ACN 153 868 789
ANNUAL REPORT 2019
CONTENTS
Company Information
Review of Operations
Directors’ Report
Corporate Governance Statement
Auditor’s Independence Declaration
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Details
Interests in Tenements
AND CONTROLLED ENTITIES
3
4
15
26
27
28
29
30
31
32
55
56
59
61
Taruga Minerals Limited
Page 2
COMPANY INFORMATION
AND CONTROLLED ENTITIES
ACN
Directors
153 868 789
Mark Gasson
Sheena Eckhof
Bernard Aylward
Gary Steinepreis
Executive Director
Executive Director
Non-Executive Director
Non-Executive Director
Joint Company
Secretaries
Daniel Smith
Sylvia Foong
Registered Office
Level 8,
99 St Georges Terrace
Perth WA 6000
Telephone:
Facsimile:
+61 8 9486 4036
+61 8 9486 4799
Share Registry
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross WA 6153
Auditor
Bankers
Telephone:
Facsimile:
1300 992 916
+61 8 9315 2233
HLB Mann Judd
Level 4, 130 Stirling Street
Perth, WA 6000
Telephone:
Facsimile:
+61 8 9227 7500
+61 8 9227 7533
Westpac Banking Corporation
116 James Street
Northbridge
Perth, WA 6000
Securities Exchange Listing
Taruga Minerals Limited Shares are listed on the Australian Securities Exchange.
The home exchange is Perth, Western Australia.
ASX Code: TAR
Website
www.tarugaminerals.com.au
Taruga Minerals Limited
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REVIEW OF OPERATIONS
AND CONTROLLED ENTITIES
REVIEW OF OPERATIONS
Company Overview
Taruga Minerals Limited (Taruga or the Company) is an exploration company that listed on the Australian
Securities Exchange (ASX) on 7 February 2012. Taruga is focused on the exploration of key commodities
required for Electric Vehicle (EV) Batteries, including Cobalt, Copper and Lithium exploration in the
Democratic Republic of Congo (DRC) and Australia.
During FY2019 Taruga completed technical due diligence drilling on two advanced Cobalt and Copper
projects, Kamilombe and Mwilu, and continued to review and evaluate other opportunities prospective for
Copper, Cobalt and Lithium within the DRC in conjunction with its DRC consultants. Finalisation of the
Kamilombe and Mwilu licence acquisitions have experienced delays due to no Provincial Government or
National Parliament appointments, other than that of the President and Prime Minister, being made since
the elections in December 2018. Consequently, there has been a lack of high-level availability and decision
making to finalise the license agreements. All outstanding Government and Parliament appointments were
made on 6 September 2019 and the Company is now confident that finalisation of title agreements is
imminent.
In addition to the African projects, Taruga has also pursued new opportunities in Australia and during the
year announced two projects regarded as prospective for Cobalt and Lithium in the mid-west region of
Western Australia.
The Company successfully concluded Tranche 2 of the placement announced 19 June 2018 during the
financial year, with funds raised totalling $1.0m.
Projects Overview
Taruga is a mineral exploration company which has projects located in the mineral rich DRC and Western
Australia.
Democratic Republic of Congo
Taruga has entered into option agreements to acquire a range of highly prospective cobalt and copper
projects in the DRC. All concessions are shown in Figure 1 highlighting their position within the ‘Kolwezi
Klippe’, Central African Copper Belt.
Taruga Minerals Limited
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REVIEW OF OPERATIONS
AND CONTROLLED ENTITIES
Figure 1: Regional geology showing location of Taruga’s optioned tenements
In February 2018, Taruga entered into an agreement with a consortium including the Government of
Lualaba Province and local construction and development company, Mint-Master, to earn a 60% interest in
the high grade Kamilombe (portion of PE 11599 and 2605) and Mwilu (portion of Permis d’Exploitation –
PE 4960) Cobalt-Copper projects. During the first half FY2019 the Company has completed due diligence
diamond drilling programmes on both projects which highlighted the high-grade cobalt and copper potential
at Kamilombe and mostly broad low grade cobalt mineralisation at Mwilu. Drilling and mapping during the
due diligence period determined that only a portion of the mineralised structures were covered by the
Kamilombe licence as provided in the initial agreement with the Consortium. A corporate decision was made
to acquire additional ground surrounding the current Kamilombe licence which would include the strike
continuity of defined mineralised structures and an open area for infrastructural mine development. It was
further decided that the additional acquisition should be concluded during the due diligence period. The
Company’s initial focus is to conclude the new Kamilombe acquisition after which the Company will focus
on Mwilu or a replacement project.
Taruga has received an extension to complete the due diligence at both Kamilombe and Mwilu or a
replacement permit. The mutually agreed extension is for 60 days from the successful signing of new title
agreements currently under discussion between La Générale des Carrières et des Mines (Gecamines) and
Mint-Master (Title Agreements) as and when agreements are concluded.
Taruga Minerals Limited
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REVIEW OF OPERATIONS
AND CONTROLLED ENTITIES
Figure 2: Geological map of the Kolwezi “Klippe” showing the Mwilu and Kamilombe project areas
and known mines and deposits
Kamilombe Project
Kamilombe covers a surface area of 2.37km2 and has similar geology to bordering KCC Katanga’s deposit
where a 275Mt @ 3.66% Cu and 0.55% Co Measured and Indicated Resource has been defined.1
Taruga twinned 5 historic holes for 999m drilled at Kamilombe as no information was available as to
methods of analysis or aggradation methods used to calculate reported grades.
During the period, the Company reported the following high grade cobalt and copper results:2,3
- KMDD001: 31.21m @ 0.52% Co from 33.1m including 3.04m @ 1.45% Co from 36.4m and 5.18m
at 1.05% Co from 57.7m
- KMDD001: 24.5m @ 1.22% Cu from 138.3m and 8.12m @ 0.1% Co from 144.08m
1 Refer to Ni 43-101 Technical Report released by Katanga Mining Limited, dated 31 March 2018
2 For KMDD001 result table please refer to Table 1 in the following ASX announcement: 30 Jul 2018 High Grade Cobalt and
Copper Results at the Kamilombe Project in the DRC
3 For KMDD002-005 result table please refer to Table 1 in the following ASX announcement: 31 Aug 2018 High Grade Cobalt
Mineralisation Confirmed at Kamilombe Project in the DRC
Taruga Minerals Limited
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REVIEW OF OPERATIONS
AND CONTROLLED ENTITIES
- KMDD002: 16.28m @ 0.2% Co from 164.6m
- KMDD004: 10.72m @ 0.38% Co from 40m
- KMDD005: 50.87m @ 0.49% Co from 5.8m including 13.68m @ 1.21% Co from 30.47m and 8.85m
@ 0.41% Co from 88.85
- KMDD005: 8.85m @ 1.32% Cu from 88.5m
Drilling confirmed that Kamilombe is first and foremost a cobalt project with copper mineralisation coming in at
deeper levels.
Figure 3: Interpreted geology from Gecamines showing historic diamond holes and 5 twinned diamond
holes completed by Taruga
Thicknesses of the mineralised intersections are close to true thickness as bedding in the highly weathered
stratigraphic units appears to be flat as shown in section in Figures 4 and 5. The sections further show that the
mineralised Mines R2 units have been duplicated from thrusting thereby increasing the overall resource potential.
Taruga Minerals Limited
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REVIEW OF OPERATIONS
AND CONTROLLED ENTITIES
Figure 4: Interpreted section across KMDD005 highlighting the near surface and shallow dipping
mineralized RSC unit and lower RAT unit
Figure 5: Interpreted section across KMDD001 and KMDD002
Taruga Minerals Limited
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REVIEW OF OPERATIONS
AND CONTROLLED ENTITIES
Metallurgy
As announced 31 January 2019, results received for provisional metallurgical studies on the DStrat
stratigraphic unit at Kamilombe demonstrate the potential for concentrate grades of 4.1% Co to 12.6% Co
and cobalt recoveries between 59% and 70% from simple gravity beneficiation. The DStrat unit occurs as
highly friable sandy material and would therefore not require crushing, thus reducing processing costs.
The testwork has provided early indications of how the orebody may be processed to maximise economic
returns from an early, shallow mining operation. Cashflow generated from shallow mining would be used
towards a deeper resource drilling programme and feasibility studies at Kamilombe. Taruga is hopeful that
a simple flowsheet and an economical processing facility can be confirmed in more detail following further
testwork on exploration drill core.
Mwilu Project
Mwilu covers 3.36km2 within the Kolwezi “Klippe” (Figure 6) which hosts a number of the largest known
cobalt and copper mines and borders the city of Kolwezi to the north. The area is currently being mined at
shallow levels by artisanal miners who are providing cobalt ore to the consortium, the sale of which is used
to fund ongoing development projects in the Lualaba Province.
During the first half FY2019 Taruga completed 8 diamond drill holes for a total of 1,247m as part of the
technical due diligence at Mwilu. Two drill fences were completed to test the near surface cobalt grades of
Mines R2 series lithologies within two interpreted fold structures as shown in Figures 6, 7 and 8.
Drilling confirmed low grade cobalt mineralisation within a shallow dipping northern zone as shown in
section in Figures 4 and 5 and high grade cobalt and copper mineralisation in a southern steeply dipping
shear. Best results from the northern zone included:4,5
- MWDD004: 16.30m @ 0.16% Co from 31.9m, 46.60m @ 0.12% Co from 81.55m and 6.20m @
0.32% Co from 164.85m
- MWDD007: 33.80m @ 0.14% from 57.6m
The northern zone attains a maximum depth of roughly 170m and is approximately 700m wide.
