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FOCUS MINERALS LTD Interim / Quarterly Report 2014

Sep 14, 2014

64932_rns_2014-09-14_6818e130-948f-4d09-8033-7c275c916f65.pdf

Interim / Quarterly Report

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Focus Minerals Limited

ABN 56 005 470 799

Interim Financial Report

for the half year ended 30 June 2014

Page | 1

Table of Contents[1]

Corporate Information ...................................................................................................................................................... 3 Directors’ Report ............................................................................................................................................................... 4 Auditor’s Independence Declaration ............................................................................................................................... 6 Financial Statements ........................................................................................................................................................ 7 Notes to the Consolidated Interim Financial Report for the Half Year Ended 30 June 2014 .................................... 11 Directors’ Declaration ..................................................................................................................................................... 20 Independent Auditor’s Review Report .......................................................................................................................... 21

1 This document should be read in conjunction with the Annual Report of Focus Minerals Limited for the six-month period ended 31 December 2013. The Annual Report can be found at http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01511386.

Page | 2

Corporate Information

ABN 56 005 470 799

Directors

Jisheng Lu Yuhuan Ge Wanghong Yang Gerry Fahey Zaiqian Zhang

Chairman - Non-Executive, Non-Independent Director - Non-Executive, Non-Independent Director – Executive Director - Independent Alternate Director to Jisheng Lu - Executive

Company Secretary

Dane Etheridge

Registered and Head Office

Level 2 159 Adelaide Terrace East Perth WA 6004

PO Box 3233 East Perth WA 6892

Tel: +61 (0) 8 9215 7888 Fax: +61 (0) 8 9215 7889

Share Registry

Computershare Investor Services Pty Ltd Level 2 / Reserve Bank Building 45 St Georges Terrace Perth WA 6000

Auditor

PricewaterhouseCoopers 125 St Georges Terrace Perth WA 6000

Bankers

National Australia Bank 100 St Georges Terrace Perth WA 6000

Bank of China Perth Branch Ground Floor, 179 St Georges Terrace Perth WA 6000

Stock Exchange Listing

Solicitors

Murcia Pestell Hillard Lawyers Suite 183, Level 6 580 Hay Street Perth, WA 6000

King and Wood Mallesons Level 30, QV1 250 St Georges Terrace Perth, WA 6000

Australian Securities Exchange (ASX) ASX Symbol: FML

Page | 3

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Directors’ Report

The Directors of Focus Minerals Limited would like to present the financial report for the half year ended 30 June 2014.

Directors

Jisheng Lu Chairman, Non-Executive, Non-Independent Yuhuan Ge Director, Non-Executive, Non-Independent Wanghong Yang Director, Executive (Interim CEO) Gerry Fahey Director, Independent Zaiqian Zhang Alternate Director to Jisheng Lu, Executive Bruce McComish[2] Director, Non-Executive, Non-Independent

Review of Operations

Corporate

During the first half of 2014, Focus Minerals redefined and readjusted itself as an exploration company, aiming to rebuild a robust gold resource and reserve foundation that will lead the Company to become a sustainable and cash generating mid-tier gold mining company in Australia.

The Company incurred a loss of $11,556,000 for the half year period ended 30 June 2014 (6 months to 31 December 2013 loss: $132,872,000). The loss was mainly caused by impairment and write off expenses:

  • $6,120,000 impairment of mine development assets and,

  • $1,765,000 write off of plant and equipment and divested exploration tenements.

As at 30 June 2014, the Company has cash, cash equivalents and restricted cash of $92,207,000 (at 31 December 2013: $99,440,000).

During the half year, the Company conducted a review of the tenement packages of Coolgardie and Laverton. Through the process, Focus identified and subsequently surrendered a total of 109 low potential tenements, resulting in an annual saving of $2.3m on tenement minimum expenditure costs.

Exploration

During this period the Company drilled a total of 94 exploration holes for 15,866.6m at its Laverton and Coolgardie projects. As announced via the ASX 30 July 2014, the drilling encompassed a number of greenfield and brownfield target areas with significant results recorded at several of the prospects.

At Laverton a total of 7,954.1m of drilling was completed, consisting of 40 RC holes for 6,080m and 13 diamond tails for 1,874.1m. This drilling included programs at Prendergast Well, Gladiator, Lancefield, Craiggiemore, Fish and Lord Byron. The best results from the Laverton drilling included 2.9m @ 8.17g/t Au from 455m in hole FHDD099 at Fish; and 2m @ 59.76g/t Au from 50m in LFRC002 at Lancefield.

