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SABRE RESOURCES LIMITED Annual Report 2012
65750_rns_2012-09-27_a6000fa7-f7ba-4785-b8ad-c5bcf1509ff1.pdf
Annual Report
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Sabre Resources Ltd
ACN: 68 003 043 570
ANNUAL REPORT
2012
INDEX
Contents
| Page No. | |
|---|---|
| •Review of Operations | 1 |
| •Directors' Report | 17 |
| •Consolidated Statement of Comprehensive Income | 22 |
| •Consolidated Statement of Financial Position | 23 |
| •Consolidated Statement of Changes in Equity | 24 |
| •Consolidated Statement of Cash Flows | 25 |
| •Notes to the Financial Statements | 26 |
| •Directors' Declaration | 51 |
| •Independent Audit Report | 52 |
| •Auditor's Independence Declaration | 55 |
| •Corporate Governance Statement | 56 |
| •Shareholder Information | 68 |
COMPANY DIRECTORY
DIRECTORS
Jonathan Downes Michael Scivolo David Zukerman
AUDITORS
Grant Thornton (WA) Partnership 10 Kings Park Road West Perth WA 6005
COMPANY SECRETARY
Norman Grafton
BANKERS
Westpac Bank 108 Stirling Highway Nedlands WA 6009
REGISTERED OFFICE
1st Floor, 8 Parliament Place West Perth WA 6005
Telephone: (08) 9481 7833 Facsimile: (08) 9481 7835 Email: [email protected] Website: www.sabresources.com
SHARE REGISTRY
Advanced Share Registry Limited 150 Stirling Highway Nedlands WA 6009
| Telephone: | (08) 9389 8033 |
|---|---|
| Facsimile: | (08) 9389 7871 |
SOLICITORS
Gilbert & Tobin 1202 Hay Street West Perth WA 6005 PO Box 454 West Perth WA 6872 Telephone: (08) 9322-7644 Facsimile: (08) 9322 1506 Email: [email protected]
SECURITIES EXCHANGE LISTING
The Company is listed on the Australian Securities Exchange and the Berlin and Frankfurt Stock Exchanges
Home Exchange: Perth, Western Australia
ASX code for shares: SBR
REVIEW OF OPERATIONS
THE OTAVI MOUNTAIN LAND PROJECT – NORTHERN NAMIBIA
Sabre has completed a successful work programme across its Otavi Mountain Land ('OML') project in northern Namibia through 2011-2012. The Exploration Team have defined a substantial JORC resource over the Border zinc-lead-silver deposit, which was followed up with the completion of a positive scoping study over the deposit. In addition, exploration has progressed at the Kaskara, Driehoek and South Ridge prospects.
The recent acquisition of the Otavi Valley tenement, immediately to the south of the Company's existing Ongava lease holding, has added over 200 km2 of highly prospective copper ground to the Company's portfolio. Drilling at the Guchab copper mining centre, in the Otavi Valley, has met with early success (Section 4.1).
A review of the Company's exploration and development programme for 2011-12, is provided below:
Location and Infrastructure
Sabre's Otavi Mountain Land project is located in northern Namibia, in southern Africa. The project comprises two granted tenements (EPL 3540 & 3542) which cover 822 km2 of the 'Otavi Triangle'.
Figure 1 – The location of the Otavi Mountain Land in Namibia and Sabre's tenement areas.
The Otavi Triangle lies at the eastern end of the Namib Copper Belt in northern Namibia (Figure 2) and hosts the only two economically significant copper mines on the belt, namely the Tsumeb copper mine and smelter complex and the Kombat copper mine. These mines are currently on 'care & maintenance' however the Tsumeb copper smelter remains one of only five operating copper smelters in Africa, whilst planning is underway to bring the Kombat mine back into operation.
REVIEW OF OPERATIONS
Figure 2 – Southern Africa and location of significant copper belts
The presence of these two significant operations has resulted in the provision of excellent infrastructure to the region including:
- Reticulated, high-voltage power,
- Reticulated water,
- Mobile and 'hard-line' communications,
- Paved Roads (extending to the capital of Windhoek 430 kilometres to the south and beyond to the port at Walvis Bay),
- Rail to Port (the rail line is used for regular heavy transport from the port at Walvis Bay to the smelter at Tsumeb, a distance of 530 kilometres, with an additional spur line passing through the Otavi Valley to Grootfontein in the east),
- A 400,000 tonne per annum copper concentrator at the Kombat mine in the Otavi Valley and,
- The Tsumeb copper smelter complex.
Overall the Otavi Mountain Land displays a significant mineral endowment of copper, base metals and semiprecious metals with the infrastructure to 'fast track' discoveries to production.
Sabre's Tenement Acquisitions
Sabre began exploration in the OML in 2007 following the acquisition of its interest in the Ongava lease area (EPL 3542) in the central OML, which now covers 600 km2 . The tenement is highly prospective for copperlead-zinc mineralisation and hosts the Border and Driehoek lead-zinc deposits as well as the Kaskara copper-lead-vanadate discovery.
In June 2012, Sabre expanded its holding in the OML following the acquisition of its interest in the Otavi Valley (EPL 3540) tenement in the southern OML. The tenement surrounds, but does not include, the Kombat Copper mine which has produced in excess of 8.7 million tonnes of copper ore at over 3% copper. The tenement covers more than 45 kilometres of strike and takes in a number of copper prospects and historical mining areas including Baltika and Guchab.
REVIEW OF OPERATIONS
**Figure 3 –**Sabre's tenement areas with recognised base metal trends and key prospect area.
Sabre has identified four extensive base metal trends in the OML, namely the Pavian & Hoek Zinc-Lead Trends, and the Lucas Post & Kombat Copper Trends. These trends are the focus of the Company's exploration programme.
Sabre's Exploration Programme 2011-2012
Sabre has completed an extensive programme of exploration in OML in the course of 2011-12. The results of this programme are detailed below:
1. Lucas Post Copper Trend
The Lucas Post Copper Trend is located in the central OML on the Ongava lease area (EPL 3542). The trend extends over more than 25 kilometres of strike and takes in a number of prospect areas including Rooikat, Lucas Post and Uitsab; importantly Lucas Post hosts Sabre's Kaskara discovery.
1.1 Kaskara Copper-Lead-Vanadate Prospect
Kaskara was initially targeted in 2009, and was the product of a dedicated programme of project generation and prospecting. Initial exploration outlined an area of outcropping mineralisation covering over 900 metres of strike and hosting a number of high-grade base metal gossans that returned results of up to 23% copper, 35% Lead, 34% Zinc and 3% Vanadium. It is important to note that Kaskara shows many structural, mineralogical, and metallurgical similarities to the nearby Tsumeb copper deposit.
Drill testing of the prospect area has proven challenging due to the nature of the mineralisation in the oxide zone over the identified sulphide geophysical target at depth. The oxide mineralisation at Kaskara is particularly fine grained and is easily washed away by the addition of water during diamond drilling,
REVIEW OF OPERATIONS
resulting in little or no return of sample. In response to this Sabre has sought the appropriate expertise to advise on the drilling of this mineralisation, as well as continuing with a comprehensive programme of sampling in the old mine workings and outcropping mineralisation discovered in the area.
1.1.1 Underground Sampling
In 2011 Sabre Resources' staff discovered previously unknown and inaccessible workings within the underground mine workings at Kaskara. Broad zones of massive Pb-V-Cu mineralisation were encountered in a network of underground tunnels. Some exceptional results were returned from channel sampling of these tunnels, including:
KKUG0003 13 metres @ 5.59% Lead, 2.31% V2O5 and 0.32% Copper
including 2 metres @ 19.85% Lead, 8.49% V2O5 and 0.91% Copper
KKUG0019 22 metres @ 4.16% Lead, 1.81% V2O5 and 0.26% Copper
including 5 metres @ 12.25% Lead, 5.44% V2O5 and 0.62% Copper
The massive mineralisation in the oxide zone occurs as continuous sub-vertical shoots extending from surface to a depth of more than 45 metres below surface. This sampling shows that the mineralised body is thickening with, and remains open at, depth. It is expected that these shoots will continue to depths of over 100 metres before transitioning into primary sulphide mineralisation at depth.
Figure 4 – Diagrammatic section showing the expected relationships between the secondary mineralisation and the expected primary mineralisation at depth.
1.1.2 Harasib III Pit Sampling
Outcropping oxide mineralisation at Kaskara occurs in gossans throughout the mineralised corridor, covering at least 900 metres of strike, however the mineralisation in the Harasib III pit is located 200 metres outside of this corridor. Importantly the Harasib III mineralisation coincides with the southern edge of the extensive IP anomaly detected at depth below Kaskara.
Channel sampling of mineralisation at the base of the Harasib III pit has returned high-grade leadvanadate mineralisation including:
REVIEW OF OPERATIONS
KKUG0023 21 metres @ 4.79% Lead, 2.00% V KKUG0023 2O5 and 0.21% Copper Including 4 metres @ 9.15% Lead, 4.16% V2O5 and 0.38% Copper
KKUG0024 KKUG0024 4 metres @ 8.71% Lead, 3.69% V2O5 and 0.47% Copper
These results show that the eastern vertical wall of the Harasib III pit is highly mineralised to the base of the workings, 18 metres below surface, and is expected to continue vertically downwards before grading into sulphide mineralisation at depth. The pit is located around 200 metres southwest of the underground high-grade intercepts reported in Section 1.1.1.
1.1.3 RC Drilling Programme
The nature of the mineralisation at Kaskara prevents effective diamond drilling in the oxide zone. This style of oxide mineralisation is peculiar to this area of southern Africa and is also observed in other locations in the Otavi Triangle where it is associated with significant sulphide ore bodies such as the Tsumeb copper deposit to the north and the Abenab & Berg Aukas Lead-Zinc deposits to the east.
Sabre has sought advice on the drilling of this mineralisation, with the aim of testing the identified sulphide target at depth. The mineralised oxides must be drilled dry utilising appropriate levels of air pressure and lift to keep drill holes dry and ensure sample return.
A highly experienced and respected local drilling company specialising in Reverse Circulation (RC) drilling has been commissioned to undertake the upcoming drilling programme at Kaskara and is scheduled to commence drilling early in the fourth quarter of 2012.
1.2 Other Target Areas
Exploration along strike from Kaskara, to both the east and west, will continue to outline additional mineralisation. Sabre's ongoing exploration programme will work towards expanding the 'footprint' of the Kaskara area, as well as examining the prospectivity of targets such as the Rooikat anomaly in the west, as well as the Uitsab mine workings in the east which appear to host a further 'Kaskara-type' target.
2. Pavian Zinc- Zinc-Lead Trend Lead TrendLead Trend
The Pavian Zinc-Lead Trend is located in the north of the Ongava lease area (EPL 3542) and covers over 30 kilometres of highly prospective zinc-lead-rich stratigraphy. The Pavian Trend extends from Ratel in the west to beyond South Ridge in the east, and hosts the Company's Border Zinc-Lead deposit. Exploration on the Pavian Trend concentrated on a scoping study over the deposit and initial reconnaissance work over the South Ridge prospect area.
2.1 Border Zinc-Lead Deposit
The Border Zinc-Lead deposit was discovered in the early 1970s by Etosha Petroleum, who estimated that a sizeable zinc-lead deposit may exist at the site. Sabre initially focused exploration at Border, with a view to bringing the deposit into production in a suitable economic environment.
Border is a modified Mississippi Valley-Type (MVT) deposit and consists primarily of galena (lead) and sphalerite (zinc) mineralisation within dolomitic host rocks. There is no pyrite nor any other sulphides present, and weathering is almost non-existent. The deposit dips at 60° to the north, stretches along strike for over 2,400 metres and extends for up to 390 m beneath surface (with the bulk of the tonnage and grade within 150 m of surface). The ore body varies between 10 metres and 85 metres in thickness, with an average thickness of 25 metres.
2.1.1 Border Resource Estimate
The inferred resource for the Border Zinc-Lead deposit is:
16,200,000 16,200,000Tonnes @ 2.12% Pb+Zn Tonnes Pb+Zn & 4.76gpt Ag (at a 1.25% Pb+Zn cut-off grade)
The mineral resource estimate increases to 31.4 Mt @ 1.50% Pb+Zn (1.10% Zn and 0.40% Pb) and 3.37 g/t Ag when reported at 0.5% Pb+Zn cut-off grade.
| Resources | Metal Grade | Contained Metal | ||||||
|---|---|---|---|---|---|---|---|---|
| Category | Cut off | Tonnage | Zinc | Lead | Silver | Zinc | Lead | Silver |
| ( %) | (Mt) | (%) | (%) | (g/t) | (t) | (t) | (Moz) | |
| Inferred | 0.5 | 31.4 | 1.10 | 0.40 | 3.37 | 346,000 | 127,000 | 3.4 |
| Inferred | 1.25 | 16.2 | 1.53 | 0.59 | 4.76 | 248,000 | 95,000 | 2.5 |
Table 1 – Border 2011 Mineral Resource Estimate
The inferred mineral resource estimate is based on a nominal 0.5% Pb+Zn wireframe cut-off with a maximum internal dilution of five metres. Grade was interpolated using an inverse distance weighting squared (IDW2 ) technique.
Figure 5 – Oblique view of the resource block model for the Border Zn-Pb-Ag deposit
Exceedingly good results from metallurgical and beneficiation test work, as well as positive results from an initial, high-level scoping study meant that the Company could pursue a higher tonnage, lower grade resource than was initially envisaged. The results of these studies are described in the following sections.
2.1.2 Metallurgical Test Work
Sabre has completed detailed metallurgical test work on the Border deposit. The test work was based upon the premise that the mineralisation would respond well to initial upgrading via Dense Media Separation (DMS), thereby greatly reducing mineral processing costs. The test work proved to be highly successful.
