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Mithril Resources Ltd
ABN 30 099 883 922
Annual Report
For the Year Ended 30 June 2015
Contents
For the Year Ended 30 June 2015
Page
Consolidated Financial Statements
Corporate Information 1
Chairman's Report 2
Directors' Report 3
Auditors Independence Declaration under Section 307C of the Corporations Act 2001 15
Consolidated Statement of Profit or Loss and Other Comprehensive Income 16
Consolidated Statement of Financial Position 17
Consolidated Statement of Changes in Equity 18
Consolidated Statement of Cash Flows 19
Notes to the Financial Statements 20
Directors' Declaration 54
Independent Audit Report 55
ASX Additional Information 58
Corporate Information
30 June 2015
Directors
Mr Graham Ascough (Chairman, Non-Executive Director) Mr David Hutton (Managing Director)
Mr Donald Stephens (Non-Executive Director) Mr Derek Carter (Retired 1 January 2015)
Mr Richard Bonython (Retired 1 January 2015)
Company Secretary
Mr Donald Stephens
Registered Office
C/- HLB Mann Judd (SA) Pty Ltd 169 Fullarton Road
DULWICH SA 5065
Principal place of business 22B Beulah Road NORWOOD SA 5067
Share Registry
Computershare Investor Services Pty Ltd Level 5, 115 Grenfell Street
ADELAIDE SA 5000
Legal Advisors O'Loughlins Lawyers Level 2, 99 Frome Street
ADELAIDE SA 5000
Bankers
Bank SA
97 King William Street ADELAIDE SA 5000
Auditors
Grant Thorton Audit Pty Ltd Level 1, 67 Greenhill Road
WAYVILLE SA 5034
Chairman's Report
30 June 2015
Dear Fellow Shareholders,
On behalf of the Board of Directors, it is my pleasure to present the 2015 Annual Report for Mithril Resources Limited ('Mithril' or 'Company').
The past year has again proven quite difficult for junior resource companies such as ours. Market conditions remain negative towards resources in general and raising sufficient funds to conduct meaningful exploration has been challenging. I do however want to assure shareholders that Mithril has continued and will continue to actively explore and prioritise its projects.
During the 2014-2015 Financial Year Mithril made a potentially significant copper-nickel-PGE discovery at the Stark Prospect located 80km southeast of Meekatharra. We acquired a new exploration partner for the Spargos Reward Gold Project and we continued to evaluate new opportunities to grow the company.
Unfortunately our share price has not reflected the hard work, success and dedication of our exploration team and I believe that this largely due to the difficult market conditions. I assure you we are working as hard as possible to provide value to our shareholders, and to ensure we maximise in-ground expenditure we have undertaken a number of measures in the past year to reduce running costs and increase efficiency including from the 1st July 2015, fees payable to the Non-Executive directors will be accrued and not paid until further notice.
The Company has also reduced the size of the Board of Directors to more appropriately reflect the Company's current activities. Mr Derek Carter and Mr Richard Bonython elected to retire as Directors effective 31 December 2014 and the Company expresses its sincere thanks to them for their considerable contributions to Mithril since their appointments in 2002.
During the year the Company completed a non-renounceable rights issue which included a partial placement of the shortfall shares. The issue offered 157,828,949 New Shares on the basis of one (1) new share for every two (2) ordinary shares held by Shareholders. It was very pleasing to see that this offer was well supported by a number of shareholders.
The Meekatharra region will remain the focus of our efforts in the near term as the area is highly prospective for the discovery of economic copper, nickel and gold mineralisation
I would like to take this opportunity to express my thanks to my fellow directors, management and staff for their dedication and work during the past 12 months. We are committed to progressing the Company and advancing our projects towards discovery for the benefit of all shareholders.
I also take this opportunity to thank all shareholders for your continued support of Mithril.
Graham Ascough Chairman
Directors' Report
30 June 2015
Your directors submit their report for the year ended 30 June 2015.
DIRECTORS
The names and details of the Company's directors in office during the financial year and until the date of this report are as follows. Directors were in office for this entire year unless otherwise stated.