A highly significant result of 6.40m at 1.11% Co from 282.45m within a broader zone of 42.85m at 0.39% Co
from 256.55m was reported from hole MWDD008 which targeted the southern zone. A significant copper
intersection of 13.05m at 2.02% Cu from 264.5m including 8.40m at 2.7% Cu from 269.15m was reported from
the same zone. Channel sampling within artisanal workings at surface reported 19.32m at 0.33% Co including
9.87m at 0.55% Co from the same zone at surface, suggesting continuous mineralisation down to a vertical depth
of 280m.
The Company will focus on finalising the tenure at Kamilombe before making a decision on Mwilu where the
northern zone has little potential due to the low grade cobalt tenor and the southern zone will need to be mined
by more costly underground mining methods.
4 For MWDD001-003 result table please refer to Table 2 in the following ASX announcement: 31 Aug 2018 High Grade Cobalt
Mineralisation Confirmed at Kamilombe Project in the DRC
5 For MWDD004-008 result table please refer to Table 1 in the following ASX announcement: 14 Sep 2018 All Results Reported
for Due Diligence at Mwilu and Kamilombe Projects in the DRC
Taruga Minerals Limited
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REVIEW OF OPERATIONS
AND CONTROLLED ENTITIES
Figure 6: Interpreted geology and drilling results at Mwilu
Taruga Minerals Limited
Page 10
REVIEW OF OPERATIONS
AND CONTROLLED ENTITIES
Figure 7: Cross section across the northern zone showing mineralisation confined to the synclinal
structure on geology
Figure 8: Cross section across both the northern and southern zone showing mineralisation
confined to the synclinal structure in the northern zone and the steeply dipping southern zone on
geology
Taruga Minerals Limited
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REVIEW OF OPERATIONS
AND CONTROLLED ENTITIES
Central African Copperbelt
All tenements are located within the Central African Copper Belt, which hosts many of the largest known
copper-cobalt deposits both in the south-eastern DRC and Zambia.
The geology of the Copper Belt sequence has been well studied, and a substantial history of mining and
exploration provides a strong platform for future development work. Cobalt-copper mineralisation was
traditionally expected within the lower sedimentary sequences of the Lower Roan sub-group of rocks known
as the Mines Group (R-2), although recent exploration has led to the discovery of several deposits in the
overlying Mwashya (R-4) and Nguba Groups. The most significant example being Ivanhoe’s Kamoa
deposits (>25m tonnes of contained copper) hosted in the “Grand Conglomerate Formation” at the base of
the Lower Kundulungu. These new discoveries have highlighted the potential for additional units with the
geological formation to host major cobalt-copper mineralisation and significantly highlight large areas of
prospective ground that has had little to no previous exploration.
Australia
Cobalt Exploration
Exploration licence E51/1832 was granted on the 5th October 2018. The licence is located 30km southeast
of the regional centre of Meekatharra in the Murchison region of Western Australia. The Company has
undertaken a review of the historic exploration and activity in the region and reviewed aeromagnetic data
to prepare an updated geological model. The Company is planning for a broad geochemical survey
targeting cobalt mineralisation following further ground reconnaissance.
Lithium
The Company has exploration licence applications in the Greenbushes region of Western Australia pending.
The licences are subject to review by the Department of Environment relating to proposed activities and
licence conditions. (Figure 9).
Taruga identified the region as highly prospective for the discovery of additional lithium mineralised
pegmatite bodies through review of historic data and geological mapping completed by the Geological
Survey of Western Australia. The tenement areas contain identified Lithium exploration targets, including
the historic Tin-Tantalum-Lithium Yeraminup prospect. The geological setting is interpreted to be analogous
to the setting of the Greenbushes mine, and a detailed exploration programme of mapping and sampling is
proposed for the tenements when granted.
Taruga Minerals Limited
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REVIEW OF OPERATIONS
AND CONTROLLED ENTITIES
Figure 9: Taruga Minerals Limited – Tenement Application Location Plan
Competent Person’s Statement – Exploration Results
The information in this report that relates to exploration results is based on, and fairly represents information
and supporting documentation prepared by Mr Mark Gasson, a Competent Person who is a Member of The
Australasian Institute of Mining and Metallurgy. Mr Gasson is an Executive Director of Taruga Minerals
Limited. Mr Gasson has sufficient experience that 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 Resource
and Ore Reserves”. Mr Gasson consents to the inclusion in this report of the matters based on his
information in the form and context in which it appears.
Taruga Minerals Limited
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REVIEW OF OPERATIONS
AND CONTROLLED ENTITIES
CORPORATE
Capital raisings
On 17 September 2018, the Company announced that it had issued 2,380,952 ordinary shares at a price
of $0.21 per share and 2,380,952 free attaching options, to sophisticated investors as part of the Tranche
2 placement announced 19 June 2018. The placement raised $500,000 before costs.
On 9 November 2018, the Company announced that it had issued 2,380,952 ordinary shares at a price of
$0.21 per share and 2,380,952 free attaching options, to sophisticated investors as part of the Tranche 2
placement announced 19 June 2018, raising $500,000 before costs.
After Balance Date Events
No matters or circumstances have arisen since the end of the financial period which significantly affected
or may significantly affect the operations of the Group, the results of these operations, or the state of affairs
in future financial years.
Taruga Minerals Limited
Page 14
DIRECTOR’S REPORT
AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
Your Directors submit their report on the Group consisting of Taruga Minerals Limited and its controlled
entities (Taruga) for the period ended 30 June 2019.
DIRECTORS
The following persons were Directors of Taruga Minerals Limited during the period and up to the date of
this report unless otherwise stated:
Bernard Aylward
Mark Gasson
Gary Steinepreis
Sheena Eckhof
Non-executive Director
Executive Director
Non-executive Director
Executive Director
In office from
In office to
21 October 2011
28 February 2018
15 July 2016
6 September 2017
present
present
present
present
PARTICULARS OF DIRECTORS
Mark Gasson
Executive Director
BSc (Hons.)
Qualifications and experience
Mr Gasson is a geologist with 33 years of experience and has been active in South Africa, Tanzania and
the DRC since 1986 in gold and base metals exploration and resource development. Mr Gasson served on
the Boards of Tiger Resources, Erongo Energy and Alphamin Resources and as Exploration Manager of a
number of Junior Exploration Companies. He was instrumental in the discovery of Tiger Resources’ 1 million
tonnes Kipoi copper deposit, 250,000 tonnes of tin at 3.5% tin at Alphamin’s Bisie tin project, and 3Moz of
gold at Amani’s Giro deposits, all of which are located in the DRC.
Mr Gasson brings considerable relevant skills and experience to the Board. He is a member of the
Australasian Institute of Mining and Metallurgy.
Interest in Shares and Options
Fully Paid Shares – 8,500,000
Performance Rights – 4,500,000
Options – Nil
Special Responsibilities
Executive Director, technical.
Directorships held in listed entities
Company Name
Tiger Resources Limited
AJN Resources Inc
Appointed
June 2005
2 September 2016
Resigned
June 2017
-
Taruga Minerals Limited
Page 15
DIRECTOR’S REPORT
AND CONTROLLED ENTITIES
Bernard Aylward
Non-Executive Director
BSc (Hons.), MAusIMM
Qualifications and experience
Mr Aylward is a geologist with over 20 years’ experience as a manager and exploration geologist in the
mining and exploration industry in a variety of commodities. Mr Aylward’s experience includes serving as
the Chief Operating Officer of International Goldfields Ltd, General Manager of Azumah Resources Ltd
(Ghana), and Exploration Manager for Croesus Mining NL.
Mr Aylward has been involved in the discoveries and management of the Bepkong, Julie, Collette and
Kunche deposits in Ghana, as well as the Deep South gold deposit, Gladstone North deposit, St Patrick’s,
Norseman Reef, and the Safari Bore gold deposit.
Mr Aylward brings considerable relevant skills and experience to the Board. He is a member of the
Australasian Institute of Mining and Metallurgy.
Interest in Shares and Options
Fully Paid Shares – 5,324,386
Performance Rights – 1,500,000
Options – Nil
Special Responsibilities
None.
Directorships held in listed entities
Company Name
Kodal Minerals Plc.
Lachlan Star Limited
Appointed
20 May 2016
18 January 2018
Resigned
-
-
Gary Steinepreis
Non-Executive Director
B.Com, CA
Qualifications and experience
Mr Steinepreis has in excess of 20 years’ experience with ASX-listing rules, corporate governance and
equity capital raisings. Mr Steinepreis is a Chartered Accountant and holds a Bachelor of Commerce from
University of Western Australia. Mr Steinepreis is currently a Non-Executive Director of CFOAM Limited
and Lachlan Star Limited.
Interest in Shares and Options
Fully Paid Shares – 5,152,502
Performance Rights – 1,500,000
Options – Nil
Special Responsibilities
None.
Taruga Minerals Limited
Page 16
DIRECTOR’S REPORT
Directorships held in listed entities
Company Name
CFOAM Limited
Lachlan Star Limited
Helios Energy Ltd
AVZ Minerals Ltd
Sheena Eckhof
Executive Director B.Com
Qualifications and experience
AND CONTROLLED ENTITIES
Appointed
30 March 2016
18 January 2018
4 June 2010
30 November 2012
Resigned
-
-
11 September 2018
21 August 2017
Miss Eckhof holds a Bachelor of Commerce degree, majoring in Corporate and Investment Finance, from
the University of Western Australia. Miss Eckhof has previously worked with two globally renowned
Investment Banks, with a specific focus on the resources sector and is currently Investor Relations Officer
at Independence Group NL, a West Australian mid-cap resources company.
