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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Wolf Minerals | LSE:WLFE | London | Ordinary Share | AU000000WLF3 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.40 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMWLFE
RNS Number : 2060S
Wolf Minerals Limited
29 September 2017
29 September 2017
Wolf Minerals Limited
("Wolf" or the "Company")
Publication of Annual Report and Annual Financial Statements
Specialty metals producer, Wolf Minerals Limited (ASX: WLF, AIM: WLFE) ("Wolf" or "the Company") wishes to advise that its Annual Report for the 12 months ending 30 June 2017 are enclosed and are also available for download from the Company's website, www.wolfminerals.com.
29 September 2017
Wolf Minerals Limited
Publication of Annual Report and Annual Financial Statements
Specialty metals producer, Wolf Minerals Limited (ASX: WLF, AIM: WLFE) (Wolf or the Company) wishes to advise that its Annual Report and Annual Financial Statements for the 12 months ending 30 June 2017 are enclosed and also available for download from the Company's website, www.wolfminerals.com.
Wolf Minerals Limited
(ABN: 11 121 831 472)
and Controlled Entities
Annual Report
For the Financial Year Ended 30 June 2017
CONTENTS
CORPORATE DIRECTORY
CHAIRMAN'S LETTER
DIRECTORS' REPORT
AUDITOR'S INDEPENCE DECLARATION
DIRECTORS' DECLARATION
INDEPENT AUDITOR'S REPORT TO THE MEMBERS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASHFLOWS
NOTES TO THE FINANCIAL STATEMENTS
CORPORATE DIRECTORY
NON-EXECUTIVE CHAIRMAN
John Hopkins OAM
INTERIM MANAGING DIRECTOR
Richard Lucas
NON-EXECUTIVE DIRECTORS
Ronnie Beevor
Nick Clarke
Chris Corbett
Don Newport
Michael Wolley
ALTERNATE DIRECTORS
Jacob Roorda
INTERIM CHIEF FINANCIAL OFFICER
Stephen Hill
COMPANY SECRETARY
Pauline Carr
PRINCIPAL & REGISTERED OFFICE
Suite 25, Level 3, 22 Railway Road
SUBIACO WA 6008
AUDITORS
PKF Mack
Level 4, 35 Havelock Street
WEST PERTH WA 6005
LAWYERS
Hogan Lovells
Level 13, St Georges Square
225 St Georges Terrace
PERTH WA 6000
SHARE REGISTER
Security Transfer Australia
770 Canning Hwy
APPLECROSS WA 6153
https://www.securitytransfer.com.au/index.cfm
UK DEPOSITORY
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 6ZZ
www.computershare.com
SECURITIES EXCHANGE LISTINGS
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
Code: WLF
Alternative Investment Market
London Stock Exchange
Code: WLFE
BANKERS
National Australia Bank
50 St Georges Terrace
PERTH WA 6000
WEBSITE
www.wolfminerals.com
CHAIRMAN'S LETTER
The 2017 financial year has seen an important transition for Wolf Minerals Limited (Wolf or the Company) with its core project, the Drakelands open pit mine (Drakelands) at the Hemerdon tungsten and tin project (the Project) completing commissioning and ramping up production during its first full year of operation.
Wolf remains committed to developing Drakelands in a corporate and socially responsible manner, with considerable efforts being made to ensure community, safety and environmental considerations are addressed positively and proactively for the benefit of all stakeholders.
The Company has continued to develop its understanding of the orebody and the performance of the processing plant, including completion of a drilling programme. The drilling programme provided both further clarity on the ore characteristics, as the mine moved through the softer oxide levels into harder granite, and samples for metallurgical analysis necessary to forecast metal recoveries. The updated geo-met modelling highlighted potential improvements in the processing plant, culminating in the development of an operating turnaround plan in May 2017 intended to achieve sustainable production at Drakelands. The initial trial period of the operating turnaround plan in June 2017 provided encouraging results, with several production indicators demonstrating immediate improvements. The Managing Director's review of operations discusses the operating turnaround plan in greater detail.
In similar fashion, the tungsten market improved slowly during the first half of the year before building momentum at the end of the financial year. In July 2016, the price of ammonium paratungstate (APT), the primary pricing point for tungsten, was US$185/mtu (metric tonne unit), and remained steady through to December 2016. However, by June 2017 the price had increased to US$220/mtu, a 19% improvement, and has continued on a strong upward trend since then to reach US$310/mtu in September 2017. Whilst demand for tungsten was steady throughout the year, the recent price rise is a result of reduced supply from China, the world's largest producer and consumer of tungsten, which has been constrained by increasing costs of production and environmental management. The very limited new supply of tungsten coming to market in recent years is expected to support prices at higher levels as demand continues to grow. The Board is encouraged by the recent price strength and the potential for longer term market equilibrium at these higher prices, providing Wolf with the opportunity to maximise its strategic value.
Whilst the tungsten price remained low for much of the year, it was necessary in October 2016 for Wolf to strengthen its balance sheet by restructuring its senior debt facilities and establishing a bridge loan facility with Resource Capital Fund VI L.P. (along with Resource Capital Fund V L.P. and its associates, collectively RCF) to support working capital requirements. As at September 2017, a total of GBP45 million of additional funding had been provided through the bridge loan facility to ensure the Company is able to deliver the operating turnaround plan and take advantage of the improving tungsten market. The Board acknowledges the ongoing contributions of RCF, the Company's lenders and major offtake customers to ensure Wolf has a strong platform to build a successful future.
On behalf of the Board I also thank our interim Managing Director, Richard Lucas, and his teams in Perth and in the UK for their continuing efforts to establish Wolf as an important producer in the tungsten market. Further, I acknowledge the contribution during the year from Russell Clark and wish him the very best for his future endeavours, and welcome Calum Semple as Chief Operating Officer and Stephen Hill as interim Chief Financial Officer.
We look forward to a successful year ahead, with Wolf realising its potential as a significant tungsten producer in the western world.
Yours sincerely
Mr John Hopkins OAM
Chairman of the Board
DIRECTORS' REPORT
Your Directors present their report on Wolf Minerals Limited (Wolf or the Company) and its controlled entities (the Group) for the financial year ended 30 June 2017.
DIRECTORS
The names of Directors in office at any time during or since the end of the financial year are:
John Hopkins OAM Non-Executive Chairman
Russell Clark Executive Managing Director (resigned 14 May 2017)
Richard Lucas Interim Managing Director (appointed 8 May 2017)
Ronnie Beevor Non-Executive Director Nick Clarke Non-Executive Director Chris Corbett Non-Executive Director Don Newport Non-Executive Director Michael Wolley Non-Executive Director
Jacob Roorda Alternate Director for Mr Wolley (appointed 29 August 2016)
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
Principal activities
The principal activity of the Group during the financial year was tungsten and tin mining, conducted through the wholly owned subsidiary, Wolf Minerals (UK) Limited.
There were no significant changes in the nature of the Group's principal activities during the year.
Operating results
The consolidated loss of the Group after providing for income tax amounted to $74,536,641 (2016: $63,094,075).
Dividends paid or recommended
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report.
MANAGING DIRECTOR'S REVIEW OF OPERATIONS
This year has seen a number of changes during the first full year of operations at Drakelands, with Wolf rising to the challenge of becoming a leading tungsten producer.
Sustainability
Wolf's corporate values emphasise the importance of safety, the environment and community engagement, with a commitment to continuous improvement for the benefit of all stakeholders.
There are over 250 people working at Drakelands on a daily basis, including 100 contractors, many of whom live in the local area. The Company is committed to supporting employment and economic growth in the wider community, with many services sourced from local businesses. Wolf is also in regular contact with community leaders, including Parish Councils and local business groups and agencies, to provide updates on activity at the site. The Company has most recently sponsored a 'Wolf Academy' in partnership with a local secondary school to support careers advice and guidance for young people.
The safety of all people working with or visiting Wolf is of core importance and a critical driver of success. The Company achieved an injury free period of 169 days, however the Lost Time Injury Frequency Rate (LTIFR) increased from 4 to 12 over the year (with 11 lost time incidents, up from three in 2015/16). In response, the Company has renewed its emphasis on safety across all areas of the business and, as part of its intensified focus on a safety-first philosophy, has recruited additional safety specialists, provided further training and introduced a behavioural based program to encourage greater personal awareness and preventative action amongst all team members.
DIRECTORS' REPORT (CONTINUED)
Sustainability (cont'd)
Following an annual audit in May 2017, Wolf retained the ISO 14001 certification for its Environmental Management System for the third successive year. Certification of the Environmental Management System at Drakelands provides confidence that the Company has procedures and practices in place to manage the environment to international standards. There have been no significant environmental incidents during the year.
Wolf's application to extend the Drakelands planning permission expiry date from 2021 to 2036 and to implement permanent seven day operational working was approved in November 2016. This approval has the potential to increase production and reduce unit costs, in addition to generating additional employment opportunities and helping to ensure the longevity of the operation. The revised planning permission was subsequently issued following agreement of a Unilateral Undertaking which included the additional monitoring requirements of Wolf.
Work has continued to focus on reducing noise from the processing plant, in particular low frequency noise (LFN), to minimise the impact on the community. Wolf has established a community working group to communicate the progress of technical solutions being pursued on LFN in an action plan agreed with the Environment Agency (EA). The working group is chaired by an independent community mediator and includes representatives from the EA and local residents. The Company values its relationship with the community and is committed to delivering a comprehensive LFN solution whilst meeting operational requirements during this important period of production improvements. Subsequent to the year end, the Company implemented temporary changes to our weekend operating arrangements while we work through technical solutions to address this issue.
Ground vibrations and noise levels from blasting remain well below prescribed levels, however Wolf continues to work with an independent expert in the field of blasting, along with County, District and Parish Councils on best practice blast design to minimise impact on the community.
Production
Mining
The open pit mining activities at Drakelands are undertaken using a mining contractor, CA Blackwell owned by Hargreaves Services plc. Hargreaves is an AIM listed supplier of solid fuels and bulk material logistics and is one of the largest developers and operators of surface mines in the UK.
Mining has continued to drop the working levels in the open pit, with a corresponding improvement in harder ore feed for the processing plant. The Company completed a resource definition drilling program to provide more detailed information on the next two years of ore feed, which has been utilised to enhance the ore body geological model and further optimise the mine plan.
A total of 2,266,958 tonnes of ore and 1,440,921 bank cubic metres (BCM) of waste was mined during the year with the open pit dropping approximately 15 metres. There are 4-5 blasts being undertaken each week, reflecting the transition into harder granite. The particle size distribution within the ore feed is improving, assisting efforts in the processing plant to enhance recoveries, and the reconciliation of the grade of ore (%WO3) extracted to date continues to be positive when compared to the grade expected from the ore reserve.
Good progress has been made at the Mining Waste Facility (MWF) throughout the year with a total of 1.9 million cubic metres of material placed to provide the necessary storage capacity. Construction of a new public road to replace a section of Lee Moor Road located at the base of the MWF has been completed and was opened in April 2017, allowing the next stage of the MWF to commence development.
Processing
The processing plant at Drakelands was developed through an Engineering-Procurement Construction (EPC) contract with GR Engineering Services (GRES). Run time and recovery were identified as the fundamental areas for further performance improvements during the year, with the change of ore feed into the processing plant having a positive impact on run time in the crushing and screening circuit. However, recovering fine tungsten in the ore and generated in circuit, along with downstream processing of recovered fines, remain key challenges.
DIRECTORS' REPORT (CONTINUED)
Production (cont'd)
An operating turnaround plan was developed, utilising a range of leading specialists on gravity recovery methods and refinery systems to obtain a consensus on effective solutions to reach or exceed name plate production. The operating turnaround plan was centred upon three trial periods in June, August and October 2017, initially targeting baseline production improvements from the current processing plant, followed by specific equipment changes. The first trial period in June provided encouraging production results through improved operating procedures and process control.
The operating turnaround plan is on schedule, with further changes to come targeting availability and recoveries in the dense media separation and gravity fines circuits and availability and throughput in the refinery.
The processing plant treated 1,918,170 tonnes of ore during the year at an average tungsten grade of 0.22% WO3 and produced 112,270 mtu of tungsten in concentrate and 194 tonnes of tin in concentrate.
Corporate
On 7 April 2017, the Board announced a leadership transition with the appointment of Company CFO and executive team member, Richard Lucas, as interim Managing Director to replace Russell Clark. The Board also announced the appointment of Calum Semple, a highly experienced chartered engineer, on a short-term contract based into the new role of Chief Operating Officer.
Subsequently, Mr Lucas has relocated to the UK and is based in Plymouth. These changes have provided a greater onsite executive team commitment to ensure the long term successful operation at Drakelands.
Senior Debt Restructure and Bridge Loan Facility
In October 2016, the Company agreed a standstill and restructure of the Senior Debt The standstill provides that a limited number of events of default shall apply under the Senior Debt, along with certain waivers of, and amendments to, the Senior Debt conditions for any non-compliance and grants relief from financial and other covenants. The terms of the debt restructure provide that all Senior Debt principal repayments are deferred until January 2018 and the tenor of the Senior Debt is extended until June 2023.
In conjunction with the debt restructure, the Company agreed a GBP20 million 12 month secured bridge loan facility (Bridge Loan Facility) with Resource Capital Fund VI L.P. (RCF VI), a major shareholder and an associate of Wolf's other major shareholders, Resource Capital Fund V L.P. and RCF V Annex Fund. After further negotiations, the Bridge Loan Facility was subsequently increased to GBP30 million in March 2017, GBP40 million in June 2017 and GBP45 million in September 2017.
During its term, the Bridge Facility will be fully secured and rank pari passu with the Senior Lenders on substantially the same form and terms as existing under the Senior Debt. Interest may be paid in cash or capitalised each quarter at Wolf's discretion.
The Company may pre pay the Bridge Facility in certain limited circumstances, but if not prepaid at the conclusion of the 12 month term, the Bridge Facility will mandatorily switch to a three year subordinated convertible loan, if certain conditions precedent are satisfied, or a three year subordinated loan if those conditions are not satisfied.
Expectations for 2018
The ramp up of the Project to its nameplate capacity is continuing and our initial focus in the 2018 financial year will be to complete the operating turnaround plan to improve availability, throughput and recoveries in a safe and sustainable manner. The additional experience and knowledge gained through this process will be invaluable for developing further operational improvements in the processing plant.
The site is also investigating additional opportunities to improve the mine plan and ore feed quality through further optimisation programs, along with cost reduction initiatives across the business.
DIRECTORS' REPORT (CONTINUED)
Expectations for 2018 (cont'd)
We are also working with the EA and the community to resolve LFN and return to 7 days per week operations to maximise the production capability at Drakelands, lower the costs of production and take advantage of the improving tungsten market.
The Company will secure further funding of GBP10 million to support the operating turnaround plan and progress further plans to meet any remaining funding requirements over the next 12 months, including potential opportunities to improve operational cashflows through additional revenue streams, cost reduction initiatives and release of cash escrowed amounts on the balance sheet. In addition, rescheduling of the Senior Debt principal repayments is to be addressed with the Lenders to ensure ongoing compliance with Senior Debt financial ratios.
DIRECTORS' REPORT (CONTINUED)
RESERVES AND RESOURCES STATEMENT 2017
The 2017 Ore Reserves and Mineral Resources of Wolf Minerals Limited are summarised in the table below along with the 2016 Ore Reserves and Mineral Resources for comparison.
The mining of ore throughout the year has focused on blending from the northern and southern ends of the pit in order to provide consistent feed for the processing plant. Both the Mineral Resource and Ore Reserves have decreased since the previous estimate at 30 June 2016 as a result of depletion for mine production.
