For personal use only Annual Report 2014 MINING CORPORATION LIMITED
For personal use only MINING CORPORATION LIMITED Annual Report 2014 For personal use only CORPORATE DIRECTORY BOARD OF DIRECTORS SHARE REGISTRY Alex Bajada Executive Chairman Terrence Jones Non Executive Director Angus Middleton Non Executive Director Advanced Share Registry Services 110 Stirling Highway, NEDLANDS Western Australia 6009 Telephone: + 61 8 9389 8033 Facsimile: + 61 8 9389 7871 COMPANY SECRETARY BANKERS Mark MJ Smith National Australia Bank 1/1238 Hay Street WEST PERTH Western Australia 6005 REGISTERED OFFICE AUDITORS 10 Canning Highway SOUTH PERTH Western Australia 6151 Somes Cooke 35 Outram Street, WEST PERTH Western Australia 6005 BUSINESS OFFICE STOCK EXCHANGE LISTING Ground Floor 16 Ord Street, WEST PERTH Western Australia 6005 Excalibur Mining Corporation Limited are quoted on Australian Stock Exchange Limited Telephone: Facsimile: + 61 8 9429 2900 + 61 8 9486 1011 WEBSITE www.excaliburmining.com.au MINING CORPORATION LIMITED ASX Code: EXM CONTENTS I COMPANY REPORT II DIRECTOR’S REPORT 1 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 18 CONSOLIDATED BALANCE SHEET 19 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 20 CONSOLIDATED STATEMENT OF CASH FLOWS 22 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 23 DIRECTOR’S DECLARATION 51 LEAD AUDITOR’S INDEPENDENCE DECLARATION 52 INDEPENDENT AUDITOR’S REPORT 53 SHAREHOLDER INFORMATION 55 SUMMARY OF TENEMENT HOLDINGS 57 For personal use only CHAIRMAN’S ADDRESS MINING CORPORATION LIMITED Excalibur Mining Corporation Annual Report 2014 1 For personal use only CHAIRMAN’S ADDRESS MINING CORPORATION LIMITED Dear Shareholder During the last twelve months the Company has continued to focus on the Tennant Creek Nobles Nob project and has increased the understanding of the structural geology of the region that will assist in determining future drill targets. After completion of its due diligence the Company did not acquire the gold copper producing project in Zambia. However, it continues to try to Joint Venture its remaining gold copper leases. The market conditions have been extremely hard for resource explorers and in acknowledgement of this and to preserve the company’s working capital the Board did not pay Directors fees during the year. There are resolutions at the Annual General Meeting for Directors/Company Secretary to be paid their Directors and accounting fees by the issue of ordinary shares. We encourage shareholders to support these resolutions. The Board is confident that the Company is making positive progress on the Tennant Creek project. The work done throughout the year has been reviewed by independent mining consultants who confirm that the Company is on the right track. We thank shareholders for their patience and assure you the Board and staff are committed to successfully developing the various projects to ensure that shareholders are justly rewarded. Alex Bajada Executive Chairman Excalibur Mining Corporation Annual Report 2014 11 COMPANY REPORT RESOURCE REVIEW: Developments during the reporting period For personal use only Excalibur has continued to explore the Tennant Creek project and during the year a ground based gravity survey was conducted by Atlas Geophysics. The Survey highlighted structural features, especially in areas that had been disturbed by historic mining activities or prior rehabilitation work that has changed the surface geology. Ongoing analysis has confirmed the presence of mineralised areas in the structural system that requires further exploration. Structural mapping together with on-site inspections have identified several highly prospective shallow drilling targets near to and surrounding the existing Nobles Nob Pit. A drilling program has been designed for the two most promising targets located within the Nobles Nob Pit area and an Amended Mining Management Plan has been approved by the Northern Territory Department of Mines and Energy. The drilling program will be implemented when sufficient funds have been raised. Prior periods In mid 2010 Excalibur released a review conducted by independent geological consultants, Cube Consulting. The review brought together not only the extensive historical information from Normandy, Geopeko and Australian Developments (which totals 95,500 metres of drilling) but also the work undertaken by Excalibur at that time, which includes 42,600 metres of drilling. Previous and more recent (2012) drilling as advised by consultants relied heavily on more traditional methods of exploration and related to magnetic geophysics and geochemical techniques. These methods, while still relevant in some locations appear to be insufficient to generate new targets for Tennant Creek style ore bodies. The magnetic target anomalies drilled did not yield gold mineralisation but did provide valuable structural information which will be used to design Excalibur’s new drill programs. This being the case the Resource as estimated by Cube Consulting in 2010 remains unchanged at this time. Excalibur Mining Corporation Annual Report 2014 PROJECT OVERVIEW 111 III For personal use only Cube estimated that Excalibur has a total inferred resource of 279,700 ounces of gold and 5,200 tonnes of copper at its Tennant Creek Project, comprising: Deposit Tonnes Au g/t Au Oz Juno 1,322,000 4.4 185,300 M10 485,000 4.2 65,200 Nobles Nob 195,000 2.0 12,700 Noble Nob West 52,200 2.9 4,800 Rising Sun 54,100 2.5 4,300 Total 2,108,300 4.1 272,300 Global Gold Resource – blocks >0.0 g/t Au within 0.5g/t Au mineralised envelope – excluding Tailings Deposit Tonnes Au g/t Au Oz NoblesNob Tailings 384,000 0.6 7,400 Global Gold Resource – within a defined area of blocks > 1 g/t Au – Nobles Nob Tailings Deposit Tonnes Cu % Cu tonnes Juno Copper 1,040,000 0.5 5,200 Global Copper Resource – blocks >0.0 % Cu within 0.25% Cu mineralised envelope – Juno Project Overview Tennant Creek Location: Tennant Creek is located in central Northern Territory, approximately 980 km south of Darwin along Stuart Highway and 500km North of Alice Springs. Both Nobles Nob and Juno are located approximately 15 km by road from the township of Tennant Creek. All the tenements are accessible by two wheel drive vehicles along either bitumen or well maintained dirt tracks. Excalibur Mining Corporation Annual Report 2014 1V IV PROJECT OVERVIEW Tenements: For personal use only The Excalibur tenement package at the Tennant Creek project comprises 41 Mining Leases (MLs) covering 376.84Ha at Juno and Nobles Nob shown in Figure 2. The tenements are all granted. Figure 2 – Tennant Creek Geology and Tenements Geology and Mineralisation: The Excalibur tenements are all located within the Tennant Creek lnlier. This lnlier consists of a series of deformed and metamorphosed Paleoproterozoic orogenic sedimentary rocks and volcaniclastic and volcanic rocks. In particular the rocks of the Warramunga Formation are highly prospective for high grade gold and base metal deposits. The target style of mineralisation at Tennant Creek resulted from mineralised hydrothermal fluids passing along a shear zones and reacting with Proterozoic iron oxide rich sediments of the Warramunga Formation typically resulting in zoned Au-Cu-Bi sulphide mineralisation. The main characteristics of this style of mineralisation are a very compact high grade ore body within a magnetite host with distinct mineralogical zoning. This zoning is generally shown as a high grade core with a copper/bismuth capping. Historic Production: The Nobles Nob deposit was previously exploited as an underground mine between 1947 and 1965 and subsequently as an open pit from 1967 to 1984. In total, the Nobles Nob and surrounding deposits produced a total of 2.14 million tonnes at 17 g/t for 1.17 million ounces of gold. Juno was exploited as an underground gold mine from 1965 to 1977 and produced 815,000 ounces of gold at an average recovered grade of 57g/t. Excalibur Mining Corporation Annual Report 2014 PROJECT OVERVIEW V V For personal use only Until 2000, approximately 160t of gold has been produced from the Tennant Creek Goldfield. Although approximately 130 deposits have recorded production in the area, the majority of gold to that time was produced from twelve, typically low-tonnage, but high-grade deposits that show a range of associated copper and bismuth production. The Warrego Mine produced 41.3t of Au and 91 500t of Cu, whereas the Peko Mine at the eastern extremity of the goldfield produced 117 465t of Cu and 7.5t of Au. Nobles Nob (34.6t Au) and White Devil (19.8t Au) were essentially copper-free deposits. The high-grade Juno deposit produced 26.1t of Au from 0.45Mt of ore. Substantial bismuth was also produced from Warrego (- 12 000t), Peko (7,350t), and Juno (2,293t). The Juno and Nobles Nob Tenements remain prospective for Tennant Creek style, high grade gold deposits. However it is now found by Excalibur’s new 2012 R & D program that high grade gold mineralisation while still related to ironstone exists only in intersecting shear zones through which fluids has been able to flow. These zones will be the focus of ongoing exploration activities and a drilling program has been designed for the two most promising targets located within the Nobles Nob Pit area. This program will commence after successful fundraising. Competent Person’s Statement: The contents of this report, that relate to geology and exploration results for the Tennant Creek area, are based on information reviewed by Dr Judith Hanson, who is an employee of Excalibur Mining Corporation Limited and a Member of the Australasian Institute of Mining & Metallurgy. She has sufficient experience relevant to the style of mineralisation and types of deposit under consideration and to the activity being undertaken to qualify as a “Competent Person”, as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Hanson consents to the inclusion in this presentation of the matters complied by therein in the form and context in which they appear. Tanami Location: EL25207 and EL28565 are located in the Western Tanami Desert within the Supplejack Downs Pastoral Lease. The Supplejack Homestead is approximately 800 km north-west of Alice Springs via the largely unsealed Tanami Road. Supplejack can also be accessed via the Tanami Road from Halls Creek to the northwest in Western Australia and via Kalkarindji and Lajamanu from the north. Previous Activity: The north-west corner of EL25207 (the project area) has been previously identified as showing geological similarities to the Arnhem Land/Alligator River area, which hosts unconformity associated uranium deposits. In early 2008, Southern Geoscience Consultants were commissioned to conduct an airborne electromagnetic magnetic survey to help assess the area for uranium potential. Excalibur Mining Corporation Annual Report 2014 V1 PROJECT OVERVIEW VI For personal use only In late 2010, Excalibur completed a RAB drilling program comprising 10 drill traverses with 267 holes for 8,758 m. The onsite activities were completed in early August 2010. 4m composite drill chip samples were analysed onsite with a pfXRF and selected 4m composites (2,209) were sent to the laboratory to be analysed for gold by Fire Assay. RAB drill hole geology consisted mainly of regolith and minor laterite overlying Proterozoic sediments, the bulk of which consisted of sandstone and shale with localised intersections of highly weathered schist, granite and felsic intrusives. Reviewing the XRF analyses of drill cuttings shows a distinct zone of highly anomalous copper, >100 ppm and ranging up to 648 ppm, in lines 2, 3, 5 and 6 (Figure 5). This anomalous zone corresponds with a strong EM anomaly, which is tested only at its margins with the RAB drilling. The predominant rock type logged in RAB drilling within the boundaries of the EM anomaly is metasediment associated with minor graphitic schist, meta-pelite and felsic intrusive. The anomalous copper is weakly associated with high zinc, up to 612 ppm. SRK Consulting conducted a review which included all geophysical, drilling and mapping data to assess the region. This review concluded several areas of high potential for gold mineralisation within the tenements. Excalibur Mining Corporation Annual Report 2014 PROJECT OVERVIEW V11 VII Developments during this reporting period: For personal use only During the year desktop reviews and planning were undertaken in preparing an exploration program to further identify and prioritise targets for a future drilling program. Zambian Projects The Buffalo Project is a 710 km2 large prospecting license that surrounds the historic Jessie Gold Mine and includes the Buffalo 1 and 2 Mines and the Chateka Mine. The project is located in the southern part of Zambia approximately 170 kilometres east of the capital, Lusaka with access by way of a sealed, bitumen road and some gravel roads. A desktop review of the Buffalo License prepared by geological consultants, Sound Mining Solutions, in January 2013 stated that there were nine gold occurrences grouped around the Jessie Mine that were hosted by a thick sequence of Muva-age mica schists, displaying similar structural geology. It has been recorded that alluvial gold occurs for a distance of about 20 kilometres along the Chipawa River, the source of the gold has not been located, but it is thought that the source is located in the area north of the Mibanga hills approximately 50 kilometres north of the project area (Coats, 2001). Developments during this reporting period Excalibur acquired two additional projects in Zambia, known as Tangerey and Menara. These projects are complimentary to the Buffalo License in regard to geographical proximity and prospectivity. During the year desktop reviews and planning were undertaken on the Lakeshore, Tangerey and Menara projects. Excalibur is seeking joint venture partners for these projects. Excalibur Mining Corporation Annual Report 2014 1 DIRECTOR’S