Moly Mines Ltd.

Published : April 28th, 2016

2015 Moly Mines Ltd Annual Report

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2015 Moly Mines Ltd Annual Report

MOLY MINES LIMITED

MOLY MINES LIMITED

ABN 32 103 295 521

ANNUAL REPORT

31 DECEMBER 2015

Board of Directors

Nelson Chen Chairman

Gregory Jones Non-Executive Director

Huan Jun Kang Non-Executive Director

Anthony Martin Non-Executive Director

Gou Qing Lou Non-Executive Director

Cathie (Wei) Wu Non-Executive Director

Executive Officers

Graeme Kininmonth Acting Chief Executive Officer

Riccardo Vittino Chief Financial Officer

Susan Hunter Company Secretary

ASX Code MOL

Principal & Registered Office

50 Kings Park Road PO Box 8215

West Perth, WA, 6005 Subiaco East, WA, 6008

Telephone: +61 8 9429 3300

Fax: +61 8 9429 3399

Email: [email protected] Website: www.molymines.com

ASX Share Register

Computershare Investor Services Pty Ltd Level 11 / 172 St Georges Terrace

Perth, WA, 6000

Telephone: +61 8 9323 2000

1300 850 505 (investors within Australia)

Fax +61 8 9323 2033

Web www.computershare.com

Auditor

Deloitte Touche Tohmatsu Tower 2, Brookfield Place 123 St Georges Terrace Perth, 6000, Australia

Telephone +61 8 9365 7000

Fax +61 9365 7001

Web: www.deloitte.com.au

Dear Shareholder,

I would like to thank you for your continued confidence in the Company and support of its management team.

In 2015, the commodity markets remained subdued. The global economy showed further signs of weakness, most notably in China, which has continued to pose serious challenges to Australia's mining industry. While there are optimists out there who have called the bottom, the fact that e xcess supply is awash in most commodities makes us feel cautious about the prospect of the industry. How long will it take the world to erode bulging stockpiles of metals is still anyone's guess.

The board and management team scrutinized multiple transactions throughout the year and have not found anything which met the requirements and conditions of the Company. With the benefits of hinder sight, we note our cautious assessment on market recovery and meticulous deal selection process has paid off, as commodity prices have generally trended lower over time and for longer. Although it is almost impossible to time the market, it is the duty of the board and management to acquire desirable projects for the Company at the most reasonable price, and more importantly, at the appropriate time.

To consolidate our balance sheet, we disposed of holdings in Unity Mining Limited, obtained as a result of settlement of royalty payments on the Dargues Gold Project. The transaction resulted in a net gain of

$1.17million for the Company. Our foreign exchange hedging strategy continued to p rovide strength to our financial footing.

With a cash balance around $70 million, we have a perfect opportunity now to make use of that strength and pursue quality deals that would benefit shareholders. This is getting more significant in the context of the Company implementing a good transaction which satisfies the requirements and rules of the ASX so as to lift the trading suspension.

In this challenging industry environment and difficult, uncertain period, s ecuring a positive future for the Company and realising value from our investment requires a carefully thought out and executed strategy. Your current directors and management team are best placed to oversee and implement this strategy, given their extensive experience and expertise in the metal and financial industry, as well as commitment to maximising shareholder wealth.

We look forward to moving the Company forward for the benefit of all stakeholders. Yours sincerely,

Nelson Feng Chen

The Directors present their report together with the financial report of Moly Mines Limited ("Moly Mines" or the "Company") and of the consolidated entity, being the Company and its cont rolled entities (the "Group") for the year ended 31 December 2015, and the auditor's report thereon.

In this report and the financial statements, references to:

  • "Hanlong" are to Hanlong Mining Investment Pty Ltd.

  • "Sichuan Hanlong Group" are to Sichuan Hanlong Group, a private company incorporated in China.

  • "Hanlong Group" are to the Chinese companies controlled by Sichuan Hanlong Group, including Hanlong and Sichuan Hanlong Group itself.

DIRECTORS

The names and details of the Company's Directors in office during the year and until the date of this report are set out below. Directors were in office for the entire year unless otherwise stated.

Director

Qualifications, Experience and Other Directorships

Committee

Membership

Nelson Chen Non-Executive Chairman

Appointed 31 May 2013. Appointed Chairman 20 December 2013.

Mr Chen is a Director of Hanlong (Australia) Resources Pty Ltd and a Chartered Accountant in Australia. He holds postgraduate degrees in finance and accounting. Prior to joining Hanlong, Mr Chen spent over 11 years with PricewaterhouseCoopers, Sydney office in their audit and M&A advisory practices. Mr Chen has served on the board of Australia China Business Council, NSW branch for over 7 years.

Details of Mr Chen's other listed public company directorships over the past three years are:

  • Marenica Energy Limited, appointed 4 October 2011, continuing.

  • General Moly, Inc. (NYSE Amex and TSX) appointed 14 September 2011 , continuing.

Material Investment,

Remuneration.

Gregory Jones

Non-Executive, independent

Appointed 22 August 2014.

Mr Jones is a geologist with 35 years' exploration and operational experience gained in a broad range of metalliferous commodities both within Australia and overseas. Mr Jones has held senior positions in a number of resource companies including Western Mining Corporation and Sino Gold Limited. His experience spans a wide spectrum of activities from grass-roots exploration through to resource definition and new project generation, project assessment and acquisition , as well as mine geology, ore resource/reserve generation and new mine development. Mr Jones is currently Managing Director of Variscan Mines Limited.

Details of Mr Jones's other listed public company directorships over the past three years are:

  • Variscan Mines Limited, appointed 20 April 2009, continuing.

  • Eastern Iron Limited, appointed 24 April 2009, continuing.

  • Silver City Minerals Limited, appointed 30 April 2009, continuing.

  • Thomson Resources Ltd, appointed 17 July 2009, continuing.

Audit and Risk

Management (Chairman),

Material Investment.

Huan Jun Kang

Non-Executive

Appointed 25 June 2012.

Mr Kang is the executive director and the acting Chief Executive Officer of Hanlong Resources Limited and Vice President of Sichuan Hanlong Group Company Limited.

Mr Kang has held lecturing positions at Hebei University and gained his PhD at the China University of Social Sciences. Since leaving academia and prior to joining the Sichuan Hanlong Group, Mr. Kang held positions with the China Securities Committee, China Zhongqi Investments and was the Chief Executive Officer of Hong Kong Fengshou Investment Company.

Mr Kang is a Board nominee and director of Hanlong, and has not been a director of any other listed public companies in the last three years.

-

Gou Qing Lou

Non-Executive

Appointed 22 August 2014.

Mr Lou is the Managing Director of Hanlong Group. He was formerly the president of China Construction Bank, Panzhihua Municipality branch in Sichaun province and has over 27 years of experience in credit management and financial investment. Mr Lou holds a Bachelor of Economics degree from Wuhan University and a Postgraduate Diploma in business administration from Sichuan University.

Mr Lou is a Board nominee and director of Hanlong.

Details of Mr Lou's other listed public company directorships over the past three years are:

  • Marenica Energy Limited, appointed 3 November 2014, continuing.

Audit and Risk

Management,

Material Investment.

Anthony Martin

Non-Executive, independent

Appointed 22 August 2014.

Mr Martin is a Perth-based geologist with over 30 years' technical and corporate experience in the junior mining sector. He is currently an executive director (non corporate) of the London-based advisory firm Northcott Capital and manages their Australian-based technical team. Northcott performed advisory work for Moly Mines during the year. His experience covers a wide range of commodities including precious metals, base metals and bulk commodities throughout the Asia Pacific region and southern Africa. He is the former CEO of ASX-listed companies Queensland Mining Corporation Limited, Sihayo Gold Limited and Westgold Resources Limited. In the past five years he has also worked as a technical consultant for a number of Chinese companies seeking investments i n mining projects owned by Australian-based companies. He has been a member of AusIMM since 1991.

Mr Martin has not been a director of any other listed public companies in the last three years.

Material Investment (Chairman), Remuneration

Cathie (Wei) Wu

Non-Executive, independent

Appointed 17 January 2014.

Ms Wu is a professional executive who has extensive experience in both the Chinese and Australian business communities. She, acting as the Managing Director of THTF Australia Mining Pty Ltd, has advised numerous Chinese companies and Australian resource companies to either manage direct investments in Australia or attract investments from China in the base metals, alumina, iron ore, coal and mineral sands sectors. She is currently the Executive Director of WIM Resources Pty Ltd and manages the development of the mineral sands project in Murray basin in Australia. She previously served at UBS SDIC Fund Management Company as a project development manager. Ms Wu holds a Bachelor of Science from Fudan University in Shanghai, China and a MPhil (Research) in Infosys from the University of New South Wales.

Details of Ms Wu's other listed public company directorships over the past three years are:

  • Queensland Mining Corporation Limited, appointed Alternat ive Director 16 March 2012 and appointed Director 9 October 2012, resigned 8 August 2013.

Audit and Risk

Management, Remuneration (Chairperson)

COMPANY SECRETARY

Ms Susan Hunter

Ms Hunter has over 20 years' experience in the corporate finance industry. She is founder and managing director of consulting firm Hunter Corporate Pty Ltd, which specialises in the provision of corporate governance and company secretarial advice to ASX listed companies, and has previously held senior management roles at Ernst & Young, Pricewaterhouse Coopers and Bankwest both in Perth and Sydney. Ms Hunter holds a Bachelor of Commerce, is a Member of the Australian Institute of Chartered Accountants, a Fellow of the Financial Services Institute of Australasia, a Graduate Member of the Australian Institute of Company Directors and an Associate of the Governance Institute of Australia Ltd. She is currently company secretary for several ASX listed companies.

INTERESTS IN THE SHARES, OPTIONS AND WARRANTS OF THE COMPANY

As at the date of this report, the interests (directly or indirectly held) of the Directors in the shares , options and warrants of Moly Mines were:

Director

Ordinary Shares

Options over Unissued

Ordinary Shares

Warrants over Unissued

Ordinary Shares

N. Chen (i)

-

-

-

G. Jones

-

-

-

A. Martin

-

-

-

C. Wu

-

-

-

H. Kang (ii)

-

-

-

G. Lou (iii)

-

-

-

  1. Mr Chen is a director of Hanlong (Australia) Resources Pty Ltd. Its ultimate parent entity , Hanlong, holds 207,244,146 shares in the Company.

  2. Mr Kang is a director of Hanlong Resources Limited. Its ultimate parent entity, Hanlong, holds 207,244,146 shares in the Company.

  3. Mr Lou is Managing Director of Hanlong Group. Its ultimate parent entity, Hanlong, holds 207,244,146 shares in the Company.

DIRECTORS' AND EXECUTIVE OFFICERS' REMUNERATION

Details of remuneration paid to Directors and other specified Executive Officers are set out in the Remuneration Report.

DIRECTORS' MEETINGS

The number of meetings of the Board of Directors and Committees of the Board held during the year and the numbers of meetings attended by each Director were as follows:

Directors' Meetings

Audit and Risk

Management Committee Meetings

Remuneration Committee Meetings

Material Investment Committee

Attended

Eligible

to Attend

Attended

Eligible

To Attend

Attended

Eligible

to Attend

Attended

Eligible

to Attend

N. Chen

11

11

-

-

1

1

8

8

G. Jones

11

11

1

1

-

-

8

8

H. Kang

2

11

-

-

-

-

-

-

G. Lou

9

11

1

1

-

-

7

8

A. Martin

11

11

-

-

1

1

7

8

C. Wu

11

11

1

1

1

1

-

-

REMUNERATION REPORT (AUDITED)

This report outlines the remuneration arrangements in place for Directors and Senior Executives of the Company and the Group in accordance with the requirements of the Corporations Act 2001 and its regulations. For the purposes of this report, Key Management Personnel ("KMP") of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any Director (whether Executive or otherwise) of the Company.

For the purposes of this report, the term 'Executive' encompasses the Chief Executive Officer ("CEO") , any Executive Director and the Executive Officers of the Company and the Group.

The KMP of the Group are:

Name

Title

Date Appointed/Resigned

Directors

Nelson Chen

Chairman (Non-Executive)

Continuing

Gregory Jones

Director (Non-Executive)

Continuing

Huan Jun Kang

Director (Non-Executive)

Continuing

Anthony Martin

Director (Non-Executive)

Continuing

Gou Qing Lou

Director (Non-Executive)

Continuing

Cathie Wu

Director (Non-Executive)

Continuing

Executive Officers

Graeme Kininmonth

Acting Chief Executive Officer

Continuing

There were no changes to KMP after the reporting date and before the date this financial report was authorised for issue.

Remuneration Committee

It is the Company's objective to provide maximum stakeholder benefit from the retention of high quality KMP by remunerating fairly and appropriately with reference to relevant employment market conditions. The Remuneration Committee assists the Board in meeting its responsibilities for ensuring the existence of effective policies, processes and practices for rewarding KMP and for succession management. The primary role of the Remuneration Committee is to provide non-executive and independent oversight of the Company's remuneration practices.

The members of the Remuneration Committee are:

  • Cathie Wu - Independent Non-Executive - Chairperson

  • Nelson Chen - Non-Executive

  • Anthony Martin - Independent Non-Executive

    The Remuneration Committee meets at least once per year. Where the Remuneration Committee discusses matters relating to remuneration of individual Directors, the conflicted Director abstains from that deliberation. The Company Secretary acts as secretary to the Committee.

    Specifically the Remuneration Committee will:

  • Review and recommend to the Board remuneration policies and strategy by reference to prevailing employment market conditions.

  • Review the remuneration package of the CEO, by reference to independent external advice if considered required, and recommend changes to CEO remuneration to the Board.

  • Review the recommendations of the CEO for other KMP remuneration packages and recommend changes to KMP remuneration to the Board.

  • Recommend to the Board fees and remuneration packages for Non-Executive Directors.

Remuneration Policy and Philosophy

The Remuneration Committee continuously reviews remuneration policies and philosophies to ensure remuneration packages remain effective and competitive given the Company's business activities and the evolving employment markets and practices.

The structure of remuneration packages will be assessed within the following general framework:

  • provide competitive rewards to attract, retain and incentivise high calibre people;

  • link rewards to shareholder value;

  • transparency; and

  • capital management.

Remuneration packages may include consulting fees, base salary, superannuation, non -cash benefits and short and / or long term variable awards.

The components of remuneration packages for KMP are determined on a case-by-case basis depending on their role and responsibility within the organisation.

The Company aims to benchmark its base salaries at or around the 75 th percentile of resources industry salary packages based on independent market research.

The objective for variable remuneration is to reward KMP in a manner that aligns remuneration with the interests of the Company's shareholders. Accordingly, variable remuneration may be awarded to KMP who can reasonably influence or impact the Company's ability to maximise shareholder returns. Cash performance bonus awards may also apply.

The Company has in place an Employee Incentive Option Scheme. The purpose of the grant of options is to provide an incentive to KMP to continue to be dedicated and committed to the Company and to maximi se their efforts for the benefit of shareholders generally over the long term. Allocations of options are at the discretion of the Board. Vesting conditions are considered when awarding options.

No elements of KMP 2015 remuneration were directly related to performance.

The Australian Securities Exchange Corporate Governance best practice recommendations specify that options should not be issued to Non-Executive Directors. However, the Board considers that in view of the financial, legal and other responsibilities assumed by Directors of public companies, the payment of monetary fees alone to Directors is not always an adequate reward and does not provide an adequate incentive to enable the Company to attract and retain Non-Executive and Executive Directors with the requisite level of experience and qualifications. Equity participation by way of the grant of options to members of the Board may be appropriate for these purposes and contributes to the preservation of Company cash reserves.