Mineral Resources and Ore Reserves are categorised in accordance with the Australasian Code for Exploration Results, Mineral Resources and Ore Reserves of 2012 (JORC Code, 2012). Estimated Measured and Indicated Mineral Resources include those Mineral Resources modified to produce the estimated Ore Reserves. Mineral Resources which are not included in the Ore Reserves did not meet the required economic viability hurdle at the time of last review.
Hot Features
Premium
2017 2016
---------------- -------------------- --------------------
Measured 36.4 0.14 0.02 38.2 0.18 0.02
Indicated 18.7 0.13 0.02 18.7 0.16 0.02
Subtotal:
(Meas+Ind) 55.1 0.13 0.02 56.9 0.17 0.02
---------------- ------ ----- ----- ------ ----- -----
Inferred 86.6 0.11 0.02 86.6 0.14 0.02
Total: (M+I+I) 141.7 0.12 0.02 143.5 0.15 0.02
---------------- ------ ----- ----- ------ ----- -----
Proved 24.4 0.18 0.03 26.2 0.19 0.03
Probable 7.8 0.15 0.02 7.8 0.15 0.02
Total: 32.2 0.17 0.03 34.0 0.18 0.03
---------------- ------ ----- ----- ------ ----- -----
All figures reported above a 0.063% W0(3) cut-off, table subject to rounding errors.
A detailed statement of the Mineral Resources and Ore Reserves can be found in the ASX announcement dated 25 March 2015. Wolf confirms in reproducing the Mineral Resources and Ore Reserves in this subsequent report, that it is not aware of any new information or data that materially affects the information included and all the material assumptions and technical parameters underpinning the estimates in this report continue to apply and have not materially changed.
CORPORATE GOVERNANCE
Wolf Minerals Limited and its controlled entities are committed to robust corporate governance practices which are appropriate to its size and life stage and which facilitate the Group's long term performance and sustainability as well as protect and enhance the interests of our shareholders.
We regularly review our governance arrangements and monitor developments in market practice, expectations and regulation.
The Group supports the 3rd Edition of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations and has prepared a Corporate Governance Statement which discloses the extent to which the Company has followed these recommendations.
A copy of the Corporate Governance Statement can be found on the Company's website at http://www.wolfminerals.com.au/irm/content/corporate-governance.aspx
DIRECTORS' REPORT (CONTINUED)
INFORMATION ON DIRECTORS
Mr John Hopkins - Non Executive Chairman (Age 67
OAM years)
Qualifications - LLB, FAICD
Experience - Mr Hopkins is a professional company
director and chairman and joined
the Wolf Board in 2010. He is a
graduate in law of the University
of Western Australia and has been
admitted to practice as a barrister
and solicitor for more than 40
years. He is also a Fellow of the
Australian Institute of Company
Directors. In 2015 Mr Hopkins was
awarded the Medal of the Order
of Australia (OAM) for his services
to the minerals and resources sector.
Mr Hopkins has been a board member
or chairman of more than 20 public
listed companies across Australia
and Canada since 1985. Many of
these positions have seen him involved
in the financing and development
of gold, base metal, energy, mineral
sands and other resource projects
in Australia and overseas.
Interest in Shares - 1,243,097 fully paid Ordinary Shares.
and Options
Directorships - Mr Hopkins is currently the Non
held in other Executive Chairman of Universal
listed entities Coal Plc, an ASX listed resources
company.
His recent former listed company
directorships include Alara Resources
Ltd (from 2013 to 2015).
In the not for profit sector he
has been Chairman of Golf Australia
Ltd (the national governing body)
since 2011.
Mr Richard Lucas Interim Managing Director (Age
42 years)
Qualifications BCom, Chartered Accountant
Experience Mr Lucas was appointed as Interim
Managing Director on 7 April 2017
and joined the Board as a Director
on 8 May 2017.
Mr Lucas is a Chartered Accountant
with over 18 years of financial
experience in various sectors,
including mining, construction,
property development and professional
services sectors. Since joining
Wolf in 2011 as the Company's Chief
Financial Officer, Mr Lucas has
established the Group's integrated
finance function and has been instrumental
in managing all elements of the
Company's equity financings, relationships
with off-takers as well as co-ordinating
and managing the Company's debt.
Prior to joining Wolf, Mr Lucas
reached Director level at PwC and
was seconded to Lihir Gold as Commercial
Manager where he managed the accounting
and finance function. He was more
recently with the Geotech Group
as Chief Financial Officer.
Interest in Shares, 75,467 fully paid Ordinary Shares.
Options and Rights 1,724,673 Performance Rights
DIRECTORS' REPORT (CONTINUED)
INFORMATION ON DIRECTORS (continued)
Directorships held Mr Lucas is not a Director of any
in other listed other listed companies.
entities
Mr Ronald (Ronnie) - Non Executive Director (Age 70
Beevor years)
Qualifications - B.A. Hons (Oxon)
Experience - Mr Beevor joined the Board in September
2013 and has had more than 30 years'
experience in investment banking,
including being the Head of Investment
Banking at NM Rothschild & Sons
(Australia) Limited between 1997
and 2002.
During his career Mr Beevor has
had an extensive involvement in
the natural resources industry,
both in Australia and internationally.
He has significant experience working
with companies transitioning from
exploration and development to
construction and production.
Mr Beevor qualified as a Chartered
Accountant in London. He is Chairman
of the Company's Audit, Risk and
Compliance Committee, Chairman
of its Remuneration Committee and
a member of its Nomination Committee.
Interest in Shares - 804,552 fully paid Ordinary Shares.
and Options
Directorships held - Mr Beevor is currently Non Executive
in other listed Chairman of Bannerman Resources
entities Limited and a Director of MZI Resources
Limited. He is also a Director
of Riversdale Resources Limited,
an unlisted public company.
His former recent listed company
directorships include Unity Mining
Limited (from 2002 until 2015).
Mr Nick Clarke - Non Executive Director (Age 65
years)
Qualifications - C Eng. , ACSM, MIMMM
Experience - Mr Clarke joined the Board in January
2014 and has 40 years of mining
experience, including 16 years
spent within senior management
positions in production and technical
services in South Africa, Ghana
and Saudi Arabia. He served as
the Managing Director of Oriel
Resources plc until its acquisition
by OAO Mechel for $1.5 billion
in 2008. From 1994 to 2004, he
was managing director at Wardell
Armstrong International Ltd, where
he managed numerous multidisciplinary
consulting projects in the resource
sector.
Mr Clarke is currently the Executive
Chairman of London AIM listed Central
Asia Metals plc, a copper producing
company with assets in Kazakhstan,
Mongolia and Chile.
Mr Clarke is a graduate of Camborne
School of Mines and a Chartered
Engineer and was named CEO of the
year at the Mining Journal outstanding
achievements awards in 2013.
DIRECTORS' REPORT (CONTINUED)
INFORMATION ON DIRECTORS (continued)
Interest in Shares - 454,552 fully paid Ordinary Shares.
and Options
Directorships held - Mr Clarke is currently the Executive
in other listed Chairman of AIM listed Central
entities Asia Metals plc. Other recent former
listed company directorships include
Columbus Copper Corporation (from
2010 to 2015).
Mr Chris Corbett - Non Executive Director (Age 43
years)
Qualifications - BEng (Hons Mech), BCom, GradDipAppFin,
GradDipMine, CPEng
Experience - Mr Corbett has more than 20 years'
experience in mining, corporate
business development and investment
management. He joined the Wolf
Board in 2009.
He is currently employed by Resource
Capital Funds, having gained prior
experience in mine development,
production and construction with
contractor Byrnecut Mining Pty
Ltd and corporate and divisional
business development roles with
Wesfarmers Limited.
Mr Corbett is a member of Engineers
Australia and the Australian Institute
of Company Directors. He is a graduate
of the University of Western Australia
with degrees in engineering and
commerce, and has postgraduate
qualifications in mining and applied
finance.
Interest in Shares - Nil.
and Options
Directorships held - Mr Corbett does not currently hold
in other listed any other listed company directorships.
entities
Mr Don Newport - Non Executive Director (Age 63
years)
Qualifications - ACIB, CDipAF
Experience - Mr Newport brings a wealth of mining
finance experience to the company.
He is based in the UK and has over
35 years of banking experience,
of which 25 years were spent in
the mining and metals sector.
Mr Newport retired at the end of
2008 as the head of Standard Bank's
Global Mining Finance Business.
Prior to moving to Standard Bank,
he led the Barclays Capital Mining
Sector Team. He has led or been
closely associated with a number
of significant mining corporate
and project financings and has
undertaken a variety of financial
advisory roles.
Mr Newport is an Associate of the
Chartered Institute of Bankers
and holds the Certified Accountant's
Diploma in Accounting and Finance.
He has been a Director of the Company
since 2009.
Interest in Shares - 454,552 fully paid Ordinary Shares.
and Options
Directorships held - Mr Newport does not currently hold
in other listed any other listed company directorships.
entities
DIRECTORS' REPORT (CONTINUED)
INFORMATION ON DIRECTORS (continued)
Mr Michael Wolley - Non Executive Director (Age 57 years)
Qualifications - BE (Hons) Chemical and Materials Engineering, M Mgmt
Experience - Mr Wolley has 15 years' experience with Mobil Oil
Australia in a range of roles including engineering,
operations, strategic planning and business development
in Australia and New Zealand. He joined the Wolf
Board in June 2013.
In 1995, he left Mobil to pursue opportunities in
Asia Pacific and worked in a number of senior executive
roles in the manufacturing and industrial sectors
including a period as President BlueScope Steel China.
In 2007, Mr Wolley returned to the resources sector
as Chief Operating Officer for Lynas Corporation,
and subsequently into the gold sector where he held
senior roles in several gold development businesses.
Mr Wolley currently holds the position of Vice President
Minerals for the Todd Corporation. He is a member
of both the Australian and New Zealand Institutes
of Company Directors.
Mr Wolley holds a first class honours degree in chemical
and materials engineering from the University of
Auckland, and a Masters of Management from Macquarie
Graduate School of Management.
Interest in Shares - Nil.
and Options
Directorships - Mr Wolley is a Non Executive Director of ASX listed
held in other iron ore developer, Flinders Mines Limited.
listed entities Mr Wolley's recent former listed company directorships
include Red Mountain Mining Limited (ceased 2016).
Mr Jacob Roorda - Alternate Director for Mr Michael Wolley (age 60)
Mr Jacob Roorda acts as Mr Wolley's Alternate Director
at any meeting of Directors which Mr Wolley is not
able to attend. The appointment of Mr Roorda will
continue until Mr Roorda either resigns, Mr Wolley
revokes the appointment or until Mr Wolley ceases
to be a Director, whichever occurs first.
Qualifications - BSc Mechanical Engineering, MBA
DIRECTORS' REPORT (CONTINUED)
INFORMATION ON DIRECTORS (continued)
Experience - Mr. Roorda is a Professional Engineer
with over 35 years of experience
in the oil and gas industry. He
is presently the Executive Vice
President of Todd Energy International
Limited, a private company focusing
on developing an unconventional
gas resource in north eastern
British Columbia, Canada and developing
a methanol production facility
in southern Louisiana, United
States.
Previously Mr Roorda was the Vice
Chairman of Canoe Financial Corp.,
the President and VP Corporate
for Harvest Operations Corp.,
VP Corporate and Director for
PrimeWest Energy Trust, and Managing
Director for Research Capital
Corporation.
He also founded three oil and
gas companies and has acted in
senior roles responsible for operational
and development management, financial
management and business development.
Interest in Shares - Nil.
and Options
Directorships held - Mr. Roorda is currently a director
in other listed of Todd Energy Canada, Northcliff
entities Resources Ltd., Epsilon Energy
Inc., Petroshale Inc as well as
South Louisiana Methanol LP.
He is also a Managing Director
of Windward Capital Limited, a
private investment company.
Mr Roorda's former listed company
directorships include Angle Energy
Inc., Enervest Diversified Income
Trust, Canoe Financial Corporation,
Argosy Energy Inc., TXCO Resources
Inc., North Peace Energy Corp.
and PrimeWest Energy Trust.
Mr Russell Clark - Former Managing Director (Age
59 years)
(resigned 14 May 2017)
Qualifications - BSc, Grad Dip, ARSM, MIMMM, MAusIMM,
CE, FAICD
Experience - Mr Clark is a chartered engineer
and mining professional with over
37 years' experience in senior
corporate, operational and project
management roles in gold, industrial
minerals, iron ore and base metal
mines and has worked in Australia,
the USA, Africa, South America
and PNG. Prior to joining Wolf
as Managing Director in October
2013, Mr Clark was CEO of Azimuth
Resources and, before that, Managing
Director of Grange Resources Limited.
Directorships held - As at the date of his resignation
in other listed Mr Clark did not hold any other
entities directorships in listed companies.
From 2014 to 2015 Mr Clark was
the Non Executive Chairman of
ASX listed coal explorer, Attila
Resources Limited.
DIRECTORS' REPORT (CONTINUED)
INFORMATION ON COMPANY SECRETARY
Ms Pauline Carr - Company Secretary
Qualifications - BEc, MBA, FAICD, FGIA, FCIS
Experience - Ms Carr is a qualified chartered
secretary and experienced executive
with over 30 years management
and commercial experience in the
resources industry with both Australian
and international companies. In
addition, she has over 25 years
of comprehensive hands-on company
secretarial, compliance and governance
experience with listed company
boards. She also provides governance,
management support, project management
and business improvement services
to organizations in a range of
sectors and is a Director of several
organizations.
DIRECTORS' REPORT (CONTINUED)
REMUNERATION REPORT - AUDITED
The names and positions held by consolidated and parent entity key management personnel in office at any time during the financial year are:
Group Position Contract details Proportion Proportion
Key Management held as (duration and of elements of elements
Personnel at 30 June termination) of remuneration of remuneration
2017 and related to not related
any change performance to performance
during the
year
----------------- ------------------ --------------------- ------------------------------------ -----------------
Non-Salary Shares/Units Rights Fixed
Cash-Based Salary/
Incentives Fees
----------------- ------------------ --------------------- ------------ ------------- ------- -----------------
% % % %
----------------- ------------------ --------------------- ------------ ------------- ------- -----------------
No fixed term.
John Hopkins Non Executive No notice required
OAM Chairman to terminate. - - - 100
----------------- ------------------ --------------------- ------------ ------------- ------- -----------------
Interim No fixed term.
Executive 3 months' notice
Richard Managing required to
Lucas(1) Director terminate. 14 - 5 81
----------------- ------------------ --------------------- ------------ ------------- ------- -----------------
No fixed term.
Ronnie Non Executive No notice required
Beevor Director to terminate. - - - 100
----------------- ------------------ --------------------- ------------ ------------- ------- -----------------
No fixed term.
Non Executive No notice required
Nick Clarke Director to terminate. - - - 100
----------------- ------------------ --------------------- ------------ ------------- ------- -----------------
No fixed term.
Chris Non Executive No notice required
Corbett Director to terminate. - - - 100
----------------- ------------------ --------------------- ------------ ------------- ------- -----------------
No fixed term.
Non Executive No notice required
Don Newport Director to terminate. - - - 100
----------------- ------------------ --------------------- ------------ ------------- ------- -----------------
No fixed term.
Michael Non Executive No notice required
Wolley Director to terminate. - - - 100
----------------- ------------------ --------------------- ------------ ------------- ------- -----------------
No fixed term.