Interest in Shares and Options
Fully Paid Shares – Nil
Performance Rights – 1,500,000
Options – Nil
Special Responsibilities
Investor Relations.
Directorships held in listed entities
Company Name
AJN Resources Inc.
Information on Company Secretaries
Appointed
26 June 2019
Resigned
-
Daniel Smith
Mr Smith is a member of the Australian Institute of Company Directors and the Governance Institute of
Australia, with a background in finance. He has primary and secondary capital markets expertise, having
been involved in a number of IPOs and capital raisings. He is also a director of Minerva Corporate, a private
corporate consulting firm.
Sylvia Foong
Miss Foong holds a Bachelor of Commerce degree, majoring in Accounting and Finance, from the
University of Western Australia. Miss Foong is a Chartered Accountant, and has a Certificate in Governance
Practice.
OPERATING AND FINANCIAL REVIEW
A review of the operations of the Group during the financial year is contained in the Review of Operations
section of this Annual Report.
Taruga Minerals Limited
Page 17
DIRECTOR’S REPORT
AND CONTROLLED ENTITIES
PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was mineral exploration in Africa and Australia.
Operating Results
The consolidated comprehensive loss after tax for the financial year is $2,914,789 (2018: $11,148,954).
Financial Position
At 30 June 2019 the Company had cash reserves of $401,763 (2018: $2,487,993).
Dividends
No dividends were paid during the year and no recommendation is made as to dividends.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In the opinion of the Directors, there were no significant changes in the state of affairs of the Group that
occurred during the financial year under review not otherwise disclosed in this report or in the consolidated
accounts.
MATTERS SUBSEQUENT TO THE END OF FINANCIAL YEAR
Corporate
No matter has arisen since 30 June 2019 that in the opinion of the directors has significantly affected or
may significantly affect in future financial years (i) the Group’s operations, or (ii) the results of those
operations, or (iii) the Group’s state of affairs.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Company is close to finalising its due diligence review of the Kamilombe and Mwilu projects, both highly
prospective for Cobalt and Copper, within the DRC. The Company is also in process of reviewing and
evaluating other opportunities prospective for Copper, Cobalt and Lithium within the DRC in conjunction
with its DRC consultants.
Taruga has also applied for exploration licences which are prospective for Cobalt and Lithium mineralisation
in Western Australia. The applications are in an early stage and the Company is proposing an exploration
program of surface mapping and geochemical sampling.
Further information on likely developments in the operations of the Group and the expected results of
operations have not been included in this report because the Directors believe it would be likely to result in
unreasonable prejudice to the Company.
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company’s Directors held during the year ended
30 June 2019, and the number of meetings attended by each Director.
Taruga Minerals Limited
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DIRECTOR’S REPORT
Gary Steinepreis
Bernard Aylward
Sheena Eckhof
Mark Gasson
REMUNERATION REPORT
AND CONTROLLED ENTITIES
Number eligible to
attend
Number
attended
4
4
4
4
4
4
4
4
This report details the nature and amount of remuneration for each director and “Key Management
Personnel” of Taruga Minerals Limited.
The report has been subject to audit. Key Management Personnel are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Group, including
any director.
Remuneration policy
The Board policy is to remunerate Directors at market rates for time, commitment and responsibilities. The
Board determines benefits to the Directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice is sought when required. The maximum
aggregate amount of Directors’ fees that can be paid is subject to approval by shareholders in general
meeting, from time to time. Fees for Non-Executive Directors are not linked to the performance of the Group.
However, to align Directors’ interests with shareholders’ interests, the Directors are encouraged to hold
securities in the Company.
The Company’s aim is to remunerate at a level that will attract and retain high-calibre Directors and
employees. Company officers and Directors are remunerated to a level consistent with the size of the
Company.
Performance-based remuneration
The Company does not pay any performance-based component of salaries.
Details of remuneration for year ended 30 June 2019
Directors’ Remuneration
No salaries, commissions, bonuses or superannuation were paid or payable to Directors during the year.
Remuneration was by way of fees paid monthly in respect of invoices issued to the Company by the
Directors or companies associated with the Directors in accordance with agreements between the Company
and those entities.
Details of the agreements are set out below.
Agreements in respect of cash remuneration of Directors:
Executive Directors
During the year, Executive Directors Mr Gasson and Miss Eckhof have agreed to a short-term reduction in
salary to conserve funds in the Company.
Taruga Minerals Limited
Page 19
DIRECTOR’S REPORT
AND CONTROLLED ENTITIES
Mr Gasson is on an Executive Employment Agreement, with a remuneration package of $180,000 per
annum (inclusive of Directors fees). Either party may terminate the agreement with 3 months’ notice period.
Subsequent to the agreed short-term reduction in fees, Mr Gasson is currently remunerated $30,000 per
annum.
Miss Sheena Eckhof is on a contract dated 6 September 2017, with a remuneration package of $24,000
per annum for Directors fees. Miss Sheena Eckhof, through Iguana Resources Pty Ltd, and the Company
entered into a contract dated 8 October 2018 (Consulting Agreement) for the provision of Investor
Relations Manager services by Miss Eckhof. Per the Consulting Agreement, Miss Eckhof is remunerated
at $60,000 per annum for these services. Either party may terminate the agreement with 1 months’ notice
period.
On 1 May 2019, Miss Eckhof and the Company mutually agreed to a variation of the Consulting Agreement
to $2,500 per month and the waiver of Directors fees to assist with the conservation of funds in the
Company. Miss Eckhof is currently remunerated at $30,000 per annum. As at 30 June 2019, there was an
outstanding amount of $2,500 owing to Iguana Resources Pty Ltd in relation to consulting fees for the
management of the Company’s investor relations.
Non-executive Directors
The Company’s constitution provides that the Non-executive Directors may collectively be paid as
remuneration for their services a fixed sum not exceeding the aggregate sum determined by a general
meeting. The aggregate remuneration has been set at an amount of $300,000 per annum.
Mr Gary Steinepreis is on a contract dated 15 July 2017, which provides for a fixed fee of $2,000 per month.
Mr Bernard Aylward is on a contract dated 15 July 2016, which provides for a fixed fee of $2,000 per month.
A Director may be paid fees or other amounts as the Directors determine where a Director performs special
duties or otherwise performs services outside the scope of the ordinary duties of a Director.
A Director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or
any special duties. Executive Directors may be paid on commercial terms as the Directors see fit.
Taruga Minerals Limited
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DIRECTOR’S REPORT
The total remuneration paid to Key Management Personnel is summarised below:
AND CONTROLLED ENTITIES
Year ended 30 June 2019
Director
Associated Company
Leisurewest Consulting Pty Ltd
Gary Steinepreis
Bernard Aylward Matlock Geological Services Pty Ltd
Sheena Eckhof
Mark Gasson
Iguana Resources Pty Ltd
Year ended 30 June 2018
Director
Associated Company
Leisurewest Consulting Pty Ltd
Gary Steinepreis
Bernard Aylward Matlock Geological Services Pty Ltd
Sheena Eckhof
Mark Gasson
Daniel Smith
Minerva Corporate Pty Ltd
Fees Consultancy
$
24,000
24,000
20,000
147,500
215,500
$
-
-
40,000
-
40,000
Short-term Benefits
Share Based
Payments
$
-
-
-
-
-
Performance
Rights(2)
$
93,500
93,500
93,500
238,500
519,000
Total
$
117,500
117,500
153,500
386,000
774,500
Performance
related
%
80
80
62
61
-
Fees Consultancy
$
23,000
24,000
19,733
-
4,834
71,567
$
-
-
60,000
-
60,000
Short-term Benefits
Share Based
Payments
$
Performance
Rights
$
-
-
-
990,000(1)
-
990,000
7,792
7,792
7,791
19,875
-
43,250
Total
$
30,792
31,792
27,524
1,069,875
4,834
1,164,817
Performance
related
%
25%
25%
28%
2%
-
-
The Group has one full time Executive officer, Mr Mark Gasson.
(1) During the 2018 financial year, Mark Gasson received 6,000,000 shares with a fair value of $990,000 for Strategic Consultancy services provided pursuant to shareholder
approval.
(2) Refer to Note 24 of the financial report for further details
Taruga Minerals Limited
Page 21
DIRECTOR’S REPORT
Shareholdings of Key Management Personnel:
AND CONTROLLED ENTITIES
Bernard
Aylward
Mark
Gasson
Gary
Steinepreis
Sheena
Eckhof2
Bernard
Aylward
Daniel
Smith1
Mark
Gasson
Gary
Steinepreis
Sheena
Eckhof2
Balance 30
June 2018
Balance on
Appointment
Additions
Balance on
Resignation
Balance 30
June 2019
5,324,386
8,500,000
5,152,502
-
18,976,888
-
-
-
-
-
-
-
-
-
-
-
5,324,386
-
-
-
-
8,500,000
5,152,502
-
18,976,888
Balance 30
June 2017
Balance on
Appointment
Additions
Balance on
Resignation
Balance 30
June 2018
5,324,386
1,078,729
-
-
-
-
-
5,324,386
1,078,729
-
-
1,000,000
7,500,000
4,152,502
1,000,000
-
-
-
-
-
-
8,500,000
5,152,502
-
10,555,617
1,000,000
8,500,000
1,078,729
18,976,888
1Mr Smith resigned on 6 September 2017 with a shareholding balance of 1,078,729 shares.