Company Performance

The remuneration philosophy for KMP endeavours to link the overall level of compensation to the Company's earnings and growth in shareholder wealth of the Company, mainly through variable awards. Consideration of the Company's earnings will be more relevant as the Company matures and becomes profitable. The chart below compares, assuming an initial investment of A$100, the yearly change in the cumulative total shareholder return versus the S&P/ASX 200 Index for the past five years. Trading in Moly Mines shares on the ASX was suspended on 17 April 2014.

31 Dec 11

31 Dec 12

31 Dec 13

31 Dec 14

31 Dec 15

Moly Mines Limited

A$58

A$25

A$22

A$13 *

A$13 *

S&P/ASX 200 Accumulation Index

A$94

A$108

A$124

A$126

A$126

Moly Mines Limited loss

($29,842,000)

($49,618,000)

($4,874,000)

($11,028,000)

($1,687,000)

  • Trading in Moly Mines shares on the ASX was suspended on 17 April 2014.

    Non-Executive Directors' Remuneration

    Clause 59 (1) of the Company's Constitution provides that Non -Executive Directors are entitled to receive Non- Executive Directors' fees within the limits approved by shareholders in general meeting. Shareholders approved the aggregate remuneration to be paid to Non-Executive Directors to be $800,000 per annum on 27 November 2007.

    Each Non-Executive Director's actual remuneration for the years ended 31 December 2015 and 31 December 2014 is shown on page 10 and 11. Each Non-Executive Director has an unspecified term of appointment, which is subject to the Company's Constitution. Conditions are reviewed at least annually by the Remuneration Committee. There are no termination benefits for any Non-Executive Director.

    Base fees for each director during their period in office were as follows:

    Non-Executive Director

    Base Fees

    $

    Audit and Risk Management

    Committee Fee

    $

    Remuneration Committee Fee

    $

    Material Investment

    Committee Fee

    $

    Superannuation

    %

    Nelson Chen

    150,000

    -

    5,000

    5,000

    10%

    Gregory Jones

    75,000

    7,500

    -

    5,000

    10%

    Huan Jun Kang

    75,000

    -

    -

    -

    -

    Anthony Martin

    75,000

    -

    5,000

    7,500

    10%

    Gou Qing Lou

    75,000

    5,000

    -

    5,000

    -

    Cathie Wu

    75,000

    5,000

    7,500

    -

    10%

    No options were issued to Non-Executive Directors during the financial year. Executive Remuneration

    The Company aims to reward KMP with a level of remuneration commensurate with their position and responsibilities within the Company in accordance with the overall remuneration philosophy.

    Base Salary and Fees

    Base salaries and fees paid to the Executive Officers for the year ended 31 December 2015 are disclosed in Remuneration Table 1.

    Bonus Arrangements

    From time to time the Company provides short-term cash bonuses to KMP and staff. Short-term bonuses are discretionary, vary between individuals and are based on performance measures that advance the interests of shareholders. Retention bonuses form part of the Company's remuneration philosophy and is a policy that may extend to all staff. Mr Kininmonth was paid a retention bonus during 2015.

    Options

    During the year ended 31 December 2012, options were issued to KMP, including the five highest remunerated officers of the Group, under the Employee Option Incentive Scheme. The third and final tranche of these options vested in February 2015. Details of the options are shown in Note 26 of the financial statements.

    Service Agreements

    Remuneration and other terms of employment for Non-Executive Directors are described above. Executive Directors and specified KMP terms of employment are formalised in service agreements or employment contracts. The major provisions of the agreements relating to remuneration are as follows:

    Executive Officers

    Graeme Kininmonth

    • Base salary - $333,500 plus 10% superannuation.

    • Notice of five weeks or payment in lieu of notice in the event of termination by the Company (other than for gross misconduct).

    • Payment of a benefit of four weeks' pay for each completed year of service pro -rated, in the event of redundancy.

    • Conditions are reviewed at least annually by Remuneration Committee

Directors' and Executive Officers' Remuneration

Details of the nature and amount of each major element of the remuneration of each Director of the Company and each of the specified Executive Officers of the Company for the years ended 31 December 2015 and 31 December 2014 are set out on the following pages.

Short Term

Remuneration

Long Term

Remuneration

Post

Employment

Share Based

Termination

Payment

Total

Performance

Related

Base Salary / Fees

$

Bonus

$

Non-monetary benefits

$

Long Service Leave

Superannuation

$

$

$

$

%

Directors

160,000

-

-

-

16,000

-

-

176,000

-

N. Chen

G. Jones

87,500

-

-

-

8,750

-

-

96,250

-

H.J. Kang

75,000

-

-

-

-

-

-

75,000

-

G. Lou

85,000

-

-

-

-

-

-

85,000

-

A. Martin

87,500

-

-

-

8,750

-

-

96,250

-

C. Wu

87,500

-

-

-

8,750

-

-

96,250

-

Executive Officers

333,500

72,355

7,900

8,210

35,116

2,186

-

459,267

-

G. Kininmonth ( i)

Total

916,000

72,355

7,900

8,210

77,366

2,186

-

1,084,017

-

(i) Mr Kininmonth was paid a retention bonus during 2015.

Table 2: Remuneration of KMP for the year ended 31 December 2014

Short Term

Remuneration

Long Term

Remuneration

Post

Employment

Share Based

Termination

Payment

Total

Performance

Related

Base Salary / Fees

$

Bonus

$

Non-monetary benefits

$

Long Service Leave

Superannuation

$

$

$

$

%

Directors

164,475

-

-

-

16,447

-

-

180,922

-

N. Chen

G. Jones ( i)

31,252

-

-

-

3,125

-

-

34,377

-

H.J. Kang

75,000

-

-

-

-

-

-

75,000

-

G. Lou ( i)

28,333

-

-

-

-

-

-

28,333

-

A. Martin ( i)

34,377

-

-

-

-

-

-

34,377

-

C. Wu ( i i )

84,646

-

-

-

8,465

-

-

93,111

-

P. Buerger (iii)

40,359

-

-

-

4,036

-

-

44,395

-

P. Eagland (iv)

14,583

-

-

-

-

-

-

14,583

-

A. Edwards (v)

22,546

-

-

-

-

-

-

22,546

-

P. Mansell (vi)

6,250

-

-

-

625

-

-

6,875

-

Executive Officers

241,500

-

5,914

21,092

25,175

12,633

-

306,314

-

G. Kininmonth (vii)

D. Pass (viii)

126,781

94,110

2,410

1,790

12,518

7,163

277,062

521,834

-

A. Howells (ix)

88,107

58,700

3,072

2,125

12,211

1,848

180,037

346,100

-

Total

958,209

152,810

11,396

25,007

82,602

21,644

457,099

1,708,767

-

  1. Mr Jones, Mr Lou and Mr Martin were appointed on 22 August 2014.

  2. Ms Wu was appointed on 17 January 2014.

  3. Mr Buerger was appointed on 17 January 2014 and resigned on 1 July 2014. (iv) Mr Eagland resigned on 20 February 2014.

(v) Mr Edwards resigned on 20 March 2014. (vi) Mr Mansell resigned on 17 January 2014.

  1. Mr Kininmonth was appointed Acting Chief Executive Officer on 11 April 2014. He previously served as Manager Health & Safety and Environment . Remuneration included in the table above is only from the point Mr Kininmonth was appointed as Acting Chief Executive Of ficer.

  2. Mr Pass resigned on 11 April 2014. He was paid out $78,799 in long service leave on cessation of employment . During 2014 the Board approved a discretionary retention bonus of $94,110 be paid.

  3. Mr Howells resigned on 30 April 2014. He was paid out $54,455 in long service leave on cessation of employment. During 2014 the Board approved a discretionary retention bonus of $58,700 be paid.

Option holdings of Key Management Personnel

Options issued to Key Management Personnel during the period are only exercisable after the vesting period is met. Option holdings of Key Management Personnel during the period ended 31 December 2015 are as follows:

Period ended

31 December 2015

Balance at 1 Jan 2015

Granted as Remuneration

Options Expired

Options Exercised

Net Change

Other

Balance at 31 Dec 2015

Vested and Exercisable

Vested and Exercisable

Not Vested or Exercisable

No.

No.

No.

No.

No.

No.

No.

%

No.

Specified Executives

G. Kininmonth

450,000

-

-

-

-

450,000

450,000

100

-

Total

450,000

-

-

-

-

450,000

450,000

-

Shareholdings of Key Management Personnel

Year ended

31 December 2015

Balance at 1 Jan 2015

Purchases /

(Sales)

Received on

Exercise of Options

Net Change

Other

Balance at 31 Dec 2015

No.

No.

No.

No.

No.

Specified Executives

G. Kininmonth

40,000

-

-

-

40,000

Total

40,000

-

-

-

40,000

Other transactions with Key Management Personnel and their related parties

$138,000 was paid to Northcott Capital, of which Moly Mines director A. Martin is an employee, for project assessment consultancy fees during 2015 (2014: nil).

Options awarded, exercised and lapsed during the year ended 31 December 2015

Number of

options awarded during the year

Number of

options vested during the year

Number of

options lapsed during the year

Executives

G. Kininmonth

-

150,000

-

Value of options awarded, exercised and lapsed during the year ended 31 December 2015

Value of options

granted during

the year

Value of options

exercised during the year

Value of options

lapsed during the

year

% of Remuneration

consisting of options

for the year

Executives

G. Kininmonth

-

-

-

0.5

SHARE OPTIONS

Unissued shares

Details of options and warrants over unissued shares as at the date of this report are:

Issuing Entity

Number of Shares

under Option

Class of Shares

Exercise Price

of Option

Expiry Date of

Options

Moly Mines Limited

6,833,320

Ordinary

$0.55

14 February 2016

Issuing Entity

Number of Shares

under Warrant

Class of Shares

Exercise Price

of Warrant

Expiry Date of

Warrant

Moly Mines Limited

4,832,157

Ordinary

$0.0001

15 February 2020

Option and warrant holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body corporate.

Shares issued as a result of the exercise of options and warrants No options or warrants were exercised during the year.

OPERATING AND FINANCIAL REVIEW

Principal Activities

The principal activity of Moly Mines and its subsidiaries (the Group) during the year was the ongoing evaluati on of potential acquisitions.

Result from Operations and Financial Position

Moly Mines is a company limited by shares that is incorporated in Australia . Its shares are currently suspended from trading on the Australian Securities Exchange (ASX).

Since the Company's incorporation in January 2003 and since listing on the ASX in March 2004, the Company's financial performance and result has been, and will continue to be, attributable to its ongoing exploration, evaluation, planned development activities and mining operations on its ground holdings.

The net loss after taxation attributable to the members of the Group for the year ended 31 December 2015 was

$1,687,000 (net loss for year ended 31 December 2014: $11,028,000). The basic and diluted loss per share for the Group for the year was 0.44 cents per share (Dec 2014: loss of 2.87 cents per share).

The Group's current year financial performance included impairment of development costs of $354,000. The December 2014 loss included impairment losses of $12,899,000, made up of $5,216,000 impairment of development costs,

$6,140,000 impairment of assets held for sale, $1,515,000 impairment of financial assets and $28,000 impairment of receivables.

As at 31 December 2015, the Company had net working capital (current assets less current liabilities, not including non-current assets held for resale) of $68,662,000 which included $69,070,000 of cash and cash equivalents.

The Hanlong Loan of $14,146,000 (Dec 2014: $12,601,000) is not due for repayment until 23 April 2020. For full details of the Hanlong Loan refer to Note 2 of the financial statements .

REVIEW OF OPERATIONS AND PROJECT DEVELOPMENT ACTIVITIES

The highlights of the Company's operations and project development activities during the year and to the date of this financial report are summarised as follows:

Spinifex Ridge Iron Ore Mine

For the period under review, rehabilitation activities at the Spinifex Ridge Iron Ore Mine were mostly completed and the site was transitioned to care and maintenance. Environmental monitoring, particularly in relation to revegetation of waste dumps was closely monitored and will be ongoing.

A Care and Maintenance Plan was submitted to the Department of Mines and Petroleum. Ongoing care and maintenance activities are aimed at maintaining the value of the infrastructure assets for potential future use.

The Western Australian Minister for Mines determined that additional royalty payments were required for part of the Spinifex Ridge Iron Ore operation. A negotiated outcome was reached with the relevant Government Department which resulted in Moly having to pay an additional $1.17 M.

Finalisation of the Iron Ore Sales agreement with Mineral Resources Limited ("MRL") was ongoing during the year. The Expert determination of the quantity of iron ore available on site at the time of transfer to MRL was completed. This determination had an outcome that would have resulted in Moly paying MRL approximately $4.2M to MRL when all outstanding amounts were included. However, Moly was of the view that this determination was not valid. Moly issued MRL with a Dispute Notice on this issue on 23 December 2015. Moly was served with a generally indorsed writ of summons from MRL on 24 December 2015 claiming $4.9M, calculated by reference to the Expert determination. Both parties have subsequently agreed that this issue, and all other outstanding issues between the parties, will be determined by arbitration. It is expected that this process will be finalised in the first half of 2016 .

Spinifex Ridge Molybdenum / Copper Project

Development of the Spinifex Ridge Molybdenum/Copper Project has been postponed as the Project's economics do not currently support the completion of full funding for the Project and a final investment decision .

BUSINESS STRATEGIES AND PROSPECTS

In view of the Iron Ore Mine divestment and the unlikelihood that the Spinifex Ridge Molybdenum / Copper Project will become economically viable in the near future, the Company is continuing to search for suitable projects that meet the Company's goals and effectively utilise the Company's cash position . The Board has continued its focus on identifying and evaluating value opportunities against their costs and associated risks.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

All significant changes in the state of affairs of the Group during the year are discussed in detail above.

DIVIDENDS

The Directors of Moly Mines have resolved not to recommend a dividend for the year ended 31 December 2015. No dividends were declared or paid during the year.

SIGNIFICANT EVENTS AFTER THE REPORTING DATE

Moly Mines and MRL have subsequently agreed that the final payment under the Iron Ore Sale and Purchase Agreement, and all other outstanding issues between the parties, will be determined by a rbitration. It is expected that this process will be finalised in the first half of 2016. Refer to Note 2 1(e) of the financial statements for further discussion.

Other than as stated above, and as stated under the Operating and Financial Review and the Review of Operations and Project Development Activities sections, there has not arisen in the interval between the end of the reporting period and the date of this financial report any other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Group, the results of those operations or the state of affairs of the Group, in future financial years .

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

Likely future developments in the operations of the Group are referred to elsewhere in th is financial report, other than as referred to elsewhere in this financial report and announcements to the ASX.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Group is subject to significant environmental regulation in respect to its exploration and development activities.

The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of and complies with all environmental legislation. The Directors of the Group are not aware of any breach of environmental legislation for the period under review.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

The Company has made an agreement to indemnify all the Directors and Off icers of the Company against all losses or liabilities incurred by each Director and Officer incurred in good faith in the ordinary course of business in their capacities as Directors and Officers of the Company. During or since the end of the reporting period, the Company has paid premiums in respect of a contract insuring all the Directors of Moly Mines legal costs incurred in defending proceedings for conduct involving:

  • A wilful breach of duty.

  • A contravention of sections 182 or 183 of the Corporations Act 2001, as permitted by section 199B of the Corporations Act 2001.

    The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

    ROUNDING

    The amounts contained in this report and in the financial report have been rounded to the nearest thousand (when rounding is applicable) under the option available to the Company under ASIC CO 98/0100. The Company is an entity to which the class order applies.

    NON-AUDIT SERVICES

    The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act. The nature and scope of each type of non -audit service provided means that auditor independence was not compromised. Details of amounts paid or payable to the auditor for non-audit services provided during the year are outlined in Note 27 to the financial statements.

