ABN: 28 106 353 253
And Controlled Entities
CONSOLIDATED ANNUAL REPORT
For the Year Ended
30 June 2017
CONTENTS
CORPORATE DIRECTORY
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE 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
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ADDITIONAL INFORMATION
1
2
21
22
23
24
25
26
60
61
65
Volt Resources Limited and Controlled Entities
CORPORATE DIRECTORY
DIRECTORS
Asimwe Kabunga
Stephen Hunt
Alwyn Vorster
Matt Bull
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
CHIEF EXECUTIVE OFFICER
Trevor Matthews
COMPANY SECRETARY
Susan Hunter
REGISTERED OFFICE
Level 5, London House
216 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9486 7788
Facsimile: +61 8 9463 6103
BUSINESS OFFICES
Level 5, London House
216 St Georges Terrace
Perth WA 6000
Volt Graphite Tanzania Ltd
432 Mahando Street
Dar es Salaam Tanzania
WEBSITE & EMAIL
www.voltresources.com
info@voltresources.com
SHARE REGISTRY
Advanced Share Registry Services
110 Stirling Highway
Nedlands WA 6009
Telephone: +61 8 9389 8033
Facsimile: +61 8 9262 3723
AUDITORS
HLB Mann Judd
Level 4
130 Stirling Street
Perth WA 6000
ASX CODES
VRC and VRCO
Volt Resources Limited and Controlled Entities
1
DIRECTORS’ REPORT
Your Directors submit the financial report of Volt Resources Limited (the Company) and its
Controlled Entities (Consolidated Entity) for the year ended 30 June 2017.
DIRECTORS AND CEO
The names of Directors who held office during or since the end of the year:
Stephen Hunt
Alwyn Vorster
Matt Bull
Asimwe Kabunga
Alan Armstrong
Executive Chairman (Until 31 December 2016)
Non-Executive Chairman (Until 4 August 2017)
Non-Executive Director (From 4 August 2017)
Non-Executive Director
Non-Executive Director
Non-Executive Director (Appointed 5 April 2017, until 4 August 2017)
Non-Executive Chairman (From 4 August 2017)
Non-Executive Director (Resigned 22 August 2016)
Trevor Matthews is the Chief Executive Officer (appointed 1 January 2017).
PRINCIPAL ACTIVITIES
The principal activity of the Consolidated Entity during the financial year was graphite exploration
activities in Tanzania.
RESULTS
The loss after tax for the year ended 30 June 2017 was $3,102,035 (2016: $3,806,555).
REVIEW OF OPERATIONS
Overview
Key operational highlights during the year included:
• Namangale Project Pre-Feasibility Study (PFS) was completed with an IRR of 87% and after
tax NPV10 of US$890 million.
• Relatively low capital development cost of US$173m and operating costs of US$536 per
product tonne.
• Maiden JORC Ore Reserve of 127.4Mt @4.4%TGC for 5.6Mt of contained graphite. This is
the largest graphite Ore Reserve in Tanzania.
• Mineral Resource Estimate increased to 461Mt at 4.9% TGC which is the largest graphite
Mineral Resource in Tanzania.
• Metallurgical testwork confirms the ability to upgrade Namangale concentrate to meet
battery anode feedstock requirements and suitability for expandable graphite market
applications.
• New strategy to develop the Namangale Graphite Project in stages. Feasibility studies
being revised to focus on a Stage 1 starter project and a stage 2 expansion project.
Volt Resources Limited and Controlled Entities
2
DIRECTORS’ REPORT Continued
• Execution of a number of product marketing agreements including:
o A binding offtake agreement with Nano Graphene Inc incorporating a fixed price
for a five year term;
o A Co-operation Agreement with Aoyu Graphite Group incorporating a 1,000
tonne ore processing trial, discussions on a processing agreement to produce up
to 20,000tpa of spheroinised graphite and 10,000 tonne to 20,000 tonne per
annum graphite product offtake;
o A Co-operation Agreement with China National Building Materials General
Machinery which, subject to completion of certain conditions, incorporates
offtake, engineering support and facilitation of Stage 1 and Stage 2 project
finance and credit insurance; and
o A detailed Offtake Term Sheet with Guangxing Electrical Materials for 5,000
tonnes per annum of flake graphite concentrate. The contract period is five years
with concentrate delivery planned to commence from mid-2018.
• The Company is proceeding with a 20,000tpa Stage 1 project with annual production
expected to be fully committed under binding offtake agreements by Q4 2017.
Namangale Project, Southern Tanzania
A number of activities were progressed in relation to the Namangale Project including exploration
and resource definition drilling, metallurgical testwork programs to facilitate processing plant
flow sheet design and product marketing, meetings to advance environmental approvals and
community engagement and the preliminary engineering combined with operational planning
required for the completion of the Pre-Feasibility Study. The PFS results summary is reported
following this section.
The drilling program undertaken in 2016 comprised 7,791 metres of RC and Diamond drilling
which resulted in the material upgrades in the Mineral Resource Estimate and a maiden Ore
Reserve during the first half of the financial year.
The Project’s close proximity to road and port infrastructure is a material benefit and has a
positive impact on the capital development costs and logistics costs during the construction and
operation phases. There is sufficient capacity at the Mtwara Port available to support the Project’s
export requirements.
low deleterious
Independent metallurgical testwork and customer analysis continues to consistently support the
positive properties of the Namangale graphite. Ease of graphite concentrate upgrading, excellent
conductivity,
impurities and very good expansion properties provide
opportunities in the entire graphite market for Namangale graphite. Technical and commercial
marketing discussions continued with key potential customers during the year resulting in the
successful execution of four agreements incorporating offtake and other supporting provisions
including downstream processing, engineering and financing support.
Volt Resources Limited and Controlled Entities
3
DIRECTORS’ REPORT Continued
Following the completion of the Pre-Feasibility Study, securing environmental approvals, the
grant of mining licences (ML’s) and progressing further Feasibility Studies are now key focus areas.
The process for securing the ML’s is progressing, with several government departments involved
with the approval process. Volt’s local team and experienced consultants have been working
across the various elements and expect to complete these activities in the second half of the 2017
calendar year.
In May 2017, the Company announced a new strategy to develop Namangale in two stages. Stage
1 will now be focussed on the potential development of a 20,000tpa graphite mine and processing
facility in Tanzania with exports of graphite products expected into the USA, China and other
markets 1. The Stage 2 development is an expansion of production based on the market demand
for Namangale’s graphite products.
This Stage 2 expansion is targeted to be completed by 2020 to meet expected significant increases
in demand for large flake graphite in the expandable market and smaller flake size products for
battery anode material and other existing and evolving industrial uses for micro carbon products.
Pre-Feasibility Study
During December 2016, the Namangale Project PFS was completed. It recommended to proceed
with the Definitive Feasibility Study (DFS), which the Board accepted.
Key points from the PFS include:
Attractive project: The base case price and production assumptions resulted in an 87% IRR and
pre-tax NPV of US$1.31B (based on ore material from Measured, Indicated and Inferred Mineral
Resource categories) that are presented in Table 1 on the following page.
1
Whilst the Company previously released the results of a Pre-Feasibility Study in relation to the development of the
Namangale Graphite Project on 16 December 2016, the Company is now revisiting that study based on the Company’s
revised objectives for the Stage 1 production from the project. The Company expects that all of the initial Stage 1
production will come from existing ore reserves and measured and indicated mineral resources attributable to the
Project area.
Volt Resources Limited and Controlled Entities
4
DIRECTORS’ REPORT Continued
Table 1: Key project financial results
Key Financial Measure
IRR - before tax
IRR - after tax
NPV @ 10.0% - before tax
NPV @ 10.0% - after tax
Units
(%, real)
(%, real)
Result
86.9%
66.5%
(US$ M, real)
1,310
(US$ M, real)
890
Payback Period from 1st ore to process plant
(years)
1.4
Key Metrics: The project’s key metrics comprise a 22-year mine life, annual throughput of 3.8Mt
@ 4.7% TGC resulting in annualised production of 170kt/y of graphite concentrate (Table 2).
Table 2: Nominal key project parameters
Parameter
Mine Life
Nominal ore feed tonnes
Average grade TGC
Oxide ore
Fresh and transition ore
Units
Y
Mt
%
%
%
Nominal strip ratio
Waste : Ore
Process throughput
Mt/y
Recovery
Concentrate
(average)
grade
TGC
%
%
Average graphite production kt/y
Design
22
83.4
4.7
40
60
1.4
3.8
93
95
170
Large Mineral Resource: The JORC Compliant Mineral Resource Estimate of 461Mt @ 4.9% TGC
(Table 3) updates the 446Mt @ 5.01% TGC announced on 12 October 2016. Management believes
this is the largest Mineral Resource in Tanzania.
Volt Resources Limited and Controlled Entities
5
DIRECTORS’ REPORT Continued
Table 3: JORC Mineral Resource Estimate for Namangale project1
Mt
TGC (%)
5.0
3.6
4.9
264
23
287
Namangale Project
Inferred
North
South
Total Inferred
Indicated
North
South
Total Indicated
Measured
North
Total Resource
Note: Namangale North previously Nam 1; and Namangale South previously Nam 2 & 3.
The Mineral Resource is inclusive of the Ore Reserve.
122
33
155
5.2
4.3
5.0
20
461
5.3
4.9
Significant Ore Reserve: The Ore Reserve consists of 127.4Mt @ 4.4% TGC which translates into
5.6Mt of contained graphite.
Table 4: Namangale Project Ore Reserve Statement as at December 20161
Contained
Graphite (Mt)
Reserve
TGC
(%)
Ore
(Mt)
19.3
-
-
19.3
Ore
Classification
Proved
Namangale 1 (North)
Namangale 2 (South)
Namangale 3 (South)
Subtotal – Proved
Probable
Namangale 1 (North)
Namangale 2 (South)
Namangale 3 (South)
Subtotal - Probable
Total Ore Reserve
Note: Namangale North previously Nam 1; and Namangale South previously Nam 2 & 3.
95.8
6.4
5.8
108.0
127.4
4.40
5.11
3.05
4.37
4.36
4.32
-
-
4.32
4.2
0.3
0.2
4.7
5.6
0.8
-
-
0.8
1. Refer to ASX announcement dated 15 December 2016 for information in relation to the Mineral Resource
Estimate and Ore Reserve Statement. The Company confirms that it is not aware of any new information or
data that materially affects the information included in this document and that all material assumptions and
technical parameters underpinning the estimates continue to apply and have not materially changed.
Volt Resources Limited and Controlled Entities
6
DIRECTORS’ REPORT Continued
Competent Person’s Statement
The information in this report that relates to Exploration Target and, Exploration Results is based
on information compiled by Mr Matt Bull, a Competent Person who is a member of Australian
Institute of Geoscientists. Mr Bull is a Director of Volt Resources. Mr Bull has sufficient experience
that is relevant to the style of mineralisation and type of deposit under consideration and to the
activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Matt Bull consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
The information in this report that relates to Mineral Resources is based on information compiled
by Mark Biggs, a Competent Person who is a Member of the Australasian Institute of Mining and
Metallurgy. Mark Biggs is a Director of ROM Resources Pty Ltd. Mark Biggs has sufficient
experience that is relevant to the style of mineralisation and type of deposit under consideration
and to the activity being undertaken to qualify as a Competent Person as defined in the 2012
Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Mark Biggs consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
The information in this report that relates to Ore Reserves is based on information compiled by
Mr Andrew Law, a Competent Person who is a Fellow and Chartered Professional of the Australian
Institute of Mining and Metallurgy. Mr Law is a Director of Optiro. Mr Law has sufficient
experience that is relevant to the style of mineralisation and type of deposit under consideration
to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for
Reporting of Mineral Resources and Ore Reserves’. Mr Law consents to the inclusion in the report
of the matters based on his information in the form and context in which it appears.
CORPORATE
Mr Stephen Brockhurst was appointed Company Secretary effective 15 August 2016 and resigned
on 1 August 2017 at which time Ms Susan Hunter was appointed Company Secretary.
The AGM was held on 29 November 2016 and all resolutions passed on a show of hands.
Mr Trevor Matthews was appointed Chief Executive Officer effective 1 January 2017 and a
number of other senior appointments were made during the year to strengthen the Company’s
marketing, project development and Tanzanian external relations and operations capabilities.
Mr Asimwe Kabunga was appointed as Non-Executive Director effective 5 April 2017 and then
appointed Non-Executive Chairman from 4 August 2017. Mr Stephen Hunt assumed the role of
Non-Executive Director effective 4 August 2017.
Meetings with financial institutions and financial advisers in various locations including the Middle
East to discuss finance options to fast track the Namangale project into production were held
during the second half of the financial year.
Volt Resources Limited and Controlled Entities
7
DIRECTORS’ REPORT Continued
DIRECTOR AND COMPANY SECRETARY INFORMATION
Current Directors
Mr Stephen Hunt – Non-Executive Director (Appointed 15 December 2015)
Qualifications – Bachelor of Business (Maj. Marketing), AICD member
Other current directorship of Listed Public Companies – American Pacific Borate and Lithium
Limited
Former Directorship (of Listed Public Companies) in last three years – Magnis Resources Limited
Interests in Shares and Options over Shares in the Company –
9,258,454 ordinary shares;
2,000,000 listed options (VRCO); 7,500,000 performance rights
Mr Hunt has more than 25 years of experience in the marketing of steel and mineral products
worldwide. His career includes 15 years at BHP Billiton Ltd. where he spent 5 years in the London
office marketing minerals to European and Middle Eastern customers. Stephen has built on his
extensive network and developed his own minerals trading company, which has a strong Chinese
focus. He brings along with him 15 years of cumulative board experience with ASX limited
companies and most recently was a founding director of Magnis Resources Limited.
Mr Matt Bull – Independent Non-Executive Director (Appointed 1 June 2015)
Qualifications – BSc Geology (hons)
Other current directorship of Listed Public Companies – Lindian Resources Limited
Former directorships (of Listed Public Companies) in last three years - Nil
Interests in Shares and Options over Shares in the Company:
4,088,885 fully paid ordinary shares
2,461,412 listed options (VRCO); 3,000,000 unlisted options
Mr Bull has over 10 years’ experience in the mining and exploration industry. He has worked in a
wide range of commodities including graphite, gold and iron ore. He has considerable experience
on the operation greenfield and resource development drilling exploration programs. His previous
positions include consultant geologist working on Discovery Africa’s Tanzanian Graphite Project
and CEO/Chief Geologist at Baru Resources.
