ANNUAL REPORT
TITAN MINERALS LIMITED
(ACN 117 790 897)
Annual Report
for the year ended 31 December 2018
2018 CONTENTS
Directors’ Report
Auditor’s Independence Declaration
Directors’ Declaration
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Independent Audit Report
1
15
16
17
18
19
20
21
63
CORPORATE DIRECTORY
DIRECTORS:
Matthew Carr
Nicholas Rowley
Robert Sckalor
Cameron Henry
COMPANY SECRETARY:
Zane Lewis
REGISTERED OFFICE & PRINCIPAL PLACE
OF BUSINESS:
Suite 6, 295 Rokeby Road
SUBIACO WA 6008
Telephone: +61 8 6555 2950
Facsimile: +61 8 6166 0261
SHARE REGISTRY:
Automic Share Registry
Level 2
267 St Georges Terrace
Perth WA 6000
ASX CODE:
TTM
AUDITORS:
Stantons International Audit and Consulting Pty Ltd
Level 2, 1 Walker Avenue
West Perth
Western Australia 6005
AUSTRALIAN COMPANY NUMBER:
ACN 117 790 897
AUSTRALIAN BUSINESS NUMBER:
ABN 97 117 790 897
DIRECTORS’ REPORT
1. DIRECTORS’ INFORMATION
The directors and company secretary of Titan Minerals Limited
(the “Company” or “Titan”) and its controlled entities (together
the “Group” or “Consolidated Entity”) during the financial year
end until the date of this report were as follows:
2. DIRECTORS AND COMPANY SECRETARY
Matthew Carr –
appointed as director on 3 February 2017, current.
Nicholas Rowley –
appointed as a director on 9 August 2016, current.
Robert Sckalor –
appointed as director on 7 August 2017, current.
Cameron Henry –
appointed as director on 8 August 2017, current.
Zane Lewis –
appointed as company secretary on 11 August 2016, current.
3. DIRECTORS’ MEETINGS
Eight meetings of the directors of the Company have been held
during the financial year ended 31 December 2018.
4. PRINCIPAL ACTIVITIES
The Group’s principal activities during the course of the financial
year were the operation of the Tulin gold toll treatment operation
in Peru, and construction of the Vista gold plant. The Company
also progressed activities on gold exploration concessions and
completed reconnaissance scale work towards development by
way of merger and acquisition of a portfolio of gold and copper
projects in South America, with a focus on the Andean Terrane.
5. SIGNIFICANT CHANGES IN THE STATE OF
AFFAIRS AND REVIEW OF OPERATIONS
The following significant changes in the state of affairs of the
Consolidated Entity occurred during the financial year:
The loss of the Group for the year ended 31 December
2018 amounted to $7,810,308 (31 December 2017: profit of
$12,433,016).
Corporate
On March 26, 2018, Titan announced that it had entered
into a bid implementation agreement with Andina Resources
Ltd (“Andina”), by which Titan would acquire all of the issued
capital in Andina via an off-market takeover bid with Andina
shareholders receiving 1 Titan Share for every 1.18 Andina
shares held (“Andina Acquisition”).
On July 12, 2018, Titan announced that Titan shareholders had
approved all resolutions necessary to satisfy conditions under
the bidder statement dated May 23, 2018 making the Andina
Acquisition unconditional. On July 24, 2018 Titan announced
that it held 97.09% of Andina shares on issue. On September
27, 2018 Titan completed the acquisition of all remaining
ordinary shares in Andina.
On May 22, 2018, Titan announced that it had received firm
commitments to raise approximately A$11,000,000 by issuing
366,666,666 Titan Shares at $0.03 per share to institutional and
sophisticated investors. Titan advised that the capital raising
would be completed in two tranches. On May 28, 2018, Titan
announced that it had issued the first tranche of 233,333,333
Titan Shares raising a total of A$7,000,000. On July 17, 2018,
Titan announced that it had issued the second tranche of
133,333,333 Titan Shares to raise A$4,000,000.
On June 28, 2018, Titan announced that it had appointed Mr.
Travis Schwertfeger to the role of Chief Operations Officer and
Group Geologist for Titan.
On August 10, 2018, Titan announced that it had engaged
Canaccord Genuity (Australia) Limited (“Canaccord”) to provide
corporate advisory services to Titan in consideration for which
Titan had agreed to issue Canaccord 45,000,000 unquoted
options comprised of: (i) 12,000,000 options exercisable at
$0.05 each on or before July 1 , 2021; (ii) 15,000,000 options
exercisable at $0.06 each on or before July 1, 2021; and (iii)
18,000,000 options exercisable at $0.07 each on or before July
1, 2021.
Core Gold Merger – Ecuador
Subsequent to the reporting period, Titan and Core Gold
Inc. (“Core Gold”) jointly announced that the companies
have entered into a binding arrangement agreement (the
“Arrangement Agreement”), pursuant to which Titan will acquire
all of the issued and outstanding Core Gold common shares
by way of a share exchange (the “Merger”). The Merger will
create a diversified Latin America focused ASX-listed gold
company with a robust portfolio of exploration, development
and production assets in both the emerging mining jurisdiction
of Ecuador and the well-established mining jurisdiction of Peru.
The proposed Arrangement Agreement will provide the merged
company with a strong pipeline of growth opportunities.
In support of Core Gold and the proposed merger, on 25 March
2019, Titan announced completion of a US$3 million private
placement with Core Gold Limited, as part of the amending
agreement announced 12 March 2019. The amendment
amended the terms of the previously announced arrangement
agreement between Titan and Core Gold of which Titan will
acquire all the issued and outstanding Core Gold common
shares by way of a court approved share exchange plan of
arrangement.
As part of the amending agreement, all of the directors and
current senior management of Core Gold holding in aggregate
38,041,981 Core Gold shares, representing 25.1% of the
currently issued and outstanding common shares of Core
Gold and 23.7% following the private placement, have entered
into customary voting and support agreements that require
those Directors and senior management to vote in favour
of the Merger at the Core Gold shareholder meeting to be
convened to approve the Merger. Together with Titan’s 5.7%,
these shareholders have agreed to vote their 29.4% collective
common share position in Core in favour of the Merger.
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 2
DIRECTORS’ REPORT
Under the Amending Agreement Titan and Core Gold have
agreed:
•
•
Termination of the go-shop period in which Core Gold was
permitted to solicit superior proposals
Increase the break fee payable by Core Gold to Titan in
the event of a superior cash proposal from C$500,000 to
C$3,000,000
•
•
Titan’s consent will be required for any disposal by Core
Gold of non-core assets prior to closing
Titan’s consent will also be required for any private
placement of the shares of Core Gold, other than a private
placement of up to US$8 million at not less than C$0.44 per
share
Ecuador Asset Overview
Dynasty Goldfield - Ecuador:
The Dynasty Goldfield project (100% owned), located in the Loja Province in southwestern Ecuador, is an advanced stage gold
project with a CIM compliant mineral resource estimate of:
CATEGORY
Measured
Indicated
Total M&I
Inferred
OZ AU
437,000
585,000
1,022,000
1,118,000
AU G/T
4.7
4.6
4.6
4.4
OZ AG
3,567,000
4,936,000
8,504,000
9,901,000
AG G/T
38.1
38.8
38.5
39.4
TONNES
2,909,000
3,958,000
6,867,000
7,825,000
Table 1: Mineral Resource Estimation as per Core press release dated November 5, 2014 for the Canadian NI 43-101 Technical Report titled “Dynasty Goldfield
Project, Celica, Loja Province, Ecuador” dated October 22, 2014.
Dynasty Goldfield is currently operating as a small-scale open
pit mining operation and is the first fully permitted open pit gold
mine in Ecuador. The Dynasty Goldfield project consists of 3
mining concessions at altitudes ranging from 1,100 – 1,800m
above sea level and covers an area of approximately 6,700
hectares. 120+ major veins have been identified in 6km strike,
predominantly drilled to less than 100m vertical extent. Cerro
Verde small scale mining has only exploited 3 of 120 veins
and has identified an additional 4 ‘blind’ veins’ in ongoing
development work. An updated NI 43-101 technical report with
restated mineral resource estimation is currently in progress
and is expected to be completed prior to mailing of Core Gold’s
circular.
As at the time of this report, the Company is not in possession of
any new information or data relating to the foreign estimate that
materially impacts on the reliability of the estimates or the mining
entity’s ability to verify the foreign estate as minerals resources
in accordance with the JORC Code. Titan confirms that the
supporting information in the initial market announcement by
the Company dated 25 February 2019 (“Initial Announcement”)
continues to apply and has not materially changed.
The information in this announcement relating to Mineral
Resource Estimates for the Dynasty Goldfield Project is a
foreign estimate and is not reported in accordance with the
JORC Code. A competent person has not done sufficient
work to classify this foreign estimate as a mineral resource
in accordance with the JORC Code and it is uncertain that
following further exploration work that this foreign estimate will
be able to be reported as a mineral resource in accordance with
the JORC Code.
As at the date of reporting, no progress on exploration activity
as proposed in the Initial Announcement in accordance with
ASX listing rule 5.12.7 has been made towards verifying the
foreign estimate as a mineral resource in accordance with the
JORC Code.
The foreign estimate has not been verified as a mineral
resource in accordance with the JORC Code where (i) the Initial
Announcement of the foreign estimate post-dates the reporting
period of this report and (ii) the proposed exploration activity
remains subject to completion of the proposed Merger with
Core Gold.
Following completion of the Merger (refer to Timetable in the
Initial Announcement) it is Titan’s intention to undertake an
evaluation of the data, and initiate further exploration work
planned for the Dynasty Goldfield Project to underpin a mineral
resource estimation report in accordance with the JORC
Code that will include, but is not limited to: (i) Comprehensive
re-logging and digital photograph acquisition of archived
diamond core material previously drilled on the project, (ii) in-fill
drilling to confirm confidence in projected mineralisation, and
selective twinning of previous drilling for verification purposes,
(iii) additional metallurgical studies to underpin assumption
or predictions to underpin anticipated preliminary economic
assessments.
Subject to completion of the Merger and any relevant permitting
requirements, the proposed exploration activity and evaluation
work is planned to be completed during CY2019, with the aim
to have an updated Mineral Resource estimation reported in
accordance with the principles of the JORC Code within a year
of completion of the Merger. Proposed work will be funded out of
the capital raised as a condition of the Arrangement Agreement.
The company intends to provide regular updates on timing of
a mineral resource update and will regularly report result of
exploration activity in compliance with continuous disclosure
obligations under ASX listing rule 3.1.
Linderos Project - Ecuador:
The Linderos project (100% owned) is a new high-grade gold
discovery identified by Core Gold during its 2017 exploration
efforts. Core Gold announced the results of a maiden 2,000m
diamond drill test from its 2018 program, which returned select
high grade intervals of 5.94 m @ 10.8 g/t Au and 7.80 m @ 5.3 g/t
Au. Core Gold’s four contiguous Linderos project concessions
total 14,317 hectares and are located approximately 45km
southwest of Core Gold’s Dynasty Goldfield project.
3 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
Zaruma - Ecuador:
Copper Duke - Ecuador:
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
currently processes all ore mined from Core Gold’s Dynasty
Goldfield project with one of its two available ball mills. Core
The Copper Duke project (100% owned) is an early stage gold-
Gold is currently planning to conduct a refurbishment program
Zaruma - Ecuador:
copper exploration project comprised of 11 mineral concessions
on Portovelo in H1 2019 to increase recoveries and throughput.
The Zaruma project (100% owned) is Core Gold’s legacy high-grade gold project in southern Ecuador, 3km
covering a number of gold and copper porphyry occurrences
from the town of Zaruma. The Zaruma project is currently on care and maintenance as Core Gold evaluates
in an area of approximately 100km2. The project is located
strategic alternatives for the asset. Zaruma initially commenced production in 2013 and ceased production in
approximately 18km east of Core Gold’s Dynasty Goldfield
The Zaruma project (100% owned) is Core Gold’s legacy
2016 producing over 60,000 ounces of gold averaging >8g/t Au. The existing underground 5m x 5m decline
project and 40km south of its Portovelo mill and processing
high-grade gold project in southern Ecuador, 3km from the
plant. To date, Core Gold has identified a potential major
portal is located 7.5km from the Portovelo mill and processing plant. This district is a significant, high-grade
town of Zaruma. The Zaruma project is currently on care and
copper-gold porphyry complex, El Huato, and four additional
goldfield, having produced over 5 million ounces of gold historically. The project has numerous underground
maintenance as Core Gold evaluates strategic alternatives for
copper-gold anomalies. Core Gold received the environmental
veins available for exploitation.
the asset. Zaruma initially commenced production in 2013 and
license (drilling permit) in January 2019.
ceased production in 2016 producing over 60,000 ounces of gold
averaging >8g/t Au. The existing underground 5m x 5m decline
portal is located 7.5km from the Portovelo mill and processing
Titan continues to advance its development strategy for the recently acquired gold treatment arm of its
plant. This district is a significant, high-grade goldfield, having
business focused in the Southern Peru region within the highly prospective Andean Terrane. Complimentary
produced over 5 million ounces of gold historically. The project
to the current ore processing capability, Titan has an ongoing process to develop a land position in Southern
has numerous underground veins available for exploitation.
Peru with mine development potential to provide Company generated feed to the centralised Vista Gold Plant.
The Portovelo mill and processing plant (100% owned) (formerly
known as the “Zaruma Mill”) hosts a conventional crush, mill,
leach, Carbon-in-Pulp (“CIP”), elution and electrowinning circuit.
Portovelo has a nameplate capacity of 2,000 tpd. Portovelo
Portovelo Mill and Processing Plant – Ecuador:
Vista Gold Plant - Peru
Vista Gold Plant - Peru
9 January 2019). The Plant’s management team continues to
In the 12-month period ending December 2018 the Andina subsidiary acquired by Titan in the reporting period
progress requisite physical safety and operational inspections
processed 13,900 tonnes of gold bearing material averaging 17.0g/t gold. The Company produced 6,957 oz
of the plant site with the Direccion Regional De Energia Y Minas
of gold and 8600 oz silver totalling US$8,922,000 in metal sales (of which US$4,207,000 was earned during
(The Regional Energy and Mines Institute, or “DREM”), prior to
the period that Titan had acquired Andina) with an average realised gold price of US$1,264 per oz;
the DREM issuing the final stage of approval of an operator’s
permit (Concession of Benefit).
Titan continues to advance its development strategy for the
recently acquired gold treatment arm of its business focused
in the Southern Peru region within the highly prospective
Andean Terrane. Complimentary to the current ore processing
capability, Titan has an ongoing process to develop a land
position in Southern Peru with mine development potential to
provide Company generated feed to the centralised Vista Gold
Plant.
In the 12-month period ending December 2018 the Andina
subsidiary acquired by Titan in the reporting period processed
13,900 tonnes of gold bearing material averaging 17.0g/t gold.
The Company produced 6,957 oz of gold and 8600 oz silver
totalling US$8,922,000 in metal sales (of which US$4,207,000
was earned during the period that Titan had acquired Andina)
with an average realised gold price of US$1,264 per oz;
During the reporting Period, Titan accelerated the development of the Vista Gold plant following acquisition to
complete construction in 2018, subsequent to which the Company received approval for its Environmental
Currently Titan is working through an operational testing phase
Impact Assessment (“EIA”) for the Vista Plant (refer to ASX announcement dated 9 January 2019). The Plant’s
of the facility while progressing the final stages of permitting
and
facilitate sales and commercial scale
management team continues to progress requisite physical safety and operational inspections of the plant site
production. When commissioned and Concession of Benefit
with the Direccion Regional De Energia Y Minas (The Regional Energy and Mines Institute, or “DREM”), prior
and full commercial licencing are granted, the Vista Gold Plant
to the DREM issuing the final stage of approval of an operator’s permit (Concession of Benefit).
will have a nameplate capacity of 150 tonnes per day, more
than triple the operating capacity of the Tulin Gold Plant. The
Currently Titan is working through an operational testing phase of the facility while progressing the final stages
Vista Gold Plant has been designed to increase its capacity to
of permitting and licensing to facilitate sales and commercial scale production. When commissioned and
350 tons per day with minimal capital outlay, when warranted
Concession of Benefit and full commercial licencing are granted, the Vista Gold Plant will have a nameplate
by supply of ore. The team intends to acquire and process high
capacity of 150 tonnes per day, more than triple the operating capacity of the Tulin Gold Plant. The Vista Gold
grade ore from licensed artisanal miners in the region in the
Plant has been designed to increase its capacity to 350 tons per day with minimal capital outlay, when
near term and utilise the Vista Gold Plant’s additional capacity
warranted by supply of ore. The team intends to acquire and process high grade ore from licensed artisanal
to advance a mine development strategy for the company and
miners in the region in the near term and utilise the Vista Gold Plant’s additional capacity to advance a mine
process any ore mined from several projects identified with
development strategy for the company and process any ore mined from several projects identified with mine
mine development potential for providing significant synergies
development potential for providing significant synergies to the group.
to the group.
During the reporting Period, Titan accelerated the development
of the Vista Gold plant following acquisition to complete
construction in 2018, subsequent to which the Company
received approval for its Environmental Impact Assessment
(“EIA”) for the Vista Plant (refer to ASX announcement dated
licensing
to
Figures 1 to 3: Vista Gold Plant – Leach Tanks for gold recovery (left), Crushed ore stockpiles ready for grinding and processing (upper right), and ball mill grinding
Figures 1 to 3: Vista Gold Plant – Leach Tanks for gold recovery (left), Crushed ore stockpiles ready for grinding and
circuit and conveyor feed to leach tanks (lower right)
processing (upper right), and ball mill grinding circuit and conveyor feed to leach tanks (lower right)
The strategy to establish expanded production for 2019 at the Company’s wholly owned Vista Gold Plant tied
in optimally with the expiry of lease at the Tulin Plant. The Tulin Plant, operated by Tulin Gold Co. SAC (“Tulin”)
was operated under a mining assignment agreement with a private owner negotiated by the previous
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 4
4
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
management (refer to ASX release dated 23 May 2018) and as a result of the expiry of the plant lease, Tulin
ceased processing ore at its Tulin plant facility. The extinguishment of lease payments for the Tulin Gold Plant
provide a significant cost saving opportunity.
DIRECTORS’ REPORT
Vista Gold commenced acquisition of ore for processing from existing supply chain acquired in the Andina
acquisition and the Titan team continues a planned process to transfer its ore purchasing and processing
capability for the Company’s gold toll treatment arm of its business to a single location.
Vista Gold commenced acquisition of ore for processing from
existing supply chain acquired in the Andina acquisition and
the Titan team continues a planned process to transfer its ore
purchasing and processing capability for the Company’s gold
toll treatment arm of its business to a single location.
The Company received gold-silver bearing material for processing at the Vista plant through December to
establish stockpiles for commercial production and commissioning of the plant over the March quarter with
over 1,500 tonnes averaging 21.6g/t Au received at the Vista Gold Plant through 31 December 2018.
The strategy to establish expanded production for 2019 at the
Company’s wholly owned Vista Gold Plant tied in optimally with
the expiry of lease at the Tulin Plant. The Tulin Plant, operated
by Tulin Gold Co. SAC (“Tulin”) was operated under a mining
assignment agreement with a private owner negotiated by the
previous management (refer to ASX release dated 23 May 2018)
and as a result of the expiry of the plant lease, Tulin ceased
processing ore at its Tulin plant facility. The extinguishment of
lease payments for the Tulin Gold Plant provide a significant
cost saving opportunity.
The Company received gold-silver bearing material
for
processing at the Vista plant through December to establish
stockpiles for commercial production and commissioning
of the plant over the March quarter with over 1,500 tonnes
averaging 21.6g/t Au received at the Vista Gold Plant through
31 December 2018.
Las Antas Gold Project - Peru
Las Antas Gold Project - Peru
On 12 September 2018 Titan agreed non-binding indicative terms with Management Environmental Solutions
S.A, a privately held Peruvian company, ("Vendor") to acquire up to an 85% ownership interest in the Las
Antas gold project in southern Peru ("Las Antas Gold Project").
On 12 September 2018 Titan agreed non-binding indicative terms with Management Environmental Solutions S.A, a privately held
Peruvian company, (“Vendor”) to acquire up to an 85% ownership interest in the Las Antas gold project in southern Peru (“Las
Antas Gold Project”).
Subsequent to the reporting period, on 14 January 2019 the Company executed a binding agreement pursuant
to which it has been granted an exclusive option to acquire an initial ownership interest of 60% in the Las Antas
Subsequent to the reporting period, on 14 January 2019 the Company executed a binding agreement pursuant to which it has
been granted an exclusive option to acquire an initial ownership interest of 60% in the Las Antas Gold Project by funding US$2m
Gold Project by funding US$2m in exploration activity within a 2-year period, and further options to acquire up
in exploration activity within a 2-year period, and further options to acquire up to an additional 25% ownership interest in the Las
to an additional 25% ownership interest in the Las Antas Gold Project (being a total of up to an 85% interest
Antas Gold Project (being a total of up to an 85% interest in the Las Antas Gold Project). Refer to the ASX release dated 12
in the Las Antas Gold Project). Refer to the ASX release dated 12 September 2018 for Indicative Key Terms.
September 2018 for Indicative Key Terms.
Figure 4 | Las Antas Project location relative to the centralised Vista Gold plant
Figure 4 | Las Antas Project location relative to the centralised Vista Gold plant
5 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
5
Las Antas Project - Highlights
Las Antas is located within the prolific epithermal gold belt
of Southern Peru (Refer to Figure 4) which contains various
precious metal deposits including the Ares Mine (1.2Moz Au &
15Moz Ag) and the Antapite Mine (600koz Au). The Las Antas
project itself hosts significant exploration potential for stand
alone, bulk tonnage, disseminated style gold mineralization,
and provides the Company with a key foothold into a broader
district containing multiple high-grade gold-silver veins.
Accessible by paved road to within 8km of the project, Las
Antas is 80km East of Peru’s prominent PanAmerican Highway
and well within trucking distance of the Company’s Vista Gold
Plant, which is currently undergoing commissioning for early
2019 commencement of commercial production.
The local mining district contains multiple high-grade gold
and silver veins located proximal to key prospects within the
Las Antas project. Las Antas is an important step towards
the Company’s objective of generating multiple opportunities
with potential to provide high-grade gold ore feed to the
centralized Vista Gold Plant. The Company is currently
completing progressing environmental permitting authorisation
to commence a maiden drilling program on targets defined from
historical surface geochemistry and geophysical survey work
anticipated to be completed in the December quarter of 2019.
Las Antas Earn-in Agreement – Key Terms
Titan, through a wholly owned Peruvian subsidiary, has
executed the Earn-in Agreement to acquire up to an 85%
interest in the Project owned by Management Environmental
Solutions S.A. (“Vendor”), a privately held Peruvian company.
The key terms of the Agreement are as follows:
•
•
•
•
•
The Vendor has granted Titan an exclusive right to acquire
60% interest in the Project (“Earn-In Option”) by completing
at least US$2,000,000 in exploration expenditure within 2
years of receiving all permitting requirements to commence
undertaking of exploration activities on the Project (“Earn-in
Obligation”).
Upon completion of the Earn-In Obligation, Titan will have
a period of 60 days within which it may elect to exercise
the Earn-In Option. If Titan elects to exercise the Earn-In
Option, it must deliver a notice to the Vendor and, within 30
days of delivery of such notice, pay the Vendor an amount
of US$450,000.
Upon Titan acquiring the initial 60% interest in the Project,
Titan and the Vendor will establish a Joint Venture to govern
the future conduct of activities in relation to the Project
(“Joint Venture”), with Titan holding a 60% initial interest in
the Joint Venture.
Upon the date on which a pre-feasibility study is first
delivered in relation to the Project (“Pre-Feasibility Date”),
Titan’s interest in the Joint Venture and the Project will
be increased by 10%. Titan will be solely responsible for
funding the pre-feasibility study.
Separately, Titan will have an option (“Buying Option”) to
purchase an additional 15% interest in the Joint Venture and
the Project from the Vendor in three tranches as follows:
•
Tranche 1: Titan can purchase a 5% interest in the Joint
Venture and the Project at any time before the Pre-
Feasibility Date by paying to the Vendor US$500,000;
• Tranche 2: Titan can purchase a 5% interest in the Joint
Venture and the Project at any time within 60 days
following the making of a decision to mine in relation
to the Project by paying to the Vendor US$1,000,000
(provided this must occur within 5 years of the Pre-
Feasibility Date); and
•
Tranche 3: Titan can purchase a 5% interest in the
Joint Venture and the Project at any time within 60 days
following the commencement of commercial production
in relation to an operating mine on the Project by paying
to the Vendor US$1,000,000,
with Titan’s right to exercise any tranche applying irrespective
of whether it has previously exercised any other tranche.
• The Vendor to retain a 15% non-diluted interest in the
Project subject to financing by the Joint Venture subsequent
to the pre-feasibility study.
• The Vendor’s contributions to the Joint Venture following
the Pre-Feasibility Date will be covered by loan funding
from Titan.
• At all times following the formation of the Joint Venture,
Titan will retain a first right of refusal over the Vendor’s
interest in the Project.
The Project features an extensive zone of intense hydrothermal
alteration at surface. The broader district contains multiple high-
grade gold and silver veins located proximal to key prospects
within the Las Antas project. The surface hydrothermal and
breccia footprint is host to significant potential for larger scale,
bulk tonnage, disseminated style gold mineralization.
Las Antas is hosted by the Calipuy volcanic layered stratigraphy
in Southern Peru hosting andesitic flows, ignimbrites, tuffs,
volcanic breccias and agglomerate units. The volcanic
stratigraphy has been intruded by several andesitic to dacitic
stocks, which comprise favourable units for mineralization
and at surface are associated with a pervasive hydrothermal
alteration system in halos of intense silicification, showing
vuggy silica, alunite and illite
Specific to the Las Antas Project area is two prioritized targets
areas:
• Yuracmarca Target, 1.5x2.2 km of area with propylitization,
argilization and silicification alterations.
• Cerro Amarillo Target, 3.5x2.3 km of area with intense
silicification, in parts vuggy silica, altered breccias, alunite
and Illite, argilitization and propylitization
The Las Antas project has received early stage modern
exploration
techniques, with non-systematic geophysical
coverage completed in historical exploration activity from 1995
through 1998 under a joint venture between Hochschild and
Anaconda. The project area has seen only limited shallow
reconnaissance RC drilling before exploration abruptly ceased
in 1998.
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 6
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
The Project features an extensive zone of intense hydrothermal alteration at surface. The broader district
The Project features an extensive zone of intense hydrothermal alteration at surface. The broader district
contains multiple high-grade gold and silver veins located proximal to key prospects within the Las Antas
contains multiple high-grade gold and silver veins located proximal to key prospects within the Las Antas
project. The surface hydrothermal and breccia footprint is host to significant potential for larger scale, bulk
project. The surface hydrothermal and breccia footprint is host to significant potential for larger scale, bulk
tonnage, disseminated style gold mineralization.
tonnage, disseminated style gold mineralization.
Las Antas is hosted by the Calipuy volcanic layered stratigraphy in Southern Peru hosting andesitic flows,
Las Antas is hosted by the Calipuy volcanic layered stratigraphy in Southern Peru hosting andesitic flows,
ignimbrites, tuffs, volcanic breccias and agglomerate units. The volcanic stratigraphy has been intruded by
ignimbrites, tuffs, volcanic breccias and agglomerate units. The volcanic stratigraphy has been intruded by
several andesitic to dacitic stocks, which comprise favourable units for mineralization and at surface are
associated with a pervasive hydrothermal alteration system in halos of intense silicification, showing vuggy
silica, alunite and illite
several andesitic to dacitic stocks, which comprise favourable units for mineralization and at surface are
associated with a pervasive hydrothermal alteration system in halos of intense silicification, showing vuggy
silica, alunite and illite
Specific to the Las Antas Project area is two prioritized targets areas:
Specific to the Las Antas Project area is two prioritized targets areas:
DIRECTORS’ REPORT
• Yuracmarca Target, 1.5x2.2 km of area with propylitization, argilization and silicification alterations.
• Yuracmarca Target, 1.5x2.2 km of area with propylitization, argilization and silicification alterations.
• Cerro Amarillo Target, 3.5x2.3 km of area with intense silicification, in parts vuggy silica, altered
• Cerro Amarillo Target, 3.5x2.3 km of area with intense silicification, in parts vuggy silica, altered
breccias, alunite and Illite, argilitization and propylitization
breccias, alunite and Illite, argilitization and propylitization
Photo 1 (Left) |Cerro Amarillo Target Area, with intense silicification, localised
Photo 1 (Left) |Cerro Amarillo Target Area, with intense silicification, localised vuggy silica, altered breccias,
vuggy silica, altered breccias, alunite, Illite and pervasive argilitization.
alunite, Illite and pervasive argilitization. Photo 2 (Right) | Cerro Amarillo Target, alteration contact between
silicification and argilized breccias.
Photo 1 (Left) |Cerro Amarillo Target Area, with intense silicification, localised vuggy silica, altered breccias,
alunite, Illite and pervasive argilitization. Photo 2 (Right) | Cerro Amarillo Target, alteration contact between
silicification and argilized breccias.
Photo 2 (Right) | Cerro Amarillo Target, alteration contact between silicification
and argilized breccias.
22.7g/t gold value returned on new vein extensions identified in recent mapping in a step-out to the
southwest.
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
The Las Antas project has received early stage modern exploration techniques, with non-systematic
The Las Antas project has received early stage modern exploration techniques, with non-systematic
Torrecillas Gold Project – Peru
geophysical coverage completed in historical exploration activity from 1995 through 1998 under a joint venture
geophysical coverage completed in historical exploration activity from 1995 through 1998 under a joint venture
between Hochschild and Anaconda. The project area has seen only limited shallow reconnaissance RC
between Hochschild and Anaconda. The project area has seen only limited shallow reconnaissance RC
During the reporting period the Company’s geological team
completed a review of the historical exploration and previous
drilling before exploration abruptly ceased in 1998.
drilling before exploration abruptly ceased in 1998.
mine development datasets and completed a detailed field
mapping and sampling campaign for the high-grade Torrecillas
Torrecillas Gold Project – Peru
Gold Project in Peru.
• Rebecca Prospect is an area of relative high vein density
and on average returning consistently high grades from
representative channel sampling across multiple veins
• Rebecca Prospect is an area of relative high vein density and on average returning consistently high
within the 1.8km long vein swarm. Again, vein extent and
grades from representative channel sampling across multiple veins within the 1.8km long vein swarm.
density are currently focused in areas of best exposure with
Again, vein extent and density are currently focused in areas of best exposure with significant potential
significant potential to add strike extent and volume through
to add strike extent and volume through further trenching and follow-up drilling along strike.
further trenching and follow-up drilling along strike.
• Preciosa Prospect is a 2.7km long corridor of veining with multiple high-grade veins mapped on
topographic highs. Sampling to date demonstrate strong potential for continuity of gold grades along
strike, and additional trench sampling is planned in areas of colluvial cover to assess additional
continuity of strike along veins within the target area.
Torrecillas Gold Project – Peru
Exploration activity on the project focused on mapping and sampling of previously underexplored areas of the
project to assess the project for growth potential through further exploration and to rate and rank numerous
targets requiring follow-up work.