    AUDITOR'S INDEPENDENCE DECLARATION

    We have obtained the attached independence declaration from our auditors, Deloitte Touche Tohmatsu, which forms part of this report.

    Signed in accordance with a resolution of the Directors.

    Nelson Chen Chairman Perth

  • March 2016

    CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

    FOR THE YEAR ENDED 31 DECEMBER 2015

    Consolidated

    Sales revenue - iron ore

    Note

    Cost of sales

    3

    Gross loss

    Interest income

    Royalty income

    9

    Other income

    Foreign currency gains

    3

    Gain on sale of financial assets classified as available for s ale Reversal of impairment of non-current assets classified as held for sale

    9

    8(b)

    Profit on sale of plant and equipment

    Realised fair value movement on derivative financial instruments

    18

    Expenses:

    Administrative expenses

    3

    Loss on sale of plant and equipment

    Loss on sale of financial assets classified as available for sale

    9

    Impairment of development costs

    12

    Impairment of non-current assets classified as held for sale

    8

    Impairment of financial assets classified as available for sale

    9

    Impairment of receivables

    Exploration expenses

    11

    Project assessment expenses

    Finance costs

    3

    Loss before income tax

    Income tax expense / (benefit)

    4

    Loss after income tax

    Other comprehensive income

    Total comprehensive loss for the period

    Loss per share attributable to the ordinary equity holders of the Company:

    Basic and diluted loss per share (cents per share)

    20

    31 Dec

    31 Dec

    2015

    2014

    A$'000

    A$'000

    -

    20,004

    (1,169)

    (21,047)

    (1,169)

    (1,043)

    634

    1,207

    -

    667

    5

    -

    3,376

    2,430

    1,170

    -

    20

    -

    5

    -

    -

    88

    (4,186)

    (649)

    -

    (1)

    -

    (12)

    (354)

    (5,216)

    -

    (6,140)

    -

    (1,515)

    -

    (28)

    -

    (11)

    (217)

    -

    (971)

    (805)

    (1,687)

    (11,028)

    -

    -

    (1,687)

    (11,028)

    -

    -

    (1,687)

    (11,028)

    0.44

    2.87

    The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying Notes.

    CONSOLIDATED STATEMENT OF FINANCIAL POSITION

    FOR THE YEAR ENDED 31 DECEMBER 2015

    Note

    31 Dec

    31 Dec

    2015

    2014

    A$'000

    A$'000

    69,070

    70,413

    1,076

    1,291

    94

    109

    70,240

    71,813

    -

    8,300

    70,240

    80,113

    -

    1,376

    315

    383

    8,380

    405

    8,695

    2,164

    78,935

    82,277

    405

    2,049

    1,173

    2,739

    1,578

    4,788

    14,146

    12,601

    74

    66

    14,220

    12,667

    15,798

    17,455

    63,137

    64,822

    402,673

    402,673

    10,213

    10,211

    (349,749)

    (348,062)

    63,137

    64,822

    Consolidated

    Current Assets

    Cash and cash equivalents

    5

    Receivables

    6

    Inventories

    7

    Non-current assets classified as held for sale

    8

    Total Current Assets

    Non-Current Assets

    Financial assets classified as available for sale

    9

    Receivables

    6

    Plant and equipment

    10

    Total Non-Current Assets

    Total Assets

    Current Liabilities

    Trade and other payables

    13

    Provisions

    14

    Total Current Liabilities

    Non-Current Liabilities

    Borrowings

    15

    Provisions

    14

    Total Non-Current Liabilities

    Total Liabilities

    Net Assets

    Equity

    Contributed equity

    16

    Reserves

    17

    Accumulated losses

    Total Equity

    The above consolidated statement of financial position should be read in conjunction with the accompanying Notes.

    CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

    FOR THE YEAR ENDED 31 DECEMBER 2015

    Contributed

    Equity

    Accumulated

    Losses

    Share Based

    Payments Reserve

    Warrants

    Reserve

    Total

    Equity

    $'000

    $'000

    $'000

    $'000

    $'000

    (Note 16)

    (Note 17)

    (Note 17)

    Consolidated

    At 1 January 2014

    402,673

    (337,034)

    4,871

    9,390

    79,900

    Loss for the period

    -

    (11,028)

    -

    -

    (11,028)

    Other comprehensive income

    -

    -

    -

    -

    -

    Total comprehensive income for the period

    -

    (11,028)

    -

    -

    (11,028)

    Equity Transactions

    Recognition of share-based

    payments (refer to Note 26)

    -

    -

    (4,050)

    -

    (4,050)

    At 31 December 2014

    402,673

    (348,062)

    821

    9,390

    64,822

    At 1 January 2015

    402,673

    (348,062)

    821

    9,390

    64,822

    Loss for the period

    -

    (1,687)

    -

    -

    (1,687)

    Other comprehensive income

    -

    -

    -

    -

    -

    Total comprehensive income for the period

    -

    (1,687)

    -

    -

    (1,687)

    Equity Transactions

    Recognition of share-based

    payments (refer to Note 26)

    -

    -

    2

    -

    2

    At 31 December 2015

    402,673

    (349,749)

    823

    9,390

    63,137

    The above consolidated statement of changes in equity should be read in conjunction with the accompanying Notes.

    CONSOLIDATED STATEMENT OF CASH FLOWS

    FOR THE YEAR ENDED 31 DECEMBER 2015

    Consolidated

    31 Dec

    31 Dec

    2015

    2014

    A$'000

    A$'000

    5

    -

    (8,397)

    (10,201)

    699

    1,364

    (965)

    (889)

    (8,658)

    (9,726)

    379

    4,464

    (315)

    (4,433)

    -

    (793)

    (208)

    -

    -

    1,000

    (36)

    (19)

    25

    69

    2,546

    160

    2,391

    448

    -

    88

    -

    88

    (6,267)

    (9,190)

    4,924

    3,546

    70,413

    76,057

    69,070

    70,413

    Note

    Cash flows from operating activities Receipts from customers

    Payments to suppliers and employees

    Interest received Interest paid

    Net cash flows used in operating activities

    22

    Cash flows from investing activities Proceeds from security deposits Payments for security deposits

    Payments for mine property development activities Payments for exploration and evaluation

    Deferred proceeds from disposal of subsidiary

    9

    Payments for plant and equipment

    Proceeds from disposal of plant and equipment

    Proceeds from sale of financial assets classified as available for sale

    Net cash flows from investing activities

    Cash flows from financing activities Proceeds from derivative financial instrument

    Net cash flows from financing activities

    Net decrease in cash and cash equivalents Net foreign exchange difference

    Cash and cash equivalents at beginning of the period

    Cash and cash equivalents at end of the period

    5

    The above consolidated statement of cash flows should be read in conjunction with the accompanying Notes.

  • CORPORATE INFORMATION

    The financial report of Moly Mines Limited ("Moly Mines" or the "Company") and its subsidiaries (the "Group") for the year ended 31 December 2015 was authorised for issue in accordance with a resolution of the Directors on 30 March 2016.

    Moly Mines is a Company limited by shares incorporated and domiciled in Australia. The ultimate Australian parent of Moly Mines is Hanlong, which owns 53.8% of the issued share capital. The ultimate parent of Hanlong is Sichuan Hanlong Group, a private company incorporated in China.

    The nature of the operations and principal activities of Moly Mines is mining, exploration and development of mineral resources. The Company reviewed a number of potential merger and acquisition opportunities during 2015. Moly Mines continues to review projects as they are identified.

  • SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Basis of Preparation

    The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report has been prepared on a historical cost basis except for available- for-sale investments, held-for-trading investments and derivative financial instruments, which have been measured at fair value. Non-current assets classified as held for sale have been measured at the lower of historical cost and fair value less costs to sell.

    The financial report is presented in Australian dollars . All values are rounded to the nearest thousand dollars ($'000) unless stated under the option available to the Company under ASIC CO 98/0100. The Company is an entity to which that class order applies.

    Compliance Statement

    These financial statements are general purposes financial statements which have been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law.

    The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the consolidated financial statements, the Company is a for-profit entity.

    Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Company and the Group comply with International Fi nancial Reporting Standards ("IFRS").

    New Accounting Standards and Interpretations

    The accounting policies adopted are consistent with those of the previous financial year except as follows:

  • Changes in accounting policy and disclosures

    The Group has adopted the following new and amended Australian Accounting Standards and Interpretations as of 1 January 2015:

  • AASB 2014-1 Amendments to Australian Accounting Standards - Part A: Annual Improvements to IFRS 2010 - 2012 and 2011-2013 Cycles, Part B: Defined Benefit Plans: Employee Contributions (Amendments to AASB 119), Part C: Materiality

  • AASB 2014-2 Amendments to AASB 1053 - Transition to and between Tiers, and related Tier 2 Disclosure Requirements

    The adoption of these Standards and Interpretations did not have a significant impact on the amounts reported in these financial statements or disclosures.

  • Australian Accounting Standards and Interpretations issued but not yet effective

    Australian Accounting Standards and Interpretations that have recently bee n issued or amended but are not yet effective have not been adopted by the Group for the year ended 31 December 2015. These are outlined the following table.

    Reference

    Title

    Summary of change

    Application date of

    standard

    Application date for

    Group

    AASB 9

    Financial

    Instruments (2014)

    AASB 9 includes requirements for a simpler approach

    for classification and measurement of financial assets compared with the requirements of AASB 139 .

    The main changes are described below.

    AASB 9 also removes the volatility in profit or loss that was caused by changes in the credit risk of liabilities elected to be measured at fair value. This change in accounting means that gains caused by the deterioration of an entity's own credit risk on such liabilities are no longer required in profit or loss.

    The impact of this standard will depend on the Group's financial assets and liabilities at the time of application.

    1 January

    2018

    1 January

    2018

  • Financial assets that are debt instruments will be classified based on:

  • The objective of the entity's business model for managing the financial assets;

  • The characteristics of the contractual cash flows.

  • Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument.

  • Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases.

  • Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows:

    • The change attributable to changes in credit risk are presented in other comprehensive income (OCI)

    • The remaining change is presented in profit or loss.

    Reference

    Title

    Summary of change

    Application date of

    standard

    Application date for

    Group

    AASB 15 and

    AASB 2014-5

    Revenue from

    Contracts with Customers

    AASB 15 will supersede the current revenue recognition guidance in IAS 18 Revenue, IAS 11 Construction Contracts and related Interpretations.

    The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduces a 5 -step approach to revenue recognition:

    Step 1: Identify the contract(s) with the customer. Step 2: Identify the performance obligations in the contract.

    Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract.

    Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.

    The application of AASB 15 may have a material impact on the amounts reported and disclosures

    made in the Group's financial statements. However, it is not practicable to provide a reasonable estimate of the effect until the Group performs a detailed review.

    1 January

    2018

    1 January

    2018

    AASB 2014-3

    Amendments

    to Australian Accounting Standards - Accounting for Interests in Joint Operations [AASB 1 and

    11]

    Amends AASB 11 to provide guidance on accounting

    for the acquisition of an interest in a joint operation that constitute a business. The amendments state that the relevant principles of accounting for business combinations under AASB 3 should be applied and the acquirer is required to disclose the information required by AASB 3.

    The amendment may affect the Group if it acquires relevant interests in joint operations.

    1 January

    2016

    1 January

    2016

    AASB 2014-4

    Amendments

    to Australian Accounting Standards - Clarification of Acceptable Methods of Depreciation [AASB 116

    and 138]

    The amendments prohibit entities from using

    revenue-based depreciation methods and introduce a rebuttable presumption that revenue is not an

    appropriate basis for amortisation of an intangible asset. This presumption can be rebutted in limited circumstances.

    1 January

    2016

    1 January

    2016

    Reference

    Title

    Summary of change

    Application date of

    standard

    Application date for

    Group

    AASB 2014-9

    Amendments

    to Australian Accounting Standards - Equity Method in Separate Financial Statements

    The amendments allow entities to use the equity

    method of accounting for investments in subsidiaries, joint ventures and associates in their separate financial statements.

    1 January

    2016

    1 January

    2016

    AASB 2014-10

    Amendments

    to Australian Accounting Standards - Sale or Contribution of Assets between and Investor and its Associates or Joint Venture

    The amendments require full gain or loss to be

    recognised when a transaction involves a business, whether it is housed in a subsidiary or not, and partial gain or loss to be recognised when a transaction involves assets that do not constitute a business, even if those assets are housed in a subsidiary.

    The amendment may affect the Group if it acquires relevant interests.

    1 January

    2018

    1 January

    2018

    AASB 2015-1

    Amendments to Australian

    Accounting Standards - Annual Improvements to Australian Accounting Standards 2012-2014

    Cycle

    Amendments to various AASBs include clarification of:

    1 January

    2016

    1 January

    2016

    AASB 2015-2

    Amendments to Australian

    Accounting Standards - Disclosure Initiative: Amendments to AASB 101

    Amendments to various AASBs in respect of disclosure.

    1 January

    2016

    1 January

    2016

    AASB 2015-3

    Amendments to Australian

    Accounting Standards arising from the Withdrawal of AASB 1031

    Materiality

    Completes the withdrawal of AASB 1031 Materiality from all Australian Accounting Standards and

    Interpretations.

    1 July 2015

    1 January

    2016

    • Changes in methods of disposal

    • Servicing contracts

    • Disclosure of information elsewhere in the interim financial report.

    Reference

    Title

    Summary of change

    Application date of

    standard

    Application date for

    Group

    AASB 2015-4

    Amendments

    to Australian Accounting Standards - Financial Reporting Requirements for Australian Groups with a Foreign Parent

    Requires that the ultimate Australian parent entity

    will need to apply the equity method in order to obtain the exemption for intermediate parent entity equity accounting at a lower level in the group.

    It will not affect the Group as it does not currently apply equity accounting.

    1 July 2015

    1 January

    2016

    AASB 2015-9

    Amendments

    to Australian Accounting Standards - Scope and Application Paragraphs

    Specifies scope of various accounting standards. It

    will not affect the Group as it already applies these standards.

    1 January

    2016

    1 January

    2016

  • Other Accounting Standards and Interpretations issued but not yet effective

  • As of the date of authorisation of the financial statements, the following IFRS standard and IFRIC interpretation were also issued but not yet effective, although Australian equivalent standards and interpr etations have not yet been issued:

  • IFRS 16: Leases (effective for annual periods beginning on or after January 2019)

  • Amendments to IAS12 - Recognition of Deferred Tax Assets for Unrealised Losses

  • Amendments to IAS 7 - Disclosure Initiative

    Basis of Consolidation

    The consolidated financial statements comprise the financial statements of Moly Mines Limited (the parent entity) and its subsidiaries at the reporting date (the "Group").

    Subsidiaries are fully consolidated from the date the Group obtains con trol until such time as control ceases. An investor controls an investee when:

  • it has power over an investee;

  • it is exposed, or has rights, to variable returns from its involvement with the investee; and

  • has the ability to use its power to affect its returns.

  • All three of these criteria must be met for an investor to have control over an investee. Previously, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

    The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses arising from intra-group transactions are eliminated in full.

    The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. The identifiable assets acquired and the liabilities assumed are measured at their acquisition date fair values. The differen ce between the above items and the fair value of the consideration (including the fair value of any pre-existing investment in the acquiree) is goodwill or a discount on acquisition.

    A change in the ownership interest of a subsidiary that does not resul t in a loss of control is accounted for as an equity transaction.

