fc47728cda74a2b141d0b8.pdf
ACN 116 931 705
DIRECTORS
Rod Marston (Non-executive Chairman) Wayne Bramwell (Managing Director) Ian McCubbing (Non-executive Director)
Gabrielle Moeller (Non-executive Director) Giles Robbins (Non-executive Director) Mike Brook (Non-executive Director)
COMPANY SECRETARY
Trevor O'Connor
NOTICE OF
ANNUAL GENERAL MEETING
The Annual General Meeting of
Kasbah Resources Limited will be held at:
Seminar Room 2
Perth Zoo Conference Centre
20 Labouchere Road, South Perth Time: 10.00am
Date: Friday 20 November 2015
PRINCIPAL REGISTERED OFFICE IN AUSTRALIA
11 Moreau Mews
Applecross WA 6153
Telephone: +61 8 9463 6651
Facsimile: +61 8 9463 6652
E-mail: [email protected] Web: www.kasbahresources.com
STOCK EXCHANGE LISTING
The Company is listed on the Australian Securities Exchange Limited under the trading code KAS.
SHARE REGISTRY
Link Market Services Limited Level 4
152 St Georges Terrace Perth WA 6000
Telephone: +61 1300 554 474
BANKERS
Westpac Banking Corporation 1257 - 1261 Hay Street
West Perth WA 6005
SOLICITORS
In Australia:
Steinepreis Paganin Lawyers & Consultants Level 4
The Read Buildings 16 Milligan Street
Perth WA 6000
Telephone: +61 8 9321 4000
Facsimile: +61 8 9321 4333
AUDITORS
BDO Audit (WA) Pty Ltd 38 Station Street
Subiaco WA 6008
Telephone: +61 8 6382 4600
Facsimile: +61 8 6382 4601
Chairman's Letter 02
Corporate Strategy 03
Highlights 04
Operations Review 06
Directors' Report 26
Auditor's Independence Declaration 44
Consolidated Statement of
Profit or Loss and Other Comprehensive Income 45
Consolidated Balance Sheet 47
Consolidated Statement of
Changes In Equity 48
Consolidated Statement of
Cash Flows 49
Notes To The Consolidated Financial Statement 50
Directors' Declaration 80
Independent Auditor's Report 82
ASX Additional Information 84
KASBAH RESOURCES 2015 ANNUAL REPORT 1
Dear Shareholders,
The past year has been one of the most challenging for the natural resource sector in modern history. Most commodities have been in a bear market since 2011 with global equity markets and investor sentiment collapsing in parallel. The tin sector has not been spared and during the 2015 financial year the LME cash tin price has retreated from US$22,575
/ t to US$13,975 / t - a fall of approximately 38%.
Kasbah, unlike many others, has continued to advance the Achmmach Tin Project during these very challenging times.
Continued exploration success at Achmmach in the Western Zone saw Kasbah commence a Definitive Feasibility Study enhancement programme (EDFS) in late 2014. This programme successfully incorporated the smaller, yet high grade Western Zone resource into the expanded mine, extending mine life and bringing higher grade ore forward in the revised mine schedule. Importantly, pre-production capital costs declined, and the project-critical C3 operating cost was reduced to US$13,296 / t of tin in concentrate.
Post completion of the EDFS in March 2015, project financing activities commenced with non-binding debt term sheets being received from a range of European commercial banks and export credit agencies. At this time and against a background of significant and continuing weakness in the commodity and equity markets the Kasbah Board agreed to defer a financing decision on the project until metal markets have stabilised.
Tin's poor performance has been exacerbated by several industry specific factors including:
n Surge of new, low cost tin production from north eastern Myanmar;
n Commodity fund speculation; and
n Erratic Indonesian tin exports.
Against this backdrop, an interim development strategy and significant corporate cost reduction programme was announced in June 2015 alongside a $3M placement to our major shareholders. Dr Robert Weinberg and Mr Gary Davidson left the Board after many years of solid service to the company, and in August 2015 Kasbah welcomed Mr Mike Brook and Mr Giles Robbins, representatives from two of the Company's long standing shareholder groups, to the Board.
