Announcement PDF BUXTON RESOURCES LIMITED ABN 86 125 049 550 INTERIM FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2017 This interim financial report does not include all the notes of the type normally included in an annual financial report. This report is to be read in conjunction with the Annual Report for the year ended 30 June 2017 and any public announcements made by Buxton Resources Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. BUXTON RESOURCES LIMITED Contents Page Corporate information 3 Directors’ report 4 Auditor’s independence declaration 14 Condensed statement of profit or loss and other comprehensive income 15 Condensed statement of financial position 16 Condensed statement of cash flows 17 Condensed statement of changes in equity 18 Notes to the condensed financial statements 19 Directors’ declaration 22 Independent review report to the members of Buxton Resources Limited 23 2 BUXTON RESOURCES LIMITED CORPORATE INFORMATION Buxton Resources Limited ABN: 86 125 049 550 Directors Seamus Cornelius Eamon Hannon Anthony Maslin Stuart Fogarty Feng (Frank) Xue Auditors Rothsay Chartered Accountants Level 1, Lincoln Building 4 Ventnor Avenue West Perth WA 6005 Company Secretary Sam Wright Registered office and principal place of business Suite 1, 1st Floor 14-16 Rowland Street Subiaco WA 6008 PO Box 9028 Subiaco WA 6008 Ph: 08 9380 6063 Fax: 08 9381 4056 Web: www.buxtonresources.com.au Share Register Computershare Investor Services Pty Limited Level 2, 45 St Georges Terrace Perth WA 6000 Home Exchange Australian Securities Exchange Level 40 Central Park 152-158 St Georges Terrace Perth WA 6000 ASX Code: BUX 3 BUXTON RESOURCES LIMITED DIRECTORS’ REPORT Your directors are pleased to present their report on Buxton Resources Limited for the half-year ended 31 December 2017. DIRECTORS The names of the directors who held office during or since the end of the half-year are: Seamus Cornelius Eamon Hannon Anthony Maslin Stuart Fogarty Feng (Frank) Xue Directors were in office for the entire period. REVIEW AND RESULTS OF OPERATIONS Operating results The Company recorded a loss for the period ended 31 December 2017 of $2,453,842 (2016; $92,466). At 31 December 2017 the Company held cash and term deposit balances of $2,848,274 (2016; $1,901,226). Double Magic Ni & Cu – West Kimberley Buxton Resources is pleased to provide an update for its 100% owned Double Magic nickel-copper project located in the West Kimberley region of Western Australia (Figures 6 & 7 at the end of this section). During the half year, Buxton Resources Limited (ASX: BUX) was pleased to report that all assays for the 2017 drill program at Double Magic had been received. Several intersections returned grades above 1% Ni. Of the 26 holes drilled, 25 intersected magmatic Ni-Cu sulphides confirming a much-increased extent of Ni-Cu sulphide mineralisation at Merlin. A very large, complex mineralised magmatic system, still open in all directions, continues to be discovered within the Ruins Dolerite. 4 BUXTON RESOURCES LIMITED Figure 1 - Part of the brecciated massive sulphide zone in DMDD0014, 317.7m to 321.2m downhole Fieldwork during 2017 has substantially expanded the known extent of continuous sulphide mineralisation along strike (~1,500m) and down-dip (>600m). A second possible conduit or feeder, with brecciated massive sulphide (DMDD0014 – Figure 1) indicating high-energy emplacement, has now been located 450 metres south-east of the 2015 discovery at Conductor D. A possible high-grade trend has been identified within the broader magmatic Ni-Cu sulphide system (Figures 1-4), providing one obvious target for future drilling. Higher-grade mineralisation along this trend includes stringer or net-textured sulphides, massive sulphides, and/or brecciated massive sulphide. This trend appears open to the south and south-west as indicated by recent down-hole transient electromagnetic (DHTEM) results, which are supported by geological observations in up-dip holes. 