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ENTERPRISE METALS LIMITED Regulatory Filings 2011
64857_rns_2011-10-30_bd4d2ddf-cb9d-403d-991c-3e518985780d.pdf
Regulatory Filings
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ENTERPRISE METALS LIMITED
and Controlled Entities ACN 123 567 073
Annual Report 2011
coRPORATE DIRECTORY
Directors
Dr. Jingbin Wang - Non-Executive Chairman Dermot Ryan - Managing Director Paul Larsen - Non-Executive Director Bruce Hawley - Non-Executive Director Anna Mao - Non-Executive Director Dr. Zhen Huang - Non-Executive Director Dennis Wilkins - Non-Executive Director
Company Secretary
Dennis Wilkins DWCorporate Pty Ltd Ground Floor 20 Kings Park Rd WEST PERTH WA 6005 Telehone: +61 8 9389 2111 Facsimile: +61 8 9389 2199 Email: [email protected]
Principal Registered Office
Level 1, 640 Murray Street WEST PERTH WA 6005 Telephone: +61 8 9436 9200 Facsimile: +61 8 9436 9220 Website: www.enterprisemetals.com.au Email: [email protected]
Solicitor
Hilary Macdonald Suite 23, 18 Stirling Highway NEDLANDS WA 6009 Telephone: +61 8 9389 1102 Facsimile: +61 8 9389 1102 Website: www.macdonaldlegal.com.au Email: [email protected]
Auditor
Grant Thornton Audit Pty Ltd Level 1, 10 Kings Park Road WEST PERTH WA 6005 Telephone: +61 8 9480 2000 Facsimile: +61 8 9322 7787 Website: www.grantthornton.com.au Email: [email protected]
Share Registry
Computershare Registry Services Level 2, 45 St Georges Terrace PERTH WA 6000
Australian Stock Exchange
ASX Code – ENT
contents
| Chairman's Letter | 2 |
|---|---|
| Introduction | 3 |
| Review of Exploration Operations | 4 |
| Corporate Governance Statement | 14 |
| Directors' Report | 18 |
| Remuneration Report (Audited) | 23 |
| Auditor's Independence Declaration | 26 |
| Consolidated Statement of Comprehensive Income | 27 |
| Consolidated Statement of Financial Position | 28 |
| Consolidated Statement of Changes in Equity | 29 |
| Consolidated Statement of Cash Flows | 30 |
| Notes to the Financial Statements | 31 |
| Directors' Declaration | 54 |
| Independent Auditor's Report | 55 |
| ASX Additional Information | 57 |
| Tenement Report | 59 |
Chairman's Letter
Dear Shareholders,
I am pleased to have this opportunity to introduce myself, and update you on the progress of Enterprise Metals Limited ("the Company") over the past year and its future strategy. My election to the Board occurred on 13 July 2011, following the raising of \$14.4 million from SinoTech (Hong Kong) Corporation Limited and Worldtex Capital Resources Ltd. On 31st July 2011 I was appointed Chairman of the Company.
Since listing in June 2007, under past Chairman Paul Larsen, the Company has assembled a quality portfolio of iron ore, uranium, gold and base metal projects within Western Australia. I would like to take this opportunity to thank Paul for his guidance in starting the Company, and his leadership in growing it to an organisation today worth over AUS\$30 million.
The Company is now entering the next exciting phase of its growth and is readying to drill test a selection of its iron ore, uranium, gold and base metal targets. The involvement of SinoTech at this stage, as a 30% shareholder in Enterprise, ensures that not only are the funds available for aggressive drill testing of targets, but technical support is available as the projects develop. Access is also assured to the rapidly growing South East Asian markets.
The Corporate Objective of the Enterprise Board continues to be "above average returns to Shareholders through successful multi-commodity exploration and the growth of the organisation into a major highly profitable mining company". To achieve this objective, we are focussing our exploration strategy on projects and commodities which have relative abundance in Western Australia, and which have some economic advantage by having installed infrastructure in the general vicinity of the project.
Dr Jingbin Wang
By way of example, our iron ore projects at Sylvania and Burracoppin are close to existing heavy gauge railway lines which lead to deep water ports, our uranium projects at Yalgoo and Byro are close to road and rail corridors leading to Geraldton, our Darlot gold project is flanked by existing gold mills at Bronzewing and Darlot, and our main base metal project at Doolgunna is situated within a developing new copper belt, close to Sandfire Resources NL's new De Grussa copper-gold mine.
I believe that our vision for the Company is soundly based and we have a strong and experienced Board of Directors and management team, supported by a strong technical team. The challenge now is to convert our exploration targets into resources and reserves, and build a major mining and exploration house. I urge you, our Shareholders, to continue supporting the team and accompany us on this journey of discovery and success. Yours sincerely,
Dr Jingbin Wang Chairman
introduction
Enterprise Metals Ltd (formerly Revere Mining Ltd or the Company) was incorporated in January 2007 as a public company for the purpose of acquiring Murchison Exploration Pty Ltd and its Revere Project gold tenements northeast of Meekatharra in Western Australia. The Company was admitted to the ASX on 20 June 2007.
In October 2008, the Company completed the acquisition of Enterprise Uranium Ltd and its portfolio of prospective iron ore, gold, uranium and base metal projects in Western Australia, and in December 2008, changed its name to Enterprise Metals Ltd (Enterprise) to reflect its broadened portfolio.
Following the investment of \$14.4 million from SinoTech and Worldtex in July 2011, Enterprise is now in a position to sequentially drill test its iron ore, gold, uranium and base metal targets throughout 2011/2012. The primary objective is to develop Enterprise into a highly profitable mining company through exploration success, but acquisition of competitor's outstanding undervalued projects will also be considered.
The Company's projects are largely within the Archaean Yilgarn Craton and surrounding Proterozoic basins and orogenic zones of Western Australia, where infrastructure is reasonably good compared to other more remote parts of Australia. We are exploring for several commodities and mineralisation styles including bedrock and channel hosted iron ore, high grade orogenic gold, base metal sulphides and calcrete and sandstone hosted uranium. Our projects are predominantly "greenfields" rather than "brownfields" style projects, and we make extensive use of airborne geophysics to "see through" surficial cover and identify conceptual geological targets. The Company holds approximately 9,900km2 exploration title spread over 14 project areas.
The Company is backed by a team of highly experienced exploration geoscientists with broad multi-commodity technical expertise, led by an experienced management team.
Project Location Plan
Review of Exploration Operations
BURRACOPPIN PROJECT
The Burracoppin Project covers approximately 1,213km2 (586km2 granted tenements) and is located 280km east of Perth, straddling the Great Eastern Highway and the standard gauge railway line that runs from Kalgoorlie to the port of Kwinana, see Figure 1. The project is considered prospective for iron ore, gold, nickel and platinum group elements (PGE).
Figure 1: Burracoppin Project, Tenement Location over Aeromagnetic Image
Iron Ore
During the year, extensive geological reconnaissance was undertaken following up magnetic features identified from two high quality detailed airborne magnetic surveys and focussed on areas with scattered outcrop of altered and unaltered quartzmagnetite/Banded Iron Formation (BIF). A total of 406 rockchip samples comprising; goethite, goethitic BIF, BIF proper and minor hematite were collected with 44 returning iron values greater than 50%. These results strengthen the Company's belief that intense alteration of BIF to goethite (and hematite) at Burracoppin has the potential to produce high grade iron mineralisation.
Gold & Platinum Group Elements
Despite the occurrence of several small gold mines in the area (Burgess Find, Bennetts Find and Junks Shaft), there has been limited modern gold exploration in the area. The gold potential of the district is highlighted by the 2-3M ounce Edna May Gold Mine, which is located some 10km to the east of the Project. During the year, Enterprise undertook a major soil sampling programme over and around an unusual magnetic feature interpreted to be a deeply weathered mafic or ultramafic complex. The programme involved the collection of 1,499 soil samples (-5+2mm fraction) which were analysed for a multielement suite. The soil sampling identified a soil gold anomaly over the eastern margin of the magnetic complex with a strike length of approximately 5km, see Figure 2.
Figure 2: Soil Gold Results over 1st VD Magnetic Image
The core of the gold anomaly, which is centred on historical workings at Burgess Find, has a multi-element character with elevated values of Au-W-Bi-Cu-Mo. The high tungsten values are particularly interesting as tungsten is reported to be associated with the nearby Edna May gold mine.
The soil sampling programme also returned anomalous platinum and palladium results, with Pt up to 57ppb and Pd up to 534ppb, see Figures 3 & 4. The best PGE anomalies occur on the eastern
margin of the interpreted mafic/ultramafic complex, over a strike length of approximately 5km, adjacent to the gold soil anomalies. Other PGE anomalies occur within the interpreted mafic/ ultramafic complex.
Figure 3: Soil Platinum Results over 1st VD Magnetic Image
Figure 4: Soil Palladium Results over 1st VD Magnetic Image
Burgess Find & Easter Gift Gold Workings
Previous shallow RC drilling by Valiant Consolidated Limited in 1981 returned an intersection of 4m @ 11g/t Au from 13m in hole BF29, including 1m at 32.4g/t Au from 14m, see Figure 5. A single follow-up RC drillhole (RC1 – total depth 45m), testing directly beneath this intersection returned an intercept of 1m @ 0.65g/t Au from 33m. No further drill testing of this intersection were undertaken. Hole BF33, 20m on-strike to the south, intersected 2m at 9g/t Au from 18m at the bottom of the hole.
Figure 5: Easter Gift Workings - Section 6512010N
Enterprise believes further drilling is warranted to test for plunging shoots associated with these high grade intersections, both at depth and along strike to the north and south.
Review of Exploration Operations
SYLVANIA PROJECT
The Sylvania Project covers 217km2 and is located 50km southwest of Newman and some 1,000km north northeast of Perth in the Pilbara region. The Project is considered to have potential for iron ore in the form of high grade bedded hematite, as well as detrital or Channel Iron Deposits (CID).
Enterprise completed a 100m line spaced airborne magnetic and radiometric survey over the eastern portion of the Sylvania Project area in September 2010. The imaged magnetic data clearly shows a well developed palaeochannel, with a flow direction from northeast to southwest, see Figure 6. The buried channel is up to several kilometres wide and has developed over the North East-South West trending Fortescue River Fault.
The palaeochannel abuts possible easterly extensions of the Marra Mamba, Dales Gorge and Joffre Members of the Brockman Iron Formation outcropping to the west, and therefore has the potential to host significant tonnages and grades of CID or unconsolidated detritals containing BIF and lump hematite. This situation may be analogous to Rio Tinto's Perry Creek detrital iron deposit some 12-15km to the west.
CUNDERDIN PROJECT
The Cunderdin project is centred on the township of Cunderdin approximately 150km east of Perth and straddles the Great Eastern Highway and the standard gauge railway line. The Company's concept is that granites and granitic gneisses within the Cunderdin area contain enclaves of northwest striking metamorphosed greenstone belts, which may also contain meta-sedimentary units including quartz-magnetite/Banded Iron Formation (BIF).
Following the completion of a low level 200m line spaced magnetic and radiometric survey over the project area, Enterprise undertook a 21 hole RC drilling programme totalling 2,015m, see Figure 7. This drilling was targeting linear magnetic features and undertaken along road verges, as access was restricted by cropped paddocks. The drilling intersected mainly granitic gneiss with broad mafic bands composed of amphibole and disseminated magnetite with minor sulphide, but no massive magnetite. Iron assay results from the drilling were generally low.
Figure 6: Sylvania Project, Aeromagnetic Image with Palaeochannel Target
Figure 7: Cunderdin Project, RC Drillholes over Aeromagnetic Image
Figure 8: Earaheedy Project, Aeromagnetic Image with Palaeochannel Targets
EARAHEEDY PROJECT
The Earaheedy Project covers 619km2 and is located 200km northeast of Wiluna and 800km northeast of Perth. The Project is considered to have potential for Channel Iron Deposits (CID) and/ or Detrital Iron Deposits (DID) concealed beneath thin Cainozoic cover.
Enterprise image processed and interpreted GSWA 400m line spaced airborne magnetic data identifying a series of major magnetic palaeochannels draining south from the BIF of the Lee Steere Ranges along the northern margin of the Proterozoic Earaheedy Basin, see Figure 8. These interpreted channels have the potential for CID and/or DID, similar in setting and character to the Robe, Yandicoogina or Koodaideri deposits in the Hamersley Basin.
Digital terrain model and gravity data for the area provide additional support for the Company's hypothesis that the large "worm like" magnetic anomalies represent palaeochannels filled with iron rich material eroded from BIF of the Lee Steere Range.
Photo 1: Earaheedy Project, Banded Iron Formation
Review of Exploration Operations
DOOLGUNNA PROJECT
The Doolgunna Project covers 1,332km2 and is located approximately 110km northeast of Meekatharra and some 10km southwest of Sandfire Resources NL's DeGrussa discovery. The project is considered prospective for Volcanogenic Massive Sulphide (VMS) and stratabound base metals and mesothermal stockwork gold.
Regional Soil Sampling Programme
During the September Quarter 2010 Enterprise completed a detailed soil sampling programme comprising 2,339 samples over the prospective Narracoota Formation volcanics of the Bryah Basin, the same rock unit which hosts Sandfire DeGrussa copper-gold deposit.
Soil samples were initially collected on a 500m x 500m spacing, with infill sampling at 100m x 100m spacing or 50m x 50m depending on local conditions such as known workings, local geology or historical geochemical anomalism. The samples were analysed for low level gold and base metals associated with VMS type deposits.
Four target areas were identified from this sampling programme: "Doolgunna", "REA", "REB" and "REC" and shown on Figures 9 & 10.
Figure 9: Geology and Geochemical Targets on Narracoota Formation
Figure 10: Aeromagnetics and Geochemical Targets on Narracoota Formation
Analytical results defined a number of discrete and co-incident "pathfinder" base metal anomalies adjacent to the Goodin Fault, within the Narracoota Formation volcanics, the Karalundi Formation sediments and the Doolgunna Formation sediments. A broad association of Ag-As-Bi-Mo-Sn-Au-Te was indicated at the four targets areas, which were followed up with IP surveys.
IP Surveys
In late 2010 the Company mobilised a geophysical contractor to site to commence ground IP surveys over the four multi-element geochemical anomalies defined by detailed soil sampling. Due to heavy rain across the district, the IP surveys were not completed until late May 2011.
At the Doolgunna Prospect, eight lines of 100m dipole-dipole were completed to follow-up a discrete and coincident Ag-As-Sn-Au-Te geochemical anomaly lying over Narracoota Formation volcanics adjacent to the Goodin Fault.