Mr Alwyn Vorster – Independent Non-Executive Director (Appointed 22 March 2016)
Qualifications – BSc Geology; MBA, MSc Mineral Economics
Other current directorship of Listed Public Companies – Managing Director of BC Iron Limited
Former Directorship (of Listed Public Companies) in last three years – Managing Director of Iron
Ore Holdings Limited (2010-2014)
Interests in Shares and Options over Shares in the Company:
3,515,151 fully paid ordinary shares
2,000,000 listed options (VRCO); 6,000,000 performance rights
Volt Resources Limited and Controlled Entities
8
DIRECTORS’ REPORT Continued
Mr Vorster is a mining professional with more than 25 years of experience working with numerous
large and smaller mining companies in technical and commercial roles covering the total supply
chain from geology, mining, rail and port, shipping, marketing and sales. He has held various CEO
roles during his career, including with BC Iron Ltd, API Management and with Iron Ore Holdings
Ltd. Mr Vorster is an executive committee member of the Australia China Business Council, a
member of the Australian Institute of Company Directors, and a board member of the RSPCA
WA. He brings significant project development, transactional and company risk management
experience to the Board.
Mr Asimwe Kabunga – Non-Executive Director (Appointed 5 April 2017 until 4 August 2017),
Non-Executive Chairman (from 4 August 2017)
Qualifications – BSc Mathematics and Physics
Other current directorship of Listed Public Companies – Strandline Resources Limited; Lindian
Resources Limited
Former directorships (of Listed Public Companies) in last three years - Nil
Interests in Shares and Options over Shares in the Company:
145,645,118 fully paid ordinary shares
11,397,613 listed options
Mr Kabunga is a Tanzanian born Australian entrepreneur who has over 19 years technical and
commercial experience in Tanzania, the United States of America and Australia. Mr Kabunga has
extensive experience in the mining industry, logistics, land access, tenure negotiation and
acquisition, as well as a developer of technology businesses. Mr Kabunga has been instrumental
in establishing the Tanzania Community of Western Australia Inc, and served as it's first President.
Mr Kabunga was also a founding member of Rafiki Surgical Missions and Safina Foundation, both
NGOs dedicated to helping children in Tanzania.
Ms Susan Hunter – Company Secretary (Appointed 1 August 2017)
Ms Hunter has over 23 years’ experience in the corporate finance industry and has extensive
experience in Company Secretarial and Non-Executive Director roles on ASX, AIM and TSX listed
companies. She is founder and Managing Director of consulting firm Hunter Corporate Pty Ltd,
which specialises in the provision of corporate governance and company secretarial advice to ASX
listed entities. She has previously held senior management roles at Ernst & Young,
PricewaterhouseCoopers and Bankwest, both in Perth and Sydney. Ms Hunter holds a Bachelor
of Commerce degree majoring in accounting and finance, is a Chartered Accountant, a Fellow of
the Financial Services Institute of Australasia, a Graduate Member of the Australian Institute of
Company Directors and a Member of the Governance Institute of Australia.
Mr Stephen Brockhurst – Company Secretary (Appointed 15 August 2016 to 1 August 2017)
Mr Brockhurst is based in Perth and has many years’ experience in delivering company secretarial
services to predominantly mining and exploration companies.
Volt Resources Limited and Controlled Entities
9
DIRECTORS’ REPORT Continued
Former Directors
Mr Alan Armstrong – former Non-Executive Director (resigned 22 August 2016)
Qualifications – B.Bus (Accounting/Finance), CA
Mr Armstrong was previously employed as a senior accountant with Shakespeare Partners in
Perth. Having 8 years’ experience in taxation and business services, he joined Shakespeare
Partners in 2012. Prior to this he was employed by Christies Accountants and Advisors in regional
NSW. Operating in the mid-tier sector, he has gained experience in various client facing roles over
his career to date. He is a member of Chartered Accountants Australia and New Zealand.
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company’s Directors held during the
year ended 30 June 2017, and the number of meetings attended by each Director.
Director
Stephen Hunt
Matt Bull
Alan Armstrong
Alwyn Vorster
Asimwe Kabunga
SHARE OPTIONS
Directors’ Meetings
Eligible to Attend
9
9
-
9
4
Attended
9
9
-
8
4
At the date of this report the following options have been granted over unissued capital.
Number
236,314,931
4,500,000
4,200,000
4,200,000
4,200,000
4,200,000
Exercise Price
$0.02
$0.02
$0.06
$0.08
$0.10
$0.12
Expiry Date Status
31 December 2017 Listed
31 December 2017 Unlisted
30 April 2019 Unlisted
30 April 2019 Unlisted
30 April 2019 Unlisted
30 April 2019 Unlisted
PERFORMANCE RIGHTS
8,000,000 performance rights have been issued during the 2017 financial year. A balance of
13,500,000 remain outstanding at balance date and at the date of this report and 4,500,000
performance rights have been converted into ordinary shares during the financial year.
Volt Resources Limited and Controlled Entities
10
DIRECTORS’ REPORT Continued
EVENTS SUBSEQUENT TO REPORTING DATE
No matters or circumstances have arisen since the end of the year which will significantly affect,
or may significantly affect, the state of affairs or operations of the Consolidated Entity in future
financial periods other than the following:
The Company completed interim funding on 7 July 2017 to raise $1m for working capital purposes
through a 12-month convertible loan facility.
A detailed Offtake Term Sheet with Qingdao Tianshengda for 10,000 tonnes per annum of flake
graphite concentrate was signed in July 2017. The contract period is five years with concentrate
delivery planned to commence from mid-2018.
Three Bills passed through the Tanzanian Parliament in early July 2017 containing changes to the
legal framework governing the natural resources sector in Tanzania. The Written Laws
Miscellaneous Amendments Act (“Miscellaneous Amendments Act”), the Natural Wealth and
Resources (Permanent Sovereignty) Act (“Permanent Sovereignty Act”) and the Natural Wealth
and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Act (“Review and
Re-Negotiation of Unconscionable Terms Act”) have been approved by Tanzania’s Parliament and
received Presidential assent. In addition, Tanzania’s Parliament has approved the new Finance
Act, which will impose a 1% clearing fee on the value of all minerals exported from the country
from 1 July 2017.
The Company advised the ASX of the impact of the new legislation on 7 July 2017. Based on the
initial review and external legal advice, the Board and Management believe the legislative changes
– as currently passed by the Tanzanian parliament – would not cause or prevent the Company
from progressing with its current business strategy and plans for the future development of the
Namangale project.
Mr Stephen Brockhurst resigned as Company Secretary effective 1 August 2017 and Ms Susan
Hunter was appointed Company Secretary effective 1 August 2017.
Mr Asimwe Kabunga was appointed Non-Executive Chairman effective 4 August 2017 and Mr
Stephen Hunt was appointed Non-Executive Director effective 4 August 2017.
LIKELY DEVELOPMENTS
The Consolidated Entity intends to continue its exploration activities on its existing tenements,
assess the viability of existing tenements and to acquire further suitable tenements for
exploration and/or development as opportunities arise.
The Company plans to complete feasibility studies and development funding discussions to
progress the construction and operation of the Namangale project.
Volt Resources Limited and Controlled Entities
11
DIRECTORS’ REPORT Continued
ENVIRONMENTAL REGULATION
The Consolidated Entity has a policy of exceeding or at least complying with its environmental
obligations. During the financial year, the Consolidated Entity did not materially breach any
particular or significant regulation in respect to environmental management in any of the
jurisdictions in which it operates.
DIVIDENDS
No dividends have been declared, provided for or paid in respect of the financial year ended 30
June 2017 (2016: None).
INDEMNIFICATION AND INSURANCE OF AUDITORS
The Consolidated Entity has paid a premium in respect of a contract insuring the directors and
secretaries of the Consolidated Entity (as named above), against liabilities incurred as such by an
auditor to the extent permitted by the Corporation Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium. The Consolidated Entity
has not otherwise, during or since the financial year, indemnified or agreed to indemnify an
auditor of the Consolidated Entity or of any related body corporate against a liability incurred as
such an auditor.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Consolidated Entity
or intervene in any proceeding to which the Consolidated Entity is a party for the purpose of taking
responsibility on behalf of the Company for all or any part of those proceedings. The Consolidated
Entity was not a party to any such proceedings during the year.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the
Directors of the Consolidated Entity support, and adhere to, good corporate governance
practices. Refer to the Company’s Corporate Governance Statement at www.voltresources.com.
NON-AUDIT SERVICES
No fees for non-audit services were paid or payable to the external auditor of the Parent Entity
during the year ended 30 June 2017 (2016: nil).
AUDITOR’S DECLARATION OF INDEPENDENCE
The auditor’s independence declaration for the year ended 30 June 2017 has been received and
is included within the financial statements.
Volt Resources Limited and Controlled Entities
12
DIRECTORS’ REPORT Continued
REMUNERATION REPORT: AUDITED
This remuneration report outlines the key management personnel remuneration arrangements
of the Consolidated Entity in accordance with the requirements of the Corporations Act 2001 and
its Regulations. For the purposes of this report, key management personnel (KMP) of the Group
are defined as those persons having authority and responsibility for planning, directing and
controlling the major activities of the Company and the Consolidated Entity, directly or indirectly,
including any director (whether executive or otherwise) of the parent company, and includes the
specified executives. For the purposes of this report, the term 'executive' encompasses the chief
executive, senior executives and secretaries of the Parent and the Consolidated Entity.
Remuneration Committee
The Company is not of a sufficient size to justify the establishment of a remuneration committee
and so the Board of Directors of the Company fulfils this obligation and is responsible for
determining and reviewing remuneration arrangements for the directors and executives. The
Board of Directors assesses the appropriateness of the nature and amount of remuneration of
executives on a periodic basis by reference to relevant employment market conditions with the
overall objective of ensuring maximum stakeholder benefit from the retention of a high quality,
high performing director and executive team.
Remuneration Philosophy
The performance of the Company depends upon the quality of its directors and executives. To
prosper, the Company must attract, motivate and retain highly skilled directors and executives.
To this end, the charter adopted by the remuneration committee aims to align rewards with
achievement of strategic objectives. The remuneration framework applied provides for a mixture
of fixed and variable pay and a blend of short and long term incentives as appropriate.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive director
and executive remuneration is separate and distinct.
Non-Executive Directors
The maximum aggregate amount of fees that can be paid to non-executive directors is subject to
approval by shareholders at General Meeting. The Company’s policy is to remunerate non-
executive directors at market rates (for comparable companies) for time, commitment and
responsibilities. Fees for non-executive directors are not linked to the performance of the
Company, however to align directors’ interests with shareholders’ interests, directors are
encouraged to hold shares in the Company, and subject to approval by shareholders, are
permitted to participate in the Employee Share Option Plan.
Retirement Benefits and Allowances
No retirement benefits or allowances are paid or payable to directors of the Company (other than
statutory or mandatory superannuation contributions, where applicable).
Volt Resources Limited and Controlled Entities
13
DIRECTORS’ REPORT Continued
Executives
Base Pay
Executives are offered a competitive level of base pay which comprises the fixed (unrisked)
component of their pay and rewards. Base pay for senior executives is reviewed annually to
ensure market competitiveness. There are no guaranteed base pay increases included in any
senior executives’ contracts.
Short Term Incentives
Payment of short term incentives is dependent on the achievement of key performance
milestones as determined by the Board of Directors. For the periods ended 30 June 2016 and
2017, these milestones required performance in relation to key strategic, non-financial measures
linked to drivers of performance in future reporting periods. No bonuses have been paid or are
payable in respect of the year to 30 June 2017. There have been no forfeitures of bonuses by key
management personnel during the current or prior periods and no cash bonuses remained
unvested at year-end.
Long Term Incentives - Share-Based Compensation
Both performance rights and share options have been issued to Directors and executives as part
of their remuneration. Share-based compensation instruments are not issued based on
performance criteria, however, they are issued with vesting conditions and exercise prices set
specifically to increase goal congruence between Directors, executives and shareholders.
Performance rights and options granted carry no dividend or voting rights. The Company
currently has no policy in place to limit an individual’s risk exposure in relation to the issue of
company securities as remuneration.
Service Agreements
On 30 September 2015, the Company entered into a consultancy agreement with Mr Alan
Armstrong, in his capacity as Managing Director. Mr Armstrong resigned on 22 August 2016.
On 11 December 2015, the Company entered into a consultancy agreement with Mr Stephen
Hunt, as a marketing consultant. Under an established Performance Rights Plan, following
shareholder approval, Mr Hunt was also issued 10,000,000 Performance Rights in the following
tranches and subject to vesting conditions:
• Tranche 1 – 2,500,000 Performance Rights vest on completion of the Prefeasibility Study
(as defined by the JORC Code) on the Namangale Project to be achieved by 31 March
2017.
• Tranche 2 – 2,500,000 Performance Rights vest on the execution of an Off-Take
Agreement in respect of the Namangale Project for a minimum of 50% of the minimum
production contemplated in the Pre-Feasibility Study to be achieved by 30 June 2017
(which had not been met by the deadline).
• Tranche 3 – 2,500,000 Performance Rights vest on the execution of contracts for finance
sufficient to fund the commissioning of mining operations at Namangale Project to be
achieved by 30 September 2017.
• Tranche 4 – 2,500,000 Performance Rights vest on the commencement of mining, and
processing of first ore recovered from the Namangale Project to be achieved by 31 March
2019.
Volt Resources Limited and Controlled Entities
14
DIRECTORS’ REPORT Continued
The conditions for Tranche 1 were achieved during the 2017 financial year and 2,500,000 shares
were issued for nil consideration to satisfy the terms of the Performance Rights.
On 21 March 2016, the Company entered into an agreement with Mr Alwyn Vorster, in his
capacity as Non-Executive Director to commence from 1 April 2016 at $48,000 per annum,
excluding any additional consulting services.
Under an established Performance Rights Plan, subject to shareholder approval, Mr Vorster was
issued 8,000,000 Performance Rights in the following tranches subject to vesting conditions:
• Tranche 1 – 2,000,000 Performance Rights vest on completion of the Pre-Feasibility Study
(as defined by the JORC Code) on the Namangale Project which was achieved by 31 March
2017.
• Tranche 2 – 2,000,000 Performance Rights vest on the execution of an Off-Take
Agreement in respect of the Namangale Project for a minimum of 50% of the minimum
production contemplated in the Pre-Feasibility Study to be achieved by 30 June 2017
(which had not been met by the deadline).
• Tranche 3 – 2,000,000 Performance Rights vest on the execution of contracts for finance
sufficient to fund the commissioning of mining operations at Namangale Project to be
achieved by 30 September 2017.