During the reporting period the Company’s geological team completed a review of the historical exploration
and previous mine development datasets and completed a detailed field mapping and sampling campaign for
the high-grade Torrecillas Gold Project in Peru.
Exploration activity on the project focused on mapping and
During the reporting period the Company’s geological team completed a review of the historical exploration
sampling of previously underexplored areas of the project
and previous mine development datasets and completed a detailed field mapping and sampling campaign for
to assess the project for growth potential through further
the high-grade Torrecillas Gold Project in Peru.
exploration and to rate and rank numerous targets requiring
Exploration activity on the project focused on mapping and sampling of previously underexplored areas of the
follow-up work.
project to assess the project for growth potential through further exploration and to rate and rank numerous
The work completed prioritised four vein zones based on strike
targets requiring follow-up work.
extent and continuity of high-grade results (refer to Figure 5),
including the Rebeca, Preciosa and Ady-Oly vein corridors,
The work completed prioritised four vein zones based on strike extent and continuity of high-grade results
with each target area containing multiple narrow vein sets
(refer to Figure 5), including the Rebeca, Preciosa and Ady-Oly vein corridors, with each target area containing
across substantial widths and ranging from 1.8 to 2.7km in
strike extent. The priority target areas defined include;
multiple narrow vein sets across substantial widths and ranging from 1.8 to 2.7km in strike extent. The priority
target areas defined include;
• Ady-Oly Prospect, which comprises numerous sub-parallel
vein and vein extensions to the historical resource at the
• Ady-Oly Prospect, which comprises numerous sub-parallel vein and vein extensions to the historical
• Ady-Oly Prospect, which comprises numerous sub-parallel vein and vein extensions to the historical
Torrecillas mine area on a complex vein array covering over
resource at the Torrecillas mine area on a complex vein array covering over 2.4km extent proximal to
resource at the Torrecillas mine area on a complex vein array covering over 2.4km extent proximal to
2.4km extent proximal to the granitic and Andesitic volcanic
host rock contact zone in the area. The area includes
the granitic and Andesitic volcanic host rock contact zone in the area. The area includes numerous
the granitic and Andesitic volcanic host rock contact zone in the area. The area includes numerous
numerous >5g/t results from channel samples across veins
>5g/t results from channel samples across veins mapped at surface. Including up to 42.7g/t gold and
>5g/t results from channel samples across veins mapped at surface. Including up to 42.7g/t gold and
mapped at surface. Including up to 42.7g/t gold and 22.7g/t
gold value returned on new vein extensions identified in
recent mapping in a step-out to the southwest.
The work completed prioritised four vein zones based on strike extent and continuity of high-grade results
(refer to Figure 5), including the Rebeca, Preciosa and Ady-Oly vein corridors, with each target area containing
multiple narrow vein sets across substantial widths and ranging from 1.8 to 2.7km in strike extent. The priority
target areas defined include;
7
• Preciosa Prospect is a 2.7km long corridor of veining with
multiple high-grade veins mapped on topographic highs.
Sampling to date demonstrate strong potential for continuity
of gold grades along strike, and additional trench sampling
is planned in areas of colluvial cover to assess additional
continuity of strike along veins within the target area.
7
Figure 5 | Location of prioritised high-grade gold target areas at Torrecillas Project in
Figure 5 | Location of prioritised high-grade gold target areas at Torrecillas Project
in Peru with reported surface sampling locations
Peru with reported surface sampling locations
Mirador Copper Gold Plant
On 17 April 2018, Titan executed an agreement subject to conditions precedent to acquire Peruvian companies
Kairos Capital Peru S.A.C (“Kairos”) and M&S Transportes y Servicios Generales S.R.L (“Mirador”).
7 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
The major assets held by Kairos and Mirador included the 100% owned Mirador processing plant located in
Chimbote, Peru (“Mirador Plant”) and six (6) 100% owned mineral concessions. The operational Mirador
Plant site is fully permitted for up to 350 tonnes per day capacity of the operation, where subject to the results
of Titan’s due diligence and completion of the acquisition, Titan proposed to upgrade the facility with a carbon
in pulp (CIP) circuit.
On 11 September 2018, The Company elected not to proceed with the acquisition of Kairos Capital Peru S.A.C
(“Kairos”) and M&S Transportes y Servicios Generales S.R.L (“Mirador”) and accordingly, will not be acquiring
the Mirador Plant.
8
Mirador Copper Gold Plant
On 17 April 2018, Titan executed an agreement subject to
conditions precedent to acquire Peruvian companies Kairos
Capital Peru S.A.C (“Kairos”) and M&S Transportes y Servicios
Generales S.R.L (“Mirador”).
The major assets held by Kairos and Mirador included the 100%
owned Mirador processing plant located in Chimbote, Peru
(“Mirador Plant”) and six (6) 100% owned mineral concessions.
The operational Mirador Plant site is fully permitted for up to
350 tonnes per day capacity of the operation, where subject
to the results of Titan’s due diligence and completion of the
acquisition, Titan proposed to upgrade the facility with a carbon
in pulp (CIP) circuit.
On 11 September 2018, The Company elected not to proceed
with the acquisition of Kairos Capital Peru S.A.C (“Kairos”) and
M&S Transportes y Servicios Generales S.R.L (“Mirador”) and
accordingly, will not be acquiring the Mirador Plant.
San Santiago Copper Plant
With the successful acquisition of Andina’s Vista Gold Plant,
Titan will not restart the gold circuit at San Santiago. Instead,
it is proposed that gold will be more cost effectively processed
at the available capacity of the Vista Gold Plant. The San
Santiago Copper Plant remains in care and maintenance,
while the Titan technical team completes ground rationalisation
of adjacent exploration tenements and evaluates options for
potential divestment of the asset
6. SHARE OPTIONS
As at the date of this report there are 45,000,000 options on
issue.
7. INDEMNIFICATION AND
INSURANCE OF
OFFICERS
During or since the end of the financial year the Company has
given an indemnity or entered into an agreement to indemnify,
or paid or agreed to pay insurance premiums as follows:
The Company has entered into agreements to indemnify
all directors and provide access to documents, against any
liability arising from a claim brought by a third party against
the Company. The agreement provides for the Company to
pay all damages and costs which may be awarded against the
directors.
The Company has paid premiums to insure each of the directors
against liabilities for costs and expenses incurred by them in
defending any legal proceedings arising out of their conduct
while acting in the capacity of director of the company, other
than conduct involving a willful breach of duty in relation to the
Company. The amount of the premium was $20,122 which was
paid during the financial year. No indemnity has been sought
for or paid to auditors.
On January 14, 2019, Titan announced that it has executed a
binding agreement pursuant to which Titan had been granted
an exclusive option to acquire up to an 85% interest in the Las
Antas Project (“Las Antas Earn-In”). Under the Las Antas Earn-
In, Titan can earn-in to 60% of the Las Antas Project by funding
US$2,000,000 in exploration activity within a 2-year period.
Upon Titan acquiring the 60% interest, Titan and the vendor
will establish a joint venture to govern the future conduct of
activities in relation to the Las Antas Project, with Titan holding
60% initial interest in the joint venture. The Las Antas Earn-In
also provides Titan with an opportunity to acquire an additional
25% interest in the Las Antas Project.
On 25 February 2019 Titan Minerals Limited and Core Gold
Inc (TSX-V: CGLD, OTCQX: CGLDF) (“Core Gold”) announce
that the companies have entered into a binding arrangement
agreement (the “Arrangement Agreement”), pursuant to which
Titan will acquire all of the issued and outstanding Core Gold
common shares by way of a share exchange (the “Merger”).
The Merger will be affected by means of a statutory plan
of arrangement (the “Arrangement”) under the Business
Corporations Act (British Columbia). Under the Arrangement:
• each Core Gold shareholder will receive twenty (20) fully
paid ordinary shares in Titan pre-consolidation (“Titan
Shares”) for every one (1) Core Gold common share (the
“Exchange Ratio”); and
• holders of Core Gold Options and Warrants will receive
options in Titan on comparable terms, taking into account
the Exchange Ratio under the Merger.
In connection with the Merger, Titan will conduct a placement
of new Titan Shares to certain eligible institutional and high
net worth investors to raise a minimum of A$20 million at an
issue price to be agreed by Titan and Core Gold (each acting
reasonably and taking into account the then current market
conditions) (the “Placement”). If a minimum of A$20 million
is raised under the Placement, assuming an issue price of
A$0.024 (being the closing price of Titan Shares on the ASX
on February 15, 2019), approximately 833,333,333 new Titan
Shares will be issued under the Placement. The issue of new
Titan Shares under the Placement will be subject to Titan
shareholder approval. Completion of the Merger is conditional
on completion of the Placement.
On 25 March 2019, the Group raised USD $3 million via loan
facility agreements. The material terms of the loan facility are:
• Amount: US$3,000,000
•
Interest: 15% interest per annum
• Security: Vista Gold S.A.C. and Core Private Placement
shares
• Repayment: earlier of 21 days from completion of Titan
Core Gold plan of arrangement or 6 months from the draw
down date, extendable to 9 months at Titan’s election with a
minimum repayment of 5 months interest payable if repaid
prior to five months from the draw down date
8. EVENTS SUBSEQUENT TO REPORTING DATE
9. DIVIDENDS
There has not been any matter or circumstance that have
arisen since the end of the financial year, that has significantly
affected or may significantly affect, the operations of the Group,
the results of the operations, or the state of the affairs of the
Group in the future financial years, other than:
No dividends have been paid or declared since the start of the
financial year by the Company.
The directors have recommended that no dividend be paid by
the Company in respect of the year ended 31 December 2018.
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 8
DIRECTORS’ REPORT
10. LIKELY DEVELOPMENTS
12. PROCEEDINGS ON BEHALF OF COMPANY
The Company will continue to pursue its principal activity of
minerals exploration and gold and copper toll processing in
Peru, particularly in respect to the projects, as outlined under
the heading ‘Significant changes in the state of affairs and
Review of operations’ of this Report. The Company will also
continue to evaluate new business opportunities in Peru.
No person has applied for leave of Court to bring proceedings
on behalf of the Company or intervene in any proceedings
to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or any part of
those proceedings. The Company was not a party to any such
proceedings during the year.
11. ENVIRONMENTAL ISSUES
The Company’s operations comply with all
relevant
environmental laws and regulations and have not been subject
to any actions by environmental regulators.
13. INFORMATION ON DIRECTORS AND COMPANY SECRETARY
Matthew Carr
Director (Executive Director)
Qualifications and Experience:
Mr Carr is a successful and experienced company director having founded Urban Capital Group. Urban Capital Group is a private
equity company with a strong focus on property backed investment and security. Matthew is also the Non-Executive Chairman of
Andina Resources Limited.
Directorships of other listed companies in the 3 years prior
to the end of the Financial Year:
N/A
Interest in shares and options of the Company:
67,384,936 Ordinary Shares
7,000,000 Class A Performance Rights
7,750,000 Class B Performance Rights
8,250,000 Class C Performance Rights
Directors meetings attended:
8 of 8 held during term of directorship in financial year
Appointed:
3 February 2017
Nicholas Rowley
Director (Non-Executive Chairman)
Qualifications and Experience:
Mr Rowley is an experienced corporate executive with a strong financial background having previously worked in the financial
services industry for over 10 years where he gained widespread experience in corporate advisory, M&A transactions and equities
markets, advising domestic and international Institutional sales and high net worth individuals. He also advised on the equity
financings of numerous ASX and TSX listed companies predominantly in the mining and resources sector. Mr Rowley currently
serves as Director of Corporate Development for Galaxy Resources Ltd (ASX:GXY).
Directorships of other listed companies in the 3 years prior
to the end of the Financial Year:
Interest in shares and options of the Company:
Non-Executive Director of Cobalt One Ltd (ASX:CO1) until 4
December 2017.
Non-Executive Director of ARC Exploration Limited appoint
31 May 2018 (ASX: ARX).
23,489,985 Ordinary Shares
7,000,000 Class A Performance Rights
7,750,000 Class B Performance Rights
8,250,000 Class C Performance Rights
Directors meetings attended:
8 of 8 held during term of directorship in financial year
Appointed:
9 August 2016
9 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
Robert Sckalor
Director (Non-Executive Director)
Qualifications and Experience:
Mr Sckalor has 30 years of experience working in the legal and financial markets worldwide and has worked on capital market
and financial transactions on five continents. Currently he is Co-Founder and President of Capital Instincts, a Private Equity and
Venture related investment company he founded 14 years ago while in London. Prior to founding Capital Instincts, Mr Sckalor was
a director and General Counsel for Liquid Capital Markets (LCM), LTD, a London Investment and Financial company. Mr Sckalor
assisted with the expansion of the firm from its single office in London to offices in Seoul and Sydney. Previously, Mr Sckalor
worked as General Counsel, IDEAglobal Ltd in New York, Singapore and London. At the time, IDEAglobal was the world’s largest
independent economic research company specializing in fixed income, equity, capital market and currency analysis. Mr Sckalor
started his career practicing law, and has been a partner at The Simons Firm and Simons, Cuddy and Friedman. Mr Sckalor
obtained his BA from Grinnell College and JD from Washington University, JD.
Directorships of other listed companies in the 3 years prior
to the end of the Financial Year:
N/A
Interest in shares and options of the Company:
3,875,000 Class B Performance Rights
4,125,000 Class C Performance Rights
Directors meetings attended:
8 of 8 held during term of directorship in financial year
Appointed:
7 August 2017
3,500,000 Class A Performance Rights
Cameron Henry
Director (Non-Executive Director)
Qualifications and Experience:
Mr Henry comes from a project development and operational background specialising in minerals processing and oil and
gas projects across the globe. Mr Henry is from a technical background with tertiary qualifications in engineering and project
management and has advised for several ASX listed companies on development, acquisitions, and execution strategies at a
number of levels. Mr Henry is currently Managing Director of Primero Group, a private engineering and construction company
that specialises in minerals processing and has been a member of the Australian Institute of Company Directors (AICD) for over
5 years.
Directorships of other listed companies in the 3 years prior
to the end of the Financial Year:
Managing Director of Primero Group Limited
Interest in shares and options of the Company:
42,373 Ordinary Shares
3,500,000 Class A Performance Rights
4,125,000 Class C Performance Rights
4,125,000 Class C Performance Rights
Directors meetings attended:
8 of 8 held during term of directorship in financial year
Appointed:
8 August 2017
Zane Lewis
Company Secretary
Qualifications and Experience:
Mr Lewis has over 20 of years corporate advisory experience with various ASX and AIM listed companies. Mr Lewis is a fellow of
Chartered Secretaries Australia and is a Non-Executive Director and Company Secretary for a number of ASX Listed companies.
Appointed as company secretary on 11 August 2016.
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 10
DIRECTORS’ REPORT
14. REMUNERATION REPORT (AUDITED)
The Directors present the remuneration report for the Company
and the Consolidated Entity for the year ended 31 December
2018. This remuneration report forms part of the Directors’
Report and has been audited in accordance with section 300A
of the Corporations Act 2001 and details the remuneration
arrangements for the key management personnel.
Key management personnel are those persons who, directly
or indirectly, have authority and responsibility for planning,
directing and controlling the major activities of the Company
and the Consolidated Entity.
Remuneration is based on fees approved by the Board of
Directors.
There is no relationship between the performance or the impact
on shareholder wealth of the Company for the current financial
year or the previous financial years and either the remuneration
of directors and executives or the issue of shares and options
to directors. Remuneration is set at levels to reflect market
conditions and encourage the continued services of directors
and executives.
The names and positions of key management personnel of the
Company and of the Consolidated Entity who have held office
during the financial year are:
Matthew Carr
Executive Chairman
Nicholas Rowley Non-Executive Director
Robert Sckalor Non-Executive Director
Cameron Henry Non-Executive Director
Travis Schwertfeger
Chief of Operations
Service Agreements
terms of employment
Remuneration and other
the
Executive Directors and other officers are formalised in a
service agreement. For Non-Executive Directors these terms
are set out in a Letter of Appointment. The major provisions of
the agreements relating to remuneration per year are set out
below.
for
Name
Matthew Carr
Nicholas Rowley
Robert Sckalor
Cameron Henry
Travis Schwertfeger
Base Salary
Consulting fees
Term of Agreement Notice Period
-
-
-
-
-
$120,000 (until 12 July 2018)
No fixed term
12/6 months*
$240,000 (from 13 July 2018)
$72,000 (until 31 August 2018)
No fixed term
$96,000 (from 1 September 2018)
$72,000 (until 31 August 2018)
No fixed term
$60,000 (from 1 September 2018)
$72,000 (until 31 August 2018)
No fixed term
$60,000 (from 1 September 2018)
N/A
N/A
N/A
$180,000
No fixed term
3 months
* Termination benefits: In the case of termination without cause by the Company Mr Carr is entitled to receive 12 months’ salary
on top of the entitles mentioned below. In the case of termination without cause by Mr Carr then he is entitled to receive 6 months’
salary on top of the entitlements outlined below. Matthew Carr is entitled to an additional 1 months’ salary on top of the notice
period for each year of continuous service to the company (pro-rata up to the date of leaving the entity).
Under Mr Schwertfeger’s Consultancy Agreement, he is entitled to the following performance rights subject to shareholder
approval:
• 5,000,000 Class A Performance Rights which vest upon the Shares achieving a daily VWAP of greater than $0.05 for a period
of 10 consecutive Trading Days;
• 5,000,000 Class B Performance Rights which vest upon the Shares achieving a daily VWAP of greater than $0.06 for a period
of 10 consecutive Trading Days; and
• 5,000,000 Class C Performance Rights which vest upon the Shares achieving a daily VWAP of greater than $0.07 for a period
of 10 consecutive Trading Days,
Each have an expiry date that is 2 years from the date of issue.
Details of Remuneration
11 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
* Termination benefits: In the case of termination without cause by the Company Mr Carr is entitled to
receive 12 months’ salary on top of the entitles mentioned below. In the case of termination without cause by
Mr Carr then he is entitled to receive 6 months’ salary on top of the entitlements outlined below. Matthew
Carr is entitled to an additional 1 months’ salary on top of the notice period for each year of continuous
service to the company (pro-rata up to the date of leaving the entity).
Under Mr Schwertfeger’s Consultancy Agreement, he is entitled to the following performance rights subject
to shareholder approval:
• 5,000,000 Class A Performance Rights which vest upon the Shares achieving a daily VWAP of
greater than $0.05 for a period of 10 consecutive Trading Days;
• 5,000,000 Class B Performance Rights which vest upon the Shares achieving a daily VWAP of
greater than $0.06 for a period of 10 consecutive Trading Days; and
• 5,000,000 Class C Performance Rights which vest upon the Shares achieving a daily VWAP of
greater than $0.07 for a period of 10 consecutive Trading Days,
Each have an expiry date that is 2 years from the date of issue.
Details of Remuneration
Compensation 12 months to 31 December 2018
Short Term
Benefits
$
Super-
annuation
$
Share
based
payments
$
Total
$
Percentage of
remuneration
that is equity
based
Compensation of key management based
on fees approved by the Board of directors.
Matthew Carr
Nicholas Rowley
Robert Sckalor
Cameron Henry
Travis Schwertfeger
180,000
80,000
68,000
68,000
91 , 40 0
-
-
-
-
-
236,000
236,000
118,000
118,000
-
416,000
316,000
186,000
186,000
91 , 40 0
57%
75%
63%
63%
-
TOTAL COMPENSATION – FOR KEY
MANAGEMENT PERSONNEL
48 7 ,4 0 0
-
708,000 1, 1 95 ,4 0 0
-
*Included in Mr Carr’s short term benefits are $60,000 of fees relevant to the aforementioned service
agreement effective 13 July 2018 paid from Andina Resources Limited.
Compensation 12 months to 31 December 2017
Short Term
Benefits
$
Super-
annuation
$
Share
based
payments
$
Total
$
Percentage of
remuneration
that is equity
based
Compensation of Directors based on fees
approved by the Board of directors.
Matthew Carr
Nicholas Rowley
Robert Sckalor
Cameron Henry
Tim Morrison
30,000
18,000
18,000
18,000
-
-
-
-
-
-
1,293
1,293
647
647
-
31,293
19,293
18,647
18,647
-
TOTAL COMPENSATION – FOR KEY
MANAGEMENT PERSONNEL
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
3,880
87,880
84,000
-
4%
7%
3%
3%
-
-
Shares and performance rights held by Key Management Personnel
Shareholdings
Matthew Carr
Nicholas Rowley
Robert Sckalor
Cameron Henry
Travis Schwertfeger
1 January 2018 or
Appointment
13
Issued as
Compensation
Net Change
Other
31 December 2018
or Resignation
Number of Ordinary Shares
5,000,000
5,000,000
-
-
-
10,000,000
-
-
-
-
-
-
62,384,936
18,489,985
-
42,373
110,000
67,384,936
23,489,685
-
42,373
110,000
81,027,294
91,027,294
1 January 2018 or
Number of Performance Rights
Issued as
Net Change
31 December 2018
Performance Rights
Appointment
Incentive
Other
or Resignation
Matthew Carr
Nicholas Rowley
Robert Sckalor
Cameron Henry
Travis Schwertfeger
23,000,000
23,000,000
11,500,000
11,500,000
-
69,000,000
-
-
-
-
-
-
-
23,000,000
23,000,000
11,500,000
11,500,000
-
69,000,000
At the General Meeting held on 18 December 2017, shareholders approved to grant 80,500,000 performance
rights as remuneration (Class A, B, C). The rights entitled the directors and company secretary to shares in
Titan Minerals Limited on achievement of market conditions. Under the plan, the participant was granted
performance rights which only vest if certain market conditions are met.
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 12
The amount of rights that will vest depends on the achievement of three market-based conditions. The three
conditions are market-based condition related to achieving a 10-day volume weighted average price of shares
on the ASX of greater than $0.05, $0.06 and $0.07 respectively.
Performance rights convert to shares on the date of vesting with no exercise price or share issue price being
payable.
Set out below is the summary of rights granted and approved by shareholders. Management have assessed
the likelihood of the rights vesting and have estimated that Class A, B and C market conditions are expected
to be achieved prior to expiry.
(i) Fair value of performance rights granted
Set out below is the assessed fair value at grant date of performance rights granted in the previous year.
Performance rights:
Class A – market
Class B – market
Class C – market
Other Information
Fair value at grant date
$0.032
$0.032
$0.032
There were no options held by the directors during the year.
There were no loans made to any Key Management Personnel during the year or outstanding at year end.
Refer to Note 28 and 29 for further transactions with Key Management Personnel during the year.
During the year the Company did not engage remuneration consultants to review its remuneration policies.
End of Remuneration Report (Audited)
14
DIRECTORS’ REPORT
At the General Meeting held on 18 December 2017, shareholders approved to grant 80,500,000 performance rights as remuneration
(Class A, B, C). The rights entitled the directors and company secretary to shares in Titan Minerals Limited on achievement of
market conditions. Under the plan, the participant was granted performance rights which only vest if certain market conditions are
met.
The amount of rights that will vest depends on the achievement of three market-based conditions. The three conditions are
market-based condition related to achieving a 10-day volume weighted average price of shares on the ASX of greater than $0.05,
$0.06 and $0.07 respectively.
Performance rights convert to shares on the date of vesting with no exercise price or share issue price being payable.
Set out below is the summary of rights granted and approved by shareholders. Management have assessed the likelihood of the
rights vesting and have estimated that Class A, B and C market conditions are expected to be achieved prior to expiry.
(i) Fair value of performance rights granted
Set out below is the assessed fair value at grant date of performance rights granted in the previous year.
Performance rights:
Fair value at grant date
Class A – market
Class B – market
Class C – market
$0.032
$0.032
$0.032
There were no options held by the directors during the year.
Other Information
There were no loans made to any Key Management Personnel during the year or outstanding at year end.
Refer to Note 28 and 29 for further transactions with Key Management Personnel during the year.
During the year the Company did not engage remuneration consultants to review its remuneration policies.
End of Remuneration Report (Audited)
13 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
15. Business Risks and Uncertainties
There are a number of risks that may have a material and adverse impact on the future operating and financial
performance of the Company. These include the risks discussed in Note 30 of the consolidated financial
statements, along with risks that are widespread and associated with any form of business and specific risks
associated with the Company’s business and its involvement in the exploration and mining industry generally
and in Peru in particular. While most risk factors are largely beyond the control of the Company, the Company
will seek to mitigate the risks where possible.
16. Incomplete Records
15.
BUSINESS RISKS AND UNCERTAINTIES
The Company was under External administration from 25 August 2015 to 4 October 2017, the financial
information relating to the period 1 January 2016 to 31 December 2016 and 1 January 2017 to 4 October 2017
was not subject to the same accounting and internal control processes, which include the implementation and
maintenance of internal controls that are relevant to the preparation and fair presentation of the financial report.
There are a number of risks that may have a material and adverse impact on the future operating and financial performance
of the Company. These include the risks discussed in Note 30 of the consolidated financial statements, along with risks that
are widespread and associated with any form of business and specific risks associated with the Company’s business and its
involvement in the exploration and mining industry generally and in Peru in particular. While most risk factors are largely beyond
the control of the Company, the Company will seek to mitigate the risks where possible.
16. INCOMPLETE RECORDS
Due to there being incomplete records, there may be actions that were taken by the previous directors and
officers of the Company and its subsidiaries that the existing board is not aware of. Whilst the Directors are
confident the Deed of Company Arrangement process deals with any outstanding liabilities at the parent entity
level (as it was the only entity subject to the Deed of Company Arrangement), there is a risk that previous
unknown actions may adversely affect the Company’s operations and financial position, including those of its
retained subsidiaries.
The Company was under External administration from 25 August 2015 to 4 October 2017, the financial information relating to
the period 1 January 2016 to 31 December 2016 and 1 January 2017 to 4 October 2017 was not subject to the same accounting
and internal control processes, which include the implementation and maintenance of internal controls that are relevant to the
preparation and fair presentation of the financial report.
17. Lead Auditor’s Independence Declaration
Due to there being incomplete records, there may be actions that were taken by the previous directors and officers of the Company
and its subsidiaries that the existing board is not aware of. Whilst the Directors are confident the Deed of Company Arrangement
process deals with any outstanding liabilities at the parent entity level (as it was the only entity subject to the Deed of Company
Arrangement), there is a risk that previous unknown actions may adversely affect the Company’s operations and financial position,
including those of its retained subsidiaries.
In accordance with the Corporations Act 2001 section 307C the auditors of the Company have provided a
signed Auditor’s Independence Declaration to the directors in relation to the year ended 31 December 2018.
A copy of this declaration appears at the end of this report.
17. LEAD AUDITOR’S INDEPENDENCE DECLARATION
Signed in accordance with a resolution of the directors.
In accordance with the Corporations Act 2001 section 307C the auditors of the Company have provided a signed Auditor’s
Independence Declaration to the directors in relation to the year ended 31 December 2018. A copy of this declaration appears at
the end of this report.
________________________________
Matthew Carr
Matthew Carr
Executive Director
Executive Director
29th day of March 2019
29th day of March 2019
Perth, Western Australia
Perth, Western Australia
15
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 14
AUDITOR’S INDEPENDENCE DECLARATION
15 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
Chartered Accountants and Consultants PO Box 1908 West Perth WA 6872 Australia Level 2, 1 Walker Avenue West Perth WA 6005 Australia Tel: +61 8 9481 3188 Fax: +61 8 9321 1204 ABN: 84 144 581 519 www.stantons.com.au Stantons International Audit and Consulting Pty Ltd trading as 29 March 2019 Board of Directors Titan Minerals Limited Suite 6, 295 Rokeby Road SUBIACO WA 6008 Dear Sirs RE: TITAN MINERALS LIMITED In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Titan Minerals Limited. As Audit Director for the audit of the financial statements of Titan Minerals Limited for the year ended 31 December 2018, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. Yours sincerely STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD (Trading as Stantons International) (An Authorised Audit Company) Martin Michalik Director T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
15. Business Risks and Uncertainties
There are a number of risks that may have a material and adverse impact on the future operating and financial
performance of the Company. These include the risks discussed in Note 30 of the consolidated financial
statements, along with risks that are widespread and associated with any form of business and specific risks
associated with the Company’s business and its involvement in the exploration and mining industry generally
and in Peru in particular. While most risk factors are largely beyond the control of the Company, the Company
will seek to mitigate the risks where possible.
16. Incomplete Records
DIRECTORS’ DECLARATION
The Company was under External administration from 25 August 2015 to 4 October 2017, the financial
information relating to the period 1 January 2016 to 31 December 2016 and 1 January 2017 to 4 October 2017
was not subject to the same accounting and internal control processes, which include the implementation and
In accordance with a resolution of the directors of Titan Minerals Limited A.C.N. 117 790 897 (“Company”), I state that:
maintenance of internal controls that are relevant to the preparation and fair presentation of the financial report.
A. In the opinion of the directors
1) As set out in Note 2(b), except for the effect of opening balances on the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, the Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows for the
year ended 31 December 2018, the Directors are of the opinion that the financial statements:
Due to there being incomplete records, there may be actions that were taken by the previous directors and
officers of the Company and its subsidiaries that the existing board is not aware of. Whilst the Directors are
confident the Deed of Company Arrangement process deals with any outstanding liabilities at the parent entity
level (as it was the only entity subject to the Deed of Company Arrangement), there is a risk that previous
unknown actions may adversely affect the Company’s operations and financial position, including those of its
retained subsidiaries.
a) give a true and fair view of the consolidated entity’s financial position as at 31 December 2018 and of the performance for
the year ended 31 December 2018; and
b) complying with Australian Accounting Standards and the Corporations Act 2001;
17. Lead Auditor’s Independence Declaration
2) the financial statements and notes also comply with the International Financial Reporting Standards as disclosed in Note 2;
and
payable.
3) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
In accordance with the Corporations Act 2001 section 307C the auditors of the Company have provided a
signed Auditor’s Independence Declaration to the directors in relation to the year ended 31 December 2018.
A copy of this declaration appears at the end of this report.
B. this declaration has been made after receiving the declarations required to be made to the directors in accordance with section
295A of the Corporations Act 2001 for the financial year ended 31 December 2018.
Signed in accordance with a resolution of the directors.
On behalf of the Board of Directors.