The IP survey located a discrete IP target centred over the geochemical anomaly (green star), one moderate IP zone on the northern margin of the geochemical anomaly (orange zone) and a strong IP zone to the south (red zone), see Figure 11. The IP response over the bulk of the geochemical anomaly is weak to moderate.
Figure 11: Doolgunna Prospect, IP Interpretation over Silver Geochemistry
Enterprise completed IP surveys in the Ruby Well area designed to follow up the three discrete, but areally extensive multi-element geochemical anomalies at the Ruby Well West (REA), Ruby Well East (REB) and Ruby Well South (REC) prospects.
The survey comprised a total of fifteen lines (54.5 line km) of 100m dipole-dipole over an area with approximately 50m of conductive cover underlain by a resistive basement, interpreted as being the Narracoota Formation volcanics. Generally the IP response within the Narracoota Formation volcanics over the geochemical anomaly is weak to moderate. Exploration targets within the Ruby Well Prospect areas are shown on Figure 12.
Figure 12: Ruby Well Prospect, IP Interpretation (Green = Cu-Au Targets, Yellow = Quartz Au Targets)
YALGOO PROJECT
The Yalgoo Project is located approximately 20km west of the township of Yalgoo and covers a total of 894km2 . The project is considered prospective for calcrete/channel hosted uranium, as well as gold and base metal mineralisation hosted in greenstone.
Ground reconnaissance was undertaken over the Yalgoo Project area following up uranium anomalies identified from the January 2010 airborne radiometric survey. An image of the uranium radiometric data is presented in Figure 13 and clearly shows the uranium target, directly related to a broad drainage channel (both ancient and modern), approximately 3.5km long and up to 700m wide. The drainage channel is well defined by the detailed radiometric data, however the continuation of the channel is still evident on the 400m spaced survey data to the south-southeast.
Figure 13: Uranium Radiometric Image with Rockchip Locations
Review of Exploration Operations
Photo 2: Drainage Channel Profile, (Hardpan 0-60cm, 29ppm U; Sand/Calcrete 60-100cm, 50 ppm U; Calcrete 250ppm U)
Rockchip Sampling
Reconnaissance work involving non-systematic calcrete rockchip sampling over the large uranium radiometric anomaly was undertaken in May 2011. Eighteen of 24 calcrete samples collected from within a major drainage channel over a length of 950m returned highly anomalous uranium results ranging from 149ppm to 418ppm U. The sampling was restricted to areas of exposed calcrete within the drainage channel and isolated occurrences of calcrete in areas of thin alluvial cover. Shallow drilling will be required to define the extent, thickness and grade of the calcrete.
The majority of the airborne anomaly is covered by red-brown sandy alluvium with no outcrop and rare calcrete float. A modern drainage channel up to 30m wide and 2m deep has removed the alluvium, exposing a well developed "layered" calcrete profile (see Photo 2). It is likely that this calcrete unit is widespread in the region, but covered by alluvium.
Figure 14 shows the uranium values for the rockchip samples plotted over a Google Earth image. This figure demonstrates the limited extent of "exposed" calcrete (white areas on image) associated with the modern drainage channel.
Figure 14: Uranium Rockchip Results on Google Earth Image
HARRIS LAKE PROJECT
The Harris Lake Project is located approximately 200km east of Kalgoorlie and 150km due south of the Mulga Rock uranium deposit. It comprises one granted exploration licence E28/1958 covering 76km2 . The project area is considered prospective for uranium mineralisation within Harris Lake and the associated major drainage channel, which drains the Archaean Yilgarn Craton and traverses the iron rich western units of the Proterozoic Albany-Fraser Orogen.
A detailed airborne magnetic and radiometric survey was completed in May 2011 over the southeastern half of Harris Lake and the surrounding drainage channels. The survey detected significant uranium anomalies with potential for sandstone hosted uranium deposits.
Figure 15 is an image showing uranium anomalism (in red) superimposed on the digital terrain model and total magnetic intensity image. Four target areas (A-D) with anomalous uranium responses are clearly shown exposed in "oxbow" situations within Harris Lake. The main uranium anomaly (C), red in the image below, is over 10km in length.
Figure 15: Harris Lake, Uranium in Red over Topography and Aeromagnetics
BYRO PROJECT
The Byro Uranium Project is located approximately 250km northeast of Geraldton in the Murchison Province and some 600km north of Perth. The Project comprises granted exploration licence E59/1617 (506km2 ) and four exploration licence applications (1,500km2 ) for a combined area of 2006km2 . The project area is considered prospective for calcrete and sandstone hosted uranium.
GSWA radiometric data over the northern portion of the Byro Project identified a prominent northeast trending linear uranium anomaly, some 45km long and 4-5 km wide, flanking the Murchison River. Following the grant of E59/1617, Enterprise commissioned a detailed airborne magnetic-radiometric survey over the southern tenement area. Figure 16 provides the uranium channel response of these two survey areas.
Figure 16: Byro Project, Regional Uranium Channel Image
Review of Exploration Operations
The radiometric data over E59/1617 is dominated by a large 2.5km x 4.75km uranium anomaly on the northwestern margin of Wooleen Lake, and also shows an elevated uranium response on the eastern margin of the lake, see Figure 17. The image indicates a uranium low over Wooleen Lake, however the lake remains highly prospective for uranium, as the presence of surface ponds of water and lake sediments is considered to have masked the true uranium response.
Regional mapping by the GSWA indicates that the anomalous uranium on the western margin of Wooleen Lake is largely coincident with extensive areas of calcrete development, (yellow polygons in Figure 17). A "hot" granite with strong uranium response located to the immediate northeast of Wooleen Lake is considered a potential source for the uranium. These observations support the calcrete hosted uranium exploration model being used by Enterprise.
DARLOT
The Darlot Project is located about 40km east northeast of Leinster and lies approximately midway between the Bronzewing and Darlot gold mines in the Yandal greenstone belt. The project is considered prospective for high grade orogenic gold deposits and VMS style copper/zinc base metal deposits.
In May 2011, Enterprise completed a detailed high resolution airborne magnetic and radiometric survey over the northern part of the North Darlot Project. The survey was undertaken to assist in targeting zones of quartz veining, silica alteration and disseminated sulphide bodies similar to the high grade Centenary deposit at Darlot and the Herbison vein at Bronzewing. Three areas (A, B, C) were identified as high priority targets considered prospective for gold mineralisation, see Figure 18.
Figure 18: Darlot North, Little Yanbo and Withers Find Prospects, IP Traverse over 1st VD Magnetic Image
An orientation Induced Polarisation (IP) survey was completed over the known gold mineralisation at the Little Yanbo prospect and extended to the east to cover a regional shear corridor. The IP survey defined two distinct bedrock chargeability responses, and a third IP chargeability response has been partly defined.
EUCLA PROJECT
The Eucla Project is centred around Balladonia, a roadhouse approximately 200km east of Norseman on the Eyre Highway. Detailed airborne magnetics and reconnaissance gravity surveys were undertaken over a series of strong intrusive like magnetic features, see Figure 19. Enterprise considered that these magnetic targets had the potential to contain or be associated with large world class deposits of Iron Oxide-Copper-Gold (IOCG), such as Olympic Dam in South Australia, concealed beneath thin cover.
Figure 19: Eucla Project, Five Aeromagnetic Targets with Drillhole Locations
An RC drilling programme comprising seven holes for a total of 589.2m was completed testing five coincident magnetic/ gravity targets. All drillholes intersected dioritic rocks with minor magnetite concentrations in the Precambrian basement, which explains the target magnetic/gravity anomalies. No mineralisation or alteration of significance was intersected and tenements in the Eucla Project were subsequently surrendered.
OTHER PROJECTS
BOOYLGOO PROJECT
The Booylgoo Project comprising one granted tenement is located 60km east northeast of Sandstone and some 610km northeast of Perth. The Project covers the northern part of the Archaean Booylgoo Range greenstone belt and contains 20km of mapped BIF. The tenement is considered to have potential for iron ore in the form of hematite/goethite deposits associated with these BIF units.
PADDY WELL PROJECT
The Paddy Well Project comprising three prospecting licences is located 80km southeast of Wiluna and 48km north of the Bronzewing mine. These tenements contain the historic Sims Find gold workings, which has potential for further gold mineralisation both down dip and along strike.
WATTAGEE PROJECT & FRASER RANGE PROJECT
A conditional sale and joint venture agreement was concluded over the Wattagee and Fraser Range Projects with Beachfront Resources Limited (Beachfront). Under the agreement, Beachfront paid Enterprise the sum of \$100,000 cash, and subject to the ASX listing of Beachfront, will pay a further \$100,000 worth of Beachfront shares, for a conditional 70% interest in the projects. Enterprise will be free carried to completion of any feasibility study. Beachfront will re-transfer its 70% interest in the Projects to Enterprise if it withdraws from the joint venture before completing a feasibility study, or if it fails to keep the tenements in good standing.
CORPORATE GOVERNANCE STATEMENT
As part of the framework of how the Board of Directors of Enterprise Metals Limited carries out its duties and obligations, the Board has considered the eight principles of corporate governance as set out in the ASX Good Corporate Governance and Best Practice Recommendations.
The essential corporate governance principles are:
- 1 Lay solid foundations for management and oversight;
- 2 Structure the Board to add value;
- 3 Promote ethical and responsible decision-making;
- 4 Safeguard integrity in financial reporting;
- 5 Make timely and balanced disclosure;
- 6 Respect the rights of shareholders;
- 7 Recognise and manage risk;
- 8 Remunerate fairly and responsibly.
The following table sets out the Company's present position in relation to each of the corporate governance principles.
| ASX Principle |
Status | Reference/comment | |
|---|---|---|---|
| Principle 1: | Lay solid foundations for management and oversight |
||
| 1.1 | Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions |
A | The Board Charter includes matters reserved for the Board and is included on the Company website in the Corporate Governance section. |
| 1.2 | Companies should disclose the process for evaluating the performance of senior executives |
N/A | The Company has a Remuneration Policy which establishes a Remuneration Committee to review and make decisions in relation to senior executive remuneration and incentive policies. No other process is currently adopted for evaluating the performance of senior executives however, the Board concurs with the full implementation of this Principle and will review appropriate ways of compliance as and when further senior executives are engaged. |
| 1.3 | Companies should provide the information indicated in the Guide to reporting on Principle 1 |
A | |
| Principle 2: | Structure the board to add value | ||
| 2.1 | A majority of the board should be independent directors |
N/A | The Board comprises seven directors, six of whom are non-executive, however only Dennis Wilkins is classified as independent. The Board believes that this is both appropriate and acceptable at this stage of the Company's development. |
| 2.2 | The chair should be an independent director | A | The Chairman is not independent, however, the roles of the Chairman and the Managing Director are separate. The Chairman is responsible for leading the Board in its duties, and facilitating effective discussions at Board level. The Managing Director is responsible for the efficient and effective operation of the Company. The Board considers that this is both appropriate and acceptable at this stage of the Company's development. |
| 2.3 | The roles of chair and chief executive officer should not be exercised by the same individual |
A | These positions are held by separate persons. |
A = Adopted N/A = Not adopted
| ASX Principle |
Status | Reference/comment | |
|---|---|---|---|
| 2.4 | The board should establish a nomination committee | A | The Company has established and operates under the Nomination Committee Charter which is included on the Company's website. |
| 2.5 | Companies should disclose the process for evaluating the performance of the board, its committees and individual directors |
A | Disclosed under the Nomination Committee Charter which is available on the Company's website. |
| 2.6 | Companies should provide the information indicated in the Guide to reporting on Principle 2 |
A | The skills and experience of Directors are set out in the Company's Annual Report and on its website. |
| Principle 3: | Promote ethical and responsible decision making | ||
| 3.1 | Companies should establish a code of conduct and disclose the code |
A | The board has established a Corporate Code of Conduct which all employees and directors are expected to follow. The Corporate Code of Conduct is available on the Company's website. |
| 3.2 | Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the Board to establish measurable objectives for achieving gender diversity and for the Board to assess annually both the objectives and progress in achieving them |
N/A | The Company has not established a Diversity Policy, however, the Company has appointed a female non executive director, Ms Anna Mao, to the Board. As the Company grows and requires more employees, the Company will adopt a Diversity Policy with a view to establishing measurable objectives for achieving gender diversity. |
| 3.3 | Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the Board in accordance with the diversity policy and progress towards achieving them |
N/A | The Company has not established a Diversity Policy, however, the Company has appointed a female non-executive director to the Board. As the Company grows and requires more employees, the Company will adopt a Diversity Policy with a view to establishing measurable objectives for achieving gender diversity. |
| 3.4 | Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board. |
A | There is one female director, Ms Anna Mao, on the Board, The Company does not have any female employees or senior executives. |
| 3.5 | Companies should provide the information indicated in the Guide to reporting on Principle 3 |
A | |
| Principle 4: | Safeguard integrity in financial reporting | ||
| 4.1 | The board should establish an audit committee | A | |
| 4.2 | The audit committee should be structured so that it: | ||
| • consists only of non executive directors | A | ||
| • consists of a majority of independent directors | N/A | The Company has established an Audit and Risk Committee consisting of three non-executive directors, only one of whom is classified as independent. Sourcing alternative directors to strictly comply with this Principle is considered expensive |
with costs outweighing the potential benefits. The Composition of the Committee is considered to be appropriate given the Company's size and stage of
development.
CORPORATE GOVERNANCE STATEMENT
| ASX Principle |
Status | Reference/comment | |
|---|---|---|---|
| • is chaired by an independent chair, who is not chair of the board |
A | ||
| • has at least three members | A | ||
| 4.3 | The audit committee should have a formal charter | A | The Audit and Risk Committee operates under the Audit and Risk Committee Charter which lists the main responsibilities of the Committee and is available on the Company's website. |
| 4.4 | Companies should provide the information indicated in the Guide to reporting on Principle 4 |
A | |
| Principle 5: | Make timely and balanced disclosure | ||
| 5.1 | Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance |
A | The Company has adopted a Continuous Disclosure Policy, a copy of which is available on the Company's website. |
| 5.2 | Companies should provide the information indicated in the Guide to reporting on Principle 5 |
A | |
| Principle 6: | Respect the rights of shareholders | ||
| 6.1 | Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings |
A | The Company has a Shareholder Communications Strategy (Policy), a copy of which is available on the Company's website. The Policy sets out the manner in which information is communicated to shareholders so that they are informed of all major developments affecting the Company's state of affairs. |
| 6.2 | Companies should provide the information indicated in the Guide to reporting on Principle 6 |
A | |
| Principle 7: | Recognise and manage risk | ||
| 7.1 | Companies should establish policies for the oversight and management of material business risks |
A | The Company has established an Audit and Risk Committee to monitor and review on behalf of the Board the system of risk management which the Group has established. This system aims to identify, assess, monitor and manage operational and compliance risks. |
| 7.2 | The board should require management to design and implement the risk management and internal control system to manage the company's material business risks and report to it on whether those risks are being managed effectively |
N/A | The Board determines the Group's 'risk profile' and has delegated to the Audit and Risk Committee the responsibility for overseeing and approving risk management strategy and policies, internal compliance and non-financial internal control. |
| The Audit and Risk Committee will report to the Board on this system of risk management and make appropriate recommendations to ensure the |
adequacy of the system.