    Investments in subsidiaries are detailed in Note 24. Significant accounting judgments, estimates and assumptions

  • Significant accounting judgments

    In the process of applying the Group's accounting policies, management has made the following judgments, apart from those involving estimations, which have a significant effect on the amounts recognised in the financial statements:

    Determination of mineral resources and ore reserves

    The determination of reserves affects the accounting for asset carrying values, depreciation and amortisation rates, deferred stripping costs and provisions for decommissioning and restoration. Moly Mines estimates its mineral resources and ore reserves in accordance with the Group Policy for the Reporting of Mineral Resources and Ore Reserves. This policy requires that the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2004 (the 'JORC code') be used as a minimum standa rd. The information on mineral resources and ore reserves were prepared by or under the supervision of Competent Persons as defined in the JORC code. The amounts presented are based on the mineral resources and ore reserves determined under the JORC code.

    There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the time of estimation may change significantly when new information becomes available.

    Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being restated.

    Dispute with Mineral Resources Limited

    Following cessation of mining in October 2014, Moly Mines and MRL were unable to agree on components of the final payment under the Iron Ore Sale and Purchase Agreement (IOSPA). In accordance with the agreement, an Independent Expert (Expert) was appointed to determine the Available Tonnage component of the payment. The Expert's report concluded that approximately A$4.2 million, net of all offsets, was payable by Moly Mines to MRL. Included within the offset amount is a receivable of $0.7 million owed by MRL to Moly Mines, which has been recognised in the financial statements at year end.

    Moly Mines is of the opinion that the Expert has incorrectly interpreted the determination of Available Tonnage under the IOSPA, specifically in relation to the ore which had been extracted and stockpiled at the commencement of the contract. Consequently, the Company has not paid any amount to MRL and on 23 December 2015 issued a Dispute Notice to MRL under the IOSPA.

    On 24 December 2015, Moly Mines received a writ of summons from MRL claiming A$4.9 million, calculated by reference to the Expert's determination of Available Tonnage.

    Moly Mines sought legal advice in relation to whether Moly Mines has a viable basis to challenge the expert determination. After independently obtaining a Senior Counsel opinion, the legal coun sel advised Moly Mines that in their view they had a greater than 50/50 chance of successfully arguing that the Expert had made an error in determining the Available Tonnage.

    Subsequent to year end, both parties have agreed that this issue, and all other outstanding issues between the parties, will be determined by arbitration. It is expected that this process will be finalised in the first half of 2016.

    For the year ended 31 December 2015 Moly Mines has not recognised any amount as a liability in relat ion to the final payment, nor have any costs associated with the arbitration been provided for.

  • Significant accounting estimates and assumptions

  • The carrying amounts of certain assets and liabilities are often determined based on estimates and assu mptions 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:

    1. Impairment of capitalised exploration and evaluation expenditure

      The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it suc cessfully recovers the related exploration and evaluation asset through sale.

      Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations), changes to commodity prices, and changes to US Dollar / Australian dollar exchange rates.

      To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made.

      In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is determined in the future that this capitalised expenditure should be written off, profits and net assets will be reduced in the period in which this determination is made.

    2. Impairment of capitalised mine property development expenditure

      The future recoverability of capitalised mine property development expenditure is dependent on a number of factors, including the level of proved, probable and inferred mineral resources, future technological changes that could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

      To the extent that capitalised mine property development expenditure is determined not to be recoverable in the future profits and net assets will be reduced in the period in which this determination is made. Key assumptions used to determine impairment are disclosed in Note 12.

    3. Impairment of plant and equipment and assets held for sale

      Plant and equipment, including assets held for sale, is reviewed for impairment if there is any indication that the carrying amount may not be recoverable. Where a review for impairment is conduct ed, the recoverable amount is assessed by reference to the higher of 'value in use' (being the net present value of expected future cash flows of the relevant cash generating unit) and 'fair value less costs to sell'.

      In determining value in use, future cash flows are based on:

  • estimates of the quantities of ore reserves and mineral resources for which there is a high degree of confidence of economic extraction;

  • future production levels;

  • future commodity prices; and

  • future cash costs of production.

    Variations to the expected future cash flows, and the timing thereof, could result in significant changes to any impairment losses recognised, if any, which could in turn impact future financial results. Key assumptions used to determine impairment are disclosed in Notes 8 and 10.

  • Provisions for decommissioning and restoration costs

    Decommissioning and restoration costs are a normal consequence of mining, and the majority of this expenditure is incurred at the end of a mine's life. In determining an appropriate level of provision consideration is given to the expected future costs to be incurred, the timing of these expected future costs (largely dependent on the life of the mine), and the estimated future level of inflation.

    The ultimate cost of decommissioning and restoration is uncertain and costs can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other mine sites. The expected timing of expenditure can also change, for example in response to changes in reserves or to production rates.

    Changes to any of the estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial results.

  • Share-based payment transactions

  • The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer us ing the Black-Scholes model using the assumptions disclosed in Note 26. The accounting estimates and assumptions relating to equity settled share-based payments used would have no impact on the changing amount of assets and liabilities within the next reporting period but may impact expenses and equity.

    Foreign Currency Translation

  • Functional and presentation currency

    The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). Both the functional and presentation currency of Moly Mines and its Australian subsidiaries is Australian dollars ($).

    In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Nonmonetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non -monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

    Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:

    • exchange differences on foreign currency borrowings relating to a ssets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

    • exchange differences on transactions entered into in order to hedge certain foreign currency risks;

    • exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

  • For the purpose of presenting these consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into Australian dollars using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).

    On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

    In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re- attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

    Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income.

    Borrowing costs

    Borrowing costs are recognised as an expense when incurred, unless they are directly attributable to the acquisition, construction or production of qualifying assets, in which case they are capitalised as part of the cost of those assets.

    Cash and cash equivalents

    Cash and short term deposits in the statement of financial position comprise of cash at bank and in hand and short term deposits with an original maturity 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 purposes of the statement of cash flows, cash includes cash at bank and in hand as defined above, net of outstanding bank overdrafts.

    Trade and other receivables

    Trade and other receivables, which generally have 30 to 90 day terms, are recognised initially at fair value, which is generally the original invoice amount, and subsequently measured at amortised cost using the effective interest method, less an allowance for impairment.

    Collectability of trade and other receivables are reviewed on an ongoing basis. Individual debts that are known to be uncollectible are written off when identified. An impairment allowance is recognised when there is objective evidence that the Group will not be able to collect the receivable. Financial difficulties of the debtor, default payments or debts more than 90 days overdue are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows, discounted at the original effective interest rate.

    Inventories

    Consumables have been valued at cost less an appropriate provision for obsolescence. Cost is determined on a first - in, first-out basis.

    Non-current assets and disposal groups held for sale and discontinued operations

    Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell if their carrying amount will be recovere d principally through a sale transaction. They are not depreciated or amortised. For an asset or disposal group to be classified as held for sale it must be available for immediate sale in its present condition and its sale must be highly probable.

    An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non -current asset (or disposal group) is recognised at the date of de-recognition.

    Investments and other financial assets

    Investments and financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are categorised as either financial assets at fair value through profit or loss, loans and receivables, held to maturity investments, or available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired or originated. Designation is re-evaluated at each reporting date, but there are restrictions on reclassifying to other categories.

    Initial recognition and measurement

    When financial assets are recognised initially, they are measured at fair value, plus, in the case of assets not at fair value through profit or loss, directly attributable transaction costs.

    Subsequent measurement

    1. Financial assets at fair value through profit and loss

      Financial assets classified as held for trading are included in the category "financial assets at fair value through profit and loss". Financial assets are classified as held for trading if they are acqui red for the purpose of selling in the near term with the intention of making a profit. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

    2. Loan and receivables

      Loans and receivable including loan notes and loans to key management personnel are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest rate method. Gains and l osses are recognised in profit or loss when the loans and receivables are derecognised or impaired. These are included in current assets, except for those with maturities greater than 12 months after reporting date, which are classified as non -current.

    3. Available-for-sale financial assets

    Available-for-sale financial assets are those non-derivative financial assets, principally equity securities, which are designated as available-for-sale or are not classified as either of the preceding categories. After i nitial recognition available-for-sale financial assets are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

    The fair values of investments that are actively traded in organised financial markets are determined by reference to quoted market bid prices at the close of business on the reporting date. For investments with no active market, fair values are determined using valuation techniques. Such techniques include: using recent arm's length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis; and option pricing models, making as much use of available and supportable market data as possible and keeping judgemental inputs to a minimum.

    Plant and equipment

    Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. The cost of each item of plant and equipment is written off over its expected economic life, adjusted for any salvage value if applicable. Estimates of remaining us eful lives are made on a regular basis for all assets, with annual reassessments for major items.

    Depreciation is provided on a straight-line basis. Major depreciation periods are:

    Dec 2015

    Dec 2014

    Plant and equipment

    2-4 years

    2-4 years

    Motor vehicles

    5 years

    5 years

    The ball mills are not being depreciated as they are not being used. They are reviewed for impairment every reporting period.

    Disposal

    An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

    Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit and loss in the period the asset is derecognised.

    Impairment

    Plant and equipment is reviewed for impairment if there is any indication that the carrying amount may not be recoverable. Where a review for impairment is conducted, the recoverable amount is assessed by reference to th e higher of 'value in use' (being the net present value of expected future cash flows of the relevant cash generating unit) and 'fair value less costs to sell'.

    Leases

    Leases are classified at their inception as either operating leases or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

    Leases that effectively transfer all risks and benefits incidental to ownership of the leased property are capitalised at the present value of the minimum lease payments and disclosed as property, plant and equipment under lease. A lease liability of equal value is also recognised.

    Capitalised leased assets are depreciated over the shorter of the estimated useful life of the assets and the lea se term. Minimum lease payments are allocated between interest expense and reduction of the lease liability with the interest expense calculated using the interest rate implicit in the lease and recognised directly in profit and loss.

    Operating lease payments are recognised as an expense in profit and loss on a straight line basis over the lease term. Lease incentives are recognised as liability when received and subsequently reduced by allocating lease payments between rental expenses and reduction of the liability.

    Exploration and evaluation expenditure

    Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area of interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure, but does not include general overheads or administrative expenditure not having a specific nexus with a particular area of interest. Each area of interest is limited to a size related to a known or probable mineral resource capable of supporting a mining operation.

    Exploration expenditure for each area of interest is written off as incurred, except that it may be carried forward provided that one of the following conditions is met:

  • such costs are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale; or

  • exploration activities in the area of interest have not, at reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves.

    Exploration expenditure which no longer satisfies the above policy is written off. In addition, an impairment allowance is raised against exploration expenditure where the Directors are of the opinion that t he carried forward net cost may not be recoverable under the above policy. The increase in the allowance account is recognised in profit and loss for the period.

    When an area of interest is abandoned, any expenditure carried forward in respect of that area is written off in the period in which the decision to abandon is made, firstly against any existing allowance account for that expenditure, with any remaining balance recognised in profit and loss for the period.

    Expenditure is not carried forward in respect of any area of interest unless the Group's right of tenure to that area of interest is current. Amortisation is not charged on areas under development, pending commencement of production.

    Exploration and evaluation expenditure will commence to amort ise by using unit-of-production method after the individual geological area commences production.

    Impairment

    The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the cash generating unit level whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.

    Impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. Any impairment losses are recognised in profit and loss.

    Mine property development expenditure

    Mine property development expenditure represents the costs incurred in preparing mines for production and i ncludes stripping and waste removal costs incurred before production commences.

    Depreciation of mine property development expenditure will commence using the unit-of-production method after the individual geological area commences production.

    The definition of an area of interest

    Mine property development expenditure incurred by or on behalf of the Group is accumulated separately for each area of interest. Each area of interest is limited to a size related to a known or probable mineral resource capable of supporting a mining operation.

    Impairment

    The carrying value of capitalised mine property development expenditure is assessed for impairment whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amo unt.

    The recoverable amount of capitalised mine property development expenditure is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

    For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash - generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its fair value.

    An impairment exists when the carrying amount of an asset or cash -generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. Any impairment losses are recognised in profit or loss.

    Provision for restoration, rehabilitation and environmental expenditure

    The amount recognised as a provision is the best estimate of the exp enditure required to settle the present obligation at the reporting date. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation. Furthe rmore, gains from the expected disposal of assets are not taken into account in measuring a provision.

    Any adjustments to the provision as a result of the unwinding of the discount are recognised as an interest expense and not as a movement in the restoration provision expense.

    Changes to the estimated liability, including changes as a result of changes to discount rates are added to or subtracted from the cost of the asset in the current period. The carrying value of the asset may not, however, be reduced below zero. Any excess is therefore taken to profit and loss.

    Trade and other payables

    Trade payables and other payables are carried at amortised cost and due to their short-term nature are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the period that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.

    Interest-bearing liabilities

    All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

    After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effect interest method. Fees paid on the establishment of loan facilities that are yield related are included as part of the carrying amount of the loans and borrowings.

    Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

    Gains and losses are recognised in profit and loss when the liabilities are derecognised. Provisions

    Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

    When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually cer tain. The expense relating to any provision is presented in profit and loss net of any reimbursement.

    Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the reporting date. The risks specific to the provision are factored into the cash flows and as such a risk-free government bond rate relative to the expected life of the provision is used as a discount rate. The increase in the provisions resulting from the passage of time is recognised as a finance cost.

    Employee entitlements

    Provision is made for employee entitlements accumulated as a result of employees rendering services up to the reporting date. These entitlements include wages and salaries, annual leave and l ong service leave.

    Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits due to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the market yield as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liabilities, are used.

    Share-based payment transactions

    The Company from time to time provides benefits to employees (including Directors) of the Company in the form of share-based payment transactions whereby employees render services in exchange for shares or rights over shares ( "share-based payments" or "equity settled transactions").

    There is currently an Employee Incentive Option Scheme in place to provide these benefits to employees.

    The cost of these equity settled transaction with employees is measured by reference to the fair value at the da te at which they are granted. The fair value is determined by an external valuer using a Black -Scholes model, details of which are given in Note 26.

    The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ( "vesting date").

    The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of the Company, will ultimately vest. This opinion is formed based on the best available informa tion at reporting date. No adjustment is made for the likelihood of market conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The profit or loss charge or credit for the period represents the movement in the cumulative expense recognised as at the beginning and end of that period.

    No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition.

    Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the total fair value of the transaction as a result of the modification, as measured at the date of modification.

    Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

    The dilutive effect, if any, of the outstanding options is reflected as additional share dilution in the computation of earnings/loss per share (see Note 20).

    Contributed equity

    Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction net of tax of the share proceeds received.

    Revenue recognition

    Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

    Sale of goods

    Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of ownership are considered passed to the buyer at the time of delivery of the goods to the customer. Revenue recognised is subject to minor adjustments based on final assay results.

    Interest revenue

    Revenue is recognised as interest accrues using the effective interest method. This is a metho d of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

    Taxes

  • Income Tax

    Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

    Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

    Deferred income tax liabilities are recognised for all taxable temporary differences:

  • except when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss ; and

  • in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

    Deferred income tax assets are recognised for all deductible temporary differences, carry -forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and tax losses can be utilised, except:

  • when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a bu siness combination and at the time of the transaction, affects neither the accounting profit nor taxable loss ; or

  • when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

    The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

    Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

    Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

    Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

    Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

    Tax consolidation legislation

    Moly Mines and its wholly-owned Australian controlled entities implemented the tax consolidation legislation as of 25 March 2004.

  • Other Taxes

  • Revenues, expenses and assets are recognised net of the amount of GST except:

  • when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

  • receivables and payables, which are stated with the amount of GST included.

    The net amount of GST recoverable from, or payable to, the taxation authority is inc luded as part of receivables or payables in the statement of financial position.

    Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

    Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

    Earnings per share

  • Basic Earnings per Share

    Basic earnings per share is determined by dividing the profit / (loss) from ordinary activities after related income tax expense by the weighted average number of ordinary shares outstanding during the period, adjusted for any bonus element.

  • Diluted Earnings per Share

  • Diluted earnings per share is calculated as net profit / (loss) attributable to members, adjusted for:

  • costs of servicing equity (other than dividends);

  • the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

  • other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

    divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

    Derivative financial instruments

    The Group uses forward contracts to hedge its risk associated with currency fluctuations. Such derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured to fair value.

    Any gains or losses arising from changes in the fair value of derivatives, except those that qualify as cash flow hedges, are taken directly to net profit or loss for the period.

    The fair value of forward exchange contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles.

    Hanlong investment in Moly Mines

    Pursuant to the Subscription Agreement dated 19 October 2009 (as amended) between Moly Mines and Hanlong which settled on 23 April 2010, Hanlong:

  • Subscribed to 207,135,646 shares in Moly Mines for US$140 million - being A$0.747 per share ("Share Subscription Price").

  • Provided Moly Mines with an interest bearing US$60 million 10 year project loan ( "Hanlong Loan"), secured by fixed and floating charges over the assets of Moly Mines.

  • Agreed to arrange debt financing for up to US$500 million for the development and construction of the Spinifex Ridge Molybdenum / Copper Project by 30 September 2010 ("Project Finance Loan Facility").

  • Were issued 35.5 million unlisted Project Finance Options exercisable at C$1.00 per share maturing 3 years from the date of issue.

  • Is required to provide parent company or related body corporate guarantees as required by the proposed financiers to the Project Finance Loan Facility.

    If Hanlong was not able to fully procure the Project Finance Loan Facility such that the facility documents were not fully executed by 30 September 2010 , then:

  • The effective Share Subscription Price was to be increased to A$1.00 per share by forgiving that much of the Hanlong Loan required to achieve this subscription price based on the US$:A$ exchange rate at 30 June 2010 (being US$44.7 million, equivalent to A$52.4 million) (Loan Forgiveness); and requiring repayment of the balance of the Hanlong Loan immediately (being US$15.3 million).

  • The Project Finance Options would lapse immediately.

    Hanlong was unable to meet its obligations by 30 September 2010 and accordingly the Project Finance Options lapsed. On 22 September 2010 Moly Mines and Hanlong agreed to extend this deadline to 31 January 2011 and to grant a new set of 35.5 million Project Finance Options. These opt ions were approved by shareholders and issued on 24 November 2010.

    Hanlong advised Moly Mines in December 2010 that it would be unlikely to meet its Subscription Agreement obligations by 31 January 2011. Accordingly, on 31 January 2011 the later set of Project Finance Options expired. During January 2011 the Company's non-Hanlong Directors met with senior executives of the Hanlong Group to seek a resolution to the financing delays.

    Moly Mines and Hanlong subsequently agreed to a further extension through to 31 December 2011. Interest owing on the amount of the Hanlong Loan that would otherwise have been forgiven at 31 January 2011 (approximately US$4 4.7 million) has been suspended until the earlier of satisfaction of conditions precedent to drawdown for t he Project Finance Loan Facility and 31 December 2011. A further set of 35.5 million Project Finance Options were issued in May 2011, which would only vest upon satisfaction or waiver of conditions precedent to drawdown under the Project Finance Loan Facility occurring by 31 December 2011. As these conditions were not met, the options expired on 31 December 2011.

    In December 2011, the Company announced its decision not to proceed with the development of the Spinifex Ridge Molybdenum / Copper Project. The non-Hanlong Directors of Moly Mines agreed to restructure the terms and extend the period in which Hanlong has to provide Moly Mines with the benefits originally contemplated under the Subscription Agreement. Hanlong's ability to reduce the Loan Forgivenes s has been extended until the expiry of the Shareholder Loan, namely April 2020.

    On each occasion in the future that Moly Mines makes a final investment decision for a new project that is financed with debt facilities supported by Hanlong guarantees and security, the amount of the Loan Forgiveness will be reduced (and 10% interest will accrue from that point forward) on a pro rata basis by comparing the debt made available to the US$500 million of financing required under the Subscription Agreement. Inter est will not be payable by Moly Mines on the Loan Forgiveness.

    In the 31 December 2010 financial statements, included in other assets was a prepayment of $52.4 million (US$44.7 million) reflecting the portion of the Hanlong Loan that might be forgiven on 31 December 2011 if the conditions described above are not met. The prepayment represented the future value of the service which Hanlong is providing for procuring the Project Finance Loan Facility. At 31 December 2011 this asset was written off and the Hanlong Loan was reduced from US$60 million to US$15.3 million.

    On 6 December 2012 a variation to the Hanlong Loan was signed and a prepayment of US$5 million was prepaid against the loan reducing the loan balance down to US$10.3 million. In addition , the loan interest rate was reduced to 7% from 10%.

    Consolidated

    31 Dec 31 Dec

    2015 2014

    A$'000 A$'000

  • OTHER INCOME AND EXPENSES

    -

    811

    1,169

    1,420

    -

    18,816

    1,169

    21,047

    4,921

    3,474

    (1,545)

    (1,044)

    3,376

    2,430

    464

    1,337

    590

    502

    98

    104

    2

    (4,050)

    83

    190

    1,237

    (1,917)

    454

    456

    395

    43

    2,100

    2,067

    4,186

    649

    971

    805

    Cost of Sales Cost of production

    Royalty expense (i) Depreciation and amortisation

    Net Foreign Currency Gains/(Losses) Realised foreign currency gains

    Unrealised foreign currency gains /(losses)

    Administrative Expenses Salaries and wages Directors' fees

    Defined contribution superannuation expense Share-based payment expense

    Other employee benefits expense

    Operating lease expense Depreciation and amortisation Other administrative expenses

    Finance costs Interest expense

    (i) The Western Australian Minister for Mines determined that additional royalty payments , relating to prior periods, were required for part of the Spinifex Ridge Iron Ore operation. A negotiated outcome was reached with the relevant government department which resulted in Moly Mines having to pay an additional $1.169 million during 2015.

    Consolidated

    31 Dec 31 Dec

    2015 2014

    A$'000 A$'000

    -

    -

    -

    -

    -

    -

    -

    -

  • INCOME TAX

    The major components of income tax expense are:

    Statement of comprehensive income

    Current Income Tax

    Current income tax charge / (benefit)

    Deferred Income Tax

    Relating to origination and reversal of timing differences

    Amounts Charged or Credited Directly to Equity

    A reconciliation between income tax expense and the product of accounting profit before income tax multiplied by the Group's applicable income tax rate is as follows:

    (1,687)

    (11,028)

    (506)

    (3,308)

    1

    1

    1

    (1,215)

    28

    49

    (351)

    -

    51

    98

    776

    3,775

    -

    -

    Accounting loss before income tax

    At the Group's statutory income tax rate of 30% (Dec 2014: 30%) Meal entertainment

    Share-based payments Foreign office expenses

    Gain on sale of financial assets classified as available for sale Other non-deductible expenses

    Unrecognised tax losses

    Income tax (benefit) / expense

    (785)

    (1,010)

    (13,522)

    (13,986)

    (48)

    (82)

    14,355

    15,078

    -

    -

    Deferred Tax Balances

    Deferred Tax Liabilities Foreign exchange Loans

    Other

    Deferred tax asset offset against deferred tax liability

    Consolidated

    31 Dec

    31 Dec

    2015

    2014

    A$'000

    A$'000

    32,997

    32,891

    9,918

    15,011

    5,093

    -

    -

    1,042

    374

    841

    101

    197

    50,243

    48,701

    98,726

    98,683

    (14,355)

    (15,078)

    (84,371)

    (83,605)

    -

    -

    Deferred Tax Assets

    Mine development

    Impairment of assets held for sale Impairment of plant and equipment Impairment of financial assets Provisions

    Other

    Tax losses

    Deferred tax asset offset against deferred tax liability Deferred tax asset not recognised

    The deferred tax assets will only be obtained if:

  • future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;

  • the conditions for deductibility imposed by tax legislation continue to be complied with ; and

  • no changes in tax legislation adversely affect the consolidated entity in realising the benefit.

  • 69,070

    -

    48,311

    22,102

    69,070

    70,413

  • CASH AND CASH EQUIVALENTS

    Cash at bank and in hand Short term deposits

    Bank bills and other money market investments are typically held for 30 to 90 days and earn interest at the prevailing rates.

    The Group obtains assistance from an independent financial risk management firm to assist with the investment of its bank bills and other money market investments. The Group has an investment policy that is strictly adhered to by the firm when providing guidance on money market investments to purchase. The Group does not have any exposure to asset-backed commercial paper.

  • RECEIVABLES

    Consolidated

  • Dec 31 Dec

  • 2015 2014

    A$'000 A$'000

    Current

    738

    738

    192

    189

    23

    93

    53

    158

    70

    113

    1,076

    1,291

    315

    383

    Trade receivables Security deposits (a)(i) GST receivables (a)(ii) Interest receivable (a)(ii) Prepayments

    Non-current

    Security deposits (a)(i)

  • Terms and conditions

    Terms and conditions relating to the above financial instruments

  • Security deposits are interest bearing with interest maturing between 30 and 90 days. They are applied as a security for government bonds on Company tenements and other miscellaneous minor bank guarantees. Their carrying value approximates their fair value.

  • These receivables are non-interest bearing and generally on 30 day terms. Due to the short -term return, their carrying value approximates their fair value.

  • Credit risk

  • The carrying value of the receivables approximates their fair value. The maximum exposure of credit risk at the reporting date is the higher of the carrying value and fair value of each class of receivables. No collateral is held as security.

  • INVENTORIES

    Current

    Consumables 94109

    Inventories are valued at the lower of cost or net realisable value.

  • NON-CURRENT ASSETS HELD FOR SALE

  • Details of assets held for sale

    The Group has certain long-lead plant and equipment held for sale due to it being in excess to expected future development requirements. The non-current assets held for sale are as follows:

    Plant and equipment - 8,300

  • Movements in the carrying amount of assets held for sale

  • 8,300

    14,500

    (20)

    (60)

    20

    (6,140)

    (8,300)

    -

    -

    8,300

    Carrying amount at beginning of the period Disposals

    Reversal of impairment / (impairment) (i) Transfer to plant and equipment (ii)

    Carrying amount at end of the period

  • Impairment of $140,000 was recognised on assets sold during 2014. A further impairment of $ 6m was recognised to reflect a reduction in the market value of the two 14 MW Polysius 7.3 x 12.5M ball mills.

  • As a result of the Company not being able to find a suitable buyer for the two ball mills and other ancillary equipment during the past 12 months, these assets no longer meet the requirements of AASB 5 Non-current Assets Held for Sale and Discontinued Operations at year end, and therefore they have been reclassified as plant and equipment.

  • The assets will continue to be held by the Company for the sole purpose of finding a suitable buyer for them. The ball mills will not be depreciated as they are not being used. They will however be subject to six monthly reviews and if necessary will be impaired.

    Due to the continuing depressed state of the resources industry worldwide , the market for this type of equipment is very constrained, however the Company will endeavour to seek out opportunities .

  • NON-CURRENT ASSETS - FINANCIAL ASSETS CLASSIFIED AS AVAILABLE FOR SALE

    1,376

    396

    -

    2,667

    (1,376)

    (172)

    -

    (1,515)

    -

    1,376

    Listed shares - Unity Mining Limited - 1,376 Movements in the carrying amount

    Carrying amount at beginning of the period

    Value of shares received Carrying value of shares sold

    Impairment of financial assets classified as available for sale Carrying amount at end of the period

    The fair value of financial assets classified as available for sale has been determined directly by reference to published price quotations in an active market.

    Unity Mining Limited (UML) was created from the 2013 merger of two ASX-listed companies, Unity Mining Limited (UML) and Cortona Resources Ltd (CRL). The Company formerly held shares in CRL and received 0.734 UML shares for every CRL share held.

    An A$4 million royalty from UML in relation to the sale by the Company to CRL in 2007 of its NSW gold assets became unconditional when a decision to mine was made on the Dargues Reef Gold Project. A$1 million was received in July 2013. Payment was due to be made by 30 November 2013 by UML electing to pay a further A$3 million in cash or A$4 million in Unity Mining shares. UML defaulted on this agreement, and under a revised agreement paid A$1 million cash on 17 February 2014 and A$2,666,667 in Unity Mining shares in staged issues during the year ended 31 December 2014 . A$3m of the cash and share proceeds received during 2014 were recognised as royalty income in the year ended 31 December 2013, resulting in the balance of A$666,667 being recognised as royalty income in the year ended 31 December 2014.

    The UML shares were sold during the year ended 31 December 2015 for net proceeds of A$2.546m, representing a gain on sale of A$1.170m.

  • PLANT AND EQUIPMENT

    12,697

    (12,617)

    12,702

    (12,297)

    8,380

    405

    Plant and equipment

    • at cost

    • accumulated depreciation

    Total plant and equipment

    Reconciliation of the carrying amounts of plant and equipment at the beginning and end of the curre nt and previous reporting periods

    405

    4,680

    70

    20

    -

    (16)

    8,300

    -

    (395)

    (4,279)

    8,380

    405

    Plant and Equipment

    Carrying amount at beginning of the period Additions

    Disposals

    Transfer from assets held for sale (i) Depreciation expense

    Carrying amount at end of the period

    (i) As a result of the Company not being able to find a suitable buyer for the two ball mills and other ancillary equipment during the past 12 months, these assets no longer met the requirements of AASB 5 Non-current Assets Held for Sale and Discontinued Operations , and for the year ended 31 December 2015 they have been reclassified as plant and equipment.

    The assets will continue to be held by the Company for the sole purpose of finding a suitable buyer for them. The ball mills will not be depreciated as they are not being used. They will however be subject to six monthly reviews and if necessary will be impaired.

    Due to the continuing depressed state of the resources industry worldwide, the market for this type of equipment is very constrained, however the Company will endeavour to seek out opportunities .

    -

    -

    -

    - 11

    (11)

    -

    -

  • EXPLORATION AND EVALUATION

    Carrying amount at beginning of the period Expenditure incurred

    Expenditure written off

    Carrying amount at end of the period

    The exploration expenditure written off noted above was written off in accordance with the Group policy described in Note 2.

    The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective mining areas.

    -

    19,016

    354

    779

    -

    (14,579)

    (354)

    (5,216)

    -

    -

  • MINE PROPERTY DEVELOPMENT

    Carrying amount at beginning of the period Expenditure incurred

    Amortisation Impairment

    Carrying amount at end of the period

    -

    -

    -

    -

    Spinifex Ridge Molybdenum / Copper Project

    Spinifex Ridge Iron Ore Mine

    Impairment Test

    In assessing the carrying value of the Project the Company has taken into account a number of considerations including:

    • The completion of mining by MRL under the Iron Ore Sales and Purchase Agreement, in October 2014.

    • The current market conditions for Iron Ore.

    • There remains approximately 335,000t of low-grade (53%) Iron Ore stockpiles and 250,000t at 59.33%, unmined underground, Iron Ore material at the Spinifex Ridge Iron Ore Project, however, no economic study has been undertaken to assess the value of that material.

      As a result, the Company decided during the year ended 31 December 2014 to further impair the Project value down by $5.216 million to Nil.

      172

      233

      -

      161

      1,454

      434

      405

      2,049

  • TRADE AND OTHER PAYABLES

    Trade and other payables Accruals

    Off-take termination royalty payable to Hanlong Metals

    Trade and other payables are non-interest bearing and generally settled on 30 day terms. Due to their short-term nature, their carrying amount is assumed to approximate their fair value.

