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CODE : GED.AX
ISIN : AU000000GED6
AUSTRALIA
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Asset profile

Annual Report to shareholders

GED

Golden Deeps Limited

ACN: 054 570 777

ANNUAL REPORT 2016

CONTENTS

Page No.

  • Corporate Directory 1

  • Review of Operations 2

  • Directors' Report 12

  • Consolidated Statement of Profit or Loss

    and Other Comprehensive Income 17

  • Consolidated Statement of Financial Position 18

  • Consolidated Statement of Changes in Equity 19

  • Consolidated Statement of Cash Flows 20

  • Notes to the Consolidated Financial Statements 21

  • Directors' Declaration 43

  • Independent Audit Report 44

  • Auditor's Independence Declaration 47

  • Corporate Governance Statement 48

  • Shareholder Information 63

Contents

DIRECTORS

Michael Scivolo Michael Norburn Robert Collins

COMPANY SECRETARY

Norman Grafton

REGISTERED OFFICE

1st Floor, 8 Parliament Place West Perth WA 6005

Telephone: (08) 9481 7833

Facsimile: (08) 9481 7835

Email: [email protected] Website: www.goldendeeps.com

SOLICITORS

Gilbert & Tobin 1202 Hay Street

West Perth WA 6005

AUDITORS

Grant Thornton Audit Pty Ltd 10 Kings Park Road

West Perth WA 6005

BANKERS

Westpac Banking Corporation 109 St George's Terrace Perth WA 6000

SHARE REGISTRY

Advanced Share Registry Limited 110 Stirling Highway

Nedlands WA 6009

Telephone: (08) 9389 8033

Facsimile: (08) 9262 3723

STOCK EXCHANGE LISTING

Golden Deeps Limited is listed on the Australian Securities Exchange.

ASX code for shares: GED

The Company continued to progress exploration and evaluation of its Namibian tenement

during the

reporting period. These tenement vanadium.

are considered to be

highly prospective for

copper, lead, zinc and

GROOTFONTEIN BASE METAL PROJECT

The Company holds an 80% interest in the

highly

prospective Grootfontein Base Metal Project (GBMP).

The Project is located

in the Otavi Mountain

Land

(OML), north east Namibia (Figure 1). The OML is a

globally significant

base metal province

with

production coming from several mines, including the

now closed Tsumeb, Aukas.

Kombat, Abenab, and

Berg

The GBMP

landholding stands at 632km2,

with a

further 331km2 under

application. There are four

recognised

base metal trends with extensive

strike

lengths located within the tenement package, namely

the Askevold, Khusib,

Pavian and Abenab Trends.

These advanced projects have been the main focus of the Company's exploration efforts.

Deeps holds two of

the five historically important

mines of the Otavi Mountain Land - Abenab and Christiana, (formerly Abenab West). Both mines have

only been

tested over short strike lengths, with

significant exploration upside available to Deeps.

The licences contain

four recognised base

metal

Figure 1. Location of the Com pany's Namibian projects

trends. Each trend hosts at least

one high

priority

exploration target identified by a prospectivity review completed earlier. These trends and targets in priority order are as follows:

  • Khusib Trend: Copper-silver trend over 6km strike. Contains the Khusib Springs Mine (excised) and at least six untested bedrock EM conductors.

  • Abenab Trend: Copper-lead zinc-vanadium trend covering 40km hosting the Abenab and Abenab West (Christiana) mines in the east and the Nosib Block copper mine in the west.

  • Pavian Trend: A lead-zinc mineralised trend with over 6km of strike held by Deeps. It is the interpreted strike extension of the Border deposit and the recent Toggenburg discovery, which are held by a subsidiary of Sabre Resources Ltd.

  • Askevold Trend: Copper trend with 30km of strike, hosting the Deblin copper mine.

Figure 2. The location of Khusib Springs, Deblin, Nosib Block and Christiana in Golden Dee s Grootfontein Project, Otavi Mountainland,

Namibia

  1. Khusib Trend

    The Khusib

    Trend is an east-west trending zone of copper anomalies and prospects locat

    d around a

    contact zone between dolomites and limestones. This is known as the T2/T3 contact position. The Khusib Trend is marked by the Pickaxe, Butterfly and Dogleg anomalies and trends northeast for over six kilometres, with the Khusib Springs copper mine located near the centre of the trend (Figure 3).

    1.1 Khusib Springs Copper Mine

    Khusib Springs was discovered and mined during the 1990s. Approximately 500,000t @ 10% Cu, 1.8% Pb and 584g/t Ag (unreferenced) was mined from Khusib Springs before its closure in 1997.

    Goldfields actively explored the area around Khusib Springs during the 1990s using predominantly electrical geophysics. Records show that many anomalies were generated from this work but few of the conductors were effectively drill tested. The EM technique and loop locations may also not have been optimal. This leaves a significant opportunity for new discoveries in the area.