A = Adopted N/A = Not adopted
| ASX Principle |
Status | Reference/comment | |
|---|---|---|---|
| 7.3 | The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks |
A | The Board has received the required assurance and declaration. |
| 7.4 | Companies should provide the information indicated in the Guide to reporting on Principle 7 |
A | |
| Principle 8: | Remunerate fairly and responsibly | ||
| 8.1 | The board should establish a remuneration committee |
A | |
| 8.2 | The remuneration committee should be structured so that it: |
||
| • consists of a majority of independent directors | N/A | The Company has established a Remuneration Committee consisting of three non-executive directors, however none of these Directors are classified as independent. Sourcing alternative directors to strictly comply with this Principle is considered expensive, with costs outweighing the potential benefits. |
|
| • is chaired by an independent director | N/A | The Company has established a Remuneration Committee consisting of three non-executive directors, however none of these Directors are classified as independent. Sourcing alternative directors to strictly comply with this Principle is considered expensive, with costs outweighing the potential benefits. |
|
| • has at least three members | A | ||
| 8.3 | Companies should clearly distinguish the structure of non-executive directors' remuneration from that of executive directors and senior executives |
A | The Company has established a Remuneration Committee consisting of three non-executive directors, however none of these are classified as independent. The composition of the Committee is considered to be appropriate given the Company's size and stage of development. The Remuneration Committee operates under the Remuneration Committee Charter. The Charter states the Remuneration Committee should consider and make recommendations to the Board on the remuneration for each executive Director having regard to the executive remuneration policy. |
| 8.4 | Companies should provide the information indicated in the Guide to reporting on Principle 8 |
A |
DIRECTORS' REPORT
Your Directors present their report on the Company and its subsidiaries ("Group") for the financial year ended 30 June 2011.
Directors
The names of Directors in office at any time during or since the end of the year are:
Dr Jingbin Wang (appointed 13 July 2011)
Mr Dermot Ryan
Mr Bruce Hawley
Mr Paul Larsen
Mr Dennis Wilkins (appointed 14 July 2011)
Ms Anna Mao (appointed 13 July 2011)
Dr Zhen Huang (appointed 13 July 2011)
Directors have been in office since the start of the financial year to the date of this Report unless otherwise stated.
Company Secretary
The following persons held the position of Company Secretary during or since the end of the financial year:
Mr Dennis Wilkins (appointed 1 August 2011)
Mr Jay Richard Stephenson (from the beginning of the financial year until he resigned 1 August 2011)
Principal Activities
The principal activities of the Group during the financial year were the exploration of a number of gold, uranium and iron ore tenements in Western Australia.
Significant Changes in State of Affairs
On 22 October 2010, the Company announced a planned Placement of 15,000,000 Shares at 20 cents per Share, together with 1 free attaching Option for every two Shares issued (exercisable at 25 cents per Share on or before 20 June 2012), to raise \$3,000,000. The Placement was made in two tranches (8 November and 10 December 2010) to sophisticated investors, pursuant to Section 708 of the Corporations Act 2001.
On 28 February 2011, the Company issued 4,000,000 ordinary fully paid Shares in Enterprise Metals Limited and a gross production royalty of 1.5% on all minerals produced to MPF Exploration Pty Ltd and Philip Frederik Hoff, to acquire all of the issued shares in MPF's 100% owned subsidiary Burracoppin Resources Pty Limited. The Share issue and royalty was in satisfaction and completion of a Share Option and Sale Agreement dated 13 August 2010. As well as tenements at Burracoppin, Burracoppin Resources Pty Ltd held a 100% interest in several tenements in the Yandal greenstone belt, and the Harris Lake tenement in the Fraser Range which is prospective for uranium.
On 23 May 2011, the Company announced that it had executed a Subscription Agreement for a private placement regulated by section 708 of the Corporations Act, with SinoTech (Hong Kong) Corporation Limited ("SinoTech") for 62,000,000 Enterprise Shares at an issue price of 20 cents each, to raise \$12,400,000 for ongoing exploration. SinoTech was also offered 20,000,000 Options at an exercise price of 25 cents each exercisable within two years of the date of grant. If 10,000,000 of these Options are exercised by SinoTech within 1 year of their date of grant, then Enterprise will issue to SinoTech a further 11,000,000 Options at an exercise price of A\$0.25, each exercisable within two years. On 13 July 2011, the Company announced that the Subscription Agreement had completed, and \$12,400,000 of funds had been received from SinoTech. The Company issued 62,000,000 Shares at an issue price of 20 cents each and 20,000,000 Options at an exercise price of 25 cents each exercisable within two years of the date of grant.
On 23 May 2011, the Company also announced that it had executed an Underwriting Agreement to the Placement referred to above, with Worldtex Capital Resources Ltd ("Worldtex"). Enterprise agreed to pay Worldtex an underwriting fee of \$248,000 cash (representing 2% of the funds raised by the SinoTech Placement), and 15,000,000 attaching Options. On 13 July 2011, the Company announced that the Underwriting Agreement had completed, and the underwriting fee of \$248,000 cash was paid and the 15,000,000 Options with an exercise date of 1 June 2013 were issued.
On 25 May 2011, the Company entered into a conditional Sale and Joint Venture Agreement with Beachfront Resources Limited ("Beachfront") over tenements in the Wattagee and Fraser Range projects. Under the agreement, Beachfront paid Enterprise the sum of \$100,000 cash, and subject to the ASX listing of Beachfront, will pay a further \$100,000 worth of Beachfront shares, for a conditional 70% interest in the projects. Enterprise will be free carried to completion of any feasibility study. Beachfront will re-transfer its 70% interest in the Projects to Enterprise if it withdraws from the joint venture before completing a final feasibility study (to mine), or if it fails to keep the tenements in good standing through inground exploration expenditure.
On 1 June 2011, the Company allotted 10,000,000 Shares in Enterprise Metals Limited at 20 cents per Share to raise \$2,000,000 to Worldtex Capital Resources Limited ("Worldtex"). In addition, 3,225,806 unlisted Options were issued to Worldtex for nil consideration, exercisable at of \$0.25 on or before 1 June 2013. The Placement was made to sophisticated investors, pursuant to Section 708 of the Corporations Act 2001. The Company issued the Shares without disclosure to investors under Part 6D.2 of the Corporations Act 2001.
Operating Results
The consolidated loss of the Group after providing for income tax amounted to \$2,973,631(2010: \$365,081).
Dividends Paid or Recommended
There were no dividends paid or recommended during the financial year ended 30 June 2011.
Review of Operations
A detailed review of the Group's exploration activities is set out in the section titled "Review of Operations" in this Annual Report.
Financial Position
The net assets of the Group have increased by \$2,447,970 from 30 June 2010 to \$19,444,950 at 30 June 2011.
After Reporting Date Events
On 13 July 2011 the Company issued 62,000,000 ordinary shares and 20 million options (exercisable at 25 cents on or before 12 July 2013) to SinoTech on receipt of \$12,400,00 million cash. Associated with this Placement, 15,000,000 underwriting Options were issued to Worldtex and 20,000,000 broker Options were issued to RI Capital, both exercisable at 25 cents on or before 12 July 2014.
Likely Developments
Likely developments, future prospects and business strategies of the operations of the Group and the expected results of those operations have not been included in this report as the directors believe, on reasonable grounds, that the inclusion of such information would be likely to result in unreasonable prejudice to the Group.
Information on Directors
Dr Jingbin Wang
Chairman (Non-Executive)
Experience
Dr Wang is Executive Director of China Nonferrous Metals Resource Geological Survey, a position he has held since 2003. He has also held the title of Vice-President of the China Nonferrous Metals Industry Association since 2008. Dr Wang is a leader in the non-ferrous metals industry in China with great expertise in mineral exploration and mining amassed over his 24 years of experience. He has been granted the title of National Youth Expert for Outstanding Contribution in China in recognition of his success in prospecting results and scientific research. In addition, he is the Chief Scientist of National 973 Program. Dr Wang has
been President of the Beijing Institute of Geology for Mineral Resources since 2002, and is currently Chairman of Sinotech Minerals Exploration Co., Ltd. And Chairman of two Canadian public companies: Canaco Resources Inc. and Silvore Fox Minerals Corp. He is an accomplished mining team leader with a track record of discovering major deposits around the world. Dr Wang received a B.Sc in Mineral Prospecting and Exploration from Central-South University of Technology Changsha, China in 1982. Subsequently, he earned Masters and PhD Degrees in magmatic petrology, economic geology from the same university. Dr Wang conducted postdoctoral research at the Institute of Geochemistry, Chines Academy of Sciences (China) in 1991.
Interest in Shares and Options
Nil Shares Nil Options
Special Responsibilities
Member of the Remuneration Committee
Directorships held in other listed entities Nil
Mr Dermot Ryan
Managing Director
Experience
Mr Ryan spent 20 years with the CRA group of companies from 1977-1996, including 10 years as Chief Geologist for CRA Exploration in various states of Australia. He was GM Exploration for Great Central Mines Ltd (later Normandy Yandal Operations Ltd) from late 1996-2001, and for the past 6 years has run a private mineral exploration consulting group (XServ Pty Ltd). He is a Fellow of the AusIMM, (CP), a Fellow of the AIG, and holds a BApSc (Geol). Mr Ryan has been Managing Director since 14 October 2008.
Interest in Shares and Options
12,075,000 Shares 3,500,000 Options
Special Responsibilities Member of Nomination Committee
Directorships held in other listed entities
Legend Mining Limited (May 2005 – present).
Mr Bruce Hawley
Non-Executive Director (was an Executive Director until 1 August 2011)
Experience
Mr Hawley has 35 years experience in the management, evaluation, development and construction of mining projects. He is a Fellow of the AusIMM (CP) andholds a BE (Chem) Hons.
Interest in Shares and Options
3,716,168 Shares 3,352,168 Options
DIRECTORS' REPORT
Special Responsibilities
Member of Remuneration Committee, Nomination Committee and Audit and Risk Committee
Directorships held in other listed entities
Nil
Mr Paul Larsen
Non-Executive Director (was Chairman until 1 August 2011)
Experience
Mr Larsen has over 25 years of commercial experience, being the Managing Director of a number of successful private companies. Mr Larsen has also been heavily involved in the construction industry.
Interest in Shares and Options
4,671,034 Shares 485,148 Options
Special Responsibilities
Member of the Remuneration Committee and Audit and Risk Committee
Directorships held in other listed entities Nil
Mr Dennis Wilkins
Non-Executive Director
Experience
Mr Wilkins is an accountant who has been a director, company secretary or acted in a corporate advisory capacity to listed resource companies for over 20 years.
Mr Wilkins previously served as the finance director and company secretary for a mid-tier gold producer and also spent five years working for a leading merchant bank in the United Kingdom. Resource postings to Indonesia, South Africa and New Zealand in managerial roles has broadened his international experience.
Mr Wilkins has extensive experience in capital raising specifically for the resources industry and is the principal of DWCorporate Pty Ltd which provides advisory, funding and administrative management services to the resource sector.
Interest in Shares and Options
Nil Shares Nil Options
Special Responsibilities
Member of Audit and Risk Committee
Directorships held in other listed entities
Key Petroleum Limited (July 2006 – present) and Minemakers Limited (September 2005 – present).
Ms Anna Mao
Non-Executive Director
Experience
Ms Mao is CEO and director of Worldtex Capital Resources Limited, a capital and investment company incorporated in Hong Kong. She is a creative leader and entrepreneur with 19 years experience and knowledge in finance and operation. She co-founded and developed several successful businesses both in China and Canada. Ms Mao graduated from Beijing Institute of Technology University in 1991, and obtained her MBA from Richard Ivey Business School of Western Ontario University in 2001. Ms Mao is also a director and founder of Sino Link Capital Resources Limited, and a director of Enpar Technologies Inc.
Interest in Shares and Options
6,500,000 Shares 2,096,774 Options
Special Responsibilities Member of Nominations Committee
Directorships held in other listed entities Nil
Dr Zhen Huang
Non-Executive Director
Experience
Dr Huang is currently a director of Sinotech Minerals Exploration Co., Ltd. and Australian company Golden Phoenix Resources Limited. He is also Managing Director of SinoDrill Co. Ltd. Prior to his appointment he was director of Geology Department of China National Nonferrous Metals Industry Corporation. Dr Huang has 29 years of experience in non-ferrous minerals exploration and since 1999, he has actively established four technical service companies covering engineering construction, drilling, environment engineering and mining investment, all of which have made significant achievements.
Interest in Shares and Options Nil Shares Nil Options
Special Responsibilities None
Directorships held in other listed entities Nil
Meetings of Directors
During the financial year, five meetings of Directors (including committees of Directors) were held. Attendances by each Director during the year were as follows:
| COMMITTEE MEETINGS | ||||||
|---|---|---|---|---|---|---|
| DIRECTORS' MEETINGS | REMUNERATION COMMITTEE | AUDIT COMMITTEE | ||||
| Number eligible to attend |
Number Attended |
Number eligible to attend |
Number Attended |
Number eligible to attend |
Number Attended |
|
| Paul Larsen | 5 | 5 | - | - | - | - |
| Dermot Ryan | 5 | 5 | - | - | - | - |
| Bruce Hawley | 5 | 5 | - | - | - | - |
Indemnifying Officers or Auditor
During or since the end of the financial year the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows:
- The Company has entered into agreements to indemnify all Directors and provide access to documents, against any liability arising from a claim brought by a third party against the Company. The agreement provides for the Company to pay all damages and costs which may be awarded against the Directors.
- The Company has paid premiums to insure each of the Directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of the Company, other than conduct involving a wilful breach of duty in relation to the Company. The amount of the premium was \$13,200.
- No indemnity has been paid to auditors.