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Mr Graham As cough
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Chairm an, Non-Executive
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Mr David Hutton
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Managing Director
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Mr Donald Stephens
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Non-Executive Director
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Mr Derek Carter
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Non-Executive Director
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Retired 1 Janu ary 2015
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Mr Richard Bonython
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Non-Executive Director
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Retired 1 January 2015
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Names, qualifications, experience and special responsibilities
Graham Ascough, BSc, PGeo (Chairman, Non-Executive Director)
Graham Ascough is a senior resources executive with more than 25 years of industry experience evaluating mineral projects and resources in Australia and overseas. He has had broad industry involvement ranging from playing a leading role in setting the strategic direction for significant country-wide exploration programs to working directly with mining and exploration companies.
Mr Ascough is a geophysicist by training and was the Managing Director of Mithril Resources Ltd from October 2006 until June 2012. Prior to joining Mithril in 2006, Mr Ascough was the Australian Manager of Nickel and PGM Exploration at the major Canadian resources house, Falconbridge Ltd (acquired by Xstrata Plc in 2006).
Mr Ascough is also Non-Executive Chairman of ASX listed Musgrave Minerals Ltd, Phoenix Copper Ltd and Avalon Minerals Ltd. He is a member of the Australian Institute of Mining and Metallurgy and is a Professional Geoscientist of Ontario, Canada. He has also been a Director of Reproductive Health Science Ltd and Aguia Resources Ltd in the last 3 years. He is also a member of the Company's audit committee.
David Hutton, BSc, (Managing Director)
David Hutton is a geologist who has spent the last 24 years working in both exploration and mining throughout Australia and overseas. After graduation, he spent 7 years with the MIM Group before joining Forrestania Gold NL / LionOre Australia, where he was involved in gold exploration throughout the WA Goldfields. He worked at Western Metals as Chief Geologist of the Lennard Shelf Operations prior to rejoining LionOre Australia where he was responsible for management of the East Kimberley Nickel Joint Venture. Prior to commencing with Mithril Resources Ltd in June 2012, David worked at ASX - listed Breakaway Resources Ltd where he was most recently Managing Director from May 2010 to June 2012.
David is a Fellow of the AusIMM and a Member of the AIG.
Donald Stephens, BA(Acc), FCA (Non-Executive Director)
Donald Stephens is a Chartered Accountant and corporate adviser with over 25 years experience in the accounting industry, including 14 years as a partner of HLB Mann Judd, a firm of Chartered Accountants. He is a Director of Petratherm Ltd, Crest Minerals Ltd and Lawson Gold Ltd and is company secretary to Highfield Resources Ltd, Minotaur Exploration Ltd, Lawson Gold Ltd and Petratherm Ltd. In the last 3 years he has been a Director of TW Holdings Ltd, Reproductive Health Science Ltd, and CRW Holdings Ltd.
He holds other public company secretarial positions and directorships with private companies and provides corporate advisory services to a wide range of organisations. He is also the company secretary and is a member of the Company's audit committee.
Directors' Report
30 June 2015
Derek Carter, MSc, FAusIMM (CP) (Non-Executive Director, retired 1 January 2015)
Derek Carter has over 40 years experience in exploration and mine geology, including 17 years in management of ASX-listed exploration/development companies. He held senior positions in the Shell Group of Companies and Burmine Ltd before founding Minotaur Exploration Ltd in 1993. He was Managing Director of Minotaur Exploration Ltd from its inception until early 2010 when he became Chairman of that company. He is also Chairman of Highfield Resources and the AusIMM and a Non-Executive Director of Intrepid Mines Ltd. He has also been a Director of Petratherm Ltd in the last 3 years.
He was Vice President and later President of the South Australian Chamber of Mines and Energy, was a Director of the Australian Gold Council and Chairman of the Federal Government's Minerals Exploration Advisory Group. He is a member of the South Australian Resources Development Board, and the South Australian Minerals and Petroleum Experts Group.
He is a recipient of AMEC's Prospector of the Year Award, the AusIMM's President's Award and is a Centenary Medallist.
Richard Bonython, B Ag Sc (Non-Executive Director, retired 1 January 2015)
Richard Bonython was a Director of Minotaur Gold Ltd for six years, Minotaur Resources Ltd for 5 years and retired as Chairman of Hindmarsh Resources Ltd following the takeover of that company in early 2006. He retired as Chairman of Diamin Resources NL in 1999 having been a director of that company for 15 years. He was Executive Director of Pioneer Property Group Ltd for over 15 years and has experience of over 42 years in the building, rural and mineral industries. He is currently a Director of Minotaur Exploration Ltd. Richard is also a member of the Company's Audit Committee. He has also been a Director of Petratherm Ltd in the last 3 years.
