25 February 2019
ASX Market Announcements Office
ASX Limited
Exchange Centre
Level 4, 20 Bridge Street
SYDNEY NSW 2000
Dear Sir/Madam,
Terramin Australia’s 2018 Full Year Financial Results for Announcement to the Market
Terramin Australia Limited announced its results today for the full year ended 31 December 2018.
Please find attached Appendix 4E and 2018 Annual Report including:
Sustainability Report
Annual Financial Report
Additional Securities Exchange Information, including
̵ Corporate Governance Statement
̵ Global Reporting Initiatives Index
Regards
Simon Iacopetta
Chief Financial Officer and Company Secretary
Enc
Terramin Australia Ltd ACN 062 576 238
Unit 7 202‐208 Glen Osmond Road Fullarton SA 5064 T +61 8 8213 1415 F +61 8 8213 1416 info@terramin.com.au terramin.com.au
Appendix 4E Statement
TERRAMIN AUSTRALIA LIMITED
PRELIMINARY FINAL REPORT
Current reporting period:
12 months ended 31 December 2018
Previous corresponding period:
12 months ended 31 December 2017
Reporting Cycle:
12 months
Results for Announcement to the Market
(All comparisons to year ended 31 December 2018)
$'000
Up/down
Revenues from ordinary activities
Revenues from ordinary activities excluding interest income
Loss after tax from ordinary activities
‐
‐
(6,010)
‐
‐
up
Movement
%
‐
‐
89
Operating and Financial Review
There was no revenue from ordinary activities for the financial year ended 31 December 2018.
The commentary on the consolidated results and outlook, including changes in the state of affairs and likely developments
of the consolidated entity, are set out in the Review of Operations section of the Directors Report. Further Appendix 4E
disclosure requirements can be found in the 31 December 2018 Annual Financial Report and accompanying notes.
Dividends Information
Amount per share
(cents)
Franked amount
per share (cents)
Tax rate for
franking credit
Interim 2018 dividend per share
Final 2018 dividend per share
Nil
Nil
Nil
Nil
Nil
Nil
No interim dividend was paid for the year ending 31 December 2018 and no final dividend has been proposed for the year
ending 31 December 2018.
Net Tangible Assets per Security
Net tangible assets per security
Independent Auditors Report
31 December 2018
31 December 2017
0.03
0.03
The consolidated financial statements upon which this Appendix 4E is based have been audited and the Independent
Auditors Report to the members of Terramin Australia Limited is included in the attached Annual Financial Report.
Terramin Australia Ltd ACN 062 576 238
Unit 7 202‐208 Glen Osmond Road Fullarton SA 5064 T +61 8 8213 1415 F +61 8 8213 1416 info@terramin.com.au terramin.com.au
2018 Annual Report
Contents
Chairman’s Review ................................................................................................................................................................. 4
About Terramin ...................................................................................................................................................................... 5
Vision and Values ................................................................................................................................................................... 6
Key Projects ............................................................................................................................................................................ 7
Sustainability .......................................................................................................................................................................... 8
Governance .......................................................................................................................................................................... 12
Financial Report ................................................................................................................................................................... 13
Directors’ Report .................................................................................................................................................................. 14
Directors’ Declaration .......................................................................................................................................................... 27
Auditor’s Independence Declaration .................................................................................................................................... 29
Auditor’s Independent Report .............................................................................................................................................. 30
Consolidated Statement of Profit or Loss and Other Comprehensive Income ....................................................................... 35
Consolidated Statement of Financial Position ...................................................................................................................... 36
Consolidated Statement of Changes in Equity ...................................................................................................................... 37
Consolidated Statement of Cash Flows ................................................................................................................................. 38
Notes to the Consolidated Financial Statements .................................................................................................................. 39
Tenement Information ......................................................................................................................................................... 62
Reserves and Resources ....................................................................................................................................................... 64
Additional Securities Exchange Information ......................................................................................................................... 66
Corporate Governance Principles and Recommendations .................................................................................................... 68
Global Reporting Initiative Index .......................................................................................................................................... 76
2
Simon Iacopetta, Michael Kennedy, Kevin McGuinness, Feng Sheng, Richard Taylor & Angelo Siciliano
Registered and Business Office
Corporate Information
Terramin Australia Limited
Unit 7, 202-208 Glen Osmond Road
Fullarton, South Australia, 5063
T
+61 8 8213 1415
E
info@terramin.com.au
W
www.terramin.com.au
ABN 67 062 576 238
ACN 062 576 238
Auditors
Grant Thornton Audit Pty Ltd
Level 3, 170 Frome Street
Adelaide, South Australia, 5000
Share Registry
Computershare Investor Services Pty Ltd
Level 5, 115 Grenfell Street
Adelaide, South Australia, 5000
T 1300 556 161
Australian Securities Exchange
ASX ticker code: TZN
Directors
Feng Sheng
Executive Chairman
Michael Kennedy
Non-Executive Deputy-Chairman
Angelo Siciliano
Non-Executive Director
Kevin McGuinness
Non-Executive Director
Wang Xinyu
Executive Director
Chief Executive Officer
Richard Taylor
Chief Financial Officer and Company Secretary
Simon Iacopetta
3
Chairman’s Review
Dear Fellow Shareholders,
In 2018, Terramin had substantial
success in repositioning the
company for development of its
two major assets, Tala Hamza in
Algeria and Bird-in-Hand in South
Australia. Terramin announced a
demerger of its gold business from
its base metals assets and the
company has worked diligently towards pursuing this
objective at a time that will add greatest value to
shareholders. I note that, at the time of writing, the gold
price in Australian dollar terms continues to be at historic
highs.
Terramin welcomed a new Chief Executive Officer (CEO), Mr
Richard Taylor, who joined Terramin from roles with Mineral
Deposits Ltd and PanAust Ltd, as well as a new Chief
Financial Officer (CFO) and Company Secretary, Mr Simon
Iacopetta, who joined the company from Ramelius
Resources Ltd. Both individuals have refreshed our
management ranks and brought new ideas and approaches
to building value in Terramin.
At the South Australian Resources and Energy Investment
Conference this year we announced our South Australian
gold strategy, which centres on growing our resource base in
the state towards an aspirational target of 1 million ounces.
By year end we were well advanced and able to announce
the acquisition of PM53, which hosts the historic Kitticoola
Mine. Kitticoola has the potential to compliment ore trucked
to Angas from Bird-in-Hand and utilise spare capacity at our
processing hub.
While we would have hoped to have made faster progress
with approvals in both Algeria and South Australia, we
continued to have constructive dialogue with regulators in
both jurisdictions that will make moving to operations
smoother. During this time, we have cut back on
administration and holding costs while we work through the
remaining issues.
Importantly, we have had a safe year without any serious
workplace injuries or environmental incidents at both sites. I
commend our dedicated workforce for their strong
performance in this area and for looking after the welfare of
their colleagues and communities that host our activities. At
Bird-in-Hand, our rehabilitation and replanting initiatives
have now had more than three years to take hold and are
developing into strong local habitats. I am pleased to see the
results of our English language training programs in Bejaia,
Algeria paying dividends for our staff.
Sustainability is central to our company, with environment
and community at the core of our developing projects. Our
Environment and Community Policies are at the forefront of
our decision making, and we strongly believe in maximising
the benefits and minimising the impacts resulting from our
activities in the communities we operate.
Tala Hamza Zinc Project
During the year, Terramin finalised the revised Definitive
Feasibility Study (DFS), Mining Lease Application and
Environmental Impact Assessment for the Tala Hamza Zinc
Project. We had several workshops and technical sessions
with our joint venture partners and the Algerian regulators,
and concluded the year in 2018 by receiving confirmation
that the technical changes to the DFS, which we embarked
on in 2014, including the Underhand Drift and Fill (UDF)
method, dry-stack tailings management and cement paste
backfill, were accepted.
As a result, subsequent discussions have moved forward on
commercial and financial aspects of the joint venture. During
2018, we were able to release the financial results of the
DFS, as well as initial positive results from an Optimisation
Study undertaken to look at utilising part of the mid-grade
halo around the central ore body. The Optimisation Study
points to the possibility of higher metal production in the
project’s early years. The optimisation work is ongoing and
Terramin will be engaging in 2019 with its joint venture
partners to see a robust technical and economic project
enter into development.
Bird-in-Hand Gold Project
I was delighted in 2018 to be able to release an updated
Bird-in-Hand Scoping Study with robust financial outcomes.
The Study demonstrates the benefit of pursuing the South
Australian gold strategy and changing our focus to unlocking
the precious metal potential in the state.
Terramin made substantial progress on the Managed Aquifer
Recharge (MAR) test work which was requested to be
brought forward in the approval process by the Department
for Energy and Mining. Initial results have proven positive
and we look forward to concluding this last piece of test
work needed to lodge the Mining Lease Application (MLA)
early in 2019.
Concluding Remarks
Terramin is set for a positive start to 2019 and we look forward
to benefitting from a return to higher commodity prices,
particularly zinc and lead. Terramin continues to be uniquely
placed to capitalise on these opportunities.
Feng (Bruce) Sheng
Executive Chairman
4
About Terramin
Terramin Australia Limited engages in the exploration, evaluation and development of base and precious metal projects in Australia
and overseas.
Terramin has a clear focus on growing a production pipeline of base and precious metal projects close to infrastructure and with
low capital and operating costs. Consistent with this focus, the Group holds a number of highly prospective mineral deposits and
exploration tenements across South Australian and Algerian locations.
Projects include the flagship Tala Hamza Zinc Project, which is located on the Mediterranean coast of Algeria and is a joint venture
with two Algerian government-owned companies, as well as the Bird-in-Hand Gold Project, Angas Zinc Mine, the Kitticoola joint
venture, the Kapunda joint venture, and the Adelaide Hills and South Gawler exploration tenements in South Australia. In total, the
Group has access to 3 billion pounds of zinc, 265,000 ounces of gold and 260 million pounds of copper in situ.
Terramin has a highly capable team to take projects from exploration through feasibility to production. This team is supported by a
Board which has extensive business and project development experience.
The safety of everyone involved in operations is at the core of the Company. The primary objective is to operate in a manner that
builds long term, sustainable value for shareholders.
Tala Hamza, Algeria
5
Vision and Values
Terramin will become a globally diversified top 5 base metals company through its first-mover
advantage in Algeria and strengths in stakeholder engagement and environmental stewardship.
Acting in a manner that is compliant with
regulatory, safety and environmental
standards
Working with others, being a member of a
high performing team
Seeking new and
innovative opportunities
to develop and grow
Terramin
Ambition
Vision
Trust
Behaving with honesty
and acting with integrity
Building shareholder
confidence
Shaping perception
Listening to others
Treating fellow employees
with respect
Shared success
A solutions orientated approach and
accountability for results
6
Key Projects
TALA HAMZA ZINC PROJECT
ALGERIA (65%)
BIRD-IN-HAND GOLD PROJECT
SOUTH AUSTRALIA (100%)
• Mineral Resource of 53.0 million tonnes @
• Mineral Resource of 265,000 ounces at 12.6 g/t
5.3% zinc and 1.3% lead.
gold.
• Definitive Feasibility Study 2018, mining lease
application and Environmental Impact Study
substantially completed and ready for
lodgement by joint venture partners.
Extensive infrastructure in place.
Low power and fuel costs.
Attractive regional exploration.
•
•
•
• Ore body remains open at depth with further
•
exploration upside nearby.
Scoping Study for Bird-in-Hand released with
Post-Tax Nominal NPV8 of $101 and IRR 96%.
• Utilising existing Angas Processing Facility.
•
Initial bores required for the Managed Aquifer
Recharge (MAR) installed.
7
Sustainability
Environment
Terramin is focussed on environmental management in the
areas in which we operate. The Group is subject to
environmental regulation, which applies to all facets of the
company’s projects – exploration, development, mining
and rehabilitation activities. Exploration licences and
mining leases contain conditions which Terramin strictly
complies with. The Group’s Directors, management,
employees, consultants and contractors are committed to
achieving a high standard of environmental performance,
which is monitored by the Audit, Risk and Compliance
Committee.
To the best of the Directors’ knowledge, there have been
no non-fulfilments of lease conditions on Terramin’s
tenements, nor any instances of non-compliance with
environmental conditions, legislation, or other regulations
through 2018.
This year, Terramin have opted to align this report with the
Global Reporting Initiatives Index as a step towards GRI
compliance in future years. The Index has been included at
the end of this report.
South Australia Seed Conservation Centre
During 2018, Terramin joined with the Adelaide Botanic
Gardens to sponsor the seed propagation of the endangered
Caladenia rigida, more commonly known as the Stiff White
Spider Orchid, which is native to the Mount Lofty Ranges. The
Stiff White Spider Orchid was known to extend from
Macclesfield, south-east of Adelaide, north to Williamstown
and to north-east of Adelaide in the early 1990s, however,
with increased land clearing, overgrazing of native animals as
well as pests and insects, bushfires and climatic changes, the
population has been in significant decline. Terramin, along
with the South Australia Seed Conservation Centre are
working together to collect, propagate and replant individual
plants into strategic locations in the Mount Lofty Ranges to
increase genetic diversity and local populations of this orchid
as part of the nationwide recovery plan.
Environment Policy
Terramin recognises that strong environmental
performance, including formal compliance with all
regulatory requirements, is an integral component of an
efficient and sustainable business. This means purposely
engaging in practices that help protect, preserve and
enhance the environment in which the Company operates,
as well as integrating environmental issues into the
decision making process of the company’s operations.
8
Sustainability (continued)
Water Management
Both Angas Zinc Mine and Bird-in-Hand project site
currently rely upon groundwater sources to supply
operational water. Regional and site groundwater
monitoring networks have been implemented and
provide water level and water quality data, which is used
to support the Mining Lease and Miscellaneous Purposes
Licence applications for the Bird-in-Hand Gold Project.
Terramin remain committed to long-term water
management planning and continuing to invest in studies
which expand upon our understanding of the
hydrogeology in the areas.
2018 Groundwater Use
Bird-in-Hand
Angas Zinc Mine
ML
10
15
Total and indirect emissions (National Pollutant
Inventory reporting)
Terramin is committed to being open and transparent about our
performance against emission standards and report annually
through the National Pollutant Inventory, administered by the
Commonwealth Department of the Environment and Energy.
The reporting period encompasses 1 July 2017 through to 30
June 2018. Current activities see emissions limited to diesel
consumption for vehicles and generators, natural gas and
electricity consumption onsite.
Substance
Oxides of Carbon
Formaldehyde
Oxides of Nitrogen
Poly Aromatic Hydrocarbons
Particulate matter < 10 um
Sulphur dioxide
Fugitive (kg)
Point (kg)
109.6
2.2
176.7
0.0085
20.9
0.14
0.04
0.23
0.01
0.00000021
The Tailings Storage Facility (TSF) at the Angas Zinc Mine
(AZM) was managed in compliance with lease conditions
throughout 2018.The 2018 audit concluded that the AZM
TSF does not present an immediate risk to the safety of the
personnel, downstream population or the environment.
Total volatile organic compounds (VOC)
22.01
0.00306
The energy and emissions boundary is based on operational control as defined
by the National Greenhouse and Energy Reporting (NGER) Act 2007. The applied
global warming potential (GWP) rates and emission factors are based on the
NGER Act (2007) and the National Pollutant Inventory.
9
Communities Policy
At Terramin we recognise that achieving positive
relationships within the communities in which we operate is
imperative in conducting responsible business. We also
recognise that it is vital to inform, consult, involve and
collaborate with the local communities to work towards
beneficial outcomes and continually strive to secure our
social license to operate. Our Communities Policy aims to be
open and transparent in our engagement with all
communities, and is focussed on creating respectful
relationships and long term partnerships which enable
communities to obtain a fair share in the benefits from our
Projects.
Terramin maintain a Grievance Policy, Community
information hotline and contact email address, available at
https://www.terramin.com.au/.
Sustainability (continued)
Social
Terramin is committed to working with communities where
we operate to maximise the benefits and minimise the
impacts resulting from our activities. All projects have a
Community Engagement Plan which aims to –
•
•
•
enhance and encourage positive relations between all
parties;
clearly disseminate information about the company’s
plans, the project, its associated activities and the
potential impacts, both adverse and positive, which may
accrue;
provide details about how this information flow will be
achieved; and
• manage the identification of and response to issues
raised by stakeholders.
National Tree Planting day saw 11 800 seedlings planted by
Joeys, Cubs, Scouts and Venturers from the Eden Hills Scout
Group. Terramin management teamed up with Eden Hills
members and volunteers over a weekend, in a fundraising
effort which was a win-win for Terramin, the environment,
and youth members scout badge program. A follow up
planting day saw a further 7 300 additional seedlings
planted. So far, more than 40 000 native trees, shrubs at
sedges have been planted at the Bird-in-Hand project site as
part of the Company’s revegetation program.
Terramin look forward to reinvigorating Community Grants
through 2019.
Communication between our Australian and Algerian offices
is paramount for success. During the year, Terramin have
continued to undertake English language training of our staff
in our Bejaia office. Language training is imperative for this
project, allowing our Australian and Algeria teams to
communicate effectively across borders, in a Project that
requires an understanding of English, French and Arabic.
10
Sustainability (continued)
CSIRO
Terramin Australia engaged CSIRO to
conduct independent ongoing analysis
of community attitudes to the
company’s proposed underground gold
operation in the Adelaide Hills during
2018. The program was called Local
Voices. The program gives
communities neighbouring the
operations an opportunity to express their views and
experiences directly, helping to inform the company’s
decision making.
CSIRO’s approach enables a dynamic interaction between
Terramin and the community that aims to increase
understanding on all sides, build trust, and strengthen
relationships. The CSIRO work builds upon knowledge gained
from Australian and global communities through thousands
of CSIRO research hours over the past decade.
The program includes a community rewards program,
whereby participants can register local community groups to
receive tokens for each survey they complete. Participants
allocate their tokens to eligible community groups who have
registered with Local Voices. These registered community
groups can then convert their tokens into a cash donation for
their use – 1000 tokens are worth $500.
More information on stakeholder groups and our Community
Consultation Committees are located on our website at
https://www.terramin.com.au/community/.
Memberships
Terramin provides industry support
and is part of the South Australian
Chamber of Mines and Energy
(SACOME) as well as a member of
the Association of Mining and
Exploration Companies (AMEC) and is
represented on the SACOME Mine
Closure Working Group. Terramin’s staff are professional
members of the Australasian Institute of Mining and
Metallurgy (AusIMM), Australian Institute of Company
Directors, CPA Australia, and the Nature Conservation
Society of South Australia.
Local Procurement
Terramin Local Spend Policy seeks to prioritise local suppliers
of goods and services in the regions where we operate. Local
businesses are supported through the pre-qualification
checklist and our procurement standards. At present,
expenditure is limited while the permitting process
continues. Terramin looks forward to sourcing much of its
construction work from local companies once approvals are
in place.
Safety
Our target is to provide an injury free workplace for our team
by ensuring hazards are identified and managed
appropriately through the Company Risk Management
Framework. All safety incidents are investigated, to allow
learnings to be shared and actions to be implemented as a
result.
July 2018 saw the implementation of an updated Company
Risk Management Framework, which outlines the key
processes and actions arising as part of hazard identification
for all parts of the Company – from new exploration sites and
exploration programs to active developing projects,
corporate offices and the Angas Zinc Mine, which remains in
Care and Maintenance.
All employees are committed to acting in ways which are in
line with our Code of Conduct, which incorporates
regulatory, safety and environmental standards, and must
take reasonable care of not only their own health and safety,
but that of those around them.
Safety statistics are reported for the Terramin workforce, as
well as all consultants, contractors and visitors working on
Terramin sites, including, but not limited to, Tala Hamza, the
Angas Zinc Mine and Processing Facility, the Bird-in-Hand
Gold Project, and any of the active exploration sites.
Safety Performance
Employee or Contractor fatalities
Safety incidents
Contractor Inductions
Visitor Inductions
Fit for Purpose safety audits on drilling
equipment
Safework SA Site Audits
-
-
51
33
5
2
11
Governance
Corporate Governance Statement
At Terramin, governance is an essential part of the way we
work; not just in what we do, but in how we act, how we
speak to each other and how we evaluate our behaviour.
Our culture and values are aligned with, and support, good
governance practices.
This summarised statement along with the Corporate
Governance Principles and Recommendations located in the
annex at page 68 set out the key features of the Terramin
Australia Limited’s governance framework, and reports
against the Corporate Governance Principles and
Recommendations (3rd edition) published by the ASX
Corporate Governance Council (ASX Principles and
Recommendations).
The Board is committed to conducting the company’s
business in accordance with high standards of corporate
governance and with a view to creating and delivering value
for shareholders. To this end, the Board has adopted a
system of internal controls, a risk management framework
and corporate governance policies and practices, which are
designed to support and promote the responsible
management and conduct of the company.
Throughout 2018, the company’s governance arrangements
were consistent with the ASX Principles and
Recommendations, where practicable. During 2018, the
company undertook a strategic review and continued to
work on progressing various changes identified as part of
that review. Where the company’s compliance with the
Principles and Recommendations is reflected in a separate
document or policy, a reference to the location of that
document or policy is included in the annex at page 68. In
accordance with the ASX Principles and Recommendations,
the company’s policies and charters referred to in the annex
on page 68 are available on the Corporate Governance
section of the company’s website. References in this
statement to “reporting period” are to the financial year
ended 31 December 2018.
The Board is responsible for overseeing the management of
the company. The Board has adopted a Board Charter that
sets out its roles and responsibilities, which includes setting
the company’s goals and objectives, reviewing and
monitoring the company’s material risks and its system of
internal compliance and controls, setting an appropriate
corporate governance framework, and determining broad
policy issues for the company. The Board also ensures that
specific powers and responsibilities have been delegated to
Company Executives and that the overall strategy is aimed at
delivering value for shareholders. Two committees help the
Board with the effective discharge of its responsibilities.
Audit and Risk Committee - assists the Board in the effective
discharge of its responsibilities in relation to financial
reporting and disclosure processes, internal financial
controls, funding, financial risk management, including
external audit functions, and oversight of the internal control
and risk management system’s effectiveness.
Nomination and Remuneration Committee - assists the
Board in discharging its responsibilities relating to the
remuneration of directors, executives and employees,
succession planning, and relevant policy establishment and
monitoring.
Our Board of Directors and Executives
Term
Director and
Chairman
Director and
Deputy Chairman
Director
Name of Director
Mr Feng (Bruce)
Sheng
Mr Michael
Kennedy
Mr Kevin
McGuinness
Mr Angelo Siciliano Director
Director
Mr Wang Xinyu
Classification
Executive
Independent
Independent
Non-Independent
Executive
Name of Executive Term
Mr Richard Taylor Chief Executive
Classification
Executive
Mr Simon
Iacopetta
Officer
Chief Financial
Officer and
Company Secretary
Executive
This Corporate Governance Statement is current as at 25
February 2019 and has been approved by the Board of
Terramin Australia Limited. Refer to annex on page 68.
12
Financial Report
13
Directors’ Report
for the Year Ended 31 December 2018
Your Directors submit their report on the consolidated entity
Terramin Australia Limited (the Company or Terramin) and
its controlled entities (the Group), for the year ended 31
December 2018 and auditor’s report.
Directors
The following persons were Directors of the Company
during the whole of the year and up to the date of the
report unless stated otherwise:
Mr Feng (Bruce) Sheng
Executive Chairman
Appointed Director 17 April 2013 and
Executive Chairman 11 January 2018
Mr Sheng is Chairman of Melbourne
based Asipac Group (including Asipac
Capital Pty Ltd and Asipac Group Pty
Ltd) (Asipac). He has owned and operated several
businesses over the years predominantly focused in
property investment and development. Asipac is an active
investor in the resources sector and a significant shareholder
in Terramin. Asipac is also an active member of the Australia
China Business Council (ACBC) and Mr Sheng is the Vice-
President of the ACBC (Victoria). He is also a Director of
Western Mediterranean Zinc Spa (WMZ), the company
which owns and operates the Tala Hamza Zinc Project in
Algeria.
Mr Michael H Kennedy
B.Com (Economics)
Non-Executive Deputy Chairman
Appointed 15 June 2005
Mr Kennedy has enjoyed a 40 year
career in the non- ferrous mining and
smelting industry, and has held a
number of senior marketing and logistics roles with the
CRA/RTZ Group, managing raw material sales from the
Bougainville, Broken Hill, Cobar and Woodlawn mines,
managed raw material purchases and supply into the Port
Pirie lead smelter, Budel zinc smelter (Netherlands), and the
Avonmouth (UK) and Cockle Creek (Newcastle) zinc-lead
smelters. He was the resident Director of the Korea Zinc
group of companies in Australia from 1991 until 2005, which
encompassed the construction and commissioning of the
Sun Metals zinc refinery in Townsville. Mr Kennedy is
Deputy-Chairman of the Board, and a member of the Audit,
Risk and Compliance Committee, the Nominations and
Remuneration Committee.