Also at Laverton, a VTEM geophysical survey was flown over approximately 25km of the Admiral Hill – Barnicoat area early in the year, ranging from Admiral Hill in the north to the Black Label prospect in the south. This survey has enabled the Company to reinterpret the geology of the Barnicoat Shear and map the entire length of a carbonaceous shale horizon which is associated with gold mineralisation adjacent to the shear. It has also highlighted a number of conductive anomalies which will be tested by drilling in the near future.

At Coolgardie a total of 41 holes were drilled for 7,912.5m, consisting of 30 RC holes for 6,698m and 11 diamond tails for 1,214.5. This included further work at Brilliant, as well as programs at Bonnie Vale and Boundary. The best results from the Coolgardie drilling included 8.3m @ 13.46g/t Au from 268.24m in BRRCD007 at Brilliant, and 6m @ 9.45g/t Au from 158m in BONC035 at Bonnie Vale.

2 Mr McComish retired as a director on 28 May 2014.

Page | 4

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Also at Coolgardie, a regional targeting review was conducted by external consultants which involved reviewing the work of previous authors in the region to produce a high-level view of prospect over the whole tenement package. This study has resulted in some fresh perspectives on areas south of Coolgardie between Tindals and Nepean which have previously received little attention.

Events Subsequent to Balance Date

The Mount project was forced to shut down in June 2013 due to high production costs. Since then, the Company had been looking for opportunities to divest the project. During first half of 2014 the Company received a number of offers in relation to The Mount and, after several rounds of negotiations with the potential buyers, the Company decided to sell The Mount to Lukah Mining for around $750,000 in August 2014.

Since the Laverton operation was shut down, the camp has been under care and maintenance. The Company received several offers to purchase the camp and in August 2014 the Company sold the camp to Rakkan Pty Ltd for around $900,000.

In March 2005, Crescent Gold (Focus Minerals acquired Crescent Gold in October 2011 and the entity is now called Focus Minerals (Laverton) Pty Ltd) signed a land access agreement with Wongatha People in exchange of certain tenements. In March 2014, NEIB Group, acting on behalf of the Wongatha People, issued a letter to the Company, claiming an amount of $1,300,000 as royalty payments dating back to 2007. In August 2014, Focus agreed to settle this matter by paying around $600,000 as well as amending the agreement in favour of the Company.

Save as the matters mentioned above, there are no events that have arisen after balance date that have significantly affected or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in the future financial periods.

Auditor’s Independence Declaration

The declaration required under Section 307C of the Corporations Act 2001 is set out on Page 6.

This report is made in accordance with a resolution of the directors.

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Jisheng Lu Chairman of the Board 12 September 2014 Jinan, Shandong, China

Page | 5

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Auditor’s Independence Declaration

Page | 6

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Financial Statements

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE HALF YEAR ENDED 30 JUNE 2014

Notes
Revenue from continuing operations
3(a)
Other Income
3(b)
Cost of Sales
Changes in inventories
Employee expenses
Depreciation and Amortisation Expenses
Finance Costs
Takeover Costs
Impairment expense
Loss on disposal of tenements and plant and equipment
Care and Maintenance Costs
Corporate and Other Expenses
Loss Before Income Tax
Income Tax Expense
Loss After Income Tax for the Period
Other Comprehensive Income for the Period, Net of Tax
Total Comprehensive Loss for the Period
Total Comprehensive Loss Attributable to:
Owners of the Parent
Total Comprehensive Loss for the Period
Earnings per Share
Basic Loss per Share (Cents Per Share)
4
Diluted Loss per Share (Cents Per Share)
4		 Consolidated
6 months to
30 June
6 months to
31 December
2014
$’000
2013
$’000
93
13,742
2,278
3,621
-
(6,618)
-
(6,583)
(1,482)
(6,489)
(1,206)
(4,158)
(227)
(204)
-
(43)
(6,120)
(113,229)
(1,765)
(8,695)
(1,585)
(593)
(1,542)
(3,623)
(11,556)
(132,872)
-
-
(11,556)
(132,872)
-
-
(11,556)
(132,872)
(11,556)
(132,872)
(11,556)
(132,872)
(11,556)
(132,872)
(0.13)
(1.45)
(0.13)
(1.45)

The accompanying notes form part of these financial statements .

