28 February 2020
ASX Market Announcements Office
ASX Limited
Exchange Centre
Level 4, 20 Bridge Street
SYDNEY NSW 2000
Dear Sir/Madam,
Terramin Australia’s 2019 Full Year Financial Results for Announcement to the Market
Terramin Australia Limited announced its results today for the full year ended 31 December 2019.
Please find attached Appendix 4E and 2019 Annual Report including:
• Annual Financial Report
• Additional Securities Exchange Information
This ASX Release was approved by the Terramin Board.
Regards
Richard Taylor
Chief Executive 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 2019
Previous corresponding period:
12 months ended 31 December 2018
Reporting Cycle:
12 months
Results for Announcement to the Market
(All comparisons to year ended 31 December 2019)
$'000
Up/down
Revenues from ordinary activities
Revenues from ordinary activities excluding interest income
-
-
-
-
Loss after tax from ordinary activities
(5,611)
down
Movement
%
-
-
7
Operating and Financial Review
There was no revenue from ordinary activities for the financial year ended 31 December 2019.
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 2019 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 2019 and no final dividend has been proposed for the year
ending 31 December 2019.
Net Tangible Assets per Security
Net tangible assets per security
Independent Auditors Report
31 December 2019
31 December 2018
0.02
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
2019 Annual Report
Contents
About Terramin ...................................................................................................................................................................... 3
Chairman’s Review ................................................................................................................................................................. 4
Key Projects ............................................................................................................................................................................ 5
Financial Report ..................................................................................................................................................................... 6
Directors’ Report .................................................................................................................................................................... 7
Directors’ Declaration .......................................................................................................................................................... 18
Auditor’s Independence Declaration .................................................................................................................................... 19
Auditor’s Independent Report .............................................................................................................................................. 20
Consolidated Statement of Profit or Loss and Other Comprehensive Income ....................................................................... 24
Consolidated Statement of Financial Position ...................................................................................................................... 25
Consolidated Statement of Changes in Equity ...................................................................................................................... 26
Consolidated Statement of Cash Flows ................................................................................................................................. 27
Notes to the Consolidated Financial Statements .................................................................................................................. 28
Tenement Information ......................................................................................................................................................... 46
Reserves and Resources ....................................................................................................................................................... 47
Additional Securities Exchange Information ......................................................................................................................... 49
2
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, the Adelaide Hills exploration tenements and two exploration earn-in agreements relating to the
South Gawler Ranges and Wild Horse 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.
Registered and Business Office
Australian Securities Exchange
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
ASX ticker code: TZN
Corporate Information
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 and Company Secretary
Richard Taylor
3
Chairman’s Review
Dear Fellow Shareholders,
In 2019, Terramin continued to focus on moving its major assets,
Tala Hamza in Algeria and Bird-in-Hand in South Australia,
towards production.
There has been considerable progress in South Australia with
the lodgement of the mining lease application for the Bird-in-
Hand Gold Mine. Unfortunately, progress has slowed in respect
of Tala Hamza as the Algerians work through a peaceful
transition of government.
With the Australian dollar gold price trading at historical highs,
we are very excited about the prospect of substantial returns
from the Bird-in-Hand Gold Project and the outlook for zinc and
lead remains strong which will underwrite the Tala Hamza
Project.
There has also been considerable progress made in adding value
the
to Terramin’s considerable mineral portfolio with
establishment of two exploration joint ventures with Freeport
McMoRan totalling $31.0 million, positive progress at the
Kapunda Copper Joint venture and the negotiation of
exploration rights of the high grade historic Kitticoola
My Directors and I are also highly appreciative of the continued
support we are getting from many of our shareholders with $8.6
million raised in a recent rights issue.
Our management team have continued to work diligently on all
our projects whilst minimising administrative and holding costs.
Tala Hamza Zinc Project
Terramin has continued to engage with its joint venture partners
and the Algerian government regarding the development of this
project.
Following confirmation from our Algerian partners that they
accept the technical aspects of the project, we have continued
to have a dialogue in regard to the commercial and financial
outcomes of the project.
Unfortunately, whilst discussions have been positive with a
high level of cooperation from our partners, progress has been
slowed as the Algerian government has been in a transitional
political phase as they appoint a new president and
government. Now that a new government has been
established, we are confident that positive discussions will
resume.
Bird-in-Hand Gold Project
We have been continuing to make pleasing progress in
respect to advancing the Bird-in-Hand Gold Project towards
development.
The completion of the Managed Aquifer Recharge test work
enabled the Company to complete and lodge with the South
Australian government, a Mining Lease Application. This
application is now under consideration by the Department for
Energy and Mining and we anticipate approval in 2020.
On behalf of my fellow directors, I would like to acknowledge
the devastating impact of the Cudlee Creek fire on the local
community. We would like to also acknowledge the great
work of all emergency services in protecting the local
community. Terramin’s Bird-in-Hand property, Goldwyn, was
partially damaged by the fire however damage was limited
due to the efforts of our staff and our neighbours. Terramin
has extended assistance to its near neighbours following the
fire.
The Company is advancing the finalisation of a definitive
feasibility study which is expected to be finalised in the 2nd
quarter of this calendar year. We are also in discussions with
a number of parties in respect of the funding of the
construction of the Bird-in-Hand Gold Project.
Concluding Remarks
I believe that 2020 is going to be a very exciting year for the
Company with positive news on Bird-in-Hand and Tala Hamza
and hopefully exciting news of our exploration activities.
Feng (Bruce) Sheng
Executive Chairman
4
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.
• 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.
•
•
•
gold.
• 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%. 1
• Utilising existing Angas Processing Facility.
•
Initial bores required for the Managed Aquifer
Recharge (MAR) installed.
1. NPV 8: NPV has been discounted using a discount rate of 8%.
NPV and IRR are discounted from ramp up of start-up capital.
5
Financial Report
6
Directors’ Report
for the Year Ended 31 December 2019
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 2019 and auditor’s report.
Mr Kevin McGuinness
BAA, ACA
Non-Executive Director
Appointed 17 April 2013
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).
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 a
member of the Audit, Risk and Compliance Committee and the
Nominations and Remuneration Committee.
Mr Wang Xinyu
Executive Director
Appointed Director 2 March 2017 and Executive Director 11
January 2018
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. Mr Wang is a former vice president
of China Non-Ferrous Metal Industry’s Foreign Engineering and
Construction Co Ltd.
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 and the Nominations and Remuneration
Committee.
Mr Angelo Siciliano
FIPA, Registered Tax Agent, BBus
Non-Executive Director
Appointed 2 January 2013
in property development and
Mr Siciliano has more than 20 years of experience as an
accountant
financial
accounting. Mr Siciliano is the Chief Financial Officer of
Asipac and for the last 17 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.
Company Secretary
Mr Richard Taylor
BEco & Law (First Class Honours), Masters of Law, MBA,
GAICD
Chief Executive Officer
Appointed 1 March 2019
Mr Taylor is a mining executive with more than 15 years’
experience in senior international and resource sector roles.
He was most recently Managing Director of PanAust Ltd’s
Asia business subsidiary, Phu Bia Mining Limited, where he
held responsibility for business development initiatives in
Myanmar and exploration in Laos. He has held senior
executive roles with Mineral Deposits Limited, Oxiana Ltd,
MMG and the World Bank. Richard is a graduate and
member of the Australian Institute of Company Directors
(GAICD) and has held board roles with a number of
companies and not-for-profit organisations. Richard holds
an MBA from the University of Cambridge and is a qualified
lawyer admitted to practice in New South Wales.
7
Directors’ Report (continued)
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 2019, and the number of meetings attended by each
Director were:
Directors
F Sheng
M Kennedy
K McGuinness
A Siciliano
X Wang
Directors’
Meetings
E
13
13
13
13
13
A
13
13
13
12
4
Audit,
Risk & Compliance
Committee
A
E
-
-
4
4
4
4
4
4
-
-
Nominations &
Remuneration
Committee
A
E
-
-
2
2
2
2
2
2
-
-
E Number of meetings eligible to attend.
A Number of meetings attended.
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 $5.6 million for the year ended 31 December 2019
(2018: $6.0 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 2019
was $50.5 million, increased from $47.4 million as at 31
December 2018.
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.
In December 2018, Terramin was advised by its joint venture
partners that they were satisfied with the technical aspects
of the project. This enabled the parties to begin discussions
on the economic and commercial aspects of the project,
including financing.
