Axiom Mining 2015 Annual Report

GROUP FINANCIAL REPORT

Notes to the financial statements for the year ended 30 September 2015

62

16. Capital and reserves (continued) A share consolidation of Axiom’s capital, on the basis of one share for every fifteen shares was completed on 14 April 2015. The number of options in the above table has been amended to reflect this consolidation. The fair value of options granted is measured using the Black-Scholes option pricing model, as appropriate, based on various assumptions on volatility, option life, dividend yield and annual risk-free interest rate, excluding the impact of any non-market vesting conditions, which generally represent the best estimate of the fair values of the share options at date of grant. Key inputs used in the calculation of the value of options granted during the year ended 30 September 2015 are:

Spot price $

Volatility %

Risk free rate %

Grant date

Expiry date

30 Sep 15 30 Sep 15 31 May 16 31 Mar 16 31 May 16

0.35 0.37 0.35 0.35 0.35

192 192 192 192 192

2.15 2.15 2.15 2.25 2.25

10 Jul 15 13 Jul 15 10 Jul 15 10 Jul 15 10 Jul 15

Expected volatility was determined based on historic volatility adjusted for any expected changes to future volatility based on publicly available information. All options granted during the year vested on grant date. None of the options issued have vesting conditions attached.

e. Performance rights Details of the movements in rights granted are as follows:

No of rights outstanding as at 1 October 2014

No. of rights outstanding as at 30 September 2015

AXIOM MINING LIMITED ANNUAL REPORT 2015

Granted during the year

Exercised during the year

Lapsed during the year

833,332

– – –

–

(166,666)

666,666 (1)

Stephen Ray Williams Ryan Richard Mount

6,666,661 7,499,993

– (6,666,661) (2) – (6,833,327)

–

666,666

(1) The VWAP hurdles relating to the 666,666 Rights were not met by 21 October 2015 and have lapsed. (2) Cancelled post year-end as detailed in Resolution 6 of the Annual General Meeting dated 31 March 2015.

f. Capital management The Group’s primary objectives when managing capital is to safeguard the Group’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, by pricing products and services commensurately with the level of risk and by securing access to finance at a reasonable cost. The Group actively and regularly reviews and manages its capital structure to maintain a balance between higher shareholder returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in economic conditions. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.