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CORAZON MINING LIMITED — Interim / Quarterly Report 2008
Mar 12, 2008
64747_rns_2008-03-12_228ad8bd-6803-4112-bdd4-7c23c6bacf5b.pdf
Interim / Quarterly Report
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INTERIM FINANCIAL REPORT
31 DECEMBER 2007
$\frac{1}{\sqrt{1-\frac{1}{2}}}$
31 DECEMBER 2007
CONTENTS
| DIRECTOR'S REPORT |
|---|
| CONDENSED CONSOLIDATED INCOME STATEMENT |
| CONDENSED CONSOLIDATED BALANCE SHEET |
| CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY5 |
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS |
| NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS7 |
| DIRECTORS' DECLARATION |
| INDEPENDENT AUDITOR'S REVIEW REPORT |
| INDEPENDENT AUDITOR'S DECLARATION |
This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report 30 June 2007 and any public announcements made by for the year ended Graynic Metals Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX Listing Rules.
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DIRECTORS' REPORT
Your directors submit the financial report of the consolidated entity for the half-year ended 31 December 2007. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:
DIRECTORS
The names of directors who held office during or since the end of the half year are:-
| Ivan Hoffman | Non-Executive Chairman |
|---|---|
| Bronwyn Barnes | Managing Director (appointed 10 th July 2007) |
| Jonathan Downes | Non-Executive Director |
| Clive Jones | Non-Executive Director |
Directors have held office for the entire period and to the date of this report unless otherwise stated.
COMPANY SECRETARY
| David Round | Company Secretary (appointed 19 th July 2007) |
|---|---|
| Kent Hunter | Company Secretary (resigned 19th July 2007) |
PRINCIPAL ACTIVITIES
During the half-year the principal activities of the consolidated entity consisted of exploration and evaluation of the group's base metal projects in Western Australia and New South Wales.
RESULT OF OPERATIONS
The directors of Graynic Metals Limited (GYN) report the loss of the consolidated entity after providing for income tax amounted to \$664,496 for the half year to 31 December 2007.
REVIEW OF OPERATIONS
The Company has extensive base metal interests in WA and NSW and a minor diamond interest in WA.
The Company's priority project is the Quartz Circle base metals project near Nullagine in the East Pilbara, WA. During the September quarter Graynic completed a field trip to Quartz Circle to assess aeromagnetic targets on the ground. During the December quarter a review of geophysical, geochemical and drill-hole datasets and re-processing of existing datasets has added greatly to Graynic's understanding of the project. Graynic is currently in the process of securing a drill rig to enable the next phase of testing, with some prospective zinc targets at the Emperor Prospect and gold targets at the Imperial and Igloo Prospects.
In the December quarter Graynic concluded a Joint Venture Agreement with King Leopard Diamonds Ltd covering Graynic's diamond tenements in Western Australia. Under the terms of the agreement Graynic will receive 1 million shares at a price of \$0.20 and 1 million options at a : price of \$0.30 and with an expiry date of five years from the date of issue in the Initial Placement
Offering ("IPO") of King Leopard Diamonds in consideration for transferring an 80% interest in
DIRECTORS' REPORT
various prospective diamond tenements currently held by Graynic. In addition, on the successful listing of King Leopard Diamonds, Graynic will receive a \$100,000 payment in recognition of the value of the tenements and Graynic's expenditure to date.
An induced polarization ("IP") geophysical survey covering the historic mine workings and possible strike extensions to the mineralization at Graynic's Gulf Creek project has been completed. Preliminary data indicates an encouraging chargeable anomaly beneath the known lode position. Graynic is currently working to secure a drill rig and implement a drilling programme that will test historically identified mineralization and any high-potential targets defined by the IP survey. The Exploration Access Agreement was completed with the Nucoorilma Native Title claimants for Gulf Creek. A Section 31 Deed has also been executed by all parties and is in the process of being lodged with the NSW Department of Primary Industries for the Minister's approval.
During the September quarter the Company conducted sampling at its Yanco Glen Project in New South Wales and received positive rock chip sample results. While only limited sampling was conducted along the historic Anaconda mine workings, results are encouraging, with gold recording between 1.9g/t and 2.37g/t and copper between 1.22% and 13.60%.
