Caeneus Minerals Ltd ABN and its controlled entities

Transcription

1 ABN and its controlled entities Half year report for the half-year ended 31 December 2015

2 Corporate directory Caeneus Minerals Ltd Board of Directors Mr Steven Elliott Mr Keith Bowker Mr Michael Nottas Managing Director Non-Executive Director Non-Executive Director Company Secretary Mr Keith Bowker Registered Office and Principal Place of Business Suite 1, 56 Kings Park Road West Perth, Western Australia 6005 Tel: Fax: Postal Address PO Box 964 West Perth, Western Australia 6872 Website Auditors Stantons International Level 2, 1 Walker Avenue West Perth, Western Australia 6005 Share Registry Advanced Share Registry Ltd 110 Stirling Highway Nedlands, Western Australia 6009 Tel: Fax: Stock Exchange Australian Securities Exchange Level 40, Central Park St Georges Terrace Perth, Western Australia 6000 ASX Code CAD

3 Half year report for the half-year ended 31 December 2015 Contents Directors report.. 1 Auditor s independence declaration Independent auditor s review report.. 4 Directors declaration.. 6 Consolidated statement of profit or loss and other comprehensive income 7 Consolidated statement of financial position... 8 Consolidated statement of changes in equity... 9 Consolidated statement of cash flows. 10 Condensed notes to the consolidated financial statements. 11

4 Directors report Caeneus Minerals Ltd The directors of Caeneus Minerals Ltd ( Caeneus or the Company ) submit herewith the financial report of Caeneus Minerals Ltd and its subsidiaries ( the Group ) for the half-year ended 31 December In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: Names of Directors The names of the directors of the Company during or since the end of the half-year are: Mr Steven Elliott Mr Keith Bowker Mr Michael Nottas Mr Antony Sage The above named directors held office during and since the end of the half-year except for: Mr Steven Elliott appointed 18 January 2016 Mr Antony Sage resigned 18 January 2016 Review of operations The consolidated loss of the Group for the half-year ended 31 December 2015 amounted to 676,903 (31 December 2014: 221,468). On 11 September 2015, the Company terminated the binding agreement with Poseidon Nickel Limited (ASX: POS) in relation to the Company s acquisition of contractual rights to mine the Silver Swan underground nickel mine. The Company issued 100,000,000 fully paid ordinary shares at a deemed issue price of under a Deed of Release for Settlement Consideration to the value of 300,000. The Company also raised 150,000 via the issue of 150,000 convertible notes at 1.00 each. The convertible notes were subsequently converted into 75,000,000 fully paid ordinary shares at each. During the half-year ended 31 December 2015, Caeneus completed the acquisition of 100% of the issued shares of private company Port Exploration Pty Ltd ( Port Exploration ) following shareholder approval at the Company s Annual General Meeting. The Company issued 750,000,000 fully paid ordinary shares at a deemed issue price of each with a 1 for 2 unlisted options exercisable at on or before 31 December 2020 as consideration payable to the Port Exploration vendors. Port Exploration has a joint venture agreement with ASX listed Segue Resources Limited to acquire the prospective Pardoo Nickel Project in Western Australia. During the half-year ended 31 December 2015, the Company raised a total of 701,829 via two (2) placements to sophisticated investors. The first placement raised 101,829 via the issue of 50,914,618 fully paid ordinary shares at each together with a 1 for 2 free attaching unlisted options exercisable at on or before 31 December The second placement (as approved by shareholders at the 2015 Annual General Meeting) raised 600,000 via the issue of 300,000,000 fully paid ordinary shares at each with a 1 for 2 free attaching unlisted options exercisable at on or before 31 December

5 Caeneus also relinquished all of its eight (8) tenements which formed the Mt Davis Project located near Leonora in Western Australia. The relinquishment of these tenements was part of the Company s ongoing strategy of rationalising less prospective non-core assets to help reduce costs and accelerate further exploration of the Company s core assets such as the Supernova Project and the newly acquired Pardoo Nickel Project. Active exploration programs are planned at the Pardoo Nickel Project and the Supernova Project, located within the Albany-Fraser Mobile Belt in Western Australia. Auditor s independence declaration The auditor s independence declaration is included on page 3 of the half-year report. Signed in accordance with a resolution of directors made pursuant to s.306(3) of the Corporations Act On behalf of the directors Mr Keith Bowker Non-Executive Director 15 March 2016 Perth, Western Australia - 2 -

