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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
86 Independence Group NL
Notes to the consolidated financial statements
30 June 2016
(continued)
15 Exploration and evaluation
Jaguar
Operation
$'000
Long
Operation
$'000
Nova Project
$'000
Stockman
Project
$'000
Karlawinda
$'000
Total
$'000
Year ended 30 June 2016
Opening net book amount
8,235
-
-
100,716
979
109,930
Acquisition of subsidiary
-
-
34,100
-
-
34,100
Additions
3,152
7,434
-
-
-
10,586
Disposals
-
-
-
-
(979)
(979)
Impairment charge
(2,985)
-
-
(32,533)
-
(35,518)
Transfer to mine
properties in production
(3,152)
(7,434)
-
-
-
(10,586)
Closing net book amount
5,250
-
34,100
68,183
-
107,533
Year ended 30 June 2015
Opening net book amount
9,888
-
-
100,716
979
111,583
Additions
1,611
10,806
-
-
-
12,417
Impairment charge
(2,232)
(1,229)
-
-
-
(3,461)
Transfer to mine
properties in production
(1,032)
(9,577)
-
-
-
(10,609)
Closing net book amount
8,235
-
-
100,716
979
109,930
(a) Impairment
The Group recognised impairment charges of $35,518,000 during the current reporting period (2015: $3,461,000).
An amount of $32,533,000 related to the Stockman Project, which is an exploration asset reported within the New
Business and Regional Exploration Activities segment. The circumstances and events that led to the recognition of the
impairment loss emerged following an assessment for the existence of impairment triggers as at 31 December 2015 in
accordance with AASB6
Exploration for and Evaluation of Mineral Resources.
The recognised impairment charge has
been determined with reference to the recoverable amount of the asset being assessed based on its fair value less
costs of disposal.
The Company adopted a discounted cash flow fair value model to arrive at the recoverable amount. Key assumptions
include a post-tax real discount rate of 10.2%, and five year average commodity prices as follows: Copper: USD5,380
per tonne, Zinc: USD2,076 per tonne, Silver: USD16.50 per ounce and foreign exchange: USD:AUD 0.72.
(b) Recognition and measurement
Exploration for and evaluation of mineral resources is the search for mineral resources after the entity has obtained
legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability
of extracting the mineral resource.
Exploration and evaluation expenditure is expensed to the profit or loss as incurred except in the following
circumstances in which case the expenditure may be capitalised:
• The existence of a commercially viable mineral deposit has been established and it is anticipated that future
economic benefits are more likely than not to be generated as a result of the expenditure; and
• The exploration and evaluation activity is within an area of interest which was acquired as an asset acquisition or in
a business combination and measured at fair value on acquisition.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest. An impairment exists when the carrying value of expenditure exceeds its
estimated recoverable amount. The area of interest is then written down to its recoverable amount and the impairment
losses are recognised in profit or loss.
Independence Group NL
58