LCL RESOURCES LIMITED - Annual Report 2018

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Metminco Limited

ABN 43 119 759 349

Annual Report - 31 December 2018

Metminco Limited
Contents
31 December 2018
Corporate directory	2
Directors' report	3
Auditor's independence declaration	15
Consolidated statement of profit or loss and other comprehensive income	16
Consolidated statement of financial position	17
Consolidated statement of changes in equity	18
Consolidated statement of cash flows	19
Notes to the consolidated financial statements	20
Directors' declaration	56
Independent auditor's report to the members of Metminco Limited	57
Shareholder information	61

Metminco Limited Corporate directory 31 December 2018

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Directors

Kevin Wilson (Executive Chairman) Roger Higgins (Non-Executive Director) Glenister Lamont (Non-Executive Director) Company secretary Andrew Metcalfe Geoffrey Widmer Registered office Suite 3, Level 2 470 Collins Street Melbourne VIC 3000 Australia Principal place of business Suite 3, Level 2 470 Collins Street Melbourne VIC 3000 Australia Share register Link Market Services Limited Level 12, 680 George Street, Sydney, NSW, Australia, 2000 1300 554 474 Auditor Grant Thornton Audit Pty Ltd Collins Square, Tower 1 727 Collins St Melbourne VIC 3000 Stock exchange listing Metminco Limited shares are listed on the Australian Securities Exchange (ASX code: MNC)

Metminco Limited Directors' report 31 December 2018

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The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity' or ‘Consolidated Group’ or the ‘Group’) consisting of Metminco Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 31 December 2018.

Directors

The following persons were Directors of Metminco Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:

Kevin Wilson Executive Chairman (appointed 23 March 2018) Roger Higgins Non-Executive Director Glenister Lamont Non-Executive Director (appointed 28 May 2018) William Howe Managing Director (resigned 23 March 2018) Francisco Vergara-Irarrazaval Non-Executive Director (retired 28 May 2018) Ram Venkat Non-Executive Director (resigned 19 March 2018)

Principal activities and significant changes in the nature of events.

The Group’s Quinchia Gold Project encompasses a potential development project at Miraflores, as well as assets with substantial exploration upside potential including the significant gold porphyry system targets of Tesorito, Dosquebradas and Chuscal. During the year, work continued on an Environmental Impact Statement for potential gold mining operations at Miraflores and exploration drilling of a gold porphyry at Tesorito.

In December 2018, Metminco entered into a joint venture (JV) to explore and develop the Chuscal Gold Prospect in Quinchia, Colombia. Chuscal is a major drill-ready gold exploration target, defined by soil and rock chip geochemistry. Chuscal is situated 1,700m south of the proposed Miraflores plant and 1,100m south of Tesorito. Drilling, subject to finance, will commence as soon as permits and approvals are granted.

While the Company also retains its 100% Chilean Projects, the primary focus is on the Quinchia Gold Project and the Chilean projects are on care and maintenance whilst Directors seek the sale of the land and mineral rights. These Chilean projects provide significant exposure to copper through Mollacas on which a mining study announced in 2014 demonstrated robust economics for development of the Mollacas Project, which is subject to resolution of a dispute with the surface land holder. The Vallecillo Project is a polymetallic deposit with identified resources.

In September 2018, the Company announced that it had entered into an agreement to acquire Sunshine Minerals Limited, a company incorporated in the Solomon Islands, which holds an 80% interest in a nickel laterite deposit, the Jejevo Nickel Project. The Company subsequently withdrew from the agreement as it was unable to complete the due diligence to its satisfaction.

During the year the Company removed its listing from the London Alternative Investment Market (AIM), and transferred most United Kingdom based shareholders to the Australian register.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $7,833,968 (31 December 2017: $35,227,373).

Significant changes in the state of affairs

There were no significant changes in the state of affairs of the consolidated entity during the financial year.

Matters subsequent to the end of the financial year

On 15 February 2019 the Company announced it had reached agreement to defer to June 2020 a $3 million deferred acquisition payment due to RMB (Australia) Holdings Limited (‘RMB’) in June 2019.

On 13 March 2019, the Company announced a proposed Merger of Metminco and Andes Resources Limited (‘Andes’) to create a leading Colombian gold explorer and developer. The proposed Merger will result in the Company holding a dominant position in the richly gold-copper endowed Mid-Cauca Gold Belt. The proposed Merger will bring together Metminco’s advanced Quinchia Gold Project, with Andes’ extensive tenement holding to create a company with multiple advance exploration assets in richly endowed gold camps. A total of up to $4 million will be raised as part of the proposed Merger.

Metminco Limited Directors' report 31 December 2018

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In March 2019, the company completed a placement of convertible notes to raise up to $1 million (as part of the $4 million proposed Merger financing). The Convertible Notes are interest free and repayable in limited circumstances. The Convertible Notes will convert into fully paid ordinary shares in Metminco. Funds raised will primarily be applied to progress the proposed Merger, undertake geophysical and geochemical work to further refine drill targeting at the Chuscal Gold Prospect in Colombia, and provide working capital.

Also as part of the proposed merger, Metminco is in the process of negotiating a significant restructuring of the existing RMB deferred acquisition payments of $5 million through a payment of $500,000 on completion of the merger, a debt for equity swap for $2.5 million, and realigning future payments of $2 million to project milestones out to 2025.

No other matter or circumstance has arisen since 31 December 2018 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Likely developments and expected results of operations

Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.

Environmental regulation

The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law. The Group is subject to environmental regulations in foreign countries where it operates, such as Chile and Colombia. The Directors are not aware of any breaches of the legislation during the year that are material in nature.

Information on Directors

Information on Directors
Name:	Kevin Wilson
Title:	Executive Chairman
Qualifications:	BSc, MBA
Experience and expertise:	Kevin was appointed Executive Chairman on 23 March 2018. He has over 30 years’
	experience in the minerals and finance industries. He was the Managing Director of
	Rey Resources Limited, an Australian energy exploration company, from 2008 to
	2016 and the Managing Director of Leviathan Resources Limited, a Victorian gold
	mining company, from its initial public offering in 2005 through to its sale in 2006. He
	has prior experience as a geologist with the Anglo American group in Africa and North
	America and as a stockbroking analyst and investment banker with CS First Boston
	and Merrill Lynch in Australia and USA. Mr Wilson is currently also Chairman (non-
	executive) of Navarre Minerals Limited and non-executive director of Investigator
	Resources Limited.
Other current directorships:	Non-executive Chairman - Navarre Minerals Limited and Non-executive Director -
	Investigator Resources Limited.
Former directorships (last 3 years): Rey Resources Limited (August 2007 to June 2016)
Interests in shares:	36,905,172 ordinary shares in Metminco Ltd
Interests in options:	5,017,104 listed options
Interests in rights:	46,400,000 LTIP performance rights

Metminco Limited Directors' report 31 December 2018

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Name: Roger Higgins Title: Non-Executive Director Qualifications: BE, MSc, and PhD Experience and expertise: Roger was appointed to the Board on 8 October 2013. He has over 40 years of mining industry experience, which has included environmental, strategy, project development and operational roles.

Roger’s earlier career included various hydrology related positions in Papua New Guinea (Australian Government and Bougainville Copper), and four years at the University of New South Wales, where he completed a PhD in water resource economics. He subsequently spent 26 years with BHP including roles as Manager Planning and Development BHP Copper, General Mine Manager Escondida, Managing Director Ok Tedi, Vice President Project Development Chile, and Vice President and Chief Operating Officer Australia, responsible for the Olympic Dam and Cannington mines. Thereafter he spent five years with Teck Resources Limited as Senior Vice President Copper in Vancouver BC, where he led operations and related activities in Canada, Chile and Peru.

	Planning and Development BHP Copper, General Mine Manager Escondida, Managing Director Ok Tedi, Vice President Project Development Chile, and Vice President and Chief Operating Officer Australia, responsible for the Olympic Dam and Cannington mines. Thereafter he spent five years with Teck Resources Limited as Senior Vice President Copper in Vancouver BC, where he led operations and related activities in Canada, Chile and Peru.
	He is a non-executive Director of WorleyParsons Ltd, Ok Tedi Mining Ltd, Newcrest
	Mining, and Minotaur Exploration (Chairman from 1 January 2017), and an Adjunct
	Professor with the Sustainable Minerals Institute at the University of Queensland.
	Professional Socieites include Fellow, Institution of Engineers, Australia and Fellow,
	Australasian Institute of Mining and Metallurgy.
Other current directorships:	Non-executive Director - Newcrest Mining Ltd (October 2015 to current), Minotaur
	Exploration Ltd (July 2016 to current) and WorleyParsons Ltd (from February 2019).
Former directorships (last 3 years):
Interests in shares:	2,123,348 ordinary shares in Metminco Ltd
Interests in options:	417,636 listed options & 9,600,000 unlisted LTIP performance options
Name:	Glenister Lamont
Title:	Non-Executive Director
Qualifications:	BEng. MBA,
Experience and expertise:	Glenister joined the Board on 28 May 2018. He is a professional non-executive
	director, who has been Chair of several ASX listed resource companies as well as a
	director of other listed companies, government, not-for-profit and investment entities.
	Encompassing a 40-year executive career, Glenister has been CEO of a listed gold
	explorer, General Manager for two ASX 200 companies and Executive Director at
	UBS Australia. This gives him significant depth of finance, business and
	management experience, both domestically and internationally.
Other current directorships:	Non-executive Chairman - Golden Rim Resources Limited (July 2007 to current)
Former directorships (last 3 years):	Valence Industries Ltd (December 2008 to November 2016)
Interests in shares:	2,625,000 ordinary shares in Metminco Ltd
Interests in options:	625,000 listed options & 9,600,000 unlisted LTIP performance options

'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.

'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.

Company secretaries

Graeme Hogan was the Company Secretary and CFO until 28 May 2018. On 26 April 2018 Geoffrey Widmer was appointed Joint Company Secretary alongside Graeme Hogan.

Graeme Hogan resigned as Company Secretary and Chief Financial Officer effective 28 May 2018. On that day Andrew Metcalfe was appointed Joint Company Secretary and CFO. Andrew Metcalfe and Geoffrey Widmer are in office at the date of this report.

Metminco Limited Directors' report 31 December 2018

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Meetings of Directors

The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 31 December 2018, and the number of meetings attended by each Director were:

	Full Board	Full Board		Audit and Risk	Committee
	Attended	Held		Attended	Held
Kevin Wilson (appointed 23 March 2018)		4	4	-	-
Roger Higgins (director for full year)		5	5	1	1
Glenister Lamont (appointed 28 May 2018)		3	3	-	-
William Howe (resigned 23 March 2018)		2	2	-	-
Francisco Vergara-Irarrazaval (retired 28 May 2018)		1	2	1	1
Ram Venkat (resigned 19 March 2018)		1	1	-	-

Held: represents the number of meetings held during the time the Director held office.

A circular resolution of the Board or Audit and Risk Committee was used where necessary.

Remuneration report (audited)

The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors.

The remuneration report is set out under the following main headings:

Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional disclosures relating to key management personnel

Principles used to determine the nature and amount of remuneration

The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward governance practices:

competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency

The Board, in the absence of the Nomination and Remuneration Committee, is responsible for determining and reviewing remuneration arrangements for its directors and executives. The performance of the consolidated entity depends on the quality of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.

The Board has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the consolidated entity.

The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it should seek to enhance shareholders' interests by:

having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
● attracting and retaining high calibre executives

Metminco Limited Directors' report 31 December 2018

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Additionally, the reward framework should seek to enhance executives' interests by:

rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards

In accordance with best practice corporate governance, the structure of non-executive director and executive director remuneration is separate.

Non-executive directors remuneration

Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors' fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice from independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line with the market. The chairman's fees are determined independently to the fees of other non-executive directors based on comparative roles in the external market. The chairman is not present at any discussions relating to the determination of his own remuneration.

ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general meeting. The most recent determination was at the Annual General Meeting held on 31 May 2012, where the shareholders approved a maximum annual aggregate remuneration of $600,000.

Executive remuneration

The consolidated entity aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both fixed and variable components.

The executive remuneration and reward framework has four components:

base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave

The combination of these comprises the executive's total remuneration.

Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the Board based on individual and business unit performance, the overall performance of the consolidated entity and comparable market remunerations.

Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it does not create any additional costs to the consolidated entity and provides additional value to the executive.

The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdles of executives. STI payments are granted to executives based on specific annual targets and key performance indicators ('KPIs') being achieved. KPIs may include profit contribution, leadership contribution and project milestones. No STI was granted in 2018.

The long-term incentives ('LTI') include long service leave and share-based payments. Shares are awarded to executives over a period of three years based on long-term incentive measures. These include increase in shareholders’ value and project milestones. The Board reviewed the long-term equity-linked performance incentives specifically for executives during the year ended 31 December 2018.

Consolidated entity performance and link to remuneration

Remuneration for certain individuals is directly linked to the performance of the consolidated entity. A portion of cash bonus and incentive payments are dependent on defined exploration objectives being met. The remaining portion of the cash bonus and incentive payments are at the discretion of the Board.

The Board is of the opinion that improved results can be attributed in part to the adoption of performance based compensation and is satisfied that performance based compensation can increase shareholder wealth if maintained over the coming years.

Metminco Limited Directors' report 31 December 2018

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Voting and comments made at the company's 28 May 2018 Annual General Meeting ('AGM')

At the 28 May 2018 AGM, 91.5% of the votes received supported the adoption of the remuneration report for the year ended 31 December 2017. The company did not receive any specific feedback at the AGM regarding its remuneration practices.

Details of remuneration

Amounts of remuneration

Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.

31 Dec 2018 Non-executive Directors: Roger Higgins (i) Glenister Lamont (i) Francisco Vergara - Irarrazaval Ram Venkat Executive Directors: Kevin Wilson (i) William Howe Other Key Management Personnel: Nicholas Winer Colin Sinclair Graeme Hogan Geoffrey Widmer Andrew Metcalfe	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 37,500 - - 27,092 - - 15,625 - - 76,253 - - 139,786 - - 225,000 - - 83,333 - - 180,000 - - 120,897 - - 48,017 - - 46,625 - -	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 37,500 - - 27,092 - - 15,625 - - 76,253 - - 139,786 - - 225,000 - - 83,333 - - 180,000 - - 120,897 - - 48,017 - - 46,625 - -	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 37,500 - - 27,092 - - 15,625 - - 76,253 - - 139,786 - - 225,000 - - 83,333 - - 180,000 - - 120,897 - - 48,017 - - 46,625 - -	Post- employment benefits Super- annuation $ - 2,799 - - 14,182 - - - 10,339 - -	Long-term benefits Long service leave $ - - - - - - - - - - -	Share- based payments Equity- settled $ 5,245 5,245 - - 38,864 - - - - - -	Total $ 42,745 35,136 15,625 76,253 192,832 225,000 83,333 180,000 131,236 48,017 46,625
	1,000,128	-	-	27,320	-	49,354	1,076,802

(i) Salary or fees for 2018 included an amount of $183,532 that was accrued as at reporting date.