REPORT Directors’ Report For the year ended 30 June 2014 For personal use only The Directors present their report together with the financial report of Excalibur Mining Corporation Limited (“the Company” or “Excalibur”), and its controlled entities (together “the Consolidated Entity”), for the financial year ended 30 June 2014 and the auditor’s report thereon. Contents 1. Directors 2 2. Corporate governance statement 3 3. Remuneration report 9 4. Directors’ Interests in Shares and Options 13 5. Directors’ meetings 14 6. Share Options 14 7. Insurance and Indemnity of officers 14 8. Audit services 14 9. Principal activities 15 10. Operating and financial review 15 11. Significant changes to state of affairs 16 12. Dividends 16 13. Company Secretary 16 14. Events subsequent to reporting date 16 15. Likely Developments 16 16. Lead Auditor’s independence declaration 17 Excalibur Mining Corporation Annual Report 2014 DIRECTOR’S REPORT 2its controlled entities Excalibur Mining Corporation Limited and 2 Directors’ Report (continued) 1. Directors For personal use only The Directors of the Company at any time during or since the end of the financial year were: Name, qualifications and independence status Age Experience, special responsibilities and other directorships Alex S Bajada Executive Chairman (Appointed 8 June 2009) Non Independent Director 63 Mr Bajada has been a Director of Excalibur since 2004. He was Managing Director from 30 June 2006 until 8 June 2009, at which time he became the Non Executive Chairman. Mr Bajada holds a Bachelor of Economics and is a corporate consultant providing advice to listed and unlisted public companies. Mr Bajada is chairman of Odin Energy Limited. Mr Bajada is a member of the Audit Committee. Terrence Jones Non-Executive Director (Appointed 3 July 2013) Independent Director 49 Mr Jones brings over 20 years extensive international experience at a senior level in Resource Consulting and Licensing, together with significant experience and working knowledge of US, Africa, Middle Eastern and European business environments. Mr Jones is a member of the Audit Committee. Angus Middleton Non-Executive Director (Appointed 6 May 2014) Independent Director 54 Mr Middleton has extensive experience in fund raising, financial management and the mining industry. He has been involved in stock broking for nearly 25 years and was a member of the Adelaide and then the Australian Stock Exchange. Mr Middleton is also a director of Aphrodite Gold Ltd. He has been primarily active in the mining sector and holds a number of directorships in public companies and professional associations. Mark Medcraft Jarvis Smith Non-Executive Director (Appointed 7 March 2013) (Resigned 6 May 2014) Non Independent Director 58 Mr Smith was appointed a director on 7 March 2013. Mr Smith holds a Bachelor of Commerce and is a certified practising accountant with many years experience providing accounting and financial services to the mining industry. Mr Smith has been company secretary of the company since 1996 and Mr Smith is a member of the Audit Committee. Adam Peter Clode Executive Director (Appointed 21 November 2012) (Resigned 3 July 2013) Non Independent Director 34 Mr Clode has extensive commercial and project management experience of resource projects at all stages of development in both Africa and Indonesia. He experience spans the full spectrum of project development from resource identification and licence acquisition through to engineering design and project construction into operations. Mr Clode also has a depth of experience in capital raising and the negotiation of off-take agreements. Excalibur Mining Corporation Annual Report 2014 3 Excalibur Mining Corporation Limited and3its controlled entities DIRECTOR’S REPORT Directors’ Report (continued) 2. Corporate governance statement For personal use only Corporate Governance Corporate governance policies and practice of Excalibur are reflective of the Company's current status. Its major activities are mineral exploration and investments in the resources industry. The Company's main corporate governance practices are set out below. The Company's practices comply with the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations (ASX Corporate Governance Recommendations), unless otherwise stated. Administration The Company’s share registry is maintained at Advanced Share Registry, 110 Stirling Highway, Nedlands Western Australia 6009. Telephone: + 61 8 9389 8033. Role of the Board The Board's primary role is the protection and enhancement of long-term shareholder value. To fulfil this role, the Board is responsible for the overall corporate governance of the Company including formulating its strategic direction, approving and monitoring capital expenditure, setting remuneration, appointing, removing and creating succession policies for Directors and senior executives, establishing and monitoring the achievement of management's goals and ensuring the integrity of internal control and management information systems. It is also responsible for approving and monitoring financial and other reporting. The Board has adopted a Board Charter and this is held at the Company’s registered office and is available upon request. The full Board currently holds regular meetings plus strategy meetings and any extraordinary meetings at such other times as may be necessary to address any specific significant matters that may arise. The agenda for meetings is prepared in conjunction with members of the Board and the Company Secretary. Submissions are circulated in advance. Directors' education Directors have the opportunity to visit the Company facilities to gain a better understanding of business operations. Directors are given access to continuing education opportunities to update and enhance their skills and knowledge. Gender Diversity There are no women in senior executive positions or on the Board. The Company currently has two part-time employees, both who are women. Independent professional advice and access to Company information Each Director has the right of access to all relevant Company information and, subject to prior consultation, may seek independent professional advice from a suitably qualified adviser at the Company's expense. The Director must consult with an adviser suitably qualified in the relevant field, and obtain approval of the fee payable for the advice before proceeding with the consultation. A copy of the advice received by the Director is made available to all other members of the Board. Excalibur Mining Corporation Annual Report 2014 DIRECTOR’S REPORT Excalibur Mining Corporation Limited and4its controlled entities 4 Directors’ Report (continued) Composition of the Board The composition of the Board is determined using the following principles: A minimum of three Directors, with a broad range of expertise both nationally and internationally. A majority of Directors having extensive knowledge of the Company's industries, and those who do not, have extensive expertise in significant aspects of auditing and financial reporting, or risk management of large companies. The Directors stand for re-election by Shareholders in accordance with the requirements of the Constitution (i.e. on a three year rotational basis). For personal use only Audit Committee The Company established an Audit Committee in August 2005. The current members of the Audit Committee are Mr Alex Bajada, Mr Mark Medcraft Jarvis Smith and Mr Terrence Jones. The Audit Committee will provide a review and/or advisory capacity to assist the Board in fulfilling its responsibilities relating to: accounting and reporting practices. compliance with relevant laws. external audit. The Company auditor has been given a standing invitation to attend meetings of the Audit Committee. The Audit Committee will meet whenever necessary. The minutes of the Audit Committee will be provided to the Board. Remuneration and Nomination Committee Due to restructuring during the year ended 30 June 2011, the Board took over the roles of the remuneration and nomination committee. Risk Management Major risks arise from such matters as: government policy changes; the impact of exchange rate movements on the price of raw materials; difficulties in sourcing exploration materials; environment, occupational health and safety, property; financial reporting; reliance on historical data and the purchase, development, management and use of information systems. The Company has adopted a risk management policy. The Board acknowledges that it is responsible for overall internal control but recognises that no cost effective internal control system will preclude all errors and irregularities. To assist in discharging this responsibility the Board instigates the following: Financial reporting – there is a budgeting system with an annual budget approved by the Directors. Actual results are regularly compared to budget and revised forecasts adopted as required. Continuous disclosure – the Company has a policy that all investors have equal access to the Company’s information with all price sensitive information disclosed to the ASX in accordance with the continuous disclosure requirements of the Corporations Act and ASX Listing Rules. Investment appraisal – the Company undertakes careful due diligence when considering any major investment or new venture. Excalibur Mining Corporation Annual Report 2014 5 Excalibur Mining Corporation Limited and5 its controlled entitiesDIRECTOR’S REPORT Directors’ Report (continued) Risk Management (continued) For personal use only Comprehensive practices have been established to ensure: Capital expenditure and revenue commitments above a certain size obtain prior board approval. Financial exposures are controlled, including the use of derivatives. Occupational health and safety standards and management systems are monitored and reviewed to achieve high standards of performance and compliance with regulations. Business transactions are properly authorised and executed. The quality and integrity of personnel (see below). Financial reporting accuracy and compliance with financial reporting regulatory framework (see below). Environmental Regulation – The Consolidated Entity is committed to achieving a high standard of environmental performance. The board is responsible for the monitoring of environmental exposures and compliance with environmental regulations. Based on the results of enquiries made, the board is not aware of any significant breaches during the period covered by this report. Ethical Standards All Directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Consolidated Entity. Conflict of Interest Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Consolidated Entity. The Board has developed procedures to assist Directors to disclose potential conflicts of interest. Where the Board believes that a significant conflict exists for a Director on a board matter, the Director concerned does not receive the relevant board papers and is not present at the meeting whilst the item is considered. Communications with Shareholders The Board has established a communications policy which provides shareholders with information using a continuous disclosure policy which includes identifying matters that may have a material effect on the price of the Company's securities, notifying them to the ASX, and issuing media releases. Information is communicated to Shareholders through: annual and half-yearly financial reports and quarterly reports; annual and other general meetings convened for Shareholder review and approval of Board proposals; continuous disclosure of material changes to ASX for open access to the public, in accordance with the Company's continuous disclosure obligations; the Company’s website. The Board encourages full participation of shareholders at annual general meetings, to ensure a high level of accountability and identification with the Company’s strategy and goals. Important issues are presented to Shareholders as single resolutions. Excalibur Mining Corporation Annual Report 2014 DIRECTOR’S REPORT 6 its controlled entities Excalibur Mining Corporation Limited and 6 Directors’ Report (continued) Communications with Shareholders (continued) For personal use only Shareholders are requested to vote on the appointment and aggregate remuneration of Directors, the granting of Options and Shares to Directors and changes to the Constitution. Copies of the Constitution are available to any shareholder who requests it. The Company's auditor is required to attend the Company's annual general meetings. The Chairman will permit Shareholders to submit questions about the conduct of the audit and the preparation and content of the audit report. All Company information is relayed via the Company website including recent ASX announcements and comprehensive explanations and disclosures of current projects. The annual, half annual and quarterly reports are also available along with email alerts to subscribing shareholders. Shareholders with internet access will also be encouraged to provide their email addresses to receive electronic copies of information distributed by the Company. Hard copies of information distributed by the Company are currently available on request. Code of Conduct The Company has a code of conduct which is available on request and will shortly be available on the Company’s website. Audit Committee Charter The Company’s audit charter is available on request and will shortly be available on the Company’s website. Explanations for departures from ASX Corporate Governance Recommendations The Company has considered the ASX Principles of Good Corporate Governance and Best Practice Recommendations (ASX Corporate Governance Recommendations). To comply with the spirit of the ASX Corporate Governance Recommendations, the Company has followed each ASX Corporate Governance Recommendation where the Board has considered it to be an appropriate benchmark for