2Miss Eckhof was appointed on 6 September 2017 with a shareholding balance of NIL.
Performance Rights holdings of Key Management Personnel:
Bernard
Aylward
Mark
Gasson
Gary
Steinepreis
Sheena
Eckhof
Balance 30
June 2018
1,500,000
4,500,000
1,500,000
1,500,000
9,000,000
Additions
Balance on
Resignation
Issues/
(Expiry)
Balance 30
June 2019
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
4,500,000
1,500,000
1,500,000
9.000,000
Taruga Minerals Limited
Page 22
DIRECTOR’S REPORT
AND CONTROLLED ENTITIES
Bernard
Aylward
Daniel
Smith
Mark
Gasson
Gary
Steinepreis
Sheena
Eckhof
Balance 30
June 2017
Additions
Balance on
Resignation
Issues/
(Expiry)
Balance 30
June 2018
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
1,500,000
-
-
4,500,000
4,500,000
1,500,000
1,500,000
1,500,000
1,500,000
9,000,000
9,000,000
Option holdings of Key Management Personnel:
Bernard
Aylward
Mark
Gasson
Gary
Steinepreis1
Sheena
Eckhof2
Bernard
Aylward
Daniel
Smith
Mark
Gasson
Gary
Steinepreis1
Sheena
Eckhof2
Balance 30
June 2018
Balance on
Appointment
Additions
Balance on
Resignation
Issues/
(Expiry)
Balance 30
June 2019
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance 30
June 2017
Balance on
Appointment
Additions
Balance on
Resignation
Issues/
(Expiry)
Balance 30
June 2018
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1Mr Steinepreis was appointed on 15 July 2016 with an option holding balance of NIL.
2Miss Eckhof was appointed on 6 September 2017 with an option holding balance of NIL.
End of remuneration report
Taruga Minerals Limited
Page 23
DIRECTOR’S REPORT
AND CONTROLLED ENTITIES
ENVIRONMENTAL ISSUES
The Group has conducted exploration activities on mineral tenements. The right to conduct these activities
is granted subject to environmental conditions and requirements. The Group aims to ensure a high
standard of environmental care is achieved and, as a minimum, to comply with relevant environmental
regulations. There have been no known breaches of any of the environmental conditions.
OPTIONS
At the date of this report, there were 11,749,999 unlisted options on issue.
The names of persons who currently hold options are entered in a register pursuant to Section 170 of the
Corporations Act 2001. No person entitled to exercise any option has or had, by virtue of the option, a right
to participate in any share issue of the Company or any other corporation. Subsequent to year end no
options have been issued or exercised.
INDEMNIFICATION OF DIRECTORS
During the financial year, the Company has not given an indemnity or entered into an agreement to
indemnify any of the Directors.
AUDITOR
HLB Mann Judd continues in office in accordance with section 327 of the Corporations Act 2001.
NON-AUDIT SERVICES
There were no non-audit services provided during the current year by our auditors, HLB Mann Judd.
Taruga Minerals Limited
Page 24
DIRECTOR’S REPORT
AND CONTROLLED ENTITIES
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in
any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
AUDITORS’ INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors
of the company with an Independence Declaration in relation to the review of the interim financial report.
This Independence Declaration is set out on page 32 and forms part of this directors’ report for the year
ended 30 June 2019.
This report is signed in accordance with a resolution of the Board of Directors made pursuant to section
306(3) of the Corporations Act 2001.
Gary Steinepreis
Non-Executive Director
Dated Perth 27 September 2019
Taruga Minerals Limited
Page 25
CORPORATE GOVERNANCE
STATEMENT
AND CONTROLLED ENTITIES
The Company has adopted systems of control and accountability as the basis for the administration of
corporate governance. The Board is committed to administering the policies and procedures with openness
and integrity, pursuing the true spirit of corporate governance commensurate with the Company's needs.
To the extent they are applicable, the Company has adopted the Corporate Governance Principles and
Recommendations (3rd Edition) as published by ASX Corporate Governance Council.
The following corporate governance charters, codes and policies have been implemented and are available
on the Company’s website at www.tarugaminerals.com.au:
•
•
•
•
•
•
•
Board Charter
Corporate Code of Conduct
Diversity, Nomination and Remuneration Committee Charter
Audit and Risk Committee Charter
Shareholder Communication Guidelines and Policy
Disclosure Policy
Securities Trading Policy
Taruga Minerals Limited
Page 26
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Taruga Minerals Limited for the year ended
30 June 2019, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
27 September 2019
M R Ohm
Partner
STATEMENT OF
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
Revenue
Depreciation
Consultants
Impairment expense
Professional fees
Travel and accommodation
Office and communication costs
Share-based payments
Exploration expenditure
Foreign exchange loss
Other expenses
Loss from continuing operations before income
tax
Income tax expense
Note
CONSOLIDATED
Year to
30 June 2019
$
Year to
30 June 2018
$
3,431
7,899
(16,311)
(310,937)
-
(110,016)
(119,170)
(32,313)
(771,500)
(1,367,546)
(6,428)
(164,997)
-
(17,173)
(7,060,393)
(96,237)
(105,176)
(43,698)
(2,044,292)
(1,568,358)
-
(265,360)
(2,895,787)
(11,192,788)
-
-
2
3
9
3
4
loss
Net
operations
for
the period
from continuing
(2,895,787)
(11,192,788)
Loss from discontinued operations net of tax
Net loss for the period
23
(71,993)
(2,967,780)
(9,835)
(11,202,623)
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange gain/(loss) on translation of foreign
subsidiaries
Total comprehensive loss for the period
52,991
(2,914,789)
53,669
(11,148,954)
Basic and diluted loss per share (cents per share)
Basic and diluted loss per share from continuing
operations (cents per share)
19
19
(2.12)
(2.07)
(10.37)
(10.37)
The accompanying notes form part of these financial statements.
Taruga Minerals Limited
Page 28
STATEMENT OF FINANCIAL
POSITION
AS AT 30 JUNE 2019
AND CONTROLLED ENTITIES
Note
5
6
7
8
9
CONSOLIDATED
30 June
2019
$
30 June
2018
$
401,763
94,613
725,608
2,487,993
26,490
-
1,221,984
2,514,483
89,934
-
89,934
61,027
-
61,027
1,311,918
2,575,510
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
NON CURRENT ASSETS
Plant and equipment
Mineral exploration and evaluation
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
10
85,819
206,122
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
85,819
206,122
85,819
206,122
1,226,099
2,369,388
11
12
12
19,531,500
830,556
(19,135,957)
18,531,500
6,065
(16,168,177)
1,226,099
2,369,388
The accompanying notes form part of these financial statements.
Taruga Minerals Limited
Page 29
STATEMENT OF CHANGES
IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
Issued Capital
Accumulated
Losses
Share Based
Payments Reserve
Foreign Currency
Translation Reserve
Total Equity
Consolidated
Year to 30 June 2018
As at 1 July 2017
Issue of shares
Share-based payments – Performance Rights
Share issue expenses
Loss for the period
Exchange loss on translation of foreign
subsidiaries
As at 30 June 2018
Year to 30 June 2019
As at 1 July 2018
Issue of shares
Share-based payments – Performance Rights
Share issue expenses
Loss for the period
Exchange loss on translation of foreign
subsidiaries
As at 30 June 2019
$
$
$
$
$
13,821,735
4,797,500
-
(87,735)
-
(4,965,554)
-
-
-
(11,202,623)
-
18,531,500
-
(16,168,177)
18,531,500
1,000,000
-
-
-
(16,168,177)
-
-
-
(2,967,780)
-
19,531,500
-
(19,135,957)
-
-
64,292
-
-
-
64,292
64,292
-
771,500
-
-
-
835,792
(111,896)
-
-
-
-
53,669
(58,227)
(58,227)
-
-
-
-
52,991
(5,236)
8,744,285
4,797,500
64,292
(87,735)
(11,202,623)
53,669
2,369,388
2,369,388
1,000,000
771,500
-
(2,967,780)
52,991
1,226,099
The accompanying notes form part of these financial statements.
Taruga Minerals Limited
Page 30
STATEMENT OF CASH
FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
CONSOLIDATED
Note
Year to
30 June 2019
$
Year to
30 June 2018
$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers
Interest income received
Payment for exploration expenditure
(588,489)
3,431
(1,695,757)
Net cash used in operating activities
16
(2,280,815)
(401,109)
7,899
-
(393,210)
CASH FLOWS FROM INVESTING ACTIVITIES
Prepayment of acquisition costs
Payments for property, plant & equipment
Payment for capitalised exploration
(725,608)
(76,028)
-
-
(30,896)
(1,571,566)
Net cash used in investing activities
(801,636)
(1,602,462)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Share issue transaction costs
1,000,000
(13,065)
2,817,487
(74,658)
Net cash provided by financing activities
986,935
2,742,829
Net increase in cash held
(2,095,516)
747,157
Cash and cash equivalents at the beginning of the
period
2,487,993
1,740,836
Effect of exchange rate fluctuations on cash held
9,366
-
Cash and cash equivalents at the end of the year
401,763
2,487,993
The accompanying notes form part of these financial statements.
Taruga Minerals Limited
Page 31
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with
other requirements of the law. Historical cost is based on the fair values of the consideration given in
exchange for assets.
The financial report has also been prepared on a historical cost basis. The financial report is presented in
Australian dollars.