Metminco Limited Directors' report 31 December 2018

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Short-term benefits Post- employment benefits Long-term benefits Cash salary Cash Non- Super- Long service and fees bonus monetary annuation leave 31 Dec 2017 $ $ $ $ $ Non-executive Directors: Roger Higgins 37,500 - - - - Francisco Vergara - Irarrazaval 37,500 - - - - Ram Venkat 143,743 - - - - Phillip Wing 58,333 - - - - Executive Directors: William Howe 225,000 - - - - Other Key Management Personnel: Colin Sinclair 150,000 - - - - Graeme Hogan 8,372 - - 795 - Brian Jones 109,000 - - - - Stephen Tainton 17,667 - - 11,276 - Phillip Killen 337,855 - - 30,002 - 1,124,970 - - 42,073 - The proportion of remuneration linked to performance and the fixed proportion are as follows: Fixed remuneration At risk - STI Name 31 Dec 2018 31 Dec 2017 31 Dec 2018 31 Dec 2017 31 Non-Executive Directors: Roger Higgins (i) 100% 100% - - Glenister Lamont (i) 100% - - - Francisco Vergara - Irarrazaval 100% 100% - - Ram Venkat - 100% - - Phillip Wing - 100% - - Executive Directors: Kevin Wilson (i) 100% - - - William Howe 100% 100% - - Other Key Management Personnel: Nicholas Winer 100% - - - Colin Sinclair 100% 100% - - Graeme Hogan 100% 100% - - Geoffrey Widmer 100% - - - Andrew Metcalfe 100% - - - Brian Jones - 100% - - Stephen Tainton - 100% - - Phillip Killen - 100% - -	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 37,500 - - 37,500 - - 143,743 - - 58,333 - - 225,000 - - 150,000 - - 8,372 - - 109,000 - - 17,667 - - 337,855 - -	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 37,500 - - 37,500 - - 143,743 - - 58,333 - - 225,000 - - 150,000 - - 8,372 - - 109,000 - - 17,667 - - 337,855 - -	Short-term benefits Cash salary Cash Non- and fees bonus monetary $ $ $ 37,500 - - 37,500 - - 143,743 - - 58,333 - - 225,000 - - 150,000 - - 8,372 - - 109,000 - - 17,667 - - 337,855 - -	Post- employment benefits Super- annuation $ - - - - - - 795 - 11,276 30,002	Long-term benefits Long service leave $ - - - - - - - - - -	Share- based payments Equity- settled $ - - - - - - - - - -	Total $ 37,500 37,500 143,743 58,333 225,000 150,000 9,167 109,000 28,943 367,857
	1,124,970	-	-	42,073	-	-	1,167,043
						At risk - LTI Dec 2018 31 Dec 2017 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

The proportion of remuneration linked to performance and the fixed proportion are as follows:

(i) Fixed remuneration excludes share based payments in the form of performance options and performance rights issued to directors during the financial year ended 31 December 2018.

Metminco Limited Directors' report 31 December 2018

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Service agreements

Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows:

Name:	Kevin Wilson
Title:	Executive Chairman
Details:	Written contract (6 months' notice)
Name:	Roger Higgins
Title:	Non-Executive Director
Details:	No written contract
Name:	Glenister Lamont
Title:	Non-Executive Director
Details:	No written contract
Name:	William Howe
Title:	Managing Director (resigned 23 March 2018); Chief Operating Officer from March
	2018
Details:	Written contract (12 months' notice)
Name:	Francisco Vergara-Irarrazaval
Title:	Non-Executive Director (retired 28 May 2018)
Details:	No written contract
Name:	Ram Venkat
Title:	Non-Executive Director (resigned 19 March 2018)
Details:	Written contract (6 months' contract with 6 weeks' notice)
Name:	Geoffrey Widmer
Title:	CFO / Joint Company Secretary
Details:	Written contract (12 months' contract with 3 months' notice)
Name:	Andrew Metcalfe
Title:	CFO / Joint Company Secretary
Details:	Written contract (12 months' contract with 3 months' notice)
Name:	Graeme Hogan
Title:	CFO and Company Secretary (resigned 28 May 2018)
Details:	Written contract (3 months' notice)
Name:	Colin Sinclair
Title:	Executive Exploration Manager
Details:	Written contract (12 months' contract with no termination notice)
Name:	Nicholas Winer
Title:	Executive Exploration Director
Details:	Written contract (6 months’ notice)

Key management personnel have no entitlement to termination payments in the event of removal for misconduct.

Share-based compensation

Issue of shares

There were no shares issued to Directors and other key management personnel as part of compensation during the year ended 31 December 2018. Directors received performance rights and performance options during the year ended 31 December 2018 that was approved for issue by shareholders at the 2018 Annual General Meeting.

Metminco Limited Directors' report 31 December 2018

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Options - unlisted LTIP performance options

The terms and conditions of each grant of options over ordinary shares affecting remuneration of Directors and other key management personnel in this financial year or future reporting years are as follows:

	Number		Vesting and			Fair value
	of options		exercisable		Exercise	per option
Name	granted	Grant date	date	Expiry date	price	at grant date
Glenister Lamont	4,800,000	28 May 2018	31 Dec 2018	31 Dec 2018	$0.0120	$0.00146
Glenister Lamont	4,800,000	28 May 2018	31 Dec 2019	31 Dec 2019	$0.0160	$0.00182
Glenister Lamont	4,800,000	28 May 2018	31 Dec 2020	30 Dec 2020	$0.0240	$0.00187
Roger Higgins	4,800,000	28 May 2018	31 Dec 2018	31 Dec 2018	$0.0120	$0.00146
Roger Higgins	4,800,000	28 May 2018	31 Dec 2019	31 Dec 2019	$0.0160	$0.00182
Roger Higgins	4,800,000	28 May 2018	31 Dec 2020	31 Dec 2020	$0.0240	$0.00187

Performance options granted carry no dividend or voting rights.

Performance rights

The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of Directors and other key management personnel in this financial year or future reporting years are as follows:

	Number of		Vesting and		Share price	Fair value
	rights		exercisable		hurdle for	per right
Name	granted	Grant date	date	Expiry date	vesting	at grant date
Kevin Wilson	11,600,000	28 May 2018	31 Dec 2018	31 Dec 2018	$0.0120	$0.00146
Kevin Wilson	11,600,000	28 May 2018	31 Dec 2019	31 Dec 2019	$0.0160	$0.00182
Kevin Wilson	11,600,000	28 May 2018	31 Dec 2019	31 Dec 2019	$0.0000	$0.00348
Kevin Wilson	11,600,000	28 May 2018	31 Dec 2020	31 Dec 2020	$0.0240	$0.00187
Kevin Wilson	11,600,000	28 May 2018	31 Dec 2020	31 Dec 2020	$0.0000	$0.00432

Performance rights carry no dividend or voting rights.

Retention rights

There were no retention rights over ordinary shares granted to or vested by Directors and other key management personnel as part of compensation during the year ended 31 December 2018.

Additional disclosures relating to key management personnel

Shareholding

The number of shares in the Company held during the financial year by each Director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

Ordinary shares Kevin Wilson Roger Higgins Glenister Lamont William Howe Francisco Vergara-Irarrazaval Ram Venkat (i) Colin Sinclair Graeme Hogan (i) Philip Wing (i) Philip Killen (i) Stephen Tainton (i)	Balance at the start of the year - 263,770 - 3,365,743 1,277,800 384,000 630,813 100,000 584,583 590,183 116,872	Received as part of remuneration - - - - - - - - - - -	Additions 36,905,172 1,859,578 2,625,000 571,421 6,069,550 1,250,000 1,000,000 475,000 - - -	Disposals/ other - - - (571,421) - (1,634,000) (1,000,000) (575,000) (584,583) (590,183) (116,872)	Balance at the end of the year 36,905,172 2,123,348 2,625,000 3,365,743 7,347,350 - 630,813 - - - -
	7,313,764	-	50,755,721	(5,072,059)	52,997,426

Metminco Limited Directors' report 31 December 2018

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(i) These members ceased to be key management personnel during the reporting period and as such nil disclosure is required.

Option holding

The number of options over ordinary shares in the Company held during the financial year by each Director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

Options over ordinary shares Kevin Wilson Roger Higgins Glenister Lamont Francisco Vergara-Irarrazaval Graeme Hogan	Balance at the start of the year - - - - -	Additions 5,017,104 417,636 625,000 2,023,184 158,334	Exercised - - - - -	Expired/ forfeited/ other - - - - -	Balance at the end of the year 5,017,104 417,636 625,000 2,023,184 158,334 8,241,258
	-	8,241,258	-	-

Performance rights holding

The number of performance rights over ordinary shares in the Company held during the financial year by each Director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

out below:
Performance rights over ordinary shares Kevin Wilson	Balance at the start of the year -	Granted 58,000,000	Vested -	Expired/ forfeited/ other (11,600,000)	Balance at the end of the year 46,400,000 46,400,000
	-	58,000,000	-	(11,600,000)

Performance option holding

The number of performance options issued in the Company held during the financial year by each Director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

below:
Performance options over ordinary shares Roger Higgins Glenister Lamont	Balance at the start of the year - -	Granted 14,400,000 14,400,000	Vested - -	Expired/ forfeited/ other (4,800,000) (4,800,000)	Balance at the end of the year 9,600,000 9,600,000 19,200,000
	-	28,800,000	-	(9,600,000)

This concludes the remuneration report, which has been audited.

Shares under option

Shares under option
Listed Options
		Exercise	Number
Grant date	Expiry date	price	under option
Apr, May & Dec 2018	1 Jun 2020	$0.011	547,369,372

Metminco Limited Directors' report 31 December 2018

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Unlisted options

Exercise Grant date Expiry date price 17 May 2017 17 May 2019 $0.0810 25 May 2017 25 May 2019 $0.0810 28 May 2018 31 Dec 2019 $0.0160 28 May 2018 31 Dec 2020 $0.0240	Number under option 12,345,639 12,345,639 9,600,000 9,600,000 43,891,278

No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or of any other body corporate.

Indemnity and insurance of officers

The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith.

During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

Indemnity and insurance of auditor

The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor.

During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity.

Proceedings on behalf of the Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

Non-audit services

Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in note 25 to the financial statements.

The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The Directors are of the opinion that the services as disclosed in note 25 to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.

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 immediately after this Directors' report.

Auditor

Grant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.

Metminco Limited Directors' report 31 December 2018

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This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.

On behalf of the Directors

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_________ Kevin Wilson Executive Chairman

29 March 2019

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Collins Square, Tower 1 727 Collins Street Docklands Victoria 3008

Correspondence to: GPO Box 4736 Melbourne Victoria 3001

T +61 3 8320 2222 F +61 3 8320 2200 E [email protected] W www.grantthornton.com.au

Auditor’s Independence Declaration

To the Directors of Metminco Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Metminco Limited for the year ended 31 December 2018, I declare that, to the best of my knowledge and belief, there have been:

a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.

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Grant Thornton Audit Pty Ltd Chartered Accountants

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B A Mackenzie Partner – Audit & Assurance

Melbourne, 29 March 2019

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

www.grantthornton.com.au

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation.

Metminco Limited Consolidated statement of profit or loss and other comprehensive income For the year ended 31 December 2018

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Note Revenue Interest revenue Expenses Employee benefits expense Foreign exchange loss Depreciation and amortisation expense 4 Impairment of property, plant & equipment 13 Loss on sale of asset 5 Impairment of exploration expenditure 14 Share based payment expense 21 Realised loss on derivative asset 9 Unrealised loss on derivative asset 9 Impairment of non-current receivables Profit on disposal of assets Finance costs 4 Corporate expenses 4 Occupancy Administration 4 Total expenses Loss before income tax expense Income tax expense 6 Loss after income tax expense for the year attributable to the owners of Metminco Limited Other comprehensive loss Items that may be reclassified subsequently to profit or loss Foreign currency translation Other comprehensive loss for the year, net of tax Total comprehensive loss for the year attributable to the owners of Metminco Limited Basic loss per share 31 Diluted loss per share 31	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 3,611 - (1,301,801) (1,295,015) (23,087) (110,185) (31,599) (40,282) (61,935) (934,037) - (27,228,513) (3,546,813) (48,437) (739,945) (426,174) (228,273) (797,257) - (1,260,330) - (180,669) - 23,182 (406,495) (559,484) (917,514) (1,416,089) (133,770) (161,574) (446,347) (792,509) (7,837,579) (35,227,373) (7,833,968) (35,227,373) - - (7,833,968) (35,227,373) (50,263) (208,982) (50,263) (208,982) (7,884,231) (35,436,355) Cents Cents (1.12) (27.69) (1.12) (27.69)
	(7,837,579)
	(7,833,968) -
	(7,833,968) (50,263)
	(50,263)
	(7,884,231)
	Cents (1.12) (1.12)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

Metminco Limited Consolidated statement of financial position As at 31 December 2018

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Note Assets Current assets Cash and cash equivalents 7 Other receivables 8 Derivative asset 9 Other 10 Asset held for sale 11 Total current assets Non-current assets Property, plant and equipment 13 Exploration and evaluation 14 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 15 Borrowings 16 Provisions 17 Total current liabilities Non-current liabilities Other payables 18 Total non-current liabilities Total liabilities Net assets Equity Issued capital 19 Reserves 22 Accumulated losses Total equity	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 167,614 834,377 73,323 167,382 - 272,683 61,426 48,610 302,363 1,323,052 2,861,983 2,586,122 3,164,346 3,909,174 637,774 569,642 10,411,767 12,015,128 11,049,541 12,584,770 14,213,887 16,493,944 4,413,855 2,584,054 - 808,020 213,133 187,214 4,626,988 3,579,288 1,781,946 4,322,867 1,781,946 4,322,867 6,408,934 7,902,155 7,804,953 8,591,789 339,411,378 332,987,792 12,216,161 (29,914,047) (343,822,586) (294,481,956) 7,804,953 8,591,789
	302,363 2,861,983
	3,164,346
	637,774 10,411,767
	11,049,541
	14,213,887
	4,413,855 - 213,133
	4,626,988
	1,781,946
	1,781,946
	6,408,934
	7,804,953
	339,411,378 12,216,161 (343,822,586)
	7,804,953

The above consolidated statement of financial position should be read in conjunction with the accompanying notes