In April 2019, Algerian President Abdelaziz Bouteflika
stepped down after 20 years in power. This has resulted in
the Algerian government essentially being in caretaker
mode until the new President, Abdelmadjid Tebboune was
elected in December 2019. During this period, the Algerian
government was not making any decisions in respect of
major projects, including Tala Hamza. Terramin is expecting
discussions with the Algerian parties to resume in early 2020
following the establishment of the new government.
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 at
12.6g/t, which is amenable to underground mining. Subject
to required regulatory approvals, the Bird-in-Hand material
will be processed utilising the facilities at the Angas Zinc
Mine, which can be modified to process gold-bearing
material. The existing tailings dam 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.
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 including pre-production and final backfilling).
In June 2019, Terramin lodged the Mining Lease Application
for the Bird-in-Hand Gold Project and a Miscellaneous
Purpose Lease in respect of the processing of ore at the
Angas Zinc Mine site. The lodgement of these applications
was followed by an extensive period of public consultation
that closed in late September 2019.
8
Directors’ Report (continued)
Terramin is expecting to receive feedback on the applications in
early 2020 with approval expected later in 2020. In the
meantime, Terramin is drafting the Program for Environmental
Protection and Rehabilitation (PEPR) which is anticipated to be
lodged soon after the approval of the Mining Lease.
Further technical studies in respect of geotechnical conditions,
ventilation and surface infrastructure as well as some drilling to
obtain ore for metallurgical test work, has been progressed to
support the finalisation of the definitive feasibility study in early
2020.
Discussions with potential offtake partners and other parties
in respect of the financing of the project have commenced
with a high level of interest recorded.
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 Joint Venture, current active
project areas include Wild Horse and Kitticoola.
In January 2019, Terramin acquired a 100 % holding of Private
Mine 53, which covers the historic Kitticoola copper gold mine
located 2.5km south of Palmer and approximately 62km by
road from the Angas Zinc Mine. 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 will evaluate Kitticoola by drilling to test the modelled
down plunge extension of the Mastermann Lode in early 2020.
In June 2019, Terramin entered into an earn in agreement with
Freeport-McMoRan Exploration Pty Ltd (Freeport) in respect of
the Wild Horse Copper Gold prospect near Murray Bridge.
Freeport have agreed to spend $3.0 million over a maximum of
4 years to earn 51% and a further $20.0 million over a maximum
of 6 years to earn a further 24%. Exploration has commenced
and is expected to continue in the new year.
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
is 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
government funding to pursue the ISR testwork.
in securing $2.6 million
in 2018
During the year, ECR has advanced its work with the
completion of three drill holes at Kapunda. Two of these
wells were screened and preliminary pump
tests
undertaken with further hydrological tests planned for early
2020. Analyses of the drill chips by a hand held X-Ray
Fluorescence defined broad zones of copper mineralisation
including 66 metres @ 0.27% copper and 23 metres @
0.49%. Samples from these holes have been submitted to
CSIRO for large particle leach tests to evaluate for copper
recovery utilising ISR.
South Gawler Ranges Project
(Menninnie Metals Pty Ltd (MMPL) 100%)
The South 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 4,524km2. 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.
In July 2019, Terramin entered into an earn-in agreement
with Freeport in respect of the South Gawler Ranges
Project. Freeport have agreed to spend $3.0 million over a
maximum of 4 years to earn 70% and a further $5.0 million
over a maximum of 6 years to earn a further 10%.
Exploration has commenced and is expected to continue
into the new year.
9
Directors’ Report (continued)
Corporate
During the year the Company completed a pro rata non-
renounceable rights issue offered to all existing shareholders
raising $8.6 million. The funds raised was sufficient to support
the Bird in Hand Gold Project Mining Lease Application and
feasibility study, and pay down existing debt.
The Company agreed with its major shareholder Asipac to
restructure their loan facilities during the year to increase the
Standby Term Facility from $6.25 million to $15.55 million, to
accommodate refinancing of the $5.3 million Angas Zinc Mine
environmental closure bond, and extending the existing debt
facilities to 30 April 2021.
The Corporate Facility has been repaid in full and the Standby
Term Facility has been reduced to $15.52 million as a result of
the Non-Renounceable Rights Issue in December 2019.
There were no options exercised and no options issued during
the reporting period.
Business Development Activities
Throughout 2019, 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 and entered into joint ventures with
Freeport in respect of the Wild Horse copper-gold prospect and
the South Gawler Ranges Project.
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
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.
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.
10
Directors’ Report (continued)
Corporate Governance Statement
Terramin has adopted fit for purpose systems of control and
accountability as the basis for the administration and
compliance of effective and practical corporate governance.
if
These systems are reviewed regularly and revised
appropriate.
The Board is committed to administering the Company’s
policies and procedures with transparency and integrity,
pursuing the genuine spirit of good corporate governance
practice. To the extent they are applicable, the Company has
adopted the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations, 3rd Edition. As
the Group’s activities transform in size, nature and scope,
additional corporate governance structures will be considered
by the Board and assessed as to their relevance.
In accordance with the ASX Listing Rules, the Corporate
Governance Statement and Appendix 4G checklist are released
to the ASX on the same day the Annual Report is released. The
Corporate Governance policies and charters can be found on
the Company’s website.
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
Name of
Director
Mr Feng (Bruce)
Sheng
Mr Michael
Kennedy
Mr Kevin
McGuinness
Mr Angelo
Siciliano
Mr Wang
Xinyu
Name of
Executive
Mr Richard
Taylor
Term
Director and Chairman
Classification
Executive
Director
and
Deputy Chairman
Director
Director
Director
Term
Chief Executive Officer
and
Company Secretary
Independent
Independent
Non-
Independent
Executive
Classification
Executive
This Corporate Governance Statement is current as at 28
February 2020 and has been approved by the Board of
Terramin Australia Limited.
Share Capital
(a) Ordinary Shares
As at 31 December 2019, there were 2,116,562,720 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.
(d) Unlisted options exercised/cancelled since 31
December 2019
No unlisted options over fully paid shares in the Company
have been exercised or cancelled since 31 December 2019.
(e) Share rights issued/converted during the year
During the year, there were no share rights issued and
converted into shares during the reporting period.
rights
issued/converted
(f) Share
December 2019
Since 31 December 2019, there were no share rights
converted to ordinary shares.
since
31
Remuneration Report - Audited
This remuneration report for the year ended 31 December
2019 outlines the remuneration arrangements of the
in accordance with requirements of the
Company
Corporations Act 2001 (Act) the Corporations Regulations
2001.
the
remuneration
remuneration
report details
The
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.
11
Directors’ Report (continued)
(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)
Mr MH Kennedy (Deputy Chairman - Independent)
Mr A Siciliano (Non-Independent)
Mr K McGuinness (Independent)
Mr X Wang (Non-Independent)
The following persons are also Key Management Personnel of
the Group:
Other Key Management Personnel
Mr R Taylor (Chief Executive Officer)1
Mr S Iacopetta (Chief Financial Officer & Company Secretary)2
1. Mr R Taylor commenced Chief Executive Officer on 28 May 2018
2. Mr S Iacopetta concluded his employment on 1 March 2019
Nominations and Remuneration Committee
(b)
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.
it
•
•
The Committee is responsible to assist the Board to:
•
ensure
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;
assess 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
that
shareholder and employee interests are aligned.
framework and ensure
Remuneration Policy and Practices
(c)
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).
•
in addition
The policy for determining the nature and amount of
remuneration of the KMP
includes consideration of
the overall
individual performance
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:
to
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 2019,
the Remuneration Report for the financial year ending 31
December 2018 was approved by shareholders.
(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.
12
Directors’ Report (continued)
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.
Employment Contracts
I.
Mr Richard Taylor, the Company’s Chief Executive Officer and
Company Secretary, entered into an employment contract in
May 2018 with no fixed term. The Company or the CEO may
terminate the agreement by providing 3 months’ notice. 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).
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
2019 was $212,500 (with a further $175,615 remaining unpaid,
including $73,115 from prior year, 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 travel 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 2019 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
Each Non-Executive
Director
Additional work to
1
standard Board duties
Chairman
Fee $
Vice
Chairman
Fee $
Member
Fee $
100,000
60,000
40,000
1,000/day
1,000/day
1,000/day
Audit, Risk and Compliance
K McGuinness (Chair),
MH Kennedy, A Siciliano
Nominations and Remuneration
K McGuinness (Chair),
MH Kennedy, A Siciliano
Due Diligence
K McGuinness (Chair),
MH Kennedy
7,500
7,500
-
-
-
-
5,000
5,000
-
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.