    100

    504

    569

    85

    504

    2,150

    1,173

    2,739

  • PROVISIONS

    Current Annual leave

    Rehabilitation - exploration drilling Rehabilitation - Spinifex Ridge Iron Ore Project

    Non-current

    Long service leave 7466

    2,150

    - (1,581)

    3,980

    - (1,830)

    569

    2,150

    Movement in the Spinifex Ridge provision for rehabilitation Carrying amount at beginning

    Additions

    Utilisation

    Closing Balance

    Rehabilitation provisions are estimated based on survey data, externa l contracted rates and the timing of the current mining schedule. Provisions are discounted based on rates that reflect current market assessments and the risks specific to that liability. Rehabilitation provisions are subject to inherent uncertainty in bo th timing and amount and as a result are continuously monitored and revised.

  • BORROWINGS

    Non-Current

    Loan - Hanlong (i) 14,14612,601

    (i) Refer Note 2 - Hanlong investment in Moly Mines for further details.

    Interest Rate, Foreign Exchange and Liquidity Risk

    The Company does not have any exposure to variable interest rate risk on its borrowings as all interest rates have been fixed on borrowings.

    Carrying Value

    Borrowings are held at amortised cost.

  • CONTRIBUTED EQUITY

    Issued and paid up capital 402,673402,673

    Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

    Changes to the then Corporations Law abolished the authorised capital and pa r value concept in relation to share capital from 1 July 1998. Therefore, the Company does not have a limited amount of authorised capital and issued shares do not have a par value.

    Movements in shares on issue:

    Number of

    shares

    A$'000

    Balance at 1 January 2014

    384,893,989

    402,673

    Balance at 31 December 2014

    384,893,989

    402,673

    Balance at 31 December 2015

    384,893,989

    402,673

    Share options

    6,833,320 options were outstanding over unissued shares in the Company as at 31 December 201 5 (Dec 2014: 6,833,320). No options were exercised during the period ( Dec 2014: nil). No options expired or were cancelled during the period (Dec 2014: 700,002). Details of options are provided in Note 26.

    Warrants

    At 31 December 2015, there were 4,832,157 (Dec 2014: 4,832,157) warrants on issue. No warrants were exercised during the period (Dec 2014: nil). No warrants expired during the period (Dec 2014: nil). Details of the warrants on issue are:

    Grant Date

    Expiry Date Exercise Price Number

    15 February 2010

    15 February 2020

    A$0.0001

    4,832,157

  • Reserves

    Nature and purpose of reserves Share based payments reserve

    This reserve is used to record the value of share based payment benefits provided to employees and Directors as part of their remuneration.

    Warrants reserve

    This reserve is used to record the fair value of warrants issued.

  • DERIVATIVE FINANCIAL INSTRUMENTS

    During the year ended 31 December 2014, the Company entered into funds investment arrangements with a major global financial institution. These arrangements were entered into and closed out during 2014 to take advantage of favourable currency movements and resulted in a gain of $88,000.

    Consolidated

    31 Dec 31 Dec

    2015 2014

    A$ A$

  • KEY MANAGEMENT PERSONNEL COMPENSATION

    996,255

    1,122,415

    8,210

    25,007

    77,366

    82,602

    2,186

    21,644

    -

    457,099

    1,084,017

    1,708,767

    Short-term employee benefits Long-term employee benefits Post-employment benefits Share-based payments Termination benefits

  • EARNINGS / (LOSS) PER SHARE

  • The following reflects the income and share data used in the calculation of basic and diluted earnings / (loss) per share

    Profit / (loss) used in calculating basic and diluted earnings / (loss) per share

    Loss attributable to ordinary equity holders of the parent (1,687)(11,028)

    Number of Shares

    Number of Shares

    384,893,989

    -

    384,893,989

    -

    384,893,989

    384,893,989

    Weighted average number of ordinary shares used in calculating basic loss per share

    Share options considered dilutive

    Weighted average number of ordinary shares used in calculating the diluted loss per share

    At 31 December 2015, 6,833,320 share options (Dec 2014: 6,833,320) and 4,832,157 warrants (Dec 2014: 4,832,157) were not considered dilutive as the conversion of the options and warrants to ordinary shares will result in a decrease in the net loss per share.

    Consolidated

    31 Dec

    2015

    31 Dec

    2014

    A$'000

    A$'000

    21.

    COMMITMENTS & CONTINGENCIES

    (a)

    Mineral tenement leases

    Within

    1 year

    282

    282

    Under the terms and conditions of the Group's tit le to its various mining tenements, it has an obligation to meet rentals and minimum levels of exploration expenditure per annum as gazetted by the Department of Industry and Resources of Western Australia, as well as local government rates and taxes.

    457

    234

    458

    721

    691

    1,179

  • Lease commitments

    Operating leases Not later than 1 year

    Later than 1 year and not later than 5 years

  • Shareholder loan reinstatement

    To the extent that Moly Mines makes a final investment decision for a new project that is fi nanced with debt facilities supported by Hanlong guarantees and security, the Shareholder Loan (Loan) of US$15.3 million ( refer Note 2) will be increased by a maximum amount of US$44.7 million on a pro rata basis by comparing the debt made available to the US$500 million of financing required under the Subscription Agreement. Interest will not be payable by Moly Mines on the portion of the Loan not reinstated.

  • Hanlong Finance Fee

    At the Company's Annual General Meeting held in May 2012, shareholders appro ved a variation to the Subscription Agreement between Moly Mines and Hanlong Mining Investment Pty Ltd (Hanlong) signed in October 2009 as subsequently amended (Subscription Agreement). The variation restructures the terms and extends the period in which Hanlong has to provide Moly Mines with the benefits originally contemplated under the Subscription Agreement.

    On each occasion in the future before 22 April 2020 that Moly Mines makes a final investment decision for a new project that is financed with debt facilities supported by Hanlong guarantees and security, a finance fee of up to US$44.7 million will become payable to Hanlong on 22 April 2020 with interest accruing at 10.0 per cent per annum from the date the facilities were arranged, matching the ori ginal commitments under the Subscription Agreement. The US$45 million finance fee will be incurred on a pro-rata basis by comparing the debt made available to the US$500 million of financing required under the Subscription Agreement.

  • Spinifex Ridge Iron Ore Mine

  • Following cessation of mining in October 2014 , Moly Mines and MRL were unable to agree on components of the final payment under the Iron Ore Sale and Purchase Agreement (IOSPA). In accordance with the agreement, an Independent Expert (Expert) was appointed to determine the Available Tonnage component of the payment. The Expert's report concluded that approximately A$4.2 million, net of all offsets, was payable by Moly Mines to MRL. Included within the offset amount is a receivable of $0.7 million o wed by MRL to Moly, which has been recognised in the financial statements at year end.

    Moly Mines is of the opinion that the Expert has incorrectly interpreted the determination of Available Tonnage under the IOSPA, specifically in relation to the ore which had been extracted and stockpiled at the commencement of the contract. Consequently, the Company has not paid any amount to MRL and on 23 December 2015 issued a Dispute Notice to MRL under the IOSPA.

    On 24 December 2015, Moly Mines received a writ of summons from MRL claiming A$4.9 million, calculated by reference to the Expert's determination of Available Tonnage.

    Moly Mines sought legal advice in relation to whether Moly Mines has a viable basis to challenge the expert determination. After independently obtaining a Senior Counsel opinion, the legal counsel advised Moly Mines that in their view they had a greater than 50/50 chance of successfully arguing that the Expert had made an error in determining the Available Tonnage.

    Subsequent to year end, both parties have agreed that this issue, and all other outstanding issues between the parties, will be determined by arbitration. It is expected that this process will be finalised in the first half of 2016.

    For the year ended 31 December 2015 Moly Mines has not recognised any amount as a liability in relation to the final payment, nor have any costs associated with the arbitration been provided for.

    The Directors are not aware of any other circumstance or information which leads them to believe there a re any material contingent liabilities outstanding or likely to be outstanding as at 31 December 2015 or 31 December 2014 .

    Consolidated

    31 Dec 31 Dec

    2015 2014

    A$'000 A$'000

    (1,687)

    395

    (5)

    - 2

    - (20)

    354

    217

    (3,376)

    177

    43

    15

    (3,215)

    23

    (1,581)

    -

    (11,028)

    18,858

    1

    12

    (4,050)

    1,515

    6,140

    5,216

    - (2,430)

    4,551

    49

    (109)

    (3,013)

    (137)

    (1,830)

    (23,471)

    (8,658)

    (9,726)

    1. CASH FLOW INFORMATION

    2. Reconciliation of operating loss after tax to net cash flows from operations

      Loss from ordinary activities

      Adjusted for:

      Depreciation and amortisation

      (Profit) / loss on disposal of plant and equipment

      Loss on disposal of financial assets classified as available for sale Share-based payments

      Impairment of financial assets classified as available for sale

      (Reversal of impairment) / impairment of non-current assets held for sale Impairment of development costs

      Impairment of exploration and evaluation costs Net gain on foreign exchange

      Changes in assets and liabilities: Decrease in receivables Decrease in prepayments

      (Increase) / decrease in inventories Decrease in payables

      Increase / (decrease) in employee provisions Decrease in rehabilitation provision Decrease in deferred revenue

      Net cash flows from / (used in) operations

    3. Non-cash investing activities

    4. During the year ended 31 December 2014, A$2,666,667 in Unity Mining Limited shares were received under a revised agreement relating to the sale by the Company to Cortona Resources Ltd of its NSW gold assets in 2007. Refer to Note 9.

    5. FINANCIAL RISK MANAGEMENT

      The Group's principal financial instruments comprise receivables, payables, finance leases , available for sale investments, derivatives and cash and short-term deposits.

      The Group manages its exposure to a variety of financial risks, market risk (including currency risk, commodity price risk and interest rate risk), credit risk, liquidity risk and cash flow interest rate risk in accordance with the Audit and Risk Management Committee Charter and specific approved Company policies. These policies are developed in accordance with the Company's operational requirements. Currently the Group has one investment policy with the purpose of maximising the return on surplus cash with the aim of outperforming the benchmark, within acceptable levels of risk return exposure and mitigate the credit and liquidity risks that the Group is exposed to through investment activities.

      Primary responsibility for the identification and control of financial risks rests with th e Audit and Risk Management Committee under the authority of the Board. The Committee reviews and agrees policies for managing each of the risks identified. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessment of market forecast for interest rate and foreign exchange. The Group manages credit risk by only dealing with recognised, creditworthy, third parties and liquidity risk is monitored through the development of future rolling cash flow forecasts.

      Commodity price risk

      The Group does not have any exposure to commodity price r isk as it does not currently operate a mine. Interest rate risk

      The Group's current exposure to the risk of changes in market interest rates relate primarily to cash assets rates and is managed by the Board (and Audit and Risk Management Committee) approved investment policy. This policy defines maximum exposures and credit ratings limits.

      The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative financing, alternative hedging positions and the mix of fixed and variable interest rates.

      The Group does not account for fixed rate financial assets and liabilities at fair value through profit or loss.

      Consolidated

      31 Dec 31 Dec

      2015 2014

      A$'000 A$'000

      At reporting date the Group had the following exposure to variable interest r ate risk

      69,070

      70,413

      69,070

      70,413

      Financial assets

      Cash at bank and money market investment

      The following table summarises the impact of reasonably possible changes in interest rates for the Group and the parent entity at 31 December 2015. The sensitivity is based on the assumption that interest rate changes by 25 basis points (Dec 2014: 25 basis points) with all other variables held constant. The 25 basis points sensitivity is based on reasonably possible changes over the reporting period.

      Consolidated

      31 Dec

      31 Dec

      2015

      2014

      A$'000

      A$'000

      172

      176

      (172)

      (176)

      Impact on post tax profit and equity Higher / (lower)

      25 bp increase (Dec 2014: 25 bp)

      25 bp decrease (Dec 2014: 25 bp)

      Foreign currency risk

      The Group has significant foreign currency risk exposure on cash reserves and borrowings and has transactional exposures arising from the payment of foreign currency interest. The Group is exposed to movements in US dollar currency on cash reserves and borrowings.

      At reporting date the Group had the following exposure to foreign currencies .

      Financial Assets and Liabilities

      Cash and cash equivalents

      - USD

      57,993

      40,465

      Receivables

      - USD

      28

      -

      Borrowings

      - USD

      (14,146)

      (12,601)

      Trade and other payables

      - USD

      (175)

      (220)

      The following table summarises the impact of reasonably possible changes in foreign currency exchange rates for the Group at 31 December 2015 on recognised financial assets and liabilities at the reporting date. The sensitivity is based on the assumption that the exchange rates change by increasing 10% and decreasing 5% with all other variables held constant. These 10% and 5% sensitivities are based on reasonably possible changes over the reporting period, using the observed range of actual historical rates for the preceding three year period. The analysis is performed on the same basis for the comparative period.

      Impact on post tax profit and equity

      Higher / (lower)

      AUD/USD +10% (2014: +5%)

      (3,973)

      (2,520)

      AUD/USD -10% (2014: -5%)

      4,855

      3,080

      There was an impact on post tax profit due to the following factors:

      • US Dollar cash held at the December 2015 and December 2014 reporting dates.

      • US Dollar interest accruals at the December 2015 reporting date.

      • US Dollar loans held at the December 2015 and December 2014 reporting dates.

      • US Dollar payables and interest accruals at the December 2015 and December 2014 reporting dates.

        The Group does not have a formal policy to mitigate foreign currency risks.

        Credit risk

        Credit risk arises in the event that a counterparty will not meet its obligations under a financial instrument leading to financial losses. The Group is exposed to credit risk from its operating activities and financing activities including deposits with banks.

        The credit risk control procedure adopted by the Group is to assess the credit quality of the institution with which funds are deposited or invested, taking into account its financial position and past experiences. Investment limits are set in accordance with limits set by the Audit and Risk Management Committee based on the counterparty credit rating. The limits are assigned to minimise concentration of risks and mitigate financial loss through potential counterparty failure. The compliance with credit limits is regularly moni tored as part of day-to-day operations. Any credit concerns are highlighted to senior management.

        Credit Quality of Financial Assets

        S&P Credit Rating

        AAA

        A1+

        A1

        A2

        Unrated

        $'000

        $'000

        $'000

        $'000

        $'000

        31 December 2015

        Cash & cash equivalents

        -

        69,070

        -

        -

        -

        Receivables

        23

        525

        -

        -

        773

        Number of counterparties

        1

        2

        -

        1

        2

        Largest counterparty (%)

        100%

        85%

        -

        100%

        95%

        31 December 2014

        Cash & cash equivalents

        1

        70,412

        -

        -

        -

        Receivables

        93

        695

        -

        -

        773

        Number of counterparties

        1

        5

        -

        1

        4

        Largest counterparty (%)

        100%

        24%

        -

        100%

        95%

        Liquidity risk

        The responsibility for liquidity risk management rests with the Board of Directors.

        The Group manages liquidity risk by maintaining sufficient cash or credit facilities to meet the operating requirements of the business and investing excess funds in highly liquid short term investments. The Group's liquidity needs can be met through a variety of sources, including: cash generated from operations, short and long term borrowings a nd issue of equity instruments.

        Alternatives for sourcing the Company's future capital needs include current cash position, future operating cash flow, project debt financings and equity raisings. These alternatives are evaluated to determine the optimal mix of capital resources.

        The following table details the Company and Group's non-derivative financial instruments according to their contractual maturities. The amounts disclosed are based on contractual undiscounted cash flows. As a result, these balances may not agree with the amounts disclosed in the statement of financial position.

        Refer Note 2 - Hanlong investment in Moly Mines for details of the Hanlong Loan .