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE
As at the date of this report, the interests of the Directors in the shares and options of Mithril Resources Ltd were:
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Number of Ordinary Shares
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Number of Options over Ordinary Shares
|
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David Hutton
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2,628,941
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2,000,000
|
|
Graham Ascough
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5,300,000
|
4,000,000
|
|
Derek Carter
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2,100,000
|
1,000,000
|
|
Richard Bonython
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3,770,000
|
1,000,000
|
|
Donald Stephens
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750,000
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1,000,000
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DIVIDENDS
No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made.
Directors' Report
30 June 2015
PRINCIPAL ACTIVITIES
The principal activities of the Company and consolidated entities ('the Group') during the financial year were:
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to carry out exploration of mineral tenements, both on a joint venture basis and by the Group in its own right;
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to continue to seek extensions of areas held and to seek out new areas with mineral potential; and
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to evaluate results achieved through surface sampling, drilling and geophysical surveys carried out during the year.
There have been no significant changes in the nature of those activities during the year.
OPERATING RESULTS
The consolidated loss of the Group for the financial year after providing for income tax amounted to $13,972,215 [2014: Loss $718,925].
OPERATIONS OVERVIEW
2015 Annual Report - Review of operations
Mithril Resources ('Mithril' or 'the Company') is exploring two projects within the Meekatharra and West Kambalda Districts of Western Australia that are highly prospective for the discovery of economic copper, nickel and gold mineralisation (Figure 1).
During the 2014-2015 Financial Year (the 'Year') Mithril made a new copper-nickel-PGE discovery at the Stark Prospect (located 80km southeast of Meekatharra), acquired a new exploration partner for the Spargos Reward Gold Project (located 20kms south west of Kambalda) and implemented a range of measures to lower its running costs.
Corporate Overview
The Company spent $2,056,000 on exploration and administration activities during the Year, of which $103,000 was received from its 2013-2014 Financial Year Research and Development Tax Incentive and $65,000 was received from Round 9 of the West Australian Government's Exploration Incentive Scheme.
Figure 1: Project Location Plan
The Company raised $738,000 (before costs) through a Non-Renounceable Rights Issue which included a Part Placement of Shortfall Shares to clients of Taylor Collison Limited and Paterson Securities Limited. The Rights Issue offered 157,828,949 New Shares on the basis of one (1) new share for every two (2) ordinary shares held by Shareholders at the Record Date at an issue price of $0.007 (0.7 cents) and was well supported by a number of shareholders.
Following completion of the Rights Issue, Mithril now has a total of 421,043,293 ordinary shares on issue and at the end of the 2014-2015 Financial Year, the Company held $543,000 in cash.
In light of continued weak market conditions a range of measures were implemented to lower the Company's running costs including: a reduction in staff costs and Director's Fees, the sale of surplus vehicles and field equipment, and the divestment of non-core exploration tenements.
The Company also reduced the size of the Board of Directors to more appropriately reflect the Company's activities. Mr Derek Carter and Mr Richard Bonython elected to retire as Directors effective 31 December 2014 and the Company expresses its sincere thanks to them for their contributions and service to Mithril.
Directors' Report
30 June 2015
Meekatharra, Western Australia (Copper-Nickel-PGE's)
Nanadie Well Project (MTH earning up to 75%)
During the Year, the Company made a new copper-nickel-PGE discovery at the Stark Prospect, located 80km southeast of Meekatharra.
Mineralisation at Stark is associated with disseminated and massive sulphides (pyrrhotite-chalcopyrite-pentlandite-pyrite) that occur both within, and at the base of a mafic (gabbro) intrusion adjacent to a metasedimentary sequence.
