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EMETALS LIMITED Interim / Quarterly Report 2011
64850_rns_2011-03-15_1b95defa-e9d7-43a3-a27f-c6191090aab0.pdf
Interim / Quarterly Report
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WEST PEAK IRON LTD
West Peak Iron Ltd
ABN 71 142 411 390
Half Yearly Financial Report
31 December 2010
West Peak Iron Limited
Page | 1
| CONTENTS | PAGE |
|---|---|
| Directors' Report | 2 |
| Auditor's Independence Declaration | 5 |
| Condensed Statement of Comprehensive Income | 6 |
| Condensed Statement of Financial Position | 7 |
| Condensed Statement of Changes in Equity | 8 |
| Condensed Statement of Cash Flows | 9 |
| Notes to the Condensed Financial Statements | 10 |
| Directors Declaration | 14 |
| Independent Auditor's Review Report | 15 |
West Peak Iron Limited
Page | 2
DIRECTORS' REPORT
Your directors submit the financial report of West Peak Iron Limited ("the Company") for the half-year ended 31 December 2010. 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 period and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.
| David Parker | Executive Chairman (appointed on incorporation: 4 March 2010) |
|---|---|
| Graham Marshall | Non-executive Director (appointed on incorporation: 4 March 2010) |
| John Royle | Non-executive Director (appointed on incorporation: 4 March 2010) |
Review and Results of Operations
Review of Operations
Highlights during the period and since the end of the half-year include:
- Completion of an ASX listing and the capital raising of $2,600,000 through the issue of 13,000,000 shares at $0.20 as part of the Initial Public Offering (IPO).
- Completion of the CRC Agreement and the Legendre Agreement to purchase a suite of Mid West tenements prospective for Iron Ore and other minerals through the issue of 3,500,000 shares and 2,500,000 options exercisable at $0.20 on or before 30 June 2013 and $110,000.
- Initiated a project acquisition program, which included new applications for tenement applications in Western Australia and the review of advanced projects for acquisition.
- The Appointment of Shane Tomlinson as Exploration Manager.
Project Overview
Santy Well Project
The Santy Well project consists of three granted tenements. Work to date has comprised of the purchase and reprocessing of multi-client magnetic and radiometric data to aid in interpretation and target generation. A brief field visit was also completed to inspect the areas of iron enrichment highlighted in the prospectus. Rock chip samples from this area had returned iron grades ranging from 45.49% to 58.96%. From field observations the iron enrichment is detrital in nature. Field investigations were limited due to poor weather and pastoral activities restricting access.
Ongoing exploration will focus on delineating the extent and grade of the detrital iron enrichment. This will involve detailed field mapping and sampling in conjunction with an assessment of the geophysical data and satellite imagery.
Pinyalling Project
The Pinyalling project is located approximately 420 km northeast of Perth, 50 km west northwest of Paynes Find, and consists of seven tenements of which one exploration license is currently granted (E59/1380). Work for the period consisted of reprocessing open-file aeromagnetic and topographic data to assist with interpretation and target generation. The aeromagnetic data indicates approximately 7.5 km of potential BIF within the tenement area.
A field trip was conducted during the half-year to assess the iron ore targets highlighted from desktop studies. Detailed outcrop mapping was completed within E59/1380 and confirms the presence of three magnetite-bearing BIFs ranging in width from 5 to 30 m which outcrop over a strike length of approximately 3 km. Based on the field mapping results, further assessment of the geophysical data is required to delineate an iron ore target of suitable size to warrant drill testing.
West Peak Iron Limited
Page | 3
DIRECTORS' REPORT (continued)
Review of Operations continued
Project Overview
Dandaraga Project
The Dandaraga tenement is located approximately 36 km southeast of Sandstone and is currently under application (ELA57/839). The Company also applied for an addition three tenements in the area (E29/804, E57/845 and E57/869) located in the vicinity to add to the project. The main tenement has a magnetic anomaly which traverses the entire tenement (27km). The prospect was believed to have limited outcrop, however a field visit during the quarter confirmed the presence of a prominent magnetite bearing BIF ridge, 2.5km long with widths up to 150m. The BIF outcrop is coincident to a strong magnetic anomaly and as such it's anticipated that the magnetic anomaly found in the tenement is due to the presence of BIF.
