CONTENTS
CORPORATE DIRECTORY ....................................................................................................................... 1
CHAIRMAN’S REPORT ........................................................................................................................... 2
DIRECTORS’ REPORT ............................................................................................................................. 3
AUDITOR’S INDEPENDENCE DECLARATION ......................................................................................... 33
CORPORATE GOVERNANCE STATEMENT ............................................................................................. 34
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ................. 35
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ....................................................................... 36
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ........................................................................ 37
CONSOLIDATED STATEMENT OF CASHFLOWS ..................................................................................... 38
NOTES TO THE FINANCIAL STATEMENTS ............................................................................................. 39
DIRECTORS’ DECLARATION ................................................................................................................. 70
INDEPENDENT AUDITOR’S REPORT ..................................................................................................... 71
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES ........................................................... 75
SCHEDULE OF INTERESTS IN MINING TENEMENTS .............................................................................. 78
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CORPORATE DIRECTORY
DIRECTORS Peter Langworthy (Non‐executive Chairman) Andrew Munckton (Managing Director) David Morgan (Non‐executive Director) Robert Cooper (Non‐executive Director) REGISTERED OFFICE 68A Hay St Subiaco, WA 6008 Telephone: (08) 9380 9440 SOLICITORS Gilbert + Tobin Level 16, Brookfield Place Tower 2 123 St Georges Terrace Perth, WA 6000 AUDITORS PKF Mack Level 5, 35 Havelock Street West Perth, WA 6005 SHARE REGISTRY Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth, WA 6000 Telephone: (08) 9323 2000 Facsimile: (08) 9323 2033 STOCK EXCHANGE LISTING Australian Securities Exchange (Home Exchange: Perth, Western Australia) Code: SMD BANK Westpac Banking Corporation 1257 Hay Street West Perth, WA 6005
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CHAIRMAN’S REPORT
Dear Shareholders, Over the past 12 months, Syndicated Metals has shifted its focus to gold exploration within one of Australia’s premier gold districts with the acquisition of the highly prospective Monument Gold Project in Western Australia. The Monument Project is located in the world‐class Laverton district and lies directly along strike from the 3.3Moz Mt Morgans Gold Project, currently being developed by Dacian Gold Limited, and in close proximity to several other multi‐million ounce gold deposits. The project was acquired from private vendors for $250,000 cash and shares – a relatively low entry price for a project of its quality and location. Our exploration teams have been diligently working through the project and its historical data, while observing the progress being made by others in the district. We have confirmed the geological setting at the most advanced prospect, Korong, as being analogous to Dacian Gold’s 1.6Moz Westralia deposit at Mt Morgans, confirmed the source of historical geophysical anomalies at A1 North, and completed extensive regional soil sampling programs to generate additional drilling targets across the project. Our geological team now has a solid understanding of the styles of gold mineralisation present in the area and is now applying a systematic exploration philosophy to the assessment of the historical prospects and new areas of surface mineralisation. We intend to build on these solid foundations during the year ahead with the commencement of aircore drilling programs which we believe will assist us to vector into potential new discoveries. In order to significantly advance activities at the Monument Project, we have recently divested our 50% ownership of the Barbara Copper Project in Queensland to our joint venture partner at the project, CopperChem Limited. This transaction has provided us with sufficient funding to underpin ongoing quality, systematic exploration programs at the Monument Project. We are committed to our approach and we are confident that it will be rewarded with a breakthrough discovery over the next year. The Board and management team remain strongly motivated and committed to delivering quality, long‐term results to all our shareholders. In conclusion, I would like to take the opportunity once again to thank all our shareholders for their support, and look forward to delivering some exciting news over the coming year. Yours sincerely
Peter Langworthy Chairman
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DIRECTORS’ REPORT
Your directors present the following report on Syndicated Metals Limited (the Company) and the entities it controlled (Group) during or at the end of the financial year ended 30 June 2017. INFORMATION ON DIRECTORS The directors of the company at any time during or since the end of the financial year are; Peter Langworthy Non‐Executive Chairman (Appointed 20 March 2012)
Mr Langworthy is a geologist with a career spanning more than 30 years in mineral exploration and project development in Australia and Indonesia. He has specific expertise in building successful teams that have been responsible for significant mineral discoveries and in integrating technically sound exploration and resource development strategies into corporate planning. His industry experience includes 12 years in senior management roles with WMC Resources, four years with PacMin Mining as Exploration Manager, five years with Jubilee Mines where he built the team responsible for numerous discoveries at the Cosmos Nickel Mine and the Sinclair Nickel Project, and three years with Talisman Mining as Technical Director. At Jubilee he was part of the corporate team responsible for the growth of the company until it was taken over by Xstrata. He has also held non‐executive directorships with other ASX‐listed companies namely Northern Star Resources, Falcon Minerals and Pioneer Resources. Mr Langworthy was previously a Non‐Executive and is now an Executive Director of Capricorn Metals Ltd (formerly Malagasy Minerals Limited) since July 2013 and has been a Non‐Executive Director of Silver Mines Limited since June 2016. Mr Langworthy holds an interest in 24,148,240 shares of the Company and 7,915,351 unlisted options. Andrew Munckton Managing Director (Appointed 20 March 2012)
Mr Munckton has a career spanning more than 30 years in senior roles in mineral exploration and project development in Australia and Sweden including 15 years in gold project exploration, development and operations as Chief Geologist with Pancontinental and General Manager Operations at Paddington, Kundana and Kanowna Belle gold mines. He was General Manager Operations for Gindalbie Metals where he oversaw the development of the Karara Iron Ore Project including securing major Joint Venture partner, Ansteel, of China and completion of a Bankable Feasibility Study on Direct Shipping Ore and Magnetite concentrate projects valued at $2.7 billion. He was Managing Director of ASX listed Avalon Minerals Ltd where he was involved in securing the Viscaria Copper Project in Sweden, building an exploration team and taking the project to Bankable Feasibility Study stage. Mr Munckton holds an interest in 6,306,306 shares of the Company and 5,182,682 performance rights. David Morgan Non‐Executive Director (Executive Director from 20 March 2012 to 31 August 2013.
Non‐Executive Director since 1 September 2013) Mr Morgan is a mining engineer and mechanical engineer with more than 30 years experience in the mining industry in Australia and Africa. He has previously held a number of executive development and mine operations roles involving project engineering, maintenance and contract earthmoving for companies such as Rio Tinto, Macmahon and WMC Resources. He was General Manager Operations for Equigold in Queensland where he was responsible for the building, commissioning and management of the Mt Rawdon Gold Mine. He was General Manager Mining and Metallurgy for Sundance Resources' Mbalam Iron Ore Project in Cameroon where he oversaw the completion of a PFS on a $3.3 billion Direct Shipping Ore and Itabirite project for that company, including the delivery of 10 years of JORC compliant, high grade Ore Reserves and the establishment of project metallurgical and processing parameters. Mr Morgan was CEO of ASX‐listed RNI NL between 2 November 2015 and 1 September 2016. Mr Morgan holds an interest in 13,966,677 shares of the Company and 2,000,000 unlisted options.
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INFORMATION ON DIRECTORS (CONT) Robert Cooper Non‐Executive Director (Appointed 4 May 2015) Mr Cooper is a mining engineer with more than 25 years’ industry experience, having held leadership roles across a diverse range of metalliferous commodities, both in Australia and overseas. He has a broad foundation of operating and technical experience in both underground and open pit operations. His career has been defined by a very strong health and safety improvement focus combined with a track record in delivering successful volume and cost outcomes through improvements in operational efficiency. He has previously held leadership positions with BHP Billiton as General Manager of Leinster Nickel Operations within Nickel West, Project Manager of a BHP Billiton‐wide organisation design project, and as Asset President of Ekati Diamonds in Canada. He more recently held positions with Discovery Metals as General Manager ‐ Operations in Botswana and as General Manager ‐ Development in their Brisbane office. Mr Cooper is currently the CEO of CopperChem Limited and Exco Resources Limited, both of which are 100% owned subsidiaries of the Washington H Soul Pattinson Group of companies. CopperChem holds 28.77% of the Company’s shares. Mr Cooper was appointed as a Non‐Executive Director of ASX‐listed Verdant Minerals Limited (formerly Rum Jungle Resources Limited) in July 2016, and as a Non‐Executive Director of Novonix Limited (formerly Graphitecorp Limited) in October 2016. Mr Cooper holds an interest in 1,580,000 shares of the Company. The directors have been in office to the date of this report unless otherwise stated. COMPANY SECRETARY Mr Paul Bridson is a Chartered Accountant and Chartered Secretary with more than 25 years accounting and finance experience, including more than 20 years in the resources industry. He was formerly Chief Financial Officer and Company Secretary for an unlisted public gold exploration company and prior to that role fulfilled the same role with ASX listed exploration company Avalon Minerals Ltd. Prior to these roles he was Financial Controller for Gindalbie Metals Ltd and has also held site based finance positions with various other WA based mining and mine service companies. Mr Bridson is a Member of the Institute of Chartered Accountants and Governance Institute of Australia. He holds a Bachelor of Commerce degree from the University of Western Australia. PRINCIPAL ACTIVITIES AND SIGNIFICANT CHANGES IN NATURE OF ACTIVITIES During the year the principal activity of the Group consisted of mineral exploration and evaluation in relation to its gold, base metals and copper mineral resources in WA and Queensland. During the year, following shareholder approval, the Company sold its interest in the Barbara Copper Project in Queensland. Apart from this sale and the acquisition of the WA‐based Monument Gold Project, there were no significant changes in the nature of the activities of the Group during the year.
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OPERATING AND FINANCIAL REVIEW Operating Results The net profit of the Group for the financial year after provision for income tax was $1,075,112 (2016: loss $7,080,625) which includes mineral exploration expenditure impaired and written off of $891,372 (2016: $6,740,665). Financial Performance During the year ended 30 June 2017 the Group’s net cash position increased. This increase was predominantly influenced by cash inflows from sale of the Barbara Copper Project of $2,300,000, capital raisings totalling $2,317,038 and receipt of a Research and Development tax incentive totalling $292,606. These inflows were offset by outflows for exploration and evaluation costs of $2,053,740, administrative costs of $622,274 and capital raising costs of $148,127. Financial Position At the end of the year the Group had a cash balance of $2,634,331 (2016: $514,957). The Company has no corporate debt and minimal non‐discretionary long‐term commitments. The net assets of the Group increased from $5,690,231 at 30 June 2016 to $9,233,682 at 30 June 2017 predominantly as a result of the receipt of proceeds of $2.3 million from the sale of the Barbara Project and the capitalisation of exploration and evaluation expenditure of approximately $1.7 million in relation to the newly acquired Monument Gold Project in WA. Total liabilities amounted to $274,317 (2016: $172,903) and were limited to trade and other payables and employee benefit provisions. Strategy The focus of the Group during the financial year was the commencement of drilling and other exploration activities at its recently acquired Monument Gold Project in the Laverton region of WA and exploration and asset maintenance activities associated with the Company’s Queensland copper‐gold projects to ensure the tenement holding is kept in good standing. The Company also negotiated the sale of the Barbara Copper Project to joint venture partner, CopperChem Limited. For the year ended 30 June 2018 the Group plans to continue exploration of the Monument Gold Project and continue to undertake asset maintenance activities associated with the Queensland copper‐gold projects to ensure the tenement holding is kept in good standing whilst avenues are investigated to extract value from these projects via joint venture or outright sales. Operational Overview During the year, the Company’s assessment of potential new gold and base metal resource assets culminated in the acquisition of the Monument Gold Project in the Laverton region of Western Australia. Syndicated immediately commenced a systematic exploration and evaluation program at the project utilizing $2.1 million in funding raised via a share placement at 2.1 cents per share completed in August 2016 on the back of the Monument Project acquisition. The Company completed its maiden RC and diamond drilling program at the Korong prospect, a follow‐up RC drilling program at the A1 North prospect, and extensive regional soil sampling programs during the reporting period to confirm its geological, geophysical and geochemical interpretation of the extensive historical dataset purchased with the project. Results from these programs have been encouraging, indicating the potential for the discovery of a large, high‐quality gold system. Planning for follow‐up exploration programs is now well underway with further drilling planned during the second half of 2017 and 2018.
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OPERATING AND FINANCIAL REVIEW (CONT) During the year, the Company sold its 50% ownership of the Barbara Copper Project to it joint venture partner, CopperChem, for $2.3 million cash plus a production royalty. It has maintained its Mt Isa‐based copper exploration tenure while seeking earn‐in joint venture partners for both the Mt Remarkable and Fountain Range projects.
Exploration and Evaluation Monument Gold Project (WA) In August 2016, Syndicated acquired the highly prospective Monument Gold Project in WA’s Laverton gold province, through the purchase of private company Monument Exploration Pty Ltd (“Monument”). Syndicated acquired Monument for $50,000 in cash and 23,767,082 fully‐paid ordinary Syndicated shares ($200,000 total share consideration). The Vendor will also receive a 0.5% gross royalty paid on future gold production of up to 100,000 ounces from the tenements. Since the initial purchase, the Company has also acquired four additional tenements from other vendors and applied for an additional three tenements to complement the ground‐holding. The Monument Gold Project comprises a 210km2 tenement package (eight granted and four pending tenements) located ~55km west of Laverton and immediately to the north‐west of the 3.3Moz Mount Morgans Gold Project, currently being explored and developed by Dacian Gold Limited (ASX: DCN) (refer Dacian Gold announcement 25 July 2016) (see Figure 1). The Project lies in the world‐class Laverton gold district of WA, which hosts numerous multi‐million ounce gold mines such as Sunrise Dam (+10Moz), Wallaby (+8Moz), Granny Smith (+2Moz) and Lancefield (+2Moz). This area is a well‐established mining district with excellent infrastructure and access including the sealed Leonora‐to‐Laverton road (which runs through the project), a new gas pipeline and sealed airstrips at Laverton and Leonora. The Monument Gold Project tenements cover an approximate 25km strike length of the Ninnis and Claypan Fault Zones, the two significant regional geological structures which control gold and nickel mineralisation identified further to the south, particularly at the Mount Morgans Gold Project (see Figure 1). The last concerted phase of exploration on the Monument tenements was undertaken by Carpentaria Exploration and Western Mining Corporation in the late 1980s and early 1990s. Carpentaria Exploration drilled the Waihi and Korong prospects, both of which contain near‐surface historical gold workings, some dating back to the last century. The Korong mine produced some 2,875 tonnes of ore at an average grade of 35.6g/t Au while the Waihi mine produced 424 tonnes of ore at an average grade of 67.9g/t Au. Most of these workings were abandoned by 1910. Historical workings are to a maximum depth of approximately 20m below surface. A total of 142 historical drill holes have been recorded on the tenements, most of which were drilled under and immediately along strike of the historical workings at the Waihi and Korong prospects. Drilling rarely penetrated the oxidised zone, which ranges from 20m to 80m depth in the area. The last recorded drill hole was completed in 2003.