Mr Kevin McGuinness
BAA, ACA
Non-Executive Director
Appointed 17 April 2013
Mr McGuinness is a finance executive
with more than 25 years of experience
as a Director and in executive
management with ASX listed and private companies in the
mining, medical equipment industries and not-for-profit
organisations. Mr McGuinness was previously the Chief
Financial Officer of Exact Mining Services. He is the current
Chairman of Green Industries SA, a former Director and
Chairman of the Royal Zoological Society of SA and a former
Director of ASX listed, Ellex Medical Lasers Limited. Mr
McGuinness is Chair of the Audit, Risk and Compliance
Committee, the Nominations and Remuneration Committee.
Mr McGuinness is also a Director of WMZ.
Mr Angelo Siciliano
FIPA, Registered Tax Agent, BBus
Non-Executive Director
Appointed 2 January 2013
Mr Siciliano has more than 20 years of
experience as an accountant in
property development and financial
accounting. Mr Siciliano is the Chief Financial Officer of Asipac
and for the last 16 years has owned and managed an
accounting practice predominantly focussing on taxation
advice and business consulting. Mr Siciliano is a fellow of the
Institute of Public Accountants. He is a member of the
Company’s Audit, Risk and Compliance Committee, and of
the Nominations and Remuneration Committee.
Mr Wang Xinyu
Executive Director
Appointed Director 2 March 2017 and
Executive Director 11 January 2018
Mr Wang is a vice president of China
Non-Ferrous Metal Industry’s Foreign
Engineering and Construction Co Ltd
(NFC) and is currently a Director of Industrial Construction
Corporation LLC (Mongolia), China Nerin Engineering Co. Ltd
and NFC India Pvt. Ltd. Mr Wang has project management
experience in a number of smelting and mining operations in
the Middle East and Central Asia, notably the Iran Yazd Zinc
Mine and Smelter and the Arak Aluminium Smelter Project.
14
Directors’ Report (continued)
Company Secretary
Mr Simon Iacopetta
B.Com (Corporate Finance &
Accounting), CA, G.Cert (Applied Finance
& Investment), MAICD
Chief Financial Officer
Mr Iacopetta is a mining executive with
broad experience in corporate finance
and financial management functions in
the resources and professional services sectors. He was most
recently Chief Financial Officer of ASX listed gold miner
Ramelius Resources Limited responsible for capital
management, corporate treasury, financial management and
project evaluation. Previously, he held senior management
roles with an international accounting firm specialising in the
provision of corporate finance and assurance services
primarily focusing on publicly listed companies. Simon is a
graduate of the University of Adelaide, has completed post
graduate study in both Finance and Accounting and is a
member of the Institute of Chartered Accountants Australia
and New Zealand and the Institute of Company Directors. Mr
Iacopetta is also Chief Financial Officer of Terramin Australia
Limited.
Meetings of Directors
The number of meetings of the Company’s Board of
Directors and of each Board committee held during the year
ended 31 December 2018, and the number of meetings
attended by each Director were:
Directors
Directors’
Meetings
Audit,
Risk &
Compliance
Committee
A
E
-
-
4
4
4
4
4
4
-
-
E Number of meetings eligible to attend.
A Number of meetings attended.
F Sheng
M Kennedy
K McGuinness
A Siciliano
X Wang
A
7
7
7
7
4
E
7
7
7
7
7
Nominations &
Remuneration
Committee
E
-
2
2
2
-
A
-
2
2
2
-
Principal Activities
During the year, there were no significant changes in the
nature of the Group’s principal activities which continued to
focus on the development of and exploration for base and
precious metals (in particular zinc, lead and gold) and other
economic mineral deposits.
Operating Results
The consolidated loss of the Group after providing for income
tax was $6.0 million for the year ended 31 December 2018
(2017: $3.2 million). The major contributors to the result were
development costs, interest and administration expenditure in
relation to Australian and overseas operations.
The consolidated net asset position as at 31 December 2018
was $47.4 million, decreased from $51.9 million as at 31
December 2017.
Dividends Paid or Recommended
No dividends were paid or declared during the year and no
recommendation was made to pay a dividend.
Review of Operations
During the year, the Company continued to focus on the
exploration, evaluation and development of base and precious
metal projects in Australia and Algeria. Highlights for each of
the Company’s major projects are reported below.
North African Projects
Tala Hamza Zinc Project
(Terramin 65%)
The Tala Hamza Zinc Project is 100% owned by Western
Mediterranean Zinc Spa (WMZ). Terramin has a 65%
shareholding in WMZ. The remaining 35% is held by two
Algerian Government owned companies: Enterprise National
des Produits Miniers Non-Ferreux et des Substances Utiles Spa
(ENOF) (32.5%) and Office National de Recherche Géologique
et Minière (ORGM) (2.5%). WMZ was formed following a
resolution of the State Participation Council (CPE) to create a
legal entity between ENOF and Terramin for the development
and mining of the Tala Hamza zinc-lead deposit.
During the reporting period, Terramin and WMZ completed
the revised Definitive Feasibility Study (DFS) and engaged in
detailed technical and financing meetings with Algerian
authorities. The Company compiled the final documentation
for the Mining Lease Application which incorporate recent
project enhancements such as the dry stacking of tailings and
the relocation of the processing plant. The documentation for
the mining lease application also includes the delivery of an
Environmental Impact Assessment.
Following finalisation of the technical aspects of the DFS, the
Tala Hamza project team undertook detailed technical review
of the DFS proposal with its joint venture partners, including
site visits to similar operations with Underhand Drift and Fill
(UDF) in operation. Terramin was informed in December 2018
that all technical matters were now finalised and the focus
would now be on commercial and financing matters.
The partners are working together to provide all the required
information to the Algerian regulator in the format that the
regulator requires for the mining lease application. The Tala
Hamza exploration license expired on 1 February 2018. Its
renewal is not required as WMZ will lodge a mining lease
application immediately after the project partners have
resolved to take a decision to mine. WMZ is entitled to a two
year grace period should it be required.
15
Directors’ Report (continued)
Australian Projects
Bird-in-Hand Gold Project (including Angas Zinc Mine and
Processing Facility)
(Terramin / Terramin Exploration Pty Ltd 100%)
The Bird-in-Hand Gold Project is located approximately
30km north of Terramin’s existing mining and processing
facilities at the Angas Zinc Mine in Strathalbyn. The project
has a high grade Resource of 265,000 ounces of gold 12.6g/t,
which is amenable to underground mining. Terramin
announced the results of an updated Scoping Study in
October 2018. Subject to required regulatory approvals, the
Bird-in-Hand material will be processed utilising the facilities
at Angas which can be modified to process gold-bearing
material. The existing tailings dam at Angas has the capacity
to hold all the Bird-in-Hand tailings.
The Angas Zinc Mine and Processing Facility is located 2 km
outside the town of Strathalbyn, 60 km south east of
Adelaide. The mine is currently in care and maintenance
pending the resumption of exploration at depth and near
mine, in addition to evaluation of the development of the
Bird-in-Hand Gold Project. The site remains in compliance
with the lease conditions on all levels.
During the reporting period, the Company released a scoping
study, which included an updated Mineral Resources
Statement, as well as project economics based on the most
current project planning, as reflected in the drafted Mining
Lease Application. The Bird-in-Hand deposit has a global
Mineral Resource Estimate of 650 Kt (at a cut off of 1.0 g/t)
including an Indicated Resource of 432 Kt. Total material
mined (at a project evaluation cut-off grade of 1.0 grams per
tonne) is 595 Kt at 11g/t (76% Indicated and 24% Inferred)
with an average mine production rate of 150 Ktpa and mine
life of 4 years (5 years incl. pre-production and final
backfilling).
Terramin has successfully conducted a trial Managed Aquifer
Recharge (MAR) drilling program which has further
demonstrated the ground water modelling developed in the
prior 5 years is fit for purpose and further confirms the sites
amenability to MAR as a water management solution. The
remainder of the reporting period focused on completing the
groundwater studies which are pivotal to the project, as
outlined in the Project’s Ministerial Determination issued by
the South Australian Government during 2017. Stage 2 (of 2)
MAR injection test work of the recently drilled bores will be
undertaken when government approvals are gained.
The Company has substantially completed the studies
necessary for the preparation of the mining lease. These
studies include groundwater modelling and management
planning, underground infrastructure planning, surface water
studies and stormwater infrastructure design, geotechnical
modelling, existing site contamination assessment, visual
amenity design, air quality and vibration studies. The risk
assessment for the project in relation to the environmental,
community and economic impacts continues to be updated,
and will continue throughout the life of the project.
16
Directors’ Report (continued)
In addition, the Company continued its community
engagement programme which included regular meetings of
the Woodside and Strathalbyn Community Consultative
Committees for the project, allowing community members to
provide valuable input into the proposed project. The
Company submitted a Miscellaneous Purposes Licence
Management Plan in draft form to allow the processing of
Bird-in-Hand ore at the Angas Processing Facility during July,
and received feedback in February 2019 from the
Department for Energy and Mining (DEM). After submitting
the mining lease in draft form to the DEM at the end of the
2017, the company received feedback on the proposal during
the year, and resultantly commenced additional groundwater
studies to address outstanding items.
Adelaide Hills Project
(Terramin / Terramin Exploration Pty Ltd 100%)
The Adelaide Hills Project consists of eleven exploration
tenements that cover 3,481km² largely over the southern
Adelaide Fold Belt. This project area is considered
prospective for gold, copper, lead and zinc. In addition to
Bird-in-Hand Gold Project and the Kapunda Copper Project
current active project areas include: Kitticoola, Wild Horse
and the Ulooloo goldfield. During the reporting period,
Terramin acquired a 100 % holding of Private Mine 53, from
Kitticooler Holdings Pty Ltd (ASX: TZN 9th January 2019). PM
53 covers the historic Kitticoola copper gold mine located
2.5km south of Palmer and approximately 62km by road
from Terramin’s Angas Processing Facility (APF) at
Strathalbyn.
The Kitticoola Mine operated between 1846 and 1869 as a
copper mine producing 7,000 tonnes of ore at an estimated
average grade of 2.25% copper. The gold potential was not
realised until 1890 and the mine intermittently produced
30,000 tonnes of ore at an average recovered grade of 5.4
g/t gold at that time.
Mineralisation in the mine area is comprised of nine lodes,
with only three, the Baker, Mastermann and Anstey lodes
having been opened to any extent. The lodes occupy two
sets of tensional fractures within the Palmer Fault. Lodes
occur within the Palmer Granite as narrow veins ranging
from 1m to 15m in width and 30m to 200m in length. In
1981 CRA Exploration Pty Ltd (CRA) evaluated the remnant
mineralisation in the oxide and sulphides zones as having
average grades of 5.24g/t gold and 0.55% copper and
14.52g/t gold and 4.45% copper respectively.
Terramin’s exploration geologists have undertaken
reconnaissance and due diligence work with the permission
of the owner of PM 53. This work confirmed the previous
publicly available information and published results.
Terramin will evaluate Kitticoola by drilling to test the
modelled down plunge extension of the Mastermann Lode.
Kapunda Copper Joint Venture
(Terramin Exploration Pty Ltd 100%, subject to farm-out)
In August 2017, Terramin entered into an agreement with
Environmental Copper Recovery Pty Ltd (ECR) in respect of the
potential development of a low cost in situ recovery (ISR)
copper project near Kapunda, South Australia, approximately
90 km north of Adelaide. The joint venture will be investigating
the potential to extract through ISR the copper from shallow
oxide ores in and around the historic Kapunda Mine workings.
If field leaching tests are successful, then a feasibility study of
the project to produce copper (and possibly gold) will be
commissioned. Under the terms of the agreement, ECR can
earn a 50% interest in the project after spending $2.0 million
and a further 25% after spending an additional $4.0 million.
Subject to the completion of this expenditure, Terramin will
retain 25% and receive a 1.5% royalty in respect of all metals
extracted by the joint venture.
Terramin and ECR have estimated a combined Resource of
47.4 million tonnes at 0.25% copper containing 119,000
tonnes of copper using a 0.05% copper cut off. This Resource
estimate is only in respect of that part of the Kapunda
mineralisation that is considered amendable to ISR (copper
oxides and secondary copper sulphides) and only reports
mineralisation that is within 100 metres of the surface. ECR
was successful in 2018 in securing $2.6m in government
funding to pursue the ISR testwork.
South Gawler Project Joint Venture
(Menninnie Metals Pty Ltd (MMPL) 100%)
The Southern Gawler Ranges Project is located in the Gawler
Craton of South Australia, an area that is becoming
increasingly recognised as an under-explored region with high
discovery potential. The project comprises a group of eighteen
Exploration Licenses totaling 8958km2. The project area is
prospective for a range of deposit styles that host
combinations of gold, silver, copper, lead and zinc. The project
hosts the Menninnie Dam deposit, the largest undeveloped
lead-zinc deposit in South Australia. The lodes at Menninnie
Central and Viper have been combined to estimate a JORC
2004 compliant Inferred Resource totaling: 7.7Mt @ 3.1% Zn,
2.6% Pb and 27g/t Ag, at a 2.5% Pb+Zn cut-off (ASX: TZN 1st
March 2011). During the year, MMPL terminated the Farm-in
and Joint Venture Agreement with Evolution Mining Limited
(Evolution) for the Project (ASX: TZN 19th April 2018).
Menninnie Metals retains 100% of the Southern Gawler
Ranges Project with Evolution relinquishing its farm-in rights.
Since resuming control of the entire Project the Company has
had the gravity and aeromagnetic data sets reprocessed.
Careful examination of the regional images suggests a number
of areas may have IOCG potential. Of the four areas modelled,
two are now judged to comprise credible multi-point gravity
anomalies.
17
Directors’ Report (continued)
Corporate
During the year the Company restructured its Board and
Senior Management roles to ensure appropriate focus on
the critical government permitting phase of both the Bird-in-
Hand gold project and Tala Hamza zinc and lead project. Mr
Feng (Bruce) Sheng assumed the role of Executive Chairman
and Mr Wang Xinyu has moved to an Executive Director role.
Mr Richard Taylor was appointed as Chief Executive Officer
and Mr Simon Iacopetta was appointed Chief Financial
Officer and Company Secretary.
The new management team represented the company at
domestic and international mining conferences and
presented to investors throughout Australia, in Hong Kong,
London and New York.
The Company and its major shareholder Asipac, agreed to
increase the Standby Term Facility from $3.25 million to
$6.25 million during the year. Additionally, both parties
agreed to extend the $5 million Corporate Facility, $6 million
Bird-in-Hand Facility and the $6.25 million Standby Term
Facility by 12 months to 31 October 2019.
There were no options exercised during the reporting period.
A total of 10,000,000 options were granted to the incoming
Chief Executive Officer during the period and 1,750,000
options expired during the reporting period.
A total of 423,828 share rights were granted during the year
ended 31 December 2018.
Business Development Activities
Throughout 2018, the Company continued to identify, assess
and, where appropriate, pursue the acquisition of interests
in advanced mining projects. The Company negotiated the
acquisition of Private Mine 53 (PM53) which contains the
historic Kitticoola Mine. The negotiations culminated in
signing of the agreement in January 2019.
Significant Changes in State of Affairs
There were no significant changes in the state of affairs of
the Group during the year, other than as referred to in this
report.
Subsequent Events
Apart from the matters below, there are no other matters or
circumstances that have arisen since the end of the year that
have significantly affected or may significantly affect either
the entities operations or state of affairs in future years or
the results of those operations in future years.
Terramin entered into an agreement to acquire 100% of
Private Mine 53 which covers the historic Kitticoola copper
gold mine that was operated intermittently between 1846
and 1971.
The agreement provides Terramin with the exploration
rights, subject to a land access fee and a sliding scale
royalty payable on gold produced.
Terramin entered into an agreement with major shareholder
Asipac to restructure and increase the existing Standby Term
Facility from $6.25 million to $8.25 million.
Future Developments
The Group will continue to work with its Algerian partners to
obtain the regulatory approvals and proceed with the
development of the Tala Hamza Zinc Project. The Group also
intends to progress the Bird-in-Hand Gold Project through to
the permitting of the project and undertake exploration and
evaluation expenditure, particularly at Kitticoola.
Competent Person Statement
The information in this report that relates to Exploration
Results and Mineral Resources is based on information
compiled by Mr Eric Whittaker (Tala Hamza, Menninnie, Angas
and Kapunda Resources and Exploration Results) and Mr Dan
Brost (Bird-in-Hand Resource), both being Competent Persons
who are Member(s) of The Australasian Institute of Mining
and Metallurgy (AusIMM).
Mr Whittaker is employed as the Regional Exploration
Manager of Terramin Australia Limited and Mr Brost is a
geologist consulting to Terramin. Mr Whittaker and Mr Brost
have 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 Competent
Person(s) as defined in the 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’.
Mr Whittaker and Mr Brost consent to the inclusion in the
report of the matters based on their information in the form
and context in which it appears.
The information in this report that relates to Ore Reserves is
based on information compiled or reviewed by Mr Luke
Neesham, a Competent Person who is a Member of The
Australasian Institute of Mining and Metallurgy (AusIMM). Mr
Neesham is Principal Mining Engineer for GO Mining Pty Ltd a
consulting firm engaged by Terramin Australia Limited to
prepare mining designs and schedules for the Tala Hamza
Feasibility Study. Mr Neesham 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 Resources and Ore Reserves’. Mr Neesham consents
to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
18
Directors’ Report (continued)
Share Capital
(a) Ordinary Shares
As at 31 December 2018, there were 1,869,601,371 fully
paid ordinary shares in the capital of the Company on issue.
(b) Unlisted Options outstanding at the date of this
report
At the date of this report, 10,000,000 unlisted options over
fully paid ordinary shares in the capital of the Company were
on issue.
Expiry Date
2 August 2023
2 August 2023
2 August 2023
2 August 2023
Total
Exercise
Price $
0.20
0.25
0.32
0.40
Number of Options
on Issue
2,500,000
2,500,000
2,500,000
2,500,000
10,000,000
No person entitled to exercise an option had or has any right by virtue of the
option to participate in any share issue of the Company or any other body
corporate.
(c) Unlisted options exercised/cancelled during the
year
There were no unlisted options over fully paid ordinary
shares in the capital of the Company exercised during the
period. During the year 1,750,000 options lapsed and were
cancelled.
(d) Unlisted options exercised/cancelled since 31
December 2018
No unlisted options over fully paid shares in the Company
have been exercised or cancelled since 31 December 2018.
(e) Share rights issued/converted during the year
During the year, there were no share rights issued. A total of
423,828 share rights were converted into shares during the
reporting period.
(f) Share rights issued/converted since 31 December 2018
Since 31 December 2018, there were no share rights
converted to ordinary shares.
Remuneration Report - Audited
This remuneration report for the year ended 31 December
2018 outlines the remuneration arrangements of the
Company in accordance with requirements of the
Corporations Act 2001 (Act) the Corporations Regulations
2001.
The remuneration report details the remuneration
arrangements for Key Management Personnel (KMP). Under
the Accounting Standards, KMPs are defined as those
persons having authority and responsibility for planning,
directing and controlling the major activities of the Company
including any Director (whether executive or otherwise). The
information regarding remuneration and entitlements of the
Company’s Board and KMP required for the purposes of
Section 300A of the Act is provided below.
(a) Directors and Other Key Management
The following persons were Directors of the Company during
the financial year and up until the date of this report unless
stated otherwise:
Non-Executive Directors
Mr F Sheng (Chairman - Non-Independent)1
Mr MH Kennedy (Deputy Chairman - Independent)
Mr A Siciliano (Non-Independent)
Mr K McGuinness (Independent)
Mr X Wang (Non-Independent) 1
1. Mr Sheng and Mr Wang were appointed Executive Chairman and
Executive Director respectively by the board on 11 January 2018.
The following persons are also Key Management Personnel of
the Group:
Other Key Management Personnel
Mr R Taylor (Chief Executive Officer)2
Mr S Iacopetta (Chief Financial Officer & Company
Secretary)3
Mr M Janes (former Chief Executive Officer)4
Mr S Gauducheau (former Legal Counsel & Company
Secretary)5
Mr JF Ranford (former Chief Technical Officer)6
2. Mr R Taylor was appointed Chief Executive Officer on 28 May 2018.
3. Mr S Iacopetta was appointed Chief Financial Officer and Company
Secretary on 5 June 2018.
4. Mr M Janes concluded his employment on 8 August 2018.
5. Mr S Gauducheau concluded his employment on 28 June 2018.
6. Mr JF Ranford concluded his employment on 30 April 2018.
19
Directors’ Report (continued)
(b) Nominations and Remuneration Committee
The Nominations and Remuneration Committee is a
committee of the Board. The current members of the
committee are Mr K McGuinness (Chair), Mr MH Kennedy
and Mr A Siciliano.
The Committee is responsible to assist the Board to:
• ensure it is of an effective composition, size and
•
commitment to adequately discharge its responsibilities
and duties; and
independently ensure that the Company adopts and
complies with remuneration policies that:
• attract, retain and motivate high calibre Directors and
Executives so as to enhance performance by the
Company;
• are consistent with the human resource needs of the
Company; and
• motivate Directors and management to pursue the
long-term growth and success of the Company within
an appropriate control framework and ensure that
shareholder and employee interests are aligned.
(c) Remuneration Policy and Practices
This report outlines the remuneration arrangements for KMP
of the Company. It is recognised that the performance of the
Company depends on the quality and skills of its Directors
and Executives. The Board is mindful of the need to attract,
motivate and retain highly skilled Directors and Executives.
Compensation of KMPs of the Group is competitively set to
attract and retain appropriately qualified and experienced
Directors and Executives in accordance with the following
principles:
• Provide competitive rewards in accordance with market
standards to attract and retain high calibre Directors and
other KMP; and
• Link rewards with the strategic goals and performance of
the Group and the creation of shareholder value (by the
granting of share options where appropriate).
The policy for determining the nature and amount of
remuneration of the KMP includes consideration of
individual performance in addition to the overall
performance of the Group. Historically, the Group’s
performance was measured by a range of financial and
production indicators. Since the Angas Zinc Mine was placed
in care and maintenance, the remuneration of KMPs is
dependent upon achievement of progress towards a number
of company objectives: (1) company funding; (2) progress
towards the development of the Tala Hamza Zinc Project
(including delivery of revised DFS, decision to mine by the
partners, approvals, funding and transition towards
development); (3) progress towards the development of the
Bird-in-Hand Gold Project (including approvals, financing,
firming and expanding the existing resource); and (4)
growing the Company’s assets.
(d) Use of Remuneration Consultants
From time to time the Nominations and Remuneration
Committee may seek external remuneration advice as
required. No such advice was obtained during the reporting
period.
(e) Remuneration Report Approval
At the last Annual General Meeting held on 30 May 2018, the
Remuneration Report for the financial year ending
31 December 2017 was not approved by shareholders. The
feedback received by directors related to the use of shares to
compensate directors and management. Following that
feedback the board resolved to no longer compensate its
directors with shares in lieu of cash payment for directors’
fees and to provide share rights only as part of the CEO’s base
salary.
(f) Executive Remuneration and Incentives
Fixed Remuneration
I.
The fixed portion of Executive remuneration packages
comprise a base salary, statutory superannuation payment
and FBT charges related to employee benefits, such as car
parking. Executive performance and remuneration packages
are reviewed, where possible, annually by the Nominations
and Remuneration Committee. The review process includes
consideration of both individual performance and the overall
performance of the Group.
Share Rights
II.
Following the feedback from shareholders at the 2017 AGM
the board resolved to no longer issue share rights under the
plan as part of the CEO’s base salary. The Company currently
does not have an operative Share Rights Plan.
Incentives
III.
Performance based remuneration may include both short-
term and long-term incentives, and is designed to reward KMP
for meeting or exceeding key performance indicators (KPI’s).
KPI’s may include financial metrics and completion of key
group objectives. The Board may from time to time approve
the award of such incentives subject to satisfaction of KPI’s.
The short-term incentive (STI) is an “at risk” bonus which may
be provided in the form of cash and/or equity securities.
