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2023 ReportPeers and competitors of AMETEK:
Latitude Consolidated Limited Ausmet Resources Limited
ABN 19 107 411 067
A N N U A L R E P O R T
3 0 J U N E 2 0 0 4
3
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
DIRECTORS
CORPORATE DIRECTORY
Howard Graham DAWSON
Chairman
Malcolm Keith SMARTT
Non Executive Director
Peter Henry STRACHAN
Non Executive Director
COMPANY SECRETARY
Malcolm Keith Smartt
PRINCIPAL and REGISTERED Level 1, 89 St Georges Terrace
OFFICE
Perth
Western Australia 6000
Telephone: (08) 9322 4855
Facsimile: (08) 9481 2200
Email: info@ausmet.com.au
Internet: www.ausmet.com.au
AUDITOR
SHARE REGISTRY
STOCK EXCHANGE
LISTING
Stanton Partners
Level 1, 1 Havelock Street
West Perth
Western Australia, 6005
Computershare Investor Services Pty Limited
Level 2, 45 St George’s Terrace
Perth
Western Australia, 6000
Telephone: (08) 9323 2000
Facsimile: (08) 9323 2096
Email: perth.services@computershare.com.au
The Company is listed on the Australian Stock
Exchange Limited
Home Exchange:
ASX Codes:
AME - Ordinary shares
AMEO - 31 December 2006 $0.20 options
Perth
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A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
AUSMET RESOURCES LIMITED
CONTENTS
Chairman’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
The Year in Review
Operations and Exploration . . . . . . . . . . . . . . . . . . . . . . . . .5-10
Summary of Tenements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12-16
Statements of Financial Performance . . . . . . . . . . . . . . . . . . . . . .16
Statements of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . .17
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . .19-31
Directors’ Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
Independent Audit Report to the Members . . . . . . . . . . . . . .33-34
Corporate Governance Statement . . . . . . . . . . . . . . . . . . . . . .35-38
ASX Additional Information . . . . . . . . . . . . . . . . . . . . . . . . .39-40
5
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A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
At the same time we have extended our brief to seek
less advanced projects that can be nevertheless
explored at minimal cost but with the potential for
high upside.
Gold is naturally a focus and base metals such as
copper and nickel also feature on the radar.
However, we will not be blinkered from pursuing
other commodities should strong projects be
offered.
The Australian resource sector is currently enjoying
its best period of growth for at least a decade.
Fuelled by demand from China, most major
commodity prices are touching or even exceeding
cyclical highs and the outlook, according to most
commentators, remains for continued bullish
conditions into 2005.
Your Directors want Ausmet to be part of this
resource boom and hope, through successful
exploration or project acquisition, to deliver the
outcome that your investment in the Company
deserves.
On behalf of my fellow Board members I thank you
for your support to date and look forward to
providing you with an active and successful coming
year.
Howard Dawson
Chairman
CHAIRMAN’S REPORT
Dear Fellow Shareholder,
I have pleasure in presenting to you the operations
and financial report for Ausmet Resources Limited
for the June 2004 financial year.
On April 30 of this year Ausmet joined the ASX as
a listed exploration company. Since listing we have
actively sought to advance our existing projects as
well as pursue new and additional exploration and
advanced resource project opportunities.
During the period covered by this report, your
Company undertook a high level of activity over our
two most advanced project areas, Dingo Range and
Batchelor.
As you may be aware, we completed our first drilling
programme at Dingo Range during May and
received some very encouraging results from the
drilling conducted over the Boundary deposit.
At the same time our staff and consultants
commenced comprehensive data reviews over the
Dingo Range and Batchelor project areas. This
review was to integrate the historic data into a single
package to allow a full assessment of past activities.
Both of these studies have highlighted additional
areas of potential within both projects and we hope
to have drill tested these targets before the end of the
current calendar year.
Despite an active period since listing, our cash
reserves still total a healthy $3.1 million.
In our prospectus I discussed that the goal of
Ausmet is to secure either through discovery or
acquisition a resource project that would add
significant value to the Company and by inference,
shareholder wealth.
Both the Dingo Range and Batchelor projects
present attractive advanced targets and are consistent
with this strategy. However, to increase our chances
of fulfilling our goals we are also actively looking for
additional projects with the same advanced
potential. During the period under review we
assessed a number of such opportunities.
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A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
THE YEAR IN REVIEW
Review of Activities
Ausmet Resources has a portfolio of advanced and
grass root exploration projects located within
Western Australia and the Northern Territory.
Since listing, the Dingo Range and Batchelor
projects have been the focus of work as they contain
the most advanced gold and base metal targets.
At the Throssell project, only remote sensing studies
have been completed as the tenements have yet to be
granted.
Ausmet has also actively reviewed a number of
promoted projects. The majority of these projects
were located within Western Australia. In addition,
a number of in house studies have been carried out
over areas where the Company considers there to be
potential for economic gold and base metal
mineralisation.
Dingo Range (100%)
The Dingo Range project area is located 400km
north of Kalgoorlie and is contained in the
greenstone belt lying immediately east of the
Bronzewing gold operation.