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9 Directors declaration The directors declare that: (a) in the directors opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and (b) in the directors opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standard AASB 134 Interim Financial Reporting and giving a true and fair view of the financial position and performance of the Group for the period ended 31 December Signed in accordance with a resolution of the directors made pursuant to s.303(5) of the Corporations Act On behalf of the directors Mr Keith Bowker Non-Executive Director 15 March 2016 Perth, Western Australia - 6 -

10 Consolidated statement of profit or loss and other comprehensive income for the half-year ended 31 December 2015 Caeneus Minerals Ltd Consolidated Half-year ended 31 Dec Dec 2014 Note Continuing operations Other income ,163 Administration costs (367,272) (37,662) Consultants costs (242,714) (174,073) Compliance costs (49,466) (62,896) Impairment expenses 5 (17,802) - Loss before income tax (676,903) (221,468) Income tax expense - - Loss for the period (676,903) (221,468) Other comprehensive income, net of income tax Items that will not be reclassified subsequently to profit or loss - - Items that may be reclassified subsequently to profit or loss - - Other comprehensive income for the period, net of income tax - - Total comprehensive loss for the period (676,903) (221,468) Loss attributable to: Owners of Caeneus Minerals Ltd (676,903) (221,468) Total comprehensive loss attributable to: Owners of Caeneus Minerals Ltd (676,903) (221,468) Loss per share: Basic and diluted (cents per share) (0.08) (0.04) Condensed notes to the consolidated financial statements are included on pages 11 to

11 Consolidated statement of financial position as at 31 December Dec 2015 Consolidated 30 Jun 2015 Note Current assets Cash and cash equivalents 177,173 4,576 Trade and other receivables 4 172,992 44,565 Total current assets 350,165 49,141 Non-current assets Exploration and evaluation expenditure 5 1,194,453 - Total non-current assets 1,194,453 - Total assets 1,544,618 49,141 Current liabilities Trade and other payables 197, ,230 Total current liabilities 197, ,230 Total liabilities 197, ,230 Net assets/(liabilities) 1,347,281 (185,089) Equity Issued capital 6 75,219,254 73,348,924 Reserves 8 339,943 1,000 Accumulated losses (74,211,916) (73,535,013) Total equity/(deficiency) 1,347,281 (185,089) Condensed notes to the consolidated financial statements are included on pages 11 to

12 Consolidated statement of changes in equity for the half-year ended 31 December 2015 Consolidated Issued Capital Reserves Accumulated losses Total Balance at 1 July ,096,424 1,000 (72,112,296) 985,128 Loss for the period - - (221,468) (221,468) Other comprehensive income, net of income tax Total comprehensive loss for the period - - (221,468) (221,468) Issue of ordinary shares 50, ,000 Balance at 31 December ,146,424 1,000 (72,333,764) 813,660 Balance at 1 July ,348,924 1,000 (73,535,013) (185,089) Loss for the period - - (676,903) (676,903) Other comprehensive income, net of income tax Total comprehensive loss for the period - - (676,903) (676,903) Issue of ordinary shares 868, ,130 Issue of ordinary shares and options related to subsidiary acquired (note 7) 750, ,943-1,088,943 Issue of shares in settlement of claims by Poseidon Nickel Ltd 300, ,000 Share issue costs (47,800) - - (47,800) Balance at 31 December ,219, ,943 (74,211,916) 1,347,281 Condensed notes to the consolidated financial statements are included on pages 11 to

13 Consolidated statement of cash flows for the half-year ended 31 December 2015 Consolidated Half-year ended 31 Dec Dec 2014 Note Cash flows from operating activities Payments to suppliers and employees (283,153) (280,722) Interest received 351 3,163 Net cash used in operating activities (282,802) (277,559) Cash flows from investing activities Payments for exploration and evaluation (58,806) (38,946) Cash acquired from acquisition of subsidiary Proceeds from sale of tenements - 50,000 Net cash (used in)/provided by investing activities (58,506) 11,054 Cash flows from financing activities Proceeds from equity instruments of the Company 393,549 50,000 Proceeds from issue of debt securities 150,000 - Repayment of borrowings (24,844) - Share issue costs (4,800) - Net cash provided by financing activities 513,905 50,000 Net increase/(decrease) in cash and cash equivalents 172,597 (216,505) Cash and cash equivalents at the beginning of the period 4, ,059 Cash and cash equivalents at the end of the period 177, ,554 Condensed notes to the consolidated financial statements are included on pages 11 to