Long-term incentives may be provided under the Terramin
Australia Employee Option Plan (EOP). The Directors may
grant options to employees to acquire shares at an exercise
price set by the Board. Each share option converts into one
ordinary share of the Company when exercised.
The grant of options is linked to the achievement of the
Company’s objectives (refer item (c) of the remuneration
report) and the creation of shareholder value.
20
Directors’ Report (continued)
IV. Employment Contracts
Mr Richard Taylor, the Company’s Chief Executive Officer,
entered into an employment contract in May 2018 with
no fixed term. Either party may terminate the agreement in
the first 6 months with 1 month’s notice. The Company or
the CEO may terminate the agreement by providing a 3
months’ notice thereafter. The Company may elect, at its
discretion, to make a payment in lieu. Under this contract,
Mr Taylor receives a salary of $325,000 per annum (including
superannuation).
Mr Simon Iacopetta, the Company’s Chief Financial Officer
and Company Secretary, entered into an employment
contract with the Company in May 2018. Under this
contract, Mr Iacopetta receives a salary of $250,000 per
annum (including superannuation). Either party may
terminate the agreement in the first 6 months with 1
month’s notice. Thereafter, either party may terminate the
employment contract without cause by providing 3 months
written notice or (in the case of the Company) by maing a
payment in lieu.
Unless agreed otherwise by the board, termination
payments of any Executives or employees are not payable in
the instance of resignation or dismissal for serious
misconduct.
(g) Directors Remuneration
Remuneration
I.
The maximum aggregate fees payable to Non-Executive
Directors is subject to approval by shareholders at a general
meeting. All securities issued to Directors and related
parties must be approved by shareholders at a general
meeting.
Non-Executive Directors are either paid a base fee plus
superannuation, or remunerated via contractual
arrangements approved by the Board and negotiated in
consultation with the Nominations and Remuneration
Committee. The current Non-Executive base fees (other than
fees for the Chairman and Deputy Chairman) are $40,000
per annum. The Chairman and Deputy Chairman receive
$100,000 and $60,000 per annum respectively.
The non-executive directors fees paid are consistent with
fees paid to non-executive directors of comparable
companies. Company policy supports the issue, where
appropriate, of equity securities to Directors (whether
Executive or Non-Executive) to help ensure Directors’
interests are aligned with those of shareholders. The board
has not paid director’s fees in shares during the reporting
period.
The aggregate fees paid to Non-Executive Directors during
2018 was $237,500 (with a further $77,500 remaining
unpaid at reporting date) compared to the maximum limit
approved by shareholders at the 2010 Annual General
Meeting of $700,000.
The Board recognises that from time to time, Non-Executive
Directors are called upon to provide services in addition to
their usual Director’s duties. Accordingly, Directors may be
compensated for additional duties undertaken at the
request of the Board, for instance extensive travels to
Algeria or meetings with overseas investors. In accordance
with Company policy additional compensation of up to
$1,000 per day may be provided to Directors for work
additional to standard Board duties. This form of Non-
Executive compensation is only provided in circumstances
where Directors are required to commit time beyond that
expected of a Non-Executive Director role and requires a
continuous commitment of 2 or more days. Additional
remuneration may be paid in shares in lieu of cash subject to
shareholder approval.
During 2018 no additional fees were paid to Non- Executive
Directors in relation to work outside of standard Board
duties.
II. Director Options
There were no options or other equity securities issued to
Directors during the year as remuneration.
III. Retirement or other Post-Employment Benefits
The Company has no policy to provide benefits to its Directors
or Executives upon their retirement or otherwise upon
cessation of employment, other than by making the statutory
superannuation guarantee contributions as required by law.
IV. Board and Committees – Membership and
Remuneration
The following table sets out the Chair and members of each
committee and the annual fees allocated for each position.
Committee
Chairman
Fee $
Vice Chairman
Fee $
Member
Fee $
Each Non-Executive Director 100,000
60,000
40,000
Additional work to standard
1
Board duties
Audit, Risk and Compliance
1,000/day
1,000/day
1,000/day
K McGuinness (Chair), MH
Kennedy, A Siciliano
7,500
Nominations and Remuneration
K McGuinness (Chair), MH
Kennedy, A Siciliano
7,500
Due Diligence
-
-
5,000
5,000
K McGuinness (Chair), MH
Kennedy
1. Subject to Board approval to compensate for work undertaken in
addition to standard Director’s duties and requires a commitment of 2 or
more days.
-
-
-
21
Directors’ Report (continued)
(h)
Parent Entity Directors’ and Executives’ Remuneration and Entitlements
During the year, the following cash and non-cash payments were made to the Key Management Personnel:
Short Term Benefits
Salary &
Fees
Contract
Payments
Long Term
Benefits
Annual and
Long Service
Leave9
Post-Employment
Share-based Payments
Total
Termination
Benefits
Share
Rights
Share
Options
% of
Total
Key Management
Personnel
Directors1
MH Kennedy
A Siciliano
K McGuinness
F Sheng
W Xinyu
Y Xie3
Key Management
R Taylor4
S Iacopetta5
MS Janes6
JF Ranford7
SD Gauducheau8
TOTAL
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2018
2018
2017
2018
2017
2018
2017
2018
63,927
63,927
-
-
-
-
-
-
-
-
-
-
177,702
131,425
230,776
218,750
116,058
293,550
138,073
200,000
-
50,000
50,000
55,000
55,000
100,000
100,000
40,000
33,115
-
6,885
-
-
-
-
-
-
-
-
Super-
annuation
Benefits
6,073
6,073
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16,105
11,984
(114,017)
30,295
(75,880)
(2,672)
(60,642)
(13,025)
16,882
12,485
15,089
24,938
8,853
27,887
8,721
19,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
43,750
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0.0%
0.0%
70,000
70,000
0.0%
50,000
0.0%
50,000
0.0%
55,000
0.0%
55,000
0.0%
100,000
0.0%
100,000
0.0%
40,000
0.0%
33,115
0.0%
0.0%
-
6,885
110,956
34.5%
321,645
-
-
-
-
-
-
-
0.0%
155,894
0.0%
131,848
13.8%
317,733
0.0%
49,031
0.0%
318,765
0.0%
186,152
0.0%
205,975
110,956
-
1,159,570
857,961
245,000
(222,450)
68,103
100,000
2017
14,598
776,227
245,000
1. Refer to page 21 of the Directors’ Report for details of Non-Executive Directors’ fees allocated by role
2. Represents 100% of the former CEO share rights entitlement for 2017
3. Mr Y Xie retired on 2 March 2017
4. Mr R Taylor commenced as Chief Executive Officer on 28 May 2018
5. Mr S Iacopetta commenced as Chief Financial Officer and Company Secretary on 5 June 2018
6. Mr M Janes concluded his employment on 8 August 2018
7. Mr JF Ranford concluded his employment on 30 April 2018
8. Mr S Gauducheau concluded his employment on 28 June 2018
9. The amounts disclosed in this column represent the movements in the associated provisions
77,898
-
43,750
-
-
1,157,473
22
Directors’ Report (continued)
(i) Key management personnel - shares and options over equity instruments
The movement during the reporting period in the number of ordinary shares or options over ordinary shares in Terramin Australia
Limited by each Key Management Personnel is as follows:
Key Management Personnel
Parent Entity Directors
MH Kennedy
A Siciliano
K McGuinness
F Sheng
W Xinyu
Other Key Management Personnel
R Taylor2
S Iacopetta3
MS Janes4
JF Ranford5
SD Gauducheau6
Shares Balance
1 Jan 18
Shares Acquired
during Year
Shares Issued as
Remuneration1
Cessation as KMP
Shares Balance
31 Dec 18
3,934,580
9,923,168
2,023,580
620,713,916
-
-
-
1,321,508
500,000
683,771
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
423,828
(1,745,336)
-
-
(500,000)
(683,771)
3,934,580
9,923,168
2,023,580
620,713,916
-
-
-
-
-
-
Total
636,595,244
1. Relates to the conversion of share rights previously issued as remuneration. Further details of Shares and Share Rights, including terms and exercise price are
639,100,523
(2,929,107)
423,828
-
included in the Financial Report
2. Mr R Taylor commenced Chief Executive Officer on 28 May 2018
3. Mr S Iacopetta commenced Chief Financial Officer and Company Secretary on 5 June 2018
4. Mr M Janes concluded his employment on 8 August 2018
5. Mr JF Ranford concluded his employment on 30 April 2018
6. Mr S Gauducheau concluded his employment on 28 June 2018
Key Management Personnel
Parent Entity Directors
MH Kennedy
A Siciliano
K McGuinness
F Sheng
W Xinyu
Other Key Management Personnel
R Taylor2
S Iacopetta3
MS Janes4
JF Ranford5
SD Gauducheau6
Options Balance
1 Jan 18
Options Granted as
1
Incentive
Options Exercised
Cessation as
KMP
Balance Options
31 Dec 18
-
-
-
-
-
-
-
750,000
500,000
500,000
-
-
-
-
-
10,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(750,000)
(500,000)
(500,000)
-
-
-
-
-
10,000,000
-
-
-
-
Total
1. Relates to options granted during the reporting period as remuneration. Further details of Options, including terms and exercise price are included in the
10,000,000
-
(1,750,000)
1,750,000
10,000,000
Financial Report
2. Mr R Taylor commenced Chief Executive Officer on 28 May 2018
3. Mr S Iacopetta commenced Chief Financial Officer and Company Secretary on 5 June 2018
4. Mr M Janes concluded his employment on 8 August 2018
5. Mr JF Ranford concluded his employment on 30 April 2018
6. Mr S Gauducheau concluded his employment on 28 June 2018
23
Directors’ Report (continued)
Key Management Personnel
Parent Entity Directors
MH Kennedy
A Siciliano
K McGuinness
F Sheng
W Xinyu
Other Key Management Personnel
R Taylor2
S Iacopetta3
MS Janes4
JF Ranford5
SD Gauducheau6
Share Rights Balance
1 Jan 18
Share Rights Issued in
Lieu of Cash Payments
Share Rights Converted
into Shares1
Balance Share Rights
31 Dec 2018
-
-
-
-
-
-
-
423,828
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(423,828)
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
1. Relates to the conversion of share rights previously issued as remuneration. Further details of Shares and Share Rights, including terms and exercise price are
(423,828)
423,828
-
included in the Financial Report
2. Mr R Taylor commenced Chief Executive Officer on 28 May 2018
3. Mr S Iacopetta commenced Chief Financial Officer and Company Secretary on 5 June 2018
4. Mr M Janes concluded his employment on 8 August 2018
5. Mr JF Ranford concluded his employment on 30 April 2018
6. Mr S Gauducheau concluded his employment on 28 June 2018
24
Directors’ Report (continued)
(j) Shares and Options Issued or Lapsed during the
Year
No shares or options were granted to Non-executive
Directors or other KMPs as remuneration during the year.
In December 2018, 1,750,000 unlisted options lapsed and
were accordingly cancelled.
(k) Share Rights Issued or Converted during the Year
During the year, there were no share rights issued. A total
of 423,828 share rights relating to 2017, were converted
into shares during the Reporting Period.
(l) Other Director and Key Management Personnel
transactions
Some KMP, or their related parties, hold positions in other
entities that result in them having control or significant
influence over the financial or operating policies of those
entities. These entities transacted with the Group in the
reporting period. The terms and conditions of the
transactions were no more favourable than those available,
or which might reasonably be expected to be available, on
similar transactions to non-Director related entities on an
arm’s length basis.
At 31 December 2018, Asipac owned 33.18% of the
ordinary shares in Terramin (2017: 33.18%) and is
controlled by Mr Sheng who is Executive Chairman of the
Company. Mr Siciliano is the Chief Financial Officer of
Asipac. The value of transactions relating to KMP and
entities over which they have control or significant
influence were as follows:
Directors’ fees outstanding as at 31 December 2018:
Directors
1
M Kennedy
1
A Siciliano
1
K McGuinness
F Sheng
W Xinyu
Y Xie
Total
2018
-
12,500
-
25,000
73,115
-
110,615
2017
-
12,500
-
25,000
33,115
76,875
147,490
1. Mr Kennedy, Mr Siciliano and Mr McGuinness are Non-Executive
Directors of the Company.
Other transactions with related parties are disclosed at
note 20.
(m) Share Trading Policies
All Company employees and contractors, Directors and
Executives are subject to the Company’s Share Trading Policy
(available on the Company’s website) with respect to limiting
their exposure to risk in relation to the Company’s securities,
including securities issued as an element of Executive
remuneration. The Company’s Share Trading Policy requires
all officers, employees and consultants to the Company to
notify the Chairman and Company Secretary of any intention
to deal in the Company’s securities, whether by sale or
purchase of shares on market, or the exercise of options.
The notified dealing is subject to the approval of the
Chairman. In addition, and in accordance with ASX Listing
Rule 12, the Company’s trading policy provides that all
Directors, officers and consultants are prohibited from
trading in the Company’s securities during specific periods.
The Board considers that, in light of the size and structure of
the Company and the absence of a secondary market for the
Company’s securities, this policy provides adequate
protection against unauthorised dealings by Directors and
specified Executives, in particular in relation to risk
mitigation. The current Share trading policy has been
approved by the board on 9 April 2015.
End of Audited Remuneration Report
Key management personnel equity interest
The Key Management Personnel of the Company had the
following direct or indirect interests in the equity of the
Company as at the date of this report:
Key Management
Personnel
Fully paid
ordinary shares
Parent Entity Directors
Options
Share Rights
MH Kennedy
A Siciliano
K McGuinness
F Sheng
W Xinyu
R Taylor
S Iacopetta
Total
3,934,580
9,923,168
2,023,580
620,713,916
-
-
-
-
-
-
-
-
10,000,000
-
636,595,244
10,000,000
Other Key Management Personnel
-
-
-
-
-
-
-
-
25
Directors’ Report (continued)
Indemnification of Directors and Officers
Directors’ and Officers’ Liability Insurance has been subscribed to. The Officers of the Company and the Group covered by the
insurance policy includes any person acting in the course of duties for the Company or the Group who is or was a Director, Secretary
or Senior Executive. The contract of insurance prohibits the disclosure of the nature of the liability covered and the amount of the
premium. The Group has not otherwise, during or since the end of the period, indemnified or agreed to indemnify an officer or
auditor of the Group or any related body corporate against a liability incurred as such an officer or auditor.
Non-audit Services
The Company may decide to employ the auditor, Grant Thornton on assignments additional to their statutory audit duties where
the auditor’s expertise and experience with the Company and/or the Group are important. Details of the amounts paid or payable
to the auditor for non-audit services provided during the year are set out below.
The Board of directors has considered the position, and in accordance with advice received from the Audit and Risk Committee, is
satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below,
did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
-
-
all non-audit services have been reviewed by the Audit & Risk Committee to ensure they do not impact the impartiality and
objectivity of the auditor;
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants.
During the year the following fees were paid or payable for non-audit services provided by the auditor of the parent entity, its
related practices and non-related audit firms:
Non-assurance services
Tax advice and compliance services
Total
Auditor’s independence declaration
2018
$’000
40
40
2017
$'000
-
-
The Auditor’s Independence Declaration for the year ended 31 December 2018 can be found on page 29 and forms part of the
Directors’ Report.
Litigation
As at the date of this report, no person has applied to the Court under section 237 of the Act for leave 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 of all or any part of those proceedings. No proceedings have been brought or intervened in on behalf of the
Company with leave of the Court under section 237 of the Act.
Rounding
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and in
accordance with the instrument, amounts in the financial report have been rounded off to the nearest thousand dollars, unless
otherwise stated.
Signed in Adelaide this 25th day of February 2019 in accordance with a resolution of the Board of Directors.
Feng Sheng
Executive Chairman
Kevin McGuinness
Non-Executive Director
26
Directors’ Declaration
The Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 35-60, and the remuneration disclosures contained in pages 21-25 of
the Directors’ Report, are in accordance with the Corporations Act 2001, and:
a.
b.
comply with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001; and
give a true and fair view of the financial position as at 31 December 2018 and of the performance for the year ended on
that date of the consolidated entity;
2.
the Chief Executive Officer and Chief Financial Officer have each declared that:
a.
b.
c.
d.
the financial records of the Company for the financial year have been properly maintained in accordance with section
286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with the Accounting Standards;
the declaration is provided in accordance with section 295A of the Corporations Act 2001 and is founded on a sound
system of risk management and internal control and that the system is operating effectively in all material respects in
relation to financial reporting risks; and
the financial statements and notes for the financial year give a true and fair view;
3.
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable;
4.
the consolidated financial statements comply with International Financial Reporting Standards as disclosed in note 2(a).
This declaration is made in accordance with a resolution of the Board of Directors.
Feng Sheng
Executive Chairman
25 February 2019
Kevin McGuinness
Non-Executive Director
25 February 2019
27
28
Auditor’s Independence Declaration
29
Auditor’s Independent Report
30
31
32
33
34
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
for the Year Ended 31 December 2018
Note
4
10
4
6
6
18
17
Other Income
Raw materials, consumables and other direct costs
Employee benefits expense
Depreciation and amortisation
Exploration and evaluation expensed (Oued Amizour Project)
Mine rehabilitation obligation expense
Share based payments expense
Other expenses
Loss before net financing costs and income tax
Finance income
Finance costs
Net finance costs
Loss before income tax
Income tax benefit
Loss for the year
Attributable to:
Owners of the Company
Non-controlling interest
Loss for the year
Other comprehensive (loss)/income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences for foreign operations
Other comprehensive (loss)/income for the year, net of income tax (tax: nil)
Total comprehensive loss for the year attributable to equity holders of the Company
Attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive loss for the year
Earnings per share attributable to the ordinary equity holders of the Company:
Note
2018
Basic earnings/(loss) per share – (cents per share)
Diluted earnings/(loss) per share – (cents per share)
The Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the notes to the consolidated financial
statements.
(0.30)
(0.30)
27(a)
27(b)
2018
$’000
254
(459)
(1,554)
(45)
(1,076)
(47)
(111)
(1,200)
(4,238)
3
(2,119)
(2,116)
2017
$’000
-
(702)
(1,336)
(44)
-
1,496
-
(983)
(1,569)
4
(1,615)
(1,611)
(6,354)
(3,180)
344
(6,010)
(5,635)
(375)
(6,010)
1,333
1,333
(4,677)
(4,302)
(375)
(4,677)
-
(3,180)
(2,996)
(184)
(3,180)
(1,717)
(1,717)
(4,897)
(4,713)
(184)
(4,897)
2017
(0.16)
(0.16)
35
Consolidated Statement of Financial Position
as at 31 December 2018
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Inventories
Property, plant and equipment
Exploration and evaluation
Total non-current assets
TOTAL ASSETS
Liabilities
Current liabilities
Trade and other payables
Short term borrowings
Provisions
Total current liabilities
Non-current liabilities
Long term borrowings
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Share capital
Reserves
Accumulated losses
Total equity attributable to equity holders of the Company
Non-controlling interest
TOTAL EQUITY
Notes
7
9
8
10
11
12
13
14
13
14
15
16
17
2018
$'000
252
138
109
499
496
8,420
63,121
72,037
72,536
3,376
16,900
163
20,439
2
4,742
4,744
25,183
47,353
2017
$'000
2,698
68
77
2,843
632
8,497
59,627
68,756
71,599
1,737
13,061
323
15,121
11
4,548
4,559
19,680
51,919
215,383
(6,063)
(175,544)
33,776
13,577
47,353
215,318
(7,442)
(169,909)
37,967
13,952
51,919
The Consolidated Statement of Financial Position is to be read in conjunction with the notes to the consolidated financial statements.
36
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2018
2018
Balance at 1 January 2018
Total comprehensive income for the period
Loss for the year
Other comprehensive income
Foreign currency translation differences
Total other comprehensive income
Total comprehensive income for the year
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Options Granted
Share Rights Converted into Shares
Total contributions by and distributions to
owners
Balance at 31 December 2018
215,383
Share
capital
$'000
215,318
Share based
payments
reserve
$’000
90
Translation
reserve
$'000
(7,532)
Accumulated
losses
$'000
(169,909)
Total
attributable
to owners
$'000
37,967
Non- controlling
interest
$'000
(note 17)
13,952
Total
equity
$'000
51,919
-
-
-
-
-
65
65
-
-
-
-
111
(65)
46
136
-
(5,635)
(5,635)
(375)
(6,010)
1,333
1,333
1,333
-
-
-
-
-
1,333
1,333
-
-
(5,635)
(4,302)
(375)
-
-
-
111
-
111
-
-
-
1,333
1,333
(4,677)
111
-
111
(6,199)
(175,544)
33,776
13,577
47,353
Share
capital
$'000
204,054
Share based
payments
reserve
$'000
9,014
Translation
reserve
$'000
(5,815)
Accumulated
losses
$'000
(175,859)
Total
attributable
to owners
$'000
31,394
Non- controlling
interest
$'000
(note 17)
14,136
Total equity
$'000
45,530
-
(2,996)
(2,996)
(184)
(3,180)
2017
Balance at 1 January 2017
Loss for the year
Other comprehensive
i
Foreign currency translation differences
Total other comprehensive income
Total comprehensive income for the year
Transactions with owners, recorded directly in
Contributions by and distributions to owners
Issue of ordinary shares
Share issue costs
Share rights issued
Share rights converted into ordinary
shares
Transfer lapsed options to retained
earnings
Total contributions by and distributions to
owners
Balance at 31 December 2017
-
-
-
-
12,000
(802)
-
66
-
11,264
215,318
-
-
-
-
-
-
88
(66)
(8,946)
(8,924)
(1,717)
(1,717)
(1,717)
-
-
(2,996)
(1,717)
(1,717)
(4,713)
-
-
(184)
-
-
-
-
-
-
-
-
-
-
8,946
8,946
12,000
(802)
88
-
-
11,286
37,967
-
-
-
-
-
-
13,952
The Consolidated Statement of Change in Equity is to be read in conjunction with the notes to the consolidated financial statements.
90
(7,532)
(169,909)
(1,717)
(1,717)
(4,897)
12,000
(802)
88
-
-
11,286
51,919
37
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2018
Cash from operating activities:
Receipts from customers
Payments to suppliers and employees
Financing costs and interest paid
Interest received
Research and development tax concession received
Total cash (used in) operating activities
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment
Payments for property, plant and equipment
Exploration and evaluation expenditure
Net cash (used in) investing activities
Cash flows from financing activities:
Proceeds from the issue of share capital
Payment of transaction costs on equity
Proceeds from borrowings
Repayment of borrowings
Net cash from financing activities
Other activities:
Net (decrease)/increase in cash and cash equivalents
Net foreign exchange differences
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Note
2018
$'000
203
(4,594)
(308)
4
272
19
(4,423)
89
(4)
(2,087)
(2,002)
-
-
4,000
(10)
3,990
(2,435)
(11)
2,698
252
7
The Consolidated Statement of Cash Flows is to be read in conjunction with the notes to the consolidated financial statements.
2017
$'000
-
(4,456)
(1,445)
4
-
(5,897)
-
(14)
(4,886)
(4,900)
12,000
(802)
2,817
(1,585)
12,430
1,633
28
1,037
2,698
38
Notes to the Consolidated
Financial Statements
1. Reporting entity
The consolidated financial statements cover the
consolidated entity of Terramin Australia Limited and its
controlled entities (the Group). Terramin Australia Limited is
a public company, listed on the Australian Securities
Exchange (ASX). The Group is primarily involved in the
development of, and exploration for, precious and base
metals (in particular gold, zinc and lead) and other economic
mineral deposits.
2. Basis of preparation
(a) Statement of Compliance
The consolidated financial statements are general purpose
financial statements that have been prepared in accordance
with Australian Accounting Standards (including Australian
Accounting Interpretations) issued by the Australian
Accounting Standards Board (AASB) and the Corporations
Act 2001. The consolidated financial statements comply with
International Financial Reporting Standards (IFRS) and
interpretations adopted by the International Accounting
Standards Board (IASB).
Terramin Australia Limited is a for-profit entity for the
purpose of preparing the financial statements.
Terramin Australia Limited is a public company incorporated
and domiciled in Australia. The address of its registered
office is Unit 7, 202-208 Glen Osmond Road, Fullarton, SA,
5063.
(b) Basis of Measurement
The financial statements are presented in Australian dollars
(AUD), have been prepared on an accruals basis and are
based on historical costs, except for the provision for mine
rehabilitation measured at the present value of future cash
flows. The Group is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument
2016/191 and in accordance with the Instrument, amounts
in the financial report have been rounded off to the nearest
thousand dollars, unless otherwise stated.