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OPERATING AND FINANCIAL REVIEW (CONT)
Figure 1 – Location of the Monument Gold Project showing regional geology and nearby mining operations. Exploration on the adjoining tenements by Dacian Gold has highlighted the importance of the confluence of the Ninnis Fault Zones with the BIF/Ultramafic unit, which hosts the Westralia and Morgans North deposits, in localising high‐grade gold mineralisation. In addition, late‐stage syenite intrusions have also been shown to localise gold mineralisation in generally flat‐lying quartz lodes adjacent to and within the mapped felsic intrusions at Wallaby, Jupiter and Cameron Well (see Figure 2).
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OPERATING AND FINANCIAL REVIEW (CONT)
Figure 2 – Monument Project tenements showing the Korong and Waihi gold prospects over regional magnetics.
Baseline geophysical surveys have been undertaken and acquired including detailed magnetics, radiometrics, broad‐spaced gravity and limited Induced Polarisation (IP). These survey and datasets have revealed a number of untested targets, both along the Korong‐Waihi trend and associated with north‐trending faults that cross‐cut the greenstone belt. These targets represent potential additional soil survey and drilling targets scheduled for follow‐up work in the second half of 2017 and 2018. Korong Drilling Program During the December 2016 Quarter, Syndicated completed a maiden exploration campaign, comprising 29 Reverse Circulation (RC) drill holes and seven diamond drill holes to test the mineralised horizon at Korong and drill through to the underlying footwall BIF. The drill program was complemented by an Induced Polarisation (IP) geophysical survey, initially covering the Korong prospect, which may subsequently be expanded to cover the entire prospective gold corridor at the Monument Project. The Korong prospect is the first of many identified gold prospects at the Monument Project, which covers a 16km strike length of the same BIF (banded iron formation/porphyry) sequence which hosts the key Westralia and Morgan’s North deposits at Dacian Gold’s (ASX: DCN) Mount Morgan’s Project.
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OPERATING AND FINANCIAL REVIEW (CONT) Significant assay results from the RC drilling program undertaken at the Korong Prospect included (for full details refer to ASX Announcements dated 28 November and 9 December 2016):
MRC003 6m @ 7.28g/t from 79m
MRC004 9m @ 1.92g/t from 88m
MRC005 8m @ 1.54g/t from 111m
MRC008 10m @ 1.21g/t from 63m
MRC011 4m @ 2.18g/t from 18m
MRC028 3m @ 5.41g/t from 112m
MRC029 6m @ 1.86g/t from 39m
MRC023 3m @ 3.27g/t from 84m
MRC024 1m @ 7.86g/t from 31m
MRC025 8m @ 1.61g/t from 75m
MRC026 7m @ 1.1g/t from 53m
MRC027 5m @ 1.35g/t from 137m and 2m @ 2.11g/t from 160m. Results from the diamond drilling included several intercepts in the Korong BIF/chert, such as:
MRCD001 10.0m @ 1.42g/t from 49m
MRCD004 3.0m @ 3.51g/t from 139m
MRCD006 5.0m @ 2.38g/t from 120m
MRCD007 5.8m @ 1.61g/t from 132m
The Korong Prospect mineralisation has so far been delineated by drilling over a strike length of approximately 500m, a down‐dip extent of 200m and an average thickness of 5m (see Figures 3 and 4). The recent drilling confirms the earlier interpretation of an east‐dipping and north‐plunging zone of gold mineralisation associated with the Korong BIF unit containing several shoots of higher grade mineralisation also plunging to the north. Representative cross‐sections of the mineralisation are shown in Figure 3. High‐grade intersections (3m @ 3.27g/t in MRC023) returned from the 1350mN line (see Figure 4) highlight the potential for further high‐grade zones at depth to the north (Target A). In addition, on the 1050mN line, near‐surface, high‐grade mineralisation (3m @ 5.41g/t in MRC028) has also been identified at Target C. These results highlight the outstanding potential to further expand the high‐grade zones of mineralisation along strike. Deeper diamond drilling was also completed to test new targets in the Korong Ultramafic stratigraphy. Four deep drill holes (MRCD001, MRCD004, MRCD005 and MRCD007) tested the ultramafic unit below Korong to a depth of approximately 300m below surface (see Figure 3). Geological logging of the drill holes indicates the presence of a suite of felsic porphyry intrusions and the intersection of a major sulphide‐rich shear zone near the lower contact with the underlying basalt unit. The shear zone contains pyrite alteration with minor gold mineralisation (see Figure 3). The targeted stratigraphy is interpreted to have been offset by the shear zone.
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OPERATING AND FINANCIAL REVIEW (CONT)
Figure 3 – Korong cross‐section 1050N (left) and 1250N (right) (Local Grid) represent Korong BIF/Chert mineralisation generally 2 to 6 metres thick at the upper contact of the Korong Ultramafic unit. The lower contact is characterised by a pyrite rich alteration zone and
represents a priority target along strike from Korong.
Figure 4 – Korong Prospect Plan: Projection of BIF hosted mineralisation.
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OPERATING AND FINANCIAL REVIEW (CONT) Geological Interpretation An updated geological interpretation of the Korong area is shown in Figure 5. A number of cross‐cutting faults have been identified that intersect the Korong stratigraphy and are associated with the regionally significant Celia Fault. These cross‐cutting faults are interpreted to be long‐lived structures that have been activated and reactivated during the extensive deformation of the greenstone belt, including the intrusion of a number of late‐stage granites and syenites which have been identified on the property. High‐grade gold mineralisation has been discovered at Dacian Gold’s neighbouring Mt Morgans Project, where BIF, ultramafic and felsic porphyry stratigraphy is intersected by north‐east trending faults that reactivate pre‐existing shear zones, intrusions and faults during later gold mineralising events, e.g. the Westralia footwall mineralisation. A number of deposits and prospects at Mt Morgans are associated with syenite intrusions (e.g. Jupiter and Cameron Well). Syndicated believes that the presence of gold mineralisation associated with sulphide alteration, in several orientations, at a number of geological settings on the Monument Project (including the Korong BIF deposit) are all associated with, and controlled by, the reactivation of the cross‐cutting faults by late‐stage granite and syenite intrusions. The varied and widespread nature of the mineralisation encountered to date is indicative of a large mineralised system. The Korong Prospect is the first target to be tested along a 16km strike length of favourable stratigraphy and major gold‐bearing structures which make up the Korong‐Waihi trend.
Figure 5 – Updated geological interpretation of Korong‐Waihi Trend, with key targets highlighted at the
intersection of the cross‐cutting faults with prospective stratigraphy.
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OPERATING AND FINANCIAL REVIEW (CONT) Geological, Structural, Geophysical & Geochemical Review During the first half of 2017, Syndicated completed a comprehensive geological, structural, geophysical and geochemical review of the Monument Project area. The review was undertaken by Southern Geoscience Consultants and culminated in the development of a new geological and structural interpretation, which is illustrated in Figure 6. The review has highlighted new target positions along the Korong‐Waihi Trend and several conceptual targets outside of this Trend which warrant initial geochemical assessment through soil sampling and ground‐based validation of the geological interpretation. A comprehensive review was also undertaken of the broader exploration potential of the Monument Gold Project, including the 16km long Korong‐Waihi Trend which has been the main focus of the Company’s exploration activity since acquiring the project. Following this review, regional soil sampling programs commenced over conceptual targets to the north‐west of Waihi, in the far northern section of the tenement holding, and to the east of Korong, to establish the presence of gold mineralisation. The objective of the program is to identify accumulations of higher grade gold mineralisation for initial follow‐up with aircore drilling. If confirmed, these targets would rank alongside previously identified targets within the Korong‐Waihi Trend for drill testing later in 2017 (see Figure 6).
Figure 6 – Updated Geological and Structural interpretation of the Monument Gold Project. Advanced Targets lie
along the Korong‐Waihi Trend. Conceptual Targets have been initially tested with soil sampling.
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OPERATING AND FINANCIAL REVIEW (CONT) At Korong, detailed analysis by WMC of the Korong mineralisation indicated two distinct stages of gold mineralisation associated with pyrite:
Early, fine‐grained pyrite associated with low grade gold and anomalous silver‐lead‐zinc; and
Later, coarse‐grained pyrite associated with high grade gold, copper and sericite alteration.
At Waihi, historical RC drilling under old workings intersected pyrite and iron‐rich (in the oxide zone) gold mineralisation associated with the BIF/Shale unit. The unit has been mapped over 4km either side of Waihi. Better assay results from the historical programs at Waihi included results such as (refer ASX announcement dated 27 July 2016):
MK32 2m @ 8.80g/t from 38m
MK33 1m @ 10.8g/t from 91m
MK34 2m @ 6.07g/t from 36m A1 North Drilling Program During the March 2017 Quarter, Syndicated completed modelling and interpretation of the Induced Polarisation (IP) geophysical survey completed earlier in the year. This revealed a new drilling target at A1 North, located 1.2km north of the previously drilled Korong prospect. The known gold (and associated pyrite) mineralisation at the Korong prospect, which was targeted by Syndicated in 2016 in its maiden drilling program, demonstrated a weak IP and resistivity response which is well correlated with the strength and position of the mineralisation encountered in the drilling. The A1 North IP target is located down‐dip from the surface expression of the mapped continuation of the Korong BIF/Shale unit. The strong IP anomaly was targeted because of the clear correlation between gold, pyrite and IP geophysics encountered at Korong.
Figure 7 – Korong and A1 North Prospects. Drill hole locations and mapped BIF/Chert outcrop over IP‐3D slice image.
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OPERATING AND FINANCIAL REVIEW (CONT) The Company completed a program of reverse circulation (RC) drilling to test the A1 North target. The program comprised six holes drilled in three fences at 200m spacings, but was curtailed by the heavy rainfall experienced in March. The A1 North drilling intersected the BIF/Shale unit in all six completed holes. Narrow zones of high‐grade gold mineralisation were intersected associated with the pyrite‐rich shales and shear zones in the expected BIF/chert positions. Gold mineralisation is also present down‐dip of the Marionette and Pot Boiler surface workings, located to the east of the A1 North Target (Figure 7). Zones of banded pyrite mineralisation with low‐grade (0.2ppm to 0.9ppm) gold in BIF/shales are interpreted to be the source of the IP anomaly. The mineralisation in these positions is similar in appearance to the Korong prospect mineralisation. Intercepts included (for full details refer to the ASX announcement dated 26 April 2017):
MRC033 3m at 3.76g/t Au from 212m
MRC034 1m at 1.65g/t Au from 207m
MRC035 6m at 0.86g/t Au from 179m The pyrite mineralisation associated with the BIF/shale unit(s) at A1 North is anomalous in silver and base metals. The A1 North drilling is considered to contain the early stage mineralisation, as encountered at Korong. Ongoing exploration activities at Monument will be focused on identifying accumulations of later stage, high grade gold mineralisation. Regional Soil Sampling A regional soil sampling program was completed in the June 2017 Quarter at three areas within the tenement package. Each area was sampled on a 400m by 100m spacing with samples submitted to Intertek laboratories for multi‐element assay. Further more detailed soil sampling is planned. As at the date of this Report assay results are pending. The sampling targeted new exploration targets, including:
Perseverance, associated with Waihi‐style narrow high‐grade mineralisation;
Old Copper and Korong East, associated with the confluence of a major N‐S oriented fault; and
The circular magnetic feature postulated to contain a late‐stage felsic intrusion. New Exploration Program The recent exploration activities have given Syndicated a clear understanding of the geological controls and distribution of gold mineralisation on the Monument Project, highlighting two distinct phases of gold mineralisation and their associated structural controls and alteration indicators across the project. This understanding, coupled with the updated geological and structural interpretation work, will be tested with exploration programs over the coming months, and includes:
Follow‐up close‐spaced soil sampling programs over new and established mineralised trends highlighted along the Korong‐Waihi Trend and conceptual targets confirmed by the regional soil sampling programs detailed above; and
A targeted aircore drilling program over prospects highlighted at:
o The Korong‐Waihi Trend, where close‐spaced soil sampling has highlighted several areas of anomalous gold mineralisation where little or no drill testing has occurred; and
o New regional prospects highlighted by the regional and follow‐up soil sampling programs associated with late stage felsic intrusions.
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OPERATING AND FINANCIAL REVIEW (CONT) Tenement Acquisitions During the year, the Company acquired a number of strategically located tenements immediately adjacent to its existing 100%‐owned tenements in the area. In December, the Company acquired tenements P39/5471 and P39/5154 from a private vendor. In February, Syndicated acquired tenements P39/5456 and P39/5457 from another private vendor under a 5‐year option agreement, allowing it to immediately commence exploration activities to evaluate the potential of the tenements. Further details regarding the acquisition of the tenements are contained in the Corporate section of this report. In May, Syndicated applied for new Exploration Licences, E39/2024, E39/2035 and E39/2036, which are currently pending. Subsequent to the end of the period in July, the Company applied for tenement P39/5837. This important strategic addition to Syndicated’s tenement package at the Monument Project further consolidated its position in the Laverton district and potentially strengthens its pipeline of exploration opportunities in this exciting emerging district. Syndicated has now increased the total size of its tenement holding in the Laverton district to 215 square kilometres, as shown in Figure 8 below.
Figure 8 – Monument Gold Project showing new and existing tenements over regional magnetics, including location of the Korong‐Waihi trend.
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OPERATING AND FINANCIAL REVIEW (CONT) Sale of Barbara Copper Project (Qld) The Barbara Copper Project is located 60km north‐east of Mt Isa in North Queensland. The Barbara Copper Project was part of the Barbara Joint Venture, which covered approximately 100km2 of tenure within the Mt Remarkable Project area. The Barbara JV was a 50/50 joint venture between CopperChem Limited (CopperChem) and Syndicated with CopperChem being the Manager of the Project. Syndicated was in joint venture with CopperChem at the Barbara Copper Project from September 2013 until June 2017. During the June Quarter, Syndicated entered into an agreement to sell its 50% share of the Barbara Copper Project to CopperChem for A$2.3 million in cash plus a production royalty. Following the satisfaction of all conditions precedent, including shareholder approval obtained at a shareholders meeting held on 7 June, and the receipt of indicative approval from the Queensland Minister of Mines for the transfer of Syndicated’s interest in the Project, the transaction was completed and funds were received from CopperChem in mid‐June. Funds raised from the sale of the Company’s interest in the Barbara Copper Project will be predominantly used to underpin the next phase of exploration programs at the Monument Gold Project. Agreement Terms and Consideration The consideration payable by CopperChem for the acquisition of Syndicated’s 50% share of the Barbara Copper Project was as follows:
A$2.3 million in cash payable in one instalment upon completion of the Sale and Purchase Agreement; and
A production royalty payable on the first 10,000 tonnes of copper‐in‐concentrate (or ore equivalent) produced by the Barbara Copper Project. The royalty will be payable as follows:
o 1% of the net smelter return (NSR) generated from the sale of concentrate or ore equivalent subject to a minimum invoiced copper price of US$2.50/lb;
o 2% of the NSR generated from the sale of concentrate or ore equivalent subject to a minimum invoiced copper price of US$3.00/lb;
o Where no production royalties are payable due to the invoiced price being below US$2.50/lb, copper sold from the Barbara Copper Project does not count towards the 10,000 tonne production royalty cap;
o NSR in relation to copper concentrate is defined as net revenue received from the sale of the products, excluding credits from other metals; and
o NSR in relation to ore sales is defined as net revenue received from the sale of the products, excluding credits from other metals and less processing costs.