Matthew Carr
Executive Director
29th day of March 2019
Perth, Western Australia
________________________________
Matthew Carr
Executive Director
29th day of March 2019
Perth, Western Australia
15
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 16
CONSOLIDATED STATEMENT OF PROFIT AND
LOSS AND OTHER COMPREHENSIVE INCOME
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
Consolidated Statement of Profit and Loss and Other Comprehensive Income
For the year ended 31 December 2018
CONTINUING OPERATIONS
Revenue
Cost of sales
Gross profit
Other revenue
Depreciation charges
Administration expenses
Foreign exchange gain / (loss)
Finance costs
Impairment (expense) / reversal
Loan forgiveness
DOCA expenses
Share based payments expense
Other expenses
(LOSS) / PROFIT BEFORE INCOME TAX EXPENSE
Income tax expense
(LOSS) / PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS
ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Discontinued operations
Profit for the year from discontinued operations
(Loss) / Profit for the year
OTHER COMPREHENSIVE INCOME
Items that may not be reclassified subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME
TAX
TOTAL COMPREHENSIVE (LOSS) / INCOME FOR THE YEAR
EARNINGS PER SHARE
Basic earnings per share
From continuing operations
Diluted earnings per share
From continuing operations
Basic earnings per share
From discontinued operations
Diluted earnings per share
From discontinued operations
Consolidated
Year ended
31-Dec-18
31-Dec-17
5,802,384
(5,211,220)
591,164
-
-
-
15,799
(87,202)
2,896
-
(3,097,136)
(600,762)
297,248
(10,903)
(16,261)
-
(7,066,878)
977,794
-
-
13,205,162
(2,350,000)
(1,230,532)
(4,527)
(154,130)
-
(10,742,570)
11,214,302
-
-
(10,742,570)
11,214,302
2,932,262
1,218,714
(7,810,308)
12,433,016
298,085
1,650,988
298,085
1,650,988
(7,512,223)
14,084,004
(0.523)
2.820
(0.523)
2.820
0.143
0.306
0.143
0.306
Note
5a
5a
5b
5b
5b
5b
31
6
24
21
21
21
21
The above Consolidated Statement of Profit of Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
17 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
18
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
Note
31-Dec-18
31-Dec-17
Consolidated
11,339,654
3,221,567
5,459,426
1,367,302
889,963
1,081,315
825,194
1,716,454
80,000
2,540,047
-
841,622
12,193,538
15,655,207
26,994,861
1,074,995
1,416,842
-
119,249
3,542,080
3,661,329
6,153,166
20,841,695
2,931,791
289,776
-
-
-
-
-
-
-
-
98,097
1,000,000
172,777
1,270,874
4,492,441
1,064,929
174,637
2,204,403
2,204,403
3,443,969
1,048,472
2,491,837
1,239,566
117,125,794
4,102,586
(100,386,685)
20,841,695
91,050,880
2,573,969
(92,576,377)
1,048,472
Consolidated Statement of Financial Position
As at 31 December 2018
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Current tax asset
Assets classified as held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Mine assets
Deferred exploration and evaluation expenditure
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables
Borrowings
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
notes.
26(a)
7
8
9
10
11
7
12
13
15
16
16
17
18
16
17
19
20
19
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Consolidated Statement of Financial Position
Consolidated Statement of Profit and Loss and Other Comprehensive Income
As at 31 December 2018
For the year ended 31 December 2018
Note
31-Dec-18
31-Dec-17
Consolidated
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
CONTINUING OPERATIONS
Revenue
Cost of sales
Gross profit
Other revenue
Depreciation charges
Administration expenses
Foreign exchange gain / (loss)
Finance costs
Impairment (expense) / reversal
Loan forgiveness
DOCA expenses
Share based payments expense
Other expenses
(LOSS) / PROFIT BEFORE INCOME TAX EXPENSE
Income tax expense
(LOSS) / PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS
ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Discontinued operations
Profit for the year from discontinued operations
(Loss) / Profit for the year
OTHER COMPREHENSIVE INCOME
Items that may not be reclassified subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME
TAX
TOTAL COMPREHENSIVE (LOSS) / INCOME FOR THE YEAR
EARNINGS PER SHARE
Basic earnings per share
From continuing operations
Diluted earnings per share
From continuing operations
Basic earnings per share
From discontinued operations
Diluted earnings per share
From discontinued operations
Consolidated
Year ended
31-Dec-18
31-Dec-17
-
-
-
-
-
-
-
5,802,384
(5,211,220)
591,164
15,799
(87,202)
297,248
(10,903)
2,896
(3,097,136)
(600,762)
(16,261)
(7,066,878)
977,794
13,205,162
(2,350,000)
(1,230,532)
(4,527)
(154,130)
(10,742,570)
11,214,302
-
-
-
(10,742,570)
11,214,302
2,932,262
1,218,714
(7,810,308)
12,433,016
298,085
1,650,988
298,085
1,650,988
(7,512,223)
14,084,004
(0.523)
2.820
(0.523)
2.820
0.143
0.306
0.143
0.306
Note
5a
5a
5b
5b
5b
5b
31
6
24
21
21
21
21
The above Consolidated Statement of Profit of Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Current tax asset
Assets classified as held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Mine assets
Deferred exploration and evaluation expenditure
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables
Borrowings
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
26(a)
7
8
9
10
11
7
12
13
15
16
16
17
18
16
17
19
20
5,459,426
1,367,302
889,963
1,081,315
825,194
1,716,454
11,339,654
80,000
2,540,047
-
841,622
12,193,538
15,655,207
26,994,861
1,074,995
1,416,842
-
2,491,837
119,249
3,542,080
3,661,329
6,153,166
20,841,695
2,931,791
289,776
-
-
-
-
3,221,567
98,097
1,000,000
172,777
-
-
1,270,874
4,492,441
1,064,929
174,637
-
1,239,566
2,204,403
-
2,204,403
3,443,969
1,048,472
117,125,794
4,102,586
(100,386,685)
20,841,695
91,050,880
2,573,969
(92,576,377)
1,048,472
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
notes.
18
19
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 18
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
NET CASH USED IN OPERATING ACTIVITIES
26b)
(5,121,416)
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from operating activities
Payments to suppliers and employees
Finance costs
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant & equipment
Payments of exploration and evaluation costs
Loans provided to third party
Net cash inflow on acquisition of subsidiary
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares (net of costs)
Proceeds from borrowings
NET CASH PROVIDED BY FINANCING ACTIVITIES
Consolidated
Year ended
Note
31-Dec-18
31-Dec-17
5,760,887
(10,882,303)
-
(1,445,775)
(497,143)
(1,114,273)
226,248
(2,830,943)
10,181,910
-
10,181,910
2,229,551
2,931,791
713,574
(3,797,390)
(1,895)
(3,085,711)
-
-
-
(191,204)
(191,204)
5,342,204
810,882
6,153,086
2,876,171
57,790
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on the balance of cash held in
foreign currencies
THE YEAR
CASH AND CASH EQUIVALENTS AT THE END OF
298,084
(2,170)
26a)
5,459,426
2,931,791
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying
notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Consolidated Statement of Cash Flows
For the year ended 31 December 2018
I
s
s
u
e
o
f
s
h
a
r
e
s
u
n
d
e
r
t
h
e
p
u
b
l
i
c
o
f
f
e
r
C
a
p
i
t
a
l
i
i
r
a
s
n
g
c
o
s
t
s
S
h
a
r
e
b
a
s
e
d
p
a
y
m
e
n
t
s
l
B
a
a
n
c
e
a
t
3
1
D
e
c
e
m
b
e
r
2
0
1
8
A
c
q
u
s
i
t
i
i
o
n
o
f
t
r
e
a
s
u
r
y
s
h
a
r
e
s
o
n
b
u
s
n
e
s
s
i
i
c
o
m
b
n
a
t
i
o
n
I
s
s
u
e
o
f
P
e
r
f
o
r
m
a
n
c
e
R
g
h
i
t
s
I
s
s
u
e
o
f
s
h
a
r
e
s
u
n
d
e
r
t
h
e
b
r
o
k
e
r
o
f
f
e
r
I
s
s
u
e
o
f
s
h
a
r
e
s
u
n
d
e
r
t
h
e
l
e
m
p
o
y
e
e
o
f
f
e
r
I
s
s
u
e
o
f
s
h
a
r
e
s
u
n
d
e
r
t
h
e
S
i
l
v
e
r
S
t
r
e
a
m
o
f
f
e
r
I
s
s
u
e
o
f
s
h
a
r
e
s
u
n
d
e
r
t
h
e
A
n
d
n
a
o
i
f
f
e
r
I
s
s
u
e
o
f
s
h
a
r
e
s
u
n
d
e
r
t
h
e
u
n
s
e
c
u
r
e
d
c
r
e
d
i
t
o
r
o
f
f
e
r
C
a
p
i
t
a
l
i
i
r
a
s
n
g
c
o
s
t
s
I
s
s
u
e
o
f
s
h
a
r
e
s
T
o
a
t
l
c
o
m
p
r
e
h
e
n
s
v
e
i
i
n
c
o
m
e
f
o
r
t
h
e
y
e
a
r
L
o
s
s
f
o
r
t
h
e
y
e
a
r
l
B
a
a
n
c
e
a
s
a
t
3
1
D
e
c
e
m
b
e
r
2
0
1
7
t
O
h
e
r
c
o
m
p
r
e
h
e
n
s
v
e
i
i
n
c
o
m
e
f
o
r
t
h
e
y
e
a
r
,
n
e
t
o
f
i
n
c
o
m
e
t
a
x
T
o
a
t
l
c
o
m
p
r
e
h
e
n
s
v
e
L
o
s
s
i
f
o
r
t
h
e
y
e
a
r
F
o
r
t
h
e
y
e
a
r
e
n
d
e
d
3
1
D
e
c
e
m
b
e
r
2
0
1
8
C
o
n
s
o
l
i
d
a
t
e
d
S
t
a
t
e
m
e
n
t
o
f
C
h
a
n
g
e
s
i
n
E
q
u
i
t
y
P
r
o
f
i
t
f
o
r
t
h
e
y
e
a
r
l
B
a
a
n
c
e
a
s
a
t
1
J
a
n
u
a
r
y
2
0
1
7
t
O
h
e
r
c
o
m
p
r
e
h
e
n
s
v
e
i
i
n
c
o
m
e
f
o
r
t
h
e
y
e
a
r
,
n
e
t
o
f
i
n
c
o
m
e
t
a
x
T
h
e
a
b
o
v
e
C
o
n
s
o
l
i
t
d
a
e
d
S
a
e
m
e
n
t
t
t
o
f
C
h
a
n
g
e
s
i
n
E
q
u
i
t
y
s
h
o
u
d
l
b
e
r
e
a
d
i
n
j
c
o
n
u
n
c
t
i
o
n
w
i
t
h
t
h
e
a
c
c
o
m
p
a
n
y
n
g
i
n
o
t
e
s
2
0
1
1
7
,
1
2
5
,
7
9
4
4
,
0
5
6
,
0
5
9
4
6
,
5
2
7
(
1
0
0
,
3
8
6
,
6
8
5
)
,
2
0
8
4
1
6
9
5
,
(
2
,
0
8
0
,
0
0
0
)
2
8
,
9
7
3
,
0
4
4
(
8
1
8
,
1
3
0
)
-
-
-
-
-
-
-
-
-
-
1
,
2
3
0
,
5
3
2
2
9
8
,
0
8
5
2
9
8
,
0
8
5
(
7
,
8
1
0
,
3
0
8
)
(
7
,
5
1
2
,
2
2
3
)
-
2
9
8
,
0
8
5
-
(
7
,
8
1
0
,
3
0
8
)
(
7
,
8
1
0
,
3
0
8
)
-
-
-
-
-
-
-
-
(
2
,
0
8
0
,
0
0
0
)
,
(
8
1
8
1
3
0
)
,
1
2
3
0
5
3
2
,
,
2
8
9
7
3
0
4
4
,
9
1
,
0
5
0
,
8
8
0
2
,
8
2
5
,
5
2
7
(
2
5
1
,
5
5
8
)
(
9
2
,
5
7
6
,
3
7
7
)
(
3
,
8
1
8
,
1
2
0
)
2
,
3
5
0
,
0
0
0
5
3
9
,
6
7
6
3
,
5
0
0
,
0
0
0
3
,
1
6
0
,
3
2
4
7
0
0
,
0
0
0
6
,
0
0
0
,
0
0
0
-
-
-
-
4
,
5
2
7
-
-
-
-
-
-
-
-
-
-
1
,
6
5
0
,
9
8
8
1
2
,
4
3
3
,
0
1
6
1
,
6
5
0
,
9
8
8
-
-
1
2
,
4
3
3
,
0
1
6
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(
3
,
8
1
8
,
1
2
0
)
,
4
5
2
7
,
2
3
5
0
0
0
0
,
5
3
9
,
6
7
6
,
3
5
0
0
0
0
0
,
,
3
1
6
0
3
2
4
,
,
6
0
0
0
0
0
0
,
7
0
0
,
0
0
0
,
1
4
0
8
4
0
0
4
,
,
1
2
4
3
3
0
1
6
,
,
1
6
5
0
9
8
8
,
,
1
0
4
8
4
7
2
,
C
a
p
i
t
a
l
I
s
s
u
e
d
R
e
s
e
r
v
e
P
a
y
m
e
n
t
S
h
a
r
e
B
a
s
e
d
R
e
s
e
r
v
e
T
r
a
n
s
l
a
t
i
o
n
C
u
r
r
e
n
c
y
F
o
r
e
i
g
n
L
o
s
s
e
s
A
c
c
u
m
u
l
a
t
e
d
E
q
u
i
t
y
T
o
t
a
l
7
8
,
6
1
9
,
0
0
0
2
,
8
2
1
,
0
0
0
(
1
,
9
0
2
,
5
4
6
)
(
1
0
5
,
0
0
9
,
3
9
3
)
(
2
5
,
4
7
1
,
9
3
9
)
T
I
T
A
N
M
I
N
E
R
A
L
S
L
I
M
I
T
E
D
–
Y
E
A
R
E
N
D
E
D
3
1
D
E
C
E
M
B
E
R
2
0
1
8
21
19 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
T I T AN M I N E R AL S L I M I T E D – Y E AR E N D E D 3 1 D E C E M B E R 20 1 8
CONSOLIDATED STATEMENT OF CASH FLOWS
Consolidated Statement of Cash Flows
For the year ended 31 December 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from operating activities
Payments to suppliers and employees
Finance costs
NET CASH USED IN OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant & equipment
Payments of exploration and evaluation costs
Loans provided to third party
Net cash inflow on acquisition of subsidiary
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares (net of costs)
Proceeds from borrowings
NET CASH PROVIDED BY FINANCING ACTIVITIES
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on the balance of cash held in
foreign currencies
CASH AND CASH EQUIVALENTS AT THE END OF
THE YEAR
26a)
Consolidated
Year ended
Note
31-Dec-18
31-Dec-17
5,760,887
(10,882,303)
-
(5,121,416)
713,574
(3,797,390)
(1,895)
(3,085,711)
26b)
(1,445,775)
(497,143)
(1,114,273)
226,248
(2,830,943)
10,181,910
-
10,181,910
2,229,551
2,931,791
-
-
(191,204)
-
(191,204)
5,342,204
810,882
6,153,086
2,876,171
57,790
298,084
(2,170)
5,459,426
2,931,791
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying
notes.
21
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
1. GENERAL INFORMATION
Corporate Information
The consolidated financial statements of Titan Minerals Limited (“Parent Entity” or “Company”) and its
controlled entities (collectively as “Consolidated Entity” or “the Group”) for the year ended 31 December
2018 were authorised for issue in accordance with a resolution of the directors on 29 March 2019. The
Parent Entity is a for-profit company limited by shares incorporated in Australia whose shares are publicly
traded on the Australian Stock Exchange.
The Group’s principal activities during the course of the financial year were the operation of the Tulin gold
toll treatment operation in Peru, and construction of the Vista gold plant. The Company also progressed
activities on gold exploration concessions and completed reconnaissance scale work towards development
by way of merger and acquisition of a portfolio of gold and copper projects in South America, with a focus
on the Andean Terrane.
Further information on nature of the operations and principal activities of the Group is provided in the
directors’ report. Information on the Group’s structure and other related party relationships are provided in
notes 22 and 29.
The Group’s registered office is in Suite 7, 295 Rokeby Road, Subiaco, WA 6008 Australia.
sources of estimation uncertainty.
2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a) Statement of compliance
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, Australian Accounting
Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001,
to the maximum extent possible given the factors outlined in 2b). Australian Accounting Standards set out
accounting policies that the AASB has concluded would result in a financial report containing relevant and
reliable information about transactions, events and conditions to which they apply. The financial statements
and notes also comply with International Financial Reporting Standards as issued by the International
Accounting Standard Board (IASB) to the maximum extent possible given the points raised below in 2b).
Material accounting policies adopted in the preparation of this financial report are presented below. They
have been consistently applied unless otherwise stated.
The financial statements were authorised for issue by the Directors’ on 29 March 2019.
b)
Incomplete Records
As disclosed in the 31 December 2017 annual report, the financial report for the year ended 31 December
2017 has been prepared by Directors who received custodianship of the operations of the Group upon
effectuation of the Deed of Company Arrangement and resignation of the Administrator on or after 4
October 2017. As such, the Directors did not have control of the Company until control was transferred to
them on the effectuation of the deed of company arrangement on 4 October 2017.
As a result of this factor amongst others also disclosed in the annual report, the Directors were unable to
state that the 31 December 2017 annual report has been prepared in accordance with Australian
Accounting Standards including Australian Accounting Interpretations, other authoritative pronouncements
of the Australian Accounting Standards Board and the Corporations Act 2001, nor was it possible to state
the financial report gives a true and fair view of the Group’s financial position.
As the conditions outlined above are relevant to the comparative information in this 31 December 2018
financial report, being the opening balances of the current period, the Directors position on the comparative
information is consistent with that of the previous annual report. As opening balances affects the
determination of the results of operations and cash flows, the Directors are of the opinion that, except for
the impact of opening balances on the Consolidated Statement of Profit or Loss and Other Comprehensive
Income, the Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows,
this financial report has been prepared in accordance with Australian Accounting Standards including
Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001.
Notes to the Consolidated Financial Statements
c) Basis of preparation
The consolidated financial statements have been prepared on the basis of historical cost. Cost is based
on the fair values of the consideration given in exchange for assets. All amounts are presented in
Australian Dollars unless otherwise noted.
The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.
d) Critical accounting judgements and key sources of estimation uncertainty
In the application of AIFRS management is required to make judgements, estimates and assumptions about
carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and various other factors that are believed to
be reasonable under the circumstance, the results of which form the basis of making the judgements.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period
or in the period of the revision and future periods if the revision affects both current and future periods.
Refer to Note 3 for a discussion of critical judgements in applying the entity’s accounting policies and key
e) New and Revised Standards that are effective for these Financial Statements
The AASB has issued a number of new and revised Accounting Standards and Interpretations are effective
for annual periods beginning or after 1 January 2018. These new and revised standards are:
Title
Financial Instruments
Revenue from Contracts with Customers
Reference
AASB 9
AASB 15
AASB 2017-5
AASB 2018-1
Amendments to Australian Accounting Standards – Classification and Measurement of
Share-based Payment Transactions
Amendments to Australian Accounting Standards – Transfers of Investments Property,
Annual Improvements 2014-2017 Cycle and Other Amendments
AASB Interpretation 22
Foreign Currency Transactions and Advance Consideration
The Group has adopted each of the above new and amended standards. The application of these standards
did not have a material impact on the results of the Group for the reporting year, as noted below:
AASB 9 Financial Instruments (AASB 9)
AASB 9 Financial Instruments (AASB 9) replaces AASB 139 Financial Instruments: Recognition and
Measurement (AASB 139) for annual periods beginning on or after 1 January 2018, bringing together all
three aspects of the accounting for financial instruments: classification and measurement; impairment; and
hedge accounting.
The Group has applied AASB 9 retrospectively, with the initial application date of 1 January 2018.
AASB 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some
contracts to buy or sell non-financial items. The Group has adopted AASB 9 retrospectively in accordance
with the standard; changes in accounting policies resulting from the adoption of AASB 9 did not have a
material impact on the Group’s consolidated financial statements.
21 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
22
23
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
1. GENERAL INFORMATION
Corporate Information
The consolidated financial statements of Titan Minerals Limited (“Parent Entity” or “Company”) and its
controlled entities (collectively as “Consolidated Entity” or “the Group”) for the year ended 31 December
2018 were authorised for issue in accordance with a resolution of the directors on 29 March 2019. The
Parent Entity is a for-profit company limited by shares incorporated in Australia whose shares are publicly
traded on the Australian Stock Exchange.
The Group’s principal activities during the course of the financial year were the operation of the Tulin gold
toll treatment operation in Peru, and construction of the Vista gold plant. The Company also progressed
activities on gold exploration concessions and completed reconnaissance scale work towards development
by way of merger and acquisition of a portfolio of gold and copper projects in South America, with a focus
on the Andean Terrane.
notes 22 and 29.
Further information on nature of the operations and principal activities of the Group is provided in the
directors’ report. Information on the Group’s structure and other related party relationships are provided in
The Group’s registered office is in Suite 7, 295 Rokeby Road, Subiaco, WA 6008 Australia.
2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a) Statement of compliance
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, Australian Accounting
Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001,
to the maximum extent possible given the factors outlined in 2b). Australian Accounting Standards set out
accounting policies that the AASB has concluded would result in a financial report containing relevant and
reliable information about transactions, events and conditions to which they apply. The financial statements
and notes also comply with International Financial Reporting Standards as issued by the International
Accounting Standard Board (IASB) to the maximum extent possible given the points raised below in 2b).
Material accounting policies adopted in the preparation of this financial report are presented below. They
have been consistently applied unless otherwise stated.
The financial statements were authorised for issue by the Directors’ on 29 March 2019.
b)
Incomplete Records
As disclosed in the 31 December 2017 annual report, the financial report for the year ended 31 December
2017 has been prepared by Directors who received custodianship of the operations of the Group upon
effectuation of the Deed of Company Arrangement and resignation of the Administrator on or after 4
October 2017. As such, the Directors did not have control of the Company until control was transferred to
them on the effectuation of the deed of company arrangement on 4 October 2017.
As a result of this factor amongst others also disclosed in the annual report, the Directors were unable to
state that the 31 December 2017 annual report has been prepared in accordance with Australian
Accounting Standards including Australian Accounting Interpretations, other authoritative pronouncements
of the Australian Accounting Standards Board and the Corporations Act 2001, nor was it possible to state
the financial report gives a true and fair view of the Group’s financial position.
As the conditions outlined above are relevant to the comparative information in this 31 December 2018
financial report, being the opening balances of the current period, the Directors position on the comparative
information is consistent with that of the previous annual report. As opening balances affects the
determination of the results of operations and cash flows, the Directors are of the opinion that, except for
the impact of opening balances on the Consolidated Statement of Profit or Loss and Other Comprehensive
Income, the Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows,
this financial report has been prepared in accordance with Australian Accounting Standards including
Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001.
c) Basis of preparation
The consolidated financial statements have been prepared on the basis of historical cost. Cost is based
on the fair values of the consideration given in exchange for assets. All amounts are presented in
Australian Dollars unless otherwise noted.
The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.
d) Critical accounting judgements and key sources of estimation uncertainty
In the application of AIFRS management is required to make judgements, estimates and assumptions about
carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and various other factors that are believed to
be reasonable under the circumstance, the results of which form the basis of making the judgements.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period
or in the period of the revision and future periods if the revision affects both current and future periods.
Refer to Note 3 for a discussion of critical judgements in applying the entity’s accounting policies and key
sources of estimation uncertainty.
e) New and Revised Standards that are effective for these Financial Statements
The AASB has issued a number of new and revised Accounting Standards and Interpretations are effective
for annual periods beginning or after 1 January 2018. These new and revised standards are:
Reference
AASB 9
AASB 15
AASB 2017-5
AASB 2018-1
Title
Financial Instruments
Revenue from Contracts with Customers
Amendments to Australian Accounting Standards – Classification and Measurement of
Share-based Payment Transactions
Amendments to Australian Accounting Standards – Transfers of Investments Property,
Annual Improvements 2014-2017 Cycle and Other Amendments
AASB Interpretation 22
Foreign Currency Transactions and Advance Consideration
The Group has adopted each of the above new and amended standards. The application of these standards
did not have a material impact on the results of the Group for the reporting year, as noted below:
AASB 9 Financial Instruments (AASB 9)
AASB 9 Financial Instruments (AASB 9) replaces AASB 139 Financial Instruments: Recognition and
Measurement (AASB 139) for annual periods beginning on or after 1 January 2018, bringing together all
three aspects of the accounting for financial instruments: classification and measurement; impairment; and
hedge accounting.
The Group has applied AASB 9 retrospectively, with the initial application date of 1 January 2018.
AASB 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some
contracts to buy or sell non-financial items. The Group has adopted AASB 9 retrospectively in accordance
with the standard; changes in accounting policies resulting from the adoption of AASB 9 did not have a
material impact on the Group’s consolidated financial statements.
22
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 22
23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
AASB 9 largely retains the existing requirements of AASB 139 for the classification and measurement of
financial liabilities, however, it eliminates the previous AASB 139 categories for financial assets held to
maturity, receivables and available for sale. Under AASB 9, on initial recognition a financial asset is
classified as measured at:
a. Amortised cost;
b. Fair Value through Other Comprehensive Income (FVOCI) – debt investment;
c. FVOCI – equity investment; or
d. Fair Value through Profit or Loss (FVTPL)
The classification of financial assets under AASB 9 is generally based on the business model in which a
financial asset is managed and its contractual cash flow characteristics. A financial asset (unless it is a
trade receivable without a significant financing component that is initially measured at the transaction price)
is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly
attributable to its acquisition. For financial assets measured at amortised cost, these assets are
subsequently measured at amortised cost using the effective interest method. The amortised cost is
reduced by impairment losses.
Interest income and impairment are recognised in profit or loss. Any gain or loss on derecognition is
recognised in profit or loss.
As of 31 December 2017 and 31 December 2018, the Company’s financial instruments consist of cash and
cash equivalents, trade and other receivables, trade and other payables, and borrowings.
Cash and cash equivalents and trade and other receivables previously designated as receivables under
AASB 139 are now classified as amortised cost under AASB 9. The trade and other payables and
borrowings are designated as other financial liabilities, which are measured at amortised cost.
The cash and cash equivalents, trade and other receivables, trade and other payables and borrowings
approximate their fair value due to their short-term nature.
Impairment of financial assets
In relation to the financial assets carried at amortised cost, AASB 9 requires an expected credit loss model
to be applied as opposed to an incurred credit loss model under AASB 139. The expected credit loss model
requires the Group to account for expected credit losses and changes in those expected credit losses at
each reporting date to reflect changes in credit risk since initial recognition of the financial asset. In
particular, AASB 9 requires the Group to measure the loss allowance at an amount equal to lifetime
expected credit loss (“ECL”) if the credit risk on the instrument has increased significantly since initial
recognition. On the other hand, if the credit risk on the financial instrument has not increased significantly
since initial recognition, the Group is required to measure the loss allowance for that financial instrument at
an amount equal to the ECL within the next 12 months.
Measurement Category
Class of financial instrument
presented in the statement
of financial position
Cash and cash equivalents
Original
category under AASB 139
measurement
New measurement category
under AASB 9
Loans and receivables
Trade and other receivables
Loans and receivables
Trade and other payables
Borrowings
Financial liability at amortised
cost
Financial liability at amortised
cost
Financial assets at amortised
cost
Financial assets at amortised
cost
Financial liability at amortised
cost
Financial liability at amortised
cost
The change in classification has not resulted in any re-measurement adjustment at 1 January 2018.
23 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
24
Notes to the Consolidated Financial Statements
AASB 15 Revenue from Contracts with Customers (AASB 15)
The Group has adopted AASB 15 with the date of initial application being 1 January 2018. In accordance
with the transitional provisions in AASB 15 the standard has been applied using the full retrospective
approach.
customer.
AASB 15 supersedes AASB 118 Revenue, AASB 111 Construction Contracts and related Interpretations
and it applies to all revenue arising from contracts with customers, unless those contracts are in the scope
of other standards. The new standard establishes a five-step model to account for revenue arising from
contracts with customers. Under AASB 15, revenue is recognised at an amount that reflects the
consideration to which an entity expects to be entitled in exchange for transferring goods or services to a
Upon acquisition of Andina Resources Limited, it was determined that the adoption of AASB 15 had no
impact on the Group as revenue arises entirely from the sale of gold bullions as described in Note 2. AASB
15 requires that revenue from contracts with customers be recognised upon the transfer of control over
goods or services to the customer. The recognition of revenue upon transfer of control to the customer is
consistent with the previous revenue recognition policy, as revenue is generally recognition when title over
the goods has transferred to the customer. Therefore, this requirement under AASB 15 has resulted in no
impact to the financial statements as the revenue recognition timing on gold bullion sales is unchanged.
f) Standards issued but not yet effective and not early adopted by the Company
The AASB has issued a number of new and amended Accounting Standards and Interpretations that have
mandatory application dates for future reporting period, some of which are relevant to the Company. The
new and amended standards that are relevant to the Company are listed below:
Reference Title
Summary
Application
date of
standard
AASB 16
Leases
AASB 16 requires lessees to account for all leases
1 January 2019
under a single on balance sheet model in a similar way
to finance leases under AASB
117 Leases. The standard includes two recognition
exemptions for lessees – leases of ’low-value’ assets
(e.g., personal computers) and short-term leases (i.e.,
leases with a lease term of 12 months or less).
At the commencement date of a lease, a lessee will
recognise a liability to make lease payments (i.e., the
lease liability) and an asset representing the right to use
the underlying asset during the lease term (i.e., the right-
of-use asset).
Lessees will be required to separately recognise the
interest expense on
the
lease
liability and
the
depreciation expense on the right-of-use asset.
Lessees will be required to remeasure the lease liability
upon the
occurrence of certain events (e.g., a change in the lease
term, a change in future lease payments resulting from a
change in an index or rate used to determine those
payments). The lessee will generally recognise the
amount of the remeasurement of the lease liability as an
adjustment to the right-of-use asset.
Lessor accounting
is substantially unchanged
from
today’s accounting under AASB 117. Lessors will
continue
to classify all
leases using
the same
classification principle as in AASB 117 and distinguish
between two types of leases: operating and finance
25
Notes to the Consolidated Financial Statements
AASB 9 largely retains the existing requirements of AASB 139 for the classification and measurement of
financial liabilities, however, it eliminates the previous AASB 139 categories for financial assets held to
maturity, receivables and available for sale. Under AASB 9, on initial recognition a financial asset is
classified as measured at:
a. Amortised cost;
b. Fair Value through Other Comprehensive Income (FVOCI) – debt investment;
c. FVOCI – equity investment; or
d. Fair Value through Profit or Loss (FVTPL)
The classification of financial assets under AASB 9 is generally based on the business model in which a
financial asset is managed and its contractual cash flow characteristics. A financial asset (unless it is a
trade receivable without a significant financing component that is initially measured at the transaction price)
is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly
attributable to its acquisition. For financial assets measured at amortised cost, these assets are
subsequently measured at amortised cost using the effective interest method. The amortised cost is
reduced by impairment losses.
recognised in profit or loss.
Interest income and impairment are recognised in profit or loss. Any gain or loss on derecognition is
As of 31 December 2017 and 31 December 2018, the Company’s financial instruments consist of cash and
cash equivalents, trade and other receivables, trade and other payables, and borrowings.
Cash and cash equivalents and trade and other receivables previously designated as receivables under
AASB 139 are now classified as amortised cost under AASB 9. The trade and other payables and
borrowings are designated as other financial liabilities, which are measured at amortised cost.
Impairment of financial assets
In relation to the financial assets carried at amortised cost, AASB 9 requires an expected credit loss model
to be applied as opposed to an incurred credit loss model under AASB 139. The expected credit loss model
requires the Group to account for expected credit losses and changes in those expected credit losses at
each reporting date to reflect changes in credit risk since initial recognition of the financial asset. In
particular, AASB 9 requires the Group to measure the loss allowance at an amount equal to lifetime
expected credit loss (“ECL”) if the credit risk on the instrument has increased significantly since initial
recognition. On the other hand, if the credit risk on the financial instrument has not increased significantly
since initial recognition, the Group is required to measure the loss allowance for that financial instrument at
an amount equal to the ECL within the next 12 months.