Former Executive 3 months' notice
Russell Managing required to
Clark(2) Director terminate. 44 - 11 45
----------------- ------------------ --------------------- ------------ ------------- ------- -----------------
(1) Appointed as Interim Managing Director on 7 April 2017
(2) Ceased as an employee on 12 May 2017
This report details the nature and amount of remuneration for each key management person of the Group and executives receiving the highest remuneration.
Remuneration policy
The remuneration policy of the Group has been designed to align key management personnel objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific short and long-term incentives based on key performance areas affecting the Group's financial results. The Board believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best key management personnel to run and manage the Group, as well as create goal congruence between directors, executives and shareholders.
DIRECTORS' REPORT (CONTINUED)
REMUNERATION REPORT - AUDITED (continued)
The Board's policy for determining the nature and amount of remuneration for key management personnel of the Group is as follows:
- The remuneration policy, setting the terms and conditions for the key management personnel, was developed by the Board and is reviewed annually by the Remuneration Committee.
- All executive key management personnel receive a base salary (which is based on factors such as experience and market demand for comparable roles), superannuation, fringe benefits and performance incentives.
- All Non Executive Directors receive base fees and Committee fees (inclusive of superannuation).
- The Board reviews key management personnel packages annually by reference to the Group's performance, executive performance and comparable information from industry sectors.
The Remuneration Committee's responsibilities include reviewing the Group's remuneration framework, evaluating the performance of the Managing Director and monitoring performance of the executive team.
Executive key management personnel
The performance of key management personnel is measured against criteria agreed annually with each executive and is based predominantly on key performance indicators (KPIs) which are aligned to strategic imperatives and the maximisation of shareholder value. All bonuses and incentives are linked to predetermined performance criteria. The Board may, however, exercise its discretion in relation to approving incentives, bonuses and share based payments. The policy is designed to attract the highest calibre of executives and reward them for performance that results in long-term growth in shareholder wealth.
Key management personnel are also entitled to participate in the employee share performance rights arrangements.
The key management personnel received a superannuation guarantee contribution of 9.5% for 2017 (2016: 9.5%), and do not receive any other retirement benefits.
All remuneration paid to key management personnel is valued at the cost to the Company and expensed. Performance rights are valued using the Black-Scholes or Monte Carlo methodology depending on the vesting criteria.
Non Executive Directors
The Board policy is to remunerate Non Executive Directors at market rates for time, commitment and responsibilities. The Board determines payments to the Non Executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to Non Executive Directors is subject to approval by shareholders at the Annual General Meeting.
Fees for Non Executive Directors are not linked to the performance of the Group. However, on 16 November 2015 shareholders approved a Directors' Share Plan whereby Non Executive Directors receive a fixed component of their fees in the form of fully paid Wolf shares. The Directors' Share Plan is designed to retain cash reserves and better align Non Executive Directors' remuneration with the performance of the Group.
The total base fees and Committee fees paid for the year ended 30 June 2017 did not exceed the shareholder approved limit of $800,000.
DIRECTORS' REPORT (CONTINUED)
REMUNERATION REPORT - AUDITED (continued)
The Non Executive Director remuneration packages (inclusive of superannuation) from 1 July 2016 are as follows:
Base Remuneration Audit, Nomination Project Non Total
Committee Risk and Committee Steering Cash
Compliance Committee
Committee
Chair Member Chair Member Chair Member Chair Member
$ $ $ $ $ $ $ $ $ $ $
John
Hopkins
OAM 111,500 - - - 5,475 5,475 - - - 48,000 170,450
Ronnie
Beevor 55,750 10,950 - 10,950 - - 2,737 - - 24,000 104,387
Nick
Clarke 55,750 - 5,475 - - - - - 5,475 24,000 90,700
Chris
Corbett 55,750 - 5,475 - - - 2,737 10,950 - 24,000 98,912
Don
Newport 55,750 - 5,475 - 5,475 - - - - 24,000 90,700
Michael
Wolley 55,750 - 5,475 - - - 2,737 - 5,475 24,000 93,437
---------- ------- ------- ------- -------- -------- ------- ------- ------- --------- ----------
390,250 10,950 21,900 10,950 10,950 5,475 8,211 10,950 10,950 168,000 648,586
---------- ------- ------- ------- -------- -------- ------- ------- ------- --------- ----------
Performance-based remuneration
The Company is an operating entity moving toward full production status. Consistent with attracting and retaining talented executives, directors and senior executives are paid market rates associated with individuals in similar positions, within the same industry.
Short term incentives
The Company has a Short Term Incentive Plan (STI) in place for senior management personnel. The STI measurement is based on KPIs that are set and agreed each year by the Remuneration Committee and the Board.
Based on individual and Company performance, the STI will be paid in cash on a pro-rata basis of the fixed salary remuneration, as follows:
2018 2017
Target Target
Managing Director 60% 60%
Executive Key Management
Personnel N/A (1) 36-50%
Senior Operations
Management 10% 10%
(1) As at the date of this report there are no executive KMP participants in the STI other than the Interim Managing Director.
The Board has kept the percentages of the STI targets unchanged for 2018 in recognition of the challenges faced during the past financial year, and the need to focus on the short term to get the processing plant at Drakelands working at or beyond nameplate production levels.
DIRECTORS' REPORT (CONTINUED)
REMUNERATION REPORT - AUDITED (continued)
Long term incentives
The Performance Rights Plan (PRP) is the Company's long term incentive arrangement (LTI). Under the PRP the Board may grant eligible Wolf employees' rights, known as Performance Rights, which are subject to the satisfaction of performance conditions (Vesting Conditions) and then convertible into fully paid Wolf ordinary shares. The Vesting Conditions relate to the relative share price performance versus the AIM Basic Resources Index (for 50% of the rights) and the Total Shareholder Return performance over the vesting period (for 50% of the rights).
The Wolf Board of Directors has ultimate discretion in determining the issue of Performance Rights and other securities under the Company's Performance Rights Plan.
The proposed LTI on a pro-rata basis of the fixed salary remuneration is as follows:
2018 2017
Target Target
Managing Director 40% 40%
Executive Key Management
Personnel N/A (1) 24-30%
(1) As at the date of this report there are no executive KMP participants in the LTI other than the interim Managing Director.
The Board has kept the percentages of the LTI target for 2018 the same.
On 1 July 2016 the Board announced that it had approved an extension to the vesting period of the Performance Rights Plan's performance rights for an additional two years to a maximum of five years. Vesting assessments will be conducted by the Remuneration Committee at predetermined intervals during the additional two year period and, subject to the outcome of the review, performance rights may vest prior to their new expiry date. Approval for the requisite elements of the extension arrangements was granted by shareholders at the Company's 2016 Annual General Meeting.
The proposed LTI for the Interim Managing Director is subject to shareholder approval and will be included in the notice of meeting for the 2017 Annual General Meeting.
Key management personnel employment policy
The contracts for service between the Company and key management personnel are on a continuing basis, the terms of which are not expected to change in the immediate future. The employment conditions of the Interim Managing Director, Richard Lucas, and other key management personnel are formalised in contracts of employment. All key management personnel are permanent employees of Wolf Minerals Limited.
The standard employment contract states a three-month notice period for key management personnel. The Company may terminate an employment contract without cause by providing one to three months' written notice or making payment in lieu of notice, based on the individual's salary component.
DIRECTORS' REPORT (CONTINUED)
REMUNERATION REPORT - AUDITED (continued)
(a) Key management personnel remuneration
Short Term Share Post Employment Total
Benefits Based Benefits
Payments
Salary Non Cash Bonuses Shares, Super-annuation Termination
and Fees Benefits Rights Benefits
& Options
$ $ $ $ $ $ $
2017
John Hopkins
OAM 111,827 - - 48,000 10,623 - 170,450
Richard Lucas 338,090 - 62,736 21,348 28,975 - 451,149
Ronnie Beevor 80,387 - - 24,000 - - 104,387
Nick Clarke 66,700 - - 24,000 - - 90,700
Chris Corbett(1) 74,912 - - 24,000 - - 98,912
Don Newport 66,700 - - 24,000 - - 90,700
Michael Wolley(2) 69,437 - - 24,000 - - 93,437
Russell Clark(3) 392,308 63,143 40,176 107,252 42,205 321,013 966,097
--------- --------- ------- ---------- --------------- ----------- ---------
1,200,361 63,143 102,912 296,600 81,803 321,013 2,065,832
--------- --------- ------- ---------- --------------- ----------- ---------
2016
John Hopkins
OAM 111,826 - - 39,389 10,623 - 161,838
Richard Lucas 305,000 36,127 77,793 45,591 28,975 - 493,486
Ronnie Beevor 80,387 - - 19,695 - - 100,082
Nick Clarke 66,700 - - 19,695 - - 86,395
Chris Corbett(1) 74,912 - - 19,695 - - 94,607
Don Newport 66,700 - - 19,695 - - 86,395
Michael Wolley(2) 69,437 - - 19,695 - - 89,132
Russell Clark 450,000 56,722 110,817 111,522 42,750 - 771,811
--------- --------- ------- ---------- --------------- ----------- ---------
1,224,962 92,849 188,610 294,977 82,348 - 1,883,746
--------- --------- ------- ---------- --------------- ----------- ---------
(1) (Chris Corbett's remuneration is paid to RCF Capital Funds Management Pty Ltd. Mr Corbett is Resource Capital Fund V L.P.'s and Resource Capital Fund VI L.P.'s representative director on the Board.)
2 Michael Wolley's remuneration is paid to TTI (NZ) Limited. Mr Wolley is TTI (NZ) Limited's representative director on the Board.
(3 Russell Clark ceased being a director and resigned from the Company on 14 May 2017.)
DIRECTORS' REPORT (CONTINUED)
REMUNERATION REPORT - AUDITED (continued)
(a) Key management personnel remuneration (continued)
Performance income as a proportion of total income
For the year ended 30 June 2017, an assessment was made of performance against the agreed KPIs. Payments totalling $102,912 were approved by the Remuneration Committee and the Board to be paid in cash, with the following amounts being paid to key management personnel:
STI ($) % Base
Salary
Richard Lucas 62,736 19%
Russell Clark 40,176 10%
(b) Performance rights issued as part of remuneration for the year ended 30 June 2017
During the year the Company issued performance rights to executive management under the LTI plan. The issue was calculated based on the employee's fixed salary remuneration for the 2017 financial year. The rights were issued to the following key management personnel:
Performance rights
Number Value
($)
Richard Lucas 746,939 43,696
Russell Clark 1,469,388 85,959
The rights have been valued using the Monte Carlo valuation method (refer Note 26). The total value of the performance rights will be recognised in the statement of profit or loss and other comprehensive income on a pro-rata basis over the life of the respective performance rights.
The total amount of performance rights relating to key management personnel recognised in the statement of profit or loss and other comprehensive income during the financial year is as follows:
LTI ($) % Base
Salary
Richard Lucas 21,348 6%
Russell Clark 107,252 27%
(c) Shares issued on exercise of compensation rights
There were 2,693,977 rights granted as compensation that vested during the year ended 30 June 2017. The rights were originally granted on a range of dates as detailed below and were exercised throughout the year.
Original Number of Rights Grant date which Vested of Rights During Year 1 December 2011 214,167 29 November 2014 1,855,659 20 November 2015 624,151
DIRECTORS' REPORT (CONTINUED)
REMUNERATION REPORT - AUDITED (continued)
(d) Shareholdings
2017 Balance Received Options/ Balance Balance
1.7.2016 as Compensation Rights on (Resignation)/ 30.6.2017
Exercised Appointment
Number of
shares held
by key management
personnel:
John Hopkins 653,309 589,788 - - 1,243,097
Richard Lucas 75,467 - - - 75,467
Ronnie Beevor 509,657 294,895 - - 804,552
Nick Clarke 159,657 294,895 - - 454,552
Don Newport 159,657 294,895 - - 454,552
Russell Clark 83,333 - - (83,333) -
Total 1,641,080 1,474,473 - (83,333) 3,032,220
--------- ---------------- ---------- ------------------ ----------
(d) Options and rights holdings
2017 Balance Granted Options Net Balance Total Total
1.7.2016 as / Rights Change 30.6.2017 Vested Exercisable
Compensation(1) Exercised Other 30.6.2017 30.6.2017
Number of
options and
rights held
by key management
personnel:
Richard Lucas 977,734 746,939 - - 1,724,673 - -
Russell Clark 2,114,211 1,469,388 - (3,583,599) - - -
Total 3,091,945 2,216,327 - (3,583,599) 1,724,673 - -
--------- ---------------- ---------- ----------- ---------- ---------- ------------
(1) Performance rights and options issued as part of remuneration.
Key management personnel who do not hold any options or rights at 30 June 2017 nor have held any during the year are not included in the above tables.
The Net Change Other reflected above includes those options or rights that have expired without being exercised during the year.
(e) Additional information
Performance over the Past 5 Years
The objective of the LTI plan is to reward and incentivise executives in a manner which aligns with the creation of shareholder wealth. The Company's performance over the 2017 financial year and the previous four financial years is tabulated below:
Year ended 30 June 2017 2016 2015 2014 2013 Net loss after tax ($'000) (74,537) (63,094) (8,762) (3,732) (4,711) Net assets ($'000) 109,358 190,327 240,892 221,067 40,192 Market capitalisation ($ million) at 30 June 63 125 340 226 44 Closing share price ($) 0.058 0.115 0.42 0.28 0.22OF REMUNERATION REPORT - AUDITED
DIRECTORS' REPORT (CONTINUED)
Meetings of Directors
The numbers of meetings of the Company's Board of Directors and of each Board Committee held during the year ended 30 June 2017, and the numbers of meetings attended by each Director were:
Directors' Audit, Risk Project Remuneration Nomination
Meetings and Steering Committee Committee
Compliance Committee
Committee
Number Number Number Number Number Number Number Number Number Number
eligible attended eligible attended eligible attended eligible attended eligible attended
to to to to to
attend attend attend attend attend
John
Hopkins 16 16 6 6 - - - - 2 2
Ronnie
Beevor 16 16 6 6 - - 4 4 2 2
Russell
Clark 13 11 - - 11 9 - - - -
Nick
Clarke 16 15 - - 11 8 4 2 - -
Chris
Corbett 16 15 - - 11 9 4 4 2 2
Don
Newport 16 16 6 6 - - 4 3 - -
Richard
Lucas 4 4 - - 2 2 - - - -
Michael
Wolley 16 7 - - 11 8 4 1 2 -
Jacob
Roorda 9 6 - - 3 1 3 - 2 1
Indemnifying officers
During or since the end of the financial year the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows:
The Company has paid premiums to insure each of the following directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of the Company, other than conduct involving a willful breach of duty in relation to the Company. The amount of the premium was approximately $9,048 for each Director.
- John Hopkins - Richard Lucas - Russell Clark - Ronnie Beevor - Chris Corbett - Nick Clarke - Don Newport - Michael Wolley
The Company has not indemnified the auditor or paid any insurance premium on behalf of the auditor.
DIRECTORS' REPORT (CONTINUED)
Rights
At the date of this report, the unissued ordinary shares of Wolf Minerals Limited under rights are as follows:
Grant Date Date of Expiry Exercise Number
Price of Rights
21/11/14 30/06/18 $0.00 273,350
21/11/14 30/06/19 $0.00 261,130
16/11/15 30/06/20 $0.00 1,086,394
04/11/11 22/12/20 $0.00 152,778
29/11/16 30/06/21 $0.00 760,897
2,534,549
----------
No person entitled to exercise right had or has any right by virtue of the right to participate in any share issue of any other body corporate.