(c) Going Concern
The financial statements have been prepared on a going
concern basis, which contemplates continuity of normal
business activities and the realisation of assets and
settlement of liabilities in the ordinary course of business.
During 2018, the Group incurred a loss of $6.0 million, and
after transferring lapsed options from the share based
payments reserve, this brought accumulated losses to $175.5
million. As at 31 December 2018 the Group’s current
liabilities exceeded its current assets by $19.9 million. The
Group had net assets of $47.4 million.
The financial report has been prepared on a going concern
basis on the expectation that the Group can raise additional
debt or equity as required. The Directors are aware that
additional debt or equity will be required within 12 months,
in order to continue as a going concern. The Group’s ability
to raise equity will rely on investor confidence in the
development or sale of the Bird-in-Hand Gold Project or
investment in the Tala Hamza Zinc Project or other assets.
The Directors note that the matters outlined above indicate
material uncertainty, which may cast significant doubt on
the ability of the Group to continue as a going concern and
therefore it may be unable to realise its assets and discharge
its liabilities in the normal course of business. At the date of
this report, the Directors believe that the Group has
adequate resources to continue to explore, evaluate and
develop the Group’s areas of interest and support to date
from Asipac will ensure the Company has sufficient funds to
meet its obligations. Subject to market conditions the
Directors believe there are reasonable grounds to conclude
that the Company will be able to raise funds by way of debt
and/or equity to fund anticipated activities and meet
financial obligations. For the reasons outlined above, the
Board has prepared the Financial Report on a going concern
basis.
(d) Use of Estimates and Judgements
The preparation of the financial statements in accordance
with AASB requires management to make judgements,
estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ
from these estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate
is revised and in any future periods affected.
In particular, information about significant areas of
estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on
the amounts recognised in the financial statements are
described in the following notes:
•
•
•
•
Note 3(i) - Exploration and Evaluation Expenditure:
recoverable amount and ore reserve estimates.
Note 3(k) - Provisions: estimated cost of rehabilitation,
decommissioning and restoration.
Note 3(l) - Share Based Entitlements and Payments:
assumptions are required to be made in respect to
measuring share price volatility, dividend yield, future
option holding period and other inputs to the Black-
Scholes option pricing model fair value calculations.
Note 3(r) - Recognition of tax losses: assessment of the
point in time at which it is deemed probable that future
taxable income will be derived.
39
(e) New and Amended Standards Adopted by the Group
i. Accounting Standards & Interpretations issued &
effective
AASB 15 Revenue from Contracts with Customers and AASB
9 Financial Instruments (2014) became effective for periods
beginning on or after 1 January 2018. Accordingly, the Group
applied AASB 15 and AASB 9 for the first time to the
reporting period ended 31 December 2018. Changes to the
Group’s accounting policies arising from these standards are
summarised below:
AASB 9 Financial Instruments
Recognition and derecognition
Financial assets & financial liabilities are recognised when
the Group becomes a party to the contractual provisions of
the financial instrument. Financial assets are derecognised
when the contractual rights to cash flows from the financial
asset expire, or when financial asset & substantially all risks a
rewards are transferred. A financial liability is derecognised
when extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Financial assets are classified according to their business
model and the characteristics of their contractual cash flows.
Except for trade receivables that do not contain a significant
financing component and are measured at transaction price
in accordance with AASB 15, all financial assets are initially
measured at fair value adjusted for transaction costs.
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial
assets, other than those designated and effective as hedging
instruments, are classified into the following four categories:
•
•
•
Financial assets (FA) at amortised cost
FA’s at fair value through profit or loss (FVTPL)
Debt instruments at fair value through other
comprehensive income (FVTOCI)
Equity instruments at FVTOCI
•
All income and expenses relating to financial assets that are
recognised in profit or loss are presented within finance
costs, finance income or other financial items, except for
impairment of trade receivables which are presented within
other expenses.
Financial assets at amortised cost
Financial assets with contractual cash flows representing
solely payments of principal and interest and held within a
business model of ‘hold to collect’ contractual cash flows are
accounted for at amortised cost using the effective interest
method. The Group’s trade & most other receivables fall into
this category.
Classification and measurement of financial liabilities
As the accounting for financial liabilities remains largely
unchanged from AASB 139, the Group’s financial liabilities
were not impacted by the adoption of AASB 9.
However, for completeness, the accounting policy is
disclosed below. The Group’s financial liabilities include
borrowings & trade & other payables. Financial liabilities are
initially measured at fair value, and, where applicable,
adjusted for transaction costs unless the Group designated a
financial liability at FVTPL. Subsequently, financial liabilities
are measured at amortised cost using effective interest
method except for derivative & financial liabilities
designated at FVTPL, which are carried subsequently at fair
value with gains or losses recognised in profit or loss (other
than derivative financial instruments that are designated &
effective hedging instruments). All interest-related charges
are reported in profit or loss are included within finance
costs or finance income. Borrowings classified as amortised
cost under AASB 139& continue to be accounted for at
amortised cost under AASB 9.
Impairment of financial instruments
The group assesses on a forward looking basis the expected
credit losses associated with its financial assets per the new
three-stage expected credit loss model. The impairment
methodology applied depends on whether there has been a
significant increase in credit risk for that class of financial
asset. For trade receivables, the group applies the simplified
approach permitted by IFRS 9, which requires expected
lifetime losses to be recognised from initial recognition of
the receivables.
Reconciliation of financial instruments on adoption of AASB 9
The table below shows the classification of each class of
financial assets & liabilities under AASB 139 & AASB 9 as at 1
January 2018:
AASB 139
Carrying
Classification
AASB 9
Carrying
Classification
AASB 139
Carrying
Amount
$’000
AASB 9
Carrying
Amount
$’000
Financial Assets
Other
Receivables
Financial Liabilities
Borrowings
Loans &
receivables
Amortised
Cost
68
68
Amortised
Cost
Amortised
Cost
13,072
13,072
When adopting AASB 9, the Group has applied transitional
relief and opted not to restate prior periods.
AASB 15 Revenue from Contracts with Customers
Replaces AASB 118 Revenue, AASB 111 Construction Contracts
and some revenue-related Interpretations:
• establishes a new revenue recognition model
• changes the basis for deciding whether revenue is to be
recognised over time or at a point in time
• provides new and more detailed guidance on specific
topics (e.g. multiple element arrangements, variable
pricing, rights of return, warranties and licensing)
• expands and improves disclosures about revenue
40
The new Standard has been applied as at 1 January 2018.
There is no impact to the Group’s historical financial results
given the company is not currently in production.
i.
Standards and Interpretations issued but not yet effective
Australian Accounting Standards and Interpretations recently
been issued or amended that potentially impact the Group
but are not yet effective and have not been adopted for the
annual reporting period ended 31 December 2018 are
outlined below:
AASB 16 Leases
AASB 16 replaces IAS 17 Leases for financial reporting
periods beginning on or after 1 January 2019. Early adoption
is permitted for companies also applying AASB 15 Revenue
from Contracts with Customers. Key features are:
• elimination of classification of leases as either operating
•
•
•
•
leases or finance leases for a lessee;
the recognition of lease assets and liabilities on the
balance sheet, initially measured at present value of
unavoidable future lease payments;
recognise depreciation of lease assets and interest on
lease liabilities on the statement of profit or loss and
other comprehensive income over the lease term;
separation of the total amount of cash paid into a
principal portion and interest in the statement of cash
flows. Leases of low-value assets (such as personal
computers) are exempt from the requirements;
short-term leases (less than 12 months) & leases of low
value assets (such as computers) are exempt.
The Group does not currently have significant operating
leases, therefore no material impact on financial
statements is expected.
3. Significant accounting policies
Profit or loss and other comprehensive income of
subsidiaries acquired or disposed of during the year are
recognised from the effective date of acquisition, or up to
the effective date of disposal, as applicable. Non-controlling
interests, presented as part of equity, represent the portion
of a subsidiary’s profit or loss and net assets that is not held
by the Group. The Group attributes total comprehensive
income or loss of subsidiaries between the owners of the
parent and the non-controlling interests based on their
respective ownership interests.
(b) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held
at call with banks and other short-term highly liquid
investments with original maturities of four months or less.
(c)
Inventories
Non-current inventories represent spare parts and
consumables which are not expected to be used within 12
months. Inventories are valued at lower of cost and net
realisable value.
(d) Trade and Other Receivables
Trade and other receivables are recognised at cost and
carried at original invoice amount less allowances for
impairment losses.
The group applies the AASB 9 simplified approach to
measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To measure
the expected credit losses, trade receivables and contract
assets have been grouped based on shared credit risk
characteristics and the days past due. In prior year,
impairment of receivables was not recognised until objective
evidence was available that a loss event had occurred.
(a) Basis of Consolidation
(e) Property, Plant and Equipment
The Group financial statements consolidate those of the
Parent Company and all of its subsidiaries as of 31 December
2018. The Parent controls a subsidiary if it is exposed, or has
rights, to variable returns from its involvement with the
subsidiary and has the ability to affect those returns through
its power over the subsidiary. All subsidiaries have a
reporting date of 31 December. All transactions and balances
between Group companies are eliminated on consolidation,
including unrealised gains and losses on transactions
between Group companies. Where unrealised losses on
intra-group asset sales are reversed on consolidation, the
underlying asset is also tested for impairment from a Group
perspective. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the
Group.
Property
Freehold land is measured at cost and buildings are measured
at cost basis less depreciation & any impairment losses
recognised.
Plant and equipment
Plant and equipment are measured on the cost basis less
depreciation and any impairment losses recognised.
The depreciable amount of all property, plant and equipment,
excluding freehold land, is depreciated on a straight line basis
over their useful lives to the Group commencing from the
time the asset is held ready for use down to the any residual
value, as determined by the Group.
41
The depreciation rates used for each class of depreciable
asset is the lesser of the rate determined by the life of the
mining operation and the asset. The assets’ residual values
and useful lives are reviewed, and adjusted if appropriate, at
each reporting date.
Class of Asset
Motor vehicles
Computer and office equipment
Plant and equipment
Leasehold improvements
Buildings and other infrastructure
(f)
Impairment of Assets
Depreciation rates
22.5 - 25%
15 - 40%
5 - 33%
20%
5 - 33%
Non-financial Assets
At each reporting date, the Group reviews the carrying
values of its non-financial assets to determine whether there
is any indication that those assets have been impaired. If
such an indication exists, the recoverable amount of the
asset is determined and compared to the asset’s carrying
value. Any excess of the asset’s carrying value over its
recoverable amount is recognised as an expense in the profit
or loss.
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 (CGU) to which the asset
belongs. A CGU is the smallest identifiable asset group that
generates cash flows that largely are independent from other
assets and groups. Impairment losses recognised in respect
of CGU’s are allocated first to reduce the carrying amount of
any goodwill allocated to the units and then to reduce the
carrying amount of the other assets in the unit (group of
units) on a pro rata basis. An impairment loss is reversed if
the reversal can be related objectively to an event occurring
after the impairment loss was recognised. An impairment
loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would
have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised, with the exception
that any previously impaired goodwill should not be re-
recognised.
Financial Assets
The Group’s financial assets are subject to AASB 9’s new
three-stage expected credit loss model. Each class of
financial asset is considered for impairment based on their
credit risk profile (as disclosed in note 22(b)(2)). No
impairment allowance was recognised for the Australian
government bonds or the corporate bonds.
Prior accounting policy for impairment of financial assets
In the prior year, a financial asset was considered to be
impaired if objective evidence indicates that one or more
events have had a negative effect on the estimated future
cash flows of that asset. An impairment loss in respect of a
financial asset measured at amortised cost was calculated as
the difference between its carrying amount, and the present
value of the estimated future cash flows discounted at the
original effective interest rate. An impairment loss in respect
of an available-for-sale financial asset was calculated by
reference to its current fair value. Significant financial assets
were tested for impairment on an individual basis. The
remaining financial assets are assessed collectively in groups
that share similar credit risk characteristics. All impairment
losses were recognised in the profit or loss. Any cumulative
loss in respect of an available-for-sale (AFS) financial asset
recognised previously in equity was transferred to the profit
or loss. An impairment loss was reversed if the reversal can
be related objectively to an event occurring after the
impairment loss was recognised. For financial assets
measured at amortised cost and AFS financial assets that are
debt securities, the reversal was recognised in profit or loss.
Recoverable Amount
In assessing whether the carrying amount of an asset is
impaired, the asset’s carrying value is compared with its
recoverable amount. The recoverable amount of non-
financial assets or cash-generating units (CGU) is the greater
of their fair value or realisable value less costs to sell and
value in use. In assessing fair value, or value in use, estimates
and assumptions including the appropriate rate at which to
discount cash flows, the timing of the cash flows, expected
life of the relevant area of interest, exchange rates,
commodity prices, ore reserves, future capital requirements
and future operating performance are used. The recoverable
amount of an asset or CGU will be impacted by changes in
these estimates and assumptions which could result in an
adjustment to the carrying amount of that asset or CGU.
(g) Ore Reserves
Economically recoverable ore reserves represent the
estimated quantity of product in an area of interest that can
be expected to be profitably extracted, processed and sold
under current and foreseeable economic conditions. The
determination of ore reserves includes estimates and
assumptions about a range of geological, technical and
economic factors, including quantities, grades, production
techniques, recovery rates, production costs, transport
costs, commodity demand, commodity prices and exchange
rates. Changes in a project’s ore reserve impacts the
assessment of recoverability of exploration and evaluation
assets, property, plant and equipment and intangible assets,
the carrying amounts of assets depreciated on a units of
production basis, provisions for site restoration and the
recognition of deferred tax assets, including tax losses.
42
(h) Investments in Associates and Joint Arrangements
Associates are those entities over which the Group is able to
exert significant influence but which are not subsidiaries.
A joint venture is an arrangement that the Group controls
jointly with one or more other investors, and over which the
Group has rights to a share of the arrangement’s net assets
rather than direct rights to underlying assets and obligations
for underlying liabilities. A joint arrangement in which the
Group has direct rights to underlying assets and obligations
for underlying liabilities is classified as a joint operation.
Investments in associates and joint ventures are accounted
for using the equity method. Interests in joint operations are
accounted for by recognising the Group’s assets (including
its share of any assets held jointly), its liabilities (including its
share of any liabilities incurred jointly), its revenue from the
sale of its share of the output arising from the joint
operation, its share of the revenue from the sale of the
output by the joint operation and its expenses (including its
share of any expenses incurred jointly).
Any goodwill or fair value adjustment attributable to the
Group’s share in the associate or joint venture is not
recognised separately and is included in the amount
recognised as investment.
The carrying amount of the investment in associates and
joint ventures is increased or decreased to recognise t h e
Group’s share of the profit or loss and other comprehensive
income of the associate and joint venture, adjusted where
necessary to ensure consistency with the accounting policies
of the Group. Unrealised gains and losses on transactions
between the Group and its associates and joint ventures are
eliminated to the extent of the Group’s interest in those
entities. Where unrealised losses are eliminated, the
underlying asset is also tested for impairment.
(i) Exploration and Evaluation Expenditure
Exploration and evaluation costs, including the costs of
acquiring licenses, are capitalised as exploration and
evaluation assets (E&E assets) on an area of interest basis
pending determination of the technical feasibility and
commercial viability of the project. When a license expires
and is not expected to be renewed, is relinquished or a
project is abandoned, the related costs are recognised in the
profit or loss immediately. With respect to the Tala Hamza
Zinc Project, all exploration and evaluation costs incurred
from February 2018 (at which time the exploration license
was not renewed) were expensed.
Tangible and intangible E&E assets that are available for use
are depreciated (amortised) over their estimated useful
lives. Upon commencement of production, 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
reserves.
E&E assets are assessed for impairment if (1) sufficient data
exists to determine technical feasibility and commercial
viability, and (2) facts and circumstances suggest that the
carrying amount exceeds the recoverable amount (see
impairment note 3(f)). E&E assets are assessed for
impairment when any of the following facts and
circumstances exist:
• The term of the exploration license in the specific area
of interest has expired during the reporting period or
will expire in the near future, and is not expected to be
renewed;
• Substantive expenditure on further exploration for and
evaluation of mineral resources in the specific area are
not budgeted nor planned;
• Exploration for and evaluation of mineral resources in
the specific area have not led to the discovery of
commercially viable quantities of mineral resources
and the decision was made to discontinue such
activities in the specified area; or
• Sufficient data exists to indicate that, although a
development in the specific area is likely to proceed,
the carrying amount of the exploration and evaluation
asset is unlikely to be recovered in full from successful
development or by sale.
E&E assets are transferred to development assets once the
technical feasibility and commercial viability of an area of
interest can be demonstrated. E&E assets are assessed for
impairment, and any impairment loss is recognised prior to
being reclassified.
Pre-licence expenditure and expenditure deemed to be
unsuccessful is recognised in the profit or loss immediately.
(j) Trade and Other Payables
Trade payables and other payables are stated at cost.
(k) Provisions
Provisions are recognised when the Group has 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.
Site restoration liability
A provision is recognised for the estimated cost of
rehabilitation, decommissioning and restoration relating to
areas disturbed during operation of the Angas Zinc Mine up
to reporting date but not yet rehabilitated.
The provision is based upon current cost estimates and has
been determined on a discounted basis with reference to
current legal requirements and technology.
43
As the provision represents the discounted value of the
present obligation, using a pre-tax rate that reflects current
market assessments and the risks specific to the liability, the
increase in value of the provision due to the passage of time
will be recognised as a borrowing cost in the profit or loss in
future periods. The provision is recognised as a non-current
liability (in line with the expected timescales for the work to
be performed), with a corresponding asset taken to account
and amortised over the life of the mine. At each reporting
date the rehabilitation liability is reviewed and re-measured
in line with changes in discount rates and timing and the
amounts of the costs to be incurred based on area of
disturbance at reporting date. Changes in the liability relating
to the re-assessment of rehabilitation estimates are
recognised directly within the profit or loss.
(l) Employee Benefits
Provision is made for the Group’s liability for employee
benefits arising from services rendered by employees to
reporting date. Employee benefits that are expected to be
settled wholly within one year have been measured at the
amounts expected to be paid when the liability is settled, plus
related on-costs.
The liability for long service leave is recognised in the
provision for employee benefits and measured as the
present value of expected future payments to be made in
respect of services provided up to the reporting d a t e .
Consideration is given to future wage and salary levels,
experience of employee departures and periods of service.
Expected future payments are discounted using market
yields at the reporting date on high quality corporate bonds
with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
Share Based Payments
The Group uses share options to provide incentives to
Directors, employees and consultants. The Board, upon the
recommendation of the Nominations and Remuneration
Committee, has discretion to determine the number of
options to be offered to Eligible Employees (as that term is
defined by the EOP) and the terms upon which they are
offered, including exercise price and vesting conditions. The
fair value of options at grant date is independently
determined using an option pricing model that takes into
account the exercise price, the term of the option, the
vesting and performance criteria, the share price at grant
date and expected price volatility of the underlying share,
the expected dividend yield and the risk free interest rate
for the term of the option. Historical volatility has been the
basis for determining expected share price volatility as it is
assumed that this is indicative of future trends, which may
not eventuate. The life of the options is based on the
historical exercise patterns, which may not eventuate in the
future.
The fair value of options granted is recognised as an expense
with a corresponding increase in equity. The fair value is
measured at grant date and recognised as an expense over
the period during which the Directors, employees or
consultants become unconditionally entitled to the options
(vesting period). Upon the exercise of options, the balance of
the share based payments reserve relating to those options
is transferred to share capital.
The Group uses share rights to provide incentives to
employees. Share rights were valued at grant date and are
expensed to reflect amounts owing. Upon issue of the share
rights an increase in equity is recognised.
(m) Leases
Leases of property, plant and equipment where the Group
has substantially all the risks and rewards of ownership are
classified as finance leases (refer notes 13 and 28(d)).
Finance leases are capitalised at lease inception at the lower
of the fair value of the leased property and the present value
of the minimum lease payments. The corresponding rental
obligations, net of finance charges, are included as loans and
borrowings. Each lease payment is allocated between the
liability and finance cost. The finance cost is charged to the
statement of profit or loss and other comprehensive income
over the lease period so as to produce a constant periodic
rate o f interest on the remaining balance of the liability for
each period. The property, plant and equipment acquired
under finance leases is depreciated over the lesser of the
asset’s useful life and the lease term.
Lease payments for operating leases, where substantially all
of the risks and benefits remain with the lessor, are charged
as expenses in the periods in which they are incurred.
An onerous lease contract arises when the unavoidable costs
exceed the benefits expected to be generated by the
contract. Where onerous leases are identified a provision for
the present value of future payments is recognised.
(n) Loans and Borrowings
Borrowings are recognised initially at fair value less
attributable transaction costs.
Subsequent to initial recognition, loans and borrowings are
stated at amortised cost, with any difference between cost
and redemption value being recognised in the profit or loss
over the period of the borrowings on an effective interest
basis. Loans and borrowings with a determinable payment
due less than twelve months from reporting date are
classified as current liabilities.
(o) Financing Costs
Financing costs include interest payable on borrowings
calculated using the effective interest method, amortisation
of ancillary costs incurred in connection with the
arrangement of borrowings, finance lease charges, and the
impact of the unwind of discount on long-term provisions
for site restoration.
44
Financing costs incurred in relation to the construction of
any qualifying asset are capitalised during the period of time
that is required to complete and prepare the asset for its
intended use or sale. Other financing costs are expensed as
incurred.
(p) Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements of each of the
group’s entities are measured using the currency of the
primary economic environment in which the entity operates
(‘the functional currency’). The consolidated financial
statements are presented in Australian Dollars (AUD), which is
Terramin’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates at the dates of
the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in
foreign currencies at year end exchange rates are generally
recognised in profit or loss. Foreign exchange gains and losses
that relate to borrowings are presented in the statement of
profit or loss, within finance costs. All other foreign exchange
gains and losses are presented in the statement of profit or
loss on a net basis within other gains / (losses).
Non-monetary items that are 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. For example,
translation differences on non-monetary assets and liabilities
such as equities held at fair value through profit or loss are
recognised in profit or loss as part of the fair value gain or loss
and translation differences on non-monetary assets such as
equities classified as at fair value through other
comprehensive income are recognised in other
comprehensive income.
Group companies
The results and financial position of foreign operations (none
of which has the currency of a hyperinflationary economy)
that have a functional currency different from the
presentation currency are translated into the presentation
currency as follows:
•
•
assets and liabilities for each balance sheet presented
are translated at the closing rate at the date of that
balance sheet
income and expenses for each statement of profit or
loss and statement of comprehensive income are
translated at average exchange rates (unless this is not a
reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates of
the transactions), and
•
all resulting exchange differences are recognised in
other comprehensive income.
On consolidation, exchange differences arising from the
translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as
hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or
any borrowings forming part of the net investment are
repaid, the associated exchange differences are reclassified
to profit or loss, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the
acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and translated at the
closing rate.
(q) Share Capital
Ordinary shares are classified as equity. Qualifying
transaction costs of an equity transaction are accounted for
as a deduction from equity, net of any related income tax
benefit.
Income Tax
(r)
The charge for current income tax expenses is based on the
profit for the year adjusted for any non-assessable or
disallowed items. It is calculated using tax rates that have
been enacted or are substantively enacted by the reporting
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 amounts in
the consolidated 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
settled. Deferred tax is credited in the profit or loss 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 differences can be utilised.
Determination of future tax profits requires estimates and
assumptions as to future events and circumstances, in
particular, whether successful development and commercial
exploitation, or alternatively sale, of the respective areas of
interest will be achieved. This includes estimates and
judgements about commodity prices, ore reserves (note
3(g)), exchange rates, future capital requirements, future
operational performance and the timing of estimated cash
flows.
45
Changes in these estimates and assumptions could impact on
the amount and probability of estimated taxable profits and
accordingly the recoverability of deferred tax assets.
The Company and its Australian subsidiaries are part of an
income tax consolidated group under the Australian Tax
Consolidation Regime.
(s) 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 Taxation Office. In these
circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a
gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash
flows.
(t) Earnings Per Share
The Group presents basic and diluted earnings per share (EPS)
data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary
shares outstanding for the effects of all dilutive potential
ordinary shares, which comprises convertible notes and share
options granted to employees, Directors, consultants and
other third parties.
(u) Segments
The consolidated entity has identified its operating segments
to be its Australian interests and its Northern African
interests, based on the different geographical regions and the
similarity of assets within those regions. This is the basis on
which internal reports are provided to management for
assessing performance and determining the allocation of
resources within the consolidated entity.