Metminco Limited Consolidated statement of changes in equity For the year ended 31 December 2018

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Issued capital $ 329,032,074 - -	Acquisition reserve $ (41,506,662) - -	Convertible note equity & option reserves $ 54,686 - -	Foreign currency translation reserve $ 11,309,289 - (208,982)	Accumulated losses $ (259,254,583) (35,227,373) -
- 4,375,000 (419,282) - -	- - - - -	- - - 11,448 426,174	(208,982) - - - -	(35,227,373) - - - -
332,987,792	(41,506,662)	492,308	11,100,307	(294,481,956)
Issued capital $ 332,987,792 - -	Acquisition reserve $ (41,506,662) - -	Convertible note equity & option reserves $ 492,308 - -	Foreign currency translation reserve $ 11,100,307 - (50,263)	Accumulated losses $ (294,481,956) (7,833,968) -
- 7,089,392 (665,806) - - - -	- - - - - - 41,506,662	- - - (11,448) 739,945 (54,688) -	(50,263) - - - - - -	(7,833,968) - - - - - (41,506,662)
339,411,378	-	1,166,117	11,050,044	(343,822,586)

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

Metminco Limited Consolidated statement of cash flows For the year ended 31 December 2018

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Metminco Limited Consolidated statement of cash flows For the year ended 31 December 2018
Note Cash flows from operating activities Payments to suppliers and employees Interest received Net cash used in operating activities 30 Cash flows from investing activities Payments for plant and equipment 13 Payments for exploration and evaluation 14 Payments against deferred acquisition consideration 18 Payments for purchase of land 13 Proceeds from disposal of plant and equipment Proceeds from sale of Los Calatos Net cash from/(used in) investing activities Cash flows from financing activities Proceeds from issue of shares 19 Cash received from convertible notes Cash received from derivative asset 9 Share issue transaction costs 19 Cash paid for redemption of convertible notes 16 Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial year 7	Consolidated 31 Dec 2018 31 Dec 2017 $ $ (3,361,900) (4,388,346) 3,611 - (3,358,289) (4,388,346) (14,244) - (1,752,353) (2,759,699) (1,000,000) (1,000,000) (169,812) - - 23,182 - 6,538,365 (2,936,409) 2,801,848 7,089,392 1,825,000 - 750,000 44,410 194,412 (665,806) (419,282) (842,381) - 5,625,615 2,350,130 (669,083) 763,632 834,377 71,548 2,320 (803) 167,614 834,377
	(3,358,289)
	(14,244) (1,752,353) (1,000,000) (169,812) - -
	(2,936,409)
	7,089,392 - 44,410 (665,806) (842,381)
	5,625,615
	(669,083) 834,377 2,320
	167,614

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 1. Significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity.

The following Accounting Standards and Interpretations are most relevant to the consolidated entity:

AASB 9 Financial Instruments

The consolidated entity has adopted AASB 9 from 1 January 2018. The standard introduced new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows which arise on specified dates and that are solely principal and interest. A debt investment shall be measured at fair value through other comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on the basis of its fair value. All other financial assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading or contingent consideration recognised in a business combination) in other comprehensive income ('OCI'). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated at fair value through profit or loss, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses using a lifetime expected loss allowance is available.

The table below outlines the accounting treatment for financial assets and financial liabilities under AASB 139 as compared to AASB 9:

o AASB 9:
Financial instrument	Previous AASB 139	Current AASB 9
Cash and cash equivalents	Amortised cost	Amortised cost
Trade and other payables	Amortised cost	Amortised cost
Borrowings	Amortised cost	Amortised cost
Deferred consideration	Amortised cost	Amortised cost
Derivative financial instruments	Fair value through profit or loss	Fair value through profit or loss

The Group’s other receivables do not meet the definition of a financial asset as they include GST receivable and prepayments.

As a result, Group management is satisfied that there is no impact from the transition from AAS139 to AASB9.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 1. Significant accounting policies (continued)

AASB 15 Revenue from Contracts with Customers

The consolidated entity has adopted AASB 15 from 1 January 2018. The standard provides a single comprehensive model for revenue recognition. The core principle of the standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduced a new contract-based revenue recognition model with a measurement approach that is based on an allocation of the transaction price. This is described further in the accounting policies below. Credit risk is presented separately as an expense rather than adjusted against revenue. Contracts with customers are presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be capitalised as an asset and amortised over the contract period. The Group does not derive any revenue from its exploration activities at this stage, as such has not recognised any operating revenue to date. Eventually when the Group starts generating revenue, revenue will be recognised in accordance with AASB 15. Therefore, there is no impact from the transition from AASB118 to AASB 15.

Going concern

The Consolidated Group incurred a net loss after tax of $7,833,968 (31 December 2017: $35,227,373), has net cash used in operations of $3,358,289 during year ended 31 December 2018 (31 December 2017: $4,388,346) and has a cash balance of $167,614 at that date (31 December 2017: $834,377).

It also has net current liabilities of $1,462,642 (31 December 2017: net current assets of $329,866) and net assets of $7,804,953 (31 December 2017: $8,591,789).

Although the Group has taken steps to ensure its outgoing expenditure is at the minimum levels required to maintain its projects in good standing and meet its governance, compliance and ASX listing obligations, additional funding will be required within the next 12 months to meet these obligations. The Company continues to review various capital raising options to underpin the continued solvency of the business and support its working capital and business development. This has been realised by the proposed merger with Andes Resources Ltd and a commitment to raise a total of up to A$4 million as reported in Note 29 - Events after the reporting date, of which $1,002,000 was raised in March 2019 by way of a convertible note placement.

If all these capital raising initiatives do not materialise, then there is possibility that the Group may not be able to raise the additional financing required, which gives rise to a material uncertainty that may cast significant doubt upon the Group’s ability to continue as a going concern.

Notwithstanding the material uncertainty the Directors are satisfied that the Company and Group have sufficient cash reserves together with its strategies as alluded to above to maintain its current portfolio and meet its debts as and when they fall due. Therefore, these financial statements have been prepared on a going concern basis.

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').

Historical cost convention

The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial instruments.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 2.

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 35.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 1. Significant accounting policies (continued)

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Metminco Limited ('Company' or 'parent entity') as at 31 December 2018 and the results of all subsidiaries for the year then ended. Metminco Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.

Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity 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 to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

Operating segments

Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

Foreign currency translation

The financial statements are presented in Australian dollars, which is Metminco Limited's functional and presentation currency.

Foreign currency transactions

Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Foreign operations

The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.

The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.

Revenue recognition

The consolidated entity recognises revenue as follows:

Interest

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 1. Significant accounting policies (continued)

Income tax

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:

When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset.

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.

Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are always classified as non-current.

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Trade and other receivables

Other receivables are recognised at amortised cost, less any allowance for expected credit losses.

Derivative financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

Derivatives are classified as current or non-current depending on the expected period of realisation.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 1. Significant accounting policies (continued)

Non-current assets or disposal groups classified as held for sale

Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continued use. They are measured at the lower of their carrying amount and fair value less costs of disposal. For non-current assets or assets of disposal groups to be classified as held for sale, they must be available for immediate sale in their present condition and their sale must be highly probable.

An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal groups to fair value less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of disposal of a non-current assets and assets of disposal groups, but not in excess of any cumulative impairment loss previously recognised.

Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of assets held for sale continue to be recognised.

Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current assets. The liabilities of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current liabilities.

Joint ventures

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Investments in joint ventures are accounted for using the equity method. Under the equity method, the share of the profits or losses of the joint venture is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive income. Investments in joint ventures are carried in the statement of financial position at cost plus post-acquisition changes in the consolidated entity's share of net assets of the joint venture. Goodwill relating to the joint venture is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment. Income earned from joint venture entities reduce the carrying amount of the investment.

Property, plant and equipment

Land and buildings are shown at fair value, based on periodic, at least every 3 years, valuations by external independent valuers, less subsequent depreciation and impairment for buildings. The valuations are undertaken more frequently if there is a material change in the fair value relative to the carrying amount. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Increases in the carrying amounts arising on revaluation of land and buildings are credited in other comprehensive income through to the revaluation surplus reserve in equity. Any revaluation decrements are initially taken in other comprehensive income through to the revaluation surplus reserve to the extent of any previous revaluation surplus of the same asset. Thereafter the decrements are taken to profit or loss.

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows:

(excluding land) over their expected useful lives	as follows:
Buildings	40 years
Leasehold improvements	3-10 years
Plant and equipment	3-7 years
Plant and equipment under lease	2-5 years

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.

An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 1. Significant accounting policies (continued)

Leases

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses on a straight-line basis over the period of the lease.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

Exploration and evaluation assets

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 carry forward costs in relation to that area of interest.

In the 2018 financial year, a detailed review was undertaken of the exploration and evaluation assets held in the Groups’ Quinchia Gold Project resulting in a decision to impair and expense expenditure relating to the Tesorito, Dosquebradas and Chuscal project target areas and expenditure outside of the Miraflores project target area.

Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. This includes considering the requirements set out in AASB 6 Exploration for and Evaluation of Mineral Resources. In respect of the capitalised exploration and development expenditure. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Plant and equipment, and capitalised exploration and development expenditure, are assessed for impairment on a cash generating unit (“CGU”) basis. A cash generating unit is the smallest grouping of assets that generates independent cash flows, and generally represents an individual project. Impairment losses recognised in respect of cash generating units are allocated to reduce the carrying amount of the assets in the unit on a pro-rata basis. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cashgenerating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior year. A reversal of an impairment loss is recognised in profit or loss immediately.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 1. Significant accounting policies (continued)

Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, the loans or borrowings are classified as non-current.

The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement of financial position, net of transaction costs.

On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in shareholders equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.

Finance costs

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred.

Employee benefits

Short-term employee benefits

Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.

Share-based payments

Equity-settled and cash-settled share-based compensation benefits are provided to employees.

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price.

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial American Tree method of valuing securities that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.

The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:

during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date.

All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability.

Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 1. Significant accounting policies (continued)

If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.

If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.

If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification.

Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Issued capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Business combinations

The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other assets are acquired.

The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.

On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.

Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is recognised in profit or loss.

Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 1. Significant accounting policies (continued)

The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the acquirer.

Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.

Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of Metminco Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Goods and Services Tax ('GST') and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 31 December 2018. The consolidated entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the consolidated entity, are set out below.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 1. Significant accounting policies (continued)

This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured at the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The consolidated entity will adopt this standard from 1 July 2019. Management’s assessment of these amendments is that they will have no material impact on the Group’s transactions or balances recognised in the financial statements.

Note 2. Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.

Share-based payment transactions

The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.

Fair value measurement hierarchy

The consolidated entity is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant to fair value and therefore which category the asset or liability is placed in can be subjective.

The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include discounted cash flow analysis or the use of observable inputs that require significant adjustments based on unobservable inputs.

Estimation of useful lives of assets

The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 2. Critical accounting judgements, estimates and assumptions (continued)

Impairment of property, plant and equipment

The consolidated entity assesses impairment of property, plant and equipment at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-inuse calculations, which incorporate a number of key estimates and assumptions.

Income tax

The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The consolidated entity recognises liabilities for anticipated tax audit issues based on the consolidated entity's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Recovery of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Derivative financial instruments

Forward foreign exchange contracts, designated as cash flow hedges, are measured at fair value. Reliance is placed on future cash flows and judgement is made on a regular basis, through prospective and retrospective testing, including at the reporting date, that the hedges are still highly effective.

Employee benefits provision

As discussed in note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account.

Deferred consideration

The deferred consideration liability is the difference between the total purchase consideration, usually on an acquisition of a business combination, and the amounts paid or settled up to the reporting date, discounted to net present value. The consolidated entity applies provisional accounting for any business combination. Any reassessment of the liability during the earlier of the finalisation of the provisional accounting or 12 months from acquisition-date is adjusted for retrospectively as part of the provisional accounting rules in accordance with AASB 3 'Business Combinations'. Thereafter, at each reporting date, the deferred consideration liability is reassessed against revised estimates and any increase or decrease in the net present value of the liability will result in a corresponding gain or loss to profit or loss. The increase in the liability resulting from the passage of time is recognised as a finance cost.

Lease make good provision

A provision has been made for the present value of anticipated costs for future restoration of leased premises. The provision includes future cost estimates associated with closure of the premises. The calculation of this provision requires assumptions such as application of closure dates and cost estimates. The provision recognised for each site is periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs for sites are recognised in the statement of financial position by adjusting the asset and the provision. Reductions in the provision that exceed the carrying amount of the asset will be recognised in profit or loss.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 2. Critical accounting judgements, estimates and assumptions (continued)

Exploration and evaluation costs

Where no mineral resources have been established or where such resources have not been evaluated sufficiently to permit the establishment of economically recoverable reserves, exploration in relation to each identifiable area is written off in the year when it is incurred. Where exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which this determination is made.

Note 3. Operating segments

Identification of reportable operating segments

The Company’s primary activity is mineral exploration in the geographic area of South America. This focus is consistent with the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

The Group is managed primarily for the sole purpose of mineral exploration.

Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual and half yearly financial statements of the Group.

Intersegment transactions

There are no intersegment transactions.

Segment assets

Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value from that asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.

Segment liabilities

Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not: considered part of the core operations of any segment:

Income tax expense
Deferred tax assets and liabilities
Current tax liabilities
Head office income / expenses and related assets / liabilities

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 3. Operating segments (continued)

Operating segment information

Consolidated - 31 Dec 2018 EBITDA Depreciation and amortisation Impairment of assets Interest revenue Finance costs Loss before income tax expense Income tax expense Loss after income tax expense Assets Segment assets Total assets Liabilities Segment liabilities Total liabilities Consolidated - 31 Dec 2017 EBITDA Depreciation and amortisation Impairment of assets Finance costs Loss before income tax expense Income tax expense Loss after income tax expense Assets Segment assets Total assets Liabilities Segment liabilities Total liabilities	Mineral Exploration $ (888,964) (29,488) (3,608,748) - -	Non-core Reconciling Items $ (2,901,774) (2,110) - 3,611 (406,495)	Total $ (3,790,738) (31,598) (3,608,748) 3,611 (406,495) (7,833,968) - (7,833,968) 14,213,887 14,213,887 6,408,934 6,408,934 Total $ (34,579,170) (40,282) (48,437) (559,484) (35,227,373) - (35,227,373) 16,493,944 16,493,944 7,902,155 7,902,155
	(4,527,200)	(3,306,768)
	13,959,425	254,462
	351,676	6,057,258
	Mineral Exploration $ (961,826) (38,591) (48,437) -	Non-core Reconciling Items $ (33,617,344) (1,691) - (559,484)
	(1,048,854)	(34,178,519)
	15,286,863	1,207,081
	379,673	7,522,482

Geographical information

Australia Colombia Chile	Sales to external customers Geographical non-current assets 31 Dec 2018 31 Dec 2017 31 Dec 2018 31 Dec 2017 $ $ $ $ - - 10,527 3,063 - - 11,039,014 12,555,560 - - - 26,147 - - 11,049,541 12,584,770	Sales to external customers Geographical non-current assets 31 Dec 2018 31 Dec 2017 31 Dec 2018 31 Dec 2017 $ $ $ $ - - 10,527 3,063 - - 11,039,014 12,555,560 - - - 26,147 - - 11,049,541 12,584,770	Sales to external customers Geographical non-current assets 31 Dec 2018 31 Dec 2017 31 Dec 2018 31 Dec 2017 $ $ $ $ - - 10,527 3,063 - - 11,039,014 12,555,560 - - - 26,147 - - 11,049,541 12,584,770
	-	-	11,049,541

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 3. Operating segments (continued)

The geographical non-current assets above are exclusive of, where applicable, financial instruments, deferred tax assets, post-employment benefits assets and rights under insurance contracts.