corporate governance practices, taking into account factors such as the size of the Company and the Board, resources available and the activities of the Company. Where, after due consideration, the Company's corporate governance practices depart from the ASX Corporate Governance Recommendations, the Board has offered full disclosure of the nature of, and reason for, the adoption of its own practice. As the Company's activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance structures will be given further consideration. The Board sets out below on an exception basis, whereby disclosure is made of any ASX Corporate Governance Recommendations that have not been adopted by the Company, together with the reasons why they have not been adopted. Principle 1 – Recommendation 1.1 Notification of Departure The Company has not formally disclosed the functions reserved to the Board and those delegated to management. The appointment of Non-Executive Directors to the Board are formalised in writing by way of a letter or other agreement. Excalibur Mining Corporation Annual Report 2014 7 its controlled entitiesDIRECTOR’S REPORT 7 Excalibur Mining Corporation Limited and Directors’ Report (continued) Principle 1 – Recommendation 1.1 (continued) For personal use only Explanation for Departure The Board recognises the importance of distinguishing between the respective roles and responsibilities of the Board and management. The Board has established an informal framework for the management of the Company and the roles and responsibilities of the Board and management. Due to the small size of the Board and of the Company, the Board does not think that it is necessary to formally document the roles of the Board and management as it believes that these roles are being carried out in practice and are clearly understood by all members of the Board and management. The Board is responsible for the strategic direction of the Company, establishing goals for management and monitoring the achievement of these goals, monitoring the overall corporate governance of the Company and ensuring that shareholder value is increased. Principle 1 – Recommendation 1.2 Notification of department The Company does not have a formal process for evaluating the performance of senior executives. Explanation for departure Due to the small size of the senior executives and the significant overlap between the board and the senior executive for the majority of the year as well as the close liaison between senior executive and the board, the board was of the view that a separate formal process for evaluating the performance of senior executives was not necessary unless the size of the senior executive expanded. Principle 1 – Recommendation 1.3 Notification of departure The Company did not formally evaluate senior executives during the financial year. Explanation for departure The substantial change in the resource position which was identified earlier in the year has necessitated a change from the previous strategic direction for the Company. As a consequence the evaluation of the performance of senior executives against the previous strategic objectives was not considered appropriate. In the future the evaluation of the performance of senior executives will be measured against the objectives of the Company once the new strategy is finalised. Principle 2 – Recommendation 2.1 Notification of Departure The Board does not have a majority of independent Directors. The ASX Corporate Governance Recommendations provide for a test of independence as set out in Box 2.1 of the ASX Corporate Governance Recommendations (Independence Test). The following Directors are not considered to be independent in accordance with the Independence Test: Mr Alex Bajada is not an independent Director as he is a member of the Company’s management. Mr Mark Medcraft Jarvis Smith was not an independent Director as he is a member of the Company’s management. Mr Terrence Jones is an independent Director. Mr Adam Peter Clode was not an independent Director as he is a member of the Company’s management. Mr Angus Middleton is an independent Director. Excalibur Mining Corporation Annual Report 2014 DIRECTOR’S REPORT 8 9 For personal use only Explanation for Departure Excalibur Mining Corporation Annual Report 2014 9 Excalibur Mining Corporation Limited and9its controlled entitiesDIRECTOR’S REPORT Directors’ Report (continued) Principle 3 – Recommendation 3.2 For personal use only Notification of Departure The Company has not established a policy concerning diversity. The policy should include requirements for the board to establish measurable objectives for achieving gender diversity for the board to assess annually both the objectives and progress in achieving them. Explanation for Departure The composition of the Board is monitored (in respect of size, diversity and membership) to ensure that the Board has a balance of skill and experience appropriate to the needs of the Company. When a vacancy arises, the Board will identify candidates with appropriate expertise and experience and appoint the most suitable person taking into account the need for diversity in gender, age, ethnicity and cultural background. Principle 3 – Recommendation 3.3 Notification of Departure The Company has not disclosed the measurable objectives for achieving gender diversity. Explanation for Departure The Company is currently not of a size that justifies the formal establishment of measurable diversity objectives. Principle 4 – Recommendation 4.2 Notification of departure The Company's Audit Committee does not meet the requirements for composition as a majority of the members are not independent and the chairperson is not independent. Explanation for departure As noted above, Mr Bajada and Mr Smith are not independent when applying the ASX Corporate Governance Council's Independence Test. The Board will annually confirm the membership of the committee. The Board considers the composition of the Audit Committee satisfactory to properly discharge the duties of the committee, given the Company's current size and operations. Principle 8 – Recommendation 8.2 Notification of departure The Remuneration and Nomination Committee does not meet the requirements for composition as a majority of the members are not independent and the Committee is not chaired by an independent Director. Explanation for departure Given the Company’s size and operations the Board has assumed the role of the Remuneration and Nomination Committee. 3. Remuneration report - audited 3.1 Principles of remuneration The Board’s remuneration policy is to ensure that remuneration properly reflects the relevant persons’ duties and responsibilities, and that the remuneration is competitive in attracting, retaining and motivating people of the highest quality. The Board believes that the best way to achieve this objective is to provide Directors with a remuneration package consisting of a fixed component and a variable component that together reflect the person’s responsibilities, duties and personal performance. Excalibur Mining Corporation Annual Report 2014 DIRECTOR’S REPORT 10its controlled entities Excalibur Mining Corporation Limited and 10 Directors’ Report (continued) 3. Remuneration report – audited (continued) For personal use only 3.1 Principles of remuneration (continued) The remuneration of Non-Executive Directors is determined by the Board as a whole having regard to the level of fees paid to Non-Executive Directors by other companies of similar size in the industry. Due to restructuring during the year ended 30 June 2011 the Board took over the roles of the remuneration and nomination committee. 3.1.1 Fixed remuneration 3.1.2 Performance linked remuneration 3.1.3 Short-term incentive bonus 3.1.4 Long-term incentive 3.1.5 Directors and Chairman Fixed remuneration consists of base remuneration being a flat per month director’s fee. Performance linked remuneration includes long term incentives, designed to reward key management personnel for reaching or exceeding specific objectives or as recognition for strong individual performance. The long term incentives are provided as options over the shares of the company and performance shares under the rules of the Employee Incentive Scheme. There was no short-term incentive bonuses offered or paid during the year ended 30 June 2014 or 30 June 2013. Long term incentives are comprised of share options and performance shares, which are granted from time to time to encourage exceptional performance in the realisation of strategic outcomes and growth in shareholder’s wealth. Options and performance shares are granted for no consideration and do not carry voting or dividend entitlements. Total compensation for all non-executive directors, last voted upon by shareholders at the 2004 AGM is not to exceed $300,000 per annum. The non-executive directors are paid directors’ fees of $40,000 per annum. The Executive Chairman is paid $140,000 per annum. 3.1.5 Service Agreements The Consolidated Entity has not entered into contracts with directors. 3.1.6 Consequences of performance on shareholder wealth In considering the Consolidated Entity’s performance and benefit for shareholder wealth, the Board believes that at this stage of the Consolidated Entity’s development there is a not a relevant direct link between revenue and profitability and the advancement of shareholder wealth. For this reason, the Consolidated Entity does not currently link revenue, share price and profitability against shareholder wealth. The share price at 30 June 2014 was $0.009 (2013 : $0.026) 3.1.7 Remuneration Consultants The Consolidated Entity did not use remuneration consultants during the year to 30 June 2014. Excalibur Mining Corporation Annual Report 2014 Directors’ and Executive Officers’ remuneration 3.2 2014 2013 Jeremy Niemi (Resigned 7 March 2013) 2014 2013 2014 2013 2014 2013 Angus Middleton (Appointed 6 May 2014) Mark MJ Smith (Appointed 7 March 2013) (Resigned 6 May 2014) Terrence Jones (Appointed 3 July 2013) Non Executive Directors 2014 2013 Alex S Bajada Executive Directors 40,000 - 33,333 10,000 6,667 - 28,321 140,000 140,000 Salary & fees $ - - - - - Nonmonetary benefits $ Short-term 40,000 - 33,333 10,000 6,667 - 28,321 140,000 140,000 Total $ - - - - - - - - - - Options and Rights $ Superannuation benefits $ Termination Benefits $ Share-based payments Post employment Nature and amount of remuneration for the year ended 30 June 2014 - - - - - 40,000 - 33,333 10,000 6,667 - 28,321 140,000 140,000 Total $ Details of the nature and amount of each major element of remuneration of each key management personnel of the Consolidated Entity are: Remuneration report - audited (continued) 3. Directors’ Report (continued) Excalibur Mining Corporation Limited and its controlled entities - - - - - S300A(1)(e)(i) proportion of remuneration performance related % 11 - - - - - S300A(1)(3)(vi) Value of options as proportion of remuneration % For personal use only 11 DIRECTOR’S REPORT Excalibur Mining Corporation Annual Report 2014 Remuneration report - audited (continued) Excalibur Mining Corporation Annual Report 2014 220,000 194,450 2014 2013 Total compensation 16,129 2014 2013 Andrew Kent (Resigned 26 November 2012) Non Executive Directors (cont’d) Salary & fees $ - - - Nonmonetary benefits $ Short-term Post employment 194,450 220,000 16,129 Total $ Superannuation benefits $ - - - Nature and amount of remuneration for the year ended 30 June 2014 (continued) 3. Directors’ Report (continued) Excalibur Mining Corporation Limited and its controlled entities Termination Benefits $ - - - Options and Rights $ Share-based payments - - - 194,450 220,000 16,129 Total $ - - - S300A(1)(e)(i) proportion of remuneration performance related % 12 - - - S300A(1)(3)(vi) Value of options as proportion of remuneration % For personal use only DIRECTOR’S REPORT 12 Excalibur Mining Corporation Limited and 13 its controlled entities DIRECTOR’S REPORT13 Directors’ Report (continued) 3.3 Equity instruments For personal use only All options refer to options over ordinary shares of Excalibur Mining Corporation Limited, which are exercisable on a one-for-one basis. 3.4 Options and rights over equity instruments granted as compensation No options or rights were granted as compensation during the year or prior year. 3.5 Modification of terms of equity-settled share-based payment transactions No terms of equity-settled share-based payment transaction (including options and rights granted as compensation to a key management person) have been altered or modified by the issuing entity during the reporting period or the prior period. 4. Directors’ interests in shares and options Ordinary Shares. Held at 1 July 2013 Directors A Bajada M Smith A Clode A Kent J Niemi D Marsh Shares Granted as Compensation Received on exercise of options Purchases Sales/ Other - - 381,745 700,000 - (1,744,448)* - 407,745 1,044,448 - Held at 30 June 2014 789,490 - * Shareholding at date of resignation on 6 May 2014. Held at 1 July 2012 Directors A Bajada A Kent M Smith J Niemi D Marsh * # Shares Granted as Compensation Received on exercise of options Purchases Sales Held at 30 June 2013 - - 80,000 - (1,130,071)# - 407,745 1,044,448 - 327,745 1,130,071 1,044,448* - Shareholding at date of appointment on 7 March 2013. Shareholding at time of resignation on 26 November 2012. The Company undertook a consolidation of its issued capital on a 1 for 100 basis, with the consolidation taking effect on 25 June 2013. END OF AUDITED SECTION END OF AUDITED SECTION Excalibur Mining Corporation Annual Report 2014 DIRECTOR’S REPORT Excalibur Mining Corporation Limited and 14 its controlled entities 14 Directors’ Report (continued) 5. Directors’ meetings For personal use only The number of Directors’ meetings (including meetings of committees of Directors) and number of meetings attended by each of the Directors of the Company during the financial year are: Director Alex S Bajada Mark Smith (resigned 6/5/2014) Terrence Jones Adam Clode (resigned 3/7/13) Angus Middleton (appointed 6/5/14) Board Meetings A 9 8 9 2 B 9 8 9 2 Audit Committee A 2 2 2 - B 2 2 2 - A – Number of meetings attended B – Number of meetings held during the time the Director held office during the year 6. Share Options Options and performance shares granted to directors and executives of the Company No options or performance shares have been granted during the financial year and since the end of the financial year (2013: nil). 