Microsoft Word - 15-09-09 TMX Annual report 30 June 2015 Final
ABN: 45 116 153 514
TERRAIN MINERALS LIMITED ANNUAL REPORT
30 JUNE 2015
TABLE OF CONTENTS
FOR THE YEAR ENDED 30 JUNE 2015
Corporate Directory 2
Directors' Report 3
Auditors' Independence Declaration 24
Statement of Profit or Loss and Other Comprehensive Income 25
Statement of Financial Position 26
Statement of Changes in Equity 27
Statement of Cash Flows 28
Notes to the Financial Statements 29
Directors' Declaration 60
Independent Audit Report 61
CORPORATE DIRECTORY
Terrain Minerals Limited Board Stock Exchange
Terrain Minerals Ltd shares are
David Porter listed on the Australian Securities Exchange
Non‐Executive Chairman
Paul Dickson
Non‐Executive Vice Chairman
Ordinary fully paid shares (ASX code TMX)
Principal and Registered office in Australia
Jonathan Lim Ground Floor, 10 Ord Street
Non‐Executive Director West Perth, WA 6005
PO Box 79, West Perth, WA 6872
Justin Virgin
Executive Director Telephone: +61 8 9381 5558
Facsimile : +61 8 6141 3599 Email: [email protected]
Damian Delaney (appointed 24 April 2015)
Company Secretary Website: www.terrainminerals.com.au
Share Register
Computershare Investor Services Pty Ltd Level 11
172 St Georges Terrace Perth WA 6000 Telephone 1300 787 272 Facsimile +61 8 9323 2033
Auditor
BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WA 6008
Solicitor
Julian Atkinson
Kings Park Corporate Lawyers 45 Richardson Street
West Perth WA 6005
Banker
Westpac Banking Corporation Business Banking Centre 218 St Georges Terrace Perth WA 6000
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2015
Your directors present their report for the financial year ended 30 June 2015. In order to comply with the provisions of the Corporations Act 2001, the Directors' report as follows:
DIRECTORS
The following persons were directors of the Company and were in office for the entire year, and up to the date of this report, unless otherwise stated:
Mr David Porter Non‐Executive Chairman Mr Paul Dickson Non‐Executive Vice Chairman Mr Jonathan Lim Non‐Executive Director
Mr Justin Virgin Executive Director
COMPANY SECRETARY
Mr Damian Delaney was appointed as Company Secretary on 24 April 2015 following the resignation of Mr Jay Stephenson. Mr Delaney is a Chartered Accountant with many years of experience working with international listed companies. Mr Delaney commenced his career in South Africa, qualifying with Coopers & Lybrand, before taking up a series of positions in the United Kingdom. He has worked in the resource sector for the past 10 years where he has been involved in numerous capital raisings. Mr Delaney is fully conversant with all regulatory requirements of the Australian markets and has significant experience managing all aspects of company financial and regulatory reporting.
Mr Jay Richard Stephenson resigned as Company Secretary on 24 April 2015. Mr Stephenson holds a Master of Business Administration (MBA) and Fellow of the Chartered Secretaries Australia (FCIS), Fellow of the Certified Practicing Accountant of Australia (FCPA), Certified Management Accountant (CMA), Member of the Australian Institute of Company Directors (MAICD).
PRINCIPAL ACTIVITIES
During the year, the principal activities of Terrain Minerals Limited consisted of exploration for gold and other mineral resources. No significant change in the nature of these activities occurred during the year.
OPERATING RESULTS
The loss of the company for the year ended 30 June 2015 from ordinary activities after providing for income tax amounted to $4,939,057 (30 June 2014: loss of $1,588,589).