Also during the December quarter the Company raised \$3,043,929 through the conversion of options and a small placement to sophisticated investors. These funds will be used to progress current exploration projects. The Company has appointed Mark Fletcher as Exploration Manager. Mark is a qualified geologist with over fifteen years experience in the mining and exploration industry with BHP Billiton and WMC Resources Ltd and was most recently the Project Leader – Base Metal and Bulk Commodities, Australia South Asia Region for BHP Billiton Minerals Exploration Division.
AUDITOR'S DECLARATION
The lead auditor's independence declaration under section 307C of the Corporations Act 2001 is set out on page 14 for the half year ended 31 December 2007.
This report is made in accordance with a resolution of the directors made pursuant to section 306(3) of the Corporations Act 2001.
$32$ San
Bronwyn Barnes Managing Director
Dated this 12 day of Merch 2008.
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$\equiv$
CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2007
| 31 December 2007 \$ |
31 December 2006 \$ |
|
|---|---|---|
| Revenue from ordinary activities | 36,026 | 81,471 |
| Employee benefits expense Directors fees Depreciation and amortisation expenses Finance costs Regulatory expenses Consultancy expenses Occupancy expenses |
(524,060) (50,000) (3,506) (36, 476) (38, 794) (22, 022) |
(166, 109) (69, 647) (4, 842) (571) (35, 880) (28, 682) (15, 929) |
| Administrative expenses Other expenses from ordinary activities |
(19, 533) (6, 131) |
(30, 123) (5,708) |
| Loss for the period from ordinary activities before income tax expense |
(664, 496) | (276, 020) |
| Income tax expense relating to ordinary activities | ||
| Loss for the period | (664, 496) | (276, 020) |
| Basic and diluted loss per share | Cents (1.47) |
Cents (0.70) |
The above condensed consolidated income statement should be read in conjunction with the accompanying notes.
$\mathrel{\mathop:}=$
CONDENSED CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2007
| 31 December 2007 |
30 June 2007 | ||
|---|---|---|---|
| \$ | \$ | ||
| CURRENT ASSETS | |||
| Cash and cash equivalents | 3,012,831 | 575,822 | |
| Trade and other receivables | 31,233 | 69,959 | |
| TOTAL CURRENT ASSETS | 3,044,064 | 645,781 | |
| NON-CURRENT ASSETS | |||
| Other financial assets | $\overline{2}$ | 4,364,526 | 2,729,820 |
| Plant and equipment | 29,741 | 7,733 | |
| Exploration and evaluation expenditure | 6,521,348 | 6,423,717 | |
| TOTAL NON-CURRENT ASSETS | 10,915,615 | 9,161,270 | |
| TOTAL ASSETS | 13,959,679 | 9,807,051 | |
| CURRENT LIABILITIES | |||
| Trade and other payables | 56,189 | 69,356 | |
| Provisions | 21,720 | 17,714 | |
| TOTAL CURRENT LIABILITIES | 77,909 | 87,070 | |
| TOTAL LIABILITIES | 77,909 | 87,070 | |
| NET ASSETS | 13,881,770 | 9,719,981 | |
| EQUITY | |||
| Issued capital | $\overline{4}$ | 12,699,317 | 9,681,818 |
| Reserves | 5,235,181 | 3,426,395 | |
| Accumulated losses | (4,052,728) | (3,388,232) | |
| TOTAL EQUITY | 13,881,770 | 9,719,981 |
The above condensed consolidated balance sheet should be read in conjunction with the accompanying $\mathcal{U}$ . notes.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2007
| Issued | Accumulated | Asset | Option | Total | |
|---|---|---|---|---|---|
| Capital | Losses | Revaluation | Reserves | ||
| Reserves | |||||
| \$ | \$ | \$ | \$ | \$ | |
| Balance at 1 July 2006 | 8,631,979 | (3,004,475) | 996,095 | 6,623,599 | |
| Loss attributable to members | |||||
| of parent entity | (276, 020) | (276, 020) | |||
| Total recognised income and expense for the period Transactions with equity holders in their capacity as |
(276, 020) | (276, 020) | |||
| equity holders: | |||||
| Issue of share capital | 1,105,000 | 1,105,000 | |||
| Issue costs | (55, 164) | (55, 164) | |||
| Issue of options | 130,400 | 130,400 | |||
| Revaluation of available for sale assets |
15,162 | 15,162 | |||
| 1,049,836 | (276, 020) | 15,162 | 130,400 | 1,180,236 | |
| Balance at 31 December 2006 |