Note 4. Expenses

Note 4. Expenses
Loss before income tax includes the following specific expenses: Depreciation Plant and equipment Impairment Property, plant and equipment Exploration and evaluation Total impairment Other expenses Corporate expenses Administration expenses Total other expenses Finance costs Interest and finance charges paid/payable Fair value adjustment to deferred consideration (i) Finance costs expensed Net loss on disposal Loss on sale of asset Share-based payments expense Share-based payments expense (ii) Employee benefits expense Employee and directors' benefits expense	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 31,599 40,282 61,935 934,037 3,546,813 48,437 3,608,748 982,474 917,514 1,416,089 446,347 792,509 1,363,861 2,208,598 22,915 130,244 383,580 429,240 406,495 559,484 - 27,228,513 739,945 426,174 1,301,801 1,295,015
	61,935 3,546,813
	3,608,748
	917,514 446,347
	1,363,861
	22,915 383,580
	406,495
	-
	739,945
	1,301,801

(i) The deferred consideration of $A5 million at the end of 31 December 2018, for Miraflores Compania Minera SAS, has been discounted at 8% per annum to determine fair value. Refer to Note 18 - Non-current liabilities - payables.

(ii) The value of share-based payments represents the value of options and performance options and rights issued to related and non-related parties during the financial year ended 31 December 2018 in lieu of services rendered. (Refer to Note 21 for further information).

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 5. Loss on sale of asset

On 27 June 2017 the Company announced the sale of its Peruvian Los Calatos asset in exchange for cash

Balance as at the beginning of the year (investment in associate)
Sale proceeds received
Loss on sale

Note 6. Income tax

Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 27.5%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Allowable capital raising deductions
Impairment of assets
Foreign exchange (gain)/loss
Provisions
Accruals
Difference in overseas tax rates
Deferred tax asset not recognized during the year
Income tax expense

Note 7. Current assets - cash and cash equivalents

Cash at bank

Note 8. Current assets - other receivables

Other receivables

Consolidated
31 Dec 2018 31 Dec 2017
$
$
-
33,766,877
-
(6,538,364)
-
27,228,513
Consolidated
31 Dec 2018 31 Dec 2017
$
$
(7,833,968)
(35,227,373)
(2,154,341)
(9,687,528)
(36,420)
(82,377)
(1,166,965)
13,320
(39,639)
19,490
7,524
(18,549)
(37,382)
30,897
(3,427,223)
(9,724,747)
(8,900)
99,299
3,436,123
9,625,448
-
-
Consolidated
31 Dec 2018 31 Dec 2017
$
$
167,614
834,377
Consolidated
31 Dec 2018 31 Dec 2017
$
$
73,323
167,382

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 9. Current assets - derivative asset

Derivative asset	Consolidated 31 Dec 2018 31 Dec 2017 $ $ - 272,683

On 31 January 2017 the Company entered into a Subscription Agreement, Escrow Agreement and Sharing Agreement with Lanstead Capital L.P. regarding a $3 million derivative asset facility. Pursuant to these agreements the Company issued 25,316,456 shares at $0.1185 per share for an aggregate subscription amount of $3 million. As security for the proceeds of these shares the recipient of the shares placed $3 million in government bonds with an escrow agent as security for the proceeds receivable. Whilst A$0.45 million was received in advance, the remaining A$2.55 million was to be received over 18 months pursuant to the Company’s measured share price compared to the benchmark price of $0.158.

Effective 28 March 2018 the arrangement was terminated and the difference between cash received and the derivative asset value was realised.

Movement in the fair value of the derivative asset is as follows:

Opening Derivative Cash received Loss on balance asset book from Settlement 1 January 2018 value derivative asset (realized loss) Current derivative asset - 2017 - 2,550,000 (219,730) (797,257) Current derivative asset - 2018 272,683 - (44,410) (228,273) Note 10. Current assets - other Prepayments Note 11. Current assets - asset held for sale Land Opening Balance Reclassified from property, plant and equipment Impact of foreign exchange movement	Closing Fair value balance adjustment 31 December (1,260,330) 272,693 - - Consolidated 31 Dec 2018 31 Dec 2017 $ $ 61,426 48,610 Consolidated 31 Dec 2018 31 Dec 2017 $ $ 2,861,983 2,586,122 Consolidated 31 Dec 2018 31 Dec 2017 $ $ 2,586,122 - - 2,586,122 275,861 - 2,861,983 2,586,122
	2,861,983

Opening
Derivative
Cash
received
Loss on
balance
asset book
from
Settlement
1 January
2018
value
derivative
asset
(realized loss)
Current derivative asset - 2017
-
2,550,000
(219,730)
(797,257)
Current derivative asset - 2018
272,683
-
(44,410)
(228,273)

Note 10. Current assets - other

Prepayments

Note 11. Current assets - asset held for sale

Land

Opening Balance
Reclassified from property, plant and equipment
Impact of foreign exchange movement

Closing
Fair value
balance

adjustment
31 December
(1,260,330)
272,693
-
-
Consolidated
31 Dec 2018 31 Dec 2017
$
$
61,426
48,610
Consolidated
31 Dec 2018 31 Dec 2017
$
$
2,861,983
2,586,122
Consolidated
31 Dec 2018 31 Dec 2017
$
$
2,586,122
-
-
2,586,122
275,861
-
2,861,983
2,586,122

2,861,983

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 11. Current assets - asset held for sale (continued)

The Directors agreed that the land at Mollacas, Chile is surplus to requirements and has therefore been offered for sale. The Directors have recorded the land at the lower valuation based upon a prompt sale value as provided by an independent valuer. The independent valuation is subject to changes in water conditions and water supply to the property which can change from time to time. The movement in the value of land during the financial reporting dates is due to foreign currency translation.

Note 12. Non-current assets - receivables

VAT Receivables (i) Provision for impairment of VAT receivables	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 370,057 180,669 (370,057) (180,669) - -
	-

(i) VAT incurred by Miraflores Compania Minera SAS relating to Quinchia Project in Colombia.

Note 13. Non-current assets - property, plant and equipment

Land - at cost Plant and equipment - at cost Less: Accumulated depreciation	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 556,792 450,032 1,427,412 1,355,993 (1,346,430) (1,236,383) 80,982 119,610 637,774 569,642
	1,427,412 (1,346,430)
	80,982
	637,774

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 1 January 2017 Disposals Exchange differences Impairment of assets Reclassification to land held for sale Depreciation expense Balance at 31 December 2017 Additions Disposals Exchange differences Impairment of assets Depreciation expense Balance at 31 December 2018	Land $ 4,409,481 - (439,290) (934,037) (2,586,122) -	Plant and equipment $ 128,868 (23,181) 54,205 - - (40,282)	Total $ 4,538,349 (23,181) (385,085) (934,037) (2,586,122) (40,282) 569,642 184,056 (8,050) (14,340) (61,935) (31,599) 637,774
	450,032 169,812 - (1,117) (61,935) -	119,610 14,244 (8,050) (13,223) - (31,599)
	556,792	80,982

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 14. Non-current assets - exploration and evaluation

Exploration and evaluation	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 10,411,767 12,015,128

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 1 January 2017 Expenditure during the year Exchange differences Impairment of assets Balance at 31 December 2017 Expenditure during the year Exchange differences Impairment of assets Balance at 31 December 2018	Exploration and Evaluation Expenditure $ 9,486,691 2,759,669 (182,795) (48,437)	Total $ 9,486,691 2,759,669 (182,795) (48,437) 12,015,128 1,752,353 191,099 (3,546,813) 10,411,767
	12,015,128 1,752,353 191,099 (3,546,813)
	10,411,767

Exploration and evaluation capitalised at 31 December 2018 represents the Miraflores Gold Project within the Quinchia Gold Portfolio.

Recoverability of the carrying amount of exploration assets is dependent upon the successful recovery of ore reserves. Impairment indicators in AASB 6 are considered for each area of interest.

Impairment:

In the 2018 financial year, a detailed review was undertaken of the exploration and evaluation assets held in the Groups’ Quinchia Gold Project resulting in a decision to impair and expense expenditure relating to the Tesorito, Dosquebradas and Chuscal project target areas and other expenditure outside of the Miraflores project target area.

Capitalised costs amounting to $1,752,353 for the period ended 31 December 2018 (for the year ended 31 December 2017: $2,759,699) have been included in cash flows from investing activities.

Note 15. Current liabilities - trade and other payables

Note 15. Current liabilities - trade and other payables
Trade payables Deferred consideration Other payables	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 710,426 780,870 2,886,751 962,250 816,678 840,934 4,413,855 2,584,054
	4,413,855

Refer to note 23 for further information on financial risk management.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 16. Current liabilities - borrowings

Convertible notes payable	Consolidated 31 Dec 2018 31 Dec 2017 $ $ - 808,020

In May 2017, the Company entered into a A$750,000 unsecured convertible note facility with Redfield Asset Management. The convertible notes were redeemed on 24 April 2018 by repaying the face value of the notes of A$750,000 plus accrued interest for a total payment of A$842,381.

Refer to note 23 for further information on financial risk management.

Note 17. Current liabilities - provisions

Annual leave Note 18. Non-current liabilities - other payables Deferred consideration (i)	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 213,133 187,214 Consolidated 31 Dec 2018 31 Dec 2017 $ $ 1,781,946 4,322,867

(i) In May 2016, the Quinchia Gold Portfolio in Colombia was acquired from RMB Australia Holdings Limited (RMB). Part consideration for the purchase included A$7 million in deferred acquisition payments. A scheduled payment of $1 million occurred in June 2017 and a further scheduled $1 million payment occurred in June 2018.

In February 2019 it was agreed with RMB to defer a $3 million deferred acquisition payment from June 2019 to June 2020 (refer Note 29 - Events after reporting the reporting period) when the final deferred acquisition payment of $2 million is also due.

The remaining $5 million of deferred acquisition payments due in June 2020 are currently being restructured in connection with a proposed Merger which was announced subsequent to the end of the financial year (refer Note 29 - Events after reporting the reporting period).

Refer to note 23 for further information on financial risk management.

The deferred consideration has been discounted at 8% per annum (2017: 8% per annum).

Deferred consideration (present value) - 2017 Deferred consideration (present value) - 2018 Note 19. Equity - issued capital Ordinary shares - fully paid	Opening Balance 1 January $ 5,855,877 5,285,117 31 Dec 2018 Shares 1,136,416,664	Payment during Fair value the year adjustment $ $ (1,000,000) 429,240 (1,000,000) 383,580 Consolidated 31 Dec 2017 31 Dec 2018 Shares $ 101,883,843 339,411,378	Closing Balance 31 December $ 5,285,117 4,668,697 31 Dec 2017 $ 332,987,792

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 19. Equity - issued capital (continued)

Movements in ordinary share capital

Details Date Balance 1 Jan 2017 50:1 Share consolidation 4 Jan 2017 Shares issued 31 Jan 2017 Costs of capital raising Balance 31 December 2017 Re-allocate from partly paid ordinary shares on termination of derivative asset facility with Lanstead Capital L.P. 28 Mar 2018 Shares issued - placement 28 Mar 2018 Shares issued - entitlements issue 24 Apr 2018 Shares issued - in lieu 30 Apr 2018 Shares issued - placement 22 May 2018 Shares issued - placement 3 Oct 2018 Shares issued - rights issue 17 Dec 2018 Costs of capital raising Balance 31 December 2018 Movements in partly paid ordinary share capital Details Date Balance 1 Jan 2017 Shares issued 31 Jan 2017 Balance 31 December 2017 Re-allocate to fully paid ordinary shares on termination of derivative asset facility with Lanstead Capital L.P. 28 Mar 2018 Balance 31 December 2018	Shares Issue price 4,513,918,626 (4,423,638,158) $0.0000 11,603,375 $0.1185 - $0.0000 101,883,843 25,316,456 $0.1185 19,080,045 $0.0080 694,831,892 $0.0080 2,702,152 $0.0080 68,734,589 $0.0080 135,000,000 $0.0040 88,867,687 $0.0030 - $0.0000 1,136,416,664 Shares Issue price - 25,316,456 $0.1185 25,316,456 (25,316,456) $0.1185 -	$ 329,032,074 - 1,375,000 (419,282) 329,987,792 3,000,000 152,640 5,558,655 21,617 549,877 540,000 266,603 (665,806) 339,411,378 $ - 3,000,000 3,000,000 (3,000,000) -

Movements in partly paid ordinary share capital

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Share buy-back

There is no current on-market share buy-back.

Capital risk management

The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.

Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 19. Equity - issued capital (continued)

In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current Company's share price at the time of the investment.

The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial year.

The capital risk management policy remains unchanged from the 2017 Annual Report.

Note 20. Equity - options

Options: 31 December 2018 - Listed

Options: 31 December 2018 - Listed
Grant date Expiry date Exercise price $ 25/04/2018 01/06/2020 $0.0110 30/04/2018 01/06/2020 $0.0110 22/05/2018 01/06/2020 $0.0110 28/05/2018 01/06/2020 $0.0110 24/12/2018 01/06/2020 $0.1100	Outstanding at 31 Dec 2017 - - - - -	Issued during year 231,610,770 9,876,512 22,911,530 237,970,560 45,000,000	Exercised during year - - - - -	Lapsed during year - - - - -	Outstanding at 31 Dec 2018 231,610,770 9,876,512 22,911,530 237,970,560 45,000,000 547,369,372
	-	547,369,372	-	-

All outstanding options above were exercisable as at 31 December 2018.