The beneficiation test work showed exceptional upgrading of the ore, producing in excess of 80 times the original lead content, and around 37 times the original zinc content when DMS is followed by grinding
REVIEW OF OPERATIONS
and flotation. Final concentrate grades are around 65 % lead and 61.5 % zinc (from an ore grading 0.77 % Pb and 1.66 % Zn), with final recoveries of 86.9 % and 81.7 % respectively.
| Process | Lead | Zinc |
|---|---|---|
| 1 - Original sample (head assay) | ||
| Grade (2.43% Pb+Zn): | 0.77 % | 1.66 % |
| 2 – Dense media separation (sinks and fines) | ||
| Product grade: | 6.3 % | 12.5 % |
| Enrichment factor (from 1): | 8.2 times | 7.5 times |
| Recovery (from 1): | 92.5 % | 86.0 % |
| 3 - Grind and float | ||
| Product grade: | 63-69 % | 61-62 % |
| Enrichment factor (from 2): | ~10 times | ~5 times |
| Recovery (from 2): | 94-95 % | ~95 % |
| Process Summary | ||
| Overall enrichment (from original): | ~82 times | ~37 times |
| Overall recovery (from original): | 86.9% | 81.7 % |
The optimised test results show:
- At a coarse 12.5 mm crush size approximately 83% of the mass (i.e. the non- and poorlymineralised portion) can be rejected by DMS,
- The remaining 17 % of mass grades 6.3 % Pb (for 92.5% recovery) and 12.5% Zn (for 86% recovery),
- At a relatively coarse grind size of 150 microns, good separation is achieved to produce lead and zinc cleaner concentrates via flotation,
- A lead cleaner concentrate grade of 65 % Pb was achieved, recovering 94.5 % of the lead from the concentrate,
- A zinc cleaner concentrate grade of 61.5% Zn was achieved, recovering 95% of the zinc from the concentrate.
In summary, after DMS and flotation, 81.7 % of the total zinc, 87.8 % of the total lead, and 89 % of the total silver was recovered. Most importantly for the economics of the project, only 17 % of the mined ore would require grinding and flotation.
2.1.3 Scoping Study
Results of the mineral resource estimate, metallurgical testwork, and industry research were used to commence a high-level scoping study on the Border Deposit.
Initial results of the scoping study are positive. The findings indicate that the Border deposit will be profitable in its own right. Sabre envisages that the Border deposit, in conjunction with other deposits on the Pavian Trend (such South Ridge and Nosib H) and the Driehoek deposits on the Hoek Trend, could be used to feed a centrally located plant built on the Pavian Trend to treat all
REVIEW OF OPERATIONS
Figure 6 – Sabre's concept of a centrally-located plant using feed from an array of mines throughout the project area.
Several open pit scenarios were postulated for mining at Border, ranging from 500,000 tonnes per annum (tpa) to 2 million tpa. For a 1 million tpa mine, key findings from the Border scoping study are as follows:
- The value of the potential ore is around $US45/t1,
- The average direct mining costs are estimated at around $US10/t potential ore2,
- Mineral processing costs (i.e. DMS followed by grinding and flotation) are estimated at around $US6/t potential ore,
- Metal royalties amount to 3%.
*Note that these figures are preliminary in nature and may vary by ± 30%, as is the nature of such highlevel scoping studies.
2.2 South Ridge Zinc-Lead Prospect
The South Ridge prospect is located at the eastern end of the Pavian Trend, approximately 6 kilometres to the east of the Border deposit. In late 2011, Sabre discovered a broad zone of outcropping lead and zinc mineralisation, measuring around 1,500 x 50 m, during mapping of a geochemical anomaly at the South Ridge.
1 Prices used for calculation were at a 5% discount to metals prices listed on the London Metals Exchange on 18/1/2012. The actual values used in the calculation are Zn: US$1870/t, Pb: US$1960/t, Ag: US$28/oz.
2 Mining cost of ore is calculated from the general mining cost per tonne (~$3.80 per tonne) and the strip ratio (here a nominal 1.65:1 based on the geometry of the deposit).
REVIEW OF OPERATIONS
The mineralisation is composed of vein network and shear-hosted zinc-lead mineralization and is similar in style and geometry to the Border deposit located to the west. The fresh galena and sphalerite mineralisation at South Ridge has now been mapped continuously for over 1.5 kilometres of strike and outcrops at the base of, and on the northern slopes of, a prominent hill.
The South Ridge prospect is located just 900 metres from the sealed Grootfontein-Tsumeb highway.
2.2.1 Channel Sampling
A number of channel samples were undertaken across the outcropping mineralization at South Ridge and returned very encouraging results:
SRCS0001 38 metres@ 4.04% Pb+Zn (1.42% Z @ 4.04% Pb+Zn Z Zinc + 2.62% Lead c + 2.62% Lead Lead) including 10 metres@ 6.40% Pb+Zn (1.69% Z @ 6.40% Pb+Zn (1.69% Z @ 6.40% Pb+Zn Zinc+ 4.71% + 4.71% + 4.71% Lead) SRCS0002 SRCS0002 23 metres@ 7.61% Pb+Zn (1.09% Z @ 7.61% Pb+Zn Z Zinc+ 6.52% + 6.52% Lead) including 14 metres@ 10.96% Pb+Zn (1.16% Z @ 10.96% Pb+Zn (1.16% Z Zinc+ 9.80% + 9.80% Lead) SRCS0003 SRCS0003 28 metres@ 1.32 % Pb+Zn (0.83 % Z @ 1.32 % Pb+Zn (0.83 Z Zinc+ 0.49 % + 0.49 % Lead) including 2 metres@ 4.77 % Pb+Zn (3.67 % Z @ 4.77 % Pb+Zn (3.67 Z Zinc+ 1.09 % + 1.09 % Lead)
2.2.2 RC Drilling
Following the successful channel sampling programme, a programme of reconnaissance drilling was undertaken at South Ridge. An initial programme of 17 Reverse Circulation (RC) holes was completed, with results including:
| SRRC 013 | 21 metres @ 1.53% Zn+Pb & 2.12 gpt Ag | from 31 metres |
|---|---|---|
| including | 7 metres @ 3.11% Zn+Pb & 3.50 gpt Ag | from 35 metres |
| SRRC 016 | 23 metres @ 1.07% Zn+Pb & 1.00 gpt Ag | from 76 metres |
This programme was designed to confirm key attributes of the zinc-lead-silver mineralisation at South Ridge, in particular its orientation and mineralogy, in preparation for a more extensive drilling programme for the estimation of a JORC resource.
3. Hoek Zinc- Hoek Zinc-Lead Trend Lead Trend Trend
The Hoek Zinc-Lead Trend is located in the central Otavi Mountain Land on the Ongava lease (EPL 3542), immediately to the south of the Lucas Post copper trend. The Hoek Trend covers more than 20 kilometres of strike from the Driehoek in the west to Hoba Ost in the east.
Exploration has centred on the delineation of the resource positions at Driehoek, as well as the definition of the trend along strike to the east.
REVIEW OF OPERATIONS
3.1 The Driehoek Zinc-Lead Deposits
The Driehoek zinc-lead deposits were discovered in the early 1990's by Goldfields of Namibia (a subsidiary of Goldfields of South Africa). The results of Goldfields' work were adopted as an exploration target in the order of:
5 to 7 Million Tonnes @ 3-5 % Zinc+Lead & 8-16 gpt Silver*
*The potential quantity and grade of the Driehoek zinc-lead deposits is conceptual in nature, as Sabre has determined that insufficient work has been undertaken to define a mineral resource and it is uncertain if further exploration will result in the determination of a mineral resource. The "exploration target" size was based upon resource estimations made by Goldfields of Namibia.
This target is contained within three deposit areas, namely Driehoek North, Central and East.
3.1.1 Driehoek North
Exploration at Driehoek North consisted of channel sampling which returned the highest grade intercepts to date from the Driehoek area. It has also resulted in the discovery of new outcropping mineralisation and shows excellent correlation with historic channel sampling over the prospect.
Channel sampling results included:
| DKCS0006DKCS0006 | 68 metres@ 3.76 % Zn@ 3.76 % Zn@ 3.76 % Zn+Pb (3.31 % Zinc + 0.45% Lead) |
|---|---|
| Including | 6 metres @ 17.89 % Zn+Pb (16.41 % Zinc + 1.48 % Lead) |
| and | 12 metres @ 11.51 % Zn+Pb (8.54 % Zinc + 2.97 % Lead) |
| DKCS0007DKCS0007 | 201 metres@ 2.71 % Pb+Zn@ 2.71 % Pb+ZnPb+Zn (2.00 % Zinc + 0.71% Lead) |
| including | 5 metres@ 17.95 % Pb+Zn@ 17.95 % Pb+ZnPb+Zn (13.25 % Zinc + 4.70 % Lead) |
| and | 12 metres@ 9.17 % Pb+Zn@ 9.17 % Pb+Zn Pb+Zn (5.49 % Zinc + 3.69 % Lead) |
| DKCS0008DKCS0008 | 65 metres@ 5.46 % Pb+Zn@Pb+Zn (4.06 % Zinc + 1.40% Lead) |
| Including | 19 metres@ 8.97 % Pb+Zn@Pb+Zn (6.56 % Zinc + 2.41 % Lead) |
| DKCS0009DKCS0009 | 45 metres@ 3.34 % Pb+Zn (2.26 %(2.26 % Zinc+ 1.07 %Lead)@+ |
| DKCS0010DKCS0010 | 100 metres@ 3.21 % Zn@Zn+Pb (2.34 % Zinc + 0.87% Lead)@ 3.21 % Zn |
| Including | 4 metres@ 32.53 % ZnZn Zn+Pb (21.95 % Zinc + 10.58 % Lead)@ |
These channel sampling results demonstrate the significant potential of the Driehoek area, where broad zones of mineralisation outcrop and new zones of mineralisation continue to be discovered.
REVIEW OF OPERATIONS
3.1.2 Driehoek Central
Resource drilling was undertaken at Driehoek Central in May 2012, with the aim of validating the existing data for the deposit and allowing the estimation of a JORC resource. A man-portable diamond drilling rig was used to undertake an initial programme of seven drill holes.
Results from Driehoek Central include:
| DKDD0003 | 21 metres @ 3.39% Zn+Pb & 3.40 gpt Ag | from 0.0 metres |
|---|---|---|
| Including | 4 metres @ 4.99% Zn+Pb & 3.75 gpt Ag | from 11.0 metres |
| DKDD0004 | 10 metres @ 4.01% Zn+Pb & 0.80 gpt Ag | from 14.0 metresmetresfrom 14.0 metres |
| DKDD0005 | 18 metres @ 6.24% Zn+Pb & 8.80 gpt Ag | from 0.0 metres |
| Including | 14 metres @ 7.29% Zn+Pb & 11.10 gpt Ag | from 11.0 metres |
Drilling at Driehoek Central is now sufficient to allow the estimation of a JORC resource.
3.1.3 Driehoek East
Driehoek East deposit is a small mineralised breccia pipe around 600 m east of the main zones of mineralisation at Driehoek Central and North. A small programme of diamond drilling was undertaken at Driehoek East to confirm historical exploration and returned excellent results, including:
| DKDD0008DKDD0008 | 61.8metres@ 4.21% Pb+Zn & 6.30@ 4.21% Pb+Zn & 6.30 6.30gptAg | from 12.4 metresfrom 12.4 |
|---|---|---|
| including | 2 metres@ 12.09% Pb+Zn & 11.87@ 12.09% Pb+Zn & 11.87 11.87gptAg | from 18.9 metresfrom 18.9 |
| and | 3 metres@ 13.78% Pb+Zn & 27@ 13.78% Pb+Zn & 27 27gptAg | from 54 from 54 54.0metres |
| DKDD0009DKDD0009 | 71 metres@ 3.62% Pb+Zn@ 3.62% Pb+Zn &4.75gptAg | from 10 from 10 10.0metres |
| including | 4 metres@ 11.43% Pb+Zn@ 11.43% Pb+Zn Pb+Zn& 22.75 & 22.75 22.75gptAg | from 18 from 18 18.0metres |
| and | 9 metres@ 7.61% Pb+Zn & 9.52@ 7.61% Pb+Zn & 9.52@ 7.61% Pb+Zn & 9.52gptAg | from 28 from 28 from 28.0 metres |
| DKDD001055. | DKDD001055.8 metres@ 2.04% Pb+Zn@Pb+Zn& 1.32gptAg | from 16. from 16. 16.3metres |
| IncludingIncluding | 20.8metres@ 3.03% Pb+Zn@Pb+Zn& 3.7gptAg@ 3.03% Pb+Zn | from 16. from 16. from 16.3metres |
| and | 5 metres@ 3.52% Zn@Zn | from 6.0 from 6.0 6.0metres |
This programme has confirmed the results of historic drilling but also indicated that mineralisation has yet to be closed off at depth. The results of this drilling will be used to assist in the estimation of a JORC resource for Driehoek.
REVIEW OF OPERATIONS
Resource estimates are currently in progress for the Driehoek Central and East deposits, and are due to be released in the fourth quarter of 2012. The estimate for Driehoek North deposit will be undertaken following an infill drilling programme.
3.2 Hoba Ost
Numerous zones of mineralisation have been identified along strike from Driehoek in the course of regional mapping and sampling. Highly anomalous copper, lead, zinc and silver are evident in outcropping carbonate rocks distributed over an area covering several kilometres of strike.
Grades encountered in grab samples from reconnaissance sampling of the Hoba Ost area include:
- Copper values up to 1.3 %,
- Lead values up to 7.1 %,
- Zinc values up to 12.3 %,
- Silver values up to 114 gpt (~3.7 Troy Ounces per tonne).
There are no historical prospects gazetted in the area, however Sabre's regional magnetic dataset combined with new geological interpretations have been instrumental in the identification of the prospectivity of this area.
An extensive soil sampling programme is presently underway to systematically cover the mineralised areas and to define targets along the eastern extensions of the Hoek zinc-lead trend.
REVIEW OF OPERATIONS
4. The Kombat Copper Trend
Sabre acquired the Otavi Valley lease (EPL 3540) in June 2012. The lease covers over 45 kilometres of the highly prospective Kombat Copper Trend, which hosts a number of historic mines, historic workings and prospects, including the Kombat Copper Mine* (8.7 Million tonnes @ 3.1% Copper & 26 gpt Silver produced), which is currently on care & maintenance.
Sabre's initial exploration is focusing on the Guchab mining centre, some 10 kilometres to the east of the Kombat mine.