Syndicated retains 100% ownership of its Northern and Southern Hub Projects in North Queensland, comprising a ground package of 1,542km2 containing numerous high‐grade copper‐gold targets plus multiple IOCG and SEDEX‐style targets.
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OPERATING AND FINANCIAL REVIEW (CONT) Mt Remarkable/Northern Hub (Syndicated 100%) (Qld) The Mt Remarkable Project consists of eleven EPM tenements covering 1,082km2 of tenure and straddles the Mt Remarkable Fault from the Barkley Hwy to Kajabbi. The project has reverted to an exploration based assessment of potential new discoveries following the divestment of the Barbara Copper Project to CopperChem. During the year, the Company sought expressions of interest for joint venture partners to undertake exploration for IOCG and SEDEX lead‐zinc‐silver style mineralisation given the project’s prospectivity for these metals. Syndicated is seeking to partially divest the project via an exploration earn‐in joint venture.
Figure 9 – Mt Remarkable Base Metal/Gold Project showing existing tenements over regional magnetics, including location
of the divested Barbara Project.
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OPERATING AND FINANCIAL REVIEW (CONT) Fountain Range/Southern Hub (Syndicated 100%) (Qld) The Fountain Range Project consists of sixteen EPM tenements covering approximately 460km2 of tenure 100km south‐east of Mt Isa. During the year, the Company sought expressions of interest for JV partners to undertake exploration for IOCG and high‐grade lode style gold mineralisation, given the project’s prospectivity for this style of mineralisation. Syndicated is seeking to divest the project via an exploration earn‐in joint venture or outright sale.
Figure 10 – Southern Hub Base Metal/Gold Project showing existing tenements over regional magnetics, including location
of the Duchess Project.
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OPERATING AND FINANCIAL REVIEW (CONT) Other Projects Syndicated Royalties Pty Ltd (a 100% owned subsidiary of Syndicated Metals) holds a 2% NSR royalty over metals extracted from tenement EPM13870 now held by Hammer Metals Limited (ASX: HMX). Mineral Resources Barbara Copper Project (formerly owned 50% by Syndicated Metals) During the year the Barbara Copper Project was sold to the Company’s joint venture partner, CopperChem Limited. The Mineral Resource estimate for the Barbara Copper Project is therefore no longer reported. Lillymay Deposit (formerly owned 50% by Syndicated Metals) Lillymay is located 4km south‐west of Barbara and formed part of the Barbara Copper Project in partnership with CopperChem. During the year the Barbara Copper Project was sold to the Company’s joint venture partner, CopperChem Limited. The Mineral Resource estimate for Lillymay is therefore no longer reported. Comparison with previous Mineral Resource Estimates The Barbara Mineral Resource was announced in July 2014 and included in the 2014 Annual Report. The Lillymay Mineral Resource was announced in December 2014 and included in the 2015 Annual Report. Both Mineral Resources were sold to CopperChem Limited during the current reporting period. Mineral Resource Governance Arrangements The Company ensures that all Mineral Resource estimates are subject to appropriate levels of governance and internal controls. Exploration results are collected and managed by competent qualified geologists and overseen by the Exploration Manager. 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. Mineral Resource estimates are prepared by qualified Competent Persons and further verified by the Company’s technical staff. If there is a material change in the estimate of a Mineral Resource the estimate and supporting documentation is reviewed by a suitably qualified independent Competent Person. Joint Ventures Barbara Joint Venture – CopperChem Limited Syndicated was in Joint Venture with CopperChem Limited over portions of tenements EPM19733 and EPM18492 and all of EPM16112 and ML90241. CopperChem had earned a 50% interest in these tenements by funding and managing a feasibility study over the Barbara Copper Project. During the period, Syndicated sold its 50% share of the Barbara Copper Project to CopperChem for A$2.3 million in cash plus a production royalty. The Barbara Joint Venture was terminated with tenements EPM16112 and ML90241 being retained by CopperChem and tenements EPM19733 and EPM18492 retained by Syndicated. CopperChem has exploration rights over portions of the tenements retained by Syndicated.
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OPERATING AND FINANCIAL REVIEW (CONT) Tenements Queensland The Company’s Queensland tenement holding covers 1,542 km2. Exploration on the Company’s tenements is managed by Syndicated Metals. The Company’s current tenement holdings consist of 100% ownership in 27 granted EPMs in the Northern and Southern Hubs. During the year tenement EPM26026 was granted to the Company. Tenements EPM16112 and ML90241 were sold by the Company. Western Australia The Company’s Western Australian tenement holding covers approximately 215 km2. The tenements are held by 100% owned subsidiary, Monument Exploration Pty Ltd. Exploration on the tenements is managed by Syndicated Metals. The Company’s current tenement holdings consist of 100% ownership in 12 tenements, 8 of which are granted and 4 applications. All tenements are located at the Monument Gold Project near Laverton. All tenements were acquired during the year. During the year tenement E39/1866 was granted to the Company. Competent Person’s Statement The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled by Mr Andrew Munckton who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking 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 (the “JORC Code”). Mr Munckton is a full‐time employee of Syndicated Metals Limited and consents to the inclusion in the report of the Exploration Targets and Exploration Results in the form and context in which they appear.
Exploration Targets This report comments on and discusses Syndicated Metals Limited’s exploration in terms of target size and type. The information relating to Exploration Targets should not be misunderstood or misconstrued as an estimate of Mineral Resources or Ore Reserves. The potential quantity and quality of material discussed as Exploration Targets is conceptual in nature since there has been insufficient work completed to define them as Mineral Resources or Ore Reserves. It is uncertain if further exploration work will result in the determination of a Mineral Resource or Ore Reserve.
Corporate Share Placement In August, Syndicated successfully raised a total of $2.1 million to fast‐track its maiden drilling program at the Monument Gold Project. The capital raising, which was undertaken at an issue price of 2.1 cents per share, comprised a heavily oversubscribed share placement to sophisticated and professional clients of Sydney‐based Blue Ocean Equities, as well as some long‐standing shareholders of the Company, and an additional $110,000 share placement to companies associated with its Directors. A total of 95,000,000 fully paid ordinary shares were issued in Tranche 1 raising $1,995,000. The balance of the Placement Shares (5,238,095 Shares) were issued to companies associated with directors also at an issue price of 2.1 cents per Share (Tranche 2) to raise $110,000. Shareholder approval was required to issue the Tranche 2 shares and this was obtained at the Company’s AGM held on 27 October 2016.
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OPERATING AND FINANCIAL REVIEW (CONT) CopperChem Anti‐dilution Right The issue of the placement shares triggered the CopperChem anti‐dilution right. CopperChem waived its anti‐dilution right in regard to the issue of the 95,000,000 Tranche 1 shares and accepted its right in regard to the Tranche 2 shares, subject to shareholder approval of the issue of the Tranche 2 shares and the issue of the CopperChem anti‐dilution shares. Details of the additional share and options issued to CopperChem under its anti‐dilution right are contained in the next section. Issue of Shares and Options Following shareholder approval obtained at the AGM held on 27 October 2016, the Company issued the following securities:
5,000,000 Shortfall Offer Shares;
5,238,095 Placement Shares;
10,355,000 Top‐Up Offer 1 and 2 Shares to CopperChem;
12,184,000 Top‐Up Offer 3 Shares to CopperChem;
2,685,000 Top‐Up Offer 4 Shares to CopperChem; and
7,677,500 unlisted Options comprising 2,500,000 Options attached to the Shortfall Offer Shares and 5,177,500 Options attached to the Top‐Up Offer 1 and 2 Shares.
Issue of Shortfall Offer Shares The Company issued 5,000,000 fully paid ordinary shares at 0.5 cents per share to raise $25,000 under the same terms and conditions of the Shortfall Offer as announced on 7 December 2015. The shares were issued to a company associated with a director, Mr Peter Langworthy. Issue of Placement Shares The Company issued 5,238,095 Shares at 2.1 cents per share to raise $110,000 under the second tranche of the share placement announced on 9 August 2016. The shares were issued to companies associated with two directors, Mr Langworthy and Mr Morgan. Issue of CopperChem Top‐Up Shares Pursuant to CopperChem’s anti‐dilution right granted under the Placement Agreement signed between Syndicated and CopperChem in September 2013, to the maximum extent permitted by law, Syndicated is required to offer to CopperChem new Shares in order for CopperChem to maintain the same percentage interest in the capital of Syndicated as was held prior to the issue of the new Shares. CopperChem exercised its right to subscribe for the following new Shares:
Issue of CopperChem Top‐Up Offer 1 and 2 Shares
On 4 April 2016, Syndicated issued 15,200,000 Shares at 0.5 cents per Share under the Shortfall Offer to unrelated parties of the Company. The Company further issued 5,000,000 Shares at 0.5 cents per Share under its Shortfall Offer to a company associated with a director, Mr Langworthy, as detailed above. The Company issued 10,355,000 fully paid ordinary shares to CopperChem. The Shares were issued at 0.5 cents per Share in line with the pricing of the Shortfall Offer and raised $51,775.
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OPERATING AND FINANCIAL REVIEW (CONT)
Issue of CopperChem Top‐Up Offer 3 Shares On 31 August 2016, Syndicated issued 23,767,082 Shares at 0.8415 cents per Share pursuant to the acquisition of unlisted company Monument Exploration Pty Ltd. The Company issued 12,184,000 fully paid ordinary shares to CopperChem. The Shares were issued at 0.8415 cents per Share in line with the pricing of the Monument acquisition and raised $102,528.
Issue of CopperChem Top‐Up Offer 4 Shares On 9 August 2016, the Company announced that it had raised $2.1 million pursuant to a share placement. A total of 95,000,000 Shares at 2.1 cents per Share to raise $1.995 million were issued to sophisticated and professional investors with the balance of the Shares (5,238,095 Shares) issued to companies associated with Directors, as noted above. CopperChem waived its top‐up right in regard to the issue of the 95,000,000 Shares and accepted its right in regard to the Shares issued to director related entities. The Company issued 2,685,000 fully paid ordinary shares to CopperChem. The Shares were issued at 2.1 cents per Share in line with the pricing of the share placement and raised $56,385.
Issue of Unlisted Options Subscribers under the Shortfall Offer were offered the opportunity to subscribe for 1 free attaching unlisted option for every 2 Shares issued, with each option having an exercise price of 1.2 cents and expiring on 8 February 2018 (Options). This offer was made under the prospectus for the Entitlement Offer dated 10 December 2015. Following its election to exercise its anti‐dilution right following the Shortfall Offer, CopperChem was also offered the opportunity to subscribe for Options. This offer was also made under the prospectus for the Entitlement Offer dated 10 December 2015. Following shareholder approval for the above Option issues obtained at the Annual General Meeting held on 27 October 2016, Syndicated issued the following Options:
2,500,000 Options attaching to the 5,000,000 Shortfall Offer Shares issued to a company associated with a director, Mr Langworthy; and
5,177,500 Options attaching to the Top‐Up Offer 1 and 2 Shares to CopperChem. Issue of Shares for Tenement Acquisition In December the Company issued 600,000 Shares at 2.5 cents per share to the vendor of tenements P39/5471 and P39/5154 as consideration for the purchase of these tenements which adjoin Syndicated’s existing Monument Gold Project tenements ($15,000 total share consideration plus $10,000 cash). In February the Company issued 100,000 Shares at 2.3 cents per share to the vendor of tenements P39/5456 and P39/5457 as consideration for the purchase of these tenements which adjoin Syndicated’s existing Monument Gold Project tenements ($2,300 total share consideration plus $10,000 cash). The consideration for the acquisition comprised a combination of cash and shares, payable in two tranches:
Tranche 1 (paid in February) – $10,000 in cash and 100,000 fully‐paid ordinary shares in the Company at a deemed issue price of 2.3c per share; and
Tranche 2 (payable on a Decision to Mine on the tenements) – $250,000 in cash and 200,000 fully‐paid ordinary shares in the Company at a deemed issue price of 2.3c per share.
A 2% royalty on gross revenue on production from the tenements will also be payable.
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OPERATING AND FINANCIAL REVIEW (CONT) Issue of Shares upon Exercise of Options In December Syndicated issued 87,500 Shares upon the exercise of unlisted options with an exercise price of 1.2 cents, expiring 8 February 2018. The Options were issued under Syndicated’s Prospectus dated 10 December 2015. Issue and Expiry of Performance Rights Following shareholder approval obtained at the AGM held on 27 October 2016, Syndicated issued a total of 2,384,473 performance rights to the Managing Director. The Tranche A rights (1,142,560) vest when the Company’s VWAP per share for 10 trading days exceeds $0.047 and the Tranche B rights (1,241,913) vest when the Company’s VWAP per share for 10 trading days exceeds $0.078. Both tranches of rights will expire on 27 October 2020. During the period the following performance rights did not meet the vesting conditions and expired:
Number Vesting when the Company’s 10 day VWAP exceeds Expiry Date
150,000 $0.30 30 November 2016
150,000 $0.45 30 November 2016
150,000 $0.60 30 November 2016
1,099,837 $0.06675 30 November 2016
1,556,692 $0.11125 30 November 2016
150,000 $0.30 8 November 2016
150,000 $0.45 8 November 2016
150,000 $0.60 8 November 2016
100,000 $0.30 31 October 2016
100,000 $0.45 31 October 2016
100,000 $0.60 31 October 2016
194,158 $0.06675 31 October 2016
274,808 $0.11125 31 October 2016
Expiry of Options On 9 January 2017, 5,000,000 unlisted options exercisable at $0.064 expired. Annual General Meeting The Company’s 2016 Annual General Meeting was held on 27 October 2016. All resolutions received strong support and were passed on a show of hands. Shareholders Meeting The Company held a General Meeting of shareholders on 7 June. All three resolutions, which included the approval to dispose of the Barbara Joint Venture interest to CopperChem, received strong support and were passed on a show of hands. Factors and Business Risks Affecting Future Business Performance The following factors and business risks could have a material impact on the Company’s ability to deliver its strategy: Access to funding The Company’s ability to continue to explore and evaluate its projects is contingent upon its ability to source timely access to additional equity funding as it is required.
