ANNUAL REPORT 2017 - aameg.org€¦ · Lockton Companies Australia Pty Ltd . Level 1/297 Vincent...

ANNUAL REPORT 2017

ADVOCACY. INSIGHTS. CONNECTIONS

AAMEG ANNUAL REPORT 2017

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TABLE OF CONTENTS

Page 3 Page 4 Page 5 Page 7 Page 9 Page 10 Page 11 Page 13 Page 15 Page 16 Page 17 Page 17

Page 18

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Page 23 Page 24 Page 25

1. Corporate Directory2. Chairman’s Report

3. The CEO Report4. Operational Highlights 2017

5. Key Objectives 2018

6. Who We Are7. Our Members8. AAMEG Member Companies9. AAMEG Board and Corporate Governance10. Sponsorship and Support11. Finances and Administration

a) Review of Operations

b) Board Meetings Attendance

c) Board of Directors

d) Retired Directors

e) Changes in State of Affairs

12. Financial Report13. Auditors Independence Declaration14. Financial Statements15. Independent Auditors Report Page 33


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CORPORATE DIRECTORY

Australia-Africa Minerals & Energy Group Limited

ACN 150 520 862

Chief Executive Officer Trish O’Reilly (until 30th June 2017)

Doug Horak (Interim CEO from 1st of July 2017)

Directors Tim Carstens (Chairman)

Ben Gargett (Vice-Chairman)

Andrew Dinning

Ron Sayers

Bill Turner

John Welborn

Andrew Patterson (to November 2016)

Gillian Swaby (to November 2016)

Adel van der Walt (to November 2016)

Company Secretary Giovanny Jefferson

Registered Office Suite 9, 1297 Hay St

West Perth, WA 6005

Post Office Box 1018

West Perth, WA 6872

Tel +61 (8) 9226 0175

Fax +61 (8) 9321 0426

Email [email protected]

www.aameg.org

Auditors Deloitte Touche Tohmatsu

Tower 2, Brookfield Place

123 St Georges Terrace

Perth WA 6000

Legal Advisors Clayton Utz

QV1, 250 St Georges Terrace

Perth WA 6000

Bankers Commonwealth Bank of Australia

1254 Hay Street

West Perth, WA 6005

Insurance Brokers Lockton Companies Australia Pty Ltd

Level 1/297 Vincent Street

Leederville WA 6007

Annual General Meeting The Annual General Meeting will be held on Tuesday, 28 November 2017 at 4pm.

The meeting venue is: Deloitte, Tower 2, Brookfield Place

123 St Georges Terrace

Perth, Western Australia 6000

http://www.aameg.org/


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CHAIRMAN’S REPORT The 2017 financial year has been one of positive change for AAMEG, with progress made on many fronts. We’ve also seen improvement in economic conditions, resulting in renewed activity in Africa by Australian resource companies, many of whom are members. At the same time, the challenges of operating in Africa have been emphasised with security, political risk and labour relations among them.

Australia is one of the top investors in mineral exploration and development in Africa. There are currently more than 170 ASX-listed mining and other resource companies operating over 400 projects in 35 African countries. This Australian footprint involves current and future investment estimated to be worth more than $40 billion. Deepening the Australian impact in Africa are the mining equipment, technology and services companies supporting these mining operations. About one in twenty companies listed on the ASX has an investment in Africa.

AAMEG exists to support and enable these Australian companies to operate successfully in Africa. We do this by helping our members better understand, and more effectively and efficiently manage risks which are non-technical in nature. These include political and social risks, health, security, bribery and corruption. Through the sharing of knowledge and resources, we facilitate collaborative solutions by drawing on the experiences of those members who are African “veterans”. This creates support networks, and provides a focal point for engagement with governments, and a voice to influence policy and narrative on behalf of members confronted with challenges.

Over the past year, we have sharpened our value proposition to members and refined our focus around three elements – Advocacy. Insights. Connections.

There has been a strong focus on Advocacy throughout 2017. A central objective has been to reinvigorate Australian Government collaboration and support, by highlighting how the Australian resources industry positively impacts Africa. With Senator Linda Reynolds championing for the cause, the Foreign Policy White Paper currently in development “is the perfect place to start addressing a renewed relationship with countries

on the African Continent” through economic diplomacy. The current Senate inquiry into Australia’s trade and investment relationships with the countries of Africa is providing reason for optimism regarding renewed engagement.

Looking to the year ahead, AAMEG is focussed on further developing our model, leveraging our capabilities for greater impact, expanding our membership-base and further deepening our connections and collaboration with government.

In pursuing the full potential of AAMEG, we can count among our many strengths a committed and capable Board, as well as the unwavering support of a suite of sponsors and contributors: Paydirt, PwC, Clayton Utz, Cannings Purple, Resolute Mining, Ausdrill and Base Resources. We should recognise that it’s you, the membership, that are central to AAMEG’s success in delivering concrete value. The greater your involvement and contribution, the greater the collective value.

AAMEG has been fortunate to benefit from a passionate and dedicated CEO who played a pivotal role in the creation of the AAMEG we have today. After nearly six years in the role, Trish O’Reilly decided it was the right time for her to hand over the reins at the end of the last financial year. On behalf of the Board, I would like to sincerely thank her for her significant contribution.

I would also like to sincerely thank Doug Horak for his contribution as interim CEO. Doug has attacked the role with enthusiasm and has had a remarkable impact in a short period of time. We wish Doug well with his future endeavours and are sure his contribution to AAMEG will continue. We now have a recruitment process underway to secure the right CEO to lead AAMEG.