Figure 7 – Oblique view east from the Kombat copper mine (foreground, excised area shaded) along strike to Sabre's series of copper targets (yellow) at Nehlen and Rendezvous in the Kombat Ost copper target area, and Guchab in the Guchab mining centre. Note the railway and highway on the right of the diagram, and the white zone of hydrothermal alteration on the flank of the hill at Guchab. The Rietfontein and Odin lead-zinc targets (grey) are also shown - the licence boundary is shown in yellow.
*The Kombat Copper Mine and Concentrator are not Sabre assets and are held by TSX.V listed Kombat Copper.
4.1 Guchab Copper Mining Area
The Guchab mining centre is a historic series of copper mines to the east of Kombat. Metamorphic copper mineralisation has formed vein and breccia style deposits throughout the area. Major copper minerals at surface include malachite, chalcocite, and dioptase within the copper gossans that extend over more than 4 km of strike. Copper-rich and silver-rich stratigraphy highlights extensive and very intense copper-in-soil geochemical anomalies (extremely high with values in soils commonly exceeding 10,000 ppm or 1% Cu).
The Guchab mining area is centred on the Guchab deposit. High-grade zones are surrounded by more moderate grade vein networks outcropping over several areas, with the main zone measuring approximately 1,000 x 150 m. Channel sampling of the historic workings at the Guchab deposit has returned some very high-grade intercepts, including:
| GCTR 001 | 17m @ | 5.86% Cu & 29 gpt Ag |
|---|---|---|
| GCTR 002 | 16m @ 10.16% Cu & 64 gpt Ag | |
| GCTR 021 | 14m @ | 6.40% Cu & 62 gpt Ag |
| GCTR 023 | 25m @ | 6.70% Cu & 59 gpt Ag |
| GCTR 026 | 22m @ | 5.83% Cu & 48 gpt Ag |
As well as the Guchab deposit, the Guchab mining centre also comprises the Rodgerberg mine and the Schlangental prospect which are located along strike from the Guchab mine. Rodgerberg was a substantial copper mine during the 1920s. An underground sampling programme was completed at Rodgerberg during the second quarter of 2012, with results including:
| RUUG 001 | 3m @ 10.88% Cu & 473 gpt Ag | |
|---|---|---|
| RUUG 005 | 5m @ | 6.96% Cu & 302 gpt Ag |
| RUUG 005 | 13m @ | 5.32% Cu & 192 gpt Ag |
Sampling and mapping have identified a number of targets for the reconnaissance drilling programme.
4.1.1 Diamond Drilling
A programme of reconnaissance diamond drilling has been planned from a number of locations (Figure 8) at Guchab to assist in defining the style of the mineralisation and the preferred orientations of the controlling structures within the mining centre.
REVIEW OF OPERATIONS
Figure 8 – Imagery of the Guchab area showing Drill Pad locations, topography and outline of elevated surface copper mineralisation (in red).
Initial diamond drilling from Pad 1 on the eastern side of the prospect intersected significant widths of shallow copper mineralisation (from surface), including:
| GCDD0001including | 107.75 m @ 1.15% Copper & 6.93 gpt Silver2.35 m @ 13.24% Copper & 70.84 gpt Silver | from 0.60 metresfrom 17.90 metres |
|---|---|---|
| 8.95 m @ 3.03% Copper & 8.18 gpt Silver | from 36.05 metres | |
| GCDD0002 | 26.56 m @ 1.06% Copper & 6.25 gpt Silver | from 1.42 metres |
| including | 4.57 m @ 2.18% Copper & 21.44 gpt Silver | from 8.19 metres |
| GCDD0003 | 18.90 m @ 1.54% Copper & 9.66 gpt Silver | from 1.00 metre |
| including | 7.00 m @ 2.52% Copper & 10.12 gpt Silver | from 1.00 metre |
| GCDD0004 | 24.05 m @ 1.29% Copper & 10.91 gpt Silver | from Surface |
| including | 1.00 m @ 8.55% Copper & 38.38 gpt Silver | from 23.05 metres |
| GCDD0005 | 22.20 m @ 3.45% Copper & 29.67 gpt Silver | from Surface |
| including | 2.15 m @ 17.60% Copper & 247.70 gpt Silver | from 20.05 metres |
REVIEW OF OPERATIONS
Figure 9 – Cross section of drilling from Pad 1 showing drill holes, interpreted geology and results of diamond drilling. Offsection drillholes GCDD0004 and 0005 are superimposed on the section as dashed lines.
Drilling is now underway on the western side of the prospect area, with resource drilling expected to commence at the completion of the reconnaissance drilling programme in the fourth quarter of 2012.
Competent Persons Declarations
The information in this report that relates to Exploration Results is based on information compiled by Dr Matthew Painter of Sabre Resources Ltd, who is a member of The Australian Institute of Geoscientists. Dr Painter has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves". Dr Painter consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Mineral Resources or Ore Reserves is based on information compiled by Luke Marshall of Kalgoorlie Mine Management, who is a member of The Australian Institute of Geoscientists. Mr Marshall has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves". Mr Marshall consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Forward-Looking Statements This document may include forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning Metals Australia
Ltd's planned exploration programme and other statements that are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may", "potential," "should," and similar expressions are forward-looking statements. Although Sabre Resources Ltd believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.
DIRECTORS' REPORT
The Directors present their report on Sabre Resources Ltd ("the Company") and its controlled entities for the year ended 30 June 2012.
DIRECTORS
The Directors of the Company (with the exception of Mr Clemen who died in July 2011) during and since the end of the financial year were:-
Alexander Clemen Jonathan Downes Michael Scivolo David Zukerman
Shares and options of Sabre Resources Ltd held by Directors at the date of this report:
| Director | Shares | Options |
|---|---|---|
| Jonathan Downes | - | - |
| Michael Scivolo | - | - |
| David Zukerman | 10 | - |
PRINCIPAL ACTIVITIES
The principal activity of the Company and its controlled entities is mineral exploration.
RESULTS
The operating loss for the financial year after providing for income tax amounted to $997,945 (2011: $832,357).
FINANCIAL POSITION
The net assets of the Group have increased by $6,447,666 from $14,964,019 at 30 June 2011 to $21,411,685 at 30 June 2012.
DIVIDENDS
Since the end of the previous financial year, no dividend has been declared or paid by the Company. The Directors do not recommend the payment of a dividend.
INFORMATION ON DIRECTORS AND COMPANY SECRETARY
- (a) All of the Directors were in office for the entire period. Their qualifications, experience and special responsibilities are as follows:-
- (i) Alexander Clemen B.Sc (Hons), FAusIMM
Mr Clemen was a Director until his death in July 2012, was a qualified geologist with over thirty years experience in this field. He worked for several large, international mining companies in various parts of the world and was experienced in exploring for gold, base metals, uranium, industrial minerals and diamonds. For the past three years he also served as a Director of Metals Australia Ltd and Golden Deeps Limited.
(ii) Jonathan Downes B.Sc (Geol), MAIG
Mr Downes has over fifteen years experience in the minerals industry, and has worked in various geological and corporate capacities. He has experience in nickel, gold and base metals, and has been intimately involved with numerous private and public capital raisings. Mr Downes
DIRECTORS' REPORT
is currently the Managing Director of Ironbark Zinc Ltd and a non-Executive Director of Wolf Minerals Ltd, Corazon Mining Ltd and Waratah Gold Ltd.
(iii) David Zukerman
Mr Zukerman has an accounting and finance background. He has held a number of public company directorships in Australia and Asia during the past 25 years, and for the past three years he has also served as a Director of Metals Australia Ltd and Golden Deeps Ltd.
(iv) Michael Scivolo B. Comm, FCPA
Mr Scivolo has extensive experience in the fields of accounting and taxation in both corporate and non-corporate entities. He is also a Director of Victory West Moly Ltd, Blaze International Ltd, Prime Minerals Ltd and Power Resources Ltd.
(b) The Company Secretary was in office for the entire period and his qualifications and experience are as follows:-
Norman Grafton FCIS, FCSA– Company Secretary
Mr Grafton has extensive experience in both Australian and international commerce, having previously been based in Singapore, Indonesia, Papua New Guinea and Jamaica. Prior to returning to Australia, he was Director of Finance and Company Secretary of the largest agroindustrial operation in Jamaica, on secondment from a major UK firm of corporate managers.
REMUNERATION REPORT (AUDITED)
2012
| Short-term Benefits | Superannuation | Share-basedPayment | ||
|---|---|---|---|---|
| DirectorsFees | Salaries &Consulting Fees | Options | Total | |
| $ | $ | $ | $ | $ |
| 12,000 | 87,000 | - | - | 99,000 |
| 12,000 | - | 1,080 | - | 13,080 |
| 12,000 | - | 1,080 | - | 13,080 |
| - | 10,655 | 14,050 | - | 24,705 |
| - | 28,236 | 9,240 | - | 37,476 |
| - | 189,240 | 24,945 | - | 214,185 |
| - | 122,001 | 10,980 | - | 132,981 |
| 36,000 | 437,132 | 61,375 | - | 534,507 |
2011
| Key Management Personnel | Short-term Benefits | Share-basedSuperannuationPayment | Options | ||
|---|---|---|---|---|---|
| DirectorsFees | Salaries &Consulting Fees | Options | Total | ||
| $ | $ | $ | $ | $ | |
| A Clemen | 12,000 | 108,550 | - | - | 120,550 |
| J Downes | 12,000 | - | 1,080 | - | 13,080 |
| M Scivolo | 12,000 | - | 1,080 | - | 13,080 |
| D Zukerman | - | 6,860 | 8,000 | - | 14,860 |
| N Grafton | - | 21,846 | 8,154 | - | 30,000 |
| M Painter | - | 180,807 | 23,903 | - | 204,710 |
| M McCabe | - | 117,147 | 10,543 | - | 127,690 |
| 36,000 | 435,210 | 52,760 | - | 523,970 |
ANALYSIS OF MOVEMENT IN OPTIONS
There was no movement during the reporting period, of options over ordinary shares in the Company held by each Director and KMP employee.
No person entitled to exercise an option had or has any right by virtue of the option to participate in any share issue of any other body corporate.
Non-executive Directors receive a fixed fee, with Executive Directors being remunerated for any professional services conducted for the Company.
No Director has an employment contract, but the employment terms and conditions of key management personnel and Group executives are formalised in twelve month contracts of employment.
Terms of employment require that thirty days notice of termination of contract is required from either employer or employee. There is no agreement to pay any termination payment other than accrued salary and annual leave.
Directors received no benefits in the form of share-based payments during the year ended 30 June 2011.
There are no retirement schemes for any Directors or any loans or any other type of compensation.
Board policy on the remuneration for this exploration company is influenced by comparing fees paid to directors in other companies within the exploration industry, and then set at a level to attract qualified people, to accept the responsibilities of directorship. No Director, executive or employee has an employment contract.
Being an exploration company with no earnings, a relationship is yet to be established between an emolument policy and the company's performance.
DIRECTORS' REPORT
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company's Directors held during the year ended 30 June 2012, and the number of meetings attended by each Director.
| Eligible toattend | Attended |
|---|---|
| 4 | |
| 4 | |
| 4 | |
| 4 | |
| 4444 |
RETIREMENT, ELECTION AND CONTINUATION OF OFFICE OF DIRECTORS
Messrs Downes and Scivolo retired by rotation as Directors at the Annual General Meeting on 30 November 2011 and were re-elected.
Mr Zukerman, who is retiring by rotation, will offer himself for re-election at the forthcoming Annual General Meeting.
ENVIRONMENTAL ISSUES
The Company's objective is to ensure that a high standard of environmental care is achieved and maintained on all properties. There are no known environmental issues outstanding.
AFTER REPORTING DATE EVENTS
No matters or circumstances have arisen since the end of the financial year, which significantly affect or may significantly affect the operations of the economic entity, the results of these operations, or the state of affairs of the economic entity in the subsequent financial years.
INDEMNIFYING OFFICERS OR AUDITOR
No indemnities have been given, or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an officer or auditor of the entity.
SHARE OPTIONS
As at the date of this report, there are on options on issue.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
On 28 June 2012, the Company acquired all the issued capital of Starloop Holdings Pty Ltd ("Starloop"), an Australian registered private company. Starloop holds an 80% interest in Gazania Investments Nine (Pty) Ltd, a Namibian registered company, which is the holder of a 100% legal and beneficial interest in Namibian exploration tenement EPL 3540, known as the Otavi Valley Base Metals Project. An independent geologist's report valued the Otavi project at A$32,900,000 with the 80% acquired by Sabre valued at A$26,320,000.
The consideration for the acquisition was the issue to the vendor of 46 million fully paid shares on settlement of the share sale agreement. A further 25 million fully paid shares are to be issued on achieving an inferred JORC resource of 1 million tonnes at a grade of 2% Cu; (or the metal equivalent being 20,000 tonnes contained Cu metal) from the Project; and a further 5 million fully paid shares on achieving an inferred JORC resource of 5 million tonnes at a grade of 3% Cu; (or the metal equivalent being 150,000 tonnes contained Cu metal) from the Project
In addition, there is a cash consideration payable of A$300,000.
DIRECTORS' REPORT
Other than the above, there have not been any significant changes in the state of affairs of the Company and its controlled entities during the financial year, other than as noted in this financial report.
PROCEEDINGS ON BEHALF OF THE 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.
AUDIT COMMITTEE
No Audit Committee has been formed as the Directors believe that the Company is not of a size to justify having a separate Audit Committee. Given the small size of the Board, the Directors believe an Audit Committee structure to be inefficient.
AUDITOR'S INDEPENDENCE DECLARATION
A copy of the independent auditor's declaration as required by section 307c of the Corporations Act 2001, is set out on page 55.
NON AUDIT SERVICES
The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor's independence for the following reasons;
- All non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
- The nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
During the year under review, Grant Thornton also provided services in relation to taxation matters. Details of the amounts paid and payable to the auditor of the company, Grant Thornton (WA) Partnership for audit and non-audit services provided during the year are set out in Note 6 to the Financial Statements.
This report is made in accordance with a resolution of the Directors and Section 298(2) of the Corporations Act 2001.