Measurement Category
Class of financial instrument
Original
measurement
New measurement category
presented in the statement
category under AASB 139
under AASB 9
of financial position
Cash and cash equivalents
Loans and receivables
Financial assets at amortised
Trade and other receivables
Loans and receivables
Financial assets at amortised
Trade and other payables
Financial liability at amortised
Financial liability at amortised
Borrowings
Financial liability at amortised
Financial liability at amortised
cost
cost
cost
cost
cost
cost
The change in classification has not resulted in any re-measurement adjustment at 1 January 2018.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
AASB 15 Revenue from Contracts with Customers (AASB 15)
The Group has adopted AASB 15 with the date of initial application being 1 January 2018. In accordance
with the transitional provisions in AASB 15 the standard has been applied using the full retrospective
approach.
AASB 15 supersedes AASB 118 Revenue, AASB 111 Construction Contracts and related Interpretations
and it applies to all revenue arising from contracts with customers, unless those contracts are in the scope
of other standards. The new standard establishes a five-step model to account for revenue arising from
contracts with customers. Under AASB 15, revenue is recognised at an amount that reflects the
consideration to which an entity expects to be entitled in exchange for transferring goods or services to a
customer.
Upon acquisition of Andina Resources Limited, it was determined that the adoption of AASB 15 had no
impact on the Group as revenue arises entirely from the sale of gold bullions as described in Note 2. AASB
15 requires that revenue from contracts with customers be recognised upon the transfer of control over
goods or services to the customer. The recognition of revenue upon transfer of control to the customer is
consistent with the previous revenue recognition policy, as revenue is generally recognition when title over
the goods has transferred to the customer. Therefore, this requirement under AASB 15 has resulted in no
impact to the financial statements as the revenue recognition timing on gold bullion sales is unchanged.
f) Standards issued but not yet effective and not early adopted by the Company
The AASB has issued a number of new and amended Accounting Standards and Interpretations that have
mandatory application dates for future reporting period, some of which are relevant to the Company. The
new and amended standards that are relevant to the Company are listed below:
Reference Title
Summary
The cash and cash equivalents, trade and other receivables, trade and other payables and borrowings
approximate their fair value due to their short-term nature.
AASB 16
Leases
AASB 16 requires lessees to account for all leases
under a single on balance sheet model in a similar way
to finance leases under AASB
117 Leases. The standard includes two recognition
exemptions for lessees – leases of ’low-value’ assets
(e.g., personal computers) and short-term leases (i.e.,
leases with a lease term of 12 months or less).
At the commencement date of a lease, a lessee will
recognise a liability to make lease payments (i.e., the
lease liability) and an asset representing the right to use
the underlying asset during the lease term (i.e., the right-
of-use asset).
Lessees will be required to separately recognise the
interest expense on
the
depreciation expense on the right-of-use asset.
Lessees will be required to remeasure the lease liability
upon the
occurrence of certain events (e.g., a change in the lease
term, a change in future lease payments resulting from a
change in an index or rate used to determine those
payments). The lessee will generally recognise the
amount of the remeasurement of the lease liability as an
adjustment to the right-of-use asset.
Lessor accounting
from
today’s accounting under AASB 117. Lessors will
continue
the same
classification principle as in AASB 117 and distinguish
between two types of leases: operating and finance
is substantially unchanged
to classify all
leases using
liability and
lease
the
Application
date of
standard
1 January 2019
24
25
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Reference Title
Summary
leases.
Application
date of
standard
AASB
2018-7
AASB
2018-1
Amendments
to Australian
Accounting
Standards –
Long-term
Interests
Associates
and
Ventures
Joint
in
1 January 2019
Group’s cash flow.
Investments
in
This Standard amends AASB 128
Associates and Joint Ventures to clarify that an entity is
required to account for long-term interests in an Associate
or joint venture, which in substance form part of the net
investment in the associate or joint venture but to which
the equity method is not applied, using AASB 9 Financial
Instruments before applying the loss allocation and
impairment requirements in AASB 128.
Annual
Improvements
to IFRS
Standards
2015–2018
Cycle
The amendments clarify certain requirements in:
1 January 2019
► AASB 3 Business Combinations and IFRS 11 Joint
Arrangements - previously held interest in a joint
operation
► AASB 112 Income Taxes - income tax consequences
of payments on financial instruments classified as equity
► AASB 123 Borrowing Costs - borrowing costs eligible
for capitalisation.
The Company has not elected to early adopt any new standards or amendments that are issued but not
yet effective. New standards and amendments will be adopted when they become effective.
When adopted, the above standards are not expected to have a material impact to the financial statements.
g) Going Concern
The financial statements have been prepared on a going concern basis, which contemplates the continuity
of normal business activity, realisation of assets and the settlement of liabilities in the normal course of
business. The Consolidated Entity incurred a net loss of $7,810,308 (2017: net profit $12,433,016 had a
net operating cash outflow of $5,121,416 (2017: $3,085,710) and a net investing cash outflow of $2,830,943
(2017: $191,204) for the year ended 31 December 2018.
The Consolidated Entity is currently in a positive working capital position of $8,847,817 (2017: $1,982,001).
As described in Note 27, the Group has entered into a binding arrangement agreement, pursuant to which
Titan Minerals Limited will acquire all of the issued and outstanding Core Gold common shares by way of
a share exchange (“the merger”). In connection with the merger, the Group will conduct a placement of new
TTM shares to raise a minimum of A$20 million, for which the issue will be subject to shareholder approval.
The completion of the merger is conditional on completion of this placement.
On 25 March 2019, the Group raised USD $3 million via loan facility agreements. The material terms of the
loan facility are:
Interest: 15% interest per annum
• Amount: US$3,000,000
•
• Security: Vista Gold S.A.C. and Core Private Placement shares
• Repayment: earlier of 21 days from completion of Titan Core Gold plan of arrangement or 6 months
from the draw down date, extendable to 9 months at Titans election with a minimum repayment of
5 months interest payable if repaid prior to five months from the draw down date
25 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
26
27
Notes to the Consolidated Financial Statements
Also on 25 March 2019, the Group announced that it has successfully closed its US $3,000,000 private
placement with Core Gold Inc. acquiring 9,151,363 common shares of Core Gold on a private placement
basis.
The Directors are confident that the Group has sufficient cash to fund its activities within the next 12 months
from the date the financial statements are approved and will be able to meet existing commitments as they
fall due. The Directors will also continue to carefully manage discretionary expenditure in line with the
Should the Group not achieve additional funding required, there is uncertainty whether the Group would
continue as a going concern and therefore whether it would realise its assets and extinguish its liabilities in
the normal course of business and at the amounts stated in the financial report.
h) Principles of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved when the Company:
• Has power over the investee;
• Is exposed, or has rights, to variable returns from its involvement with the investee; and
• Has the ability to use its power to affect those returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of profit or loss and
other comprehensive income from the date the Company gains control until the date when the Company
ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income of subsidiaries is attributed to the owners
of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is
attributed to the owners of the Company and to the non-controlling interests even if this results in the non-
controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated
as the difference between (i) the aggregate of the fair value of the consideration received and the fair value
of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities
of the subsidiary and any non-controlling interests. All amounts previously recognised in other
comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed
of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another
category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in
the former subsidiary as the date when control is lost is regarded as the fair value on initial recognition for
subsequent accounting under AASB 139, when applicable, the cost on initial recognition of an investment
in an associate or joint venture.
i) Significant Accounting Policies
The following significant policies have been adopted in the preparation of the Financial Report:
Notes to the Consolidated Financial Statements
Reference Title
Summary
leases.
Application
date of
standard
AASB
2018-7
AASB
2018-1
Amendments
This Standard amends AASB 128
Investments
in
1 January 2019
to Australian
Associates and Joint Ventures to clarify that an entity is
Accounting
required to account for long-term interests in an Associate
Standards –
or joint venture, which in substance form part of the net
Long-term
investment in the associate or joint venture but to which
Interests
in
the equity method is not applied, using AASB 9 Financial
Associates
Instruments before applying the loss allocation and
and
Joint
impairment requirements in AASB 128.
The amendments clarify certain requirements in:
1 January 2019
Ventures
Annual
Improvements
to IFRS
Standards
2015–2018
Cycle
► AASB 3 Business Combinations and IFRS 11 Joint
Arrangements - previously held interest in a joint
operation
► AASB 112 Income Taxes - income tax consequences
of payments on financial instruments classified as equity
► AASB 123 Borrowing Costs - borrowing costs eligible
for capitalisation.
The Company has not elected to early adopt any new standards or amendments that are issued but not
yet effective. New standards and amendments will be adopted when they become effective.
When adopted, the above standards are not expected to have a material impact to the financial statements.
g) Going Concern
The financial statements have been prepared on a going concern basis, which contemplates the continuity
of normal business activity, realisation of assets and the settlement of liabilities in the normal course of
business. The Consolidated Entity incurred a net loss of $7,810,308 (2017: net profit $12,433,016 had a
net operating cash outflow of $5,121,416 (2017: $3,085,710) and a net investing cash outflow of $2,830,943
(2017: $191,204) for the year ended 31 December 2018.
The Consolidated Entity is currently in a positive working capital position of $8,847,817 (2017: $1,982,001).
As described in Note 27, the Group has entered into a binding arrangement agreement, pursuant to which
Titan Minerals Limited will acquire all of the issued and outstanding Core Gold common shares by way of
a share exchange (“the merger”). In connection with the merger, the Group will conduct a placement of new
TTM shares to raise a minimum of A$20 million, for which the issue will be subject to shareholder approval.
The completion of the merger is conditional on completion of this placement.
On 25 March 2019, the Group raised USD $3 million via loan facility agreements. The material terms of the
loan facility are:
• Amount: US$3,000,000
•
Interest: 15% interest per annum
• Security: Vista Gold S.A.C. and Core Private Placement shares
• Repayment: earlier of 21 days from completion of Titan Core Gold plan of arrangement or 6 months
from the draw down date, extendable to 9 months at Titans election with a minimum repayment of
5 months interest payable if repaid prior to five months from the draw down date
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Also on 25 March 2019, the Group announced that it has successfully closed its US $3,000,000 private
placement with Core Gold Inc. acquiring 9,151,363 common shares of Core Gold on a private placement
basis.
The Directors are confident that the Group has sufficient cash to fund its activities within the next 12 months
from the date the financial statements are approved and will be able to meet existing commitments as they
fall due. The Directors will also continue to carefully manage discretionary expenditure in line with the
Group’s cash flow.
Should the Group not achieve additional funding required, there is uncertainty whether the Group would
continue as a going concern and therefore whether it would realise its assets and extinguish its liabilities in
the normal course of business and at the amounts stated in the financial report.
h) Principles of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved when the Company:
• Has power over the investee;
• Is exposed, or has rights, to variable returns from its involvement with the investee; and
• Has the ability to use its power to affect those returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of profit or loss and
other comprehensive income from the date the Company gains control until the date when the Company
ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income of subsidiaries is attributed to the owners
of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is
attributed to the owners of the Company and to the non-controlling interests even if this results in the non-
controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated
as the difference between (i) the aggregate of the fair value of the consideration received and the fair value
of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities
of the subsidiary and any non-controlling interests. All amounts previously recognised in other
comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed
of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another
category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in
the former subsidiary as the date when control is lost is regarded as the fair value on initial recognition for
subsequent accounting under AASB 139, when applicable, the cost on initial recognition of an investment
in an associate or joint venture.
i) Significant Accounting Policies
The following significant policies have been adopted in the preparation of the Financial Report:
26
27
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
i. Revenue recognition
The group primarily generates revenue from the sale of gold bullion. Revenue from the sale of these
goods is recognised when control over the inventory has transferred to the customer, typically at physical
delivery when title is transferred to the customer.
ii.Interest revenue
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield
on the financial asset.
iii. Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash, which are subject to an insignificant
risk of changes in value and have a maturity of three months or less at the date of acquisition.
v. Inventory
Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
iv.Trade and other receivables
Trade receivable (without a significant financing component) are initially recognised at their transaction
price and all other receivables are initially measured at fair value. Receivables are measured at
amortised cost if it meets both of the following conditions and is not designated as at fair value through
profit or loss:
-
-
it is held within a business model with the objective to hold assets to collect contractual cash flows;
and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
For the purposes of the assessment whether contractual cash flows are solely payments of principal
and interest, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’
is defined as consideration for the time value of money and for the credit risk associated with the
principal amount outstanding during a particular period of time and for other basic lending risks and
costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the
Group considers the contractual terms of the instrument. This includes assessing whether the financial
asset contains a contractual term that could change the timing or amount of contractual cash flows
such that it would not meet this condition. In making this assessment, the Group considers:
-
-
-
-
contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable rate features;
prepayment and extension features; and
terms that limit the Group’s claim to cash flows from specified assets (e.g. non recourse features).
The Group recognises an allowance for expected credit losses (“ECLs”) for all receivables not held at
fair value through profit or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate (“EIR”).
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL).
28
27 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
Notes to the Consolidated Financial Statements
For trade receivables and other receivables due in less than 12 months, the Group applies the
simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track
changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime
ECL at each reporting date. The Group has established a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment. For any other financial assets carried at amortised cost (which are due in more than 12
months), the ECL is based on the 12-month ECL. The 12-month ECL is the proportion of lifetime ECLs
that results from default events on a financial instrument that are possible within 12 months after the
reporting date. However, when there has been a significant increase in credit risk since origination,
the allowance will be based on the lifetime ECL. When determining whether the credit risk of a financial
asset has increased significantly since initial recognition and when estimating ECLs, the Group
considers reasonable and supportable information that is relevant and available without undue cost or
effort. This includes both quantitative and qualitative information and analysis, based on the Group’s
historical experience and informed credit assessment including forward-looking information.
Inventories are valued at the lower of cost and net realisable value. Cost includes expenditure incurred
in acquiring and bringing the inventories to their existing condition and location but excludes overheads.
Cost is accounted for as follows:
• Bullion - average fixed direct costs and variable direct costs.
• Gold in circuit - average cost.
• Stores - purchase cost on a first in first out cost method.
• Ore stockpiles - cost of mining on an average cost method.
• Work in progress - cost of mining and processing at an average cost method.
vi. Property, plant and equipment
Property, plant and equipment are stated at cost less depreciation and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all
or part of the purchase consideration is deferred, cost is determined by discounting the amounts
payable in the future to their present value as at the date of acquisition.
Depreciation is provided on property, plant and equipment, including freehold buildings but excluding
land. Depreciation is calculated on a straight line basis so as to write off the net cost of each asset
over its expected useful life to its estimated residual value commencing from the date the asset is
available for use. The estimated useful lives, residual values and depreciation method are reviewed
at the end of each annual reporting period.
Depreciation on assets utilised in exploration, evaluation and mine development during the pre-
production phase is included in the carrying value of Deferred Exploration Expenditure and Mine
Assets reflected on the balance sheet. On commencement of production, depreciation is expensed to
The following estimated useful lives are used in the calculation of depreciation:
the Income Statement.
Facilities
Vehicles
Furniture and fixtures
Computer and other equipment
Other plant and equipment
vii. Mine assets
Expenditure on mine properties in production or under development are accumulated and brought to
account at cost less accumulated amortisation in respect of each identifiable area of interest.
Amortisation of capitalised costs is provided on a production output basis, proportional to the depletion
of the mineral resource of each area of interest expected to be ultimately economically recoverable.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest. Should the carrying value of expenditure not
10 years
5 years
10 years
4 years
3 – 10 years
29
Notes to the Consolidated Financial Statements
i. Revenue recognition
The group primarily generates revenue from the sale of gold bullion. Revenue from the sale of these
goods is recognised when control over the inventory has transferred to the customer, typically at physical
delivery when title is transferred to the customer.
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield
ii.Interest revenue
on the financial asset.
iii. Cash and cash equivalents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
For trade receivables and other receivables due in less than 12 months, the Group applies the
simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track
changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime
ECL at each reporting date. The Group has established a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment. For any other financial assets carried at amortised cost (which are due in more than 12
months), the ECL is based on the 12-month ECL. The 12-month ECL is the proportion of lifetime ECLs
that results from default events on a financial instrument that are possible within 12 months after the
reporting date. However, when there has been a significant increase in credit risk since origination,
the allowance will be based on the lifetime ECL. When determining whether the credit risk of a financial
asset has increased significantly since initial recognition and when estimating ECLs, the Group
considers reasonable and supportable information that is relevant and available without undue cost or
effort. This includes both quantitative and qualitative information and analysis, based on the Group’s
historical experience and informed credit assessment including forward-looking information.
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash, which are subject to an insignificant
risk of changes in value and have a maturity of three months or less at the date of acquisition.
v. Inventory
Inventories are valued at the lower of cost and net realisable value. Cost includes expenditure incurred
in acquiring and bringing the inventories to their existing condition and location but excludes overheads.
Cost is accounted for as follows:
• Bullion - average fixed direct costs and variable direct costs.
• Gold in circuit - average cost.
• Stores - purchase cost on a first in first out cost method.
• Ore stockpiles - cost of mining on an average cost method.
• Work in progress - cost of mining and processing at an average cost method.
it is held within a business model with the objective to hold assets to collect contractual cash flows;
vi. Property, plant and equipment
Property, plant and equipment are stated at cost less depreciation and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all
or part of the purchase consideration is deferred, cost is determined by discounting the amounts
payable in the future to their present value as at the date of acquisition.
Depreciation is provided on property, plant and equipment, including freehold buildings but excluding
land. Depreciation is calculated on a straight line basis so as to write off the net cost of each asset
over its expected useful life to its estimated residual value commencing from the date the asset is
available for use. The estimated useful lives, residual values and depreciation method are reviewed
at the end of each annual reporting period.
Depreciation on assets utilised in exploration, evaluation and mine development during the pre-
production phase is included in the carrying value of Deferred Exploration Expenditure and Mine
Assets reflected on the balance sheet. On commencement of production, depreciation is expensed to
the Income Statement.
The following estimated useful lives are used in the calculation of depreciation:
Facilities
Vehicles
Furniture and fixtures
Computer and other equipment
Other plant and equipment
10 years
5 years
10 years
4 years
3 – 10 years
vii. Mine assets
Expenditure on mine properties in production or under development are accumulated and brought to
account at cost less accumulated amortisation in respect of each identifiable area of interest.
Amortisation of capitalised costs is provided on a production output basis, proportional to the depletion
of the mineral resource of each area of interest expected to be ultimately economically recoverable.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing
to carry forward costs in relation to that area of interest. Should the carrying value of expenditure not
28
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 28
29
Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
iv.Trade and other receivables
Trade receivable (without a significant financing component) are initially recognised at their transaction
price and all other receivables are initially measured at fair value. Receivables are measured at
amortised cost if it meets both of the following conditions and is not designated as at fair value through
profit or loss:
-
-
and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
For the purposes of the assessment whether contractual cash flows are solely payments of principal
and interest, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’
is defined as consideration for the time value of money and for the credit risk associated with the
principal amount outstanding during a particular period of time and for other basic lending risks and
costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the
Group considers the contractual terms of the instrument. This includes assessing whether the financial
asset contains a contractual term that could change the timing or amount of contractual cash flows
such that it would not meet this condition. In making this assessment, the Group considers:
-
-
-
-
contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable rate features;
prepayment and extension features; and
terms that limit the Group’s claim to cash flows from specified assets (e.g. non recourse features).
The Group recognises an allowance for expected credit losses (“ECLs”) for all receivables not held at
fair value through profit or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate (“EIR”).
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
yet amortised exceed its estimated recoverable amount in any period, the excess is written off to the
income statement.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for
an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value
less costs to sell and it does not generate cash inflows that are largely independent of those from other
assets or groups of assets, in which case, the recoverable amount is determined for the cash-
generating unit to which it belongs.
Pre-production revenue from gold sales derived from mine development ore is netted off against
capitalised mine development expenditure.
viii. Impairment of assets
At each reporting date, the Consolidated Entity reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows
that are independent from other assets, the Consolidated Entity estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating
unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal
of an impairment loss is recognised in profit or loss immediately.
ix. Deferred exploration expenditure
Exploration and evaluation expenditure for each area of interest is carried forward as an asset provided
that one of the following conditions is met:
•
Such costs are expected to be recouped through successful development and exploitation of the
area of interest or, alternatively, by its sale; or
Exploration activities in the area of interest have not yet reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and
active and significant operations in relation to the area are continuing.
•
Exploration and evaluation expenditure, which fails to meet at least one of the conditions outlined
above, is written off.
Identifiable exploration assets acquired from another mining company are carried as assets at their
cost of acquisition. Exploration assets acquired are reassessed on a regular basis and these costs
are carried forward provided that at least one of the conditions outlined above are met. Exploration
and evaluation expenditure incurred subsequent to acquisition in respect of an exploration asset
acquired, is accounted for in accordance with the policy outlined above for exploration incurred by or
on behalf of the entity. Exploration and evaluation expenditure assets are assessed for impairment
when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset
may exceed its recoverable amount.
The recoverable amount of the exploration and evaluation asset is estimated to determine the extent
of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount
of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that
29 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
30
31
Notes to the Consolidated Financial Statements
the increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset in previous years. Where a decision is made to
proceed with development in respect of a particular area of interest, the relevant exploration and
evaluation asset is tested for impairment and the balance is then reclassified to mine assets.
x. Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is not control or
joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing
of control of an arrangement, which exists only when decisions about the relevant activities require
unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in these
consolidated financial statements using the equity method of accounting, except with the investment,
or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with
AASB 5. Under the equity method, an investment in an associate or joint venture is initially recognised
in the consolidated statements of financial position at cost and adjusted thereafter to recognise the
Group’s share of the profit or loss and other comprehensive income of the associate or joint venture.
When the Group share of losses of an associate or a joint venture exceeds the Group’s interest in that
associate or joint venture, the Group discontinue recognising its share of further losses. Additional
losses are recognised only to the extent that the Group has incurred legal or constructive obligations
or made payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the date
on which the investee becomes an associate or a joint venture. On acquisition of the investment in an
associate or a joint venture, any excess of the cost of the investment over the Group’s share of the net
fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is
included within the carrying amount of the investment. Any excess of the Group’s share of the net fair
value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is
recognised immediately in profit or loss in the period in which the investment is acquired.
The Group discontinues the use of the equity method from the date when the investment ceases to be
an associate or a joint venture, or when the investment is classified as held for sale.
When a group entity transacts with an associate or a joint venture of the Group, profits and losses
resulting from the transactions with the associate or joint venture are recognised in the Group’s
consolidated financial statements only to the extent of interest in the associate or joint venture that are
not related to the Group.
xi. Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration
transferred in a business combination is measured at fair value which is calculated as the sum of the
acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the
former owners of the acquire and the equity instruments issued by the Group in exchange for control
of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at
their fair value, except that:
• deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements
are recognised and measured in accordance with AASB 112 ‘Income Taxes’ and AASB 119
‘Employee Benefits’ respectively;
•
liabilities or equity instruments related to share-based payment arrangements of the acquiree or
share-based payment arrangements of the Group entered into to replace share-based payment
Notes to the Consolidated Financial Statements
yet amortised exceed its estimated recoverable amount in any period, the excess is written off to the
income statement.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for
an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value
less costs to sell and it does not generate cash inflows that are largely independent of those from other
assets or groups of assets, in which case, the recoverable amount is determined for the cash-
generating unit to which it belongs.
Pre-production revenue from gold sales derived from mine development ore is netted off against
capitalised mine development expenditure.
viii. Impairment of assets
At each reporting date, the Consolidated Entity reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows
that are independent from other assets, the Consolidated Entity estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating
unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal
of an impairment loss is recognised in profit or loss immediately.
ix. Deferred exploration expenditure
Exploration and evaluation expenditure for each area of interest is carried forward as an asset provided
that one of the following conditions is met:
•
•
Such costs are expected to be recouped through successful development and exploitation of the
area of interest or, alternatively, by its sale; or
Exploration activities in the area of interest have not yet reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and
active and significant operations in relation to the area are continuing.
Exploration and evaluation expenditure, which fails to meet at least one of the conditions outlined
above, is written off.
Identifiable exploration assets acquired from another mining company are carried as assets at their
cost of acquisition. Exploration assets acquired are reassessed on a regular basis and these costs
are carried forward provided that at least one of the conditions outlined above are met. Exploration
and evaluation expenditure incurred subsequent to acquisition in respect of an exploration asset
acquired, is accounted for in accordance with the policy outlined above for exploration incurred by or
on behalf of the entity. Exploration and evaluation expenditure assets are assessed for impairment
when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset
may exceed its recoverable amount.
The recoverable amount of the exploration and evaluation asset is estimated to determine the extent
of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount
of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
the increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset in previous years. Where a decision is made to
proceed with development in respect of a particular area of interest, the relevant exploration and
evaluation asset is tested for impairment and the balance is then reclassified to mine assets.
x. Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is not control or
joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing
of control of an arrangement, which exists only when decisions about the relevant activities require
unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in these
consolidated financial statements using the equity method of accounting, except with the investment,
or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with
AASB 5. Under the equity method, an investment in an associate or joint venture is initially recognised
in the consolidated statements of financial position at cost and adjusted thereafter to recognise the
Group’s share of the profit or loss and other comprehensive income of the associate or joint venture.
When the Group share of losses of an associate or a joint venture exceeds the Group’s interest in that
associate or joint venture, the Group discontinue recognising its share of further losses. Additional
losses are recognised only to the extent that the Group has incurred legal or constructive obligations
or made payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the date
on which the investee becomes an associate or a joint venture. On acquisition of the investment in an
associate or a joint venture, any excess of the cost of the investment over the Group’s share of the net
fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is
included within the carrying amount of the investment. Any excess of the Group’s share of the net fair
value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is
recognised immediately in profit or loss in the period in which the investment is acquired.
The Group discontinues the use of the equity method from the date when the investment ceases to be
an associate or a joint venture, or when the investment is classified as held for sale.
When a group entity transacts with an associate or a joint venture of the Group, profits and losses
resulting from the transactions with the associate or joint venture are recognised in the Group’s
consolidated financial statements only to the extent of interest in the associate or joint venture that are
not related to the Group.
xi. Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration
transferred in a business combination is measured at fair value which is calculated as the sum of the
acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the
former owners of the acquire and the equity instruments issued by the Group in exchange for control
of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at
their fair value, except that:
• deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements
are recognised and measured in accordance with AASB 112 ‘Income Taxes’ and AASB 119
‘Employee Benefits’ respectively;
•
liabilities or equity instruments related to share-based payment arrangements of the acquiree or
share-based payment arrangements of the Group entered into to replace share-based payment
30
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 30
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
arrangements of the acquiree are measured in accordance with AASB 2 ‘Share-based Payment’
at the acquisition date; and
• assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 ‘Non-
current Assets Held for Sale and Discontinued Operations’ are measured in accordance with that
Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity
interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets
acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of
the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree and the fair value of the
acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit
or loss as a bargain purchase gain.
Where the consideration transferred by the Group in a business combination includes assets or
liabilities resulting from a contingent consideration arrangement, the contingent consideration is
measured at its acquisition-date fair value. Changes in the fair value of the contingent consideration
that qualify as measurement period adjustments are adjusted retrospectively, with corresponding
adjustments against goodwill. Measurement period adjustments are adjustments that arise from
additional information obtained during the ‘measurement period’ (which cannot exceed one year from
the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify
as measurement period adjustments depends on how the contingent consideration is classified.
Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates
and its subsequent settlement is accounted for within equity. Contingent consideration that is classified
as an asset or liability is remeasured at subsequent reporting dates in accordance with AASB 139
‘Financial Instruments: Recognition and Measurement; or AASB 137 ‘Provisions, Contingent Liabilities
and Contingent Assets’, as appropriate, with the corresponding gain or loss being recognised in profit
or loss.
Where a business combination is achieved in stages, the Group’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group attains control)
and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in
the acquiree prior to the acquisition date that have previously been recognised in other comprehensive
income are reclassified to profit or loss where such treatment would be appropriate if that interest were
disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in
which the combination occurs, the Group reports provisional amounts for the items for which the
accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see
above), or additional assets or liabilities are recognised, to reflect new information obtained about facts
and circumstances that existed as of the acquisition date that, if known, would have affected the
amounts recognised as of that date.
xii. Trade and other payables
Trade payables and other accounts payable are recognised when the Consolidated Entity becomes
obliged to make future payments resulting from the purchase of goods and services.
xiii. Provisions
Provisions are recognised when the Consolidated Entity has a present obligation, the future sacrifice
of economic benefits is probable, and the amount of the provision can be measured reliably. The
amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at reporting date, taking into account the risks and uncertainties surrounding the
obligation. Where a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows.
Notes to the Consolidated Financial Statements
Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result
of exploration, development, production, transportation or storage activities undertaken, it is probable
that an outflow of economic benefits will be required to settle the obligation and the amount of the
provision can be measured reliably.
The provision for future restoration costs is the best estimate of the present value of the expenditure
required to settle the restoration obligation as at the reporting date. Future restoration costs are
reviewed annually and any change in the estimates are reflected in the present value of the restoration
provision at reporting date.
The initial estimate of the restoration and rehabilitation provision relating to exploration, development
and production facilities is capitalised into the cost of the related asset and amortised on the same
basis as the related asset, unless the present value arises from the production of inventory in the
period, in which case the amount is included in the cost of production for the period. Changes in the
estimate of the provision for restoration and rehabilitation are treated in the same manner, except that
the unwinding of the effect of discounting on the provision is recognised as a finance cost rather than
being capitalised into the cost of the related asset.
xiv. Employee benefits
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave
and long service leave when it is probable that settlement will be required and they are capable of
being measured reliably.
Provisions made in respect of employee benefits expected to be settled wholly within twelve months,
are measured at their nominal values using the remuneration rate expected to apply at the time of
settlement.
Provisions made in respect of employee benefits which are not expected to be settled within twelve
months are measured as the present value of the estimated future cash outflows to be made in respect
of services provided by employees up to the reporting date.
Contributions to defined contribution superannuation plans are expensed when incurred.
Defined contribution plans
xv. Financial assets
Other financial assets are classified into the following specified categories: financial assets ‘at fair
value through profit or loss’, ‘held-to-maturity investments’, ‘available-for-sale’ financial assets, and
‘loans and receivables’. The classification depends on the nature and purpose of the financial assets
and is determined at the time of initial recognition. The Group’s “other financial Assets” held during
the year comprise solely of assets classified as “loans and receivables”.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of
allocating interest income over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset, or, where
appropriate, a shorter period.
Income is recognised on an effective interest rate basis for debt instruments other than those financial
assets ‘at fair value through profit or loss’.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are
not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are
measured at amortised cost using the effective interest method less impairment. Interest is
recognised by applying the effective interest rate.
