net 
investment is disposed of. 
Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of equity beneﬁts issued by the Company.

NOTE 22. ACCUMULATED LOSSES

Movements in accumulated losses are set out below

Balance at beginning of period

Loss for the period 

Demerger of Jacana Minerals Limited

Balance at the end of period

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

(29,835)

(3,258)

-

(33,093)

(18,670)

(11,633)

468

(29,835)

For personal use only 
 
 
 
 
 
 
 
NOTE 23. DIVIDENDS
There were no dividends paid, recommended or declared during the current or previous ﬁnancial period.

NOTE 24. COMMITMENTS, CONTINGENCIES AND GUARANTEES

(a)  Capital expenditure commitments 
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

Mine properties and development

-   Mines under construction

Total capital commitments

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

44,657

44,657

-

-

The above capital expenditure commitments are in relation to the development and construction of the Balama Graphite 
Project in Mozambique.

(b)  Operating lease expenditure commitments 
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

Within one year

After one year but not more than five years

Minimum lease payments

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

126

59

185

115

2

117

(c)  Tenement expenditure commitments
The Group has to meet the conditions under which mining and exploration tenements were granted to maintain the right of 
tenure.  The minimum expenditure requirements, including interests in joint venture arrangements, for current tenements 
held is as follows:

Within one year

After one year but not more than five years

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

29

157

186

209 

691

900

(d)  Contingencies
The Group did not have any contingent assets or liabilities at the end of the current and previous ﬁnancial periods. 

81

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For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 25. RELATED PARTY TRANSACTIONS

(a)  Ultimate parent
Syrah Resources Limited is the ultimate holding company of the Group.

(b)  Subsidiaries
Interests in subsidiaries are set out in Note 27.

(c)  Key management personnel compensation

Short-term employee benefits

Post-employment benefits

Long term benefits

Share-based payments

6 MONTHS TO
31 DECEMBER 2015
$

12 MONTHS TO  
30 JUNE 2015 
$

716,043

44,563

7,550

2,975,671

3,743,827

1,197,932

68,765

3,087

4,614,644

5,884,428

Detailed remuneration disclosures are provided in the remuneration report on pages 31 to 44.  

(d)  Transactions with related parties
Transactions with related parties are set out below:

Purchases of goods and services

Legal services provided by Sal & Caldeira Advogados, Lda (1)

Accounting and company secretarial services provided by Leydin Freyer (2)

Consultancy services provided by Proman Consulting Engineers Pty Ltd (3)

Consultancy services provided by T Eadie (4) 

Office lease charges paid to Copper Strike Limited (5)

6 MONTHS TO
31 DECEMBER 2015
$

12 MONTHS TO  
30 JUNE 2015 
$

513,547

-

27,500

-

-

553,857

310,142

123,950

62,500

99,000

100,184

695,776

(1) 

(2) 

(3) 

(4) 

(5) 

Represents legal services provided to the Company by Sal & Caldeira Advogados, Ltd in Mozambique. J Caldeira is a Non-Executive Director of the 
Company and is a Senior Partner at Sal & Caldeira Advogados, Lda.

Represents accounting and company secretarial services provided to the Company by Leydin Freyer Corp Pty Ltd. M Leydin, Company Secretary, is 
a principal and has a beneﬁcial interest in Leydin Freyer Corp Pty Ltd. M Leydin ceased to be classiﬁed as Key Management Personnel from  
5 January 2015.

Represents consultancy services provided to the Company by R Brans who is a Non-Executive Director of the Company.  

Represents consultancy services provided to the Company by T Eadie as part of the demerger of Jacana Minerals Limited. T Eadie was  
Non-Executive Chairman of the Company until his resignation on 2 October 2014.

Represents oﬃce lease charges paid to Copper Strike Limited a shareholder of Syrah Resources Limited. T Eadie who was Non-Executive 
Chairman of the Company until his resignation on 2 October 2014 is also Non-Executive Chairman of Copper Strike Limited.

