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ba407293357c6b06938fbd.pdf
ANNOUNCEMENT
Financial Report 2015
30 September 2015: Brisbane, Australia - Citigold Corporation Limited ('Citigold' or 'Company') (ASX:CTO) is pleased to provide the Annual Financial Report for the Year ending 30 June 2015, attached herewith.
Although this year we have seen a few delays in the joint venture ('Joint Venture') with Kingsford Investment Groups (KIG) and Citigold, we firmly believe that this time has enabled us to enhance our team and continue to work towards the best outcome for the Company and ultimately its stakeholders.
The strengthened team at Citigold is looking forward to the year ahead and are dedicated to turning the gold deposit into a large scale mine with the initial target of 50,000 ounces per annum building to over 300,000 ounces of gold production per annum over time. In order to move back into gold production we continue to plan the resumption of mining gold at Charters Towers.
To achieve this goal the following are some of the activities carried out during the financial year:
-
A detailed strategic business plan (guided by Gibsons project management consultants).
-
Mine plan and schedule to commence the mining operation once the funding has finalised.
-
Designs and budgeting for the Central Mine, including the decline development extension, the main exhaust shaft, extraction slots in the mineralised zones and gold production.
-
Drilling and geophysics program which has yielded excellent results showing high grade drill intersections.
-
Development and planning using a low-cost methodology of gold production aimed at being an ultra-low cost gold producer.
Citigold incurred a net loss of just over $103 million during the 2015 Financial Year, including, a non-cash impairment of $96 million of its Capitalised Exploration, Evaluation and Development Expenditure. This was previously brought to account and reported in the December 2014 Half Year Financials. The net loss, before the impairment was just over $7 million.
The impairment is in accordance with accounting standards and derived in the assets of the Consolidated Group post the proposed commencement of the $72 million planned joint venture.
The Directors believe the net present value of the group's projects remains well above the carrying value of its Capitalised Exploration, Evaluation and Development Expenditure.
We have continued to reduce the office and corporate administration expenses during the 2015 financial year. The Net debt gearing ratio remains low at 7.7%. The research and development tax offset of $861,000 was of strong support to our innovation program.
During the period government charges continued to increase as did our financing cost.
The large production ready asset at Charters Towers requires a substantial investment each year to maintain and hold the asset. Therefore we are looking forward to moving the asset back towards gold production in the 2015-16 financial year
Citigold has a strong foundation and over many years has been building on this towards becoming a large and profitable gold producer. We believe that once the major funding has finalised, the realisation of becoming a large ultra-low cost gold producer is within reach.
We look forward to the upcoming Financial Year and reporting the successes of Citigold to all Stakeholders.
Mark Lynch - Chairman
Or visit the Company's website - www.citigold.com
Cautionary Note: This release may contain forward-looking statements that are based upon management's expectations and beliefs in regards to future events. These statements are subjected to risk and uncertainties that might be out of the control of Citigold Corporation Limited and may cause actual results to differ from the release. Citigold Corporation Limited takes no responsibility to make changes to these statements to reflect change of events or circumstances after the release
Citigold Corporation Limited Financial Report 2015
ABN 30 060 397 177
Table of Contents
Directors' Report 1
Auditors Independence Declaration 9
Consolidated statement of profit or loss and other comprehensive income 10
Consolidated statement of financial position 11
Consolidated statement of changes in Equity 12
Consolidated statement of cash flows 13
Notes to the Financial Statements 14
Directors' Declaration 39
Auditors Report 40
Directors' Report
The directors present their report together with the financial report of Citigold Corporation Limited and the consolidated financial report of the consolidated entity for the year ended 30 June 2015 and the auditor's report therein.
-
DIRECTORS
The names and the relevant details of Directors of the Company in office during or since the end of the financial year are as follows.
Current Directors
M J Lynch FAICD, MAusIMM Appointed 02/07/1993
Actively involved in gold exploration and mining for over 30 years. Mr Lynch has extensive hands- on experience in mine operations and management from the pegging of mining leases through to pouring gold bars. During his corporate career he has maintained a competitive focus on business efficiency centred on strategic planning and innovation. He has held the position of Director of the Queensland Resources Council for six years and is currently a Fellow of the Australian Institute of Company Directors and Member of the Australasian Institute of Mining and Metallurgy.