Tim Carstens Chairman 31 October 2017


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THE CEO REPORT

It is my pleasure to present the 2016/17 Annual Report for the Australia-Africa Minerals and Energy Group.

It has been a year of positive change for the Australia Africa corridor, none more so than the improvement in commodity prices, particularly that of gold. Increased engagement at the Australian Federal Government level, driven by Senator Linda Reynolds was initiated with a trip in February to the Mining Indaba conference in Cape Town and followed up with a Senate Inquiry into the business relationships between Australia and Africa. This broader, more collaborative approach by Senator Reynolds has been welcomed by industry, indicating the building of a sustainable level of momentum.

A far more positive and upbeat sentiment at the Africa Down Under conference in Perth this September, again reaffirmed a positive outlook for Australia-Africa opportunities.

AAMEG membership, as one would expect, is reflective of the somewhat subdued economic climate of the past. I believe, as positivity filters through the industry we will see membership numbers improve.

AAMEG is already seeing West African players becoming more active within the organisation and new members coming on-board from mining companies in East Africa as a direct result of the advocacy work AAMEG is facilitating following changes to the Tanzanian Mining Law. Often when the industry faces challenges, representative bodies like AAMEG play a key role in supporting affected members, as well as advocating on behalf of the industry at large. As anyone operating in developing economies would appreciate, change is inevitable and quite often unexpected, with little to no industry consultation. Expanding and growing our membership base continues to be one of our highest priorities, and by remaining highly relevant to stakeholders, we believe this is achievable.

Member-based organisations like AAMEG exist because they fulfil the needs of a community, group, or segment of a population. The long-term sustainability of our organisation depends on our

ability to remain relevant and deliver tangible value to members. This relevance is determined largely by assessing the needs of the membership base and the pressures experienced in the current operating environment. In mid 2017, AAMEG’s board completed a process that focused on refining the membership value proposition, settling on three core pillars of delivery; Advocacy, Insights and Connections. Advocacy on behalf of members is not an uncommon principal for a membership-based organisation. Most recently, AAMEG’s strengths in this area were demonstrated through the unexpected Tanzanian mining law changes, which impacted many Australian companies operating in the country. Within days of the announcement, AAMEG had reached out to all companies operating in Tanzania and established a working group. This working group met countless times over the ensuing months to establish a detailed document of the legislation’s potential impacts. AAMEG facilitated the flow of information between all impacted stakeholders, both in Australia and abroad, ensuring affected parties were informed, connected and collaborative in their approach. Government at the highest levels in both countries were engaged, resulting in a meeting request by the Tanzanian Government via their Honorary Consul in Perth. Details of this meeting are currently being formalised.

One of AAMEG’s key responsibilities is to provide critical country and operating insights that will improve our members’ ability to operate on the continent of Africa. These insights cover a broad range of themes from community engagement, to health and safety, security, government relations, legal, business intelligence and operating excellence. We engage members and industry experts in delivering this information to ensure the timely sharing of information via events, workshops, panel discussions, submissions, white papers, and expert reports.


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A recent example of the insights we provide is AAMEG’s response to the Senate Inquiry exploring Australia’s trade and investment relationships with the countries of Africa.

As an organisation founded on building connections, AAMEG endeavours to build and facilitate relationships between members and stakeholders across the two continents. Our members are typically entrepreneurial in nature and display a willingness to collaborate and share knowledge with other members to support industry success in Africa. The value of AAMEG’s connections cannot be underestimated and should be leveraged to promote best practice and leadership.

In recent months, AAMEG has undertaken a brand refresh to reflect our three core pillars of delivery. A new website design has allowed us to consider user needs, improving functionality, navigation and user experience. These changes are part of a continuous process of refining and distilling AAMEG’s value offering to members. We encourage your feedback and engagement as we continue to roll out these changes.

This year Trish O’Reilly stepped down as AAMEG’s CEO after six years of hard work, for which AAMEG and its members will forever be indebted. A more passionate, energetic, and persevering individual is hard to find, and the vacuum left by Trish will take some time to replace. Trish spent many hours walking the corridors of Canberra and we have her efforts to thank for the support AAMEG now enjoys from Senator Reynolds, Africa Branch and our strong relationships with the Australian Heads of Mission in Africa.

In my role of interim CEO, I have been privileged to work alongside high profile and talented board members and mining professionals, all of whom have huge responsibility and yet still manage to

find time to assist in the ongoing operation of AAMEG. When one considers that these executives spend almost half their year abroad, it is incredible that they find the time and energy to contribute and I am extremely grateful to them all.

I leave my role with AAMEG with a heavy but happy heart. I believe with the support of the board, Danielle, and the broader Paydirt team, we have covered a lot of new ground in a short space of time. Prioritising the allocation of very limited resources will continue to be a challenge in the short-term, however the future looks bright for AAMEG and its growing membership.

To our key sponsors, particularly Paydirt Media, Base Resources, Ausdrill and Resolute Mining, and to all our members for their active involvement, participation and support – you are world leaders in your field and have much to contribute to the positive and sustainable development of the African continent.

I look forward to continuing to observe your ongoing success in the Australia-Africa space.

Doug Horak Interim Chief Executive Officer 31 October 2017


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OPERATIONAL HIGHLIGHTS OF THE 2017 FINANCIAL YEAR

Advocacy

• Continuing advocacy for theAustralia-Africa minerals and energyindustry at a Parliamentary level,responded to a Senate inquiry intoAustralia’s trade and investmentrelationships with the countries of Africa.