13
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
Leave7
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
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Key Management Personnel
R Taylor2
S Iacopetta3
MS Janes4
JF Ranford5
SD Gauducheau6
TOTAL
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
63,927
63,927
-
-
-
-
-
-
-
-
296,804
177,702
38,957
131,425
-
230,776
-
116,058
-
138,073
-
50,000
50,000
55,000
55,000
100,000
100,000
40,000
40,000
-
-
-
-
-
-
-
-
-
-
Super-
annuation
Benefits
6,073
6,073
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,102
16,105
(12,014)
11,984
-
28,196
16,882
4,535
12,485
-
(114,017)
15,089
-
-
(75,880)
8,853
-
-
399,688
245,000
(1,912)
38,804
-
(60,642)
8,721
100,000
2018
857,961
245,000
1. Refer to page 14 of the Directors’ Report for details of Non-Executive Directors’ fees allocated by role
2. Mr R Taylor commenced Chief Executive Officer on 28 May 2018
3. Mr S Iacopetta concluded his employment on 1 March 2019
4. Mr MS Janes concluded his employment on 8 August 2018
5. Mr JF Ranford concluded his employment on 30 April 2018
6. Mr SD Gauducheau concluded his employment on 28 June 2018
7. The amounts disclosed in this column represent the movements in the associated provisions
(222,450)
68,103
100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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%
40,000
187,533
35.9%
522,635
110,956
34.5%
321,645
-
-
-
-
-
-
-
-
0.0%
31,478
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
155,894
-
131,848
-
49,031
-
186,152
187,533
-
869,113
110,956
-
1,159,570
14
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:
Shares Balance
1 Jan 19
Shares Acquired
during Year
Shares Issued as
Remuneration
Cessation as KMP
Shares Balance
31 Dec 19
Key Management Personnel
Parent Entity Directors
MH Kennedy
A Siciliano
K McGuinness
F Sheng
W Xinyu
Other Key Management Personnel
R Taylor
S Iacopetta1
3,934,580
9,923,168
2,023,580
1,311,527
76,832
674,528
620,713,916
206,755,754
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,246,107
10,000,000
2,698,108
827,469,670
-
-
-
845,413,885
Total
1. Mr S Iacopetta concluded his employment on 1 March 2019
636,595,244
208,818,641
Key Management Personnel
Parent Entity Directors
MH Kennedy
A Siciliano
K McGuinness
F Sheng
W Xinyu
Other Key Management Personnel
R Taylor
S Iacopetta2
Options Balance
1 Jan 19
Options Granted as
1
Incentive
Options Exercised
Cessation as
KMP
Balance Options
31 Dec 19
-
-
-
-
-
10,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
-
10,000,000
Financial Report
2. Mr S Iacopetta concluded his employment on 1 March 2019
15
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. No shares or
options lapsed during the year.
(k) Share Rights Issued or Converted during the Year
During the year, there were no share rights issued to Non-
executive Directors and other KMP’s during the year.
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 relation to risk
in particular
mitigation. The current Share trading policy has been
approved by the board on 9 April 2015.
End of Audited Remuneration Report
(l) Other Director and Key Management Personnel
Key management personnel equity interest
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
to be available, on similar
reasonably be expected
transactions to non-Director related entities on an arm’s
length basis.
At 31 December 2019, Asipac owned 39.09% of the ordinary
shares in Terramin (2018: 33.18%) and is controlled by Mr
Sheng who is Executive Chairman of the Company. Mr
Siciliano is the Chief Financial Officer of Asipac.
Directors’ fees outstanding as at 31 December 2019
Directors
1
M Kennedy
1
A Siciliano
1
K McGuinness
F Sheng
W Xinyu
Total
2019
-
12,500
-
50,000
113,115
175,615
2018
-
12,500
-
25,000
73,115
110,615
1. Mr Kennedy, Mr Siciliano and Mr McGuinness are Non-Executive
Directors of the Company.
Other related party transactions 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 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
Parent Entity Directors
MH Kennedy
A Siciliano
K McGuinness
F Sheng
W Xinyu
Fully paid
ordinary shares
Options
5,246,107
10,000,000
2,698,108
827,469,670
-
-
-
-
-
-
Other Key Management Personnel
R Taylor
S Iacopetta
Total
-
-
10,000,000
-
845,413,885
10,000,000
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.
16
Directors’ Report (continued)
Non-audit Services (continued)
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
2019
$’000
34
34
2018
$'000
40
40
The Auditor’s Independence Declaration for the year ended 31 December 2019 can be found on page 20 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 28th day of February 2020 in accordance with a resolution of the Board of Directors.
Feng Sheng
Executive Chairman
Kevin McGuinness
Non-Executive Director
17
Directors’ Declaration
The Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 24-45, and the remuneration disclosures contained in pages 11-16 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 2019 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
28 February 2020
Kevin McGuinness
Non-Executive Director
28 February 2020
18
Auditor’s Independence Declaration
19
Auditor’s Independent Report
20
21
22
23
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
for the Year Ended 31 December 2019
Revenue and Other Income
Raw materials, consumables and other direct costs
Employee benefits expense
Depreciation and amortization
Exploration and evaluation expensed (Tala Hamza Project)
Exploration and evaluation impairment
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
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:
Basic earnings/(loss) per share – (cents per share)
Diluted earnings/(loss) per share – (cents per share)
Note
4
10
11
4
6
6
18
17
Note
27(a)
27(b)
2019
$’000
264
(420)
(1,038)
(110)
(590)
(198)
(70)
(187)
(838)
(3,187)
26
(3,057)
(3,031)
2018
$’000
254
(459)
(1,554)
(45)
(1,076)
-
(47)
(111)
(1,200)
(4,238)
3
(2,119)
(2,116)
(6,218)
(6,354)
607
(5,611)
(5,399)
(212)
(5,611)
(38)
(38)
(5,649)
(5,437)
(212)
(5,649)
2019
(0.29)
(0.29)
344
(6,010)
(5,635)
(375)
(6,010)
1,333
1,333
(4,677)
(4,302)
(375)
(4,677)
2018
(0.30)
(0.30)
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.
24
Consolidated Statement of Financial Position
as at 31 December 2019
Assets
Current Assets
Cash and cash equivalents
Restricted cash on deposit
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
7
9
8
10
11
12
13
14
13
14
15
16
17
2019
$'000
960
5,340
178
105
6,583
495
8,601
64,987
74,083
80,666
3,356
181
136
3,673
21,625
4,910
26,535
30,208
50,458
2018
$'000
219
33
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
223,950
(5,939)
(180,918)
37,093
13,365
50,458
215,383
(6,063)
(175,544)
33,776
13,577
47,353
The Consolidated Statement of Financial Position is to be read in conjunction with the notes to the consolidated financial statements.
25
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2019
Share
capital
$'000
215,383
Share based
payments
reserve
$’000
136
Translation
reserve
$'000
(6,199)
Accumulated
losses
$'000
(175,544)
Total
attributable
to owners
$'000
33,776
Non-controlling
interest
$'000
(note 17)
13,577
Total
equity
$'000
47,353
-
-
-
-
-
(5,399)
(5,399)
(212)
(5,611)
-
-
(38)
(38)
-
-
(38)
(38)
(5,399)
(5,437)
(212)
(5,649)
2019
Balance at 1 January 2019
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
Issue of ordinary shares
Share issue costs
Options Granted
Transfer lapsed options to retained
earnings
Total contributions by and distributions to
owners
Balance at 31 December 2019
8,642
(75)
-
-
8,567
223,950
-
-
-
-
-
-
187
(25)
162
298
(38)
(38)
(38)
-
-
-
-
-
-
-
-
25
25
8,642
(75)
187
-
8,754
37,093
-
-
-
-
-
8,642
(75)
187
-
8,754
13,365
50,458
(6,237)
(180,918)
2018
Balance at 1 January 2018
Loss for the year
Other comprehensive
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
Options Granted
Share Rights Converted into Shares
Total contributions by and distributions to
owners
Balance at 31 December 2018
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
-
(5,635)
(5,635)
(375)
(6,010)
1,333
1,333
1,333
-
-
-
-
-
1,333
1,333
-
-
1,333
1,333
(5,635)
(4,302)
(375)
(4,677)
-
-
-
111
-
111
-
-
-
111
-
111
215,383
136
(6,199)
(175,544)
33,776
13,577
47,353
The Consolidated Statement of Change in Equity is to be read in conjunction with the notes to the consolidated financial statements.