For personal use only 
 
 
 
 
 
 
 
NOTE 25. RELATED PARTY TRANSACTIONS (CONTINUED)

(e)  Outstanding balances arising from purchases of goods and services

Trade and other payables

Related parties

31 DECEMBER 2015
$

30 JUNE 2015 
$

77,266

77,266

73,201

73,201

NOTE 26. REMUNERATION OF AUDITORS 
During the ﬁnancial period the following fees were paid or payable for services provided by the auditor of the parent entity, 
its related practices and non-related audit ﬁrms.

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

 (a)  PricewaterhouseCoopers Australia

Audit of group financial statements:

PwC Australian firm

Network firms of PwC Australian firm 

Total remuneration for audit services

Non-assurance services

Tax compliance services

Tax consulting services

Total remuneration for non-assurance services

Total remuneration paid to PricewaterhouseCoopers

(b)  Grant Thornton Audit Pty Ltd

Audit and review of financial reports

Total remuneration of Grant Thornton

82

43

125

23

308

331

446

-

-

-

-

-

-

-

-

-

72

72

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For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

NOTE 27. SUBSIDIARIES 
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance 
with the accounting policy described in Note 1. 

PRINCIPAL PLACE OF BUSINESS /
COUNTRY OF INCORPORATION

PERCENTAGE OF EQUITY INTEREST 
HELD BY THE GROUP

31 DECEMBER
2015 
% 

30 JUNE  
2015
%

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NAME

Jacana Resources Limited

Syrah Resources (KSA) Pty Ltd

Twigg Exploration and Mining, Limitada

Jacana Resources (Zambia) Ltd

Syrah Resources Saudi Arabia LLC

Syrah Resources Group Holdings Pty Ltd (1)

Australia

Australia

Mozambique

Zambia

Saudi Arabia

Australia

Syrah Resources and Trading DMCC (2)

United Arab Emirates

(1)    Syrah Resources Group Holdings Pty Ltd was incorporated on 6 November 2015.

(2)    Syrah Resources and Trading DMCC was incorporated on 10 September 2015.

100

100

100

100

100

100

100

100

100

100

100

100

-

-

For personal use only 
 
 
 
 
 
 
 
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NOTE 28. DEED OF CROSS GUARANTEE
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the others:

Syrah Resources Limited 
Jacana Resources Limited

By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare ﬁnancial 
statements and a directors’ report under Class Order 98/1418 (as amended) issued by the Australian Securities and 
Investments Commission (‘ASIC’).

The above companies represent a ‘Closed Group’ for the purposes of the Class Order, and as there are no other parties 
to the Deed of Cross Guarantee that are controlled by Syrah Resources Limited, they also represent the ‘Extended Closed 
Group’.

(a)  Consolidated statement of comprehensive income and summary of movements in 

consolidated accumulated losses

Set out below is a consolidated statement comprehensive income and a summary of movements in consolidated 
accumulated losses for the current or previous ﬁnancial period for the ‘Closed Group’.

Consolidated statement of comprehensive income

Revenue from continuing operations

Other income

Expenses

Legal and consulting expense

Administration expenses

Employee benefits expense

Depreciation and amortisation expense

Exploration and evaluation costs written off

Impairment of available-for-sale financial assets

Loss for the period before income tax expense

Income tax expense

Loss after income tax expense for the period

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

392

5,914

(1,378)

(937)

(5,431)

(44)

(2)

(70)

(1,556)

-

(1,556)

290

868

(1,256)

(2,826)

(8,054)

(405)

(2)

(132)

(11,517)

-

(11,517) 

Total comprehensive income for the period

(1,556)

(11,517) 

Summary of movements in consolidated accumulated losses

Balance at beginning of period

Loss after income tax expense for the period

Balance at end of period

(27,140)

(1,556)

(28,696)

(15,623)

(11,517)

(27,140)

For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

NOTE 28. DEED OF CROSS GUARANTEE (CONTINUED)

(b)  Consolidated statement of ﬁnancial position
Set out below is a consolidated statement of ﬁnancial position as at the end of the current and previous ﬁnancial period for 
the ‘Closed Group’.