• Tranche 4 – 2,000,000 Performance Rights vest on the commencement of mining, and
processing of first ore recovered from the Namangale Project to be achieved by 31 March
2019.
The conditions for Tranche 1 were achieved during the 2017 financial year and 2,000,000 shares
were issued for nil consideration to satisfy the terms of the Performance Rights.
Volt Resources Limited and Controlled Entities
15
DIRECTORS’ REPORT Continued
Remuneration of Directors and Key Management Personnel
Short Term Benefits
Key
Management
Personnel
Consulting
Cash
Salary
and Fees
$
Post-
Employment
Benefits
Super-
annuation
Share Based
Payments
Total Performance
Related
Performance
Rights /
Options
$
$
$
$
%
30 June 2017
Stephen
Hunt
Alan
Armstrong
Trevor
Matthews
Matt Bull
Alwyn
Vorster
Asimwe
Kabunga
Mark
Hoffmann
Jason
Livingstone
Total
30 June 2016
Stephen
Hunt
Adrien Wing
Alan
Armstrong
Matt Bull
Alwyn
Vorster
Total
85,000
199,300
21,071
85,000
390,371
22%
-
-
-
90,000
42,265
-
151,218
10,000
4,015
-
-
-
-
100,000
197,498
-%
-%
-%
48,000
4,000
4,560
134,000
190,560
70%
11,441
-
1,087
-
265,000
-
-
-
12,528
265,000
61,385
338,091
-
619,518
5,832
46,565
-
67,217
219,000 1,223,174
131,236
92,500
12,000
54,500
106,670
36,530
8,000
179,500
12,000
378,936
4,400
258,400
12,373
-
-
3,470
-
15,843
40,000
98,000
195,609
245,000
98,000
114,500
212,670
334,000
40,000
56,400
390,500 1,043,679
-%
-%
-%
18%
20.4%
40.0%
46.1%
34.3%
70.9%
37.4%
Volt Resources Limited and Controlled Entities
16
DIRECTORS’ REPORT Continued
Share Based Compensation
Options
Details of options over ordinary shares provided as remuneration to each Director of Volt
Resources Limited and each of the key management personnel of the Company and Consolidated
Entity are set out below. When exercised, each option is convertible into one ordinary share of
Volt Resources Limited. Terms and conditions of share-based payment arrangements affecting
remuneration of key management personnel in the current financial year or future financial years:
Grant
Date
27-May-14
25-Feb-15
07-Aug-15
01-Apr-16
07-Apr-16
Total
Number Vesting Date
9,000,000
6,000,000
3,000,000
2,000,000
2,000,000
22,000,000
27-May-15
25-Feb-15
07-Aug-15
01-Apr-16
07-Apr-16
Expiry
Date
31-Dec-17
31-Dec-17
31-Dec-17
31-Dec-17
31-Dec-17
Exercise
Price
$0.02
$0.02
$0.02
$0.02
$0.02
Grant Date
Fair Value
$0.0048
$0.0067
$0.0055
$0.0200
$0.0200
%
Vested
100%
100%
100%
100%
100%
There were no options granted, exercised or lapsed during the financial year, in relation to options
granted to key management personnel as part of their remuneration.
Performance Rights
8,000,000 performance rights have been issued to Alwyn Vorster during the 2017 financial year
with milestones identical to performance rights issued to Stephen Hunt in the 2016 financial year.
Based upon a valuation of the performance rights at the grant date an amount of $219,000 has
been included in remuneration for these recipients based on the value attributable to the
milestones which were achieved during the 2017 financial year. Performance rights whose
targets were met during the 2017 financial year have been converted into ordinary shares. The
remaining performance rights will be cancelled and new performance rights will be issued, subject
to shareholder approval.
Volt Resources Limited and Controlled Entities
17
DIRECTORS’ REPORT Continued
Directors and Key Management Personnel Equity Holdings
Shares
Key
Management
Personnel
Balance at
Beginning
of Year
Issued as
Remuneration
2017
Stephen Hunt
Alan
Armstrong
Trevor
Matthews
Matt Bull
Alwyn Vorster
Asimwe
Kabunga
Mark
Hoffmann
Jason
Livingstone
Total
2016
Stephen Hunt
Adrien Wing
Alan
Armstrong
Matt Bull
Alwyn Vorster
Total
4,173,454
4,000,000
-
3,838,885
1,515,151
142,127,795
-
-
155,655,285
-
3,000,000
500,000
-
378,788
3,878,788
*On-market purchases / (sales).
**Balance on date of resignation.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Net Other
Change*
Balance at
End of Year
Exercise of
Options /
Conversion of
Performance
Rights
2,500,000
2,585,000
9,258,454
-
(4,000,000)**
-
-
-
2,000,000
-
250,000
-
-
4,088,885
3,515,151
-
-
3,517,323 145,645,118
-
-
-
4,500,000
-
-
2,352,323 162,507,608
-
1,000,000
4,173,454
1,700,056
4,173,454
5,700,056
3,000,000
3,000,000
-
7,000,000
500,000
838,885
1,136,363
8,348,758
4,000,000
3,838,885
1,515,151
19,227,546
Volt Resources Limited and Controlled Entities
18
DIRECTORS’ REPORT Continued
Options
Key
Management
Personnel
2017
Stephen
Hunt
Alan
Armstrong
Trevor
Matthews
Matt Bull
Alwyn
Vorster
Asimwe
Kabunga
Mark
Hoffmann
Jason
Livingstone
Total
2016
Stephen
Hunt
Adrien Wing
Alan
Armstrong
Matt Bull
Alwyn
Vorster
Total
Vested at End of Year
Balance at
Beginning
of Year
Granted as
Remuneration
Exercise
of
Options
Net Other
Change*
Balance at
End of
Year
Exercisable
Vested
During
Year
2,000,000
3,000,000
-
3,000,000
2,000,000
9,046,430
-
-
19,046,430
-
-
-
-
-
-
-
-
-
-
9,000,000
2,000,000
-
3,000,000
-
-
3,000,000
-
12,000,000
2,000,000
7,000,000
-
-
2,000,000
2,000,000
-
(3,000,000)**
-
-
-
2,461,412
-
5,461,412
-
5,461,412
-
2,000,000
2,000,000
2,351,183 11,397,613 11,397,613
300,000
300,000
300,000
-
-
2,112,595 21,159,025 21,159,025
-
-
-
-
-
-
-
-
-
-
850,028
2,000,000
9,850,028
2,000,000 2,000,000
-
9,850,028
-
-
3,000,000
3,000,000
3,000,000
-
3,000,000 3,000,000
-
2,000,000 2,000,000
850,028 19,850,028 19,850,028 7,000,000
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
*On-market purchases / (sales).
**Option lapse.
All share options issued to key management personnel were made in accordance with the
provisions of the employee share option plan. During the financial year, no options were exercised
by key management personnel (2016: nil). For details of the employee share option plan and of
share options granted during the 2017 and 2016 financial years, please refer to Note 14.
Volt Resources Limited and Controlled Entities
19
DIRECTORS’ REPORT Continued
Other Transactions with Key Management Personnel of the Consolidated Entity
During the 2016 financial year, the Consolidated Entity paid $4,950 as an underwriting fee, on
normal commercial terms to Stephen Hunt.
End of Remuneration Report
Signed in accordance with a resolution of directors.
___________________
Asimwe Kabunga
Non-Executive Chairman
28 August 2017
Volt Resources Limited and Controlled Entities
20
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Volt Resources Limited for the
year ended 30 June 2017, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
HLB Mann Judd
Chartered Accountants
L Di Giallonardo
Partner
Perth, Western Australia
28 August 2017
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: hlb@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a world-wide organisation of accounting firms and business advisers
21
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Revenue
Corporate compliance fees
Corporate management costs
Foreign exchange (loss)
Marketing and investor relations costs
Occupancy expenses
Share based payments
Other expenses
Loss before income tax benefit
Income tax benefit
Net loss for the year from continuing operations
Discontinued operations
Loss after tax from discontinued operations
Net loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or
loss:
Exchange differences on translation of foreign operations
Note
2
2, 13
3
9
Consolidated
Year Ended
30 June 2017
$
Consolidated
Year Ended
30 June 2016
$
52,260
(470,490)
(1,173,265)
15,241
(332,727)
(130,153)
(792,750)
(423,003)
24,100
(428,417)
(627,620)
(40,282)
(223,210)
(53,877)
(1,773,609)
(203,660)
(3,254,887)
152,852
(3,326,575)
-
(3,102,035)
(3,326,575)
-
(479,980)
(3,102,035)
(3,806,555)
(400,866)
(25,829)
Total comprehensive loss for the year
(3,502,901)
(3,832,384)
Loss attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive loss attributable to:
Owners of the parent
Non-controlling interests
(3,099,831)
(2,204)
(3,102,035)
(3,812,285)
5,730
(3,806,555)
(3,500,697)
(2,204)
(3,502,901)
(3,838,114)
5,730
(3,832,384)
Basic and diluted loss per share from continuing operations
(cents)
Basic and diluted loss per share from discontinued
operations(cents)
4
4
(0.32)
-
(0.57)
(0.08)
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
22
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total Current Assets
Non-Current Assets
Trade and other receivables
Other financial assets
Plant and equipment
Deferred exploration expenditure
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
EQUITY
Issued capital
Reserves
Accumulated losses
Parent entity interest
Non-controlling interests
Total Equity
Note
Consolidated
30 June
2017
$
Consolidated
30 June
2016
$
5
6
6
7
8
9
102,208
148,401
52,315
7,617,762
104,120
103,973
302,924
7,825,855
2,400
30,000
123,854
16,581,589
2,400
20,000
-
10,750,378
16,737,843
10,772,778
17,040,767
18,598,633
10
11
667,062
21,682
1,108,067
-
688,744
1,108,067
688,744
1,108,067
16,352,023
17,490,566
12
13
53,342,884
4,173,650
(40,946,202)
16,570,332
(218,309)
51,722,526
3,830,516
(37,846,371)
17,706,671
(216,105)
16,352,023
17,490,566
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
23
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Consolidated
Entity
Issued
Capital
Reserves
Accumulated
Losses
$
$
$
Parent Entity
Interest
$
Non-
Controlling
Interest
$
Total
$
Balance at 1 July
2016
Loss for the year
Other
comprehensive
income
Total
comprehensive
income for the
year
Shares issued
during the year
Security issue
expenses
Share based
payments
Balance at 30
June 2017
Balance at 1 July
2015
Loss for the year
Other
comprehensive
income
Total
comprehensive
income for the
year
Shares issued
during the year
Security issue
expenses
Share based
payments
Balance at 30
June 2016
51,722,526 3,830,516
(37,846,371)
17,706,671
(216,105)
17,490,566
-
(3,099,831)
(3,099,831)
(2,204)
(3,102,035)
-
(400,866)
-
(400,866)
-
(400,866)
-
(400,866)
(3,099,831)
(3,500,697)
(2,204)
(3,502,901)
1,637,708
(17,350)
-
-
-
744,000
-
-
-
1,637,708
(17,350)
744,000
-
-
-
1,637,708
(17,350)
744,000
53,342,884
4,173,650
(40,946,202)
16,570,322
(218,309)
16,352,023
32,466,385 2,903,738
(34,034,086)
1,336,037
(221,835)
1,114,202
-
-
-
(3,812,285)
(3,812,285)
5,730
(3,806,555)
(25,829)
-
(25,829)
-
(25,829)
-
(25,829)
(3,812,285)
(3,838,114)
5,730
(3,832,384)
19,968,609
(712,468)
-
-
-
952,607
-
-
-
19,968,609
(712,468)
952,607
-
-
-
19,968,609
(712,468)
952,607
51,722,526
3,830,516
(37,846,371)
17,706,671
(216,105)
17,490,566
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
24
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Cash flows from operating activities
Payments to suppliers and employees
Research and development tax credit received
Interest received
Note
Consolidated
Year Ended
30 June 2017
$
Inflows/
(Outflows)
Consolidated
Year Ended
30 June 2016
$
Inflows/
(Outflows)
(2,246,478)
229,279
52,447
(1,386,523)
-
24,100
Net cash used in operating activities
5
(1,964,752)
(1,362,423)
Cash flows from investing activities
Payments for term deposits
Payments for plant and equipment
Payments for exploration and evaluation
expenditure
Payment for acquisition of Volt Graphite Tanzania
Limited (formerly Nachi Resources Limited)
(10,000)
(133,058)
(22,400)
-
(6,266,877)
(3,038,679)
-
(342,002)
Net cash used in investing activities
(6,409,935)
(3,403,081)
Cash flows from financing activities
Proceeds from issue of shares
Payment of share issue costs
1,148,957
(283,349)
12,341,609
(512,468)
Net cash provided by financing activities
865,608
11,829,141
Net increase/(decrease) in cash held
(7,509,079)
7,063,637
Cash and cash equivalents at beginning of the
financial year
Effects of exchange rates on cash and cash
equivalents
7,617,762
554,125
(6,475)
-
Cash and cash equivalents at year end
5
102,208
7,617,762
The accompanying notes form part of these financial statements.
Volt Resources Limited and Controlled Entities
25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
1.
Statement of significant accounting policies
Basis of preparation
a)
These financial statements are general purpose financial statements, which have been prepared
in accordance with the requirements of the Corporations Act 2001, Accounting Standards and
Interpretations and comply with other requirements of the law. The accounting policies detailed
below have been consistently applied to all of the years presented unless otherwise stated. The
financial statements are for the Consolidated Entity consisting of Volt Resources Limited and its
subsidiaries. The financial statements have also been prepared on a historical cost basis. Cost
is based on the fair values of the consideration given in exchange for assets. The Company is a
listed public company, incorporated in Australia. The entity’s principal activities are mineral
exploration in Tanzania (as more fully described in the Directors’ Report).
Going Concern
The financial report has been prepared on a going concern basis, which contemplates the
continuity of normal business activity and the realisation of assets and the settlement of liabilities
in the normal course of business.
As at 30 June 2017 the Consolidated Entity had net assets of $16,352,023 (2016: $17,490,566), an
excess of current liabilities over current assets of $385,820 (2016: excess of current assets over
current liabilities of $6,717,788), and a cash balance of $102,208 (2016: $7,617,762).