REVIEW OF OPERATIONS
The principal activity of the Company during the course of the financial year consisted of repositioning Terrain after the extensive cost cutting and restructuring initiatives over the past twelve months. These initiatives have allowed Terrain the flexibility to take advantage of current market trends and better redistribute resources towards core capabilities on an as needs basis. This has seen the building of many new relationships that ensure objectives and outcomes are achieved in a cost effective and timely manner. These strategic relationships are beneficial to all, and results are starting to emerge.
Over the past twelve months two drilling campaigns were carried out at Dodger Well and Great Western (JORC 2012 compliant resources). The assessment process continued throughout the year and several old historic assets where relinquished. The Board was very pleased to be able to transfer back into the Company the Great Western (GW) asset, a high grade gold project, due to a payment default from SR‐ Mining (71.9% owned by Bligh Resources). The asset base was further enhanced by the acquisition of the Gimlet Project, which consists of 469sq km continuous tenure, strategically located in the Southern Fraser range. Gimlet is currently under an extensive data review and a works program will follow. Opportunities continue to be assessed and due to current market conditions an emphasis has been placed on locating near term cash flow opportunities, including the monetising of GW. A process is currently underway to assess all options available at GW including self‐mining, Joint venture, part or full sale.
The Board has maintained its emphasis of maintaining tight cost controls to ensure expenditure is aimed at project generation and value add to maximise shareholder wealth.
Great Western Gold Project ‐ JORC 2012 Compliant Resources
M37/54 ‐ The 100% owned project is located 68km north of Leonora and 1km from the Goldfields Highway on Weebo pastoral leases and forms part of the historic Wilsons Patch mining area. Terrain has previously held this project and considers it as an advanced and ready to mine opportunity which has the potential to still be open down plunge and along strike. The project was transferred back due to a payment default described in the 'Bundarra receivable' section below.
In August 2015, Terrain announced an updated mineral resource for the GW gold deposit which included recent drilling data which also updated the resources to be compliant with JORC 2012. This is an important milestone for Terrain and confirms the asset's value. A 12 hole, 1,612m Reverse Circulation (RC) drill program was completed in June 2015 confirming the continuity of mineralised zones throughout the deposit. As a result the GW model is now more robust. The mineral resource, adjusted for previous mining, is shown in the following table.
Reportable Mineral Resource ‐ JORC 2012 Compliant
|
Great Western Deposit
Reportable in situ Mineral Resource depleted for mining
|
|
Open Cut (0.5g/t)
|
Underground (1.5g/t)
|
Combined
|
|
Class
|
Tonnes
|
Au g/t
|
Tonnes
|
Au g/t
|
Tonnes
|
Au g/t
|
|
Measured
|
90,000
|
2.35
|
90,000
|
2.35
|
|
Indicated
|
166,000
|
2.63
|
77,000
|
3.15
|
243,000
|
2.80
|
|
Inferred
|
183,000
|
1.86
|
153,000
|
4.72
|
336,000
|
3.16
|
|
TOTAL
|
439,000
|
2.25
|
230,000
|
4.20
|
669,000
|
2.92
|
The tonnes have been rounded to the nearest 1000 ‐ See resource details ASX Announcement 28/08/2015
In the table the mineral resource is reported above and below 100m from surface to reflect respectively areas within the model with potential for open cut and underground mining. Such reporting is not based on definitive studies at this time.
Terrain will now undertake a Prefeasibility Study at GW. Several studies have previously been completed and these findings will be utilised and new drilling data will be added. It is important to note the JORC 2012 mineral resource estimate is only an indication of contained metal and not necessarily a true indication of the grade and tonnes that will be actually mined as mining methods vary based on many factors. Example Speechly mining study on GW September 2009, proposed the following (see diagram 1): Open pit to 65m for 113,532 tonnes at 2.74 g/t and then a 150m deep Underground containing 183,021 tonnes at 7.66 g/t Total mined tonnes 296,552 at 5.77g/t for 53,013 ounces of gold.
Diagram 1. The above pit, decline and stopes do not exist. Resent drilling intersection not shown.