9,681,815 | (3,280,495) | 15,162 | 1,126,495 | 7,542,977 |
| Balance at 1 July 2007 | 9,681,818 | (3,388,232) | 2,299,900 | 1,126,495 | 9,719,981 |
| Loss attributable to members of parent entity |
(664,496) | (664, 496) | |||
| Total recognised income and expense for the period Transactions with equity holders in their capacity as |
(664, 496) | (664, 496) | |||
| equity holders: | |||||
| Issue of share capital | 3,043,929 | 3,043,929 | |||
| Issue costs | (154, 105) | (154, 105) | |||
| Exercise of options | 127,675 | (127, 675) | |||
| Revaluation of available for sale assets |
1,634,704 | 1,634,704 | |||
| Recognition of share based | |||||
| payments | 301,757 | 301,757 | |||
| 3,017,499 | 1,634,704 | 174,082 | 4,825,285 | ||
| Balance at 31 December 2007 |
12,699,317 | (4,052,728) | 3,934,604 | 1,300,577 | 13,881,770 |
The above condensed consolidated statement of changes in equity should be read in conjunction with the $\ddot{\mathbf{r}}$ accompanying notes. $2.2 - 2.5$
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2007
| 31 December | 31 December | |
|---|---|---|
| 2007 | 2006 | |
| S | \$ | |
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Payments to suppliers and employees | (367, 264) | (229, 140) |
| Payments for exploration and evaluation | (97, 631) | (593, 638) |
| Interest received | 37,594 | 41,536 |
| Other revenue | 10,389 | |
| NET CASH USED IN OPERATING ACTIVITIES | (427,301) | (770, 853) |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Proceeds from sale of investment securities | 74,175 | |
| Payments for property, plant and equipment | (25, 514) | (2,821) |
| Payments for investments | (12,057) | |
| NET CASH PROVIDED BY/(USED IN) INVESTING | ||
| ACTIVITIES | (25,514) | 59,297 |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Proceeds from issue of shares | 3,043,929 | 1,105,000 |
| Payment for costs of issue of shares | (154, 105) | (55, 164) |
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 2,889,824 | 1,049,836 |
| Net increase in cash held | 2,437,009 | 338,280 |
| Cash at the beginning of the reporting period | 575,822 | 1,397,135 |
| Cash at the end of the reporting period | 3,012,831 | 1,735,415 |
The above condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes.
ry,
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2007
NOTE 1: BASIS OF PREPARATION OF HALF YEAR FINANCIAL REPORT
Statement of Compliance
The half year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and Accounting Standard AASB 134: Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.
It is recommended that this interim financial report be read in conjunction with the annual report for the year ended 30 June 2007 and any public announcements made by Graynic Metals Limited and its controlled entities during the interim reporting period in accordance with the continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.
The accounting policies have been consistently applied by the entities in the consolidated group and are consistent with those in the 30 June 2007 financial report.
Reporting Basis and Conventions
The half-year report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.
The half year report does not include full disclosures of the type normally included in an annual financial report.
In the half-year ended 31 December 2007, the consolidated entity has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 January 2007. It has been determined by the consolidated entity that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to the consolidated entity's accounting policy.
NOTE 2: OTHER FINANCIAL ASSETS
| 31 December | |
|---|---|
| 2007 | 30 June 2007 |
| 4,364,526 | 2,729.820 |
The company holds 2,000,000 shares in Wolf Minerals Ltd. The share price of Wolf Minerals Ltd rose from \$1.33 at 30 June 2007 to \$2.15 at 31 December 2007 resulting in a significant increase in the fair value of the financial assets available for sale.
NOTE 3: SEGMENT INFORMATION
The Company operates predominantly in one geographical segment, being Australia, and in one industry, mineral mining and exploration.