A geographical segment is engaged in providing products or
services within a particular economic environment and is
subject to risks and returns that are different from those
segments operating in other economic environments.
Segment information is presented only in respect of the
Group’s geographical segments, being Australia and Northern
Africa, which is the basis of the Group’s internal reporting.
(v) Financial Risk Management
The Group’s activities expose it to the following risks from the
use of financial instruments:
Credit Risk
The risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its
contractual obligations. This arises principally from short term
cash investments.
Liquidity Risk
The risk that the Group will not be able to meet its financial
obligations as they fall due. The Group manages this exposure
by targeting to have sufficient cash financing facilities
available on demand to meet planned expenditure for a
minimum period of 45 days (refer note 13 for detail on
available financing facilities).
Market Risk
The risk that changes in foreign exchange rates and interest
rates will affect the Group’s income or value of its holdings of
financial instruments. The Group may enter into commodity
derivatives, foreign exchange derivatives and may also incur
financial liabilities (debt), in order to manage market risks. All
such transactions are carried out within Board approved
limits.
The Group’s financial risks are managed primarily by the Chief
Executive Officer, including external consultation advice as
required, as a part of the day-to-day management of the
Group’s affairs. Finance and risk reporting is a standard item
in the report presented at each Board meeting.
Capital Management
The Board seeks to maintain a strong capital base sufficient
to maintain the future development of the Group’s business.
The Board closely monitors the Group’s level of capital so as
to ensure it is appropriate for the Group’s planned level of
activities. There were no changes to the Group’s approach
to capital management during the year.
(w) Research and Development Tax Incentive
To the extent that research and development costs are
eligible activities, under the “Research and Development Tax
Incentive” programme, a refundable tax offset is available
for companies with annual turnover of less than $20 million.
The Group recognises, where it is possible to reliably
estimate, refundable tax offsets in the financial year as an
income tax benefit in profit or loss, resulting from the
monetisation of available tax losses that otherwise would
have been carried forward.
46
4. Other Income and Expenses
8. Inventories
Other Income
Gain on disposal of plant and equipment
Service fee income
Other
Total other income
Other Expenses
Corporate Administration and Marketing Costs
Legal, Accounting, Community Relations and
Other Consultants
ASX fees and Share Registry Costs
Other
Total other expenses
5. Auditor’s Remuneration
Grant Thornton Audit Pty Ltd
Audit and review of financial reports
Non-audit services
Total auditor’s remuneration
6. Finance Income and Costs
Finance income
Interest income
Foreign exchange gains
Total finance income
Finance costs
Interest on borrowings
Unwinding of discount on mine rehabilitation
provision
Amortisation of borrowing costs
Other borrowing costs
Foreign exchange losses
2018
$000’s
46
137
71
254
2018
$000’s
576
451
95
78
1,200
2017
$000’s
-
-
-
2017
$000’s
379
421
89
94
983
2018
$
2017
$
68,000
40,000
108,000
73,118
-
73,118
2018
$’000
2017
$’000
2
1
3
4
-
4
2018
$’000
2017
$’000
1,177
215
365
362
-
901
162
238
313
1
Total finance costs
2,119
1,615
7. Cash and Cash Equivalents
Cash on hand
Bank balances
Short-term deposits1
Total cash and cash equivalents
2018
$’000
2
217
33
252
2017
$’000
3
2,672
23
2,698
1. Represents restricted cash to support a bond and minor credit card
facilities.
Non-current
Raw materials and consumables
Total inventories at the lower of cost and
net realisable value
9. Trade and Other Receivables
Trade receivables
Research and development tax benefit
Other receivables (including GST refund)
Total trade and other receivables
2018
$’000
496
496
2018
$’000
-
72
66
138
2017
$’000
632
632
2017
$’000
-
-
68
68
10. Property Plant and Equipment
2018
$’000
2017
$’000
4,271
4,271
Freehold land
At cost
Total freehold land1
Buildings and other infrastructure
At cost
Less accumulated depreciation
Total buildings and other infrastructure1
Plant and Equipment
At cost
Less accumulated impairment
Less accumulated depreciation
Total plant and equipment1
Total property plant and equipment
1. The Directors have considered the recoverable amount of property,
58,536
(14,219)
(40,173)
126
(121)
4,144
8,420
5
59,029
(14,219)
(40,590)
4,220
8,497
4,271
4,271
126
(120)
6
plant and equipment based on available market information and have
taken into account the expected future use of these assets as the
Company moves towards approval of a mining licence for the Bird-in-
Hand Gold Project.
47
Construction
in progress
$'000
-
-
-
-
-
-
Construction
in progress
$'000
-
14
-
(14)
-
-
-
2018
$’000
87
3,289
3,376
Total
$'000
8,497
4
(61)
(45)
25
8,420
Total
$'000
8,531
14
-
-
(44)
(4)
8,497
2017
$’000
205
1,532
1,737
10. Property Plant and Equipment (continued)
Movements in carrying amounts
Opening carrying amount 1 Jan 2018
Additions
Disposals
Depreciation and amortisation
Foreign currency movement
Carrying amount at 31 Dec 2018
Opening carrying amount 1 Jan 2017
Additions
Disposals
Transfers
Depreciation and amortisation
Foreign currency movement
Carrying amount at 31 Dec 2017
Freehold
land
$'000
4,271
-
-
-
-
4,271
Freehold
land
$'000
4,271
-
-
-
-
-
4,271
Buildings and
other
infrastructure
$'000
6
-
-
(1)
-
5
Buildings and
other
infrastructure
$'000
9
-
-
-
(3)
-
6
Plant and
equipment
$'000
4,220
4
(61)
(44)
25
4,144
Plant and
equipment
$'000
4,251
-
-
14
(41)
(4)
4,220
11. Exploration and Evaluation Assets
12. Trade and Other Payables
Exploration and evaluation
At cost
Additions
Exploration write-off1
Foreign currency movement
Total exploration and evaluation
2018
$’000
59,627
2,397
(121)
1,218
63,121
2017
$’000
56,278
4,948
-
(1,599)
59,627
Trade payables
Other payables and accrued expenses
Total trade and other payables
Trade and other payables are normally non-interest bearing
and are settled on 30 days end of month terms.
1. Exploration write-off represents all exploration and evaluation costs
incurred from February 2018 (at which time the exploration license was
not renewed) for the Tala Hamza project.
13. Loans and Borrowings
Exploration and evaluation projects by location
Tala Hamza Zinc (Terramin 65%)
Adelaide Hills (Terramin 100%)1
Bird in Hand Gold (Terramin Exploration 100%)
South Gawler (Menninnie Metals 100%)
Total exploration and evaluation
2018
$’000
44,101
2,038
11,384
5,598
63,121
2017
$’000
42,734
1,451
9,964
5,478
59,627
1. The Company has entered into an agreement with respect to the
Kapunda Project, over which the Company has a current Exploration
Licence. Environment Copper Recovery Pty Ltd (ECR) can earn up to a
50% interest in the project after spending $2m on field trials and
associated studies. ECR can earn an additional 25% interest in the
project by spending a further $4m. Subject to the completion of the
expenditure by ECR, the Company will retain a minimum 25%
contributing interest as well as a 1.5% net smelter royalty in respect of
all metals extracted from the joint venture area. ECR have agreed to
spend a minimum of $300,000 within the first year and each subsequent
year of the joint arrangement. The expenditure by ECR on the project is
not reflected in the accounts of the Company, however will contribute to
the minimum expenditure obligations under the terms of the
Exploration License.
Current liabilities
Lease liabilities (note 28(d))1
Loans - secured2
Loans - unsecured3
Total current borrowings
Non-current liabilities
Lease liabilities (note 28(d))1
Total non-current borrowings
Financing facilities
Loan facilities - available
Loan facilities - undrawn
Loan facilities - drawn
Less: unamortised transaction costs
Carrying amount at 31 December
Guarantee facility
Guarantee facility - available4
Guarantee facility - undrawn
Guarantee facility - drawn
2018
$’000
9
11,000
5,891
16,900
2
2
17,250
-
17,250
(359)
16,891
5,315
-
5,315
2017
$’000
10
11,000
2,051
13,061
11
11
14,250
(1,000)
13,250
(199)
13,051
5,315
-
5,315
48
14. Provisions
Current
Employee benefits
Total current provisions
Non-current:
Employee benefits
Mine rehabilitation
Total non-current provisions
At 1 January 2018
Increases in provisions
Paid during the period
At 31 December 2018
2018
$’000
163
163
50
4,692
4,742
Employee
Benefits
$’000
Mine
rehabilitation
$’000
439
379
(605)
213
4,432
260
-
4,692
2017
$’000
323
323
116
4,432
4,548
Total
$’000
4,871
639
(605)
4,905
The mine rehabilitation provision is recognised for the
estimated cost of rehabilitation, decommissioning,
restoration and long term monitoring of areas disturbed
during operation of the Angas Zinc Mine up to reporting date
but not yet rehabilitated.
The provision is based upon current cost estimates and has
been determined on a discounted basis with reference to
current legal requirements and technology. The provision
has been calculated using a risk free discount rate of 2.25%
(2017: 2.57%).
The rehabilitation is expected to occur following the
processing of ore from the Bird-in-Hand Gold Project (subject
to regulatory approvals).
1.
2.
3.
4.
Lease liabilities are effectively secured as rights to the leased assets
revert to the lessor in the event of default.
At reporting date, the Group had fully drawn down $11 million of two
loan facilities provided by Asipac. Interest is payable half yearly on the
facilities and is fixed at a base rate of 8%. Interest can be paid in cash
or shares at the election of the Group. The facility has a term expiring
31 October 2019. It will be an interest rate review event if the Group
does not raise $10 million of additional equity by 31 January 2019. If
the lender formally declares an interest rate review event, then it may
request by notice to the Borrower that it will review the interest rate
in a manner to be negotiated between the parties in good faith within
90 days. No review event has been declared as at the date of this
report.
As at reporting date, the Group had drawn down $6.25 million of its
unsecured short-term facility provided by Asipac to support working
capital requirements. The facility has a term expiring 31 October
2019. Interest is fixed at a base rate of 8%, payable upon termination
date. If the lender formally declares an interest rate review event,
then it may request by notice to the Borrower that it will review the
interest rate in a manner to be negotiated between the parties in
good faith within 90 days.
A $5.3 million guarantee facility has been provided by Investec PLC in
relation to rehabilitation bonds required by South Australian
Government over Mining Lease 6229. The facility has a term expiring
30 September 2019. It will be a review event if the Group does not
raise a minimum of $10,000,000 of additional capital by 31 May
2019.
The carrying value of plant and equipment and mining
property subject to finance loans and hire purchase
contracts at 31 December 2018 was $ 11,497 (2017:
$21,700). Assets under hire purchase contracts are pledged
as security for related finance loans & hire purchase
liabilities.
The Guarantee Facility provided by Investec and the $5.0
million loan facility provided by Asipac to the Company
(Corporate Facility) are secured under the terms of a security
trust deed for which Investec PLC acts as trustee (Security
Trust Deed). The first ranking security interests created
under the Security Trust Deed relates to all assets of the
Company.
Under the terms of the $6.0 million loan facility provided to
Terramin Exploration Pty Ltd (BIH Facility), the following first
ranking securities have been granted to Asipac: a real
property mortgage over land acquired at Bird-in-Hand, a
general security interest over all the assets of Terramin
Exploration Pty Ltd & a specific security over the shares of
Terramin Exploration Pty Ltd. All security interests will be
discharged upon repayment of all amounts due under the
BIH Facility.
49
15. Issued capital
(a) Ordinary shares
1,869,601,371 (2017: 1,869,177,543)
Ordinary shares
Share issue costs
Total issued capital
2018
$’000
221,034
(5,651)
215,383
2017
$'000
220,969
(5,651)
215,318
The holders of ordinary shares are entitled to one vote per share at meetings of the Company and participation in dividends
declared. All issued shares are fully paid.
(b) Detailed table of capital issued during the year
Type of Share Issue
Opening balance 1 January 2018
Share rights converted
Share rights converted
Share rights converted
Closing balance 31 December 2018
Share issue costs
Issued Capital
Type of Share Issue
Opening balance 1 January 2017
Share placement
Share rights converted
Share rights converted
Share placement
Share rights converted
Share placement
Closing balance 31 December 2017
Share issue costs
Issued Capital
Date of Issue
Number of Ordinary Shares on
issue
Issue Price
$
Share Capital
$'000
2 January 2018
4 April 2018
5 July 2018
1,869,177,543
162,615
137,882
123,331
1,869,601,371
0.13
0.16
0.18
215,318
21
22
22
215,383
-
215,383
Date of Issue
Number of Ordinary Shares
on issue
Issue Price
$
Share Capital
$'000
2 February 2017
4 April 2017
3 July 2017
27 September 2017
4 October 2017
4 October 2017
1,795,996,987
25,000,000
140,231
190,332
37,500,001
230,945
10,119,047
1,869,177,543
0.16
0.16
0.12
0.17
0.10
0.17
204,054
4,000
22
22
6,300
22
1,700
216,120
(802)
215,318
50
16. Reserves
(a) Foreign currency translation reserve
Foreign currency translation reserve
2018
$’000
2017
$'000
Balance at the beginning of the year
(7,532)
(5,815)
Adjustment arising on translation into
presentation currency
Balance at the end of the year
1,333
(6,199)
(1,717)
(7,532)
The foreign currency translation reserve is used to record
exchange differences arising from the translation of the
financial statements of foreign subsidiaries.
(b) Share based payments reserve
Balance at the beginning of the year
2018
$'000
90
2017
$'000
9,014
Movement in non-controlling interest in 2018 relates to the
35% minority interest (ENOF 32.5% and ORGM 2.5%) in
exploration and evaluation costs for the Tala Hamza Zinc
Project funded directly by the Group through its 65%
shareholding in WMZ. During 2018, the Group funded
approximately $0.8 million (2017: $3.1 million) of
exploration and evaluation costs in WMZ, of which ENOF
and ORGM are entitled to $0.3 million (2017: $1.1 million)
being (35%). The remainder of the movement is in relation
to foreign exchange changes. A total of 35% of all assets
contributed to WMZ by the Group effectively accrue to ENOF
and ORGM for nil consideration (other than forming part of
the Group’s 65% earn-in) and has therefore been included in
movement in net assets attributable to the non-controlling
interest.
Refer to note 23 for further disclosures with respect to
material non-controlling interests.
Transfer of lapsed options to retained earnings
-
(8,946)
18. Income Tax Expense
Options issued during the year
Share rights issued during the year
Share rights converted during the year
Balance at the end of the year
111
-
(65)
136
-
88
(66)
90
Prima facie tax benefit on loss before income tax
at 30% (2017: 30%)
2018
$'000
2017
$'000
(1,906)
(875)
Total reserves
(6,063)
(7,442)
Decrease in income tax benefit due to:
The share based payment reserve is used to recognise the
value of equity-settled share-based payment transactions,
including employees and KMP, as part of their remuneration.
During the 2018 reporting period the CEO received
10,000,000 options (2017: nil) which were valued in
accordance with the Black Scholes valuation methodology for
which $110,956 was recognised as a share based payment
expense during the 2018 reporting period (2017: $nil). There
were no share rights granted to employees including KMP’s
during the 2018 reporting period. Under the terms of the
remuneration package of the Group’s Chief Executive Officer
$87,500 was paid in share rights in the 2017 reporting period
under a Terramin Employee Share Rights Plan. The share
rights were issued quarterly and were priced at a 5%
discount to the volume weighted average price of the shares
traded in the last 5 days of the relevant quarter. The share
rights convert to ordinary shares 12 months after the date of
issue. During the 2017 reporting period, 654,773 share rights
were issued, 393,560 of which relate to the 2016
remuneration year and 261,213 to 2017. 561,508 share rights
converted to ordinary shares during the 2017 reporting
period ($65,625).
17. Non-controlling Interest
Balance at the beginning of the year
Share of movement in net assets
Balance at the end of the year
2018
$’000
13,952
(375)
13,577
2017
$'000
14,136
(184)
13,952
(Deductible)/non-deductible items
Deferred tax asset not brought to account
64
11
(1,842)
(864)
Research and development tax concession received1
344
-
Unused tax losses for which no deferred tax asset
has been recognised
Potential tax benefit
173,280
164,858
51,984
49,262
29%
27%
The applicable weighted average effective tax rates
for the reporting period are:
1.
As at the date of this report, an estimate of the Research and
Development claim has been calculated for the 2017/18 financial year
and is included in Trade and Other Receivables.
The Company is part of an Australian Tax Consolidated
Group. The Australian Tax Consolidated Group has potential
deferred tax assets of $51.9 million (2017: $49.3 million).
These have not been brought to account because the
Directors do not consider the realisation of the deferred tax
asset as probable. The benefit of these tax losses will be
obtained if:
a. the Australian Tax Consolidated Group derives future
assessable income of a nature and of an amount
sufficient to enable the benefits to be realised;
b. the Australian Tax Consolidated Group can comply with
the conditions for deductibility imposed by tax legislation;
and
c. no changes in the income tax legislation adversely affect
the Australian Tax Consolidated Group in realising the
benefit from the deduction of the loss.
In order to utilise the benefit of the tax losses, an
assessment will need to be undertaken with regards to the
continuity of ownership or same business tests.
51
19. Cash Flow Information
Reconciliation of cash flow from operations with loss from
ordinary activities after income tax:
Loss for the period
Adjustment for:
Depreciation and amortisation
Non-cash inventory movements
Share-based payment transactions (other)
Realised foreign exchange (gain)/loss
Amortisation of borrowing costs
Mine rehabilitation provision - change in
assumptions (including discount unwind)
Mine rehabilitation provision - revision of
expected future costs
Gain on disposal of Non-Current Asset
Other
Change in operating assets and liabilities: As
Decrease/(increase) in trade and other
receivables
Decrease/(increase) in inventory
Decrease/(increase) in prepayments
(Decrease)/increase in payables and accruals
(Decrease)/increase in provisions
Cashflow (used in) operating activities
2018
$’000
(6,010)
2017
$'000
(3,180)
45
95
111
-
365
260
44
38
88
1
238
357
-
(1,691)
(27)
-
(112)
-
(20)
1,096
(226)
(4,423)
-
9
30
28
(4)
(1,897)
42
(5,897)
20. Related Parties
(a) Key management personnel compensation
Summary of Key Management Personnel (KMP)
compensation:
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
Total KMP compensation
2018
$
1,102,961
(222,450)
68,103
100,000
110,956
2017
$
1,021,227
14,598
77,898
-
43,750
1,159,570
1,157,473
The amounts disclosed in the table are the amounts
recognised as an expense during the reporting year related
to KMP. Amounts paid to KMP from prior years have been
excluded from this table.
(b) Other transactions with related parties
The following table provides the total amount of
transactions that have been entered into with related
parties for the relevant financial year.
Entities with significant influence over the Group
At 31 December 2018, Asipac owned 33.18% of the ordinary
shares in Terramin (2017: 33.18%) and is controlled by Mr
Sheng who is the Executive Chairman of the Company. Mr
Siciliano is the Chief Financial Officer of Asipac. Asipac has
had the following transactions in the year:
Asipac Group
Borrowings as at 1 January
Loans advanced during the year
Loan repayments in the year
Borrowings as at 31 December
Related Party Transactions
Fees in relation to equity raising
Loan facility fees paid/payable
Interest paid/payable
Related Party Balance
Amounts owed at year end
2018
$’000
13,250
4,000
-
17,250
-
764
1,657
2017
$’000
11,650
2,600
(1,000)
13,250
264
484
903
2,421
774
Terms and conditions of transactions with related parties
The transactions with related parties are made on terms
equivalent to those that prevail in arm’s length transactions.
On 6 November 2015, the Terramin Exploration Pty Ltd
entered into a Marketing Agreement with Asipac Capital Pty
Ltd, a related party of Asipac. The marketing Agreement
appoints Asipac Capital as its marketing agent for the sale of
gold products in Asian markets and China in particular.
Other related party of the Group
As at the date of this report, Asipac Group owns 50% of the
shares in BMY Group Pty Ltd and Mr Bruce Sheng, the
Executive Chairman of the Company is also is a director of
BMY Group Pty Ltd. The Company entered into the following
transactions with BMY Group Pty Ltd:
Fees in relation to equity raisings
BMY Group
2018
$’000
-
2017
$’000
528
There are no other related party transactions not disclosed in
this report.
21. Financial Instruments
The Group is exposed to market risk in the form of
commodity price risk, foreign currency exchange risk and
interest rate risk. The carrying value of the financial assets
and liabilities of the Group, together with the equity and
profit or loss impact during the period (if any), that are
affected by market risk are categorised as follows:
52
Financial Instruments
Current
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Financial liabilities at amortised cost
Total current financial instruments
Note
7
9
12
13
2018
$'000
2017
$'000
252
138
(3,376)
(16,902)
(19,888)
2,698
68
(1,737)
(13,072)
(12,043)
Fair value
The fair values of the financial assets and liabilities of the
Group are equal to the carrying amount in the accounts (as
detailed previously). In the case of loans and borrowings it is
considered that the variable rate debt and associated credit
margin is in line with current market rates and therefore is
carried in the accounts at fair value.
22. Financial Risk Management
The Group’s principal financial liabilities comprise loans and
trade and other payables. The main purpose of these
financial instruments is to finance the Group’s operations.
The Group has various financial assets such as accounts
receivable and cash and short-term deposits, which arise
directly from operations.
The Group manages its exposure to key financial risks in
accordance with the Group’s risk management policy. The
objective of the policy is to support the delivery of the
Group’s financial targets while protecting future financial
security. The main risks that could adversely affect the
Group’s financial assets, liabilities or future cash flows are
market risks, comprising commodity price risk, currency risk,
interest rate risk, credit risk and liquidity risk.
The Group’s senior management oversees the management
of financial risks. The Group’s senior management is
supported by the Audit, Risk and Compliance Committee that
advises on financial risks and the appropriate financial risk
governance framework for the Group. The Audit, Risk and
Compliance Committee provides assurance to the Group’s
senior management that the Group’s financial risk-taking
activities are governed by appropriate policies and
procedures and that financial risks are identified, measured
and managed in accordance with Group policies and the
Group’s risk appetite.
All derivative activities for risk management purposes are
carried out by management that have the appropriate skills,
experience and supervision. It is the Group’s policy that no
trading in derivatives for speculative purposes shall be
undertaken. At this stage, the Group does not currently apply
any form of hedge accounting.
The Board of Directors reviews and agrees policies for
managing each of these risks which are summarised below.
1. Market Risk
Market risk is the risk that the fair value of future cash flows
of a financial instrument will fluctuate because of changes in
market prices. Market prices comprise three types of risk:
commodity price risk, interest rate risk and currency risk.
Financial instruments affected by market risk include loans
and borrowings, deposits, accounts receivable, accounts
payable, accrued liabilities and derivative financial
instruments. The Company currently has no commodity
price risk.
(a) Currency risk
The Group is exposed to foreign currency risk on purchases
and cash at bank which are denominated in a currency other
than AUD. The currencies giving rise to this are primarily
USD and Algerian Dinar (DZD). The Group does not enter
into derivative financial instruments to hedge such
transactions denominated in a foreign currency. No amount
was recognised in the statement of profit or loss and other
comprehensive income during the current year (2017:$nil).
The Group’s exposure to foreign currency risk at reporting
date was as follows:
In AUD thousand
equivalent
Cash at bank
Trade receivables
Trade payables
Gross exposure
31 December 2018
DZD
USD
31 December 2017
DZD
USD
2
-
-
2
34
30
(74)
(10)
1
-
-
1
7
12
(227)
(208)
The following exchange rates applied
Consolidated Statement of Financial Position:
for the Group
Currency Exchange Rates
Year-end rates used for the
consolidated statement of financial
position, to translate the currencies
into AUD, are:
Currency
2018
2017
USD
DZD
0.71
83.05
0.78
89.35
Sensitivity Analysis
Sensitivity to fluctuations in foreign currency rates is based
on outstanding monetary items at 31 December 2018 which
are denominated in a foreign currency.
Holdings exposed to currency risk at the end of the period
are minimal.
(b) Interest rate risk
The Group has an exposure to future interest rates on
investments in variable-rate securities and variable- rate
borrowings.
The Group does not use derivatives to mitigate these
exposures.