Options
At the date of this report, the un-issued ordinary shares of Enterprise Metals Limited under option are as follows:
| Grant Date | Date of Expiry | Exercise Price | Number under Option |
|---|---|---|---|
| 23 July 2008 | 22 November 2012 | \$0.25 | 1,500,000 |
| 23 July 2008 | 30 June 2013 | \$0.50 | 2,500,000 |
| 14 October 2008 | 22 November 2012 | \$0.25 | 1,500,000 |
| 13 July 2009 | 20 June 2012 | \$0.25 | 9,281,966 |
| 27 July 2009 | 20 June 2012 | \$0.25 | 6,000,000 |
| 13 December 2010 | 20 June 2012 | \$0.25 | 7,500,035 |
| 1 Jun 2011 | 1 June 2013 | \$0.25 | 3,225,806 |
| 12 July 2011 | 12 July 2013 | \$0.25 | 20,000,000 |
| 12 July 2011 | 12 July 2014 | \$0.25 | 35,000,000 |
| 86,507,807 |
No person entitled to exercise the option has or has any right by virtue of the option to participate in any share issue of any other body corporate.
DIRECTORS' REPORT
Environmental Regulations
In the normal course of business, there are no environmental regulations or requirements that the Group is subject to.
Non-audit Services
The following non audit services were provided by the entity's auditor, Grant Thornton Audit Pty Ltd, or associated entities. The directors are satisfied that the provision of non audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
- − All non-audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity of the auditor;
- − None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.
Grant Thornton Audit Pty Ltd, or associated entities, received or are due to receive the following amounts for the provision of non audit services:
| 2011 | 2010 | |
|---|---|---|
| \$ | \$ | |
| Tax consulting services | 1,900 | - |
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Auditor's Independence Declaration
The lead auditor's independence declaration for the year ended 30 June 2011 has been received and can be found on page 26 of the Annual Report.
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each Director of Enterprise Metals Limited and key management receiving the highest remuneration.
A. Remuneration Policy
The remuneration policy of Enterprise Metals Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component, and offering specific long-term incentives based on key performance areas affecting the Group's financial results. The Board of Enterprise Metals Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best management and directors to run and manage the Group, as well as create goal congruence between directors, executives and shareholders.
The Board's policy for determining the nature and amount of remuneration for Board members and senior executives of the Group is as follows:
The remuneration policy, setting the terms and conditions for the executive Directors and other senior executives, was developed by the Remuneration Committee and approved by the Board. All executives receive a base salary (which is based on factors such as length of service and experience), superannuation, and Options as performance incentives. The Remuneration Committee reviews executive packages annually by reference to the Group's performance, executive performance, and comparable information from industry sectors and other listed companies in similar industries.
Executives are also entitled to participate in the Employee Share and Option arrangements.
All remuneration paid to Directors and executives is valued at the cost to the Company and expensed. Options given to Directors and employees are valued using the Black-Scholes methodology.
The Board policy is to remunerate non-executive Directors at the lower end of market rates for comparable companies for time, commitment, and responsibilities. The non-executive Directors have been provided with Options that are designed to incentivise the non-executive Directors. The Remuneration Committee determines payments to the non-executive Directors and reviews their remuneration annually based on market practice, duties, and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive Directors is subject to approval by shareholders at the Annual General Meeting. Fees for non-executive Directors are not linked to the performance of the Group. However, to align Directors' interests with shareholder interests, the Directors are encouraged to hold shares in the Company.
The remuneration policy has been tailored to increase the direct positive relationship between shareholders' investment objectives and Directors' and executives' performance. Currently, this is facilitated through the issue of Options to the majority of Directors and executives to encourage the alignment of personal and shareholder interests. The Company believes this policy will be effective in increasing shareholder wealth. For details of Directors' and executives' interests in options at year end, refer to note 5 of the Financial Statements.
REMUNERATION REPORT (AUDITED)
B. Details of Remuneration for Year Ended 30 June 2011
There were no cash bonuses paid during the year and there are no set performance criteria for achieving cash bonuses. The following table of benefits and payment details, in respect to the financial year, the components of remuneration for each member of the key management personnel of the Group. Key management personnel are also specified executives.
Table of Benefits and Payments for the Year Ended 30 June 2011
| Key Management Personnel |
Short-term benefits |
Post employment benefits |
Long-term benefits |
Equity-settled share-based payments |
Total | Remuneration that is performance based |
||||
|---|---|---|---|---|---|---|---|---|---|---|
| Salary, fees and leave |
Cash from other activities |
Non monetary |
Other | Superannuation | Other | Equity | Options | |||
| \$ | \$ | \$ | \$ | \$ | \$ | \$ | \$ | \$ | % | |
| Paul Larsen | 40,000 | - | - | - | 2,700 | - | - | - | 42,700 | - |
| Dermot Ryan* | - | 114,739 | - | - | - | - | - | - | 114,739 | - |
| Bruce Hawley | 30,000 | 58,950 | - | - | - | - | - | - | 88,950 | - |
| Jay Stephenson** | - | - | - | - | - | - | - | - | - | - |
| 70,000 | 173,689 | - | - | 2,700 | - | - | - | 246,389 | - |
2010
2011
| Key Management Personnel |
Short-term benefits |
Post employment benefits |
Long-term benefits |
Equity-settled share-based payments |
Total | Remuneration that is performance based |
||||
|---|---|---|---|---|---|---|---|---|---|---|
| Salary, fees and leave |
Cash from other activities |
Non monetary |
Other | Superannuation | Other | Equity | Options | |||
| \$ | \$ | \$ | \$ | \$ | \$ | \$ | \$ | \$ | % | |
| Paul Larsen | 40,000 | - | - | - | - | - | - | - | 40,000 | - |
| Dermot Ryan* | - | 156,450 | - | - | - | - | - | - | 156,450 | - |
| Bruce Hawley | 30,000 | 104,433 | - | - | - | - | - | - | 134,433 | - |
| Jay Stephenson** | - | - | - | - | - | - | - | - | - | - |
| 70,000 | 260,883 | - | - | - | - | - | - | 330,883 | - |
* Dermot Ryan is paid by a related party of the Group – refer Note 20 for disclosure of related party transactions. The amount shown above is an assessment of the amount paid for his services.
** Jay Stephenson is paid by a related party of the Group – refer Note 20 for disclosure of related party transactions.
C. Service Agreements
The Company has no service agreements with any Directors. The employment contract stipulates a one month resignation period. The Company may terminate the employment contract without cause by providing one month's written notice, or making payment in lieu of notice based on the individual's annual salary component. Termination payments are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the Company can terminate employment at any time.
D. Share-based compensation
Incentive Option Scheme
Options are granted under the Enterprise Metals Limited Incentive Option Scheme. All staff who have been continuously employed by the Company for a period of at least one year are eligible to participate in the plan. Options are granted under the plan for no consideration. Options are granted for a five year period.
Options granted under the plan carry no dividend or voting rights.
The ability for the employee to exercise the Options is restricted in accordance with the terms and conditions detailed in the Incentive Option Scheme. Each Option will automatically lapse if not exercised within five years of the date of issue. The exercise period may also be affected by other events as detailed in the terms and conditions in the Incentive Option Scheme.
The Options vest when they are issued.
Director and Key Management Personnel Options
There were no Options issued to Director and Key Management Personnel during the 2011 financial year.
This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors.
Dermot Ryan MANAGING DIRECTOR
Dated this 30th day of September 2011
Auditor's Independence Declaration To the Directors of Enterprise Metals Limited
Grant Thornton Audit Pty Ltd ABN 94 269 609 023 10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E [email protected] W www.grantthornton.com.au Grant Thornton Audit Pty Ltd Grant Thornton Audit Pty Ltd W www.grantthornton.com.au
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Enterprise Metals Limited for the year ended 30 June 2011, I declare that, to the best of my knowledge and belief, there have been: 10 Kings Park Road West Perth WA 6005 PO Box 570
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and West Perth WA 6872
b no contraventions of any applicable code of professional conduct in relation to the audit. T +61 8 9480 2000
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
C A Becker
Director - Audit & Assurance Perth, 30 September 2011
Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.
Liability limited by a scheme approved under Professional Standards Legislation
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2011
| Note | 2011 | 2010 | |
|---|---|---|---|
| \$ | \$ | ||
| Revenue | 2 | 319,141 | 236,600 |
| Accounting and Audit Fees | (42,697) | (37,344) | |
| Share registry and Listing Fees | (65,538) | (110,141) | |
| Employee Benefits Expense | (247,423) | (222,943) | |
| Computers and Software | (1,883) | (2,135) | |
| Depreciation | 3 | (31,127) | (14,551) |
| Insurance | (17,712) | (22,672) | |
| Investor Relations | (19,373) | (21,288) | |
| Legal Fees | (28,126) | - | |
| Office Equipment and Supplies | (8,383) | - | |
| Office Rental Expense | 3 | (7,487) | (7,828) |
| Travel and Accommodation | (71,288) | - | |
| Exploration and Evaluation Expensesnot capitalised | 3 | (50,777) | (28,285) |
| Impairment of Exploration and Evaluation | 3 | (2,653,308) | (62,093) |
| Other expenses | (46,422) | (72,401) | |
| Loss before income tax | 3 | (2,972,403) | (365,081) |
| Income tax expense | 4 | (1,228) | - |
| Loss from continuing operations | (2,973,631) | (365,081) | |
| Other comprehensive income, net of tax | - | - | |
| Total comprehensive loss for the year | (2,973,631) | (365,081) | |
| Total comprehensive loss attributable to members of the parent entity | (2,973,631) | (365,081) | |
| Overall Operations | |||
| Basic loss per share (cents per share) | 7 | (2.421) | (0.374) |
| Diluted loss per share (cents per share) | 7 | (2.421) | (0.374) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2011
| Note | 2011 | 2010 | |
|---|---|---|---|
| \$ | \$ | ||
| Current Assets | |||
| Cash and cash equivalents | 8 | 2,839,508 | 2,166,400 |
| Trade and other receivables | 9 | 165,232 | 134,017 |
| Total Current Assets | 3,004,740 | 2,300,417 | |
| Non-Current Assets | |||
| Plant and equipment | 10 | 94,371 | 91,037 |
| Exploration and evaluation | 11 | 16,597,534 | 14,926,587 |
| Other financial assets | 12 | 393 | 73 |
| Total Non-Current Assets | 16,692,298 | 15,017,697 | |
| TOTAL ASSETS |
19,697,038 | 17,318,114 | |
| Current Liabilities | |||
| Trade and other payables | 13 | 252,088 | 321,134 |
| Total Current Liabilities | 252,088 | 321,134 | |
| TOTAL LIA BILITIES |
252,088 | 321,134 | |
| NET ASSETS |
19,444,950 | 16,996,980 | |
| Equity | |||
| Issued capital | 15 | 23,058,868 | 17,637,267 |
| Options reserve | 16 | 877,150 | 877,150 |
| Accumulated losses | (4,491,068) | (1,517,437) | |
| TOTAL EQUITY |
19,444,950 | 16,996,980 |
The accompanying notes form part of these Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2011
| Issued Capital | Accumulated Losses |
Options Reserve |
Total | |
|---|---|---|---|---|
| \$ | \$ | \$ | \$ | |
| Balance at 1 July 2009 | 11,210,098 | (1,152,356) | 877,150 | 10,934,892 |
| Loss attributable to members of the parent entity for the year | - | (365,081) | - | (365,081) |
| Other comprehensive Income | - | - | - | - |
| Total comprehensive income for the year | - | (365,081) | - | (365,081) |
| Transaction with owners, directly in equity | ||||
| Shares issued during the year – net of costs | 6,427,169 | - | - | 6,427,169 |
| Balance at 30 June 2010 | 17,637,267 | (1,517,437) | 877,150 | 16,996,980 |
| Balance at 1 July 2010 | 17,637,267 | (1,517,437) | 877,150 | 16,996,980 |
| Loss attributable to members of the parent entity for the year | - | (2,973,631) | - | (2,973,631) |
| Other comprehensive Income | - | - | - | - |
| Total comprehensive income for the year | - | (2,973,631) | - | (2,973,631) |
| Transaction with owners, directly in equity | ||||
| Shares issued during the year – net of costs | 5,421,601 | - | - | 5,421,601 |
| Balance at 30 June 2011 | 23,058,868 | (4,491,068) | 877,150 | 19,444,950 |
The accompanying notes form part of these Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2011
| Note | 2011 | 2010 | |
|---|---|---|---|
| \$ | \$ | ||
| CASH FLO WS FROM OPERATING ACTI VITIES |
|||
| Interest received | 92,228 | 68,920 | |
| Rent and other receipts | 224,375 | 184,447 | |
| Payments to suppliers and employees | (752,564) | (454,453) | |
| Net cash used in operating activities | 17a | (435,961) | (201,086) |
| CASH FLO WS FROM INVESTING ACTI VITIES |
|||
| Purchase of property, plant and equipment | (34,461) | (97,080) | |
| Payments for exploration and evaluation expenditure | (3,558,118) | (3,975,064) | |
| Purchase of controlled entities, net of cash acquired | 14 | 48 | (108,793) |
| Net cash used in investing activities | (3,592,531) | (4,180,937) | |
| CASH FLO WS FROM FINANCING ACTI VITIES |
|||
| Proceeds from issue of shares, net of costs | 4,701,600 | 5,512,169 | |
| Net cash provided by financing activities | 4,701,600 | 5,512,169 | |
| Net increase in cash and cash equivalents held | 673,108 | 1,130,146 | |
| Cash and cash equivalents at 1 July | 2,166,400 | 1,036,254 | |
| Cash and cash equivalents at 30 June | 8 | 2,839,508 | 2,166,400 |
The accompanying notes form part of these Financial Statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial report includes the consolidated financial statements and notes of Enterprise Metals Limited and controlled entities ('Consolidated Group' or 'Group'). Enterprise Metals Limited is a listed public company, incorporated and domiciled in Australia.
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
The financial statements were authorised for issue by the directors on 30 September 2011. The directors have the power to amend and reissue the financial statements.
Going Concern
The financial report has been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
The consolidated entity incurred a net loss after income tax of \$2,973,631 (2010: \$365,081) and had cash outflows from operations of \$435,961 (2010: \$201,086) during the year ended 30 June 2011.
Due to the capital raising program completed to SinoTech (refer note 19) the directors believe that the Group has sufficient funds for atleast the next 12 months.
(a) Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Enterprise Metals Limited at the end of the reporting period. A controlled entity is any entity over which Enterprise Metals Limited has the power to govern the financial and operating policies so as to obtain benefits from the entity's activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.