This tenement is considered a high priority within the West Peak holdings and work programmes will commence as soon as the tenement is granted.
Other Project Areas & Tenement Applications
The Company has applied for additional tenure in the Mid West based on mapped greenstone and aeromagnetic features. These applications have increased the Company's footprint in the Mid West, with project areas now comprising: Santy Well, Pinyalling, Kirkalocka, Paynes Find, Mount Magnet, Cue and Dandaraga.
The Company was advised that E59/1721, part of the Paynes Find Project, was successful in a three way Ballot. Tenements E58/393 (Mount Magnet) and E21/156 (Cue) are subject to a Ballot with several other applicants.
Additional work will be completed on these tenements closer to granting of the tenements.
Project Generation and Acquisition
During the period West Peak reviewed a number of resource based projects for potential investment. The Company has focused on Iron Ore based acquisitions, but is not limited to iron projects and as such has reviewed a range of resource based projects.
The Company applied for several exploration license applications in Western Australia to complement those held by the Company.
The Company will continue to grow it's tenement portfolio through tenement applications and will continue to evaluate potential new resources projects based in Australia and overseas with a view to increasing the number of projects held by the Company.
Corporate
The following material corporate events occurred during the half year ended 31 December 2010:
On 6 August 2010 the Company lodged a Prospectus to raise $2,600,000 through the issue of 13,000,000 shares at $0.20 as part of the Initial Public Offering (IPO).
On 13 October 2010 the Company issued 13,000,000 shares at $0.20 to investors through the IPO Prospectus.
On 13 October 2010 the Company settled the Agreement with Corporate & Resource Consultants Pty Ltd, Bruce Legendre and T.E. Johnston Pty Ltd 'CRC Agreement' by the payment of $70,000 and the issue of 2,500,000 shares and 1,500,000 Company Options exercisable at $0.20 on or before 30 June 2013.
On the 13 October 2010 the Company settled the Agreement with Bruce Legendre and Legend Mining Pty Ltd (Legendre Agreement) by the payment of $40,000 and the issue of 1,000,000 shares and 1,000,000 Company Options exercisable at $0.20 on or before 30 June 2013.
West Peak Iron Limited
Page | 4
DIRECTORS' REPORT (continued)
Review of Operations continued
Corporate continued
On 21 October 2010 the Company was admitted to the official list of the ASX, and the securities of the Company commenced trading on 26 October 2010.
Appointment of Exploration Manager
The Company appointed Shane Tomlinson as Exploration Manager of the Company during the period. Shane has extensive experience as an exploration and mine geologist for over 15 years and has over two years experience as a senior exploration geologist focused on exploration of iron ore in Western Australia for an emerging WA iron ore producer. As part of his remuneration package, he has been offered Company Options, comprising 1,500,000 unlisted Company Options, (1,000,000 exercisable at $0.20 and 500,000 exercisable at $0.30 both expiring on or before 30 June 2013). These Company Options were subject to shareholder approval, which was obtained at the Annual General Meeting held on 4 March 2011, and were not issued during the quarter.
Significant Events Since the end of the period
Corporate Advisor Mandate
Since the end of the quarter the Company entered into a Corporate Advisor Mandate with Alto Capital. Alto Capital have been engaged to provide corporate advisory services, including providing corporate advice, assistance with communications strategy and investor presentations. The mandate will last six months and the fees payable will be the issue of 4,000,000 unlisted Company Options, exercisable at $0.20 on or before 30 June 2013, subject to shareholder approval.
On 7 March 2010 Shareholders approved the grant of 4,000,000 Options to Alto Capital (exercisable at $0.20 on or before 30 June 2013) and 1,500,000 Company Options to Shane Tomlinson (1,000,000 exercisable at $0.20 and 500,000 exercisable at $0.30 both expiring on or before 30 June 2013).