The company is a listed public company, incorporated in Australia and operating in West Africa. The entity’s
principal activity is mineral exploration.
The accounting policies detailed below have been consistently applied to all of the periods presented unless
otherwise stated. The financial statements are for the Group consisting of Taruga Minerals and its
subsidiaries. For the purposes of preparing the consolidated financial statements, the Group is a for profit
entity.
The financial report has also been prepared on an accruals basis and is based on historical costs modified
by the revaluation of selected non-current assets, and financial assets and financial liabilities for which the
fair value basis of accounting has been applied.
Statement of Compliance
The financial report was authorised for issue on 27 September 2019.
The financial report complies with Australian Accounting Standards, which include Australian equivalents
to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial
report, comprising the financial statements and notes thereto, complies with International Financial
Reporting Standards (IFRS).
Adoption of new and revised standards
Standards and Interpretations applicable to 30 June 2019
In the year ended 30 June 2019, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group’s operations and effective for annual
reporting periods beginning on or after 1 July 2018. As a result of this review the Directors have determined
that there is no material impact of the new and revised Standards and Interpretations on its business and
therefore no material change is necessary to Group accounting policies.
The Directors have also reviewed all new Standards and Interpretations that have been issued but are not
yet effective for the year ended 30 June 2019. As a result of this review, the Director have determined that
there is no material impact of the new and revised Standards and Interpretations on the Group and,
therefore, no change is necessary to Group accounting policies.
Taruga Minerals Limited
Page 32
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
AASB 9 Financial Instruments
AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement and makes changes to
a number of areas including classification of financial instruments, measurements, impairment of financial
assets and hedge accounting model.
The Group has adopted AASB 9 from 1 July 2018.
The standard introduced new classification and measurement models for financial assets. A financial asset
shall be measured at amortised cost if it is held within a business model whose objective is to hold assets
in order to collect contractual cash flows which arise on specified dates and that are solely principal and
interest.
The Group has applied AASB 9 retrospectively with the effect of initially applying this standard recognised
at the date of initial application, being 1 July 2018. There is no change to previously reported amounts upon
implementation of AASB 9.
Accounting Policies
(a) Basis of Consolidation
A controlled entity is any entity controlled by Taruga Minerals Limited. Control exists where Taruga Minerals
Limited has the capacity to dominate the decision-making in relation to the financial and operating policies
of another entity so that the other entity operates with Taruga Minerals Limited to achieve the objectives of
Taruga Minerals Limited. All controlled entities have a 30 June financial year-end.
All inter-company balances and transactions between entities in the Group, including any unrealised profit
or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed
where necessary to ensure consistencies with those policies applied by the parent entity.
Where controlled entities have entered or left the Group during the year, their operating results have been
included from the date control was obtained or until the date control ceased.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated
as the difference between:
• The aggregate of the fair value of the consideration received and the fair value of any retained
interest; and
• The previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and
any non-controlling interests.
All amounts previously recognised in other comprehensive income in relation to that subsidiary are
accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e.
reclassified to profit or loss or transferred to another category of equity as specified/permitted by the
applicable AASBs). The fair value of any investment retained in the former subsidiary at the date when
control is lost is regarded as the fair value on initial recognition for subsequent accounting under AASB 139,
when applicable, the cost on initial recognition of an investment in an associate or a joint venture.
(b) Going Concern
The financial statements have been prepared on the going concern basis, which contemplates the continuity
of normal business activity and the realisation of assets and the settlement of liabilities in the normal course
of business.
Taruga Minerals Limited
Page 33
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
Notwithstanding the fact that the Group incurred an operating loss of $2,914,789 for the year ended 30
June 2019, and a net cash outflow from operating activities amounting to $2,280,815, the Directors are of
the opinion that the Company is a going concern. Once the Kamilombe and Mwilu licences have been
finalised the Company has 4 weeks to complete its due diligence. On completion of the due diligence and
should the Company wish to continue, the Company will make a further payment of US$2,000,000. The
Directors will be seeking to raise additional funds during the coming period in relation to future planned
expenditure.
The Directors are satisfied that the Group will have access to sufficient cash as and when required to enable
it to fund administrative and other committed expenditure. The Directors are satisfied that they will be able
to raise additional funds by debt and/or equity raisings.
However, should the above equity raisings not be completed, there is a material uncertainty that may cast
significant doubt as to whether the Company will continue as a going concern and realise its assets and
extinguish its liabilities in the normal course of business.
(c)
Income Tax
The charge for current income tax expenses is based on the result for the year adjusted for any non-
assessable or disallowable items. It is calculated using tax rates that have been enacted or are
substantively enacted by the balance date.
Deferred tax is accounted for using the liability method in respect of temporary differences arising between
the tax bases of assets and liabilities and their carrying amount in the financial statements. No deferred
income tax will be recognised from the initial recognition of an asset or liability, excluding a business
combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised
or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it
relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly
against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be
available against which deductible temporary difference can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income taxation legislation and the anticipation that the Group will
derive sufficient future assessable income to enable the benefit to be realised and comply with the
conditions of deductibility imposed by the law.
(d) Plant and Equipment
Each class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation.
Plant and equipment are measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess
of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the
expected net cash flows which will be received from the assets employment and subsequent disposal. The
expected net cash flows have been discounted to their present values in determining recoverable amounts.
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 consolidated benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged
to the statement of comprehensive income during the financial period in which they are incurred.
Depreciation
Taruga Minerals Limited
Page 34
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
The depreciable amount of all fixed assets including capitalised lease assets, but excluding computers, is
depreciated on a reducing balance commencing from the time the asset is held ready for use. Computers
are depreciated on a straight line basis over their useful lives to the Group commencing from the time the
asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset:
Plant and Equipment
Depreciation Rate:
15 – 50%
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are included in the statement of comprehensive income. When revalued assets are sold,
amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.
(e) Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is either written off as incurred or accumulated in respect
of each identifiable area of interest. Tenement acquisition costs are initially capitalised where the
requirements under AASB 6 for so doing are satisfied. Costs are only carried forward to the extent that they
are expected to be recouped through the successful development of the areas, sale of the respective areas
of interest or where activities in the area have not yet reached a stage which permits reasonable
assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which
the decision to abandon the areas is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over
the life of the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest.
Restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities
are expensed as incurred and treated as exploration and evaluation expenditure.
(f)
Impairment of Assets
At each reporting date, the Directors review the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication exists,
the recoverable amount of the assets, being the higher of the asset’s fair value less costs to sell and value
in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its
recoverable amount is expensed to the statement of comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
(g) Provisions
Provisions are recognised where there is a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably
measured.
Taruga Minerals Limited
Page 35
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
(h) Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly
liquid investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of change in value.
(i)
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are generally
due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which
uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have
been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(j)
Revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to
the financial assets.
(k) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expenses. Receivables
and payables in the statement of financial position are shown inclusive of GST.
(l)
Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction
of the share proceeds received.
(m) Trade and other payables
Trade payables 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 year that are unpaid and arise when the
Group becomes obliged to make future payments in respect of the purchase of these goods and services.
(n) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the Board of Directors of
Taruga Minerals Limited.
Taruga Minerals Limited
Page 36
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
(o) Critical accounting estimates and judgements
The application of accounting policies requires the use of judgements, estimates and assumptions about
carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
Key Estimates – Impairment
The Directors assess impairment at each reporting date by evaluating conditions specific to the Group that
may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset
is determined.
An impairment was recognised in the prior year in respect of costs carried forward as exploration assets in
Note 8 due to the uncertainty surrounding the renewals of the existing West African licenses, as well as the
uncertainty regarding the granting of new licenses.
Key Estimates – Share-based payment transactions
The Group 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 is determined by an external
valuer using a Black-Scholes model, using the assumptions detailed in Note 24.
The Group measures the cost of cash-settled share-based payments at fair value at the grant date using
the Black-Scholes model taking into account the terms and conditions upon which the instruments were
granted.
(p) Share based payments – shares and options
The fair value of shares and share options granted is recognised as an expense with a corresponding
increase in equity. Fair value is measured at grant date and recognised over the period during which the
grantees become unconditionally entitled to the shares or share options.
The fair value of share grants at grant date is determined by the share price at that time.
The fair value of share options at grant date is determined using a Black-Scholes option pricing model that
takes into account the exercise price, the term of the option, any vesting and performance criteria, the share
price at grant date, the expected price volatility of the underlying share, the expected dividend yield and the
risk free rate for the term of the option.
Upon the exercise of the option, the balance of the share-based payments reserve relating to the option is
transferred to share capital.
(q) Foreign currency translation
Both the functional and presentation currency of Taruga Minerals Limited is Australian dollars. Each entity
in the Group determines its own functional currency and items included in the financial statements of each
entity are measured using that functional currency.
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange
rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies
are retranslated at the rate of exchange ruling at the balance date.
All exchange differences in the consolidated financial report are taken to profit or loss with the exception of
differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity.
Taruga Minerals Limited
Page 37
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
These are taken directly to equity until the disposal of the net investment, at which time they are recognised
in profit or loss.
Tax charges and credits attributable to exchange differences on those borrowings are also recognised in
equity.
Non-monetary items that are measured in terms of historical cost in a 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. Translation differences on assets and liabilities carried at
fair value are reported as part of the fair value gain or loss.
The functional currency of the foreign operations during the period and up to the disposal of some of the
subsidiaries being the entities - Gecko Gold Niger, Gecko Gold CI and MGS Ghana is CFA Francs. The
functional currency of Taruga Congo SARLU was Congalese Franc.