Where controlled entities have entered or left the Group during the year, the financial performance of those entities are included only for the period of the year that they were controlled.
A list of controlled entities is contained in Note 12 to the financial statements.
In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses and results in the consolidation of its assets and liabilities.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The acquisition method requires that for each business combination one of the combining entities must be identified as the acquirer (ie parent entity). The business combination will be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the parent entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to certain limited exceptions, the fair value of the identifiable assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be reliably measured.
The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted for the measurement of goodwill will impact on the measurement of any non-controlling interest to be recognised in the acquiree where less than 100% ownership interest is held in the acquiree.
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements. Consideration
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
may comprise the sum of the assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.
Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of comprehensive income. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss.
Included in the measurement of consideration transferred is any asset or liability resulting from a contingent consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of consideration previously paid are recognised as a receivable. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or a liability is remeasured each reporting period to fair value through the statement of comprehensive income unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.
(b) Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
(c) Property, Plant, and Equipment
Each class of property, plant, and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the historical cost basis.
The cost of fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing costs, and an appropriate proportion of fixed and variable overheads.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the Group commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
| Class of Fixed Asset | Depreciation Rate |
|---|---|
| Plant and equipment | 20% |
| Computers | 33% |
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.
(d) Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is 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 reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.
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.
(e) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the Group are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the Group will obtain ownership of the asset or over the term of the lease.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.
(f) Financial Instruments
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified 'at fair value through profit or loss', in which case transaction costs are expensed to profit or loss immediately.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period. (All other loans and receivables are classified as non-current assets.)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.
Derivative instruments
Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are taken to the statement of comprehensive income unless they are designated as hedges.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm's length transactions, reference to similar instruments and option pricing models.
Impairment
At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for sale financial instruments, a significant and prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the statement of comprehensive income.
Derecognition
Financial assets are derecognised where the contractual rights to cash flow expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
(g) Impairment of Non-Financial Assets
At each the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, to the asset's carrying value. Any excess of the asset's carrying value over its recoverable amount is expensed to the statement of comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
(h) Employee Benefits
Provision is made for the Group's liability for employee benefits arising from services rendered by employees to reporting date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.
Equity-settled compensation
The Group operates an Incentive Option Scheme share-based compensation plan. The bonus element over the exercise price of the employee services rendered in exchange for the grant of shares and options is recognised as an expense in the statement of comprehensive income. The total amount to be expensed over the vesting period is determined by reference to the fair value of the shares of the options granted.
(i) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will results and that outflow can be reliably measured.
(j) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position.
(k) Revenue and Other Income
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. Rental income is recognised on an accrual basis.
Management fees are recognised on portion of completion basis.
All revenue is stated net of the amount of goods and services tax (GST).
(l) Trade and Other Payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Group during the reporting period which remains unpaid. The balance is recognised as a current liability with the amount being normally paid within 30 days of recognition of the liability.
(m) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in income in the period in which they are incurred.
(n) Goods and Services Tax (GST)
Revenues, expenses, and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of financing activities, which are disclosed as operating cash flow.
(o) Government Grants
Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis.
(p) Earnings Per Share
i. Basic earnings per share
Basic earnings per share is determined by dividing the profit attributable to equity holders of the company, excluding any costs of service 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 year.
ii. Diluted earnings per share
Diluted earnings per share adjusts the figure used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financial 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.
(q) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
When the Group applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in its financial statements, a statement of financial position as at the beginning of the earliest comparative period will be disclosed.
(r) Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group.
Key Estimates — Impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the consolidated entity that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined.
The Directors considered the impairment of their investment in subsidiaries and loans receivable from subsidiaries based on the fair value less costs to sell of the underlying mineral tenements. The inter-company loans have no interest or repayment terms and are effectively investments in controlled entities and are reflected at cost.
No impairment has been recorded for the year.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Key Estimates – Share based payment transactions
The Group 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 the Black-Scholes formula. Details of the estimates used to determine the fair value are detailed in Note 18.
Key Judgments – Exploration and Evaluation Expenditure
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. While there are certain areas of interest from which no reserves have been extracted, the Directors are of the continued belief that such expenditure should not be written off since feasibility studies in such areas have not yet concluded. Such capitalised expenditure is carried at the end of the reporting period at \$16,597,534 (2010: \$14,926,587). An impairment of \$2,653,308 (2010: Nil) was recognised during the year ended 30 June 2011.
Key Judgments – Carbon Tax
On 10 July 2011, the Commonwealth Government announced the "Securing a Clean Energy Future – the Australian Government's Climate Change Plan". Whilst the announcement provides further details of the framework for a carbon pricing mechanism, uncertainties continue to exist on the impact of any carbon pricing mechanism on the Group as legislation must be voted on and passed by both houses of Parliament. In addition, as the Group will not fall within the "Top 500 Australian Polluters", the impact of the Carbon Scheme will be through indirect effects of increased prices on many production inputs and general business expenses as suppliers subject to the carbon pricing mechanism are likely to pass on their carbon price burden to their customers in the form of increased prices. Directors expect that this will not have an significant impact upon the operation costs within the business, and therefore will not have an impact upon the valuation of assets and/or going concern of the business.
(s) New Accounting Standards for Application in Future Periods
The AASB has issued new and amended accounting standards and interpretations that have mandatory application dates for future reporting periods. The Group has decided against early adoption of these standards. A discussion of those future requirements and their impact on the Group follows:
• AASB 9: Financial Instruments and AASB 2009–11: Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12] (applicable for annual reporting periods commencing on or after 1 January 2013).
These standards are applicable retrospectively and amend the classification and measurement of financial assets. The Group has not yet determined the potential impact on the financial statements.
The changes made to accounting requirements include:
- simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value;
- simplifying the requirements for embedded derivatives;
- removing the tainting rules associated with held-to-maturity assets;
- removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost;
- allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument; and
- reclassifying financial assets where there is a change in an entity's business model as they are initially classified based on:
- a. the objective of the entity's business model for managing the financial assets; and
- b. the characteristics of the contractual cash flows.
-
AASB 124: Related Party Disclosures (applicable for annual reporting periods commencing on or after 1 January 2011). This standard removes the requirement for government related entities to disclose details of all transactions with the government and other government related entities and clarifies the definition of a related party to remove inconsistencies and simplify the structure of the standard. No changes are expected to materially affect the Group.
-
AASB 2009–12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual reporting periods commencing on or after 1 January 2011).
- This standard makes a number of editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of International Financial Reporting Standards by the IASB. The standard also amends AASB 8 to require entities to exercise judgment in assessing whether a government and entities known to be under the control of that government are considered a single customer for the purposes of certain operating segment disclosures. These amendments are not expected to impact the Group.
- AASB 2009–14: Amendments to Australian Interpretation Prepayments of a Minimum Funding Requirement [AASB Interpretation 14] (applicable for annual reporting periods commencing on or after 1 January 2011). This standard amends Interpretation 14 to address unintended consequences that can arise from the previous accounting requirements when an entity prepays future contributions into a defined benefit pension plan.
- AASB 2010-04: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101, AASB 134 and Interpretation 13] (for annual reporting periods commencing on or after 1 July 2011).
Emphasises the interaction between quantitative and qualitative AASB 7 disclosures and the nature and extent of risks associated with financial instruments.
Clarifies that an entity will present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity or in the notes to the financial statements.
Provides guidance to illustrate how to apply disclosure principles in AASB 134 for significant events and transactions.
Clarify that when the fair value of award credits is measured based on the value of the awards for which they could be redeemed, the amount of discounts or incentives otherwise granted to customers not participating in the award credit scheme, is to be taken into account.
The Group does not anticipate the early adoption of any of the above Australian Accounting Standards.
| NOTE 2: RE VENUE |
2011 | 2010 | |
|---|---|---|---|
| \$ | \$ | ||
| Rental and other income | 226,913 | 167,679 | |
| Interest received from other parties | 92,228 | 68,921 | |
| Total Revenue | 319,141 | 236,600 |
| NOTE 3: LOSS FOR THE YEAR |
2011 | 2010 | |
|---|---|---|---|
| \$ | \$ | ||
| (a) E xpenses |
|||
| Exploration expenses not capitalised | 50,777 | 28,285 | |
| Depreciation of plant and equipment | 31,127 | 14,551 | |
| Office rental expense | 7,487 | 7,828 | |
| (b) S ignificant Revenues and Expenses |
|||
| The following significant revenue and expense items are relevant in explaining the financial performance: |
|||
| Impairment of Exploration and Evaluation | 2,653,308 | 62,093 |
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
| NOTE | 4: INCOME TAX |
Note | 2011 | 2010 |
|---|---|---|---|---|
| \$ | \$ | |||
| (a) I | ncome tax expense | |||
| Current tax | - | - | ||
| Deferred tax | - | - | ||
| Adjustments for current tax of prior periods | 1,228 | - | ||
| 1,228 | - | |||
| Deferred income tax expense included in income tax expense comprises: |
||||
| - (Increase) in deferred tax assets | 4(c) | (247,443) | (1,181,814) | |
| - Increase in deferred tax liabilities | 4(d) | 247,443 | 1,181,814 | |
| - | - | |||
| (b) R | econciliation of income tax expense to prima facie tax payable | |||
| The prima facie tax payable on profit from ordinary activities before | ||||
| income tax is reconciled to the income tax expense as follows: | ||||
| Prima facie tax on operating loss at 30% | (891,721) | (109,524) | ||
| Add / (Less) tax effect of: | ||||
| Non-deductible expenses | 587 | 1,446 | ||
| Deferred tax asset not brought to account | 891,134 | 108,078 | ||
| Adjustments for current tax of prior periods | 1,228 | - | ||
| Income tax attributable to operating loss | 1,228 | - | ||
| The applicable weighted average effective tax rates are as follows: | nil% | nil% | ||
| (c) | Deferred tax assets | |||
| Tax Losses | 2,031,166 | 1,801,187 | ||
| Provisions and Accrual | 4,500 | 6,000 | ||
| Other | 18,964 | - | ||
| 2,054,630 | 1,807,187 | |||
| Set-off deferred tax liabilities | 4(d) | (2,054,630) | (1,807,187) | |
| Net deferred tax assets | - | - | ||
| (d) | Deferred tax liabilities | |||
| Exploration expenditure | 2,054,630 | 1,807,187 | ||
| 2,054,630 | 1,807,187 | |||
| Set-off deferred tax assets | 4(c) | (2,054,630) | (1,807,187) | |
| Net deferred tax liabilities | - | - | ||
| (e) T | ax losses | |||
| Unused tax losses for which no deferred tax asset has been recognised | 1,411,489 | 490,517 |
NOTE 4: INCOME TAX (cont.)
Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not been brought to account at 30 June 2011 because the Directors do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in time. These benefits will only be obtained if:
- the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the loss and exploration expenditure to be realised;
- the Group continues to comply with conditions for deductibility imposed by law; and
- no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the loss and exploration expenditure.
NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION
(a) Key management personnel (KMP) compensation
Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration paid to each member of the Group's KMP for the year ended 30 June 2010.
The totals of remuneration paid to KMP during the year are as follows:
| 2011 | 2010 | |
|---|---|---|
| \$ | \$ | |
| Short-term employee benefits | 243,689 | 330,883 |
| Post employment benefits | 2,700 | - |
| Total | 246,389 | 330,883 |
(b) Equity instrument disclosures relating to KMP
(i) Option holdings
The number of options over ordinary shares held by each KMP of the Group during the financial year is as follows:
| 2011 | Balance at the beginning of year |
Granted as remuneration during the year |
Exercised during the year |
Other changes during the year |
Balance at the end of the year |
Vested and exercisable at the end of the year |
Vested during the year |
|---|---|---|---|---|---|---|---|
| Directors of Enterprise Metals Limited | |||||||
| Paul Larsen | 485,148 | - | - | - | 485,148 | 485,148 | - |
| Dermot Ryan | 3,500,000 | - | - | - | 3,500,000 | 3,500,000 | - |
| Bruce Hawley | 3,352,168 | - | - | - | 3,352,168 | 3,352,168 | - |
| 7,337,316 | - | - | - | 7,337,316 | 7,337,316 | - |
| 2010 | Balance at the beginning of year |
Granted as remuneration during the year |
Exercised during the year |
Other changes during the year |
Balance at the end of the year |
Vested and exercisable at the end of the year |
Vested during the year |
|---|---|---|---|---|---|---|---|
| Directors of Enterprise Metals Limited | |||||||
| Paul Larsen | 500,000 | - | (500,000) | 485,148 | 485,148 | 485,148 | - |
| Dermot Ryan | 1,500,000 | - | - | 2,000,000 | 3,500,000 | 3,500,000 | - |
| Bruce Hawley | 3,000,000 | - | - | 352,168 | 3,352,168 | 3,352,168 | - |
| 5,000,000 | - | (500,000) | 2,837,316 | 7,337,316 | 7,337,316 | - | |
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION (cont.)
(ii) Shareholdings
The number of ordinary shares in Enterprise Metals Limited held by each KMP of the Group during the financial year is as follows:
| 2011 | Balance at the start of the year |
Received during the year as compensation |
Received during the year on the exercise of options |
Other changes during the year |
Balance at the end of the year |
|---|---|---|---|---|---|
| Directors | |||||
| Ordinary Shares | |||||
| Paul Larsen | 5,046,034 | - | - | (375,000) | 4,671,034 |
| Dermot Ryan | 12,075,000 | - | - | - | 12,075,000 |
| Bruce Hawley | 3,526,168 | - | - | 190,000 | 3,716,168 |
| Total | 20,647,202 | - | - | (185,000) | 20,462,202 |
| 2010 | Balance at the start of the year |
Received during the year as compensation |
Received during the year on the exercise of options |
Other changes during the year |
Balance at the end of the year |
|---|---|---|---|---|---|
| Directors | |||||
| Ordinary Shares | |||||
| Paul Larsen | 2,910,886 | - | 500,000 | 1,635,148 | 5,046,034 |
| Dermot Ryan | 12,000,000 | - | - | 75,000 | 12,075,000 |
| Bruce Hawley | 1,914,000 | - | - | 1,612,168 | 3,526,168 |
| Total | 16,824,886 | - | 500,000 | 3,322,316 | 20,647,202 |
(c) Loans to KMP
There are no loans made to KMP as at 30 June 2011.