Executive Chairman, Member of Nomination, Remuneration, and Health, Safety, Environment and Risk Committees
J J Foley BD, LLB, BL (Dub)
Appointed 02/07/1993
Graduating in law from the University of Sydney in 1969, Mr Foley was admitted to practise as a barrister in New South Wales in 1971. He was called to the Irish Bar in 1989 and admitted as a Member of the Honourable Society of Kings' Inns in Dublin. Mr Foley has over 30 years' experience in the gold mining industry, has been a guest speaker at the World Gold Council in New York and is a past Director of the Australian Gold Council.
Non-Executive Director, Member of Audit and Finance, Nomination, Remuneration and Health, Safety, Environment and Risk Committees
A Panchariya
Appointed 22/9/2013
Mr Panchariya is active in private and investment banking fields. He was President of Euram Bank Asia Limited and has since taken his experience to emerging markets worldwide with a focus on Africa. This includes providing formal advice to Governments on infrastructure development, finance, mining and agriculture. He is currently the Consul General of Liberia to Dubai, UAE, the principal of Global Finance & Capital Limited, and a director of Al Brooge Securities LLC, Global Capital Advisors and Cardinal Capital Partners Limited.
Non-Executive Director. Member of Audit and Finance, Nomination and Remuneration Committees
C Towsey BSc(Hons), MSc, Dip Ed, FAusIMM, CP(Geo), MAIG Appointed 21/02/2014
Mr Towsey has worked in 26 countries in mining, exploration and OHSE auditing. He specialises in gold and base metals underground mining and exploration, with recent coal mining development and operational experience. He is a previous Director of the Qld Resources Council, and has held Chief Geologist, Exploration Manager, General Manager, COO and Managing Director positions in exploration, underground gold mining and drilling companies. He has also held the statutory positions of Site Senior Executive in gold and coal mines. Mr Towsey is a Fellow of the Australasian Institute of Mining and Metallurgy, a member of the Australian Institute of Geoscientists and a Chartered Professional (Geology).
Executive Director, Member Health, Safety, Environment and Risk Committee
Retired Directors
R Tan
Appointed 06/02/2013, Resigned 23/03/2015
Mr Tan, is the Acting CEO, General Counsel, Executive Director and Company Secretary of Singapore's SGX listed LionGold Corp Ltd, has 30 years corporate law experience and heads their legal and compliance affairs worldwide.
Company Secretary
Francis Rigby B.Eco, Adv. Dip. Financial Planning Appointed 21/08/2015
Mr. Rigby has a Bachelor of Economics, an Advanced Diploma in Financial Planning and is a member of the AFA (Association of Financial Advisers). As a professional financial adviser for the past 14 years he also played an integral part in the development of strategic business plans for organisations and individuals. He was the Responsible Manager for the business' AFSL (Australian Financial Services Licence), active in maintaining relevant legislative changes and integrating this into his business position, ensuring compliance. This skill translates well into the Corporate Secretary role. He is currently completing a Graduate Diploma in Applied Corporate Governance.
J Haley Company Secretary
Appointed 28/11/2013 Resigned 21/08/2015
Meetings of Directors
The number of directors' meetings (including board committees) held and the number of meetings attended by each director during the year ended 30 June 2015 was:
|
Board Meeting
|
Audit and Finance
|
Health, Safety, Environment and Risk
|
Remuneration
|
Nomination
|
|
A
|
B
|
A
|
B
|
A
|
B
|
A
|
B
|
A
|
B
|
|
M J Lynch
|
14
|
14
|
*
|
*
|
2
|
2
|
1
|
1
|
1
|
1
|
|
J J Foley
|
14
|
14
|
2
|
2
|
2
|
2
|
1
|
1
|
1
|
1
|
|
C Towsey
|
14
|
14
|
*
|
*
|
2
|
2
|
*
|
*
|
*
|
*
|
|
A Panchariya
|
14
|
8
|
2
|
0
|
*
|
*
|
1
|
0
|
1
|
0
|
|
R Tan
|
11
|
6
|
2
|
2
|
*
|
*
|
*
|
*
|
*
|
*
|
* Not a member of the relevant committee
Column A- Number of meetings held during the time the director held office or was a member of the relevant committee Column B- Number of meetings attended
Directors' interests
The relevant interest of each director in the shares and options issued by the companies within the consolidated entity and other related bodies corporate, as notified by the directors to the Australian Securities Exchange in accordance with s205G (1) of the Corporations Act, at the date of this report is detailed in the following table.
|
Director
|
Ordinary shares
|
Share Options
|
|
J J Foley
|
7,307,876
|
-
|
|
M J Lynch
|
88,347,084
|
-
|
|
C Towsey
|
1,032,880
|
-
|
|
A Panchariya
|
-
|
-
|
|
TOTAL
|
96,687,840
|
-
|
Remuneration of directors and senior management
Information about the remuneration of the directors and senior management is set out in the Remuneration Report of the Directors' Report.