Page | 7

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

Notes
Assets
Current Assets
Cash and Cash Equivalents
5
Short term deposits
5
Trade and Other Receivables
6
Financial Assets
7
Total Current Assets
Non-Current Assets
Restricted Cash
5
Inventories
Plant and Equipment
9
Mine Properties and Development
8
Exploration and Evaluation Assets
10
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and Other Payables
Interest Bearing Liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Interest Bearing Liabilities
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
12 (a)
Reserves
Accumulated Losses
Total Equity		 Consolidated
30 June
31 December
2014
$’000
2013
$’000
683
81,239
74,398
166
1,184
813
349
600
76,614
82,818
17,126
18,035
2,894
2,894
9,163
12,115
750
6,876
40,319
37,059
70,252
76,979
146,866
159,797
1,393
1,396
267
1,018
1,531
2,136
3,191
4,550
227
227
24,987
25,003
25,214
25,230
28,405
29,780
118,461
130,017
427,167
427,167
(6,995)
(6,995)
(301,711)
(290,155)
118,461
130,017

The accompanying notes form part of these financial statements.

Page | 8

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

STATEMENT OF CHANGES IN EQUITY

FOR THE HALF YEAR ENDED 30 JUNE 2014

Notes Issued
Capital		 Accumulated
Losses		 Reserves Total
$’000 $’000 $’000 $’000
Balance as at 30 June 2013 427,167 (157,283) (6,995) 262,889
Total Comprehensive Income for
the period		 - (132,872) - (132,872)
Balance as at 31 December 2013 427,167 (290,155) (6,995) 130,017
Total Comprehensive Income for
the period		 - (11,556)
-		 (11,556)
Balance as at 30 June 2014 427,167 (301,711) (6,995) 118,461

The accompanying notes form part of these financial statements.

Page | 9

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

STATEMENT OF CASHFLOWS

FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2014

Notes
Cash Flows from Operating Activities
Receipts from Customers
Payments to Suppliers and Employees (Including GST)
Royalties Paid
Other Income
Takeover Costs
Interest Received
Finance Costs
Net Cash Outflow from Operating Activities
Cash Flows from Investing Activities
Proceeds from sale of Plant and Equipment
Acquisition of Plant and Equipment
Mine Development Expenditure
Proceeds from sale of financial assets
Increase in short term deposits
Exploration Expenditure
Net Cash Outflow from Investing Activities
Cash flows from Financing Activities
Drawn down of deposit relating to Loan Offset Facility
Repayment of Interest Bearing Liabilities
Payment for Loan Offset Facility
Net pay back from Performance Bonds
Net Cash Inflow/(Outflow) from Financing Activities
Net Decrease in Cash and Cash Equivalents
Cash and Cash Equivalents at the Beginning of the Period
Cash and Cash Equivalents at the Ending of the Period
5(i)		 Consolidated
6 months to
30 June
6 months to
31 December
2014
’$000
2013
’$000
93
16,408
(5,132)
(43,915)
(17)
(2,350)
252
995
-
(43)
1,488
2,104
(227)
(204)
(3,543)
(27,005)
511
514
(3)
(158)
-
(1,265)
171
-
(74,241)
-
(3,619)
(4,238)
(77,181)
(5,147)
-
(8,000)
(751)
-
-
8,000
918
-
167
(769)
(80,557)
(32,920)
81,239
114,159
682
81,239

The accompanying notes form part of these financial statements.

Page | 10

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Notes to the Consolidated Interim Financial Report for the Half Year Ended 30 June 2014

Note 1: Basis of preparation of half-year report

The interim financial report of Focus Minerals Limited (“the Company”, together with its consolidated reporting entities, as “the Group”) for the half-year reporting period ended 30 June 2014 has been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

The Company has changed its financial year end from 30 June to 31 December, which enables the Company to align its financial reporting period with its major shareholder, Shandong Gold International Mining Corporation Limited. The comparative for this half-year reporting period is 31 December 2013 and the six months then ended.

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the Annual Report for the Period Ended 31 December 2013 and any public announcements made by Focus Minerals Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies adopted are consistent with those of previous financial year and corresponding interim reporting period, unless otherwise noted below.