7. Insurance and Indemnity of Officers The Company has entered into an agreement to indemnify all Directors and the Company Secretary against any liability arising from a claim brought by a third party against the Company. The agreement provides for the Company to pay all damages and costs which may be awarded against the officer or Director. During the period the Company has paid an insurance premium in respect of a Directors’ and Officers’ Liability Insurance Contract. The insurance premium relates to liabilities that may arise from an Officer’s position, with the exception of conduct involving a wilful breach of duty or improper use of information or position to gain personal advantage. The officers covered by the insurance policies are the Directors and the Company secretary. The contract of insurance prohibits the disclosure of the nature of the liabilities and the amount of premium. 8. Audit services Details of the amounts paid to the auditors of the Company and their related practices for audit and non-audit services provided during the year are set out below. Consolidated 2013 2014 $ Audit Services: $ Auditors of the Company KPMG Australia Audit and review of financial report 1,834 Auditors of the Company Somes Cooke Audit and review of financial report 33,000 Excalibur Mining Corporation Annual Report 2014 51,800 - 51,800 15 Excalibur Mining Corporation Limited and its controlled entities 15 DIRECTOR’S REPORT Directors’ Report (continued) 9. Principal activities For personal use only The principal continuing activities of the consolidated entity during the year consisted of minerals exploration and investment in companies that own and manage producing or near producing mining operations. The Company’s key strategic activities for 2015 calendar year are: 10. Developing the most appropriate strategy to add value to the Company’s assets at Juno and Nobles Nob at Tennant Creek. Evaluating potential development options for the Company’s assets at Tennant Creek. Further exploration and analysis at Tennant Creek and Tanami projects. Further exploration and analysis on the Zambian projects. Continue to review the Company’s investment portfolio. Business development to identify and where appropriate acquire assets that have potential to further enhance the company’s portfolio of projects. Operating and financial review Review of Results and Operations of the Consolidated Entity The consolidated loss after income tax for the year was $1,232,826 (2013 loss $2,628,185). Cash and cash equivalents at 30 June 2014 total $22,823 (2013: $7,166). Tennant Creek During the year the company continued to work with technical staff and consultants on developing and refining its exploration strategy for the Tennant Creek project. A comprehensive review of the Company’s geological data base was undertaken with an emphasis on comparing the Company’s tenements to the regional structural geology. A ground based gravity geophysics survey was conducted by Atlas Geophysics over both the Juno and Nobles Nob tenements. The survey was designed to show structural features, specially in areas that had been disturbed by historical mining activities and rehabilitation work that has changed the surface geology. The ongoing analysis has confirmed the presence of mineralised areas in the structural system that requires further exploration. Further structural mapping, together with onsite inspections have identified several highly prospective shallow drilling targets near to and surrounding the existing Nobles Nob Pit. A drilling program was formulated and a mine management plan containing the new drill targets has been submitted to the Northern Territory Department of Mines and Energy. The company holds the gold and precious metal rights over EL 25207 within the Browns Range area of the Tanami region of the Northern Territory. This tenement is located approximately 600 km north west of Alice Springs and is wholly contained within the Suplejack Pastoral Lease. EL 25207 is held by Palace Resources Ltd (“Palace”). Zambia Desktop workMining was carried out on the Lakeshore, Tangerey andcontrolled Menara projects. The Company is seeking Joint Venture 16 Excalibur Corporation Limited and its entities partners on these projects. Subsequent to the end of the reporting period the Company terminated the Joint Venture agreement on the previously announced gold copper project in Zambia. Directors’ Report (continued) 11. Significant changes in the state of affairs Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and its controlled entities 16 DIRECTOR’S REPORT 16 Subsequent to the end of the reporting period the Company terminated the Joint Venture agreement on the previously announced gold copper project in Zambia. Directors’ Report (continued) 11. Significant changes in the state of affairs For personal use only In the opinion of the directors, there were no significant changes in the state of affairs of the Consolidated Entity that occurred during the year ended 30 June 2014. 12. Dividends No dividends have been paid or declared by the Company to members since the end of the previous financial year. 13. Company Secretary 14. Events subsequent to reporting date Mark J Smith Company Secretary (Appointed 3 May 1996) Mr Smith has been Company Secretary of Excalibur since 1996. Mr Smith is a Certified Practising Accountant with many years’ experience providing accounting and taxation advice to the mining industry. Mr Smith was a member on the International Executive Committee of the International Accountancy Association JHI. The Joint Venture with Zamunda Minerals Zambia Limited to operate a gold and copper project in Western Zambia was terminated after the completion of due diligence. Exploration has continued on the structural geology of the Tennant Creek project and an amended Mine Management Plan has been submitted to the Northern Territory Department of Mines and Energy and a drilling programme will be implemented once all permissions have been received and fundraising completed. 15. Likely developments Further technical work conducted by geological consultants together with the company’s technical team have indicated that the Nobles Nob area remains prospective for Tennant Creek style, high grade ore bodies within the company’s tenements. A number of geological sites with potential for gold mineralization have been identified and these will be systematically investigated. The ground based gravity geophysics survey confirmed the existence of priority targets located within the Nobles Nob area. An amended mine management plan was submitted to the Northern Territory Department of Mines and Energy incorporating a drilling programme designed for the two most promising targets. If results from this programme are sufficiently promising the existing Nobles Nob pit may be dewatered to facilitate shallow drilling into the areas underlying the existing pit floor. Upon the successful raising of capital the Company will seek to develop the production capabilities of both the Tennant Creek and Zambia projects. Excalibur Mining Corporation Annual Report 2014 DIRECTOR’S REPORT For personal use only 17 Excalibur Mining Corporation Annual Report 2014 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Excalibur Mining Corporation Limited 18 and its controlled entities 18 Consolidated Statement of Profit or Loss and other Comprehensive Income For the year ended 30 June 2014 For personal use only Consolidated Note Other income 4 Depreciation expense Consulting fees Legal fees Travelling expenses Other operating expenses Impairment losses Loss from operating activities Finance income Finance expense Net finance (expense) income Loss before income tax Income tax expense Loss for the year 5(i) 5(ii) 6 6 7 Other comprehensive income net of income tax 2014 2013 $ $ 103,096 473,557 (24,306) (40,329) (179,906) (227,595) (2,606) (16,114) (50,365) (115,662) (776,856) (936,598) (284,737) (1,750,056) (1,215,680) (2,612,797) 2,779 6,942 (19,925) (22,330) (17,146) (1,232,826) (15,388) (2,628,185) (1,232,826) (2,628,185) 25,775 14,896 (1,207,051) (2,613,289) Items that may be reclassified subsequently to profit or loss Fair value reserve movements Total comprehensive income for the year Loss per share: Basic Loss per share - cents Diluted Loss per share – cents 8 8 (1.92) (1.92) The notes on pages 24 to 50 are an integral part of these consolidated financial statements. Excalibur Mining Corporation Annual Report 2014 (6.02) (6.02) 19 Excalibur Mining Corporation Limited and its controlled entities OF FINANCIAL POSITION 19 CONSOLIDATED STATEMENT Consolidated Statement of Financial Position As at 30 June 2014 For personal use only Consolidated Assets Cash and cash equivalents Note 9 Trade and other receivables 10 Investments 12 Other financial assets 2014 2013 $ $ 22,823 11 19,223 507,572 12,275 291,163 99,523 881,103 45,202 Total current assets 7,166 75,202 Other financial assets 11 107,328 107,328 Exploration expenditure 13 10,913,604 10,444,534 Total non-current assets 11,261,887 10,816,641 Total assets 11,361,410 11,697,744 1,187,495 1,231,137 6,128 4,959 Total current liabilities 1,193,623 1,236,096 Total liabilities 1,193,623 1,236,096 10,167,787 10,461,648 54,816,164 53,902,974 (66,970) (92,745) (44,581,407) (43,348,581) 10,167,787 10,461,648 Property, plant and equipment Liabilities Trade and other payables Employee benefits 14 15 16 Net assets 240,955 264,779 Equity Share capital Reserves Accumulated losses Total equity 17 17 The notes on pages 24 to 50 are an integral part of these consolidated financial statements. Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Annual Report 2014 Accumulated Losses $ Share Capital - 130,000 53,902,974 (43,348,581) 1,123,301 (2,628,185) - - - (2,628,185) - (41,843,697) 53,772,974 Issued Capital $ - (90,400) - - - - 90,400 Share Based Payment $ The notes on pages 24 to 50 are an integral part of these consolidated financial statements. Closing balance 30 June 2013 Expired Options Total comprehensive income for the period Transactions with owners, recorded directly in equity Total contributions by and distributions to owners Issued during the year Other comprehensive income Net change in fair value of available for sale financial assets Opening balance 1 July 2012 Total comprehensive income for the period Loss for the year Consolidated For the year ended 30 June 2013 Consolidated Statement of changes in Equity Excalibur Mining Corporation Limited and its controlled entities - (1,032,901) - - - - (92,745) - - 14,896 14,896 - (107,641) Fair Value Reserve $ Reserves 1,032,901 Option Premium $ 10,461,648 - 130,000 (2,613,289) 14,896 (2,628,185) 12,944,937 Total $ For personal use only 20 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 20 54,816,164 (44,581,407) - (1,232,826) - 913,190 - The notes on pages 24 to 50 are an integral part of these consolidated financial statements. - - - - - (1,232,826) - - - (43,348,581) Share Based Payment $ 53,902,974 Issued Capital $ Accumulated Losses $ Share Capital Also refer to Note 17 for a breakdown of shares issued during the year. Closing balance 30 June 2014 Total comprehensive income for the period Transactions with owners, recorded directly in equity Total contributions by and distributions to owners Issued during the year Other comprehensive income Net change in fair value of available for sale financial assets Loss for the year Opening balance 1 July 2013 Total comprehensive income for the period Consolidated For the year ended 30 June 2014 Consolidated Statement of changes in Equity (continued) - - - - - - Reserves Option Premium $ (66,970) - 25,775 25,775 - (92,745) Fair Value Reserve $ 10,167,787 913,190 (1,207,051) 25,775 (1,232,826) 10,461,648 Total $ For personal use only Excalibur Mining Corporation Limited and its controlled entities 21 21 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued) Excalibur Mining Corporation Annual Report 2014 CONSOLIDATED STATEMENT 22 OF CASH FLOWS Mining Corporation Limited Excalibur and its controlled entities 22 Consolidated Statement of cash flows For personal use only For the year ended 30 June 2014 Note Cash Flows from (used in) operating activities Cash receipts in the course of operations Cash paid to suppliers and employees R & D cash refund Consolidated 2013 2014 $ 3,096 Interest received Net cash used in operating activities 21 5,085 (476,966) (334,578) (29,910) - 3,283 7,677 (40,162) (257,995) (134,077) (982,494) - 32,570 - (4,693) 30,000 56,463 (104,077) (898,154) 66,473 - 93,423 111,977 159,896 316,711 15,657 (839,438) 22,823 7,166 460,335 Interest paid $ 63,821 Cash Flows from (used in) investing activities Payments for exploration expenditure Proceeds from sale of investments Acquisition of property, plant & equipment Deposits returned Net cash used in investing activities Cash Flows from (used in) financing activities Proceeds from the issue of share capital Other financing Borrowings - Net cash from financing activities Net increase/decrease from cash and cash equivalents Cash and cash equivalents at 1 July Cash and cash equivalents at 30 June 7,166 9 The notes on pages 24 to 50 are an integral part of these consolidated financial statements. Excalibur Mining Corporation Annual Report 2014 204,734 846,604 Excalibur Mining Corporation Limited and23 its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 23 Notes to the consolidated financial statements For personal use only 1. 