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OPERATING AND FINANCIAL REVIEW (CONT) Commodity demand and pricing The Company is exposed to adverse global demand for commodities and/or adverse commodity price movements. This could affect the Company’s ability to raise equity to fund its activities. Tenure risks The Company is exposed to loss of its tenure holding if it is unable to meet its tenement commitments due to lack of funding to do so. Operational risks The Company is exposed to several operational risks including unsuccessful exploration efforts, environmental issues and health and safety issues. Significant Changes in the State of Affairs During the reporting period the Company issued 130,574,595 shares at prices ranging between $0.005 and $0.021 raising $2,342,038 and a further 24,467,082 shares at prices ranging between $0.008415 and $0.025 in regard to the acquisition of assets and tenements. The Company also sold its interest in the Barbara Copper Project to its joint venture partner, CopperChem Limited for $2.3 million. In the opinion of the directors, other than as outlined in this report, there were no other significant changes in the state of affairs of the Group that occurred during the 2017 financial year. DIVIDENDS PAID OR RECOMMENDED No dividend has been paid or declared since the start of the financial year and no dividend is recommended.
EVENTS SUBSEQUENT TO REPORTING DATE There are no matters or circumstances that have arisen since the end of the financial year that have significantly affected or may significantly affect the operations of the entity, the results of those operations or the state of affairs of the entity, in future years. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS Other than likely developments contained in the Operating and Financial Review, further information on likely developments in the operations of the Group and the expected results of those operations in future financial years have not been included in this report, as the directors believe that inclusion of such information is likely to result in unreasonable prejudice to the Company. ENVIRONMENTAL REGULATION The Group’s operations are regulated by the requirements of the Queensland Department of Natural Resources and Mines and the WA Department of Mines, Industry Regulation and Safety environmental regulations. The Company has complied with all of these requirements. MEETINGS OF DIRECTORS During the financial year five meetings of directors were held and the number of meetings attended by each director during the year is shown below:
Board Meetings Audit & Risk Committee
Remuneration Committee
Eligible to Attend
Attended Eligible to Attend
Attended Eligible to Attend
Attended
P J Langworthy 5 5 1 1 2 2
A T Munckton 5 5 1 1 ‐ ‐
D B Morgan 5 5 1 1 2 2
R J Cooper 5 5 1 1 ‐ ‐
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INDEMNIFYING OFFICERS During the financial year, the Group paid insurance premiums (inclusive of fees and charges) in respect of Directors’ and Officers’ liability insurance. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against Officers in their capacity as Officers of the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the Officers or the improper use by the Officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. SHARE OPTIONS Unissued shares under options As at the reporting date, the unissued ordinary shares of the Company under unlisted options are as follows:
Grant date
Expiry date Exercise price (cents) Quantity
08/02/2016 08/02/2018 1.2 60,164,182
60,164,182
Each option entitles the holder to one fully paid ordinary share in the Company at any time up to expiry date. As at the reporting date 112,500 shares had been issued as a result of the exercise of options.
PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied for leave of Court to bring proceedings on behalf of the Company or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. NON AUDIT SERVICES The board of directors is satisfied that the provision of non‐audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditors’ independence for the following reasons: All non‐audit services are reviewed and approved by directors prior to commencement to ensure they do
not adversely affect the integrity and objectivity of the audit; and The nature of the services provided do not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
The following fees were paid to PKF Mack for non‐audit services provided during the year ended 30 June 2017:
Taxation Services $ 2,550
AUDITOR’S INDEPENDENCE DECLARATION The auditor’s independence declaration for the year ended 30 June 2017 has been received and is included in the financial report.
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REMUNERATION REPORT ‐ AUDITED This report details the nature and amount of remuneration for each key management person of Syndicated Metals Limited and its controlled entities, and for the executives receiving the highest remuneration. Remuneration policy The remuneration policy of Syndicated Metals Limited has been designed to align key management personnel objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long‐term incentives. The board of Syndicated Metals Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best key management personnel to run and manage the company, as well as create congruence between directors, executives and shareholders. The board’s policy for determining the nature and amount of remuneration for key management personnel of the Company is as follows:
The remuneration policy, setting the terms and conditions for the key management personnel, was developed by the board.
All key management personnel receive a base salary (which is based on industry experience and comparable rates for similar industry roles), superannuation and share based payments.
The board of directors review key management personnel packages annually by reference to the Company’s performance, executive performance and comparable information from industry sectors.
The performance of key management personnel is measured against criteria agreed with each executive. The board may, however, exercise its discretion in relation to approving incentives and share based payments. The policy is designed to attract the highest calibre of executives and reward them for performance that results in long‐term growth in shareholder wealth. Under the Company’s Performance Rights Plan, if in the opinion of the Board a participant acts fraudulently or dishonestly or is in material breach of his or her obligations to the Company or any of its subsidiaries, then the Board may, in its absolute discretion determine that:
‐ all of the participant’s performance rights have lapsed; or ‐ all shares held by the participant (or their nominee), as a result of the exercise of a performance right as
of the date of such determination will be bought back and cancelled by the Company (subject to the passage of a special resolution of shareholders), and until then will be subject to a transfer restriction.
The key management personnel receive a superannuation contribution, which for the year ended 30 June 2017 was 9.50%, and do not receive any other retirement benefits. All remuneration paid to key management personnel is valued at the cost to the Company and either expensed through the statement of profit or loss or capitalised to exploration and evaluation costs on the statement of financial position as appropriate. Share based payments are valued using the Black‐Scholes or binomial methodologies. The board policy is to remunerate non‐executive directors at market rates for time, commitment and responsibilities. The board determines payments to the non‐executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non‐executive directors is subject to approval by shareholders. Fees for non‐executive directors are not linked to the performance of the Company. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company.
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REMUNERATION REPORT ‐ AUDITED PRINCIPLES OF COMPENSATION Company performance, shareholder wealth and director and executive remuneration The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives by the issue of share based payments to the directors and executives to encourage the alignment of personal and shareholder interests. The Company believes this policy will be effective in increasing shareholder wealth. Executive Contractual Arrangements Remuneration and other terms of employment for the Chairman and Managing Director are formalised in service agreements. The agreements provide for participation in the Performance Rights Plan. Other major provisions of the agreements relating to remuneration are set out below. Mr P J Langworthy, Chairman The term of the agreement is continuous. Chairman’s fees, exclusive of superannuation were $42,210 per annum during the reporting period. Mr A T Munckton, Managing Director The term of the agreement is continuous with a termination notice period of 3 months. Upon demotion due to operational matters of the Company the executive may give 1 month’s notice and will be entitled to 12 months base salary and superannuation. Base salary, exclusive of superannuation and other benefits was $173,905 per annum during the reporting period. All other key management personnel (Non‐Executive Directors) are employed under standard employment agreements. Additional Information The earnings of the Group and the factors that are considered to affect total shareholders return for the five years to 30 June 2017 are summarised below:
2017 2016 2015 2014 2013
Sales revenue Nil Nil Nil Nil Nil
Profit/(loss) after income tax 1,075,112 (7,080,625) (1,074,400) (514,616) (5,822,114)
Share price at financial year end ($) $0.017 $0.006 $0.021 $0.061 $0.017
Total dividends declared (cents per share) Nil Nil Nil Nil Nil
Basic earnings per share (cents per share) 0.18 (1.70) (0.37) (0.22) (3.60)
Remuneration of directors and key management personnel Details of the remuneration of directors and key management personnel of the Group are set out in the following tables. The key management personnel of the Group consisted of the following directors of Syndicated Metals Limited:
Peter Langworthy – Non‐Executive Chairman
Andrew Munckton – Managing Director
David Morgan – Non‐Executive Director
Robert Cooper – Non‐Executive Director
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REMUNERATION REPORT ‐ AUDITED Remuneration of directors and key management personnel (cont) For the year ended 30 June 2017 Short‐Term
Benefits Post‐
Employment Benefits
Share‐Based Payments
Value of share based
payments as proportion of remuneration
Directors Fees
Salary and Fees
Superannuation Performance Rights
Total
$ $ $ $ $ % Directors P J Langworthy 42,210 ‐ 4,010 ‐ 46,220 ‐ A T Munckton ‐ 173,905 16,521 57,128 247,554 23.07 D B Morgan 27,949 ‐ 2,655 ‐ 30,604 ‐ R J Cooper 27,949 ‐ 2,655 ‐ 30,604 ‐
Total 98,108 173,905 25,841 57,128 354,982
For the year ended 30 June 2016 Short‐Term
Benefits Post‐
Employment Benefits
Share‐Based Payments
Value of share based
payments as proportion of remuneration
Directors Fees
Salary and Fees
Superannuation Performance Rights
Total
$ $ $ $ $ % Directors P J Langworthy 47,407 ‐ 4,503 ‐ 51,910 ‐ A T Munckton ‐ 195,319 18,554 ‐ 213,873 ‐ D B Morgan 31,390 ‐ 2,982 ‐ 34,372 ‐ R J Cooper 31,390 ‐ 2,982 ‐ 34,372 ‐
Total 110,187 195,319 29,021 ‐ 334,527
Executives P A Bridson* ‐ 101,575 7,705 ‐ 109,280 ‐ M J Martin* ‐ 91,425 6,925 ‐ 98,350 ‐
Total 110,187 388,319 43,651 ‐ 542,157
* The positions of Mr Bridson and Mr Martin were made redundant on 30 November 2015. No termination payments other than accrued annual leave entitlements were paid.
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REMUNERATION REPORT – AUDITED Shareholdings of key management personnel The movement during the reporting year in the number of shares in Syndicated Metals Limited held, directly, indirectly or beneficially, by each key management person, including related parties, is as follows:
2017 Balance at 1 July 2016
Granted as compensation
Bought/ (Sold)
Held upon termination
Balance at 30 June 2017
Directors P J Langworthy 15,814,907 ‐ 8,333,333 ‐ 24,148,240A T Munckton 6,306,306 ‐ ‐ ‐ 6,306,306D B Morgan 12,061,915 ‐ 1,904,762 ‐ 13,966,677R J Cooper ‐ ‐ 1,580,000 ‐ 1,580,000
34,183,128 ‐ 11,818,095 ‐ 39,694,917
2016 Balance at 1 July 2015
Granted as compensation
Bought/ (Sold)
Held upon termination
Balance at 30 June 2016
Directors P J Langworthy 4,984,205 ‐ 10,830,702 ‐ 15,814,907A T Munckton 6,306,306 ‐ ‐ ‐ 6,306,306D B Morgan 8,061,915 ‐ 4,000,000 ‐ 12,061,915R J Cooper ‐ ‐ ‐ ‐ ‐
19,352,426 ‐ 14,830,702 ‐ 34,183,128
Executives P A Bridson* 1,000,000 ‐ ‐ (1,000,000) ‐M J Martin* ‐ ‐ ‐ ‐ ‐
Total 20,352,426 ‐ 14,830,702 (1,000,000) 34,183,128
* The positions of Mr Bridson and Mr Martin were made redundant on 30 November 2015.
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REMUNERATION REPORT ‐ AUDITED Option holdings of key management personnel
2017 Balance at 1 July 2016
Issued* Exercised/ Expired
Held upon termination
Balance at 30 June 2017**
Directors P J Langworthy 5,415,351 2,500,000 ‐ ‐ 7,915,351A T Munckton ‐ ‐ ‐ ‐ ‐D B Morgan 2,000,000 ‐ ‐ ‐ 2,000,000R J Cooper ‐ ‐ ‐ ‐ ‐
7,415,351 2,500,000 ‐ ‐ 9,915,351
* On 7 December 2015 the Company announced a share placement and entitlement issue at $0.005 per share with a free attaching 1 for 2 unlisted option, exercisable at $0.012 and expiring on 8 February 2018. An entity associated with Mr Langworthy applied for shortfall in regard to the entitlement issue and received shareholder approval to take up shortfall on 29 January 2016. The shortfall took longer than the allowed one month period to be placed and as a result further shareholder approval was required to be obtained. This shareholder approval was obtained at the Company’s AGM held on 27 October 2016. The options issued to Mr Langworthy relate to his participation in the entitlement issue shortfall. ** The above options are vested and exercisable.
2016 Balance at 1 July 2015
Issued** Exercised/ Expired
Held upon termination
Balance at 30 June 2016***
Directors P J Langworthy 913,514 5,415,351 (913,514) ‐ 5,415,351A T Munckton 2,364,864 ‐ (2,364,864) ‐ ‐D B Morgan 2,027,027 2,000,000 (2,027,027) ‐ 2,000,000R J Cooper ‐ ‐ ‐ ‐ ‐Executives P A Bridson* ‐ ‐ ‐ ‐ ‐M J Martin* ‐ ‐ ‐ ‐ ‐
5,305,405 7,415,351 (5,305,405) ‐ 7,415,351
* The positions of Mr Bridson and Mr Martin were made redundant on 30 November 2015. ** On 7 December 2015 the Company announced a share placement and entitlement issue at $0.005 per share with a free attaching 1 for 2 unlisted option, exercisable at $0.012 and expiring on 8 February 2018. Mr Langworthy and Mr Morgan participated in the share placement subject to shareholder approval. On 29 January 2016 shareholders approved the placement of shares to these directors. The options issued to Mr Langworthy relate to his participation in both the share placement and entitlement issue. The options issued to Mr Morgan relate to his participation in the share placement. *** The above options are vested and exercisable. Options and rights over equity instruments granted as compensation No options were granted over ordinary shares in the Company as compensation to key management personnel during the reporting period. No options have been granted since the end of the financial year. Exercise of options granted as compensation No options were exercised during the reporting period.
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REMUNERATION REPORT ‐ AUDITED Performance share holdings of key management personnel
2017 Balance at 1 July 2016
Granted as compensation
Exercised/ Expired
Held upon termination
Balance at 30 June 2017
Directors P J Langworthy ‐ ‐ ‐ ‐ ‐A T Munckton 2,798,209 2,384,473 ‐ ‐ 5,182,682D B Morgan ‐ ‐ ‐ ‐ ‐R J Cooper ‐ ‐ ‐ ‐ ‐
2,798,209 2,384,473 ‐ ‐ 5,182,682
2016 Balance at
1 July 2015 Granted as
compensationExercised/ Expired
Held upon termination
Balance at 30 June 2016
Directors P J Langworthy 2,000,000 ‐ (2,000,000) ‐ ‐A T Munckton 7,798,209 ‐ (5,000,000) ‐ 2,798,209D B Morgan 5,000,000 ‐ (5,000,000) ‐ ‐R J Cooper ‐ ‐ ‐ ‐ ‐Executives P A Bridson* 1,849,085 ‐ ‐ (1,849,085) ‐M J Martin* 1,707,444 ‐ ‐ (1,707,444) ‐
18,354,738 ‐ (12,000,000) (3,556,529) 2,798,209
* The positions of Mr Bridson and Mr Martin were made redundant on 30 November 2015. Performance rights ‐ Vesting conditions The performance rights issued in the current period are able to be exercised when the volume weighted average price (VWAP) for 10 trading days on ASX equals or exceeds $0.047 (1,142,560 performance rights) and $0.078 (1,241,913 performance rights). The performance rights issued in prior periods are able to be exercised when the volume weighted average price (VWAP) for 10 trading days on ASX equals or exceeds $0.06675 (1,158,478 performance rights) and $0.11125 (1,639,731 performance rights). Performance rights ‐ Valuation methodology The binomial barrier up and in model was used in the valuation of the performance rights which is suitable for a right with share price hurdles that are a condition of the rights.