31 DECEMBER 2015
$’000

30 JUNE 2015 
$’000

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Current assets

Cash and cash equivalents

Trade and other receivables

Available-for-sale financial assets

Total current assets

Non-current assets

Property, plant and equipment

Intangibles

Mine properties and development

Exploration and evaluation

Investments

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Provisions

Total current liabilities

Non-current liabilities

Provisions

Total non-current liabilities

Total liabilities

Net assets

Equity

Issued capital

Reserves

Accumulated losses

Total equity

46,917

921

163

48,001

836

137

42,639

1,218

178,715

223,545

8,891

889

33

9,813

899

182

19,798

811

30,793

52,483

271,546

62,296

5,768

154

5,922

13

13

2,069

141

2,210

9

9

5,935

2,219

265,611

60,077

284,430

9,877

(28,696)

80,911

6,306

(27,140)

265,611

60,077

For personal use only 
 
 
 
 
 
 
 
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NOTE 29.  RECONCILIATION OF PROFIT AFTER INCOME TAX TO 
NET CASH INFLOW FROM OPERATING ACTIVITIES

Loss after income tax expense for the year

Adjustments for:

Depreciation and amortisation

Share-based payments

Exploration and evaluation costs written off

Impairment of assets

Net foreign exchange gain

Reserves released to profit on demerger of Jacana Minerals Limited

Changes in operating assets and liabilities:

(Increase) / decrease in trade and other receivables

Increase / (decrease) in trade and other payables

Increase / (decrease) in provisions

Net cash inflow / (outflow) from operating activities

NOTE 30. EARNINGS PER SHARE

Basic earnings per share

From continuing operations attributable to the ordinary equity holders  
of the Company

From discontinued operations attributable to the ordinary equity holders  
of the Company

Total basic earnings per share attributable to the ordinary equity holders  
of the Company

Diluted earnings per share

From continuing operations attributable to the ordinary equity holders 
of the Company

From discontinued operations attributable to the ordinary equity holders 
of the Company

Total diluted earnings per share attributable to the ordinary equity holders 
of the Company

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

(3,258)

(11,633)

328

4,177

-

1,151

(5,995)

-

(443)

287

44

(3,709)

656

5,741

151

132

-

(790)

(271)

(133)

42

(6,105)

6 MONTHS TO
31 DECEMBER 2015 
CENTS

12 MONTHS TO
30 JUNE 2015
(ADJUSTED) (1)
CENTS

(1.51)

-

(1.51)

(1.51)

-

(1.51)

(7.26)

0.27

(6.99)

(7.26)

0.27

(6.99)

(1) 

Basic earnings per share for the 12 months to 30 June 2015 has been adjusted as a result of the pro-rata accelerated renounceable Entitlement 
Oﬀer as announced on 3 August 2015 where eligible shareholders were able to subscribe for 4 new Syrah shares for every 19 existing shares.  

For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 30. EARNINGS PER SHARE (CONTINUED)

(a)  Reconciliations of earnings used in calculating earnings per share

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

Basic earnings per share

Profit/(loss) attributable to the ordinary equity holders of the Company used 
in calculating basic earnings per share from continuing operations

Profit/(loss) attributable to the ordinary equity holders of the Company used 
in calculating basic earnings per share from discontinued operations

Total profit/(loss) attributable to the ordinary equity holders of the Company 
used in calculating basic earnings per share

Diluted earnings per share

Profit/(loss) attributable to the ordinary equity holders of the Company used 
in calculating diluted earnings per share from continuing operations

Profit/(loss) attributable to the ordinary equity holders of the Company used 
in calculating diluted earnings per share from discontinued operations

Total profit/(loss) attributable to the ordinary equity holders of the Company 
used in calculating diluted earnings per share

(b)  Weighted average number of shares used as the denominator

(3,258)

(12,076)

-

443

(3,258)

(11,633)

(3,258)

(12,076)

-

443

(3,258)

(11,633)

Weighted average number of ordinary shares used as the denominator in 
calculating basic earnings per share

Weighted average number of ordinary shares used as the denominator in 
calculating diluted earnings per share

6 MONTHS TO
31 DECEMBER 2015 
NUMBER

12 MONTHS TO
30 JUNE 2015
(ADJUSTED) (1)
NUMBER

215,758,310

166,225,691

215,758,310

166,225,691

(1) 

The weighted average number of shares for the 12 months to 30 June 2015 has been adjusted as a result of the pro-rata accelerated  
renounceable Entitlement Oﬀer as announced on 3 August 2015 where eligible shareholders were able to subscribe for 4 new Syrah shares  
for every 19 existing shares.  