• AAMEG’s timely submission to the inquiryaimed to demonstrate to the governmentthe economic and political significance theAustralian resources industry playsacross the African continent and thepositive impacts we as a collectiveminerals and energy industry are making.Findings to be released a White Paper inFebruary 2018.

• Strengthened relationships with theAustralian Federal Government wereachieved with AAMEG board membersmaking four Canberra trips. This includedmeeting with the Department of ForeignAffairs and Trade to establish a mentoringprogram.

• Continued representation of theAustralia-African minerals and energyindustry on a global level with boardmembers attending both the INDABA2017 conference and the Africa DownUnder conference.


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Insights

• Partnered with Sahara Mining Services and MS Risk to create and test the D-Risk security alert service, enabling mining personnel operating in West Africa to accurately assess the risks and dangers associated with their businesses, investments and travel plans. This is a result of AAMEG’s ongoing commitment to member security.

• Developed a partnership with the Australian Strategic Policy Institute (ASPI) – resulting in a research project exploring how Australian industry in Africa contributed to counter extremism.

• Collaborative effort to develop insight into responding appropriately to changes in investment climate of Tanzania.

• Ongoing media engagement.

Connections

• Implemented a logo and website design update as part of AAMEG’s strategic growth strategy. Critical to the profile of AAMEG, this initiative forms part of AAMEG’s ongoing development as the leading member organisation supporting the Australian minerals and energy industries operating in Africa.

• Continued to deliver to members a relevant and diverse events calendar, including the conceptualisation of the new “AAMEG Social Circle” networking events.

• Growth of associate membership for African Governments, an initiative which seeks to provide the opportunity for positive dialogue and relationship building.

• Support of the Australia Awards, a professional mentoring program which links three professional African women with three Australian women who have demonstrated leadership in the African Australian extractives industry. This opportunity was created in conjunction with the Australian Federal Government to strengthen relationships between the Australian and African minerals and energy industries.

• Facilitated Federal Government representation at INDABA 2017, the first time in 3 years.


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KEY OBJECTIVES FOR THE YEAR AHEAD Going forward into 2018, we will continue to base our objectives on AAMEG’s three cornerstones: Advocacy, Insights and Connections. The themes of security, government, stakeholder engagement, sustainable community development, health and safety, and doing business ethically in Africa will continue to drive the agenda and focus for AAMEG.

• We aim to continue building the AAMEG Security Group, which assists in driving discussion, thoughtleadership, documentation and solution based outcomes for our membership, stakeholders and thebroader Australia- Africa community. This group consists of board members, the AAMEGmembership and industry service providers.

• Strengthening government and stakeholder engagement remains a priority for AAMEG. We willendeavour to travel to Canberra to advocate on behalf of our membership and the industry ingeneral. We will also continue leveraging events such as Mining Indaba in Cape Town to create aplatform from which to engage with the Africa Heads of Mission and African Governmentrepresentatives. The Foreign Policy White Paper currently in development will be an importantvehicle for focussing Government engagement and support for Australia interested in Africa.

• Sustainable community development continues to be central to AAMEG’s agenda. The impactsAustralian minerals and energy companies have had in their host nations continue to meet andexceed global best practice. Highlighting these stories and the ongoing contribution that AAMEGmember companies make on the African continent is critical for the ongoing improvement ofAustralia-Africa relations.

• Improving the health and safety of surrounding communities through targeted initiatives andthroughout the general course of conducting operations in Africa continues to highlight the Australianminerals and energy community in positive light. In 2018, we will keep growing the goodwill receivedby African governments when building commercial partnerships on the continent.

• The ethical business practices of AAMEG members remains a strong differentiator for Australianinvestment in Africa. This approach continues to be welcomed by host nations and AAMEG iscommitted to its responsibility in sharing knowledge and ensuring these practices are relevant andmeeting global best practice or above.


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WHO WE ARE Founded in May 2011, the Australia-Africa Minerals & Energy Group Ltd. (AAMEG) is the peak body representing Australian companies engaged in the development of Africa’s resources industry. AAMEG facilitates collaboration between industry, governments and other stakeholders to ensure that resource development produces sustainable outcomes in Africa.

AAMEG supports members by providing advocacy, insights and connections. AAMEG advocate on behalf of its members to raise the profile of the significant investment and contribution that Australian minerals and energy companies have in Africa. AAMEG supports member companies to conduct operations successfully in Africa, providing unique insights to address non-technical risks. AAMEG exists to forge connections between the Australian minerals and energy industry in Africa and its key stakeholders, both at home and abroad.

VISION AND STRATEGIC GOALS AAMEG’s vision as the peak body representing Australian companies engaged in the development of Africa’s resource industry is to enhance the industry’s capacity to become a world leader in delivering successful equitable and sustainable resource development outcomes in Africa.

AAMEG’s Strategic Goals are to:

1. Be the voice of industry and preferred channel of contact for stakeholders engaged in the Australianresources sector in Africa.

2. Build Australian Government understanding of and support for Australian resource investors,operators and service providers in Africa.

3. Build African Governments’ understanding of the benefits derived from Australian resourcesinvestment, operation and service providers.

4. Improve the performance of Australian resource companies operating in Africa through facilitatingthe sharing of information, knowledge and learnings so that they will become partners of choice forAfrican Governments.


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OUR MEMBERS AAMEG has over 80 members representing the exploration, mineral and energy companies, professional services, government and resources services sectors, as well as 10 African governments who are associate members.

Our Commitment to Members

Advocacy

We believe in policy development that promotes technical leadership in resource development, innovation, project development and sustainability best practice.

AAMEG advocate on behalf of our members to raise the profile of the significant investment and contribution that Australian minerals and energy companies have in Africa. As the voice of the industry, we are passionate about and committed to the sustainable and positive economic development of the African Continent.