26
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2019
Note
2019
$'000
19
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 and accrued interest
Net cash from financing activities
Other activities:
Net increase /(decrease) in cash and cash equivalents
Net foreign exchange differences
Cash and cash equivalents at beginning of the year (including restricted cash on deposit)
Cash and cash equivalents at end of the year (including restricted cash on deposit)
7
The Consolidated Statement of Cash Flows is to be read in conjunction with the notes to the consolidated financial statements.
264
(3,049)
(339)
20
605
(2,499)
-
-
(1,984)
(1,984)
8,642
(75)
9,300
(7,319)
10,548
6,065
(17)
252
6,300
2018
$'000
203
(4,594)
(308)
4
272
(4,423)
89
(4)
(2,087)
(2,002)
-
-
4,000
(10)
3,990
(2,435)
(11)
2,698
252
27
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
the Australian
Accounting
Accounting Standards Board (AASB) and the Corporations Act
2001. The consolidated financial statements comply with
International Financial Reporting Standards
(IFRS) and
International Accounting
interpretations adopted by the
Standards Board (IASB).
Interpretations)
issued by
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
for mine
on historical costs, except for the provision
rehabilitation measured at the present value of future cash
flows. The Group is of a kind referred to in ASIC Corporations
(Rounding
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.
Financial/Directors’ Reports)
in
(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 2019, the
Group incurred a loss of $5.6 million, and after transferring
lapsed options from the share based payments reserve, this
brought accumulated losses to $180.9 million. As at 31
December 2019 the Group’s current assets exceeded its
current liabilities by $2.91 million, however the Group had
negative cash operating and investing cashflows of $4.48
million. The Group had net assets of $50.5 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 a
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
to accounting estimates are
ongoing basis. Revisions
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(e) – Property, Plant and Equipment: assessment of
the valuation method
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.
28
(e) New and Amended Standards Adopted by the
Group
i. Accounting Standards and Interpretations issued and
effective
AASB 16 Leases became effective for period beginning on or
after 1 January 2019. Accordingly, the Group applied AASB 16
for the first time to the reporting period ended 31 December
2019. Changes to the Group’s accounting policies arising from
these standards are summarised below:
AASB 16 Leases
AASB 16 Leases became mandatorily effective on 1 January
2019. Accordingly, these standards apply for the first time to
this set of financial statements. On adoption of AASB 16, the
group recognised lease liabilities in relation to leases which had
previously been classified as ‘operating leases’ under the
principles of AASB 117 Leases. These liabilities were measured
at the present value of the remaining lease payments,
discounted using the lessee’s incremental borrowing rate as of
1 January 2019. The weighted average lessee’s incremental
borrowing rate applied to the lease liabilities on 1 January 2019
was 4.50%.
The associated right-of-use assets for property leases were
measured using the modified retrospective approach, option 2
to bring in the lease balance being the present value of
remaining lease payments. Other right-of use assets were
measured at the amount equal to the lease liability, adjusted by
the amount of any prepaid or accrued lease payments relating
to that lease recognised in the statement of financial position
as at 31 December 2018. There were no onerous lease
contracts that would have required an adjustment to the right-
of-use assets at the date of initial application.
Reconciliation of lease assets and liabilities on adoption of
AASB 16
The change in accounting policy affected the following items in
the statement of financial position on 1 January 2019:
AASB 16 Carrying
Classification
AASB 16 Carrying
Amount $’000
Non-current Assets
Property, Plant and
Equipment
Financial Liabilities
Borrowings
Amortised Cost
Amortised Cost
Reconciliation of total operating lease commitments at 31
Dec 2018 to the lease liabilities recognised at 1 Jan 2019
Total operating lease commitments disclosed - 31 Dec 2018
Operating lease commitment variation
Operating lease liabilities before discounting
Discounted using incremental borrowing rate
Operating lease liabilities
Finance lease liabilities
Total lease liabilities recognised under AASB 16 - 1 Jan 2019
90
(90)
AASB 16
Carrying
Amount
$’000
102
(8)
94
(4)
90
11
101
In previous financial periods, leases of property were classified
as either finance or operating leases. Payments made under
operating leases (net of any incentives received from the lessor)
were charged to profit or loss on a straight-line basis over the
period of the lease.
From 1 January 2019, leases are recognised as a right-of-use
asset and a corresponding liability at the date at which the
leased asset is available for use by the group. Each lease
payment
interest
expense. The interest expense is charged to profit or loss over
the lease period so as to produce a constant periodic rate of
is allocated between the
liability and
interest on the remaining balance of the liability for each
period. The right-of-use asset is depreciated over the shorter of
the asset's useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured
on a present value basis. Lease liabilities mainly represent the
net present value of the fixed lease payments (including in-
substance fixed payments), less any lease incentives receivable.
The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be determined, the
lessee’s incremental borrowing rate is used, being the rate that
the lessee would have to pay to borrow the funds necessary to
in a similar economic
obtain an asset of similar value
environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the
following:
•
The amount of the initial measurement of lease liability,
• Any lease payments made at or before the commencement
date less any lease incentives received,
• Any initial direct costs, and
• Restoration costs.
Payments associated with short-term leases and leases of low-
value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a
lease term of 12 months or less.
AASB Interpretation 23 Uncertainty over Income Tax
Treatment
The Interpretation addresses the accounting for income taxes
when tax treatments involve uncertainty that affects the
application of AASB 112 Income Taxes. It does not apply to
taxes or levies outside the scope of AASB 12, nor does it
specifically include requirements relating to interest and
penalties associated with uncertain tax treatments. The
Interpretation specifically addresses the following:
• Whether an entity considers uncertain tax treatments
•
separately
The assumptions an entity makes about the examination of
tax treatments by taxation authorities
• How an entity determines taxable profit (tax loss), tax
bases, unused tax losses, unused tax credits and tax rates
facts and
• How an entity considers changes
in
There was no net impact on retained earnings on adoption on
1 January 2019.
circumstances
29
An entity has to determine whether to consider each uncertain
tax treatment separately or together with one or more other
uncertain tax treatments. The approach that better predicts the
resolution of the uncertainty needs to be followed. The Group
applies judgement in identifying uncertainties over income tax
treatments. Since the Group operates in a multinational
environment, it assessed whether the Interpretation had an
impact on its consolidated financial statements. Upon adoption
of the Interpretation, the Group determined, based on its tax
compliance, that it is probable that its tax treatments (including
those for the subsidiaries) will be accepted by the taxation
authorities. The interpretation did not have an impact on the
consolidated financial statements of the Group.
3. Significant accounting policies
(a) Basis of Consolidation
The Group financial statements consolidate those of the Parent
Company and all of its subsidiaries as of 31 December 2019. 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
including
companies are eliminated on consolidation,
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.
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
liquid
at call with banks and other short-term highly
investments with original maturities of four months or less.
inventories
Inventories
(c)
Non-current
and
consumables which are not expected to be used within 12
months. Inventories are valued at lower of cost and net
realisable value.
represent
spare
parts
(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.
(e) Property, Plant and Equipment
Property
Freehold land is measured at cost and buildings are measured
at cost less depreciation and 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 any residual value, as
determined by the Group.
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
Depreciation rates
Motor vehicles
Computer and office equipment
Plant and equipment
Leasehold improvements
Buildings and other infrastructure
22.5 - 25%
15 - 40%
5 - 33%
20%
5 - 33%
Impairment of Assets
(f)
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
30
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 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)).
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.
(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
revenue from the sale of the output by the joint operation and
its expenses (including its share of 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 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
31
• 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.
is recognised
Site restoration liability
A provision
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.
for
The provision is based upon current cost estimates and has
been determined on a discounted basis with reference to
current legal requirements and technology.
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 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, timing & 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
levels, experience of employee
future wage and salary
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.
incentives to
The Group uses share rights to provide
employees. Share rights are 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 (Accounting policy applicable before 1 January 2019)
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 of interest on the remaining
balance of the liability for each period. The property, plant and
equipment acquired under finance leases is depreciated over
the 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.
32
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) Revenue
To determine whether to recognise revenue, the Group follows
a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance
obligations
5. Recognising revenue when/as performance obligation(s)
are satisfied.