Operating results
The loss of the Company for the period was $246,127.
Auditor Independence and Non-Audit Services
Section 307C of the Corporation Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the Company with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on page 5 and forms part of this directors' report for the half-year ended 31 December 2010.
This report is signed in accordance with a resolution of the Board of Directors made pursuant to s.306(3) of the Corporations Act 2001.
David Parker
Executive Chairman
Perth, Western Australia; Dated this 15 day of March 2011
Competent Person Statement
Scientific or technical information in this news release has been prepared under the supervision of Mr Shane Tomlinson, an employee of the Company and a Member of the Australasian Institute of Geoscientists (AIG). Mr Tomlinson has sufficient experience which is relevant to the style of mineralisation under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (the JORC Code). Mr Tomlinson consents to the inclusion in this report of the Information, in the form and context in which it appears.
HLB Mann Judd
Accountants | Business and Financial Advisers
AUDITOR'S INDEPENDENCE DECLARATION
As lead auditor for the review of the financial report of West Peak Iron Limited for the half-year ended 31 December 2010, I declare that to the best of my knowledge and belief, there have been no contraventions of:
a) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
b) any applicable code of professional conduct in relation to the review.
Perth, Western Australia
15 March 2011
N G NEILL
Partner, HLB Mann Judd
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth 6000 PO Box 8124 Perth BC 6849 Western Australia. Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: [email protected]. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of HLB International, a world-wide organisation of accounting firms and business advisers
West Peak Iron Limited
Page | 6
CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
| Notes | 31 Dec 2010 $ | |
|---|---|---|
| Other income | 8,937 | |
| Employment benefits expense | (157,673) | |
| Other expenses | (97,391) | |
| Loss before income tax expense | 2 | (246,127) |
| Income tax expense | - | |
| Loss after income tax expense | (246,127) | |
| Other comprehensive income | - | |
| Total comprehensive loss for the period | (246,127) |
Basic loss per share (cents per share) (1.69)
The accompanying notes form part of these financial statements
West Peak Iron Limited
Page | 7
CONDENSED STATEMENT OF FINANCIAL POSITION
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
| Note | 31 Dec 2010 $ | 30 Jun 2010 $ | |
|---|---|---|---|
| Assets | |||
| Current Assets | |||
| Cash and cash equivalents | 2,071,655 | 107,795 | |
| Trade and other receivables | 15,261 | 3,928 | |
| Total Current Assets | 2,086,916 | 111,723 | |
| Non-Current Assets | |||
| Property, plant and equipment | 6,038 | - | |
| Deferred exploration and evaluation expenditure | 3 | 1,125,595 | 57,437 |
| Total Non-Current Assets | 1,131,633 | 57,437 | |
| Total Assets | 3,218,549 | 169,160 | |
| Liabilities | |||
| Current Liabilities | |||
| Trade and other payables | 70,798 | 15,012 | |
| Total Current Liabilities | 70,798 | 15,012 | |
| Total Liabilities | 70,798 | 15,012 | |
| Net Assets | 3,147,751 | 154,148 | |
| Equity | |||
| Issued capital | 4 | 3,268,321 | 161,941 |
| Reserves | 135,483 | 2,134 | |
| Accumulated losses | (256,053) | (9,927) | |
| Total Equity | 3,147,751 | 154,148 |
The accompanying notes form part of these financial statements
West Peak Iron Limited
Page | 8
CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
| Issued Capital | Option Reserves | Accumulated Losses | Total Equity | |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| Balance at 1 July 2010 | 161,941 | 2,134 | (9,927) | 154,148 |
| Loss for the period | - | - | (246,126) | (246,126) |
| Total comprehensive loss for the period | - | - | (246,126) | (246,126) |
| Shares issued as part of prospectus | 2,600,000 | - | - | 2,600,000 |
| Options issued as consideration for tenements | - | 133,349 | - | 133,349 |
| Shares issued as consideration for tenements | 700,000 | - | - | 700,000 |
| Transaction costs on share issue | (193,620) | - | - | (193,620) |
| As at 31 December 2010 | 3,268,321 | 135,483 | (256,053) | 3,147,751 |
The accompanying notes form part of these financial statements
West Peak Iron Limited