D N Zukerman DIRECTOR
Dated this twenty eighth day of September 2012. Perth, Western Australia
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012
| Consolidated | ||||
|---|---|---|---|---|
| Notes | 2012 | 2011 | ||
| $ | $ | |||
| Revenue | 5 | 261,162 | 309,216 | |
| Expenditure | ||||
| Investments marked to market | 34,667 | 38,667 | ||
| Loss/(gain) on sale of fixed assets | 32,756 | - | ||
| Management fees | 245,060 | 238,155 | ||
| Directors' fees and services | 55,298 | 53,020 | ||
| Other expenses | 312,593 | 215,681 | ||
| Administration costs | 158,485 | 201,287 | ||
| Salaries & wages expense | 433,759 | 339,355 | ||
| Depreciation | 55,795 | 55,408 | ||
| 1,328,413 | 1,141,573 | |||
| (Loss) before income tax | (1,067,251) | (832,357) | ||
| Income tax (Research & Development Grant) | 4 | (69,306) | - | |
| (Loss) after income tax | 15 | (997,945) | (832,357) | |
| Other comprehensive income/(loss):Exchange differences on translating foreigncontrolled entities | (596,202) | (236,344) | ||
| Total comprehensive (loss) for the year | (1,594,147) | (1,068,701) |
| Earnings per share | Cents | Cents | |
|---|---|---|---|
| Basic Earnings per share | 17 | (0.8) | (0.8) |
Diluted earnings per share has no effect as compared to the Basic earnings per share.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012
| Consolidated | |||
|---|---|---|---|
| Notes | 2012$ | 2011$ | |
| CURRENT ASSETS | |||
| Cash and cash equivalents | 8 | 420,355 | 1,920,788 |
| Trade and other receivables | 9 | 58,192 | 79,013 |
| TOTAL CURRENT ASSETS | 478,547 | 1,999,801 | |
| NON-CURRENT ASSETS | |||
| Financial assets | 13,333 | 48,000 | |
| Plant and equipment | 10 | 95,448 | 148,590 |
| Exploration and evaluation expenditure | 11 | 20,236,748 | 12,961,146 |
| TOTAL NON-CURRENT ASSETS | 20,345,529 | 13,157,736 | |
| TOTAL ASSETS | 20,824,076 | 15,157,537 | |
| CURRENT LIABILITIES | |||
| Trade and other payables | 12 | 552,392 | 193,518 |
| TOTAL CURRENT LIABILITIES | 552,392 | 193,518 | |
| TOTAL LIABILITIES | 552,392 | 193,518 | |
| NET ASSETS | 20,271,684 | 14,964,019 | |
| EQUITYIssued capital | 13 | 41,463,620 | 34,561,808 |
| Share option reserve | 14 | 652,716 | 652,716 |
| Foreign currency translation reserve | (914,188) | (317,986) | |
| Accumulated losses | 15 | (20,930,464) | (19,932,519) |
| TOTAL EQUITY | 20,271,684 | 14,964,019 | |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2012
CONSOLIDATED ENTITY
| IssuedCapital | OptionReserve | ForeignCurrencyTranslation | (AccumulatedLosses) | Total | |
|---|---|---|---|---|---|
| $ | $ | Reserve$ | $ | $ | |
| Balance as at 1 July 2010 | 34,461,808 | 652,716 | (81,642) | (19,100,162) | 15,932,720 |
| Total other comprehensiveincome for the period | - | - | (236,344) | - | (236,344) |
| Shares issued on exercise ofoptionsLoss attributable to members of | 100,000 | - | - | - | 100,000 |
| parent entity | - | - | - | (832,357) | (832,357) |
| Balance as at 30 June 2011 | 34,561,808 | 652,716 | (317,986) | (19,932,519) | 14,964,019 |
| Total other comprehensive(loss) for the period | - | - | (596,202) | - | (596,202) |
| Issue of shares | 1,938,750 | - | - | - | 1,938,750 |
| Share issue costs | (96,938) | - | - | - | (96,938) |
| Shares issued on acquisition ofNamibian tenement | 5,060,000 | - | - | - | 5,060,000 |
| Loss attributable to members ofparent entity | - | - | - | (997,945) | (997,945) |
| Balance as at 30 June 2012 | 41,463,620 | 652,716 | (914,188) | (20,930,464) | 20,271,684 |
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2012
| Consolidated | |||||
|---|---|---|---|---|---|
| Note | 2012$ | 2011$ | |||
| Cash flow from operating activities | |||||
| Payments to suppliers | (848,933) | (1,079,455) | |||
| Interest received | 88,275 | 213,285 | |||
| Sundry Income | 196,319 | 123,707 | |||
| Research and Development Grant | 69,306 | - | |||
| Net cash (outflow) from operating activities | 16 | (495,033) | (743,363) | ||
| Cash flow from investing activities | |||||
| (Purchase)/sale of property, plant and equipment | (35,409) | (65,852) | |||
| Exploration and evaluation expenditure | (2,820,127) | (2,406,956) | |||
| Purchase of Power Resources Ltd shares | - | (86,667) | |||
| Net cash (outflow) from investing activities | (2,855,536) | (2,559,475) | |||
| Cash flow from financing activities | |||||
| Proceeds from issue of shares | 1,938,750 | - | |||
| Proceeds from exercise of options | - | 100,000 | |||
| Share issue costs | (96,938) | - | |||
| Net cash inflow from financing activities | 1,841,812 | 100,000 | |||
| Net increase/(decrease) in cash and cash equivalents held | (1,508,757) | (3,202,838) | |||
| Cash and cash equivalents at the beginning of the financial year | 1,920,788 | 5,120,154 | |||
| Effect of exchange rates on cash holdings in foreign currencies | 8,324 | 3,472 | |||
| Cash and cash equivalents at the end of the financial year | 8 | 420,355 | 1,920,788 |
NOTES TO THE FINANCIAL STATEMENTS
1. Corporate Information
The financial report of Sabre Resources Ltd (the Company) for the year ended 30 June 2012 was authorised for issue in accordance with a resolution of the directors on 28 September 2012.
Sabre Resources Ltd is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange and the Berlin and Frankfurt Stock Exchanges.
The nature of the operations and principal activity of the Group is mineral exploration.
2. Summary of Significant Accounting Policies
(a) Basis of Preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards and complies with other requirements of the law. The financial report has also been prepared on an accruals basis and on a historical cost basis, except for financial assets and liabilities, which have been measured at fair value.
The financial report is presented in Australian Dollars.
The financial statements of the Company and Group have been prepared on a going concern basis which anticipates the ability of the Company and Group to meet its obligations in the normal course of the business.
(b) Statement of compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRS).
(c) Changes in accounting policies on initial application of Accounting Standards
The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 July 2010:
- AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project;
- AASB 2009-8 Amendments to Australian Accounting Standards Group cash-settled Share-based Payment Transactions;
- AASB 2009-10 Amendments to Australian Accounting Standards Classification of Rights Issues;
- AASB Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments;
- AASB 2009-13 Amendments to Australian Accounting Standards arising from Interpretation 19; and
- AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project.
The adoption of these standards did not have any impact on the amounts for the current period or prior periods.
(d) New Accounting standards and interpretation
The AASB has issued new, revised and amended 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:
NOTES TO THE FINANCIAL STATEMENTS
| New/revisedpronouncement | Supersededpronouncement | Explanation of amendments | Effective date(i.e. annualreportingperiodsendingon or after) | Example disclosure ofimpact of new standardon the financial report(if standard is notadopted early) | Relatedpronouncement whichmust beearly adoptedifthisstandard isearly adopted | Likely impact |
|---|---|---|---|---|---|---|
| AASB 9FinancialInstrumentsAASB 2009-11Amendmentsto AustralianAccountingStandardsarisingfromAASB 9 | AASB 139FinancialInstruments:Recognition andMeasurement(part) | AASB 9 introduces newrequirements for the classificationand measurement of financialassets and liabilities. AASB 9uses a single approach todetermine whether a financialasset is measured at amortisedcost or fair value, replacing themany different rules in AASB 139and removes the impairmentrequirement for financial assetsheld at fair value.In addition, the majority ofrequirements from AASB 139 forthe classification andmeasurement of financial liabilitieshas been carried forwardunchanged, except in relation toown credit risk where an entitytakes the option to measurefinancial liabilities at fair value.AASB 9 requires the amount of thechange in fair value due tochanges in the entity's own creditrisk to be presented in othercomprehensive income (OCI),unless there is an accountingmismatch in the profit or loss, inwhich case all gains or losses areto be presented in the profit orloss.The requirements from AASB 139related to the derecognition offinancial assets and liabilities havebeen incorporated unchanged intoAASB 9. | 31 December2013 | AASB 9 amends theclassification andmeasurement of financialassets; the effect on theentity will be that moreassets are held at fairvalue and the need forimpairment testing hasbeen limited to assetsheld at amortised costonly.Minimal changes havebeen made in relation tothe classification andmeasurement of financialliabilities, except 'owncredit risk' instruments.The effect on the entitywill be that the volatility inthe profit or loss will bemoved to the OCI, unlessthere is an accountingmismatch. | AASB 2009-11AASB 2010-7 | Depending onassets held, theremay be significantmovement ofassets between fairvalue and costcategories andceasing ofimpairment testingon available for saleassets.If the entity holdsany 'own credit risk'financial liabilities,the fair value gainor loss will beincorporated in theOCI, rather thanprofit or loss, unlessaccountingmismatch. |
| AASB124Related PartyDisclosuresAASB 2009-12Amendmentsto AustralianAccountingStandardsarising fromAASB 124. | AASB 124Related PartyDisclosures | This revision amends thedisclosure requirements forgovernment related entities andthe definition of a related party. | 31 December2011 | Since the entity is not agovernment relatedentity; there is notexpected to be anychanges arising from thisstandard. | AASB 2009-12 | Unlikely to havesignificant impact inAustralia. |
| AASB 2010-4FurtherAmendmentsto AustralianAccountingStandardsarising fromthe AnnualImprovements Project[AASB 1, | None | Emphasises the interactionbetween quantitative andqualitative AASB 7 disclosuresand the nature and extent of risksassociated with financialinstruments.Clarifies that an entity will presentan analysis of othercomprehensive income for eachcomponent of equity, either in thestatement of changes in equity or | 31 December2011 | Given the number ofstandards amended byAASB 2010-4, anexample disclosure isnot included.Entities assess theimpact of each of theamendments on theirorganisation. | None | Varies dependingon relevance,however impact isunlikely to besignificant. |
NOTES TO THE FINANCIAL STATEMENTS
| AASB 7,AASB 101,AASB 134andInterpretation13] | in the notes to the financialstatements.Provides guidance to illustrate howto apply disclosure principles inAASB 134 for significant eventsand transactions.Clarify that when the fair value ofaward credits is measured basedon the value of the awards forwhich they could be redeemed,the amount of discounts orincentives otherwise granted tocustomers not participating in theaward credit scheme, is to betaken in account. | |||||
|---|---|---|---|---|---|---|
| AASB 2010-6Amendmentsto AustralianAccountingStandards –Disclosureson Transfersof FinancialAssets(AASB 1 &AASB 7) | None | The Standard amends thedisclosures required, to help usersof financial statements evaluatethe risk exposures relating to morecomplex transfers of financialassets (eg. securitisations) and theeffect of those risks on an entity'sfinancial position. | 30 June 2012 | TheAmendmentswillintroduce more extensiveand onerous quantitativeand qualitative disclosurerequirementsforderecognition of financialassets. | AASB 7 | More extensive andonerousquantitative andqualitativedisclosurerequirements forde-recognition offinancial assets. |
| AASB 2010-7Amendmentsto AustralianAccountingStandardsarising fromAASB 9(December2010) [AASB1, 3, 4, 5, 7,101, 102,108, 112,118, 120,121, 127,128, 131,132, 136,137, 139,1023, & 1038andinterpretations 2, 5, 10, 12,19 & 127] | None | The requirements for classifyingand measuring financial liabilitieswere added to AASB 9. Theexisting requirements for theclassification of financial liabilitiesand the ability to use the fair valueoption have been retained.However, where the fair valueoption is used for financialliabilities the change in fairvalue is accounted for as follows:► The change attributable tochanges in credit risk arepresented in othercomprehensive income (OCI)► The remaining change ispresented in profit or lossIf this approach creates orenlarges an accounting mismatchin the profit or loss, the effect ofthe changes in credit risk are alsopresented in profit or loss. | 31 December2013 | This Standard makesamendments to a rangeof Australian AccountingStandards andInterpretations as aconsequence of theissuance of AASB 9:Financial Instruments inDecember 2010.Accordingly, theseamendments will onlyapply when the entityadopts AASB 9. | AASB 9AASB 2009-11 | Unlikely to havesignificant impact inAustralia. |
| ConsolidatedFinancialStatements | IAS 27 | IFRS 10 establishes a new controlmodel that applies to all entities. Itreplaces parts of IAS 27Consolidated and SeparateFinancial Statements dealing withthe accounting forconsolidated financial statementsand SIC-12 Consolidation –Special Purpose Entities.The new control model broadensthe situations when an entity isconsidered to be controlled byanother entity and includes newguidance for applying the model tospecific situations, including whenacting as a manager may givecontrol, the impact of potentialvoting rights and when holdingless than a majority voting rights | 31 December2013 | It introduces a new,principle-based definitionof control which will applyto all investees todetermine the scope ofconsolidation.Traditional controlassessments based onmajority ownership ofvoting rights will veryrarely be affected.However, 'borderline'consolidation decisionswill need to be reviewedand some will need to bechanged taking intoconsideration potentialvoting rights andsubstantive rights. | IFRS 11IFRS 12IAS 27IAS 28IAS 31 | Entities most likelyto be impacted arethose that:- have significant,but not a majorityequity interests inother entities;- hold potentialvoting rights overinvestments, suchas options orconvertible debt. |
NOTES TO THE FINANCIAL STATEMENTS
| may give control. This is likely tolead to more entities beingconsolidated into the group. | ||||||
|---|---|---|---|---|---|---|
| Disclosure ofInterestsinOther Entities | IAS 27IAS 28IAS 31 | IFRS 12 includes all disclosuresrelating to an entity's interests insubsidiaries, joint arrangements,associates and structuresentities. New disclosures havebeen introduced about thejudgements made by managementto determine whether controlexists, and to require summarisedinformation about jointarrangements, associates andstructured entities and subsidiarieswith non-controlling interests. | 31 December2013 | IFRS 12 combines thedisclosure requirementsfor subsidiaries, jointarrangements, associatesand structured entitieswithin a comprehensivedisclosure standard.It aims to provide moretransparency on'borderline' consolidationdecisions and enhancedisclosures aboutunconsolidated structuredentities in which aninvestor or sponsor hasinvolvement. | None | There are someadditionalenhanceddisclosures centredaround significantjudgements andassumptions madearound determiningcontrol, joint controland significantinfluence. |
| Fair ValueMeasurement | None | IFRS 13 establishes a singlesource of guidance under IFRS fordetermining the fair value ofassets and liabilities. IFRS 13does not change when an entity isrequired to use fair value, butrather, provides guidance on howto determine fair value under IFRSwhen fair value is required orpermitted by IFRS. Application ofthis definition may result indifferent fair values beingdetermined for the relevant assets.IFRS 13 also expands thedisclosure requirements for allassets or liabilities carried at fairvalue. This includes informationabout the assumptions made andthe qualitative impact of thoseassumptions on the fair valuedetermined. | 31 December2013 | IFRS 13 has beencreated to:establish a singlesource of guidancefor all fair valuemeasurements;clarify thedefinition of fairvalue and relatedguidance; andenhancedisclosures aboutfair valuemeasurements(new disclosuresincreasetransparencyabout fair valuemeasurements,including thevaluationtechniques andinputs used tomeasure fairvalue). | None | For financial assets,IFRS 13's guidanceis broadlyconsistent withexisting practice. Itwill however alsoapply to themeasurement of fairvalue for nonfinancial assets andwill make asignificant changeto existing guidancein the applicablestandards. |
The Group does not anticipate early adoption of the above reporting requirements and does not expect these requirements to have any material effect on the Group's financial statements.