Performance Options: 31 December 2018 - Unlisted

Grant date Expiry date Exercise price $ 17/05/2017 17/05/2019 $0.0810 25/05/2017 25/05/2019 $0.0810 28/05/2018 31/12/2018 $0.0120 28/05/2018 31/12/2019 $0.0160 28/05/2018 31/12/2020 $0.0240	Outstanding at 31 Dec 2017 12,345,639 12,345,639 - - -	Granted during year - - 9,600,000 9,600,000 9,600,000	Exercised during year - - - - -	Lapsed during year - - (9,600,000) - -	Outstanding at 31 Dec 2018 12,345,639 12,345,639 - 9,600,000 9,600,000 43,891,278
	24,691,278	28,800,000	-	(9,600,000)

All outstanding performance options above were exercisable as at 31 December 2018.

Performance Options: 31 December 2018 - Unlisted

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 20. Equity - options (continued)

Outstanding at 31 December 2017 - - - - -	Granted during the year 11,600,000 11,600,000 11,600,000 11,600,000 11,600,000	Exercised during the year - - - - -	Lapsed during the year 11,600,000 - - - -
-	58,000,000	-	11,600,000
Outstanding at 31 Dec 2016 5,000,000 - -	Granted during year - 12,345,639 12,345,639	Exercised during year - - -	Lapsed during year (5,000,000) - -
5,000,000	24,691,278	-	(5,000,000)

All outstanding performance options above were exercisable as at 31 December 2017.

Note 21. Equity - share based payments

Note 21. Equity - share based payments
Options – 21.1 Long-term incentive plan – 21.2	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 690,589 426,174 49,354 - 739,943 426,174
	739,943

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 21. Equity - share based payments (continued)

21.1 Options

The Group has determined the fair value of its options, performance options and performance rights (‘options and rights’) using the Binomial American Tree method of valuing securities. The following options and rights were issued during the year ended 31 December 2018, alongside the key inputs utilised in the pricing model, including the Group’s risk-free borrowing rate and volatility of the Group’s shares.

Options awarded in consideration for capital raising fees (following approval at AGM held on 28 May 2018) are as follows.

									$
									Share based
								Options	payment
Recipient			Terms of issue					issued	value
			Options exercisable at		$0.011 each on or
Redfield Asset	Management	Pty Ltd	before 1 June 2020					9,876,512	21,234
Patersons Securities Ltd as underwriters or			Options exercisable at		$0.011 each on or
their nominee			before 1 June 2020				231,610,545		669,355
							241,487,057		690,589
The following options in lieu of services rendered were awarded during					the year ended 31 December 2018:
					Value of
			Fair value		options	Amount	of
Awarded	Award date		of option at		granted	expense
during the	and vesting		award date	Exercise	during the	recognised		Risk free	Expected
year	date	Expiry date	($)	price ($)	year ($)	($)		rate %	volatility %
9,867,512	30/04/2018	01/06/2020	$0.00215	$0.011	21,234	21,234		2.12%	67.2%
231,610,545	24/04/2018	01/06/2020	$0.00289	$0.011	669,355	669,355		2.12%	67.2%
					690,589	690,589

The following options in lieu of services rendered were awarded during the year ended 31 December 2018:

The following options in lieu of services rendered were awarded during the year ended 31 December 2017:

Awarded during the year Award date and vesting date Expiry date Fair value of option at award date ($) Exercise price ($) 12,345,639 17/05/2017 17/05/2019 $0.01745 $0.081 12,345,639 25/05/2017 25/05/2020 $0.01703 $0.081	Value of options granted during the year ($) 215,927 210,247	Amount of expense recognised ($) Risk free rate % Expected volatility % 215,927 1.62% 80.0% 210,247 1.62% 80.0% 426,174
	426,174

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 21. Equity - share based payments (continued)

21.2 Long term incentive plan

Performance Rights and Performance Options issued to related parties under the Company’s Long-Term Incentive Plan was approved at AGM held on 28 May 2018. The Group has determined the fair value of its performance rights and options issues (for services rendered), using the Binomial American Tree method of valuing securities.

The following options and rights issued during the year ended 31 December 2018 to related parties under the Company’s Long-Term Incentive Plan (following approval at AGM held on 28 May 2018), alongside the key inputs utilised in the pricing model, including the Group’s risk-free borrowing rate and volatility of the Group’s shares, are as follows.

Performance Rights and Performance Options.

Performance Rights and Performance Options.
Recipient Terms of issue Kevin Wilson Performance Rights issued under terms of Company’s Employee Long Term Incentive Plan Glenister Lamont Performance Options issued under terms of Company’s Employee Long Term Incentive Plan Roger Higgins Performance Options issued under terms of Company’s Employee Long Term Incentive Plan	Options issued 58,000,000 14,400,000 14,400,000	$ Share based payment value 38,864 5,245 5,245 49,354
	86,800,000

The following performance conditions are applicable to the rights awarded in the year:

Tranche 1 - 11,600,000 Performance Rights vesting on a 30 day VWAP of 1.2 cents before December 31 2018;
Tranche 2 - 11,600,000 Performance Rights vesting on a 30 day VWAP of 1.6 cents before December 31, 2019;
Tranche 3 - 11,600,000 Performance Rights vesting on delivery of a resource of at least 1 million ounces gold at Tesorito before December 31, 2019;
Tranche 4 - 11,600,000 Performance Rights vesting on a 30 day VWAP of 2.4 cents before December 31, 2020; and
Tranche 5 - 11,600,000 Performance Rights vesting on delivery of a resource of at least 1 million ounces gold at Chuscal before December 31, 2020.

The 58 million Performance Rights are seen as incentivising Mr Wilson to achieve either share price targets or resources at exploration targets that if achieved will be to the benefit of all shareholders.

Management has assessed that those conditions are more than probable to be achieved by the expiry date and therefore the total value of the rights incorporates all tights awarded. The expense recorded as share based payments is recognised straight-line to the expiry date as there is a service condition inherent in the award whereby the recipient must continue to be employed by the Company for the rights to vest.

The tabled below discloses the number of performance rights granted, vested and lapsed during the year. Each performance right coverts to one ordinary share in the Group upon satisfaction of the performance conditions linked to the rights. The rights do not carry any other privileges. The fair value of the performance rights granted is determined based on the number of rights awarded multiplied by the share price of the Group on the date awarded.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 21. Equity - share based payments (continued)

The following performance rights were awarded during the year ended 31 December 2018.

Awarded during the year Award date Vesting date Expiry date Fair value of performanc e right at award date ($) 11,600,000 29/05/2018 31/12/2018 31/12/2018 $0.00146 11,600,000 29/05/2018 31/12/2018 31/12/2019 $0.00182 11,600,000 29/05/2018 31/12/2018 31/12/2019 $0.00348 11,600,000 22/05/2018 31/12/2018 31/12/2020 $0.00187 11,600,000 29/05/2018 31/12/2018 31/12/2020 $0.00432	Service period date (days) 217 582 582 948 948	No. vested and lapsed during the year 11,600,000 - - - -	Value of performanc e rights granted during the year ($) - 21,112 40,368 21,692 50,112	Amount of expense recognised ($) - 7,778 14,872 4,898 11,316 38,864
		11,600,000	133,284

The following performance conditions are applicable to the options awarded in the year.

Tranche 1: 4,800,000 Options vesting on 30 day VWAP of 1.2 cents before 31 December 2018;
Tranche 2: 4,800,000 Options vesting on 30 day VWAP of 1.6 cents before 31 December 2019; and
Tranche 3: 4,800,000 Options vesting on 30 day VWAP of 2.4 cents before 31 December 2020

The above Options have an issue price equal to the vesting price I.e. 1.2 cents for Tranche 1, 1.6 cents for Tranche 2 and 2.4 cents for Tranche 3.

The 28.8 million Options are seen as incentivising Mr Higgins and Mr Lamont to achieve share price targets that if achieved will be to the benefit of all Shareholders. The number of Options to be provided to Mr Higgins and Mr Lamont was a decision of the Board in response to the changes in the Board and Management. The number of Options to be provided and their terms were negotiated between Mr Higgins and Mr Lamont and the Board. There is no other disclosure as to why the specified number of Options are to be granted to Mr Higgins and Mr Lamont and why the specified value of the Options was chosen.

Management has assessed that those conditions are more than probable to be achieved by the expiry date and therefore the total value of the options incorporates all rights awarded. The expense recorded as share based payments is recognised straight-line to the expiry date as there is a service condition inherent in the award whereby the recipient must continue to be employed by the Company for the options to vest.

The tabled below discloses the number of performance options granted, vested and lapsed during the year. Each performance option coverts to one ordinary share in the Group upon satisfaction of the performance conditions linked to the options. The options do not carry any other privileges. The fair value of the performance options granted is determined based on the number of options awarded multiplied by the share price of the Group on the date awarded.

The following performance options were awarded during the year ended 31 December 2018.

Awarded during the year Award date Vesting date Expiry date Fair value of performanc e option at award date ($) 9,600,000 29/05/2018 31/12/2018 31/12/2018 $0.00146 9,600,000 29/05/2018 31/12/2018 31/12/2018 $0.00182 9,600,000 29/05/2018 31/12/2018 31/12/2018 $0.00187	Service period date (days) 217 582 948	No. vested and lapsed during the year 9,600,000 - -	Value of performanc e option granted during the year ($) - 17,472 17,952	Amount of expense recognised ($) - 5,424 5,424 10,848
		9,600,000	35,424

There were no performance rights issued during the year ended 31 December 2017.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 22. Equity - reserves

Foreign currency reserve Options reserve Acquisition reserve Convertible note equity reserve	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 11,050,044 11,100,307 1,166,117 480,860 - (41,506,662) - 11,448 12,216,161(29,914,047)
	12,216,161

Note 23. Financial risk management

Financial risk management objectives

The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity. The consolidated entity may use derivative financial instruments such as forward foreign exchange contracts to hedge certain risk exposures. Derivatives are exclusively used for hedging purposes, i.e. not as trading or other speculative instruments. The consolidated entity uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk.

Risk management is carried out by senior finance executives ('Finance') under policies approved by the Board. These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate procedures, controls and risk limits. Finance identifies, evaluates and, if appropriate, hedges financial risks within the consolidated entity's operating units. Finance reports to the Board on a monthly basis.

The Group’s financial instruments consist mainly of deposits with banks, trade and other receivables and trade and other payables.

The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:

Cash and receivables Cash and cash equivalents Trade and other receivables Derivative asset Total cash and receivables Financial liabilities (at amortised cost) Trade and other payables Deferred consideration Total financial liabilities	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 167,614 834,377 73,323 167,382 - 272,683 240,937 1,274,442 1,527,104 2,429,824 4,668,697 5,285,117 6,195,801 7,714,941
	240,937
	1,527,104 4,668,697
	6,195,801

Market risk

Foreign currency risk

The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange rate fluctuations.

Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 23. Financial risk management (continued)

Price risk

Exposure to other price risk arises on derivative asset may result in the fair value of cash flows from the equity swap receipts due to movement in the Company’s share price. The future receipts are calculated as the difference between the benchmark share price and the 5 day VWAP of the Company’s share price as quoted on the ASX. The movement in the Company’s share price cannot be reliably determined.

Interest rate risk

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The Group is also exposed to earnings volatility on floating rate instruments.

The Consolidated Group is exposed to interest rate and foreign exchange risk through cash assets held and financial liabilities owed as at the reporting date.

liabilities owed as at the reporting date.
Cash assets held in Australian dollars and subject to floating interest rate Australian currency equivalent of cash assets held in US dollars and subject to floating interest rate Australian currency equivalent of cash assets held in UK pounds and subject to floating interest rate Australian currency equivalent of cash assets held in other currencies and subject to floating interest rate Total cash assets	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 145,732 33,484 3,984 780,740 2,580 19,170 15,318 83 167,614 833,477
	167,614

liabilities owed as at the reporting date.

Cash assets held in Australian dollars and subject to floating interest rate
Australian currency equivalent of cash assets held in US dollars and subject to floating
interest rate
Australian currency equivalent of cash assets held in UK pounds and subject to floating
interest rate
Australian currency equivalent of cash assets held in other currencies and subject to floating
interest rate
Total cash assets

Consolidated
31 Dec 2018 31 Dec 2017
$
$
145,732
33,484
3,984
780,740
2,580
19,170
15,318
83
167,614
833,477

167,614

Sensitivity Analysis

The following table illustrates sensitivities to the Group’s exposures to changes in interest rates and exchange rates. The table indicates how profit and equity values reported at reporting date would have been affected by changes in the relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is independent of other variables.

Interest Rate Sensitivity Analysis

At 31 December 2018, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:

	31 December	31 December
Consolidated	2018	2017
Change in profit
Increase in interest rate by 2%	3,352	16,678
Decrease in interest rate by 2%	(3,352)	(16,678)
Change in equity
Increase in interest rate by 2%	3,352	16,678
Decrease in interest rate by 2%	(3,352)	(16,678)

Foreign Currency Risk Sensitivity Analysis

At 31 December 2018, the effect on profit and equity as a result of changes in the foreign exchange rates, with all other variables remaining constant would be as follows:

variables remaining constant would be as follows:
	31 December	31 December
Consolidated	2018	2017
Change in profit
Improvement in AUD to USD by 5%	(199)	(39,037)
Decline in AUD to USD by 5%	199	39,037

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 23. Financial risk management (continued)

Note 23. Financial risk management (continued)
Change in equity
Improvement in AUD to USD by 5%	(199)	(39,037)
Decline in AUD to USD by 5%	199	39,037
Change in profit
Improvement in AUD to GBP by 5%	(661)	(959)
Decline in AUD to GBP by 5%	661	959
Change in equity
Improvement in AUD to GBP by 5%	(661)	(959)
Decline in AUD to GBP by 5%	661	959
Change in profit
Improvement in AUD to CLP by 5%	(104)	(25)
Decline in AUD to CLP by 5%	104	25
Change in equity
Improvement in AUD to CLP by 5%	(104)	(25)
Decline in AUD to CLP by 5%	104	25

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit limits. The consolidated entity obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements. The consolidated entity does not hold any collateral.

The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all customers of the consolidated entity based on recent sales experience, historical collection rates and forward-looking information that is available.

Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater than 1 year.

Liquidity risk

Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.

The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.

The tables below reflect an undiscounted contractual maturity analysis for financial liabilities.

Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 23. Financial risk management (continued)

Note 23. Financial risk management (continued)
Financial Liability and Financial Asset Maturity Analysis 31 December 2018 Consolidated Group Trade and other payables Deferred consideration (i) Cash and cash equivalents Other receivables Net (outflow)/inflow on financial instruments	Within 1 Year (1,527,104) (2,886,751) 167,614 73,323	1 to 5 Years - (1,781,946) - -	Over 5 Years - - - -	Total (1,527,104) (4,668,697) 167,614 73,323 (5,954,864)
	(4,172,918)	(1,781,946)	-

(i) Under renegotiation (refer Note 29 - Events after the reporting period).