Revenue is recognised either at a point in time or over time,
when (or as) the Group satisfies performance obligations by
transferring the promised goods or services to its customers.
The Group recognises contract liabilities for consideration
received in respect of unsatisfied performance obligations and
reports these amounts as other liabilities in the statement of
financial position. Similarly, if the Group satisfies a performance
obligation before it receives the consideration, the Group
recognises either a contract asset or a receivable in its
statement of financial position, depending on whether
something other than the passage of time is required before
the consideration is due.
include
(p) Financing Costs
interest payable on borrowings
Financing costs
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.
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.
(q) 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
liabilities denominated
transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation of
monetary assets and
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 statement of financial position
presented are translated at the closing rate at the reporting
date,
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
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.
investments, are recognised
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.
(r) 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.
33
Income Tax
(s)
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
in the
of assets and liabilities and their carrying amounts
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.
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.
(t) 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.
(u) 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 profit or loss attributable to ordinary shareholders
and 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.
(v) 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
for assessing
reports are provided
performance and determining the allocation of resources within
the consolidated entity.
to management
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.
(w) 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.
34
(x) 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.
4. Revenue, Other Income and Expenses
2019
$000’s
-
187
77
264
Gain on disposal of plant and equipment
Revenue from contracts
Other income
Total revenue and other income
2018
$000’s
46
100
108
254
Revenue and Other Income
Revenue from contracts
Revenue recognized over time
Revenue recognised at a point in time
Total revenue
31 December 2019
Service
Income
$000’s
96
-
96
Data Fee
$000’s
Total
$’000’s
-
91
91
96
91
187
31 December 2018
Revenue from contracts
Revenue recognized over time
Revenue recognised at a point in time
Total revenue
Other Expenses
Service
Income
$000’s
-
-
-
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
Unwind of discount on mine rehabilitation provision
Amortisation of borrowing costs
Other borrowing costs
Total finance costs
Data Fee
$000’s
Total
$’000’s
-
100
100
2019
$000’s
464
281
-
100
100
2018
$000’s
576
451
92
1
95
78
838
1,200
2019
$
74,000
34,000
129,000
2018
$
68,000
40,000
108,000
2019
$’000
26
-
26
2019
$’000
2,102
117
825
13
3,057
2018
$’000
2
1
3
2018
$’000
1,177
215
365
362
2,119
7. Cash and Cash Equivalents
Cash on hand
Bank balances
Total cash and cash equivalents
Short-term deposits1
2019
$’000
2
958
960
5,340
2018
$’000
2
217
219
33
Restricted cash on deposit
1. Represents restricted cash to support an environmental rehabilitation
5,340
33
bonds, office lease and minor credit card facilities.
8. Inventories
Non-current
Raw materials and consumables
Total inventories at the lower of cost and net
realisable value
9. Trade and Other Receivables
Trade receivables
Accrued interest receivable
Research and development tax benefit
Other receivables (including GST refund)
Total trade and other receivables
10. Property Plant and Equipment
2019
$’000
495
495
2019
$’000
-
6
74
98
178
Freehold land
At cost
Total freehold land1
Buildings and other infrastructure
At cost
Less accumulated depreciation
Total buildings and other infrastructure1
Right-of-use Assets
At cost
Less accumulated depreciation
Total Right-of-use Assets
2019
$’000
4,271
4,271
126
(122)
4
298
(77)
221
2018
$’000
496
496
2018
$’000
-
-
72
66
138
2018
$’000
4,271
4,271
126
(121)
5
-
-
-
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, 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.
58,536
(14,219)
(40,212)
58,536
(14,219)
(40,173)
4,144
8,420
8,601
4,105
35
10. Property Plant and Equipment (continued)
Movements in carrying amounts
Opening carrying amount 1 Jan 2019
Recognition upon first time adoption of AASB 16
Additions
Disposals
Transfers
Depreciation and amortization
Foreign currency movement
Carrying amount at 31 Dec 2019
Opening carrying amount 1 Jan 2018
Additions
Disposals
Transfers
Depreciation and amortisation
Foreign currency movement
Carrying amount at 31 Dec 2018
Freehold
land
$'000
4,271
-
-
-
-
-
-
4,271
Freehold
land
$'000
4,271
-
-
-
-
-
4,271
Buildings & other
infrastructure
$'000
5
-
-
-
-
(1)
-
4
Buildings & other
infrastructure
$'000
6
-
-
-
(1)
-
5
Plant and
equipment
$'000
4,144
-
-
-
-
(32)
(7)
4,105
Plant and
equipment
$'000
4,220
4
(61)
-
(44)
25
4,144
11. Exploration and Evaluation Assets
12. Trade and Other Payables
Rights-of-use
Assets
$'000
-
90
207
-
-
(77)
1
221
Construction
in progress
$'000
-
-
-
-
-
-
-
2019
$’000
261
532
2,563
3,356
Total
$'000
8,420
90
207
-
-
(110)
(6)
8,601
Total
$'000
8,497
4
(61)
-
(45)
25
8,420
2018
$’000
87
868
2,421
3,376
Exploration and evaluation
At cost
Additions
Impairment1
Exploration write-off2
Foreign currency movement
Total exploration and evaluation
2019
$’000
63,121
2,077
(198)
-
(13)
64,987
2018
$’000
59,627
2,397
-
(121)
1,218
63,121
1.
Impairment of capitalized exploration represents the value of damages
sustained at the Goldwyn property as a result of the Cudlee Creek Bushfire
in December 2019.
2. 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.
Exploration and evaluation projects by location
Tala Hamza Zinc Project (Terramin 65%)
Adelaide Hills (Terramin 100%)1, 2
Bird in Hand Gold (Terramin Exploration 100%)
South Gawler Ranges (Menninnie Metals 100%)3
Total exploration and evaluation
2019
2018
$’000
$’000
44,089
1,934
13,291
5,673
64,987
44,101
2,038
11,384
5,598
63,121
1. The Company has entered into an agreement with respect to the Kapunda
Project, over which the Company has a current Exploration Licence.
In
December 2019, Environment Copper Recovery Pty Ltd (ECR) can earn, in
two stages, up to 75% of the rights over metals which may be recovered
via
in the Kapunda deposit (ASX
Announcement: (ASX: THR): Kapunda Copper and Gold). 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.
in-situ recovery (ISR) contained
2. The Company entered
into an earn-in arrangement with Freeport
Exploration Australia Pty Ltd in respect of the Wild Horse project.
3. The Company entered
into an earn-in arrangement with Freeport
Exploration Australia Pty Ltd in respect of the South Gawler Ranges projects.
Trade payables
Other payables and accrued expenses
Payables and accrued interest on borrowings
Total trade and other payables
Trade and other payables are normally non-interest bearing
and are settled on 30 days end of month terms.
13. Loans and Borrowings
Current liabilities
Lease liabilities (note 28(d))1
Loans - secured2
Loans - unsecured3
Total current borrowings
Non-current liabilities
Lease liabilities (note 28(d))1
Loans – secured2
Total non-current borrowings
Financing facilities
Loan facilities - available
Loan facilities - drawn
Less: unamortised transaction costs
Carrying amount at 31 December
Guarantee facility
Guarantee facility - available4
Guarantee facility - undrawn
Guarantee facility - drawn
2019
$’000
113
-
68
181
110
21,515
21,625
21,515
21,515
-
21,515
5,315
-
5,315
2018
$’000
9
11,000
5,891
16,900
2
-
2
17,250
17,250
(359)
16,891
5,315
-
5,315
1.
Under AASB 16 lease liabilities represent finance and operating leases,
and unwind as lease payments are made.
36
2.
3.
4.
At reporting date, the Group had fully drawn down $21.52 million of two
loan facilities provided by Asipac. Interest is fixed at a base rate of 12%,
payable upon termination date following Asipac declaring an interest rate
review event during the year. The facilities were restructured during the
reporting period and now have a term expiring 30 April 2021.
During the prior reporting period, the Group secured the short-term
standby facility that Asipac provided to support working capital
requirements.
The $5.3 million guarantee facility in relation to the environmental
rehabilitation bonds required by the South Australian Government over
Mining Lease 6229 was refinanced during the period. The facility was
previously provided by Investec Bank PLC and was scheduled to expire on
30 September 2019. The facility was replaced by a cash backed
Commonwealth Bank of Australia (CBA) guarantee.
