ANNUAL REPORT
2016
2 Maximus Resources Limited ANNUAL REPORT 2016
Maximus Resources Limited
ABN 74 111 977 354
CORPORATE DIRECTORY
CONTENTS
Directors
Robert Kennedy Non-executive Chairman
Kevin Malaxos Managing Director
Leigh McClusky Non-executive Director
Ewan Vickery Non-executive Director
Nicholas Smart Alternate for Mr Vickery
Company Secretary
Rajita Alwis
Registered Office
Level 3, 100 Pirie Street Adelaide, South Australia 5000
Principal Office
Level 3, 100 Pirie Street Adelaide, South Australia 5000 Telephone +61 8 7324 3172
Facsimile +61 8 8312 5501
Solicitors
DMAW Lawyers
Level 3, 80 King William Street Adelaide, South Australia 5000 Telephone +61 8 8210 2222
Facsimile +61 8 8210 2233
Minter Ellison Lawyers
Level 10, 25 Grenfell Street Adelaide, South Australia 5000 Telephone +61 8 8233 5555
Facsimile +61 8 8233 5556
Share Registry Computershare Investor Services Level 5, 115 Grenfell Street Adelaide, South Australia 5000 Telephone +61 8 8236 2300
Facsimile +61 8 8236 2305
Auditor
Grant Thornton
67 Greenhill Road
Wayville, South Australia 5034
Banker
National Australia Bank
48 Greenhill Road
Wayville, South Australia 5034
Stock Exchange Listing
Australia Securities Exchange (Adelaide)
Maximus Resources Limited shares are listed on the Australian Securities Exchange
ASX code: MXR
Website
www.maximusresources.com
The website includes information about the Company,
its strategies, projects, reports and ASX announcements.
Chairman's Letter 3
Managing Director's Report 4
Tenement Schedule 6
Financial Report 8
Directors' Report 9
Auditor's Independence Declaration 17
Financial Statements
Consolidated Statement of Profit or Loss and 18
Other Comprehensive Income
Consolidated Statement of Financial Position 19
Consolidated Statement of Changes In Equity 20
Consolidated Statement of Cash Flows 21
Notes To The Consolidated Financial Statements 22
Directors' Declaration 40
Independent Auditor's Report To The Members 41
ASX Additional Information 44
COMPLIANCE STATEMENTS
Disclaimer
This Annual Report contains forward looking statements that are subject to risk factors associated with the exploration and mining industry.
It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a variety of variables which could cause actual results or trends to differ materially.
Exploration Targets
Exploration Targets are reported according to Clause 18 of the JORC Code, 2012. This means that the potential quantity and grade is conceptual in nature and that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource.
Competent Person
The information in this report relating to Exploration Results, Mineral Resources and Ore Reserves is based on information compiled by Mr Stephen Hogan who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Hogan is a consultant to Maximus Resources Limited. He has sufficient experience that is relevant to the styles of mineralisation and types of deposit under consideration and consents to the inclusion of the information in this report in the form and context in which it appears. Mr Hogan qualifies as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code).
Front cover image:
Burbanks Processing Plant, located approx 8km SW of Coolgardie, Western Australia
CHAIRMAN'S LETTER
Dear Fellow Shareholders
My addresses at the past two AGMs commenced by describing market conditions as the perfect storm for the resources sector. Thankfully, over the past 12 months we have seen a minor resurgence in the market's appetite for mineral exploration, primarily due to rising gold and lithium commodity pricing.
Conducive market conditions and prospective opportunities identified by management have enabled Maximus to successfully raise sufficient capital to fund gold and lithium exploration activities along with the acquisitions of the Spargoville tenement package and the nearby Burbanks Processing Plant. The
survival of any junior exploration company is centered upon its shareholders and I thank all those who have participated in the recent capital raisings.
During the 2016 financial year, Maximus' exploration activities primarily focused on the Spargoville tenement package located in the Eastern Goldfields of Western Australia. During this period, Maximus moved to full ownership of the Spargoville project which illustrates the high regard in which these tenements are held and the strong belief that significant gold mining potential
exists. Additionally, a significant review of the lithium prospectivity of the Spargoville tenements was undertaken. This resulted in
the discovery of substantial lithium bearing pegmatites at the Lefroy prospect. X-Ray diffraction analysis was also undertaken on selected samples of pegmatite sourced during previous exploration programs and confirmed the presence of lithium bearing minerals including spodumene.
During the June quarter of 2016, Maximus undertook due diligence on the Burbanks Processing Plant. Maximus was selected as the preferred bidder, and subsequently announced the landmark signing of a binding Share Sale Agreement with ASX-listed Ramelius Resources Limited. Maximus acquired the facility for a total of $2.5 million which includes staged payments over a 24 month period. The facility previously treated ore from Ramelius' Wattle Dam gold mine located within Maximus' current Spargoville portfolio and consequently provides Maximus with the ability to easily monetise future exploration success. Maximus has identified numerous parties potentially requiring gold treatment options and will be able to provide toll milling services later in 2016 following refurbishment and recommissioning of
the facility. The acquisition provides Maximus with a near-term revenue opportunity and a platform for further growth.