Australia is considered a global leader in resource governance and AAMEG embodies the ethical philosophies demonstrated by our members’ conduct in Africa, not just within the communities in which they work, but with the broader stakeholder audience and host governments.

By aligning your business with AAMEG, you can influence Australian minerals and energy success in Africa, and enhance the reputation and investment climate for the Australian resources industry.

Insights

AAMEG supports member companies to conduct operations successfully in Africa, providing unique insights to address non-technical risks.

AAMEG members have access to first-hand, real-time insights that target current operational challenges and best practice. We seek to facilitate the exchange of ideas that contribute to the positive development and performance of Australian resource companies in Africa through the delivery of events, workshops, introductions, publications and online platforms.

The complex nature of doing business in any foreign destination and specifically the developing economies of Africa cannot be underestimated. To successfully manage expectations and deliverables across a broad cross section of stakeholders, comprehensive engagement must begin at the highest levels of government and filter through to state or provincial leadership before developing trust and rapport with host community structures.

Our members collaborate on issues including: • Political and social risk • Skills development • Safety and health • Poverty • Bribery and corruption • Investment climate updates • Security • Foreign law and regulation

AAMEG is active in providing support to member companies on social impact and community development projects, in addition to the complex issues surrounding successful operations in Africa.


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Connections

AAMEG exists to forge connections between the Australian minerals and energy industry in Africa and its key stakeholders, both at home and abroad.

We believe in the power of a good network, bringing people together over a common point of interest, ‘doing business in Africa’, while connecting people from different backgrounds. Whenever our members are impacted by any serious event such as policy or legislative change, war, terrorism, acts of nature etc., AAMEG has an important role to play. This could include parliamentary representation, educating, capacity building, facilitating an industry-wide response, mobilising resources, or sharing knowledge.

Currently we represent and support almost 80 Australian mining, oil and gas, exploration, service and supply companies, and individual consultants active in Africa. Our reach across industries is extensive, and includes: Government, Education, Agricultural, Legal, Finance and Accounting, Insurance, Marketing, NGOs, Not-For-Profit and many other participants crucial to mineral and energy success in Africa.

Being an Australian led organisation, AAMEG works actively at the State and Federal levels to engage the Government’s cooperation on mining related activity in Africa. AAMEG responded to the Federal Governments enquiry into economic and political system of the Australian Resource Industry Presence across Africa (February 2017). Most recently we played an influential role in the current Senate Inquiry into Australia’s Trade relationships with Africa – this is just one of many examples of how we build connections.

http://aameg.org/aameg-submission-australian-senate-australias-trade-investment-relationships-countries-africa/

http://aameg.org/aameg-submission-australian-senate-australias-trade-investment-relationships-countries-africa/


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AAMEG MEMBER COMPANIES AS AT 30 JUNE 2017

Full Members

African Geopolitics Afrilog Amec Foster Wheeler Arthur J. Gallagher Ausdrill Limited Azumah Resources Baker & McKenzie Bannerman Resources Ltd Barminco Ltd Base Resources Ltd Business For Development Capital Drilling Ltd Claviger Pty Ltd Clayton UTZ Crewshield Ltd Dare Contract Services Deep Yellow Ltd Genmin Limited Geodrill Limited Gilbert & Tobin Globe 24-7 Pty Ltd Globetrotter Graphex Mining Ltd (IMX) Hawcroft Consulting International Group Herbert Smith Freehills Hawcroft Consulting International Group iNHEMACO S.A. International SOS (Australasia) Pty Ltd ITC Global (Australia) Pty Ltd Kimathi & Partners Kibaran Resources Limited Knight Piesold Pty Ltd KordaMentha Kroll Australia KPS Power Africa Lockton Companies Australia Pty Ltd

Lycopodium McGrath Nicol Middle Island Resources Ltd Murdoch University Norton Rose Fulbright Australia Optiro Pty Ltd Orelogy Consulting Pty Ltd Orica Ltd - Europe, Africa & Asia Osprey International Pacific Road Capital Management Ltd Paydirt Media PCF Capital Peak Resources Ltd Perseus Mining Limited Prefab Building Solutions PricewaterhouseCoopers (PWC) Regal Resources Ltd Relines Australia Pty Ltd Resolute Mining Ltd Resources WA Royal Equipment Risk 2 Solutions (incl. SRA & Calibre) RTG Mining Inc RPM Global Sarama Resources Ltd Save the Children Sipa Resources Ltd Speedcast Squire Patton Boggs Syrah Resources Limited Tiger Resources Ltd UWA - Energy and Minerals Institute WA School of Mines - (Curtin University) Walkabout Resources Whittle Consulting Williams Mining Woodside Energy


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Contra Members

Cannings Purple

Deloitte

ENSafrica

Sahara Mining Services Ltd

SNL Metals & Mining

South African Airways

Sundance Resources Ltd

Individual Members

Mr Bill Turner

Mr Bill Williams

Mr Douglas Hall

Mr Robin Budden

Mr Simon Woods

Ms Sonia Finucane

Associate Members

Egypt (Arab Republic of Egypt)

Hon Sherif Ismail Minister of Petroleum & Mineral Resources

Ethiopia (Federal Democratic Republic of Ethiopia)

Hon Tolesa Shagui Minister of Mines

Equatorial Guinea (Republic of Equatorial Guinea)

H.E Gabriel Mbaga Obiang Minister of Mines, Industry and Energy

Mauritius (Republic of Mauritius)

Hon Charles Gaëtan Xavier-Luc Duval

Minister of Finance & Economic Development & Vice Prime Minister

Uganda (Republic of Uganda)

Hon Irene Muloni Minister of Energy & Mineral Development

Mali (Republic of Mali)

Hon Boubou Cissé Cisse Minister of Mines

Nigeria (Federal Republic of Nigeria)

Arc Musa Mohammed Sada Minister of Mines & Steel Development

Côte d’Ivoire

HE Adama Toungara Minister of Mines, Petroleum and Energy

Malawi

Hon Aggrey Masi Minister of Natural Resources, Energy and Mining

Kenya

Hon Dan Kazungu Mining Cabinet Secretary


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AAMEG BOARD AND CORPORATE GOVERNANCE AAMEG’s Board is responsible for the company’s business planning and strategic direction. The Board’s governance obligations are defined under the Constitution.