31 December 2017 Consolidated Group Trade and other payables Deferred consideration Cash and cash equivalents Other receivables Derivative asset Net (outflow)/inflow on financial instruments	Within 1 Year (2,429,824) (962,250) 834,377 167,382 272,683	1 to 5 Years - (4,322,867) - - -	Over 5 Years - - - - -	Total (2,429,824) (5,285,117) 834,377 167,382 272,683 (6,440,499)
	(2,117,632)	(4,322,867)	-

Fair value of financial instruments

Fair value estimation

Financial assets and financial liabilities are presented at fair value or at amortised cost in the statement of financial position. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions may have a material impact on the amounts estimated. Where possible, valuation information used to calculate fair value is extracted from the market, with more reliable information available from markets that are actively traded. In this regard, fair values for listed securities are obtained from quoted market bid prices. Where securities are unlisted and no market quotes are available, fair value is obtained using discounted cash flow analysis and other valuation techniques commonly used by market participants.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 23. Financial risk management (continued)

The fair values of financial assets and liabilities, together with their carrying amounts in the statement of financial position, for the consolidated entity are as follows:

31 Dec 2018 Carrying amount Fair value $ $ 167,614 167,614 73,323 73,323 - - 2,861,983 2,861,983	31 Dec 2018 Carrying amount Fair value $ $ 167,614 167,614 73,323 73,323 - - 2,861,983 2,861,983	31 Dec 2017 Carrying amount Fair value $ $ 834,377 834,377 167,382 167,382 272,683 272,683 2,586,122 2,586,122 3,860,564 3,860,564 780,870 780,870 1,648,954 1,648,954 5,285,117 5,285,117 7,714,941 7,714,941
3,102,920	3,102,920	3,860,564
710,462 816,678 4,668,697	710,462 816,678 4,668,697	780,870 1,648,954 5,285,117
6,195,837	6,195,837	7,714,941

The fair values disclosed in the above table have been determined based on the following methodologies: Cash and cash equivalents, trade and other receivables and trade and other payables are short-term instruments in nature whose carrying value approximates to fair value. Deferred consideration represents short-term and long-term financial instruments which are valued at amortised cost which also approximates fair value. Trade and other payables exclude amounts provided for annual leave, which is not considered a financial instrument.

Note 24. Key management personnel disclosures

Compensation

The aggregate compensation made to Directors and other members of key management personnel of the consolidated entity is set out below:

entity is set out below:
Short-term employee benefits Post-employment benefits Termination benefits Share-based payments	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 988,059 875,615 27,320 42,073 12,069 249,355 49,354 - 1,076,802 1,167,043
	1,076,802

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 25. Remuneration of auditors

During the financial year the following fees were paid or payable for services provided by Grant Thornton Audit Pty Ltd, the auditor of the Company, and its network firms:

auditor of the Company, and its network firms:
Audit services - Grant Thornton Audit Pty Ltd Audit or review of the financial statements Other services - Grant Thornton Audit Pty Ltd Advisory services Audit services - network firms Audit or review of the financial statements Other services - network firms Preparation of the tax return	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 126,480 144,398 - 58,450 126,480 202,848 15,462 - 8,288 - 23,750 -
	-
	126,480
	15,462
	8,288
	23,750

Note 26. Contingent liabilities

The Company is aware that a former director and chief executive officer of one of the Company's subsidiaries (Miraflores Compania Minera SAS (previously Minera Seafield SAS)) previously lodged a claim with the Labour Court in Medellin, Colombia (Juzgado Laboral del Circuito de Medellin) seeking termination payments, unpaid bonus payments and damages in the amount of approximately US$2 million. The Directors are of the opinion that the claim can be successfully defended and believe that the risk of the Company facing an unfavourable judgement is remote. The next court hearing is expected to occur on or around November 2019. The Company intends to defend the proceeding.

RMB Australia Holdings Limited - As part of the acquisition of the Quinchia Gold Portfolio in 2016, part of the deferred consideration included a maximum of A$7 million in royalty payments to RMB from future operating cashflows. Management are unable to assess the payment as being probable, and therefore the payment is included as a contingent liability rather than a provision.

Ausenco Chile Limitada - Under the terms of a Memorandum of Understanding with Ausenco Chile Limitada (‘Ausenco’) dated 30 November 2017, Metminco has agreed that Ausenco will provide a Guaranteed Maximum Price and a Lump Sum Turnkey price and will enter into an EPC for the development of the Miraflores mine. If Metminco withdraws from this agreement, Metminco has agreed to pay Ausenco $838,500 representing 150% of the $559,000 liability which is owed to Ausenco by Miraflores and accrued as a liability (refer Note 15).

The Company has no material commitment other than lease commitment obligations (refer Note 27) and mining access rights.

Otherwise the Group is not aware of any other contingent liabilities.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 27. Commitments

Lease commitments - operating (i) Committed at the reporting date but not recognised as liabilities, payable: Within one year One to five years Exploration Tenement Licence Commitments (ii) Committed at the reporting date and recognised as liabilities, payable: Within one year Total commitment Less: Future finance charges Net commitment recognised as liabilities	Consolidated 31 Dec 2018 31 Dec 2017 $ $ 51,580 52,258 - 24,556 51,580 76,814 457,458 347,831 457,458 347,831 - - 457,458 347,831
	51,580
	457,458
	457,458 -
	457,458

(i) The Group has lease commitments over four premises in Colombia with terms ranging up to 13 months. Rent is payable monthly in advance

(ii) Represents mining and exploration licence fees for tenements held by the Group but not yet capitalised in the financial statements.

Note 28. Related party transactions

Parent entity

Metminco Limited is the parent entity.

Subsidiaries

Interests in subsidiaries are set out in note 32.

Joint ventures

Interests in joint ventures are set out in note 33.

Key management personnel

Disclosures relating to key management personnel are set out in note 24 and the remuneration report included in the Directors' report.

Transactions with related parties

There were no transactions with related parties during the current and previous financial year.

Receivable from and payable to related parties

There were no trade receivables from or trade payables to related parties at the current and previous reporting date.

Loans to/from related parties

There were no loans to or from related parties at the current and previous reporting date.

Note 29. Events after the reporting period

On 15 February 2019 the Company announced it had reached agreement to defer to June 2020 a $3 million deferred acquisition payment due to RMB (Australia) Holdings Limited (‘RMB’) in June 2019.

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 29. Events after the reporting period (continued)

Note 30. Reconciliation of loss after income tax to net cash used in operating activities

Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Impairment of property, plant and equipment
Net loss on disposal of non-current assets
Net gain on disposal of property, plant and equipment
Share-based payments
Foreign exchange differences
Impairment of non-current receivables
Non cash financing charges on deferred acquisition consideration
Realised loss on derivative asset
Unrealised loss on derivative asset
Interest paid on redemption of convertible note
Impairment of exploration assets
Change in operating assets and liabilities:
Decrease in other receivables
Increase in prepayments
Decrease in trade and other payables
Increase/(decrease) in employee benefits
Net cash used in operating activities

Consolidated
31 Dec 2018 31 Dec 2017
$
$
(7,833,968)
(35,227,373)
31,599
40,282
61,935
934,037
-
27,228,512
-
(23,182)
739,945
426,174
7,339
382,912
-
180,669
383,580
429,240
228,273
797,257
-
1,260,330
22,915
-
3,546,813
48,437
94,059
63,094
(12,816)
(27,550)
(653,882)
(771,721)
25,919
(129,464)
(3,358,289)
(4,388,346)

(3,358,289)

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 31. Loss per share

Note 31. Loss per share
Loss after income tax attributable to the owners of Metminco Limited Basic loss per share Diluted loss per share Weighted average number of ordinary shares used in calculating basic earnings per share Weighted average number of ordinary shares used in calculating diluted earnings per share	Consolidated 31 Dec 2018 31 Dec 2017 $ $ (7,833,968) (35,227,373)
	Cents (1.12) (1.12) Number 699,682,616	Cents (27.69) (27.69) Number 127,200,299
	699,682,616	127,200,299

Note 32. Interests in subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1:

		Ownership	interest
	Principal place of business /	31 Dec 2018 31 Dec 2017
Name	Country of incorporation	%	%
Controlled Entities consolidated
Subsidiaries of Metminco Limited:
Hampton Mining Limited	Australia	100%	100%
North Hill Holdings Group Inc.	British Virgin Islands	100%	100%
Wholly owned subsidiaries of North Hill Holdings Group
Inc.:
Cerro Norte Mining Inc.	British Virgin Islands	100%	100%
North Hill Ovalle Inc.	British Virgin Islands	100%	100%
North Hill Perú Inc.	British Virgin Islands	100%	100%
North Hill Colombia Inc.	British Virgin Islands	100%	100%
Minera Hampton Chile Limitada	Chile	100%	100%
Miraflores Hampton Colombia SAS	Colombia	100%	100%
Miraflores Compania Minera SAS	Colombia	100%	100%

Note 33. Interests in joint ventures

Interests in joint ventures are accounted for using the equity method of accounting. Information relating to joint ventures that are material to the consolidated entity are set out below:

		Ownership interest	Ownership interest
	Principal place of business /	31 Dec	2018 31 Dec 2017
Name	Country of incorporation	%	%
Chuscal JV	Colombia		10% -

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 33. Interests in joint ventures (continued)

Key Terms of the JV

In December 2018 Metminco and Anglo Gold Ashanti (“AngloGold”) formed the Chuscal JV with ownership: MNC 10% and AGA 90%. Metminco have the right to earn a further 41% interest in the JV by spending US$2.5 million over 3 years, including at least 7,500m of drilling. AngloGold holds a free carried interest during this period.

Once Metminco has earned its 51% interest, the parties may participate pro rata or dilute. On a party being diluted to a 9.9% interest, the participation of the diluting party reverts to a 2% Net Profit Royalty.

AngloGold has a one-off right to buy back a 21% interest from Metminco on the publication of a JORC resource of at least 3 million ounces of gold with the price of the 21% interest to be agreed between the parties or determined by an independent valuer at that time. On exercise of the buyback right ownership will be AngloGold 70% and Metminco 30%; AngloGold will be manager of the JV; and AngloGold will free carry Metminco through feasibility and until permits have been granted for a development proposal of an operation to produce over 250,000oz annual gold production.

As at 31 December 2018, the amount invested into the JV was NIL.

Note 34. General information

The financial statements cover Metminco Limited as a consolidated entity consisting of Metminco Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Metminco Limited's functional and presentation currency.

Metminco Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Suite 3, Level 2 470 Collins Street Melbourne VIC 3000 Australia

A description of the nature of the consolidated entity's operations and its principal activities are included in the Directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of Directors, on 29 March 2019. The Directors have the power to amend and reissue the financial statements.

Note 35. Parent entity information

Set out below is the supplementary information about the parent entity.

Statement of profit or loss and other comprehensive income

Statement of profit or loss and other comprehensive income
Loss after income tax Total comprehensive loss	Parent 31 Dec 2018 31 Dec 2017 $ $ (7,884,231) (300,017,769) (7,884,231) (300,017,769)
	(7,884,231)

Metminco Limited Notes to the consolidated financial statements 31 December 2018

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Note 35. Parent entity information (continued)

Statement of financial position

Statement of financial position
Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Options reserve Convertible note equity reserve Accumulated losses Total equity	Parent 31 Dec 2018 31 Dec 2017 $ $ 243,935 1,204,018 13,862,211 16,114,271 4,275,312 3,199,615 6,057,258 7,522,482 339,411,378 332,987,792 1,166,117 480,860 - 11,448 (332,772,542) (324,888,311) 7,804,953 8,591,789
	13,862,211
	4,275,312
	6,057,258
	339,411,378 1,166,117 - (332,772,542)
	7,804,953

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

North Hill Colombia Inc., a wholly owned subsidiary of Metminco, the parent entity, entered into a sale and purchase deed dated 30 May 2016 with RMB Australia Holdings Limited under which North Hill Colombia Inc. purchased the entire issued share capital of Miraflores Compania Minera SA. Metminco guaranteed the obligations of North Hill Colombia Inc. under the sale and purchase deed.

Miraflores Compania Minera SA, a wholly owned subsidiary of Metminco, the parent entity, entered into a joint venture agreement dated 8 November 2018 with AngloGold Ashanti Colombia S.A under which, amongst other rights and obligations, Miraflores Compania Minera SA can earn an interest in the Chuscal Project. Metminco guaranteed the obligations of Miraflores Compania Minera SA under the joint venture agreement.

The parent entity has no other guarantees in relation to its subsidiaries as at 31 December 2018 and 31 December 2017.

Contingent liabilities

Other than guarantees entered into by the parent entity in relation to the debts of its subsidiaries, the parent entity had no contingent liabilities as at 31 December 2018 and 31 December 2017.

Metminco Limited Directors' declaration 31 December 2018

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In the Directors' opinion:

the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 31 December 2018 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

The Directors have been given the declarations required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.

On behalf of the Directors

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_________ Kevin Wilson Executive Chairman

29 March 2019

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Collins Square, Tower 1 727 Collins Street Melbourne Victoria 3000

Correspondence to: GPO Box 4736 Melbourne Victoria 3001

T +61 3 8320 2222 F +61 3 8320 2200 E [email protected] W www.grantthornton.com.au

Independent Auditor’s Report

To the Members of Metminco Limited

Report on the audit of the financial report

Opinion

We have audited the financial report of Metminco Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2018, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and the Directors’ declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 , including:

a giving a true and fair view of the Group’s financial position as at 31 December 2018 and of its performance for the year ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to Note 1 in the financial statements, which indicates that the Group incurred a net loss of $7,833,968 during the year ended 31 December 2018, and as of that date, the Group’s current liabilities exceeded its total assets by $1,462,642. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

www.grantthornton.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

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Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter

How our audit addressed the key audit matter

Recoverability of Exploration and Evaluation Assets (Note 1 & Note 14)

At 31 December 2018 the carrying value of Exploration and Evaluation Assets was $10,411,767.

As the carrying value of these Exploration and Evaluation Assets represents a significant asset of the Group, we considered it necessary to assess whether any facts or circumstances exist to suggest that the carrying amount of this asset may exceed its recoverable amount.

This area is a key audit matter due to the inherent subjectivity that is involved in the Group making judgements in relation to the evaluation for any impairment indicators, in accordance with AASB 6: Exploration for and Evaluation of Mineral Resources.