(e) Basis of consolidation
The consolidated financial statements comprise the financial statements of Sabre Resources Ltd and its subsidiaries ('the Group').
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.
All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.
NOTES TO THE FINANCIAL STATEMENTS
Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which Sabre Resources Limited has control.
Minority interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately for the Group's equity therein. Minority interests consist of the amount of those interests at the date of the original business combination and the minority's share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority's interest in the subsidiary's equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make additional investments to cover the losses.
(f) Interest in joint venture operation
The Group's interest in any joint venture operation is accounted for by recognising the Group's assets and liabilities from the joint venture, as well as expenses incurred by the Group and the Group's share of income earned from the joint venture, in the consolidated financial statements.
(g) Foreign currency translation
The functional and presentation currency of Sabre Resources Ltd, Link National Pty Ltd and Starloop Holdings Pty Ltd is Australian Dollars (A$), and the functional and presentation of Sabre Resources Namibia (Pty) Ltd and Gazania Investments Nine (Pty) Ltd is Namibian Dollars (N$).
Cash remittances from the parent entity to the Namibian subsidiaries are either sent in Australian Dollars or converted by the remitting bank into Rand and then converted to Namibian dollars using the same rate of exchange. That is, once the A$ is translated to Rand by the bank, which then converts it to the same balance in Namibian dollars. As such, foreign currency transactions are initially recorded in the functional currency at the date of the transaction using the Rand. Monetary assets and liabilities denominated in the foreign currencies are retranslated at the rate of exchange at the reporting date.
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date.
All differences in the consolidated financial report are taken to the Statement of Comprehensive Income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
As at the reporting date the assets and liabilities of any overseas subsidiaries would be translated into the presentation currency of Sabre Resources Ltd at the rate of exchange ruling at the Statement of Financial Position date and the Statement of Comprehensive Income are translated at the weighted average exchange rates for the period.
The exchange differences arising on the retranslation are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the Statement of Comprehensive Income.
(h) Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.
Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows: Plant and equipment - over 3 to 5 years
NOTES TO THE FINANCIAL STATEMENTS
Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash-generating units are written down to their recoverable amount.
The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the Statement of Comprehensive Income in the period the item is derecognised.
(i) Goodwill
Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is not amortised.
Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.
As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination's synergies.
Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates.
Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation.
Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.
(j) Impairment of non-financial assets
At each reporting date, the Group assesses whether there is any indication that a non-financial asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable
NOTES TO THE FINANCIAL STATEMENTS
amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset's value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
(k) Investments and other financial assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.
All regular way purchases and sales of financial assets are recognised on the trade date, i.e. that date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or conversion in the market place.
(i) Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category "financial assets at fair value through profit or loss". Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term with the intention of making a profit. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss.
(ii) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-to maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process.
(iii) Loans and receivables
Loans and receivables, including loan notes and loans to key management personnel are nonderivative financial assets with fixed or determinable payment that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.
NOTES TO THE FINANCIAL STATEMENTS
(iv) Available-for-sale-investments
Available-for-sale-investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition, available-for-sale investments are measured at fair value with gains or losses being recognised as a separate economic component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.
The fair values of investments that are actively traded in organised financial markets are determined by reference to quoted market bid prices at the close of business on the reporting date. For investments with no active market, fair values are determined using valuation techniques. Such techniques include: using recent arm's length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models making as much use of available and supportable market data as possible and keeping judgemental inputs to a minimum.
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 the end of each reporting period, 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 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.
(l) Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable through the successful development, or sale, 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.
Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on a discounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site.
NOTES TO THE FINANCIAL STATEMENTS
(m) Trade and other receivables
Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts.
An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.
(n) Cash and cash equivalents
Cash and short-term deposits in the Statement of Financial Position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.
(o) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the Statement of Comprehensive Income net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
(p) Share-based payment transactions
(i) Equity settled transactions:
In the year under review, the Group did not provide benefits to management personnel and consultants of the Group in the form of share-based payments whereby personnel render services in exchange for shares, although this type of benefit was provided in previous years.
The cost of these equity-settled transactions with management personnel and consultants was measured by reference to the fair value of the equity instruments at the date on which they were granted. The fair value was determined using the Black-Scholes formula.
In valuing equity-settled transactions, no account was taken of any performance conditions, other than conditions linked to the price of the shares of Sabre Resources Ltd (market conditions). The cost of equity-settled transactions was recognised, together with the corresponding increase in equity, on the date of grant of the options.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.
(ii) Cash settled transactions:
The Group does not provide benefits to employees in the form of cash-settled share based payments.
Any cash-settled transactions would be measured initially at fair value at the grant date using the Black-Scholes formula taking into account the terms and conditions upon which the instruments
NOTES TO THE FINANCIAL STATEMENTS
were granted. This fair value is expensed over the period until vesting with recognition of a corresponding liability. The liability is remeasured to fair value at each reporting date up to and including the settlement date with changes in fair value recognised in profit or loss.
(q) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to the buyer at the time of delivery of the goods to the customer.
Interest
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.
Dividends
Revenue is recognised when the shareholders' right to receive the payment is established.
(r) Income tax
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
- except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be utilised:
- except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and,
- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the
NOTES TO THE FINANCIAL STATEMENTS
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of comprehensive income.
(s) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
- where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
- receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
(t) Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.
(u) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(v) Earnings per share
Basic earnings per share is calculated as net loss attributable to members of the parent, divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net loss attributable to members of the parent, adjusted for:
- the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
- other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
(w) Comparatives
Comparatives are reclassified where necessary to be consistent with the current year's disclosures.
NOTES TO THE FINANCIAL STATEMENTS
3. Significant Accounting Judgments, Estimates and Assumptions
In applying the Group's accounting policies, management continually evaluates judgments, estimates and assumptions based on experience and other factors, including expectations of future events that may have an impact on the Group. All judgments, estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to management. Actual results may differ from the judgments, estimates and assumptions. Significant judgments, estimates and assumptions made by management in the preparation of these financial statements are outlined below:
- (i) Significant accounting judgments include:
- (a) Provision for investments in and loans to subsidiaries
Investments in, and loans to, subsidiaries are fully provided for until such time as subsidiaries are in a position to repay loans.
(b) Exploration 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 $12,961,146.
- (ii) Significant accounting estimates and assumptions include:
- (a) Share-based payment transactions
The Group measured the cost of equity-settled transactions with management personnel and consultants in previous years by reference to the fair value of the equity instruments at the date at which they were granted. The fair value was determined using the Black-Scholes model, with the assumptions detailed in note 7. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity.
The Group measured the cost of cash settled share-based payments at fair value at the grant date using the Black-Scholes formula taking into account the terms and conditions under which the instruments were granted
(b) Estimation of useful lives of assets
The estimation of the useful lives of assets has been based on historical experience as well as manufacturers' warranties (for plant and equipment) and turnover policies (for motor vehicles). In addition, the condition of assets is assessed at least once per year and considered against the remaining useful life. Adjustments to useful life are made when considered necessary. Depreciation calculations are included in note 10.
NOTES TO THE FINANCIAL STATEMENTS
4. Income Tax
| Consolidated | ||
|---|---|---|
| 2012 | 2011 | |
| $ | $ | |
| The prima facie tax on profit/(loss) from ordinary activities before incometax is reconciled to the income tax as follows:Prima facie tax on profit/(loss) from ordinary activities before income tax | ||
| at 30% (2011: 30%) | ||
| Consolidated Group | (320,175) | (249,707) |
| Add: | ||
| Tax effect of: | ||
| Other non-allowable items | 147,570 | 85,660 |
| Other assessable items: | ||
| Deferred tax asset not bought to account | 169,890 | 71,109 |
| Less: | ||
| Tax effect of: | ||
| Research & Development tax offset | (69,306) | |
| Effect of overseas tax rate | (7,285) | (7,062) |
| Income tax attributable to entity | (69,306) | - |
| Unrecognised Deferred Tax Assets | ||
| - Tax losses: operating losses | ||
| 2,458,030 | 2,414,054 | |
| - Tax losses: capital losses | 1,659,800 | 1,986,235 |
| - Temporary differences | 9,231 | 4,050 |
| - Temporary differences equity | - | 66 |
| - Foreign tax losses | 521,023 | 121,872 |
| 4,858,084 | 4,526,277 | |
| Unrecognised Deferred Tax Liabilities | - | (7,030) |
(i) The companies derive future assessable income of a nature and of an amount sufficient to enable the benefit from the deduction for the losses to be realised;
(ii) The companies continue to comply with the conditions for deductibility purposes imposed by the Law; and
(iii) No changes in tax legislation adversely affect the companies in realising the benefits from the deductions for the losses.
5. Revenue
| Consolidated | |||
|---|---|---|---|
| 2012$ | 2011$ | ||
| Interest earned | 64,843 | 185,509 | |
| Cost recovery | 196,319 | 123,707 | |
| 261,162 | 309,216 |
NOTES TO THE FINANCIAL STATEMENTS
6. Auditor's Remuneration
Amounts received or due and receivable by the Company's auditors for:-
| Consolidated | ||
|---|---|---|
| 2012$ | 2011$ | |
| Remuneration of the auditor of the parent entity, Grant Thornton (WA)Partnership | ||
| - auditing or reviewing of the financial report | 22,696 | 20,896 |
| - taxation services provided by related practice of the auditor | 10,500 | 6,200 |
| Remuneration of other auditors of subsidiaries for: | ||
| - auditing or reviewing the financial reports of subsidiaries | 22,122 | 9,372 |
| 55,318 | 36,468 |
7. Interests of Key Management Personnel (KMP)
Refer to the Remuneration Report contained in the Directors' Report for Details of the remuneration paid or payable to each member of the Group's key management personnel for the year ended 30 June 2012.
The totals of remuneration paid to KMP during the year are as follows:
| Short-term employee benefits | 473,132 | 471,210 |
|---|---|---|
| Post-employment benefits | 61,375 | 52,760 |
| 534,507 | 523,970 |
KMP Options and Rights Holdings
The number of options over ordinary shares held by each KMP during the financial year is as follows:
| 30 June 2012 | Balance1 July 2011 | Granted asCompensation | OptionsExercised | Options Expired | Balance30 June 2012 |
|---|---|---|---|---|---|
| A Clemen | - | - | - | - | - |
| J Downes | - | - | - | - | - |
| M Scivolo | - | - | - | - | - |
| D Zukerman | - | - | - | - | - |
| N Grafton | - | - | - | - | - |
| M Painter | 250,000 | - | - | 250,000 | - |
| M McCabe | - | - | - | - | |
| Total | 250,000 | - | - | 250,000 | - |
NOTES TO THE FINANCIAL STATEMENTS
KMP Options and Rights Holdings
The number of options over ordinary shares held by each KMP during the financial year is as follows:
| 30 June 2011 | Balance1 July 2010 | Granted asCompensation | OptionsExercised | Options Expired | Balance30 June 2011 |
|---|---|---|---|---|---|
| A Clemen | - | - | - | - | - |
| J Downes | - | - | - | - | - |
| M Scivolo | - | - | - | - | - |
| D Zukerman | - | - | - | - | - |
| N Grafton | - | - | - | - | - |
| M Painter | 250,000 | - | - | 250,000 | |
| M McCabe | - | - | - | - | - |
| Total | - | - | - | - | - |
KMP Shareholdings
The number of ordinary shares in Sabre Resources Ltd held by each KMP during the financial year is as follows:
| 30 June 2012 | Balance1 July 2011 | Granted asCompensation | Issued onExercise ofOptions Duringthe Year | Other ChangesDuring the Year | Balance30 June 2012 |
|---|---|---|---|---|---|
| A Clemen | 10 | - | - | - | 10 |
| J Downes | - | - | - | - | - |
| M Scivolo | - | - | - | - | - |
| D Zukerman | 10 | - | - | - | 10 |
| N Grafton | - | - | - | - | - |
| M Painter | - | - | - | - | - |
| M McCabe | - | - | - | - | - |
| Total | 20 | - | - | - | 20 |
KMP Shareholdings
The number of ordinary shares in Sabre Resources Ltd held by each KMP during the financial year is as follows:
| 30 June 2011 | Balance1 July 2010 | Granted asCompensation | Issued onExercise ofOptions Duringthe Year | Other ChangesDuring the Year | Balance30 June 2011 |
|---|---|---|---|---|---|
| A Clemen | 10 | - | - | - | 10 |
| J Downes | - | - | - | - | - |
| M Scivolo | - | - | - | - | - |
| D Zukerman | 10 | - | - | - | 10 |
| N Grafton | - | - | - | - | - |
| Total | 20 | - | - | - | 20 |
There are no retirement schemes for any Directors or any loans or any other type of compensation. Directors' fees are paid on a quarterly basis. Consulting fees for professional services are paid as events occur.