As at the balance date the assets and liabilities of these subsidiaries are translated into the presentation
currency of Taruga Minerals Limited at the rate of exchange ruling at the balance date and income and
expense items are translated at the average exchange rate for the period, unless exchange rates fluctuated
significantly during that period, in which case the exchange rates at the dates of the transactions are used.
The exchange differences arising on the translation are taken directly to a separate component of equity,
being recognised in the foreign currency translation reserve.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that
particular foreign operation is recognised in profit or loss.
In addition, in relation to the partial disposal of a subsidiary that does not result in the Group losing control
over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-
controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial
disposals of associates or jointly controlled entities that do not result in the Group losing significant influence
or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or
loss.
(r)
Parent entity financial information
The financial information for the parent entity, Taruga Minerals Limited, disclosed in Note 22 has been
prepared on the same basis as the consolidated financial statements, except for Investments in subsidiaries
which are accounted for at cost in the parent entity’s financial statements. Dividends received from
associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying
amount of these investments.
NOTE 2 – REVENUE
Revenue
Interest received
Total Revenue
Consolidated
2019
$
3,431
3,431
2018
$
7,899
7,899
Taruga Minerals Limited
Page 38
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 3 – LOSS FROM CONTINUING ACTIVITIES BEFORE INCOME
TAX
Expenses
Depreciation of non-current assets
Plant and Equipment
Office furniture and equipment
Motor vehicles
Total depreciation of non-current assets
Share-based payments
Share-based payments to Contractors 1
Performance rights to Directors (Note 23)
Consolidated
2019
$
2018
$
1,662
339
14,310
16,311
1,290
1,511
7,034
9,835
252,500
519,000
771,500
1,980,000
64,292
2,044,292
1 In the prior year, the Company received approval at the 24 May 2018 General Meeting to issue 1,500,000
Performance Rights to two contractors for their services, past and future, as exploration manager and
engineering consultant of the Company. The expense is related to the Performance Rights previously
allotted.
NOTE 4 – INCOME TAX
The prima facie tax expense at 30% on loss from continuing activities is reconciled to the income tax
expense in the financial statements as follows:
Loss from continuing operations
Loss from discontinued operations
2019
$
2018
$
(2,895,787)
(71,993)
(11,202,263)
(11,202,263)
Prima facie income tax expense at 30%
(890,334)
(3,080,721)
Tax effect of permanent differences
Impairment
Foreign projects
Share-based payments
Other non-deductible expenses
-
306,765
231,450
242,455
1,941,608
444,914
562,180
41,909
Income tax expense adjusted for permanent differences
(109,663)
(90,110)
Deferred tax asset not brought to account
Income tax expense
109,663
-
90,110
-
Taruga Minerals Limited
Page 39
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 4 – INCOME TAX (CONTINUED)
Income tax benefit
The directors estimate the cumulative unrecognised deferred tax asset
attributable to the company and its controlled entity at 30% is as follows:
Deferred tax assets
Revenue losses after permanent differences
Capital raising costs yet to be claimed
Accruals
Other
Consolidated
2019
$
781,829
7,050
5,293
85
794,257
2018
$
635,700
3,812
4,675
-
644,187
The potential deferred tax asset has not been brought to account in the financial report at 30 June 2019
as the Directors do not believe it is appropriate to regard the realisation of the asset as probable. This
asset will only be obtained if:
(a)
(b)
The company and its controlled entity derive future assessable income of an amount and type
sufficient to enable the benefit from the deductions for the tax losses and the unrecouped
exploration expenditure to be realised;
The company and its controlled entity continue to comply with the conditions for deductibility
imposed by tax legislation; and
(c) No changes in tax legislation adversely affect the company and its controlled entity in realising
the benefit from the deductions for the tax losses and unrecouped exploration expenditure.
Franking Credits
No franking credits are available at balance date for the subsequent financial year.
NOTE 5 – CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Cash at bank earns interest at floating rates based on daily deposit rates.
NOTE 6 – TRADE AND OTHER RECEIVABLES
Current
GST receivable
Other receivables
Other current assets
No credit losses are expected at balance date.
2019
$
401,763
2018
$
2,487,993
2019
$
69,732
17,222
7,659
94,613
2018
$
6,050
12,781
7,659
26,490
Taruga Minerals Limited
Page 40
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 7 – OTHER ASSETS
Prepaid acquisition consideration1
Consolidated
2019
$
2019
$
725,608
-
1 Prepaid acquisition consideration totalling US $510,000 towards due diligence costs, and the acquisition
of the Kamilombe project and adjacent tenure in the DRC. In the event the acquisition of Kamilombe does
not proceed, there is provision for the repayment of the consideration to the Company.
Taruga Minerals Limited
Page 41
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 8 – PLANT AND EQUIPMENT
Cost
2018
Balance Brought Forward
Additions
Foreign exchange movement
Balance Carried Forward
Accumulated Depreciation
Balance Brought Forward
Charge
Foreign exchange movement
Balance Carried Forward
Motor Vehicles
Computer
Equipment
$
$
Consolidated
Plant
&
Equipment
$
120,951
14,033
7,209
142,193
93,834
7,034
5,744
106,612
-
2,860
-
2,860
-
-
-
-
22,537
14,003
1,343
37,883
17,562
1,290
1,075
19,927
Fixtures
&
Fittings
$
26,086
-
1,555
27,641
20,262
1,511
1,238
23,011
Total
$
169,574
30,896
10,107
210,577
131,658
9,835
8,057
149,550
Net Book Value 30 June 2018
35,581
2,860
17,956
4,630
61,027
Taruga Minerals Limited
Page 42
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 8 – PLANT AND EQUIPMENT (CONTINUED)
Cost
2019
Balance Brought Forward
Additions
Disposals
Foreign exchange movement
Balance Carried Forward
Accumulated Depreciation
Balance Brought Forward
Charge
Disposals
Foreign exchange movement
Balance Carried Forward
Motor Vehicles
Computer
Equipment
$
$
Consolidated
Plant
&
Equipment
$
142,193
75,061
(127,092)
(1,068)
89,094
106,612
16,332
(107,713)
(1,055)
14,176
2,860
-
-
-
2,860
-
339
-
-
339
37,883
154
(23,681)
(199)
14,157
19,927
2,033
(20,126)
(172)
1,662
Fixtures
&
Fittings
$
27,641
-
(27,410)
(231)
-
23,011
434
(23,247)
(198)
-
Total
$
210,577
75,214
(178,183)
(1,498)
106,111
149,550
19,138
(151,086)
(1,425)
16,177
Net Book Value 30 June 2019
74,918
2,521
12,495
-
89,934
Taruga Minerals Limited
Page 43
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 9 – MINERAL EXPLORATION AND EVALUATION
Opening balance
Expenditure during the year
Impairment – refer Note 1(m)
Foreign exchange movement
Closing balance
Consolidated
2019
$
-
-
-
-
-
2018
$
6,995,457
22,055
(7,060,393)
42,881
-
The ultimate recoupment of exploration expenditure carried forward is dependent upon successful
development and commercial exploitation, or sale of the respective areas.
NOTE 10 – TRADE AND OTHER PAYABLES
Trade creditors
Other payables
2019
$
67,050
18,769
85,819
2018
$
206,122
-
206,122
Trade payables are non-interest bearing and are normally settled on 30 day terms.
NOTE 11 – ISSUED CAPITAL
(a)
Issued capital
141,167,238 shares fully paid
2019
$
2018
$
19,531,500
18,531,500
Movements in ordinary share capital of the Company were as follows:
Opening balance at 30 June 2017
Placement
Placement March 2018
Consultants shares
Placement - Tranche 1
Issue costs
Closing balance at 30 June 2018
Opening balance at 30 June 2018
Placement - Tranche 2 (Part 1)
Placement - Tranche 2 (Part 2)
Issue costs
Closing balance at 30 June 2019
Number
103,917,239
10,900,000
2,600,000
12,000,000
6,988,095
-
136,405,334
Number
136,405,334
2,380,952
2,380,952
-
141,167,238
$
13,821,735
1,090,000
260,000
1,980,000
1,467,500
(87,735)
18,531,500
$
18,531,500
500,000
500,000
-
19,531,500
Taruga Minerals Limited
Page 44
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 11 – ISSUED CAPITAL (CONTINUED)
Movements in options were as follows:
Opening balance at 30 June 2017
Unlisted options exercisable at $0.30 each on or before 19 June
2020
Closing balance at 30 June 2018
Unlisted options exercisable at $0.30 each on or before 19 June
2020 (free attaching)
Closing balance at 30 June 2019
(b)
Voting and dividend rights
Number
-
6,988,095
6,988,095
4,761,904
11,749,999
$
-
-
-
-
-
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion
to the number of shares held.