Directors’ Report
32
REMUNERATION REPORT ‐ AUDITED Performance rights granted as compensation Details of performance rights that were granted as compensation to each key management person in the current and prior periods are as follows;
Director
Series
Number of performance rights granted
Grant Date
Fair value per share at grant date (cents)
Expiry date A T Munckton D 1,158,478 21/10/2014 0.0368 21/10/2018 A T Munckton E 1,639,731 21/10/2014 0.026 21/10/2018 A T Munckton F 1,142,560 27/10/2016 0.025 27/10/2020 A T Munckton G 1,241,913 27/10/2016 0.023 27/10/2020
5,182,682
Signed in accordance with a resolution of the Board of Directors.
___________________ Andrew Munckton Managing Director 31 August 2017
33
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF SYNDICATED METALS LIMITED
In relation to our audit of the financial report of Syndicated Metals Limited for the year ended 30 June 2017, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
PKF MACK
SHANE CROSS PARTNER 31 AUGUST 2017 WEST PERTH, WESTERN AUSTRALIA
34
CORPORATE GOVERNANCE STATEMENT
The Company’s Corporate Governance Statement can be found on the Company’s website at http://www.syndicatedmetals.com.au/corporate‐governance.php, under the section marked "Corporate Governance Statements". The following governance‐related documents can also be found on the Company's website at the Corporate Governance page:
Charters Board Nomination Committee Audit and Risk Committee Remuneration Committee
Policies and Procedures Process for Performance Evaluation Policy and Procedure for Selection and (Re) Appointment of Directors Induction Program Procedure for the Selection, Appointment and Rotation of External Auditor Code of Conduct (summary) Diversity Policy (summary) Policy on Continuous Disclosure (summary) Compliance Procedures (summary) Shareholder Communication and Investor Relations Policy Securities Trading Policy
35
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Note 2017 2016 $ $ Revenue Interest income 3 21,801 11,069 Proceeds on disposal of Barbara Copper Project 2,300,000 ‐ Sundry income 88,077 2,000
2,409,878 13,069 Expenses Administration expenses (439,730) (261,024) Occupancy expenses 4 (68,472) (68,195) Depreciation expense 4 (15,578) (13,422) Employee benefits expense 4 (155,092) (261,726) Exploration expenditure written off 4 (7,210) (155,115) Exploration expenditure impairment 4 (884,162) (6,585,550) Share based payments 4 (57,128) ‐
(1,627,372) (7,345,032) Profit/(Loss) before income tax expense 782,506 (7,331,963) Income tax benefit 5 292,606 251,338
Profit/(Loss) for the period 1,075,112 (7,080,625) Other comprehensive income ‐ ‐
Total comprehensive profit/(loss) for the year 1,075,112 (7,080,625)
Basic profit/(loss) per share (cents) 24 0.18 (1.70) Diluted profit/(loss) per share (cents) 24 0.17 (1.70)
The accompanying notes form part of these financial statements.
36
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
Note 2017 2016 $ $ CURRENT ASSETS
Cash and cash equivalents 6 2,634,331 514,957 Trade and other receivables 7 110,578 87,829
TOTAL CURRENT ASSETS 2,744,909 602,786
NON CURRENT ASSETS Property, plant and equipment 8 56,198 91,922 Exploration and evaluation costs 9 6,706,892 5,168,426
TOTAL NON CURRENT ASSETS 6,763,090 5,260,348
TOTAL ASSETS 9,507,999 5,863,134
CURRENT LIABILITIES Trade and other payables 10 239,082 139,086 Provisions 11 22,605 26,992
TOTAL CURRENT LIABILITIES 261,687 166,078
NON CURRENT LIABILITIES Provisions 11 12,630 6,825
TOTAL NON CURRENT LIABILITIES 12,630 6,825
TOTAL LIABILITIES 274,317 172,903
NET ASSETS 9,233,682 5,690,231
EQUITY Issued capital 12 26,187,467 23,776,256 Share based payments reserve 13 142,393 317,273 Accumulated losses (17,096,178) (18,403,298)
TOTAL EQUITY 9,233,682 5,690,231
The accompanying notes form part of these financial statements.
37
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Issued Capital Share Based
Payments Reserve
Accumulated Losses
Total
$ $ $ $ Balance at 1 July 2016
23,776,256 317,273 (18,403,298) 5,690,231
Profit for the period ‐ ‐ 1,075,112 1,075,112Other comprehensive income ‐ ‐ ‐ ‐
Total comprehensive profit for the period ‐ ‐ 1,075,112 1,075,112
Transactions with owners, recorded directly in equity
Issue of share capital 2,559,338 ‐ ‐ 2,559,338Share issue costs (148,127) ‐ ‐ (148,127)Options and performance rights expired ‐ (232,008) 232,008 ‐Fair value of performance rights issued ‐ 57,128 ‐ 57,128
2,411,211 (174,880) 232,008 2,468,339
Balance at 30 June 2017 26,187,467 142,393 (17,096,178) 9,233,682
Issued Capital Share Based Payments Reserve
Accumulated Losses
Total
$ $ $ $ Balance at 1 July 2015
23,294,933 1,075,125 (12,080,525) 12,289,533
Loss for the period ‐ ‐ (7,080,625) (7,080,625)Other comprehensive income ‐ ‐ ‐ ‐
Total comprehensive loss for the period ‐ ‐ (7,080,625) (7,080,625)
Transactions with owners, recorded directly in equity
Issue of share capital 525,992 ‐ ‐ 525,992Share issue costs (44,669) ‐ ‐ (44,669)Options expired ‐ (757,852) 757,852 ‐Fair value of performance rights issued ‐ ‐ ‐ ‐
481,323 (757,852) 757,852 481,323
Balance at 30 June 2016 23,776,256 317,273 (18,403,298) 5,690,231
The accompanying notes form part of these financial statements.
38
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Note 2017 2016 $ $ Cash flows from operating activities Interest received 20,074 18,475Payments to suppliers and employees (622,274) (634,081)Payments for exploration and evaluation (2,053,740) (1,341,476)Sundry income 88,077 2,000R&D income tax benefit 292,606 251,338
Net cash used in operating activities 15 (2,275,257) (1,703,744)
Cash flows from investing activities Purchase of plant and equipment (4,301) (2,378)Proceeds from joint venture partner ‐ 10,442Purchase of tenements (20,000) ‐Purchase of Monument Exploration Pty Ltd 26 (49,979) ‐Proceeds from sale of Barbara Copper Project 2,300,000 ‐
Net cash from investing activities 2,225,720 8,064
Cash flows from financing activities Proceeds from issue of shares 2,317,038 525,992Funds held in trust for share issue requiring shareholder approval ‐ 25,000Capital raising costs (148,127) (45,885)Payments for security deposits ‐ (340)
Net cash from financing activities 2,168,911 504,767
Net increase/(decrease) in cash 2,119,374 (1,190,913) Cash and cash equivalents at 1 July 514,957 1,705,870
Cash and cash equivalents at 30 June 6 2,634,331 514,957
The accompanying notes form part of these financial statements.
39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Syndicated Metals Limited (the “Company”) is a company domiciled and incorporated in Australia and listed on the Australian Securities Exchange. The consolidated financial statements of the Company as at and for the year ended 30 June 2017 comprise the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”). The Group is primarily involved in mineral exploration activity. New, revised or amending Accounting Standards and Interpretations adopted The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Basis of Preparation and Going Concern Basis The accounting policies set out below have been consistently applied to all years presented. Statement of Compliance The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 as appropriate for for‐profit entities. The consolidated financial report of the Group and the financial report of the Company comply with International Financial Reporting Standards (IFRS) and Interpretations adopted by the International Accounting Standards Board (IASB). The consolidated financial report was authorised for issue in accordance with a resolution of the Directors on 31 August 2017. Basis of Measurement The consolidated financial statements have been prepared on an accruals basis and are based on historical cost except for certain financial instruments which are fair valued through the profit or loss. Functional and Presentation Currency These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency. Principles of Consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Syndicated Metals Limited ('Company' or 'parent entity') as at 30 June 2017 and the results of all subsidiaries for the year then ended. Syndicated Metals Limited and its subsidiaries together are referred to in these financial statements as the 'Group'.
Notes to the Financial Statements
40
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) Principles of Consolidation (cont) Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de‐consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non‐controlling interest acquired is recognised directly in equity attributable to the parent. Non‐controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other comprehensive income, statement of financial position and statement of changes in equity of the Group. Losses incurred by the Group are attributed to the non‐controlling interest in full, even if that results in a deficit balance. Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non‐controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss. Operating segments Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'), the Board. The CODM is responsible for the allocation of resources to operating segments and assessing their performance. Significant Accounting Policies (a) Income tax The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
Notes to the Financial Statements
41
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (a) Income tax (cont) ● When the deferred income tax asset or liability arises from the initial recognition of goodwill or 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 nor taxable profits; or
● When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset. Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously. (b) Exploration and evaluation expenditure Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which:
such costs are expected to be recouped through successful development and exploitation or from sale of the area; or
exploration and evaluation activities in the area have not, at reporting date, reached a stage which permit a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations in, or relating to, the area are continuing.
Accumulated costs in respect of areas of interest which are abandoned are written off in full against profit/(loss) in the year in which the decision to abandon the area is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the successful development and commercial exploitation or alternatively sale of the respective areas of interest. Rehabilitation, Restoration and Environmental Costs Long‐term environmental obligations are based on the Company’s environmental management plans, in compliance with current environmental and regulatory requirements. The costs will include obligations relating to reclamation, waste site closure, plant closure and other costs associated with the restoration of the site, when relevant.
Notes to the Financial Statements
42
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (b) Exploration and evaluation expenditure (cont) Full provision is made based on the net present value of the estimated cost of restoring the environmental disturbance that has been incurred as at the reporting date. Increases due to additional environmental disturbance (to the extent that it relates to the development of an asset) are capitalised and amortised over the remaining lives of the mines. Annual increases in provision relating to the change in the present value of the provision are accounted for in earnings. The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation, technology or other circumstances. Cost estimates are not reduced by the potential proceeds from sale of assets or from plant clean‐up at closure. (c) Business Combinations The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other assets are acquired. The consideration transferred is the sum of the acquisition‐date fair values of the assets transferred, equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non‐controlling interest in the acquiree. For each business combination, the non‐controlling interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss. On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or accounting policies and other pertinent conditions in existence at the acquisition‐date. Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the acquiree at the acquisition‐date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or loss. Contingent consideration to be transferred by the acquirer is recognised at the acquisition‐date fair value. Subsequent changes in the fair value of contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. The difference between the acquisition‐date fair value of assets acquired, liabilities assumed and any non‐controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre‐existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre‐existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition‐date, but only after a reassessment of the identification and measurement of the net assets acquired, the non‐controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer. Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition‐date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.
Notes to the Financial Statements
43
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (d) Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable. Interest income is recognised as it accrues. (e) Trade and Other Receivables Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. Trade receivables are generally due for settlement within 30 days. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short‐term receivables are not discounted if the effect of discounting is immaterial. Other receivables are recognised at amortised cost, less any provision for impairment. (f) Impairment of Non‐Financial Assets At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of profit or loss and other comprehensive income. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash‐generating unit to which the asset belongs.
(g) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment is measured on the cost basis less depreciation and impairment losses.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is depreciated on a straight line basis over their useful lives to the Company commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are:
Notes to the Financial Statements
44
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (g) Property, Plant and Equipment (cont)
Class of Fixed Asset Depreciation Rate Furniture 15 ‐ 30% Plant and equipment 25 ‐ 50% Vehicles 20 ‐ 30% Computer equipment 25 ‐ 33%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of profit or loss and other comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to the asset are transferred to retained earnings. (h) Leases A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non‐current assets, and operating leases under which the lessor effectively retains substantially all such risks and benefits. Incentives received on entering into operating leases are recognised as liabilities. Lease payments are allocated between rental expense and reduction of the liability. Other operating lease payments are charged to the statement of profit or loss and other comprehensive income in the periods in which they are incurred, as this represents the pattern of benefits derived from the leased assets. (i) Trade and Other Creditors These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year and which are unpaid. Due to their short‐term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
(j) Employee Benefits (i) Wages, salaries and annual leave Liabilities for wages, salaries and annual leave expected to be settled within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. (ii) Employee benefits payable later than one year Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. (iii) Superannuation Contributions are made by the Company to superannuation funds as stipulated by statutory requirements and are charged as expenses when incurred. (iv) Employee benefit on costs Employee benefit on‐costs, including payroll tax, are recognised and included in employee benefits liabilities and costs when the employee benefits to which they relate are recognised as liabilities.
Notes to the Financial Statements
45
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (j) Employee Benefits (cont) (v) Share‐based payments Equity‐settled share‐based compensation benefits are provided to employees. Equity‐settled transactions are awards of shares, options over shares or performance rights that are provided to employees in exchange for the rendering of services. The cost of equity‐settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black‐Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non‐vesting conditions that do not determine whether the Group receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity‐settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. All changes in the liability are recognised in profit or loss. Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied. If equity‐settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share‐based compensation benefit as at the date of modification. If the non‐vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity‐settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award are treated as if they were a modification.
(k) Cash and Cash Equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short‐term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement of financial position.
Notes to the Financial Statements
46
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
(l) Fair Value Measurement When an asset or liability, financial or non‐financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. For non‐financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair value measurement. For recurring and non‐recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data. (m) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST where applicable. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. (n) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (o) Financial Instruments The Company classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables, held‐to‐maturity investments and available‐for‐sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re‐evaluates this designation at each reporting date.
Notes to the Financial Statements
47
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
(o) Financial Instruments (cont) (i) Financial assets at fair value through profit or loss Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short‐term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss. (ii) Loans and receivables Loans and receivables are non‐derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Company provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the reporting date which are classified as non‐current assets. Loans and receivables are included in receivables in the statement of financial position. (iii) Held‐to‐maturity investments Held‐to‐maturity investments are non‐derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Company’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.
(iv) Available‐for‐sale financial assets Available‐for‐sale financial assets are non‐derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. Fair value Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models. Impairment At each reporting date, the Company assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available‐for‐sale financial instruments, a significant or prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in the statement of profit or loss and other comprehensive income. Financial guarantees Where material, financial guarantees issued, which require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due, are recognised as a financial liability at fair value on initial recognition. The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.
Notes to the Financial Statements
48
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (o) Financial Instruments (cont) The fair value of financial guarantee contracts has been assessed using a probability weighted discounted cash flow approach. The probability has been based on: - the likelihood of the guaranteed party defaulting in a year period; - the proportion of the exposure that is not expected to be recovered due to the guaranteed party
defaulting; and - the maximum loss exposed if the guaranteed party were to default. Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non‐cash assets or liabilities assumed, is recognised in profit or loss. (p) 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. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.
Notes to the Financial Statements
49
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (q) New Standards and Interpretations Not Yet Adopted The AASB has issued the following new and amended accounting standards and interpretations that have mandatory application dates for future reporting periods. The Group has decided against early adoption of these standards, and has not yet determined the potential impact on the financial statements from the adoption of these standards and interpretations.