NOTES TO THE FINANCIAL STATEMENTS
8. Cash and Cash Equivalents
| Consolidated | ||
|---|---|---|
| 2012 | 2011 | |
| $ | $ | |
| Represented by | ||
| Cash at bank | 387,658 | 220,788 |
| Bank deposits | 32,697 | 1,700,000 |
| 420,355 | 1,920,788 | |
| 9.Trade and Other Receivables | ||
| Current | ||
| Other debtors | 58,192 | 79,013 |
| 10.Plant and Equipment | ||
| Plant and Equipment, at cost | 232,638 | 232,638 |
| Less: accumulated depreciation | (84,048) | (84,048) |
| 148,590 | 148,590 | |
| Opening written down value | 148,590 | 138,145 |
| ¤Additions | 2,653 | 65,853 |
| Disposals | - | - |
| Depreciation | (55,795) | (55,408) |
| Closing written down value | 95,448 | 148,590 |
| 11.Exploration and Evaluation Expenditure | ||
| Opening balance | 12,961,146 | 10,794,008 |
| Acquisition of Starloop Holdings Pty Ltd | 5,360,000 | - |
| Expenditure for the year | 1,915,602 | 2,167,138 |
| 20,236,748 | 12,961,146 |
On 29 June 2012, the company acquired all the issued share capital of Starloop Holdings Pty Limited (Starloop) for a purchase consideration of 5,360,000, consisting of 46,000,000 converting shares of Sabre Resources Limited (Sabre) at a share price of 11cents and $300,000. The consideration securities are subject to a 12 month escrow period. Other terms of the transaction include the issue of the following shares upon meeting the targets:
-
- 25 million shares on achieving inferred JORC resource of 1million tonnes at grade 2% CU,
-
- 5 million shares on achieving an inferred JORC resource of 5 million tonnes at a grade 3% CU
12. Trade and other Payables Current
| Consolidated | ||||
|---|---|---|---|---|
| 4. | 4.4. | 2012 | 2011 | |
| $ | $ | |||
| Payables | 491,068 | 193,518 | ||
| Provision for staff leave | 14,771 | - | ||
| Other Loans | 46,553 | - | ||
| Payables | 552,392 | 193,518 | ||
13. Issued Capital
Movement in ordinary share capital of the Company during the last two years.
| Date | Details | NumberofShares | IssuePrice(cents) | Amount$ |
|---|---|---|---|---|
| 1 July 2010 | Balance | 109,802,997 | 34,461,808 | |
| September 2010October 2010 | Shares issued on exercise of optionsShares issued on exercise of options | 100,000300,000 | 2525 | 25,00075,000 |
| 30 June 2011 | Balance | 110,202,997 | 34,561,808 | |
| November 2011June 2012 | Shares issuedShares issued on tenement purchase | 16,500,00046,000,000 | 11.1611.00 | 1,841,8125,060,000 |
| 30 June 2012 | Balance | 172,702,997 | 41,463,620 |
The Company's capital consists of Ordinary Shares. The Company does not have a limited amount of authorised share capital. The Shares have no par value and are entitled to participate in dividends and the proceeds on any winding up of the Company in proportion to the number of Shares held.
At shareholders' meetings each fully paid ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
Capital Management
Management controls the capital of the group in order to maintain a good debt to equity ratio and to ensure that the group can fund its operations and continue as a going concern.
The group's debt and capital includes ordinary share capital, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the group's capital by assessing the group's financial risks and adjusting its capital structure in response to changes in these risks and in the market.
There have been no changes in the strategy adopted by management to control the capital of the group since the prior year.
14. Share Option Reserve
| Details | IssueNumberPriceof(cents)Options | Amount$ |
|---|---|---|
| Balance | 32,250,000 | 652,716 |
| Options exercised | (100,000) | - |
| Options exercised | (300,000) | - |
| Options expired | (250,000) | - |
| Options expired | (250,000) | - |
| Balance | 31,350,000 | 652,716 |
NOTES TO THE FINANCIAL STATEMENTS
| 30 November 2011 | Options expired | 8,350,000 | - |
|---|---|---|---|
| 30 June 2012 | Balance | 23,000,000 | 652,716 |
The weighted average remaining contractual life of options outstanding at year end was 0.50 years. The weighted average exercise price of outstanding shares at the end of the reporting period was 10.00 cents.
Summary of Options Granted
The following table sets out the number (No .) and weighted average exercise price (WAEP) of, and movements in, share options granted during the year:
| 2012o.N | 2012WAEP(cents) | 2011o.N | 2011WAEP(cents) | |
|---|---|---|---|---|
| Outstanding at beginning of yearGranted during the year | 31,350,000- | 14.00 | 32,250,000- | 14.46 |
| Exercised during the year | - | (400,000) | ||
| Expired during the year | (8,350,000) | (500,000) | ||
| Forfeited during the year | - | - | ||
| Outstanding at the end of the year | 23,000,000 | 10.00 | 31,350,000 | 14.00 |
The outstanding balance as at 30 June 2012 was comprised of 23,000,000 options over ordinary shares exercisable at 10 cents each, at any time up to 31 December 2012.
The weighted average remaining contractual life for the share options outstanding as at 30 June 2012 was 0.50 years (2011: 1.21 years).
The exercise prices for option outstanding at the end of the year was 10 cents (2011: 10 to 25 cents).
No options were granted during the year under review or the previous year.
15. Accumulated Losses
| Consolidated | ||
|---|---|---|
| 2012$ | 2011$ | |
| Accumulated losses at the beginning of the year | (19,932,519) | (19,100,162) |
| (Loss) for year | (997,945) | (832,357) |
| Accumulated losses at the end of the financial year | (20,930,464) | (19,932,519) |
NOTES TO THE FINANCIAL STATEMENTS
16. Cash flow Information
Reconciliation to Statement of Cash Flows
| Consolidated | |||
|---|---|---|---|
| 2012 | 2011 | ||
| Note | $ | $ | |
| Operating (loss) after income taxNon-cash flows in loss | (997,945) | (832,357) | |
| DepreciationRevaluation of sharesLoss on sale of fixed assetsChanges in assets and liabilities | 10 | 55,79534,66732,756 | 55,40838,667- |
| (Increase)/decrease in receivablesIncrease/(decrease) in trade and other payables | 11,108368,586 | 12,219(17,300) | |
| Net cash flows (used in) operating activities | (495,033) | (743,363) | |
| 17.Earnings per share |
| 2012Number | 2011Number | |
|---|---|---|
| Weighted average number of shares on issue during the financialyear used in the calculation of basic earnings per share | 120,813,653 | 110,081,059 |
Options to purchase ordinary shares not exercised at 30 June 2011 have not been included in the determination of basic earnings per share. Diluted loss per share has not been disclosed, as it does not show a position which is inferior to basic earnings per share.
| Loss per share – cents | (0.8) | (0.8) |
|---|---|---|
| ------------------------ | ------- | ------- |
18. Financial Instruments
(a) Interest Rate Risk
The consolidated entity's exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on those financial assets and financial liabilities, is as follows:
| Floating Interest Rate | Non-Interest Bearing | TOTAL | ||||
|---|---|---|---|---|---|---|
| 20120.00% - 5.93% | 20110.00% - 6.01% | 2012 | 2011 | 2012 | 2011 | |
| $ | $ | $ | $ | $ | $ | |
| Financial AssetsCash and cash | ||||||
| equivalents | 420,355 | 1,920,788 | - | - | 420,355 | 1,920,788 |
| Loans and ReceivablesHeld-for-trading | - | - | 58,192 | 79,013 | 58,192 | 79,013 |
| investments | - | - | 13,333 | 48,000 | 13,333 | 48,000 |
| Total Financial Assets | 420,355 | 1,920,788 | 71,525 | 127,013 | 491,880 | 2,047,801 |
NOTES TO THE FINANCIAL STATEMENTS
| Financial Liabilities (atamortised cost) | ||||||
|---|---|---|---|---|---|---|
| Trade and otherpayables | - | - | (552,392) | (193,518) | (515,097) | (193,518) |
| Net Financial Assets | 420,355 | 1,920,788 | (480,867) | (66,505) | (23,218) | 1,854,283 |
Reconciliation of Financial Assets to Net Assets
| Consolidated | ||
|---|---|---|
| 2012 | 2011 | |
| $ | $ | |
| Net financial assets | (23,218) | 1,854,283 |
| Exploration and Evaluation expenditure | 20,236,748 | 12,961,146 |
| Fixed assets | 95,448 | 148,590 |
| 20,308,978 | 14,964,019 |
(b) Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount of those assets, net of any provision for doubtful debts, as disclosed in the Statement of Financial Position and notes to the financial report.
The consolidated entity does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the consolidated entity.
(c) Net Fair Values
The carrying amount of financial assets and financial liabilities recorded in the financial statements represent their respective net fair values determined in accordance with the accounting policies disclosed in Note 2 to the financial statements.
(d) Financial Risk Management
The Group's financial instruments consist mainly of deposits with recognised banks, investments in bank bills up to 90 days, accounts receivable and accounts payable, and loans to subsidiaries. Liquidity is managed, when sufficient funds are available, by holding sufficient funds in a current account to service current obligations and surplus funds invested in bank bills. The Directors analyse interest rate exposure and evaluate treasury management strategies in the context of the most recent economic conditions and forecasts. The main risks the Group is exposed to, through its financial instruments, are the depository banking institution itself, holding the funds, and interest rates. The Group's active exposure to foreign currency is confined to services procured through the Namibian subsidiary. The Group's credit risk is minimal as being an exploration company, no goods are sold, or services provided, for which consideration is claimed.
(e) Sensitivity Analysis
Interest Rate Risk, Foreign Currency Risk and Price Risk
The group has performed sensitivity analysis relating to its exposure to interest rate risk, foreign currency risk and price risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.
NOTES TO THE FINANCIAL STATEMENTS
Interest Rate Sensitivity Analysis
At 30 June 2010, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:
| Consolidated | ||
|---|---|---|
| 2012$000 | 2011$000 | |
| Change in profit | ||
| Increase in interest rate by 2%- | 4 | 35 |
| Decrease in interest rate by 2%- | (4) | (35) |
| Change in Equity | ||
| Increase in interest rate by 2%- | 4 | 35 |
| Decrease in interest rate by 2%- | (4) | (35) |
(f) 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 the risk through the following mechanisms:
- preparing forward looking cash flow analysis in relation to its operational, investing and financing activities;
- maintaining a reputable credit profile;
- managing credit risk related to financial assets;
- only investing surplus cash with major financial institutions; and comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
The tables below reflect an undiscounted contractual maturity analysis for financial liabilities.
Cash flows realised from financial assets reflect management's expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and does not reflect management's expectations that banking facilities will be rolled forward.
| Consolidated Group | Within 1 Year | 1 to 5 Years | Over 5 Years | Total | ||||
|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| Financial Liabilities - Due forPayment | ||||||||
| Trade and Other Payables | 552,392 | 193,518 | - | - | - | - | 552,392 | 193,518 |
| Total expected outflows | 552,392 | 193,518 | - | - | - | - | 552,392 | 193,518 |
| Financial Assets - Cash FlowsRealisable | ||||||||
| Cash and Cash Equivalents | 387,658 | 220,788 | - | - | - | - | 387,658 | 220,788 |
| Bank Deposit over 3 months | 32,697 | 1,700,000 | - | - | - | - | 32,697 | 1,700,000 |
| Receivables | 58,192 | 79,013 | - | - | - | - | 58,192 | 79,013 |
| Held-for-trading investments | - | - | 13,333 | 48,000 | - | - | 13,333 | 48,000 |
| Total anticipated Inflows | 478,547 | 1,999,801 | 13,333 | 48,000 | - | - | 491,880 | 2,047,801 |
| Net (outflow)/inflow on financialinstruments | (73,845)_ | 1,806,283 | 13,333 | 48,000 | - | - | (60,512) | 1,854,283 |
NOTES TO THE FINANCIAL STATEMENTS
(g) Price risk
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices largely due to demand and supply factors for commodities.
The Group is also exposed to securities price risk on investments held for trading or for medium to longer terms. Such risk is managed through diversification of investments across industries and geographical locations.
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the Statement of Financial Position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels:
- quoted prices in active markets for identical assets or liabilities (Level 1);
- inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and
- inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| Consolidated Group | $000 | $000 | $000 | $000 |
| 2012 | ||||
| Financial assets | ||||
| Financial assets at fair value through profit or loss: | ||||
| - investments – held-for-trading | 13 | - | - | 13 |
| 13 | - | - | 13 | |
| 2011 | ||||
| Financial assets | ||||
| Financial assets at fair value through profit or loss: | ||||
| - investments – held-for-trading | 48 | - | - | 48 |
| 48 | - | - | 48 |
Included within Level 1 of the hierarchy are listed investments. The fair values of these financial assets have been based on the closing quoted bid prices at the end of the reporting period, excluding transaction costs.
19. Investment in controlled entities
| Name ofEntity | CountryofIncorporation | ClassofShares | EquityHolding% | Book Valueof Investment | Contribution toConsolidated Result | |||
|---|---|---|---|---|---|---|---|---|
| 2012% | 2011% | 2012$ | 2011$ | 2012$ | 2011$ | |||
| Link NationalPty LtdSabre | Australia | Ordinary | 100 | 100 | 8,000,000 | 8,000,000 | - | - |
| ResourcesNamibia (Pty)Ltd | Namibia | Ordinary | 70 | 70 | - | - | (182,119) | (176,549) |
| StarloopHoldings PtyLtdGazania | Australia | Ordinary | 100 | - | 5,360,000 | - | - | - |
| InvestmentsNine (Pty) Ltd | Namibia | Ordinary | 80 | - | 6,500,000 | - | - | - |
20. Related Parties
The Groups related parties include its subsidiaries, key management and others as described below. Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were received or given.
| Year ended 30 June 2012 | Year ended 30 June 2011 | |||||
|---|---|---|---|---|---|---|
| Related Party | Relationship | Nature OfTransaction | Transaction | Balance | Transaction | Balance |
| Sabre ResourcesNamibia (Pty) Ltd | Subsidiary | Expensespaid | 2,152,156 | 6,716,594 | 2,059,196 | 4,564,800 |
| Metals Australia Ltd | Commondirectorship | OtherIncome | 66,712 | 11,025 | 50,980 | 6,017 |
| Golden DeepsLimited | Commondirectorship | OtherIncome | 47,207 | 3,767 | 25,144 | 1,594 |
| Golden DeepsLimited | Commondirectorship | StaffSalaries | (8,385) | (8,385) | (39,758) | (39,758) |
All transactions with Directors are disclosed in Note 7.