14 Condensed notes to the consolidated financial statements for the half-year ended 31 December Significant accounting policies Statement of compliance The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The half-year report does not include notes of the type normally included in an annual financial report and should be read in conjunction with annual financial statements of the Company for the year ended 30 June 2015 together with any public announcements made during the following half year. The half-year financial report was authorised for issue by the directors on 15 March Basis of preparation The consolidated financial statements have been prepared on the basis of historical cost. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company s 2015 annual financial report for the financial year ended 30 June 2015, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards. Going concern basis The consolidated financial statements have been prepared on the going concern basis which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. For the half-year ended 31 December 2015, the Group incurred a loss after tax of 676,903 (31 December 2014: 221,468) and a net cash outflow from operations of 282,802 (31 December 2014: 277,559). At 31 December 2015, the Group had net current assets of 152,828 (30 June 2015: net liabilities of 185,089). Based upon the Group s existing cash resources of 177,173 (30 June 2015: 4,576), the ability to modify expenditure outlays if required, and to source additional funds, the Directors consider there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable, and therefore the going concern basis of preparation is considered to be appropriate for the Group s 31 December 2015 half-year consolidated financial statements. The board of directors is aware, having prepared a cash flow forecast, of the Group s working capital requirements and the need to access additional equity funding or asset divestment if required within the next 12 months. In the event that the Group is not able to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and perhaps at amounts different to those stated in its financial statements

15 Principles of consolidation The consolidated financial statements incorporate all assets, liabilities, and results of the parent and all of its subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Company. The consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group. Business Combinations Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred. At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that: deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with AASB 112 Income Taxes and AASB 119 Employee Benefits respectively; liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with AASB 2 Share-based Payment at the acquisition date; and assets (or disposal groups) that are that are classified as held for sale in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard. Significant accounting judgements and key estimates The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. In preparing these half-yearly statements, the significant judgements made by management in applying the Company s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual financial report for the year ended 30 June

16 Amendments to AASBs and the new Interpretation that are mandatorily effective for the current reporting period The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half-year. New and revised Standards and amendments thereof and Interpretations effective for the current half-year that are relevant to the Group include: AASB Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality Impact of the application of AASB Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality Completes the withdrawal of references to AASB 1031 in all Australian Accounting Standards and Interpretations. The adoption of the amending Standard does not have any impact on the disclosures or the amounts recognised in the Group s consolidated financial statements. 2. Segment information The Group operates in one business segment and one geographical segment, namely the mineral exploration industry in Australia only. AASB 8 Operating Segments states that similar operating segments can be aggregated to form one reportable segment. Also, based on the quantitative thresholds included in AASB 8, there is only one reportable segment, namely the mineral exploration industry. However, none of the other operating segments currently meet any of the prescribed quantitative thresholds and as such do not have to be reported separately. The Group has therefore decided to aggregate all its reporting segments into one reportable operating segment. The revenue and results of this segment are those of the Group as a whole and are set out in the consolidated statement of profit or loss and other comprehensive income. The segment assets and liabilities are those of the Group and set out in the consolidated statement of financial position. 3. Other income 31 Dec Dec 2014 Interest income 351 3,163 Sale of tenements (i) - 50, ,163 (i) An amount of 50,000 was received from the sale of the Wee MacGregor Copper Project comprising of four (4) granted exploration permits namely EPM 17449, 17904, 17907, and one (1) application for an exploration permit namely EPM