In addition, the AAMEG Charter defines the respective roles and responsibilities of the Board, the directors and senior management in setting the direction, management and control of the association.

The Board

Members of the Board immediately following the 2016 annual general meeting were:

• Tim Carstens (Chairman),Base Resources Limited

• Ben Gargett (Vice-Chairman),PricewaterhouseCoopers

• Andrew Dinning (Director),Sarama Resources Limited

• Ron Sayers (Director),Ausdrill

• Bill Turner,Retired as Chairman (January 2016)

• John Welborn, (Director)Resolute Mining Limited

Management and Administration

The AAMEG Executive Team continues to strive for excellence in service delivery to members and is passionate about making a valid contribution to the industry. The AAMEG Executive Team includes:

• Doug Horak,Interim Chief Executive Officer

• Danielle Harsant,Administration and Member SupportAssistant (2 days per week)

Acknowledgements

Trish O’Reilly retired from her position as CEO in March 2017. We would like to thank her for the significant impact she had in leading AAMEG with distinction over a 6-year period, deepening engagement with our members and Australian and African stakeholders.

AAMEG strongly appreciates the ongoing support of Paydirt staff, particularly Bill Repard for his continuous encouragement and advice, Giovanny Jefferson (Company Secretary – AAMEG) and his staff for making a significant contribution to the financial management of AAMEG during the year.


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SPONSORSHIP AND SUPPORT Sponsorship and member support is vital for AAMEG to adequately fulfil its role.

AAMEG has established categories for direct financial/in-kind support and pro-bono support and would like to recognise those who have contributed.

Sponsors

Platinum (Up to $50,000)

Gold (Up to $25,000)

In-Kind Support

• Cannings Purple

• Clayton Utz

• Deloitte

• PwC


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FINANCES AND ADMINISTRATION At 30 June 2017, AAMEG had 85 full members, and nine associate members.

The membership fee structure is based on market capitalisation for companies that are listed and the number of employees for those that are not listed.

Membership Fee Structure (GST Inclusive)

Less than $100 million market capitalisation $2,750

$100 million to $1 billion market capitalisation $5,500

Greater than $1 billion market capitalisation $8,250

Private Service and Supply companies (>25 employees) $3,300

Private Service and Supply companies (<25 employees) $1,500

Individuals $500

Associate Members Free of Charge

Liability of Members

Each Member undertakes to contribute an amount not exceeding AUD$10.00 to the property of the Company if the Company is wound up at a time when that person is a Member, or within one year of the time that person ceased to be a Member, for:

(a) payment of the Company's debts and liabilities contracted before that person ceased to be a Member;

(b) payment of the costs, charges and expenses of winding up the Company; and

(c) adjustment of the rights of the contributories among themselves.

The total amount that members of the company are liable to contribute if the company is wound up as at 30 June 2017 was $850 (there being a total of 85 members as at that date).

Review of Operations (Financial)

The 2016/17 financial year saw the Company’s operating income (i.e. income net of contributions from members of $75,000) decrease by approximately $38,000 or 17.5% from $220,000 in 2015/16 to $181,000. Expenses were down by around $109,000 or 30.2% compared to the previous financial year’s, with staff costs again making up almost three-quarters of the total expenses paid for the financial year of $252,000. The 2016/17 financial year was concluded with a small surplus of just under $5,000, with cash available at the end of the financial year dropping by approximately $23,000 since the start of the financial year, in contrast to a cash decrease of $52,000 in the previous financial year.

Assets as at 30 June 2017 totalled $71,000, with close to no liabilities to other parties outstanding as at the same date.


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Board Meeting Attendance

Board attendance (Pre- AGM 15/11/2016)

Tim Carstens

Andrew Dinning

Ben Gargett

Andrew Patterson

Bill Turner

Gill Swaby

Adel Van der Walt

John Wellborn

26/7/16 X X

23/8/16 X X

29/9/16

25/10/16 X X

Board attendance (Post – AGM 15/11/2016) Tim Carstens

Andrew Dinning

Ben Gargett

Ron Sayers

Bill Turner

John Wellborn

5/12/16

25/1/17 X X

14/3/17 X

23/5/17 X X X

27/6/17 X X


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Board of Directors

Chairman – Tim Carstens BCom, ACA Tim Carstens has been Managing Director of Base Resources Ltd since its inception in 2008. During this time it has acquired, designed, funded, developed and successfully operationalised the $310 million Kwale Mineral Sands Project, Kenya’s first large scale mining project. In the process of advancing the Kwale Mineral Sands project from concept to operation, Tim has gained valuable experience of the challenges and opportunities in the African resources sector. Tim has been instrumental in laying the foundations for the company’s progressive governance, sustainability and social responsibility programs, which have secured broad local community and Kenyan government support for the Kwale project and the company.