Mineralisation remains open in all directions with significant intercepts from drilling to date as follows (downhole widths):
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16m @ 0.81% copper, 0.09% nickel, and 0.39g/t (gold + platinum + palladium - 'PGE's') from 183 metres in NRC14008 including; 4m @1.91% copper, 0.18% nickel, and 0.96g/t PGE's,
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16.37m @ 0.40% copper, 0.07% nickel, and 0.20g/t PGE's from 213.43 metres in NDD15001 including; 0.27m @ 0.41% copper, 1.62% nickel, and 1.60g/t PGE's and 0.43m @ 2.19% copper, 0.12% nickel, and 0.77g/t PGE's, and
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0.6m @ 3.81% copper, 0.05% nickel, 1.05g/t PGE's, and 19.1g/t silver from 246.35 metres in NDD1500 including; 0.15m @ 13.70% copper, 0.16% nickel, 3.94g/t PGE's, and 73.7g/t silver.
Interpretation and modelling of downhole (DHTEM) and ground (FLTEM) geophysical data has identified a series of bedrock EM conductors along strike from and beneath the drilled mineralisation at Stark.
With the exception of one hole, none of these new conductors have been drilled and clearly demonstrate the potential of Stark to host extensions to existing mineralisation as well as for new mineralised positions.
Following its discovery by Mithril in late 2014, only eight RC and Diamond holes have been drilled at Stark with each hole intersecting copper-nickel-PGE mineralisation.
Stark lies within tenements subject to a Farmin and Joint Venture Agreement with Intermin Resources Limited (ASX: IRC). Under the terms of the joint venture, Mithril can earn a 60% interest in the project tenements by completing expenditure of $2M by 14 April 2018, and an additional 15% by completing further expenditure of $2M over a further 2 years (in total $4M over 6 years for 75% - see ASX Announcement dated 6 December 2013).
West Kambalda, Western Australia (Gold)
Spargos Reward Gold Project (MTH 100%)
Late in the Year, the Company executed a Binding Heads of Agreement with Corona Minerals Limited ('Corona') for the sale of a 50% equity interest in the Spargos Reward Gold Project (located 30kms west of Kambalda).
On the formation of a 50-50 JV, Corona can earn a further 15% interest (for a total of 65%) in the project by sole funding A$150,000 in exploration expenditure within 12 months and a further 20% interest (for a total of 85%) by electing to sole fund exploration to the completion of a positive scoping study on a Mineral Resource estimated in compliance with the 2012 JORC Code.
The project includes the historic Spargos Reward Gold Deposit and a number of priority exploration targets. Spargos Reward was historically mined to a vertical depth of 120 metres (underground and open pit) with total production of approximately 29,260 ounces @ 8g/t gold.
RC drilling by Mithril in 2013 beneath the historic workings returned a number of significant intercepts including (downhole widths):
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8m @ 10.30 g/t gold from 242 metres in 13SPRC07 including 3m @ 25.73 g/t gold, and
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10m @ 4.60 g/t gold from 256 metres in 13SPRC09 including 3m @ 13.00 g/t gold.
Directors' Report
30 June 2015
The introduction of a new exploration partner for Spargos Reward is significant as it not only sees exploration activities resume at the highly prospective gold project, but ensures that Mithril remains focussed on Stark and the surrounding targets.
Other Projects
Spargoville Project (MTH 20% and earning up to 80%)
Mithril withdrew from the Spargoville Farm-in and Joint Venture with KalNorth Gold Mines Limited (ASX: KGM) effective 11 May 2015.
Copper Hills Project (MTH earning up to 80%)
Mithril withdrew from the Copper Hills Farm-in and Joint Venture Agreement with Doray Minerals Limited (ASX: DRM) effective 27 April 2015.
East Pilbara Project (MTH 100% with Kalamazoo Resources earning 60%)
The project is subject to a Farm-in and Joint Venture with a private company - Kalamazoo Resources Pty Ltd (Kalamazoo) whereby Kalamazoo can earn up to an 80% interest in the tenements by spending $150,000 over 2 years and completing a Bankable Feasibility Study.
During the Year, Kalamazoo conducted a helicopter assisted reconnaissance mapping and sampling program over a number of copper and iron ore targets throughout the Project area without any significant results being returned and subsequent to the end of the Financial Year, gave notice of its intention to withdraw from the joint venture.
East Arunta Projects (Huckitta Option and Joint Venture - MMG earning up to 80% of the Nickel Rights), (Harts Range Option and Joint Venture - MMG earning up to 90%), Yambah Project (MTH 100%) and Sammy Joint Venture (MTH 80%)
During the Year, the Company rationalised its East Arunta landholdings and remained focused on its WA exploration assets. Mithril withdrew from all its joint ventures and sold two non-joint venture tenements to KGL Resources Limited (ASX: KGL) for $20,000 in cash.