The Group’s exposure to interest rate risk and effective
weighted average interest rates are as follows:
Net Financial Assets
(Liabilities)
2018
Cash1
Short-term deposits1
Finance lease liabilities
Loans1
Total (Net)
Effective
interest
rate
2.03%
1.42%
14.50%
8.00%
Total
$’000
219
33
(11)
(17,250)
(17,009)
Floating
Int rate
$’000
219
33
-
-
252
Fixed
interest
rate
-
-
(11)
(17,250)
(17,261)
53
2. Credit risk
The carrying amount of the Group’s financial assets
represents the maximum credit exposure. The Group’s
maximum exposure to credit risk at the reporting date was:
Credit risk exposure - assets
Note
Trade and other receivables
Cash assets
Total financial assets
9
7
2018
$’000
138
252
390
2017
$’000
68
2,698
2,766
The Group’s maximum exposure to credit risk for loans and
receivables at the reporting date by geographic region was:
Credit risk exposure – loans and
receivables
Australia
USA
Other
Total trade and other receivables
Note
9
2018
$’000
109
-
29
138
2017
$’000
56
-
12
68
Net Financial Assets
(Liabilities)
2017
Cash1
Short-term deposits1
Finance lease liabilities
Loans
Total (Net)
Total
$’000
2,675
23
(21)
(13,250)
(10,573)
Includes AUD and USD denominated balances.
Effective
interest
rate
0.76%
2.08%
4.20%
8.00%
Floating
Interest
rate
$’000
2,675
23
-
-
2,698
Fixed
interest
rate
-
-
(21)
(13,250)
(13,271)
1.
2. The facilities have a term expiring 31 October 2019. It will be an interest
rate review event if the Group does not raise $10 million of additional
equity by 31 January 2019. If the lender formally declares an interest
rate review event, then it may request by notice to the Borrower that it
will review the interest rate in a manner to be negotiated between the
parties in good faith within 90 days. No review event has been declared
as at the date of this report.
Sensitivity analysis
The Group has interest bearing liabilities with the Asipac
Group which may be varied.
The following table illustrates the sensitivity of interest
repayments to a reasonably possible change in interest of +/-
1% (2017: +/- 1%)
.
Interest Rate Sensitivity
Loans - 31 December 2018
Loans - 31 December 2017
$’000
+1%
(173)
-
$’000
-1%
173
-
3. Liquidity risk
The contractual maturities of financial liabilities, including estimated interest payments:
Carrying
amount1
$'000
Contractual
cash flows2
$'000
6 months
or less3
$'000
6-12
Months3
$'000
1-2 years3
$'000
2-5 years3
$'000
More than 5
years3
$'000
3,376
(3,376)
(3,376)
-
11,000
(12,287)
5,891
11
(6,620)
(11)
-
-
(6)
(12,287)
(6,620)
(3)
-
-
-
(2)
(2)
-
-
-
-
-
-
-
-
-
-
Carrying
amount1
$'000
Contractual
cash flows2
$'000
6 months
or less3
$'000
6-12
Months3
$'000
1-2 years3
$'000
2-5 years3
$'000
More than 5
years3
$'000
2018
Non-derivative financial liabilities
Trade and other payables
Loans - secured
Loans - unsecured
Finance lease liabilities
Note
12
13
13
28(d)
2017
Non-derivative financial liabilities
Trade and other payables
Loans - secured
Loans - unsecured
Finance lease liabilities
Note
12
13
13
28(d)
Total non-derivative financial liabilities
20,278
(22,294)
(3,382)
(18,910)
1,737
10,801
2,250
17
(1,737)
(1,737)
-
(11,532)
(434)
(11,098)
(2,400)
(17)
(89)
(4)
(2,311)
(4)
(13,413)
Total non-derivative financial liabilities
(15,686)
1. Represents amounts reflected in the statement of financial position as at 31 December.
2. Represents total loan principal, accrued interest and accrued fees payable as at 31 December.
14,805
(2,264)
3.
Represents schedule of payments of loan principal, accrued interest and accrued fees in accordance with specified time bands.
-
-
-
(8)
(8)
-
-
-
(1)
(1)
-
-
-
-
-
54
23. Controlled Entities
Name
Parent Entity
Terramin Australia Limited
Subsidiaries of parent entity
Menninnie Metals Pty Ltd
Western Mediterranean Zinc Spa
Terramin Spain S.L.
Terramin Exploration Pty Ltd
Country of incorporation
2018
2017
Percentage
Australia
Australia
Algeria
Spain
Australia
100%
65%
100%
100%
100%
65%
100%
100%
Subsidiary with material non-controlling interests
The Group includes one subsidiary, Western Mediterranean Zinc Spa, with material Non-Controlling Interests (‘NCI’):
Name
Proportion of Ownership Interests
& Voting Rights held by the NCI
Profit/(Loss) Allocated to NCI
Accumulated NCI
Western Mediterranean Zinc Spa
35%
35%
(375)
(184)
13,577
13,952
31-Dec-18
31-Dec-17
31-Dec-18
31-Dec-17
31-Dec-18
31-Dec-17
Summarised financial information for Western Mediterranean Zinc Spa, before intragroup eliminations, is set out below:
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Revenue
Loss for the year
Other comprehensive income for the year (all attributable to owners of the parent)
Total comprehensive loss for the year
Net cash (used in) operating activities
Net cash used in investing activities
Net cash from financing activities
Net cash (outflow)
Cash Balance as at 31 December
2018
$'000
101
44,113
44,214
74
-
74
2018
$'000
-
(1,072)
-
(1,072)
(823)
-
847
24
31
2017
$'000
94
42,739
42,833
227
-
227
2017
$'000
-
(525)
-
(525)
(1,128)
-
1,229
101
7
55
24. Segment Reporting
For management purposes, the Group is organised into business units based on geography and has two reportable operating
segments:
a. Australia - explores, develops and mines zinc, lead and gold deposits
b. Northern Africa - developing a zinc deposit
No operating segments have been aggregated to form the above reportable operating segments.
Australia
Northern Africa
Consolidated
Other Income
External customers
Total Other Income
Results
Raw materials, consumables and other direct costs
Employee benefits & share based payments expense
Depreciation and amortisation
Exploration and evaluation expensed
Mine rehabilitation obligation expense
Other expenses
Net finance costs
(Loss) before income tax
Income tax expense
(Loss) for the year for the operating segment
(Loss) for the year attributable to non-controlling interest
(Loss) for the year attributable to equity holders of the Company
Operating assets
Operating liabilities
Other disclosures
2018
$'000
254
254
(459)
(1,665)
(45)
-
(47)
(1,204)
(2,116)
(5,282)
344
(4,938)
-
(4,938)
28,322
25,109
2017
$'000
2018
$'000
2017
$'000
2018
$'000
2017
$'000
-
-
(702)
(983)
(44)
-
1,496
(811)
(1,611)
(2,655)
-
(2,655)
-
(2,655)
28,766
19,453
-
-
-
-
-
(1,076)
-
4
-
(1,072)
-
(1,072)
(375)
(697)
-
-
-
(353)
-
-
-
(172)
-
(525)
-
(525)
(184)
(341)
44,214
42,833
74
227
254
254
(459)
(1,665)
(45)
(1,076)
(47)
(1,200)
(2,116)
(6,354)
344
(6,010)
(375)
(5,635)
72,536
25,183
-
-
(702)
(1,336)
(44)
-
1,496
(983)
(1,611)
(3,180)
-
(3,180)
(184)
(2,996)
71,599
19,680
128
Capital expenditure1
1. Capital expenditure consists of additions of property, plant and equipment, and exploration and evaluation assets.
2,273
2,337
3,096
2,401
5,433
Management monitors the operating results of its business units separately for the purpose of making decisions about resource
allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured
consistently with operating profit or loss in the consolidated financial statements.
There are no transactions other than cash funding between reportable segments.
25. Share Based Entitlements and Payments
The Group uses share options and share rights to provide incentives to Directors, employees and consultants. The Board, upon the
recommendation of senior management, has discretion to determine the number of options to be offered to Eligible Employees (as
that term is defined by the EOP) and the terms upon which they are offered, including exercise price and vesting conditions.
For the first half of the calendar year 2017, under the terms of the remuneration package of the Group’s Chief Executive Officer,
share rights under a Terramin Employee Share Rights Plan were issued. The share rights were issued quarterly and are priced at a
5% discount to the volume weighted average price of the shares traded in the last 5 days of the relevant quarter. The share rights
convert to ordinary shares 12 months after the date of issue. During the period, the remuneration package of the Group’s Chief
Executive Officer was renegotiated and from 1 July 2017, the share rights component was replaced with an equivalent cash
payment.
During the calendar year 2018, 10,000,000 options were granted to the Group’s Chief Executive Officer. Details of the options
granted to the Chief Executive Officer are summarised in the notes that follow. No options were granted to KMP’s during the
calendar year 2017.
56
(a) Number and weighted average exercise prices of share options
Outstanding at 1 January
Granted during the period
Exercised during the period
Lapsed during the year
Outstanding at 31 December
Exercisable at 31 December
Weighted average
exercise price
2018
$0.135
$0.293
$0.00
$0.135
$0.293
$0.00
Number of
options
2018
1,750,000
10,000,000
-
(1,750,000)
10,000,000
-
Weighted average
exercise price
2017
$0.135
-
-
$0.135
$0.135
$0.135
Number of
options
2017
3,500,000
-
-
(1,750,000)
1,750,000
1,750,000
The options outstanding at 31 December 2018 have a weighted average contractual life of 3.4 years (2017: 0.97 years).
A balance of 10,000,000 options were outstanding for the Group at 31 December 2018. A total of 1,750,000 options lapsed during
the reporting period ending 31 December 2018.
(b) Options exercised during the year
There were not options exercised during the reporting period (2017: Nil).
(c) Table of share options movement for the Group at 31 December 2018
Expiry Date
Opening balance 1 January 2018
Granted during the period
Lapsed during the period
Closing balance 31 December 2018
Number of
options
1,750,000
10,000,000
(1,750,000)
10,000,000
(d) Table of share options movement for the Group at 31 December 2017
Expiry Date
Opening balance 1 January 2017
Lapsed during the period
Closing balance 31 December 2017
Number of
options
3,500,000
(1,750,000)
1,750,000
(e) Shares issued in lieu of cash payments
During the year, the following share were issued in lieu of cash payments.
Options expense
this year
$'000
-
111
-
111
Options expense
this year
$'000
-
-
-
Total option
value
$'000
-
371
-
371
Total option
value
$'000
-
-
-
Type of Share Rights Issue 2018
Shares issued in lieu of salary and wages
Shares issued in lieu of salary and wages
Shares issued in lieu of salary and wages
Total shares issued in lieu of cash payments
Type of Share Rights Issue 2017
Share Rights issued in lieu of salary and wages
Share Rights issued in lieu of salary and wages
Share Rights issued in lieu of salary and wages
Share Rights issued in lieu of salary and wages
Total Share Rights issued in lieu of cash payments
Date of issue
2 January 2018
4 April 2018
8 July 2018
Date of issue
2 February 2017
2 February 2017
4 April 2017
3 July 2017
Number of
Ordinary Shares
on issue
162,615
137,882
123,331
423,828
Issue Price
$
0.13
0.16
0.18
Share Capital
$'000
21
22
22
65
Number of Share
Rights issued
Issue Price
$
Share Rights
$'000
230,945
162,615
137,882
123,331
654,773
0.09
0.13
0.16
0.18
22
22
22
22
88
57
26. Employee Option Plan
27. Earnings per Share
(a) Current Options
10,000,000 options were granted, no options were exercised
and 1,750,000 options lapsed during the reporting period.
(b) Employee Incentive Plan
Terramin has established an Employee Incentive Plan. Shares
are allotted to employees under this Plan at the Board’s
discretion.
The following options are currently on issue:
Fair
Value
$’000
-
104,750
90,250
88,250
87,500
370,750
-
370,750
Share Based Payments expense is recognised over the vesting period
on a pro-rata basis from the grant date.
Represents the weighted average exercise price
Balance as at 1 January 2018
Granted during the financial year1
Granted during the financial year1
Granted during the financial year1
Granted during the financial year1
Balance as at 31 December 2018
Lapsed during the financial year
Balance as at 31 December 2018
1.
No. of
Options
on issue
1,750,000
2,500,000
2,500,000
2,500,000
2,500,000
11,750,000
(1,750,000)
10,000,000
Exercise
Price
$0.135
$0.200
$0.250
$0.320
$0.400
$0.2932
2.
Tranche A
Granted
Dec-18
$104,750
Tranche B
Granted
Dec-18
$90,250
Tranche C
Granted
Dec-18
$88,250
Tranche D
Granted
Dec-18
$87,500
2,500,000
2,500,000
2,500,000
Total fair value at
grant date1
Number of
securities issued
Exercise price
Volatility
Term
Risk free rate
1. Options were granted on 2 August 2018. During the 2018 reporting
period the share based payment expense of $110,956 represents the
vested portion of total fair value of options of $370,750.
$0.32
80%
3.5 years
2.20%
$0.20
80%
3 years
2.10%
$0.25
80%
3 years
2.10%
$0.40
80%
4 years
2.20%
2,500,000
The fair value of options issued is calculated using the Black-
Scholes Option Pricing Model.
(a) Basic earnings per share
The calculation of basic earnings per share at 31 December
2018 was based on the net loss attributable to owners of the
Company of $5.6m (2017: $3.0m) and a weighted average
number of ordinary shares outstanding during the year
ended 31 December 2018 of 1,869,503,284 (2017:
1,831,391,323), calculated as follows:
Net loss for the year attributable to
the owners of the Company
Ordinary shares on issue
Weighted average number of shares
2018
$’000
(5,635)
2017
$’000
(2,996)
1,869,601,371
1,869,503,284
1,869,177,543
1,831,391,323
Basic earnings per share (cents)
(0.30)
(0.16)
(b) Diluted earnings per share
The calculation of diluted earnings per share does not
include potential ordinary shares on issue as to do so would
have the effect of reducing the amount of the loss per share.
Therefore the diluted earnings per share equates to the
ordinary earnings per share.
28. Commitments and Contingencies
There are contractual commitments at the reporting date as
follows:
(a) Operating lease
Non-cancellable operating leases contracted but not
capitalised in the financial statements payable:
Within 1 year
One to five years
Total
2018
$’000
80
22
102
2017
$’000
31
22
53
58
(b) Minimum expenditure on exploration tenements of
which the Group has title
In order to maintain current rights of tenure to exploration
tenements, the Company is required to perform minimum
exploration work to meet minimum expenditure
requirements. These obligations are subject to renegotiation
and may be farmed out or relinquished. These obligations
are not provided for in the parent entity financial
statements.
Region
Adelaide
Hills1
$’000
South
Gawler2
$’000
Total
$'000
Within 1 year
-
4,171
4,171
4,434
1 to 5 years
Total minimum expenditure3
1. Adelaide Hills fold belt tenements have an amalgamated minimum
expenditure of $4.16 million over 2 years expiring on 30 June 2020 and
represents a portion of the total minimum expenditure.
10,275
4,434
1,670
5,841
6,104
2. South Gawler project tenements have an amalgamated minimum
expenditure of $3.5 million over 3 years expiring on 31 December 2019
and represents a portion of the total minimum expenditure.
3. The minimum expenditure on a tenement is subject to change at the end
of a five year term from when the tenement was granted.
Future minimum rentals payable on non-
cancellable leases due
Within 1 year
Later than 1 year but not later than 3 years
Total minimum commitments
2018
$’000
4,171
6,104
10,275
(c) Capital expenditure commitments
Within 1 year
Total
2018
$'000
-
-
2017
$'000
3,000
980
3,980
2017
$'000
25
25
The minimum expenditure on a tenement is subject to change
at the end of a five year term from when the tenement was
granted.
(d) Finance leases
Within 1 year
Longer than 1 year and not longer than 5
Minimum lease payments
Less: future finance charges
Total lease liabilities
Representing
Current
Non-current
Total lease liabilities
2018
$’000
2017
$'000
10
2
12
1
11
9
2
11
10
11
21
4
17
7
10
17
The interest rate implicit in the lease is 14.5%.
(e) Other commitments
Tala Hamza Zinc Project
In February 2006, the Group signed a joint venture
agreement in respect of the Tala Hamza Zinc Project with
ENOF, an Algerian Government company involved in
exploration and mining activities. The Company agreed to
manage and finance the joint venture until a decision to
mine is made.
Bird-in-Hand acquisition
Terramin Exploration Pty Ltd agreed to purchase the Bird-in-
Hand Gold Project from Maximus Resources Limited.
Pursuant to a tenement sale and purchase agreement two
further payments of $1 million each may become payable
following approval of the Programme for Environmental
Protection and Rehabilitation in respect of the Bird-in- Hand
deposit and following the first shipment of mined gold
respectively. A net smelter royalty will also become payable
following the first shipment of mined gold.
Consultancy fee
Under the Technical Cooperation Agreement entered into
with NFC up to an additional 8 million ordinary shares will
be issued upon the Board of WMZ taking a decision to mine.
Finder’s Fee
A second tranche of a finder’s fee is payable to a non-
related party and linked to the commencement of
commercial production from the first producing mine
established on the Oued Amizour tenement covered by the
Algerian joint venture agreement with ENOF. The amount
payable will be US$62,500 which will be converted into the
Australian Dollar equivalent at the time of the contingent
payment in the future, as well as 100,000 unlisted options
exercisable at 25 cents each within 3 years of date of issue.
Bank Guarantees - Angas Zinc Mine
As at 31 December 2018, the Company had lodged bank
guarantees having a face value of $5.3 million with the South
Australian Government.
Litigation
As at the date of this report, the Company is not involved in
any litigation.
29. Events After the Reporting Date
Apart from the matters below, there are no other matters
or circumstances that have arisen since the end of the year
that have significantly affected or may significantly affect
either the entities operations or state of affairs in future
years or the results of those operations in future years.
Terramin entered into an agreement to acquire 100% of
Private Mine 53 which covers the historic Kitticoola copper
gold mine that was operated intermittently between 1846
and 1971. The agreement provides Terramin with the
exploration rights, subject to a land access fee and a sliding
scale royalty payable on gold produced.
Terramin entered into an agreement with major shareholder
Asipac to restructure and increase the existing Standby Term
Facility from $6.25 million to $8.25 million.
59
30. Parent Entity Disclosures
As at, and throughout, the financial year ending 31 December 2018 the parent Company of the Group was Terramin Australia
Limited.
Result of the parent entity
Loss for the period
Other comprehensive income
Total comprehensive income for the period
Financial position of parent entity
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Share capital
Reserves
Accumulated losses
Total equity
2018
$’000
(4,676)
-
(4,676)
13,735
51,834
13,472
18,216
215,383
135
(168,165)
47,353
2017
$'000
(4,899)
-
(4,899)
14,143
50,603
8,269
12,827
215,318
90
(163,489)
51,919
Parent entity capital commitments for acquisition of property plant and equipment
There are no capital commitments for acquisition of property, plant and equipment as at 31 December 2018.
Parent entity guarantees in respect of debts of its subsidiaries
The parent entity has not entered into a deed of Cross Guarantee with respect to its subsidiaries.
60
61
Tenement Information
Terramin Australia Limited
Tenement listing
Title name and locations
Angas - South Australia
1
Bremer - South Australia
1
Cambrai - South Australia
1
Pfeiffer - South Australia
1
Tepko - South Australia
Wild Horse - South Australia
Licence number
ML 6229
EL 5924
EL 5662
EL 6228
EL 6267
EL 5846
Terramin Exploration Pty Ltd (100% Terramin)
Tenement listing
Title name and locations
1
Kapunda - South Australia
1
Lobethal - South Australia
1
Mount Barker - South Australia
1
Mount Pleasant - South Australia
1
Mount Torrens - South Australia
Ulooloo – South Australia
Licence number
EL 6198
EL 5469
EL 6154
EL 5805
EL 5568
EL 6293
Licence
area
87.97ha
387km2
89km2
154km2
778km2
462km2
Licence
area
624km2
221km2
118km2
452km2
93km2
103km2
Application for renewal
of licence lodged
Application for renewal
of licence lodged
Expiry date
Interest Minimum expenditure
16/08/2026
100% Not applicable
26/10/2021
100%
$1,680,000 over 3 years
20/07/2020
100%
$120,000 over 3 years
21/11/2019
100%
$180,000 over 2 years
7/10/2020
100%
$420,000 over 2 years
8/09/2020
100%
$174,000 over 2 years
Expiry date
Interest Minimum expenditure
27/04/2020
100%
$720,000 over 2 years
31/08/2019
100%
$600,000 over 3 years
24/02/2020
100%
$320,000 over 2 years
29/03/2021
100%
$900,000 over 3 years
24/02/2019
100%
$480,000 over 3 years
22/11/2018
18/12/2020
100%
$100,000 over 2 years
Western Mediterranean Zinc Spa (65% Terramin)
Tenement listing
Title name and locations
Oued Amizour - Algeria
Licence number
6911 PEM
Licence
area
12,276ha
Expiry date
31/01/2018
WMZ
Interest
100%
Minimum expenditure
Not applicable
Menninnie Metals Pty Ltd (100% Terramin)
Tenement listing
Title name and locations
Beacon - South Australia
Jumpuppy - South Australia
Kallinta - South Australia
2
Kolendo - South Australia
2
Menninnie - South Australia
2
Moonaree - South Australia
2
Mt Ive - South Australia
Mt Ive South - South Australia
2
Mulleroo - South Australia
2
Nonning - South Australia
Peltabinna – South Australia
Reid - South Australia
Siam - South Australia
Tanner - South Australia
2
Taringa - South Australia
Thurlga - South Australia
2
Unalla - South Australia
2
Wipipippee - South Australia
Licence number
EL 6076
EL 6077
EL 6078
EL 5453
EL 5949
EL 6079
EL 6200
EL 5430
EL 5855
EL 5925
EL 6290
EL 6093
EL 6094
EL 5458
EL 5816
EL 5518
EL 6179
EL 6064
Licence
area
371km2
971km2
688km2
208km2
101km2
816km2
214km2
394km2
210km2
312km2
637km2
716km2
379km2
354km2
988km2
951km2
155km2
493km2
Expiry date
MMPL
Interest
Minimum expenditure
Application for renewal
of licence lodged
9/01/2020
100%
$130,000 over 2 years
9/01/2020
100%
$250,000 over 2 years
9/01/2020
100%
$190,000 over 2 years
26/07/2019
100%
$300,000 over 3 years
26/10/2018
100%
$640,000 over 2 years
18/09/2018
9/01/2020
100%
$220,000 over 2 years
20/06/2020
100%
$200,000 over 2 year
19/06/2018
100%
$320,000 over 2 year
19/09/2018
100%
$100,000 over 2 years
30/11/2018
100%
$480,000 over 2 years
11/12/2020
100%
$180,000 over 2 years
11/01/2020
100%
$225,000 over 2 years
11/01/2020
100%
$155,000 over 2 years
31/07/2018
100%
$259,000 over 1 year
20/02/2021
100%
$750,000 over 3 years
27/11/2018
100%
$412,000 over 1 year
6/06/2020
100%
$180,000 over 2 year
2/05/2019
100%
$320,000 over 2 years
9/05/2018
9/08/2018
25/10/2018
29/06/2018
26/10/2018
1.
2.
Subject to an amalgamated expenditure arrangement with the Department for Energy and Mining (DEM) (see note 28(b)) encompassing the Adelaide Hills
tenements.
Subject to an amalgamated expenditure arrangement with the Department for Energy and Mining (DEM)) (see note 28(b)) encompassing the Menninnie Metals
tenements.
62
63
Reserves and Resources
Terramin’s Mineral Resource and Ore Reserve estimates as at 31 December 2017 and 31 December 2018 are listed below. The
Mineral Resource estimates are reported inclusive of Ore Reserve estimates. The totals and average of some reports may appear
inconsistent with the parts, but this is due to rounding of values to levels of reporting precision commensurate with the confidence
in the respective estimates.
The complete JORC Code reports, including JORC Code Table 1 checklists, which detail the material assumptions and technical
parameters for each estimate, can be found at https://www.terramin.com.au/ under the menu ‘ASX Announcements'. The JORC
Code Competent Person statements for the 31 December 2018 estimates are included on pages 18 and 65 of this Annual Report.
Terramin’s public reporting governance for mineral resources and ore reserves includes a chain of assurance measures. Firstly,
Terramin ensures that the Competent Persons responsible for public reporting:
•
•
•
•
are current members of a professional organisation that is recognised in the JORC Code framework;
have sufficient mining industry experience that is relevant to the style of mineralisation and reporting activity, to be considered
a Competent Person as defined in the JORC Code;
have provided Terramin with a written sign-off on the results and estimates that are reported, stating that the report agrees
with supporting documentation regarding the results or estimates prepared by each Competent Person; and
have prepared supporting documentation for results and estimates to a level consistent with normal industry practices – which
for JORC Code 2012 resources includes Table 1 Checklists for any results and/or estimates reported.