(a) New and amended standards adopted by the Group

The Group applied the following standards and amendments for first time in their annual reporting period commencing 1 January 2014:

• Amendments to AASB 2011-4 and revised Corporations Regulations 2M.3.03 move the individual key management personnel (KMP) disclosures about equity holdings, loans and other transactions with KMP from the notes to the financial statements the remuneration report and require aggregate disclosures in the related parties note.

• Changes to Australian Conceptual Framework and Materiality (AASB CF 2013-1, AASB 1031, AASB 2013-9) Incorporates the guidance from the IASB’s Framework on the objective and qualitative characteristics of financial reporting and removes Australian specific guidance on materiality from AASB 1031.

The adoption of these Standards and Interpretations has not had a significant impact on the Group’s accounting policies.

(b) Impacts of standards issued but not yet applied by the Group

The following standards are available for early adoption but have not been applied by the Group:

• AASB 9 Financial Instruments addresses the classification, measurement and de-recognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2017 but is available for early adoption. It is not anticipated to have an impact on the Group’s accounting policies in regards to its financial assets and liabilities.

• Annual improvements project – 2011-2013 cycle containing amendments to clarify minor points in various accounting standards, including AASB 1, AASB 3, AASB 13 and AASB 140, which are largely effective for annual periods beginning on or after 1 July 2014. These amendments are not expected to have an impact on the Group’s accounting policies.

• The ASX has revised its Corporate Governance Principles and Recommendations, with important changes to guidance on risk management, governance reporting, independence of long-serving directors and gender diversity. The updated Principles and Recommendations will apply to listed entities from 1 July 2014.

Page | 11

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

  • (c) Change in method of accounting estimation: Depreciation of mill assets

In order to make a better reflection of the Group’s business and operation result, as at 1 January 2014, the Group revised the depreciation method of mill treatment assets from the diminishing value to the straight-line method. This change in method of accounting estimate did not result a significant impact in the net profit for the six months period ended 30 June 2014.

Note 2: Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer.

All of Focus Minerals Limited’s subsidiaries are wholly owned. The Group has three reportable segments, as described below, which are the Group’s strategic business units. The business units are managed separately as they require differing processes and skills. The Chief Executive Officer reviews internal management reports on a monthly basis. Gold produced is sold through agents at spot pricing.

Segment Financial Information for the six months ended 30 June 2014 is presented below:

Revenue from continuing operations
Depreciation and Amortisation Expenses
Employee expenses
Finance costs
Other income
Care and Maintenance Costs
Impairment expenses
Loss on disposal of tenements and
plant and equipment
Corporate and Other expenses
SEGMENT LOSS BEFORE TAX
Income taxes
SEGMENT LOSS
Current Assets
Non-Current Assets
- Restricted Cash
- Plant and Equipment
- Mine Properties and Development
- Exploration and Evaluation Assets
TOTAL ASSETS
Current Liabilities
Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Capital Expenditures		 6 months to
30 June
6 months to
30 June
6 months to
30 June
6 months to
30 June
2014
2014
2014
2014
Coolgardie
Laverton
Corporate
Consolidated
$’000
$’000
$’000
$’000
93
-
-
93

(1,127)
-
(79)
(1,206)
(220)
(13)
(1,249)
(1,482)
-
(1)
(226)
(227)
481
156
1,641
2,278
(396)
(1,189)
-
(1,585)
(6,120)
-
-
(6,120)
(1,399)
(366)
-
(1,765)
(65)
(118)
(1,359)
(1,542)
(8,753)
(1,531)
(1,272)
(11,556)
-
-
-
-
(8,753)
(1,531)
(1,272)
(11,556)
3,082
363
76,063
79,508
706
7458
8,962
17,126
8,920
-
243
9,163
750
-
-
750
27,247
13,072
-
40,319
40,705
20,893
85,268
146,866
1,432
1,050
709
3,191
12,853
11,818
543
25,214
14,285
12,868
1,252
28,405
26,420
8,025
84,016
118,461
1,684
1,932
3
3,629

Page | 12

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Segment Financial Information for the 6 months ended 31 December 2013 is presented below:

Revenue from continuing operations
Cost of Sales
Depreciation and Amortisation Expenses
Changes in inventories
Employee expenses
Finance costs
Other income
Takeover costs
Care and Maintenance Costs
Impairment expenses
Loss on disposal of tenements and
plant and equipment
Other expenses
SEGMENT LOSS BEFORE TAX
Income taxes
SEGMENT PROFIT / (LOSS)
Current Assets
Non-Current Assets
- Restricted Cash
- Plant and Equipment
- Mine Properties and Development
- Exploration and Evaluation Assets
TOTAL ASSETS
Current Liabilities
Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Capital Expenditures		 6 months to
31 December
6 months to
31 December
6 months to
31 December
6 months to
31 December
2013
2013
2013
2013
Coolgardie
Laverton
Corporate
Consolidated
$’000
$’000
$’000
$’000
14,335
-
1,511
15,846
(6,618)
-
-
(6,618)
(2,921)
(1,158)
(79)
(4,158)
(6,391)
(192)
-
(6,583)
(2,520)
(591)
(3,377)
(6,490)
228
(239)
(193)
(204)
(8)
1,134
391
1,517
-
-
(43)
(43)
(43)
(549)
-
(593)
(53,601)
(59,628)
-
(113,229)
(1,781)
(6,260)
(654)
(8,695)
-
(44)
(3,579)
(3,623)
(59,320)
(67,527)
(6,024)
(132,872)
-
-
-
-
(59,320)
(67,527)
(6,024)
(132,868)
4,493
635
80,584
85,712
751
7,818
9,466
18,035
11,793
-
322
12,115
6,876
-
-
6,876
25,273
11,786
-
37,059
49,186
20,239
90,372
159,797
2,344
452
1,754
4,550
12,852
11,818
561
25,231
15,196
12,270
2,315
29,781
33,990
7,969
88,057
130,017
1,923
3,669
69
5,661

Page | 13

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Note 3: Revenues

(a) Revenue from continuing operations
Gold sales
Silver sales
Total revenue from continuing operations
(b) Other income
Sundry income
Finance income
Interest income
Change in fair value of financial assets
Total Other income		 Consolidated
6 months ended
30 June
6 months ended
31 December
2014
$’000
2013
$’000
93
13,698
-
44
93
13,742
522
995
21
389
1,735
2,104
-
133
2,278
3,621
Note 4: Earnings per Share
Basic earnings per share:
Total Basic EPS
Diluted earnings per share
Total Diluted EPS
Basic Earnings per share
The earnings used in the calculation of basic earnings per share
Weighted average number of ordinary shares for the purposes of basic
earnings per share
Diluted Earnings per share
The earnings used in the calculation of diluted earnings per share
Weighted average number of ordinary shares for the purposes of diluted
earnings per share		 Consolidated
6 months to
30 June
6 months to
31 December
2014
Centsper Share
2013
Centsper Share
(0.13)
(1.45)
(0.13)
(1.45)
$000
$000
(11,556)
(132,872)
9,137,375,877
9,137,375,877
‘$000
‘$000
(11,556)
(132,872)
9,165,875,877
9,165,875,877

Page | 14

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Note 5: Cash, Cash Equivalents, Short Term Deposits and Restricted Cash

Cash and cash equivalents
Short term deposits
Non- current – restricted cash		 Consolidated
6 months to
30 June
6 months to
31 December
2014
$’000
2013
$’000
683
81,239
74,398
166
75,081
81,405
17,126
18,035

Cash at bank earns interest at floating rates based on daily deposit rates.

Cash deposits are made for varying periods up to three months, depending on the immediate cash requirements of the Group, and earn interest at the respective commercial short-term deposit rates which is recognised as cash and cash equivalents

Short term deposits are made longer than three months and shorter than one year.

Performance bonds have been issued by a bank on behalf of the Group in respect of Western Australian mining tenements. The Group has indemnified the bank against any loss arising from the performance bonds and the indemnity is secured against cash deposits. Those are recognised as restricted cash.

Note 6: Current Trade and Other Receivables

Trade receivables
Other receivables		 Consolidated
6 months to
30 June
6 months to
31 December
2014
$’000
2013
$’000
264
72
920
741
1,184
813

An allowance for doubtful debts is made when there is objective evidence that a trade receivable is impaired. No provision is considered necessary as at 30 June 2014.