At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
NOTE 12 – RESERVES AND ACCUMULATED LOSSES
Share-based Payments Reserve
Foreign Currency Translation Reserve
Accumulated Losses
Balance at beginning of the year
Net loss from ordinary activities
Balance at end of the year
Share-based Payment Reserve
Balance at beginning of the year
Reserve arising on share-based payments expensed
Balance at end of the year
Foreign Currency Translation Reserve
Balance at beginning of the year
Transfer of exchange gain/(loss) on discontinued operations
Reserve arising on translation of foreign subsidiaries
Balance at end of the year
Consolidated
2019
$
2018
$
835,792
(5,326)
830,466
64,292
(58,227)
6,065
2019
$
16,168,177
2,967,780
19,135,957
2018
$
4,965,554
11,202,623
16,168,177
2019
$
64,292
771,500
835,792
2019
$
(58,227)
34,865
18,126
(5,236)
2018
$
-
64,292
64,292
2018
$
(111,896)
-
53,669
(58,227)
Taruga Minerals Limited
Page 45
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 12 – RESERVES AND ACCUMULATED LOSSES (CONTINUED)
Nature and purpose of Reserves
The foreign currency translation reserve is used to record exchange differences arising from the translation
of the financial statements of foreign subsidiaries. It is also used to record the effect of hedging net
investments in foreign operations.
This share-based payments reserve is used to record the value of equity benefits provided to employees,
Directors and consultants as part of their remuneration.
NOTE 13 – COMMITMENTS FOR EXPENDITURE
(a)
Mineral Tenement Leases
In order to maintain current rights of tenure to mining tenements, the Group will be required to outlay
amounts of $1,500,000 in respect of minimum tenement expenditure requirements and lease rentals
(subject to the applications noted on page 18). The obligations are not provided for in the financial report
and are payable as follows :
Not later than one year
Later than 1 year but not later than 2 years
Later than 2 years but not later than 5 years
2019
$
2018
$
500,000
500,000
500,000
1,500,000
500,000
500,000
500,000
1,500,000
NOTE 14 – INVESTMENT IN CONTROLLED ENTITIES
Registered
Number
Country of
Incorporation
Interest Held
Value of investment
Parent
2019
2018
2019
$
2018
$
Taruga Minerals Limited 153 868 789
Australia
Subsidiaries
Taruga Congo SARLU
MGS Ghana Limited
Gecko Gold Niger SARL
Gecko Gold CI SARL
01-122-
N31711L
CA-80, 601
RCCM-NI-NIA-
2010-B-2625
RCCM-CI-ABJ-
2010-B-1899
DRC
100%
100%
1,361
1,361
Ghana
100%
100%
Niger
Cote d’Ivoire
-
-
100%
100%
-
-
-
-
1,316,675
1,350,367
Taruga Minerals Limited
Page 46
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 15 – SEGMENT INFORMATION
AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports
about components of the Group that are regularly reviewed by the Chief Operating Decision Maker in order
to allocate resources to the segment and to assess its performance.
The Group’s operating segments have been determined with reference to the monthly management
accounts used by the Chief Operating Decision maker to make decisions regarding the Group’s operations
and allocation of working capital. Due to the size and nature of the Group, the Board as a whole has been
determined as the Chief Operating Decision Maker.
Based on the quantitative thresholds included in AASB 8, there is only two reportable segments, being the
exploration of minerals in the Democratic Republic of Congo (DRC) and Australia.
The accounting policies of the reportable segments are the same as Group accounting policies.
Geographic Information
Australia
30 June 2019
Revenues from external customers
$
DRC
$
Discontinued
Operations
$
Consolidated
$
Total loss after tax
(2,087,603)
(808,184)
(71,993)
(2,967,780)
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
368,098
27,230
395,328
853,886
62,704
916,590
59,897
59,897
25,922
25,922
Net assets
335,431
890,668
-
-
-
-
-
-
1,221,984
89,934
1,311,918
85,819
85,819
1,226,099
30 June 2018
Revenues from external customers
Total loss after tax
(11,060,061)
(142,562)
-
(11,202,623)
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
2,268,841
30,896
2,299,737
240,518
240,518
5,124
30,132
35,256
2,514,483
61,028
2,575,511
206,122
206,122
-
-
-
-
206,122
206,122
Net assets
2,093,615
240,518
35,256
2,369,389
Taruga Minerals Limited
Page 47
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 16 – NOTES TO THE STATEMENT OF CASH FLOWS
Reconciliation of loss after income tax to net operating cash flows
Loss from ordinary activities
Depreciation
Impairment of exploration
Exploration expenditure
Exchange loss
Share-based payments
Movement in assets and liabilities
Receivables
Payables
Consolidated
2019
$
2018
$
2,967,780
11,202,623
(16,311)
-
-
(6,428)
(771,500)
(9,835)
(7,060,393)
(1,673,534)
(2,044,292)
-
2,173,541
414,569
60,464
46,810
5,135
(26,494)
Net cash used in operating activities
2,280,815
393,210
NOTE 17 – RELATED PARTY INFORMATION
a) Transactions with Key Management Personnel
The transactions with key management personnel have been entered into under terms and conditions no
more favourable than those the Company would have adopted if dealing at arm's length.
b) Directors and Executives Disclosures
The aggregate compensation made to directors and other key management personnel of the Group is set
out below:
Short-term employee benefits
Post-employment benefits
NOTE 18 – REMUNERATION OF AUDITORS
Auditing and reviewing of the financial statements of Taruga Minerals
Limited and of its controlled entities.
2019
$
774,500
-
774,500
2019
$
26,265
26,265
2018
$
1,164,817
-
1,164,817
2018
$
25,000
25,000
Taruga Minerals Limited
Page 48
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 19 – LOSS PER SHARE
The loss and weighted average number of ordinary shares used in the calculation of basic loss per share
is as follows:
Loss for the year
Loss for the year from continuing operations
Loss for the year from discontinued operations
Consolidated
2019
$
2,967,780
2,895,787
71,993
2018
$
11,202,623
11,202,623
-
Number
Number
Weighted average number of ordinary shares outstanding during the
year used in the calculation of basic loss per share
139,790,852
108,061,812
There are no potential ordinary shares on issue at the date of this report.
NOTE 20 – FINANCIAL INSTRUMENTS
Financial Risk Management Policies
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable, accounts
payable and hire purchase liabilities.
The Board’s overall risk management strategy seeks to assist the Group in meeting its financial targets,
whilst maintaining potential adverse effects on financial performance. The Group has developed a
framework for a risk management policy and internal compliance and control systems that covers the
organisational, financial and operational aspects of the group’s affairs. The Chairman is responsible for
ensuring the maintenance of, and compliance with, appropriate systems.
Financial Risk Exposures and Management
The main risks the group is exposed to through its financial instruments are interest rate risk, foreign
currency risk and liquidity risk.
Interest Rate Risk
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate
as a result of change in the market, interest rate and the effective weighted average interest rate on these
financial assets, is as follows:
Financial Assets
Cash at Bank
Total Financial Assets
Weighted Average Effective
Floating Interest Rate
Interest Rate
Consolidated
2019
2018
0.21%
0.60%
2019
$
402,024
402,024
2018
$
2,256,619
2,256,619
There are no financial liabilities subject to interest rate fluctuations.
Taruga Minerals Limited
Page 49
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 20 – FINANCIAL INSTRUMENTS (CONTINUED)
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed
in the statement of financial position and in the notes to and forming part of the financial statements.
Interest Rate Sensitivity Analysis
The Group has performed a sensitivity analysis relating to its exposure to interest rate risk. This sensitivity
analysis demonstrates the effect on the current year results and equity which could result in a change in
these risks.
At 30 June 2019 the effect on the loss and equity as a result of changes in the interest rate with all other
variables remaining constant is as follows:
Change in Loss
•
Increase in interest by 2%
• Decrease in interest by 2%
Change in Equity
•
Increase in interest by 2%
• Decrease in interest by 2%
Foreign Currency Risk
Consolidated
2019
$
(8,040)
8,040
(8,040)
8,040
2018
$
(45,119)
45,119
(45,119)
45,119
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to
exchange rate fluctuations arise.
The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities
at the reporting date is as follows:
Currency
Congolese Dollars
Foreign currency
Liabilities
2019
$
-
Consolidated
Assets
2019
$
52,325
Liabilities
2018
$
Assets
2018
$
-
226,330
Other than translational risk the Group has no significant exposure to foreign currency risk at the balance
date.
Liquidity Risk
The group manages liquidity risk by monitoring forecast cash flows.
Taruga Minerals Limited
Page 50
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 20 – FINANCIAL INSTRUMENTS (CONTINUED)
Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance
date, is the carrying amount net of any provisions for doubtful debts, as disclosed in the statement of
financial position and notes to the financial statement.
In the case of cash deposited, credit risk is minimised by depositing with recognised financial intermediaries
such as banks, subject to Australian Prudential Regulation Authority Supervision.
The Group does not have any material risk exposure to any single debtor or group of debtors under financial
instruments entered into by it.
Capital Management Risk
Management controls the capital of the Group in order to maximise the return to shareholders and ensure
that the group can fund its operations and continue as a going concern.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting
its capital structure in response to changes in these risks and in the market. These responses include the
management of expenditure and debt levels and share and option issues.
There have been no changes in the strategy adopted by management to control capital of the Group since
the prior year.
Net Fair Values
For financial assets and liabilities, the net fair value approximates their carrying value. The Group has no
financial assets or liabilities that are readily traded on organised markets at balance date and has no
financial assets where the carrying amount exceeds net fair values at balance date.
NOTE 21 - MATTERS SUBSEQUENT TO THE END OF FINANCIAL YEAR
No matters or circumstances have arisen since the end of the financial period which significantly affected
or may significantly affect the operations of the Group, the results of these operations, or the state of affairs
in future financial years.