21. Operating Segments
The Group has identified its operating segments based on the internal management reporting that is used by the executive management team (the chief operating decision maker) in assessing performance and allocating resources. The Group's operating segments have been identified based on how the financial and operating results of the Group are monitored and presented internally to the executive management team. The reportable segments are based on aggregated operating segments determined by the similarity of the products sold, as these are the sources of the Group's major risks and have the most effect on the performance of the Group.
The executive management team have aggregated the performance of all segments as they maintain similar economic characteristics of which includes the development and exploration of the Group's minerals interests in Namibia.
NOTES TO THE FINANCIAL STATEMENTS
22. Commitments
(i) Mining Tenements
The Company's main focus is the highly prospective Ongava Project in Namibia. There are no formal exploration commitments specified by the Namibian Ministry of Mining and Energy.
(ii) Management Agreement
The Company has an agreement with a management service company for the provision of services at $220,000 per annum plus CPI. Charges are at commercial terms in accordance with the agreement renewed on 23 April 2012 for a five year term.
23. Parent Entity Information
The following details information related to the parent entity, Sabre Resources Ltd, at 30 June 2012. The information presented here has been prepared using consistent accounting policies as shown in Note 2.
| Parent Entity | |||
|---|---|---|---|
| 2012 | 2011 | ||
| $ | $ | ||
| ASSETS | |||
| Current assets | 438,292 | 1,921,910 | |
| Non-current assets | 15,092,194 | 9,289,478 | |
| TOTAL ASSETS | 15,530,486 | 11,211,388 | |
| LIABILITIES | |||
| Current liabilitiesNon-current liabilities | (491,799) | (106,893) | |
| TOTAL LIABILITIES | (491,799) | (106,893) | |
| EQUITY | |||
| Issued capital | 41,463,620 | 34,561,808 | |
| Accumulated losses | (27,077,649) | (24,110,029) | |
| TOTAL EQUITY | 14,385,971 | 13,066,783 | |
| RESERVES | |||
| Share option reserve | 652,716 | 652,716 | |
| TOTAL RESERVES | 652,716 | 652,716 | |
| FINANCIAL PERFORMANCE | |||
| (Loss) for the year | (2,967,620) | (2,715,004) | |
| TOTAL COMPREHENSIVE (LOSS) | (2,967,620) | (2,715,004) |
No guarantees have been entered into by the parent entity on behalf of its subsidiary.
No contractual commitments by the parent company exist.
NOTES TO THE FINANCIAL STATEMENTS
24. Contingent Liabilities
In addition to the shares issued to the vendor of the new Namibian tenement, a further 25,000,000 shares will be issued on achieving an inferred JORC resource of 1 million tonnes at a grade of 2% copper; (or the metal equivalent being 20,000 tonnes copper metal) from the Project and 5,000,000 shares on achieving an inferred JORC resource of 5 million tonnes at a grade of 3% copper; (or the metal equivalent being 30,000 tonnes copper metal)
No other contingent liability exists for termination benefits under service agreements with directors or persons who take part in the management of the company.
25. Subsequent Events
On 29 August 2012, 23,000,000 options were exercised at ten cents each to raise $2,300,000.
On 30 August 2012, 30,769,231 shares were issued at 26 cents each to raise $8,000,000 before costs.
No other matters or circumstances have arisen since the end of the financial year which significantly affect, or may significantly affect, the operations of the economic entity, the results of these operations, or the state of affairs of the economic entity in the subsequent financial years.
DIRECTORS' DECLARATION
- In the opinion of the Directors of Sabre Resources Limited (the "Company"):
- (a) the financial statements and notes set out on pages 22 to 50, and the Remuneration disclosures that are contained in pages 18 to 19 of the Remuneration Report in the Directors' Report, are in accordance with the Corporations Act 2001*,* including:
- (i) giving a true and fair view of the Group's financial position as at 30 June 2012 and of its performance, for the financial year ended on that date; and
- (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
- (iii) complying with International Financial Reporting Standards as disclosed in Note 2.
- (b) the remuneration disclosures that are contained in page 18 to 19 of the Remuneration Report in the Directors' Report comply with Australian Accounting Standard AASB 124 Related Party Disclosures and
- (c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
-
- The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2012.
Signed in accordance with a resolution of the Directors:
D N Zukerman DIRECTOR
Dated this twenty eighth day of September 2012 Perth, Western Australia
Grant Thornton (WA) Partnership ABN 17 735 344 518
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
Independent Auditor's Report To the Members of Sabre Resources Limited
Report on the financial report
We have audited the accompanying financial report of Sabre Resources Limited (the "Company"), which comprises the consolidated statement of financial position as at 30 June 2012, 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.
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 in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determines is necessary to enable the preparation of the financial report that gives a true and fair view and is 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, the financial statements comply 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. Those standards 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
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
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 of the financial report that gives a true and fair view 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.
Electronic presentation of audited financial report
This auditor's report relates to the financial report of Sabre Resources Limited and controlled entities for the year ended 30 June 2012 included on Sabre Resources Limited's web site. The Company's Directors are responsible for the integrity of Sabre Resources Limited's web site. We have not been engaged to report on the integrity of Sabre Resources Limited'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 Sabre Resources 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 2012 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 18 to 19 of the directors' report for the year ended 30 June 2012. 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 Sabre Resources Limited for the year ended 30 June 2012, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants
P W Warr Partner
Perth, 28 September 2012
Grant Thornton (WA) Partnership ABN 17 735 344 518
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
Auditor's Independence Declaration To the Directors of Sabre Resource Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Sabre Resource Limited for the year ended 30 June 2012, I declare that, to the best of my knowledge and belief, there have been:
- a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
- b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON (WA) PARTNERSHIP Chartered Accountants
P W Warr Partner
Perth, 28 September 2012
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.
INTRODUCTION
Sabre Resources Ltd ACN 003 043 570 ("the Company") has adopted systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised below.
Additional information about the Company's corporate governance practices is set out on the Company's website at www.sabresources.com :
Principle 1 – Lay solid foundations for management and oversight
Responsibilities of the Board
The Board is responsible for the following matters:
- o ensuring the Company's conduct and activities are ethical and carried out for the benefit of all its stakeholders;
- o development of corporate strategy, implementation of business plans and performance objectives;
- o reviewing, ratifying and monitoring systems of risk management, codes of conduct, internal control system and legal and regulatory compliance;
- o the appointment of the Company's Corporate Manager, Chief Executive Officer (or equivalent), Chief Financial Officer, Company Secretary and other senior executives;
- o monitoring senior executives' performance and implementation of strategy;
- o determining appropriate remuneration policies;
- o allocating resources and ensuring appropriate resources are available to management;
- o approving and monitoring the annual budget, progress of major capital expenditure, capital management, and acquisitions and divestitures; and
- o approving and monitoring financial and other reporting.
Diversity
The Company recognises and respects the value of diversity at all levels of the organisation.
Due to the size and scale of the Company's activities, most managerial and geological services are provided by the Corporate Manager and the Company has only two direct employees, one of whom is a woman.
When the level of activity permits, the Directors will ensure that women are fairly considered and the Company's aim will be to promote a culture which embraces diversity through ongoing education, succession planning, director and employee selection and recognising that skills are not gender specific.
As at the date of this report, the Company has no women appointed to the Board, to senior management, and one to the organisation as a whole.
CORPORATE GOVERNANCE
Chairman
The Chairman is responsible for leadership of the Board and for the efficient organisation and conduct of the Board's business. The Chairman should facilitate the effective contribution of all directors and promote constructive and respectful relations between directors and between the Board and management of the Company. The Chairman is responsible for briefing directors on issues arising at Board meetings and is ultimately responsible for communications with shareholders and arranging Board performance evaluation.
Corporate Manager
The Corporate Manager is responsible for running the affairs of the Company under authority delegated from the Board. In carrying out its responsibilities the Corporate Manager must report to the Board in a timely manner and ensure all reports to the Board present a true and fair view of the Company's financial condition and operational results.
Company Secretary
The Company Secretary is responsible for monitoring the extent that Board policy and procedures are followed, and coordinating the timely completion and despatch of Board agendas and briefing material. All directors are to have access to the Company Secretary.
Performance Evaluation
The Chairman and/or the Corporate Manager are responsible for reviewing the performance of each executive at least once every calendar year with reference to the terms of their employment contract.
Principle 2 - Structure the Board to add value
Composition of the Board
The Company will ensure that the Board will be of a size and composition that is conducive to making appropriate decisions and be large enough to incorporate a variety of perspectives and skills, and to represent the best interests of the Company as a whole rather than of individual shareholders or interest groups. It will not, however, be so large that effective decision-making is hindered.
Independent Directors
The Company will regularly review whether each non-executive director is independent and each non-executive director should provide to the Board all information that may be relevant to this assessment. If a director's independence status changes this should be disclosed and explained to the market in a timely fashion.
The Company will endeavour to ensure that it has a majority of independent directors at all times, subject to the right of shareholders in general meeting to elect and remove directors**.**
Chairman
The Chairman should be a non-executive director who is independent. The Chairman should not be the Chief Executive Officer of the Company. The Chairman's other positions should not be such that they are likely to hinder the effective performance of his role of Chairman of the Company.
Independent decision- making
All directors - whether independent or not - should bring an independent judgment to bear on Board decisions. Non-executive directors are encouraged to confer regularly without management present. Their discussions are to be facilitated by the Chairman, if he is independent, or, if he is not independent, the deputy Chairman. Non-executive directors should inform the Chairman before accepting any new appointments as directors.
Independent advice
To facilitate independent decision making, the Board and any committees it convenes from time to time may seek advice from independent experts whenever it is considered appropriate. With the consent of the Chairman, individual directors may seek independent professional advice, at the expense of the Company, on any matter connected with the discharge of their responsibilities.
Procedure for selection of new directors
The Company believes it is not of a size to justify having a Nomination Committee. If any vacancies arise on the Board, all directors will be involved in the search and recruitment of a replacement. The Board believes corporate performance is enhanced when it has an appropriate mix of skills and experienced.
In support of their candidature for directorship or re-election, non-executive directors should provide the Board with details of other commitments and an indication of time available for the Company. Prior to appointment or being submitted for re-election nonexecutive directors should specifically acknowledge to the Company that they will have sufficient time to meet what is expected of them. Re-appointment of directors is not automatic.
Induction and education
The Board will implement an induction programme to enable new directors to gain an understanding of:
- o the Company's financial, strategic, operational and risk management position;
- o the rights, duties and responsibilities of the directors;
- o the roles and responsibilities of senior executives; and
- o the role of any Board committees in operation.
Directors will have reasonable access to continuing education to update and enhance their skills and knowledge, including education concerning key developments in the Company and in the industries in which the Company's business is involved.
Access to information
The Board has the right to obtain all information from within the Company which it needs to effectively discharge its responsibilities.
Senior executives are required on request from the Board to supply the Board with information in a form and timeframe, and of a quality that enables the Board to discharge its duties effectively. Directors are entitled to request additional information where they consider such information necessary to make informed decisions.
Principle 3: Promote ethical and responsible decision-making
Code of conduct
The Board has adopted the Code of Conduct set out at Appendix A to promote ethical and responsible decision making by directors, management and employees. The Code embraces the values of honesty, integrity, enterprise, excellence, accountability, justice, independence and equality of stakeholder opportunity.
The Board is responsible for ensuring that training on the Code of Conduct is provided to staff and officers of the Company.
The Board is responsible for making advisers, consultants and contractors aware of the Company's expectations set out in the Code of Conduct.
Policy for trading in Company securities
The Board has adopted a policy on trading in the Company's securities by directors, senior executives and employees set out in Appendix B.
The Board is responsible for ensuring that the policy is brought to the attention of all affected persons and for monitoring compliance with the policy.
Principle 4: Safeguard integrity in financial reporting
Audit and Risk Management
The Company believes it is not of a size to justify having a separate Audit and Risk Management Committee. Ultimate responsibility for the integrity of the Company's financial reporting rests with the full Board. Given the small size of the Board, the directors believe an Audit Committee structure to be inefficient. All directors share responsibility for ensuring the integrity of the Company's financial reporting and appropriate Board processes must be implemented to perform the following audit and risk management functions:
-
external audit function:
- o review the overall conduct of the external audit process including the independence of all parties to the process;
- o review the performance of the external auditors;
-
o consider the reappointment and proposed fees of the external auditor; and
-
o where appropriate seek tenders for the audit and where a change of external auditor is recommended arrange submission to shareholders for shareholder approval;
-
reviewing the quality and accuracy of published financial reports;
-
reviewing the accounting function and ongoing application of appropriate accounting and business policies and procedures;
-
reviewing and imposing variations to the risk management and internal control policies designed and implemented by Company management; and
-
any other matters relevant to audit and risk management processes.
Principle 5: Make timely and balanced disclosure
Disclosure Policy
The Board has adopted a Disclosure Policy for ensuring timely and accurate disclosure of price-sensitive information to shareholders through the ASX set out in Appendix D.
The Disclosure Policy ensures that:
- all investors have equal and timely access to material information concerning the Company including its financial position, performance, ownership and governance; and
- Company announcements are subjected to a vetting and authorisation process designed to ensure they:
- o are released in a timely manner;
- o are factual;
- o do not omit material information; and
- o are expressed in a clear and objective manner that allows investors to assess the impact of the information when making investment decisions.
Principle 6: Respect the rights of shareholders
Communication with Shareholders
The Board is committed to open and accessible communication with holders of the Company's shares and other securities. Disclosure of information and other communication will be made as appropriate by telephone, mail or email.