Our procedures included, amongst others:

Evaluating management’s assessment of each impairment trigger per AASB 6;
Assessing that the Group had the rights to explore in the relevant exploration area, which included obtaining external confirmation of continued rights to tenure;
Enquiring that management had the intention to carry out exploration and evaluation activity in the relevant exploration area. We also assessed management’s cashflow forecast models to assess the level of the budgeted expenditure on these areas;
Assessing whether any data exists to suggest that the carrying value of these exploration and evaluation assets is unlikely to be recovered through development or sale;
Assessing management’s application of AASB 136: Impairment of Assets where impairment indicators were identified; and
Assessing the adequacy of the financial report disclosures.

Accounting for asset held for sale ( Note 1 & Note 11)

At 31 December 2018 the Group had classified the land held by Minera Hampton Chile Limitada as held for sale in accordance with AASB 5: Non-current Assets Held for Sale and Discontinued Operations . The Group believes that its carrying value will be recovered principally through a sale transactions, rather than continuing use.

This area was a key audit matter due to the significance of the balance, and the nature of the judgements made by the Group in assessing whether the requirements of AASB 5 have been satisfied. The Group also engaged an expert to assist in determining the fair value of the land.

Our procedures included, amongst others:

Assessing whether the criteria outlined in the applicable accounting standards was met to classify the land as held for sale, including whether the sale is highly probable to complete within 12 months of the reporting date;
Evaluating the competence, capability and objectivity of the management’s external expert and performing a review of their report to understand the scope of their engagement and any limitations in the report; and
Assessing the adequacy of the financial report disclosures.

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Information other than the financial report and auditor’s report thereon

The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 31 December 2018, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the financial report

The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our auditor’s report.

Report on the remuneration report

Opinion on the remuneration report

We have audited the Remuneration Report included in pages 6 to 12 of the Directors’ report for the year ended 31 December 2018.

In our opinion, the Remuneration Report of Metminco Limited, for the year ended 31 December 2018 complies with section 300A of the Corporations Act 2001 .

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Responsibilities

The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Grant Thornton Audit Pty Ltd Chartered Accountants

B A Mackenzie Partner – Audit & Assurance

Melbourne, 29 March 2018

Metminco Limited Shareholder information 31 December 2018

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The shareholder information set out below was applicable as at 28 February 2019

Distribution of equitable securities

Analysis of number of equitable security holders by size of holding:

Distribution of equitable securities Analysis of number of equitable security holders by size of holding:
1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over Holding less than a marketable parcel Equity security holders	Number of holders of ordinary shares 499 190 84 391 623	Number of holders of options over ordinary shares 69 113 21 113 243 559 331
	1,787
	1,346

Twenty largest quoted equity security holders

The names of the twenty largest security holders of quoted equity securities are listed below:

TOPSERV CVBA
CITICORP NOMINEES PTY LIMITED
KEVIN WILSON
MR NEVRES CRLJENKOVIC
OSIRIS CAPITAL INVESTMENTS PTY LTD
ASHGROVE W PTY LTD
OCEAN VIEW WA PTY LTD
TROCA ENTERPRISES PTY LTD
ESM LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMS PTY LTD
BONTOWN PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
KOBIA HOLDINGS PTY LTD
MR CHRISTIAN WILLIAM PATTERSON
DIXTRU PTY LIMITED
SANPEREZ PTY LTD
BNP PARIBAS NOMINEES PTY LTD
ORCA CAPITAL GMBH
BNP PARIBAS NOMINEES PTY LTD

Ordinary shares
% of total
shares
Number held
issued
50,000,000
4.21
34,741,352
2.92
33,333,333
2.81
33,075,000
2.78
30,000,000
2.53
22,702,000
1.91
21,750,000
1.83
20,000,000
1.68
20,000,000
1.68
19,292,207
1.62
18,871,826
1.59
18,000,000
1.52
17,180,268
1.45
15,000,000
1.26
14,087,689
1.19
14,000,000
1.18
13,337,500
1.12
13,132,812
1.11
12,882,353
1.08
12,501,340
1.05
433,887,680
36.52

433,887,680

Metminco Limited Shareholder information 31 December 2018

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ALEXIOS ADAMIDES NEUROSURGERY PTY LTD
MR ALEXIS ADAMIDES
FORTUNE 20 PTY LTD
MR LUKE MILOJEVIC
MR CHARBEL BOUSTANI
ESM LIMITED
OLIVE CAPITAL PTY LTD
MICKWARNRICH PTY LTD
REDFIELD ASSET MANAGEMENT PTY LIMITED
FREEDOM TRADER PTY LTD
MR BENJAMIN SCOTT WALE
ST BARNABAS INVESTMENTS PTY LTD
GOFFACAN PTY LTD
TROCA ENTERPRISES PTY LTD
RED DOG FUND PTY LTD
MISS KAVEENAR N RAJENDRAN
MR MATTHEW DEAN QUINN
MR LUKE MILOJEVIC
NAUTICAL HOLDINGS WA PTY LTD
MR KEVIN WILSON & MRS JOLA WILSON

Options over ordinary
shares
% of total
options
Number held
issued
35,000,000
6.39
22,000,000
4.02
22,000,000
4.02
21,925,000
4.01
21,600,000
3.95
18,000,000
3.29
17,708,333
3.24
10,000,000
1.83
9,876,512
1.80
8,958,333
1.64
7,298,294
1.33
7,159,847
1.31
7,000,000
1.28
6,666,667
1.22
6,250,000
1.14
6,000,000
1.10
5,836,148
1.07
5,575,000
1.02
5,017,104
0.92
5,017,104
0.92
248,888,342
45.50

248,888,342

Substantial holders

There are no substantial holders in the Company.

Voting rights

The voting rights attached to ordinary shares are set out below:

Ordinary shares

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Metminco Limited Shareholder information 31 December 2018

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Shareholder information (continued)

TENEMENTS

TENEMENTS
Quinchia Gold Project,	Colombia
TENEMENT ID (1)	HOLDER (2)	TYPE OF CONTRACT (3)	STAGE
010-87M (4)	MCM	Contribution	Exploitation
DLK-14544X	MCM	Concession	Exploration
DLK-142 (6)	AngloGold JV	Concession	Exploration
FCG-08353X	MCM	Concession	Exploration
FCG-08355X	MCM	Concession	Exploration
FCG-08356X	MCM	Concession	Exploration
FCG-08357X	MCM	Concession	Exploration
FCG-08358X	MCM	Concession	Exploration
FKH-145510X	MCM	Concession	Exploration
TDR-11411 (5)	MCM	Application	Exploration
GC4-15004X (5)	AngloGold	Application	Exploration
GC4-15006X (5)	AngloGold	Application	Exploration
GC4-15007X (5)	AngloGold	Application	Exploration
GC4-15008X (5)	AngloGold	Application	Exploration
GC4-15009X (5)	AngloGold	Application	Exploration
GC4-150010X (5)	AngloGold	Application	Exploration
GC4-15002X (6)	AngloGold JV	Application	Exploration
GC4-15005X (6)	AngloGold JV	Application	Exploration
KHL-15421 (5)	AngloGold	Application	Exploration
OG2-08112 (5)	MCM	Application	Exploration
OG2-10591 (5)	MCM	Application	Exploration
OG2-8073 (5)	MCM	Application	Exploration

(1) All titles are part of the Quinchia Gold Portfolio, Quinchia, Department of Risaralda, Colombia.

(2) MCM (Miraflores Compañia Minera SAS) a 100%-owned subsidiary of North Hill Holdings Group Inc., owned as to 100% by Metminco.

(3) Concessions at exploration stage have 3 year life extendable for two years to a maximum 11 years.

(4) 15 year life extendable for 15 years.

(5) Applications have neither legal liabilities nor certainty that they will be granted in whole or in part. If there was open ground at the time of lodging, a contract for exploration and potential exploitation will be offered to the applicant. MCM has a beneficial interest of 100% of the tenement when the application is granted.

(6) Metminco has a 10% beneficial interest in these tenements, with the right to earn up to 51% interest through a JV with AngloGold.

Metminco Limited Shareholder information 31 December 2018

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Shareholder information (continued)

Mollacas Project, Chile
SERNAGEOMIN			CONCESSION
NATIONAL ROLL	Concession	COURT	NAME
04203-0694-6	Exploitation	1º Ovalle	CENTINELA 1/10 *
04203-0700-4	193-2002	1º Ovalle	MANTO PRIMERO 1/10
04203-0654-7	10,541	3º Ovalle	MANTO SIETE II 1/20
04203-0708-K	10-Mar	2º Ovalle	MANTO SIETE III 1/10
04203-0655-5	26,550	2º Ovalle	MANTO SIETE IV 1/40
04203-0656-3	10,663	3º Ovalle	MANTO SIETE V 1/10
04203-0657-1	26,556	2º Ovalle	MANTO SIETE VI 1/20
04203-0658-K	26,553	2º Ovalle	MANTO SIETE VII 1/20
04203-0811-6	63-07	3º Ovalle	VALDIVIA 8 1/40
04203-0812-4	62-07	3º Ovalle	VALDIVIA 9 1/40
04203-1017-K	269-09	3º Ovalle	VALDIVIA 10 B, 1/40
04203-1018-8	270-09	3º Ovalle	VALDIVIA 11 B, 1/60
04203-1019-6	271-09	3º Ovalle	VALDIVIA 12 B, 1/60
04203-0813-2	19-Jul	3º Ovalle	VALDIVIA 13 1/60
04203-0814-0	21-Jul	3º Ovalle	VALDIVIA 14 A 1/25
04203-0815-9	18-Jul	3º Ovalle	VALDIVIA 14 B 1/50
04203-0816-7	17-Jul	3º Ovalle	VALDIVIA 15 1/75
04203-0817-5	16-Jul	3º Ovalle	VALDIVIA 16 1/60 *
04203-0818-3	15-Jul	3º Ovalle	VALDIVIA 17 1/60
04203-1020-K	272-09	3º Ovalle	VALDIVIA 18 1/60
04203-1113-3	V-39-11	2º Ovalle	VALDIVIA 19 1/25
Mollacas Project, Chile	(Exploration Concession Applications)
SERNAGEOMIN	COURT		CONCESSION
NATIONAL ROLL	NUMBER	COURT	NAME
Claim Registered	V-316-12	3º Ovalle	BONDI 1
Claim Registered	V-317-12	3º Ovalle	BONDI 2
Claim Registered	V-318-12	3º Ovalle	BONDI 3
Claim Registered	V-319-12	3º Ovalle	BONDI 4
Claim Registered	V-320-12	3º Ovalle	BONDI 5
Claim Registered	V-321-12	3º Ovalle	BONDI 6
Claim Registered	V-322-12	3º Ovalle	BONDI 7
Claim Registered	V-323-12	3º Ovalle	BONDI 8
Claim Registered	V-324-12	3º Ovalle	BONDI 9
Claim Registered	V-325-12	3º Ovalle	BONDI 10
Claim Registered	V-326-12	3º Ovalle	BONDI 11

Metminco Limited Shareholder information 31 December 2018

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Shareholder information (continued)

Vallecillo Project, Chile (Mining Exploitation Concessions)

SERNAGEOMIN	COURT		CONCESSION
NATIONAL ROLL	NUMBER	COURT	NAME
04203-0717-9	360-04	3º Ovalle	ANDREA UNO 1/200
04203-0718-7	361-04	3º Ovalle	ANDREA DOS 1/300
04203-0719-5	362-04	3º Ovalle	ANDREA TRES 1/300
04206-0542-0	522-04	1º Ovalle	ANDREA CUATRO 1/300
04203-0720-9	364-04	3º Ovalle	ANDREA CINCO 1/300
04203-0721-7	365-04	3º Ovalle	ANDREA SEIS 1/300
04203-0722-5	366-04	3º Ovalle	ANDREA SIETE 1/300
04203-0723-3	367-04	3º Ovalle	ANDREA OCHO 1/200
04203-0724-1	368-04	3º Ovalle	ANDREA NUEVE 1/200
04203-0725-K	369-04	3º Ovalle	ANDREA DIEZ 1/300
04203-0726-8	370-04	3º Ovalle	ANDREA ONCE 1/300
04203-0727-6	371-04	3º Ovalle	ANDREA DOCE 1/300
04203-0728-4	372-04	3º Ovalle	ANDREA TRECE 1/300
04203-0747-0	137-2005	1º Ovalle	ANDREA CATORCE 1/300
04203-0748-9	138-2005	1º Ovalle	ANDREA QUINCE 1/300
04203-0749-7	139-2005	1º Ovalle	ANDREA DIECISEIS 1/300
04203-0750-0	140-2005	1º Ovalle	ANDREA DIECISIETE 1/300
04203-0751-9	141-2005	1º Ovalle	ANDREA DIECIOCHO 1/300
04203-0752-7	142-2005	1º Ovalle	ANDREA DIECINUEVE 1/300
04203-0267-3	26,947	1º Ovalle	CHIFLON 1/40 *
04203-0256-8	26,925	1º Ovalle	COLORADO 1/150 *
04203-0287-8	26,925	1º Ovalle	COLORADO 1/150 (28/30-
			47) *
Claim Registered	V-676-2012	3° Ovalle	EL VALLECITO 6, 1/300

Metminco Limited Shareholder information 31 December 2018

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Shareholder information (continued)