        Less than 6 months

        6 months -

        12 months

        1-2 years > 2 years

        $'000 $'000 $'000 $'000

        Consolidated entity at 31 December 2015 Trade and other payables

        405

        -

        -

        -

        Borrowings

        496

        496

        990

        16,436

        901

        496

        990

        16,436

        Consolidated entity at 31 December 2014

        Trade and other payables

        2,049

        -

        -

        -

        Borrowings

        441

        441

        884

        15,670

        2,490

        441

        884

        15,670

        Capital risk management

        When managing capital (being equity and long term debt) management's objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits to oth er stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity reflecting the current business status of the entity.

        Management constantly adjusts the capital structure to take advantage of favourable costs of capital or high return on assets. As the market is constantly changing, management may return capital to shareholders, issue new shares or sell assets to reduce debt. Management have no plans to issue further shares on the market. The Group does not currently have a dividend policy.

        The Company monitors its capital through monthly Board reporting including management accounts and forecasts combined with appropriate external financial, corporate and legal advice when required. Due to the nature of the operations of the Group and its financial position, Management does not have a target debt/equity ratio. Management prefers to maintain a flexible financing structure. The Company has a major shareholder that owns 53.8% of the Company and as a result its structure is currently inflexible.

        The Group is not subject to any externally imposed capital requirements. Fair value

        The Group uses various methods in estimating the fair value of a financial instrument . The methods comprise: Level 1 - the fair value is calculated using quoted prices in active markets.

        Level 2 - the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for

        the asset or liability, either directly (as prices) or indirect ly (derived from prices).

        The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the following table.

        Year ended

        31 December 2 Quoted

        Market Price

        (Level 1)

        $'000

        015

        Total

        $'000

        Year ende

        31 December Quoted

        Market Price

        (Level 1)

        $'000

        d

        2014

        Total

        $'000

        Financial assets Financial asset classified available for sale

        as

        -

        -

        1,376

        1,376

        -

        -

        1,376

        1,376

        Quoted market price represents the fair value determined based on quoted prices on active markets as at the reporting date without any deduction for transaction costs. The fair value of the listed equity investments is based on quoted market prices.

        For financial instruments not quoted in active markets, the Group uses valuation techniques such as present value techniques, comparison to similar instruments for which market observable prices exist and other relevant models used by market participants. These valuation techniques use observable market inputs.

    6. RELATED PARTY DISCLOSURE

      Subsidiaries

      Name Country of

      Incorporation

      % Equity Interest Principal Activities

      Dec 2015

      Dec 2014

      Moly Metals Australia Pty Ltd

      Australia

      100

      100

      100

      100

      100

      100

      100

      Owns the Spinifex Ridge iron ore mine Dormant

      Holding company

      Evaluation and relinquishment of tenement holdings

      Evaluation of acquisition opportunities Evaluation of acquisition opportunities

      Copper Metals Australia Pty Ltd

      Australia

      100

      Spinifex Ridge Holdings Pty Ltd

      Australia

      100

      Moly Ex Pty Ltd

      Australia

      100

      Moly Mines USA Limited

      USA

      100

      Mettle Mining Holdings Limited

      Cayman

      100

      Islands

      Ultimate Parent Entity

      Moly Mines Limited is the ultimate parent entity of the Group. The ultimate Australian parent of Moly Mines Limited is Hanlong Mining Investment Pty Ltd, which was incorporated in Australia and owns 53.8% of Moly Mines Limited. The ultimate parent of Hanlong Mining Investment Pty Ltd is Sichuan Hanlong Group, a private company incorporated in China.

      Details of Related Party Transactions

    7. Subsidiaries

      Moly Mines Limited has related party transactions with its subsidiaries whereby it funds and pays for the exploration and evaluation expenses incurred by its subsidiaries. These expenses are charged to the subsidiaries through intercompany loans, which are non-interest bearing and have no fixed repayment terms. Balances and transactions between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed in this note.

    8. Ultimate parent entity

      Refer Note 2 - Hanlong investment in Moly Mines for full details of the Subscription Agreement between Moly Mines and Hanlong and assets encumbered.

      Transactions and outstanding balances with Hanlong were as follows:

      31 Dec

      31 Dec

      2015

      2014

      A$'000

      A$'000

      971

      805

      336

      268

      80

      44

      167

      220

      -

      434

      28

      -

      14,165

      12,601

      Finance costs Director fees

      Other transactions with Hanlong entities

      Payables - loan interest

      Payables - off-take termination royalty Payables - other

      Loan from Hanlong

    9. Northcott Capital

    10. The consolidated entity entered into a transaction with Northcott Capital, a company of which Moly Mines director Mr A. Martin is an employee, for project assessment consultancy.

      31 Dec

      2015

      A$'000

      31 Dec

      2014

      A$'000

      138

      -

      Project assessment consultancy fees

      The consolidated entity has not entered into any transactions nor has other outstanding commitments at 31 December 2015 with other related parties (2014: nil).

    11. SEGMENT INFORMATION

      The Group has identified its operating segments based on the internal reports tha t are used by the chief operating decision makers ("CODM") in order to allocate resources to the segment and to assess its performance. Segments are identified on the basis of mineral type. The CODM of the Group are the Board of Directors and the Chief Executive Officer. Financial information about each segment is provided to the CODM on at least a monthly basis.

      The entity has two reportable operating segments as follows:

    12. Spinifex Ridge Molybdenum / Copper Project. This Project is located in the Pilbara region of Western Australia; it is fully permitted and ready for immediate development subject to achieving a successful project financing based on improvements in commodity prices and/or exchange rates.

    13. Spinifex Ridge Iron Ore Project. This Project is located in the Pilbara region of Western Australia.

      The following items and associated assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

    14. Cash on hand and interest revenue.

    15. Foreign currency gains and losses incurred on foreign currency cash on hand.

    16. Fair value gains/losses on available for sale financial assets.

    17. Foreign currency gains/losses and finance costs on borrowings.

    18. Corporate administrative expenses.

    19. Property, plant and equipment considered not part of an operating segment .

    20. Exploration expenditure considered not part of an operating segment .

    21. Income tax considered not part of an operating segment.

    22. Borrowings considered not part of an operating segment.

The accounting policies applied for internal reporting purposes are consistent with those applied in the preparation of these financial statements.

Spinifex Ridge

Spinifex Ridge

Total

Molybdenum Project

Iron Ore Project

31 Dec 2015

31 Dec 2015

31 Dec 2015

A$'000

$'000

$'000

Revenue and other income

-

-

-

Segment revenue

Segment other income

20

-

20

Unallocated

634

Interest revenue

Gain on sale of financial assets classified as

available for sale

1,170

Profit on sale of plant and equipment

5

Other income

5

Foreign currency gains

3,376

Total revenue and other income

5,210

Results

(334)

(1,552)

(1,886)

Pre-tax segment result

Unallocated

634

Interest revenue

Gain on sale of financial assets classified as

available for sale

1,170

Profit on sale of plant and equipment

5

Other income

5

Foreign currency gains

3,376

Administrative expenses

(3,803)

Exploration expenses

(217)

Finance costs

(971)

Loss after income tax

(1,687)

Segment Assets

8,300

870

9,170

Segment operating assets

Unallocated assets

69,070

Cash

Other

617

Property, plant and equipment

78

Total assets

78,935

Segment acquisitions of non-current assets

-

-

-

Segment Liabilities

504

569

1,073

Segment operating liabilities

Unallocated liabilities

14,146

Borrowings

Trade and other payables

405

Provisions

174

Total liabilities

15,798

Spinifex Ridge

Molybdenum Project

31 Dec 2014

A$'000

Spinifex Ridge

Iron Ore Project 31 Dec 2014

$'000

Total 31 Dec 2014

$'000

Revenue and other income

Segment revenue

-

20,004

20,004

Unallocated

Interest revenue

1,207

Royalty income

667

Hedging gains

88

Foreign currency gains

2,430

Total revenue and other income

24,396

Results

Pre-tax segment result

(11,356)

(1,047)

(12,403)

Unallocated

Interest revenue

1,207

Royalty income

667

Hedging gains

88

Foreign currency gains

2,430

Loss on sale of assets

(1)

Loss on sale of financial assets classified as

available for sale

(12)

Impairment of available-for-sale financial assets

(1,515)

Impairment of receivables

(28)

Exploration expenses

(11)

Administrative expenses

(645)

Finance costs

(805)

Loss after income tax

(11,028)

Segment Assets

Segment operating assets

8,300

1,365

9,665

Unallocated assets

Cash

70,413

Other

793

Financial assets classified as available for sale

1,376

Property, plant and equipment

30

Total assets

82,277

Segment acquisitions of non-current assets

-

-

-

Segment Liabilities

Segment operating liabilities

504

3,798

4,302

Unallocated liabilities

Borrowings

12,601

Trade and other payables

401

Provisions

151

Total liabilities

17,455

  1. SHARE-BASED PAYMENT PLANS

  2. Recognised share-based payment expenses

    The expense recognised in profit and loss in relation to share-based payments is disclosed in Note 3. No significant changes occurred during the year ended 31 December 2015.

    Following the resignation of employees and directors during the year ended 31 December 2014, the Company undertook a full review of the carrying values in the Share-Based Payments Reserve. The amounts represent rights to options issued to current and former directors and employees of the Company pursuant to the Employee Incentive Option Scheme ("EIOS"). It was determined that as a result of the resignations, the service period conditions attached to previously issued options were not achieved. The Company has adjusted the carrying values accordingly.

    The amount credited to administrative expenses in the consolidated statement of profit or loss and other comprehensive income in the year ended 31 December 2014 as a result of this adjustment was $4,078,000.

  3. General terms of share-based payment plans

    The Group has an Employee Incentive Option Scheme ("EIOS"). The Directors may, in their absolute discretion, grant options to Directors and full or part time employees of the Group for nil consideration in accordance with performance guidelines established by the Directors. The options are not quoted on the Australian Securities Exchange or the Toronto Stock Exchange.

    Under the EIOS, the exercise price of the option is set by the Board of Directors. The performance guidelines established by the Directors do not consider the performance of the employee when setting the exercise price.

    When a participant ceases employment prior to the vesting of their share options, the share options are generally forfeited unless cessation of employment is due to termination initiated by the Group or death. In the case of the retrenchments which took effect in 2013, at the Board of Directors' discretion, the share options were cancelled with the exception in some cases of those options that were to vest on 14 February 2014.

    There are a number of different contractual lives for the current issued options. There are no cash settlement alternatives.

  4. Summary of options granted under the EIOS

    In February 2012, the Company issued a series of options to employees under the EIOS. The total number of o ptions issued was 15,350,000. The movements in options on issue and weighted average exercise price (WAEP) are shown in the following table.

    Dec 2015

    No.

    Dec 2015

    WAEP

    Dec 2014

    No.

    Dec 2014

    WAEP

    6,833,320

    0.55

    7,533,322

    0.55

    -

    -

    -

    -

    -

    -

    -

    -

    -

    -

    (700,002)

    0.55

    6,833,320

    0.55

    6,833,320

    0.55

    6,833,320

    0.55

    6,683,320

    0.55

    Outstanding at the beginning of the period Granted during the period

    Exercised during the period Expired during the period

    Outstanding at the end of the period

    Exercisable at reporting date

  5. Weighted average remaining contractual life

    The weighted average remaining contractual life for the share options outstanding under the EIOS as at 31 December 2015 is 0.1 years (Dec 2014: 1.1 years).

  6. Range of exercise price and weighted average share price at the date of exercise

  7. No options were exercised during the years ended 31 December 2015 or 31 December 2014. (f) Weighted average fair value

    No options were granted under the EOIS during the period ended 31 December 201 5 or 31 December 2014. (g) Option pricing model

    The fair value of the equity-settled share options granted under the option plan is estimated as at the date of grant using a Black-Scholes model taking into account the terms and conditions upon which the options we re granted.

    The following table lists the inputs to the model used for the options granted in February 2012:

    Dividend yield (%)

    Expected volatility (%)

    Nil

    70%

    Risk-free interest rate (%)

    3.563%

    Expected life (years)

    4

    Weighted average share price at grant date ($)

    0.32

  8. Details of Options

    Year ended 31 December 2015

    Opening Balance

    1 Jan 2015

    Options Issued

    Options Exercised

    Options Expired

    Closing Balance

    31 Dec 2015

    Employee

    options

    6,833,320

    -

    -

    -

    6,833,320

    Total

    6,833,320

    -

    -

    -

    6,833,320

    Year ended 31 December 2014

    Opening

    Balance 1 Jan 2014

    Options

    Issued

    Options

    Exercised

    Options

    Expired

    (i)

    Closing

    Balance 31 Dec 2014

    Employee options 7,533,322 - - (700,002) 6,833,320

    Total 7,533,322 - - (700,002) 6,833,320

  9. Options were forfeited upon resignation. Options issued to employees subsequently made redundant were cancelled, except for those options due to be earned on 14 February 2013 and in some cases those options due to be earned on 14 February 2014.

  10. Details of the options are as follows:

    Grant date 15 February 2012

    Vesting price $0.65

    Exercise price $0.55

    Expiry date 14 February 2016

    Original number Vesting date

    5,116,650

    14 February 2013

    5,116,672

    14 February 2014

    5,116,678

    14 February 2015

  11. AUDITOR'S REMUNERATION

    The auditor of the Group is Deloitte Touche Tohmatsu.

    Consolidated

    31 Dec

    2015

    A$

    31 Dec

    2014

    A$

    28,350

    108,150

    65,500

    24,648

    136,500

    90,148

    Amounts received or due and receivable by Deloitte Touche Tohmatsu: Audit fees for audit and review of the financial report

    Tax compliance (non-audit services)

    31 Dec

    31 Dec

    2015

    2014

    A$'000

    A$'000

    68,896

    29,601

    77,862

    77,974

    506

    485

    14,725

    13,152

    402,673

    402,673

    (349,749)

    (348,062)

    823

    821

    9,390

    9,390

    63,137

    64,822

    (1,687)

    (11,028)

    (1,687)

    (11,028)

  12. PARENT ENTITY INFORMATION

    Current assets Total assets Current liabilities Total liabilities

    Contributed equity Accumulated losses

    Share-based payments reserve Warrants reserve

    Total shareholders' equity

    Loss of the parent entity

    Total comprehensive loss of the parent entity

    Moly Mines and its 100% owned Australian resident subsidiaries formed a tax consolidated group with effect from 25 March 2004. Moly Mines is the head entity of the tax consolidated group. Members of the group have entered into a tax sharing agreement that provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the financial statement in re spect of this agreement on the basis that the possibility of default is remote.

  13. SIGNIFICANT EVENTS AFTER THE REPORTING DATE

  14. As discussed in Note 21(e), Moly Mines and MRL have subsequently agreed that the final payment under the Iron Ore Sale and Purchase Agreement, and all other outstanding issues between the parties, will be determined by arbitration. It is expected that this process will be finalised in the first half of 2016.

    No other circumstances or events have arisen subsequent to the end of t he period that have had, or are likely to have, a material impact on the operations of the Group or the financial statements.

    DIRECTORS' DECLARATION

    In accordance with a resolution of the Directors of Moly Mines Limited, we state that: In the opinion of the Directors:

  15. The financial statements and notes of the Consolidated Entity are in accordance with the Corporations Act 2001, including:

  16. giving a true and fair view of the Consolidated Entity's financial position as at 3 1 December 2015 and of its performance for the year ended on that date; and

  17. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 ;

  18. the financial statements and notes also comply with International Financial Reporting S tandards as disclosed in Note 2;

  19. this declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the Corporations Act 2001 for the financial year ending 31 December 2015; and

  20. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due and payable.