During the year, the Consolidated Entity had a net cash outflow from operating activities of
$1,964,752 (2016: $1,362,423), net outflow from investing activities of $6,409,935 (2016:
$3,403,081) and a net inflow from financing activities of $865,608 (2016: $11,829,141) for an
overall net cash outflow of $7,509,079 (2016: net inflow of $7,063,637) before effects of exchange
rates on cash. The Consolidated Entity has undertaken a number of initiatives to reduce the cost
of operations and to seek further funding. The Directors are of the opinion that the Consolidated
Entity is a going concern due to the following factors:
(i)
As at 30 June 2017 the Company has 236,314,931 listed options and 4,500,000 unlisted
options on issue, exercisable at $0.02 and expiring 31 December 2017. As these are
currently “in the money”, the Company anticipates that these options will be exercised,
resulting in the receipt of proceeds of $4.82m;
The Company has received a $1,000,000 convertible loan in July 2017. The loan is
repayable within one year, however it has the potential to be converted into ordinary
shares in the Company; and
The Company has the ability to raise additional working capital from a capital raising in
the short term.
(ii)
(iii)
Whilst the Directors are confident that the above initiatives will generate sufficient funds to
enable the Consolidated Entity to continue as a going concern for at least the period of 12 months
from the date of signing this financial report, should these initiatives be unsuccessful, there exists
a material uncertainty that may cast significant doubt on the ability of the Consolidated Entity to
continue as a going concern and, therefore, whether it will be able to realise its assets and
extinguish its liabilities in the normal course of business and at the amounts stated in the financial
report.
Volt Resources Limited and Controlled Entities
26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
1.
Statement of significant accounting policies (Continued)
Adoption of new and revised standards
b)
Standards and Interpretations applicable to 30 June 2017
In the year ended 30 June 2017, the Directors have reviewed all of the new and revised Standards
and Interpretations issued by the AASB that are relevant to the Consolidated Entity and effective
for the current annual reporting period. As a result of this review, the Directors have determined
that there is no impact, material or otherwise, of the new and revised Standards and
Interpretations on the Consolidated Entity’s business and, therefore, no change is necessary to
the Consolidated Entity’s accounting policies. The Directors have also reviewed all new Standards
and Interpretations that have been issued but are not yet effective for the year ended 30 June
2017. As a result of this review the Directors have determined that there is no impact, material or
otherwise, of the new and revised Standards and Interpretations on the Consolidated Entity’s
business and, therefore, no change necessary to the Consolidated Entity’s accounting policies.
c)
Statement of compliance
The financial report was authorised for issue on 28 August 2017. The financial report complies
with Australian Accounting Standards, which include Australian equivalents to International
Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial
Reporting Standards (IFRS).
Basis of consolidation
d)
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 in with the investee;
and
• has the ability to affect its 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 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 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 are 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 controlling interest having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries to bring their accounting
policies in line with the Consolidated Entity’s accounting policies. All intragroup assets and
liabilities, equity, income, expenses and cash flows relating to transactions between members
are eliminated in full on consolidation.
Volt Resources Limited and Controlled Entities
27
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
Critical accounting judgements and key sources of estimation uncertainty
e)
The application of accounting policies requires the use of judgements, estimates and
assumptions about carrying values of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual results may differ from these
estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions are recognised in the period in which the estimate is revised if it affects only that
period, or in the period of the revision and future periods if the revision affects both current and
future periods.
Share-based payment transactions:
The Consolidated Entity measures the cost of equity-settled transactions by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
using the Black and Scholes formula taking into account the terms and conditions upon which the
instruments were granted.
2.
Revenue and expenses
Revenue
Continuing operations
Interest income
Expenses
Continuing operations
Share based payments:
Ordinary shares
Liability settled in ordinary shares
Performance rights
Options
Consolidated
Year Ended 30
June 2017
$
Consolidated
Year Ended
30 June 2016
$
52,260
24,100
52,260
24,100
-
(48,750)
(219,000)
(525,000)
(698,500)
(440,000)
(294,000)
(341,109)
(792,750)
(1,773,609)
Accounting policy: revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to
the Consolidated Entity and the revenue can be reliably measured. The following specific
recognition criteria must also be met before revenue is recognised:
(i) Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective
yield on the financial asset.
Volt Resources Limited and Controlled Entities
28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
Consolidated
Year Ended 30
June 2017
$
Consolidated
Year Ended
30 June 2016
$
3.
Income tax
The prima facie income tax benefit on pre-tax accounting loss reconciles to the income tax benefit
in the financial statements as follows:
Accounting loss before income tax
Income tax benefit calculated at 27.5% (2016: 28.5%)
Share based payments
Non-deductible expenses
Capital raising costs deductible
Income tax losses not brought to account
Profit and loss proportion of research and development tax
credit
Income tax benefit from continuing operations
(3,254,887)
895,094
(243,100)
(295,444)
22,962
(379,512)
152,852
152,852
(3,806,555)
1,084,868
(505,479)
(20,996)
47,856
(606,249)
-
-
The tax rate used in the above reconciliation is the corporate tax rate of 27.5% (2016: 28.5%)
payable by Australian corporate entities on taxable profits under Australian tax law for small
businesses. The Consolidated Entity has tax losses arising in Australia of $17,543,167 (2016:
$16,163,124) that are available indefinitely for offset against future taxable profits of the
companies in which the losses arose. The availability of these losses is subject to the satisfaction
of either the same business or continuity of ownership tests. Deferred tax assets have not been
recognised in respect of these items because it is not sufficiently probable that future taxable
profit will be available against which the Consolidated Entity can utilise the benefits thereof.
Accounting policy: income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted by the
reporting date. Deferred income tax is provided on all temporary differences at the reporting
date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary
differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or
of an asset or liability in a transaction that is not a business combination and that, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss;
or
• when the taxable temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, and the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary difference will not
reverse in the foreseeable future.
Volt Resources Limited and Controlled Entities
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
3.
Income tax (continued)
Deferred income tax assets are recognised for all deductible temporary differences, carry-
forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences and the carry-forward
of unused tax credits and unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; or
• when the deductible temporary difference
in
subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset
is only recognised to the extent that it is probable that the temporary difference will
reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
is associated with
investments
The carrying amount of deferred income tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred
income tax assets are reassessed at each reporting date and are recognised to the extent that it
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to
apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in
profit or loss. Deferred tax assets and deferred tax liabilities are offset only if a legally
enforceable right exists to set off current tax assets against current tax liabilities and the
deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
Tax consolidation legislation
Volt Resources Limited and its 100% owned Australian resident subsidiary have implemented
the tax consolidation legislation. Current and deferred tax amounts are accounted for in each
individual entity as if each entity continued to act as a taxpayer on its own. Volt Resources
Limited recognises both its own current and deferred tax amounts and those current tax
liabilities, current tax assets and deferred tax assets arising from unused tax credits and unused
tax losses which it has assumed from its controlled entities within the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognised as amounts payable or receivable from or payable to other entities in the
Consolidated Entity. Any difference between the amounts receivable or payable under the tax
funding agreement are recognised as a contribution to (or distribution from) controlled entities
in the tax consolidated group.
Volt Resources Limited and Controlled Entities
30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
3.
Income tax (continued)
Accounting policy: other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition
of the asset or as part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as
part of receivables or payables in the statement of financial position. Cash flows are included in
the statement of cash flows on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority
are classified as operating cash flows. Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation authority.
4.
Loss per share
Loss after tax from continuing operations
Loss after tax from discontinued operations
Consolidated
Year Ended
30 June 2017
$
Consolidated
Year Ended
30 June 2016
$
(3,102,035)
-
(3,326,575)
(479,980)
Consolidated
Year Ended
30 June 2017
No.
Consolidated
Year Ended
30 June 2016
No.
Weighted average number of ordinary shares
962,554,436
583,282,168
Consolidated
Year Ended
30 June 2017
Cents per
Share
Consolidated
Year Ended
30 June 2016
Cents per
Share
Basic / diluted loss per share – continuing operations
Basic / diluted loss per share – discontinued operations
(0.32)
-
(0.57)
(0.08)
As the Consolidated Entity is loss making in both 2017 and 2016, no potential ordinary shares are
considered to be dilutive as they would act to decrease the loss per share. The options on issue
(Note 12) represent potential ordinary shares but are not dilutive and accordingly have been
excluded from the weighted average number of ordinary shares and potential ordinary shares
used in the calculation of diluted earnings per share.
Volt Resources Limited and Controlled Entities
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
4.
Loss per share (continued)
Accounting policy: loss per share
Basic earnings per share is calculated as net profit or loss attributable to members of the parent,
adjusted to exclude any costs of servicing equity (other than dividends) divided by the weighted
average number of ordinary shares, adjusted for any bonus element. Diluted earnings per share
is calculated as net profit or loss attributable to members of the parent, adjusted for:
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary
shares that have been recognised as expenses; and
• other non-discretionary changes in revenues or expenses during the period that would
result from the dilution of potential ordinary shares; divided by the weighted average
number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
5.
Cash and cash equivalents
Cash at bank and on hand
Consolidated
30 June 2017
$
Consolidated
30 June 2016
$
102,208
7,617,762
102,208
7,617,762
Consolidated
Year Ended
30 June 2017
$
Consolidated
Year Ended
30 June 2016
$
Reconciliation of loss for the year to net cash outflows from operating activities:
Loss for the year
Depreciation
Non-capitalised exploration expenditure
Impairment of other assets
Foreign exchange (gain)/loss
Share based payments
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments
(Increase)/decrease in trade and other payables
(3,102,035)
11,787
-
-
(15,241)
792,750
(44,281)
51,658
340,610
(3,806,555)
-
479,980
73,670
-
1,773,609
(87,297)
(103,973)
308,143
Net cash used in operating activities
(1,964,752)
(1,362,423)
Volt Resources Limited and Controlled Entities
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
5.
Cash and cash equivalents (continued)
Accounting policy: cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. Cash at bank earns interest at floating rates based on daily
bank deposit rates.
6.
Trade and other receivables
Current:
Other receivables
Rental bonds
Non-Current:
Rental bond
Consolidated
30 June 2017
$
Consolidated
30 June 2016
$
91,056
57,345
104,120
-
148,401
104,120
2,400
2,400
2,400
2,400
Accounting policy: trade and other receivables
Trade receivables are measured on initial recognition at fair value and are subsequently
measured at amortised cost using the effective interest rate method, less provision for
impairment. Trade receivables are generally due for settlement within periods ranging from 15
days to 30 days. Impairment of trade receivables is continually reviewed and those that are
considered to be uncollectible are written off by reducing the carrying amount directly. An
allowance account is used when there is objective evidence that the Consolidated Entity may
not be able to collect all amounts due according to the original contractual terms. Factors
considered by the Consolidated Entity in making this determination include known significant
financial difficulties of the debtor, review of financial information and significant delinquency in
making contractual payments to the Consolidated Entity. The impairment allowance is set equal
to the difference between the carrying amount of the receivable and the present value of
estimated future cash flows, discounted at the original effective interest rate. Where
receivables are short-term discounting is not applied in determining the allowance. The amount
of the impairment loss is recognised in the statement of profit or loss within other expenses.
When a trade receivable for which an impairment allowance had been recognised becomes
uncollectible in a subsequent period, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are credited against other expenses in the
statement of profit or loss.
Volt Resources Limited and Controlled Entities
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
7.
Other financial assets
Term deposit
Consolidated
30 June 2017
$
Consolidated
30 June 2016
$
30,000
20,000
30,000
20,000
Accounting policy: financial assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement
are classified as either financial assets at fair value through profit or loss, loans and receivables,
held-to-maturity investments, or available-for-sale investments, as appropriate. When financial
assets are recognised initially, they are measured at fair value, plus, in the case of investments
not at fair value through profit or loss, directly attributable transactions costs. The Consolidated
Entity determines the classification of its financial assets after initial recognition and, when
allowed and appropriate, re-evaluates this designation at each financial year-end. All regular
way purchases and sales of financial assets are recognised on the trade date i.e. the date that
the Consolidated Entity commits to purchase the asset. Regular way purchases or sales are
purchases or sales of financial assets under contracts that require delivery of the assets within
the period established generally by regulation or convention in the marketplace.
(i) Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category ‘financial assets at fair
value through profit or loss’. Financial assets are classified as held for trading if they are acquired
for the purpose of selling in the near term. Derivatives are also classified as held for trading
unless they are designated as effective hedging instruments. Gains or losses on investments
held for trading are recognised in profit or loss.
(ii) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are
classified as held-to-maturity when the Consolidated Entity has the positive intention and ability
to hold to maturity. Investments intended to be held for an undefined period are not included
in this classification. Investments that are intended to be held-to-maturity, such as bonds, are
subsequently measured at amortised cost. This cost is computed as the amount initially
recognised minus principal repayments, plus or minus the cumulative amortisation using the
effective interest method of any difference between the initially recognised amount and the
maturity amount. This calculation includes all fees and points paid or received between parties
to the contract that are an integral part of the effective interest rate, transaction costs and all
other premiums and discounts. For investments carried at amortised cost, gains and losses are
recognised in profit or loss when the investments are derecognised or impaired, as well as
through the amortisation process.
Volt Resources Limited and Controlled Entities
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
7.
Other financial assets (continued)
(iii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Such assets are carried at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, as well as through the amortisation process.
(iv) Available-for-sale investments
Available-for-sale investments are those non-derivative financial assets that are designated as
available-for-sale or are not classified as any of the three preceding categories. After initial
recognition available-for sale investments are measured at fair value with gains or losses being
recognised as a separate component of equity until the investment is derecognised or until the
investment is determined to be impaired, at which time the cumulative gain or loss previously
reported in equity is recognised in profit or loss. The fair value of investments that are actively
traded in organised financial markets is determined by reference to quoted market bid prices at
the close of business on the reporting date. For investments with no active market, fair value is
determined using valuation techniques. Such techniques include using recent arm’s length
market transactions; reference to the current market value of another instrument that is
substantially the same; discounted cash flow analysis and option pricing models.
8.
Plant and equipment
Cost
Accumulated depreciation
Written down value
Reconciliation:
Opening written down value
Additions
Depreciation
Foreign currency translation
Closing written down value
Consolidated
30 June 2017
$
Consolidated
30 June 2016
$
143,797
(19,943)
123,854
8,156
(8,156)
-
Consolidated
Year Ended
30 June 2017
$
Consolidated
Year Ended
30 June 2016
$
-
137,676
(11,787)
(2,035)
123,854
-
-
-
-
-
Volt Resources Limited and Controlled Entities
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
8.
Plant and equipment (continued)
Accounting policy: property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated
impairment losses. Depreciation is calculated on a straight-line basis over the estimated useful
life of the assets as follows:
• Plant and equipment – over 3 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date,
with recoverable amount being estimated when events or changes in circumstances indicate
that the carrying value may be impaired. The recoverable amount of plant and equipment is the
higher of fair value less costs to sell 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
an asset that does not generate largely independent cash inflows, recoverable amount is
determined for the cash-generating unit to which the asset belongs, unless the asset's value in
use can be estimated to be close to its fair value. An impairment exists when the carrying value
of an asset or cash-generating units exceeds its estimated recoverable amount. The asset or
cash-generating unit is then written down to its recoverable amount. For plant and equipment,
impairment losses are recognised in profit or loss for the year as a separate line item.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further
future economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
9.