Previous exploration within the area has defined
gold resources of 306,000 ounces, contained in three
zones – Boundary, Bungarra, and Stirling.
In addition, previous exploration has also defined a
large number of anomalous areas within the project
area – these anomalous areas would appear to have
potential
for gold as well as base metal
mineralisation such as copper and nickel.
The initial focus of our exploration activities has
been to further understand the geometry and style of
mineralisation within the larger of the existing gold
resources – the Boundary deposit. A 5 hole reverse
circulation drilling programme was completed over
this deposit during May 2004 and was specifically
targeted to test the potential for an east west
orientation to the main lode structure, rather than
the conventional interpretation of a north – south
bias.
The results of this programme, which included both
high grade as well as wide widths of lower grade
mineralised intercepts, indicated that there may be
greater continuity along the east-west orientation
and this will require additional study.
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A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
The more significant drill intersections from this programme included:
Hole No.
BRC 1001
including
BRC 1001
BRC 1001
including
BRC 1001
including
BRC 1001
BRC 1002
BRC 1002
including
BRC 1002
BRC 1003
BRC 1003
BRC 1004
BRC 1004
BRC 1004
including
BRC 1005
BRC 1005
BRC 1005
including
BRC 1005
BRC 1005
BRC 1005
East
(local)
8830m 23165m
North
(local)
Dip
(degrees)
60
Azimuth
(degrees)
0
8831m 23130m
60
0 15
8810m 23170m
8810m 23135m
60
60
8831m 23010m
60
0
0
0
From
(metres)
64
67
81
96
96
100
102
132
22 7
58
58
65
89
96
131
91
127
30
82
88
90
18
51
60
66
72
80
86
101
115
To
(metres)
69
68
82
99
98
108
106
133
1.5
Interval
(metres)
5
1
1
3
2
8
4
1
114
63
68
92
98
132
98
128
36
84
91
91
30
53
82
67
82
82
90
102
116
56
5
3
3
2
1
7
1
6
2
3
1
12
2
22
1
10
2
4
1
1
Gold
(g/t)
2.1
6.0
2.4
2.3
3.2
4.2
6.6
4.3
3.6
5.2
44.0
2.7
8.5
8.0
1.1
36.0
5.7
8.3
1.4
3.1
0.7
2.5
1.8
6.5
2.2
4.9
1.7
2.6
2.4
From an economic perspective, this drilling
programme provided further evidence that the
dominant controlling feature over the mineralisation
within the Boundary deposit is brittle fracture,
rather than a conventional lode structure prevalent
throughout much of the eastern goldfields.
Such an interpretation indicates that the primary
economic potential for the Boundary deposit is as a
low grade bulk mining operation.
An initial scoping study has been carried out to test
this potential and a more detailed study will be
completed before year end to determine the
economic parameters required to make such an
operation viable.
Within the greater Dingo Range area, field
reconnaissance of the majority of the previously
delineated anomalies has been carried out.
In addition, a review of the exploration work
completed by previous owners has been commenced
and is likely to be completed during the September
quarter. Included in this review was a programme to
integrate all of the historic drilling results into a
single, computer based data set. This integration has
been completed and the data will be used to
understand better the validity of a number of the
anomalies developed within the regolith.
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A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
Equally importantly, this integration of data will
allow the effectiveness of much of the exploration
completed by previous tenement owners, to be
determined.
The review completed to date has confirmed that
there are a number of structural zones and
stratigraphic
particularly for gold mineralisation.
targets which remain untested,
Drill rig availability and weather permitting, it is
planned to drill test these areas during September
and October of this year.
Figure 2
DINGO RANGE PROJECT – REGIONAL GEOLOGICAL SETTING
9
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
Batchelor (earning 60%)
The Batchelor project is located in the Northern
Territory near the town of Batchelor.
Similar to Dingo Range, the Batchelor project has a
number of readily identifiable anomalous zones
ready for drill testing. The focus of Batchelor is
more base metal than gold, in particular for copper
and zinc. This is because the Batchelor project area
is located along the same strike horizon that hosted
the nearby world class Woodcutters zinc/lead
deposit as well as the undeveloped Browns deposit,
which contains 39.8 million tonnes @ 3.61% lead,
0.11 cobalt and associated copper, nickel and silver
credits.
Field reconnaissance has been carried out and drill
cuttings from wide spaced drilling completed by
previous tenement holders over the “Woodcutters”
strike horizon, sampled. Although not providing a
complete set of data as some hole samples were no
longer available, the sampling of these cuttings
should prove to be a cost effective tool in
determining areas of greater potential.
These samples are currently being logged and will be
assayed for gold, copper and zinc.
In addition, a desk top review have been completed
over the project area. This review involved a
complete reappraisal of all historic work available
focusing particulary on areas of anomolous
geochemisty or alteration which previous explorers
had either not adequately tested or followed up for
various reasons.
A number of advanced targets, in addition to those
target areas outlined in our prospectus, have been
identified.
A drilling programme to test the preferred strike
horizon as well as the other anomalous areas
identified, is planned to be carried out in October,
with precise timing subject to rig availability.