(d) Other transactions with KMP
There have been no other transactions involving equity instruments other than those described in the tables above. For details of other transactions with KMP, refer Note 20: Related party transactions.
| NOTE 6: AU DITORS ' REMUNERATION |
2011 | 2010 |
|---|---|---|
| \$ | \$ | |
| Remuneration of the auditor of the parent entity for: | ||
| - Auditing or reviewing the financial report | 32,268 | 25,825 |
| Remuneration of the auditor, or associated entities, of the parent entity for non-audit services: |
||
| - Tax consulting services | 1,900 | - |
| NOTE 7: LOSS PER SHARE |
2011 | 2010 |
| \$ | \$ | |
| (a) Reconciliation of earnings to loss | ||
| Earnings used in the calculation of basic EPS | (2,973,631) | (365,081) |
| (b) Weighted average number of ordinary shares outstanding during the year | ||
| used in calculation of basic EPS | 122,814,638 | 97,561,725 |
| Basic loss per share (cents per share) | (2.421) | (0.374) |
| Options are out of the money as at 30 June 2011 and are therefore anti-dilutive. |
NOTE 8: CASH AND CASH EQUIVALENTS
| 2011 | 2010 | |
|---|---|---|
| \$ | \$ | |
| Cash at bank | 2,235,594 | 158,000 |
| Cash in term deposit | 603,914 | 2,008,400 |
| 2,839,508 | 2,166,400 | |
| Reconciliation of cash | ||
| Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: |
||
| Cash and cash equivalents | 2,839,508 | 2,166,400 |
| Cash at bank earns an effective interest rate of 4.29% (2010: 2.84%). Cash in term deposit rolls every 30 days and earns an effective interest rate of 4.97% (2010: 3.92%). |
||
| NOT E 9: TRA DE AN D OTHER RECEI VABLES |
2011 | 2010 |
| \$ | \$ | |
| CURRENT | ||
| GST receivable | 140,087 | 107,792 |
| Trade receivables | 14,179 | 15,982 |
| Prepayments | 10,966 | 10,243 |
| 165,232 | 134,017 |
There are no balances within trade and other receivables that contain assets that are impaired and are past due. The trade receivables relate to withholding tax receivable and interest receivable. It is expected these balances will be received when due.
| NOTE 10: PLANT AN D EQUIPMENT |
2011 | 2010 |
|---|---|---|
| \$ | \$ | |
| NON -CURRENT |
||
| Computer equipment – cost | 19,888 | 10,166 |
| Accumulated depreciation | (9,014) | (5,566) |
| Plant and equipment – cost Accumulated depreciation Furniture and fittings – cost Accumulated depreciation Motor vehicles - cost Accumulated depreciation Software - cost Accumulated depreciation |
10,874 | 4,600 |
| 81,808 | 68,316 | |
| (24,605) | (5,485) | |
| 57,203 | 62,831 | |
| 8,371 | 8,371 | |
| (4,879) | (2,787) | |
| 3,492 | 5,584 | |
| 23,660 | 23,660 | |
| (11,552) | (5,638) | |
| 12,108 | 18,022 | |
| 11,247 | - | |
| (553) | - | |
| 10,694 | - | |
| Total plant and equipment | 94,371 | 91,037 |
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 10: PLANT AND EQUIPMENT (cont.)
a) Reconciliation of Carrying Amounts
Movements in the carrying amounts for each class of plant and equipment between the beginning and the end of the current financial year:
| Computer equipment | |||
|---|---|---|---|
| Opening balance | 4,600 | 4,375 | |
| - Additions | 9,722 | 3,273 | |
| - Depreciation expense | (3,448) | (3,048) | |
| Carrying amount at the end of the year | 10,874 | 4,600 | |
| Plant and equipment | |||
| Opening balance | 62,831 | 2,650 | |
| - Additions | 13,492 | 64,414 | |
| - Depreciation expense | (19,120) | (4,233) | |
| Carrying amount at the end of the year | 57,203 | 62,831 | |
| Furniture and fittings | |||
| Opening balance | 5,584 | 1,483 | |
| - Additions | - | 5,734 | |
| - Depreciation expense | (2,092) | (1,633) | |
| Carrying amount at the end of the year | 3,492 | 5,584 | |
| Motor vehicles | |||
| Opening balance | 18,022 | - | |
| - Additions | - | 23,659 | |
| - Depreciation expense | (5,914) | (5,637) | |
| Carrying amount at the end of the year | 12,108 | 18,022 | |
| Software | |||
| Opening balance | - | - | |
| - Additions | 11,247 | - | |
| - Depreciation expense | (553) | - | |
| Carrying amount at the end of the year | 10,694 | - | |
| Totals Opening balance |
91,037 | 8,508 | |
| - Additions | 34,461 | 97,080 | |
| - Depreciation expense | (31,127) | (14,551) | |
| Carrying amount at the end of year | 94,371 | 91,037 | |
| NOTE 11: EXPLORATION AN D EVALUATION |
Note | 2011 | 2010 |
| \$ | \$ | ||
| Exploration and evaluation phases – at cost | 16,597,534 | 14,926,587 | |
| (a) Exploration and evaluation | |||
| Opening balance | 14,926,587 | 9,989,822 | |
| Exploration expenditure | 3,558,118 | 3,887,743 | |
| Acquisition through business combination | 14 | 766,137 | 1,049,022 |
| Impairment expense | (2,653,308) | - | |
| Closing balance | 16,597,534 | 14,926,587 |
The Directors' assessment of the carrying amount for the Group's exploration properties was after consideration of prevailing market conditions; previous expenditure for exploration work carried out on the tenements; and the potential for mineralisation based on the Group's and independent geological reports. The ultimate value of these assets is dependent upon recoupment by commercial development or the sale of the whole or part of the Group's interests in these exploration properties for an amount at least equal to the carrying value. There may exist on the Group's exploration properties, areas subject to claim under Native Title or containing sacred sites or sites of significance to Aboriginal people. As a result, the Group's exploration properties or areas within the tenements may be subject to exploration and mining restrictions.
| NOTE 12: OTHER FINANCIAL ASSETS |
2011 \$ |
2010 \$ |
|---|---|---|
| NON -CURRENT |
||
| Formation costs | 393 | 73 |
| Percentage Owned % | ||||
|---|---|---|---|---|
| Details of Controlled Entities | Country of | Class of | 2011 | 2010 |
| Incorporation | Shares | |||
| Murchison Exploration Pty Limited | Australia | Ordinary | 100 | 100 |
| Enterprise Uranium Pty Ltd | Australia | Ordinary | 100 | 100 |
| Enterprise Exploration Pty Ltd | Australia | Ordinary | 100 | 100 |
| Enterprise Gold Pty Ltd - (previously | Australia | Ordinary | 100 | 100 |
| Australasian Mining and Exploration Pty Ltd) | ||||
| Enterprise Iron Pty Ltd - (previously Traynor Pty Ltd) | Australia | Ordinary | 100 | 100 |
| Glintan Pty Ltd | Australia | Ordinary | 100 | 100 |
| Amiable Holdings Pty Ltd | Australia | Ordinary | 100 | 100 |
| Burracoppin Resources Pty Ltd | Australia | Ordinary | 100 | - |
| NOTE 13: TRA DE AN D OTHER PAYA BLES |
2011 | 2010 | ||
| \$ | \$ | |||
| CURRENT – unsecured liabilities |
||||
| Trade payables | 160,812 | 194,996 | ||
| Accrued Expenses | 80,933 | 108,398 | ||
| Provision for Dividends | - | 1,195 | ||
| GST payable | 10,343 | 14,162 |
NOTE 14: ACQUISITION OF ENTITIES
Acquisition of Burracoppin Resources Pty Ltd
On 28 February 2011, 100% of Burracoppin Resources Pty Ltd ("Burracoppin") was acquired. Burracoppin was a private Australian company which had been assessing resource investment opportunities within Australia. The purchase was satisfied by the issue of 4,000,000 ordinary shares at a fair value of \$0.18, and a 1.5% gross production royalty on all minerals produced or obtained from the area the subject of the agreement. The issue was based on the market price at the date of purchase.
Amount due to related parties - 2,383
This acquisition has not been accounted for as a business combination under AASB 3: Business Combinations as Burracoppin's assets were not considered to constitute a business. Accordingly, the Burracoppin acquisition has been accounted for as an acquisition of assets, at cost based on the fair value of shares used for the acquisition.
The purchase price was allocated to the identifiable assets and liabilities of Burracoppin at the date of acquisition as follows:
| \$ | |
|---|---|
| Cash | 48 |
| Other financial assets | 320 |
| Exploration assets | 766,137 |
| Trade and other payables | (46,505) |
| 720,000 | |
Acquisition date fair value of consideration: Shares issued 720,000
252,088 321,134
The cashflow on acquisition is the cash acquired with the subsidiary of \$48.
In the opinion of the Directors the gross royalty component is not probable and cannot be measured reliably, as required by AASB 3. For this reason the contingent consideration has not been recognised.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
| NOTE 15: ISSUE D CAPITAL |
Note | 2011 | 2010 |
|---|---|---|---|
| \$ | \$ | ||
| 140,970,776 (2010: 111,970,840) Fully paid ordinary shares | 15a | 23,058,868 | 17,637,267 |
| The Company has no authorised share capital. Shares have no par value. | |||
| (a) Ordinary Shares | |||
| 2011 | 2010 | ||
| \$ | \$ | ||
| At the beginning of the reporting period | 17,637,267 | 11,210,098 | |
| Shares issued during the year | |||
| • 10,209,743 on 13 July 2009 at \$0.15 per Share | - | 1,532,761 | |
| • 5,000,000 on 27 July 2009 at \$0.15 per Share | - | 750,000 | |
| • 1,009,668 options exercised on 16 October 2009 at \$0.25 per Share | - | 252,417 | |
| • 914,775 options exercised on 2 November 2009 at \$0.25 per Share | - | 228,694 | |
| • 3,334 options exercised on 3 November 2009 at \$0.25 per Share | - | 834 | |
| • 1,500,000 on 10 February 2010 at \$0.21 per Share for the acquisition of Amiable Pty Ltd | - | 315,000 | |
| • 3,000,000 on 3 March 2010 at \$0.20 per Share for the acquisition of Glintan Pty Ltd | - | 600,000 | |
| • 1,000,000 on 4 March 2010 at \$0.20 per Share | - | 200,000 | |
| • 1,250,000 on 8 March 2010 at \$0.20 per Share | - | 250,000 | |
| • 8,806,820 on 12 March 2010 at \$0.20 per Share | - | 1,761,364 | |
| • 2,500,000 on 15 March 2010 at \$0.20 per Share | - | 500,000 | |
| • 400,000 on 19 March 2010 at \$0.20 per Share | - | 80,000 | |
| • 500,000 on 29 March 2010 at \$0.20 per Share | - | 100,000 | |
| • 14,999,936 on 30 November 2010 at \$0.20 per Share | 2,999,987 | - | |
| • 4,000,000 on 28 February 2011 at \$0.18 per Share for the acquisition of Burracoppin Resources Pty Ltd |
720,000 | - | |
| • 10,000,000 on 1 June 2011 at \$0.20 per Share | 2,000,000 | - | |
| Transaction costs relating to share issues | (298,386) | (143,901) | |
| At reporting date | 23,058,868 | 17,637,267 |
| NOTE 15: ISSUE D CAPITAL (Cont.) |
2011 | 2010 |
|---|---|---|
| No. | No. | |
| At the beginning of the reporting period | 111,970,840 | 75,876,500 |
| Shares issued during the year | ||
| • 10,209,743 on 13 July 2009 at \$0.15 per Share |
- | 10,209,743 |
| • 5,000,000 on 27 July 2009 at \$0.15 per Share |
- | 5,000,000 |
| • 1,009,668 options exercised on 16 October 2009 at \$0.25 per Share |
- | 1,009,668 |
| • 914,775 options exercised on 2 November 2009 at \$0.25 per Share |
- | 914,775 |
| • 3,334 options exercised on 3 November 2009 at \$0.25 per Share |
- | 3,334 |
| • 1,500,000 on 10 February 2010 at \$0.21 per Share for the acquisition of Amiable Pty Ltd |
- | 1,500,000 |
| • 3,000,000 on 3 March 2010 at \$0.20 per Share for the acquisition of Glintan Pty Ltd |
- | 3,000,000 |
| • 1,000,000 on 4 March 2010 at \$0.20 per Share |
- | 1,000,000 |
| • 1,250,000 on 8 March 2010 at \$0.20 per Share |
- | 1,250,000 |
| • 8,806,820 on 12 March 2010 at \$0.20 per Share |
- | 8,806,820 |
| • 2,500,000 on 15 March 2010 at \$0.20 per Share |
- | 2,500,000 |
| • 400,000 on 19 March 2010 at \$0.20 per Share |
- | 400,000 |
| • 500,000 on 29 March 2010 at \$0.20 per Share |
- | 500,000 |
| • 14,999,936 on 30 November 2010 at \$0.20 per Share |
14,999,936 | - |
| • 4,000,000 on 28 February 2011 at \$0.20 per Share for the acquisition of Burracoppin Resources Pty Ltd |
4,000,000 | - |
| • 10,000,000 on 1 June 2011 at \$0.20 per Share |
10,000,000 | - |
| At reporting date | 140,970,776 | 111,970,840 |
Ordinary Shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of Shares held. At shareholders meetings each ordinary Share is entitled to one vote when a poll is called, otherwise each Shareholder has a vote on a show of hands.
b) Movement in options on issue
| 2011 | 2010 | |
|---|---|---|
| No. | No. | |
| At the beginning of the reporting period | 20,781,966 | 7,500,000 |
| Issued during the year: | ||
| • Exercisable at 25 cents, on or before 20 June 2012 |
7,500,035 | 16,209,743 |
| • Exercisable at 25 cents, on or before 1 June 2013 |
3,225,806 | - |
| Exercised/expired during the year: | ||
| • Exercised at 25 cents, on or before 31 December 2009 |
- | (1,000,000) |
| • Exercised at 25 cents, on or before 20 June 2012 |
- | (927,777) |
| • Expired on 31 December 2009, exercisable at 25 cents |
- | (1,000,000) |
| At reporting date | 31,507,807 | 20,781,966 |
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 15: ISSUED CAPITAL (Cont.)
(c) Capital Management
The Directors' objectives when managing capital are to ensure that the Group can fund its operations and continue as a going concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders. The Group has no debt therefore has no externally imposed capital restrictions.