5 BUXTON RESOURCES LIMITED Figure 2 - Plan of Merlin Prospect, showing surface geology. drill hole collars, traces and downhole assayed intervals >0.1% Ni (highlighting Ni-Cu sulphide mineralisation), modelled DHTEM plates and the section line correlating to Figure 4 The presence of brecciated massive sulphides is particularly encouraging, indicating forceful injection or reworking of massive sulphides in a high-energy magmatic environment, something usually considered an essential part of the processes involved in forming large, high-grade magmatic sulphide deposits. This discovery of brecciated sulphides at Merlin is therefore a very strong confirmation of the genetic model, and consequent prospectivity, of the Merlin mineralised system as it demonstrates the system had the capability to segregate and deposit high-grade massive sulphides. Figure 3 – Massive brecciated sulphides from DMDD0014. Field of view 318.2m to 318.5m downhole A plan of drill hole locations is included as Figure 2 and drill hole details listed in Table 2. A cross-section through the east of the Merlin Prospect shows the location of brecciated massive sulphides (Figure 4). Table 1 lists all 2017 intersections above 0.25% Ni, greater than 2m in length (with up to 2m of subgrade). 6 BUXTON RESOURCES LIMITED Figure 4 – Cross-section of the eastern Merlin Prospect, including the recent brecciated massive sulphide intercept in DMDD0014. For section line orientation and clip see Figure 2 Geophysics DHTEM surveying of the last hole of the 2017 program, DMDD0014, indicated the hole successfully intercepted the modelled conductor, which was then refined as being approximately 150mx50m in size and probably extending to the south or south-west. The very high in-hole response amplitude in DMDD0014 has masked any more distant responses, including from any other electrically disconnected conductors within the same broad geological horizon. This means that additional conductors in the area may not have been detected by any EM completed to date. Step-out holes drilled specifically to provide platforms for DHTEM, as well as more traditional holes testing geological targets, may be required to effectively explore this trend. 7 BUXTON RESOURCES LIMITED Figure 5 – Cross-section close-up of DMDD0014 and DMDD0012 showing modelled high conductance DHTEM plate. Conductor is open to the south and southwest. Note primary net-textured Ni-Cu mineralisation in DMDD0014 above the DHTEM plate. Geophysical assessment and reporting has now been completed. Apart from routine gyro surveying, holes were down-hole logged for TEM, conductivity, magnetic susceptibility, and natural gamma. Six selected holes were also logged for gamma-gamma (density), and down-hole Induced Polarisation (DHIP). Benchtop petrophysical testwork on core from DMDD0005 has been completed to assist interpretation of DHIP logging results, pursuant to better understanding the nature of the large IP anomaly identified in 2016. As the excellent intercepts from DMDD0014, DMDD0012 and DMRC0038 came towards the end of the funded 2017 work program, Buxton elected to suspend drilling until all data had been received and thoroughly assessed. Buxton Resources acknowledges the support of the Western Australian Department of Mines and Petroleum for their contribution via the WA Exploration Incentive Scheme and is pleased to announce further assistance for the up-coming 2018 drill programme. Buxton looks forward to updating investors as work progresses on this challenging but exciting project. 8 BUXTON RESOURCES LIMITED Table 1. Intersections + 0.25 % Ni Hole ID DMDD0006 DMDD0007 DMDD0008 DMDD0009 DMDD0010 DMDD0011 DMDD0011 DMDD0011 DMDD0012 including DMDD0014 including including DMRC0025 DMRC0027 DMRC0028 DMRC0029 DMRC0031 DMRC0033 DMRC0034 DMRC0035 DMRC0036 DMRC0038 including including DMRC0040 From (m) 106 39 58 178 191 89 133.5 153.5 126 185 197.6 292.1 298 302 305.4 310.85 310.85 318 318 250 80 23 70 80 16 31 173 133 148 153 170 195 218 255 51 22 150 188 247 261 8 53 53 57 79 106 To (m) 113 41 61 180 204 92.5 137.2 156.8 128.4 189 202 295.5 300 306.3 305.8 315.60 313 321.5 319.6 252 94 27 72 83 19 35 175 136 151 155 178 199 222 260 53 33 153 190 249 264 11 59 55 59 82 109 Thickness (m) 7 2 3 2 13 3.5 3.7 3.3 2.4 4 4.4 3.4 2 4.3 0.4 4.75 2.15 3.5 1.6 2 14 4 2 3 3 4 2 3 3 2 8 4 4 5 2 11 3 2 2 3 3 6 2 2 3 3 9 Ni % 0.33 0.36 0.35 0.41 0.43 0.44 0.30 0.43 0.48 0.39 0.55 0.38 0.29 0.74 2.73 1.00 1.34 1.37 2.4 0.26 0.48 0.34 0.36 0.36 0.26 0.31 0.29 0.41 0.39 0.36 0.50 0.35 0.29 