NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
65
ANNUAL REPORT 2015
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.12 INTANGIBLE ASSETS (CONT’D)
(b)
Deferred mine exploration and evaluation expenditure
Exploration and evaluation activity involves the search for mineral resources, the determination of technical
feasibility and the assessment of commercial viability of an identified resource.
Exploration and evaluation activity includes:
–
Researching and analysing historical exploration data
–
Gathering exploration data through geophysical studies
–
Exploratory drilling and sampling
–
Determining and examining the volume and grade of the resource
–
Surveying transportation and infrastructure requirements
–
Conducting market and finance studies
Licence costs paid in connection with a right to explore in an existing exploration area are capitalised and amortised
based on the unit-of-production method.
Mine exploration and evaluation expenditures incurred for a new area of interest are accumulated in respect of each
identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area or where activities in the area have not yet reached a stage that
permits a reasonable assessment of the existence of economically recoverable ore reserves and resources. These
costs also include directly attributable employee remuneration, materials used and overhead costs.
Once an economically mineable resource for an area of interest is established and development is sanctioned, such
exploration and evaluation expenditure is transferred to mine properties. No amortisation is charged during the
exploration and evaluation phase.
A review is carried out annually on the carrying amount of deferred mine exploration and evaluation expenditure to
determine whether there is any indication of impairment. Any impairment loss is recognised as an expense in profit
or loss.