31 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
32
33
Notes to the Consolidated Financial Statements
arrangements of the acquiree are measured in accordance with AASB 2 ‘Share-based Payment’
at the acquisition date; and
• assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 ‘Non-
current Assets Held for Sale and Discontinued Operations’ are measured in accordance with that
Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity
interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets
acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of
the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree and the fair value of the
acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit
or loss as a bargain purchase gain.
Where the consideration transferred by the Group in a business combination includes assets or
liabilities resulting from a contingent consideration arrangement, the contingent consideration is
measured at its acquisition-date fair value. Changes in the fair value of the contingent consideration
that qualify as measurement period adjustments are adjusted retrospectively, with corresponding
adjustments against goodwill. Measurement period adjustments are adjustments that arise from
additional information obtained during the ‘measurement period’ (which cannot exceed one year from
the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify
as measurement period adjustments depends on how the contingent consideration is classified.
Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates
and its subsequent settlement is accounted for within equity. Contingent consideration that is classified
as an asset or liability is remeasured at subsequent reporting dates in accordance with AASB 139
‘Financial Instruments: Recognition and Measurement; or AASB 137 ‘Provisions, Contingent Liabilities
and Contingent Assets’, as appropriate, with the corresponding gain or loss being recognised in profit
or loss.
disposed of.
Where a business combination is achieved in stages, the Group’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group attains control)
and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in
the acquiree prior to the acquisition date that have previously been recognised in other comprehensive
income are reclassified to profit or loss where such treatment would be appropriate if that interest were
If the initial accounting for a business combination is incomplete by the end of the reporting period in
which the combination occurs, the Group reports provisional amounts for the items for which the
accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see
above), or additional assets or liabilities are recognised, to reflect new information obtained about facts
and circumstances that existed as of the acquisition date that, if known, would have affected the
amounts recognised as of that date.
xii. Trade and other payables
xiii. Provisions
Trade payables and other accounts payable are recognised when the Consolidated Entity becomes
obliged to make future payments resulting from the purchase of goods and services.
Provisions are recognised when the Consolidated Entity has a present obligation, the future sacrifice
of economic benefits is probable, and the amount of the provision can be measured reliably. The
amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at reporting date, taking into account the risks and uncertainties surrounding the
obligation. Where a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result
of exploration, development, production, transportation or storage activities undertaken, it is probable
that an outflow of economic benefits will be required to settle the obligation and the amount of the
provision can be measured reliably.
The provision for future restoration costs is the best estimate of the present value of the expenditure
required to settle the restoration obligation as at the reporting date. Future restoration costs are
reviewed annually and any change in the estimates are reflected in the present value of the restoration
provision at reporting date.
The initial estimate of the restoration and rehabilitation provision relating to exploration, development
and production facilities is capitalised into the cost of the related asset and amortised on the same
basis as the related asset, unless the present value arises from the production of inventory in the
period, in which case the amount is included in the cost of production for the period. Changes in the
estimate of the provision for restoration and rehabilitation are treated in the same manner, except that
the unwinding of the effect of discounting on the provision is recognised as a finance cost rather than
being capitalised into the cost of the related asset.
xiv. Employee benefits
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave
and long service leave when it is probable that settlement will be required and they are capable of
being measured reliably.
Provisions made in respect of employee benefits expected to be settled wholly within twelve months,
are measured at their nominal values using the remuneration rate expected to apply at the time of
settlement.
Provisions made in respect of employee benefits which are not expected to be settled within twelve
months are measured as the present value of the estimated future cash outflows to be made in respect
of services provided by employees up to the reporting date.
Defined contribution plans
Contributions to defined contribution superannuation plans are expensed when incurred.
xv. Financial assets
Other financial assets are classified into the following specified categories: financial assets ‘at fair
value through profit or loss’, ‘held-to-maturity investments’, ‘available-for-sale’ financial assets, and
‘loans and receivables’. The classification depends on the nature and purpose of the financial assets
and is determined at the time of initial recognition. The Group’s “other financial Assets” held during
the year comprise solely of assets classified as “loans and receivables”.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of
allocating interest income over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset, or, where
appropriate, a shorter period.
Income is recognised on an effective interest rate basis for debt instruments other than those financial
assets ‘at fair value through profit or loss’.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are
not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are
measured at amortised cost using the effective interest method less impairment. Interest is
recognised by applying the effective interest rate.
32
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 32
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Impairment of financial assets
Financial assets are assessed for indicators of impairment at the end of each reporting period.
Financial assets are considered to be impaired when there is objective evidence that, as a result of
one or more events that occurred after the initial recognition of the financial asset, the estimated future
cash flows of the investment have been affected.
For certain categories of financial asset, such as trade receivables, assets that are assessed not to be
impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence
of impairment for a portfolio of receivables could include the Group’s past experience of collecting
payments, an increase in the number of delayed payments in the portfolio past the average credit
period of 60 days, as well as observable changes in national or local economic conditions that correlate
with default on receivables. For financial assets carried at amortised cost, the amount of the
impairment loss recognised is the difference between the asset’s carrying amount and the present
value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets carried at cost, the amount of the impairment loss is measured as the difference
between the asset’s carrying amount and the present value of the estimated future cash flows
discounted at the current market rate of return for a similar financial asset. Such impairment loss will
not be reversed in subsequent periods.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial
assets with the exception of trade receivables, where the carrying amount is reduced through the use
of an allowance account. When a trade receivable is considered uncollectible, it is written off against
the allowance account. Subsequent recoveries of amounts previously written off are credited against
the allowance account. Changes in the carrying amount of the allowance account are recognised in
profit or loss.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognised, the previously recognised impairment loss is reversed through profit or
loss to the extent that the carrying amount of the investment at the date the impairment is reversed
does not exceed what the amortised cost would have been had the impairment not been recognised.
xvi. Financial Liabilities
Borrowings and other financial liabilities (including trade payables but excluding derivative liabilities)
are recognised initially at fair value, net of transaction costs incurred and are subsequently stated at
amortised cost. Any difference between the amounts originally received for borrowings and other
financial liabilities (net of transaction costs) and the redemption value is recognised in the income
statement over the period to maturity using the effective interest method.
Fair value
Fair value is the amount at which a financial instrument could be exchanged in an arm’s length
transaction between informed and willing parties. Where relevant market prices are available, these
have been used to determine fair values. In other cases, fair values have been calculated using
quotations from independent financial institutions, or by using valuation techniques consistent with
general market practice applicable to the instrument.
(a) The fair values of cash, short-term borrowings and loans to joint ventures and associates
approximate to their carrying values, as a result of their short maturity or because they carry
floating rates of interest.
(b) The fair values of medium and long-term borrowings are calculated as the present value of
the estimated future cash flows using quoted prices in active markets or an appropriate market
based yield curve. The carrying value of the borrowings is amortised cost.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial liability and
of allocating interest expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash outflows through the expected life of the financial liability, or,
where appropriate, a shorter period.
Notes to the Consolidated Financial Statements
An expense is recognised on an effective interest rate basis for debt instruments other than those
financial assets ‘at fair value through profit or loss’.
Ordinary share capital is recognised at the fair value of the consideration received by the Company. Any
transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from
equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the
Group’s own equity instruments. Any difference between the carrying amount and the consideration, if
reissued, is recognised in the share premium.
xvii. Issued Capital
of the share proceeds received.
xviii. Treasury Shares
xix. Foreign currency
Foreign currency transactions
The individual financial statements of each group entity are presented in its functional currency being
the currency of the primary economic environment in which the entity operates. For the purpose of the
consolidated financial statements, the results and financial position of each entity are expressed in
Australian dollars, which is the functional currency of Titan Minerals Limited and the presentation
currency for the consolidated financial statements.
All foreign currency transactions during the financial year are brought to account using the exchange
rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are
translated at the exchange rate existing at reporting date. Non-monetary assets and liabilities carried
at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date
when the fair value was determined. Exchange differences are recognised in profit or loss in the year
in which they arise except that exchange differences on monetary items receivable from or payable to
a foreign operation for which settlement is neither planned or likely to occur, which form part of the net
investment in a foreign operation, are recognised in the foreign currency translation reserve in the
consolidated financial statements and recognised in consolidated profit or loss on disposal of the net
investment.
Foreign operations
On consolidation, the assets and liabilities of the Consolidated Entity’s overseas operations are
translated at exchange rates prevailing at the yearend closing rate. Income and expense items are
translated at the average exchange rates for the year unless exchange rates fluctuate significantly.
Exchange differences arising, if any, are recognised in the foreign currency translation reserve, and
recognised in profit or loss on disposal of the foreign operation.
xx. Goods and services tax
except:
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST),
(i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised
as part of the cost of acquisition of an asset or as part of an item of expense; or
(ii)
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables. Cash flows are included in the cash flow statement on a gross basis. The
GST component of cash flows arising from investing and financing activities which is recoverable from,
or payable to, the taxation authority is classified as operating cash flows.
xxi. Share-based payments
Equity-settled share-based payments with employees and others providing similar services are
measured at the fair value of the equity instrument at the grant date. The expected life used in the
33 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
34
35
Notes to the Consolidated Financial Statements
Impairment of financial assets
Financial assets are assessed for indicators of impairment at the end of each reporting period.
Financial assets are considered to be impaired when there is objective evidence that, as a result of
one or more events that occurred after the initial recognition of the financial asset, the estimated future
cash flows of the investment have been affected.
For certain categories of financial asset, such as trade receivables, assets that are assessed not to be
impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence
of impairment for a portfolio of receivables could include the Group’s past experience of collecting
payments, an increase in the number of delayed payments in the portfolio past the average credit
period of 60 days, as well as observable changes in national or local economic conditions that correlate
with default on receivables. For financial assets carried at amortised cost, the amount of the
impairment loss recognised is the difference between the asset’s carrying amount and the present
value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets carried at cost, the amount of the impairment loss is measured as the difference
between the asset’s carrying amount and the present value of the estimated future cash flows
discounted at the current market rate of return for a similar financial asset. Such impairment loss will
not be reversed in subsequent periods.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial
assets with the exception of trade receivables, where the carrying amount is reduced through the use
of an allowance account. When a trade receivable is considered uncollectible, it is written off against
the allowance account. Subsequent recoveries of amounts previously written off are credited against
the allowance account. Changes in the carrying amount of the allowance account are recognised in
profit or loss.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognised, the previously recognised impairment loss is reversed through profit or
loss to the extent that the carrying amount of the investment at the date the impairment is reversed
does not exceed what the amortised cost would have been had the impairment not been recognised.
xvi. Financial Liabilities
Borrowings and other financial liabilities (including trade payables but excluding derivative liabilities)
are recognised initially at fair value, net of transaction costs incurred and are subsequently stated at
amortised cost. Any difference between the amounts originally received for borrowings and other
financial liabilities (net of transaction costs) and the redemption value is recognised in the income
statement over the period to maturity using the effective interest method.
Fair value
Fair value is the amount at which a financial instrument could be exchanged in an arm’s length
transaction between informed and willing parties. Where relevant market prices are available, these
have been used to determine fair values. In other cases, fair values have been calculated using
quotations from independent financial institutions, or by using valuation techniques consistent with
general market practice applicable to the instrument.
(a) The fair values of cash, short-term borrowings and loans to joint ventures and associates
approximate to their carrying values, as a result of their short maturity or because they carry
floating rates of interest.
(b) The fair values of medium and long-term borrowings are calculated as the present value of
the estimated future cash flows using quoted prices in active markets or an appropriate market
based yield curve. The carrying value of the borrowings is amortised cost.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial liability and
of allocating interest expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash outflows through the expected life of the financial liability, or,
where appropriate, a shorter period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
An expense is recognised on an effective interest rate basis for debt instruments other than those
financial assets ‘at fair value through profit or loss’.
xvii. Issued Capital
Ordinary share capital is recognised at the fair value of the consideration received by the Company. Any
transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction
of the share proceeds received.
xviii. Treasury Shares
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from
equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the
Group’s own equity instruments. Any difference between the carrying amount and the consideration, if
reissued, is recognised in the share premium.
xix. Foreign currency
Foreign currency transactions
The individual financial statements of each group entity are presented in its functional currency being
the currency of the primary economic environment in which the entity operates. For the purpose of the
consolidated financial statements, the results and financial position of each entity are expressed in
Australian dollars, which is the functional currency of Titan Minerals Limited and the presentation
currency for the consolidated financial statements.
All foreign currency transactions during the financial year are brought to account using the exchange
rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are
translated at the exchange rate existing at reporting date. Non-monetary assets and liabilities carried
at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date
when the fair value was determined. Exchange differences are recognised in profit or loss in the year
in which they arise except that exchange differences on monetary items receivable from or payable to
a foreign operation for which settlement is neither planned or likely to occur, which form part of the net
investment in a foreign operation, are recognised in the foreign currency translation reserve in the
consolidated financial statements and recognised in consolidated profit or loss on disposal of the net
investment.
Foreign operations
On consolidation, the assets and liabilities of the Consolidated Entity’s overseas operations are
translated at exchange rates prevailing at the yearend closing rate. Income and expense items are
translated at the average exchange rates for the year unless exchange rates fluctuate significantly.
Exchange differences arising, if any, are recognised in the foreign currency translation reserve, and
recognised in profit or loss on disposal of the foreign operation.
xx. Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST),
except:
(i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised
as part of the cost of acquisition of an asset or as part of an item of expense; or
(ii)
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables. Cash flows are included in the cash flow statement on a gross basis. The
GST component of cash flows arising from investing and financing activities which is recoverable from,
or payable to, the taxation authority is classified as operating cash flows.
xxi. Share-based payments
Equity-settled share-based payments with employees and others providing similar services are
measured at the fair value of the equity instrument at the grant date. The expected life used in the
34
35
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
model has been adjusted, based on management’s best estimate, for the effects of non-transferability,
exercise restrictions, and behavioural considerations.
Current and deferred tax for the period
The fair value determined at the grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will
eventually vest.
Equity-settled share-based payment transactions with other parties are measured at the fair value of
the goods and services received, except where the fair value cannot be estimated reliably, in which
case they are measured at the fair value of the equity instruments granted, measured at the date the
entity obtains the goods or the counterparty renders the service.
For cash-settled share-based payments, a liability equal to the portion of the goods or services
received is recognised at the current fair value determined at each reporting date.
xxii. Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
Current tax currently payable is based on taxable profit for the year. Taxable profit differs from profit
as reported in the consolidated statement of comprehensive income because of items of income or
expense that are taxable or deductible in other periods and items that are never taxable or deductible.
The company’s liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the end of the reporting year.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible temporary differences to the extent that
it is probable that taxable profits will be available against which those deductible temporary differences
can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments
in subsidiaries and associates, and interests in joint ventures, except where the company is able to
control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences
associated with such investments and interests are only recognised to the extent that it is probable
that there will be sufficient taxable profits against which to utilise the benefits of the temporary
differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would follow from the manner in which the
company expects, at the end of the reporting period, to recover or settle the carrying amount of its
assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same
taxation authority and the company intends to settle its current tax assets and liabilities on a net
basis.
Current and deferred tax are recognised as an expense or income in profit or loss, except when they
relate to items that are recognised outside profit or loss (whether in other comprehensive income or
directly in equity), in which case the tax is also recognised outside profit or loss, or where they arise
from the initial accounting for a business combination. In the case of a business combination, the tax
effect is included in the accounting for the business combination.
xxiii. Leasing
UNCERTAINTY
financial statements.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
The following are the key estimates that management has made in the process of applying the Group’s
accounting policies and that have the most significant effects on the amounts recognised in the
(a) Impairment of property, plant and equipment
The Group reviews for impairment of property, plant and equipment, in accordance with its
accounting policy. The recoverable amount of these assets has been determined based on the
higher of the assets’ fair value less costs to sell and value in use. These calculations require the
use of estimates and judgements.
In estimating the fair value of an asset or a liability, the Group uses market-observable data to the
extent it is available. The Group may engage the assistance of third parties to establish the
appropriate valuation techniques and inputs to the valuation model.
(b) Impairment of deferred exploration expenditure
The future recoverability of deferred exploration and evaluation expenditure is dependent on
several
factors,
including whether
the Group decides
to exploit
the
related
tenement/lease/concession itself or, if not, whether it successfully recovers the related exploration
and evaluation asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources,
future technological changes, costs of drilling and production, production rates, future legal
changes (including changes to environmental restoration obligations) and changes to commodity
prices.
(c) Impairment of Goodwill
The Group reviews for impairment on goodwill at each reporting date. In determining the
recoverable amount of relevant cash generating units, in the absence of quoted market prices,
estimations are made regarding the present value of future cash flows. For goodwill, expected
future cash flow estimation is based on future production profiles, commodity prices and costs.
These estimates and assumptions are subject to risk and uncertainty. Therefore, there is a
possibility that changes in circumstances will impact these projections, which may impact the
recoverable amount of the goodwill.
Furthermore, as the accounting for the business combination has been provisionally determined
(refer Note 22) as at the date of this report, the recognition of and associated impairment
assessment requirements are subject to change.
35 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
36
37
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
model has been adjusted, based on management’s best estimate, for the effects of non-transferability,
exercise restrictions, and behavioural considerations.
Current and deferred tax for the period
Current and deferred tax are recognised as an expense or income in profit or loss, except when they
relate to items that are recognised outside profit or loss (whether in other comprehensive income or
directly in equity), in which case the tax is also recognised outside profit or loss, or where they arise
from the initial accounting for a business combination. In the case of a business combination, the tax
effect is included in the accounting for the business combination.
xxiii. Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
The following are the key estimates that management has made in the process of applying the Group’s
accounting policies and that have the most significant effects on the amounts recognised in the
financial statements.
(a) Impairment of property, plant and equipment
The Group reviews for impairment of property, plant and equipment, in accordance with its
accounting policy. The recoverable amount of these assets has been determined based on the
higher of the assets’ fair value less costs to sell and value in use. These calculations require the
use of estimates and judgements.
In estimating the fair value of an asset or a liability, the Group uses market-observable data to the
extent it is available. The Group may engage the assistance of third parties to establish the
appropriate valuation techniques and inputs to the valuation model.
(b) Impairment of deferred exploration expenditure
The future recoverability of deferred exploration and evaluation expenditure is dependent on
several
related
tenement/lease/concession itself or, if not, whether it successfully recovers the related exploration
and evaluation asset through sale.
the Group decides
including whether
to exploit
factors,
the
Factors that could impact the future recoverability include the level of reserves and resources,
future technological changes, costs of drilling and production, production rates, future legal
changes (including changes to environmental restoration obligations) and changes to commodity
prices.
(c) Impairment of Goodwill
The Group reviews for impairment on goodwill at each reporting date. In determining the
recoverable amount of relevant cash generating units, in the absence of quoted market prices,
estimations are made regarding the present value of future cash flows. For goodwill, expected
future cash flow estimation is based on future production profiles, commodity prices and costs.
These estimates and assumptions are subject to risk and uncertainty. Therefore, there is a
possibility that changes in circumstances will impact these projections, which may impact the
recoverable amount of the goodwill.
Furthermore, as the accounting for the business combination has been provisionally determined
(refer Note 22) as at the date of this report, the recognition of and associated impairment
assessment requirements are subject to change.
36
37
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 36
The fair value determined at the grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will
eventually vest.
Equity-settled share-based payment transactions with other parties are measured at the fair value of
the goods and services received, except where the fair value cannot be estimated reliably, in which
case they are measured at the fair value of the equity instruments granted, measured at the date the
entity obtains the goods or the counterparty renders the service.
For cash-settled share-based payments, a liability equal to the portion of the goods or services
received is recognised at the current fair value determined at each reporting date.
xxii. Income tax
Current tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax currently payable is based on taxable profit for the year. Taxable profit differs from profit
as reported in the consolidated statement of comprehensive income because of items of income or
expense that are taxable or deductible in other periods and items that are never taxable or deductible.
The company’s liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the end of the reporting year.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible temporary differences to the extent that
it is probable that taxable profits will be available against which those deductible temporary differences
can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments
in subsidiaries and associates, and interests in joint ventures, except where the company is able to
control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences
associated with such investments and interests are only recognised to the extent that it is probable
that there will be sufficient taxable profits against which to utilise the benefits of the temporary
differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would follow from the manner in which the
company expects, at the end of the reporting period, to recover or settle the carrying amount of its
assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same
taxation authority and the company intends to settle its current tax assets and liabilities on a net
basis.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
4. SEGMENT INFORMATION
Identification of Reportable Segments
The Group has identified its operating segments based on the internal reports that are reviewed and used
by the Board (the chief operating decision-maker) in assessing performance and in determining the
allocation of resources. The operating segments are identified by the Board based on reporting lines and
the nature of services provided. Discrete financial information about each of these operating segments is
reported to the Board on a monthly basis. The Group operates predominately in Peru. The reportable
segments are based on aggregated operating segments determined by the similarity of the services
provided and other factors.
Segments
The Group has one reportable operating segment, which is the gold toll processing operation in Peru. The
information is further analysed based on the mineral sold within the region.
Segment result represents the profit or loss earned by each segment without allocation of corporate
administration costs, investment revenue and finance costs or income tax expense. This is the measure
reported to the chief operating decision maker for the purposes of resource allocation and assessment of
segment performance.
Holding Company
Holding Company costs (or unallocated costs, assets and liabilities) are those costs which are managed
on a Group basis and not allocated to business segments. They include costs associated with executive
management, strategic planning and compliance costs.
Accounting Policies
The accounting policies of the reportable segments are the same as the Group’s accounting policies
described in Note 2. Segment profit represents the profit earned by each segment without allocation of
central administration costs and directors’ salaries, share of profits of associates, gain recognised on
disposal of interest in former associate, investment income, gains and losses, finance costs and income
tax expense. This is the measure reported to the chief operating decision maker for the purposes of
resource allocation and assessment of segment performance.
Intersegment Transfers
There have been no intersegment sales during the year.
The following is an analysis of the Group’s revenue and results by reportable operating segment for the
year under review:
Revenue
Year ended
Segment Result
Year ended
31-Dec-18
31-Dec-17
31-Dec-18
31-Dec-17
5,802,384
5,802,384
Continuing operations
Segment result before income tax – Peru
Gold Toll Treatment Processing
Other revenue
Central administration costs and director
salaries and depreciation
Foreign exchange gain / (loss)
Finance costs
Loan forgiveness
Impairment expense / (reversal)
DOCA Expenses
Share Based Payments
(Loss) / profit before income tax
expense
Income tax expense
-
-
591,164
591,164
15,799
2,896
(3,338,468)
(600,762)
297,248
(10,903)
(7,066,878)
(1,230,532)
(16,261)
13,205,162
977,794
(2,350,000)
(4,527)
(10,742,570)
11,214,302
-
-
-
-
-
-
-
Loss) / profit for the year from continuing operations
(10,742,570)
11,214,302
The revenue reported above represents revenue generated from processed gold sales, toll treatment
revenues and concentrate sales to external customers.
The following is an analysis of the Group’s assets by reportable operating segment:
The following is an analysis of the Group’s liabilities by reportable operating segment:
Assets
Peru Gold Toll Treatment Processing
Unallocated assets
Consolidated total assets
Liabilities
Peru Gold Toll Treatment Processing
Unallocated liabilities
Consolidated total liabilities
31-Dec-18
31-Dec-17
16,988,800
10,006,061
26,994,861
1,270,874
3,221,567
4,492,441
31-Dec-18
31-Dec-17
(5,882,362)
(270,804)
(6,153,166)
(3,347,207)
(96,762)
(3,443,969)
38
37 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
39
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
4. SEGMENT INFORMATION
Identification of Reportable Segments
The Group has identified its operating segments based on the internal reports that are reviewed and used
by the Board (the chief operating decision-maker) in assessing performance and in determining the
allocation of resources. The operating segments are identified by the Board based on reporting lines and
the nature of services provided. Discrete financial information about each of these operating segments is
reported to the Board on a monthly basis. The Group operates predominately in Peru. The reportable
segments are based on aggregated operating segments determined by the similarity of the services
provided and other factors.
Segments
The Group has one reportable operating segment, which is the gold toll processing operation in Peru. The
information is further analysed based on the mineral sold within the region.
Segment result represents the profit or loss earned by each segment without allocation of corporate
administration costs, investment revenue and finance costs or income tax expense. This is the measure
reported to the chief operating decision maker for the purposes of resource allocation and assessment of
segment performance.
Holding Company
Accounting Policies
Holding Company costs (or unallocated costs, assets and liabilities) are those costs which are managed
on a Group basis and not allocated to business segments. They include costs associated with executive
management, strategic planning and compliance costs.
The accounting policies of the reportable segments are the same as the Group’s accounting policies
described in Note 2. Segment profit represents the profit earned by each segment without allocation of
central administration costs and directors’ salaries, share of profits of associates, gain recognised on
disposal of interest in former associate, investment income, gains and losses, finance costs and income
tax expense. This is the measure reported to the chief operating decision maker for the purposes of
resource allocation and assessment of segment performance.
Intersegment Transfers
There have been no intersegment sales during the year.
The following is an analysis of the Group’s revenue and results by reportable operating segment for the
year under review:
Revenue
Year ended
Segment Result
Year ended
31-Dec-18
31-Dec-17
31-Dec-18
31-Dec-17
Continuing operations
Segment result before income tax – Peru
Gold Toll Treatment Processing
5,802,384
5,802,384
Other revenue
Central administration costs and director
salaries and depreciation
Foreign exchange gain / (loss)
Finance costs
Loan forgiveness
Impairment expense / (reversal)
DOCA Expenses
Share Based Payments
(Loss) / profit before income tax
expense
Income tax expense
Loss) / profit for the year from continuing operations
-
-
591,164
591,164
15,799
-
-
2,896
(3,338,468)
(600,762)
297,248
(10,903)
-
(7,066,878)
-
(1,230,532)
(16,261)
-
13,205,162
977,794
(2,350,000)
(4,527)
(10,742,570)
11,214,302
-
(10,742,570)
-
11,214,302
The revenue reported above represents revenue generated from processed gold sales, toll treatment
revenues and concentrate sales to external customers.
The following is an analysis of the Group’s assets by reportable operating segment:
Assets
Peru Gold Toll Treatment Processing
Unallocated assets
Consolidated total assets
31-Dec-18
31-Dec-17
16,988,800
10,006,061
26,994,861
1,270,874
3,221,567
4,492,441
The following is an analysis of the Group’s liabilities by reportable operating segment:
Liabilities
Peru Gold Toll Treatment Processing
Unallocated liabilities
Consolidated total liabilities
31-Dec-18
31-Dec-17
(5,882,362)
(270,804)
(6,153,166)
(3,347,207)
(96,762)
(3,443,969)
38
39
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
5. REVENUE AND EXPENSES
The following is an analysis of the Group’s revenue for the year from continuing operations:
Consolidated
31-Dec-18
31-Dec-17
(a) Revenue
Gold Toll Treatment Processing
Revenue for continuing operations
Other income
Other Revenue
(b) Expenses
(i) Depreciation
Plant and equipment
(ii) Administration expenses
Compliance expenses
Legal costs
Professional fees and consultants
Director fees
Advertising and investor relations
Travel and accommodation
Employee benefits expense
Other Administration costs
(iii) Impairment (expense) / reversal
Impairment / reversal of impairment - San Santiago1
Impairment of Deferred exploration and evaluation expenditure assets
and mine assets2
Impairments relating to Tulin Plant3
Impairment – other receivables
5,802,384
5,802,384
15,799
15,799
(87,202)
(87,202)
(509,556)
(81,444)
(1,313,330)
(331,000)
(51,968)
(276,318)
(255,080)
(278,440)
(3,097,136)
(1,000,000)
(3,838,030)
(2,003,072)
(225,776)
(7,066,878)
-
-
2,896
2,896
-
-
*
*
*
*
*
*
*
*
(600,762)
1,000,000
-
-
(22,206)
977,794
1The Company reversed the provision for impairment upon the directors resumed custodianship of the Company
from administration on 4 October 2017. With the successful acquisition of Andina Resources Limited (including
the Vista Gold Plant), the Company decided that the gold circuit at San Santiago would not be restarted. The San
Santiago plant remains in care and maintenance while the Company assesses future options for the asset. As a
result, the Company has fully impaired the San Santiago plant in the 2018 financial year.
2As a result of the acquisition of Andina Resources Limited as described in Note 23, the Company acquired the
full rights to the Torrecillas concession, recognising the fair value of the asset acquired of $5.4 million.
While the Company still continues it’s exploration plans for this asset, as the asset currently remains as an early
stage exploration project, the Company has decided to impair the value of the Torrecillas asset down to Group
costs incurred on the project. The impairment is made up of impairment of Deferred exploration and evaluation
expenditure assets $5,228,298 net of the derecognition of the deferred tax liability of $1,390,268 recognised as a
result of business combination.
Notes to the Consolidated Financial Statements
3The Tulin Plant, operated by Tulin Gold Co. SAC (“Tulin”), a subsidiary of Andina Resources Limited, was
operating under a mining assignment agreement with a private owner and as a result of the expiry of the plant
lease, Tulin has ceased processing ore at the facility. The expiry of the lease and the non-compliance has
resulted in a dispute in finalising the termination of assignment. The Company is working with DREM (‘The
Direccion Regional De Energia Y Minas’ or ‘The Regional Energy and Mines Institue’) with a focus on the return
of the facility back to the underlying owner. Until there is a resolution, the Company is restricted from accessing
assets owned by the Company, including ore material stockpiles and operational equipment. As a result of the
above, a provision for impairment amounting $2,003,072 over the restricted assets have been raised.
* The Company was under External administration from 25 August 2015 to 4 October 2017, consequently the
Company did not have sufficient information to allow the level of disclosure required for the year ended 31
December 2017.
(iv) Loan Forgiveness:
Cash settlements
Equity settlements
Book value of loans forgiven
6.
INCOME TAXES
Income tax recognised in profit or loss
Tax expense comprises:
Deferred tax expense
Total tax expense
The prima facie income tax expense on pre-tax accounting loss / profit from continuing operations reconciles to
the income tax expense in the financial statements as follows:
(Loss) / Profit from continuing operations
Income tax calculated at 27.5% (2017: 27.5%)
Expenses that are not deductible / (income that is exempt) in
determining taxable profit
jurisdictions
Effect of different tax rates of subsidiaries operating in other
Tax benefit not recognised as recovery not probable
(3,083,933)
The tax rate used in the above reconciliation is the tax rate of 27.5% (2017: 27.5%) payable by Australian
corporate entities on taxable profits under Australian tax law.
Deferred tax balances as at 31 December 2018 were not recognised in the statement of financial position.