-
PRINCIPAL ACTIVITIES
During the year the principal activities of the consolidated entity consisted of production, development and exploration of the Charters Towers goldfield. There has been no significant change in the nature of these activities during the year.
-
DIVIDENDS - CITIGOLD CORPORATION LIMITED
No amount has been paid or declared by way of dividend by the Company during the year. The directors do not recommend a dividend at this time.
-
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs on the consolidated entity during the financial year were as follows:
(a) An increase in ordinary shares in the Company from 1,495,764,906 to 1,613,950,553 as a result of:
|
Type of Issue
|
Issue Price
|
Number of shares Issued
|
|
Share placement
|
$0.015
|
20,000,000
|
|
Share placement
|
$0.0175
|
48,142,861
|
|
Share placement
|
$0.014
|
7,735,094
|
|
Share placement
|
$0.013
|
42,307,692
|
Net cash received was used to continue the exploration, development and general activities of the Company. See Note 17 of the Financial Statements.
-
SHARE OPTIONS
Details of unissued shares or interest under options as at the date of this report are:
|
Issuing Entity
|
Number of options
|
Exercise Price
|
Expiry date of Option
|
|
Citigold Corporation Limited
|
20,000,000
|
$0.03
|
20 June 2016
|
-
POST BALANCE DATE EVENTS
Since the end of the financial year the Company issued 112,000,000 shares to raise working capital.
-
REVIEW OF OPERATIONS
During the 2015 Financial Year, the Company sold 984 ounces of gold and 1,204 ounces of silver before suspending gold production to focus on detailed mine planning. This resulted in average realised gold price of $1,382, down from the 2013-2014 average realised price $1,425 per ounce, and the 2012-2013 year average realised gold price of A$1,536 per ounce. The average realised silver price in 2014-2015 was $20.36 per ounce.
Royalties were paid to the Queensland State Government on the revenue from gold and silver totalling $64,176. Highlights included
-
$1.4 million revenue from gold and silver sales (984 ounces of gold and 1,204 ounces of silver sold).
-
Citigold has completed the bulk sampling program (open pit prefeasibility study) at Imperial, which has been profitable.
-
Ongoing drilling and geophysics program showing excellent results
-
Key designs for the Central Mine completed, budgeted and scheduled The project has advanced in many areas including:
-
Refurbishment and installation of the downhole borehole dewatering pump
-
Progressive rehabilitation of decommissioned areas at the Black jack processing plant
-
Redesign and budget of main exhaust shaft, new vertical ventilation & emergency egress shaft, dewatering system and Central Decline development.
-
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Likely developments in the operations of the consolidated entity are:
-
the continuation of exploration activity aimed at increasing resources and reserves,
-
the continuation of mining activity at Charters Towers.
Additional comments on expected results are included in the Review of Operations.
-
INDEMNIFICATION AND INSURANCE
During the financial year the Company paid premiums to insure all Directors and Officers of the Company against claims brought against the individual while performing services for the Company and against expenses relating thereto, other than conduct involving a wilful breach of duty in relation to the Company. Under the terms and conditions of the insurance contract, the nature of liabilities insured against and the premium paid cannot be disclosed.
The Company has not otherwise, save as enshrined in the Company's Constitution, during or since the end of the financial year, in respect of any person who is or has been an officer of the Company:
-
indemnified or made any relevant agreement for indemnifying against a liability, including costs and expenses in successfully defending legal proceedings; or
-
paid or agreed to pay a premium in respect of a contract insuring against a liability from the costs or expenses to defend legal proceedings.
-
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings
-
ENVIRONMENTAL REGULATIONS
Entities in the consolidated entity are subject to significant environmental regulation in respect to its exploration and mining activities in gold.
The organisation has developed criteria to determine areas of 'particular' or 'significant' importance, with regard to environmental performance. These are graded 1 to 4 in terms of priority.
Level 1 incident - major non compliance with regulatory requirements resulting in potential political outcry and significant environmental damage of both a long and short term nature.