A Chartered Accountant by profession, Tim’s resources career spans more than 20 years, including senior executive roles with Perilya Limited, North Limited, Robe River Iron Associates, Iron Ore Company of Canada and St Barbara Mines Limited in operations, strategy, corporate development and finance, both in Australia and overseas. Tim was appointed Chairman of AAMEG in November 2015.

Vice-Chairman – Ben Gargett BCom

Ben Gargett is a partner in PwC’s Assurance practice, based in Perth. Ben specialises in the resources sector, primarily mining, but also oil and gas. Through his role in driving PwC’s growth in the mid-tier and junior mining sectors, he developed a passion for supporting dynamic and growing organisations and helping companies to achieve and exceed their potential. Ben’s focus on the mining sector lead to the development of PwC’s Australia-Africa Practice, which he leads nationally. The Australia-Africa practice connects Australian companies with PwC’s leading African network, supported by our Australian team which understand their business, culture and objectives and connects our clients to partners on the ground

where they need it. He has extensive experience in providing audit and related services to the resources sector globally, working with iconic Australia companies such as Fortescue Metals Group, Rio Tinto and BHP Billiton, large multinationals such as Newmont, Shell and Exxon Mobil and a range of companies across the junior and mid-tier mining sector.

Ben spent three years as PwC’s Global Mining Knowledge Manager, on the firm’s Global Mining Leadership Team, which included responsibility for supporting and growing PwC’s major mining account teams around the world. As an assurance partner Ben has extensive experience in audit related services, mergers and acquisitions and accounting as it applies to advice to all sizes of mining, oil & gas producers and related services companies and is a frequent key speaker at conventions and conferences in the resources sector. Ben was appointed Vice-Chairman of AAMEG in November 2016.

Director – Andrew Dinning MBA, BE Andrew Dinning is a founder and the President and CEO of Sarama Resources Ltd. He has over 25 years’ experience in the international mining arena having worked in the Democratic Republic of Congo, West Africa, UK, Russia and Australia. Andrew has extensive mine management, operations and capital markets experience and has spent most of his career in the gold sector. He was a Director, President and Chief Operating Officer of DRC based Moto Goldmines Ltd from 2005 to 2009. Andrew oversaw the company’s flagship Moto Gold Project (now Kibali Gold) develop from 4 million ounces of gold to +22 million ounces of gold and took the project from exploration to pre-development before Moto Goldmines was purchased by Randgold Resources and AngloGold Ashanti in October 2009.

Andrew has a MBA, a First Class Mine Managers Certificate (Western Australia) and a Bachelor of Engineering (Mining) degree.


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Director – Ron Sayers An experienced Managing Director with strong leadership and communication skills, Ron Sayers is an effective team builder, has a proven capability in strategic work, is a successful deliverer of profitable growth and is pragmatic, hardworking and approachable.

He is currently the Managing Director of Ausdrill Limited (ASX:ASL), a diversified mining services company which he founded in Kalgoorlie in 1987. Ausdrill has grown significantly in the past 30 years and has operations across Australia, Africa and the United Kingdom. Ausdrill is a leader in providing services in contract mining, grade control, drill & blast, exploration, mineral analysis, procurement & logistics. The Ausdrill Group employs over 4,500 staff worldwide.

Director – Bill Turner AO BSc, MSc, MBA, FAUSIMM Bill Turner, former President and CEO of Anvil Mining Limited, retired in mid-2011 after 16 years with the company. He took Anvil into Africa in 1995 and since 2002, has overseen the building of two open pit copper mines and a tailings retreatment project in the Democratic Republic of Congo and the development of a culture with a strong focus on corporate social responsibility (“CSR”) issues.

Bill has substantial experience in political and operational risk management and a good appreciation for the connections between enlightened approaches to CSR, risk mitigation and developing a competitive advantage.

He has worked for more than 30 years in developing and emerging countries of SE Asia, the Middle East, the former Soviet Union and latterly Africa. Currently he maintains two board positions; Director of AAMEG Group and Chairman of Geo40 Limited.

Director – John Welborn BCom, CA MAICD, SA Fin, JP, MAusIMM John Welborn is an experienced senior executive in the resources industry, currently holding the position of Managing Director and CEO at Resolute Mining. A former International Rugby Union player, John was previously the Head of Specialised Lending in Western Australia for Investec Bank. As a Director and Chief Executive, he has been responsible for driving growth in resource companies including Prairie Mining Ltd, Papillion Resources Ltd, and Equatorial Resources Ltd. Joining Resolute in July 2015, Mr Welborn is a champion for responsible and sustainable mining development in West and Central Africa and was named by MiningMx as one of the 100 Most Influential People in Africa’s Mining Industry.

Company Secretary – Giovanny Jefferson BCOM, MCom, CPA CIA CTA CRMA ACIS ACMA As a qualified accountant and company secretary with more than 10-year audit, not-for-profit and commercial experience, Giovanny, who is also the Company Secretary of Paydirt Media Pty Ltd (a member company), oversees AAMEG’s administration, compliance, accounting and other financial affairs. He has been AAMEG’s Company Secretary since its incorporation in April 2011.


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Retired Directors

These directors retired in the 2015/16 financial year.

Andrew Patterson – Director BA, LLB, MBA Retired November 2016

Andrew is Chief Consultant International Development at MMG with accountability for strategic advice on management of country relationships in the company’s growing international operational, development and exploration portfolio. He was previously General Manager Support for MMG’s Sepon copper and gold mine in Laos with responsibility for country and stakeholder relationships, community relations, supply chain, human resources and shared business services.