17 4. Trade and other receivables 31 Dec Jun 2015 Prepayments 18,647 8,420 Other receivables 16,823 36,145 Funds yet to be received from placement (i) 137, ,992 44,565 (i) This represents the amount yet to be received from the underwriter for the placement of 600,000 completed by the Company on 17 December 2015 via the issue of 300,000,000 fully paid ordinary shares at each plus a 1 for 2 free attaching unlisted options exercisable at on or before 31 December 2020 to sophisticated investors of the Company. As at the date of this report, the amount of 137,522 has been received by the Company. None of the trade and other receivables are past due at the reporting date. 5. Exploration and evaluation expenditure 31 Dec Jun 2015 Carrying value at beginning of the period - 654,242 Arising on acquisition of Port Exploration Pty Ltd (i) 1,089,752 - Capitalised exploration expenditure acquired from Port Exploration Pty Ltd (ii) 63,697 - Expenditure incurred during the period (ii) 58,806 56,163 Impairment of exploration and evaluation expenditure (iii) (17,802) (710,405) Carrying value at end of the period 1,194,453 - (i) This represents the excess of purchase consideration over net liabilities acquired on acquisition of Port Exploration Pty Ltd which was capitalised to exploration and evaluation expenditure (refer to note 7). (ii) This represents expenditure incurred by Port Exploration Pty Ltd ( Port ) on the Pardoo Nickel Project. Port has a joint venture agreement with Segue Resources Limited (ASX: SEG). During the half-year, Caeneus acquired 100% of the issued shares of Port. Refer to note 7. (iii) An impairment expense of 17,802 has been recognised in profit or loss for the half-year ended 31 December 2015 (30 June 2015: 710,405). This is consistent with the Group s policy on exploration and evaluation expenditure. Refer to the 2015 annual financial report. During the half-year ended 31 December 2015, Caeneus surrendered all of its eight (8) tenements which formed the Mt Davis Project. All exploration and evaluation expenditure incurred in relation to the Mt Davis Project and the Supernova Project was impaired for the half-year as the directors believed that the value of exploration and evaluation expenditure could not be recovered hence the capitalised amount was impaired through the statement of profit or loss and other comprehensive income

18 6. Issued capital 31 Dec Jun ,930,580,894 fully paid ordinary shares (30 June 2015: 646,515,646) 75,219,254 73,348,924 Fully paid ordinary shares 31 Dec 2015 No. 30 Jun 2015 No. Balance at beginning of period 646,515,616 73,348, ,301,330 73,096,424 Issue of shares to Poseidon Nickel Limited (i) 100,000, , Issue of shares (ii) 50,914, , Issue of shares on conversion of Convertible Notes (iii) 75,000, , Issue of shares (iv) 8,150,660 16, Placement (v) 300,000, , Issue of shares (vi) 750,000, , Exercise of options (vii) ,000,000 50,000 Exercise of options (viii) ,500,000 52,500 Issue of shares to Poseidon Nickel Limited (ix) ,714, ,000 Share issue costs - (47,800) - - 1,930,580,894 75,219, ,515,616 73,348,924 (i) Issue of fully paid ordinary shares at a deemed issue price of each on 28 October 2015 to Poseidon Nickel Limited (ASX: POS) pursuant to a Deed of Release for settlement consideration to the value of 300,000 in relation to the proposed acquisition of contractual rights to mine at the Silver Swan Nickel mine. (ii) Issue of fully paid ordinary shares at each on 28 October 2015 to sophisticated investors of the Company. (iii) Issue of fully paid ordinary shares at each on 1 December 2015 following the conversion of convertible notes totaling 150,000. (iv) Issue of fully paid ordinary shares at a deemed issue price of each on 1 December 2015 to a creditor of the Company for services rendered. (v) Issue of fully paid ordinary shares at each on 17 December 2015 pursuant to a placement to sophisticated investors of the Company. (vi) Issue of fully paid ordinary shares at each on 17 December 2015 for non-cash consideration for the acquisition of 100% of the issued capital of Port Exploration Pty Ltd (refer to ASX announcement on 17 December 2015). (vii) Issue of fully paid ordinary shares at each on 23 July 2014 following the exercise of unlisted options. (viii) Issue of fully paid ordinary shares at each during the month of May 2015 following the exercise of unlisted options. (ix) Issue of fully paid ordinary shares at a deemed issue price of each on 22 May 2015 to Poseidon Nickel Limited (ASX: POS) for the deposit payment in regards to the acquisition of contractual rights to mine at Silver Swan pursuant to a binding terms sheet