2. Reporting Entity Excalibur Mining Corporation Limited (the ‘Company’) is a company domiciled in Australia. The consolidated entity is a for-profit entity. The consolidated financial statements of the Company for the financial year ended 30 June 2014 comprises the Company and its subsidiaries (together referred to as the ‘Consolidated Entity’). The principal place of business is 16 Ord St, West Perth. The principal activities of the consolidated entity are minerals exploration and investment in companies that own and manage producing or near producing mining operations. Basis of preparation (a) Statement of compliance The consolidated financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (‘AASBs’) adopted by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001. The consolidated financial report also complies with the IFRSs and interpretations adopted by the International Accounting Standards Board. The financial report was authorised for issue by the Directors on 30 September 2014. (b) Basis of measurement The consolidated financial statements have been prepared on the historical cost basis except that the following assets and liabilities which are stated at their fair value: Available for sale financial assets Financial instruments at fair value through profit or loss Share based payments (c) Functional and presentation currency note These consolidated financial statements are presented in Australian dollars which is the Company’s functional currency and the functional currency of the majority of the Consolidated Entity. (d) Uses of estimates and judgements The preparation of financial statements requires management to make judgements, estimates and underlying 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. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is discussed below: (i) Impairment of exploration and evaluation assets The ultimate recoupment of the value of exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale, of the underlying mineral exploration properties. Excalibur Mining Corporation Annual Report 2014 FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and24 its controlled entities NOTES TO THE CONSOLIDATED 24 Notes to the consolidated financial statements For personal use only (i) Impairment of exploration and evaluation assets (continued) The Consolidated Entity undertakes at least on an annual basis, a comprehensive review for indicators of impairment of these assets. Should an indicator of impairment exist, there is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts. The key areas of estimation and judgement that are considered in this review included: recent drilling results and reserves and resource estimates environmental issues that may impact the underlying tenements the estimated market value of assets at the review date independent valuations of underlying assets that may be available fundamental economic factors such as the gold price, exchange rates and current and anticipated operating costs in the industry the Consolidated Entity’s market capitalisation compared to its net assets Information used in the review process is rigorously tested to externally available information as appropriate. (e) Going Concern The financial statements for the year ended 30 June 2014 have 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 ordinary course of business. The Consolidated Entity incurred a loss after tax for the year of $1,232,826 (2013: loss of $2,628,185) and has a deficiency in working capital at 30 June 2014 of $1,094,100 (30 June 2013: Deficiency of $354,993). During the year, the Consolidated Entity used cash of $40,162 (2013: $257,995) in its operations and used cash of $104,077 in investing activities (2013: $898,154). The Consolidated Entity has continued to have net cash outflows from its operations since 30 June 2014. The Consolidated Entity will require further funding in order to meet its actual working capital requirements, and planned administration expenses and exploration activities. The Directors of the Consolidated Entity acknowledge the future funding requirements and believe the going concern basis of preparation remains appropriate for the following reasons: The directors and related party creditors of $659,211 have agreed to not seek repayment of the debts owed to them until the Consolidated Entity is able to meet all other financial obligations; The Consolidated Entity has historically demonstrated that it can successfully complete capital raisings; and If the Consolidated Entity is unable to raise sufficient funds, the directors may need to sell all or a portion of the Tennant Creek tenements and related assets. Should the Consolidated Entity be unable to raise sufficient capital when required as set out above, there is a material uncertainty which may cast significant doubt as to whether the Consolidated Entity will continue as a going concern and therefore the company may be unable to realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and25 its controlled entities NOTES TO THE CONSOLIDATED 25 FINANCIAL STATEMENTS Notes to the consolidated financial statements 2. Basis of Preparation (continued) For personal use only (e) Going Concern (continued) The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that may be necessary should the Group be unable to continue as a going concern. 3. Significant Accounting Policies The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by the Consolidated Entity. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Investments in subsidiaries are carried at their cost of acquisition less impaired losses in the Company’s financial statements. (ii) Transactions eliminated on consolidation Intra-Group balances and any unrealised gains and losses or income and expenses arising from intra-Group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates and jointly controlled entities are eliminated to the extent of the consolidated entity’s interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Gains and losses are recognised as the contributed assets are consumed or sold by the associates and jointly controlled entities or, if not consumed or sold by the associate or jointly controlled entity, when the consolidated entity’s interest in such entities is disposed of. (iii) Interests in Joint Arrangements Joint arrangements represent the contractual sharing of control between parties in a business venture where unanimous decisions about relevant activities are required. Separate joint venture entities providing joint venturers with an interest to net assets are classified as a joint venture and accounted for using the equity method. Joint venture operations represent arrangements whereby joint operators maintain direct interests in each asset and exposure to each liability of the arrangement. The Consolidated Entity’s interests in the assets, liabilities, revenue and expenses of joint operations are included in the respective line items of the consolidated financial statements. Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties’ interests. When the Consolidated Entity makes purchases from a joint operation, it does not recognise its share of the gains and losses from the joint arrangement until it resells those goods/assets to a third party. Excalibur Mining Corporation Annual Report 2014 FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and26 its controlled entities NOTES TO THE CONSOLIDATED 26 Notes to the consolidated financial statements 3. Significant Accounting Policies (continued) Foreign currency (i) Foreign currency transactions For personal use only (b) (ii) (c) (i) (ii) Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the statement of financial position date are translated to Australian dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Australian dollars at foreign exchange rates ruling at the dates the fair value was determined. Financial statements of foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to Australian dollars at foreign exchange rates ruling at the statement of financial position date. The revenues and expenses of foreign operations are translated to Australian dollars at rates approximating to the foreign exchange rates ruling at the dates of transactions. Foreign exchange differences arising on retranslation are recognised directly in a separate component of equity. Property, plant and equipment Recognition and measurement Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see accounting policy (3e)). Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials, direct labour, the initial estimate, where relevant, of the costs of dismantling and removing the items and restoring the site on which they are located, and an appropriate proportion of production overheads. Mining property and development assets include costs transferred from exploration and evaluation assets once technical feasibility and commercial viability of an area of interest are demonstrable and subsequent costs to develop the mine to the production phase. Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within “other income” in profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings. Subsequent costs The Consolidated Entity recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied within the item will flow to the Consolidated Entity and the cost of the item can be measured reliably. All other costs are recognised in the profit or loss as an expense as incurred. (iii) Depreciation With the exception of freehold land, depreciation is charged to the profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. Plant and equipment are depreciated over estimated useful lives of between 2 and 7 years. The residual value, the useful life and the depreciation method applied to an asset are reassessed at least annually. Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and27 its controlled entities NOTES TO THE CONSOLIDATED 27 FINANCIAL STATEMENTS Notes to the consolidated financial statements 3. Significant Accounting Policies (continued) For personal use only (d) Exploration and evaluation assets Exploration and evaluation costs, which are intangible costs, including the costs of acquiring licences, are capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the consolidated entity has obtained the legal rights to explore an area are recognised in the profit or loss. Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either: (i) the expenditures are expected to be recouped through successful development and exploitation of the area of interest; or (ii) activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable assessment of the existence or other wise of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing. Exploration and evaluation assets are assessed for impairment if (i) sufficient evidence exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. The cash generating unit shall not be larger than the area of interest. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified from intangible assets to mining property and development assets within property, plant and equipment. (e) 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 original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its current 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 in profit or loss. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in equity is transferred to profit or loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity. Excalibur Mining Corporation Annual Report 2014 FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and28 its controlled entities NOTES TO THE CONSOLIDATED 28 Notes to the consolidated financial statements 3. Significant Accounting Policies (continued) For personal use only (ii) Non-financial assets The carrying amounts of the Consolidated Entity’s non-financial assets, other than deferred tax 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, recoverable amount is estimated at each reporting date. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. 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 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 exists. 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 had been recognised. (f) Employee benefits (i) Defined contribution superannuation funds (ii) A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised in profit or loss in the period during which the services are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Short term benefits Liabilities for employee benefits for wages, salaries, annual leave and sick leave that are expected to be settled within 12 months of the reporting date represent present obligations resulting from employees’ services provided to reporting date. These are calculated at undiscounted amounts based on remuneration wage and salary rates that the Consolidated Entity expects to pay as at reporting date including related oncosts, such as workers compensation insurance and payroll tax. Non-accumulating non-monetary benefits, such as medical care, housing, cars and free or subsidised goods and services, are expensed based on the net marginal cost to the consolidated entity as the benefits are taken by the employees. Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and29 its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 29 Notes to the consolidated financial statements 3. Significant Accounting Policies (continued) For personal use only (f) Employee benefits (continued) (iii) Long term service benefits (g) (h) (i) (j) The Consolidated Entity’s net obligation in respect of long-term service benefits, other than defined benefit superannuation funds, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using expected future increases in wage and salary rates including related on-costs and expected settlement dates, and is discounted using the rates attached to the Commonwealth Government bonds at the statement of financial position date which have maturity dates approximating to the terms of the consolidated entity’s obligations. Provisions A provision is recognised in the statement of financial position when the Consolidated Entity has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount is recognised as a finance cost. Trade and other payables Trade and other payables are stated at their amortised cost. Finance income and expenses Net financing costs comprise interest payable on borrowings calculated using the effective interest method, interest receivable on funds invested and foreign exchange gains and losses that are recognised in the profit or loss. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit and loss using the effective interest method. Interest income is recognised in the profit or loss as it accrues, using the effective interest method. Income tax Income tax on the profit or loss for the year comprises current and deferred tax and is calculated using the balance sheet method. Income tax expense is recognised in the profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Excalibur Mining Corporation Annual Report 2014 FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and30 its controlled entities NOTES TO THE CONSOLIDATED 30 Notes to the consolidated financial statements 3. Significant Accounting Policies (continued) For personal use only (k) (l) Segment reporting The Consolidated Entity determines and presents operating segments based on the information that internally is provided to the Managing Director, who is the Consolidated Entity’s chief operating decision maker. An operating segment is a component of the Consolidated Entity that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Consolidated Entity’s other components. All operating segments’ operating results are regularly reviewed by the Consolidated Entity’s Managing Director to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Goods and services tax Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position. Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows. (m) Financial instruments (i) Non-derivative financial instruments Non-derivative financial instruments comprise investments in equity shares, trade and other receivables, cash and cash equivalents, and trade and other payables. Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs, except as described below. Subsequent to initial recognition non-derivative financial instruments are measured as described below. A financial instrument is recognised if the Consolidated Entity becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Consolidated Entity’s contractual rights to the cash flows from the financial assets expire or if the Consolidated Entity transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the Consolidated Entity commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Consolidated Entity’s obligations specified in the contract expire or are discharged or cancelled. Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Consolidated Entity’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Accounting for finance income and expense is discussed in note 3(i). Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and31 its controlled entities NOTES TO THE CONSOLIDATED 31 FINANCIAL STATEMENTS Notes to the consolidated financial statements 3. Significant Accounting Policies (continued) (m) Financial instruments (continued) For personal use only (i) (ii) (n) (o) Non-derivative financial instruments (continued) Available-for-sale financial assets The Consolidated Entity’s investments in equity securities are classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses (see note 3(e)(i)), and foreign exchange gains and losses on available-for-sale monetary items are recognised as a separate component of equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred to profit or loss. Investments at fair value through profit or loss An instrument is classified as at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated at fair value through profit or loss if the Consolidated Entity manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Consolidated Entity’s documented risk management or investment strategy. Upon initial recognition, attributable transaction costs are recognised in profit or loss when incurred. Financial instruments at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss. Other Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses. Share Capital Ordinary Shares Ordinary Shares are classified as equity. Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit. Other income Other income is recognised in the profit or loss as it accrues. The Research and Development refundable tax offset is recognised as income when it is determined that it is probable that it will be received and the amount can be estimated reliably. Within the income tax expense reconciliation the income is non-assessable and R&D expenditure non-deductible. Determination of fair values A number of the Consolidated Entity’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. Excalibur Mining Corporation Annual Report 2014 FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and32 its controlled entities NOTES TO THE CONSOLIDATED 32 Notes to the consolidated financial statements 3. Significant Accounting Policies (continued) For personal use only (o) Determination of fair values (continued) (i) (ii) Investments in equity and debt securities The fair value of financial assets at fair value through profit or loss, and available-for-sale financial assets is determined by reference to their quoted closing bid price at the reporting date, and for unquoted assets determined by using the share price of a previous capital raising. Share-based payment transactions The fair value of the share options are measured using either the binomial formula or Black Scholes. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value. (p) New Accounting Standards for Application in Future Periods The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods, some of which are relevant to the Consolidated Entity. The Consolidated Entity has decided not to early adopt any of the new and amended pronouncements. The Cosolidated Entity’s assessment of the new and amended pronouncements that are relevant to the Consolidated Entity but applicable in future reporting periods is set out below: - AASB 9: Financial Instruments (December 2010) and associated Amending Standards (applicable for annual reporting periods commencing on or after 1 January 2017). These standards will be applicable retrospectively (subject to the provisions on hedge accounting outlined below) and include revised requirements for the classification and measurement of financial instruments, revised recognition and derecognition requirements for financial instruments and simplified requirements for hedge accounting. The key changes that may affect the Consolidated Entity on initial application of AASB 9 and associated Amending Standards include certain simplifications to the classification of financial assets, simplifications to the accounting of embedded derivatives, and the irrevocable election to recognise gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. AASB 9 also introduces a new model for hedge accounting that will allow greater flexibility in the ability to hedge risk, particularly with respect to hedges of non-financial items. Should the entity elect to change its hedge policies in line with the new hedge accounting requirements of AASB 9, the application of such accounting would be largely prospective. Although the directors anticipate that the adoption of AASB 9 may have an impact of the Consolidated Entity’s financial instruments, including hedging activity, it is impracticable at this stage to provide a reasonable estimate of such impact. - AASB 2012-3: Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities (applicable for annual reporting periods commencing on or after 1 January 2014). This standard provides clarifying guidance relating to the offsetting of financial instruments, which is not expected to impact the Consolidated Entity’s financial statements. Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and33 its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 33 Notes to the consolidated financial statements 3. Significant Accounting Policies (continued) For personal use only (p) New Accounting Standards for Application in Future Periods (continued) 4. 5. - AASB 2013-3: Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets (applicable for annual reporting periods commencing on or after 1 January 2014) This Standard amends the disclosure requirements in AASB 136: Impairment of Assets pertaining to the use of fair value in impairment assessment and is not expected to significantly impact the Consolidated Entity’s financial statements. - AASB 2013-5: Amendments to Australian Accounting Standards – Investment Entities (applicable for annual reporting periods commencing on or after 1 January 2014). AASB 2013-5 amends AASB 10: Consolidated Financial Statements to define an ‘investment entity’ and requires, with limited exceptions, that the subsidiaries of such entities be accounted for at fair value through profit or loss in accordance with AASB 9: Financial Instruments and not be consolidated. Additional disclosures are also required. As neither the parent nor its subsidiaries meet the definition of an investment entity, this Standard is not expected to significantly impact the Consolidated Entity’s financial statements. Other income In AUD Consolidated 2013 2014 $ $ Other income Research & development refundable tax offset 103,096 103,096 13,419 460,138 473,557 (i) Other operating expenses In AUD Consolidated 2013 2014 $ $ Accounting expense Auditing expense ASX listing fees Administrative & management costs Company secretary fees Directors fees Rent and outgoings expense Share registry expense Superannuation Exploration Expense Other 72,000 34,834 22,691 160,320 48,000 220,000 3,283 77,700 3,813 27,746 106,469 776,856 72,620 51,800 28,555 162,114 48,000 194,450 6,025 59,532 13,485 208,878 91,139 936,598 Excalibur Mining Corporation Annual Report 2014 FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and34 its controlled entities NOTES TO THE CONSOLIDATED 34 Notes to the consolidated financial statements 5. (i) Other operating expenses (continued) For personal use only (ii) Impairment losses 6. 7. In AUD Consolidated 2013 2014 $ $ Exploration Expenditure Available for Sale Investments 284,737 284,737 1,750,056 1,750,056 During the prior year the Consolidated Entity impaired certain capitalised exploration and other investment costs to the estimated recoverable amount resulting in a charge in profit or loss ($1,750,056). For further explanation refer to note 13. During the current year, the Consolidated Entity impaired its Available for Sale investment. Refer to note 12. Net finance (expense) income Interest income Finance income Consolidated 2013 2014 $ $ 2,779 6,942 2,779 6,942 Change in fair value of assets held for trading Finance expense (19,925) (19,925) (22,330) (22,330) Net finance (expense) income (17,146) (15,388) In AUD Income tax expense In AUD Current tax expense Current period Excalibur Mining Corporation Annual Report 2014 Consolidated 2013 2014 $ $ - - Excalibur Mining Corporation Limited and35 its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 35 Notes to the consolidated financial statements For personal use only 7. Income tax expense (continued) Consolidated 2013 2014 $ $ In AUD Prima facie income tax benefit calculated at 30% on loss from ordinary activities (369,848) (788,456) Impairment losses R & D tax offset Exploration Expenditure Non-Deductible Expenses Other Income tax benefit not brought to account Income tax benefit 105,512 (140,721) 725 6,406 397,926 - 168,718 (210,249) 995 4,525 824,467 - As at 30 June 2014, the Consolidated Entity had future income tax benefits attributable to tax losses calculated at 30% (2013: 30%) of approximately $4,234,608 (2013: $5,786,780). A deferred tax asset of $3,277,764 (2013: $3,220,709) has been recognised to offset the deferred tax liabilities. The net deferred tax asset of $843,292 (2013: $2,566,071) has not been recognised as an asset because realisation of the benefit is not probable. The potential future income tax benefit will only be obtained if: i) the relevant Company derives future assessable income of a nature and amount sufficient to enable the benefit to be realised; ii) the relevant Company complies with the conditions for deductibility imposed by the law; and iii) no changes in tax legislation adversely affect the relevant Company in realising the benefit. Recognised deferred tax assets and tax liabilities In AUD Tax losses Deferred tax asset Financial assets Exploration Deferred tax liability 2014 $ Consolidated 2013 $ 3,277,764 3,277,764 3,220,709 3,220,709 (3,683) (3,274,081) (3,277,764) (87,349) (3,133,360) (3,220,709) Unrecognised deferred tax assets and tax liabilities In AUD Tax losses Deferred tax asset 2014 $ Consolidated 956,844 956,844 2013 $ 2,566,071 2,566,071 Excalibur Mining Corporation Annual Report 2014 FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and36 its controlled entities NOTES TO THE CONSOLIDATED 36 Notes to the consolidated financial statements For personal use only 8. 9. 