The Company's website will also be used to provide additional relevant information to security holders. The Board considers the following to be appropriate features for the Company's website:
- o placing the full text of notices of meeting and explanatory material on the website;
- o providing information about the last three years' press releases or
announcements plus at least three years of financial data on the website; and
o providing information updates to security holders on request by email.
General Meetings
The Company is committed to improving shareholder participation in general meetings. In order to achieve that objective, the Company has adopted guidelines of the ASX Corporate Governance Council for improving shareholder participation through the design and content of notices and through the conduct of the meeting itself.
Principle 7: Recognise and manage risk
Creation and implementation of Company risk management policies
It is the responsibility of the Corporate Manager to create, maintain and implement risk management and internal control policies for the Company, subject to review by the Board.
The Corporate Manager must report to the Board on an annual basis regarding the design, implementation and progress of the risk management policies and internal control systems.
Audit and Risk Management
As referenced with respect to Principle 4, the Board has not established an Audit and Risk Management Committee for the reasons given above.
Review by the Board
The Board will review the effectiveness of implementation of the risk management system and internal control system at least annually.
When reviewing risk management policies and internal control system the Board should take into account the Company's legal obligations and should also consider the reasonable expectations of the Company's stakeholders, including security holders, employees, customers, suppliers, creditors, consumers and the community.
Corporate Manager
The Corporate Manager is required annually to state in writing to the Board that the Company has a sound system of risk management, that internal compliance and control systems are in place to ensure the implementation of Board policies, and that those systems are operating efficiently and effectively in all material respects.
Verification of financial reports
The Corporate Manager and Chief Financial Officer are required by the Company to state the following in writing prior to the Board making a solvency declaration pursuant to section 295(4) of the Corporations Act:
- o that the Company's financial reports contain a true and fair view, in all material respects, of the financial condition and operating performance of the Company and comply with relevant accounting standards; and
- o that the declaration provided in accordance with section 295A of the
Corporations Act is founded on a sound system of risk management and that the system is operating effectively in all material respects in relation to financial reporting risks.
Principle 8: Remunerate fairly and responsibly
Director and senior executive remuneration policies
The Company's remuneration policy is structured for the purpose of:
- o motivating senior executives to pursue the long-term growth and success of the Company; and
- o demonstrating a clear relationship between senior executives' performance and remuneration.
The Board's responsibility is to set the level and structure of remuneration for officers (including but not limited to directors and secretaries) and executives, for the purpose of balancing the Company's competing interests of:
- o attracting and retaining senior executives and directors; and
- o not paying excessive remuneration.
Executive directors' remuneration should be structured to reflect short and long-term performance objectives appropriate to the Company's circumstances and goals.
Executive directors' and senior executives' remuneration packages should involve a balance between fixed and incentive-based pay, reflecting short and long-term performance objectives appropriate to the Company's circumstances and goals.
Non-executive directors' remuneration should be formulated with regard to the following guidelines:
- o non-executive directors should normally be remunerated by way of fees, in the form of cash, non-cash benefits, superannuation contributions or equity, usually without participating in schemes designed for the remuneration of executives;
- o non-executive directors should not be provided with retirement benefits other than superannuation.
No director may be involved in setting their own remuneration or terms and conditions and in such a case relevant directors are required to be absent from the full Board discussion.
Remuneration Committee
The Company believes it is not of a size to justify having a Remuneration Committee and that it has Board processes in place which raise the issues which would otherwise be considered by a committee.
Appendix A – Code of Conduct
Introduction
This Code of Conduct sets out the standards with which the Board, management and employees of the Company are encouraged to comply when dealing with each other, the Company's shareholders and the broader community.
Responsibility to shareholders
The Company aims:
- o to increase shareholder value within an appropriate framework which safeguards the rights and interests of shareholders; and
- o to comply, with openness and integrity, the systems of control and accountability which the Company has in place as part of its corporate governance.
Responsibility to clients, employees, suppliers, creditors, customers and consumers
The Company will comply with all legislative and common law requirements which affect its business.
Employment practices
The Company will employ the best available staff with the skills required to carry out the role for which they are employed. The Company will ensure a safe workplace and maintain proper occupational health and safety practices.
Responsibility to the community
The Company recognises, considers and respects environmental, native title and cultural heritage issues which may arise in relation to the Company's activities and will comply with all applicable legal requirements.
Responsibility to the individual
The Company recognises and respects the rights of individuals and will comply with applicable laws regarding privacy and confidential information.
Obligations relative to fair trading and dealing
The Company will deal with others in a way that is fair and will not engage in deceptive practices.
Business courtesies, bribes, facilitation payments, inducements and commissions
Corrupt practices are unacceptable to the Company. It is prohibited for the Company or its directors, managers or employees to directly or indirectly offer, pay, solicit or accept bribes or any other corrupt arrangements.
Conflicts of interest
The Board, management and employees must report any situations where there is a real or apparent conflict of interest between them as individuals and the interests of the Company. Where a real or apparent conflict of interest arises, the matter must be brought to the attention of the Chairman in the case of a Board member, the Corporate Manager in the
case of a member of management and a supervisor in the case of an employee, so that it may be considered and dealt with in an appropriate manner.
Compliance with the Code of Conduct
Any breach of compliance with this Code of Conduct is to be reported directly to the Chairman.
Periodic review of Code
The Company will monitor compliance with this Code of Conduct periodically by liaising with the Board, management and staff. Suggestions for improvements or amendments to this Code of Conduct can be made at any time to the Chairman.
Appendix B – Policy for trading in Company securities
Introduction
The Company recognises and enforces legal and ethical restrictions on trading in its securities by relevant persons within and external to the Company. The terms of this securities dealing policy apply to the Company's directors, Corporate Manager, senior executives, employees and consultants (Relevant Persons).
Communication
This policy will be communicated to all Relevant Persons and will be placed on the Company website.
Trading restrictions
Trading by Relevant Persons in the Company's securities is subject to the following limitations:
- o No trading in Company securities shall take place during the two weeks preceding release of each quarterly report, half-yearly financial report, and annual financial report of the Company.
- o No trading in the Company's securities shall take place, directly or indirectly, where it is known, or ought reasonably to have been known by the person intending to trade, that information exists which has not been released to the ASX and where that information is of a type that could reasonably be expected to encourage buying or selling were that information known by others.
- o No trading shall take place in Company securities unless prior notice is given to the Chairman [and approval is obtained from the Chairman].
Hardship
During a period specified in paragraph o, Relevant Persons may, after obtaining the Chairman's consent, trade the Company's securities to the extent reasonably necessary to avoid or ameliorate documented hardship and suffering or as required by other extenuating circumstances.
Directors' trading and disclosures
Within twenty four hours of a director being appointed to the Board, resigning or being removed from the Board, or trading in the Company's securities, full details of the director's notifiable interests in the Company's securities and changes in such interest must be advised to the Company Secretary so that a record is kept within the Company and so that necessary ASX notifications will occur.
All directors must notify the Company Secretary of any margin loan or similar funding arrangement entered into in relation to the Company's securities and any variations to such arrangements, including the number of securities involved, the circumstances in which the lender can make margin calls, and the right of the lender to dispose of securities.
Appendix C - Disclosure Policy
Disclosure requirements
The Company recognises its obligations pursuant to the continuous disclosure rules of the ASX Listing Rules and the Corporations Act to keep the market fully informed of information which may have a material effect on the price or value of the Company's securities.
Subject to certain exceptions (in ASX Listing Rule 3.1A), the Company is required to immediately release to the market information that a reasonable person would expect to have a material effect on the price or value of the Company's securities.
Responsibilities of directors officers and employees
The Board as a whole is primarily responsible for ensuring that the Company complies with its disclosure obligations and for deciding what information will be disclosed. Subject to delegation, the Board is also responsible for authorising all ASX announcements and responses of the Company to ASX queries.
Every director, officer and employee of the Company is to be informed of the requirements of this policy and must advise the Corporate Manager, Chairman or Company Secretary as soon as possible (and prior to disclosure to anyone else) of matters which they believe may be required to be disclosed.
Authorised Disclosure Officer
The Board has delegated its primary responsibilities to communicate with ASX to the following Authorised Disclosure Officer:
- o the Company Secretary or
- o in the absence of the Company Secretary, the Corporate Manager is authorised to act in that capacity by the Board.
Responsibilities of Authorised Disclosure Officer
Subject to Board intervention on a particular matter, the Authorised Disclosure Officer is responsible for the following:
- o monitoring information required to be disclosed to ASX and coordinating the Company's compliance with its disclosure obligations;
- o ASX communication on behalf of the Company, authorising Company announcements and lodging documents with ASX;
- o requesting a trading halt in order to prevent or correct a false market;
- o providing education on these disclosure policies to the Company's directors, officers and employees; and
- o ensuring there are vetting and authorisation processes designed to ensure that Company announcements:
- o are made in a timely manner;
- o are factual;
- o do not omit material information;
- o are expressed in a clear and objective manner that allows investors to assess the impact of the information when making investment decisions.
An Authorised Disclosure Officer, who is responsible for providing contact details and other information to ASX to ensure such availability, must be available to communicate with the ASX at all reasonable times.
Measures to avoid a false market
In the event that ASX requests information from the Company in order to correct or prevent a false market in the Company's securities, the Company will comply with that request. The extent of information to be provided by the Company will depend on the circumstances of the ASX request.
If the Company is unable to give sufficient information to the ASX to correct or prevent a false market, the Company will request a trading halt.
If the full Board is available to consider the decision of whether to call a trading halt, only they may authorise it, but otherwise, the Authorised Disclosure Officer may do so.
ASX announcements
Company announcements of price sensitive information are subjected to the following vetting and authorisation process to ensure their clarity, timely release, factual accuracy and inclusion of all material information:
- o The Authorised Disclosure Officer must prepare ASX announcements when required to fulfil the Company's disclosure obligations.
- o Proposed announcements must be approved by the Corporate Manager or in his absence, urgent announcements may be approved by any other person expressly authorised by the Board.
- o Announcements must first be released to the ASX Announcements Platform before being disclosed to any other private or public party (such as the media). After release of the announcement, it must be displayed on the Company's website, following which the Company can then release such information to media and other information outlets.
- o Wherever practical, all announcements must be provided to the directors, Corporate Manager and Company Secretary prior to release to the market for approval and comment.
Confidentiality and unauthorised disclosure
The Company must safeguard the confidentiality of information which a reasonable person would expect to have a material effect on the price or value of the Company's securities. If such information is inadvertently disclosed, the Authorised Disclosure Officer must be informed of the same and must refer it to the Chairman and Corporate Manager as soon as possible.
External communications and media relations
The Chairman, Corporate Manager and Company Secretary are authorised to communicate on behalf of the Company with the media, government and regulatory authorities, stock brokers, analysts and other interested parties or the public at large. No other person may do so unless specifically authorised by the Chairman or the Corporate Manager.
All requests for information from the Company must be referred to the Authorised Disclosure Officer for provision to the Chairman and the Corporate Manager.
Breach of Disclosure Policy
Serious breaches of the Company's Disclosure Policy may be treated with disciplinary action, including dismissal, at the discretion of the Board. Where the breach is alleged against a member of the Board, that director will be excluded from the Board's consideration of the breach.
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1. Distribution of Shareholders
(a) As at 25 September 2012 the distribution of members and their shareholdings were:-
| Range of Holding | Holders | Shares Held | Percent | ||
|---|---|---|---|---|---|
| 1 | - | 1,000 | 259 | 95,638 | 0.04 |
| 1,001 | - | 5,000 | 386 | 1,125,108 | 0.50 |
| 5,001 | - | 10,000 | 237 | 1,969,086 | 0.87 |
| 10,001 | - | 100,000 | 759 | 30,313,109 | 13.38 |
| 100,001 | and over | 195 | 192,969,287 | 85.21 | |
| 1,836 | 226,472,228 | 100.00 |
100.00 (b) There exist 418 shareholders with unmarketable parcels of shares.
2. Substantial Shareholders
The names of the substantial shareholders who have notified the Company in accordance with Section 671B of the Corporation Act 2001 are:
| Name | Number of | Percentage of | |
|---|---|---|---|
| Ordinary Shares Issued Capital | |||
| Coniston Pty Ltd, | 71,840,000 | 31.72% | |
| Kalgoorlie Mine Management Pty Ltd | |||
| together with group member | |||
| James John del Piano |
The twenty largest shareholders as at 25 September 2012, representing 63.82% of the paid up capital were:
| Name of Holder | Number | % |
|---|---|---|
| Coniston Pty Ltd | 69,200,000 | 30.56 |
| National Nominees Limited | 20,509,303 | 9.06 |
| Brispot Nominees Pty Ltd | 9,762,898 | 4.31 |
| BBY Nominees Ltd | 9,142,729 | 4.04 |
| HSBC Custody Nominees (Australia) Ltd | 6,573,963 | 2.90 |
| Bow Lane Nominees Pty Ltd | 6,513,800 | 2.88 |
| Kirk Group Holdings Pty Ltd | 3,761,088 | 1.66 |
| Ironside Pty Ltd | 2,060,000 | 0.91 |
| J P Morgan Nominees Australia Ltd | 2,020,305 | 0.89 |
| Buckingham Investment Financial Services Pty Ltd | 2,000,000 | 0.88 |
| Langoni Investments Pty Ltd | 1,803,882 | 0.80 |
| Coniston Pty Ltd | 1,500,000 | 0.66 |
| Zero Nominees Pty Ltd | 1,380,000 | 0.61 |
| Citicorp Nominees Pty Ltd | 1,358,855 | 0.60 |
| Herlequin Investments Ltd | 1,200,000 | 0.53 |
| Myles A M Sutton | 1,200,000 | 0.53 |
| Nelbert Finance Ltd | 1,200,000 | 0.53 |
| David Beamond | 1,198,347 | 0.53 |
| Kalgoorlie Mine Management Pty Ltd | 1,140,000 | 0.50 |
| Clariden Capital Limited | 1,000,000 | 0.44 |
| 144,525,170 | 63.82 |
In addition, there are 46,000,000 fully paid ordinary shares held in escrow until 29 June 2012.
There are no options on issue.
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