Vallecillo Project (Mining	Exploration Concessions and Exploration Concession Applications)	Exploration Concessions and Exploration Concession Applications)
SERNAGEOMIN	COURT		CONCESSION
NATIONAL ROLL	NUMBER	COURT	NAME
04206-1175-7	V-25-11	2ºOvalle	ANDREA 26
04203-2363-8	V-26-11	2ºOvalle	ANDREA 27
04206-1167-6	V-27-11	2ºOvalle	EL VALLECITO 29
04206-1168-4	V-28-11	2ºOvalle	EL VALLECITO 30
04206-1169-2	V-29-11	2ºOvalle	EL VALLECITO 31
04206-1170-6	V-30-11	2ºOvalle	EL VALLECITO 32
04206-1171-4	V-31-11	2ºOvalle	EL VALLECITO 33
04206-1172-2	V-32-11	2ºOvalle	EL VALLECITO 34
04206-1173-0	V-33-11	2ºOvalle	EL VALLECITO 35
04206-1174-9	V34-11	2ºOvalle	EL VALLECITO 36
04203-2357-3	V-35-11	2ºOvalle	EL VALLECITO 37
04203-2358-1	V-36-11	2ºOvalle	EL VALLECITO 38
04203-2359-K	V-37-11	2ºOvalle	EL VALLECITO 39
04203-2360-3	V-38-11	2ºOvalle	EL VALLECITO 40
04206-1184-6	V-458-11	3º Ovalle	EL VALLECITO 41
04206-1185-4	V-459-11	3º Ovalle	EL VALLECITO 42
04206-1186-2	V-460-11	3º Ovalle	EL VALLECITO 43
Renewal in Process	V-677-2012	3° Ovalle	VALLECILLO 1
Renewal in Process	V-678-2012	3° Ovalle	VALLECILLO 2
Renewal in Process	V-679-2012	3° Ovalle	VALLECILLO 3
Renewal in Process	V-680-2012	3° Ovalle	VALLECILLO 4
Renewal in Process	V-681-2012	3° Ovalle	VALLECILLO 5
Renewal in Process	V-682-2012	3° Ovalle	VALLECILLO 7
Renewal in Process	V-683-2012	3° Ovalle	VALLECILLO 8
Renewal in Process	V-684-2012	3° Ovalle	VALLECILLO 9
Renewal in Process	V-490-2012	3º Ovalle	VALLECILLO 11
Renewal in Process	V-491-2012	3º Ovalle	VALLECILLO 12
Renewal in Process	V-547-2012	3º Ovalle	VALLECILLO 13
Renewal in Process	V-548-2012	3º Ovalle	VALLECILLO 14
Renewal in Process	V-550-2012	3º Ovalle	VALLECILLO 15
Renewal in Process	V-551-2012	3º Ovalle	VALLECILLO 16
Renewal in Process	V-552-2012	3º Ovalle	VALLECILLO 17
Renewal in Process	V-553-2012	3º Ovalle	VALLECILLO 18
Renewal in Process	V-554-2012	3º Ovalle	VALLECILLO 19
Renewal in Process	V-555-2012	3º Ovalle	VALLECILLO 20
Renewal in Process	V-556-2012	3º Ovalle	VALLECILLO 21
Renewal in Process	V-557-2012	3º Ovalle	VALLECILLO 22
Renewal in Process	V-558-2012	3º Ovalle	VALLECILLO 23
Renewal in Process	V-559-2012	3º Ovalle	VALLECILLO 24
Renewal in Process	V-560-2012	3º Ovalle	VALLECILLO 25
Renewal in Process	V-561-2012	3º Ovalle	VALLECILLO 26
Renewal in Process	V-562-2012	3º Ovalle	VALLECILLO 27
Renewal in Process	V-563-2012	3º Ovalle	VALLECILLO 28
Renewal in Process	V-492-2012	3º Ovalle	VALLECILLO 44
Renewal in Process	V-493-2012	3º Ovalle	VALLECILLO 45
Renewal in Process	V-494-2012	3º Ovalle	VALLECILLO 46
Renewal in Process	V-694-2012	3° Ovalle	VALLECILLO 47
Renewal in Process	V-695-2012	3° Ovalle	VALLECILLO 48
Renewal in Process	V-701-2012	3° Ovalle	VALLECILLO 49

Metminco Limited Shareholder information 31 December 2018

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Shareholder information (continued)

Loica Project (Mining	Exploitation Concessions and Exploitation Concession Application)	Exploitation Concessions and Exploitation Concession Application)
04203-0995-3	221-09	2º Ovalle	CANGURO 2, 1
04203-0731-4	508	1ª Ovalle	TORCA 25 1/85
04203-0732-2	509	1ª Ovalle	TORCA 26 1/260
04203-0733-0	510	1ª Ovalle	TORCA 27 1/265
04203-0734-9	511	1ª Ovalle	TORCA 28 1/300
04203-0735-7	512	1ª Ovalle	TORCA 31 1/200
04203-0736-5	513	1ª Ovalle	TORCA 32 1/300
04203-0737-3	514	1ª Ovalle	TORCA 33 1/261
04203-0738-1	515	1ª Ovalle	TORCA 35 1/78
04203-0739-K	516	1ª Ovalle	TORCA 36 1/300
04203-0740-3	517	1ª Ovalle	TORCA 37 1/300
04203-0741-1	518	1ª Ovalle	TORCA 38 1/292
04203-0742-K	519	1ª Ovalle	TORCA 39 1/300
04203-0743-8	520	1ª Ovalle	TORCA 40 1/200
04203-0744-6	521	1ª Ovalle	TORCA 41 1/300

(i) All tenements in Chile are held by Minera Hampton Chile Limitada, a wholly owned subsidiary of North Hill Ovalle Inc, itself wholly owned by North Hill Holdings Group Inc which is a 100% subsidiary of Metminco Limited. (ii) All tenements are of type Propiedad.

Metminco Limited Shareholder information 31 December 2018

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Shareholder information (continued)

ANNUAL MINERAL RESOURCES AND RESERVES STATEMENT - 31 DECEMBER 2018

APPENDIX 1

Summarised below are the Mineral Resources that have been estimated by Metal Mining Consultants, and the Ore Reserves estimated by Ausenco for the Company's Miraflores Gold Project located in Colombia; and the Mineral Resources that have been estimated by SRK Consulting (Chile) S.A, for the Company’s Mollacas and Vallecillo projects located in Chile.

The Miraflores Project Mineral Resource estimate has been estimated by Metal Mining Consultants in accordance with the JORC Code (2012 Edition) and first publicly reported on 14 March 2017. The Miraflores Project Ore Reserve estimate has been estimated by Ausenco in accordance with the JORC Code (2012 Edition) and first publicly reported on 27 October 2017. The Mollacas and Vallecillo projects resource estimates were completed by SRK Consulting (Chile) S.A., in accordance with the JORC Code (2004 Edition) and first publicly reported on the 23 July 2012 and 31 October 2012 respectively. No material changes have occurred after the reporting of these resource estimates since their first reporting.

MIRAFLORES PROJECT - COLOMBIA

Table 1: Mineral Resource Statement, 14 March 2017.

				Contained	Contained
				Metal (Koz	Metal (Koz
Resource Classification	Tonnes (‘000)	Au (g/t)	Ag (g/t)	Au)	Ag)
Measured	2,958	2.98	2.49	283	237
Indicated	6,311	2.74	2.90	557	588
Measured & Indicated	9,269	2.82	2.77	840	826
Inferred	487	2.36	3.64	37	57

Note:

(i) Reported at a 1.2g/t gold % Cu cut-off.

(ii) Mineral Resource estimated by Metal Mining Consultants Inc.

(iii) First publicly released on 14 March 2017. No material change has occurred after that date that may affect the JORC Code (2012 Edition) Mineral Resource estimation.

(iv) These Mineral Resources are inclusive of the Ore Reserves listed in Table 2 below.

(v) Rounding may result in minor discrepancies.

Table 2: Miraflores Mineral Reserve Estimate as at 27 November 2017 (100% basis)

				Contained	Contained
				Metal (Koz	Metal (Koz
Reserve Classification	Tonnes (Mt)	Au (g/t)	Ag (g/t)	Au)	Ag)
Proved	1.70	2.75	2.20	150	120
Probable	2.62	3.64	3.13	307	264
Total	4.32	3.29	2.77	457	385

Note:

(vi) Rounding-off of numbers may result in minor computational errors, which are not deemed to be significant. (vii) These Ore Reserves are included in the Mineral Resources listed in Table 1 above.

(viii) First publicly released on 27 November 2017. No material change has occurred after that date that may affect the JORC Code (2012 Edition) Ore Reserve estimation.

(ix) Source: Ausenco, 2017

Metminco Limited Shareholder information 31 December 2018

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Shareholder information (continued)

MOLLACAS PROJECT - CHILE

MOLLACAS PROJECT - CHILE	MOLLACAS PROJECT - CHILE	MOLLACAS PROJECT - CHILE	MOLLACAS PROJECT - CHILE
Table 3: Mineral Resource Statement, 23 July 2012 (Copper Leach Project – Oxides & Secondary Sulphides).
Category	Tonnes (‘000)	Cu T (%)	Cu Sol (%)	Au (g/t)
Measured	11,168	0.55	0.44	0.12
Indicated	4,314	0.41	0.29	0.14
Measured & Indicated	15,482	0.51	0.40	0.13

Note:

(i) Reported at a cut-off of 0.20% Cu.

(ii) Mineral Resource estimated by SRK Consulting (Chile) S.A.

(iii) First publicly released on 23 July 2012. No material change has occurred after that date that may affect the JORC Code (2004 Edition) Mineral Resource estimation.

(iv) Rounding may result in minor discrepancies.

(v) Cu Sol is copper metal that is heap leach soluble; Cu T is total copper including soluble copper.

VALLECILLO PROJECT (LA COLORADA DEPOSIT) - CHILE

Table 4: Mineral Resource Statement, 31 October 2012.

Category	Tonnes (‘000)	Au (g/t)	Ag (g/t)	Zn (%)	Cu (%)	Pb (%)
Measured	5,516	0.84	9.99	1.12	0.06	0.32
Indicated	2,570	0.80	10.23	0.94	0.07	0.35
Measured & Indicated	8,086	0.82	10.06	1.06	0.06	0.33
Inferred	773	0.50	8.62	0.48	0.12	0.17

Notes:

(i) Reported at a cut-off of 0.20g/t Au.

(ii) Mineral Resource estimated by SRK Consulting (Chile) S.A.

(iii) First publicly released on 31 October 2012. No material change has occurred after that date that may affect the JORC Code (2004 Edition) Mineral Resource estimation.

(iv) Rounding may result in minor discrepancies.

COMPETENT PERSON'S STATEMENT

Metminco

The information in this report that relates to Exploration Results is based on information compiled by Gavin Daneel, BSc, MSc, who is a Member of the Australasian Institute of Mining and Metallurgy and is engaged as a Consultant in Australia. The annual mineral resources and ore reserves statement as a whole in the form and context in which it appears in this report is also approved by Mr. Daneel.

Gavin Daneel is a consultant to the Company and has sufficient experience which is relevant to the style of mineralisation, type of deposit under consideration, and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results’. Mr. Daneel, as Competent Person for this report, has consented to the inclusion of the information in the form and context in which it appears herein.

Metminco Limited Shareholder information 31 December 2018

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Shareholder information (continued)

Ausenco

The Company’s Ore Reserve estimates for the Miraflores Gold Project have been independently reviewed and signed off by Mr. Boris Caro who is a Member of the Australasian Institute of Mining and Metallurgy and a Registered Member of the Chilean Mining Commission. Mr. Caro is an independent consultant contracted by Ausenco to review and sign off the Ore Reserve estimate. Mr. Caro has a broad international experience leading mining projects in several countries and he was a Qualified Person of Fortuna Silver Mines in 2014 and 2015. Mr. Caro has over five years’ experience relevant to the style of mineralisation and type of mineral deposit under consideration, and to the activity which was undertaken, to make the statements found in this report in the form and context in which they appear. Mr. Caro visited the site in August 2017 for 3 days as part of the study team to review all aspects of the study including an investigation of the mine, plant and site layouts. Mr. Caro consented to be named in the first publicly released announcement and inclusion of information attributed to him in the form and context in which it appears therein.

Metal Mining Consultants Inc.

The information provided as it relates to Exploration Results and Mineral Resources of the Miraflores Gold Project is based on information compiled by Scott Wilson, President of Metal Mining Consultants Inc. in Colorado, USA. Mr. Wilson, a Qualified Person for JORC (2012 Edition) compliant statements, reviewed the technical information presented in this document.

Mr. Wilson has sufficient experience that is relevant to the style of mineralisation and type of mineral deposit under consideration, and to the activity which was undertaken, to make the statements found in this report in the form and context in which they appear. Mr. Wilson consented to be named in the first publicly reported announcement and inclusion of information attributed to him in the form and context in which it appears therein.

SRK Consulting (Chile) S.A.

Metminco supplied SRK with geological models and supporting drill hole data. Copper and gold grades for Mollacas and gold, silver, zinc, copper and lead grades for Vallecillo were estimated into block models using ordinary kriging with GEMCOM software.

The information provided in this Annual Report as it relates to Exploration Results and Mineral Resources of the Mollacas and Vallecillo projects is based on information compiled by George G. Even, Principal Geologist and Mr. Ernesto Jaramillo, Principal Resource Geologist of SRK Consulting in Santiago, Chile. Mr. Ernesto Jaramillo performed the resource estimation. Mr. Even has sufficient experience that is relevant to the style of mineralisation and type of mineral deposit under consideration, and to the activity which was undertaken, to make the statements found in this report in the form and context in which they appear. Mr. Even and Mr. Jaramillo consented to be named in the first publicly reported announcement and inclusion of information attributed to them in the form and context in which it appeared therein.

AI assistant

LCL RESOURCES LIMITED — Annual Report 2018

65217_rns_2019-03-28_80dce47b-bc69-4561-8fe3-1e06895cad7a.pdf

Metminco Limited

ABN 43 119 759 349

Directors

Directors

Principal activities and significant changes in the nature of events.

Dividends

Review of operations

Significant changes in the state of affairs

Matters subsequent to the end of the financial year

Likely developments and expected results of operations

Environmental regulation

Information on Directors

Company secretaries

Meetings of Directors

Remuneration report (audited)

Principles used to determine the nature and amount of remuneration

Non-executive directors remuneration

Executive remuneration

Consolidated entity performance and link to remuneration

Voting and comments made at the company's 28 May 2018 Annual General Meeting ('AGM')

Details of remuneration

Amounts of remuneration

Service agreements

Share-based compensation

Issue of shares

Options - unlisted LTIP performance options

Performance rights

Retention rights

Additional disclosures relating to key management personnel

Shareholding

Option holding

Performance rights holding

Performance option holding

This concludes the remuneration report, which has been audited.

Shares under option

Indemnity and insurance of officers

Indemnity and insurance of auditor

Proceedings on behalf of the Company

Non-audit services

Auditor's independence declaration

Auditor

Auditor’s Independence Declaration

To the Directors of Metminco Limited

Metminco Limited Consolidated statement of profit or loss and other comprehensive income For the year ended 31 December 2018

Metminco Limited Consolidated statement of changes in equity For the year ended 31 December 2018

Note 1. Significant accounting policies

New or amended Accounting Standards and Interpretations adopted

AASB 9 Financial Instruments

Note 1. Significant accounting policies (continued)

AASB 15 Revenue from Contracts with Customers

Going concern

Basis of preparation

Historical cost convention

Critical accounting estimates

Note 1. Significant accounting policies (continued)

Principles of consolidation

Operating segments

Foreign currency translation

Foreign currency transactions

Foreign operations

Revenue recognition

Interest

Note 1. Significant accounting policies (continued)

Income tax

Current and non-current classification

Cash and cash equivalents

Trade and other receivables

Derivative financial instruments

Note 1. Significant accounting policies (continued)

Non-current assets or disposal groups classified as held for sale

Joint ventures

Property, plant and equipment

Note 1. Significant accounting policies (continued)

Leases

Exploration and evaluation assets

Impairment of non-financial assets

Trade and other payables

LCL RESOURCES LIMITED Annual Report 2018