Significant changes in state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Events after the reporting period
On 17 August 2017, the Company provided an update on the operating turnaround plan at Drakelands which included improvements in processing plant reliability in the crushing circuit and performance of the refinery to enhance production levels, along with providing temporary changes to weekend operating arrangements whilst technical solutions are being implemented to address LFN emissions. In addition, The Company had decided to notify GRES of its intention to recover the cost of the LFN rectification works from the Performance Bond under the construction contract if GRES did not take all necessary actions to do so at its own cost. That remains the current position.
On 31 August 2017, the Company announced that RCF VI had agreed to release a further GBP5 million tranche of the Bridge Loan Facility to support short term working capital. The funds were subsequently received on 11 September 2017.
Proceedings on behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Non-audit services
The Board is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external auditor's independence for the following reasons:
- all non-audit services are reviewed and approved by the board prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
- the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
DIRECTORS' REPORT (CONTINUED)
Auditor's Independence Declaration
The lead auditor's independence declaration for the year ended 30 June 2017 has been received and can be found on page 24.
This report is made in accordance with a resolution of the Board of Directors. These financial statements were authorised for issue on 28 September 2017 by the Directors of the Company.
Richard Lucas
Director
Date: 28 September 2017
AUDITOR'S INDEPENCE DECLARATION
TO THE DIRECTORS OF WOLF MINERALS LIMITED
In relation to our audit of the financial report of Wolf Minerals Limited for the year ended 30 June 2017, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
PKF Mack
Simon Fermanis
Partner
28 September 2017
West Perth,
Western Australia
DIRECTORS' DECLARATION
The Directors of the Company declare that:
1. The financial statements and notes, as set out on pages 30 to 69, and the remuneration disclosures in the Directors Report designated audited are in accordance with the Corporations Act 2001 and:
a. comply with Accounting Standards and the Corporations Regulations 2001; and
b. give a true and fair view of the financial position as at 30 June 2017 and of the performance for the year ended on that date of the Company and Consolidated Entity;
c. the financial statements are in compliance with International Financial Reporting Standards, as stated in Note 1 to the financial statements.
2. The Managing Director and Chief Financial Officer have each declared that:
a. the financial records of the Company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;
b. the financial statements and notes for the financial year comply with the Accounting Standards; and
c. the financial statements and notes for the financial year give a true and fair view.
3. In the Directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Richard Lucas
Director
Date: 28 September 2017
INDEPENT AUDITOR'S REPORT
TO THE MEMBERS OF WOLF MINERALS LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Wolf Minerals Limited (the company), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the company and the consolidated entity comprising the company and the entities it controlled at the year's end or from time to time during the financial year.
In our opinion the financial report of Wolf Minerals Limited is in accordance with the Corporations Act 2001, including:
i) Giving a true and fair view of the consolidated entity's financial position as at 30 June 2017 and of its performance for the year ended on that date; and
ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. Our responsibilities under those standards are further described in the Auditor's Responsibility section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
Without modifying our opinion, we draw attention to Note 1 in the financial report which highlights that the consolidated entity incurred a net loss after tax of $(74,536,641) during the year ended 30 June 2017 (2016: $(63,094,075)). In addition, the consolidated entity has a working capital deficit of $(72,958,414) as at 30 June 2017 (2016: $(14,020,440)). These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the company and consolidated entity's ability to continue as a going concern and therefore, the company and consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.
The financial report of the company and consolidated entity does not include any adjustments in relation to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the company and consolidated entity not continue as going concerns.
Independence
We are independent of the consolidated entity in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. This matter was addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.
Impairment of Property, Plant and Equipment and Mine Properties and Development
Property, Plant and Equipment Our audit work included:
and Mine Properties and * Considering whether triggers of impairment were
Development total $263,749,966 evident and the appropriateness of the CGU
(Note 16) and $5,582,197 designation adopted by management;
(Note 17) respectively.
These non-current assets
represent 90% of total
assets. Notes 1(e) and * Evaluating the significant assumptions, methodologies
1(f) detail the consolidated and conclusions used by the consolidated entity in
entity's accounting policy particular, those relating to the forecast inflows
on these assets. and inputs used to formulate them;
Under Australian Accounting
Standards, an entity shall
assess whether at the
end of the reporting period * Assessing the reasonableness of the significant
there is any indication assumptions including the commodity prices,
that its assets are impaired. production quantities, costs of production, foreign
If any such indication exchange rates utilised and discount factor;
exists, the entity shall
estimate the recoverable
amount of the asset. At
year end, the consolidated * Performing sensitivity analysis; and
entity has concluded that
recoverable amount of
the related cash generating
unit ("CGU") is in excess * Assessing the reasonableness of the anticipated
of the carrying value future inflows from the CGU.
of non-current assets.
As a result no impairment
was recognised during
the year. The assumptions We also considered the
of indicators of impairment adequacy of the financial
are highly judgemental report disclosure concerning
and include modelling the judgemental nature
key assumptions and estimates of the consolidated entity's
based on past and current assessment of impairment
performance that may be of these non-current assets.
impacted by future performance These key assumptions,
and economic conditions. judgements and estimates
are set out in the financial
Key assumptions, judgements report in Note 1 (b) (iii).
and estimates used in
the consolidated entity's
assessment of impairment
of non-current assets
are set out in the financial
report in Note 1 (b) (iii).
Other Information
Other information is financial and non-financial information in the annual report of the consolidated entity which is provided in addition to the financial report and the auditor's report. The directors are responsible for other information in the annual report.
The other information we obtained prior to the date of this auditor's report was the Director's Report, Chairman's Letter and Additional Information for Listed Public Companies. The remaining other information, if any is expected to be made available to us after the date of the auditor's report. Our opinion on the financial report does not cover the other information and, accordingly, the auditor does not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the remuneration report.
In connection with our audit of the financial report, our responsibility is to read the other information. In doing so, we consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this other information in the financial report and based on the work we have performed on the other information that we obtained prior the date of this auditor's report we have nothing to report.
Directors' Responsibilities for the Financial Report
The Directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using a going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue and auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individual or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the consolidated entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the consolidated entity to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the consolidated entity to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2017.
In our opinion, the Remuneration Report of Wolf Minerals Limited for the year ended 30 June 2017 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
PKF MACK
Simon Fermanis
Partner
28 September 2017
West Perth,
Western Australia
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEARED 30 JUNE 2017
2017 2016
NOTE $ $
Revenue 3 24,700,004 8,568,961
Cost of sales 4 (76,396,715) (50,030,633)
------------ ------------
Gross loss (51,696,711) (41,461,672)
Other income 1,317,709 12,191
Corporate and technical services 5 (8,233,903) (5,376,517)
Financial instrument gain/(loss) (7,607,347) (5,992,401)
Operating loss (66,220,252) (52,818,399)
Finance income 125,921 340,858
Finance costs 6 (8,442,310) (10,616,534)
Total finance costs (8,316,389) (10,275,676)
Loss before income tax (74,536,641) (63,094,075)
Income tax expense 7 - -
------------ ------------
Loss for the year after income
tax (74,536,641) (63,094,075)
============ ============
Other comprehensive income for
the year
Items that may be reclassified
subsequently to profit or loss
Foreign currency translation (11,064,618) (22,875,023)
Movement in the cash flow hedge
reserve (net of tax) 4,287,276 (11,324,746)
Other comprehensive income for
the year (net of tax) (6,777,342) (34,199,769)
------------ ------------
Total comprehensive income/(loss)
for the year attributable to
members of the parent (81,313,983) (97,293,844)
------------ ------------
LOSS PER SHARE
Basic loss per share (cents) 10 (6.87) (7.53)
Diluted loss per share (cents) 10 (6.87) (7.53)
The accompanying notes form part of these financial statements.
These financial statements are presented in Australian dollars being the Group's functional and presentation currency.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
2017 2016
NOTE $ $
CURRENT ASSETS
Cash and cash equivalents 11 8,333,662 35,010,327
Trade and other receivables 12 2,328,126 5,671,617
Inventories 13 3,098,154 1,791,640
Derivative financial instruments 14 - -
Other current assets 15 531,497 627,959
------------- ------------
TOTAL CURRENT ASSETS 14,291,439 43,101,543
------------- ------------
NON CURRENT ASSETS
Property, plant and equipment 16 263,749,966 276,841,685
Mine properties and development 17 5,582,197 5,474,647
Derivative financial instruments 14 - -
Other non-current assets 15 17,189,663 17,787,186
------------- ------------
TOTAL NON CURRENT ASSETS 286,521,826 300,103,518
------------- ------------
TOTAL ASSETS 300,813,265 343,205,061
------------- ------------
CURRENT LIABILITIES
Trade and other payables 18 22,978,838 22,500,206
Provisions 19 193,960 197,387
Borrowings 20 59,874,424 25,480,837
Derivative financial instruments 14 4,202,631 8,943,553
TOTAL CURRENT LIABILITIES 87,249,853 57,121,983
------------- ------------
NON CURRENT LIABILITIES
Provisions 19 6,778,765 6,162,775
Borrowings 20 97,060,134 84,971,049
Derivative financial instruments 14 366,877 4,622,730
TOTAL NON CURRENT LIABILITIES 104,205,776 95,756,554
TOTAL LIABILITIES 191,455,629 152,878,537
------------- ------------
NET ASSETS 109,357,636 190,326,524
============= ============
EQUITY
Issued capital 21 274,080,313 273,544,711
Reserves 22 (6,642,857) 324,992
Accumulated losses (158,079,820) (83,543,179)
------------- ------------
TOTAL EQUITY 109,357,636 190,326,524
============= ============
The accompanying notes form part of these financial statements.
These financial statements are presented in Australian dollars being the Group's functional and presentation currency.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEARED 30 JUNE 2017
Ordinary Accumulated Option Cash Foreign Total
shares losses reserve flow currency
hedge translation
reserve reserve
$ $ $ $ $ $
Balance at 30 June
2015 226,982,428 (20,449,104) 1,576,880 653,715 32,127,749 240,891,668
Loss for the year - (63,094,075) - - - (63,094,075)
Other comprehensive
income
Foreign currency
translation differences - - - - (22,875,023) (22,875,023)
Other comprehensive
income for the year - - - (11,324,746) - (11,324,746)
----------- ------------- --------- ------------ ------------ ------------
Total comprehensive
income for the year - - - (11,324,746) (22,875,023) (34,199,769)
Transactions with
owners, recorded
directly in equity
Issue of share capital 47,042,500 - - - - 47,042,500
Transaction costs (706,232) - - - - (706,232)
Options & rights
exercised during
the year 88,153 - (88,153) - - -
Options expired during - - - - - -
the year
Options & rights
expensed during the
year - - 254,570 - - 254,570
Equity compensation
benefit 137,862 - - - - 137,862
Balance at 30 June
2016 273,544,711 (83,543,179) 1,743,297 (10,671,031) 9,252,726 190,326,524
------------
Loss for the year - (74,536,641) - - - (74,536,641)
Other comprehensive
income
Foreign currency
translation differences - - - (11,064,618) (11,064,618)
Other comprehensive
income for the year - - - 4,287,276 - 4,287,276
------------
Total comprehensive
income for the year - - - 4,287,276 (11,064,618) (6,777,342)
Transactions with
owners, recorded
directly in equity
Issue of share capital - - - - - -
Transaction costs (41,043) - - - - (41,043)
Options & rights
exercised during
the year 408,645 - (408,645) - - -
Options & rights
expensed during the
year - - 218,138 - - 218,138
Equity compensation
benefit 168,000 - - - - 168,000
------------
Balance at 30 June
2017 274,080,313 (158,079,820) 1,552,790 (6,383,755) (1,811,892) 109,357,636
=========== ============= ========= ============ ============ ============
The accompanying notes form part of these financial statements.
These financial statements are presented in Australian dollars being the Group's functional and presentation currency.
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE FINANCIAL YEARED 30 JUNE 2017
2017 2016
NOTE $ $
Cash Flows from Operating Activities
Receipts from customers 23,395,420 8,361,290
Payments to suppliers and employees (63,301,078) (33,478,591)
Other income 1,317,709 12,191
Interest received 262,783 192,578
Net cash used in operating
activities 25 (38,325,166) (24,912,532)
------------ ------------
Cash Flows from Investing Activities
Payments for exploration and
development - (30,272,248)
Payments made in respect on
bonds and collateral deposits (547,659) -
Payments for property, plant
& equipment (17,929,458) (312,153)
------------ ------------
Net cash used in investing
activities (18,477,117) (30,584,401)
------------ ------------
Cash Flows from Financing Activities
Proceeds from issue of shares - 47,042,500
Payments for share issue costs (41,043) (706,232)
Proceeds from borrowings 55,882,200 26,929,500
Repayment of borrowings (4,658,543) (5,831,134)
Payments for borrowing costs (7,202,257) (8,095,566)
Financial instrument payments (11,546,913) (2,610,450)
------------ ------------
Net cash generated from financing
activities 32,433,444 56,728,618
------------ ------------
Net increase/(decrease) in
cash and cash equivalents (24,368,839) 1,231,685
Effects of exchange rate changes
on the balance of cash held
in foreign currencies (2,307,826) (638,812)
Cash and cash equivalents at
beginning of financial year 11 35,010,327 34,417,454
------------
Closing cash and cash equivalents
carried forward 11 8,333,662 35,010,327
============ ============
The accompanying notes form part of these financial statements.
These financial statements are presented in Australian dollars being the Group's functional and presentation currency.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
This financial report includes the consolidated financial statements and notes of Wolf Minerals Limited and its controlled entities (Consolidated Entity or Group), and the parent entity disclosure for Wolf Minerals Limited as an individual parent entity (Parent Entity).
Wolf Minerals Limited is a listed public company, trading on the Australian Securities Exchange and Alternative Investment Market of the London Stock Exchange, limited by shares, incorporated and domiciled in Australia.
Basis of Preparation
The accounting policies set out below have been consistently applied to all years presented.
Statement of Compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (AASBs) including Australian Interpretations and other pronouncements adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001 for "for profit" oriented entities. The consolidated financial report of the Group and the financial report of the Company comply with International Financial Reporting Standards (lFRSs) and interpretations adopted by the International Accounting Standards Board (IASB).
The consolidated financial statements were authorised for issue by the Board of Directors on 28 September 2017. The Board has the power to amend and reissue the financial statements.
Basis of Measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position if applicable:
-- derivative financial instruments are measured at fair value
-- financial instruments at fair value through profit or loss are measured at fair value
-- available-for-sale financial assets are measured at fair value
-- liabilities for cash-settled share-based payment arrangements are measured at fair value
-- the defined benefit asset is measured as the net total of the plan assets, plus unrecognised past service cost and unrecognised actuarial losses, less unrecognised actuarial gains and the present value of the defined benefit obligation.
Use of Estimates and Judgements
The preparation of the consolidated financial statements in conformity with AASBs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are set out in Note 1 (b). Estimates and assumptions are continually evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets and liabilities affected in future periods.
Going Concern
The consolidated financial report has been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business. The Consolidated Entity incurred a loss after tax of A$74,536,641 for the year ended 30 June 2017 (2016: A$63,094,075). Furthermore the Consolidated Entity has a working capital deficit of A$72,958,414 as at 30 June 2017 (2016: A$14,020,440).
The ability of the Company and the Consolidated Entity to maintain compliance with its debt obligations and covenants and continue to pay its debts as and when they fall due is dependent upon receiving additional funding support, successfully ramping up production to nameplate capacity and rescheduling fixed debt repayments with senior debt lenders.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
Going Concern (continued)
On 31 August 2017, the Company announced that RCF VI has agreed to release a further GBP5 million tranche of the Bridge Loan Facility to support short term working capital. Following the utilisation of the GBP5 million of the Bridge Loan Facility, further funding of GBP10 million is required early in the December 2017 quarter to complete the operating turnaround plan and negotiations are advanced in this regard.