Options

The rights to options held by option holders have not been included in the weighted average number of ordinary shares  
for the purposes of calculating diluted EPS as they do not meet the requirements for inclusion in AASB 133 “Earnings  
per Share”. The rights to options are non-dilutive as the group is loss making. 

For personal use only 
 
 
 
 
 
 
 
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NOTE 31. SHARE-BASED PAYMENTS

(a)  Types of share based payment plans
The Group has a Long Term Incentive Plan and a Share Option Plan in existence. 

These share based payment plans form an important part of a comprehensive remuneration strategy for the Company’s 
employees and directors, and aligns their interests with those of shareholders by linking rewards to the long term success of 
the Company and its ﬁnancial performance. 
(i)  Long Term Incentive Plan (LTIP)
The LTIP was established and approved by shareholders at an Annual General Meeting held on 13 November 2015 and 
enables the Company, at the discretion of the Board of Directors, to oﬀer employees and directors a number of equity 
related interests, including options, performance rights and shares. 
(ii)  Share option plan (SOP)
The SOP was established and approved by shareholders at an Annual General Meeting held on 19 November 2013 and 
enables the Company, at the discretion of the Board of Directors, to oﬀer employees and directors options. No further 
options will be issued under this plan. 

(b)  Summary and movement of Options on issue
The table below summarises the number, weighted average exercise prices and movements in options issued during the 
ﬁnancial period: 

6 MONTHS TO
31 DECEMBER 2015

12 MONTHS TO 
30 JUNE 2015

WEIGHTED 
AVERAGE 
EXERCISE PRICE 
PER SHARE 
OPTION (1)

$4.56

$4.64

$0.15

$0.17

$5.17

$5.89

WEIGHTED 
AVERAGE 
EXERCISE PRICE 
PER SHARE 
OPTION (2)

$1.85

$5.32

$1.57

-

$4.61

$2.33

NUMBER OF 
OPTIONS

6,622,005

1,250,000

(925,001)

(4)

6,947,000

3,572,000

NUMBER OF 
OPTIONS

4,294,467

5,050,000

(2,722,462)

-

6,622,005

1,572,005

Balance at beginning of the period

Granted during the period

Exercised during the period (3)

Expired during the period

Balance at end of the period

Vested and exercisable at end of period

(1) 

Eﬀective from 9 September 2015, the exercise price of options were reduced by $0.05 (5 cents) per option in accordance with the terms of  
the options, ASX Listing Rule 3.11.2 and the formula contained in ASX Listing Rile 7.22.3 as a result of the issuance of shares from the 4 for  
19 accelerated renounceable entitlement oﬀer. The weighted average exercise price per share option as at 30 June 2015 does not incorporate 
this change. 

(2)  On 15 October 2014, the exercise price of options were reduced on $0.04 (4 cents) per option in accordance with the term of the options,  

ASX Listing Rules 3.11.2 and the formula contained in ASX Listing Rule 7.22.3 as a result of the demerger of Jacana Minerals Limited and the  
3 for 10 Jacana Minerals share distribution. The weighted average exercise prices per share option for the year ended 30 June 2015 incorporates 
this change. 

(3) 

The weighted average share price at the date of exercise of options exercised during the period ended 31 December 2015 was $3.53  
(30 June 2015: $4.48)

Each option is convertible into one ordinary share. There are no voting or dividend rights attached to the options. Voting and 
dividend rights will attach to the ordinary shares when the options have been exercised.