The carrying value of plant and equipment and mining property
subject to finance loans and hire purchase contracts at 31
December 2019 was $2,425 (2018: $11,497). Assets under hire
purchase contracts are pledged as security for related finance
loans & hire purchase liabilities.
Under the terms of the $6.0 million BIH facility (BIH Facility) and
$15.52 million Standby facility (Standby Facility) provided to
Terramin Exploration Pty Ltd, 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 and
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.
14. Provisions
Current
Employee benefits
Total current provisions
Non-current:
Employee benefits
Mine rehabilitation
Total non-current provisions
At 1 January 2019
Increases in provisions
Paid during the period
At 31 December 2019
2019
$’000
136
136
30
4,880
4,910
Employee
Benefits
$’000
Mine
rehabilitation
$’000
213
68
(114)
167
4,692
187
-
4,879
2018
$’000
163
163
50
4,692
4,742
Total
$’000
4,905
255
(114)
5,046
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 on 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 1.88% risk-free discount rate (2018: 2.25%).
The rehabilitation is expected to occur following the processing
of ore from the Bird-in-Hand Gold Project (subject to regulatory
approvals).
15. Issued capital
(a) Ordinary shares
2,116,562,720 (2018: 1,869,601,371)
Ordinary shares
Share issue costs
Total issued capital
2019
$’000
229,676
(5,726)
223,950
2018
$'000
221,034
(5,651)
215,383
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
At 1 Jan 2019
Non-renounceable
Rights Issue
At 31 Dec 2019
Share issue costs
Issued Capital
Type of Share Issue
At 1 Jan 2018
Share rights converted
Share rights converted
Share rights converted
At 31 Dec 2018
Share issue costs
Issued Capital
Date of
Issue
Number of
Ordinary
Shares on issue
Issue
Price
$
2 Dec 2019
1,869,601,371
246,961,349
0.035
2,116,562,720
Share
Capital
$'000
215,383
8,642
224,025
(75)
223,950
Date of
Issue
Number of
Ordinary
Shares on issue
Issue
Price
$
Share
Capital
$'000
2 Jan 2018
4 Apr 2018
5 Jul 2018
1,869,177,543
162,615
137,882
123,331
1,869,601,371
215,318
0.13 21
0.16 22
0.18 22
215,383
-
215,383
37
16. Reserves
(a) Foreign currency translation reserve
18. Income Tax Expense
Foreign currency translation reserve
2019
$’000
2018
$'000
Prima facie tax benefit on loss before income tax
at 30% (2018: 30%)
Balance at the beginning of the year
(6,199)
(7,532)
Adjustment arising on translation into
presentation currency
Balance at the end of the year
(38)
(6,237)
1,333
(6,199)
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
Share based payments reserve
Balance at the beginning of the year
Transfer of lapsed options to retained earnings
Options value vested during the year
Share rights issued during the year
Share rights converted during the year
Balance at the end of the year
2019
$'000
136
(25)
187
-
-
298
2018
$'000
90
-
111
-
(65)
136
Total reserves
(5,939)
(6,063)
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
2019 reporting period the CEO received no options (2018:
10,000,000). The 10,000,000 options granted to the CEO in
2018 were valued in accordance with the Black Scholes
valuation methodology for which $187,533 was recognised as
a share based payment expense during the 2019 reporting
period (2018: $110,956). There were no share rights granted to
employees including KMP’s during the reporting period.
17. Non-controlling Interest
Balance at the beginning of the year
Share of movement in net assets
Balance at the end of the year
2019
$’000
13,577
(212)
13,365
2018
$'000
13,952
(375)
13,577
Movement in non-controlling interest in 2019 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 2019, the Group funded
approximately $0.6 million (2018: $0.8 million) of exploration
and evaluation costs in WMZ, of which ENOF and ORGM are
entitled to $0.2 million (2018: $0.3 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.
2019
$'000
2018
$'000
(1,865)
(1,906)
258
64
(1,607)
(1,842)
Decrease in income tax benefit due to:
(Deductible)/non-deductible items
Deferred tax asset not brought to account
Research and development tax concession received1
607
344
Adjustment to prior year tax losses
(7,376)
Unused tax losses for which no deferred tax asset
has been recognised
Potential tax benefit
The applicable weighted average effective tax rates
for the reporting period are:
171,261
173,280
51,378
51,984
26%
29%
1.
As at the date of this report, an estimate of the Research and
Development claim has been calculated for the 2019/20 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 $51.4 million (2018: $51.9 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.
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)
Amortisation of borrowing costs
Impairment of non-current assets
Mine rehabilitation provision - change in
assumptions (including discount unwind)
Gain on disposal of Non-Current Asset
Change in operating assets and liabilities: As
Decrease/(increase) in trade and other
receivables
Decrease/(increase) in prepayments
(Decrease)/increase in payables and accruals
(Decrease)/increase in provisions
Cashflow (used in) operating activities
2019
$’000
(5,611)
2018
$'000
(6,010)
110
-
187
826
198
187
45
95
111
365
-
260
-
(27)
(11)
(112)
(1)
1,662
(46)
(2,499)
(20)
1,096
(226)
(4,423)
38
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
2019
$
644,688
(1,912)
38,804
-
187,533
869,113
2018
$
1,102,961
(222,450)
68,103
100,000
110,956
1,159,570
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 2019, Asipac owned 39.09% of the ordinary
shares in Terramin (2018: 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
Loan facility fees paid
Loan facility fees incurred
Interest paid
Interest incurred
Related Party Balance
Amounts owed at year end
2019
$’000
17,250
9,300
(5,035)
21,515
(1,230)
1,230
(970)
3,513
2018
$’000
13,250
4,000
-
17,250
-
764
-
1,657
2,543
2,421
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 28 October 2019, the Company and its subsidiary Terramin
Exploration Pty Ltd entered into an agreement with major
shareholder Asipac Group Pty Ltd to restructure its Facility
Agreements. Under this agreement refinancing and marketing
fees are waived, along with the waiver of the right to negotiate
an offtake agreement for BiH, in return for a 3% NSR royalty on
gold production from BiH. In the event that BiH production is
less than 500koz the royalty shall extend to Terramin’s wholly
owned South Australian gold tenements until a total of 500koz
is reached. The term of the facilities were also extended to 30
April 2021.
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:
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
2019
$'000
2018
$'000
6,300
178
(3,356)
(21,515)
(18,393)
252
138
(3,376)
(16,902)
(19,888)
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
the Group’s senior
Committee provides assurance
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.
to
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.
39
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 (2018:$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 2019
DZD
1
6
(74)
(67)
USD
-
-
-
-
31 December 2018
DZD
34
30
(74)
(10)
USD
2
-
-
2
following exchange rates applied
The
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
2019
2018
USD
DZD
0.70
83.10
0.71
83.05
Sensitivity Analysis
Sensitivity to fluctuations in foreign currency rates is based on
outstanding monetary items at 31 December 2019 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:
.
Interest Rate Sensitivity
Loans - 31 December 2019
Loans - 31 December 2018
$’000
+1%
(215)
(173)
$’000
-1%
215
173
Net Financial Assets
(Liabilities)
2019
Cash1
Short-term deposits1
Finance lease liabilities
Loans1
Total (Net)
Effective
interest
rate
1.20%
1.20%
14.50%
12.00%
Total
$’000
965
5,335
(2)
(21,515)
(15,217)
Net Financial Assets
(Liabilities)
2018
Cash1
Short-term deposits1
Finance lease liabilities
Loans2
Total (Net)
Total
$’000
219
33
(11)
(17,250)
(17,009)
Includes AUD and USD denominated balances.
Effective
interest
rate
2.03%
1.42%
14.50%
8.00%
Floating
Int rate
$’000
965
5,335
-
-
6,300
Floating
Int rate
$’000
219
33
-
-
252
Fixed
interest
rate
-
-
(2)
(21,515)
(21,517)
Fixed
interest
rate
-
-
(11)
(17,250)
(17,261)
1.
2. During the reporting period, the facilities were extended by 18 months with
an expiry date of 30 April 2021. No review event has been declared as at
the date of this report. An interest rate review event was declared by the
lender resulting in the interest rate increasing from 8% to 12%.
Sensitivity analysis
The Group has interest bearing liabilities with the Asipac Group
which may be varied.