  21. On behalf of the Board

    Nelson Chen Chairman Perth

    30 March 2016

    Deloitte Touche Tohmatsu ABN 74 490 121 060

    Brookfield Place, Tower 2 123 St Georges Terrace Perth WA 6000

    GPO Box A46

    Perth WA 6837 Australia

    Tel: +61 8 9365 7000

    Fax: +61 8 9365 7001

    www.deloitte.com.au

    Independent Auditor's Report to the Members of Moly Mines Limited

    Report on the Financial Report

    We have audited the accompanying financial report of Moly Mines Limited, which comprises the consolidated statement of financial position as at 31 December 2015, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of cash flows and the consolidated statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of 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 as set out on pages 17 to 64.

    Directors' Responsibility 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 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the consolidated financial statements comply with International Financial Reporting Standards.

    Auditor's Responsibility

    Our responsibility is to express an opinion on the financial report based on our audit. 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 whether the financial report is free from material misstatement.

    An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control, relevant to the company'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 company's 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

    Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

    Auditor's Independence Declaration

    In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Moly Mines Limited, would be in the same terms if given to the directors as at the time of this auditor's report.

    Basis for Qualified Opinion

    Moly Mines Limited has two '14 MW Polysius 7.3 x 12.5M' ball mills recognised within Property Plant and Equipment at a total carrying value of $8 million. Given the current economic environment and the specific nature and market for such assets, we have not been able to obtain sufficient appropriate audit evidence to enable us to determine the recoverable value of these assets.

    Consequently we were unable to determine whether an adjustment to the carrying amount of these assets was necessary. Should the recoverable amount be less that the carrying value, the difference would need to be expensed through profit or loss as an impairment expense.

    Qualified Opinion

    In our opinion, except for the effects of the matter referred to in the Basis for Qualified Opinion paragraph;

  22. the financial report of Moly Mines Limited is in accordance with the Corporations Act 2001, including:

  23. giving a true and fair view of the consolidated entity's financial position as at 31 December 2015 and of its performance for the year ended on that date; and

  24. complying with Australian Accounting Standards and the Corporations Regulations 2001; and

  25. the consolidated financial statements also comply with International Financial Reporting Standards as disclosed in Note 2.

  26. Report on the Remuneration Report

    We have audited the Remuneration Report included on pages 5 to 13 of the directors' report for the year ended 31 December 2015. 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.

    Opinion

    In our opinion the Remuneration Report of Moly Mines Limited for the year ended 31 December 2015, complies with section 300A of the Corporations Act 2001.

    DELOITTE TOUCHE TOHMATSU

    Leanne Karamfiles

    Partner

    Chartered Accountants Perth, 30 March 2016

    Deloitte Touche Tohmatsu ABN 74 490 121 060

    Tower 2, Brookfield Place 123 St Georges Terrace Perth WA 6000

    GPO Box A46

    Perth WA 6837 Australia

    Tel: +61 (0) 8 9365 7000

    Fax: +61 (8) 9365 7001

    www.deloitte.com.au

    The Board of Directors Moly Mines Limited 50 Kings Park Road West Perth, WA 6005

    30 March 2016

    Dear Board Members

    Moly Mines Limited

    In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Moly Mines Limited.

    As lead audit partner for the audit of the financial statements of Moly Mines Limited for the year ended 31 December 2015, I declare that to the best of my knowledge and belief, there have been no contraventions of:

  27. the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

  28. any applicable code of professional conduct in relation to the audit.

  29. Yours sincerely

    DELOITTE TOUCHE TOHMATSU

    Leanne Karamfiles

    Partner

    Chartered Accountants

    Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

    The following additional information is required by the Australian Securities Exchange. The information is current as at 31 March 2016.

    1. Distribution schedule and number of holders of equity securities as at 31 March 2016

      1 - 1,000

      1,001 -

      5,000

      5,001 -

      10,000

      10,001 -

      100,000

      100,001 -

      and over

      Total

      Fully Paid Ordinary Shares (MOL)

      1,181

      1,240

      571

      883

      84

      3,959

      Unlisted Warrants -

      $0.0001 15/2/2020

      -

      -

      -

      -

      1

      1

      The number of holders holding less than a marketable parcel of fully paid ordinary shares as at 31 March 2016 is 2,655.

    2. 20 Largest holders of quoted equity securities as at 31 March 2016

    The names of the twenty largest holders of fully paid ordinary shares (ASX: MOL) as at 31 March 2016 are:

    Rank

    Name

    Shares

    % of Total Share s

    1

    HANLONG MINING INVESTMENT PTY LIMITED

    207,135,646

    53.82

    2

    CITICORP NOMINEES PTY LIMITED

    44,483,638

    11.56

    3

    J P MORGAN NOMINEES AUSTRALIA LIMITED

    41,408,576

    10.76

    4

    HSBC CUSTODY NOMINEES

    26,219,360

    6.81

    5

    NATIONAL NOMINEES LIMITED

    2,639,470

    0.69

    6

    ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD

    2,414,423

    0.63

    7

    BNP PARIBAS NOMS PTY LTD

    1,919,881

    0.50

    8

    VALADON PTY LTD

    1,500,000

    0.39

    9

    ZHOU HONG

    1,474,868

    0.38

    10

    NEFCO NOMINEES PTY LTD

    1,172,064

    0.30

    11

    NATIONAL NOMINEES LIMITED

    1,086,543

    0.28

    12

    PERSHING AUSTRALIA NOMINEES PTY LTD

    1,010,750

    0.26

    13

    JAMBER INVESTMENTS PTY LTD

    759,939

    0.20

    14

    FORSYTH BARR CUSTODIANS LTD

    636,937

    0.17

    15

    SECURITY & EQUITY RESOURCES LIMITED

    617,216

    0.16

    Rank

    Name

    Shares

    % of Total Share s

    16

    MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED

    603,611

    0.16

    17

    LIN YIN

    586,339

    0.15

    18

    MR PETER ROSE + MRS DONNA ROSE

    541,020

    0.14

    19

    MAPT PTY LIMITED

    500,000

    0.13

    20

    LAM BROS ALLIANCE PTY LTD

    489,590

    0.13

    TOTAL

    337,199,871

    87.61

    Stock Exchange Listing - Listing has been granted for 384,893,989 ordinary fully paid shares of the Company on issue on the Australian Securities Exchange. Trading in Moly Mines shares on the ASX was suspended on 17 April 2014.

    The unquoted securities on issue as at 31 March 2016 are detailed below in part (d). (c) Substantial shareholders

    Substantial shareholder in Moly Mines Limited and the number of equity securities and percentage holding over wh ich the substantial shareholder has a relevant interest as disclosed in substantial holding notices provided to the Company are listed below:

    Substantial Shareholder

    No. Shares Held

    % of Issued Capital

    Sichuan Hanlong Group

    207,244,146

    53.84

    1. Unquoted securities and the names of persons holding more than 20% of a given class of unquoted securities (other than employee options) as at 31 March 2016

      The number of unquoted securities on issue as at 31 March 2016:

      Security

      Number on issue

      Unlisted

      warrants

      held

      by

      EIG

      Global

      Energy

      exercisable

      at

      $0.0001,

      on

      or

      before

      15/2/2020.

      4,832,157

    2. Restricted Securities as at 31 March 2016

    There are no restricted securities on issue as at 31 March 2016. (f) Voting Rights

    All fully paid ordinary shares carry one vote per ordinary share without restriction. Unquoted warrants have no voting rights.

    1. Company Secretary

      The Company Secretary is Ms Susan Hunter.

    2. Registered Office

      The Company's Registered Office is 50 Kings Park Road, West Perth, Western Australia 6005.

    3. Share Registry

      The Company's Share Registry is Computershare Investor Services Pty Ltd of Level 11, 172 St Georges Terrace, Perth WA 6000. Telephone 1300 557 010.

    4. On-Market Buy-back

    The Company is not currently performing an on-market buy-back. (K) Corporate Governance Statement

    The Company's 31 December 2015 Corporate Governance Statement and Appendix 4G is available on the Company's website at http://www.molymines.com/public/Corporate-Governance.aspx and have also been released to ASX.

    Tenement ID

    District

    Description

    Ownership (100%)

    Status

    M45/1095

    Marble Bar

    Spinifex Ridge Project

    Moly Metals

    Granted

    M45/1096

    Marble Bar

    Spinifex Ridge Project

    Moly Metals

    Granted

    M45/1164

    Marble Bar

    Spinifex Ridge Project

    Moly Metals

    Granted

    G45/276

    Marble Bar

    Spinifex Ridge Project

    Moly Metals

    Granted

    L45/159

    Marble Bar

    Spinifex Ridge Infrastructure

    Moly Metals

    Granted

    L45/160

    Marble Bar

    Spinifex Ridge Infrastructure

    Moly Metals

    Granted

    L45/185

    Marble Bar

    Spinifex Ridge Infrastructure

    Moly Metals

    Granted

    L45/186

    Marble Bar

    Spinifex Ridge Infrastructure

    Moly Metals

    Granted

    (l) Schedule of interests in mining tenements Western Australia

Read the rest of the article at www.publicnow.com
Data and Statistics for these countries : Australia | China | Hong Kong | All
Gold and Silver Prices for these countries : Australia | China | Hong Kong | All

Moly Mines Ltd.

PRODUCER
CODE : MOL.AX
ISIN : AU000000MOL6
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Moly Mines is a iron and molybdenum development stage company based in Australia.

Moly Mines produces iron, molybdenum, copper and silver in Australia.

Its main asset in production is SPINIFEX RIDGE in Australia and its main exploration properties are GREENBUSHES, MT PLEASANT, GLEN EDEN and MT TENNYSON in Australia.

Moly Mines is listed in Australia, in Canada, in Germany and in United States of America. Its market capitalisation is AU$ 26.6 millions as of today (US$ 19.9 millions, € 17.8 millions).

Its stock quote reached its highest recent level on July 27, 2007 at AU$ 7.25, and its lowest recent point on April 11, 2014 at AU$ 0.06.

Moly Mines has 384 890 016 shares outstanding.

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In the News and Medias of Moly Mines Ltd.
11/29/2016ASX slams door on Moly Mines, leaves 4,000 shareholders in l...
Annual reports of Moly Mines Ltd.
2008 Annual Report
Financings of Moly Mines Ltd.
5/29/2011TCW exercises 19 million Warrants
4/18/2007Completes C$22.5 Million Private Placement
Nominations of Moly Mines Ltd.
10/28/2013Reports Appointments of Independent Directors and Company Se...
9/19/2013Reports Filing of Notice of Meeting-Removal and Appointment ...
8/30/2013Reports Notice of Removal and Appointment of Directors
5/21/2013-Director Resignation & Update on Board Replacement Process
12/23/2011Reports Director Resignation
Financials of Moly Mines Ltd.
4/27/2011Reports Quarter Highlights
Project news of Moly Mines Ltd.
5/10/2013(Spinifex Ridge): Mine Gate Sale of Spinifex Ridge Iron Ore
6/28/2011(Spinifex Ridge)Signs US$494 Million Debt Facilities for the Spinifex Ridge ...
4/11/2011(Spinifex Ridge): China Development Bank Approves US$500 Million Project Fin...
3/29/2011(Spinifex Ridge)Third Iron Ore Shipment Departs Port Hedland
3/4/2011(Spinifex Ridge)Advises Utah Point Access Extended to 2015
2/25/2011(Spinifex Ridge)Reports Spinifex Ridge Iron Ore Shipments Recommence After C...
4/14/2008(Spinifex Ridge)EPA RECOMMENDS SPINIFEX RIDGE MOLYBDENUM PROJECT FOR MINISTE...
3/17/2008(Spinifex Ridge)Spinifex Ridge Molybdenum Project Update
2/14/2008(Spinifex Ridge)$1.1 billion mining contract awarded for Spinifex Ridge
1/29/2008(Spinifex Ridge)Capital Cost Control Estimate & Budget
10/22/2007(Spinifex Ridge)SAMPLING RETURNS HIGH GRADE IRON AT SPINIFEX RIDGE
10/11/2007(Spinifex Ridge)Moves rapidly to detailed design and construction planning a...
9/5/2007(Spinifex Ridge) Spinifex Ridge Land Access Deed
8/1/2007(Spinifex Ridge) Spinifex Ridge increased to 20 million tonnes pa
7/13/2007Reports Spinifex Ridge Feasibility Study Almost Ready
5/2/2007(Spinifex Ridge)Spinifex Ridge – First Equipment Order
Corporate news of Moly Mines Ltd.
5/30/2016Annual General Meeting Presentation
5/30/2016Board Changes
4/28/2016Notice of Annual General Meeting/Proxy Form
4/28/20162015 Moly Mines Ltd Annual Report
3/31/2016Acting CEO Contract Extension
3/31/2016Annual Financial Report 31 December 2015
12/30/2015Iron Ore Sale Final Payment - Update
8/31/2015Financial Statements for the Half-Year Ended 30 June 2015
4/1/2015Moly Mines Reports Acting CEO Contract Extension
4/1/2015Acting CEO Contract Extension
3/30/2015Annual Financial Report 31 December 2014
10/20/2014Application to Cease to Be A Reporting Issuer in Canada
8/22/2014Moly Mines Reports Board Appointments
7/2/2014Moly Mines Announces Director Resignation
4/30/2014Moly Mines Reports Quarter Highlights
9/26/2013Reports Executive Changes
7/2/2013Mine Gate Sale in Effect/Employee Options
6/26/2013: Mine Gate Sale Unconditional-Update on Company Strategy-Fo...
6/26/2013: Mine Gate Sale Unconditional-Update on Company Strategy-Fo...
5/31/2013Reports AGM Results and Board Changes
4/24/2013Reports Quarter Highlights
4/9/2013Provides Update in Respect of Media Reports
3/20/2013-Announcement Regarding Mr Liu Han
1/31/2013Reports Quarter Highlights
10/31/2012New Alert for Moly Mines Limited
7/30/2012Reports Quarter Highlights
6/25/2012New Alert for Moly Mines Limited
4/27/2012New Alert for Moly Mines Limited
3/15/2012New Alert for Moly Mines Limited
1/30/2012New Alert for Moly Mines Limited
1/3/2012New Alert for Moly Mines Limited
12/28/2011Enters Strategic Alliance With CDB-Update on Molybdenum / Co...
12/20/2011Reports One Million Tonnes of Iron Ore Shipments Achieved
5/7/2008MOL Featured in Diggers and Drillers
4/7/2008EPCM Contract Awarded to WorleyParsons
2/22/2008Awards Crusher Contract to Metso
1/31/2008REPORTS QUARTER ACTIVITIES
12/19/2007ENTERS STRATEGIC ALLIANCE WITH WORLD MOLY LEADER
12/3/2007appointed JPMorgan and Morgan Stanley as Joint Lead Arranger...
9/25/2007Proceeds with spinifex Ridge Project execution and financing
7/5/2007banks A$5 million and becomes major shareholder in Cortona
6/29/2007poised to settle sale of New South Wales Gold Assets
5/29/2007Expands Spinifex Ridge Landholding
5/17/2007Advises the Results of General Meeting
5/1/2007World's Largest Moly Mine to Increase Productivity with Juni...
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AUSTRALIA (MOL.AX)TORONTO (MOL.TO)
0.069+0.00%0.060-7.69%
AUSTRALIA
AU$ 0.069
03/24 07:15 -
0%
Prev close Open
0.069 0.069
Low High
0.069 0.069
Year l/h YTD var.
 -  -
52 week l/h 52 week var.
- -  0.069 -%
Volume 1 month var.
0 -%
Produces Copper - Molybdenum - Silver
Develops
Explores for Molybdenum - Tungsten
 
 
 
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