The following tables set out the current Resource and Reserve position for the Company.
Table of Resources – Lead Zinc
Measured Resource
Indicated Resource
Inferred Resource
Total Resources
Terramin
Interest (%)
Tonnes
(Mt)
Zn
(%)
Pb
(%)
Tonnes
(Mt)
Zn
(%)
Pb
(%)
Tonnes
(Mt)
2017
Tala Hamza
Angas
Sunter
Menninnie Dam
Total (100%)
Total (Terramin share 2017)
2018
Tala Hamza1, 2
Angas4, 5
Sunter4, 6
Menninnie Dam7, 8
Total (100%)
Total (Terramin share)
65
100
100
100
65
100
100
100
Table of Resources – Gold
30.6
5.7
1.6
30.6
19.6
5.7
5.7
1.6
1.6
20.5
0.66
0.13
21.3
14.1
44.2
0.66
0.13
44.99
29.53
3.6
4.68
5.7
3.6
3.6
5.54
4.68
5.70
5.53
5.20
0.8
1.81
2.31
0.8
0.8
1.44
1.81
2.31
1.45
1.45
17.5
0.25
0.24
7.7
25.8
19.7
8.9
0.25
0.24
7.7
17.09
13.98
Zn
(%)
3.7
2.8
2.9
3.1
3.5
3.4
4.0
2.8
2.9
3.1
2.16
3.46
Pb
(%)
Tonnes
(Mt)
0.6
1.3
1.2
2.6
1.2
1.4
0.7
1.3
1.2
2.6
1.57
1.77
68.6
0.91
0.38
7.7
77.5
53.5
53.0
0.91
0.38
7.7
61.99
43.44
Zn
(%)
4.6
4.2
3.8
3.1
4.4
4.3
5.3
4.2
3.8
3.1
4.62
4.87
Pb
(%)
1.1
1.7
1.6
2.6
1.3
1.3
1.3
1.7
1.6
2.6
1.47
1.54
Indicated Resource
Terramin
Interest (%)
Tonnes
(Kt)
Au
(g/t)
2017
Bird-in-Hand
Total (100%)
Total (Terramin share 2017)
2018
Bird-in-Hand9, 10
Total (100%)
Total (Terramin share)
100
100
-
-
167
167
167
432
432
432
16.16
16.16
16.16
14.4
14.4
14.4
Ag
(g/t)
13.5
13.5
13.5
7.56
7.56
7.56
Inferred Resource
Tonnes
(Kt)
Au
(g/t)
Ag
(g/t)
Total Resources
Tonnes
(Kt)
Au
(g/t)
Au
(kOz)
Ag
(g/t)
Ag
(kOz)
421
421
421
220
220
220
12.23
12.23
12.23
9.2
9.2
9.2
3
3
3
2.4
2.4
2.4
588
588
588
650
650
650
13
13
13
12.6
12.6
12.6
252
252
252
265
265
265
6.1
6.1
6.1
5.8
5.8
5.8
115
115
115
122
122
122
64
Reserves and Resources (continued)
Table of Resources – Copper
2018
Kapunda11, 12, 13
Total (100%)
Total (Terramin share)
Terramin
Interest (%)
100
-
-
Table of Reserves – Lead Zinc
Indicated Resource
Cu
Tonnes
(%)
(Mt)
Inferred Resource
Tonnes
(Mt)
47.4
47.4
47.4
Terramin
Interest (%)
Probable Reserve
Zn
(%)
Tonnes
(Mt)
2017
Tala Hamza
Tatal (100%)
Total (Terramin share 2017)
2018
Tala Hamza2, 3
Total (100%)
Total (Terramin share)
65
65
-
-
38.1
38.1
24.8
25.9
25.9
16.8
4.78
4.78
4.78
6.3
6.3
6.3
Pb
(%)
1.36
1.36
1.36
1.8
1.8
1.8
Cu
(%)
0.25
0.25
0.25
Tonnes
(Mt)
38.1
38.1
24.8
25.9
25.9
16.8
Total Resources
Tonnes
(Mt)
47.4
47.4
47.4
Cu
(%)
0.25
0.25
0.25
Total Reserve
Zn
(%)
4.78
4.78
4.78
6.3
6.3
6.3
Pb
(%)
1.36
1.36
1.36
1.8
1.8
1.8
1. Resources for Tala Hamza (JORC 2004) are estimated at a cut off of 3% ZnEq. The Zinc Equivalence formula for Tala Hamza is %ZnEq = %Zn + 0.856 x %Pb and is based on long term
predicted prices of Pb USD2,400/t and Zn USD2425/t and metal recoveries of Pb 62% and Zn 88%.
2. Tala Hamza Resources as at January 2018. The reserve is as at 29 August 2018. The reserve is based on the Underhand Drift and Fill mining method. Resources are inclusive of Reserves.
3. Reserve cut off grade at Tala Hamza is 4.5% ZnEq (JORC 2012).
4. Resources for Angas and Sunter (JORC 2004) are estimated at a cut off of 2% Pb+Zn.
5. Angas Resources as at 1 Jan 2013. Resources exclude oxide and transitional material.
6. Sunter Resources as at 29 November 2011. Resources exclude oxide and transitional material.
7. Resources for Menninnie Dam (JORC 2004) are estimated at a cut off of 2.5% Pb+Zn.
8. Menninnie Dam Resources as at 15 February 2011. Resources exclude oxide and transitional material.
9. Resources for Bird-in-Hand (JORC 2012) are estimated at a cut off of 1g/t Au.
10. Bird-in-Hand Resources as at 30 October 2018.
11. Resource for Kapunda (JORC 2012) estimated at a cut off of 0.05% Cu. Resource excludes primary sulphide material.
12. Kapunda Resource as at 12 February 2018.
13. Subject to terms of JV with Environmental Copper Recovery Pty Ltd announced 2 August 2017.
JORC Competent Person Statement
The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr Eric Whittaker (Tala Hamza, Menninnie, Angas and Kapunda
Resources and Exploration Results) and Mr Dan Brost (Bird-in-Hand Resource), both being Competent Persons who are Members of The Australasian Institute of Mining and Metallurgy
(AusIMM). Mr Whittaker is employed as the Regional Exploration Manager of Terramin Australia Limited and Mr Brost is a geologist consulting to Terramin. Mr Whittaker and Mr Brost have
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(s) as
defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Whittaker and Mr Brost consent to the inclusion in the
report of the matters based on their information in the form and context in which it appears. The information in this report that relates to Ore Reserves is based on information compiled or
reviewed by Mr Luke Neesham, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Neesham is Principal Mining Engineer for GO
Mining Pty Ltd a consulting firm engaged by Terramin Australia Limited to prepare mining designs and schedules for the Tala Hamza Feasibility Study. Mr Neesham has sufficient experience
that is relevant to the style of mineralization and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of
the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Neesham consents to the inclusion in the report of the matters based on his information
in the form and context in which it appears.
65
Additional Securities Exchange Information
Equity Securities on Issue
Fully paid ordinary shares
As at 31 January 2019, there were 2,521 holders of a total of 1,869,601,371 ordinary fully paid shares in the capital of the Company.
All ordinary fully paid shares in the capital of the Company are listed for quotation on the ASX.
Unlisted options
As at 31 January 2019, there was 1 holder of a total of 10,000,000 options over fully paid ordinary shares in the capital of the
Company.
Shareholder Voting Rights
At a general meeting of shareholders, on a show of hands, each person who is a member or sole proxy has one vote. On a poll, each
shareholder is entitled to one vote for each fully paid share.
Unlisted options carry no voting rights.
Distribution Schedule as at 31 January 2019
Number of securities
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Total
Fully paid ordinary shares
Unlisted options
486
740
325
719
251
2,521
0
0
0
0
1
1
As at 31 January 2019, there were 1,166 shareholdings of less than a marketable parcel.
Substantial Shareholders
As at 31 January 2019, the following shareholders were substantial shareholders, as disclosed in substantial shareholder notices
given to the Company:
Shareholder
Asipac Group Pty Ltd
Citycorp Nominees Pty Limited
Tronic Enterprise Development Limited
HSBC Custody Nominees (Australia) Limited
Number of shares
% Issued capital
620,267,260
288,335,952
198,636,923
155,702,567
33.18
15.42
10.62
8.33
66
Additional Securities Exchange Information (continued)
List of 20 Largest Shareholders
The names of the twenty largest shareholders as shown in the Company’s register at 31 January 2019 are:
Shareholder
Asipac Group Pty Ltd
Citycorp Nominees Pty Limited
Tronic Enterprise Development Limited
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
China Non-Ferrous Metals Industry’s Foreign Engineering and Construction
New Asia Wealth Investment Holding (SG) Pty Ltd
Fly Wealth Investment Pty Ltd
Mr Jing Wang
Vasco Investment Managers Ltd
Mr Julian Paul Leach
Auway Finance Group Pty Ltd
Ms Er Xu
Silver Springs Investment Pty Ltd
BNP Paribas Nominees Pty Ltd
Vasco Investment Managers Limited
Huge Field Investment Ltd
BNP Paribas Noms Pty Ltd
Enterprise Flourishing Pty Ltd
Zhang & Chen Investment Trust
Number of shares
% Issued capital
620,267,260
288,335,952
198,636,923
155,702,567
71,126,111
67,800,000
57,185,513
35,800,000
35,399,949
19,049,619
18,685,187
17,857,143
17,511,817
15,580,967
15,043,242
10,119,047
10,000,000
9,700,842
9,056,197
7,700,000
33.18
15.42
10.62
8.33
3.80
3.63
3.06
1.91
1.89
1.02
1.00
0.96
0.94
0.83
0.80
0.54
0.53
0.52
0.48
0.41
Total
1,680,558,336
89.89
Additional Information
Unquoted equity securities
The following persons were the holders of 20% or more of the equity securities in an unquoted class as at 31 January 2019:
Class of unquoted securities
Unlisted options
Richard Taylor
Number of securities held
% of securities in class
10,000,000
100.00
On-Market Share Buy-Back
There is no current on-market buy-back in place.
Corporate Governance Principles and Recommendations
The Corporate Governance Principles and Recommendations are included overleaf.
Global Reporting Initiative Index
This year, Terramin have opted to prepare this report with the objectives outlined in the Global Reporting Initiatives Index, which
has been included at the end of this report.
67
Corporate Governance
Principles and
Recommendations
Principle 1 – Lay solid foundations for
management and oversight
Recommendation 1.1 – Recommendation
followed
A listed entity should disclose:
(a)
(b)
the respective roles and responsibilities of its board and
management; and
those matters expressly reserved to the board and those
delegated to management.
The Company’s Board Charter sets out (amongst other
things): (a) the roles and responsibilities of the Board and of
management; (b) the matters expressly reserved to the
Board; and (c) the matters delegated to management.
A copy of the Board Charter can be viewed at:
https://www.terramin.com.au/corporate/charters-policies/
The Audit & Risk Committee and Nomination &
Remuneration Committee have also been referred
responsibilities by the Board as set out in each Committee’s
Charter. The Charters for the Committees can be viewed at:
https://www.terramin.com.au/corporate/charters-policies/
https://www.terramin.com.au/corporate/charters-policies/
Recommendation 1.2 – Recommendation
followed
A listed entity should:
(a) undertake appropriate checks before appointing a
person, or putting forward to security holders a
candidate for election, as a director; and
(b) provide security holders with all material information in
its possession relevant to a decision on whether or not
to elect or re-elect a director.
Prior to the appointment of a person, or putting forward to
security holders a candidate for election, as a director, the
Company undertakes checks which it believes are
appropriate to verify a director’s character, experience,
education, criminal record and bankruptcy history including
for new directors:
• background and reference checking;
• requesting information in relation to the person’s current
and previous positions, directorships, bankruptcy history
and any potential conflicts of interests.
The Company ensures that all material information in its
possession relevant to a shareholder’s decision whether to
elect or re-elect a director, including the information
referred to in Recommendation 1.2, is provided to
shareholders in the Company’s Notice of Annual General
Meeting.
Recommendation 1.3 – Recommendation
followed
A listed entity should have a written agreement with each
director and senior executive setting out the terms of their
appointment.
Each director and senior executive of the Company has an
agreement in writing with the Company which sets out the
key terms and conditions of their appointment including
their duties, rights and responsibilities and (to the extent
applicable) the matters referred to in the commentary to
Recommendation 1.3.
Recommendation 1.4 – Recommendation
followed
The company secretary of a listed entity should be
accountable directly to the board, through the chair, on all
matters to do with the proper functioning of the board.
The Company Secretary has a direct line of reporting to the
Chairman and is responsible for:
• advising and supporting the Chairman and the Board and
its committees to manage the day to day governance
framework of the Company;
• assisting with Board effectiveness by monitoring whether
applicable Board and committee policies, procedures and
charters are followed and coordinating timely completion
and despatch of Board agendas and papers; and
• assisting with all matters to do with the proper
functioning of the Board including advising on governance
matters and assisting with induction and professional
development of directors.
The responsibilities of the Company Secretary are set out in
the Board Charter located at:
https://www.terramin.com.au/corporate/charters-policies/
Recommendation 1.5 – Recommendation not
followed
A listed entity should:
(a) have a diversity policy which includes requirements for
the board or a relevant committee of the board to set
measurable objectives for achieving gender diversity
and to assess annually both the objectives and the
entity’s progress in achieving them;
(b) disclose that policy or a summary of it; and
(c) disclose as at the end of each reporting period the
measurable objectives for achieving gender diversity set
68
by the board or a relevant committee of the board in
accordance with the entity’s diversity policy and its
progress towards achieving them, and either:
(i)
the respective proportions of men and women on
the board, in senior
executive positions and across the whole
organisation (including how the entity has defined
“senior executive” for these purposes); or
if the entity is a “relevant employer” under the
Workplace Gender Equality Act, the entity’s most
recent “Gender Equality Indicators”, as defined in
and published under that Act.
(ii)
The Company seeks to treat everyone with fairness and
respect which includes valuing diversity and difference and
acting without prejudice. The Company believes that
decision-making is enhanced through diversity and supports
and encourages diversity at all levels of the organisation in
accordance with the Company’s Diversity & Equal
Employment Opportunity Policy. A copy of the Diversity &
Equal Employment Opportunity Policy is located at:
https://www.terramin.com.au/corporate/charters-
policies/
The Nomination & Remuneration Committee is responsible
for recommending to the Board any measurable objectives
for achieving gender diversity and reviewing regularly any
such objectives and the Company’s progress towards
achieving them. The Committee reviews and reports to the
Board at least annually on the relative proportion of women
and men appointed or employed within the Company group.
A copy of the Committee Charter is located at:
https://www.terramin.com.au/corporate/charters-
policies/
Given the size of the Company and status of the Company’s
exploration and development projects, the directors believe
that it is not appropriate at this stage to set measurable
objectives in relation to diversity beyond those included in
the Diversity & Equal Employment Opportunity Policy.
Notwithstanding this, the Company strives to provide the
best possible opportunities for current and prospective
employees of all backgrounds in
such a manner that best adds to overall shareholder value
and which reflects the values, principles and spirit of the
Diversity & Equal Employment Opportunity Policy. The
directors also believe that diversity is a relevant
consideration for constitution of an effective Board, as
discussed at Recommendation 2.2.
For the reporting year ended 31 December 2018, the
Company had a total of:
• 4 female employees out of a total of 13 employees in
Australia (not including overseas employees);
• no female employee out of a total of 6 employees in
executive positions; and
• no female director out of a total of 5 directors on the
Board.
Recommendation 1.6 – Recommendation not
followed
A listed entity should:
(a) have and disclose a process for periodically evaluating
the performance of the board, its committees and
individual directors; and
(b) disclose, in relation to each reporting period, whether a
performance evaluation was undertaken in the
reporting period in accordance with that process.
The Board recognises that as a result of the Company’s size
and its position as a publicly listed exploration and
development company, the assessment of the Board’s
overall performance and its own succession plan is
conducted on an ad hoc basis. Whilst
Recommendation 1.6 is not strictly followed the Directors
consider that at the date of this report the evaluation
process of company directors is appropriate and effective. A
more formal process of Board assessment will be considered
in the future as the Company develops.
The informal review undertaken by the Board takes into
account various matters including those set out in the Board
Charter located at:
https://www.terramin.com.au/corporate/charters-policies/
The Nomination & Remuneration Committee assists the
Board as required with the evaluation of performance of
directors.
Recommendation 1.7 – Recommendation
followed
A listed entity should:
(a) have and disclose a process for periodically evaluating
the performance of its senior executives; and
(b) disclose, in relation to each reporting period, whether a
performance evaluation was undertaken in the
reporting period in accordance with that process.
The Chief Executive Officer reviews the performance of the
senior executives annually with the assistance of the
Nomination & Remuneration Committee. These evaluations
take into account criteria such as the achievement and
performance towards the Company’s objectives and (where
appropriate) performance benchmarks and the achievement
of individual performance objectives.
During the reporting period, senior executives had
performance agreements and annual review processes were
in place.
69
Principle 2 – Structure the board to add value
• technical expertise (including finance);
Recommendation 2.1 – Recommendation
followed
The board of a listed entity should: (a) have a nomination
committee which: (i)has at least three members, a majority
of whom are independent directors; and (ii)is chaired by an
independent director, and disclose: (iii) the charter of the
committee; (iv)the members of the committee; and (v)as at
the end of each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or (b) if it
does not have a nomination committee, disclose that fact
and the processes it employs to address board succession
issues and to ensure that the board has the appropriate
balance of skills, knowledge, experience, independence and
diversity to enable it to discharge its duties and
responsibilities effectively.
The Company has established a Nomination & Remuneration
Committee which comprises 3 non-executive directors, the
majority of whom are independent directors (Mr
McGuinness and Mr Kennedy) and which is chaired by an
independent director (Mr McGuinness).
The Remuneration & Nomination Committee’s Charter is
located at:
https://www.terramin.com.au/corporate/charters-policies/
The Committee’s members, the number of times the
Committee met throughout the reporting period and the
attendance of the Committee’s members at those meetings
are set out on page 15 of the 2018 Annual Report.
https://www.terramin.com.au/category/annual-reports/
Recommendation 2.2 – Recommendation
followed
A listed entity should have and disclose a board skills matrix
setting out the mix of skills and diversity that the board
currently has or is looking to achieve in its membership.
The Board regularly evaluates the mix of skills, experience
and diversity at the Board level. The Board believes that a
highly credentialed Board, with a diversity of background,
skills and perspectives, will be effective in supporting and
enabling delivery of good governance for the Company and
value for the Company’s shareholders. The mix of skills
comprised in the current Board, and that the Board would
look to maintain, and to build on, includes:
• mining industry expertise;
• metallurgy and metals marketing expertise;
• metal processing;
• experience in dealing with joint ventures and high levels
of government and regulators;
• high level of business acumen;
• ability to think strategically;
• project management;
• governance experience and expertise.
The Board aspires to have a Board comprised of individuals’
diverse experience and expertise and will be mindful of this
when making appointments which will also be based on
merit.
Recommendation 2.3 – Recommendation
followed
A listed entity should disclose:(a) the names of the
directors considered by the board to be independent
directors; (b) if a director has an interest, position,
association or relationship of the type described in Box
2.3 but the board is of the opinion that it does not
compromise the independence of the director, the nature
of the interest, position, association or relationship in
question and an explanation of why the board is of that
opinion; and (c )the length of service of each director.
In the opinion of the board, to qualify as being
“independent”, a director must be independent of
management and free of any business or other relationship
which could materially interfere or could reasonably be
perceived to interfere materially with the Director’s
independent exercise of their judgement.
Mr Angelo Siciliano and Mr Feng Sheng were appointed to
the Board in January and April 2013, respectively and
represent Asipac Group Pty Ltd (Asipac) and associated
entities. Asipac is a substantial shareholder and financier of
the Company. Mr Feng is director and substantial
shareholder of Asipac. Mr Siciliano is also the Chief Financial
Officer of Asipac. As such, Mr Sheng and Mr Siciliano are not
considered by the Board to be independent directors for the
purpose of ASX Recommendation 2.3. Mr Sheng was
appointed as Executive Chairman in January 2018.
Since 2 March 2017, Mr Wang Xinyu represents NFC to the
board of Terramin. Mr Wang is not considered by the Board
to be an independent director for the purpose of ASX
Recommendation 2.3. Mr Wang was appointed as Executive
Director in January 2018.
Mr Kennedy and Mr McGuinness are both considered by the
Board to be independent directors, having regard to the
factors set out above.
Recommendation 2.4 – Recommendation not
followed
A majority of the board of a listed entity should be
independent directors.
The Company currently does not follow the
recommendation of principle 2.4 as the Board does not have
a majority of independent directors (2 out of the 5 directors
are independent).
70
In accordance with the ASX Recommendations, the
independence of a director is assessed by determining
whether the director is independent of management and free
of any business or other relationship that could materially
interfere with, or could reasonably be perceived to materially
interfere with, the exercise of their unfettered and
independent judgment. The test of whether a relationship or
business is material is based on the nature of the relationship
or business and on the circumstances and activities of the
director. Materiality thresholds are considered by the Board
from time to time.
As stated above, Mr Sheng, Mr Siciliano and Mr Wang are not
deemed to be independent for the purpose of the ASX
Recommendations.
Mr Kennedy and Mr McGuinness are both regarded as
independent as they are free of any business or other
relationship that could materially interfere with, or could
reasonably be perceived to materially interfere with, the
exercise of their unfettered and independent judgement.
As the business develops, changes to and/or further
appointments to the Board may be warranted and the Board
will consider the need to appoint independent directors.
Recommendation 2.5 – Recommendation not
followed
The chair of the board of a listed entity should be an
independent director and, in particular, should not be the
same person as the CEO of the entity.
Mr Sheng was appointed as Executive Chairman of Terramin
in January 2018 assuming executive functions. In particular
in the immediate term Mr Sheng has been focussing on
finalising project approvals from the Algerian regulatory
authorities, and the grant of the formal mining lease for the
Tala Hamza project.
Recommendation 2.6 – Recommendation
followed
A listed entity should have a program for inducting new
directors and provide appropriate professional development
opportunities for directors to develop and maintain the skills
and knowledge needed to perform their role as directors
effectively.
All new directors are provided with an induction including
comprehensive meetings with the Executive Management,
and provision of information on the Company including
Company and Board policies and other material documents.
All directors are expected to maintain the skills required to
effectively discharge their obligations to the Company.
Directors are encouraged to undertake continuing
professional education and, if this involves industry seminars
and approved education courses, where appropriate, this is
paid for by the Company. The Company Secretary under the
guidance of the Nomination & Remuneration Committee
oversees the induction program for new directors.
Principle 3 – Act ethically and responsibly
Recommendation 3.1 – Recommendation
followed
A listed entity should: (a) have a code of conduct for its
directors, senior executives and employees; and (b) disclose
that code or a summary of it.
The Company has a Code of Conduct that sets out the
standards of behaviour expected of all its employees,
directors, officers, contractors and consultants. The Code of
Conduct is located at:
https://www.terramin.com.au/corporate/charters-policies/
Principle 4 – Safeguard integrity in corporate
reporting
Recommendation 4.1 – Recommendation
followed
The board of a listed entity should:(a) have an audit
committee which: (i) has at least three members, all of whom
are non-executive directors and a majority of whom are
independent directors; and (ii) is chaired by an independent
director, who is not the chair of the board, and disclose: (iii)
the charter of the committee; (iv) the relevant qualifications
and experience of the members of the committee; and (v) in
relation to each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or(b) if it
does not have an audit committee, disclose that fact and the
processes it employs that independently verify and safeguard
the integrity of its corporate reporting, including the
processes for the appointment and removal of the external
auditor and the rotation of the audit engagement partner.
The Company has established an Audit & Risk Committee
which comprises 3 non-executive directors, the majority of
whom are independent directors, and is chaired by an
independent director, Mr McGuinness who is not the chair of
the Board.
The Audit & Risk Committee’s Charter is located at:
https://www.terramin.com.au/corporate/charters-policies/
The Committee’s members and their relevant qualifications
and experience, the number of times the Committee met
throughout the reporting period and the attendance of the
Committee’s members at those meetings is set out on pages
14-15 of the 2018 Annual Report.