Deferred exploration expenditure
Balance at beginning of year
Expenditure during the year
Acquisition of Tanzanian graphite project
Impairment
Foreign currency translation
Balance at end of year
Consolidated
30 June 2017
$
Consolidated
30 June 2016
$
10,750,378
6,166,554
11,339
-
(346,682)
478,703
7,637,536
3,114,119
(479,980)
-
16,581,589
10,750,378
Volt Resources Limited and Controlled Entities
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
9.
Deferred exploration expenditure (continued)
Discontinued operations:
During the 2016 financial year, tenements comprising the Australian Coal assets were
relinquished and, accordingly, the amounts previously capitalised in the financial report were
written off. Due to these assets representing a separate geographical segment per the segment
reporting at Note 17, this represents a discontinued operation. The loss after tax from
discontinued operations was $Nil (2016: $479,980).
Acquisition of subsidiary:
During the 2016 financial year, the Consolidated Entity acquired 100% of Volt Graphite Tanzania
Limited (formerly Nachi Resources Limited) (a company registered in Tanzania). As Volt Graphite
Tanzania Limited does not constitute a business, this transaction was accounted for as an asset
acquisition, being the acquisition of exploration and evaluation assets.
Accounting policy: exploration and evaluation
Exploration and evaluation expenditures in relation to each separate area of interest are
recognised as an exploration and evaluation asset in the year in which they are incurred where
the following conditions are satisfied:
(i)
(ii) at least one of the following conditions is also met:
the rights to tenure of the area of interest are current; and
(a) the exploration and evaluation expenditures are expected to be recouped through
successful development and exploration of the area of interest, or alternatively, by its
sale; or
(b) exploration and evaluation activities in the area of interest have not at the reporting
date reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and significant operations
in, or in relation to, the area of interest are continuing.
Volt Resources Limited and Controlled Entities
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
9.
Deferred exploration expenditure (continued)
Exploration and evaluation assets are initially measured at cost and include acquisition of rights
to explore, studies, exploratory drilling, trenching and sampling and associated activities and an
allocation of depreciation and amortised of assets used in exploration and evaluation activities.
General and administrative costs are only included in the measurement of exploration and
evaluation costs where they are related directly to operational activities in a particular area of
interest. Exploration and evaluation 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
(for the cash generating unit(s) to which it has been allocated being no larger than the relevant
area of interest) 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 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 has been
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
development. Capitalised exploration and evaluation expenditure represents the accumulated
cost of acquisition and subsequent cost of exploration and evaluation of the properties.
Ultimate recoupment of these costs is dependent on the successful development and
commercial exploitation, or alternatively, sale, of the respective areas of interest.
Accounting policy: impairment of assets
The Consolidated Entity assesses at each reporting date whether there is an indication that an
asset may be impaired. If any such indication exists, or when annual impairment testing for an
asset is required, the Consolidated Entity makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use
and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets and the asset's value in
use cannot be estimated to be close to its fair value. In such cases the asset is tested for
impairment as part of the cash-generating unit to which it belongs. When the carrying amount
of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating
unit is considered impaired and is written down to its recoverable amount. 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. Impairment losses relating to continuing operations are recognised in those
expense categories consistent with the function of the impaired asset unless the asset is carried
at revalued amount (in which case the impairment loss is treated as a revaluation decrease). An
assessment is also made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated.
Volt Resources Limited and Controlled Entities
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
9.
Deferred exploration expenditure (continued)
A previously recognised impairment loss is reversed only if there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is increased to its recoverable
amount. That increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount,
in which case the reversal is treated as a revaluation increase. After such a reversal the
depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount,
less any residual value, on a systematic basis over its remaining useful life.
Accounting policy: non-current assets (or disposal groups) held for sale and discontinued
operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will
be recovered principally through a sale transaction rather than through continuing use and a
sale is considered highly probable. They are measured at the lower of their carrying amount and
fair value less costs to sell, except for assets such as deferred tax assets, assets arising from
employee benefits, financial assets and investment property that are carried at fair value and
contractual rights under insurance contracts, which are specifically exempt from this
requirement. An impairment loss is recognised for any initial or subsequent write-down of the
asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent
increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any
cumulative impairment loss previously recognised. A gain or loss not previously recognised by
the date of the sale of the non-current asset (or disposal group) is recognised at the date of
derecognition. Non-current assets (including those that are part of a disposal group) are not
depreciated or amortised while they are classified as held for sale. Interest and other expenses
attributable to the liabilities of a disposal group classified as held for sale continue to be
recognised. Non-current assets classified as held for sale and the assets of the disposal group
classified as held for sale are presented separately from the other assets in the statement of
financial position. The liabilities of a disposal group classified as held for sale are presented
separately from other liabilities in the statement of financial position. A discontinued operation
is a component of the entity that has been disposed of or is classified as held for sale and that
represents a separate major line of business or geographical area of operations, is part of a single
co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary
acquired exclusively with a view to resale. The results of discontinued operations are presented
separately in the statement of profit or loss.
Accounting policy: business combinations
The acquisition method of accounting is used to account for all business combinations, including
business combinations involving entities or business under common control, regardless of
whether equity instruments or other assets are acquired. The consideration transferred for the
acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities
incurred and the equity interests issued by the group. The consideration transferred also
includes the fair value of any contingent consideration arrangement and the fair value of any
pre-existing equity interest in the subsidiary.
Volt Resources Limited and Controlled Entities
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
9.
Deferred exploration expenditure (continued)
Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition
basis, the group recognises any non-controlling interest in the acquiree either at fair value or at
the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. The
excess of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over
the fair value of the group’s share of the net identifiable assets acquired is recorded as goodwill.
If those amounts are less than the fair value of the net identifiable assets of the subsidiary
acquired and the measurement of all amounts has been reviewed, the difference is recognised
directly in profit or loss as a bargain purchase. Where settlement of any part of cash
consideration is deferred, the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the entity’s incremental borrowing
rate, being the rate at which a similar borrowing could be obtained from an independent
financier under comparable terms and conditions. Contingent consideration is classified as
either equity or a financial liability. Amounts classified as a financial liability are subsequently
remeasured to fair value with changes in fair value recognised in profit or loss.
10.
Trade and other payables
Trade creditors and accruals
Consolidated
30 June 2017
$
Consolidated
30 June 2016
$
667,062
1,108,067
667,062
1,108,067
Accounting policy: trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods
and services provided to the Consolidated Entity prior to the end of the financial year that are
unpaid and arise when the Consolidated Entity becomes obliged to make future payments in
respect of the purchase of these goods and services. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months. Trade payables are non-interest
bearing and are normally settled on 30-day terms.
11.
Provisions
Employee entitlements
21,682
21,682
-
-
Volt Resources Limited and Controlled Entities
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
12.
Issued capital
Issued and paid up capital:
Ordinary shares fully paid of no par value
Consolidated
30 June 2017
$
Consolidated
30 June 2016
$
53,342,884
51,722,526
53,342,884
51,722,526
Movement in ordinary shares on
issue:
Balance at beginning of year
Entitlements issue
Subsidiary acquisitions
In lieu of consultancy and
corporate advisory fees
Options exercised at $0.02 per
share
Placement at $0.035 per share
Performance rights converted at
$Nil per right
Placement at $0.033 per share
Placement at $0.01 per share
Options exercised (not yet issued)
In lieu of services
Performance rights converted at
$Nil per right
Options exercised at $0.02 per
share
Security issue expenses
Balance at end of year
Consolidated
Year Ended 30 June 2017
Number
$
Consolidated
Year Ended 30 June 2016
Number
$
906,180,471
-
-
51,722,526
-
-
308,645,421
127,661,569
176,000,000
32,466,385
1,531,843
6,928,500
-
-
-
-
-
-
-
5,250,000
4,500,000
-
-
-
35,104,529
698,500
21,703,802
50,000,000
434,001
1,750,000
-
-
-
-
488,750
9,000,000
138,065,150
40,000,000
-
-
-
4,556,150
4,000,000
69,615
-
-
-
-
60,853,718
-
976,784,189
1,148,958
(17,350)
53,342,884
-
-
906,180,471
-
(712,468)
51,722,526
Volt Resources Limited and Controlled Entities
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
12.
Issued capital (continued)
Share options:
Grant Date Details
Expiry
Date
Exercise
Price
Balance at
30-Jun-16
26-Nov-12 Unlisted options
02-Aug-12 Unlisted options
2
Listed options
01-Apr-16 Unlisted options
25-May-16 Unlisted options
25-May-16 Unlisted options
25-May-16 Unlisted options
25-May-16 Unlisted options
13-Sep-16 Unlisted options
13-Sep-16 Unlisted options
13-Sep-16 Unlisted options
30-Nov-16
02-Aug-16
31-Dec-17
31-Dec-17
30-Apr-19
30-Apr-19
30-Apr-19
30-Apr-19
12-Aug-17
12-Aug-18
12-Aug-19
2,200,000
$0.25
$0.25
475,000
$0.02 289,668,649
12,000,000
$0.02
4,200,000
$0.06
4,200,000
$0.08
4,200,000
$0.10
4,200,000
$0.12
-
$0.12
-
$0.14
-
$0.16
Granted
During the
Year
-
-
-
-
-
-
-
7,500,000
7,500,000
7,500,000
Exercised
During the
Year
-
-
(53,353,718)
(7,500,000)
-
-
-
-
-
-
-
Expired
During the
Year
(2,200,000)
(475,000)
-
-
-
-
-
-
-
-
-
Cancelled
During the
Year
Balance at
30-Jun-17
-
-
236,314,931
4,500,000
4,200,000
4,200,000
4,200,000
4,200,000
-
-
-
(7,500,000)
(7,500,000)
(7,500,000)
321,143,649 22,500,000
(60,853,718)
(2,675,000)
(22,500,000) 257,614,931
The options granted during the year (and cancelled) were granted to a corporate advisor for
services relating to ongoing capital market strategy requirements, and the resulting value of
$525,000 has been expensed in the current year. In addition, a further expense of $90,000
relating to options issued in the previous year but relating to services rendered in the current
year, has been recorded. The options granted during the year have been valued using the Black
and Scholes option pricing method with the following inputs:
Exercise Price
$0.12
$0.14
$0.16
Expiry Date
12-Aug-17
12-Aug-18
12-Aug-19
Share Price
$0.07
$0.07
$0.07
Volatility
100%
100%
100%
Interest Rate
1.5%
1.5%
1.5%
Performance rights:
Issue Date Details
Various Unlisted performance rights
Balance at
30-Jun-16
10,000,000
10,000,000
Granted
During the
Year
8,000,000
8,000,000
Expired
During the
Year
-
-
Converted
During the
Year
(4,500,000)
(4,500,000)
Balance at
30-Jun-17
13,500,000
13,500,000
2 Varying grant dates: 27-May-14, 20-Feb-15, 26-Feb-15, 19-Mar-15, 21-Apr-15, 15-May-15, 07-Aug-15, 10-Aug-15, 18-Aug-15, 22-
Oct-16, 04-Nov-15, 11-Nov-15.
Volt Resources Limited and Controlled Entities
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
12.
Issued capital (continued)
The unlisted performance rights granted during the year to a Non-Executive Director each convert
into one fully paid ordinary share upon satisfaction of certain milestones achieved by the
Company. The unlisted performance rights will rank equally with the existing fully paid ordinary
shares on issue. The performance rights granted during the year were valued at $536,000 in total.
The value attributed to the performance rights whose vesting conditions were satisfied during the
year, together with the value attributed to the performance rights granted in previous years
whose vesting conditions were satisfied during the year, amounted to $219,000. This amount has
been expensed in the current year.
Accounting policy: issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds.
13.
Reserves
Share based payments reserve:
Balance at beginning of year
Share based payments
Balance at end of year
Foreign currency translation reserve:
Balance at beginning of year
Currency translation differences
Balance at end of year
Consolidated
Year Ended
30 June 2017
$
Consolidated
Year Ended
30 June 2016
$
3,932,507
744,000
2,979,900
952,607
4,676,507
3,932,507
(101,991)
(400,866)
(76,162)
(25,829)
(502,857)
(101,991)
Total reserves
4,173,650
3,830,516
Volt Resources Limited and Controlled Entities
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
13.
Reserves (continued)
Accounting policy: foreign currency translation
Both the functional and presentation currency of Volt Resources Limited and its Australian
subsidiaries is Australian dollars. Each entity in the Consolidated Entity determines its own
functional currency and items included in the financial statements of each entity are measured
using that functional currency.
Transactions in foreign currencies are initially recorded in the functional currency by applying
the exchange rates ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of exchange ruling at the
reporting date. All exchange differences in the consolidated financial report are taken to profit
or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rate as at the date of the initial transaction. Non-monetary
items measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value was determined. Translation differences on assets and liabilities carried
at fair value are reported as part of the fair value gain or loss. The functional currency of foreign
operations through Dugal Resources Lda and Xiluva Mozambi Lda, is Mozambique New Metical
(MZN) The functional currency of foreign operations through Volt Graphite Tanzania Limited is
Tanzanian Shillings (TZS) and US Dollars (USD). As at the balance date the assets and liabilities
of these subsidiaries are translated into the presentation currency of Volt Resources Limited at
the rate of exchange ruling at the reporting date and their statements of comprehensive income
are translated at the weighted average exchange rate for the year. The exchange differences
arising on the translation are taken directly to a separate component of equity, being recognised
in the foreign currency translation reserve. On disposal of a foreign entity, the deferred
cumulative amount recognised in equity relating to that particular foreign operation is
recognised in profit or loss.
Volt Resources Limited and Controlled Entities
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
14.