Gimlet - Fraser Range South
E63/1740 ‐ The Gimlet Project is located 20km east of Salmon Gums in the Fraser Range nickel province in the south eastern extent of Western Australia.
The Project area covers a total land area of 469km2 directly adjacent to an ASX listed company which has reported both primary and secondary nickel and copper. Terrain is reviewing extensive historical exploration activities to devise a systematic exploration program.
Diagram 2. Regional Gravity and Gimlet Project Location
A review of the available historical reports has determined that the major international mining houses of BHP, AngloGold and Teck Cominco have previously explored across the Gimlet Project area. These predecessors targeted Broken Hill Type base metals and structurally controlled gold mineralisation. Exploration conducted by BHP confirms Proterozoic lithologies underlie the Gimlet Project. The exploration conducted to date has not tested the potential of hosting magmatic nickel sulphides.
Diagram 3. Regional Geology and Gimlet
Project Location
Diagram 4. Targets and Regional Magnetics
The review of available geophysical and structural data (Refer to Diagram 3) has resulted in the identification of fifteen discreet exploration targets of which six have been deemed to be of high priority and worthy of further investigation. The targets were derived from review of transient electromagnetic (TEM) and aeromagnetic data combined with a new structural interpretation of the tenement. Review of aeromagnetic data, in light of the structural interpretation, resulted in the identification of an additional nine targets of second and third order priority. Terrain's predecessors had evaluated the available geophysical coverages separately and for predominantly uranium and gold potential. It is through the evaluation of the multiple surveys and the differing targeting model that Terrain was able to identify these targets warranting further investigation. The review of historical auger and soil geochemistry are now underway.
Bundarra Receivable
SR Mining Limited ('SRM') which at the time was 71.9% owned by ASX listed Bligh Resources Ltd defaulted on their $600,000 annual payment part of the total $6 million outstanding from the Bundarra asset sale which was sold for $8,000,000 with $2,000,000 received. A Legal settlement was reach in November 2014 and all related parties signed a Binding Term Sheet with Terrain Minerals Limited in relation to the Bundarra Tenement Sales Agreement (TSA) and The Inter Creditors Deed.
SRM and Bligh have settled their Royalty obligations with Terrain for the following:
-
Immediate Return of Tenement M37/54 Great Western and all relating data ‐ received
-
Cash consideration of $165,000 plus GST at settlement - received
-
400,000 Fully Paid Ordinary Bligh shares with no escrow - received
-
$200,000 cash payment due 28 November 2015 - Convertible note was put in place so that 4,000,000 Bligh shares could be converted at 5c up until expiry. No shares have been exercised to date. The Convertible Note automatically converts to Cash at expiry.
-
All parties release each other of all contractual obligations and any future claims relating to the TSA, Inter Creditor Deed or other related agreements to this transaction once all obligations have been fulfilled.
Bligh Resources Ltd Payment update: Bligh Resources released an announcement in September 2015 regarding a proposed Joint Venture (JV) on the Bundarra project which gave mention to paying Terrain the outstanding $200,000 from a payment due in by the 14th November 2015 from the JV partner.
Relinquished Projects
Terrain conducted extensive project reviews on all existing projects which include desk top work, field trips and exploration drilling. The following projects have been relinquished;
Black Cat - Gold: JV with St Barbara Limited.
Dodger's Well - Gold: An extensive RAB program was conducted in the 2nd Quarter to test possible gold occurrences along strike to historic workings.
East Kambalda ‐ Nickel ‐ Aztec Dome
Project Generation
Project selection due to financial market conditions has been more focused on Western Australia based opportunities, but other jurisdictions that offer company making opportunities will continue to be reviewed. Terrain is looking at all economic commodities including but not limited to gold, copper, nickel and other economic commodities in Australia, Europe, Africa, Asia, and the America's.