In addition to the further funding amount of GBP10 million, the Directors have appropriate plans in place to meet the remaining funding shortfall over the next 12 months. This potentially includes opportunities to improve operational cashflows through additional revenue streams, cost reduction initiatives and release of cash escrowed amounts on the balance sheet. This plan will also require the Directors to reschedule fixed debt repayments with the senior debt lenders to avoid any non compliance with senior debt conditions and financial ratios.
The Directors believe it is appropriate to prepare the consolidated financial report on a going concern basis. The Directors believe the Company is able to raise the additional funds as required, based on the improvement in the operating performance of the Drakelands mine and the strength of the APT price, along with the continued support from Wolf's major shareholders and its offtakers and Lenders and a proven track record of being able to raise funding as and when required.
In the event that the Company and Consolidated Entity do not achieve the above outcomes, there exists a material uncertainty that casts significant doubt as to whether the Company and Consolidated Entity will be able to continue as going concerns and realise their assets and extinguish their liabilities in the normal course of business.
The consolidated financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Company and Consolidated Entity not continue as going concerns.
Accounting Policies
a. Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Consolidated Entity as at 30 June 2017 and the results of all controlled entities for the year then ended.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity controls an entity when the Consolidated Entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated Entity. They are de-consolidated from the date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. All controlled entities have a June financial year end.
A list of controlled entities is contained in Note 2 to the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
b. Significant Accounting Estimates, Judgments and Assumptions
The preparation of consolidated financial statements requires management to make judgments and estimates relating to the carrying amounts of certain assets and liabilities. Actual results may differ from the estimates made. Estimates and assumptions are reviewed on an ongoing basis.
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 accounting period are:
(i) Share based payment transactions
The Consolidated Entity measures the cost of equity settled transactions by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of share options and performance rights is determined by an external valuer using an appropriate valuation model.
(ii) Impairment of investments in and loans to subsidiaries
The ultimate recoupment of the Parent Entity's investment in subsidiaries, and loans to subsidiaries is dependent on the successful development and commercial exploitation, or alternatively, sale, of the development assets. Impairment tests are carried out on a regular basis to identify whether the asset carrying values exceed their recoverable amounts. There is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts.
The key areas of judgement and estimation include:
- Recent development results and mineral resource estimates; - Environmental issues that may impact on the underlying tenements;
- Fundamental economic factors that impact the operations and carrying values of assets and liabilities.
(iii) Estimated impairment of mine properties and property, plant and equipment (Note 16 and 17)
The Company tests annually whether the mine properties and property, plant and equipment has suffered any impairment. The recoverable amount of the cash generating unit (CGU) has been determined based on value in use calculations which require the use of estimates and assumptions such as long-term commodity prices, discount rates, operating costs, future capital requirements and mineral resource estimates (see below). These estimates and assumptions are subject to risk and uncertainty and therefore there is a possibility that changes in circumstances will impact the recoverable amount. The Project is the Company's only CGU.
In assessing the carrying amounts of its mine properties and property, plant and equipment at the Project, the Directors have used an updated financial model based upon the original DFS prepared by the parent undertaking in conjunction with a number of independent experts. The study has been approved by the Directors.
The assessment period used in the report is the updated life of the mine of 10 years from the increased reserves, plus the remaining period for commissioning and preparation for full production. Tungsten revenues have been estimated over that period at a price range of US$220 - US$320 per mtu. Tin revenues have been estimated over that period at a price of US$20,000/tonne. These conservative estimates are based on, and are consistent with, external sources of information. The calculation assumes average annual tungsten and tin production of 367,647 mtu's and 563 tonnes respectively. The life of mine operating cost estimate has been updated to match the mine plan for the new reserves. Royalties have been calculated at 2% of gross sales revenues and corporate income tax at 21%. A discount rate of 8% has been utilised. Based on the calculations, the net present value as at 30 June 2017 after the recoupment of the remaining capital costs of the Project exceeds the carrying value of the mine properties and property, plant and equipment, therefore no impairment has been recorded.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
b. Significant Accounting Estimates, Judgments and Assumptions (continued)
(iii) Estimated impairment of mine properties and property, plant and equipment (Note 16 and 17) (continued)
The recoverable amount is sensitive to possible changes in the key assumptions which would cause the carrying amount to exceed the recoverable amount. The value in use calculations have been updated to reflect the successful application to extend the current planning permission to enable the full ore body to be mined, together with obtaining the requisite permission to operate 7 days a week.
The Financial Statements have been prepared on the basis that the entity can meet its commitments as and when they fall due and can therefore continue normal business activities, and the realisation of assets and liabilities in the ordinary course of business (refer Going Concern section of Note 1).
(iv) Mine environmental rehabilitation and restoration provision (Note 19)
Rehabilitation costs will be incurred by the Group at the end of the operating life of the Project. The Group assesses its rehabilitation provision at each reporting date. The ultimate rehabilitation costs are uncertain and cost estimates can vary in response to various factors, including estimates of the extent and costs of rehabilitation activities, regulatory changes, inflation rates and changes in discount rates. These uncertainties may result in future actual expenditure differing from the amounts currently provided and there could be significant adjustments to the provisions established which would affect future financial results. The provision as at 30 June 2017 represents management's best estimate of the present value of future rehabilitation costs required.
(v) Income tax expenses
Judgement is required in assessing whether deferred tax assets and liabilities are recognised on the consolidated statement of financial position. Deferred tax assets, including those arising from temporary differences, are recognised only when it is considered more likely than not that they will be recovered, which is dependent on the generation of future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised.
c. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of 12 months or less, and bank overdrafts.
d. Receivables
Collectability of trade debtors is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for impairment is raised when some doubt as to collection exists.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
e. Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.
(i) Freehold land
Freehold land is recognised at historic cost and is not depreciated as it has an indefinite useful life.
(ii) Plant and equipment
Plant and equipment is measured on the cost basis.
The cost of fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the consolidated statement of profit or loss and other comprehensive income during the financial period in which they are incurred.
(iii) Depreciation
Items of property, plant and equipment are depreciated over their estimated useful lives. The Company uses the unit-of-production basis when depreciating mine specific assets which results in a depreciation/amortisation charge proportional to the depletion of the anticipated remaining life of mine. Each item's economic life has due regard to both its physical life limitations and to present assessments of economically recoverable reserves and resources of the mine property at which it is located.
For the remainder of assets the reducing balance method is used, resulting in estimated useful lives between 3 to 10 years, the duration of which reflects the useful life depending on the nature of the asset. Estimates of remaining useful lives and depreciation methods are reviewed annually for all major items of plant and equipment.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of profit or loss and other comprehensive income.
f. Development Assets
Capitalised mining development costs include expenditures incurred to develop new ore bodies to define further mineralisation in existing ore bodies, to expand the capacity of a mine and to maintain production. Mining development also includes costs transferred from exploration and evaluation phase once construction and development commences in the area of interest.
Amortisation of mining development is computed by the units of production basis over the estimated proved and probable reserves. Proved and probable mineral reserves reflect estimated quantities of economically recoverable reserves which can be recovered in the future from known mineral deposits. These reserves are amortised from the date on which production commences. The amortisation is calculated from recoverable proven and probable reserves and a predetermined percentage of the recoverable measured, indicated and inferred resource. This percentage is reviewed annually.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
g. Financial Instruments (i) Financial assets at fair value through profit or loss
This category has two sub-categories; financial assets held for trading, and those designated at fair value through profit or loss on initial recognition. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. The policy of management is to designate a financial asset if there exists the possibility it will be sold in the short term and the asset is subject to frequent changes in fair value. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the reporting date.
(ii) Loans and receivables
Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the consolidated entity provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the reporting date which are classified as non-current assets. Loans and receivables are included in receivables in the consolidated statement of financial position.
(iii) Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the reporting date.
Purchases and sales of investments are recognised on trade-date being the date on which the Consolidated Entity commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Consolidated Entity has transferred substantially all the risks and rewards of ownership.
Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are included in the consolidated statement of comprehensive income in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available-for-sale investments are recognised in equity in the "available for sale revaluation reserve". When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the consolidated statement of comprehensive income as gains and losses from investment securities.
(iv) Fair value
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Consolidated Entity establishes fair value by using valuation techniques. These include reference to the fair values of recent arm's length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing methods refined to reflect the issuer's specific circumstances.
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Consolidated Entity is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
g. Financial Instruments (continued) (iv) Fair value (continued)
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques. The Consolidated Entity uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Consolidated Entity for similar financial instruments.
(v) Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date. The accounting for subsequent changes
in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
Derivatives are classified as current or non-current depending on the expected period of realisation.
(vi) Cash flow hedges
Cash flow hedges are used to cover the Consolidated Entity's exposure to variability in cash flows that is attributable to particular risk associated with a recognised asset or liability or a firm commitment which could affect profit or loss. The effective portion of the gain or loss on the hedging instrument is recognised directly in equity, whilst the ineffective portion is recognised in profit or loss. Amounts taken to equity are transferred out of equity and included in the measurement of the hedged transaction when the forecast transaction occurs.
Cash flow hedges are tested for effectiveness on a regular basis both retrospectively and prospectively to ensure that each hedge is highly effective and continues to be designated as a cash flow hedge. If the forecast transaction is no longer expected to occur, amounts recognised in equity are transferred to profit or loss.
If the hedging instrument is sold, terminated, expires, exercised without replacement or rollover, or if the hedge becomes ineffective and is no longer a designated hedge, amounts previously recognised in equity remain in equity until the forecast transaction occurs.
h. Investments
Interests in listed and unlisted securities are initially brought to account at cost.
Controlled entities are accounted for in the consolidated financial statements as set out in Note 1 (a).
Other securities are included at fair value at reporting date. Unrealised gains/losses on securities held for short term investment are accounted for as set out in Note 1 (g) (i) financial assets at fair value through profit or loss. Unrealised gains/losses on securities held for long term investment are accounted for as set out in Note 1 (g) (iii) available for sale financial assets.
i. Acquisition of Assets
The purchase method of accounting is used for all acquisitions of assets regardless of whether equity instruments or other assets are acquired. Cost is determined as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs directly attributable to the acquisition.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
j. Impairment (i) Financial Assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the effective interest rate.
An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
All impairment losses are recognised either in the consolidated statement of comprehensive income or revaluation reserves in the period in which the impairment arises.
(ii) Non-financial Assets
The carrying amounts of the Consolidated Entity's non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each reporting date.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. 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.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the consolidated statement of comprehensive income. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units, then to reduce the carrying amount of the other assets in the unit on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exits. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss has been recognised.
k. Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
The Group recognises a restoration and rehabilitation provision where it has a legal and constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. The nature of these restoration activities includes dismantling and removing structures; rehabilitating the mine; dismantling operating facilities; and restoring, reclaiming and revegetating affected areas.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
k. Provisions (continued)
On initial recognition, the present value of the estimated costs is capitalised by increasing the carrying amount of the related mining asset to the extent that it was incurred as a result of the development or construction of the mine. Any changes to or additional rehabilitation costs are recognised as additions or charges to the corresponding asset and rehabilitation liability when they occur.
Over time, the discounted liability is increased for the change in present value based on the discount rate that reflects current market assessments and the risks specific to the liability. The annual unwinding of the discount is recognised in profit or loss as part of finance costs.
The Group does not recognise the deferred tax asset in respect of the temporary difference on the rehabilitation liability nor the corresponding deferred tax liability in respect of the temporary difference on the rehabilitation asset.
l. Inventory
Recognition and measurement
Consumable materials for plant and equipment are recognised as inventory. Consumable stocks are carried at the lower of cost and net realisable value.
m. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use (a qualifying asset) are capitalised as part of the cost of the respective asset until the asset is substantially ready for its intended use. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Where funds are borrowed specifically to finance a project, the amount capitalised represents the actual borrowing costs incurred under the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating borrowing costs over the relevant period. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
n. Contributed Equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares, options or performance rights are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares, options or performance rights, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.
o. EPS (i) Basic loss per share
Basic loss per share is determined by dividing the net loss after income tax attributable to members of the Group, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted loss per share
Diluted earnings per share adjusts the figures used in the determination of basic loss per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
p. Foreign Currency Transactions and Balances (i) Functional and presentation currency
The functional currency of each of the Group's entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the Parent Entity's functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the consolidated statement of comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity; otherwise the exchange difference is recognised in the consolidated statement of comprehensive income.
(iii) Group companies
The financial results and position of foreign operations whose functional currency is different from the group's presentation currency are translated as follows:
- Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
- Income and expenses are translated at average exchange rates for the period; and
- Retained profits are translated at the exchange rate prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Group's foreign currency translation reserve in the consolidated statement of financial position. These differences are recognised in the consolidated statement of comprehensive income in the period in which the operation is disposed.
q. Current/Non-current Classification
Assets and liabilities are presented in the consolidated statement of financial position based on current and non-current classification.
An asset is current when: it is expected to be realised or intended to be sold or consumed in normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within twelve months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within twelve months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
r. Revenue recognition
Revenue is recognised to the extent that 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 from the sale of goods and disposal of other assets is recognised when persuasive evidence, usually in the form of an executed sales agreement, or an arrangement exists, indicating there has been a transfer of risks and rewards to the customer, no further work or processing is required by the Group, the quantity and quality of the goods has been determined with reasonable accuracy, the price is fixed or determinable and collectability is reasonably assured. This is generally when title passes.
s. Employee Benefits (i) Wages, salaries and annual leave
Liabilities for wages, salaries and annual leave expected to be settled within one year of the reporting date are recognised in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Employee benefits payable later than one year
Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.
(iii) Superannuation
Contributions are made by the consolidated entity to superannuation funds as stipulated by statutory requirements and are charged as expenses when incurred.
(iv) Employee benefit on costs
Employee benefit on costs, including payroll tax, are recognised and included in employee benefits liabilities and costs when the employee benefits to which they relate are recognised as liabilities.
t. Equity Settled Compensation
The group operates equity-settled share-based payment employee share option and performance rights schemes. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using a Monte Carlo pricing model which takes into account the exercise price, the term of the option or right, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option or right, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option or right. The number of share option and performance rights expected to vest is reviewed and adjusted at each reporting date such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.
u. Income Tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
u. Income Tax (continued)
- When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
- When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entity's which intend to settle simultaneously.
Research and development tax offsets are accounted for on receipt and under the requirements of AASB 112.
v. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.
w. Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
x. New, Revised or Amending Accounting Standards and Interpretations Adopted
The Consolidated Entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the AASB that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Note 1: Statement of Significant Accounting Policies (continued)
y. New and amended standards and interpretations issued but not yet effective for the financial year beginning 1 July 2016 and not early adopted
The following Australian Accounting Standards have been issued or amended and are applicable to the annual financial statements of the Consolidated Entity (or the Company) but are not yet effective. This assumes the following have not been adopted in preparation of the financial statements at the reporting date.
AASB No. Title Application date of standard Issue date
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 9 Financial Instruments 1 January 2018 December 2014
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2010-7 Amendments arising from Accounting Standards 1 January 2018 September 2012
arising from AASB 9 (December 2010)
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2014-1 Amendments to Australian Accounting Part E - 1 January 2018 June 2014
Standards
Part E - Financial Instruments
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2014-5 Amendments to Australian Accounting Standard 1 January 2018 December 2014
Arising From AASB 15
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2014-7 Amendments to Australian Accounting Standard 1 January 2018 December 2014
Arising From AASB 9 (December 2014)
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2014-10 Amendments to Australian Accounting Standard 1 January 2018 December 2014
- Sale of Contribution of Assets Between
Investors
and its Associates or Joint Venture
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2015-8 Amendments to Australian Accounting 1 January 2018 October 2015
Standards - Effective Date of AASB 15
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2015-10 Amendments to Australian Accounting 1 January 2018 December 2015
Standards - Effective Date of Amendments to
AASB 10 and
AASB 128.