Share based payments
Under an established Performance Rights Plan, Stephen Hunt, Alwyn Vorster, Alan Armstrong,
Matt Bull, and Adrien Wing were issued Performance Rights in the following tranches and subject
to the following vesting conditions:
Key
Management
Personnel
Grant Date
Tranche
Number of
Performance
Rights
Fair Value
Expensed
Vesting Conditions
Vesting
Conditions
Achieved
Stephen Hunt
08-Apr-16
1
2,500,000
$85,000
2
3
4
1
2
3
1
2
3
1
2
3
1
2
3
4
2,500,000
$Nil
2,500,000
$Nil
2,500,000
$Nil
1,000,000
$32,600
1,000,000
$30,400
1,000,000
$35,000
1,000,000
$32,600
1,000,000
$30,400
1,000,000
$35,000
1,000,000
$32,600
1,000,000
$30,400
1,000,000
$35,000
2,000,000
$134,000
2,000,000
$Nil
2,000,000
$Nil
2,000,000
27,000,000
$Nil
$513,000
08-Apr-16
08-Apr-16
08-Apr-16
Adrien Wing3
26-Oct-15
Alan
Armstrong 4
26-Oct-15
26-Oct-15
26-Oct-15
26-Oct-15
26-Oct-15
Matt Bull
26-Oct-15
26-Oct-15
26-Oct-15
Alwyn Vorster
20-Dec-16
22-Dec-16
22-Dec-16
22-Dec-16
Total
3 Resigned 15-Aug-16
4 Resigned 22-Aug-16
Completion of a PFS on the Namangale project by 31
March 2017
Execution of an off-take agreement in respect of the
Namangale project for a minimum of 50% of the
minimum production contemplated in the PFS by 30 June
2017
Execution of contracts for finance sufficient to fund the
commissioning of mining operations at the Namangale
project by 30 September 2017
Commencement of mining and processing of first ore
recovered from the Namangale project by 31 March
2019
Market capitalisation of the Company of $25m or more
within 3 years of issue date
Market capitalisation of the Company of $40m or more
within 3 years of issue date
Company successfully raising an aggregate of $5m or
more for the purposes of development of the Tanzanian
assets, working capital and other opportunities
Market capitalisation of the Company of $25m or more
within 3 years of issue date
Market capitalisation of the Company of $40m or more
within 3 years of issue date
Company successfully raising an aggregate of $5m or
more for the purposes of development of the Tanzanian
assets, working capital and other opportunities
Market capitalisation of the Company of $25m or more
within 3 years of issue date
Market capitalisation of the Company of $40m or more
within 3 years of issue date
Company successfully raising an aggregate of $5m or
more for the purposes of development of the Tanzanian
assets, working capital and other opportunities
Completion of a PFS on the Namangale project by 31
March 2017
Execution of an off-take agreement in respect of the
Namangale project for a minimum of 50% of the
minimum production contemplated in the PFS by 30 June
2017
Execution of contracts for finance sufficient to fund the
commissioning of mining operations at the Namangale
project by 30 September 2017
Commencement of mining and processing of first ore
recovered from the Namangale project by 31 March
2019
Yes
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
Volt Resources Limited and Controlled Entities
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
14.
Share based payments (continued)
Under a new Performance Rights Plan (to be approved by shareholders at the 2017 Annual
General Meeting), Stephen Hunt, Trevor Matthews, Matt Bull, Alwyn Vorster and Asimwe
Kabunga will be issued Performance Rights in the following tranches and subject to the following
vesting conditions during the year:
Key
Management
Personnel
Stephen
Hunt
Trevor
Matthews
Matt Bull
Alwyn
Vorster
Asimwe
Kabunga
Total
Tranche
Number of
Performance
Rights
Vesting Conditions
1
3
1
2
3
1
3
1
3
1
3
4,000,000
1,000,000
Commence stage 1 of the construction of the
Namangale project
Achieving a 30-day VWAP of 20c/share for the
Company
Commence stage 1 of the construction of the
Namangale project
10,000,000
2,000,000 Completion of the Namangale project DFS
Achieving a 30-day VWAP of 20c/share for the
Company
Commence stage 1 of the construction of the
Namangale project
Achieving a 30-day VWAP of 20c/share for the
Company
Commence stage 1 of the construction of the
Namangale project
Achieving a 30-day VWAP of 20c/share for the
Company
Commence stage 1 of the construction of the
Namangale project
Achieving a 30-day VWAP of 20c/share for the
Company
5,000,000
3,000,000
1,000,000
3,000,000
1,000,000
3,000,000
1,000,000
34,000,000
Volt Resources Limited and Controlled Entities
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
14.
Share based payments (continued)
The following share based payments were made during the financial year:
Details
Security Type
Consulting services
Consulting services
Consulting services
Consulting services
Stephen Hunt
Alwyn Vorster
Total
Fully paid ordinary shares
Unlisted options exercisable at
$0.12 expiring 12-Aug-17
Unlisted options exercisable at
$0.14 expiring 12-Aug-18
Unlisted options exercisable at
$0.16 expiring 12-Aug-19
Director performance rights
Director performance rights
Issue / Grant Date Number Issued
/ Granted
1,250,000
25-Aug-16
Fair Value
$48,750
Vested
Expense
$48,750
13-Sep-16
7,500,0005
$112,500
$112,500
13-Sep-16
7,500,0006
$180,000
$180,000
13-Sep-16
7,500,0007
$232,500
20-Dec-16 & 22-Dec-16
8
8,000,000
31,750,000
$536,000
$1,109,750
$232,500
$85,000
$134,000
$792,750
The fair value of the equity settled share options granted during the financial year is estimated as
at the date of grant using the Black Scholes model taking into account the terms and conditions
upon which the options were granted:
Details
Expected volatility
Risk free interest rate
Expected option life
Exercise price
Grant date share price
Unlisted options exercisable
at $0.12 expiring 12-Aug-17
100%
1.50%
333 days
$0.12
$0.07
Unlisted options exercisable
at $0.14 expiring 12-Aug-18
100%
1.50%
698 days
$0.14
$0.07
Unlisted options exercisable
at $0.16 expiring 12-Aug-19
100%
1.50%
1,063 days
$0.16
$0.07
Accounting policy: share-based payment transactions
(i) Equity settled transactions:
The Consolidated Entity provides benefits to employees (including senior executives) of the
Consolidated Entity in the form of share-based payments, whereby employees render services
in exchange for shares or rights over shares (equity-settled transactions). The cost of these
equity-settled transactions with employees is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by an
external valuer using a Black-Scholes model. In valuing equity-settled transactions, no account
is taken of any performance conditions, other than conditions linked to the price of the shares
of Volt Resources Limited (market conditions) if applicable. The cost of equity-settled
transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (the vesting period).
5 Cancelled 18-May-17
6 Cancelled 18-May-17
7 Cancelled 18-May-17
8 The expense of $85,000 relates to the milestones achieved in the current year in relation to performance rights granted in the
previous year
Volt Resources Limited and Controlled Entities
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
14.
Share based payments (continued)
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects (i) the extent to which the vesting period has expired and (ii) the
Consolidated Entity’s best estimate of the number of equity instruments that will ultimately vest.
No adjustment is made for the likelihood of market performance conditions being met as the
effect of these conditions is included in the determination of fair value at grant date. The
statement of comprehensive income charge or credit for a period represents the movement in
cumulative expense recognised as at the beginning and end of that period. No expense is
recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition. If the terms of an equity-settled award are modified, as a
minimum an expense is recognised as if the terms had not been modified. In addition, an
expense is recognised for any modification that increases the total fair value of the share-based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification. If an equity-settled award is cancelled, it is treated as if it had vested on the date
of cancellation, and any expense not yet recognised for the award is recognised immediately.
However, if a new award is substituted for the cancelled award and designated as a replacement
award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award, as described in the previous paragraph. The dilutive effect,
if any, of outstanding options is reflected as additional share dilution in the computation of
earnings/loss per share (see Note 4).
15.
Financial instruments
Capital risk management
The Consolidated Entity manages its capital to ensure that entities in the Consolidated Entity will be
able to continue as a going concern while maximising the return to stakeholders through the
optimisation of the debt and equity balance. The Consolidated Entity’s overall strategy remains
unchanged from 2016. The capital structure of the Consolidated Entity consists of debt, cash and cash
equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves
and retained earnings. None of the entities are subject to externally imposed capital requirements.
Operating cash flows are used to maintain and expand operations, as well as to make routine
expenditures such as tax, and general administrative outgoings. Gearing levels are reviewed by the
Board on a regular basis in line with its target gearing ratio, the cost of capital and the risks associated
with each class of capital.
Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Consolidated
30 June 2017
$
Consolidated
30 June 2016
$
102,208
150,801
30,000
7,617,762
106,520
20,000
283,009
7,744,282
Volt Resources Limited and Controlled Entities
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
15.
Financial instruments (continued)
Categories of financial instruments
Financial liabilities
Trade and other payables
Consolidated
30 June 2017
$
Consolidated
30 June 2016
$
667,062
(1,108,067)
667,062
(1,108,067)
Financial risk management objectives
The Consolidated Entity is exposed to market risk (including currency risk, fair value interest rate
risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Consolidated
Entity seeks to minimise the effect of these risks, by using derivative financial instruments to
hedge these risk exposures where appropriate. The use of financial derivatives is governed by the
Consolidated Entity’s policies approved by the board of directors, which provide written principles
on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-
derivative financial instruments, and the investment of excess liquidity. Compliance with policies
and exposure limits is reviewed by management on a continuous basis. The Consolidated Entity
does not enter into or trade financial instruments, including derivative financial instruments, for
speculative purposes.
Market risk
The Consolidated Entity’s activities expose it primarily to the financial risks of changes in foreign
currency exchange rates, commodity prices and exchange rates. There has been no change to the
Consolidated Entity’s exposure to market risks or the manner in which it manages and measures
the risk from the previous period.
Foreign currency risk management
The Consolidated Entity undertakes certain transactions denominated in foreign currencies,
hence exposures to exchange rate fluctuations arise. Exchange rate exposures are managed
within approved policy parameters. No forward contracts or other hedging instruments have
been used during the current or prior year as the Consolidated Entity’s foreign exchange exposure
is not considered to be sufficiently material to justify such activities. The carrying amounts of the
Consolidated Entity’s foreign currency denominated monetary assets and monetary liabilities at
the balance date expressed in Australian dollars are as follows:
US dollars
Tanzanian shillings
Assets
Liabilities
2017
US$12,458
TZS6,712,836
2016
US$12,273
TZS-
2017
US$59,963
TZS-
2016
US$-
TZS-
Volt Resources Limited and Controlled Entities
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
15.
Financial instruments (continued)
Foreign currency sensitivity analysis
The Consolidated Entity is exposed to US Dollar (USD) currency fluctuations. The following table
details the Consolidated Entity’s sensitivity to a 10% increase and decrease in the Australian dollar
against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign
currency risk internally to key management personnel and represents management’s assessment
of the possible change in foreign exchange rates. The sensitivity analysis includes only
outstanding foreign currency denominated monetary items and adjusts their translation at the
period end for a 10% change in foreign currency rates. A positive number indicates a weakening
against the respective currency. For a strengthening of the Australian Dollar against the respective
currency there would be an equal and opposite impact on the profit and other equity and the
balances below would be negative.
Result for the year
Result for the year
USD Impact
2017
$
4,083
2016
$
1,227
TZS Impact
2017
TZS
(27)
2016
TZS
-
Interest rate risk
As at and during the year ended on reporting date the Consolidated Entity had no significant
interest-bearing assets or liabilities other than liquid funds on deposit. As such, the Consolidated
Entity’s income and operating cash flows (other than interest income from funds on deposit) are
substantially independent of changes in market interest rates. The Consolidated Entity’s exposure
to interest rate risk for each class of financial assets and liabilities is set out below:
Financial Asset
Cash and cash equivalents
Total
Interest Rate Consolidated
2017
$
102,208
102,208
Floating
Consolidated
2016
$
7,617,762
7,617,762
Consolidated Entity and Parent Company sensitivity
The sensitivity analyses below have been determined based on the exposure to interest rates at
the balance date and the stipulated change taking place at the beginning of the financial year and
held constant through the reporting period. At balance date, if interest rates had been 80 basis
points higher or lower and all other variables were held constant, the Consolidated Entity’s net
result would increase or decrease by $4,181 (2016: $60,942). This is mainly attributable to the
Consolidated Entity’s exposure to interest rates on its variable rate cash holdings.
Volt Resources Limited and Controlled Entities
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
15.
Financial instruments (continued)
Credit risk
The Consolidated Entity seeks to trade only with recognised, trustworthy third parties and it is the
Group’s policy to perform credit verification procedures in relation to any customers wishing to
trade on credit terms with the Consolidated Entity. The Consolidated Entity has no significant
concentrations of credit risk.
Liquidity risk
Prudent liquidity management involves the maintenance of sufficient cash, marketable securities,
committed credit facilities and access to capital markets. It is the policy of the Board to ensure
that the Consolidated Entity is able to meet its financial obligations and maintain the flexibility to
pursue attractive investment opportunities through keeping committed credit lines available
where possible, ensuring the Consolidated Entity has sufficient working capital and preserving the
15% share issue limit available to the Company under the ASX Listing Rules.
Maturities of financial liabilities
Consolidated Entity - As at reporting date the Consolidated Entity had total financial liabilities of
$667,062 (2016: $668,067), comprised of non-interest-bearing payables to related parties, trade
creditors and accruals with a maturity of less than 6 months.
Net fair value
The carrying amount of financial assets and liabilities recorded in the financial statements
approximate their fair value as at 30 June 2017.
Accounting policy: derecognition of financial assets and financial liabilities
(i) Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is derecognised when:
•
•
•
the rights to receive cash flows from the asset have expired;
the Consolidated Entity retains the right to receive cash flows from the asset, but has
assumed an obligation to pay them in full without material delay to a third party under
a ‘pass-through’ arrangement; or
the Consolidated Entity has transferred its rights to receive cash flows from the asset and
either:
(a)
(b)
has transferred substantially all the risks and rewards of the asset, or
has neither transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the asset.
When the Consolidated Entity has transferred its rights to receive cash flows from an asset and
has neither transferred nor retained substantially all the risks and rewards of the asset nor
transferred control of the asset, the asset is recognised to the extent of the Consolidated Entity’s
continuing involvement in the asset. Continuing involvement that takes the form of a guarantee
over the transferred asset is measured at the lower of the original carrying amount of the asset
and the maximum amount of consideration received that the Consolidated Entity could be
required to repay.
Volt Resources Limited and Controlled Entities
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
15.
Financial instruments (continued)
When continuing involvement takes the form of a written and/or purchased option (including a
cash-settled option or similar provision) on the transferred asset, the extent of the Consolidated
Entity’s continuing involvement is the amount of the transferred asset that the Consolidated
Entity may repurchase, except that in the case of a written put option (including a cash-settled
option or similar provision) on an asset measured at fair value, the extent of the Consolidated
Entity’s continuing involvement is limited to the lower of the fair value of the transferred asset
and the option exercise price.
(ii) Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability
and the recognition of a new liability, and the difference in the respective carrying amounts is
recognised in profit or loss.