10. Loss per share Basic loss per share The calculation of basic loss per share at 30 June 2014 was based on the loss attributable to ordinary shareholders $1,299,796 (2013: $2,628,185) and a weighted average number of ordinary shares as set out below. In AUD Loss attributable to ordinary shareholders 2014 $ Consolidated 2013 $ (1,232,826) (2,628,185) Weighted average number of shares 2014 Weighted average number of shares 2013 Issued ordinary shares at beginning of the year 43,683,853 42,384,161 Weighted average number of shares 64,054,518 43,673,476 (1.92) (6.02) Weighted average number or ordinary shares Effect of shares issued during the year 20,370,665 Basic and diluted loss per share (cents) 1,289,315 Basic loss per share (continued) The Company undertook a consolidation of its issued capital on a 1 for 100 basis, with the consolidation taking effect on 25 June 2013. In 2014, as the potential ordinary shares on issue would decrease the loss per share they are not considered dilutive. Cash and cash equivalents In AUD 2014 $ Consolidated 2013 $ Bank balances 22,823 7,166 Cash and cash equivalents in the statement of cash flows 22,823 7,166 Trade and other receivables In AUD Current Prepayments R & D tax offset receivable Other receivables Excalibur Mining Corporation Annual Report 2014 2014 $ Consolidated 12,486 6,737 19,223 2013 $ 13,169 460,138 34,265 507,572 Excalibur Mining Corporation Limited and37 its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 37 Notes to the consolidated financial statements For personal use only 11. 12. 13. Other financial assets In AUD Current Term Deposits Non-Current Security Deposits 2014 $ Consolidated 2013 $ 45,202 75,202 107,328 107,328 Investments In AUD Investments held for trading - at fair value Investments available for sale - at fair value (i) (i) Consolidated 2013 2014 $ $ 12,275 32,200 258,963 12,275 291,163 During the financial year the Consolidated Entity impaired its investment in Magyar Mining. Exploration expenditure In AUD Cost brought forward Acquisition of Lakeshore Project, Zambia (i) Acquisition of other Zambian tenements (ii) Other exploration capitalised Exploration expenditure imparied Exploration expenditure carried forward Consolidated 2013 2014 $ $ 10,444,534 11,493,762 300,000 50,000 119,070 700,828 (1,750,056) 10,913,604 10,444,534 The recovery of the carrying amounts of exploration assets is dependent on the successful development and commercial exploitation or the sale of the respective areas of interest. (i) (ii) Consideration for the acquisition was 10 million ordinary shares in the Company (Note 17). Consideration for the acquisition was 5 million ordinary shares in the Company (Note 17). Excalibur Mining Corporation Annual Report 2014 NOTES TO THE CONSOLIDATED 38 FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and its controlled entities 38 Notes to the consolidated financial statements For personal use only 14. 15. Property, plant and equipment Consolidated Land and buildings In AUD Plant and equipment $ Total $ $ 219,706 338,710 558,416 - 4,693 4,693 Balance at 30 June 2013 219,706 343,403 563,109 Balance at 1 July 2013 219,706 343,403 563,109 - 482 482 219,706 343,885 563,591 - (258,001) (258,001) - (298,330) (298,330) - (322,636) (322,636) Cost Balance at 1 July 2012 Non-current assets purchased Non-current assets purchased Balance at 30 June 2014 Depreciation Balance at 1 July 2012 Depreciation charged for the year Balance at 30 June 2013 Balance at 1 July 2013 Depreciation charged for the year Balance at 30 June 2014 - (40,329) (298,330) (24,306) (40,329) (298,330) (24,306) Carrying amounts At 1 July 2012 At 30 June 2013 At 1 July 2013 At 30 June 2014 219,706 219,706 80,079 45,073 300,415 264,779 219,706 21,249 240,955 219,706 45,073 264,779 Trade and other payables In AUD Trade payables (i) Mortgage (ii) Non-trade payables and accrued expenses (i) (ii) Consolidated 2013 2014 $ $ 917,300 1,021,598 200,000 200,000 70,195 9,539 1,187,495 1,231,137 Refer to Note 22 for total amounts owing to directors and their related parties. Secured by property (Note 14). Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and 39 its controlled entities NOTES TO THE CONSOLIDATED 39 FINANCIAL STATEMENTS Notes to the consolidated financial statements For personal use only 16. 17. Employee benefits Consolidated 2013 2014 $ $ 5,859 4,690 269 269 6,128 4,959 In AUD Accrued superannuation Provision for annual leave Defined contribution superannuation funds The Consolidated Entity makes contributions to a defined contribution superannuation fund. The amount recognised as expense was $3,813 for the financial year ended 30 June 2014 (2013 $13,485). Capital and reserves (a) Share capital Ordinary shares On issue at 1 July Acquisition of Lakeshore Project Acquisition of other tenements Entitlement issue for cash Shares issued to settle amounts owing to creditors Share issue costs On issue at 30 June 2014 # 43,683,853 10,000,000 5,000,000 6,647,254 25,971,744 2014 $ 53,902,974 300,000 50,000 66,473 496,717 2013 # 42,383,853 2013 $ 53,772,974 1,300,000 - 130,000 - 91,302,851 54,816,164 43,683,853 53,902,974 Consolidation of share capital The Company undertook a consolidation of its issued capital on a 1 for 100 basis, with the consolidation taking effect on 25 June 2013. Prior year’s number of shares are stated post consolidation in the financial report. Terms and conditions of share capital Holders of ordinary shares are entitled to receive dividends that may be declared from time to time and are entitled to one vote per share at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any proceeds from liquidation. Accordingly, the Company does not have authorised capital or par value in respect of its issued shares. (b) Options There are no options outstanding over unissued ordinary shares at 30 June 2014 (2013: Nil). (c) Terms of ordinary shares The holders of ordinary shares are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets. Excalibur Mining Corporation Annual Report 2014 FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and40 its controlled entities NOTES TO THE CONSOLIDATED 40 Notes to the consolidated financial statements For personal use only 17. 18. 19. Capital and reserves (continued) (d) Fair Value Reserve The fair value reserve comprises the cumulative net change in the fair value of available-for-sale assets until the investments are derecognised or impaired. Consolidated entities Parent entity Excalibur Mining Corporation Limited Subsidiaries Tennant Resources Pty Ltd Tennant Gold Pty Ltd Elara Mining Pty Ltd Clement Resources Pty Ltd Crestline Enterprises Pty Ltd Australian Uranium Energy Pty Ltd 2014 2013 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Parent Entity Disclosures As at, and throughout, the financial year ended 30 June 2014 the parent company of the Consolidated Entity was Excalibur Mining Corporation Limited. Company 2014 2013 $ $ Results of the parent entity Loss for the year (1,232,426) (2,629,410) Other comprehensive income 14,896 Total comprehensive loss for the year (1,232,426) (2,614,514) Financial position of parent entity at year end Current assets Total assets Current liabilities Total liabilities Total equity of the parent entity comprising of: Share capital Reserves Accumulated losses Total equity Parent entity contingencies 99,022 10,797,887 880,101 11,133,821 1,193,623 1,193,623 1,236,096 1,236,096 54,816,164 (66,970) (45,144,931) 53,902,974 (92,745) (43,912,504) 9,604,263 9,923,500 The directors are of the opinion that there are no material contingencies at 30 June 2014. Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and its controlled entities 41 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 41 Notes to the consolidated financial statements For personal use only 20. 21. Exploration and expenditure commitments In order to maintain current rights of tenure to exploration tenements, the Consolidated Entity is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various State Governments. These obligations are subject to renegotiation when application for a mining lease is made and at other times. These obligations are not provided for in the financial report and are payable: In AUD Within one year Consolidated 2013 2014 $ $ 119,000 105,500 Expenditure commitments for exploration programs beyond the next 12 months have not been determined by the Consolidated Entity. Reconciliation of cash flows from operating activities In AUD Cash flows from operating activities Loss for the period Adjustments for: Depreciation expense Impairment losses Share based payments Change in fair value of assets held for trading Operating profit before changes in working capital Change in trade and other receivables Change in trade and other payables relating to operating activities Change in employee benefits Net cash used in operating activities Consolidated 2014 $ 2013 $ (1,232,826) (2,628,185) 24,306 40,329 284,737 1,750,056 496,717 - 19,525 22,330 (407,541) (815,470) 488,349 (348,875) (122,138) 912,936 1,168 (6,586) (40,162) (257,995) Non-cash investing and financing activities: During the year: - Creditors of $496,717 were settled through the issue of ordinary shares in the Company (Note 17). - Exploration projects valued at $350,000 were acquired. Consideration was 15 million ordinary shares in the Company (Note 17 and 13). Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 42 42 Notes to the consolidated financial statements For personal use only 22. Key management personnel disclosures The following were key management personnel of the Consolidated Entity at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period: Non-executive Directors Mark Medcraft Jarvis Smith Non-Executive Director (Appointed 7 March 2013) (Resigned 6 May 2014) Executives Alex S Bajada Executive Chairman (Appointed 30 June 2006) Terrence Jones Non-Executive Director (Appointed 3 July 2013) Adam Clode Executive Director (Appointed 21 November 2012) (Resigned 3 July 2013) Angus Middleton Non-Executive Director (Appointed 6 May 2014) Refer to the remuneration report contained in the director’s report for details of the remuneration paid or payable to each member of the Group’s key management personnel for the year ended 30 June 2014. Key personnel compensation was as follows: Short term employee benefits Non-Monetary benefits Post employment benefits Termination Payments 2014 $ 220,000 - 2013 $ 194,450 - 220,000 194,450 Apart from the details disclosed in this note, no Director has entered into a material contract with the Company or the Consolidated Entity since the end of the previous financial year and there were no material contracts involving Directors’ interests existing at year-end. Other key management personnel transactions with the Company Key management persons, or their related parties, hold positions in other entities that result in them having control or significance over the financial or operating policies of those entities. These entities transacted with the Company in the reporting period. Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and its controlled entities 43 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 43 Notes to the consolidated financial statements For personal use only 22. 23. Key management personnel disclosures (continued) Other key management personnel transactions with the Company (continued) The aggregate amounts recognised during the year relating to key management personnel and their related parties were as follows: Note In AUD Key management person and their related parties Key management person Transactions value year ended 30 June 2013 2014 $ $ Balance receivable/(payable) as at 30 June 2013 2014 $ $ Transaction Eks Solutions Pty Ltd Accounting (i) 101,010 40,000 . (133,448) (132,682) Spartan Nominees Pty Ltd Administrative (ii) 40,320 40,320 (13,440) (33,600) Odin Energy Ltd Administrative/Consultancy (iii) 100,000 - - - (i) Mark Smith is a Director of eks Solutions Pty Ltd which has been engaged to provide accounting, company secretarial, management and administration services on commercial terms. The transaction value is for the period of directorship from 1 July 2013 to 6 May 2014. (ii) Alex Bajada is a Director of Spartan Nominees Pty Ltd which provided secretarial, administration and consulting services for the entire Consolidated Entity on commercial terms. (iii) Alex Bajada is a Director of Odin Energy Ltd. Excalibur provided consultancy and administrative support during joint venture negotiations. Odin Energy Ltd also received interests in some copper/gold leases as a result of the joint venture. Amounts payable to key management personnel at reporting date arising from these transactions were as follows: In AUD Consolidated 2013 2014 $ $ Current payables Key management personnel Trade creditors 146,888 166,282 Total payables/total liabilities 146,888 166,282 Subsequent Events The Joint Venture with Zamunda Minerals Zambia Limited to operate a gold and copper project in Western Zambia was terminated after the completion of due diligence. Exploration has continued on the structural geology of the Tennant Creek project and an amended Mine Management Plan has been submitted to the Excalibur Mining Corporation Annual Report 2014 FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and44 its controlled entities NOTES TO THE CONSOLIDATED 44 Northern Territory Department of Mines and Energy and a drilling programme will be implemented once all permissions have been received and fundraising completed. Notes to the consolidated financial statements For personal use only 24. 25. 26. Auditors remuneration In AUD Audit services: Consolidated 2014 $ 2013 $ Auditors of the Company KPMG Australia: Audit and review of financial reports 1,834 51,800 Somes Cooke Audit and review of financial reports 33,000 - 34,834 51,800 Total Segment Reporting The Board has determined that the Consolidated Entity has one reportable segment, being mineral exploration in Australia. As the Consolidated Entity is focused on mineral exploration, the Board monitors the Consolidated Entity based on actual versus budgeted consolidated results. This internal reporting framework is the most relevant to assist the Board in making decisions regarding the Consolidated Entity and its ongoing exploration activities, while also taking into consideration the results of exploration work that has been performed to date. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial statement of the Group as a whole. Financial Risk Management Overview This note presents information about the Consolidated Entity’s exposure to credit, liquidity and market risks, its objectives, policies and processes for measuring and managing risk, and the management of capital. The Consolidated Entity does not use any form of derivatives as it is not at a level of exposure that requires the use of derivatives to hedge its exposure. Exposure limits are reviewed by management on a continuous basis. The Consolidated Entity does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Management monitors and manages the financial risks relating to the operations of the Consolidated Entity through regular reviews of the risks. Credit risk Credit risk is the risk of financial loss to the Consolidated Entity if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Consolidated Entity’s receivables from customers and investment securities. Presently, the Consolidated Entity undertakes exploration and evaluation activities exclusively in Australia. At the statement of financial position date there were no significant concentrations of credit risk. Cash and cash equivalents The Consolidated Entity limits its exposure to credit risk by currently only investing in Magyar and liquid counterparties that have an acceptable credit rating. Excalibur Mining Corporation Annual Report 2014 45 45 Excalibur Mining Corporation Limited and its controlled entitiesNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements Financial Risk Management (continued) For personal use only 26. Credit risk (continued) Trade and other receivables As the Consolidated Entity operates primarily in exploration activities, it does not have trade receivables and therefore is not exposed to credit risk in relation to trade receivables. Exposure to credit risk The carrying amount of the Consolidated Entity’s financial assets represents the maximum credit exposure. The Consolidated Entity’s maximum exposure to credit risk at the reporting date was: In AUD Held for trading financial assets Available-for-sale financial assets Trade and other receivables Cash and cash equivalents Other financial assets - term deposits - security deposits Consolidated Carrying amount 2014 2013 12,275 32,200 258,963 19,223 22,823 45,202 107,328 494,403 7,166 75,202 107,328 Impairment losses None of the Consolidated Entity’s other receivables are past due or impaired (2013: nil). Liquidity risk Liquidity risk is the risk that the Consolidated Entity will not be able to meet its financial obligations as they fall due. The Consolidated Entity’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 Consolidated Entity’s reputation. The Consolidated Entity manages liquidity risk by maintaining adequate cash reserves from funds raised in the market and by continuously monitoring forecast and actual cash flows. The Consolidated Entity has mortgage of $200,000 secured by a property and no other external borrowings. The Consolidated Entity anticipates raising additional capital in the next 12 months to meet forecast operational and exploration activities. The decision on how the Consolidated Entity will raise future capital will depend on market conditions existing at that time. The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements: Excalibur Mining Corporation Annual Report 2014 46 Excalibur Mining Corporation Limited and its controlled entities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 46 Notes to the consolidated financial statements For personal use only 26. Financial Risk Management (continued) Liquidity risk (continued) Consolidated 30 June 2014 In AUD Trade and other payables Mortgage Carrying amount 987,495 200,000 Contractual cash flows - 6 months or less 987,495 - 6-12 months 200,000 1-2 years Carrying amount 1,031,137 200,000 Contractual cash flows - 6 months or less 1,031,137 - 6-12 months 200,000 1-2 years - 2-5 years - Consolidated 30 June 2013 In AUD Trade and other payables Mortgage - 2-5 years - Market Risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Consolidated Entity’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Currency risk The Consolidated Entity’s only exposure to currency risk was its investment in Magyar Mining Ltd, a United Kingdom registered Company. As at 30 June 2014 the Consolidated Entity holds no financial assets or liabilities which are exposed to foreign currency risk. Sensitivity analysis A strengthening of the AUD, as indicated below, against the GBP at 30 June would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Consolidated Entity considered to be reasonably possible at the end of the reporting period. The analysis assumes all other variables, in particular interest rates, remain constant. The same analysis is performed on the same basis for 2013. Strengthening Profit or loss Equity Weakening Profit or loss Equity 30 June 2014 GBP (10 percent movement) - - - - 30 June 2013 GBP (10 percent movement) 28,773 - (23,542) - Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and its controlled entities 47 47 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements For personal use only 26. Financial Risk Management (continued) Interest Rate Risk The Consolidated Entity is exposed to interest rate risk (primarily on its cash and cash equivalents), which is the risk that a financial instrument’s value will fluctuate as a result of changes in the market interest rates on interestbearing financial instruments. The Consolidated Entity does not use derivatives to mitigate these exposures. The Consolidated Entity adopts a policy of ensuring that as far as possible it maintains excess cash and cash equivalents in short terms deposit at interest rates maturing over 90 day rolling periods. Profile At the reporting date the interest rate profile of the Consolidated Entity’s interest-bearing financial instruments was: In AUD Fixed rate instruments Financial assets - Term Deposits Variable rate instruments Financial assets - Cash and cash Equivalents Consolidated Carrying amount 2014 2013 45,202 75,202 22,823 7,166 7,166 45,202 22,823 75,202 Fair value sensitivity analysis for fixed rate instruments The Consolidated Entity does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, therefore a change in interest rates at the reporting date would not affect profit or loss. Cash flow sensitivity analysis for variable instruments A change of 100 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis performed on the same basis for 2013. Effect In AUD 30 June 2014 Variable rate instruments 30 June 2013 Variable rate instruments Consolidated Profit or loss 100bp increase 100bp decrease 680 (680) 824 (824) Other Market Price Risk Other Equity price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. Excalibur Mining Corporation Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and 48 its controlled entities 48 Investments are managed on an individual basis and material buy and sell decisions are approved by the Board of Directors. The primary goal of the Consolidated Entity’s investment strategy is to maximise investment returns. The Consolidated Entity’s investments are solely in equity instruments. For personal use only Notes to the consolidated financial statements 26. Financial Risk Management (continued) Other Market Price Risk (continued) The following table details the breakdown of the investment assets and liabilities held by the Consolidated Entity: In AUD Listed equities Unlisted equities Total equity instruments Consolidated Carrying amount 2014 2013 12,275 32,200 258,963 12,275 291,163 Sensitivity analysis The Consolidated Entity’s listed equity investments are on the Australian Stock Exchange. The Consolidated Entity’s investment in an unlisted company is an exploration company registered in the UK. A 10% increase in stock prices at 30 June 2014 would have resulted in an increase in profit or loss of $1,227 (2013: $3,220) and no increase in equity (2013: $25,896); an equal change in the opposite direction would have resulted in a decrease in the profit or loss by an equal but opposite amount. Commodity Price Risk The Consolidated Entity operates primarily in the exploration and evaluation phase and accordingly the Consolidated Entity’s financial assets and liabilities are subject to minimal commodity price risk. Capital Management The Consolidated Entity’s objectives when managing capital are to safeguard the Consolidated Entity’s ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Consolidated Entity may return capital to shareholders, issue new shares or sell assets to reduce debt. The Consolidated Entity’s focus has been to raise sufficient funds through equity to fund exploration and evaluation activities. The Consolidated Entity monitors capital on the basis of the gearing ratio, however there are no external borrowings as at balance date. There were no changes in the Consolidated Entity’s approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. Excalibur Mining Corporation Annual Report 2014 Excalibur Mining Corporation Limited and its controlled entities 49 49 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements Financial Risk Management (continued) For personal use only 26. Fair Values The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows: 30 June 2014 Carrying Fair Value amount in AUD 30 June 2013 Carrying Fair Value amount Assets carried at fair value Available-for-sale financial assets - - 258,963 258,963 12,275 12,275 32,200 32,200 12,275 12,275 291,163 291,163 19,223 19,223 494,403 494,403 Security Deposits Term Deposit 107,328 107,328 107,328 107,328 45,202 75,202 75,202 Cash and cash equivalents 22,823 22,823 7,166 7,166 194,576 194,576 684,099 684,099 1,187,495 1,187,495 1,231,137 1,231,137 1,187,495 1,187,495 1,231,137 1,231,137 Financial assets held for trading Assets carried at amortised cost Trade and other receivables Other financial assets - 45,202 Liabilities carried at amortised cost Trade and other payables Fair value hierarchy The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Excalibur Mining Corporation Annual Report 2014 FINANCIAL STATEMENTS Excalibur Mining Corporation Limited and50 its controlled entities NOTES TO THE CONSOLIDATED For personal use only 50 Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). Notes to the consolidated financial statements 26. Financial Risk Management (continued) Fair value hierarchy (continued) in AUD Available-for-sale financial assets Financial assets held for trading Excalibur Mining Corporation Annual Report 2014 Level 1 Level 2 Level 3 Total 12,275 - - 12,275 - 12,275 - 12,275 - - - DIRECTOR’S DECLARATION For personal use only 51 Excalibur Mining Corporation Annual Report 2014 For personal use only LEAD AUDITOR’S INDEPENDENCE DECLARATION Excalibur Mining Corporation Annual Report 2014 52 INDEPENDENT AUDITOR’S REPORT For personal use only 53 Excalibur Mining Corporation Annual Report 2014 For personal use only INDEPENDENT AUDITOR’S REPORT Excalibur Mining Corporation Annual Report 2014 54 55 ASX ADDITIONAL INFORMATION ASX ADDITIONAL INFORMATION For personal use only Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below. Shareholdings (as at 30 September 2014) Substantial shareholders Gold Wells Pty Ltd 5.48% Voting rights Distribution of equity security holders NUMBER OF EQUITY SECURITY HOLDERS Ordinary shares Category EXM 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 1,530 1,207 423 563 122 3,845 The number of shareholders holding less than a marketable parcel of ordinary shares is 3,641. Ordinary Shares All ordinary shares issued by the Company carry one vote per share without restriction. Options Options for ordinary shares do not carry any voting rights. Unlisted Securities The Company does not have any Unlisted Securities on issue. Excalibur Mining Corporation Annual Report 2014 SHAREHOLDERS INFORMATION 56 56 The 20 largest shareholders are set out below: EXM For personal use only Name Gold Wells Pty Ltd Fay Holdings Pty Ltd Hampton Court Pty Ltd AAG Management Pty Ltd Montreux Pty Ltd <E J Berry Super Fund A/C> Ever Senang Investments Pte Ltd Ms Yanping Zhou Mega Hills Limited Chembank Pty Limited <CABAC Super Fund A/C> Orequest Pty Ltd <Special Situations A/C> Clouday Pty Ltd <Smith Super Fund A/C> Jackson Jessie Pty Ltd <Hitchcock Superfund A/C> Orequest Pty Ltd <The CNT Family A/C> Bajara Pty Ltd Norvest Projects Pty Ltd Lawsam Pty Limited Mr Stanley Nare Mr Bernard Stege Sealblue Investments Pty Ltd Mr Youssef Oubani & Mr Hussein Oubani < Oubani Holdings S/F A/C> Total Excalibur Mining Corporation Annual Report 2014 Number of shares held Percentage of capital held 5,000,000 3,411,111 3,000,000 2,888,889 2,761,949 2,500,000 2,400,000 2,000,000 2,000,000 1,835,853 1,722,000 1,705,384 1,067,152 1,063,251 1,049,290 1,000,000 1,000,000 1,000,000 833,333 760,000 5.476 3.736 3.286 3.164 3.025 2.738 2.629 2.191 2.191 2.011 1.886 1.868 1.169 1.165 1.149 1.095 1.095 1.095 0.913 0.832 38,998,212 42.714 57 57 ASX ADDITIONAL INFORMATION Summary of Tenement Holdings For personal use only Western Australia Mt Monger Interest M26/325 Royalty Interest Northern Territory Juno Juno Juno Juno Juno Tanami Tanami Nobles Nob Nobles Nob Nobles Nob Nobles Nob Nobles Nob Nobles Nob Nobles Nob Nobles Nob Nobles Nob Zambia Zambia Zambia Zambia Zambia MCC284 MLC154 & MLC155 MLC45 TO MLC47 MLC578 & MLC579 MLC68 EL25207 EL28565 MLC512 TO MLC517 MLC521 MLC525 & MLC526 MLC531 TO MLC534 MLC537 TO MLC545 MLC548 TO MLC550 MLC556 MLC589 & MLC590 MLC688 TO MLC691 18362-HQ-LPL 17853-HQ-LPL 17854-HQ-LPL 17855-HQ-LPL 17782-HQ-LPL 100% 100% 100% 100% 100% 90% 90% 100% 100% 100% 100% 100% 100% 100% 100% 100% 80% 80% 80% 80% 80% Excalibur Mining Corporation Annual Report 2014 58 For personal use only BLANK INTENTIONALLY MINING CORPORATION LIMITED 59 For personal use only BLANK INTENTIONALLY MINING CORPORATION LIMITED 60 For personal use only BLANK INTENTIONALLY MINING CORPORATION LIMITED For personal use only For personal use only www.cpgprint.com.au MINING CORPORATION LIMITED
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