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2016-1 Amendments to Australian Accounting 1 January 2017 February 2016
Standards - Recognition of Deferred Tax
Assets for Unrealised
Losses [AASB 112]
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2016-2 Amendments to Australian Accounting 1 January 2017 March 2016
Standards - Disclosure Initiative:
Amendments to AASB
107
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2016-3 Amendments to Australian Accounting 1 January 2018 May 2016
Standards - Clarifications to AASB 15
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2016-5 Amendments to Australian Accounting 1 January 2018 July 2016
Standards - Classification and Measurement
of Share-based
Payment Transactions [AASB 2]
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2016-6 Amendments to Australian Accounting 1 January 2018 October 2016
Standards - Applying AASB 9 Financial
Instruments with
AASB 4 Insurance Contracts [AASB 4]
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2017-1 Amendments to Australian Accounting 1 January 2018 February 2017
Standards - Transfers of Investment
Property, Annual Improvements
2014-2016 Cycle and Other Amendments
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2017-2 Amendments to Australian Accounting 1 January 2017 February 2017
Standards -Further Annual
Improvements2014-2016 Cycle
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 2017-3 Amendments to Australian Accounting 1 January 2018 July 2017
Standards - Clarifications to AASB 4
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 15 Revenues from Contracts with Customers 1 January 2018 October 2015
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB 16 Leases 1 January 2019 February 2016
----------------------- --------------------------------------------- ----------------------------- ---------------
AASB Interpretation 22 Foreign Currency Transactions and Advance 1 January 2018 February 2017
Consideration
----------------------- --------------------------------------------- ----------------------------- ---------------
IFRIC 23 Uncertainty over Income Tax Treatments 1 January 2019 June 2017
----------------------- --------------------------------------------- ----------------------------- ---------------
The potential impact of those standards and interpretations above that are material to the Consolidated Entity are yet to be assessed.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 2: CONTROLLED ENTITIES
Country 2017 2016
of incorporation
% Investment % Investment
owned ($) owned ($)
Subsidiaries
of Wolf Minerals
Limited:
Wolf Minerals United
(UK) Limited Kingdom 100 313,711,847 100 297,798,047
Wolf Minerals
Finance Pty Ltd Australia 100 124 100 124
Wolf Minerals United
LLP Kingdom 100 - 100 -
During the year Wolf Minerals (UK) Limited repaid a loan to Wolf Minerals Limited through the issue of shares.
2017 2016
NOTE 3: REVENUE $ $
Revenue - tungsten 20,615,254 7,912,923
Revenue - tin 4,084,750 656,038
---------- ---------
24,700,004 8,568,961
========== =========
NOTE 4: COST OF SALES
Mining 18,722,495 13,496,110
Processing 30,995,537 16,145,351
Site administration 9,457,142 8,889,220
Depreciation 17,221,541 11,499,952
76,396,715 50,030,633
========== ==========
NOTE 5: CORPORATE AND TECHNICAL SERVICES
Administration expenses 5,617,022 2,732,611
Depreciation & amortisation expense 26,793 35,804
Directors' fees 480,586 480,586
Equity compensation benefits 311,234 359,455
Employee benefits expense
* superannuation contributions 113,552 126,682
* transfer to/(from) provision for annual leave (3,427) 24,544
* transfer to/(from) provision for long service leave (20,326) 28,670
* salary and wages and other employee benefits 1,708,469 1,588,165
--------- ---------
8,233,903 5,376,517
========= =========
NOTE 6: FINANCE COSTS
Bank charges 9,636 6,281
Interest expense 6,897,615 9,132,039
Borrowing costs 1,364,291 1,243,063
Unwinding of discount on rehabilitation
provision 170,768 235,151
8,442,310 10,616,534
========= ==========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
2017 2016
NOTE 7: INCOME TAX EXPENSE $ $
a. The components of tax expense
comprise:
Current tax - -
Deferred tax - -
------------ ------------
- -
============ ============
b. The prima facie tax on loss from ordinary activities
before income tax is reconciled to the income
tax as follows:
Prima facie tax payable on loss from ordinary
activities before income tax at 30% (2016: 30%)
Consolidated group (22,224,742) (18,928,223)
Add:
Tax effect of:
* Share based payments 116,670 118,451
* Other non-allowable items 4,820 8,417
* Provisions and accruals 289,046 13,973
-
* Property, plant and equipment -
* Rehabilitation expense and amortisation 167,678 -
* Other assessable items 28,558 149
* Revenue losses not recognised 238,634 410,288
* Overseas revenue losses not recognised 14,262,432 12,270,969
* Lower tax rate in foreign jurisdictions on overseas
revenue losses 7,131,216 6,135,484
------------ ------------
22,239,054 18,957,731
Less:
Tax effect of:
-
* Provisions and accruals -
* Capital raising costs (4,368) (29,384)
* Other non-assessable items (9,944) (124)
-
* Research and development tax concession rebate -
------------ ------------
(14,312) (29,508)
Income tax expense/(benefit) - -
============ ============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 7: INCOME TAX EXPENSE (continued)
2017 2016
The applicable average weighted tax
rates are as follows: 0% 0%
c. The following deferred tax balances
have not been accounted for:
2017 2016
$ $
Deferred tax assets:
At 30%
Carried forward revenue losses 2,179,027 1,366,596
Capital raising costs 9,850 1,905
Provisions and accruals 99,976 87,974
2,288,853 1,456,475
At 20% (United Kingdom)
Property, plant and equipment 24,381 24,381
Unrealised Foreign Exchange Loss 19,039 -
Rehabilitation Asset 226,904 -
Provisions and accruals 177,935 -
Carried forward overseas revenue losses 32,138,349 17,875,918
32,586,608 17,900,299
========== ==========
The tax benefits of the above Deferred Tax Assets will only be obtained if:
(a) The company derives future assessable income of a nature and an amount sufficient to enable the benefits to be utilised; and
(b) The company continues to comply with the deductibility conditions imposed by the Income Tax Assessment Act 1997 and its overseas equivalent; and
(c) No change in income tax legislation adversely affects the company in utilising the benefits.
Deferred tax liabilities:
At 30%
Accrued income 108 125
-------- ----
108 125
======== ====
At 20% (United Kingdom):
Accrued income 6,640 -
-------- ----
6,640 -
======== ====
The above deferred tax liabilities have not been
recognised as they have given rise to the carry
forward revenue losses for which the deferred
tax asset has not been recognised.
No deferred tax liability or deferred tax asset is recognised on the development asset as the current net effect is minimal. This will change when the Group commences production.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 8: KEY MANAGEMENT PERSONNEL COMPENSATION
2017 2016
$ $
The key management personnel
compensation comprised:
Short term employment benefits 1,366,416 1,506,421
Share based payments 296,600 294,977
Post employment benefits 402,816 82,348
--------- ---------
2,065,832 1,883,746
========= =========
a. Key management personnel compensation
b. Individual directors' and executives' compensation disclosure
Information regarding individual directors' and executives' compensation and some equity instruments disclosures as required by Corporation Regulation 2M.3.03 is provided in the remuneration report section of the directors' report.
Apart from the details disclosed in this note, no director has entered into a material contract with the Group since the end of the previous financial year and there were no material contracts involving directors' interest existing at the year end.
c. Parent entity
The ultimate parent entity within the Group is Wolf Minerals Limited.
NOTE 9: AUDITORS' REMUNERATION 2017 2016
$ $
Remuneration of the auditor of the
parent entity for:
* Auditing and reviewing the financial report 108,000 115,400
* Taxation services 7,660 4,510
Remuneration of the auditors of the
subsidiary for:
* Auditing and reviewing the financial report 62,063 93,897
177,723 213,807
======= =======
NOTE 10: LOSS PER SHARE
a. Loss used to calculate basic and
dilutive EPS (74,536,641) (63,094,075)
============= ============
2017 2016
No No
b. Weighted average number of ordinary
shares on issue during the year used
in
the calculation of basic EPS 1,084,425,200 837,478,563
c. Weighted average number of ordinary
shares outstanding during the year
used
in calculating dilutive EPS 1,084,425,200 837,478,563
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 11: CASH AND CASH EQUIVALENTS 2017 2016
$ $
Cash at bank and on hand 8,255,188 34,894,928
Short term bank deposits 78,474 115,399
--------- ----------
8,333,662 35,010,327
========= ==========
The effective interest rate on cash
at bank and on hand and short-term
bank deposits was 1.45% (2016: 0.51%)
these deposits have an average maturity
of 180 days.
Reconciliation of cash
Cash at the end of the financial
year as shown in the statement of
cash flows is reconciled to items
in the statement of financial position
as follows:
Cash and cash equivalents 8,333,662 35,010,327
========= ==========
NOTE 12: TRADE AND OTHER RECEIVABLES
Current
Trade Debtors 1,484,799 2,825,538
GST receivable 20,351 22,502
VAT receivable 822,976 2,823,577
2,328,126 5,671,617
========= =========
Provision for impairment of receivables
Current trade and term receivables are generally on 30 day terms. Non-current trade and term receivables are assessed for recoverability based on the underlying terms of the contract. A provision for impairment is recognised when there is objective evidence that an individual trade or term receivable is impaired.
There are no balances within trade and other receivables that are impaired and are past due. It is expected these balances will be received when due.
NOTE 13: INVENTORIES
Consumables - at cost 3,098,154 1,791,640
3,098,154 1,791,640
========= =========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
2017 2016
Fair Fair Fair Fair
value value value value
of asset of liability of asset of liability
NOTE 14: DERIVATIVE FINANCIAL
INSTRUMENTS
Current
Amortising interest rate
swaps - - - -
Forward foreign exchange
contracts - cash flow hedges - 4,202,631 - 8,943,553
--------- ------------- --------- -------------
Total Current - 4,202,631 - 8,943,553
--------- ------------- --------- -------------
Non-Current
Amortising interest rate
swaps - 366,877 - 1,237,623
Forward foreign exchange
contracts - cash flow hedges - - - 3,385,107
--------- ------------- --------- -------------
Total Non-Current - 366,877 - 4,622,730
--------- ------------- --------- -------------
The maximum notional principal amount of the outstanding interest rate swap contracts during the year ended 30 June 2017 was GBP34,291,667 (A$58,069,509) (30 June 2016: GBP35,000,000).
During the year ended 30 June 2017 the fixed interest rates were 2.05% (30 June 2016: 1.175% to 2.05%), and the main floating rate is LIBOR.
2017 2016
$ $
NOTE 15: OTHER ASSETS
Current
Prepayments 495,370 589,242
Accrued interest - 416
Other assets 36,127 38,301
-------------- --------------
531,497 627,959
============== ==============
Non-Current
Other assets(1) 17,189,663 17,787,186
============== ==============
(1) Other assets comprise a bond agreement and
cash collateral deposits the Company has provided
as security to various parties in connection with
environmental restoration obligations. The bond
and collateral deposits are not released until
the underlying obligations have been fulfilled
by the Company to the satisfaction of the UK authorities.
The two major non-current collateral deposits
are a GBP9.05 million restoration bond and a GBP0.75
million financial provision for the environmental
waste permit.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
2017 2016
$ $
NOTE 16: PROPERTY, PLANT & EQUIPMENT
Plant and equipment:
At cost 162,660,199 167,564,573
Accumulated depreciation (18,067,950) (7,127,986)
Total plant and equipment 144,592,249 160,436,587
Motor vehicles:
At cost 614,526 651,505
Accumulated depreciation (445,882) (353,518)
------------ -----------
Total motor vehicles 168,644 297,987
Land and buildings
At cost 127,758,344 119,119,934
Accumulated depreciation (8,769,271) (3,012,823)
------------ -----------
Total land and buildings 118,989,073 116,107,111
Total property, plant and equipment 263,749,966 276,841,685
============ ===========
Motor Plant Land Total
vehicles and equipment and buildings
$ $ $ $
Balance at 30 June 2015 415,990 198,756 - 614,746
Additions 114,169 197,984 - 312,153
Transferred from mine
properties and development - 167,031,060 119,119,934 286,150,994
Depreciation expense (205,615) (7,910,697) (3,419,444) (11,535,756)
Effect of foreign currency
exchange differences (26,557) 919,484 406,621 1,299,548
--------- -------------- -------------- ------------
Balance at 30 June 2016 297,987 160,436,587 116,107,111 276,841,685
Additions - 4,595,618 15,399,576 19,995,194
Depreciation expense (111,586) (11,253,748) (5,883,000) (17,248,334)
Effect of foreign currency
exchange differences (17,757) (9,186,208) (6,634,614) (15,838,579)
--------- -------------- -------------- ------------
Balance at 30 June 2017 168,644 144,592,249 118,989,073 263,749,966
========= ============== ============== ============
2017 2016
NOTE 17: MINE PROPERTIES AND DEVELOPMENT $ $
Mine properties:
At cost 6,349,227 5,927,001
Accumulated amortisation (767,030) (452,354)
--------- ---------
Total mine development expenditure 5,582,197 5,474,647
========= =========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
Mine Mine Total
properties development
NOTE 17: MINE PROPERTIES AND $ $ $
DEVELOPMENT (Continued)
Balance at 30 June 2015 - 296,983,129 296,983,129
Expenditure capitalised during
the year 31,456,414 31,456,414
Transferred to plant and equipment (167,031,060) (167,031,060)
Transferred to land and buildings (119,119,934) (119,119,934)
Transferred to mine properties 5,873,210 (5,873,210) -
Amortisation (452,354) - (452,354)
Effect of foreign currency exchange
differences 53,791 (36,415,339) (36,361,548)
----------- ------------- -------------
Balance at 30 June 2016 5,474,647 - 5,474,647
Expenditure capitalised during
the year 809,377 - 809,377
Amortisation (388,158) - (388,158)
Effect of foreign currency exchange
differences (313,669) - (313,669)
----------- ------------- -------------
Balance at 30 June 2017 5,582,197 - 5,582,197
=========== ============= =============
Mine properties relates to the rehabilitation asset of the Drakelands Mine. The amortisation is recognised as part of cost of sales in the Statement of Profit or Loss and Other Comprehensive Income.
2017 2016
$ $
NOTE 18: TRADE AND OTHER PAYABLES
Current
Trade payables(1) 13,662,144 12,382,539
Accrued borrowing costs 1,003,222 1,092,157
Sundry payables and accrued
expenses(2) 8,313,472 9,025,510
---------- ----------
22,978,838 22,500,206
========== ==========
(1) Trade and other payable are generally settled
within 30 days.
(2) Accrued expenses at 30 June 2017 include work
performed by suppliers during June but not invoiced
at period end. Included in the accrued expenses
amount is an amount owed to the mining services
contractor, CA Blackwell (Contracts) Limited,
for GBP1,312,885 (.APPROX. $2,223,239).