    The area

    around Khusib Springs

    is considered highly prospective for additional high grade Cu-Pb-Ag

    deposits similar to that of the mined out deposit. The area around the mine hosts a number of high-order anomalies generated from close-spaced soil geochemistry, geophysics and airborne magnetics.

    Figure 3. Simplified geology of the Khusib Springs area showing Protem loops with high priority EM targets circled in green

    A large volume of new information was acquired from the Tsumeb archives during the year. This information was in the form of hardcopy maps and reports, which were scanned and filed on the Perth office server. A large amount of underground survey data and underground drillhole data were converted to digital format from the scanned hardcopies. This allowed the generation of detailed 3D geological models. This ongoing work has added significant value to the project.

  2. Abenab-Nosib Trend

    The Abenab Trend is defined by a series of V-Pb-Zn-Cu occurrences l

    cated near the contact between the

    Auros Shale and Maieberg Dolomites. The Christiana, Nosib Block, and Okurundu mines are located on this

    contact position and

    are the hig

    est priority

    targets. A

    proximately

    40km strike extent of

    this highly

    prospective trend lies within the Company's EPL3543.

  3. Christiana Zn-Pb-V Mine

    Christiana is the largest historic m ne in the Grootfontein Base Metal Project and was formerly known as

    Abenab West. The Abenab area pr

    duced over 100,000t of Vanadium concentrates. Production figures from

    Christiana itself are not known, but the workings extend over 800m of strike and to a depth of at least 380m below surface. In the underground mine, extensive level development is in place, but only selective mining has been undertaken, leaving broad zones of mineralisation in situ.

    During the year further progress was made on the potential development of the "Zinc Reef" mineralisation at

    Christiana.

    High level scoping and test work indicate that a positive cash flow is possible fro

    a potential

    high grade mining operation on the project.

    The Company continued discussions with several potential

    buyers for a high grade zinc product and several potential contractors for proposed mining, mineral dressing and haulage operations.

  4. Nosib Block Cu Mine

  5. Figure 4. Azurite mineralisation in underground exposure at Nosib Block Mine

    The historic Nosib copper mine is located on

    the western end of the Abenab-Nosib Trend.

    High grade

    copper, lead, vanadium and silver are hosted in a sequence of tillites, conglomerates and felspathic sandstones (mine sequence) in contact with massive dolomites to the north (hanging wall) and basement granites to the south (footwall). The mine sequence is dipping moderately to the north and the mineralisation appears to be plunging to the north east.

    The Company's sampling and mapping activities indicate that most of the copper mineralisation remains in situ. Level 1, 20m below surface, Level 2, 40m below surface and Level 3, 60m below surface have been

    accessed, mapped and sampled. encountered on all levels.

    Broad zones of strong copper, le

    d, vanadium and silve

    have been

    In excess of 1,600m of strike have been identified to date containing several high priority exploration targets (Figure 7).

    The Company's 3D modelling shows high grade continuity from surface to over 60m below surface. The mineralisation remains open in all directions.

    Channel sample results from Level 1 included;

    NOUG0001 6 m @ 9.30% Cu, 4.72% Pb & 7.92 g/t Ag*

    NOUG0002 13m @ 2.32% Cu, 7.06% Pb, 6.85 g/t Ag*

    NOUG0005 6 m @ 1.51% Cu, 10.59% Pb, 7.15 g/t

    g & 1.12% V2O5*

    NOUG0004 9 m @ 1.37% Cu, 10.37% Pb & 14.4 g/t Ag*

    NOUG0006 6 m @ 1.38% Cu, 4.19% Pb, 3.53 g/t Ag, 0.45% Zn & 1.09% V2O5*

    NOUG0003 16 m @ 0.68% Cu, 6.58% Pb & 5.5 g/t Ag*

    NOUG0010 13m @ 1.99% Cu, 5.56% Pb, 2.30% V2O5, 20.56 g/t Ga*

    Channel sample results from Levels 2 and 3 included;

    NOUG0012 8 m @ 2.86% Cu, 3.13% Pb, 5.56 g/t Ag & 0.56% V2O5*

    NOUG0018 6m @ 2.50% Cu, 40.00g/t Ag & 16.8g/t Ga*

    NOUG0020 9m @ 3.10% Cu, 11.33g/t Ag, 10.84%

    b, 3.12% V2O5 & 94.95g/t Ga*

    *Refer to ASX announcement "More High Grade Copper, Lead, Silver Identified at Nosib", 20 Ja

    uary 2014.