For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

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NOTE 31. SHARE-BASED PAYMENTS (CONTINUED)

(b)  
Summary and movement of Options on issue (continued)
The outstanding balance of options as at 31 December 2015 is represented by: 
Options issued as part of the SOP
5,947,000 options with an exercise price ranging from $nil to $6.26
Options issued as part of the LTIP
1,000,000 options with an exercise price of $4.71

Share options outstanding at the end of the ﬁnancial period have the following expiry date and exercise prices: 

GRANT DATE

EXPIRY DATE

15 December 2011 

15 December 2015

16 July 2012

19 May 2014

12 June 2014

16 July 2016

19 May 2019

12 June 2016

2 October 2014

2 October 2019

28 January 2015

28 January 2018

27 April 2015

27 April 2017

7 May 2015

9 June 2015

7 May 2018

9 June 2018

26 October 2015

26 October 2020

1 December 2015

1 December 2018

TOTAL Options

EXERCISE 
PRICE (1) (2)

SHARE OPTIONS 
31 DECEMBER 
2015

SHARE OPTIONS 
30 JUNE 2015

$0.17 

$2.12 

$5.41

$2.81

$6.26 

$4.08

- (3)

$5.40

$4.99

$4.38

$4.71

-

22,000

500,000

250,000

2,800,000

1,200,000

125,000

500,000

300,000

250,000

1,000,000

6,947,000

800,005

22,000

500,000

250,000

2,800,000

1,200,000

250,000

500,000

300,000

-

-

6,622,005

Weighted average remaining contractual life of options  
outstanding at the end of the period

3.03 years

1.72 years 

(1)  

Eﬀective from 9 September 2015, the exercise price of options was reduced by $0.05 (5 cents) per option in accordance with the term of the 
options, ASX Listing Rule 3.11.2 and the formula contained in ASX Listing Rule 7.22.3 as a result of the issuance of shares from a 4 for 19 
accelerated renounceable entitlement oﬀer. The exercise price included in the above table incorporates this change. 

(2)   On 15 October 2014, the exercise price of options was reduced by $0.04 (4 cents) per option in accordance with the term of the options, ASX 

Listing Rules 3.11.2 and the formula contained in ASX Listing Rule 7.22.3 as a result of the demerger of Jacana Minerals Limited and the 3 for 10 
Jacana Minerals Limited share distribution. The exercise price included in the above table incorporates this change. 

(3)   Represents options that were granted to a selected senior employee for NIL consideration with exercise conditional on the achievement of certain 

performance hurdles that are aligned with the creation of shareholder value.

Fair value of options granted
For the options granted during the current ﬁnancial period, the valuation model inputs used to determine the fair value at 
the grant date are as follows: 

GRANT DATE

EXPIRY DATE

26 October 2015

26 October 2015

1 December 2015 1 December 2018

SHARE 
PRICE AT 
GRANT 
DATE

$3.13

$3.48

EXERCISE 
PRICE

EXPECTED 
VOLATILITY

DIVIDEND 
YIELD

RISK-FREE 
INTEREST 
RATE

FAIR VALUE 
AT GRANT 
DATE

$4.38

$4.71

52.70%

52.65%

-

-

1.857%

2.080%

$1.18

$0.96

For personal use only 
 
 
 
 
 
 
 
NOTE 31. SHARE-BASED PAYMENTS (CONTINUED)

(c)  Summary and movement of Performance Rights on issue
The table below summarises the number and movements in performance rights issued during the ﬁnancial period: 

Balance at the beginning of the period 

Granted during the period

Vested during the period

Lapsed during the period

Forfeited during the period

Balance at the end of the period

6 MONTHS TO
31 DECEMBER 2015
NUMBER

12 MONTHS TO  
30 JUNE 2015 
NUMBER

-

100,707

-

-

-

100,707

-

-

-

-

-

-

Performance rights on issue as part of the LTIP have a nil exercise price.

During the ﬁnancial period 100,707 performance rights were issued to selected Senior Employees and will be subject to 
performance testing at 31 December 2017.