Level 2 incident - significant non compliance resulting in regulatory action, however, environmental damage is only of a short term nature.
Level 3 incident - minor non compliance, however, regulatory authority may be notified.
|
Level 1
|
Level 2
|
Level 3
|
Level 4
|
|
Incidents
|
-
|
-
|
-
|
-
|
Level 4 incident - non-compliance with internal policies and procedures. The incident is contained on site. In the last year the following incidents have occurred.
The Company has an internal reporting and monitoring system with regard to environmental management on the site. The Company employs an environmental officer to monitor all water quality, noise and air quality issues as well as liaise with the community on activities that may impact on the local area.
-
AUDIT/NON-AUDIT SERVICES AND AUDITOR INDEPENDENCE
The fees paid or payable for services provided by the auditor of the Company are set out in Note 5 of the Financial Statements. The Auditor's independence declaration is included on page 9.
-
REMUNERATION REPORT - Audited
The remuneration report, which has been audited, outlines the director and executive remuneration arrangements for the consolidated entity and the company, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
The remuneration report is set out under the following main headings:
-
Principles used to determine the nature and amount of remuneration
-
Details of remuneration
-
Service agreements
-
Additional information
-
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's and company's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and conforms to the market best practice for delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward governance practices:
-
competitiveness and reasonableness
-
acceptability to shareholders
-
performance linkage / alignment of executive compensation
-
transparency
While the Board has overall responsibility for the executive structure and outcomes, it has appointed a Nomination and Remuneration Committee for advice and makes recommendations on remuneration matters.
The performance of the consolidated entity and company depends on the quality and dedication of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance, dedicated and high quality personnel.
The Remuneration Committee annually considers the appropriate levels and structure of remuneration for Directors and Key Management Personnel relative to the Company's circumstances, size and nature of business, as well as company performance. This is done by reference to independent data and advice.
The Company competes for labour in the broader resources industry. In selecting, retaining and remunerating directors and executives the committee considers the appropriateness taking into account the corporate and operational regulatory environment that a mining enterprise operates in these days in Australia that places substantial and ever increasing burdens of responsibility upon these officers of the Company in addition to the usual business performance.
Reward structures are transparent and are aligned with shareholders' interests by:
-
being market competitive to attract and retain high calibre individuals motivated and skilled in the business of the Company;
-
recognising the contribution of each senior executive to the continued growth and success of the Company;
-
encouraging, recognising and rewarding high individual performance; and
-
ensuring that long term incentives are based on total shareholder return outperformance over a period of three years.
In accordance with best practice corporate governance, the structure of non-executive directors and executive remunerations are separate.
Non-Executive Directors Remuneration
Non-executive directors are paid fixed fees. In addition, Non-Executive directors may also be remunerated for additional service, for example, if they take consulting work on behalf of the company outside the scope of their normal Directors duties. Fees and payments to non-executive directors are set to attract individuals of appropriate calibre and reflect the demands which are made on, and the responsibilities of, the directors. Non-Executive directors' fees and payments are reviewed annually by the Remuneration Committee and determined based on comparative roles in the external market.
In order to maintain their independence and impartiality, the fees paid to Non-Executive Directors are not linked to the performance of the Company. Non-Executive Directors have no involvement in the day to day management of the Company.
ASX listing rules requires that the aggregate Non-Executive Directors remuneration shall be determined periodically by a general meeting. The most recent determination was at the Annual General Meeting held on 17 November 2010, where the shareholders approved an aggregate remuneration of $400,000.
Executive Remuneration
The consolidated entity and company aims to reward executives with a level and mix of remuneration based on their position and responsibility, which is both fixed and variable.
The executive remuneration and reward may consist of the following
-
Fixed remuneration
-
Variable performance incentives - Short term incentives - Long term incentives The combination of these comprises the executive's total remuneration.
Fixed Remuneration
Fixed remuneration consist of base salary, superannuation, long service leave and non-monetary benefits are reviewed annually by the Remuneration Committee, based on individual and business unit performance, the overall performance of the consolidated entity and comparable market remunerations.
Executives can receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it does not create any additional costs to the consolidated entity and adds additional value to the executive.
Variable Performance Incentives
Short-Term Incentives
The short-term incentives program is designed to align the targets of the business units with the targets of those executives in charge of meeting those targets and to improve company's short term and long term performance. These incentives are meant to reward executive only when performance targets are met to increase shareholders value. They are granted to executives based on individual contribution to profit, production costs, leadership contribution and safety outcomes. Short-term incentives are currently paid in cash. No short-term incentives were paid during the reporting period.