0.34 0.31 0.47 0.30 0.30 0.30 0.29 0.38 1.04 1.36 1.58 0.28 0.36 Cu % 0.13 0.13 0.12 0.16 0.17 0.13 0.09 0.17 0.04 0.13 0.20 0.12 0.09 0.24 0.44 0.29 0.39 0.19 0.33 0.16 0.16 0.12 0.13 0.13 0.08 0.10 0.19 0.14 0.16 0.13 0.20 0.13 0.07 0.11 0.11 0.18 0.17 0.10 0.12 0.11 0.10 0.19 0.24 0.29 0.10 0.13 Co ppm 155 140 151 208 160 165 146 195 164 161 209 145 129 426 755 291 379 379 629 169 195 138 150 160 121 127 204 162 188 178 207 145 117 137 130 181 153 124 134 127 168 328 396 496 126 156 BUXTON RESOURCES LIMITED Hole Type Hole ID Easting Northing RL (m) Azimuth Inclination EOH Depth Diamond DMDD0005 655035 8126878 95 35 -80 434.4 Diamond DMDD0006 655431 8127068 106 35 -60 150.4 Diamond DMDD0007 655202 8127111 104 35 -60 261.0 Diamond DMDD0008 655425 8126955 111 0 -60 243.6 Diamond DMDD0009 655692 8127061 101 35 -60 150.6 Diamond DMDD0010 655298 8127010 103 35 -60 235.4 Diamond Diamond Tail DMDD0011 655625 8126955 105 15 -65 273.7 DMRD0035 655232 8126601 96 15 -60 486.5 Diamond DMDD0012 655640 8126800 102 0 -75 397.0 Diamond DMDD0013 655846 8126934 104 30 -60 147.5 Diamond DMDD0014 655584 8126747 102 7 -75 400.0 RC DMRC0025 655152 8127039 96 35 -80 316 RC DMRC0026 654881 8127007 90 35 -90 385 RC DMRC0027 655351 8127091 103 35 -60 258 RC DMRC0028 655598 8127139 108 35 -60 132 RC DMRC0029 655147 8127224 155 35 -60 234 RC DMRC0030 656240 8126351 102 35 -60 240 RC DMRC0031 655072 8126719 99 35 -60 306 RC DMRC0032 654954 8127104 93 35 -60 265 RC DMRC0033 655490 8127151 117 35 -60 90 RC DMRC0034 655387 8127255 154 35 -60 78 RC DMRC0035 655232 8126601 96 15 -60 378 RC DMRC0036 655499 8126916 119 15 -60 336 RC DMRC0037 655705 8126900 105 35 -60 252 RC DMRC0038 655791 8127017 105 35 -60 168 RC DMRC0039 655101 8127142 123 35 -60 230 RC DMRC0040 655576 8127115 95 0 -75 163 RC DMRC0041 660891 8125893 97 10 -60 109 RC DMRC0042 661395 8125631 102 20 -60 120 RC DMRC0043 663791 8125233 118 15 -70 198 RC DMRC0044 668338 8119764 85 20 -60 70 10 BUXTON RESOURCES LIMITED Figure 6 – Location of Buxton’s Double Magic & Sentinel Ni-Cu Projects in Western Australia. Also shown is the location of Panoramic’s Savannah Ni-Cu Mine. Figure 7 – Location of Double Magic prospect areas 11 BUXTON RESOURCES LIMITED COMPETENT PERSONS STATEMENT The information in this report that relates to Exploration Results is based on information compiled by Mr. Derek Marshall, Member of the Australasian Institute of Geoscientists, and Mr. Eamon Hannon Fellow of the Australian Institute of Geoscientists. Mr. Marshall and Mr. Hannon are full-time employees of Buxton. Mr. Marshall and Mr. Hannon have sufficient experience which is relevant to the activity being undertaken to qualify as a “Competent Person”, as defined in the 2012 edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Marshall and Mr. Hannon consent to the inclusion in this report of the matters based on the information in the form CORPORATE During the period the Company issued 2,000,000 shares and received $250,000 on the exercise of 2,000,000 options which had an exercise price of 12.5 cents. ANNUAL GENERAL MEETING Buxton held its Annual General Meeting of Shareholders on 30 November 2017 at Steve’s Wine Cellar, 30 The Avenue, Nedlands, Western Australia and all resolutions that were put were unanimously passed on a show of hands. SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE Subsequent to the balance date no matter or circumstance has arisen which has significantly affected, or may significantly affect the operations of the Company, the result of those operations, or the state of affairs of the Company in subsequent financial years. 12 BUXTON RESOURCES LIMITED AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on the following page. This report is made in accordance with a resolution of directors. Seamus Cornelius Director Perth, 14th March 2018 13 BUXTON RESOURCES LIMITED CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2017 Note Half-year ended 31 Dec 2017 $ 31 Dec 2016 $ 159,064 1,500,000 (8,901) (7,456) (270,413) (269,016) - (497,904) (2,211,384) (668,669) Corporate expense (100,707) (73,010) Administration expense (51,574) (83,943) (2,483,915) (99,998) 30,073 7,532 - - 30,073 7,532 (2,453,842) (92,466) - - (2,453,842) (92,466) (1.82) (0.10) Revenue from continuing operations 3 Depreciation expense Salaries and employee benefits expense Share-based payment expense Exploration and evaluation expense Loss from operating activities Finance income Finance cost Net finance income Loss before income tax Income tax expense TOTAL COMPREHENSIVE LOSS FOR THE PERIOD Basic and diluted loss per share (cents) The above condensed statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. 