Financial assets carried at amortised cost
Accounting policy: impairment of financial assets
The Consolidated Entity assesses at each reporting date whether a financial asset or group of
financial assets is impaired.
(i)
If there is objective evidence that an impairment loss on loans and receivables carried at
amortised cost has been incurred, the amount of the loss is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows (excluding
future credit losses that have not been incurred) discounted at the financial asset’s original
effective interest rate (i.e. the effective interest rate computed at initial recognition). The
carrying amount of the asset is reduced either directly or through use of an allowance account.
The amount of the loss is recognised in profit or loss. The Consolidated Entity first assesses
whether objective evidence of impairment exists individually for financial assets that are
individually significant, and individually or collectively for financial assets that are not
individually significant. If it is determined that no objective evidence of impairment exists for an
individually assessed financial asset, whether significant or not, the asset is included in a group
of financial assets with similar credit risk characteristics and that group of financial assets is
collectively assessed for impairment. Assets that are individually assessed for impairment and
for which an impairment loss is or continues to be recognised are not included in a collective
assessment of impairment. 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. Any
subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the
carrying value of the asset does not exceed its amortised cost at the reversal date.
(ii) Financial assets carried at cost
If there is objective evidence that an impairment loss has been incurred on an unquoted equity
instrument that is not carried at fair value (because its fair value cannot be reliably measured),
or on a derivative asset that is linked to and must be settled by delivery of such an unquoted
equity instrument, the amount of the loss is measured as the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the current
market rate of return for a similar financial asset.
Volt Resources Limited and Controlled Entities
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
15.
Financial instruments (continued)
(iii) Available-for-sale investments
If there is objective evidence that an available-for-sale investment is impaired, an amount
comprising the difference between its cost (net of any principal repayment and amortisation)
and its current fair value, less any impairment loss previously recognised in profit or loss, is
transferred from equity to profit or loss for the period. Reversals of impairment losses for equity
instruments classified as available-for-sale are not recognised in profit. Reversals of impairment
losses for debt instruments are reversed through profit or loss if the increase in an instrument's
fair value can be objectively related to an event occurring after the impairment loss was
recognised in profit or loss.
Consolidated
Year Ended
30 June 2017
$
Consolidated
Year Ended
30 June 2016
$
16.
Commitments and contingencies
In order to maintain and preserve the rights of tenure to granted exploration tenements, the
Consolidated Entity is required to meet certain minimum levels of exploration expenditure. As at
the reporting date, these future minimum exploration expenditure commitments are as follows:
Within one year
One to five years
723,836
7,238,356
279,418
838,256
7,962,192
1,117,674
There are no contingent liabilities as at the date of this report.
17.
Financial reporting by segments
AASB 8 requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the chief operating decision maker in
order to allocate resources to the segment and to assess its performance.
The function of the chief operating decision maker is performed by the Board collectively.
Information reported to the Board for the purposes of resource allocation and assessment of
performance is focused broadly on the Group’s diversified activities across different sectors.
The Group’s reportable segments under AASB 8 are therefore as follows:
• Mineral Exploration – Tanzania
• Mineral Exploration – Australia
Information regarding the activities of these segments during the current and prior financial year
is set out in the following tables.
Volt Resources Limited and Controlled Entities
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
Australian
Exploration
$
Tanzanian
Exploration
$
Total
$
30 June 2017
Segment revenue
Segment results
Interest revenue
Central administration costs and Directors’
remuneration
Loss before income tax
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
-
-
-
(50,422)
-
(50,422)
52,260
(3,256,725)
(3,254,887)
-
16,581,589
16,581,589
459,178
17,040,767
-
303,460
303,460
385,284
688,744
Volt Resources Limited and Controlled Entities
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
Australian
Exploration
$
Tanzanian
Exploration
$
Total
$
17.
Financial reporting by segments (continued)
30 June 2016
Segment revenue
Segment results
Interest revenue
Central administration costs and Directors’
remuneration
Share based payments
Loss before income tax
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
-
(479,980)
-
-
-
(479,980)
24,100
(1,577,066)
(1,773,609)
(3,806,555)
-
10,750,378
10,750,378
7,848,255
18,598,633
-
184,647
184,647
923,420
1,108,067
Accounting policy: segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision maker. The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating segments, has been identified as
the Board of Directors of Volt Resources Limited.
Volt Resources Limited and Controlled Entities
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
18.
Subsidiaries
Subsidiary
Principal Activity
Deregistered
Blackall Capital Pty Ltd
Dormant
Dugal Pty Ltd
Dormant
Dugal Resources Lda
Deregistered
Mine Mixers Pty Ltd
Deregistered
MNBB Pty Ltd
Mozambi Graphite Pty Ltd
Dormant
Mozambi Resources Pty Ltd Dormant
Mozambi Ventures Lda
Dormant
Volt Graphite Tanzania Ltd9 Graphite exploration
Xiluva Mozambi Lda
Dormant
Country of
Incorporation
Australia
Australia
Mozambique
Australia
Australia
Australia
Australia
Mozambique
Tanzania
Mozambique
Equity Interest
2017
2016
-%
100%
70%
-%
-%
100%
100%
80%
100%
80%
100%
100%
70%
100%
100%
100%
100%
80%
100%
80%
19.
Auditor’s remuneration
Amounts received or due and receivable by HLB Mann Judd
for an audit or review of the financial report
Consolidated
Year Ended
30 June 2017
$
Consolidated
Year Ended
30 June 2016
$
38,250
31,000
38,250
31,000
20.
Key management personnel remuneration
Total remuneration paid to key management personnel during the year:
Short term benefits
Post-employment benefits
Share based payments
957,609
46,565
219,000
637,336
15,843
390,500
1,223,174
1,043,679
During the year, Asimwe Kabunga received consultancy fees of $60,000 before his appointment
as Director.
9 Changed its name from Nachi Resources Ltd on 18-Apr-17
Volt Resources Limited and Controlled Entities
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
Parent Entity
30 June 2017
$
Parent Entity
30 June 2016
$
21.
Parent entity information
The following details information related to the parent entity, Volt Resources Limited, as at 30
June 2017. The information presented here has been prepared using consistent accounting
policies as presented in Note 1.
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
262,892
16,699,868
16,962,760
7,818,413
10,586,123
18,404,536
(610,737)
-
(610,737)
(913,970)
-
(913,970)
16,352,023
17,490,566
53,342,844
4,676,509
(41,667,330)
16,352,023
51,722,526
3,932,507
(38,164,467)
17,490,566
Parent Entity
Year Ended
30 June 2017
$
Parent Entity
Year Ended
30 June 2016
$
Loss for the year
Total comprehensive loss for the year
(3,502,863)
(3,502,863)
(3,852,851)
(3,852,851)
Within one year
One to five years
78,128
26,366
104,494
-
-
-
Volt Resources Limited and Controlled Entities
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
21.
Parent entity information (continued)
Accounting policy: parent entity financial information
The financial information for the parent entity, Volt Resources Limited, disclosed in this note has
been prepared on the same basis as the consolidated financial statements, except as set out
below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the
financial statements of Volt Resources Limited. Dividends received from associates are
recognised in the parent entity’s profit or loss, rather than being deducted from the carrying
amount of these investments.
(ii) Share-based payments
The Consolidated Entity measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which they are granted. The
fair value is determined using a Black-Scholes model.
22.
Events subsequent to year end
No matters or circumstances have arisen since the end of the year which will significantly affect,
or may significantly affect, the state of affairs or operations of the reporting entity in future
financial periods other than the following:
The Company completed interim funding on 7 July 2017 to raise $1m for working capital purposes
through a 12-month convertible loan facility.
A detailed Offtake Term Sheet with Qingdao Tianshengda for 10,000 tonnes per annum of flake
graphite concentrate was signed in July 2017. The contract period is five years with concentrate
delivery planned to commence from mid-2018.
Three Bills passed through the Tanzanian Parliament in early July 2017 containing changes to the
legal framework governing the natural resources sector in Tanzania. The Written Laws
Miscellaneous Amendments Act (“Miscellaneous Amendments Act”), the Natural Wealth and
Resources (Permanent Sovereignty) Act (“Permanent Sovereignty Act”) and the Natural Wealth
and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Act (“Review and
Re-Negotiation of Unconscionable Terms Act”) have been approved by Tanzania’s Parliament and
received Presidential assent. In addition, Tanzania’s Parliament has approved the new Finance
Act, which will impose a 1% clearing fee on the value of all minerals exported from the country
from 1 July 2017.
The Company advised the ASX of the impact of the new legislation on 7 July 2017. Based on the
initial review and external legal advice, the Board and Management believe the legislative changes
– as currently passed by the Tanzanian parliament – would not cause or prevent the Company
from progressing with its current business strategy and plans for the future development of the
Namangale project.
Volt Resources Limited and Controlled Entities
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
FOR THE YEAR ENDED 30 JUNE 2017
22.
Events subsequent to year end (continued)
Mr Stephen Brockhurst resigned as Company Secretary effective 1 August 2017 and Mrs Susan
Hunter was appointed Company Secretary effective 1 August 2017.
Mr Asimwe Kabunga was appointed Non-Executive Chairman effective 4 August 2017 and Mr
Stephen Hunt was appointed Non-Executive Director effective 4 August 2017.
Volt Resources Limited and Controlled Entities
59
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of Volt Resources Limited (the ‘Company’):
a. the accompanying financial statements and notes and the additional disclosures
are in accordance with the Corporations Act 2001 including:
i. giving a true and fair view of the Consolidated Entity’s financial position
as at 30 June 2017 and of its performance for the year then ended; and
ii. complying with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations regulations 2001; and
b. there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
2. The financial statements and notes thereto are in accordance with International Financial
Reporting Standards issued by the International Accounting Standards Board.
3. 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 30 June 2017.
This declaration is signed in accordance with a resolution of the Board of Directors.
___________________
Asimwe Kabunga
Non-Executive Chairman
28 August 2017
Volt Resources Limited and Controlled Entities
60
INDEPENDENT AUDITOR’S REPORT
To the members of Volt Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Volt Resources Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June
2017, 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, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a)
giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its financial
performance for the year then ended; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1(a) in the financial report, which indicates that the ability of the Group to
continue as a going concern is dependent on the ability to raise sufficient capital in the future or other
forms of funding. If the Group is unable to raise sufficient capital in the future or other forms of funding,
there exists a material uncertainty that may cast significant doubt on the Group’s ability to continue as
a going concern and therefore, the Group may be unable to realise its assets and discharge its liabilities
in the normal course of business. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material Uncertainty
Related to Going Concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
61
Key Audit Matter
How our audit addressed the key audit matter
Carrying amount of exploration and evaluation
expenditure
Note 9 of the financial report
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group
capitalises all exploration and evaluation
including acquisition costs and
expenditure,
subsequently applies
the cost model after
recognition.
Our audit focussed on the Group’s assessment of
the carrying amount of the capitalised exploration
and evaluation asset, as this is one of the most
significant assets of the Group. We planned our
work to address the audit risk that the capitalised
expenditure might no longer meets the recognition
criteria of the standard. In addition, we considered
it necessary
facts and
circumstances existed to suggest that the carrying
amount of an exploration and evaluation asset
may exceed its recoverable amount.
to assess whether
Share based payment expense
Note 14 of the financial report
The Group has recorded a material share based
payment expense for the year ended 30 June
2017. This expense has arisen from the granting
during the current year and previous years of
options to a corporate advisor and performance
rights to a non-executive director. The valuation of
these options and performance rights are subject
to complex estimation techniques and significant
judgement. A small change in assumptions can
have a material impact on the financial report.
Our procedures included but were not limited to
the following:
We obtained an understanding of the key
processes associated with management’s
review of the carrying values of each area of
interest;
We considered the Directors’ assessment of
potential indicators of impairment;
We obtained evidence that the Group has
current rights to tenure of its areas of interest;
We examined the exploration budget for the
year ending 30 June 2018 and discussed with
management the nature of planned ongoing
activities;
We enquired with management, reviewed
ASX announcements and reviewed minutes
of Directors’ meetings to ensure that the
Group had not resolved
to discontinue
exploration and evaluation at any of its areas
of interest; and
We examined the disclosures made in the
financial report.
Our procedures included but were not limited to
the following:
We assessed the reasonableness of the
assumptions used in the valuation of the
share based payments as well as testing the
accuracy of the calculations themselves.
We agreed the terms of the share based
payments to the actual option agreements
and performance
to
ensure that the valuations were based on the
terms of those agreements.
rights agreements
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2017, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
62
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
63
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
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.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the remuneration report
We have audited the remuneration report included in pages 13 to 20 of the directors’ report for the year
ended 30 June 2017.
In our opinion, the remuneration report of Volt Resources Limited for the year ended 30 June 2017
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration
report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the remuneration report, based on our audit conducted in accordance with Australian
Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
28 August 2017
L Di Giallonardo
Partner
64
ADDITIONAL INFORMATION
As at 22 August 2017
Issued Securities
Fully paid ordinary shares
$0.02 listed options expiring 31-Dec-17
$0.02 unlisted options expiring 31-Dec-17
$0.06 unlisted options expiring 30-Apr-19
$0.08 unlisted options expiring 30-Apr-19
$0.10 unlisted options expiring 30-Apr-19
$0.12 unlisted options expiring 30-Apr-19
Total
Distribution of Listed Ordinary Fully Paid Shares
Unlisted
Total
Quoted
on ASX
976,784,189
236,814,931
976,784,189
-
236,814,931
-
4,500,000
- 4,500,000
4,200,000
- 4,200,000
4,200,000
- 4,200,000
4,200,000
- 4,200,000
4,200,000
- 4,200,000
1,213,599,120 21,300,000 1,234,899,120
Spread of Holdings
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Total
Number of Holders Number of Units % of Total Issued Capital
0.009%
0.061%
0.182%
6.916%
92.832%
100.000%
88,849
596,907
1,774,536
67,553,770
906,770,127
976,784,189
252
212
221
1,455
1,170
3,310
Number of shareholders holding less than a marketable parcel: 974
Volt Resources Limited and Controlled Entities
65
ADDITIONAL INFORMATION (CONTINUED)
Top 20 Listed Ordinary Fully Paid Shareholders
Rank Shareholder
1.
2.
3.
4.
5.
Kabunga Holdings Pty Ltd
Chata Holdings Pty Ltd
Gerard C Toscan Management Pty Ltd
Gasmere Pty Ltd
Dominic Virgara
Leslie Thomas King & Heather King
6.
Leticia Kokutengeneza Kabunga
7.
Littlejohn Embrey Engineering Pty Ltd
8.