Due to the nature of the Group's activities, being mineral exploration, the Group does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group's capital risk management is the current working capital position against the requirements of the Group to meet exploration programmes and corporate overheads. The Group's strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the Group at 30 June 2011 and 30 June 2010 are as follows:
| 2011 | 2010 | |
|---|---|---|
| \$ | \$ | |
| Cash and cash equivalents | 2,839,508 | 2,166,400 |
| Trade and other receivables | 165,232 | 134,017 |
| Trade and other payables | (252,088) | (321,134) |
| Working capital position | 2,752,652 | 1,979,283 |
| NOTE 16: OPTIONS RESER VE |
2011 | 2010 |
| \$ | \$ | |
| Options Reserve | 877,150 | 877,150 |
| The Options Reserve records the value of share based payments. | ||
| NOTE 17: CASHFLO W INFORMATION |
||
| 2011 | 2010 | |
| \$ | \$ | |
| (a) Reconciliation of Cash Flow from Operations with loss after Income Tax | ||
| Loss after income tax | (2,973,631) | (365,081) |
| Cash flows excluded from loss attributable to operating activities | ||
| Non-cash flows in loss from ordinary activities | ||
| Depreciation | 31,127 | 14,551 |
| Amortisation of formation expenses | - | 458 |
| Impairment of Exploration and Evaluation | 2,653,308 | 62,093 |
| Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries | ||
| (Increase) in receivables | (68,008) | (45,731) |
| (Increase) in prepayments | (723) | (1,463) |
| (Decrease)/Increase in payables | (78,034) | 134,087 |
| Cash flow used in operations | (435,961) | (201,086) |
(b) Acquisition of Entities
Refer Note 14 for details.
(c) Credit Standby Facilities
The Company had no credit standby facilities as at 30 June 2011.
NOTE 17: CASHFLOW INFORMATION (cont.)
(d) Non-Cash Financing and Investing activities
Share issues
For the year ended 30 June 2011
On 28 February 2011, 4,000,000 ordinary Shares were issued at \$0.18 each as the consideration for the purchase of Burracoppin Resources Pty Ltd. The issue was based on the market price at the date of purchase.
For the year ended 30 June 2010
On 10 February 2010, 1,500,000 ordinary Shares were issued at \$0.21 each as part of the consideration for the purchase of Amiable Holdings Pty Ltd. The issue was based on the market price at the date of purchase.
On 3 March 2010, 3,000,000 ordinary Shares were issued at \$0.20 each as part of the consideration for the purchase of Glintan Pty Ltd. The issue was based on the market price at the date of purchase.
NOTE 18: SHARE-BASED PAYMENTS
The following share-based payment arrangements existed at 30 June 2011:
On 23 July 2008, 1,500,000 share options were granted to Directors to take up ordinary shares at an exercise price of \$0.25 each. The options are exercisable on or before 22 November 2012.
On 23 July 2008, 2,500,000 share options were granted to Directors to take up ordinary shares at an exercise price of \$0.50 each. The options are exercisable on or before 30 June 2013.
On 14 October 2008, 1,500,000 share options were granted to Directors to take up ordinary shares at an exercise price of \$0.25 each. The options are exercisable on or before 22 November 2012.
On 13 July 2009, 9,281,966 share options were granted to take up ordinary shares at an exercise price of \$0.25 each. The options are exercisable on or before 20 June 2012.
On 27 July 2009, 6,000,000 share options were granted to take up ordinary shares at an exercise price of \$0.25 each. The options are exercisable on or before 20 June 2012.
All options granted to key management personnel are ordinary shares in Enterprise Metals Limited, which confer a right to one ordinary share for every option held.
A summary of the movements of all company options issued is as follows:
| 2011 | 2010 | 2011 | 2010 | |
|---|---|---|---|---|
| Number of Options |
Number of Options |
Weighted Average Exercise Price |
Weighted Average Exercise Price |
|
| \$ | \$ | |||
| Outstanding at beginning of the year | 20,781,966 | 7,500,000 | \$0.28 | \$0.33 |
| Granted | - | 15,281,966 | - | \$0.25 |
| Forfeited | - | - | - | - |
| Exercised | - | (1,000,000) | - | \$0.25 |
| Expired | - | (1,000,000) | - | \$0.25 |
| Outstanding at year-end | 20,781,966 | 20,781,966 | \$0.28 | \$0.28 |
| Exercisable at year-end | 20,781,966 | 20,781,966 | \$0.28 | \$0.28 |
The options outstanding at 30 June 2011 had a weighted average exercise price of \$0.28 and a remaining weighted average contractual life of 1.88 years. The exercise price of the options ranged from 25 to 50 cents.
NOTE 19: EVENTS SUBSEQUENT TO REPORTING DATE
On 13 July 2011 the Company issued 62 million ordinary shares and 20 million options (exercisable at 25 cents on or before 12 July 2013) to SinoTech on receipt of \$12.4 million cash. Associated with this placement, 15 million underwriting options were issued to Worldtex and 20 million broker options were issued to RI Capital, both exercisable at 25 cents on or before 12 July 2014.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
| NOTE 20: RELATE D PARTY TRANSACTIONS |
2011 | 2010 |
|---|---|---|
| \$ | \$ | |
| Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. |
||
| Transactions with related parties, inclusive of Directors' Remuneration: | ||
| XServ Pty Ltd | ||
| Mr Ryan is a Director Shareholder of XServ Pty Ltd. Mr Ryan provides Geological Consulting Services for Enterprise Metals Limited in addition to his Directors fees. |
||
| Management Fees earned from XServ Pty Ltd | - | 3,301 |
| Mineral Exploration Services | 971,021 | 1,241,118 |
| As at 30 June 2011, \$49,173 (2010: \$nil) was payable to XServ Pty Ltd | ||
| West Coast Projects Pty Ltd | ||
| Mr Hawley is a Director Shareholder of West Coast Projects Pty Ltd. Mr Hawley provides consultancy services in the area of technical support for Enterprise Metals Limited in addition to his Directors Fees. |
||
| West Coast Projects | 93,434 | 104,433 |
| As at 30 June 2011, \$nil (2010: \$nil) was payable to West Coast Projects Pty Ltd | ||
| Phillip Hoff Taxation Consultant | ||
| Mr Phillip Hoff is a taxation consultant and is a significant shareholder of Enterprise Metals Limited. |
||
| Phillip Hoff Taxation Consultant | 4,036 | 4,769 |
| As at 30 June 2011, \$964 (2010: \$2,383) was payable to Phillip Hoff Pty Ltd | ||
| Wolfstar Group Pty Ltd | ||
| Mr Stephenson is a Director of Wolfstar Group Pty Ltd. Mr Stephenson provided Company Secretarial and Chief Financial Officer services for Enterprise Metals Limited. In addition, Wolfstar provides accounting, administration and Corporate Advisory Services to Enterprise Metals Limited. |
||
| Wolfstar Group Pty Ltd | 41,050 | 40,800 |
| As at 30 June 2011, \$nil (2010: \$nil) was payable to Wolfstar Group Pty Ltd | ||
| Legend Mining Limited | ||
| Mr Ryan is a Director of ASX listed Legend Mining Limited. During the year, there were transactions between the Group and Legend Mining Limited for the following: |
||
| Purchase of fixed assets from Legend Mining Limited | 1,430 | - |
| Payment of administration expenses to Legend Mining Limited | 129 | - |
| Consulting services provided by the Group to Legend Mining Limited | 6,600 | - |
| As at 30 June 2011, \$129 (2010: \$nil) was payable to Legend Mining Limited, and \$756 (2010: \$nil) was receivable from Legend Mining |
Limited
| NOTE 21: CAPITAL AN D LEASING COMMITMENTS |
2011 | 2010 |
|---|---|---|
| \$ | \$ | |
| Capital expenditure commitments: | ||
| Capital expenditure commitments contracted for: | ||
| Exploration tenement minimum expenditure requirements | ||
| Amounts payable: | ||
| - not later than 12 months | 2,470,720 | 1,518,960 |
| - between 12 months and 5 years | 14,005,200 | 4,582,684 |
| - greater than 5 years | - | 1,151 |
| 16,475,920 | 6,102,795 |
Commitments relate to granted exploration and prospecting tenements.
NOTE 22: FINANCIAL INSTRUMENTS
The Group's financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, and accounts receivable and payable.
The main purpose of non-derivative financial instruments is to raise finance for Group operations.
The Group does not speculate in the trading of derivative instruments.
A summary of the Group's financial assets and liabilities is shown below.
| 2011 | Floating Interest Rate |
Fixed Interest maturing in 1 year or less |
Fixed Interest maturing over 1 to 5 years |
Non-interest bearing |
Total |
|---|---|---|---|---|---|
| \$ | \$ | \$ | \$ | \$ | |
| Financial assets | |||||
| Cash and cash equivalents | 2,839,508 | - | - | - | 2,839,508 |
| Loans and receivables | - | - | - | 165,232 | 165,232 |
| Total Financial assets | 2,839,508 | - | - | 165,232 | 3,004,740 |
| Weighted average interest rate – cash assets |
4.60% | ||||
| Financial Liabilities at amortised cost | |||||
| Trade and other payables | - | - | - | 252,088 | 252,088 |
| Total Financial Liabilities | - | - | - | 252,088 | 252,088 |
| Net financial assets | 2,839,508 | - | - | (86,856) | 2,752,652 |
| 2010 | Floating Interest Rate |
Fixed Interest maturing in 1 year or less |
Fixed Interest maturing over 1 to 5 years |
Non-interest bearing |
Total |
| \$ | \$ | \$ | \$ | \$ | |
| Financial assets | |||||
| Cash and cash equivalents | 2,166,400 | - | - | - | 2,166,400 |
| Loans and receivables | - | - | - | 134,017 | 134,017 |
| Total Financial assets | 2,166,400 | - | - | 134,017 | 2,300,417 |
| Weighted average interest rate – cash assets |
3.56% | ||||
| Financial Liabilities at amortised cost |
Trade and other payables - - - 321,134 321,134 Total Financial Liabilities - - - 321,134 321,134 Net financial assets 2,166,400 - - (187,117) 1,979,283
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 22: FINANCIAL INSTRUMENTS (cont.)
Specific Financial Risk Exposures and Management
The main risk the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate, foreign currency risk and equity price risk.
a. Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group.
The Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the Group.
Credit risk exposures
The maximum exposure to credit risk is that to its alliance partners and that is limited to 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.
There are no other material amounts of collateral held as security at 30 June 2011. Trade and other receivables are expected to be settled within 30 days.
Credit risk related to balances with banks and other financial institutions is managed by the Group in accordance with approved Board policy. Such policy requires that surplus funds are only invested with counterparties with a Standard and Poor's rating of at least AA-. The following table provides information regarding the credit risk relating to cash and money market securities based on Standard and Poor's counterparty credit ratings.
| Note | 2011 | 2010 | |
|---|---|---|---|
| \$ | \$ | ||
| Cash and cash | |||
| equivalents | |||
| - AA Rated | 8 | 2,839,508 | 2,166,400 |
b. Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash and marketable securities are available to meet the current and future commitments of the Group. Due to the nature of the Group's activities, being mineral exploration, the Group does not have ready access to credit facilities, with the primary source of funding being equity raisings. The Board of Directors constantly monitor the state of equity markets in conjunction with the Group's current and future funding requirements, with a view to initiating appropriate capital raisings as required. Any surplus funds are invested with major financial institutions.
The financial liabilities of the Group are confined to trade and other payables as disclosed in the statement of financial position. All trade and other payables are non-interest bearing and due within 12 months of the reporting date.
c. Market risk
The Board meets on a regular basis to analyse currency and interest rate exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.
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.
Interest rate risk is managed by closely monitoring the interest rates at various financial institutions. The Company has no debt and as such the interest rate risk is limited to the Company's investments in term deposits and other interest bearing investments.
NOTE 22: FINANCIAL INSTRUMENTS (cont.)
Sensitivity Analysis
The following table illustrates sensitivities to the Group's exposures to changes in interest rates. The table indicates the impact on 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.
| Consolidated Group | |||
|---|---|---|---|
| Profit | Equity | ||
| Year ended 30 June 2011 | \$ | \$ | |
| +/-1% in interest rates | +/- 20,046 | +/- 20,046 | |
| Year ended 30 June 2010 | |||
| +/-1% in interest rates | +/- 19,339 | +/- 19,339 |
Net Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying values as presented in the statement of financial position. Fair values are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.
For unlisted investments where there is no organised financial market, the net fair value has been based on a reasonable estimation of the underlying net assets or discounted cash flows of the investment. Other assets and other liabilities approximate their carrying value. Aggregate net fair values and carrying amounts of financial assets and financial liabilities at reporting date:
| 2011 | 2011 | 2010 | 2010 | |
|---|---|---|---|---|
| Carrying Amount | Net Fair Value | Carrying Amount | Net Fair Value | |
| \$ | \$ | \$ | \$ | |
| Financial Assets | ||||
| Cash and cash equivalents | 2,839,508 | 2,839,508 | 2,166,400 | 2,166,400 |
| Loans and receivables | 165,232 | 165,232 | 134,017 | 134,017 |
| Total Financial Assets | 3,004,740 | 3,004,740 | 2,300,417 | 2,300,417 |
| Financial Liabilities at amortised cost | ||||
| Trade and other payables | 252,088 | 252,088 | 321,134 | 321,134 |
| Total Financial Liabilities | 252,088 | 252,088 | 321,134 | 321,134 |
Cash and cash equivalents, trade and other receivables, and trade and other payables are short-term investments in nature whose carrying value is equivalent to fair value.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
| NOTE 23: PARENT ENTITY DISCLOSURES |
2011 | 2010 |
|---|---|---|
| \$ | \$ | |
| (a) Financial Position of Enterprise Metals Limited | ||
| CURRENT ASSETS |
||
| Cash and cash equivalents | 2,787,980 | 2,110,506 |
| Trade and other receivables | 1,667,133 | 868,208 |
| TOTAL CURRENT ASSETS |
4,455,113 | 2,978,714 |
| NON -CURRENT ASSETS |
||
| Plant and equipment | 94,371 | 91,037 |
| Exploration and evaluation | 7,626,287 | 6,007,683 |
| Other financial assets | 8,152,194 | 8,152,194 |
| TOTAL NON -CURRENT ASSETS |
15,872,852 | 14,250,914 |
| TOTAL ASSETS |
20,327,965 | 17,229,628 |
| CURRENT LIA BILITIES |
||
| Trade and other payables | 252,014 | 293,666 |
| TOTAL CURRENT LIA BILITIES |
252,014 | 293,666 |
| TOTAL LIA BILITIES |
252,014 | 293,666 |
| NET ASSETS |
20,075,951 | 16,935,962 |
| EQUITY | ||
| Issued Capital | 23,058,868 | 17,637,267 |
| Options Reserve | 877,150 | 877,150 |
| Accumulated Losses | (3,860,067) | (1,578,455) |
| TOTAL EQUITY |
20,075,951 | 16,935,962 |
| (b) Financial Performance of Enterprise Metals Limited | ||
| Loss for the year | (2,281,612) | (384,868) |
| Other comprehensive income, net of tax | - | - |
| Total comprehensive loss | (2,281,612) | (384,868) |
(c) Guarantees entered into by Enterprise Metals Limited to the debts of its subsidiaries
There are no guarantees entered into by Enterprise Metals Limited for the debts of its subsidiaries as at 30 June 2011 (2010: none).