Mine rehabilitation(1) Employee Total
benefits
NOTE 19: PROVISIONS $ $ $
Opening balance at 1 July
2016 6,080,399 279,763 6,360,162
Additional provisions 636,316 (23,753) 612,563
---------------------- --------- ---------
Balance at 30 June 2017 6,716,715 256,010 6,972,725
====================== ========= =========
2017 2016
$ $
Analysis of total provisions
Current 193,960 197,387
Non current 6,778,765 6,162,775
--------- ---------
6,972,725 6,360,162
========= =========
(1) The Group makes full provision for the future cost of rehabilitating mine sites and associated production facilities on a discounted basis at the time of constructing the mine and installing those facilities.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 19: PROVISIONS (continued)
The rehabilitation provision represents the present value of rehabilitation costs relating to the Project site which are expected to be incurred up to and following the expiration date of the mining licence. The provision has been created based upon the updated Definitive Feasibility Study. Assumptions based upon the current economic environment and development work completed at the Project have been made, which management believes are a reasonable basis upon which to estimate the future liability, and will be reviewed regularly to take into account any material changes to the assumptions. The actual rehabilitation costs and works required will ultimately depend upon future market prices for the necessary rehabilitation works required, changes in future regulatory requirements and the timing on when the mine ceases to operate commercially.
The discount rate used in the calculation of the provision as at 30 June 2017 is 3% per annum. The value of the undiscounted provision is $8,906,661 (2016: $8,290,460).
2017 2016
$ $
NOTE 20: BORROWINGS
Current
Bridge loan facility 56,315,448 -
Senior secured loan 3,558,976 25,480,837
----------- -----------
59,874,424 25,480,837
Non-current
Senior secured loan 97,060,134 84,971,049
Details of the bridge loan facility
at 30 June
Bridge loan facility 57,278,513 -
Less: unamortised transaction costs (963,065) -
----------- -----------
56,315,448 -
=========== ===========
Details of the senior secured loan
at 30 June
Senior secured loan - Tranche A 49,544,820 54,783,939
Senior secured loan - Tranche B 58,834,474 65,055,927
Less: unamortised transaction costs (7,760,184) (9,387,980)
----------- -----------
100,619,110 110,451,886
=========== ===========
Total
Reconciliation of transaction costs $
Bridge loan facility
Opening balance at 1 July 2016 -
Capitalised transaction costs 3,040,031
Amortisation of transaction costs (2,076,966)
-----------
Balance at 30 June 2017 963,065
===========
Senior secured loan
Opening balance at 1 July 2016 9,387,980
Capitalised transaction costs -
Amortisation of transaction costs (1,086,729)
Effect of foreign currency exchange differences (541,067)
-----------
Balance at 30 June 2017 7,760,184
===========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 20: BORROWINGS (continued)
Senior Secured Loan and Bond Facility
On 10 May 2014 the Company signed documentation with UniCredit Bank AG, London Branch; ING Bank N.V.; and Caterpillar Financial SARL (together the Lenders) for GBP75 million in senior debt finance facilities, incorporating a GBP70 million term loan facility and a GBP5 million bond facility. The term loan facility comprises two tranches, A and B, amounting to GBP32 million and GBP38 million respectively.
The senior debt facility is secured by mortgages and charges over the Company's Mine Properties asset and Property, Plant and Equipment.
On 24 October 2016 the Company announced it has executed binding agreements with its existing senior lenders (Senior Lenders) for a standstill and restructure of the senior debt currently outstanding. The standstill provides that a limited number of events of default shall apply under the Senior Debt, along with certain waivers of, and amendments to, the Senior Debt conditions for any non-compliance and grants relief from financial and other covenants. Since the Company entered into the standstill there have been no breaches of the debt covenants.
The terms of the Debt Restructure provide that all Senior Debt principal repayments are deferred until January 2018 and the tenor of the Senior Debt is extended until June 2023.
Bridge Loan Facility
In conjunction with the debt restructure, the Company agreed a GBP20 million 12 month secured bridge loan facility (Bridge Loan Facility) with Resource Capital Fund VI L.P. (RCF VI), a major shareholder and an associate of Wolf's other major shareholders, Resource Capital Fund V L.P. and RCF V Annex Fund. After further negotiations, the Bridge Loan Facility was subsequently increased to GBP30 million in March 2017, GBP40 million in June 2017 and GBP45 million in September 2017. As at 30 June, GBP33 million of the available loan had been utilised.
During its term, the Bridge Facility will be fully secured and rank pari passu with the Senior Lenders on substantially the same form and terms as existing under the Senior Debt. Interest may be paid in cash or capitalised each quarter at Wolf's discretion.
The Company may pre pay the Bridge Facility in certain limited circumstances, but if not prepaid at the conclusion of the 12 month term, the Bridge Facility will mandatorily switch to a three year subordinated convertible loan, if certain conditions precedent are satisfied, or a three year subordinated loan if those conditions are not satisfied.
Financing Arrangements
The following financing arrangements were in place at the reporting date:
Name Currency Availability Maturity Interest Limit Drawn/ Repaid
Utilised
---------- --------- ------------- --------- --------- --------- ---------- ---------
Senior GBP 10 May 10 years LIBOR GBP70 GBP70 GBP6
Debt 2013 + 4.25% million million million
Term
Loan
---------- --------- ------------- --------- --------- --------- ---------- ---------
Bond GBP 10 May 10 years 2.75% GBP5 GBP5 -
Facility 2013 million million
---------- --------- ------------- --------- --------- --------- ---------- ---------
Bridge GBP 24 October 1 year LIBOR GBP45 GBP33 -
Loan 2016 + 4.25% million million
Facility
---------- --------- ------------- --------- --------- --------- ---------- ---------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
2017 2016
$ $
NOTE 21: ISSUED CAPITAL
1,087,645,948 (2016: 1,082,887,708)
fully paid ordinary shares 274,080,313 273,544,711
=========== ===========
2017 2016
No $ No $
a. Ordinary shares
At the beginning of reporting
period 1,082,887,708 273,544,711 809,422,200 226,982,428
Shares issued during
the year
* 20 November 2015 - - 124,593 28,656
* 8 January 2016 - - 177,967 32,924
* 4 May 2016 - - 174,102,285 30,884,800
* 10 May 2016 - - 251,649 40,264
* 30 June 2016 - - 98,245,735 16,193,718
* Options/Rights exercised during the year - - 563,279 88,153
* 22 December 2016 352,645 42,000 - -
* 30 December 2016 506,638 42,000 - -
* 3 April 2017 563,759 42,000 - -
* 30 June 2017 641,221 42,000 - -
* Options/Rights exercised during the year 2,693,977 408,645 - -
Share issue expenses - (41,043) - (706,232)
------------- ----------- ------------- -----------
At reporting date 1,087,645,948 274,080,313 1,082,887,708 273,544,711
============= =========== ============= ===========
Ordinary shares participate in dividends and the proceeds on winding up of the Parent Entity in proportion to the number of shares held. Ordinary shares have no par value.
At the shareholders' meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
Capital Management
When managing capital, the Board's objective is to ensure the entity continues as a going concern as well as to obtain optimal returns to shareholders and benefits for other stakeholders. The Board also aims to maintain a capital structure which assists to ensure the lowest possible cost of capital available to the Group.
During the term of the senior secured loan facility, the Group will have the following capital restrictions imposed:
-- The Parent Entity may only issue shares where the net proceeds of such issuance are applied towards funding project costs; and
-- Pursuant to an issuance of shares for corporate activities of the Group, limited to 25% of the market capitalisation of the Parent Entity in accordance with the rules of the Australian Securities Exchange and which does not require notification to or a resolution of, the shareholders of the Parent Entity.
Options and performance rights
For information relating to the Wolf Minerals Limited employee option plan and performance rights plan, including details of options and performance rights issued, exercised and lapsed during the financial year and the options and performance rights outstanding at year end, refer to Note 26 Share-based Payments.
For information relating to share options and performance rights issued to key management personnel during the financial year, refer to Note 26 Share-based Payments.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 22: RESERVES
Share based payments reserve
The share based payments reserve records items recognised as expenses on valuation of share options and performance rights.
2017 2016
No $ No $
Balance 1 July 4,792,992 1,743,297 9,129,320 1,576,880
Issued during the year
to key management personnel 3,447,368 218,138 2,035,908 254,570
Exercised during the
year (2,693,977) (408,645) (563,279) (88,153)
Cancelled during the
year (3,011,834) - - -
Expired during the year - - (5,808,957) -
Balance 30 June 2,534,549 1,552,790 4,792,992 1,743,297
=========== ========= =========== =========
Foreign currency translation reserve
The foreign currency translation reserve records the effect of exchange differences on the translation of foreign currency financial statements of subsidiaries.
2017 2016
$ $
Balance 1 July 9,252,726 32,127,749
Foreign currency differences during
the year (11,064,618) (22,875,023)
Balance 30 June (1,811,892) 9,252,726
============ ============
Cash flow hedge reserve
The cash flow hedge reserve records the effect of exchange and interest differences on the translation of hedged instruments.
2017 2016
$ $
Balance 1 July (10,671,031) 653,715
Cash flow hedge, net of tax 4,287,276 (11,324,746)
Balance 30 June (6,383,755) (10,671,031)
============ ============
NOTE 23: COMMITMENTS
(a) Development commitments
Under the terms of the forty year lease for the minerals and rights at the Project the Company has to pay an annual rent of $117,236 (GBP69,231) indexed annually. The option lapses if the Company fails to maintain its obligations under the lease.
Under the same option agreement the Company is required to procure security for various parties in the event that it is not able to meet its contractual obligations in terms of environmental rehabilitation and restoration at the conclusion of the Project. Included within other receivables are deposits and cash collateral amounting to $17,173,975 (GBP10,141,712) (2016: $17,626,774 (GBP9,818,289)) in respect of the bonds in place at year end.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 23: COMMITMENTS (continued)
(b) Lease expenditure commitments
2017 2016
$ $
Not longer than one year 140,133 133,051
Longer than one year, but not longer
than five years 145,738 282,282
------- -------
285,871 415,333
======= =======
The Group has entered into the following leases on commercial terms for office accommodation:
Location Term Expiry 22 Railway Road Subiaco 4 years 19 June 2019 (c) Other contractual commitments
Mining Services Contract
In 2013 Wolf Minerals (UK) Limited awarded an GBP85 million Mining Services Contract (MSC) for the Project to CA Blackwell (Contracts) Limited.
The MSC is rates-based and made up of two parts:
-- Phase 1, Mining pre-strip and Mine development, -- Phase 2, Mine production.
The MSC term for phase one finished on 31 March 2016. Phase 2 has a five year term from completion of phase 1 work. The MSC is able to be terminated by Wolf at any time with 60 days' notice.
Supply agreements
The Group has signed supply agreements for the future sale of mining outputs from the Project. These agreements are contingent on the Company meeting certain milestones in the project and contracted quantities being met; if these conditions are not met the agreements are terminable at the discretion of the buyer.
NOTE 24: SEGMENT REPORTING
The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and used by the chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.
The financial information presented in the profit or loss and statement of financial position is the same as that presented to the chief operating decision makers.
The Consolidated Entity predominately operates in the tungsten and tin industry of the mining and materials sector in the United Kingdom.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 25: CASH FLOW INFORMATION
2017 2016
$ $
a. Reconciliation of cash flow from
operations with loss after income
tax
Net loss (74,536,641) (63,094,075)
Non cash flows in profit
Depreciation 17,248,334 11,535,756
Financial instrument expense 7,607,347 5,992,401
Equity compensation benefits 388,900 359,455
Foreign exchange differences 296,783 (7,821)
Finance cost 8,442,310 10,616,534
Changes in assets and liabilities,
net of the effects of purchase and
disposal of subsidiaries
(Increase)/decrease in trade and
term receivables 1,071,974 (3,169,049)
(Increase)/decrease in inventories (1,408,207) (1,791,639)
(Increase)/decrease in prepayments 64,640 (476,876)
Increase/(decrease) in trade payables
and accruals 2,523,147 14,671,005
Increase/(decrease) in provisions (23,753) 451,777
Cash flow used in operations (38,325,166) (24,912,532)
============ ============
NOTE 26: SHARE BASED PAYMENTS
Included under Corporate and technical services expense in the statement of profit or loss and other comprehensive income is $311,234 (2016: $359,455), and relates, in full, to equity-settled share-based payment transactions.
All options granted to key management personnel are for ordinary shares in Wolf Minerals Limited, which confer a right of one ordinary share for every option held.
2017 2016
Number Weighted Number Weighted
of options average of options/rights average
exercise exercise
price price
No $ No $
Options issued to
key management personnel
Outstanding at the
beginning of the
year - - 850,000 0.34
Options exercised - - - -
Granted - - - -
Options expired - - (850,000) 0.34
Outstanding at year
end - - - -
----------- --------- ------------------ ---------
Exercisable at year
end - - - -
=========== ========= ================== =========
2017 2016
Number Weighted Number Weighted
of options average of options/rights average
exercise exercise
price price
No $ No $
Options issued to
shareholders
Outstanding at the
beginning of the
year - - 4,958,957 0.29
Granted - - - -
Exercised - - - -
Expired - - (4,958,957) 0.29
Outstanding at year
end - - - -
----------- --------- ------------------ ---------
Exercisable at year
end - - - -
=========== ========= ================== =========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 26: SHARE BASED PAYMENTS (continued)
2017 2016
Rights issued to Number Weighted Number Weighted
key management personnel of rights average of rights average
exercise exercise
price price
Outstanding at the
beginning of the
year 4,792,992 - 3,320,363 -
Rights exercised (2,693,977) - (563,279) -
Granted 3,447,368 - 2,035,908 -
Rights lapsed (3,011,834) - - -
Outstanding at year
end 2,534,549 - 4,792,992 -
----------- --------- ---------- ---------
Exercisable at year
end 2,534,549 - 4,792,992 -
=========== ========= ========== =========
When key management personnel cease employment the options or rights are deemed to have lapsed.
The weighted average contract life remaining at 30 June 2017 was:
-- Rights 4.75 years
Performance Right issued during the year
During the year ended 30 June 2017, the Company issued one tranche of performance rights, Issue 5. Issue 5 was granted on 22 December 2016 and consisted of 3,447,368 performance rights. The tranche was issued to employees in accordance with the Wolf Minerals Limited Performance Rights Plan as readopted by shareholders at the Annual General Meeting held on 29 November 2016.
The vesting of the performance rights is subject to the following conditions:
a) 50% of performance rights will vest based on the Company's relative share price performance versus the AIM Basic Resources Index in accordance with a defined scale; and
b) 50% of performance rights will vest based upon the Company's Total Shareholder Return (TSR) performance as measured over the vesting period.
The performance rights were valued by an independent third party using industry standard valuation techniques. The key inputs and valuations are summarised in the table below.
Issue 5
Vesting conditions a) b)
Underlying security spot
price $0.085 $0.085
Exercise price Nil Nil
Valuation date 22/12/16 22/12/16
Expiration date 30/06/21 30/06/21
Performance period (years) 4.52 4.52
Volatility 80.00% 80.00%
Risk free rate 2.31% 2.31%
Dividend Yield Nil Nil
Number of performance
rights 1,723,684 1,723,684
Valuation per performance
right $0.063 $0.054
Valuation per tranche $108,592 $93,079
As at 30 June 2017, the unissued ordinary shares of Wolf Minerals Limited under options or rights are as follows:
Grant Date Date of Expiry Exercise Number
Price of Rights
28/11/14 30/06/18 $0.00 273,350
28/11/14 30/06/19 $0.00 261,130
16/11/15 30/06/20 $0.00 1,086,394
04/11/11 22/12/20 $0.00 152,778
22/12/16 30/06/21 $0.00 760,897
2,534,549
----------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 27: RELATED PARTY DISCLOSURES
i. Interests in controlled entities are disclosed in Note 2.
ii. No amounts in addition to those disclosed in Note 8 to the financial statements were paid or payable to Directors of the Company at the end of the year.
iii. During the year, Wolf Minerals Limited invoiced Wolf Minerals (UK) Limited $6,471,040 for management fees (2016: $4,179,532). At 30 June 2017 $1,532,877 of management charges remained unpaid.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.