Citicorp Nominees Pty Ltd
9.
Robert Adrian James
10.
Richard Him Sim Vom
11.
12.
Daroc Pty Ltd
13. Minerals & Metals Marketing Pty Ltd
Endjua Pty Ltd
14.
Gasmere Pty Ltd
15.
Robert Lorenzin
16.
17.
Aspen Gold Investments Pty Ltd
18. Molate Pty Ltd
19.
20.
Total
Endeavour Resources Pty Ltd
Adrien Wing
Shares Held
145,645,118
19,000,000
15,026,750
14,151,515
10,000,000
9,750,000
9,196,698
8,579,094
8,116,410
7,500,910
7,439,371
7,113,969
6,758,454
6,082,866
5,972,956
5,331,718
5,030,303
5,014,000
5,000,000
5,000,000
305,710,132
% Issued
Capital
14.911%
1.945%
1.538%
1.449%
1.024%
0.998%
0.942%
0.878%
0.831%
0.768%
0.762%
0.728%
0.692%
0.623%
0.611%
0.546%
0.515%
0.513%
0.512%
0.512%
31.298%
The substantial shareholders of the Company are: Kabunga Holdings Pty Ltd holding
145,645,118 representing 14.911%.
Volt Resources Limited and Controlled Entities
66
ADDITIONAL INFORMATION (CONTINUED)
Top 20 Listed Option Holders
Rank Option Holder
1.
2.
Littlejohn Embrey Engineering Pty Ltd
Kabunga Holdings Pty Ltd
Leslie Thomas King & Heather King
3.
David Lachlan Wildy
4.
CCI Super Fund Pty Ltd
5.
Laurie Barichello
6.
Nicholas Edward Bull
7.
Ian David Penny
8.
Endjua Pty Ltd
9.
David Vyvian Retallick
10.
11. Wobbly Investments Pty Ltd
Leslie Thomas King
12.
Stephen Charles Stuart Watts
13.
Stephen C S Watts & Sarah Scott Watts
14.
Vassago Pty Ltd
15.
Ian Hunter
16.
David Michael Gartner
17.
Tony Crea
18.
Body Sculpting Com Au Pty Ltd
19.
20.
Glenn Thomas Connor
Total
Options
Held
12,466,820
11,397,613
7,000,000
5,701,000
5,000,000
4,000,000
4,000,000
3,935,000
3,865,112
3,680,000
3,536,713
3,400,000
3,346,226
3,330,453
3,081,250
3,000,000
3,000,000
3,000,000
2,625,000
2,480,097
91,845,284
% Listed
Options
5.276%
4.823%
2.962%
2.412%
2.116%
1.693%
1.693%
1.665%
1.636%
1.557%
1.497%
1.439%
1.416%
1.409%
1.304%
1.269%
1.269%
1.269%
1.111%
1.049%
38.866%
Volt Resources Limited and Controlled Entities
67
ADDITIONAL INFORMATION (CONTINUED)
Corporate Governance Statement
The Board of Volt Resources has adopted the spirit and intent of the 3rd Edition of the
Corporate Governance Principles and Recommendations of the ASX Corporate Governance
Council.
The Company’s Corporate Governance Statement is available in the Governance section of the
Company’s website http://voltresources.com/corporate-governance/ . This document is
reviewed regularly to address any changes in governance practices and the law.
Volt Resources Limited and Controlled Entities
68
ADDITIONAL INFORMATION (CONTINUED)
Tenement Listing
All tenement within Tanzania are held by Volt Graphite Tanzania Ltd, a wholly owned
subsidiary of Volt Resources Ltd.
Current tenements
Project
Location
Tenement
Number
Status
Beneficial
Interest
Tanzania
Graphite
Tanzania - Nachingwea, Ruangwa & Masasi
Districts
Tanzania - Ruangwa & Masasi Districts
Tanzania - Newala & Masasi Districts
Tanzania - Newala, Ruangwa & Masasi Districts
Tanzania - Masasi District
Tanzania - Ruangwa & Lindi Districts
Tanzania - Masasi District
PL 10643
PL 10644
PL 10667
PL 10668
PL 10718
PL 10717
PL 10788
Live
Live
Live
Live
Live
Live
Live
100%
100%
100%
100%
100%
100%
100%
Relinquished tenements
Project
Location
Tanzania
Graphite
Tanzania - Luchingi, Masasi
& Newala Districts
Tanzania - Lindi & Ruangwa
Districts
Tanzania - Masasi District
Tanzania - Masasi &
Nanyumba Districts
Tanzania - Masasi District
Tenement
Number
Status
Beneficial
Interest
Date
Relinquished
PL 10642
Relinquished
0%
20/11/2016
PL 10665
Relinquished
0%
20/11/2016
PL 10666
Relinquished
PL 10716
Relinquished
0%
0%
20/11/2016
20/11/2016
PL 10719
Relinquished
0%
20/11/2016
Volt Resources Limited and Controlled Entities
69
ADDITIONAL INFORMATION (CONTINUED)
Mineral Resource and Ore Reserve Statements
Summary of results of the entity’s annual review of its Ore Reserves and Mineral Resources.
The Company carries out an annual review of its Mineral Resources and Ore Reserves as
required by the ASX Listing Rules. The review was carried out as at 30 June 2017. The
estimates for Ore Reserves and Mineral Resources were prepared and disclosed under the
JORC Code 2012.
As of the 30 June 2017, the Company reviewed the Mineral Resource and Ore Reserve
inventories and found:
• All Mineral Resource and Ore Reserve statements follow JORC 2012 guidelines.
• Opportunities for the Company to convert lower classified Mineral Resources into
higher classification, and
• Opportunities to convert appropriate Mineral Resources into Ore Reserves,
with follow up exploratory work including but not limited to infill drilling and further
metallurgical test work.
Except for the changes to the Mineral Resource Estimate noted below, the Company is not
aware of any new information or data that materially affects the information included in the
Annual Statement about Mineral Resources or Ore Reserves and confirms that all material
assumptions and technical parameters underpinning the estimates continue to apply and have
not materially changed as of 30 June 2017.
Mineral Resource and Ore Reserve Statements
All Mineral Resources and Ore Reserves announced by Volt Resources Ltd are with the
Republic of Tanzania.
Volt Resources Ltd is targeting Graphite mineralisation within the Republic of Tanzania.
As of the 30 June 2017, the Graphite Mineral Resources for Volt Resources Ltd were:
North
South
Total Inferred
Namangale Project Mt
Inferred
264
23
286
Indicated
122
33
155
Measured
20
461
North
South
Total Indicated
TGC (%)
5.0
3.6
4.9
5.2
4.3
5.0
North
Total Resource
Note:
Namangale North previously Nam, Namangale South previously Nam 2 & 3. The Mineral Resource is inclusive of the Ore Reserves.
Inconsistencies in totals are due to rounding.
Refer to announcement “Pre-Feasibility Study Completed” dated 15 December 2016.
This Mineral Resource statement has been compiled in accordance with the guidelines of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (The JORC Code – 2012 Edition).
Mineral Resources were based on cut-off grades of 2.5% TGC for Namangale North and 4% TGC for Namangale South.
5.3
4.9
Volt Resources Limited and Controlled Entities
70
ADDITIONAL INFORMATION (CONTINUED)
As per clause 49 of the JORC 2012 Code, to detail the specifications of the minerals reported
above:
Size
Namangale 1
(North)
Label %
µm
500 Super Jumbo
Jumbo
300
180 Large
150 Medium
75 Small
-75 Fine
1
13
29
12
27
18
Namangale
2 (South)
%
Namangale
3 (South)
%
9
29
29
8
16
9
5
26
30
10
19
11
Note:
Inconsistencies in totals are due to rounding.
Refer to announcement “Pre-Feasibility Study Completed” dated 15 December 2016.
As of the 30 June 2017, the Graphite Ore Reserves for Volt Resources Ltd were:
Ore Reserve Classification Ore (Mt) TGC (%)
Contained Graphite (Mt)
0.8
0.8
Namangale 1 (North)
Namangale 2 (South)
Namangale 3 (South)
Subtotal - Proved
Proved
19.3
4.32
-
-
-
-
-
-
4.32
19.3
Probable
95.8
6.4
5.8
108.1
127.4
4.4
5.11
3.05
4.37
4.36
Namangale 1 (North)
Namangale 2 (South)
Namangale 3 (South)
Subtotal - Probable
Total Ore Reserve
Note:
Namangale North previously Nam, Namangale South previously Nam 2 & 3.
Inconsistencies in totals are due to rounding.
Refer to announcement “Pre-Feasibility Study Completed” dated 15 December 2016.
This Ore Reserve statement has been compiled in accordance with the guidelines of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (The JORC Code – 2012 Edition).
Ore Reserves are based on the following processing cut-off that varied between deposits: 1.29% TGC for Namangale 1, 1.52% for
Namangale 2, and 1.76% for Namangale 3.
4.2
0.3
0.2
4.7
5.6
Volt Resources Limited and Controlled Entities
71
ADDITIONAL INFORMATION (CONTINUED)
Material changes in Mineral Resources and Ore Reserve Holdings
Volt Resources Ltd reports our material changes within the financial year period.
Material changes in Mineral Resources and Ore Reserve Holdings from the previous financial
year
At the end of the 2016 financial year, the Graphite Mineral Resource inventory was:
Namangale
Project
TGC (%)
Namangale 1
Namangale 2
Namangale 3
Total Inferred
Namangale 1
Namangale 2
Namangale 3
Total Indicated
Total Resource
-
-
Mt
Inferred
133.4
16.8
1.6
151.8
Indicated
62.6
-
-
62.6
214.4
5.1
5.4
5.3
5.1
5.1
5.1
5.1
The material change in the Graphite Mineral Resources from the 2016 financial year to the
2017 financial year:
Namangale Project
Total Inferred
Total Indicated
Total Measured
TGC (%) (difference)
Mt (difference)
Increase of
134.2Mt
Down 0.2% TGC
Increase of 92.4Mt Down 0.1% TGC
Increase of 20Mt
Increase of
246.6Mt
-
Total Resources
Note:
Inconsistencies in totals are due to rounding.
Refer to announcement “Pre-Feasibility Study Completed” dated 15 December 2016 & “High Quality Concentrates Produced and
JORC Resource Upgrade at the Namangale Project” dated 13 May 2016.
Down 0.2% TGC
The increase in the total Graphite Mineral Resource tonnage was the result of extensional and infill drilling
completed over each of the mineral resources and subsequent resource estimations utilising such information.
Extensional drilling identified lower grading graphite mineralisation within each resource, hence the slightly lower
total graphitic carbon percentage in the updated mineral resource estimate.
Governance Arrangements and Internal Controls with respect to Mineral Resource and Ore
Reserve Estimates
The Company ensures that all Mineral Resource and Ore Reserve calculations are subject to
appropriate levels of governance and internal controls.
Exploration Results are collected and managed by competent qualified geologists and
metallurgists. All data collection activities are conducted to industry standards based on a
framework of quality assurance and quality control protocols covering all aspects of sample
collection, topographical and geophysical surveys, drilling, sample preparation, physical and
chemical analysis and data and sample management.
Volt Resources Limited and Controlled Entities
72
ADDITIONAL INFORMATION (CONTINUED)
Mineral Resource and Ore Reserve estimates are prepared by qualified independent
Competent Persons. If there is a material change in the estimate of a Mineral Resource, the
modifying factors for the preparation of Ore Reserves, or reporting an inaugural Mineral
Resource or Ore Reserve, the estimate and supporting documentation in question are
reviewed by a suitably qualified independent Competent Person.
The Company reports its Mineral Resources and Ore Reserves on an annual basis in
accordance with the JORC Code 2012 Edition.
The Ore Reserves and Mineral Resources Statement is based on and fairly represents
information and supporting documentation prepared by competent and qualified
independent external professionals.
The Mineral Resources Statement has been approved by a Competent Person, Mr Mark Biggs
of ROM Resources Ltd, a member of the Australasian Institute.
The Ore Reserves Statement has been approved by Mr Andrew Law of Optiro Pty Ltd, a
Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr
Law, Mr Biggs, Mr Bull and Mr Hoffmann have consented to the inclusion of the Statement in
the form and context in which it appears in this Annual Report.
Competent Person’s Statement
The information extracted from the announcements listed above, The Company confirms that
it is not aware of any new information or data that materially affects the information included
in the original market announcement and, in the case of estimates of Mineral Resources and
Ore Reserves, that all material assumptions and technical parameters underpinning the
estimates in the relevant market announcements continue to apply and have not materially
changed. The Company confirms that the form and context in which the Competent Person’s
findings are presented have not been materially modified from the original market
announcement. Nevertheless, for ease of access, please see the relevant Competent Person’s
statements below:
The information in this report that relates to Exploration Results (metallurgical) is based on
information compiled by Mr Mark Hoffmann, a Competent Person who is a member of the
Australasian Institute of Mining and Metallurgy. Mr Hoffmann is a consultant to Volt
Resources Ltd. Mr Hoffmann has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity being undertaken
to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Hoffmann
consents to the inclusion in the report of the matters based on his information in the form and
context in which it appears.
The information in this report that relates to Exploration Targets and Exploration Results is
based on information compiled by Mr Matthew Bull, a Competent Person who is a member of
the Australasian Institute of Mining and Metallurgy. Mr Bull is a director of Volt Resources Ltd
and holds securities in the Company. Mr Bull has sufficient experience that is relevant to the
style of mineralisation and type of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Mr Bull consents to the inclusion in the report of the matters based on his information in the
form and context in which it appears.
The information in this report that relates to Mineral Resources is based on information
compiled by Mr Mark Biggs, a Competent Person who is a member of the Australasian
Institute of Mining and Metallurgy. Mr Biggs is a Director of ROM Resources Pty Ltd. Mr Biggs
has sufficient experience that is relevant to the style of mineralisation and type of deposit
under consideration and to the activity being undertaken to qualify as a Competent Person as
defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results,
Volt Resources Limited and Controlled Entities
73
ADDITIONAL INFORMATION (CONTINUED)
Mineral Resources and Ore Reserves’. Mr Biggs consents to the inclusion in the report of the
matters based on his information in the form and context in which it appears.
The information in this report that relates to Ore Reserves is based on information compiled
Mr Andrew Law, a Competent Person who is a Fellow and Chartered Professional of the
Australasian Institute of Mining and Metallurgy. Mr Law is a Director of Optiro. Mr Law has
sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent Person as
defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. Mr Law consents to the inclusion in the report of the
matters based on his information in the form and context in which it appears.
Volt Resources Limited and Controlled Entities
74