A copy of the 2018 Annual Report is located at:
https://www.terramin.com.au/category/annual-
reports/
71
Recommendation 4.2 – Recommendation
followed
The board of a listed entity should, before it approves the
entity’s financial statements for a financial period, receive
from its CEO and CFO a declaration that, in their opinion, the
financial records of the entity have been properly maintained
and that the financial statements comply with the
appropriate accounting standards and give a true and fair
view of the financial position and performance of the entity
and that the opinion has been formed on the basis of a
sound system of risk management and internal control which
is operating effectively.
The Board has received a declaration in the form set out in
Recommendation 4.2 from its CEO and CFO in relation to the
financial statements for the financial periods ended 31
December 2018.
Recommendation 4.3 – Recommendation
followed
A listed entity that has an AGM should ensure that its
external auditor attends its AGM and is available to answer
questions from security holders relevant to the audit.
The Company’s external auditor attends each AGM of the
Company and is available to answer questions from security
holders relevant to the audit.
Principle 5 – Make timely and balanced
disclosure
Recommendation 5.1 – Recommendation
followed
A listed entity should: (a) have a written policy for complying
with its continuous disclosure obligations under the Listing
Rules; and (b) disclose that policy or a summary of it.
The Company has a Continuous Disclosure Policy that
outlines the processes followed by the Company to ensure
compliance with its continuous disclosure obligations and
the corporate governance standards applied by the
Company in its communications to the market. The
Continuous Disclosure Policy can be viewed at:
https://www.terramin.com.au/corporate/charters-
policies/
Principle 6 – Respect the rights of security
holders
Recommendation 6.1 – Recommendation
followed
A listed entity should provide information about itself and its
governance to investors via its website.
Information about the Company and its operations is
located at:
www.terramin.com.au
Information about the Company’s corporate governance
(including links to the Company’s corporate governance
policies and charters) is located at:
www.terramin.com.au/Corporate/Corporate-Governance-
Statement/
Recommendation 6.2 – Recommendation
followed
A listed entity should design and implement an investor
relations program to facilitate effective two-way
communication with investors.
The Company has a Shareholders Communications Policy
that outlines the processes followed by the Company to
ensure communication with shareholders and the
investment community is effective, consistent and adheres
to the principles of continuous disclosure. The Shareholders
Communications Policy is located at:
https://www.terramin.com.au/corporate/charters-policies/
The Company’s Continuous Disclosure Policy also outlines
policies and requirements for communications with analysts
and investors to ensure that the communications are
effective and comply with the Company’s continuous
disclosure obligations under the Corporations Act and the
ASX Listing Rules.
https://www.terramin.com.au/corporate/charters-policies/
Recommendation 6.3 – Recommendation
followed
A listed entity should disclose the policies and processes it has
in place to facilitate and encourage participation at meetings
of security holders.
The Shareholders Communication Policy sets out the policies
and processes the Company has in place to facilitate and
encourage participation at meetings of security holders. The
Company permits shareholders to cast their proxies prior to
a General Meeting if they are unable to attend the meeting.
Recommendation 6.4 – Recommendation
followed
A listed entity should give security holders the option to
receive communications from, and send communications to,
the entity and its security registry electronically.
The Company gives security holders the option to receive
communications from, and send communications to, the
Company and its security registry electronically, as provided
for in the Company’s Shareholder Communications Policy.
72
Principle 7 – Recognise and manage risk
Recommendation 7.1 – Recommendation
followed
The board of a listed entity should: (a) have a committee or
committees to oversee risk, each of which: (i) has at least
three members, a majority of whom are independent
directors; and (ii) is chaired by an independent director, and
disclose: (iii) the charter of the committee; (iv) the members
of the committee; and (v) as at the end of each reporting
period, the number of times the committee met throughout
the period and the individual attendances of the members at
those meetings; or (b) if it does not have risk committee or
committees that satisfy (a) above, disclose that fact and the
processes it employs for overseeing the entity’s risk
management framework.
The Board is responsible for ensuring that management has
developed and implemented a sound system of risk
management and internal control. The Company has
established an Audit & Risk Committee which is responsible
for ensuring that there are adequate policies in relation to
risk management, compliance and internal control system.
The Audit & Risk Committee comprises 3 non-executive
directors, the majority of whom are independent directors,
and is chaired by an independent director, Mr McGuinness,
who is not the chair of the Board.
The Audit & Risk Committee’s Charter is located at:
https://www.terramin.com.au/corporate/charters-policies/
The Committee’s members and their relevant qualifications
and experience, the number of times the Committee met
throughout the reporting period and the attendance of the
Committee’s members at those meetings is set out on pages
14-15 of the 2018 Annual Report.
A copy of the 2018 Annual Report is located at:
https://www.terramin.com.au/category/annual-reports/
Recommendation 7.2 – Recommendation
followed
The board or a committee of the board should: (a) review the
entity’s risk management framework at least annually to
satisfy itself that it continues to be sound; and (b) disclose, in
relation to each reporting period, whether such a review has
taken place.
The Audit, Risk and Compliance Committee monitors the
Company’s risk management by overseeing management’s
actions in the evaluation, management, monitoring and
reporting of material operational, financial, compliance and
strategic risk. For this purpose, the Committee:
• reviews group wide objectives in the context of
management of corporate risk;
• reviews and, where necessary approves guidelines and
policies governing the identification, assessment and
management of the company’s exposure to risk; and
• reviews and approves the delegations of financial
authorities to management and ensures that such
authorities are updated on a regular basis.
Under the Company’s Risk Management Policy, the Audit &
Risk Committee and management undertake a structured
consideration and review of the risk management framework
and the material risks faced by, and the risk attitude of the
Company. The Risk Management Policy is located at:
https://www.terramin.com.au/corporate/charters-policies/
In the reporting period the Board has undertaken a specific
review of the Company’s risk management framework. The
Board has satisfied itself that the company has a sound
system of risk management and internal control.
Management regularly reports to the Board in relation to risk
management on the basis of the Risk Management Policy.
The Board considers that the major business risks are being
understood and managed effectively.
The adequacy of risk management policies and measures are
continually monitored by the Board at directors’ meetings
and in communication with management. The Company
believes this to be appropriate given the size and nature of
the Company at this time.
The Board will review its risk management framework as its
projects receive approval and preparation for mining
development starts.
Recommendation 7.3 – Recommendation
followed
A listed entity should disclose: (a) if it has an internal audit
function, how the function is structured and what role it
performs; or (b) if it does not have an internal audit function,
that fact and the processes it employs for evaluating and
continually improving the effectiveness of its risk
management and internal control processes.
Terramin is committed to understanding and managing risk
and to establishing an organisational culture that ensures risk
management is included in all activities, decision making and
business processes.
The Audit & Risk Committee meets regularly to receive and
consider reports on, and monitor and discuss, known and
emerging risk and compliance issues, including non-financial
operational and other business risks.
The ongoing mitigation and management of key business
risks is a standing item of business on the agenda of the
Audit & Risk Committee. Management reports regularly to
the Committee on the Company’s risk register.
73
Management, is responsible for implementing the risk
management framework to ensure the Company’s material
business risks are managed and for reporting to the
Committee on whether those risks are being managed
effectively.
In support of the functions of the Audit & Risk Committee,
the Company's managers are directly responsible for risk
management in their respective areas of accountability, in
accordance with the Company’s Risk Management
Framework.
Operational, financial, legal, compliance, strategic and
reputational risks continue to be managed primarily by the
Chief Executive Officer as a part of the day-to-day
management of the Company’s affairs. Where appropriate,
these risks are managed with the support of relevant
external professional advisers.
The Company has an established Risk Management
Framework based on the Australian Standard for Risk
Management AS/NZ 31000:2018, which is aimed at the
systematic identification, assessment, treatment,
communication and monitoring of risk within all areas of the
Company.
The Chief Executive Officer and the Chairman of the Audit &
Risk Committee are primarily responsible for reporting to the
Board on a regular basis in relation to whether the
Company's material business risks are being managed
effectively by way of the Company's risk management and
internal control systems.
As set out in the Company’s Risk Management Policy (under
the heading “Risk Management Framework”), given the
Company’s current size and nature of its operations, the
Board may engage external advisors (independent of the
external auditor) as appropriate from time to time to
perform the internal audit function. These external advisers
report to either the Audit & Risk Committee or the Board.
The Risk Management Policy is located at:
https://www.terramin.com.au/corporate/charters-policies/
The Audit & Risk Committee is responsible for monitoring
and reviewing the effectiveness and objectivity of the
internal audit function.
Recommendation 7.4 – Recommendation
followed
A listed entity should disclose whether it has any material
exposure to economic, environmental and social
sustainability risks and, if it does, how it manages or intends
to manage those risks.
The Company undertakes minerals exploration and mining
development and, as such, faces risks inherent to its
business, including economic, environmental and social
sustainability risks, which may materially impact the
Company’s ability to create or preserve value for security
holders over the short, medium or long term.
One of the Company’s core values is safety; it prioritises
safety and health to people, the environment and
community. The Company views sustainable and responsible
business practices as an important long term driver of
performance and shareholder value and is committed to
transparency, fair dealing, responsible treatment of
employees and partners and positive interaction with the
community.
The Company has in place policies and procedures, including
a risk management framework (as described in the
Company’s Risk Management Policy), which is developed and
updated to help manage these risks. Copies of some of these
policies regarding the management of specific risks are
located at:
https://www.terramin.com.au/corporate/charters-policies/
Principle 8 – Remunerate fairly and responsibly
Recommendation 8.1 – Recommendation
followed
The board of a listed entity should: (a) have a remuneration
committee which: (i) has at least three members, a majority
of whom are independent directors; and (ii) is chaired by an
independent director, and disclose (iii) the charter of the
committee; (iv) the members of the committee; and (v) as at
the end of each reporting period, the number of times the
committee met throughout the period and the individual
attendances of the members at those meetings; or (b) if it
does not have a remuneration committee, disclose that fact
and the processes it employs for setting the level and
composition of remuneration for directors and senior
executives and ensuring that remuneration is appropriate
and not excessive.
The Company has an established Nomination &
Remuneration Committee which has 3 non-executive
directors, the majority of whom are independent directors
and which is chaired by an independent director.
Recommendation 2.1 sets out, or provides the location of,
the information referred to in paragraph (a)(iii) – (v) in
Recommendation 8.1.
Recommendation 8.2 – Recommendation
followed
A listed entity should separately disclose its policies and
practices regarding the remuneration of non-executive
directors and the remuneration of executive directors and
other senior executives.
The Company’s policies and practices regarding the
remuneration of non-executive directors and the
remuneration of executive directors and other senior
executives is set out in the Nomination & Remuneration
Committee Charter and in the Remuneration Report
contained in the 2018 Annual Report. The Remuneration &
Nomination Committee Charter can be viewed at:
74
https://www.terramin.com.au/corporate/charters-policies/
A copy of the 2018 Annual Report is located at:
https://www.terramin.com.au/category/annual-reports/
Recommendation 8.3 – Recommendation
followed
A listed entity which has an equity-based remuneration
scheme should: (a) have a policy on whether participants are
permitted to enter into transactions (whether through the
use of derivatives or otherwise) which limit the economic risk
of participating in the scheme; and (b) disclose that policy or
a summary of it.
The Company has an equity-based remuneration scheme.
The Company’s Securities Trading Policy provides that
participants in the scheme must not enter into any
transaction which would have the effect of hedging or
otherwise transferring to any other person the risk of any
fluctuation in the value of any unvested equity interest. The
Securities Trading Policy is located at:
https://www.terramin.com.au/corporate/charters-policies/
75
Global Reporting Initiative Index
G4 indicator Disclosure title
Strategy and analysis
G4-1
Provide a statement from the most senior decision-maker of
the organisation about the relevance of sustainability to the
organisation and the organisation’s strategy for addressing
sustainability.
Organisational profile
G4-2
G4-3
G4-4
Provide a description of key impacts, risks and opportunities.
Report the name of the organisation.
Report the primary brands, products and services.
G4-5
G4-6
G4-7
G4-8
G4-9
G4-10
G4-11
G4-12
G4-13
G4-14
Report the location of the organisation’s headquarters.
Report the number of countries where the organisation
operates.
Report the nature of ownership and legal form.
Report the markets served (including geographic breakdown,
sectors served, and types of customers and beneficiaries).
Report the scale of the organisation, including: total number of
employees, total number of operations, net revenues, quantity
of products or services provided.
Report the total number of employees by:
• employment contract and gender;
• permanent employees by employment
• type and gender; total workforce by
• employees and supervised workers and
• by gender; total workforce by region
• and gender; self-employed, any significant
• variations in employment numbers due to
• season etc.
Report the percentage of total employees covered by
collective bargaining agreements.
Describe the organisation’s supply chain.
Report any significant changes during the reporting period
regarding the organisation’s size, structure, ownership, or its
supply chain.
Report whether and how the precautionary approach or
principle is addressed by the organisation.
G4-15
List externally developed economic, environmental and social
charters, principles, or other initiatives to which the
organisation subscribes or which it endorses.
Report section
Page reference
Chairman’s Review
Page 4
Company details
Review of Operations:
Each project is described in
detail in this section. All
projects are in the
development stages.
Company details
About Terramin
Share Registry, ASX and
Additional Securities
Information sections
Review of Operations:
Each project is described in
detail in this section. All
projects are in the
development stages
To be reported in 2019
Corporate Governance
Principles and
Recommendations:
Recommendation 1.5
Page 3
Pages 15-17
Page 3
Page 5
Page 3 and 66
Pages 15-17
Page 69
To be reported in 2019
To be reported in 2019
Directors’ Report
Pages 18-19
Corporate Governance
Principles and
Recommendations:
Recommendation 7.1-7.4
Risk - Applied through the
Risk Management Policy
and Environment Policy.
Sustainability: Social
Pages 73-74
Page 8
76
G4 indicator Disclosure title
G4-16
List memberships of associations.
G4-17
G4-18
G4-19
G4-20
G4-21
G4-22
G4-23
List all entities included in the organisation’s consolidated
financial statements.
Explain the process for defining the report content and the
Aspect Boundaries.
Explain how the organisation has implemented the Reporting
Principles for Defining Report Content.
List all the material Aspects identified in the process for
defining report content.
For each material Aspect, report the Aspect Boundary within
the organisation.
For each material Aspect, report the Aspect Boundary outside
the organisation.
Report the effect of any restatements of information provided
in previous reports, and the reasons for such restatement.
Report significant changes from previous reporting periods in
the Scope and Aspect Boundaries.
Stakeholder engagement
G4-24
Provide a list of stakeholder groups engaged by the
organisation.
G4-25
G4-26
G4-27
Report the basis for identification and selection of
stakeholders with whom to engage.
Report the organisation’s approach to stakeholder
engagement, including frequency of engagement by type and
by stakeholder group.
Report key topics and concerns that have been raised through
stakeholder engagement, and how the organisation has
responded to those key topics and concerns.
Report profile
G4-28
G4-29
G4-30
G4-31
G4-32
Reporting period for information provided.
Date of most recent previous report.
Reporting cycle.
Provide the contact point for questions regarding the report or
its contents.
Report the ‘in accordance’ option the organisation has chosen.
Report the GRI Content Index for the chosen option.
Report the reference to the External Assurance Report.
G4-33
Report the organisation’s policy and current practice with
regard to seeking external assurance for the report.
Report section
Sustainability: Social -
Memberships
Review of Operations
Page reference
Page 11
Pages 15-17
To be reported in 2019
To be reported in 2019
To be reported in 2019
To be reported in 2019
First report
First report
Pages 8-11
Page 10
Page 11
Pages 10-11
Sustainability: -
Website includes
stakeholder information
Sustainability: Social -
Description of Community
Engagement Plans
Sustainability: Social -
Website includes
stakeholder engagement
information
Sustainability: Social –
Description of Community
Engagement Plans outlines
identification of
stakeholder concerns and
topics. CCC specific
websites outline how the
organisation is addressing
concerns
Appendix 4E Statement
Appendix 4E Statement
Appendix 4E Statement
Company details
Refer Appendix 4E
Refer Appendix 4E
Refer Appendix 4E
Page 3
Page 8
Sustainability: Environment
- Terramin have opted to
align this report with the
Global Reporting Initiatives
Index as a step towards
GRI compliance in future
years.
No assurance
77
G4 indicator Disclosure title
Governance
G4-34
Report the governance structure of the organisation, including
committees of the highest governance body.
Report the process for delegating authority for economic,
environmental and social topics from the highest governance
body to senior executives and other employees.
G4-35
G4-36
G4-37
G4-38
G4-39
G4-40
Report whether the organization has appointed an executive-
level position or positions with responsibility for economic,
environmental and social topics, and whether post holders
report directly to the highest governance body.
Report processes for consultation between stakeholders and
the highest governance body on economic, environmental
and social topics. If consultation is delegated, describe to
whom and any feedback processes to the highest governance
body.
Report the composition of the highest governance body and
its committees by:
• Executive or non-executive
•
• Tenure on the governance body
• Number of each individual’s other significant positions
and commitments, and the nature of the commitments
Independence
• Gender
• Membership of under-represented social groups
• Competences relating to economic, environmental and
social impacts
• Stakeholder representation
Report whether the Chair of the highest governance body is
also an executive officer (and, if so, his or her function within
the organization’s management and the reasons for this
arrangement).
Report the nomination and selection processes for the highest
governance body and its committees, and the criteria used for
nominating and selecting highest governance body members,
including:
• Whether and how diversity is considered
• Whether and how independence is considered
• Whether and how expertise and experience relating to
economic, environmental and social topics are
considered
• Whether and how stakeholders (including shareholders)
are involved
Report section
Page reference
Governance
Corporate Governance
Principles and
Recommendations:
The Company’s Board
Charter and Audit and
Risk Committee Charter
outlines how topics are
delegated through to
senior executives
CEO is responsible for
economic, environmental
and social topics.
Sustainability: Social -
Description of Community
Engagement Plans
outlines identification of
and response to issues
raised by stakeholders
Governance:
Includes information on
board composition
Page 12
Page 68
Page 10
Page 12
Corporate Governance
Principles and
Recommendations:
Recommendation 2.5
Corporate Governance
Principles and
Recommendations:
Recommendation 1.1
Board Charter -
Board is selected based on
the Board Charter for
their respective
Page 71
Refer to page 68
and
https://www.
terramin.com.au/
corporate/charters-
policies/
Recommendation 1.5
Diversity
Pages 68-69
Recommendation 2.1
Independence
Page 70
78
G4 indicator Disclosure title
G4-41
Report processes for the highest governance body to ensure
conflicts of interest are avoided and managed.
Report whether conflicts of interest are disclosed to
stakeholders, including, as a minimum:
• Cross-board membership
• Cross-shareholding with suppliers and other stakeholders
• Existence of controlling shareholder
• Related party disclosures
G4-42
G4-43
G4-44
G4-45
G4-46
Report the highest governance body’s and senior executives’
roles in the development, approval, and updating of the
organisation’s purpose, value or mission statements,
strategies, policies, and goals related to economic,
environmental and social impacts.
Report the measures taken to develop and enhance the
highest governance body’s collective knowledge of economic,
environmental and social topics.
a. Report the processes for evaluation of the highest
governance body’s performance with respect to governance of
economic, environmental and social topics. Report whether
such evaluation is independent or not, and its frequency.
Report whether such evaluation is a self-assessment.
b. Report actions taken in response to evaluation of the
highest governance body’s performance with respect to
governance of economic, environmental and social topics,
including, as a minimum, changes in membership and
organizational practice
a. Report the highest governance body’s role in the
identification and management of economic, environmental
and social impacts, risks, and opportunities. Include the highest
governance body’s role in the implementation of due diligence
processes.
b. Report whether stakeholder consultation is used to support
the highest governance body’s identification and management
of economic, environmental and social impacts, risks, and
opportunities.
Report the highest governance body’s role in reviewing the
effectiveness of the organization’s risk management processes
for economic, environmental and social topics.
Page reference
Page 68
Page 52
Page 68
Report section
Corporate Governance:
Recommendation 1.2
Conflicts of interest are
investigated prior to the
appointment of new
directors.
Notes to the Consolidated
Financial Statements: 20.
Related Parties -
Transactions with related
parties are reported on as
part of the Consolidated
Financial Statements
Corporate Governance:
Recommendation 1.1
Board Charter -
Board Charter outlines the
Board’s key responsibilities
including determining
Terramin’s Strategic
Objectives.
To be reported in 2019
Page 69
Corporate Governance:
Recommendation 1.6
Board Performance -
Board Charter outlines the
process regarding Board
Performance Review
Pages 73-74
Page 74
Corporate Governance:
Recommendation 7.1-7.4
Risk -
Board Charter, Audit and
Risk Committee Charter
and Risk Management
Policy outline Terramin
processes regarding risk
management.
Corporate Governance:
Recommendation 7.4 Risk -
Outline Terramin’s
processes regarding risk
management and
associated policies
regarding economic, social
and environmental risks.
79
G4 indicator Disclosure title
G4-47
Report the frequency of the highest governance body’s review
of economic, environmental and social impacts, risks, and
opportunities.
G4-48
G4-49
G4-50
G4-51
G4-52
Report the highest committee or position that formally reviews
and approves the organization’s sustainability report and
ensures that all material Aspects are covered.
Report the process for communicating critical concerns to the
highest governance body
Report the nature and total number of critical concerns that
were communicated to the highest governance body and the
mechanism(s) used to address and resolve them.
Report the remuneration policies for the highest governance
body and senior executives for the below types of
remuneration:
• Fixed pay and variable pay:
– Performance based pay
– Equity-based pay
– Bonuses
– Deferred or vested shares
• Sign-on bonuses or recruitment incentive payments
• Termination payments
• Clawbacks
• Retirement benefits, including the difference between
benefit schemes and contribution rates for the highest
governance body, senior executives, and all other employees
b. Report how performance criteria in the remuneration policy
relate to the highest governance body’s and senior executives’
economic, environmental and social objectives.
Report the process for determining remuneration. Report
whether remuneration consultants are involved in determining
remuneration and whether they are independent of
management. Report any other relationships which the
remuneration consultants have with the organization.
Page reference
Pages 73-74
Pages 73-74
Pages 19-25
Report section
Corporate Governance:
Recommendation 7.1-7.4
Risk -
Risk Management Policy
and Audit and Risk
Committee Charter
outlines the frequency of
Board risk review
Not included
Corporate Governance:
Recommendation 7.1-7.4
Risk -
Risk Management Policy
outlines the process for
risk reporting up to the
Board
To be reported in 2019
Remuneration Report –
Audited -
Includes remuneration and
incentives of both
Directors and Senior
Executives
Page 69
Corporate Governance:
Recommendation 1.7 -
The Nomination and
Remuneration Committee
is subject to a charter
which outlines evaluations
of senior executive
positions and receives
external advice as required
80
G4 indicator Disclosure title
G4-53
Report how stakeholders’ views are sought and taken into
account regarding remuneration, including the results of votes
on remuneration policies and proposals, if applicable.
G4-54
G4-55
Report the ratio of the annual total compensation for the
organization’s highest-paid individual in each country of
significant operations to the median annual total
compensation for all employees (excluding the highest-paid
individual) in the same country.
Report the ratio of percentage increase in annual total
compensation for the organization’s highest-paid individual in
each country of significant operations to the median
percentage increase in annual total compensation for all
employees (excluding the highest-paid individual) in the same
country.
Ethics and integrity
G4-56
Describe the organization’s values, principles, standards and
norms of behaviour such as codes of conduct and codes of
ethics.
Report the internal and external mechanisms for seeking
advice on ethical and lawful behaviour, and matters related to
organizational integrity, such as helplines or advice lines.
Report the internal and external mechanisms for reporting
concerns about unethical or unlawful behaviour, and matters
related to organizational integrity, such as escalation through
line management, whistleblowing mechanisms or hotlines.
G4-57
G4-58
Page reference
Page 69
Report section
Corporate Governance:
Recommendation 1.7 -
The Nomination and
Remuneration Committee
is responsible for ensuring
director and executive
remuneration is
appropriate and is subject
to a charter which outlines
responsibilities regarding
executive remuneration.
To be reported in 2019
To be reported in 2019
Vision and Values
Page 6
Sustainability
To be reported in 2019
Pages 8 to 11
Page 10
Sustainability: Social -
Terramin maintain a
Grievance Policy, as well as
a dedicated Community
hotline and email address
81
Terramin Australia Limited
Unit 7, 202 – 208 Glen Osmond Road
Fullarton, South Australia, 5063
T: +61 8 8213 1415
F: +61 8 8213 1416
E: info@terramin.com.au
W: www.terramin.com.au