The positive from the sector turmoil is that a weaker tin price has seen a supply side contraction from tin producers in Indonesia, South America and Africa. Further supply disruptions are expected from 1 November 2015 as new 'Clean and Clear' legislation pertaining to certification of mining leases constrains the Indonesian tin sector. Any further contraction in global tin supply during 2015 should set the commodity for a rapid price correction in 2016-2017.
I would like to reaffirm to all our shareholders that the company remains focused on seeking alternative mechanisms to advance the company's tin strategy and the Achmmach Tin Project in particular. I would also like to thank you, our loyal shareholders and Kasbah's dedicated staff for the continued support given during these difficult and challenging times.
Rod Marston
Chairman
2 KASBAH RESOURCES 2015 ANNUAL REPORT
HEADING HERE
Kasbah Resources Limited (Kasbah) is an Australian listed mineral exploration and development
company
Our prime commodity is tin
Kasbah's corporate strategy is to:
n Grow the Company into a new generation producer of high quality tin concentrates;
n Leverage our exploration and development expertise into new tin production opportunities; and
n Target high margin tin assets with growth potential.
Kasbah's project assets include:
n The Achmmach Tin Project (Morocco - Kasbah Resources Limited 75%, Toyota Tsusho Corporation 20%, Nittetsu Mining Co. Ltd 5%); and
n The Bou El Jaj Tin Project (Morocco - Kasbah Resources Limited 100%).
KASBAH RESOURCES 2015 ANNUAL REPORT 3
HIGHLIGHTS 2015
2015
In June 2015, based upon a 38% deterioration in
the tin price over the last 12 months (Figure 6), the Kasbah Board announced a deferment of a financing decision
on Achmmach until the tin price improves towards an average LME tin price of circa US$18,000 / t.
HIGHLIGHTS
Kasbah achieved the following corporate
and technical milestones during the
last 12 months
Kasbah announced an Interim Development and funding strategy that
included a $3M Placement to Kasbah's major shareholders
and implementation of a corporate cost reduction programme.
4 KASBAH RESOURCES 2015 ANNUAL REPORT
HIGHLIGHTS 2015
Established an Exploration presence in Rwanda
Successfully extended the high grade Western Zone
target through drilling and increased the Western Zone metallurgical recovery to 78% in October 2014
Completed a non- renounceable rights issue in September 2014 to raise approximately
$3,900,000
Released an updated Ore Reserve and
Enhanced Definitive Feasibility Study for Achmmach in March 2015,
extending mine life and reducing project pre-production capital and the critical C3 operating cost to a competitive US$13,296 / t
Received four key approvals and
agreements in January 2015 including the final
acceptance of the Achmmach Environmental and Social Impact Assessment (ESIA) including final Environmental and
Social Monitoring and Management Plan (ESMMP)
Extensional drilling at the Western Zone in
November 2014 upgraded the Indicated Mineral Resource
to 340,000 t @ 1.25% Sn for approximately 4,200 t
of contained tin
KASBAH RESOURCES 2015 ANNUAL REPORT 5
During the last year
the Achmmach Tin Project remained the Company's prime focus. The objective remains to advance the project through its final stages of evaluation and achieve all the key project approvals, such that a development decision
can be made.
6 KASBAH RESOURCES 2015 ANNUAL REPORT
Additional exploration success at the Western Zone (WZ) of the largely unexplored Sidi Addi trend at Achmmach saw Kasbah extend the penultimate project evaluation assessment and commence a EDFS to incorporate this high grade target into the Achmmach mining inventory. A new Ore Reserve was announced in early March 2015 that saw the March 2015 Achmmach Ore Reserve increase to 9.2 Mt @ 0.77% Sn for approximately 71,300 t of contained tin.
This represented a 9% increase in Ore Reserve tonnage above the 2014 DFS Maiden Reserve tonnage and a 9% increase in contained tin.