    Several intersections contain anomalous levels of gallium, germanium and zinc, which show a similar metal association to the Tsumeb deposit located 26km to the northwest (30MT @ 4.3% Cu, 10% Pb, 3.5% Zn, 100g/t Ag and 50g/t Ge). This metal association has strong implications for the exploration and development potential of Nosib Block.

    Figure 5. View looking WNW showing the underground workings in blue and 4% Cu Equivalent (CuEq)* 3D implic it model in red

    *CuEq grade is calculated by combining the metals of interest based on their prices. In this case C % + (Zn% x 0.25) + (Pb% x 0.25) + (Ag ppm * 0.00625) + (V2O5% * 1.695) + CuEq%. It is used as a visualisation tool only and is required Nosib Block due to the poly metallic and strongly zoned nature of the mineralisation. In this situation a CuEq grade provides a better picture of the overall geometry of the mineralisation than using copper grade on its own.

    Figure 6. Plan view of the Nosib Mine workings. To the east the pinch out position is shown and the potential san dstone host is shown extending to the west

  6. Askevold Trend

    The Askevold Trend is defined by a series of copper occurrences and geochemical anomalies associated with a sheared contact between the Askevold Volcanics and the overlying Abenab Dolomites. A 30km strike length of this highly prospective contact position is held by the Company.

    Historic data compilation, field map

    ing, soil geochemistry and surface EM surveying has resulted in six high

    priority targets on the Askevold Trend. They are the Deblin, Askevold South, Hartbeespoort South, Redrob,

    Deblin South and Deblin West pros

    ects (Figure 7).

    Figure 7. The Askevold Trend showing geochemical anomalies and prospect locations. Debl n, Askevold Sou th, Hartbeespoort South and

    Redrob are the highest priority prospects

  7. Deblin Copper Mine

    Earlier drilling and subsequent geological modelling by

    Deeps resulted in several significant copper

    intersections at the Deblin prospect. Further drilling is required to extend and confirm the geometry and mineralisation and to allow a JORC compliant copper mineral resource to be estimated.

    Broad intersections of mineralisation resulted in a revised structural interpretation for Deblin. The new model suggests faulting and thrusting to be the main controls rather than folding. The interpreted thrust positions and their related structures will be targeted for thick accumulations of copper mineralisation similar to those intersected in DBDD0002 (Figure 8).

    Importantly, most mineralisation encountered at Deblin to date is within 100 metres of surface

    The simple

    mineralogy of the Deblin deposit, the presence of a broad low-grade halo of copper mineralisation (in excess of 60 m) around the thickest intercept, and the newly interpreted geometry of the deposit make Deblin potentially amenable to open cut mining.

    Figure 8. Interpreted geological cross section at 758545mE, looking west, and showing drillholes DBDD0001 and DBDD0002, new drill targets and new structural interpretation

    Figure 9. Geological Map of Deblin showing the channel sample locations and drillhole collars

    Figure 10. Interpreted longitudinal projection of Deblin looking north. Note that historic drill intercepts and tra ces have been digitised from historic interpreted sections. Several drill collar locations have been confirmed in the field but hard copy as says and drill cores are not available

    The results to date demonstrate the potential for Deblin to host a signifi ant copper deposit and highlight the prospectivity of the Askevold Copper Trend.

  8. Deblin West

    Deblin West was identified in 2012 by the use of close spaced soil sampling programs. The sampling identified two high amplitude (+1000ppm Cu, or 0.1% Cu) geochemical anomalies directly along strike to the west of the Deblin deposit (Figures 11 and 12). The anomalies are approximately 1km and 1.8km west of Deblin. Both anomalies are similar in size and amplitude to the Deblin gossan anomaly, which is believed to be the surface expression of the Deblin copper mineralisation.

    Followup work discovered a zone of strong

    outcropping copper mineralisation at Anomaly 1. The

    outcropping including:

    mineralisation was channel sampled and mapped in d

    tail, with very encouraging results

    16 m @ 1.21% Cu & 2.11 g/t Ag including 2 m @ 5.38% Cu & 5.45 g/t Ag in DBCS0008 20 m @ 1.02% Cu & 8.53 g/t Ag in DBCS0009

    Followup drilling did not intersect any significant mineralisation beneath the outcrop at Anomaly 1, but only one hole was drilled at the time. The hole intersected Askevold Volcanics from very close to surface and was therefore likely collared too far north to effectively test the target. This anomaly requires further work to locate the source of the surface mineralisation.

    Figure 11. Geological map of the Deblin area showing the location of Anomaly 1 and channel samples D BCS0008 to DBCS0011

  9. Deblin South

  10. The FLTEM survey conducted during the 2012 detected three strong conductors at Deblin South, approximately 600m south of the Deblin Copper Mine. Four holes have been designed to test the three separate conductive bodies.

    Figure 12. Locations of the Deblin West geochemical anomalies and the Deblin South FLTEM conductors