Note 7: Financial Assets

Opening balance at 01 January 2014
Sale of shares
Fair value adjustment
Investments in listed entities – at fair value		 Consolidated
6 months to
30 June
6 months to
31 December
2014
$’000
2013
$’000
600
467
(150)
-
(101)
133
349
600

Investment in the listed entity – Macphersons Resources Limited (“MRL”) was made for an amount of $1,000,000. The Company sold 828,741 Macphersons Resources Limited shares (average price per share 0.18 cents) during the half year ended 30 June 2014.

Page | 15

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Note 8: Impairment of Non-current Assets

After an internal review carried out in the half year ended 30 June 2014, the Company has provided the following impairment on its non-current assets.

IMPAIRMENT Exploration Mine Properties Plant and Total
$’000s and Equipment
Development
Coolgardie - 6,120 - 6,120
Laverton - - - -
Total - 6,120 - 6,120

Note 9: Plant and Equipment

Non-current
At 31 December 2013
Cost or fair value
Accumulated depreciation
Impairment loss
Net book amount
6 months ended June 2014
Opening net book amount
Reclassifications between
Plant and Equipment
Balance after adjustment
Additions
Depreciation expense
Disposals
Closing book amount
At 30 June 2014
Cost or fair value
Accumulated depreciation
Impairment loss
Net book amount		 Furniture &
fittings
‘$000
Plant &
Equipment
‘$000
Mill assets
‘$000
Construction
in progress
‘$000
Motor
Vehicles
‘$000
Total
‘$000
2,138
16,027
39,811
8,000
551
66,527
(1,500)
(6,233)
(20,967)
-
(330)
(29,030)
-
(5,872)
(11,510)
(8,000)
-
(25,382)
638
3,922
7,334
-
221
12,115
638
3,922
7,334
-
221
12,115
(158)
(1,017)
1,070
-
105
-
480
2,905
8,404
-
326
12,115
3
-
-
-
-
3
(163)
(247)
(703)
-
(93)
(1,206)
(4)
(5)
(1,675)
-
(65)
(1,749)
316
2,653
6,026
-
168
9,163
1,992
13,304
39,225
8,000
624
63,145
(1,663)
(4,703)
(21,828)
-
(406)
(28,600)
(13)
(5,948)
(11,371)
(8,000)
(50)
(25,382)
316
2,653
6,026
-
168
9,163

Page | 16

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Non-current
At 30 June 2013
Cost or fair value
Accumulated depreciation
Impairment loss
Net book amount
6 months ended 31
December 2013
Opening net book amount
Additions
Transfer from Construction in
progress
Depreciation additions
Disposals
Impairment loss
Closing book amount
At 31 December 2013
Cost or fair value
Accumulated depreciation
Impairment loss
Net book amount		 Furniture &
Fittings
‘$000
Plant &
Equipment
‘$000
Mill Assets
‘$000
Construction
in Progress
‘$000
Motor
Vehicles
‘$000
Total
‘$000
2,154
18,589
39,872
8,000
1,115
69,730
(1,437)
(5,411)
(18,851)
-
(736)
(26,435)
-
(5,872)
-
-
-
(5,872)
717
7,306
21,021
8,000
379
37,423
717
7,306
21,021
8,000
379
37,423
-
-
-
101
57
158
74
(2,444)
-
-
-
(2,370)
(59)
(909)
(2,146)
-
(58)
(3,172)
(94)
(31)
(31)
(101)
(157)
(414)
-
-
(11,510)
(8,000)
-
(19,510)
638
3,922
7,334
-
221
12,115
2,138
16,027
39,811
8,000
551
66,527
(1,500)
(6,233)
(20,967)
-
(330)
(29,030)
-
(5,872)
(11,510)
(8,000)
-
(25,382)
638
3,922
7,334
-
221
12,115

Note 10: Exploration and Evaluation Assets

Exploration and Evaluation Expenditure:
At Cost
Less: Accumulated Impairment
Net Book Value
Movement Summary:
Carrying amount at beginning of the period
plus – exploration expenditure
less – write off of tenements allowed to lapse or dropped
less - Impairment
Carrying amount at end of year		 Consolidated
6 months to
30 June
6 months to
31 December
2014
$’000
2013
$’000
147,497
144,237
(107,178)
(107,178)
40,319
37,059
37,059
91,176
3,626
4,238
(366)
(8,588)
-
(49,767)
40,319
37,059

The value of the Group’s interest in exploration expenditure is dependent upon:

  • the continuance of the Group’s rights to tenure of the areas of interest;

  • the results of future exploration;

  • the recoupment of costs through successful development and exploitation of the areas of interest, or alternatively, by their sale; and

  • no significant changes in laws and regulations that greatly impact the Group’s ability to maintain tenure.