NOTE 28: FINANCIAL RISK MANAGEMENT
a. Financial Risk Management Policies
The Consolidated Entity's financial instruments consist mainly of deposits with banks, other receivables, trade and other payables, loans to the UK based subsidiary and derivative financial instruments.
i. Treasury Risk Management
The Board meets on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.
The Board's overall risk management strategy seeks to assist the Group in meeting its financial targets, whilst minimising potential adverse effects on financial performance.
Risk management policies are approved and reviewed by the Board on a regular basis. These include the use of credit risk policies and future cash flow requirements.
ii. Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are foreign currency risk, liquidity risk, credit risk and price risk.
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currencies and is exposed to foreign currency risk through foreign exchange rate fluctuations, primarily with respect to pounds sterling and US Dollar.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity's functional currency. These currencies are reasonably stable, and the risk is managed by maintaining bank accounts denominated in those currencies.
During previous periods the Consolidated Entity entered into forward foreign exchange contracts. These contracts are to hedge the variability in the highly probable cash flows associated with the US$ receipts from future tungsten sales. The Consolidated Entity expects that there will be a close relationship between the hedge instrument (the FX forward contract) and the hedged item (US$ drawdown and US$ receipts).
The maturity, settlement amounts and the average contractual exchange rates of the Consolidated Entity's outstanding forward foreign exchange contracts at the reporting date was as follows:
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 28: FINANCIAL RISK MANAGEMENT (continued)
Foreign currency risk (continued)
Average exchange
Sell USD rates
2017 2016 2017 2016
$ $
Buy GBP
Maturity:
0 - 6 months 18,330,831 21,866,995 1.5260 1.5489
6 - 12 months 14,907,224 25,911,516 1.3754 1.5536
12+ months - 33,238,055 - 1.4546
The Consolidated Entity recognises the profits and losses resulting from currency fluctuations as and when they arise.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation. Typically the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 90 days; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Further details regarding the Group's liquidity position is included within the Going Concern section of Note 1.
The table below summarises the maturity profile of the Consolidated Entity's financial liabilities based on contractual undiscounted payments.
Less Between Between Over Total Carrying
than 1 and 2 and 5 years Amount
1 Year 2 years 5 years
$ $ $ $ $ $
30 June 2017
Trade and other
payables 22,978,838 - - - 22,978,838 22,978,838
Interest-bearing
borrowings 62,697,392 13,208,520 50,039,970 39,711,924 165,657,806 156,934,558
85,676,230 13,208,520 50,039,970 39,711,924 188,636,644 179,913,396
---------- ---------- ---------- ---------- ----------- -----------
Less Between Between Over Total Carrying
than 1 & 2 2 & 5 5 years Amount
1 Year years years
$ $ $ $ $ $
30 June 2016
Trade and other
payables 22,500,206 - - - 22,500,206 22,500,206
Interest-bearing
borrowings 29,180,806 27,836,127 62,822,933 - 119,839,866 110,451,886
51,681,012 27,836,127 62,822,933 - 142,340,072 132,952,092
---------- ---------- ---------- -------- ----------- -----------
Financing arrangements
The borrowing facilities in place at the reporting date are disclosed in Note 20.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group's receivables from customers and investment securities. The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the consolidated financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 28: FINANCIAL RISK MANAGEMENT (continued)
Credit risk (continued)
The Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the Group.
Price risk
Commodity price risk is the risk that the Group's future earnings will be adversely impacted by changes in the market prices of commodities, primarily tungsten. Management is aware of this impact on its primary revenue stream but knows that there is little it can do to influence the price earned apart from a hedging scheme.
The Group's Treasury policy allows for hedging of highly probable cash flows associated with the US Dollar receipts from future tungsten sales up to a maximum of 50% of the Group's rolling 24 month production. This policy allows management to combine the benefits of an exposure to the tungsten price for its shareholders whilst also facilitating the ability for management to put in place limited hedging to cover the cost base.
The following table details the Group's sensitivity to a 10% increase and decrease in the tungsten price against the invoiced price. 10% is the sensitivity used when reporting commodity price internally to management and represents management's assessment of the possible change in price. A positive number below indicates an increase in profit for the year and other equity where the price increases.
The Group holds the following financial instruments:
2017 2016
$ $
10% increase in tungsten price 2,061,525 791,292
10% decrease in tungsten price (2,061,525) (791,292)
The Group holds the following financial instruments:
2017 2016
$ $
Financial assets:
Cash and cash equivalents 8,333,662 35,010,327
Trade and other receivables 2,328,126 5,671,617
Other current assets 36,127 38,717
Derivative financial instruments - -
Other non-current assets 17,189,663 17,787,186
Total financial assets 27,887,578 58,507,847
----------- -----------
Trade and other receivables
are expected to be received
as follows:
Less than 1 month 2,328,126 5,671,617
Less than 6 months - -
=========== ===========
Financial liabilities:
Trade and sundry payables 22,978,838 22,500,206
Interest bearing liabilities 156,934,558 110,451,886
Derivative financial instruments 4,569,508 13,566,283
----------- -----------
Total financial liabilities 184,482,904 146,518,375
----------- -----------
Trade and sundry payables are
expected to be paid as follows:
Less than 1 month 22,978,838 22,500,206
Less than 6 months - -
=========== ===========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 28: FINANCIAL RISK MANAGEMENT (continued)
iii. Net fair values
No financial assets and financial liabilities are readily traded on organised markets in standardised form other than listed investments, forward exchange contracts and interest rate swaps.
Fair values are materially in line with carrying values.
iv. Sensitivity analysis
Interest Rate Risk and Foreign Currency Risk
The Group has performed sensitivity analysis relating to its exposure to interest rate risk and foreign currency risk at reporting date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.
Interest Rate Risk Exposure Analysis
Weighted Floating Interest Non Interest
Average Rate Bearing
Effective
Interest
Rate
2017 2016 2017 2016 2017 2016
FINANCIAL ASSETS % %
Cash at bank
and on hand 1.45 0.51 8,333,662 35,010,327 - -
Receivables - - - - 2,328,126 5,671,617
Other current
assets - - - - 36,127 38,717
Derivative financial - - - - - -
instruments
Other non-current
assets - - - - 17,189,663 17,787,186
----------- ----------- ---------- ----------
Total financial
assets 8,333,662 35,010,327 19,553,916 23,497,520
=========== =========== ========== ==========
FINANCIAL LIABILITIES
Payables - - - - 22,978,838 22,500,206
Interest bearing
liabilities 4.67 4.84 156,934,558 110,451,886 - -
Derivative financial
instruments - - - - 4,569,508 13,566,283
----------- ----------- ---------- ----------
Total financial
liabilities 156,934,558 110,451,886 27,548,346 36,066,489
=========== =========== ========== ==========
Interest Rate Sensitivity Analysis
At 30 June 2017, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:
2017 2016
$ $
Change in profit
Increase in interest rate by 0.5%
(50 basis points) (209,941) (290,238)
Decrease in interest rate by 0.5%
(50 basis points) 209,941 290,238
Change in equity
Increase in interest rate by 0.5%
(50 basis points) (209,941) (290,238)
Decrease in interest rate by 0.5%
(50 basis points) 209,941 290,238
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 28: FINANCIAL RISK MANAGEMENT (continued)
Foreign Currency Risk Sensitivity Analysis
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity's functional currency. These currencies are reasonably stable, and the risk is managed by maintaining bank accounts denominated in those currencies.
During previous periods, the Consolidated Entity entered into forward foreign exchange contracts. These contracts are to hedge the variability in the highly probable cash flows associated with the US$ receipts from future tungsten sales. The Consolidated Entity expects that there will be a close relationship between the hedge instrument (the FX forward contract) and the hedged item (US$ receipts).
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the reporting date were as follows:
Assets Liabilities
2017 2016 2017 2016
Consolidated $ $ $ $
Pounds sterling 7,985,116 40,827,813 108,749,424 137,484,811
US dollars 231,022 304,532 - -
---------- ----------- ------------ ------------
8,216,138 41,132,345 108,749,424 137,484,811
========== =========== ============ ============
2017 2016
$ $
Change in profit
Improvement in AUD by 5% 5,026,664 4,379,120
Decline in AUD by 5% (5,026,664) (4,379,120)
Change in equity
Improvement in AUD by 5% 5,026,664 4,379,120
Decline in AUD by 5% (5,026,664) (4,379,120)
The above interest rate and foreign exchange rate risk sensitivity analysis has been performed on the assumption that all other variables remain unchanged.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEARED 30 JUNE 2017
NOTE 29: FAIR VALUE MEASUREMENT
Fair value hierarchy
The following tables detail the Consolidated Entity's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
Level Level Level
30 June 2017 1 2 3 Total
$ $ $ $
Assets
Forward foreign exchange
contracts - - -
Total assets - - -
Liabilities
Amortising interest
rate swaps - 366,877 - 366,879
Forward foreign exchange
contracts - 4,202,631 - 4,202,631
Total liabilities - 4,569,508 - 4,569,510
----- --------- ----- ---------
Level Level Level
30 June 2016 1 2 3 Total
$ $ $ $
Assets
Forward foreign exchange
contracts - - - -
Total assets - - - -
Liabilities
Amortising interest
rate swaps - 1,237,623 - 1,237,623
Forward foreign exchange
contracts - 12,328,660 - 12,328,660
Total liabilities - 13,566,283 - 13,566,283
----- ---------- ----- ----------
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 2.
Level 2 hedging derivatives comprise forward foreign exchange contracts, forward foreign exchange options and interest rate swaps. These forward foreign exchange contracts have been fair valued using forward exchange rates that are quoted in an active market. Interest rate swaps are fair valued using forward interest rates extracted from observable yield curves. The effects of discounting are generally insignificant for Level 2 derivatives.
This valuation technique maximises the use of observable market data where it is available and relies as little as possible on entity specific estimates
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 30: PARENT ENTITY DISCLOSURES
Financial position 2017 2016
Assets $ $
Current assets 57,613,431 17,590,373
Non-current assets 313,773,215 297,884,443
----------- -----------
Total assets 371,386,646 315,474,816
----------- -----------
Liabilities
Current liabilities 57,709,913 974,603
Non-current liabilities 62,050 82,376
----------- -----------
Total liabilities 57,771,963 1,056,979
----------- -----------
Net assets 313,614,683 314,417,837
=========== ===========
Equity
Issued capital 274,080,314 273,544,711
Equity settled benefits 1,552,789 1,743,297
Accumulated losses 37,981,580 39,129,829
----------- -----------
Total equity 313,614,683 314,417,837
=========== ===========
Financial performance 2017 2016
$ $
Profit/(loss) for the year (1,148,249) 28,562,647
Other comprehensive income - -
Total comprehensive income (1,148,249) 28,562,647
=========== ==========
The Parent Entity has no contingent liabilities or guarantees outstanding at 30 June 2017 other than a $46,540 rental guarantee.
NOTE 31: DIVIDENDS
The Board of Directors have recommended that no dividend be paid. No dividends were paid during the year.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2017
NOTE 32: CONTINGENT ASSETS AND LIABILITIES
As at reporting date the Group had no contingent assets or liabilities other than a rental guarantee of $46,540.
NOTE 33: EVENTS AFTER THE REPORTING DATE
On 17 August 2017, the Company provided an update on the operating turnaround plan at Drakelands which included improvements in processing plant reliability in the crushing circuit and performance of the refinery to enhance production levels, along with providing temporary changes to weekend operating arrangements whilst technical solutions are being implemented to address LFN emissions. The Company had decided to notify GRES of its intention to recover the cost of the LFN rectification works from the Performance Bond under the construction contract if GRES did not take all necessary actions to do so at its own cost. That remains the current position.
On 31 August 2017, the Company announced that RCF VI had agreed to release a further GBP5 million tranche of the Bridge Loan Facility to support short term working capital. The funds were subsequently received on 11 September 2017.
No other matters or circumstances have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.
NOTE 34: COMPANY DETAILS
The registered office and principal place of business address is:
Suite 25, Level 3
22 Railway Road
SUBIACO WA 6008
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
The following additional information is required by the Australian Securities Exchange Ltd in respect of listed public companies only.
Shareholdings
Distribution
a. Distribution of Shareholders of holders
Category (size of holding)
1 - 1,000 84
1,001 - 5,000 223
5,001 - 10,000 182
10,001 - 100,000 379
100,001 - and over 82
------------
950
------------
a. There are no shareholdings held in less than marketable parcels.
b. The names of the substantial shareholders
listed in the holding company's register
as at 18 September 2017 are:
Number
Shareholder: of Ordinary
Shares
Resource Capital Fund V LP 610,158,609
TTI (NZ) Limited 260,972,270
Computershare Clearing 113,780,298
Traxys Projects LP 55,506,776
Note: Computershare Clearing is the nominee account for the depositary interests that are traded on the Alternative Investment Market of the London Stock Exchange.
c. Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
- Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.
d. 20 Largest Shareholders - Ordinary
Shares
Number Percentage
of Ordinary of Ordinary
Fully Fully
Paid Shares Paid Shares
Name Held Held
1. Resource Cap Fund V L.P. 610,158,609 56.10%
2. TTI (NZ) Limited 260,972,270 23.99%
3. Computershare Clearing 113,780,298 10.46%
4. Traxys Projects LP 55,506,776 5.10%
5. BNP Paribas Nom PL 2,275,775 0.21%
6. J P Morgan Nom Aust Ltd 1,875,940 0.17%
7. CITICORP Nom PL 1,561,834 0.14%
8. Aaress PL 1,302,427 0.12%
9. Pershing Aust Nom PL 1,297,072 0.12%
10. Russell Ralph + Hynes A M 1,287,731 0.12%
11. Bond Street Custodians Ltd 1,243,098 0.11%
12. McCracken Susan Jane 1,210,395 0.11%
13. Spar Nom PL 1,155,000 0.11%
14. Clark Russell St John 1,031,626 0.09%
15. Aust Forestry Inv PL 947,833 0.09%
16. Novacarta PL 909,534 0.08%
17. HSBC Custody Nom Aust Ltd 821,682 0.08%
18. Homewood Inv Ltd 767,040 0.07%
19. Lewis Sharon 687,000 0.06%
20. Fleurbow PL 537,602 0.05%
1,059,329,542 97.38%
============= ============
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
1. The name of the company secretary is Pauline Carr. 2. The address of the principal registered office in Australia is:
Suite 25, Level 3
22 Railway Road
SUBIACO WA 6008
Telephone 61 (08) 6143 2070
3. Registers of securities are held at the following address in Western Australia is:
Security Transfer Australia
770 Canning Hwy
Applecross WA 6153
4. Stock Exchange Listings
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Securities Exchange Limited and the Alternative Investment Market of the London Stock Exchange Limited.
5. Unquoted Securities
Ordinary Shares
Nil.
Options over Unissued Shares
A total of 2,534,549 unquoted rights are on issue.
ENDS
For further details, please contact:
Numis Securities: John Prior/James Black/Paul Gillam +44(0)20 7260 1000 Newgate: Adam Lloyd / Ed Treadwell +44 (0) 20 7653 9850 Wolf Minerals Limited: Richard Lucas +61 (0) 8 6143 2070
About Wolf Minerals
Wolf Minerals is a dual listed ("ASX: WLF", "AIM: WLFE") specialty metals producer. In 2015, Wolf Minerals completed the development of a large tungsten resource at its Drakelands Mine, located at Hemerdon, in southwest England.
This information is provided by RNS
The company news service from the London Stock Exchange
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September 29, 2017 02:03 ET (06:03 GMT)
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