These relate to the deferred tax assets from the following accounts:
Temporary differences
Tax losses – revenue
Tax losses – capital
Consolidated
31-Dec-18
31-Dec-17
-
-
-
-
(1,379,183)
(4,739,676)
19,324,021
13,205,162
Consolidated
31-Dec-18
31-Dec-17
-
-
-
-
(10,742,570)
11,204,302
(2,954,207)
3,083,933
2,326,532
57,087
570,588
-
168,239
1,665,551
8,663,325
10,497,115
1,001,705
8,663,325
9,665,030
-
-
-
-
40
39 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
41
Notes to the Consolidated Financial Statements
The following is an analysis of the Group’s revenue for the year from continuing operations:
Consolidated
31-Dec-18
31-Dec-17
5. REVENUE AND EXPENSES
(a) Revenue
Gold Toll Treatment Processing
Revenue for continuing operations
Other income
Other Revenue
(b) Expenses
(i) Depreciation
Plant and equipment
(ii) Administration expenses
Compliance expenses
Legal costs
Professional fees and consultants
Director fees
Advertising and investor relations
Travel and accommodation
Employee benefits expense
Other Administration costs
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
3The Tulin Plant, operated by Tulin Gold Co. SAC (“Tulin”), a subsidiary of Andina Resources Limited, was
operating under a mining assignment agreement with a private owner and as a result of the expiry of the plant
lease, Tulin has ceased processing ore at the facility. The expiry of the lease and the non-compliance has
resulted in a dispute in finalising the termination of assignment. The Company is working with DREM (‘The
Direccion Regional De Energia Y Minas’ or ‘The Regional Energy and Mines Institue’) with a focus on the return
of the facility back to the underlying owner. Until there is a resolution, the Company is restricted from accessing
assets owned by the Company, including ore material stockpiles and operational equipment. As a result of the
above, a provision for impairment amounting $2,003,072 over the restricted assets have been raised.
(iv) Loan Forgiveness:
Cash settlements
Equity settlements
Book value of loans forgiven
Consolidated
31-Dec-18
31-Dec-17
-
-
-
-
(1,379,183)
(4,739,676)
19,324,021
13,205,162
* The Company was under External administration from 25 August 2015 to 4 October 2017, consequently the
Company did not have sufficient information to allow the level of disclosure required for the year ended 31
December 2017.
6.
INCOME TAXES
Income tax recognised in profit or loss
Tax expense comprises:
Deferred tax expense
Total tax expense
Consolidated
31-Dec-18
31-Dec-17
-
-
-
-
(3,097,136)
(600,762)
The prima facie income tax expense on pre-tax accounting loss / profit from continuing operations reconciles to
the income tax expense in the financial statements as follows:
5,802,384
5,802,384
15,799
15,799
(87,202)
(87,202)
(509,556)
(81,444)
(1,313,330)
(331,000)
(51,968)
(276,318)
(255,080)
(278,440)
(1,000,000)
(3,838,030)
(2,003,072)
(225,776)
(7,066,878)
2,896
2,896
-
-
-
-
*
*
*
*
*
*
*
*
-
-
1,000,000
(22,206)
977,794
(iii) Impairment (expense) / reversal
Impairment / reversal of impairment - San Santiago1
Impairment of Deferred exploration and evaluation expenditure assets
and mine assets2
Impairments relating to Tulin Plant3
Impairment – other receivables
1The Company reversed the provision for impairment upon the directors resumed custodianship of the Company
from administration on 4 October 2017. With the successful acquisition of Andina Resources Limited (including
the Vista Gold Plant), the Company decided that the gold circuit at San Santiago would not be restarted. The San
Santiago plant remains in care and maintenance while the Company assesses future options for the asset. As a
result, the Company has fully impaired the San Santiago plant in the 2018 financial year.
2As a result of the acquisition of Andina Resources Limited as described in Note 23, the Company acquired the
full rights to the Torrecillas concession, recognising the fair value of the asset acquired of $5.4 million.
While the Company still continues it’s exploration plans for this asset, as the asset currently remains as an early
stage exploration project, the Company has decided to impair the value of the Torrecillas asset down to Group
costs incurred on the project. The impairment is made up of impairment of Deferred exploration and evaluation
expenditure assets $5,228,298 net of the derecognition of the deferred tax liability of $1,390,268 recognised as a
result of business combination.
(Loss) / Profit from continuing operations
Income tax calculated at 27.5% (2017: 27.5%)
Expenses that are not deductible / (income that is exempt) in
determining taxable profit
Effect of different tax rates of subsidiaries operating in other
jurisdictions
Tax benefit not recognised as recovery not probable
The tax rate used in the above reconciliation is the tax rate of 27.5% (2017: 27.5%) payable by Australian
corporate entities on taxable profits under Australian tax law.
Deferred tax balances as at 31 December 2018 were not recognised in the statement of financial position.
These relate to the deferred tax assets from the following accounts:
Temporary differences
Tax losses – revenue
Tax losses – capital
168,239
1,665,551
8,663,325
10,497,115
(10,742,570)
11,204,302
(2,954,207)
3,083,933
2,326,532
-
1,001,705
8,663,325
9,665,030
57,087
570,588
-
-
(3,083,933)
-
-
40
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 40
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
* The Company was under External administration from 25 August 2015 to 4 October 2017, consequently the
Company did not have sufficient information to allow the level of disclosure required for the year ended 31
December 2017.
Notes to the Consolidated Financial Statements
7. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
GST/VAT receivable
Other receivables
At the reporting date no trade receivables were past due but not impaired.
Non-Current
Deposits
Other receivables
8. PREPAYMENTS
Current
Advances to suppliers(1)
Other prepayments
31-Dec-18
31-Dec-17
14,850
1,010,683
341,769
1,367,302
-
98,572
191,204
289,776
31-Dec-18
31-Dec-17
80,000
-
80,000
-
98,097
98,097
31-Dec-18
31-Dec-17
Property, plant and equipment
868,381
21,582
889,963
-
-
-
(1) This balance primarily relates to advances given to mineral suppliers to secure goods in the ordinary
course of business.
9.
INVENTORIES
Raw materials in stockpile
In process ore
Auxilliary materials
10. CURRENT TAX ASSET
Current tax receivable
The balance reflects tax that are eligible for a refund from the Peruvian tax authorities as a result of income
tax prepayments and the export of minerals.
11. ASSETS CLASSIFIED AS HELD FOR SALE
31-Dec-18
31-Dec-17
865,778
208,791
6,746
1,081,315
-
-
-
31-Dec-18
31-Dec-17
825,194
825,194
-
-
31-Dec-18
31-Dec-17
1,716,454
1,716,454
-
-
41 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
42
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
9.
INVENTORIES
Raw materials in stockpile
In process ore
Auxilliary materials
10. CURRENT TAX ASSET
At the reporting date no trade receivables were past due but not impaired.
Current tax receivable
31-Dec-18
31-Dec-17
865,778
208,791
6,746
1,081,315
-
-
-
31-Dec-18
31-Dec-17
825,194
825,194
-
-
The balance reflects tax that are eligible for a refund from the Peruvian tax authorities as a result of income
tax prepayments and the export of minerals.
11. ASSETS CLASSIFIED AS HELD FOR SALE
31-Dec-18
31-Dec-17
Property, plant and equipment
31-Dec-18
31-Dec-17
1,716,454
1,716,454
-
-
Notes to the Consolidated Financial Statements
* The Company was under External administration from 25 August 2015 to 4 October 2017, consequently the
Company did not have sufficient information to allow the level of disclosure required for the year ended 31
December 2017.
7. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
GST/VAT receivable
Other receivables
Non-Current
Deposits
Other receivables
8. PREPAYMENTS
Current
Advances to suppliers(1)
Other prepayments
31-Dec-18
31-Dec-17
14,850
1,010,683
341,769
1,367,302
-
98,572
191,204
289,776
31-Dec-18
31-Dec-17
80,000
-
80,000
-
98,097
98,097
868,381
21,582
889,963
-
-
-
(1) This balance primarily relates to advances given to mineral suppliers to secure goods in the ordinary
course of business.
42
43
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
a
t
I
n
S
a
n
S
a
n
t
i
a
g
o
.
A
s
a
r
e
s
u
l
t
,
t
h
e
G
r
o
u
p
h
a
s
r
e
c
o
g
n
s
e
d
a
n
i
i
m
p
a
i
r
m
e
n
t
o
f
t
h
e
f
u
l
l
y
i
c
a
r
r
y
n
g
v
a
u
e
o
f
l
$
1
,
0
0
0
,
0
0
0
.
4
4
t
h
e
3
1
D
e
c
e
m
b
e
r
2
0
1
8
f
i
n
a
n
c
a
i
l
y
e
a
r
,
w
i
t
h
t
h
e
s
u
c
c
e
s
s
f
u
l
i
a
c
q
u
s
i
t
i
o
n
o
f
i
A
n
d
n
a
R
e
s
o
u
r
c
e
s
i
L
m
i
’
i
t
e
d
s
V
s
t
a
G
o
d
P
a
n
t
,
l
l
T
i
t
a
n
d
e
c
d
e
d
i
i
t
w
i
l
l
n
o
t
r
e
s
t
a
r
t
t
h
e
g
o
d
l
c
i
r
c
u
i
t
D
e
c
e
m
b
e
r
2
0
1
7
f
i
n
a
n
c
a
i
l
y
e
a
r
.
a
p
p
r
o
v
e
d
a
c
o
n
s
e
r
v
a
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
e
v
e
r
s
e
t
h
e
p
r
o
v
s
o
n
i
i
f
o
r
i
m
p
a
i
r
m
e
n
t
b
a
c
k
t
o
a
n
a
s
c
r
i
b
e
d
f
a
i
r
l
v
a
u
e
o
f
A
U
$
1
,
0
0
0
,
0
0
0
f
o
r
t
h
e
S
a
n
S
a
n
t
i
a
g
o
l
p
a
n
t
d
u
r
i
n
g
t
h
e
3
1
n
o
w
t
h
a
t
t
h
e
C
o
m
p
a
n
y
w
a
s
o
u
t
o
f
i
a
d
m
n
s
t
r
a
i
t
i
o
n
.
T
h
e
l
v
a
u
e
r
u
s
e
d
a
n
o
r
d
e
r
o
f
m
a
g
n
i
t
u
d
e
l
v
a
u
a
t
i
o
n
e
s
t
i
m
a
t
e
a
n
d
a
r
r
i
v
e
d
a
t
a
f
a
i
r
l
v
a
u
e
o
f
U
S
$
1
,
3
0
2
,
5
0
0
.
T
h
e
d
i
r
e
c
t
o
r
s
$
n
i
l
.
T
h
e
d
i
r
e
c
t
o
r
s
t
o
b
a
n
e
d
i
a
t
h
i
r
d
-
p
a
r
t
y
l
v
a
u
a
t
i
o
n
r
e
p
o
r
t
o
n
t
h
e
S
a
n
S
a
n
t
i
a
g
o
l
p
a
n
t
f
r
o
m
P
r
i
m
e
r
o
G
r
o
u
p
P
t
y
L
t
d
t
o
a
s
c
e
r
t
a
n
w
h
a
t
i
t
h
e
f
a
i
r
l
v
a
u
e
o
f
t
h
e
l
p
a
n
t
s
h
o
u
d
l
b
e
i
o
d
a
n
s
h
p
i
o
f
t
h
e
C
o
m
p
a
n
y
i
t
w
a
s
n
o
t
e
d
t
h
a
t
t
h
e
S
a
n
S
a
n
t
i
a
g
o
l
p
a
n
t
h
a
s
a
p
r
o
v
s
o
n
i
i
f
o
r
i
m
p
a
i
r
m
e
n
t
t
h
a
t
b
r
o
u
g
h
t
t
h
e
b
o
o
k
l
v
a
u
e
t
o
N
e
t
b
o
o
k
v
a
l
u
e
A
s
a
t
3
1
D
e
c
e
m
b
e
r
2
0
1
8
A
s
a
t
3
1
D
e
c
e
m
b
e
r
2
0
1
7
*
W
h
e
n
t
h
e
d
i
r
e
c
t
o
r
s
r
e
s
u
m
e
d
c
u
s
t
I
m
p
a
i
r
m
e
n
t
E
x
c
h
a
n
g
e
d
i
f
f
e
r
e
n
c
e
s
B
a
l
a
n
c
e
a
t
3
1
D
e
c
e
m
b
e
r
2
0
1
8
T
r
a
n
s
f
e
r
r
e
d
t
o
h
e
d
f
o
r
l
l
s
a
e
(
N
o
t
e
1
1
)
i
D
s
p
o
s
a
s
l
D
e
p
r
e
c
a
t
i
o
n
i
i
A
c
q
u
s
i
t
i
o
n
o
f
i
s
u
b
s
d
a
r
y
i
B
a
l
a
n
c
e
a
t
3
1
D
e
c
e
m
b
e
r
2
0
1
7
i
B
m
a
p
l
a
a
n
i
r
c
m
e
e
a
n
t
t
3
1
D
e
c
e
m
b
e
r
2
0
1
6
A
c
c
u
m
u
l
a
t
e
d
d
e
p
r
e
c
i
a
t
i
o
n
a
n
d
E
x
c
h
a
n
g
e
d
i
f
f
e
r
e
n
c
e
s
B
a
l
a
n
c
e
a
t
3
1
D
e
c
e
m
b
e
r
2
0
1
8
T
r
a
n
s
f
e
r
r
e
d
t
o
h
e
d
f
o
r
l
l
s
a
e
(
N
o
t
e
1
1
)
i
D
s
p
o
s
a
s
l
A
d
d
i
t
i
o
n
s
i
A
c
q
u
s
i
t
i
o
n
o
f
i
s
u
b
s
d
a
r
y
i
A
s
s
e
t
s
a
t
C
o
s
t
B
a
l
a
n
c
e
a
t
3
1
D
e
c
e
m
b
e
r
2
0
1
7
A
d
d
i
t
i
o
n
s
R
e
v
e
r
s
a
l
o
f
i
m
p
a
i
r
m
e
n
t
B
a
l
a
n
c
e
a
t
3
1
D
e
c
e
m
b
e
r
2
0
1
6
1
,
0
0
0
,
0
0
0
(
1
,
0
0
0
,
0
0
0
)
(
1
,
0
0
0
,
0
0
0
)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
,
2
0
0
3
3
0
,
1
,
0
0
0
,
0
0
0
1
,
2
0
0
3
3
0
,
-
-
-
-
-
1
,
0
2
5
4
7
4
,
1
2
0
,
3
2
2
5
4
,
5
3
4
-
-
1
,
0
0
0
,
0
0
0
1
,
0
0
0
,
0
0
0
-
-
-
-
(
7
3
,
3
6
8
)
(
3
1
,
8
0
0
)
(
2
,
6
5
7
)
-
(
2
0
,
4
1
6
)
(
3
4
,
9
9
6
)
1
6
,
5
0
1
-
-
7
3
,
6
3
3
3
,
0
2
2
(
1
7
,
8
9
5
)
8
8
,
5
0
6
-
-
-
-
(
3
6
0
,
8
6
2
)
(
4
,
9
7
5
)
3
1
,
3
9
8
-
-
(
3
5
6
,
5
0
2
)
(
3
0
,
7
8
3
)
-
-
7
4
5
,
5
9
6
3
6
,
1
9
3
-
(
1
8
5
,
6
5
8
)
4
4
1
,
6
0
6
4
5
3
,
4
5
5
-
-
(
3
3
1
)
(
3
)
-
-
-
(
3
2
8
)
-
-
-
2
3
,
3
3
9
1
,
3
1
2
2
2
,
0
2
7
-
-
-
-
-
(
4
1
,
0
8
0
)
(
1
0
,
3
0
6
)
(
1
,
8
6
0
)
-
-
(
2
6
,
8
3
5
)
(
2
,
0
7
9
)
-
-
5
2
,
1
7
1
2
,
3
6
7
-
-
4
4
,
8
4
2
4
,
9
6
2
-
-
2
6
5
-
3
8
4
,
7
3
4
-
2
3
,
0
0
8
-
1
1
,
0
9
1
-
(
6
7
7
,
5
4
4
)
(
2
4
9
,
7
4
1
)
(
3
9
,
0
0
2
)
1
6
4
,
6
7
2
-
(
5
1
9
,
8
7
7
)
(
3
3
,
5
9
6
)
-
-
-
-
-
-
-
-
-
-
-
-
-
1
2
0
,
8
0
2
7
9
9
,
8
1
7
2
,
5
4
0
,
0
4
7
1
,
0
0
0
,
0
0
0
(
2
,
1
5
3
,
1
8
5
)
(
1
,
2
6
0
,
4
4
9
)
(
4
8
,
4
9
7
)
1
6
4
,
6
7
2
1
6
,
5
0
1
(
9
3
8
,
2
1
0
)
(
8
7
,
2
0
2
)
-
-
7
9
8
,
3
4
6
3
2
,
9
5
0
7
9
9
,
8
1
7
2
2
,
1
6
0
4
,
6
9
3
,
2
3
2
1
5
2
,
5
3
8
(
2
1
1
,
8
1
1
)
(
1
,
5
5
4
,
9
0
8
)
(
1
,
7
8
4
,
6
1
4
)
9
4
4
,
8
1
3
3
2
,
3
9
4
-
1
,
8
0
5
,
2
8
4
5
2
7
,
2
8
1
-
-
-
-
-
(
1
8
5
,
6
5
8
)
1
,
1
4
8
,
5
9
2
4
,
3
6
2
,
3
7
4
1
,
0
0
0
,
0
0
0
1
,
0
0
0
,
0
0
0
T
o
t
a
l
-
13. MINE ASSETS
Mine assets at cost
Impairment
Net book value
Carrying amount at beginning of the year
- fair value adjustment on disposal
- impairment – refer Note 5(b)
Reconciliation of the carrying amounts of mine assets at the beginning and end of the current financial year:
14. DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
Consolidated
31-Dec-18
31-Dec-17
Deferred exploration expenditure
Reconciliation of the carrying amounts of mine assets at the beginning and end of the current financial year:
Carrying amount at beginning of the year
- additions
combinations
- acquisitions through business combination – refer Note 23
combinations
- impairment – refer Note 5(b)
- impact of foreign exchange
Consolidated
31-Dec-18
31-Dec-17
172,777
(172,777)
-
-
-
172,777
(172,777)
841,622
-
453,811
5,400,000
(5,055,521)
43,332
841,622
172,777
-
172,777
500,000
(327,223)
-
172,777
-
-
-
-
-
-
-
-
-
-
Consolidated
31-Dec-18
31-Dec-17
12,110,496
83,042
12,193,538
15. INTANGIBLES
Goodwill(1)
Other intangibles
(1) Goodwill relates to the acquisition of Andina Resources Limited as described in Note 23. As described in
this note, the accounting for the business combination has been determined provisionally as at the date of
this report.
N
o
t
e
s
t
o
t
h
e
C
o
n
s
o
l
i
d
a
t
e
d
F
n
a
n
c
i
a
l
i
S
t
a
t
e
m
e
n
t
s
1
2
.
P
R
O
P
E
R
T
Y
,
P
L
A
N
T
A
N
D
E
Q
U
P
M
E
N
T
I
S
a
n
S
a
n
t
i
a
g
o
C
o
m
p
u
t
e
r
F
u
r
n
i
t
u
r
e
O
t
h
e
r
P
l
a
n
t
a
n
d
P
l
a
n
t
*
L
a
n
d
F
a
c
i
l
i
t
i
e
s
V
e
h
c
i
l
e
s
i
E
q
u
p
m
e
n
t
a
n
d
f
i
x
t
u
r
e
s
i
E
q
u
p
m
e
n
t
P
r
o
g
r
e
s
s
W
o
r
k
i
n
43 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
(continued)
13. MINE ASSETS
Mine assets at cost
Impairment
Net book value
Consolidated
31-Dec-18
31-Dec-17
172,777
(172,777)
-
172,777
-
172,777
Reconciliation of the carrying amounts of mine assets at the beginning and end of the current financial year:
Carrying amount at beginning of the year
- fair value adjustment on disposal
- impairment – refer Note 5(b)
14. DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
172,777
-
(172,777)
-
500,000
(327,223)
-
172,777
Consolidated
31-Dec-18
31-Dec-17
Deferred exploration expenditure
841,622
Reconciliation of the carrying amounts of mine assets at the beginning and end of the current financial year:
Carrying amount at beginning of the year
- additions
combinations
- acquisitions through business combination – refer Note 23
combinations
- impairment – refer Note 5(b)
- impact of foreign exchange
-
453,811
5,400,000
(5,055,521)
43,332
841,622
-
-
-
-
-
-
-
15. INTANGIBLES
Goodwill(1)
Other intangibles
Consolidated
31-Dec-18
31-Dec-17
12,110,496
83,042
12,193,538
-
-
-
(1) Goodwill relates to the acquisition of Andina Resources Limited as described in Note 23. As described in
this note, the accounting for the business combination has been determined provisionally as at the date of
this report.
45
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
16. TRADE AND OTHER PAYABLES
18. PROVISIONS
Current
Provision for mine closure (1)
Total Current
Non-current
Provision for mine closure
Total Non–Current
TOTAL
Provision for mine closure
Opening balance
- decrease in the provision
Closing balance
Consolidated
31-Dec-18
31-Dec-17
-
-
-
-
-
-
-
-
-
-
-
-
-
-
328,651
(328,651)
(1) The provision for mine closure is an environmental management instrument used to evaluate and
plan necessary measures before, during and after the closure of operations to eliminate, mitigate and
control adverse effects on the area used or disturbed by the mining activity, in order to be considered
as a compatible ecosystem with a healthy environment, appropriate for the biological development
and landscape preservation. This Environmental Impact Statement has been approved by the
Regional Government of Arequipa.
Current Liabilities
Trade and other payables
Employee benefits
Non- Current Liabilities*
Trade and other payables
Tax liabilities
Consolidated
31-Dec-18
31-Dec-17
1,074,995
-
1,074,995
119,249
-
119,249
340,952
723,977
1,064,929
1,801,826
402,577
2,204,403
* When the directors resumed custodianship of the Company it was noted that a large portion of the
payables in the subsidiaries related to debts owed from the period 2010-2017. Some of which pre-dated
the Company’s acquisition of the subsidiaries. It is directors expectation that the Company will not settle
these outstanding liabilities within the next 12 months as the validity of the liabilities cannot be confirmed,
and therefore have classified these liabilities as non-current.
17. BORROWINGS
CURRENT
Unsecured at amortised cost
Loans
Secured at amortised cost
Loan – Silverstream SECZ
NON CURRENT
Secured at amortised cost
Loan – Silverstream SECZ
TOTAL BORROWINGS
Silverstream SECZ Loan
Consolidated
31-Dec-18
31-Dec-17
-
174,637
1,416,842
1,416,842
3,542,080
3,542,080
4,958,922
-
174,637
-
-
174,637
As a result of the acquisition of Andina Resources Limited (refer Note 23), the Group assumed the
Silverstream liability has been assumed by the Group. The Silverstream agreement is secured over the
Torrecillas concessions and mining operations that the Titan group had with Silverstream SECZ.
The loan is interest free, and requires the total payment of US$3,700,000 over 15 instalments commencing
on 1 July 2018 and ending on 30 June 2022.
46
45 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
47
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
16. TRADE AND OTHER PAYABLES
18. PROVISIONS
Current
Provision for mine closure (1)
Total Current
Non-current
Provision for mine closure
Total Non–Current
TOTAL
Provision for mine closure
Opening balance
- decrease in the provision
Closing balance
Consolidated
31-Dec-18
31-Dec-17
-
-
-
-
-
-
-
-
-
-
-
-
-
328,651
(328,651)
-
(1) The provision for mine closure is an environmental management instrument used to evaluate and
plan necessary measures before, during and after the closure of operations to eliminate, mitigate and
control adverse effects on the area used or disturbed by the mining activity, in order to be considered
as a compatible ecosystem with a healthy environment, appropriate for the biological development
and landscape preservation. This Environmental Impact Statement has been approved by the
Regional Government of Arequipa.
* When the directors resumed custodianship of the Company it was noted that a large portion of the
payables in the subsidiaries related to debts owed from the period 2010-2017. Some of which pre-dated
the Company’s acquisition of the subsidiaries. It is directors expectation that the Company will not settle
these outstanding liabilities within the next 12 months as the validity of the liabilities cannot be confirmed,
and therefore have classified these liabilities as non-current.
Current Liabilities
Trade and other payables
Employee benefits
Non- Current Liabilities*
Trade and other payables
Tax liabilities
17. BORROWINGS
CURRENT
Loans
Unsecured at amortised cost
Secured at amortised cost
Loan – Silverstream SECZ
NON CURRENT
Secured at amortised cost
Loan – Silverstream SECZ
TOTAL BORROWINGS
Silverstream SECZ Loan
Consolidated
31-Dec-18
31-Dec-17
1,074,995
1,074,995
-
-
119,249
119,249
340,952
723,977
1,064,929
1,801,826
402,577
2,204,403
Consolidated
31-Dec-18
31-Dec-17
-
174,637
1,416,842
1,416,842
3,542,080
3,542,080
4,958,922
174,637
-
-
-
174,637
As a result of the acquisition of Andina Resources Limited (refer Note 23), the Group assumed the
Silverstream liability has been assumed by the Group. The Silverstream agreement is secured over the
Torrecillas concessions and mining operations that the Titan group had with Silverstream SECZ.
The loan is interest free, and requires the total payment of US$3,700,000 over 15 instalments commencing
on 1 July 2018 and ending on 30 June 2022.
46
47
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Number
1,635,381,023
-
1,635,381,023
31 December 2017
$
91,051,880
-
91,051,880
31 December 2018
$
119,205,794
(2,080,000)
117,125,794
Number
2,563,706,065
-
2,563,706,065
19. ISSUED CAPITAL
(a)
Issued capital reconciliation
Issued capital
Ordinary shares fully paid
Treasury shares (1)
Total Issued Capital
Movements in shares on issue
Balance at the beginning of the financial
year
Consolidation on a 350:1 basis
Shares issued 5 October 2017, at $0.01,
under the Public Offer
Shares issued 5 October 2017, at $0.01,
under the Employee Offer
Shares issued 5 October 2017, at $0.01,
under the Broker Offer
Shares issued 5 October 2017, at $0.01,
under the SilverStream Offer
Shares issued 5 October 2017, at $0.01,
under the Unsecured Creditor Offer
Shares issued 5 October 2017, at $0.01,
under the Andina Offer
Shares issued 28 May 2018, at $0.03
under Tranche 1 of Share Placement
Shares issued 16 July 2018, at $0.03
under Tranche 2 of Share Placement
Shares issued 10 August 2018, at $0.032
for the acquisition of Andina Resources
Limited
Shares issued 26 September 2018, at
$0.032 for the acquisition of Andina
Resources Limited
Capital Raising Costs
1,635,381,023
91,050,880
3,633,823,438
78,619,000
As at 31 December 2018, there are 45,000,000 unlisted share options issued to corporate advisors.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,623,442,415)
-
600,000,000
6,000,000
70,000,000
700,000
316,032,382
3,160,324
350,000,000
3,500,000
53,967,618
539,676
235,000,000
2,350,000
233,334,333
7,000,030
133,334,333
4,000,010
545,263,978
17,448,447
16,392,398
524,557
-
(818,130)
-
-
-
-
-
-
-
-
-
(3,818,120)
(b)
Shares under option – unlisted
Recipient
Number of
shares under
Exercise
price
Expiry
date
Vested
option
Canaccord Genuity (Australia) Limited
12,000,000
$0.05
1 July 2021
100%
Canaccord Genuity (Australia) Limited
15,000,000
$0.06
1 July 2021
100%
Canaccord Genuity (Australia) Limited
18,000,000
$0.07
1 July 2021
100%
Unquoted share options granted carry no rights to dividends and no voting rights and details of the
movement in unissued shares or interests under option as at the date of this report are:
Balance at 1 January 2017
Consolidation on a 350:1 basis
Share options lapsed
Issue of options
Share options lapsed
Total number of options outstanding as at 31 December 2017
Total number of options outstanding as at 31 December 2018
No options were exercised during the year.
20. RESERVES
Share based payments reserve
Foreign currency translation reserve
Movements in Share based payments reserve
At the beginning of the financial year
Additions
Number of Options
(Unlisted)
82,275,000
(82,039,929)
(25,714)
209,357
45,000,000
(209,357)
45,000,000
Consolidated
31-Dec-18
4,056,059
46,527
4,102,586
2,825,527
1,230,532
4,056,059
31-Dec-17
2,825,527
(251,558)
2,573,969
2,821,000
4,527
2,825,527
(251,558)
298,085
46,527
(1,902,546)
1,650,988
(251,558)
Balance at end of financial year
2,563,706,065
119,205,794
1,635,381,023
91,050,880
Terms and conditions of contributed equity
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the
Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of
and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or
by proxy, at a meeting of the Company.
(1) Treasury shares
As a result of the acquisition of Andina Resources Limited as outlined in Note 23, by way of Andina
Resources Limited’s holding in Titan Minerals Limited at the date of acquisition, the Group acquired
65,000,000 TTM shares. The shares are carried at cost (being the deemed issue price as per the Andina
takeover bid) and recognised as a deduction against Issued capital.
The share based payments reserve is used to accumulate the fair value of share based payments issued,
including options and performance rights.
Movements in Foreign currency translation reserve
At the beginning of the financial year
Movement
The foreign currency translation reserve is used to record exchange differences arising from the translation
of subsidiaries from the functional currency (US dollars for Peru) to the presentation currency (AUD).
48
47 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
49
19. ISSUED CAPITAL
(a)
Issued capital reconciliation
Issued capital
Ordinary shares fully paid
Treasury shares (1)
Total Issued Capital
Movements in shares on issue
Balance at the beginning of the financial
year
Consolidation on a 350:1 basis
Shares issued 5 October 2017, at $0.01,
under the Public Offer
Shares issued 5 October 2017, at $0.01,
under the Employee Offer
Shares issued 5 October 2017, at $0.01,
under the Broker Offer
Shares issued 5 October 2017, at $0.01,
under the SilverStream Offer
Shares issued 5 October 2017, at $0.01,
under the Unsecured Creditor Offer
Shares issued 5 October 2017, at $0.01,
under the Andina Offer
Shares issued 28 May 2018, at $0.03
under Tranche 1 of Share Placement
Shares issued 16 July 2018, at $0.03
under Tranche 2 of Share Placement
Shares issued 10 August 2018, at $0.032
for the acquisition of Andina Resources
Limited
Shares issued 26 September 2018, at
$0.032 for the acquisition of Andina
Resources Limited
Capital Raising Costs
-
-
-
-
-
-
-
-
31 December 2018
31 December 2017
Number
2,563,706,065
$
Number
$
119,205,794
(2,080,000)
1,635,381,023
91,051,880
-
-
2,563,706,065
117,125,794
1,635,381,023
91,051,880
-
-
-
-
-
-
-
(3,623,442,415)
-
600,000,000
6,000,000
70,000,000
700,000
316,032,382
3,160,324
350,000,000
3,500,000
53,967,618
539,676
235,000,000
2,350,000
-
-
-
-
-
-
-
-
-
233,334,333
7,000,030
133,334,333
4,000,010
545,263,978
17,448,447
16,392,398
524,557
Balance at end of financial year
2,563,706,065
119,205,794
1,635,381,023
91,050,880
-
(818,130)
(3,818,120)
Terms and conditions of contributed equity
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the
Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of
and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or
by proxy, at a meeting of the Company.
(1) Treasury shares
As a result of the acquisition of Andina Resources Limited as outlined in Note 23, by way of Andina
Resources Limited’s holding in Titan Minerals Limited at the date of acquisition, the Group acquired
65,000,000 TTM shares. The shares are carried at cost (being the deemed issue price as per the Andina
takeover bid) and recognised as a deduction against Issued capital.