Page | 9
CONDENSED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
| | Note | 31 Dec 2010
$ |
| --- | --- | --- |
| | | Inflows/
(Outflows) |
| Cash flows from operating activities | | |
| Payments to suppliers and employees | | (240,968) |
| Interest received | | 8,937 |
| Net cash (used in) operating activities | | (232,031) |
| Cash flows from investing activities | | |
| Payments for property, plant and equipment | | (7,160) |
| Payments for exploration and evaluation expenditure | | (203,329) |
| Net cash (used in) investing activities | | (210,489) |
| Cash flows from financing activities | | |
| Proceeds from issue of shares | | 2,600,000 |
| Transaction costs on issue of shares | | (193,620) |
| Net cash provided by financing activities | | 2,406,380 |
| Net increase in cash held | | 1,963,860 |
| Cash and cash equivalents at the beginning of the period | | 107,795 |
| Cash and cash equivalents at the end of the financial period | | 2,071,655 |
The accompanying notes form part of these financial statements
West Peak Iron Limited
Page | 10
NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
The interim financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001, applicable accounting standards including AASB 134 'Interim Financial Reporting', Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board ('AASB'). Compliance with AASB 134 ensures compliance with IAS 34 'Interim Financial Reporting'.
This condensed half-year report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the group as in the full financial report.
It is recommended that this financial report be read in conjunction with the annual financial report for the period ended 30 June 2010 and any public announcements made by West Peak Iron Limited during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.
The accounting policies adopted are consistent with those of the previous financial year.
Basis of preparation
The interim report has been prepared on a historical cost basis. Cost is based on the fair value of the consideration given in exchange for assets. The Company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted.
For the purpose of preparing the interim report, the half-year has been treated as a discrete reporting period.
Significant accounting judgements and key estimates
The preparation of interim financial reports requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.
In preparing this interim report, the significant judgements made by management in applying the Company's accounting policies and the key estimates of uncertainty were the same as those applied for the period ended 30 June 2010.
Adoption of new and revised Accounting Standards
In the half-year ended 31 December 2010, the Company 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 July 2010.
The Company has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half-year ended 31 December 2010. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Company accounting policies.
Segment Reporting
Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision-maker has been identified as the Board of West Peak Iron Limited.
West Peak Iron Limited
Page | 11
NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
NOTE 2: LOSS BEFORE INCOME TAX EXPENSE
The following revenue and expense items are relevant in explaining the performance for the half-year:
| 31 Dec 2010 | |
|---|---|
| $ | |
| Income | |
| Interest Income | 8,937 |
| Expenses | |
| Administrative expenses | 6,048 |
| ASX and registry fees | 36,849 |
| Computer and software expenses | 2,042 |
| Employee benefits expenses | 157,673 |
| Legal and professional | 17,489 |
| Rent | 30,000 |
| Other | 4,963 |
NOTE 3: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
| Costs carried forward in respect of: | 31 Dec 2010 | 30 Jun 2010 |
|---|---|---|
| Exploration and evaluation phase – at cost | $ | $ |
| Balance at the beginning of the period | 57,437 | - |
| Expenditure incurred and acquisition costs | ||
| Santy Well Project | 314,144 | 15,177 |
| Pinyalling Project | 694,492 | 31,607 |
| Kirkalocka Project | 7,190 | - |
| Other Projects | 52,332 | 10,653 |
| Total Exploration Expenditure balance at end of the period | 1,125,595 | 57,437 |
The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the discovery of commercially viable mineral or other natural resource deposits and their successful development and commercial exploration or sale of the respective mining areas.