Taruga Minerals Limited
Page 51
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 22 - PARENT ENTITY DISCLOSURES
Financial Position
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other current assets
Total Current Assets
NON CURRENT ASSETS
Plant and equipment
Loans to subsidiaries less impairment
Total Non Current assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Financial Performance
Loss for the year
Impairment
Total comprehensive loss
2019
$
2018
$
349,412
11,000
7,659
2,256,511
4,642
7,659
368,071
2,268,812
27,229
-
30,896
275,802
27,229
306,698
395,300
2,575,510
59,896
206,122
59,896
206,122
59,896
206,122
335,404
2,369,388
19,531,500
835,792
(20,031,888)
18,531,500
64,292
(16,226,404)
335,404
2,369,388
3,805,484
-
3,805,484
3,989,833
7,159,120
11,148,953
The parent entity has not entered into any guarantees in relation to debts of its subsidiaries, has no
contingent liabilities, and has no commitments for acquisition of plant and equipment.
Taruga Minerals Limited
Page 52
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 23 – DISCONTINUED OPERATIONS
During the financial year, following the divestments of its West African gold assets, the Group deregistered
two of its subsidiaries: Gecko Gold Cote d’Ivoire SARL and Gecko Gold Limited. There was no material
loss or cash flows attributable to the discontinued operations with the $71,993 loss being comprised of
written off assets and the attributable foreign currency reserve balance.
Assets and liabilities of discontinued operations
Assets
Cash and cash equivalents
Property, plant and equipment
Trade and other receivables
Net Assets
Results of discontinued operations
Revenue
Cost of sales
Expenses
Results from operating activities
Income tax (expense)/benefit
Results from operating activities after tax
Loss on disposal of discontinued operations
Other comprehensive income from discontinued
operations
Exchange gain from discontinued operations
Cashflows gained from/(used in) discontinued
operations
Net cash gained from operating activities
Net cash flow for the year
2019
$
5,562
28,740
-
29,296
-
-
(2,826)
(2,826)
-
(2,826)
(69,167)
(71,993)
34,865
34,865
-
-
2018
$
5,124
30,132
-
35,256
-
-
(9,835)
(9,835)
-
(9,835)
-
(9,835)
-
-
-
-
Taruga Minerals Limited
Page 53
NOTES TO THE FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
NOTE 24 – SHARE-BASED PAYMENTS
Performance Rights Valuation
Item
Value of underlying security
Exercise price
Valuation date
10-Day VWAP barrier
Life of the Rights (years)
Volatility
Risk-free rate
Dividend yield
Vesting Conditions
Number of Rights
Value per Right
Value per Tranche
Tranche A
$0.22
nil
1 June 2018
$0.30
3.00
60%
2.12%
nil
Note 1
8,500,000
$0.19
$1,589,500
Tranche B
$0.22
nil
1 June 2018
$0.40
3.00
60%
2.12%
nil
Note 2
2,500,000
$0.16
$392,500
Tranche C
$0.22
nil
1 June 2018
$0.50
3.00
60%
2.12%
nil
Note 3
2,500,000
$0.13
$332,500
1 The Tranche A Rights will vest upon the 10-day volume weighted average price (‘10-Day VWAP’) of shares traded
on the Australian Securities Exchange (‘ASX’) being at $0.30 or greater.
2 The Tranche B Rights will vest upon the 10-Day VWAP of shares traded on the ASX being at $0.40 or greater.
3 The Tranche C Rights will vest upon the 10-Day VWAP of shares traded on the ASX being at $0.50 or greater.
The above tranches of performance rights are expensed over the life of the rights (3 years). The expense
included in the reporting period to 30 June 2019 was $771,500.
NOTE 25 – DEMOCRATIC REPUBLIC OF CONGO INTERESTS
Continuing due diligence is being performed on the Company’s West African interests.
The principal terms of the terms sheet for Taruga to acquire a 60% interest in the Mwilu and Kalimombe Projects
from the Consortium are as follows:
1. Taruga to conduct drilling programmes at Mwilu and Kamilombe during the due diligence period until the
granting of the licenses
2. On completion of the due diligence and should Taruga wish to continue, Taruga will make a further payment
of US$2,000,000
3. Taruga will fund all exploration to the completion of a Bankable Feasibility Study (BFS) within 3 years with
2 additional years if required
4. Should Taruga wish to continue after completion of BFS, Taruga will make a pas de porte payment of
US$10,000,000 for each permit that it wishes to continue to develop
5. Taruga will make a final payment of US$20,000,000 for each project where it discovers resources in the
Measured and Indicated categories exceeding 250,000 tonnes of contained cobalt OR 1,000,000
tonnes of contained copper at the conclusion of the BFS
6. Taruga can withdraw its interest in any project at any stage and will return all information
Taruga Minerals Limited
Page 54
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2019
AND CONTROLLED ENTITIES
In the opinion of the directors of Taruga Minerals Limited (“the Company”):
1)
The attached financial statements and notes thereto are in accordance with the Corporations Act
2001 including:
(a)
(b)
complying with Australian Accounting Standards, the Corporations Regulations 2001,
professional reporting requirements and other mandatory requirements; and
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
performance for the period then ended; and
2)
3)
4)
There are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
The financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
This declaration has been made after reviewing the declarations required to be made to the
Directors in accordance with section 295A of the Corporations Act 2001 for the financial period
ended 30 June 2019.
This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to
s.303(5) of the Corporations Act 2001.
Gary Steinepreis
Non-Executive Director
Dated Perth 27 September 2019
Taruga Minerals Limited
Page 55
INDEPENDENT AUDITOR’S REPORT
To the members of Taruga Minerals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Taruga Minerals Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30
June 2019, the consolidated statement of comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial statements, including a summary of significant accounting policies, and the
directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (“the Code”) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1(b) in the financial report, which indicates that a material uncertainty
exists that may cast significant doubt on the entity’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We have determined that there are no key audit
matters to communicate in our report, other than the matter described in the Material Uncertainty
Related to Going Concern section above.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2019 but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee
that an audit conducted in accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
-
-
-
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2019.
In our opinion, the Remuneration Report of Taruga Minerals Limited for the year ended 30 June
2019 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
27 September 2019
M R Ohm
Partner
ASX Additional Information
ANALYSIS OF SHAREHOLDING as at 26 September 2019
1
1,001
5,001
10,001
100,001
Total on Issue
1,000
-
5,000
-
-
10,000
- 100,000
- or more
AND CONTROLLED ENTITIES
Shareholders
200
97
65
213
105
680
The number of shareholdings held in less than marketable parcels is 351.
Voting Rights
Article 16 of the Constitution specifies that on a show of hands every member present in person, by
attorney or by proxy shall have:
a)
b)
for every fully paid share held by him one vote
for every share which is not fully paid a fraction of the vote equal to the amount paid up on the
share over the nominal value of the shares
Substantial Shareholders
The following substantial shareholders have notified the Company in accordance with Corporations Act
2001.
Hongze Group Ltd
Mark Gasson
Directors’ Shareholding
Shares
9,523,809
8,500,000
%
6.75
6.02
The interest of each director in the share capital of the Company is detailed in the director’s report.
Securities Subject to Escrow
Nil.
Taruga Minerals Limited
Page 59
ASX Additional Information
AND CONTROLLED ENTITIES
TOP TWENTY SHAREHOLDERS
Rank Holder Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
MCNEIL NOM PL
J P MORGAN NOM AUST PL
HSBC CUSTODY NOM AUST LTD
HONGZE GRP LTD
GASSON MARK
RANCHLAND HLDGS PL
AYLWARD BERNARD
KHNAIZER WALID
OAKHURST ENTPS PL
TWO TOPS PL
BNP PARIBAS NOM PL
SAMLISA NOM PL
HSBC CUSTODY NOM AUST LTD
AUTOTRADING PL
BEBB TIFFANY
VINALE PL
ASCENT CAP HLDGS PL
DING MARCUS STEVEN
CITICORP NOM PL
REPLAY HLDGS PL
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES
(TOTAL)
Total Remaining Holders Balance
Securities
17,693,287
14,052,323
13,097,767
9,523,809
8,500,000
5,751,152
4,698,586
4,422,588
3,609,167
3,300,000
2,953,927
2,000,000
2,000,000
1,700,000
1,666,667
1,666,666
1,543,335
1,524,213
1,364,838
1,250,000
102,318,325
%
12.53%
9.95%
9.28%
6.75%
6.02%
4.07%
3.33%
3.13%
2.56%
2.34%
2.09%
1.42%
1.42%
1.20%
1.18%
1.18%
1.09%
1.08%
0.97%
0.89%
72.48%
38,848,913
27.52%
The name of the joint Company Secretaries are Daniel Smith and Sylvia Foong.
The address of the registered office is: Level 8, 99 St Georges Terrace, Perth WA 6000.
Registers of securities are held Security Transfer Registrars Pty Ltd, 770 Canning Highway, Applecross
WA 6153
Quotation has been granted for all the ordinary shares of the Company on the Australian Securities
Exchange Ltd.
There are nil securities currently subject to escrow.
Unquoted Options over Un-issued Shares
There are 11,749,999 unlisted options exercisable at $0.30 each on or before 19 June 2020.
Taruga Minerals Limited
Page 60
ASX Additional Information
AND CONTROLLED ENTITIES
Interests in tenements held directly by Taruga Minerals or subsidiary company
Tenements
Held
Country
E51/1832
E70/5029
E70/5030
E70/5031
Kamilombe
Mwilu
100%
100% (In application)
100% (In application)
100% (In application)
Due diligence and Option to
acquire 60%
Due diligence and Option to
acquire 60%
Australia
Australia
Australia
Australia
DRC
DRC
Taruga Minerals Limited
Page 61