(d)  Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the ﬁnancial period as part of employee 
beneﬁt expense were as follows:

Options issued under the LTIP and SOP

Performance rights issued under the LTIP

Shares to be issued under the LTIP (1) 

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

3,315

95

767

4,177

5,741

-

-

5,741

(1) 

Represents amount expensed for a once-oﬀ bonus of 142,745 shares awarded to T. Kumova (subject to shareholder approval) and  
75,493 shares awarded to selected senior employees (issued on 19 February 2016) in recognition of the signiﬁcant contribution made to ensure 
the ﬁnalisation of the feasibility study, the success of the Company’s fundraising activities, the commencement of mine development and the 
on-going work to establish key sales and marketing targets as the mine moves towards commissioning.

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For personal use only 
 
 
 
 
 
 
 
FINANCIAL  
STATEMENTS  
CONTINUED

NOTE 32. PARENT ENTITY FINANCIAL INFORMATION

 Summary ﬁnancial information

(a) 
The individual ﬁnancial statements for the parent entity show the following aggregate amounts:

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Balance sheet

Current assets

Total assets

Current liabilities

Total liabilities

Shareholders’ equity

Issued capital

Share-based payments reserve 

Accumulated losses

Total equity

6 MONTHS TO
31 DECEMBER 2015
$’000

12 MONTHS TO  
30 JUNE 2015 
$’000

48,001

271,627

5,922

5,934

284,430

9,877

(28,614)

265,693

9,812

62,376

2,209

2,219

80,910

6,305

(27,058)

60,157

Loss after income tax for the year

(1,556)

(11,465) 

Total comprehensive income for the year

(1,556)

(11,465) 

(b)  Contingent liabilities of the parent entity
The parent entity has no contingent liabilities as at 31 December 2015 and 30 June 2015. 

NOTE 33. EVENTS OCCURRING AFTER THE REPORTING PERIOD
No event has occurred subsequent to 31 December 2015 that has signiﬁcantly aﬀected, or may signiﬁcantly aﬀect, the 
Group’s operations, the results of those operations, or the state of aﬀairs in future ﬁnancial periods.

For personal use only 
 
 
 
 
 
 
 
DIRECTORS’ 
DECLARATION

In the Directors’ opinion: 

(a)  the ﬁnancial statements and notes set out on pages 48 to 92 are in accordance with the Corporations Act 2001, 

including: 

(i)   complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional 

reporting requirements, and 

(ii)   giving true and fair view of the consolidated entity’s ﬁnancial position as at 31 December 2015 and of its 

performance for the six month ﬁnancial period ended on that date, and

(b)  there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due 

and payable, and 

(c)  at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group 
identiﬁed in Note 28 will be able to meet any obligations or liabilities to which they are, or may become, subject by 
virtue of the deed of cross guarantee described in Note 28.

Note 1(a) conﬁrms that the ﬁnancial statements also comply with International Financial Reporting Standards as issued by 
the International Accounting Standards Board. 

The Directors have been given the declarations by the Managing Director and Chief Financial Oﬃcer as required by section 
295A of the Corporations Act 2001. 

This declaration is made in accordance with a resolution of the Directors.

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James Askew 
Chairman 

Melbourne, Australia

31 March 2016 

Tolga Kumova 
Managing Director

For personal use only 
 
 
 
 
 
 
 
INDEPENDENT 
AUDITOR’S  
REPORT

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SHAREHOLDER  
INFORMATION

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ADDITIONAL ASX INFORMATION
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this report is as 
follows. The shareholder information set out below was applicable as at 29 March 2016 except where otherwise indicated.

EQUITY SECURITY HOLDERS

Top 20 largest quoted security holders as at 29 March 2016
The names of the twenty largest security holders of quoted equity securities are listed below:

RANK NAME

UNITS 

% OF UNITS

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

J P MORGAN NOMINEES AUSTRALIA LIMITED

CITICORP NOMINEES PTY LIMITED

NATIONAL NOMINEES LIMITED

COPPER STRIKE LIMITED

KITARA INVESTMENTS PTY LTD 

MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED

CREDIT SUISSE SECURITIES (EUROPE) LTD

MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LTD

HARALAMBOS HATZIKYRIAZIS

BNP PARIBAS NOMINEES PTY LTD

BNP PARIBAS NOMS PTY LTD

CS FOURTH NOMINEES PTY LIMITED

UBS NOMINEES PTY LTD

GONDWANA INVESTMENT GROUP PTY LTD

BUPRESTID PTY LTD

CITICORP NOMINEES PTY LIMITED

18. MR TOLGA KUMOVA

19.