AASB No. Title Issue Date Application Date
(Annual reporting periods beginning on
or after)
9 Financial Instruments Dec 2014 1 Jan 2018
2010‐7 Amendments arising from Accounting Standards arising from AASB 9 (December 2010)
Sep 2012 1 Jan 2018
2014‐1 Amendments to Australian Accounting Standards Part E ‐ Financial Instruments
Jun 2014 1 Jan 2018
2014‐5 Amendments to Australian Accounting Standard Arising From AASB 15
Dec 2014 1 Jan 2018
2014‐7 Amendments to Australian Accounting Standard Arising From AASB 9 (December 2014)
Dec 2014 1 Jan 2018
2014‐10 Amendments to Australian Accounting Standard ‐ Sale of Contribution of Assets Between Investors and its Associates or Joint Venture
Dec 2014 1 Jan 2018
2015‐8 Amendments to Australian Accounting Standards – Effective Date of AASB 15
Oct 2015 1 Jan 2018
2015‐10 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128
Dec 2015 1 Jan 2018
2016‐1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised Losses [AASB 112]
Feb 2016 1 Jan 2017
2016‐2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107
Mar 2016 1 Jan 2017
2016‐3 Amendments to Australian Accounting Standards – Clarifications to AASB 15
May 2016 1 Jan 2018
2016‐5 Amendments to Australian Accounting Standards – Classification and Measurement of Share‐based Payment Transactions [AASB 2]
Jul 2016 1 Jan 2018
2017‐1 Amendments to Australian Accounting Standards – Transfers of Investment Property, Annual Imporvements 2014‐2016 Cycle and Other Amendments
Feb 2017 1 Jan 2018
2017‐2 Amendments to Australian Accounting Standards – Further Annual Improvements 2014‐2016 Cycle
Feb 2017 1 Jan 2017
15 Revenues from Contracts with Customers Oct 2015 1 Jan 2018
16 Leases Feb 2016 1 Jan 2019
IFRIC 23 Uncertainty over Income Tax Treatments Jun 2017 1 Jan 2019
(r) Provisions Provisions are recognised when the Company has a present legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Notes to the Financial Statements
50
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (s) Interests in Joint Arrangements IFRS defines a joint arrangement as one over which two or more parties have joint control, which is the contractually agreed sharing of control over an arrangement. This exists only when the decisions about the relevant activities (being those that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control. Joint operations A joint operation is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. In relation to its interests in joint operations, the Company recognises its:
Assets, including its share of any assets held jointly
Liabilities, including its share of any liabilities incurred jointly
Revenue from the sale of its share of the output arising from the joint operation
Share of the revenue from the sale of the output by the joint operation
Expenses, including its share of any expenses incurred jointly.
(t) Earnings per share Basic earnings per share Basic earnings per share is determined by dividing the net profit/(loss) after income tax attributable to members of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. (u) Current and non‐current classification Assets and liabilities are presented in the statement of financial position based on current and non‐current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non‐current. A liability is classified as current when: it is either expected to be settled in normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non‐current. Deferred tax assets and liabilities are always classified as non‐current.
Notes to the Financial Statements
51
NOTE 2: SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
Use of Estimates and Judgements The preparation of financial statements in conformity with AASBs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Going Concern The financial report has been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and the settlement of liabilities in the normal course of business. The Group incurred a profit of $1,075,112 for the year ended 30 June 2017 (2016: loss $7,080,625). Included within this profit was the proceeds on disposal of the Barbara Copper Project of $2,300,000 and the impairment and write off of exploration expenditure of $891,372 (2016: $6,740,665). The ability of the Company and the Group to continue to pay its debts as and when they fall due is dependent upon the Company successfully raising additional share capital and ultimately developing its mineral properties. The accounts have been prepared on the basis that the Company can meet its commitments as and when they fall due and can therefore continue normal business activities, and the realisation of assets and liabilities in the ordinary course of business. The Directors believe that they will continue to be successful in securing additional funds through equity issues as and when the need to raise working capital arises. Critical Accounting Judgements, Estimates and Assumptions The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are: Share Based Payment Transactions The Group measures the cost of equity‐settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of the employee options is determined by a valuation using the Black‐Scholes option pricing model, using the assumptions detailed in Note 17. The fair value of the performance rights is determined by a valuation using a binomial model, with the assumptions also detailed in Note 17. Exploration and Evaluation Costs Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward in respect of an area that has not at reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and the expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale. While there are certain areas of interest from which no reserves have been extracted, the directors are of the continued belief that such expenditure should not be written off since expenditures are expected to be recouped as noted above. Such capitalised expenditure is carried at reporting date at $6,706,892.
Notes to the Financial Statements
52
NOTE 2: SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (CONT) Critical Accounting Judgements, Estimates and Assumptions (cont) Impairment of Exploration and Evaluation Assets and Investments in Subsidiaries The ultimate recoupment of the value of exploration and evaluation assets, the Company’s investment in subsidiaries, and loans to subsidiaries is dependent on the successful development and commercial exploitation, or alternatively, sale, of the exploration and evaluation assets. Impairment tests are carried out on a regular basis to identify whether the asset carrying values exceed their recoverable amounts. There is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts. The key areas of judgement and estimation include:
Recent exploration and evaluation results and resource estimates;
Environmental issues that may impact on the underlying tenements;
Economic factors that have an impact on the operations and carrying values of assets and liabilities. Classification of Investments The Company has decided to classify investments in listed securities as available for sale. These securities are accounted for at fair value. Any increments or decrements in their value at year end are charged or debited to the statement of profit or loss and other comprehensive income. Income tax expenses Judgement is required in assessing whether deferred tax assets and liabilities are recognised on the statement of financial position. Deferred tax assets, including those arising from temporary differences, are recognised only when it is considered more likely than not that they will be recovered, which is dependent on the generation of future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised. Employee benefits provision As discussed in Note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account. Estimation of useful lives of assets The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives. Any technically obsolete or non‐strategic assets that have been abandoned or sold will be written off or written down.
Notes to the Financial Statements
53
NOTE 3: REVENUE FROM CONTINUING OPERATIONS 2017 2016
$ $Operating activities Interest received 21,801 11,069
NOTE 4: EXPENSES Depreciation expense 40,025 62,528 less capitalised in exploration and evaluation (24,447) (49,106)
15,578 13,422
Share based payments 57,128 ‐
Employee benefits expenses
Salaries and on‐costs 275,767 610,743 Superannuation 25,841 56,836 Other ‐ ‐
less capitalised in exploration and evaluation (146,516) (405,853)
155,092 261,726
Exploration expenditure written off 7,210 155,115
Exploration expenditure impairment 884,162 6,585,550
Occupancy expenses 68,472 68,195
NOTE 5: INCOME TAX (EXPENSE)/BENEFIT The prima facie tax payable on the operating profit/(loss) is reconciled to the income tax provided in the accounts as follows:
Prima facie tax payable on operating profit/(loss) before income tax at 27.5% 215,189 (2,199,588) Effect of non‐deductible expenses 15,883 130 Increase/(decrease) in deferred tax balances not brought to account (231,072) 2,199,458 Research and development tax concession refund 292,264 251,338
Income tax (expense)/benefit 292,264 251,338
Notes to the Financial Statements
54
2017 2016 $ $ NOTE 5: INCOME TAX (EXPENSE)/BENEFIT (CONT) The following deferred tax balances have not been recognised: Deferred Tax Assets at 27.5%: Carry forward revenue losses 6,042,473 6,604,948 Capital losses carried forward 6,398 6,398 Capital raising costs 68,656 72,609 Provisions and accruals 13,677 12,995 Other 2,374 6,980
6,133,578 6,703,930
The tax benefits of the above deferred tax assets will only be obtained if: a. The Company derives future assessable income of a nature and of an amount sufficient to enable
the benefits to be utilised; b. The Company continues to comply with the conditions for deductibility imposed by law; and c. No changes in income tax legislation adversely affect the Company in utilising the benefits. Deferred Tax Liabilities at 27.5%: Exploration and evaluation costs 1,770,660 1,550,528Accrued interest income 724 272
1,771,384 1,550,800
The above deferred tax liabilities have not been recognised as they have given rise to the carry forward revenue losses for which the deferred tax asset has not been recognised. NOTE 6: CASH AND CASH EQUIVALENTS Cash on hand 300 300Cash at bank 434,031 214,657Term deposits 2,200,000 300,000
2,634,331 514,957
NOTE 7: TRADE & OTHER RECEIVABLES Accrued interest receivable 2,633 906GST receivable 10,205 3,837Trade debtors 17,480 720Security deposits 74,058 76,558Prepayments 6,202 5,808
110,578 87,829
There are no assets in trade & other receivables that are past due or impaired.
Notes to the Financial Statements
55
2017 2016 $ $
NOTE 8: PROPERTY, PLANT & EQUIPMENT Plant and equipment at cost 205,586 202,413Less: accumulated depreciation (191,071) (170,586)
14,515 31,827
Furniture at cost 98,136 98,136Less: accumulated depreciation (86,964) (81,072)
11,172 17,064
Computer equipment at cost 60,133 59,005Less: accumulated depreciation (57,954) (55,100)
2,179 3,905
Vehicles at cost 153,887 153,887Less: accumulated depreciation (125,555) (114,761)
28,332 39,126
Total plant and equipment 56,198 91,922
Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current and previous financial year are as follows: Plant and
equipmentFurniture Computer
equipment Vehicles Total
$ $ $ $ $ Carrying amount at 30 June 2015 52,897 21,363 15,450 62,362 152,072Net additions 818 1,560 ‐ ‐ 2,378Depreciation expense (21,888) (5,859) (11,545) (23,236) (62,528)
Carrying amount at 30 June 2016 31,827 17,064 3,905 39,126 91,922Net additions 3,173 ‐ 1,128 ‐ 4,301Depreciation expense (20,485) (5,892) (2,854) (10,794) (40,025)
Carrying amount at 30 June 2017 14,515 11,172 2,179 28,332 56,198
Notes to the Financial Statements
56
2017 2016 $ $
NOTE 9: EXPLORATION AND EVALUATION COSTS Exploration expenditure capitalised 6,706,892 5,168,426
Movement in carrying value: Balance at 1 July 5,168,426 10,705,120 Exploration expenditure capitalised during the year 2,457,686 1,309,560 Expenditure recharged to Barbara Copper Project partner (27,848) (105,589) Exploration expenditure written off during the year (7,210) (155,115) Exploration expenditure impaired during the year (884,162) (6,585,550)
Balance at 30 June 6,706,892 5,168,426
The value of the exploration expenditure is dependent upon:
The continuance of the rights to tenure of the areas of interest; The results of future exploration; and The recoupment of costs through successful development and exploitation of the areas of
interest or alternatively by their sale. A provision for impairment totaling $4,775,175 was raised in the prior period in relation to carry forward costs incurred on the tenements the subject of the Barbara Joint Venture. The Barbara Joint Venture was terminated during the period and the Company’s interests in tenements EPM16112 and ML90241 were sold to CopperChem. Additional holding costs totaling $112,464 that were incurred on the Barbara Joint Venture tenements during the period have been impaired. A provision for impairment totaling $618,130 has also been raised in relation to carry forward costs on some tenements within the Mt Remarkable area of interest. All tenements were assessed for prospectivity and those tenements considered to have low prospectivity were impaired during the period. Additionally, although the carry forward expenditure on the Fountain Range area of interest is expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale, the area of interest has been fully impaired as substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is not budgeted as at reporting date. The impairment totaled $153,568 (2016: $1,810,375).
NOTE 10: TRADE & OTHER PAYABLES Trade and other payables 150,403 65,639
Accruals 88,505 48,198 GST Payable 174 249 Funds held in trust for share issue requiring shareholder approval ‐ 25,000
239,082 139,086
NOTE 11: PROVISIONS Current Provision for annual leave 22,605 26,992
Non Current Provision for long service leave 12,630 6,825
Notes to the Financial Statements
57
NOTE 12: ISSUED CAPITAL 2017 2016 2017 2016 Shares Shares $ $ (a) Share capital
Fully paid ordinary shares 634,484,141 479,442,464 27,063,027 24,503,689Less: capital issue costs ‐ ‐ (875,560) (727,433)
634,484,141 479,442,464 26,187,467 23,776,256
(b) Movements in ordinary share capital
Date Details Number of
shares
Issue price Value $
Balance at 30 June 2015 374,244,100 23,294,933
8/12/2015 Issue of shares for cash 26,000,000 0.005 130,000 8/02/2016 Issue of shares for cash 63,998,364 0.005 319,992 4/04/2016 Issue of shares for cash 15,200,000 0.005 76,000
Less: capital issue costs ‐ ‐ (44,669)
Balance at 30 June 2016 479,442,464 23,776,256
16/08/2016 Issue of shares for cash 95,000,000 0.021 1,995,000 23/08/2016 Issue of shares for cash 25,000 0.012 300 31/08/2016 Issue of shares for Company
acquisition 23,767,082
0.008415 200,000 09/11/2016 Issue of shares for cash 15,355,000 0.005 76,775 09/11/2016 Issue of shares for cash 12,184,000 0.008415 102,528 09/11/2016 Issue of shares for cash 7,923,095 0.021 166,385 09/12/2016 Issue of shares for tenement
acquisition 600,000
0.025 15,000 09/12/2016 Issue of shares for cash 87,500 0.012 1,050 22/02/2017 Issue of shares for tenement
acquisition 100,000
0.023 2,300 Less: capital issue costs ‐ ‐ (148,127)
Balance at 30 June 2017 634,484,141 26,187,467
(c) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. These shares have no par value.
(d) Capital management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets for in‐specie distributions.
Notes to the Financial Statements
58
NOTE 12: ISSUED CAPITAL (CONT) The Group’s focus has been to raise sufficient funds through equity to fund exploration and evaluation activities. The Group monitors capital on the basis of the gearing ratio, however there are no external borrowings as at reporting date. Capital includes accumulated profits and fair value reserve. The Group encourages employees to be shareholders through the issue of free performance rights. There were no changes in the Group’s approach to capital management during the year. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
2017 2016 $ $ (e) Capital Risk Management Cash and cash equivalents 2,634,331 514,957Less: Total liabilities (274,317) (172,903)
Net cash and cash equivalents 2,360,014 342,054
Total equity 9,233,682 5,690,231
Debt to equity ratio at 30 June 2.97% 3.04% Management of Share Capital The Directors primary objective is to maintain a capital structure that ensures the lowest cost of capital available to the Group. Unissued shares under options As at the reporting date, the unissued ordinary shares of Syndicated Metals Limited under unlisted options are as follows:
Grant date
Expiry date Exercise price (cents) Quantity
08/02/2016 08/02/2018 1.2 60,164,182
60,164,182
Each option entitles the holder to one fully paid ordinary share in the Company at any time up to expiry date. As at the reporting date 112,500 shares had been issued as a result of the exercise of options. NOTE 13: SHARE BASED PAYMENTS RESERVE Balance at 1 July 317,273 1,075,125 Share based payments during the period – refer to Note 17 57,128 ‐ Expiry of options and performance rights (232,008) (757,852)
Balance at 30 June 142,393 317,273
The share based payment reserve represents the unexpired portion of expense of performance rights currently on issue.