(d) Contingent liabilities of Enterprise Metals Limited
There are no contingent liabilities as at 30 June 2011 (2010: none).
(e) Commitments by Enterprise Metals Limited
| Capital expenditure commitments contracted for: | 2011 | 2010 |
|---|---|---|
| \$ | \$ | |
| Exploration tenement minimum expenditure requirements | ||
| Not longer than 1 year | 2,470,720 | 1,518,960 |
| Longer than 1 year and not longer than 5 years | 14,005,200 | 4,582,684 |
| Longer than 5 years | - | 1,151 |
| Total | 16,475,920 | 6,102,795 |
Commitments relate to granted exploration and prospecting tenements.
NOTE 24: CONTINGENT LIABILITIES
There are no contingent liabilities as at 30 June 2011 (2010: none).
NOTE 25: OPERATING SEGMENTS
The Directors have considered the requirements of AASB 8 – Operating Segments and the internal reports that are reviewed by the chief operating decision maker (the Board) in allocating resources and have concluded that at this time there are no separately identifiable segments.
The Group remains focused on mineral exploration over areas of interest solely in Western Australia.
NOTE 26: COMPANY DETAILS
The registered office and principal place of business of the Company is:
Enterprise Metals Limited Level 1 640 Murray Street WEST PERTH WA 6005
DIRECTORS' DECLARATION
The directors of the Company declare that:
-
- The financial statements and notes, as set out on pages 27 to 53, are in accordance with the Corporations Act 2001 and:
- (a) comply with Accounting Standards; and
- (b) are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board, as stated in note 1 to the financial statements; and
- (c) give a true and fair view of the financial position as at 30 June 2011 and of the performance for the year ended on that date of the Group;
-
- the Chief Executive Officer and Chief Finance Officer have each declared that:
- (a) the financial records of the Company for the financial year have been properly maintained in accordance with s 286 of the Corporations Act 2001;
- (b) the financial statements and notes for the financial year comply with the Accounting Standards; and
- (c) the financial statements and notes for the financial year give a true and fair view;
-
- in the directors' opinion 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 made in accordance with a resolution of the Board of Directors.
Dermot Ryan MANAGING DIRECTOR
Dated 30 September 2011, Perth WA
INDEPENDENT AUDITor's REPORT
TO THE MEMBERS OF ENTERPRISE METALS LIMITED
Grant Thornton Audit Pty Ltd ABN 94 269 609 023 10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E [email protected] W www.grantthornton.com.au Grant Thornton Audit Pty Ltd Grant Thornton Audit Pty Ltd W www.grantthornton.com.au
Report on the financial report
We have audited the accompanying financial report of Enterprise Metals Limited (the "Company"), which comprises the consolidated statement of financial position as at 30 June 2011, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors' declaration of the consolidated entity comprising the Company and the entities it controlled at the year's end or from time to time during the financial year. West Perth WA 6005 PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E [email protected] W www.grantthornton.com.au
Directors' responsibility 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 of the financial report in accordance with Australian Accounting Standards and the Corporations Act 2001. This responsibility includes such internal controls as the Directors determine are necessary to enable the preparation of the financial report to be free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards which require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Liability limited by a scheme approved under Professional Standards Legislation
Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.
INDEPENDENT AUDIT REPORT
TO THE MEMBERS OF ENTERPRISE METALS LIMITED
Electronic presentation of audited financial report
This auditor's report relates to the financial report of Enterprise Metals Limited and its controlled entities for the year ended 30 June 2011 included on the Company's web site. The Company's Directors are responsible for the integrity of its web site. We have not been engaged to report on the integrity of the Company's web site. The auditor's report refers only to the statements named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on this web site.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor's opinion
In our opinion:
- a the financial report of Enterprise Metals Limited is in accordance with the Corporations Act 2001, including:
- i giving a true and fair view of the consolidated entity's financial position as at 30 June 2011 and of its performance for the year ended on that date; and
- ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and
- b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements.
Report on the remuneration report
We have audited the remuneration report included in pages 23 to 25 of the directors' report for the year ended 30 June 2011. 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.
Auditor's opinion on the remuneration report
In our opinion, the remuneration report of Enterprise Metals Limited for the year ended 30 June 2011, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD Chartered Accountants
C A Becker
Director - Audit & Assurance Perth, 30 September 2011
ASX ADDITIONAL INFORMATION
FOR LISTED PUBLIC COMPANIES
The following additional information is required by the Australian Stock Exchange Ltd in respect of listed public companies only.
1 Shareholding as at 29 September 2011
(a) Distribution of Shareholders
| Number | Number | |
|---|---|---|
| Category (size of holding) | Holders | Shares |
| 1 – 1,000 | 63 | 7,117 |
| 1,001 – 5,000 | 161 | 514,088 |
| 5,001 – 10,000 | 171 | 1,457,820 |
| 10,001 – 100,000 | 547 | 20,054,317 |
| 100,001 – and over | 205 | 180,937,434 |
| 1,147 | 202,970,776 |
(b) The number of shareholdings held in less than marketable parcels is 146 (185,474 shares).
(c) Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
— Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.
(d) 20 Largest Shareholders — Ordinary Shares as at 29 September 2011
| Name | Number of Ordinary Fully Paid Shares Held |
% Held of Issued Ordinary Capital |
|
|---|---|---|---|
| 1 | Sinotech (Hong Kong) Corporation Limited | 62,000,000 | 30.55 |
| 2 | Mr Dermot Michael Ryan & Mrs Vivienne Eleanor Ryan | 6,075,000 | 2.99 |
| 3 | Mr Dermot Michael Ryan &Mrs Vivienne Eleanor Ryan | 6,000,000 | 2.96 |
| 4 | Worldtex Capital Resources Limited | 5,000,000 | 2.46 |
| 5 | HSBC Custody Nominees (Australia) Limited | 4,766,433 | 2.35 |
| 6 | Mr Phillip Hoff | 4,432,595 | 2.18 |
| 7 | Windsong Valley Pty Ltd | 3,823,008 | 1.88 |
| 8 | Mr William John Robertson & Mrs June Dianne Robertson <robertson superFund A/C> | 3,275,000 | 1.61 |
| 9 | Mr Francis Leslie Owen & Mrs Elizabeth Ann Owen | 2,901,333 | 1.43 |
| 10 | Mr Miles George Smyth | 2,819,358 | 1.39 |
| 11 | Rosane Pty Ltd | 2,772,334 | 1.37 |
| 12 | Mr Paul Graeme Larsen | 2,208,209 | 1.09 |
| 13 | Avanteos Investments Limited <2871495 A/C> | 2,050,000 | 1.01 |
| 14 | Concord Ability Development Ltd | 2,000,000 | 0.99 |
| 15 | Larsen Superannuation Fund Pty Ltd | 1,962,825 | 0.97 |
| 16 | Ms Christine Linda Meeks | 1,750,000 | 0.86 |
| 17 | Major Millennium Development Ltd | 1,500,000 | 0.74 |
| 18 | Mega Capital Resources Ltd | 1,500,000 | 0.74 |
| 19 | HSBC Custody Nominees (Australia) Limited GSCO ECA | 1,450,139 | 0.71 |
| 20 | Avanteos Investments Limited <2852902 a/c> | 1,450,000 | 0.71 |
| 119,736,234 | 58.99 |
ASX ADDITIONAL INFORMATION
FOR LISTED PUBLIC COMPANIES
- 2 The name of the Company Secretary is Dennis Wilkins.
- 3 The address of the principal registered office in Australia is Level 1, 640 Murray Street, West Perth WA 6005. Telephone Number: 08 9436 9200.
4 Registers of securities are held at the following addresses
Western Australia Computershare Registry Services Level 2, 45 St Georges Terrace PERTH WA 6000
5 Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the Australian Stock Exchange Limited.
6 Unquoted Securities
Options over Un-issued Shares
A total of 86,507,807 Options are on issue of which 9,434,090 are on issue to the seven Directors.
7 Use of Funds
The Company has used its funds in accordance with its initial business objectives.
TENEMENT REPORT
| Tenement | Lease Status | Project | % Held |
|---|---|---|---|
| E04/2068 | Application | Kimberley | 0% |
| E04/2069 | Application | Kimberley | 0% |
| E04/2070 | Application | Kimberley | 0% |
| E09/1731 | Application | Mt Philips | 0% |
| E09/1732 | Application | Mt Philips | 0% |
| E09/1864 | Application | Byro | 100% |
| E20/620 | Granted | Wattagee* | 100% |
| E20/726 | Granted | Wattagee* | 100% |
| E20/756 | Application | Wattagee* | 100% |
| E20/758 | Application | Byro | 100% |
| E28/1958 | Granted | Harris Lake | 100% |
| E36/706 | Granted | Darlot | 80% |
| E36/731 | Granted | Darlot | 100% |
| E36/768 | Application | Darlot | 100% |
| E36/778 | Application | Darlot | 100% |
| E36/781 | Application | Darlot | 100% |
| E37/1009 | Granted | Darlot | 100% |
| E37/1025 | Granted | Darlot | 100% |
| E37/1031 | Granted | Darlot | 100% |
| E37/1075 | Granted | Darlot | 100% |
| E37/1105 | Application | Darlot | 100% |
| E37/1112 | Application | Yandal | 100% |
| E37/818 | Granted | Darlot | 100% |
| E37/859 | Granted | Darlot | 80% |
| E37/926 | Granted | Darlot | 100% |
| E37/927 | Granted | Darlot | 100% |
| E37/939 | Granted | Darlot | 100% |
| E37/947 | Granted | Darlot | 100% |
| E51/1079 E51/1168 |
Granted Granted |
Doolgunna Doolgunna |
100% 100% |
| E51/1301 | Application | Doolgunna | 100% |
| E51/1302 | Granted | Doolgunna | 100% |
| E51/1303 | Granted | Doolgunna | 100% |
| E51/1304 | Granted | Doolgunna | 100% |
| E51/1337 | Application | Doolgunna | 100% |
| E51/1385 | Application | Doolgunna | 100% |
| E51/1466 | Application | Wattagee* | 100% |
| E51/941 | Granted | Doolgunna | 100% |
| E52/1689-I | Granted | Sylvania | 100% |
| E52/2049 | Granted | Doolgunna | 100% |
| E52/2349 | Granted | Sylvania | 100% |
| E52/2404 | Granted | Doolgunna | 100% |
| E52/2406 | Granted | Doolgunna | 100% |
| E57/834 | Application | Booylgoo | 100% |
| E59/1437 | Granted | Yalgoo | 100% |
| E59/1617 | Granted | Byro | 100% |
| E59/1632 | Granted | Yalgoo | 100% |
| E59/1633 | Granted | Yalgoo | 100% |
| E59/1645 | Granted | Yalgoo | 100% |
| E59/1651 | Granted | Yalgoo | 100% |
| E59/1655 | Granted | Yalgoo | 100% |
| E59/1658 | Application | Yalgoo | 100% |
TENEMENT REPORT
| Tenement | Lease Status | Project | % Held |
|---|---|---|---|
| E63/1281 | Granted | Fraser* | 100% |
| E63/1282 | Granted | Fraser* | 100% |
| E63/1283 | Granted | Fraser* | 100% |
| E63/1448 | Application | Fraser* | 100% |
| E69/2607 | Granted | Earaheedy | 100% |
| E69/2636 | Application | Earaheedy | 100% |
| E69/2674 | Application | Eucla | 100% |
| E69/2689 | Application | Eucla | 100% |
| E70/3637 | Granted | Burracoppin | 100% |
| E70/3638 | Granted | Burracoppin | 100% |
| E70/3756 | Granted | Cunderdin | 100% |
| E70/3815 | Granted | Burracoppin | 100% |
| E70/3816 | Granted | Cunderdin | 100% |
| E70/4133 | Application | Burracoppin | 100% |
| E70/4150 | Application | Burracoppin | 100% |
| E70/4171 | Application | Burracoppin | 100% |
| E77/1752 | Granted | Burracoppin | 100% |
| E77/1970 | Application | Burracoppin | 100% |
| E77/1973 | Application | Burracoppin | 100% |
| M37/1288 | Granted | Darlot | 100% |
| M51/818 | Granted | Doolgunna | 100% |
| P20/2155 | Application | Wattagee* | 100% |
| P36/1660 | Granted | Darlot | 100% |
| P36/1661 | Granted | Darlot | 100% |
| P37/7081 | Granted | Darlot | 100% |
| P37/7082 | Granted | Darlot | 100% |
| P37/7083 | Granted | Darlot | 100% |
| P37/7084 | Granted | Darlot | 100% |
| P37/7085 | Granted | Darlot | 100% |
| P37/7745 | Granted | Darlot | 100% |
| P37/7746 | Granted | Darlot | 100% |
| P37/7747 | Granted | Darlot | 100% |
| P37/7748 | Granted | Darlot | 100% |
| P37/7749 | Granted | Darlot | 100% |
| P37/7750 | Granted | Darlot | 100% |
| P51/2516 | Granted | Doolgunna | 100% |
| P51/2517 | Granted | Doolgunna | 100% |
| P51/2624 | Granted | Doolgunna | 100% |
| P51/2625 | Granted | Doolgunna | 100% |
| P51/2626 | Granted | Doolgunna | 100% |
| P51/2627 | Granted | Doolgunna | 100% |
| P53/1273 | Granted | Paddy Well | 100% |
| P53/1274 | Granted | Paddy Well | 100% |
| P53/1275 P59/1925 |
Granted Application |
Paddy Well Yalgoo |
100% 100% |
| P59/1926 | Application | Yalgoo | 100% |
| P59/1927 | Application | Yalgoo | 100% |
| P59/1928 | Application | Yalgoo | 100% |
| P59/1928 | Application | Yalgoo | 100% |
*Conditional Sale and Joint Venture Agreement signed with Beachfront Resources Ltd for Fraser Range and Wattagee Projects, but not yet Completed.
www.enterprisemetals.com.au