Page | 17

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Note 11: Share Based Payments

Options

Options Issued

No options were issued in the half year ended 30 June 2014 (six months ended 31 December 2013: Nil).

As at 30 June 2014, the exercisable options are as follow:

Balance at
beginning
of period
1/1/2014		 Issued
during
period		 Options
Exercised/
(lapsed)		 Balance at
end of
period
30/06/2014		 Vested as at 30 June 2014 Vested as at 30 June 2014 Vested as at 30 June 2014
Total Vested Not
Vested
in millions in millions in millions in millions in millions in millions in millions
Exercisable at
12.3 cents		 13.5 - (13.5) - - - -
Exercisable at
5.0 cents		 15.0 - - 15.0 15.0 15.0 -
Total 28.5 - - 15.0 15.0 15.0 -

Options Exercised

There were no options exercised during the period.

Options Lapsed

During the period, there were 13,500,000 options (exercise price: 12.30 cents) expired on 30 June 2014.

Options Outstanding

As at 30 June 2014, details of unissued ordinary shares under options are as follows:

Issuing Entity
Grant date
Focus Minerals Ltd
8 April 2013
Total Options on issue		 Number of
Options
Exercise Price
Cents per Share
Expiry Date
15,000,000
5.00
28/02/2016
15,000,000

Note 12: Issued Capital and Reserves

Authorised Capital

The Company does not have an Authorised Capital and there is no par value for ordinary shares.

(a) Ordinary shares
Issued capital
No. of shares $’000
Shares issued at 1 July 2013, 31 December 2013
and 30 June 2014		 9,137,375,877 427,167

Page | 18

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Share Issue Details

There were no shares issued during the half year period.

Voting Entitlements

At each shareholder’s meeting each ordinary share is entitled to one vote on the calling of a poll, otherwise each shareholder is entitled to one vote on a show of hands.

(b) Dividends

No dividends have been paid or provided for during the half year period ended 30 June 2014 (6 months ending 31 December 2013: Nil).

Note 13: Related Party Disclosure

Transactions with Related Parties

Mr Gerry Fahey is a Director of CSA Global, which provided technical consulting services to the Group. Technical services provided by CSA Global for the period totalled $52,840 (6 months ending 31 December 2013: nil).

Note 14: Significant Events after Balance Date

The Mount project was forced to shut down in June 2013 due to high production costs. Since then, the Company had been looking for opportunities to divest the project. During first half of 2014 the Company received a number of offers in relation to The Mount and after several rounds of negotiations with the potential buyers the Company decided to sell The Mount to Lukah Mining for around $750,000 in August 2014.

Since the Laverton operation was shut down, the camp has been under care and maintenance. The Company received several offers to purchase the camp and in August 2014 the Company sold the camp to Rakkan Pty Ltd for around $900,000.

In March 2005, Crescent Gold (Focus Minerals acquired Crescent Gold in October 2011 and the entity is now called Focus Minerals (Laverton) Pty Ltd) signed a land access agreement with Wongatha People in exchange of certain tenements. In March 2014, NEIB Group, acting on behalf of the Wongatha People, issued a letter to the Company, claiming an amount of $1,300,000 as royalty payments dating back to 2007. In August 2014, Focus agreed to settle this matter by paying around $600,000 as well as amending the agreement in favour of the Company.

Save as the matters mentioned above, there are no events that have arisen after balance date that have significantly affected or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in the future financial periods.

Page | 19

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Directors’ Declaration

The directors of the Company declare that:

  1. The financial statements and notes, as set out on pages 7 to 19 are in accordance with the Corporations Act 2001, including:

  2. a. Companying with the Accounting Standard AASB 134: Interim Financial Reporting; and

  3. b. Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its performance for the half year ended on that date.

  4. 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.

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Jisheng Lu Chairman of the Board 12 September 2014 Jinan, Shandong, China

Page | 20

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

Independent Auditor’s Review Report

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Page | 21

Focus Minerals Ltd – Financial Report for the half year ended 30 June 2014

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Page | 22

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