West Peak Iron Limited
Page | 12
NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
NOTE 4: ISSUED CAPITAL AND RESERVES
| 31 December 2010 | 30 June 2010 | |||
|---|---|---|---|---|
| No. | $ | No. | $ | |
| Ordinary shares | ||||
| Movement in number of fully paid ordinary shares | ||||
| Opening balance | 7,500,001 | 161,941 | 1 | 1 |
| Shares issued to seed capital investors | - | - | 7,500,000 | 175,000 |
| Shares issued as part of IPO | 13,000,000 | 2,600,000 | - | - |
| Shares issued as part of CRC and Legendre agreements on 13 October 2010 | 3,500,000 | 700,000 | - | - |
| Transaction costs arising from issue of shares | - | (193,620) | - | (13,060) |
| Closing balance | 24,000,001 | 3,268,321 | 7,500,001 | 161,941 |
| Company options | ||||
| Movement in number of options | ||||
| Opening balance | 5,000,000 | 2,134 | - | - |
| Options issued to board on 6 April 2010 | - | - | 5,000,000 | 2,134 |
| Issued to Vendors on 13 October 2010 | 2,500,000 | 133,349 | - | - |
| Closing balance | 7,500,000 | 135,483 | 5,000,000 | 2,134 |
West Peak Iron Limited
Page | 13
NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2010
NOTE 5: SEGMENT REPORTING
The company operates in one segment, being mineral operation and evaluation in Australia.
NOTE 6: DIVIDENDS
The directors of the Company have not declared an interim dividend.
NOTE 7: CONTINGENT LIABILITIES
There has been no change in contingent liabilities since the last annual reporting date.
NOTE 8: EVENTS SUBSEQUENT TO REPORTING DATE
Corporate Advisor Mandate
Since the end of the quarter the Company entered into a Corporate Advisor Mandate with Alto Capital. Alto Capital have been engaged to provide corporate advisory services, including providing corporate advice, assistance with communications strategy and investor presentations. The mandate will last six months and the fees payable will be the issue of 4,000,000 unlisted Company Options, exercisable at $0.20 on or before 30 June 2013, subject to shareholder approval.
On 7 March 2010 Shareholders approved the grant of 4,000,000 Options to Alto Capital (exercisable at $0.20 on or before 30 June 2013) and 1,500,000 Company Options to Shane Tomlinson (1,000,000 exercisable at $0.20 and 500,000 exercisable at $0.30 both expiring on or before 30 June 2013).
West Peak Iron Limited
Page | 14
DIRECTORS' DECLARATION
In the opinion of the directors of West Peak Iron Limited ('the Company'):
- the financial statements and notes thereto, as set out on pages 6 to 13, are in accordance with the Corporations Act 2001 including:
a. complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and other mandatory professional reporting requirements;
b. giving a true and fair view of the Company's financial position as at 31 December 2010 and of its performance for the half-year then ended.
- there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to S.303 (5) of the Corporations Act 2001.
David Parker
Executive Chairman
Dated this 15 day of March 2011
HLB Mann Judd
Accountants | Business and Financial Advisers
INDEPENDENT AUDITOR'S REVIEW REPORT
To the members of West Peak Iron Limited
Report on the Condensed Half-Year Financial Report
We have reviewed the accompanying half-year financial report of West Peak Iron Limited ("the Company") which comprises the condensed statement of financial position as at 31 December 2010, the condensed statement of comprehensive income, condensed statement of changes in equity and condensed statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory notes and the directors' declaration.
Directors' Responsibility for the Half-Year Financial Report
The directors of the Company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.
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 Auditing Standard on Review Engagements ASRE 2410 Review of a 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 company's financial position as at 31 December 2010 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of West Peak Iron 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.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth 6000 PO Box 8124 Perth BC 6849 Western Australia. Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of HLB International, a world-wide organisation of accounting firms and business advisers
Page 16
HLB Mann Judd
Accountants | Business and Financial Advisers
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of West Peak Iron Limited is not in accordance with the Corporations Act 2001 including:
(a) giving a true and fair view of the company's financial position as at 31 December 2010 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
HLB MANN JUDD
HLB MANN JUDD
Chartered Accountants
Perth, Western Australia
15 March 2011
N G NEILL
Partner