The following table
interest
repayments to a reasonably possible change in interest of +/-
1% (2018: +/- 1%)
illustrates the sensitivity of
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
2019
$’000
178
6,300
6,478
2018
$’000
138
252
390
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
2019
$’000
172
-
6
178
2018
$’000
109
-
29
138
40
3. Liquidity risk
The contractual maturities of financial liabilities, including estimated interest payments:
2019
Non-derivative financial liabilities
Trade and other payables
Loans - secured
Finance lease liabilities
Total non-derivative financial liabilities
2018
Non-derivative financial liabilities
Trade and other payables
Loans - secured
Loans - unsecured
Finance lease liabilities
Note
12
13
28(d)
Note
12
13
13
28(d)
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
3,356
(3,356)
(3,356)
21,515
(24,129)
2
(2)
-
(1)
24,873
(27,487)
(3,357)
-
-
(1)
(1)
-
(24,129)
-
(24,129)
-
-
-
-
-
-
-
-
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
11,000
5,891
11
(3,376)
(3,376)
-
(12,287)
(6,620)
(11)
-
-
(6)
(12,287)
(6,620)
(3)
(18,910)
-
-
-
(2)
(2)
-
-
-
-
-
-
-
-
-
-
(22,294)
Total non-derivative financial liabilities
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.
20,278
(3,382)
3.
Represents schedule of payments of loan principal, accrued interest and accrued fees in accordance with specified time bands.
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
2019
2018
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%
(212)
(375)
13,365
13,577
Summarised financial information for Western Mediterranean Zinc Spa, before intragroup eliminations, is set out below:
31-Dec-19
31-Dec-18
31-Dec-19
31-Dec-18
31-Dec-19
31-Dec-18
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
2019
$'000
9
44,207
44,216
108
45
153
2018
$'000
101
44,113
44,214
74
-
74
41
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
2019
$'000
-
(608)
-
(608)
(433)
-
403
(30)
1
2018
$'000
-
(1,072)
-
(1,072)
(823)
-
847
24
31
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
2019
$'000
264
264
(420)
(1,225)
(92)
(198)
(70)
(838)
(3,031)
(5,610)
607
(5,003)
-
(5,003)
36,450
30,055
2018
$'000
254
254
(459)
(1,665)
(45)
-
(47)
(1,204)
(2,116)
(5,282)
344
(4,938)
-
(4,938)
28,322
25,109
2019
$'000
2018
$'000
2019
$'000
2018
$'000
-
-
-
-
(18)
(590)
-
-
-
-
-
-
-
-
(1,076)
-
4
-
(608)
(1,072)
-
(608)
(212)
(396)
-
(1,072)
(375)
(697)
44,216
44,214
153
74
264
264
(420)
(1,225)
(110)
(788)
(70)
(838)
(3,031)
(6,218)
607
(5,611)
(212)
(5,399)
80,666
30,208
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
-
Capital expenditure1
1. Capital expenditure consists of additions of property, plant and equipment, and exploration and evaluation assets.
2,077
2,273
128
2,077
2,401
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.
42
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.
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 2019. The options outstanding at 31 December 2019 have a weighted average contractual life of 3.4 years (2018: 3.4
years). A balance of 10,000,000 options were outstanding for the Group at 31 December 2019.
(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 2019
$0.135
Number of
options 2019
10,000,000
$0.293
$0.00
$0.00
$0.293
$0.20
-
-
-
10,000,000
2,500,000
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
-
(b) Options exercised during the year
There were not options exercised during the reporting period (2018: Nil).
(c) Table of share options movement for the Group at 31 December 2019
Expiry Date
Opening balance 1 January 2019
Granted during the period
Lapsed during the period
Closing balance 31 December 2019
Number of
options
10,000,000
-
-
10,000,000
(d) 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
(e) Shares issued in lieu of cash payments
During the year, no shares were issued in lieu of cash payments.
Options expense
this year
$'000
111
187
-
298
Options expense
this year
$'000
-
111
-
111
Total option
value
$'000
371
-
-
371
Total option
value
$'000
-
371
-
371
Type of Share Rights Issue 2019
Shares issued in lieu of salary and wages
Total shares issued in lieu of cash payments
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
Date of issue
Number of
Ordinary Shares
on issue
-
-
Issue Price
$
-
-
Share Capital
$'000
-
-
Date of issue
2 January 2018
4 April 2018
8 July 2018
Number of Share
Rights issued
Issue Price
$
162,615
137,882
123,331
423,828
0.13
0.16
0.18
Share Rights
$'000
21
22
22
65
43
26. Employee Option Plan
(a) Current Options
No options were granted, no options were exercised and no
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:
Balance as at 1 January 2019
Granted during the financial year1
Balance as at 31 December 2019
Lapsed during the financial year
Balance as at 31 December 2019
No. of
Options
on issue
10,000,000
-
10,000,000
-
10,000,000
Exercise
Price
$0.2932
-
$0.2932
Fair
Value
$’000
370,750
-
370,750
-
370,750
1.
2.
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
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
2,500,000
$0.20
80%
3 years
2.10%
$0.25
80%
3 years
2.10%
$0.32
80%
3.5 years
2.20%
$0.40
80%
4 years
2.20%
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 2019 reporting
period the share based payment expense of $187,533 represents the
vested portion of total fair value of options of $370,750.
The fair value of options issued is calculated using the Black-
Scholes Option Pricing Model.
27. Earnings per Share
(a) Basic earnings per share
The calculation of basic earnings per share at 31 December
2019 was based on the net loss attributable to owners of the
Company of $5.4m (2018: $5.6m) and a weighted average
number of ordinary shares outstanding during the year ended
31 December 2019 of 1,889,222,958 (2018: 1,869,503,284),
calculated as follows:
Net loss for the year attributable to
the owners of the Company
Ordinary shares on issue
Weighted average number of shares
2019
$’000
(5,399)
2018
$’000
(5,635)
2,116,562,720
1,889,222,958
1,869,601,371
1,869,503,284
Basic earnings per share (cents)
(0.29)
(0.30)
(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
2019
$’000
-
-
-
2018
$’000
80
22
102
(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.
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. The Wild Horse and Ulooloo tenements are
excluded from the Adelaide Hills fold belt amalgated minimum
expenditure arrangement.
The minimum expenditure for the Wild Horse tenement is
$174,000 over 2 years expiring on 8 September 2020.
The minimum expenditure for the Ulooloo tenement
$100,000 over 2 years expiring on 18 December 2020.
is
South Gawler project tenements have an amalgamated
minimum expenditure of $1.5 million over 2 years expiring on
3 July 2021 and represents a portion of the total minimum
expenditure.
The minimum expenditure on a tenement is subject to change
at the end of a five year term from when the tenement was
granted.
(c) Finance leases
2019
$’000
2018
$'000
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
2
-
2
-
2
2
-
2
The interest rate implicit in the lease is 14.5%.
10
2
12
1
11
9
2
11
44
(d) Other commitments and contingencies
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
linked to the commencement of commercial
party and
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.
Asipac Royalty
On 28 October 2019, the Company and its subsidiary Terramin
Exploration Pty Ltd entered into an agreement with major
shareholder Asipac Group Pty Ltd to restructure its Facility
Agreements. Under this agreement refinancing and marketing
fees are waived, along with the waiver of the right to negotiate
an offtake agreement for BiH, in return for a 3% NSR royalty on
gold production from BiH. In the event that BiH production is
less than 500koz the royalty shall extend to Terramin’s wholly
owned South Australian gold tenements until a total of 500koz
is reached.
Goldwyn Property (Bird-in-Hand Project) insurance claim
In December 2019, the Company submitted an insurance claim
for damages at Goldwyn Farm, the site of its Bird-in-Hand Gold
Project. The Company’s insurer is currently assessing the claim.
Bank Guarantees - Angas Zinc Mine
As at 31 December 2019, the Company had lodged bank
guarantees having a face value of $5.3 million with the South
Australian Government.
Litigation
At the reporting date, the Company is currently pursuing
litigation in South Australia in regard to a non-complying
planning approval of a neighbouring property and two cases
related to land access under the Mining Act 1971.
29. Events After the Reporting Date
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.
30. Parent Entity Disclosures
As at, and throughout, the financial year ending 31 December
2019 the parent Company of the Group was Terramin Australia
Limited.
Result of the parent entity
Loss for the period
Other comprehensive income
2019
$’000
2018
$'000
(5,650)
(4,676)
-
-
Total comprehensive income for the period
(5,650)
(4,676)
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
6,533
73,022
2,073
22,564
406
65,569
13,472
18,216
223,950
215,383
298
136
(173,790)
(168,166)
50,458
47,353
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 2019.