Notes to the Financial Statements
59
2017 2016 $ $
NOTE 14: AUDITORS REMUNERATION Audit and review of financial reports 24,237 23,055 Other services ‐ taxation 2,550 2,800
26,787 25,855
NOTE 15: NOTES TO THE STATEMENT OF CASH FLOWS Reconciliation of cash flow from operations with profit/(loss) from ordinary activities after income tax.
Profit/(Loss) for the period
1,075,112 (7,080,625)
Adjustment for: Depreciation 15,578 13,422 Exploration expenditure written off 7,210 155,115 Exploration expenditure impairment 884,162 6,585,550 Share based payments 57,128 ‐ Proceeds from sale of Barbara Copper Project (2,300,000) ‐ Payments for exploration and evaluation (2,053,740) (1,341,476)
(Increase)/decrease in accrued interest (1,727) 7,406 (Increase)/decrease in prepayments 58 1,505 Increase/(decrease) in accruals and trade creditors 40,253 (22,894) Increase/(decrease) in provision for employee entitlements 709 (21,747)
Net cash flow used in operating activities (2,275,257) (1,703,744)
NOTE 16: INTERESTS IN JOINT ARRANGEMENTS Interests in joint operations
On 16 September 2013 Syndicated executed a Joint Venture and Acquisition Agreement with CopperChem Limited to jointly develop the Barbara Copper Project. As part of the broader agreement establishing a 50/50 exploration and development joint venture, CopperChem agreed to sole fund and manage the Barbara Feasibility Study through to a decision to mine and jointly fund the Barbara Exploration program on a 50/50 basis with Syndicated. Syndicated agreed to manage the Exploration joint venture. CopperChem earned a 50% interest over portions of tenements EPM19733 and EPM18492 and all of EPM16112 and ML90241 by completing the feasibility study over the Barbara Copper Project in the prior period.
During the current period Syndicated finalised an agreement to sell its 50% share of the Barbara Copper Project to CopperChem for A$2.3 million in cash plus a production royalty. Shareholder approval was obtained at a shareholders meeting held on 7 June and the transaction was completed and funds were received from CopperChem in mid‐June. The Company’s interests in tenements EPM16112 and ML90241 were sold to CopperChem.
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation.
Notes to the Financial Statements
60
NOTE 17: SHARE BASED PAYMENTS Number and weighted average exercise prices of share options The following table illustrates the total number, weighted average exercise prices (WAEP), and movement in share options issued and/or expired during the year: 2017 2016 Number of
options Weighted average
exercise price
Number of options
Weighted average
exercise price No. (cents) No. (cents) Outstanding at 1 July 5,000,000 6.4 5,000,000 6.4 Issued during the year ‐ ‐ ‐ ‐ Expired during the year (5,000,000) 6.4 ‐ ‐
Outstanding at 30 June ‐ ‐ 5,000,000 6.4
Exercisable at 30 June ‐ ‐ 5,000,000 6.4
There are an additional 9,915,351 unlisted options that were issued in February 2016 and November 2016 as free attaching options to director related entities as part of a capital raising. These options expire on 8 February 2018. Further details are contained in the Share Options section of the Directors’ Report. Number and weighted average vesting prices of performance rights The following table illustrates the total number, weighted average vesting prices, and movement in performance rights issued during the year: 2017 2016 Number of
performance rights
Weighted average
vesting price
Number of performance
rights
Weighted average
vesting price No. (cents) No. (cents) Outstanding at 1 July 7,123,704 15.30 19,123,704 30.12 Issued during the year 2,384,473 6.31 ‐ ‐ Expired during the year (4,325,495) 19.19 (12,000,000) 47.81
Outstanding at 30 June 5,182,682 7.91 7,123,704 15.30
Vested at 30 June ‐ ‐ ‐ ‐
Notes to the Financial Statements
61
NOTE 17: SHARE BASED PAYMENTS (CONT) Performance rights ‐ Vesting conditions The performance rights issued in 2014 are able to be exercised when the volume weighted average price (VWAP) for 10 trading days on ASX equals or exceeds $0.06675 (1,158,478 performance rights) and $0.11125 (1,639,731 performance rights). The performance rights expire on 21 October 2018. The performance rights issued in October 2016 are able to be exercised when the volume weighted average price (VWAP) for 10 trading days on ASX equals or exceeds $0.047 (1,142,560 performance rights) and $0.078 (1,241,913 performance rights). The performance rights expire on 27 October 2020. Performance rights ‐ Valuation methodology The up and in single barrier share option pricing model was used in the valuation of the performance rights which is suitable for a right with share price hurdles that are a condition of the rights. The model incorporates a trinomial option valuation. The key assumptions used in the model included, an underlying spot price of $0.032, share price volatility of 100%, a risk‐free interest rate of 1.80% and a dividend yield of nil. The fair value per right at grant date was $0.025 (1,142,560 performance rights) and $0.023 (1,241,913 performance rights). Expenses arising from share‐based payment transactions
Total expenses arising from share‐based payment transactions recognised during the year as part of employee benefits expense were as follows:
2017 2016
$ $
Performance rights issued 57,128 ‐
57,128 ‐
NOTE 18: COMMITMENTS FOR FUTURE EXPENDITURE The Group has commitments for future expenditure in respect of its tenements, lease of office space and lease of equipment. Commitments are as follows: Tenement commitments Committed at the reporting date but not recognised as liabilities, payable:
‐ within one year 2,543,700 2,168,050
‐ one to five years 4,861,650 6,887,600
7,405,350 9,055,650
Tenement commitments are only valid if the tenement remains held by the Group. Should the Group decide not to retain the tenure the corresponding commitment for that tenement lapses.
Lease commitments – operating Committed at the reporting date but not recognised as liabilities, payable:
‐ within one year 39,199 78,525 ‐ one to five years ‐ 46,320
39,199 124,845
The operating lease commitment relates to lease of the Company’s Perth office premises. The lease expires in February 2018.
Notes to the Financial Statements
62
NOTE 19: FINANCIAL INSTRUMENTS The Group’s principal financial instruments comprise cash and short term deposits. The main purpose of the financial instruments is to earn the maximum amount of interest at a low risk to the Group. The Group also has other financial instruments such as trade debtors and creditors which arise directly from its operations. For the period under review, it has been the Group’s policy not to trade in financial instruments. The main risks arising from the Group’s financial instruments are interest rate risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below: a) Interest Rate Risk The Group is exposed to movements in market interest rates on short term deposits. The policy is to monitor the interest rate yield curve out to 180 days to ensure a balance is maintained between the liquidity of cash assets and the interest rate return. The Group does not have short or long term debt, and therefore this risk is minimal. b) Credit Risk Credit risk refers to the risk that a counter‐party will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted the policy of only dealing with creditworthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the Group’s maximum exposure to credit risk. Carrying
Amount Carrying Amount
2017 2016 $ $(a) Exposure to credit risk The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit risk at the reporting date was: Cash and cash equivalents 2,634,331 514,957Other receivables 20,113 1,626
2,654,444 516,583
(b) Impairment losses None of the Group’s other receivables are past due hence no impairment was provided for. (c) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring forecast and actual cash flows. The Group does not have any external borrowings.
Notes to the Financial Statements
63
NOTE 19: FINANCIAL INSTRUMENTS (CONT)
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: Carrying
amount Contractual cash flows
<6 months
6‐12 months
1‐2 Years
2‐5 Years
>5 Years
30 June 2017 Trade and other payables 239,082 239,082 239,082 ‐ ‐ ‐ ‐
239,082 239,082 239,082 ‐ ‐ ‐ ‐
30 June 2016 Trade and other payables 139,086 139,086 139,086 ‐ ‐ ‐ ‐
139,086 139,086 139,086 ‐ ‐ ‐ ‐
(d) Market risk The Group is not exposed to market risk and at reporting date the Company and the Group hold no financial assets or liabilities which are exposed to market risk. (e) Currency risk The Group is not exposed to currency risk and at reporting date the Company and the Group hold no financial assets or liabilities which are exposed to foreign currency risk. (f) Interest rate risk The Group is exposed to interest rate risk (primarily on its cash and cash equivalents), which is the risk that a financial instrument's value will fluctuate as a result of changes in the market interest rates on interest‐bearing financial instruments. The Group does not use derivatives to mitigate these exposures. The Group adopts a policy of ensuring that as far as possible it maintains excess cash and cash equivalents in short term deposits at interest rates maturing over 30‐180 day rolling periods. Carrying
Amount Carrying Amount
2017 2016 $ $ (g) Profile At the reporting date the interest rate profile of the Company's and the Group’s interest bearing financial instruments was:
Variable rate instruments Cash and cash equivalents 434,031 214,657
Fixed rate instruments Cash and cash equivalents 2,200,000 300,000
Notes to the Financial Statements
64
NOTE 19: FINANCIAL INSTRUMENTS (CONT)
(h) Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) profit or loss by the amounts shown below. The analysis is performed on the same basis for 2016.
100bp
100bp Increase Decrease
$ $ 30 June 2017 Cash and cash equivalents 26,340 (26,340)
26,340 (26,340)
30 June 2016 Cash and cash equivalents 5,150 (5,150)
5,150 (5,150)
(i) Fair values versus carrying amounts The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows: 30 June 2017 30 June 2016 Carrying
Value Fair Value
Carrying Value
Fair Value
$ $ $ $ Cash and cash equivalents 2,634,331 2,634,331 514,957 514,957Receivables 110,578 110,578 87,829 87,829Trade and other payables (239,082) (239,082) (139,086) (139,086)
2,505,827 2,505,827 463,700 463,700
The basis for determining fair values is disclosed in Note 1. (j) Other market price risk Other market price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. The Group is not exposed to other market price risk and at reporting date the Company and the Group hold no financial assets or liabilities which are exposed to other market price risk. (k) Commodity price risk The Group operates in the resources industry and is in the exploration and evaluation phase and accordingly the Group's financial assets and liabilities are subject to minimal commodity price risk.
(l) Fair value measurement The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short‐term nature.
Notes to the Financial Statements
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NOTE 20: INTERESTS IN CONTROLLED ENTITIES Controlled entities consolidated The consolidated financial statements incorporate the assets, liabilities and the results of the following subsidiaries in accordance with the accounting policy described in Note 1. Name
Country of Incorporation
Class of Shares
Equity Holding %*
Investment $
2017 2016 2017 2016 Monument Exploration Pty Ltd Australia Ordinary 100 ‐ 250,000 ‐Syndicated Royalties Pty Ltd Australia Ordinary 100 100 1 1
250,001 1
* Percentage of voting power is in proportion to ownership.
Incorporation of controlled entities Monument Exploration Pty Ltd was incorporated on 12 December 2014 and was purchased by Syndicated Metals on 31 August 2016. Syndicated Royalties Pty Ltd was incorporated on 12 April 2010. NOTE 21: SEGMENT REPORTING The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board to make decisions about resources to be allocated to the segments and assess their performance. Operating segments are identified by Management based on the mineral resource and exploration activities in Australia. Discrete financial information about each project is reported to the Board on a regular basis. The reportable segments are based on aggregated operating segments determined by the similarity of the Group characteristics, the nature of the activities and the regulatory environment in which those segments operate. The Group operates in two reportable segments based on geographical areas of the mineral resource and exploration activities in Australia. Queensland WA Unallocated Total 30 June 2017 $ $ $ $ Segment revenue 2,327,279 ‐ 82,599 2,409,878
Segment net profit/(loss) 1,443,117 (7,210) (360,795) 1,075,112
Segment assets 4,697,184 2,071,888 2,738,927 9,507,999
Segment liabilities 34,431 120,540 119,346 274,317
Queensland WA Unallocated Total 30 June 2016 $ $ $ $ Segment revenue 2,000 ‐ 11,069 13,069
Segment net loss (6,587,793) ‐ (492,832) (7,080,625)
Segment assets 5,242,254 ‐ 620,880 5,863,134
Segment liabilities 23,699 ‐ 149,204 172,903
Notes to the Financial Statements
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NOTE 22: RELATED PARTY DISCLOSURE 2017 2016 $ $ (a) Key management personnel compensation The key management personnel compensation comprised: Post‐employment benefits 25,841 43,651Short term employment benefits 272,013 498,506Share based payments 57,128 ‐
354,982 542,157
(b) Individual directors’ and executives’ compensation disclosure Information regarding individual directors’ and executives’ compensation and some equity instruments disclosures as required by Corporations Regulation 2M.3.03 is provided in the Remuneration Report section of the Directors’ Report. Apart from the details disclosed in this note, no director has entered into a material contract with the Group since the end of the previous financial year and there were no material contracts involving directors’ interests existing at year end.
(c) Loans to key management personnel There were no loans to key management personnel during or at the end of the year. (d) Transactions with related parties During the period the Company invoiced CopperChem Limited, its Barbara Joint Venture partner, a total of $32,227 (inclusive of GST) (2016: $8,312) for costs incurred in relation to the Barbara Copper Project. As at the reporting date a total of $17,480 (2016: $nil) was receivable from CopperChem.
During the period the Company received invoices totalling $445,342 (2016: $92,682) from OMNI GeoX Pty Ltd, a director‐related entity of Mr Peter Langworthy, for the provision of geological consultancy services. As at reporting date a total of $19,728 (2016: $27,720) was payable to OMNI GeoX. All transactions were made on normal commercial terms and conditions and at market rates. NOTE 23: PARENT ENTITY INFORMATION 2017 2016 $ $Information for Syndicated Metals Limited Current assets 2,994,766 602,786Total assets 9,258,020 5,863,134 Current liabilities 261,687 166,078Total liabilities 274,316 172,903 Issued capital 26,187,467 23,776,256Share based payments reserve 142,393 317,273Accumulated losses (17,346,157) (18,403,298)
Total shareholder’s equity 8,983,703 5,690,231
Net profit/(loss) before income tax expense of the parent entity 532,527 (7,331,963)Total comprehensive profit/(loss) of the parent 825,133 (7,080,625)
Notes to the Financial Statements
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NOTE 24: EARNINGS PER SHARE 2017 2016
$ $ Profit/(Loss) for the period 1,075,112 (7,080,625)
Profit/(Loss) used in calculating basic and diluted profit/(loss) per share 1,075,112 (7,080,625)
Number NumberWeighted average number of ordinary shares used in calculating basic earnings per share 605,440,473 417,712,309Adjustments for calculation of diluted earnings per share: Options over ordinary shares 28,076,618 ‐
Weighted average number of ordinary shares used in calculating diluted earnings per share 633,517,091 417,712,309
Cents CentsBasic earnings per share 0.18 (1.70)Diluted earnings per share 0.17 (1.70)
Refer to Note 17 and the Director’s Report for details of options and performance rights that have been taken into account in the calculation of dilutive potential ordinary shares. NOTE 25: CONTINGENT ASSETS AND LIABILITIES During the period Syndicated sold it’s 50% share of the Barbara Copper Project to joint venture partner, CopperChem Limited for A$2.3 million in cash plus a production royalty. The production royalty is payable on the first 10,000 tonnes of copper‐in‐concentrate (or ore equivalent) produced by the Barbara Copper Project. The royalty will be payable as follows:
o 1% of the net smelter return (NSR) generated from the sale of concentrate or ore equivalent subject to a minimum invoiced copper price of US$2.50/lb;
o 2% of the NSR generated from the sale of concentrate or ore equivalent subject to a minimum invoiced copper price of US$3.00/lb;
o Where no production royalties are payable due to the invoiced price being below US$2.50/lb, copper sold from the Barbara Copper Project does not count towards the 10,000 tonne production royalty cap.