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2007
NOTE 4: ISSUANCES, REPURCHASES AND REPAYMENT OF EQUITY SECURITIES During the period the company completed the following transactions in its securities:
- Placement of 3,000,000 shares at 20 cents per share on 9 October 2007 raising \$600,000
- Exercise of 12,219,643 options at 20 cents on 15 November 2007 raising \$2,443,929 $\bullet$
- Options $\bullet$
- o Issue of 250,000 unlisted incentive options to employees exercisable at 30 cents on or before 18 October 2010
- Issue of 2,000,000 unlisted incentive options to employees exercisable at 30 cents $\circ$ on or before 1 November 2010
- Issue of 2,000,000 unlisted incentive options to directors exercisable at 30 cents on $\circ$ or before 2 November 2010
- Issue of 250,000 unlisted incentive options to employees exercisable at 45 cents on $\Omega$ or before 18 October 2011
- o Issue of 1,000,000 unlisted incentive options to employees exercisable at 45 cents on or before 1 November 2011
- Issue of 1,000,000 unlisted incentive options to directors exercisable at 45 cents on $\circ$ or before 2 November 2011
- o Issue of 1,000,000 unlisted incentive options to employees exercisable at 65 cents on or before 1 November 2012
- Issue of 1,000,000 unlisted incentive options to directors exercisable at 65 cents on $\circ$ or before 2 November 2012
Further details on options granted during the period are shown in Note 8.
NOTE 5: CONTINGENT LIABILITIES
There has been no change to contingent liabilities since the last annual reporting date.
NOTE 6: EVENTS SUBSEQUENT TO REPORTING DATE
No matter or circumstance has arisen subsequent to 31 December 2007 that has significantly affected, or may significantly affect:
- the company's operations in future financial years; or $(a)$
- the results of those operations in future financial years; or $(b)$
- the company's state of affairs in future financial years. $(c)$
NOTE 7: COMMITMENTS
The company notes that nothing material has changed since the 30 June 2007 annual financial report. For details on these commitments, please refer to the 30 June 2007 annual financial report.
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2007
NOTE 8: SHARE BASED PAYMENTS
During the period 8,500,000 options were issued to key management personnel as follows:
| Key Management Personnel |
Number granted |
Tranche | Grant date |
Vesting date |
Expiry date |
Exercise price (\$) |
Fair value at grant date (S) |
|---|---|---|---|---|---|---|---|
| Geoff Willets | 250,000 | A | 02/11/2007 | 02/11/2008 | 18/10/2010 | 0.30 | 0.299 |
| Mark Fletcher | 2,000,000 | B | 02/11/2007 | 02/11/2008 | 01/11/2010 | 0.30 | 0.300 |
| Bronwyn Barnes |
2,000,000 | $\mathbf C$ | 02/11/2007 | 02/11/2008 | 02/11/2010 | 0.30 | 0.300 |
| Geoff Willets | 250,000 | D | 02/11/2007 | 02/11/2009 | 18/10/2011 | 0.45 | 0.297 |
| Mark Fletcher | 1,000,000 | E | 02/11/2007 | 02/11/2009 | 01/11/2011 | 0.45 | 0.298 |
| Bronwyn Barnes |
1,000,000 | $\boldsymbol{F}$ | 02/11/2007 | 02/11/2009 | 02/11/2011 | 0.45 | 0.298 |
| Mark Fletcher | 1,000,000 | G | 02/11/2007 | 02/11/2010 | 01/11/2012 | 0.65 | 0.301 |
| Bronwyn Barnes |
1,000,000 | H | 02/11/2007 | 02/11/2010 | 02/11/2012 | 0.65 | 0.301 |
The options were valued using a Black and Scholes model with the following inputs:
| Tranche A |
Tranche в |
Tranche C |
Tranche D |
Tranche Ε |
Tranche $\mathbf F$ |
|
|---|---|---|---|---|---|---|
| Grant date share price $(\$)$ |
0.43 | 0.43 | 0.43 | 0.43 | 0.43 | 0.43 |
| Exercise price (\$) | 0.30 | 0.30 | 0.30 | 0.45 | 0.45 | 0.45 |
| Expected volatility | 95.00% | 95.00% | 95.00% | 95.00% | 95.00% | 95.00% |
| Option life (years) | 2.962 | 3.000 | 3.003 | 3.962 | 4.000 | 4.003 |
| Dividend paid | Nil | Nil | Nil | Nil | Nil | N il |
| Risk free interest free | 6.77% | 6.77% | 6.77% | 6.55% | 6.55% | 6.55% |
| Tranche G | Tranche H | |
|---|---|---|
| Grant date share price (\$) | 0.43 | 0.43 |
| Exercise price (\$) | 0.65 | 0.65 |
| Expected volatility | 95.00% | 95.00% |
| Option life (years) | 5.000 | 5.003 |
| Dividend paid | Nil | Nil |
| Risk free interest free | 6.55% | 6.55% |
$\equiv$
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2007
NOTE 9: RELATED PARTIES
Arrangements with related parties are continued to be in place. For details of these arrangements, please refer to 30 June 2007 annual financial report.