15 BUXTON RESOURCES LIMITED CONDENSED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017 31 December 30 June 2017 $ 2017 $ Cash and cash equivalents 2,848,274 5,221,125 Trade and other receivables 127,186 69,749 Other current assets 47,581 8,644 3,023,041 5,299,518 Deferred exploration and evaluation expenditure 656,862 656,862 Plant and equipment 87,018 95,919 TOTAL NON-CURRENT ASSSETS 743,880 752,781 3,766,921 6,052,299 Trade and other payables 83,212 164,748 TOTAL CURRENT LIABILITIES 83,212 164,748 TOTAL LIABILITIES 83,212 164,748 3,683,709 5,887,551 Note CURRENT ASSETS TOTAL CURRENT ASSETS NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES NET ASSETS EQUITY Issued capital 4 19,518,256 19,268,256 Reserve 6 1,725,254 1,810,662 (17,559,801) (15,191,367) 3,683,709 5,887,551 Accumulated losses TOTAL EQUITY The above condensed statement of financial position should be read in conjunction with the accompanying notes. 16 BUXTON RESOURCES LIMITED CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2017 Issued capital Accumulated losses Share-based payment reserve Total $ $ $ $ 14,884,484 (14,755,878) 1,973,646 2,102,252 Total comprehensive income for the period - (92,466) - (92,466) Expiry of options - 627,093 (627,093) - 6,594 - 491,310 497,904 Balance at 31 December 2016 14,891,078 (14,221,251) 1,837,863 2,507,690 Balance at 1 July 2017 19,268,256 (15,191,367) 1,810,662 5,887,551 - (2,453,842) - (2,453,842) 250,000 85,408 (85,408) 250,000 19,518,256 (17,559,801) 1,725,254 3,683,709 Balance at 1 July 2016 Share-based payments Total comprehensive income for the period Exercise of options Balance at 31 December 2017 The above condensed statement of changes in equity should be read in conjunction with the accompanying notes. 17 BUXTON RESOURCES LIMITED CONDENSED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2017 Half-year ended 31 Dec 2017 $ 31 Dec 2016 $ 133,132 - (2,277,767) (689,070) Payments to suppliers (229,464) (182,988) Payments to staff (277,210) (236,673) Interest received 28,458 7,736 (2,622,851) (1,100,995) Proceeds from the sale of exploration interests - 1,500,000 Net cash outflow from investing activities - 1,500,000 Proceeds from the exercise of options 250,000 - Net cash inflow from financing activities 250,000 - Net increase/(decrease) in cash and cash equivalents (2,732,851) 399,005 Cash and cash equivalents at the beginning of the period 5,221,125 1,374,221 Cash and cash equivalents at the end of the period 2,848,274 1,773,226 Cashflows from operating activities Cash receipts from customers Payments for exploration and evaluation Net cash inflow/(outflow) from operating activities Cashflows from investing activities Cashflows from financing activities The above condensed statement of cash flows should be read in conjunction with the accompanying notes. 18 BUXTON RESOURCES LIMITED NOTES TO THE CONDENSED FINANCIAL STATEMENTS NOTE 1: BASIS OF PREPARATION OF THE INTERIM FINANCIAL REPORT This general purpose financial report for the interim half-year reporting period ended 31 December 2017 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001. This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2017 and any public announcements made by Buxton Resources Limited during the interim period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except as set out below. New and amended standards adopted by the Company There were no new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) applicable to the company for the current half-year. Significant Accounting Judgements and Key Estimates The preparation of the interim financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. In preparing this half-year report the significant judgements made by management in applying the Company’s’ accounting policies and key sources of estimation uncertainty were the same as