Other than the above, the Group is unaware of any other contingent assets or liabilities that may have a material impact on the Company’s financial position.
Notes to the Financial Statements
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NOTE 26: ACQUISITION OF MONUMENT EXPLORATION PTY LTD On 31 August 2016 the Company acquired 100% of Monument Exploration Pty Ltd. The acquisition consideration comprised payment of $50,000 cash and the issue of 23,767,082 fully‐paid ordinary shares to the vendor. The vendor will also receive a 0.5% gross royalty paid on future gold production of up to 100,000 ounces from the Monument Gold Project tenements. The Monument Gold Project comprises a 210km2 tenement package located ~55km west of Laverton in the Laverton gold district of WA. The initial acquisition package comprised four contiguous tenements (all of which were granted).
Acquisition Consideration $
Cash
Acquisition consideration 50,000
Share capital
23,767,082 fully paid ordinary shares at $0.008415 per share 200,000
Total Acquisition Consideration 250,000
Identifiable assets acquired and liabilities assumed at acquisition date $
Current Assets
Cash on hand 21
Non‐current Assets
Exploration Assets* 249,979
Identifiable Net Assets Acquired 250,000
*Exploration assets acquired with a fair value of $249,979 relates to the value of the four tenements held by Monument Exploration Pty Ltd.
Net cash outflow arising on acquisition $
Consideration paid in cash 50,000
Less: cash and cash equivalent balances acquired (21)
Net Cash Outflow 49,979
Impact of the acquisition on the results of the Group The Group’s loss for the year included an amount of $349 which is attributable to Monument Exploration Pty Ltd. The Directors of the Group consider these pro‐forma numbers to represent an approximate measure of the performance of the Group on a yearly basis and to provide a reference point for comparison in future years.
Notes to the Financial Statements
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NOTE 27: NON‐CASH INVESTING AND FINANCING ACTIVITIES
2017 2016
$ $
Shares issued for purchase of Monument Exploration Pty Ltd 200,000 ‐
Shares issued for purchase of tenements 17,300 ‐
217,300 ‐
NOTE 28: DIVIDENDS There were no dividends paid or declared during the financial year. NOTE 29: EVENTS SUBSEQUENT TO REPORTING DATE There are no matters or circumstances that have arisen since the end of the financial year that have significantly affected or may significantly affect the operations of the entity, the results of those operations or the state of affairs of the entity, in future years. NOTE 30: COMPANY DETAILS The registered office and principal place of business of the company is 68A Hay Street, Subiaco, Western Australia, 6008.
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DIRECTORS’ DECLARATION
The Directors of the Company declare that: 1. The financial statements, notes and additional disclosures included in the Directors’ Report and
designated as audited, are in accordance with the Corporations Act 2001 and:
(a) comply with Australian Accounting Standards and the Corporations Regulations 2001;
(b) give a true and fair view of the financial position as at 30 June 2017 and of the performance for the year ended on that date of the Group; and
(c) the financial statements are in compliance with International Financial Reporting Standards, as
stated in Note 1 to the financial statements. 2. The Chief Executive Officer and Chief Financial Officer have each declared that:
(a) the financial records of the Company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;
(b) the financial statements and notes for the financial year comply with the Australian
Accounting Standards; and
(c) the financial statements and notes for the financial year give a true and fair view. 3. In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to
pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors.
___________________ Andrew Munckton Managing Director 31 August 2017
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SYNDICATED METALS LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Syndicated Metals Limited (the company), 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, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the company and the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.
In our opinion:
a) The financial report of Syndicated Metals Limited is 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 ended on that date; and
ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. Our responsibilities under those standards are further described in the Auditor’s Responsibility section of our report.
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
Without modifying our opinion, we draw attention to Note 2 in the financial report, which indicated that the consolidated entity incurred a net profit after tax of $1,075,112 during the year ended 30 June 2017 (2016: loss of $7,080,625) which included a one-off sales transaction relating to the proceeds on disposal of the Barbara Copper Project of $2,300,000. Based upon the Board’s approved cash flow forecast for the following year, the consolidated entity will be reliant on future capital raisings. This, along with other matters as set forth in Note 2, indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.
The financial report of the consolidated entity does not include any adjustments in relation to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.
Independence
We are independent of the consolidated entity in accordance with 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.
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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. This matter was 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 this matter. For the matter below, our description of how our audit addressed the matter is provided in that context.
1. Carrying value of capitalised exploration expenditure
Why significant How our audit addressed the key audit matter
As at 30 June 2017 the carrying value of exploration and evaluation assets was $6,706,892 (2016: $5,168,426), as disclosed in Note 9.
The Group’s accounting policy in respect of
exploration and evaluation expenditure is outlined in Note 1.b. Significant judgement is required:
in determining whether facts and circumstances indicate that the exploration and evaluation assets should be tested for impairment in accordance with Australian Accounting Standard AASB 6 Exploration for and Evaluation of Mineral Resources (“AASB
6”); and
in determining the treatment of exploration and evaluation expenditure in accordance with AASB 6, and the Group’s accounting policy. In
particular:
o whether the particular areas of interest meet the recognition conditions for an asset; and
o which elements of exploration and evaluation expenditures qualify for capitalisation for each area of interest.
Our work included, but was not limited to, the following procedures:
to assess whether there are indicators of impairment:
o assessing whether the rights to tenure of the areas of interest remained current at reporting date as well as confirming that rights to tenure are expected to be renewed for tenements that will expire in the near future;
o holding discussions with the directors and management as to the status of ongoing exploration programmes for the areas of interest, as well as assessing if there was evidence that a decision had been made to discontinue activities in any specific areas of interest; and
o obtaining and assessing evidence of the Group’s future intention for the areas of
interest, including reviewing future budgeted expenditure and related work programmes;
considering whether exploration activities for the areas of interest had reached a stage where a reasonable assessment of economically recoverable reserves existed;
testing, on a sample basis, exploration and evaluation expenditure incurred during the year for compliance with AASB 6 and the Group’s
accounting policy; and
assessing the appropriateness of the related disclosures in Note 9.
Other Information
Other information is financial and non-financial information in the annual report of the Group which is provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible for Other Information in the annual report.
We have obtained all the Other Information prior to the date of this Auditor’s Report, which includes the Director’s report, Chairman’s Report, Corporate Governance Statement, Additional Information for Listed Public Companies and the Schedule of Interests in Mining Tenements.
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Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we 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.
We are required to report if we conclude that there is a material misstatement of this Other Information in the Financial Report and based on the work we have performed on the Other Information that we obtained prior the date of this Auditor’s Report we have nothing to report.
Directors’ Responsibilities 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 Note 1, the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using a going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor’s judgement, including assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the consolidated entity to cease to continue as a going concern.
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We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the consolidated entity to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2017.
In our opinion, the Remuneration Report of Syndicated Metals 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.
PKF MACK
SHANE CROSS PARTNER 31 AUGUST 2017 WEST PERTH, WESTERN AUSTRALIA
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ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
The Company presents the following additional information included in accordance with the listing requirements of the Australian Securities Exchange: Shareholders
Distribution of shareholders as at 21 August 2017:
Number of Shareholders Number of Ordinary Shares
1 – 1,000 35 3,915
1,001 – 5,000 34 122,560
5,001 – 10,000 70 618,972
10,001 – 100,000 618 33,898,999
100,001 and over 509 599,839,695
1,266 634,484,141
There are 284 shareholders holding unmarketable parcels (being a minimum $500 parcel at $0.017 per unit) totalling 3,841,854 shares. The names of the substantial shareholders who have notified the Company in accordance with Section 671B of the Corporations Act 2001 are:
Number of Shares Held
Percentage Held
CopperChem Limited* 182,556,392 28.77%
*On 16 September 2013, the Company announced that it had entered into a strategic alliance with CopperChem Limited pursuant to which CopperChem agreed to take an 18.9% stake in the Company, and for CopperChem to jointly explore and develop the Company’s Barbara Copper Project north‐east of Mt Isa in North Queensland. Syndicated and CopperChem entered into a subscription agreement with respect to the strategic alliance. Pursuant to the subscription agreement, ASX have granted the Company a waiver from Listing Rule 6.18 to permit CopperChem to have a right to maintain its equity interest in the Company in the event that further equity issues are undertaken. CopperChem will be given the opportunity to participate in these future equity issues of the Company on the same terms as those being offered to third parties. Unlisted Options and Performance Rights
As at the date of this report, the unissued ordinary shares of Syndicated Metals Limited under options are as follows:
Expiry date Exercise price (cents) Quantity Number of Holders
08/02/2018 1.2 60,164,182 88
Additional Information for Listed Public Companies
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As at the date of this report, the unissued ordinary shares of Syndicated Metals Limited under performance rights are as follows:
Expiry date
Vesting Price
Quantity
Number of Holders
21/10/2018 $0.06675 1,158,478 1
21/10/2018 $0.11125 1,639,731 1
27/10/2020 $0.047 1,142,560 1
27/10/2020 $0.078 1,241,913 1
5,182,682
Voting Rights
The voting rights attached to each class of equity security are as follows: Ordinary Shares
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.
Options and Performance Rights
Unlisted options and performance rights do not carry the right to vote until such time as they are exercised and converted to ordinary shares.
Restricted Securities
There are no shares on issue that have been classified by ASX Limited as restricted securities.
On‐market Buy‐back
There is no on‐market buy‐back currently being undertaken.
Additional Information for Listed Public Companies
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Twenty Largest Shareholders as at 21 August 2017
Name Number of Ordinary Fully
Paid Shares Held
% of Issued Ordinary Capital
Held
CopperChem Limited 182,556,392 28.77
Harmanis Holdings Pty Ltd 24,000,000 3.78
Jericho Exploration Pty Ltd 15,814,907 2.49
Sun Metals Corporation Pty Ltd 10,600,000 1.67
Emlyn Holdings Pty Ltd 10,595,885 1.67
Vicex Holdings Pty Ltd 10,179,006 1.60
ACN 112 940 057 Pty Ltd 10,000,000 1.58
Windsong Valley Pty Ltd 10,000,000 1.58
Xserv Pty Ltd 7,000,000 1.10
Saroda Holdings Pty Ltd <Sciarrone Family S/F A/C> 6,902,381 1.09
Ms Lois Deborah Blackwood 6,391,536 1.01
Metamorphic Investments Pty Ltd 6,306,306 0.99
Omni GeoX Pty Ltd 5,952,381 0.94
Spectral Investments Pty Ltd 5,898,762 0.93
Saroda Holdings Pty Ltd <Sciarrone Family A/C> 5,417,534 0.85
Running Water Limited 5,107,729 0.81
Hawkestone Resources Pty Ltd 5,000,000 0.79
Alltwen Pty Ltd 4,917,500 0.78
Mr Oliver Judd 4,132,631 0.65
Ashe Super Pty Ltd 4,000,001 0.63
340,772,951 53.71
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SCHEDULE OF INTERESTS IN MINING TENEMENTS
Tenement Lease Name Percentage Held Status Current
Sub‐blocks Area (km2)
Syndicated Metals Limited (SMD) – Mt Isa, Queensland
Mt Remarkable Project (Northern Hub)
EPM 16197 Blockade SMD 100% Granted 6 19
EPM 17638 Phillips Hill SMD 100% Granted 17 55
EPM 17947 Blockade East Extension SMD 100% Granted 5 16
EPM 18492(1) Mt Remarkable Extended SMD 100% Granted 50 160
EPM 17914 Blockade East SMD 100% Granted 13 41
EPM 14281 Yamamilla SMD 100% Granted 18 58
EPM 19049 Mt Remarkable Nth SMD 100% Granted 2 6
EPM 19733(1) Mt Remarkable Consolidated SMD 100% Granted 105 336
EPM 25824 Mt Remarkable Inclusion SMD 100% Granted 53 170
EPM 25915 Mt Remarkable Expansion SMD 100% Granted 14 45
EPM 26026 Pinnacle SMD 100% Granted 2 6
Fountain Range Project (Southern Hub)
EPM 14362 Malbon Vale SMD 100% Granted 5 16
EPM 14366 Bushy Park SMD 100% Granted 13 41
EPM 14369 Dronfield SMD 100% Granted 14 45
EPM 17637 Revenue SMD 100% Granted 1 3
EPM 18078 Wimberu #1 SMD 100% Granted 3 10
EPM 18082 Wimberu #2 SMD 100% Granted 6 19
EPM 18223 Bronzewing Bore SMD 100% Granted 4 13
EPM 18671 Bulonga SMD 100% Granted 15 47
EPM 18980 Mayfield SMD 100% Granted 8 25
EPM 19008 Duchess SMD 100% Granted 12 38
EPM 25435 Mt Erle #1 SMD 100% Granted 21 67
EPM 25439 Mt Erle #2 SMD 100% Granted 5 16
EPM 25853 Southern Hub Extended SMD 100% Granted 68 217
EPM 9083 Burke River SMD 100% Granted 20 64
EPM 11013 Monastery SMD 100% Granted 1 3
EPM 25972 Duchess North SMD 100% Granted 2 6
Monument Exploration Pty Ltd (MEPL) – Laverton, WA
Monument Gold Project Current Area
Area Unit
E39/1846 Bernie Bore MEPL 100% Granted 1 Block
E39/1866 Monument MEPL 100% Granted 69 Blocks
P39/5519 Korong South MEPL 100% Granted 86 Hectares
P39/5520 Korong MEPL 100% Granted 200 Hectares
P39/5154 Westcott MEPL 100% Granted 79 Hectares
P39/5471 Fred Well MEPL 100% Granted 180 Hectares
E39/2024 Bernborough MEPL 100% Application 1 Block
E39/2035 North Well MEPL 100% Application 10 Blocks
E39/2036 Farnham MEPL 100% Application 18 Blocks
P39/5456 Marionette MEPL 100% Granted 120 Hectares
P39/5457 McKenzie Bore MEPL 100% Granted 170 Hectares
P39/5837 Waihi North MEPL 100% Application 155 Hectares
Legend
(1) Tenements upon which CopperChem Limited have exploration rights on selected sub‐blocks.
SMD – Syndicated Metals Ltd MEPL – Monument Exploration Pty Ltd (100% owned subsidiary of SMD)