Andrew has held senior management positions in the agro-forestry and education sectors and served for five years as a diplomatic officer with DFAT. Andrew was actively involved in supporting AAMEG’s activities in Melbourne.

Gillian Swaby – Director BBus, FCIS, FAICD Retired November 2016

Gillian has been involved in financial and corporate administration for listed companies, as both Director and Company Secretary covering a broad range of industry sectors, for over 30 years.

Gillian has extensive experience in corporate governance, mergers and acquisitions, and corporate and financial management. Gillian is the principal of a corporate consulting company and was a member of the Paladin Energy Ltd Board for a period of 10 years. Until recently, she was Group Company Secretary & EGM Corporate Services at Paladin, having been involved as a senior executive with that company since its formation over 20 years ago. She has extensive experience African operations with the development of Paladin’s two uranium mines in Malawi and Namibia. She is also the director of listed companies Deep Yellow Ltd, Comet Ridge Ltd and Birimian Ltd.

Adel van der Walt –Director LLM, LLB Retired November 2016

Adel is an Energy and Resources Partner in the Perth office of law firm Clayton Utz. Adel specialises in a wide range of matters in connection with energy and resources, electricity, corporate and broader commercial transactions, mergers and acquisitions and distressed business transactions. Adel has extensive experience in energy and resources and corporate matters both in Australia and Africa and regularly advises Australian companies with assets or interests in Africa. Before joining Clayton Utz in 2008, Adel practised at one of the leading South African law firms, where she specialised in mining law, and advised clients in connection with energy and resources transactions and legal compliance issues, including social responsibility and community issues as well as the South African Government’s broad based black economic empowerment requirements. Adel has assisted with the review of the mining legislation / codes of a number of African countries. Adel is recognised in the International Who’s Who Legal directory of leading Energy lawyers. Jointly with partner Gary Berson, Adel heads up Clayton Utz’ Africa Practice Group.


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Changes in State of Affairs

Future Developments Disclosure of information regarding likely developments in the operations of the Company in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Company. Accordingly, this information has not been disclosed in this report.

Subsequent Events There has not been any matter or circumstance that has arisen since the end of the financial year that has significantly affected, or may significantly affect, the operations of the AAMEG, the results of its operations, or the state of affairs of the Company in future financial years that has not been reflected in the financial statements.

Auditor’s Independence Declaration The Auditor’s Independence Declaration is included on page 24.

Insurance AAMEG provides insurance covers for its staff and consultants while undertaking work on behalf of the Company. All directors and officers of the Company are also covered while carrying out their duties and responsibilities as directed by the Constitution and relevant regulations. Public liability insurance is in place which covers all attendees at any AAMEG-organised event.

AAMEG insurance is managed by Lockton Companies Australia Pty Ltd, which is also a member company, and insurance cover includes:

• Corporate Travel;

• Workers Compensation - WA and ACT;

• Public Liability; and

• Management Liability.

Dividend Policy No dividends are paid to members. Surpluses are reinvested to support the Company’s operations and further its objectives.


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FINANCIAL REPORT

The Directors have determined that the Company is not a reporting entity and that this special purpose financial report should be prepared in accordance with the accounting policies described in Note 1 to the financial statements.

The Directors of the Company declare that:

1. The financial statements and notes are in accordance with the Corporations Act 2001; and

(a) comply with Accounting Standards; and

(b) give a true and fair view of the Company’s financial position as at 30 June 2016 and of its performance for the year ended on that date in accordance with the accounting policies described in Note 1 to the financial statements.

2. In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

Tim Carstens Chairman Perth, Western Australia 31 October 2017


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AUDITORS INDEPENDENCE DECLARATION


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FINANCIAL STATEMENTS

STATEMENT OF COMPREHENSIVE INCOME For the Year Ended 30 June 2017

NOTE 2017 2016

$ $ INCOME

Revenue 2 179,686 218,991

Bank Interest & Other Income 1,560 663

Voluntary Contributions 3 75,000 75,000

TOTAL INCOME 256,246 294,654

EXPENSES

Administration Expenses 4 251,359 355,824

Finance Costs 5 840 686

Other Expenses 6 277 5,273

TOTAL EXPENSES 252,476 361,783

OPERATING PROFIT/(LOSS) 3,770 (67,129)

OTHER COMPREHENSIVE INCOME - -

INCOME TAX BENEFIT/(EXPENSE) 786 7,197

NET PROFIT/(LOSS) 4,556 (59,932)


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STATEMENT OF FINANCIAL POSITION As At Ended 30 June 2017

NOTE 2017 2016

$ $ ASSETS

Cash 38,207 60,846

Trade & Other Receivables 7 25,350 24,050

GST Receivable 8,974 478

TOTAL ASSETS 72,531 85,374

LIABILITIES

Trade Creditors 840 13

Owed to Paydirt 125 125

Provisions for Income Tax 1,131 -

Accrued Expenses 140 17,997

Unearned Income - 1,500

TOTAL LIABILITIES 2,236 19,635

NET ASSETS 70,295 65,739

EQUITY

Surplus Brought Forward 65,739 125,671

Current Financial Year’s Surplus/(Deficit) 4,556 (59,932)

TOTAL EQUITY 70,295 65,739


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STATEMENT OF CASH FLOW For the Year Ended 30 June 2017

NOTE 2017 2016

$ $ RECEIPTS

Membership Fees & Other Income 242,456 271,297

Bank Interest & Credit Card Surcharge 196 665

Net GST Receipts from ATO 1,294 14,820

TOTAL RECEIPTS 243,946 286,782

PAYMENTS

Payment to Suppliers 268,502 343,778

Income Tax (Refund) / Payment (1,917) (5,485)

TOTAL PAYMENTS 266,585 338,293

NET CASH MOVEMENTS (22,639) (51,511)

OPENING CASH BALANCE 60,846 112,357

CLOSING CASH BALANCE 38,207 60,846


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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the Year Ended 30 June 2017

1. ACCOUNTING POLICIESThis special purpose financial report has been prepared for distribution to the members to fulfil the Directors’ financial reporting requirements. The accounting policies used in the preparation of this report, as described below, are consistent with the financial reporting requirements of the Company’s Constitution and are, in the opinion of the Directors, appropriate to meet the needs of members, as:

• The financial report has been prepared on an accrual basis of accounting, including the historicalcost convention and the going concern assumption.