20.

FINANCE ASSOCIATES PTY LTD

ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD

Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL)

Total Remaining Holders Balance

Unquoted equity securities as at 29 March 2016

Options over ordinary shares

Performance rights over ordinary shares

34,039,448

32,168,189

29,532,386

13,780,350

11,000,005

10,213,015

6,930,617

6,350,000

5,988,371

4,223,888

3,592,000

3,329,478

3,300,000

2,818,576

2,777,778

1,895,000

1,743,117

1,530,542

1,400,000

1,360,305

177,973,065

53,369,582

14.71

13.90

12.77

5.96

4.75

4.41

3.00

2.74

2.59

1.83

1.55

1.44

1.43

1.22

1.20

0.82

0.75

0.66

0.61

0.59

76.93

23.07

NUMBER  
ON ISSUE

 6,947,000 

 100,707 

NUMBER OF 
HOLDERS

 13 

 2 

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DISTRIBUTION OF EQUITABLE SECURITIES
Analysis of number of equitable security holders by size of holding:

RANGE

1 to 1,000

1,001 to 5,000

5,001 to 10,000

10,001 to 100,000

100,001 and over

TOTAL HOLDERS

1,268

1,392

483

632

104

3,879

UNITS

625,469

3,692,101

3,841,002

18,415,455

204,768,620

231,342,647

% OF  
ISSUED CAPITAL

0.27

1.60

1.66

7.96

88.51

100.00

The number of shareholders holding less than a marketable parcel of Ordinary Shares at 29 March 2016 was 212.

VOTING RIGHTS
The voting rights attached to ordinary shares are set out below:

ORDINARY SHARES
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each 
share shall have one vote.

There are no other classes of equity securities.

SUBSTANTIAL SHAREHOLDERS
An extract of the Company’s Register of Substantial Shareholders as at 29 March 2016 is set out below:

RANK NAME

UNITS 

% OF UNITS

1.

2.

3.

4.

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

J P MORGAN NOMINEES AUSTRALIA LIMITED

CITICORP NOMINEES PTY LIMITED

NATIONAL NOMINEES LIMITED

34,039,448

32,168,189

29,532,386

13,780,350

14.71

13.90

12.77

5.96

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SHAREHOLDER 
INFORMATION  
CONTINUED

TENEMENT SCHEDULE
as at 31 March 2016

DESCRIPTION

Balama

Balama (1)

Botswana

Botswana

Botswana

Botswana

Sasare North

TENEMENT 
NUMBER

6432C

5684L

347/2014

348/2014

349/2014

350/2014

17904-HQ-LPL

INTEREST  
OWNED

100%

100%

100%

100%

100%

100%

100%

(1)   Syrah has entered into a tenement sale agreement (TSA) for the acquisition of a tenement (Tenement) in Balama from  a third party (Seller). 
Under the TSA, Syrah may be required to issue to the Seller, as part of the contingent consideration for the acquisition of the Tenement, up to 
US$2.0 million of fully paid ordinary shares (Sale Shares) in various tranches, with the number of Sale Shares under each tranche to be calculated 
based on the 30 day volume weighted average price of Syrah shares prior to the issue date.  The Sale Shares (if issued) will rank equally with  
Syrah’s existing shares, and will not be issued to an existing class of security holders in Syrah. It is not expected that security holder approval  
will be required for the issue of Sale Shares.

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SYRAH RESOURCES LIMITED
ABN 77 125 242 284 

Level 9, 356 Collins Street
Melbourne Victoria 3000

t: +61 3 9670 7264
e: enquiries@syrahresources.com.au
w: www.syrahresources.com.au

For personal use only