The EDFS was completed in March 2015 (announced 18 March 2015) and successfully delivered the following key changes and improvements from the 2014 DFS (announced 31 March 2014) including:
n A 9% increase in Ore Reserve for Achmmach (announced 12 March 2015);
n An extension in mine life to approximately
10 years;
n Enhancement in life of mine metallurgical recovery from 70.3% to 71.8%;
n The connection of the high grade WZ to the Meknès Trend;
n A revised mine design and schedule that brings tonnage and grade forward in the early years of production; and
n A review of project capital and operating costs that saw the critical C3 production cost fall from US$15,309 to US$13,296 / t of tin in concentrate.
In addition to these enhancements, there had been significant devaluation of the three key currencies that underpin in excess of 80% of all Achmmach
capital and operating costs (i.e. the Moroccan Dirham (MAD), the Euro (EUR) and the South African Rand (ZAR)). All of these factors combined lead to significant reductions in project capital (down 5.5% from the 2014 DFS) and operating costs (down 18% from the 2014 DFS) and confirmed Achmmach as a low cost tin production opportunity.
It is important to reiterate that Kasbah has advanced Achmmach from scoping study, pre-feasibility, definitive feasibility to the EDFS stage and has now defined a large, long life underground project with very competitive C3 operating costs. Achmmach has all the major approvals in place and pending an appropriate funding solution, can be rapidly advanced to construction. In addition Kasbah is investigating options to enable the commencement of mining on a smaller scale at Achmmach with a corresponding reduction in capital costs. This phased approach could set a platform for transition to full EDFS scale production at a later date.
There are few other opportunities in the tin sector of the scale or quality of Achmmach that are 'development ready'.
KASBAH RESOURCES 2015 ANNUAL REPORT 7
-
PROJECT DEVELOPMENT
During the 2014-2015 period Kasbah achieved additional exploration success in the WZ and advanced the Achmmach Tin Project through to EDFS stage.
-
Resource Estimation
At 30 June 2014, the Company's defined resource at Achmmach stood at 14.6Mt @ 0.85% Sn (for 123.1kt of contained tin) (Table 1) as released to the market on 10 September 2013.
Table 1:
September 2013 - Mineral Resource Estimate Achmmach Tin Project
(@ 0.5% Sn cut-off gradeA )
|
Category
|
M Tonnes
|
Sn %
|
Contained Tin (kt)
|
|
Measured
|
1.6
|
1.0
|
16.1
|
|
Indicated
|
13.0
|
0.8
|
107.0
|
|
Inferred
|
-
|
-
|
-
|
|
Total
|
14.6
|
0.85
|
123.1
|
A The tin grade has been rounded to the nearest 0.05% Sn. The 0.5% Sn cut-off grade used for reporting the resource is based on a tin price of US$23,000/t and a total estimated operating cost of US$79/t (mining US$27/t, processing US$38/t and smelting US$14/t). Processing recovery for tin at an average head grade of 0.85% Sn will be approximately 70%. Bulk density was estimated by Ordinary Kriging, and has an average value within the mineralised zones of 2.89t/m3.
On 6 February 2014, the Company announced an upgraded Indicated Mineral Resource for its WZ target at Achmmach. The WZ - February 2014 Mineral Resource Estimate (Table 2) comprises 221kt of Indicated Resource at 0.95% Sn for 2.1kt contained tin (at 0.35% Sn cut-off) and is located on the highly prospective Sidi Addi Trend at Achmmach.
Table 2:
Western Zone - February 2014 Mineral Resource Estimate (@ 0.35% Sn cut off gradeB )
|
Category
|
K Tonnes
|
Sn %
|
Contained Tin (kt)
|
|
Measured
|
-
|
-
|
-
|
|
Indicated
|
221
|
0.95
|
2.1
|
|
Inferred
|
-
|
-
|
-
|
|
Total
|
221
|
0.95
|
2.1
|
B The Sn grade in this table has been rounded to the nearest 0.05% Sn. The open pit resource has been reported within an optimised Whittle pit shell using a tin price of US $23,000/t and overall slope angles of 45°. The 0.35% Sn cut off is based on a tin price of US $23,000/t, with open pit mining costs of US $2/t of rock for waste and $3/t for ore. The strip ratio within the pit shell is 18:1, giving an overall mining cost of $2.1/t. Total processing costs (including smelting) are US $38/t of ore, with processing recoveries of 75% at an average head grade of 0.9% Sn.