• The Company is not a reporting entity because in the opinion of the Directors, there are unlikely toexist users of the financial report who are unable to command the preparation of reports tailored soas to satisfy specifically all of their information needs. Accordingly, these special purpose financialstatements have been prepared to satisfy the Directors’ reporting requirements under theCorporations Act 2001.

• The financial statements have been prepared in accordance with the Corporations Act 2001, therecognition and measurement requirements specified by all Australian Accounting Standards andInterpretations, and the disclosure requirements of Accounting Standards AASB 101 ‘Presentation ofFinancial Statements’, AASB 107 ‘Statement of Cash Flows’, AASB 108 ‘Accounting Policies,Changes in Accounting Estimates and Errors’ and AASB 1054 ‘Australian Additional Disclosures’.

• Cost is based on the fair values of the consideration given in exchange for assets. Unless otherwiseindicated, all amounts are presented in Australian dollars.

• Accounting policies are selected and applied in a manner which ensures that the resulting financialinformation satisfies the concepts of relevance and reliability, thereby ensuring that the substance ofthe underlying transactions or other events is reported.

• AAMEG operates on a not-for-profit basis and is run only for the benefit of its members.

• The following significant accounting policies have been adopted in the preparation and presentationof the financial report.

Cash and Cash Equivalents

• Cash and cash equivalents comprise cash on hand, cash in banks and investments in money marketinstruments, net of outstanding bank overdrafts (if applicable).

Payables

• Trade payables and other accounts payable are recognised when the entity becomes obliged tomake future payments resulting from the purchase of goods and services.

Receivables

• Trade receivables and other receivables are recorded at amortised cost less impairment.

Comparative Information

• Certain comparative information has been adjusted to be presented on a consistent basis withcurrent year’s presentation.


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Revenue Recognition Revenue from the sale of goods and disposal of other assets is recognised when the entity has passed risks and benefits of ownership of the goods or other assets to the buyer.

Going Concern This financial report has been prepared on the going-concern basis, which contemplates the continuity of normal business activities and the realisation of assets and the settlement of liabilities in the normal course of business.

The Company has generated a profit before tax for the year ended 30 June 2017 of $3,770 (2016: loss of $67,129) and experienced net cash outflows of $22,639 (2016: $51,511) for the year ended 30 June 2017.

The directors have prepared a cash flow forecast for the period ending 31 October 2018, which indicates that the Company will experience a cash flow deficit in the third quarter of the 2018 financial year, which has been based largely on maintaining the existing level of membership income and operating expenditure.

The Company has a history of successfully receiving additional support from its members to meet the Company’s funding requirements. The Directors believe that at the date of signing the financial statements there are reasonable grounds to believe that they will be successful in receiving further support and that the Company will have sufficient funds to meet their obligations as and when they fall due, and are of the opinion that the use of the going concern basis remains appropriate.

Should the Company be unable to receive additional membership support, or alternative funding, a material uncertainty would exist as to whether the Company will be able to continue as a going concern and therefore whether it will realise its assets and discharge its liabilities in the normal course of business.

The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary should the Company not continue as a going concern.


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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS CONTINUED… For the Year Ended 30 June 2017

2. REVENUE 2017 2016

$ $ Level 1 Memberships 35,250 35,250

Level 2 Memberships 38,000 36,818

Level 3 Memberships 7,500 15,000

Large Service Company Memberships 62,300 86,300

Small Service Company Memberships 31,773 30,954

Individual Membership 1,363 4,546

Function Revenue 3,500 10,123

179,686 218,991

3. VOLUNTARY CONTRIBUTIONS 2017 2016

$ $ Members’ Voluntary Contributions

75,000 75,000

75,000 75,000


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4. ADMINISTRATION EXPENSES 2017 2016 $ $ Bad Debts

25,118 50,868

Consultants-Main 151,955 205,056

Consultants-Admin 30,916 55,913

Consultants-Other 409 -

Function Experts 3,121 5,293

Indaba Expenses 813 5,109

Insurance 3,314 4,027

IT Expenses 9,779 948

Legal Fees 1,176 1,635

Postage Costs - 178

Printing & Stationary 2,441 4,079

Promotion & Marketing 13,666 13,575

Travel-Local 6,976 6,642

Travel-Overseas 300 701

Telephone Expenses 1,375 1,800

251,359 355,824

5. FINANCE COSTS 2017 2016

$ $

Bank Fees & Credit Card Surcharge 840 686

840 686


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6. OTHER EXPENSES 2017 2016

$ $

Miscellaneous Expenses - 4,867

Petty Cash Expenses 277 406

277 5,273

7. TRADE & OTHER RECEIVABLES 2017 2016

$ $

Trade Receivables 56,505 41,455

Less: Provision – Bad Debts (31,155) (17,405)

25,350 24,050


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INDEPENDENT AUDITORS REPORT


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