End of Review of Operations
EQUITIES ISSUED
During the year, the Company issued a total of 12,000,000 options to Mr Jonathan Lim, Paul Dickson, David Porter, and Justin Virgin and were approved by shareholders at the 2014 Annual General Meeting.
DIVIDENDS PAID OR RECOMMENDED
No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made.
FINANCIAL POSITION
The net assets of Terrain Minerals Limited have decreased by $4,924,228 from 30 June 2014 to
$1,130,576 in 30 June 2015 year end. The decrease in net assets is mainly as a result of $4,575,594 exploration expenditure and trade receivables written off during the year.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than as mentioned in the Review of Operations, no significant changes in the state of affairs of the Consolidated Entity occurred during the financial period.
. EVENTS SUBSEQUENT TO REPORTING DATE
No other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the company, the results of those operations or the state of affairs of the company in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The management team and Board of Directors ('the Board') of the Company are continuing to review opportunities available to the Company, which includes the exploration of the Company's existing tenements and assessment of new opportunities.
ENVIRONMENTAL REGULATIONS
The company is subject to the reporting requirements of both the Energy Efficiency Opportunities Act 2006 and the National Greenhouse and Energy Reporting Act 2007. The Energy Efficiency Opportunities Act 2006 requires the company to assess its energy usage, including the identification, investigation and evaluation of energy saving opportunities, and to report publicly on the assessments
undertaken, including what action the company intends to take as a result. The company continues to meet its obligations under this Act.
The National Greenhouse and Energy Reporting Act 2007, requires the company to report its annual greenhouse gas emissions and energy use. The company has implemented systems and processes for the collection and calculation of the data required and submitted its 2010/11 report to the Greenhouse and Energy Data Officer on 24 October 2011. Other than the above, the company's operations are not regulated by any significant environmental regulations under a law of the Commonwealth or of a state or territory.
INFORMATION ON DIRECTORS' INTERESTS IN SECURITIES OF TERRAIN
The names and particulars of the directors of the company during or since the end of the financial year are:
INFORMATION ON DIRECTORS
Mr David Porter Non‐Executive Chairman
Experience Mr Porter is a professional geologist and Fellow of the Australasian Institute of Mining and Metallurgy with over 40 years' experience in the mining industry, including most facets of exploration and mining. For the past 15 years he has focussed his activities in Africa and was the founding Chairman of Cam Iron SA and Congo Iron SA, both part of the Mbalam Iron Project of
Sundance Resources Ltd. The project has a planned output of 35 million tonnes per annum of high grade iron ore and is at development stage which involves capital expenditure of $4.7 billion. He was also instrumental in the development of two coal projects in the Waterberg region of South Africa which are at development stage. Prior to Mr Porter's project generation activities in Africa he was managing director of three ASX‐listed exploration companies, all of which developed gold and base metal projects. In Diversified Mineral Resources he supervised the resource definition at the Agbaou gold deposit in Cote d'Ivoire into plus one million ounces of gold. Africwest Gold acquired the nickel deposits at Kambalda and developed into a leading Australian nickel producer while Golden Rim Resources is now developing gold resources in Burkina Faso.
Mr Porter was an executive director and exploration manager of Gasgoyne Gold Mines NL from 1989 until 1996, and managed the Yilgarn Star feasibility study in 1990/1991. Gasgoyne produced over 100,000 ounces of gold per year from the Yilgarn Star Mine until it was taken over in 1996 by Sons of Gwalia Ltd in a A$180 million transaction. In the period from 1971 to 1989, Mr Porter worked for many international mining companies, with small ASX‐listed companies and as an independent consultant on gold, base metal, iron ore and coal projects.
Interest in Shares and Options
7,000,000 options
Special Responsibilities Nil
Directorships held in other listed entities during the three years prior to the current year
Mr David is an Executive Director of the ASX listed Blina Minerals NL and Non‐ Executive Director of European Metals Holdings Limited (Formerly known as Equaminerals Holdings Limited).