Parent entity guarantees
subsidiaries
The parent entity has not entered into a deed of Cross
Guarantee with respect to its subsidiaries.
in respect of debts of
its
45
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 Australia3
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
Bird-in-Hand Mineral Claim
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 6154
EL 6447
EL 6198
MC 4473 194.78ha
624km2
221km2
118km2
452km2
93km2
103km2
EL 6293
EL 6319
EL 5805
Licence
area
87.97ha
387km2
89km2
154km2
778km2
462km2
Licence
area
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
21/11/2022
100%
$270,000 over 3 years
7/10/2020
100%
$420,000 over 2 years
8/09/2020
100%
$174,000 over 2 years
Expiry date
Interest Minimum expenditure
-
100% Not applicable
27/04/2020
100%
$720,000 over 2 years
31/08/2021
100%
$800,000 over 2 years
24/02/2020
100%
$320,000 over 2 years
29/03/2021
100%
$900,000 over 3 years
24/02/2021
100%
$640,000 over 2 years
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
Kolendo - South Australia
2, 3
Menninnie - South Australia
2, 3
Mt Ive - South Australia
Mt Ive South - South Australia3
2, 3
Mulleroo - South Australia
2, 3
Nonning - South Australia
Peltabinna – South Australia3
2, 3
Tanner - South Australia3
Taringa - South Australia
Thurlga - South Australia3
2, 3
Unalla - South Australia
2, 3
Licence number
EL 6413
EL 5949
EL 6200
EL 6412
EL 5855
EL 5925
EL 6290
EL 6414
EL 5816
EL 5518
EL 6179
Licence
area
208km2
101km2
214km2
394km2
210km2
312km2
637km2
354km2
988km2
951km2
155km2
Expiry date
MMPL
Interest
Minimum expenditure
Application for renewal
of licence lodged
26/07/2021
100%
$400,000 over 2 years
26/10/2021
100%
$960,000 over 3 years
20/06/2020
100%
$200,000 over 2 years
19/06/2021
100%
$280,000 over 2 years
19/09/2021
100%
$150,000 over 3 years
30/11/2021
100%
$720,000 over 3 years
11/12/2020
100%
$180,000 over 2 years
31/07/2021
100%
$260,000 over 2 years
20/02/2021
100%
$750,000 over 3 years
27/11/2019
100%
$484,200 over 1 year
6/06/2020
100%
$180,000 over 2 years
28/08/2019
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.
3. The Wild Horse and Menninnie Metals (South Gawler Ranges) tenements are subject to an earn-in agreement with Freeport Exploration Australia Pty Ltd
46
Reserves and Resources
Terramin’s Mineral Resource and Ore Reserve estimates as at 31 December 2018 and 31 December 2019 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 2019 estimates are included on pages 11 and 51 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)
Zn
(%)
Pb
(%)
Tonnes
(Mt)
Zn
(%)
Pb
(%)
2018
Tala Hamza
Angas
Sunter
Menninnie Dam
Total (100%)
Total (Terramin share 2018)
2019
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
44.2
0.66
0.13
44.99
29.53
44.2
0.66
0.13
44.99
29.53
5.54
4.68
5.70
5.53
5.20
5.54
4.68
5.70
5.53
5.20
1.44
1.81
2.31
1.45
1.45
1.44
1.81
2.31
1.45
1.45
8.9
0.25
0.24
7.7
17.09
13.98
8.9
0.25
0.24
7.7
17.09
13.98
4.0
2.8
2.9
3.1
2.16
3.46
4.0
2.8
2.9
3.1
2.16
3.46
0.7
1.3
1.2
2.6
1.57
1.77
0.7
1.3
1.2
2.6
1.57
1.77
53.0
0.91
0.38
7.7
61.99
43.44
53.0
0.91
0.38
7.7
61.99
43.44
5.3
4.2
3.8
3.1
4.62
4.87
5.3
4.2
3.8
3.1
4.62
4.87
1.3
1.7
1.6
2.6
1.47
1.54
1.3
1.7
1.6
2.6
1.47
1.54
Indicated Resource
Terramin
Interest (%)
Tonnes
(Kt)
2018
100
Bird-in-Hand
Total (100%)
-
Total (Terramin share 2018) -
2019
Bird-in-Hand9, 10
Total (100%)
Total (Terramin share)
100
-
-
432
432
432
432
432
432
Au
(g/t)
14.4
14.4
14.4
14.4
14.4
14.4
Ag
(g/t)
7.56
7.56
7.56
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)
220
220
220
220
220
220
9.2
9.2
9.2
9.2
9.2
9.2
2.4
2.4
2.4
2.4
2.4
2.4
650
650
650
650
650
650
12.6
12.6
12.6
12.6
12.6
12.6
265
265
265
265
265
265
5.8
5.8
5.8
5.8
5.8
5.8
122
122
122
122
122
122
47
Reserves and Resources (continued)
Table of Resources – Copper
Terramin
Interest (%)
Indicated Resource
Cu
Tonnes
(%)
(Mt)
Inferred Resource
Tonnes
(Mt)
2018
Kapunda
Total (100%)
Total (Terramin share)
2019
Kapunda11, 12, 13
Total (100%)
Total (Terramin share)
100
-
-
100
-
-
Table of Reserves – Lead Zinc
Terramin
Interest (%)
Probable Reserve
Zn
(%)
Tonnes
(Mt)
2018
Tala Hamza
Tatal (100%)
Total (Terramin share 2018)
2019
Tala Hamza2, 3
Total (100%)
Total (Terramin share)
65
-
-
65
-
-
25.9
25.9
16.8
25.9
25.9
16.8
6.3
6.3
6.3
6.3
6.3
6.3
47.4
47.4
47.4
47.4
47.4
47.4
Pb
(%)
1.8
1.8
1.8
1.8
1.8
1.8
Cu
(%)
0.25
0.25
0.25
0.25
0.25
0.25
Tonnes
(Mt)
25.9
25.9
16.8
25.9
25.9
16.8
Total Resources
Tonnes
(Mt)
Cu
(%)
47.4
47.4
47.4
47.4
47.4
47.4
Total Reserve
Zn
(%)
6.3
6.3
6.3
6.3
6.3
6.3
0.25
0.25
0.25
0.25
0.25
0.25
Pb
(%)
1.8
1.8
1.8
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.
48
Additional Securities Exchange Information
Equity Securities on Issue
Fully paid ordinary shares
As at 31 January 2020, there were 2,459 holders of a total of 2,116,562,720 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 2020, 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 2020
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
476
686
311
707
279
2,459
0
0
0
0
1
1
As at 31 January 2020, there were 1,641 shareholdings of less than a marketable parcel.
Substantial Shareholders
As at 31 January 2020, 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
HSBC Custody Nominees (Australia) Limited
Mr Yong Yang
Number of shares
% Issued capital
827,023,014
289,054,230
164,083,363
108,000,000
39.07
13.66
7.75
5.10
49
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 2020 are:
Shareholder
Asipac Group Pty Ltd
Citycorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Mr Yong Yang
BNP Paribas Noms Pty Ltd
J P Morgan Nominees Australia Pty Limited
China Non-Ferrous Metals Industry’s Foreign Engineering and Construction
New Asia Wealth Investment Holding (SG) Pte 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
BNP Paribas Nominees Pty Ltd
Silver Springs Investment Pty Ltd
Enterprise Flourishing Pty Ltd
Huge Field Investment Ltd
Vasco Investment Managers Limited
Zhang & Chen Investment Trust
Total
Additional Information
Number of shares
% Issued capital
827,023,014
289,054,230
164,083,363
108,000,000
100,888,085
77,279,637
67,800,000
57,185,513
35,800,000
35,399,949
19,049,619
18,685,187
17,857,143
17,511,817
16,042,137
15,580,967
10,000,000
10,000,000
8,919,047
7,700,000
39.07
13.66
7.75
5.10
4.77
3.65
3.20
2.70
1.69
1.67
0.90
0.88
0.84
0.83
0.76
0.74
0.47
0.47
0.42
0.36
1,903,859,708
89.95
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
On-Market Share Buy-Back
There is no current on-market buy-back in place.
Number of securities held
% of securities in class
10,000,000
100.00
Corporate Governance Principles and Recommendations
The Corporate Governance Principles and Recommendations can be found on the Company’s website.
50
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