Long- Term Incentives
The long-term incentives include performance rights or share-based payments. No options were issued or exercised by any executive during the reporting period. No long-term incentives were paid during the reporting period. The Remuneration Committee may revisit the long-term equity-linked performance incentives specifically for executives during the year ending 30 June 2016.
The majority of bonus and incentive payments are at the discretion of the Nomination and Remuneration Committee.
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Details of remuneration
Details of the remuneration of the directors, other key management personnel (defined as those who have the authority and responsibility for planning, directing and controlling the major activities of the consolidated entity) and specified executives of Citigold Corporation Limited are set out in the following tables.
The following persons were Directors and/or key management personnel of the Group during the year:
M.J. Lynch (Executive Chairman)
J.J. Foley (Non Executive Director)
A. Panchariya (Non Executive Director)
R. Tan (Non Executive Director Resigned 23 March 2015)
C. Towsey (Executive Director)
M.B. Martin (Chief Executive Officer - Resigned 20 March 2015)
3) Payments to Directors and Key Management Personnel
|
Short-term employee benefits
|
Post- employment benefits
|
Share- based payments
|
|
2015
|
Cash salary and fees
|
Cash Bonus
|
Non- monetary benefits
|
Related party Payments1
|
Superannuation
|
Options
|
Total
|
|
Directors
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
J J Foley
|
82,380
|
-
|
7,826
|
90,206
|
|
M J Lynch
|
-
|
-
|
-
|
460,428
|
-
|
-
|
460,428
|
|
C Towsey
|
291,419
|
-
|
-
|
30,142
|
27,685
|
-
|
349,246
|
|
Other Key Management Personnel
|
|
M B Martin*
|
323,838
|
-
|
-
|
-
|
14,996
|
-
|
338,834
|
|
697,637
|
-
|
-
|
490,570
|
50,507
|
-
|
1,238,714
|
|
* resigned 20 March 2015
|
|
Short-term employee benefits
|
Post- employment benefits
|
Share- based payments
|
|
2014
|
Cash salary and fees
|
Cash Bonus
|
Non-
monetary benefits
|
Related
party Payments1
|
Superannuation
|
Options
|
Total
|
|
Directors
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
|
J J Foley
|
82,380
|
-
|
-
|
23,746
|
7,620
|
-
|
113,746
|
|
M J Lynch
|
-
|
-
|
-
|
470,072
|
-
|
-
|
470,072
|
|
C Towsey
|
49,818
|
-
|
-
|
9,557
|
4,608
|
-
|
63,983
|
|
B White
|
85,183
|
-
|
-
|
-
|
7,879
|
-
|
93,062
|
|
Other Key Management Personnel
|
|
M B Martin
|
392,625
|
-
|
-
|
-
|
19,994
|
-
|
412,619
|
|
610,006
|
-
|
-
|
503,375
|
40,101
|
-
|
1,153,482
|
1The related party payments are payments to entities related to the Directors and/or Key Management Personnel for work carried out by that entity or the hire of equipment owned by that entity.
C. Service Contracts
Executive Chairman
Contract Term: 5 years, Commenced January 2011
Base Salary: $468,830, inclusive of superannuation, may be reviewed annually by the Remuneration committee
Termination Payments: Payment on early termination by the Group, other than for gross misconduct, equal to 1 years of employment.
Chief Executive Officer
Contract Term: Commenced December 2005 resigned 20 March 2015
Base Salary: $445,000, inclusive of superannuation, may be reviewed annually by the Remuneration committee.
Termination Payments: Payment on early termination by the Group, other than for gross misconduct, equal to 1 year of base salary.
Executive Director
Contract Term: Ongoing, Commenced April 2014
Base Salary: $350,000, inclusive of superannuation, may be reviewed annually by the Remuneration committee.
Termination Payments: Payment on early termination by the Group, other than for gross misconduct, equal to 3 month's base salary.
This concludes the remuneration report, which has been audited. Share options exercised during the current year
No options were exercised during the year by Key Management Personnel or Executives of the consolidated entities.
|
This report is made in accordance with a resolution of Directors. For and on behalf of the Board
Dated at Brisbane this 29 day of September 2015
|
|
Mark Lynch Chairman
|
|
|