Key management personnel continue to receive compensation in the form of short term employee benefits, post employment benefits and share-based payments. Further details on options granted during the period to directors and executives are shown in Note 8.
$=$
DIRECTORS' DECLARATION
The directors of the company declare that:-
- The financial statements and notes, as set out on pages 3 to 10: $1.$
- comply with Accounting Standard AASB 134: Interim Financial Reporting and the $(a)$ Corporations Regulations 2001; and
- give a true and fair view of the consolidated entity's financial position as at $(b)$ 31 December 2007 and of its performance for the half year ended on that date.
- In the directors' opinion there are reasonable grounds to believe that the company will be able $2.$ to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors made pursuant to Section 303(5) of the Corporations Act 2001.
-
- Parcs.
Bronwyn Barnes Managing Director
Dated this
12 day of Ucerch.
2008.
$\sim$
INDEPENDENT AUDITORS' REVIEW REPORT TO THE MEMBERS OF GRAYNIC METALS LIMITED
Report on the Half-Year Financial Report
We have reviewed the financial report of Graynic Metals Limited for the half year ended 31 December 2007 comprising the balance sheet, income statement, cash flow statement, statement of changes in equity, accompanying notes to the financial statements and directors' declaration of the consolidated entity.
Director's Responsibility for the Half-Year Financial Report
The directors of Graynic Metals Limited are responsible for the preparation and fair presentation of the half-year financial report in accordance with the Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor's Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. Our review has been conducted in accordance with Auditing Standards on Review Engagements ASRE 2410 Review on an Interim Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of Graynic Metals Limited's financial position as at 31 December 2007 and its performance for the half year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporation Regulations 2001. As the auditor of Graynic Metals Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of Graynic Metals Limited and Controlled Entities would be in the same terms if provided to the directors as at the date of this auditor's review report.
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INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF GRAYNIC METALS LIMITED
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of Graynic Metals Limited, which comprises the condensed balance sheet as at 31 December 2007, and the condensed income statement, condensed statement of changes in equity and condensed cash flow statement for the half-vear ended on that date, a statement of accounting policies, other explanatory notes and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year period.
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor's responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Australian Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Graynic Metals Limited's financial position at 31 December 2007 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001. As the auditor of Graynic Metals Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, provided to the directors of Graynic Metals Limited on 12 March 2008, would be in the same terms if provided to the directors as at the date of this auditor's review report.

Ian K Macpherson CA
Robert W Parker CA
Craig A Vivian CA
CONSTANTING TO AN INCHES
Level 2, 47 Colin Street West Perth WA 6005 PO Box 359 West Perth WA 6872 $\bullet$ +61 8 9321 3514 $\frac{1}{28}$ +61 8 9321 3523 [email protected] www.ordnexia.com.au

$\tilde{z}$
$\frac{1}{1}$
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the halfyear financial report of Graynic Metals Limited is not in accordance with the Corporations Act 2001 including:
13
- giving a true and fair view of the of the company and consolidated entity's financial position as at 31 December $(i)$ 2007 and of its performance for the half-year ended on that date; and
- complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations $(ii)$ Regulations 2001.
ORD PARTMERS Chartered Accountants
$\overline{1}$ Ian Macpherson
Partner
Perth, 12 March 2008
12 March 2008
To the Board of Directors of Graynic Metals Limited
Dear Sirs
AUDITORS INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
I declare that, to the best of my knowledge and belief, in relation to the review for the financial period ended 31 December 2007, there have been no contraventions of:
- the auditor independence requirements of the Corporations Act 2001 in relation $\bullet$ to the review; and
- any applicable code of professional conduct in relation to the review. $\bullet$
Yours faithfully ORD PARTNERS
Ian Macpherson Partner
wp.

Ian K Macpherson CA
Robert W Parker CA
Craig A Vivian CA
Disabilities and the
Level 2, 47 Colin Street West Perth WA 6005 PO Box 359 West Perth WA 6872 $\bullet$ +61 8 9321 3514 △ +61 8 9321 3523 [email protected] www.ordnexia.com.au