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
(continued)
(b)
Shares under option – unlisted
Recipient
Number of
shares under
option
Exercise
price
Expiry
date
Vested
Canaccord Genuity (Australia) Limited
12,000,000
$0.05
1 July 2021
100%
Canaccord Genuity (Australia) Limited
15,000,000
$0.06
1 July 2021
100%
Canaccord Genuity (Australia) Limited
18,000,000
$0.07
1 July 2021
100%
1,635,381,023
91,050,880
3,633,823,438
78,619,000
As at 31 December 2018, there are 45,000,000 unlisted share options issued to corporate advisors.
Unquoted share options granted carry no rights to dividends and no voting rights and details of the
movement in unissued shares or interests under option as at the date of this report are:
Balance at 1 January 2017
Consolidation on a 350:1 basis
Share options lapsed
Total number of options outstanding as at 31 December 2017
Issue of options
Share options lapsed
Total number of options outstanding as at 31 December 2018
No options were exercised during the year.
20. RESERVES
Share based payments reserve
Foreign currency translation reserve
Movements in Share based payments reserve
At the beginning of the financial year
Additions
Number of Options
(Unlisted)
82,275,000
(82,039,929)
(25,714)
209,357
45,000,000
(209,357)
45,000,000
Consolidated
31-Dec-18
4,056,059
46,527
4,102,586
2,825,527
1,230,532
4,056,059
31-Dec-17
2,825,527
(251,558)
2,573,969
2,821,000
4,527
2,825,527
The share based payments reserve is used to accumulate the fair value of share based payments issued,
including options and performance rights.
Movements in Foreign currency translation reserve
At the beginning of the financial year
Movement
(251,558)
298,085
46,527
(1,902,546)
1,650,988
(251,558)
The foreign currency translation reserve is used to record exchange differences arising from the translation
of subsidiaries from the functional currency (US dollars for Peru) to the presentation currency (AUD).
48
49
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
(continued)
Notes to the Consolidated Financial Statements
21. LOSS PER SHARE
Basic and diluted loss per share from continuing operations
(Loss) / Profit from Continuing Operations Attributable to Equity
Holders of Titan Minerals Ltd
Weighted average number of ordinary shares used in the
calculation of basic EPS
Potential ordinary shares not considered to be dilutive at year end
Basic and diluted loss per share from discontinued operations
Profit from Discontinued Operations Attributable to Equity Holders
of Titan Minerals Ltd
Weighted average number of ordinary shares used in the
calculation of basic EPS
Potential ordinary shares not considered to be dilutive at year end
Consolidated
31-Dec-18
Cents
(0.523)
$
31-Dec-17
Cents
2.820
$
(10,742,570)
11,214,302
No.
2,052,757,028
-
No.
397,709,790
-
Consolidated
31-Dec-18
Cents
0.143
$
2,932,262
No.
2,052,757,028
-
31-Dec-17
Cents
0.306
$
1,218,714
No.
397,709,790
-
There were no potential ordinary shares considered to be dilutive at year end.
Country of
interest
interest
Ownership
Ownership
incorporation
22. SUBSIDIARIES
Name of entity
Mundo Minerals USA
Inc
Compania Minera
Cobrepampa S.A.C
Empresa Minera
Cobrepampa S.A.C
Grupo Cobrepampa
S.A.C
Korisumaq S.A.C
Derivados Y
Concentrados S.A.C
Hogans Heros S.A.C
Hogans Hotel California
S.A.C
Little Twiggy S.A.C
Andina Resources
Limited
Tulin Gold S.A.C
Vista Gold S.A.C
Mantle Mining S.A.C
Andean Metals S.A.C
USA
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Australia
Porphyry Assets Pty Ltd
Australia
Porphyry Assets S.A.C
Peru
2018
100%
-1
100%2
100%2
100%2
-1
100%
100%
100%
100%3
100%3
100%3
100%3
100%3
100%3
100%3
2017
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
Principal Activity
Administrative holding company
Copper exploration
Copper exploration
Copper exploration
Copper exploration
Processing plant operator
Administrative holding company
Administrative holding company
Administrative holding company
Administrative holding company
Processing plant operator
Processing plant operator
Gold exploration
Administrative holding company
Administrative holding company
Administrative holding company
Note 1: Compania Minera Cobrepampa S.A.C and Derivados Y Concentrados S.A.C were disposed of
during the year. Refer Note 24 for further details
Note 2: Empresa Minera Cobrepampa S.A.C, Grupo Cobrepampa S.A.C and Korisumaq S.A.C were
placed in liquidation during the year, with the process ongoing as at 31 December 2018.
Note 3: Control of these entities was obtained as a result of the acquisition of Andina Resources Limited
as described in Note 23.
23. BUSINESS COMBINATION
Acquisition of Andina Resources Limited
On 26 March 2018 the Group announced that it had entered into a bid implementation agreement with
Andina Resources Limited (“Andina”), by which Titan would acquire all of the issued capital in Andina via
an off-market takeover bid. Under the bid, Andina shareholders will receive 1 fully paid ordinary share in
the capital of Titan Minerals Limited for every 1.18 Andina shares held.
On 12 July 2018, the Group’s acquisition of Andina became unconditional upon the completion of the key
conditions of the takeover bid.
The accounting of the business combination has been determined provisionally as at the date of this report.
The Group is obtaining all necessary information to ensure that the fair value of the recognised assets and
liabilities on acquisition are accurate.
49 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
50
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
22. SUBSIDIARIES
Name of entity
Mundo Minerals USA
Inc
Compania Minera
Cobrepampa S.A.C
Empresa Minera
Cobrepampa S.A.C
Grupo Cobrepampa
S.A.C
Korisumaq S.A.C
Derivados Y
Concentrados S.A.C
Hogans Heros S.A.C
Hogans Hotel California
S.A.C
Little Twiggy S.A.C
Andina Resources
Limited
Tulin Gold S.A.C
Vista Gold S.A.C
Mantle Mining S.A.C
Andean Metals S.A.C
Porphyry Assets Pty Ltd
Porphyry Assets S.A.C
Country of
incorporation
USA
Peru
Ownership
interest
2018
100%
-1
Ownership
interest
2017
100%
100%
Peru
Peru
Peru
Peru
Peru
Peru
Peru
Australia
Peru
Peru
Peru
Peru
Australia
Peru
100%2
100%2
100%2
-1
100%
100%
100%
100%3
100%3
100%3
100%3
100%3
100%3
100%3
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
Principal Activity
Administrative holding company
Copper exploration
Copper exploration
Copper exploration
Copper exploration
Processing plant operator
Administrative holding company
Administrative holding company
Administrative holding company
Administrative holding company
Processing plant operator
Processing plant operator
Gold exploration
Administrative holding company
Administrative holding company
Administrative holding company
Note 1: Compania Minera Cobrepampa S.A.C and Derivados Y Concentrados S.A.C were disposed of
during the year. Refer Note 24 for further details
Note 2: Empresa Minera Cobrepampa S.A.C, Grupo Cobrepampa S.A.C and Korisumaq S.A.C were
placed in liquidation during the year, with the process ongoing as at 31 December 2018.
Note 3: Control of these entities was obtained as a result of the acquisition of Andina Resources Limited
as described in Note 23.
23. BUSINESS COMBINATION
Acquisition of Andina Resources Limited
On 26 March 2018 the Group announced that it had entered into a bid implementation agreement with
Andina Resources Limited (“Andina”), by which Titan would acquire all of the issued capital in Andina via
an off-market takeover bid. Under the bid, Andina shareholders will receive 1 fully paid ordinary share in
the capital of Titan Minerals Limited for every 1.18 Andina shares held.
On 12 July 2018, the Group’s acquisition of Andina became unconditional upon the completion of the key
conditions of the takeover bid.
The accounting of the business combination has been determined provisionally as at the date of this report.
The Group is obtaining all necessary information to ensure that the fair value of the recognised assets and
liabilities on acquisition are accurate.
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 50
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(a) Consideration transferred
Issued capital (561,656,376 shares)
(b) Assets acquired and liabilities recognised at the date of acquisition
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Financial assets*
Current tax asset
Non-current assets
Property, plant and equipment
Deferred exploration and evaluation expenditure
Deferred tax asset
Current liabilities
Trade and other payables
Financial liabilities
Non-current liabilities
Financial liabilities
Other financial liabilities**
Deferred tax liabilities
$
17,973,004
$
226,248
1,439,816
460,038
1,039,005
2,080,000
375,823
3,140,477
5,400,000
95,922
765,044
1,015,710
4,109,524
1,114,273
1,390,268
Total assets acquired and liabilities recognised at the date of acquisition
5,862,508
*Andina Resources Limited held in its shares in Titan Minerals Limited as at the date of the acquisition
with a value of $2,080,000. Upon acquisition of these shares, they are now recognised by the Group as
treasury shares in Equity (refer Note 19) as at year end.
**Other financial liabilities relates to the loan owing from Mantle Mining S.A.C (a subsidiary of Andina
Resources Limited), to Hogan’s Heros S.A.C (a subsidiary of Titan Minerals Limited). Upon acquisition of
Andina, this loan eliminates upon consolidation.
Goodwill arising on acquisition
Consideration transferred
Less: Fair value of identifiable net assets and liabilities acquired
Goodwill (Note 15)
$
17,973,004
(5,862,508)
12,110,496
(c) Net cash inflow on acquisition of subsidiary
Cash and cash equivalents acquired
$
226,248
There was no cash consideration transferred for the acquisition of Andina Resources Limited.
(d) Impact of acquisitions on the results of the Group
Included in the loss for the year is a $2,814,457 loss attributable to the operational results of Andina.
Revenue for the year of $5,802,384 relates to the results of Andina.
Had these business combinations been effected at 1 January 2018, the revenue of the Group from
continuing operations attributable to Andina would have been $11,926,530, and the loss attributable to
Andina would have been $8,486,322.
24. DISCONTINUED OPERATIONS
The profit or loss attributable to discontinued operations relate to the disposal of the below entities.
On 15 June 2018, the Group disposed of its 100% owned subsidiary Derivado Y Concentrados S.A.C for
MPG Group
Derivado Y Concentrados S.A.C
Compañía Minera Cobrepampa SAC
Total Profit / (loss) for the year from discontinued
operations (attributable to owners of the company)
The details of the disposal are outlined below:
Disposal of Derivado Y Concentrados S.A.C
3,500 Soles (AUD $1,068).
(a) Financial performance
Profit for the period from discontinued operations
Depreciation and amortisation charges
Revenue
Cost of goods sold
Gross profit
Administration expenses
Loan forgiveness
Other expenses
(Loss) / profit for the year from discontinued
operations for the year or until date of disposal
Gain on disposal
Profit before income tax
Attributable income tax expense
Profit for the year from discontinued operations
(attributable to owners of the company)
31 Dec 2018
31 Dec 2017
-
(1,835,586)
2,468,151
464,103
3,054,300
-
2,932,254
1,218,714
31 Dec 2018
31 Dec 2017
-
-
-
-
-
-
-
(777,136)
(777,136)
3,245,287
2,468,151
638,684
(807,242)
(168,558)
(213,291)
(853,720)
4,548,627
(258,758)
3,054,300
3,054,300
-
-
2,468,151
3,054,300
51 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
52
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
(c) Net cash inflow on acquisition of subsidiary
Cash and cash equivalents acquired
$
226,248
There was no cash consideration transferred for the acquisition of Andina Resources Limited.
(d) Impact of acquisitions on the results of the Group
Included in the loss for the year is a $2,814,457 loss attributable to the operational results of Andina.
Revenue for the year of $5,802,384 relates to the results of Andina.
Had these business combinations been effected at 1 January 2018, the revenue of the Group from
continuing operations attributable to Andina would have been $11,926,530, and the loss attributable to
Andina would have been $8,486,322.
24. DISCONTINUED OPERATIONS
The profit or loss attributable to discontinued operations relate to the disposal of the below entities.
MPG Group
Derivado Y Concentrados S.A.C
Compañía Minera Cobrepampa SAC
Total Profit / (loss) for the year from discontinued
operations (attributable to owners of the company)
The details of the disposal are outlined below:
Disposal of Derivado Y Concentrados S.A.C
31 Dec 2018
31 Dec 2017
-
(1,835,586)
2,468,151
464,103
3,054,300
-
2,932,254
1,218,714
On 15 June 2018, the Group disposed of its 100% owned subsidiary Derivado Y Concentrados S.A.C for
3,500 Soles (AUD $1,068).
(a) Financial performance
Profit for the period from discontinued operations
Revenue
Cost of goods sold
Gross profit
Depreciation and amortisation charges
Administration expenses
Loan forgiveness
Other expenses
(Loss) / profit for the year from discontinued
operations for the year or until date of disposal
Gain on disposal
Profit before income tax
Attributable income tax expense
Profit for the year from discontinued operations
(attributable to owners of the company)
31 Dec 2018
31 Dec 2017
-
-
-
-
-
-
(777,136)
(777,136)
3,245,287
2,468,151
-
2,468,151
638,684
(807,242)
(168,558)
(213,291)
(853,720)
4,548,627
(258,758)
3,054,300
-
3,054,300
-
3,054,300
53
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Cash flows from discontinued operations
Net cash outflow from operating activities
(b) Details of the sale of Derivado Y Concentrados S.A.C
Consideration received in cash and cash equivalents
Analysis of assets and liabilities over which control was
lost
Trade and other payables
Derecognition of foreign currency reserve
Gain on disposal of subsidiary
31 Dec 2018
31 Dec 2017
(b) Details of the sale of Compañía Minera Cobrepampa SAC
(205,608)
(111,823)
Consideration received in cash and cash equivalents
15 June 2018
1,068
2,985,309
258,910
3,245,287
The above gain on disposal of subsidiary is included in the profit for the period from discontinued
operations.
Disposal of Compañía Minera Cobrepampa SAC
On 29 August 2018, the Group disposed of its 100% owned subsidiary Compañía Minera Cobrepampa
SAC for no consideration.
(a) Financial performance and cash flow information
On 4 October 2017 the shares in the entities that made up the MPG group of companies were transferred
to the Minera Gold Limited Creditors Trust.
(a) Financial performance and cash flow information
Loss for the year from discontinued operations
Revenue - rendering of services
31 Dec 2018
31 Dec 2017
31 Dec 2018
31 Dec 2017
Loss for the year from discontinued operations until date of
Profit for the period from discontinued operations
Revenue
Cost of goods sold
Gross profit
Other expenses
Profit for the year from discontinued operations for
the year or until date of disposal
Gain on disposal
Profit before income tax
Attributable income tax expense
Profit for the year from discontinued operations
(attributable to owners of the company)
-
-
-
-
-
464,103
464,103
-
464,103
-
-
-
-
-
-
-
-
-
Cash flows from discontinued operations
Net cash outflow from operating activities
31 Dec 2018
31 Dec 2017
-
-
Analysis of assets and liabilities over which control was
lost
Trade and other payables
Gain on disposal of subsidiary
The above gain on disposal of subsidiary is included in the profit for the period from discontinued
29 August 2018
-
464,103
464,103
operations.
Disposal of MPG Group
Other income
Expenses
disposal
Loss on disposal
Loss before income tax
Attributable income tax expense
Loss for the year from discontinued operations (attributable
to owners of the company)
(b)
Cash flows from discontinued operations
Net cash outflow from operating activities
Net cash outflows from discontinued operations
3,109
-
3.109
(1,511,354)
(1,508,245)
(327,341)
(1,835,586)
-
-
(1,835,586)
-
-
-
-
-
-
-
-
-
(363,663)
(363,663)
53 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
54
55
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
31 Dec 2018
31 Dec 2017
(b) Details of the sale of Compañía Minera Cobrepampa SAC
(205,608)
(111,823)
Consideration received in cash and cash equivalents
Analysis of assets and liabilities over which control was
lost
Trade and other payables
Gain on disposal of subsidiary
29 August 2018
-
464,103
464,103
The above gain on disposal of subsidiary is included in the profit for the period from discontinued
operations.
Disposal of MPG Group
On 4 October 2017 the shares in the entities that made up the MPG group of companies were transferred
to the Minera Gold Limited Creditors Trust.
(a) Financial performance and cash flow information
Loss for the year from discontinued operations
Revenue - rendering of services
Other income
Expenses
Loss for the year from discontinued operations until date of
disposal
Loss on disposal
Loss before income tax
Attributable income tax expense
Loss for the year from discontinued operations (attributable
to owners of the company)
(b)
Cash flows from discontinued operations
Net cash outflow from operating activities
Net cash outflows from discontinued operations
31 Dec 2018
31 Dec 2017
-
-
-
-
-
-
-
-
3,109
-
3.109
(1,511,354)
(1,508,245)
(327,341)
(1,835,586)
-
(1,835,586)
-
-
(363,663)
(363,663)
Cash flows from discontinued operations
Net cash outflow from operating activities
(b) Details of the sale of Derivado Y Concentrados S.A.C
Consideration received in cash and cash equivalents
Analysis of assets and liabilities over which control was
lost
Trade and other payables
Derecognition of foreign currency reserve
Gain on disposal of subsidiary
15 June 2018
1,068
2,985,309
258,910
3,245,287
The above gain on disposal of subsidiary is included in the profit for the period from discontinued
operations.
Disposal of Compañía Minera Cobrepampa SAC
On 29 August 2018, the Group disposed of its 100% owned subsidiary Compañía Minera Cobrepampa
SAC for no consideration.
(a) Financial performance and cash flow information
Profit for the period from discontinued operations
31 Dec 2018
31 Dec 2017
Revenue
Cost of goods sold
Gross profit
Other expenses
Profit for the year from discontinued operations for
the year or until date of disposal
Gain on disposal
Profit before income tax
Attributable income tax expense
Profit for the year from discontinued operations
(attributable to owners of the company)
Cash flows from discontinued operations
Net cash outflow from operating activities
-
-
-
-
-
-
-
464,103
464,103
464,103
-
-
-
-
-
-
-
-
-
-
31 Dec 2018
31 Dec 2017
54
55
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
(continued)
Notes to the Consolidated Financial Statements
(b)
Details of the sale of the MPG Group
Consideration received or receivable:
Cash
Total disposal consideration
Carrying amount of net assets sold
Foreign Currency Translation reclassified from reserve to profit or loss on disposal
Loss on disposal
The carrying amounts of assets and liabilities as at the date of sale (4 October 2017) were:
Cash and cash equivalents
Other current assets
Property, plant and equipment
Other non-current assets
Total assets
Trade and other payables
Other non-current liabilities
Total liabilities
Net assets
4-Oct-17
$
-
-
4,742,518
(5,069,859)
(327,341)
4-Oct-17
$
-
488,205
630,367
10,198,265
11,316,837
(3,319,685)
(3,254,634)
(6,574,319)
4,742,518
* The Company was under External administration from 25 August 2015 to 4 October 2017, consequently the
Company did not have sufficient information to allow the level of disclosure required for the year ended 31
December 2017.
25. CONTINGENCIES AND COMMITMENTS
As at reporting date, the Group had outstanding commitments under non-cancellable operating leases,
which fall due as follows:
Within one year
In the second to fifth years inclusive
After 5 years
Consolidated
31-Dec-18
31-Dec-17
37,404
144,234
181,638
-
-
-
Operating leases are comprised of rentals payable by the Group for office rental.
The Group has no other commitments or contingent liabilities as at 31 December 2018.
26. NOTES TO THE CASH FLOW STATEMENT
(a) Reconciliation of cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in
banks and investments in money markets instruments. Cash and cash equivalents at the end of the
financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet
as follows:
(b) Reconciliation of loss for the year to net cash flows used in operating
Depreciation and amortisation of non-current assets
Cash at bank and deposits at call
Profit / (Loss) for the year
activities
Adjustments for:
Share based payments
Foreign exchange
Loan forgiveness
DOCA expenses
Provision expense
Impairment / (reversal) of impairment
Gain on disposal of subsidiary
Non-cash financing activities:
- Assumption of financial liability
(Increase)/decrease in assets:
Trade and other receivables
Prepayments
Inventories
Current tax assets
Increase/(decrease) in liabilities:
Trade and other payables
Net cash used in operating activities
(c) Non-cash financing activities
Consolidated
31-Dec-18
31-Dec-17
5,459,426
2,931,791
(7,810,308)
12,433,016
87,202
1,230,532
(297,248)
-
-
-
7,066,878
(2,932,262)
1,053,133
380,386
(429,926)
(42,310)
(449,371)
213,291
4,527
16,261
(17,753,789)
2,350,000
22,206
(1,000,000)
-
-
-
-
-
289,625
(2,978,122)
(5,121,416)
339,151
(3,085,712)
During the year the Group loaned funds to Mantle Mining S.A.C of $1,114,273. As part of the acquisition
of Andina Resources Limited as described in Note 23, the Group acquired the corresponding loan
payable, thereby extinguishing the Group’s balance.
27. EVENTS AFTER THE REPORTING PERIOD
There has not been any matter or circumstance that have arisen since the end of the financial year, that
has significantly affected or may significantly affect, the operations of the Group, the results of the
operations, or the state of the affairs of the Group in the future financial years, other than:
On January 14, 2019, Titan announced that it has executed a binding agreement pursuant to which Titan
had been granted an exclusive option to acquire up to an 85% interest in the Las Antas Project (“Las Antas
Earn-In”). Under the Las Antas Earn-In, Titan can earn-in to 60% of the Las Antas Project by funding
US$2,000,000 in exploration activity within a 2-year period. Upon Titan acquiring the 60% interest, Titan
and the vendor will establish a joint venture to govern the future conduct of activities in relation to the Las
55 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
56
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
26. NOTES TO THE CASH FLOW STATEMENT
(a) Reconciliation of cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in
banks and investments in money markets instruments. Cash and cash equivalents at the end of the
financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet
as follows:
Cash at bank and deposits at call
Consolidated
31-Dec-18
31-Dec-17
5,459,426
2,931,791
(b) Reconciliation of loss for the year to net cash flows used in operating
Profit / (Loss) for the year
Adjustments for:
activities
(7,810,308)
Depreciation and amortisation of non-current assets
Share based payments
Foreign exchange
Loan forgiveness
DOCA expenses
Provision expense
Impairment / (reversal) of impairment
Gain on disposal of subsidiary
Non-cash financing activities:
- Assumption of financial liability
(Increase)/decrease in assets:
Trade and other receivables
Prepayments
Inventories
Current tax assets
Increase/(decrease) in liabilities:
Trade and other payables
Net cash used in operating activities
(c) Non-cash financing activities
12,433,016
213,291
4,527
16,261
(17,753,789)
2,350,000
22,206
(1,000,000)
-
87,202
1,230,532
(297,248)
-
-
-
7,066,878
(2,932,262)
1,053,133
-
380,386
(429,926)
(42,310)
(449,371)
289,625
-
-
-
(2,978,122)
(5,121,416)
339,151
(3,085,712)
During the year the Group loaned funds to Mantle Mining S.A.C of $1,114,273. As part of the acquisition
of Andina Resources Limited as described in Note 23, the Group acquired the corresponding loan
payable, thereby extinguishing the Group’s balance.
27. EVENTS AFTER THE REPORTING PERIOD
There has not been any matter or circumstance that have arisen since the end of the financial year, that
has significantly affected or may significantly affect, the operations of the Group, the results of the
operations, or the state of the affairs of the Group in the future financial years, other than:
On January 14, 2019, Titan announced that it has executed a binding agreement pursuant to which Titan
had been granted an exclusive option to acquire up to an 85% interest in the Las Antas Project (“Las Antas
Earn-In”). Under the Las Antas Earn-In, Titan can earn-in to 60% of the Las Antas Project by funding
US$2,000,000 in exploration activity within a 2-year period. Upon Titan acquiring the 60% interest, Titan
and the vendor will establish a joint venture to govern the future conduct of activities in relation to the Las
57
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Antas Project, with Titan holding 60% initial interest in the joint venture. The Las Antas Earn-In also
provides Titan with an opportunity to acquire an additional 25% interest in the Las Antas Project.
On 25 February 2019 Titan Minerals Limited and Core Gold Inc (TSX-V: CGLD, OTCQX: CGLDF) (“Core
Gold”) announce that the companies have entered into a binding arrangement agreement (the
“Arrangement Agreement”), pursuant to which Titan will acquire all of the issued and outstanding Core
Gold common shares by way of a share exchange (the “Merger”).
The Merger will be affected by means of a statutory plan of arrangement (the “Arrangement”) under the
Business Corporations Act (British Columbia). Under the Arrangement:
•
•
each Core Gold shareholder will receive twenty (20) fully paid ordinary shares in Titan pre-consolidation
("Titan Shares") for every one (1) Core Gold common share (the “Exchange Ratio”); and
holders of Core Gold Options and Warrants will receive options in Titan on comparable terms, taking into
account the Exchange Ratio under the Merger.
In connection with the Merger, Titan will conduct a placement of new Titan Shares to certain eligible
institutional and high net worth investors to raise a minimum of A$20 million at an issue price to be agreed
by Titan and Core Gold (each acting reasonably and taking into account the then current market
conditions) (the "Placement"). If a minimum of A$20 million is raised under the Placement, assuming an
issue price of A$0.024 (being the closing price of Titan Shares on the ASX on February 15, 2019),
approximately 833,333,333 new Titan Shares will be issued under the Placement. The issue of new Titan
Shares under the Placement will be subject to Titan shareholder approval. Completion of the Merger is
conditional on completion of the Placement.
On 25 March 2019, the Group raised USD $3 million via loan facility agreements. The material terms of
the loan facility are:
Interest: 15% interest per annum
• Amount: US$3,000,000
•
• Security: Vista Gold S.A.C. and Core Private Placement shares
• Repayment: earlier of 21 days from completion of Titan Core Gold plan of arrangement or 6 months from
the draw down date, extendable to 9 months at Titan’s election with a minimum repayment of 5 months
interest payable if repaid prior to five months from the draw down date
Also on 25 March 2019, the Group announced that it has successfully closed its US $3,000,000 private
placement with Core Gold Inc. acquiring 9,151,363 common shares of Core Gold on a private placement
basis.
below:
(i)
Statement of Financial Position
57 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
58
Notes to the Consolidated Financial Statements
28. KEY MANAGEMENT PERSONNEL
Remuneration of key management personnel
Short term employee benefits
Post-employment benefits
Share based payments
Termination benefits
31-Dec-18
31-Dec-17
487,400
84,000
708,000
3,880
-
-
-
-
1,195,400
87,880
Refer to the Remuneration Report on pages 12-14 of the Directors Report for further details.
29. RELATED PARTY TRANSACTIONS
a) Subsidiaries
The ultimate parent entity of the group is Titan Minerals Limited. Details of the ownership of ordinary
shares held in subsidiaries are disclosed in Note 22 to the Financial Statements. Balances and
transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in the Note. Details of transactions
between the Group and other related parties, if any, are disclosed below.
Transactions and balances between the Company and its subsidiaries were eliminated in the
preparation of consolidated financial statements of the Group.
As described in Note 23, the Group acquired Andina Resources Limited during the period. Mr Matthew
Carr is a director of Andina Resources Limited.
The ultimate parent entity of the Group is Titan Minerals Limited.
The Statement of Comprehensive Income and Financial position on the parent entity are summarised
b)
Parent entity
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Issued capital
Reserves
Accumulated losses
Shareholder Equity
Statement of Comprehensive Income
Loss after tax
Total comprehensive loss
59
Parent
31-Dec-18
31-Dec-17
5,396,859
80,000
5,476,859
158,100
-
3,009,430
3,009,430
112,762
-
-
158,100
112,762
5,318,759
2,896,668
117,125,794
91,050,880
4,056,060
2,825,527
(115,863,095)
(90,979,739)
5,318,759
2,896,668
31-Dec-18
31-Dec-17
(24,883,356)
(12,057,002)
(24,883,356)
(12,057,002)
Notes to the Consolidated Financial Statements
Antas Project, with Titan holding 60% initial interest in the joint venture. The Las Antas Earn-In also
provides Titan with an opportunity to acquire an additional 25% interest in the Las Antas Project.
On 25 February 2019 Titan Minerals Limited and Core Gold Inc (TSX-V: CGLD, OTCQX: CGLDF) (“Core
Gold”) announce that the companies have entered into a binding arrangement agreement (the
“Arrangement Agreement”), pursuant to which Titan will acquire all of the issued and outstanding Core
Gold common shares by way of a share exchange (the “Merger”).
The Merger will be affected by means of a statutory plan of arrangement (the “Arrangement”) under the
Business Corporations Act (British Columbia). Under the Arrangement:
•
•
each Core Gold shareholder will receive twenty (20) fully paid ordinary shares in Titan pre-consolidation
("Titan Shares") for every one (1) Core Gold common share (the “Exchange Ratio”); and
holders of Core Gold Options and Warrants will receive options in Titan on comparable terms, taking into
account the Exchange Ratio under the Merger.
In connection with the Merger, Titan will conduct a placement of new Titan Shares to certain eligible
institutional and high net worth investors to raise a minimum of A$20 million at an issue price to be agreed
by Titan and Core Gold (each acting reasonably and taking into account the then current market
conditions) (the "Placement"). If a minimum of A$20 million is raised under the Placement, assuming an
issue price of A$0.024 (being the closing price of Titan Shares on the ASX on February 15, 2019),
approximately 833,333,333 new Titan Shares will be issued under the Placement. The issue of new Titan
Shares under the Placement will be subject to Titan shareholder approval. Completion of the Merger is
conditional on completion of the Placement.
On 25 March 2019, the Group raised USD $3 million via loan facility agreements. The material terms of
the loan facility are:
• Amount: US$3,000,000
•
Interest: 15% interest per annum
• Security: Vista Gold S.A.C. and Core Private Placement shares
• Repayment: earlier of 21 days from completion of Titan Core Gold plan of arrangement or 6 months from
the draw down date, extendable to 9 months at Titan’s election with a minimum repayment of 5 months
interest payable if repaid prior to five months from the draw down date
Also on 25 March 2019, the Group announced that it has successfully closed its US $3,000,000 private
placement with Core Gold Inc. acquiring 9,151,363 common shares of Core Gold on a private placement
(i)
basis.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
28. KEY MANAGEMENT PERSONNEL
Remuneration of key management personnel
Short term employee benefits
Post-employment benefits
Share based payments
Termination benefits
31-Dec-18
31-Dec-17
487,400
-
708,000
-
84,000
-
3,880
-
1,195,400
87,880
Refer to the Remuneration Report on pages 12-14 of the Directors Report for further details.
29. RELATED PARTY TRANSACTIONS
a) Subsidiaries
The ultimate parent entity of the group is Titan Minerals Limited. Details of the ownership of ordinary
shares held in subsidiaries are disclosed in Note 22 to the Financial Statements. Balances and
transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in the Note. Details of transactions
between the Group and other related parties, if any, are disclosed below.
Transactions and balances between the Company and its subsidiaries were eliminated in the
preparation of consolidated financial statements of the Group.
As described in Note 23, the Group acquired Andina Resources Limited during the period. Mr Matthew
Carr is a director of Andina Resources Limited.
b)
Parent entity
The ultimate parent entity of the Group is Titan Minerals Limited.