19 7. Acquisition of subsidiary Caeneus Minerals Ltd On 17 December 2015, the Company completed the transaction to acquire 100% of the issued capital of private company Port Exploration Pty Ltd ( Port Exploration ) ( Acquisition ). The Acquisition became effective as from 30 November 2015 when shareholder approval was obtained at the Annual General Meeting of the Company. The consideration for the Acquisition was satisfied via the issue of 750,000,000 fully paid ordinary shares in Caeneus at a deemed issue price of each with a 1 for 2 free attaching unlisted option exercisable at on or before 31 December Consideration transferred Fair value Non-cash (fully paid ordinary shares) (i) 750,000 Non-cash (unlisted options) (ii) 338,943 1,088,943 (i) This represents the issue of 750,000,000 Caeneus shares at a deemed issue price of to acquire 100% of the issued capital of Port Exploration. (ii) This represents the issue of 375,000,000 free attaching unlisted options exercisable at on or before 31 December 2020 valued at issue date. Refer to note 9. Assets acquired and liabilities assumed at the date of acquisition Port Exploration Pty Ltd Current assets Cash 300 Other current assets 38 Non-current assets Exploration and evaluation expenditure 63,697 Current liabilities Unsecured loans (64,844) Net assets/(liabilities) (809) The fair values of assets acquired and liabilities assumed approximate their carrying value. Excess arising on acquisition Consideration transferred 1,088,943 Add: fair value of identifiable net liabilities acquired 809 Excess allocated to exploration and evaluation expenditure (i) 1,089,752 (i) At 30 November 2015 (effective date of acquisition), the excess consideration over fair value of net liabilities acquired of 1,089,752 was capitalised to exploration and evaluation expenditure

20 8. Reserves 31 Dec Jun 2015 Balance at beginning of the period 1,000 1,000 Options issued on acquisition of Port Exploration Pty Ltd (i) 338,943 - Carrying value at end of the period 339,943 1,000 (i) This represent the value attributed to 375,000,000 free attaching unlisted options issued as part of the consideration for the acquisition of Port Exploration Pty Ltd. Refer to note Options The following options arrangements were in existence at the reporting date: Option series Number Grant date Grant date Exercise fair value price Expiry date Vesting date 1 19,500,000 i 21 Dec Dec 2016 Vested 2 306,150,001 ii 28 Feb Feb 2017 Vested 3 25,457,309 iii 1 Dec Dec 2020 Vested 4 150,000,000 iv 17 Dec Dec 2020 Vested 4 375,000,000 v 17 Dec Dec 2020 Vested i Issued to directors pursuant to a Prospectus dated 13 December ii Issued on 28 February 2014 as part of the consideration for the acquisition of Caeneus Minerals Pty Ltd (refer to ASX announcement dated 28 February 2014). iii Issued on 1 December 2015 for nil consideration to sophisticated investors as part of a placement (refer to ASX announcement dated 1 December 2015). iv Free attaching unlisted options issued on 17 December 2015 to sophisticated investors as part of a placement (refer to ASX announcement dated 17 December 2015). v Issued on 17 December 2015 as part of the consideration for the acquisition of Port Exploration Pty Ltd (refer to ASX announcement dated 17 December 2015 and note 7). There has been no alteration of the terms and conditions of the above options arrangements since the grant date. Fair value of unlisted options issued as part of the consideration for the acquisition of Port Exploration Pty Ltd The fair value of options issued as part of the consideration for the acquisition of Port Exploration Pty Ltd has been independently determined using the Black-Scholes option pricing model. Inputs into the model Input Series 4 (375,000,000 options) Grant date share price Exercise price Expected volatility 167% Option life 5 years 15 days Dividend yield n/a Risk-free interest rate 2.29%

21 10. Convertible notes On 11 August 2015, the Company raised 150,000 via the issue of 150,000 convertible notes at 1.00 each with an interest rate of 10% per annum. On 1 December 2015, the Company issued 75,000,000 fully paid ordinary shares at each in full settlement of the convertible notes. The conversion of the convertible notes was approved by shareholders at the 2015 Annual General Meeting of the Company. 11. Dividends No dividends were paid or declared for the half-year ended 31 December 2015 and the directors have not recommended the payment of a dividend. 12. Commitments for expenditure Exploration expenditure on granted tenements 31 Dec Jun 2015 Not longer than 1 year 174,590 57,680 Longer than 1 year and not longer than 5 years 1,278, ,720 1,452, ,400 In order to retain the rights of tenure to its granted tenements, the Group is required to meet the minimum statutory expenditure requirements but may reduce these at any time by reducing the size of the tenements. The figures quoted above assume that no new tenements are granted and that only compulsory statutory area reductions are made. If the Group decides to relinquish certain leases and/or does not meet these obligations, assets recognised in the consolidated statement of financial position may require review to determine the appropriateness of carrying values. The sale, transfer or farm-out exploration rights to third parties will reduce or extinguish these obligations. 13. Contingent liabilities and contingent assets There has been no significant change in contingent liabilities and/or contingent assets since the last annual report. Please refer to the 30 June 2015 annual financial report. 14. Subsequent events There has not been any matter or circumstance that has arisen since the end of the half-year that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years