After assessing the possibility of developing the WZ as an open pit, the concept was dismissed due to unfavourably high stripping ratio and difficult terrain, the Company then formed the view that the deposit would be best mined by underground methods.
On 25 November 2014, the Company announced an upgrade of the Western Zone Mineral Resource estimate to 340kt @ 1.25% Sn for 4.2kt of contained tin (Table 3).
8 KASBAH RESOURCES 2015 ANNUAL REPORT
Table 3:
Western Zone - November 2014 Mineral Resource Estimate (@ 0.5% Sn cut off gradeC)
|
Category
|
K Tonnes
|
Sn %
|
Contained Tin (kt)
|
|
Measured
|
-
|
-
|
-
|
|
Indicated
|
340
|
1.25
|
4.2
|
|
Inferred
|
-
|
-
|
-
|
|
Total
|
340
|
1.25
|
4.2
|
C The tin grade has been rounded to the nearest 0.05% Sn. The 0.5% Sn cut-off grade used for reporting the resource is based on a tin price of US$23,000/t and a total estimated operating cost of US$79/t (mining US$27/t, processing US$38/t and smelting US$14/t). Processing recovery for tin at an average head grade of 0.85% Sn will be approximately 70%. Bulk density was estimated by Ordinary Kriging, and has an average value within the mineralised zones of 2.89t/m3.
-
Ore Reserve
On 12 March 2015, the company announced to the market an upgraded Ore Reserve for the Meknès Underground of 9.219Mt @ 0.77% Sn for 71,300t of contained tin (Table 4).
This Ore Reserve has been estimated by Entech of Perth, Western Australia and is based on the Achmmach September 2013 Measured and Indicated Resource reported to the market on 10 September 2013 and the Western Zone Indicated Resource reported to the market on 25 November 2014.
Table 4:
March 2015 Achmmach Ore Reserve D
|
Achmmach
|
Proven
|
Probable
|
Total
|
|
tonnes
|
% Sn
|
tonnes
|
% Sn
|
tonnes
|
% Sn
|
(@ 0.55% Sn Cut-off grade for High Grade Ore and 0.25% Sn for Low Grade Development Ore)
|
Total High Grade Ore
|
1,258,000
|
0.98
|
7,463,000
|
0.76
|
8,721,000
|
0.80
|
|
Total Low Grade Development Ore
|
13,000
|
0.56
|
485,000
|
0.41
|
498,000
|
0.39
|
|
Total
|
1,271,000
|
0.97
|
7,948,000
|
0.74
|
9,219,000
|
0.77
|
D The cut-off grade of 0.55% tin is based on a tin price of US$23,000/t, mining costs of US$33.75/t of ore, including sustaining capital, processing cost of US$18.13/t of ore, G&A costs of US$4.67/t of ore, mine development costs of US$1,309/m and shipping & concentrate treatment charges of US$1,173/t of tin. All reported numbers are rounded to 1,000t ore, 0.01% Sn.
KASBAH RESOURCES 2015 ANNUAL REPORT 9
1.3 Achmmach Enhanced Definitive Feasibility Study
On 18 March 2015, Kasbah announced to the market that it had completed its EDFS for the Achmmach Tin Project. The EDFS has determined that a 1.05Mtpa underground tin project with a 10 year life is technically and commercially feasible and can generate strong cash flows at competitive industry operating costs.
EDFS highlights included:
n An increased Ore Reserve of 9.22Mt @ 0.77% Sn for 71,300 of contained tin;
n Mine life of 10 years;
n Underground access via twin declines has been retained;
n Long-hole open stoping with paste fill has been retained as the most appropriate mining method;
n Average production of 1.05Mtpa is scheduled to produce approximately 5,850t of tin in concentrate per annum;
n Pre-production capital cost of US$148M;
n On an after tax, ungeared basis (using an average Sn price of US$21,511/t and an 8% discount rate), the EDFS delivers a Net Present Value of US$171M with an Internal rate of return of 32.9%;
n Life of mine C3 cash costs of US$13,269/t of tin; and
n A payback period of 2.3 years.
10 KASBAH RESOURCES 2015 ANNUAL REPORT