The Statement of Comprehensive Income and Financial position on the parent entity are summarised
below:
Statement of Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Issued capital
Reserves
Accumulated losses
Shareholder Equity
Statement of Comprehensive Income
Loss after tax
Total comprehensive loss
Parent
31-Dec-18
31-Dec-17
5,396,859
80,000
5,476,859
158,100
-
158,100
5,318,759
3,009,430
-
3,009,430
112,762
-
112,762
2,896,668
117,125,794
4,056,060
(115,863,095)
5,318,759
91,050,880
2,825,527
(90,979,739)
2,896,668
31-Dec-18
31-Dec-17
(24,883,356)
(24,883,356)
(12,057,002)
(12,057,002)
58
59
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
c)
Expenditure commitments by the parent entity:
Trade and other payables maturing as follows:
Not longer than 1 year
Longer than 1 year and not longer than 5 years
31-Dec-18
31-Dec-17
-
-
-
*
-
*
* The Company was under External administration from 25 August 2015 to 4 October 2017, consequently the
Company did not have sufficient information to allow the level of disclosure required for the year ended 31
December 2017.
30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Group's overall risk management program focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses
different methods to measure different types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate, price and foreign exchange risks and ageing analysis for
credit and liquidity risk.
Risk management is carried out by senior management under direction of the Board of Directors. The
Board provides principles for overall risk management, as well as policies covering specific areas. The
consolidated entity is not materially exposed to changes in interest rates in its activities.
Cash and short-term deposits;
Trade and Other Receivables;
The material financial instruments to which the Group has exposure include:
(i)
(ii)
(iii) Accounts payable; and
(iv) Borrowings
The carrying values of these financial instruments approximate their fair values. The carrying values of the
Group’s financial instruments are as follows:
US dollars
6,808,428
284,628
4,265,073
2,610,821
Financial Assets
Cash and Cash Equivalents
Trade and Other Receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Borrowings
Total Financial Liabilities
Net Exposure
31-Dec-18
31-Dec-17
5,459,426
1,447,302
6,906,728
2,931,791
387,873
3,319,664
1,194,244
4,958,922
6,153,166
753,562
3,269,332
174,637
3,443,969
(124,305)
The table reflects the undiscounted contractual settlement terms for financial instruments of a fixed period
of maturity as well as management’s expectations of settlement period for all other financial instruments.
Trade and other receivables maturing as follows:
Less than 6 months
6 months to 1 year
Later than 1 year but not longer than 5 years
Over 5 years
31-Dec-18
31-Dec-17
1,367,302
-
80,000
-
1,447,302
289,776
-
98,097
-
387,873
60
59 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
61
Later than 1 year but not longer than 5 years
119,249
2,204,403
Less than 6 months
6 months to 1 year
Over 5 years
Borrowings maturing as follows:
Less than 6 months
6 months to 1 year
Later than 1 year but not longer than 5 years
Over 5 years
(a) Market Risk
Foreign Exchange Risk
1,074,995
1,064,929
1,194,244
3,269,332
-
-
-
708,416
708,416
3,542,090
4,958,922
-
-
-
-
-
174,637
174,637
The Group operates internationally and is exposed to foreign exchange risk arising primarily from its
subsidiaries, primarily with respect to the US dollar.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the entity’s functional currency.
The carrying amounts of the Group’s foreign currency denominated assets and monetary liabilities at the
end of the reporting year are as follows:
Assets
Liabilities
31-Dec-18
31-Dec-17
31-Dec-18
31-Dec-17
$
$
$
$
Interest Rate Risk
All the consolidated entity’s financial instruments that are exposed to interest rate risk are either non-
interest bearing, bear interest at commercial interest rates or at fixed rates. The weighted average interest
rate on cash and short-term deposits at 31 December 2018 was 1.15% (31 December 2017: 0.5%). All
receivables, other financial assets and payables are non-interest bearing.
The Group is exposed to commodity price risk through its gold sales from the Toll processing operations.
The Group does not currently hedge the price at which it sells gold.
Price risk
(b) Credit Risk
Financial instruments, which potentially subject the consolidated entity to credit risk, consist primarily of
cash and short-term deposits. Credit risk on cash, short term deposits and trade receivables is largely
minimised by dealing with companies with acceptable credit ratings.
The consolidated entity has no reason to believe credit losses will arise from any of the above financial
instruments. However, the maximum amount of loss, which may possibly be realised, is the carrying
amount of the financial instrument.
Cash in Australia is held with National Australia Bank Limited which is an appropriate financial institution
with an external credit rating of AA-. Cash in Peru is held with Banco De Credito Del Peru which is an
appropriate financial institution with an external credit rating of BBB+.
c)
Expenditure commitments by the parent entity:
Not longer than 1 year
Longer than 1 year and not longer than 5 years
31-Dec-18
31-Dec-17
-
-
-
*
-
*
* The Company was under External administration from 25 August 2015 to 4 October 2017, consequently the
Company did not have sufficient information to allow the level of disclosure required for the year ended 31
December 2017.
30. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Group's overall risk management program focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses
different methods to measure different types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate, price and foreign exchange risks and ageing analysis for
credit and liquidity risk.
Risk management is carried out by senior management under direction of the Board of Directors. The
Board provides principles for overall risk management, as well as policies covering specific areas. The
consolidated entity is not materially exposed to changes in interest rates in its activities.
The material financial instruments to which the Group has exposure include:
(i)
(ii)
Cash and short-term deposits;
Trade and Other Receivables;
(iii) Accounts payable; and
(iv) Borrowings
Group’s financial instruments are as follows:
Financial Assets
Cash and Cash Equivalents
Trade and Other Receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Borrowings
Total Financial Liabilities
Net Exposure
31-Dec-18
31-Dec-17
5,459,426
1,447,302
6,906,728
2,931,791
387,873
3,319,664
1,194,244
4,958,922
6,153,166
753,562
3,269,332
174,637
3,443,969
(124,305)
31-Dec-18
31-Dec-17
1,367,302
289,776
-
-
-
-
1,447,302
387,873
The table reflects the undiscounted contractual settlement terms for financial instruments of a fixed period
of maturity as well as management’s expectations of settlement period for all other financial instruments.
Trade and other receivables maturing as follows:
Less than 6 months
6 months to 1 year
Over 5 years
Later than 1 year but not longer than 5 years
80,000
98,097
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
Trade and other payables maturing as follows:
Less than 6 months
6 months to 1 year
Later than 1 year but not longer than 5 years
Over 5 years
Borrowings maturing as follows:
Less than 6 months
6 months to 1 year
Later than 1 year but not longer than 5 years
Over 5 years
(a) Market Risk
Foreign Exchange Risk
1,074,995
-
119,249
-
1,194,244
1,064,929
-
2,204,403
-
3,269,332
708,416
708,416
3,542,090
-
4,958,922
-
-
-
174,637
174,637
The Group operates internationally and is exposed to foreign exchange risk arising primarily from its
subsidiaries, primarily with respect to the US dollar.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the entity’s functional currency.
The carrying amounts of the Group’s foreign currency denominated assets and monetary liabilities at the
end of the reporting year are as follows:
Assets
Liabilities
31-Dec-18
$
31-Dec-17
$
31-Dec-18
$
31-Dec-17
$
The carrying values of these financial instruments approximate their fair values. The carrying values of the
US dollars
6,808,428
284,628
4,265,073
2,610,821
Interest Rate Risk
All the consolidated entity’s financial instruments that are exposed to interest rate risk are either non-
interest bearing, bear interest at commercial interest rates or at fixed rates. The weighted average interest
rate on cash and short-term deposits at 31 December 2018 was 1.15% (31 December 2017: 0.5%). All
receivables, other financial assets and payables are non-interest bearing.
Price risk
The Group is exposed to commodity price risk through its gold sales from the Toll processing operations.
The Group does not currently hedge the price at which it sells gold.
(b) Credit Risk
Financial instruments, which potentially subject the consolidated entity to credit risk, consist primarily of
cash and short-term deposits. Credit risk on cash, short term deposits and trade receivables is largely
minimised by dealing with companies with acceptable credit ratings.
The consolidated entity has no reason to believe credit losses will arise from any of the above financial
instruments. However, the maximum amount of loss, which may possibly be realised, is the carrying
amount of the financial instrument.
Cash in Australia is held with National Australia Bank Limited which is an appropriate financial institution
with an external credit rating of AA-. Cash in Peru is held with Banco De Credito Del Peru which is an
appropriate financial institution with an external credit rating of BBB+.
60
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 60
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
(c) Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities. Management monitors the rolling forecasts
of the Group’s cash and fair value assets based on expected cash flows. This is generally carried out at a
local level in the operating companies of the Group in accordance with the practise and limits set by the
Group.
(d) Capital Risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going
concern, so that they can continue to maintain a suitable capital structure and fulfil the objectives of the
Group.
.
31. SHARE-BASED PAYMENTS
Performance Rights
At the General Meeting held on 18 December 2016, shareholders approved to grant 80,500,000
performance rights as remuneration (Class A, B, C). The rights entitled the directors and company
secretary to shares in Titan Minerals Limited on achievement of market conditions. Under the plan, the
participant was granted performance rights which only vest if certain market conditions are met.
The amount of rights that will vest depends on the achievement of three market-based conditions. The
three conditions are market-based condition related to achieving a 10-day volume weighted average price
of shares on the ASX of greater than $0.05, $0.06 and $0.07 respectively.
Performance rights convert to shares on the date of vesting with no exercise price or share issue price
being payable.
Set out below is the summary of rights granted and approved by shareholders. Management have
assessed the likelihood of the rights vesting and have estimated that Class A, B and C market conditions
are expected to be achieved prior to expiry.
(i) Fair value of performance rights granted
Set out below is the assessed fair value at grant date of performance rights granted in the previous year.
Performance rights:
Class A – market
Class B – market
Class C – market
Options
Fair value at grant
date
$0.032
$0.032
$0.032
On 10 August 2018 the Company issued the following 45,000,000 options to Canaccord Genuity (Australia)
Limited, comprised of:
- 12,000,000 unquoted options exercisable at $0.05 each on or before 1 July 2021;
- 15,000,000 unquoted options exercisable at $0.06 each on or before 1 July 2021; and
- 18,000,000 unquoted options exercisable at $0.07 each on or before 1 July 2021.
Notes to the Consolidated Financial Statements
The options were valued using a Black Scholes valuation model. The key inputs into the valuation were:
Options exercisable at:
$0.05
$0.06
$0.07
Grant date
Expiry date
Estimated volatility
Risk-free interest rate
Fair value
10 August 2018
10 August 2018
10 August 2018
1 July 2021
1 July 2021
1 July 2021
75.93%
75.93%
75.93%
1.82%
$0.01
1.82%
$0.009
1.82%
$0.008
Expenses Arising from Share-based Payment Transactions
Total expenses arising from share-based payment transactions recognised during the year were as
follows:
Shares Issued under the Employee Offer
Shares Issued under the Broker Offer
Shares Issued under the SilverStream Offer
Shares Issued under the Unsecured Creditor Offer
Shares Issued under the Andina Offer
Performance Rights issued to directors and staff
Options issued to Canaccord Genuity (Australia) Limited
32. REMUNERATION OF AUDITORS
Auditor of the parent entity
Audit and review of the financial report
Tax services
Other auditors – associate firms of the auditor of the parent entity in Peru
Audit or review of the financial report
31-Dec-18
31-Dec-17
$
$
-
-
-
-
-
(700,000)
(3,160,324)
(3,500,000)
(539,676)
(2,350,000)
(4,527)
-
(826,000)
(404,532)
31-Dec-18
31-Dec-17
$
$
74,985
-
74,985
22,732
66,695
45,103
111,798
-
Total share-based payments
(1,230,532)
(10,254,527)
61 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
62
63
Notes to the Consolidated Financial Statements
(c) Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities. Management monitors the rolling forecasts
of the Group’s cash and fair value assets based on expected cash flows. This is generally carried out at a
local level in the operating companies of the Group in accordance with the practise and limits set by the
(d) Capital Risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going
concern, so that they can continue to maintain a suitable capital structure and fulfil the objectives of the
Group.
Group.
.
31. SHARE-BASED PAYMENTS
Performance Rights
At the General Meeting held on 18 December 2016, shareholders approved to grant 80,500,000
performance rights as remuneration (Class A, B, C). The rights entitled the directors and company
secretary to shares in Titan Minerals Limited on achievement of market conditions. Under the plan, the
participant was granted performance rights which only vest if certain market conditions are met.
The amount of rights that will vest depends on the achievement of three market-based conditions. The
three conditions are market-based condition related to achieving a 10-day volume weighted average price
of shares on the ASX of greater than $0.05, $0.06 and $0.07 respectively.
Performance rights convert to shares on the date of vesting with no exercise price or share issue price
being payable.
Set out below is the summary of rights granted and approved by shareholders. Management have
assessed the likelihood of the rights vesting and have estimated that Class A, B and C market conditions
are expected to be achieved prior to expiry.
(i) Fair value of performance rights granted
Set out below is the assessed fair value at grant date of performance rights granted in the previous year.
Performance rights:
Class A – market
Class B – market
Class C – market
Options
Limited, comprised of:
Fair value at grant
date
$0.032
$0.032
$0.032
On 10 August 2018 the Company issued the following 45,000,000 options to Canaccord Genuity (Australia)
- 12,000,000 unquoted options exercisable at $0.05 each on or before 1 July 2021;
- 15,000,000 unquoted options exercisable at $0.06 each on or before 1 July 2021; and
- 18,000,000 unquoted options exercisable at $0.07 each on or before 1 July 2021.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Notes to the Consolidated Financial Statements
The options were valued using a Black Scholes valuation model. The key inputs into the valuation were:
Options exercisable at:
$0.05
$0.06
$0.07
Grant date
Expiry date
Estimated volatility
Risk-free interest rate
Fair value
10 August 2018
10 August 2018
10 August 2018
1 July 2021
1 July 2021
1 July 2021
75.93%
75.93%
75.93%
1.82%
$0.01
1.82%
$0.009
1.82%
$0.008
Expenses Arising from Share-based Payment Transactions
Total expenses arising from share-based payment transactions recognised during the year were as
follows:
Shares Issued under the Employee Offer
Shares Issued under the Broker Offer
Shares Issued under the SilverStream Offer
Shares Issued under the Unsecured Creditor Offer
Shares Issued under the Andina Offer
Performance Rights issued to directors and staff
Options issued to Canaccord Genuity (Australia) Limited
Total share-based payments
32. REMUNERATION OF AUDITORS
Auditor of the parent entity
Audit and review of the financial report
Tax services
Other auditors – associate firms of the auditor of the parent entity in Peru
Audit or review of the financial report
31-Dec-18
31-Dec-17
$
$
-
-
-
-
-
(826,000)
(404,532)
(700,000)
(3,160,324)
(3,500,000)
(539,676)
(2,350,000)
(4,527)
-
(1,230,532)
(10,254,527)
31-Dec-18
$
31-Dec-17
$
74,985
-
74,985
22,732
66,695
45,103
111,798
-
62
63
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 62
INDEPENDENT AUDIT REPORT
63 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
PO Box 1908 West Perth WA 6872 Australia Level 2, 1 Walker Avenue West Perth WA 6005 Australia Tel: +61 8 9481 3188 Fax: +61 8 9321 1204 ABN: 84 144 581 519 www.stantons.com.au Liability limited by a scheme approved under Professional Standards Legislation Stantons International Audit and Consulting Pty Ltd trading as Chartered Accountants and Consultants INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TITAN MINERALS LIMITED Report on the Audit of the Financial Report Qualified Opinion We have audited the financial report of Titan Minerals Limited the Company and its subsidiaries (“the Group”), which comprises the consolidated statement of financial position as at 31 December 2018, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration. In our opinion, except for the effects of the matter described in the Basis of Qualified Opinion section of our report, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s financial position as at 31 December 2018 and of its financial performance for the year then ended; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Qualified Opinion During the period 25 August 2015 to 4 October 2017, the Company was subject to a Deed of Company Arrangement (“DOCA”) and therefore under external administration. On 4 October 2017, the recapitalisation of the Company was completed and the DOCA was fully effectuated. Accordingly, on 4 October 2017, the Company exited external administration and the control of the Company was passed to the directors of the Company. Since the Directors did not control the Company until it exited external administration, the financial information for the period up to 4 October 2017, and consequently to 31 December 2017, was not subject to accounting and internal control processes that are relevant to the preparation and presentation of the financial report. Accordingly, we are not in a position and do not express any assurance in respect of, the comparative information for the year ended 31 December 2017 and the statement financial position as at 31 December 2017. The potential impact of the aforementioned basis of qualified opinion on the current year’s financial performance and cash flows, prevents us from determining whether adjustments might have been necessary in respect of the income and expenditure for the year ended 31 December 2018 reported in the statement of profit or loss and other comprehensive income and the net cash flows reported in the statement of cash flows. The Company through its foreign subsidiary, carried inventory stated in the financial statements at $1,081,315. Due to the reasons outlined in Note 5(b) point 3, we were unable to determine whether any adjustment to this balance was necessary. We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110: Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. INDEPENDENT AUDIT REPORT
(continued)
Emphasis of Matter Relating to Going Concern
In addition to our qualified audit opinion expressed above, attention is drawn to the following matter.
As referred to in Note 2 to the financial statements, the consolidated financial statements have been prepared on the
going concern basis. At 31 December 2018, the Group had cash and cash equivalents of $5,459,426, and incurred a loss
after income tax of $7,810,308.
The ability of the Group to continue as a going concern and meet its planned exploration, administration and other
commitments is dependent upon the Group raising further working capital and/or successfully recommencing profitable
operations and/or exploiting its mineral and other assets. In the event that the Group is not successful in raising further
equity or successfully recommencing profitable operations and /or exploiting its mineral and other assets, the Group may
not be able to meet its liabilities as and when they fall due and the realisable value of the Group’s current and non-current
assets may be significantly less than book values.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report of the current period. These matters were addressed in the context of our audit of the financial report as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matters
How the matter was addressed in the audit
Business Combination – Acquisition of Andina
Resources Limited and Carrying Value of
Goodwill
During the year, the Company acquired 100% of the
issued capital of Andina Resources Limited.
Inter alia, our audit procedures
following:
included
the
The acquisition has been disclosed in Note 23 to
the financial report and was considered a key audit
matter due to:
the
transaction
The significance of
($17,973,004 consideration paid); and
$5,862,508 net assets acquired resulting
in goodwill of $12,110,496.
The judgement required in the application
of AASB 3 Business Combinations (“AASB
3”).
AASB 3 required the Group to determine, if the
transaction is an asset acquisition or a business
combination.
i. Examining the contract for the acquisition of
Andina Resources Limited;
ii. Reviewing and assessing the determination
made by the Group whether the transaction is
an asset acquisition or a business combination;
iii. Assessing the fair value of consideration paid
the acquisition of Andina Resources
for
Limited;
iv. Examining the net assets of Andina Resources
Limited as at the date of acquisition;
v. Considering the adequacy of the financial
report disclosures contained in Note 23 in
relation to AASB 3; and
vi. Review of the Carrying Value of Goodwill as at
31 December 2018.
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 64
INDEPENDENT AUDIT REPORT
(continued)
Issued Capital
Issued Capital amounted
to
The Group’s
$117,125,794. During
reporting period,
928,325,042 ordinary shares were issued resulting
in an increase in Issued Capital of $26,074,914 (net
of capital raising costs).
the
Issued Capital is a key audit matter due to:
the quantum and value of share capital issued
during the year; and
the varied nature of the movements during the
year.
We have expended significant audit effort on
ensuring the Issued Capital was appropriately
accounted for and disclosed.
Inter alia, our audit procedures included the
following:
i. Obtaining an understanding of the underlying
transactions;
ii. Verifying all issued capital movements to the
relevant ASX announcements; Agreements and
Directors Minutes;
iii. Vouching proceeds from capital raisings to bank
relevant supporting
statements and other
documentation;
iv. Verifying underlying capital raising costs and
these costs were appropriately
ensuring
recorded;
v. Ensuring consideration paid
for
in
Business
accordance with
Business
Combinations and agreed the share issues to
the relevant supporting documentation; and
in shares
is measured
combination
AASB
3
vi. Ensuring the requirements of the relevant
accounting standards and disclosures achieve
fair presentation and reviewing the financial
statements to ensure appropriate disclosures
are made.
Other Information
The directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 31 December 2018, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of
assurance opinion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
65 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
INDEPENDENT AUDIT REPORT
(continued)
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain
professional scepticism throughout the audit. An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity's preparation of the financial report that gives a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor's report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether
the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in Internal control that we identify during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We also
provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit
of the financial report of the current period and are therefore key audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 66
INDEPENDENT AUDIT REPORT
(continued)
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 14 of the directors’ report for the year ended 31
December 2018.
In our opinion, the Remuneration Report of Titan Minerals Limited for the year ended 31 December 2018 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
West Perth, Western Australia
29 March 2019
ADDITIONAL INFORMATION AS AT 29 APRIL 2019
ANALYSIS OF HOLDINGS OF LISTED SHARES AND OPTIONS IN THE COMPANY
1 — 1,000
1,001 — 5,000
5,001 — 10,000
10,001 — 100,000
100,001 — and over
Total number of holders
Holdings of less than a marketable
parcel
Ordinary
Shares
94
33
9
438
722
1,296
219
REGISTERED OFFICE OF THE COMPANY
SHARE REGISTRY
Suite 7, 295 Rokeby Road
Subiaco Western Australia 6005
The registers of shares and options of the
Company are maintained by:-
Tel:
Fax:
+61 (8) 6555 2950
+61 (8) 6166 0261
Voting Rights
Automic Share Registry
Level 2
267 St Georges Terrace
Perth WA 6000
For all ordinary shares, voting rights are one vote
per member on a show of hands and one vote per
Telephone (within Australia): 1300 992 916
Telephone (outside Australia): +61 3 9315 2333
share in a poll.
COMPANY SECRETARY
The name of the Company Secretary is Zane
Lewis.
company.
TAXATION STATUS
Titan Minerals Limited is taxed as a public
67 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
67
ADDITIONAL INFORMATION AS AT 29 APRIL 2019
ADDITIONAL INFORMATION AS AT 29 APRIL 2019
ANALYSIS OF HOLDINGS OF LISTED SHARES AND OPTIONS IN THE COMPANY
1 — 1,000
1,001 — 5,000
5,001 — 10,000
10,001 — 100,000
100,001 — and over
Total number of holders
Holdings of less than a marketable
parcel
Ordinary
Shares
94
33
9
438
722
1,296
219
REGISTERED OFFICE OF THE COMPANY
SHARE REGISTRY
Suite 7, 295 Rokeby Road
Subiaco Western Australia 6005
The registers of shares and options of the
Company are maintained by:-
Tel:
Fax:
+61 (8) 6555 2950
+61 (8) 6166 0261
Voting Rights
Automic Share Registry
Level 2
267 St Georges Terrace
Perth WA 6000
For all ordinary shares, voting rights are one vote
per member on a show of hands and one vote per
share in a poll.
Telephone (within Australia): 1300 992 916
Telephone (outside Australia): +61 3 9315 2333
COMPANY SECRETARY
The name of the Company Secretary is Zane
Lewis.
TAXATION STATUS
Titan Minerals Limited is taxed as a public
company.
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 68
67
ADDITIONAL INFORMATION AS AT 29 APRIL 2019
(continued)
ADDITIONAL INFORMATION AS AT 29 APRIL 2019
ADDITIONAL INFORMATION AS AT 29 APRIL 2019
TWENTY LARGEST HOLDERS OF ORDINARY SHARES
TENEMENTS
Rank
Holder Name
Securities
%
Project
Location
Tenement
Interest held
1
2
3
4
5
6
7
8
8
9
10
11
12
13
14
15
16
17
18
19
20
J P MORGAN NOMINEES AUSTRALIA PTY
LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA)
LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY
LIMITED
TAZGA TWO PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
ROCKFORD INVESTMENT FUND P/L
J STIMPSON PTY LTD
MR REEGAN BUSWELL
UBS NOMINEES PTY LTD
SILVERSTREAM SEZC
FISKE NOMINEES LIMITED
RICHSHAM NOMINEES PTY LTD
TEXBRIDGE HOLDINGS PTY LTD
VONROSS NOMINEES PTY LTD
ANDINA RESOURCES LIMITED
ALITIME NOMINEES PTY LTD
IAN MALCOLM CARR &
MATTHEW IAN CARR
RATDOG PTY LTD
ML CARR PTY LTD
RANGWELL BOYS PTY LTD
187,702,652
7.32%
104,390,470
4.07%
95,551,262
3.73%
92,833,334
3.62%
92,079,985
81,805,402
3.59%
3.19%
79,800,000
3.11%
75,000,000
2.93%
75,000,000
2.93%
72,559,005
65,095,991
40,000,000
34,550,338
33,366,666
32,900,000
32,500,000
31,825,669
2.83%
2.54%
1.56%
1.35%
1.30%
1.28%
1.27%
1.24%
28,505,392
1.11%
27,415,254
26,340,524
1.07%
1.03%
25,000,000
0.98%
TOTAL
2,563,706,066
100.00%
The Company’s practices are mainly consistent with those of the guidelines and where they do not correlate
with the recommendations in the guidelines the Company considers that its adopted practices are
SUBSTANTIAL SHAREHOLDERS
Holder Name
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
Securities
187,702,652
%
7.32%
Consistency with business objectives - ASX Listing Rule 4.10.19
In accordance with Listing Rule 4.10.19, the Group states that it has used the cash and assets in a form
readily convertible to cash that it had at the time of admission in a way consistent with its business
objectives. The business objective is primarily exploration for natural resources and acquisition of resource
based projects. The Group believes it has used its cash in a consistent manner to which was disclosed
under the Prospectus dated 18 August 2017.
69 / TITAN MINERALS LTD / YEAR ENDED 31 DECEMBER 2018
68
69
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Retorno-I
Retorno-II
Retorno-III
Retorno-IV
Southern Peru
Retorno-V
Southern Peru
Retorno-VI
Southern Peru
Retorno-VII
Southern Peru
Retorno-IX
Southern Peru
RetornoXIV
Southern Peru
RetornoXV
Southern Peru
RetornoX
Southern Peru
Retorno XX
Southern Peru
Retorno XXXIV
Southern Peru
Retorno XXXII
San Santiago
San Santiago
Southern Peru
San Santiago De Acari
Southern Peru
Virgen Del Carmen 2004P
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
CORPORATE GOVERNANCE STATEMENT
The directors of Titan Minerals support and adhere to the principles of corporate governance, recognising
the need for the highest standard of corporate behaviour and accountability. Please refer to the corporate
governance statement and the appendix 4G released to ASX and posted on the Company website at
www.titanminerals.com.au.
The directors are focused on fulfilling their responsibilities individually, and as a Board, for the benefit of all
the Company’s stakeholders. That involves recognition of, and a need to adopt, principles of good corporate
governance. The Board supports the guidelines on the “Principles of Good Corporate Governance and
Recommendations – 3rd Edition” established by the ASX Corporate Governance Council.
Given the size and structure of the Company, the nature of its business activities, the stage of its
development and the cost of strict and detailed compliance with all of the recommendations, it has adopted
a range of modified systems, procedures and practices which enables it to meet the principles of good
corporate governance.
appropriate to it.
ADDITIONAL INFORMATION AS AT 29 APRIL 2019
ADDITIONAL INFORMATION AS AT 29 APRIL 2019
(continued)
ADDITIONAL INFORMATION AS AT 29 APRIL 2019
TWENTY LARGEST HOLDERS OF ORDINARY SHARES
TENEMENTS
Rank
Holder Name
Securities
%
Project
Location
Tenement
Interest held
J P MORGAN NOMINEES AUSTRALIA PTY
187,702,652
7.32%
HSBC CUSTODY NOMINEES (AUSTRALIA)
104,390,470
4.07%
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY
95,551,262
3.73%
LIMITED
LIMITED
LIMITED
ROCKFORD INVESTMENT FUND P/L
79,800,000
3.11%
1
2
3
4
5
6
7
8
8
9
10
11
12
13
14
15
16
17
18
19
20
TAZGA TWO PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
J STIMPSON PTY LTD
MR REEGAN BUSWELL
UBS NOMINEES PTY LTD
SILVERSTREAM SEZC
FISKE NOMINEES LIMITED
RICHSHAM NOMINEES PTY LTD
TEXBRIDGE HOLDINGS PTY LTD
VONROSS NOMINEES PTY LTD
ANDINA RESOURCES LIMITED
ALITIME NOMINEES PTY LTD
IAN MALCOLM CARR &
MATTHEW IAN CARR
RATDOG PTY LTD
ML CARR PTY LTD
RANGWELL BOYS PTY LTD
92,833,334
3.62%
92,079,985
81,805,402
3.59%
3.19%
75,000,000
2.93%
75,000,000
2.93%
72,559,005
65,095,991
40,000,000
34,550,338
33,366,666
32,900,000
32,500,000
31,825,669
2.83%
2.54%
1.56%
1.35%
1.30%
1.28%
1.27%
1.24%
28,505,392
1.11%
27,415,254
26,340,524
1.07%
1.03%
25,000,000
0.98%
TOTAL
2,563,706,066
100.00%
SUBSTANTIAL SHAREHOLDERS
Holder Name
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
Securities
%
187,702,652
7.32%
Consistency with business objectives - ASX Listing Rule 4.10.19
In accordance with Listing Rule 4.10.19, the Group states that it has used the cash and assets in a form
readily convertible to cash that it had at the time of admission in a way consistent with its business
objectives. The business objective is primarily exploration for natural resources and acquisition of resource
based projects. The Group believes it has used its cash in a consistent manner to which was disclosed
under the Prospectus dated 18 August 2017.
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
San Santiago
San Santiago
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Retorno-I
Retorno-II
Retorno-III
Retorno-IV
Retorno-V
Retorno-VI
Retorno-VII
Retorno-IX
RetornoXIV
RetornoXV
RetornoX
Retorno XX
Retorno XXXIV
Retorno XXXII
San Santiago De Acari
Virgen Del Carmen 2004P
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
CORPORATE GOVERNANCE STATEMENT
The directors of Titan Minerals support and adhere to the principles of corporate governance, recognising
the need for the highest standard of corporate behaviour and accountability. Please refer to the corporate
governance statement and the appendix 4G released to ASX and posted on the Company website at
www.titanminerals.com.au.
The directors are focused on fulfilling their responsibilities individually, and as a Board, for the benefit of all
the Company’s stakeholders. That involves recognition of, and a need to adopt, principles of good corporate
governance. The Board supports the guidelines on the “Principles of Good Corporate Governance and
Recommendations – 3rd Edition” established by the ASX Corporate Governance Council.
Given the size and structure of the Company, the nature of its business activities, the stage of its
development and the cost of strict and detailed compliance with all of the recommendations, it has adopted
a range of modified systems, procedures and practices which enables it to meet the principles of good
corporate governance.
The Company’s practices are mainly consistent with those of the guidelines and where they do not correlate
with the recommendations in the guidelines the Company considers that its adopted practices are
appropriate to it.
68
YEAR ENDED 31 DECEMBER 2018 / TITAN MINERALS LTD / 70
69
ASX:TTM
www.titanminerals.com.au
Suite 6, 295 Rokeby Road
SUBIACO WA 6008
Telephone:
Facsimile:
+61 8 6555 2950
+61 8 6166 0261