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Notes to the

financial statements

for the year ended 30 September 2015


4. Summary of significant accounting

policies (continued)

When production commences, the accumulated costs

for the relevant area of interest are amortised over the

life of the area according to the rate of depletion of the

economically recoverable reserves.

A regular review is undertaken of each area of interest to

determine the appropriateness of continuing to capitalise

costs in relation to that area.

Costs of site restoration are provided for over the life

of the project from when exploration commences and

are included in the costs of that stage. Site restoration

costs include the dismantling and removal of mining

plant, equipment and building structures, waste removal,

and rehabilitation of the site in accordance with local

laws and regulations and clauses of the permits. Such

costs have been determined using estimates of future

costs, current legal requirements and technology on an

undiscounted basis.

Any changes in the estimates for the costs are accounted

for on a prospective basis. In determining the costs of site

restoration, there is uncertainty regarding the nature and

extent of the restoration due to community expectations

and future legislation. Accordingly, the costs have been

determined on the basis that the restoration will be

completed within one year of abandoning the site.

The carrying amount of the mineral exploration

expenditure is reviewed annually and adjusted for

impairment whenever one of the following events or

changes in circumstances indicates that the carrying

amount may not be recoverable:

The period for which the Company has the right to

explore in the specific area has expired during the

period or will expire in the near future, and is not

expected to be renewed

Substantive expenditure on further exploration for and

evaluation of mineral resources in the specific area is

neither budgeted nor planned

Exploration for and evaluation of mineral resources

in the specific area have not led to the discovery of

commercially viable quantities of mineral resources

and the Company has decided to discontinue such

activities in the specific area, or

Sufficient data exist to indicate that, although a

development in the specific area is likely to proceed,

the carrying amount of the mineral exploration

expenditure is unlikely to be recovered in full from

successful development or by sale.

An impairment loss is recognised in profit or loss

whenever the carrying amount of an asset exceeds its

recoverable amount.

Impairment of non-financial assets

The Company assesses at the end of each reporting

period whether there is an indication that an asset may

be impaired. If such an indication exists, the Company

makes an estimate of the asset’s recoverable amount.

The recoverable amount of an asset is the higher of its

fair value less costs of disposal and its value in use. In

assessing value in use, the estimated future cash flows

are discounted to their present value using a pre-tax

discount rate that reflects current market assessments

of the time value of money and the risks specific to

the asset. Where an asset does not generate cash

inflows largely independent of those from other

assets, the recoverable amount is determined for the

smallest group of assets that generates cash inflows

independently (i.e., a cash-generating unit).

An impairment loss is recognised in profit or loss

whenever the carrying amount of an asset, or the

cash-generating unit to which it belongs, exceeds its

recoverable amount. The impairment loss is reversed

if there has been a favourable change in the estimates

used to determine the recoverable amount. A reversal

of the impairment loss is limited to the asset’s carrying

amount that would have been determined had no

impairment loss been recognised in prior years. The

reversal of the impairment loss is credited to the

statement of profit or loss in the year in which it arises.


Where the Company is the leasee, rental payable under

operating leases, net of any incentives received from the

lessor, are charged to profit or loss on a straight-line basis

over the lease terms.

Financial instruments

a. Financial assets

The Company’s financial assets include cash and

cash equivalents, prepayment and other receivables

and amounts due from subsidiaries are classified and

accounted for as loans and receivables. Financial

assets are recognised on the trade date.

Loans and receivables are non-derivative financial

assets with fixed or determinable payments that are

not quoted in an active market. Loans and receivables

are initially recognised at fair value and subsequently

measured at amortised cost using the effective interest

rate method, less any impairment losses. Any changes

in their value are recognised in profit or loss.

Derecognition of financial assets occurs when the

rights to receive cash flows from the financial assets

expire or are transferred and substantially all of the

risks and rewards of ownership have been transferred.