Mithril's remaining interest in the East Arunta is the 100%-owned Leaky Bore tenement (EL26942) which contains the Basil Copper Deposit (2004 JORC Code Compliant Inferred Resource of 26.5Mt @ 0.57%Cu, 0.05%Co - see ASX Announcement dated 21 March 2012) and a number of undrilled copper and nickel sulphide targets.
Investments
Mithril is the largest shareholder in Musgrave Minerals Limited ('Musgrave' - ASX: MGV) with 9.28 million shares and
2.5 million options. Mithril vended tenements into Musgrave as part of their successful IPO that was completed on 29 April 2011.
During the Year, Musgrave continued to explore tenements in the Fraser Range District of Western Australia, the Musgrave Province and the Southern Gawler Craton, both of which are in South Australia.
Competent Persons Statement
The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr David Hutton, who is a Competent Person, and a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Hutton is Managing Director and a full-time employee of Mithril Resources Ltd.
Mr Hutton has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.
Mr Hutton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Directors' Report
30 June 2015
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Mithril Resources Limited support and have adhered to the principles of sound corporate governance. The Board recognises the recommendations of the Australian Securities Exchange Corporate Governance Council, and considers that Mithril Resources is in compliance to the extent possible with those guidelines, which are of importance to the commercial operation of a junior listed resources company. During the financial year, shareholders continued to receive the benefit of an efficient and cost-effective corporate governance policy for the Company.
The Company has established a set of corporate governance policies and procedures and these can be found within the Company's Corporate Governance located on the Company's website http://www.mithrilresources.com.au/corpgovernance.php
RISK MANAGEMENT
The Group takes a proactive approach to risk management. The Board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that the Group's objectives and activities are aligned with the risks and opportunities identified by the board.
The Group believes that it is crucial for all Board members to be a part of this process, and as such the Board has not established a separate risk management committee.
The Board has a number of mechanisms in place to ensure that management's objectives and activities are aligned with the risks identified by the board. These include the following:
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Board approval of a strategic plan, which encompasses the Group's vision, mission and strategy statements, designed to meet stakeholder's needs and manage business risk.
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Implementation of Board approved operating plans and budgets and board monitoring of progress against these budgets, including the establishment and monitoring of performance indicators of both a financial and non financial nature.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
On 1 December 2014 the Company announced it had completed a $737,699 capital raise through a rights issue of 105,385,543 shares at $0.007 per share.
EVENTS ARISING SINCE THE END OF THE REPORTING DATE
On 18 August 2015 the Company announced capital raising by way of a Share Purchase Plan ('SPP') at an issue price of $0.0045 (0.45cents). Under the SPP, a maximum of 126,312,988 shares will be issued to raise up to $0.57M.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Group expects to maintain the present status and level of operations and therefore there are no likely developments in the Group's operations.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group is aware of its responsibility to impact as little as possible on the environment, and where there is any disturbance, to rehabilitate sites. During the year under review the majority of work carried out was in the Northern Territory and Western Australia and the Group followed procedures and pursued objectives in line with guidelines published by the Northern Territory/Western Australian Governments. These guidelines are quite detailed and encompass the impact on owners and land users, heritage, health and safety and proper restoration practices. The Group supports this approach and is confident that it properly monitors and adheres to these objectives, and any local conditions applicable wherever it explores.
Directors' Report
30 June 2015
The Group is committed to minimising environmental impacts during all phases of exploration, development and production through a best practice environmental approach. The Group shares responsibility for protecting the environment for the present and the future. It believes that carefully managed exploration programs should have little or no long-lasting impact on the environment and the company has formed a best practice policy for the management of its exploration programs. The Group properly monitors and adheres to this approach and there were no environmental incidents to report for the year under review. Furthermore, the Group is in compliance with the state and/or commonwealth environmental laws for the jurisdictions in which it operates.