Maximus is currently reviewing additional project opportunities and continues to operate on minimal budget overheads in order to preserve capital for exploration whilst meeting an acceptable standard for a listed company.
Finally, I thank my fellow Directors and all of our shareholders for your continued support and commitment to Maximus during this past period. The Maximus board and management team will continue to work hard to capitalise on our existing portfolio and
other value-accretive opportunities in a bid to create shareholder value in the 2017 financial year.
Bob Kennedy
CHAIRMAN
Maximus Resources Limited ANNUAL REPORT 2016 3
MANAGING DIRECTOR'S REPORT
Review of operations
Spargoville
Maximus acquired an initial 25% interest in the Spargoville
tenement package located 70km south of Coolgardie in the Eastern Goldfields of Western Australia
on 5 August 2015, with 3 years to complete exploration expenditure totalling a further $800,000 to
secure 90% equity. The initial 25% stake of Tychean Resources Ltd's (TYK) interest in the 36 tenements totalling approximately 11,485 hectares was secured for $200,000. In November 2015, Maximus achieved the stage 1 earn-in commitment following exploration expenditure of $200,000 and increased its equity share in the Spargoville tenements to 51%.
In February 2016, following exploration expenditure totalling a further $600,000 MXR achieved the Stage 2 earn-in commitment and securing 90% equity in the Spargoville project. In addition, MXR negotiated a second Sale Agreement with TYK securing the remaining 10% equity in the Spargoville project for 25 million MXR shares. This final payment extinguishing all remaining TYK equity in the Spargoville tenement package and cancels the gold royalty applicable under the first Sale Agreement. The pace at which MXR moved to full ownership of the Spargoville project confirms the high regard in which these tenements are held
and the strong belief that significant gold potential still exists at several sites across the tenement package.
Following the commencement of the extensive soil sampling program across multiple targets on the Wattle Dam tenements, several high quality targets were identified. Maximus commenced its maiden drilling campaign on Eagles Nest during December 2015 with a total of 8 holes completed for 809 metres. Final assay
NT
QLD
WA
results reported high grade intersections at significant widths including 24m @ 3.05g/t from 19m (including 8m @ 4.0 g/t from 35m) in hole MXENRC04, 7m @ 4.0 g/t from 33m (including
1m @ 14.7g/t from 34m) in hole MXENRC05 and 6m @ 1.98g/t from 81m (including 1m @ 5.3g/t from 81m) in hole MXENRC07 (refer to ASX announcement dated 28 January 2016). Further reverse circulation (RC) drilling was completed on the Eagles Nest tenement in March, testing strike and depth extensions of the orebody. Activities have progressed to generating cross-section and ore modelling and producing a JORC 2012 compliant ore resource. It is anticipated that a resource model will be completed in the December quarter 2016.
A significant review of the Lithium prospectivity of the Spargoville tenements was undertaken in the March quarter. This resulted
in the discovery of significant lithium bearing pegmatites on the Lefroy prospect in the north eastern region of the tenement package, which lies on the northern portion of the Southern Yilgarn Tantalum-Tin-Lithium Province, in the vicinity of two
major Lithium Projects; Mt Marion (Neometals) and Lepidolite Hill (Lithium Australia). The Lefroy prospect is located approximately 20km south of, and along strike of the Mt Marion Lithium project. The discovery was made during the Company's first dedicated Lithium field exploration program designed to test a series of targets generated from auger drill results by previous explorers, detailed aerial photography interpretations and geophysical imaging. The discovery identified lithium bearing mica (lepidolite) over a strike length of 200m with results averaging 3.55% Li20, with a peak value of 4.97% Li20.
In May, X-Ray diffraction (XRD) analysis was undertaken on selected samples of pegmatite sourced during previous gold and nickel exploration programs and confirmed the presence of lithium bearing minerals including spodumene.
Narndee
The Narndee tenements in Western Australia remain an important asset for the company, but minimal progress was made during 2015/16 due to the exploration priority given to the Spargoville acquisition.
Analysis of previous RC drilling assay results confirmed elevated Copper grades in addition to substantial intervals of Copper
and Zinc mineralisation and contributes to our confidence that the area has the potential to host a significant Volcanic Massive Sulphide (VMS) style Copper-Gold orebody, similar to
other projects in the region. These RC drill results continued to
NARNDEE
Yilgarn Craton
SPARGOVILLE
SA
Gawler Craton
Eromanga Basin
NORTH GAWLER CRATON MILLERS CREEK
NSW
ADELAIDE HILLS
VIC
TAS
encourage, but we were not able to plot consistent intervals of mineralisation across adjacent intersections.
This analysis of previous RC drilling results confirmed the presence of several electromagnetic (EM) conductors on the Narndee homestead tenement. A survey was undertaken in May 2016, with one target evaluated. Unfortunately the survey was terminated due to inclement weather, with plans to complete at a later date when access was re-established.
Applications were submitted for 3 additional tenements surrounding the company's E59/908 tenement to protect the EM anomalies and potential future prospects.
4 Maximus Resources Limited ANNUAL REPORT 2016