those that applied to the financial report for the year ended 30 June 2017. NOTE 2: SEGMENT INFORMATION Segment reporting Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the full Board of Directors. The Company operates in predominantly one business and geographical segment, being mineral exploration in Australia. NOTE 3: REVENUE FROM CONTINUING OPERATIONS Sale of exploration interest Exploration grant Rental income Total for the period 19 1 July 2017 to 31 December 2017 $ 1 July 2016 to 31 December 2016 $ 150,000 9,064 159,064 1,500,000 1,500,000 BUXTON RESOURCES LIMITED NOTES TO THE CONDENSED FINANCIAL STATEMENTS (CONTINUED) NOTE 4: ISSUED CAPITAL Issued and paid up capital Fully paid ordinary shares 31 December 2017 30 June 2017 $ $ 19,518,256 Six months to 31 December 2017 Number Movements in fully paid shares on issue At beginning of period Share-based payment Issued on conversion of options Issued for cash Balance at end of period 108,850,822 2,000,000 110,850,822 Movements in options over ordinary shares on issue Unlisted Balance at beginning of period Issue of options during the period Exercise of options during the period Expiry of options during the period Balance at end of period Six months to 31 December 2017 $ 25,625,000 (2,000,000) 23,625,000 19,268,256 Year to 30 June 2017 Number 88,462,921 247,863 350,000 19,790,038 108,850,822 Year to 30 June 2017 $ 27,350,000 5,900,000 (350,000) (7,275,000) 25,625,000 NOTE 5: RESERVES Six months to 31 December 2017 $ Share-based payment reserve Balance at beginning of period Exercise of options during the period Expiry of options during the period Issue of options during the period Balance at end of period 1,810,662 (85,408) 1,725,254 Year to 30 June 2017 $ 1,973,646 (27,201) (627,094) 491,311 1,810,662 Share-based payment reserve The share-based payment reserve is used to record the value of options issued by the Company. 20 BUXTON RESOURCES LIMITED NOTES TO THE CONDENSED FINANCIAL STATEMENTS (CONTINUED) NOTE 6: CONTINGENT ASSETS AND LIABILITIES There has been no change in contingent liabilities or assets since the last annual reporting date. NOTE 7: SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE Subsequent to the balance date no matter or circumstance has arisen which has significantly affected, or may significantly affect the operations of the Company, the result of those operations, or the state of affairs of the Company in subsequent financial years. NOTE 8: COMMITMENTS Exploration commitments In order to maintain current rights of tenure to mining tenements and permits, the Company has the following discretionary exploration expenditure requirements up until expiry of leases. These obligations, which are subject to renegotiation upon expiry of the leases, are not provided for in the financial statements and are payable: 31 December 30 June 2017 2017 $ $ Within one year Later than one year but not later than 5 years 432,220 649,220 2,060,880 2,596,880 2,493,100 3,246,100 If the Company decides to relinquish certain leases and/or does not meet these obligations, assets recognised in the statement of financial position may require review to determine the appropriateness of carrying values. The sale, transfer or farm-out of exploration rights to third parties will reduce or extinguish these obligations. Operating lease commitments Within one year Later than one year but not later than 5 years 21 31 December 30 June 2017 2017 $ $ 15,824 23,400 - 1,950 15,824 25,350 BUXTON RESOURCES LIMITED DIRECTORS’ DECLARATION In the opinion of the Directors of the Company: 1. 2. The attached financial statements and notes thereto are in accordance with the Corporations Act 2001 including: (a) complying with Accounting Standard AASB 134 “Interim Financial Reporting” and the Corporations Regulations 2001; and (b) giving a true and fair view of the company’s financial position as at 31 December 2017 and of its performance as represented by the results of its operations, changes in equity and its cash flows for the period from 1 July 2017 to 31 December 2017. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of the Directors made pursuant to s.303(5) of the Corporations Act 2001. On behalf of the Directors Seamus Cornelius Director Perth,14th March 2018 22