OCCUPATIONAL HEALTH, SAFETY AND WELFARE
In running its business, Mithril aims to protect the health, safety and welfare of employees, contractors and guests. In the reporting period the Group experienced 1 medical aid incident, however none of the incidents resulted in lost time or injuries. The Group reviews its OHS&W policy at regular intervals to ensure a high standard of OHS&W, and to reflect best practice in injury and accident prevention.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
To the extent permitted by law, the Group has indemnified (fully insured) each director and the secretary of the Group for a premium of $12,210. The liabilities insured include costs and expenses that may be incurred in defending civil or criminal proceedings (that may be brought) against the officers in their capacity as officers of the Group or a related body, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a willful 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 Group.
SHARE OPTIONS
Unissued Shares
At the date of this report, the following options to acquire ordinary shares in the Company were on issue:
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Issue Date
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Expiry Date
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Exercise Price
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Balance at 1 July 2014
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Net Issued/ (Exercised) during Year
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Lapsed/ Cancelled/ Expired
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Balance at 30 June
2015
|
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Unlisted Options
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|
|
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23/09/2010
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22/09/2015
|
$0.18
|
350,000
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-
|
-
|
350,000
|
|
17/12/2010
|
16/12/2015
|
$0.25
|
2,235,000
|
-
|
-
|
2,235,000
|
|
18/02/2011
|
16/12/2015
|
$0.30
|
8,000,000
|
-
|
-
|
8,000,000
|
|
23/05/2011
|
22/05/2016
|
$0.20
|
550,000
|
-
|
-
|
550,000
|
|
31/07/2012
|
30/07/2017
|
$0.10
|
1,300,000
|
-
|
-
|
1,300,000
|
|
29/11/2012
|
28/11/2017
|
$0.10
|
1,000,000
|
-
|
-
|
1,000,000
|
|
29/11/2012
|
28/11/2017
|
$0.15
|
1,000,000
|
-
|
-
|
1,000,000
|
|
22/07/2018
|
21/07/2018
|
$0.05
|
2,050,000
|
-
|
-
|
2,050,000
|
|
20/06/2019
|
19/06/2019
|
$0.015
|
2,900,000
|
-
|
-
|
2,900,000
|
|
|
|
19,385,000
|
-
|
-
|
19,385,000
|
Directors' Report
30 June 2015
Remuneration Report (audited)
This Remuneration Report for the year ended 30 June 2015 outlines the remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been audited as required by section 308(3C) of the Act.
Introduction
The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Parent. These are as follows:
Mr Graham Ascough Chairman
Mr David Hutton Managing Director
Mr Donald Stephens Non-Executive Director
Mr Derek Carter Non-Executive Director (Retired 1 January 2015) Mr Richard Bonython Non-Executive Director (Retired 1 January 2015) Mr Jim McKinnon-Matthews General Manager - Geology
Remuneration philosophy
The board is responsible for determining remuneration policies applicable to directors and senior executives of the Group. The broad policy is to ensure that remuneration properly reflects the individuals' duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people with appropriate skills and experience.
Employment contracts
The employment conditions of the Managing Director, Mr David Hutton, are formalised in a contract of employment. Mr Hutton commenced employment on 18th June 2012 and his gross salary for the year ended 30 June 2015, inclusive of 9.5%
superannuation guarantee, was $270,519. The contract includes flexibility that has allowed the Company to source services on an as need basis. The Company or the employee may terminate the employment contract without cause by providing 6 months written notice or making payment in lieu of notice, based on the annual salary component. Termination payments are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the Company can terminate employment at any time.
The employment conditions of the General Manager-Geology, Mr Jim McKinnon-Matthews, are formalised in a contract of employment. Mr McKinnon-Matthews commenced employment on 13 January 2003 and his gross salary for the year ended 30 June 2015, inclusive of superannuation guarantee was $171,072. The contract includes flexibility that has allowed the Company to source services on an as need basis. The Company or the employee may terminate the employment contract without cause by providing three (3) months written notice or making payment in lieu of notice, based on the annual salary component. Termination payments are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the Company can terminate employment at any time.
Key management personnel remuneration and equity holdings
The Board currently determines the nature and amount of remuneration for board members and senior executives of the Group. The policy is to align Director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives.
The non-executive Directors and other executives receive a superannuation guarantee contribution required by the government, which is currently 9.5%, and do not receive any other retirement benefits. Some individuals, however, may choose to sacrifice part of their salary to increase payments towards superannuation. All remuneration paid to Directors and executives is expensed as incurred. Executives are also entitled to participate in the Company share option scheme. Options are valued using the Black-Scholes methodology.
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