Figure 3
BATCHELOR PROJECT – REGIONAL GEOLOGICAL SETTING
10
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
Throssell (100%)
The Throssell project area is located 420 kilometres
northeast of Kalgoorlie and consists of 4 exploration
licence applications.
Throssell is a grass roots conceptual target seeking to
test the potential for previously untested greenstone
lithologies adjacent to the northeast margin of the
Yilgarn Craton.
We are currently working through the tenement
approval process and it appears likely that the earliest
we could hope to drill this project would be during
the March quarter of 2005.
A 1,500 metre drilling programme to test the
targeted zones is planned once this approval has
been received.
In the meantime desk top studies have been
undertaken, and we are continuing to more precisely
target potential drill locations.
Figure 4
THROSSELL PROJECT – REGIONAL GEOLOGICAL SETTING
11
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
Business Development/New Projects
The technical consultants of Ausmet regard its
existing suite of projects highly. At the same time,
the Board of Ausmet recognise the potential for new
projects to add value to your Company. As a
consequence, the Company maintains an active
search for advanced projects, both within Australia
and overseas.
Since your Company was listed a large range of
projects have been reviewed and advanced
discussions carried on two opportunities. However,
whilst more detailed analysis downgraded these
targets, opportunities continue to be evaluated.
Corporate
As at the completion of the June 2004 financial year
the Company’s cash balance was $3,145,469. Your
Board is committed to the wise expenditure of these
funds and to keeping administration costs to a
minimum.
On 7 July, following the resignation of Michael
Curnow, Peter Strachan joined the Board of Ausmet.
Your Board was pleased to secure Peter as he has a
wealth of technical, corporate and managerial
experience which will allow him to assist the
Company with
its planned growth through
exploration and project acquisition.
Howard Dawson
Chairman
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A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
AUSMET RESOURCES LIMITED
SUMMARY OF TENEMENTS
Project
Tenement
Status
Interest
Dingo Range
Batchelor
Throssell
E37/769
E37/794
M37/108
M37/519
M37/1167
EL 9253
EL 9501
ERL 134
MLN 512
MLN 513
MLN 514
MLN 515
MLN 542
MLN 543
MLN 1984
AN 495
AN 515
E38/1648
E38/1649
E38/1650
E38/1651
Application
Application
Granted
Granted
Application
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
Application
Application
100%
100%
100%
100%
100%
earning 60%
earning 60%
earning 60%
earning 60%
earning 60%
earning 60%
earning 60%
earning 60%
earning 60%
earning 60%
earning 60%
earning 60%
100%
100%
100%
100%
AN
EL
ERL
M
Authority – North
Exploration Licence
Exploration Retention Lease
-
-
-
- Mining Lease
MLN
- Mineral Lease – North
13
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
DIRECTORS’ REPORT
Peter Henry Strachan
Non Executive Director
The Directors present their report together with the
financial report of Ausmet Resources Limited (“the
Company”) for the period 16 December 2003 (date
of incorporation) to 30 June 2004 and the auditors’
report thereon.
DIRECTORS
The Directors of the Company at any time during
or since the end of the period are:
Howard Graham Dawson
Chairman
Mr Dawson was formerly an exploration and
resource development geologist with a number of
major companies including BHP Minerals Limited.
In 1987 he entered the securities industry as a
Resource Analyst with a subsequent move into
senior management roles with firms including
McIntosh Securities, Merril Lynch Australia and
ABN Amro Morgans Limited.
Malcolm Keith Smartt
Non Executive Director
Mr Smartt is an accountant and company secretary
and after retiring from the RAAF in 1987 as a
Squadron Leader he joined the resource sector. He
has held a number of senior positions as a company
secretary and or Finance Director in a number of
public companies such as Chevron Exploration,
Arboyne, Mt Edon, Menzies Gold, Coolgardie Gold
and New World Alloys.
Mr Strachan commenced his working life as a
research metallurgist in Zambia and then gained
significant practical experience with Bougainville
Copper and CRA (now Rio Tinto). Since 1983 he
has been involved in the Securities Industry in
activities such as corporate research, institutional
banking
and
management.
development
business
and
Michael Paul Curnow
Mr Curnow resigned as a Director on 7 July 2004.
PRINCIPAL ACTIVITIES
The principal activities of the Company during the
course of the period were mineral exploration.
RESULTS OF OPERATIONS
The net loss after income tax for the Company for
the period was $694,373 (2003: Not Applicable).
DIVIDENDS
No dividend has been paid since incorporation and
no dividend is recommended for the current year.
14
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
SIGNIFICANT CHANGES IN THE STATE OF
AFFAIRS
In the opinion of the Directors there were no
significant changes in the state of affairs of the
Company that occurred during the period under
review, other than as noted in this Annual Report.
DIRECTORS REPORT
REVIEW OF ACTIVITIES
During the year the Company identifies and
explored a number of resource projects located
within Australia. A summary of these activities is
contained in the section of this report entitled “The
Year in Review – Operations and Exploration”.
OPTIONS OVER UNISSUED CAPITAL
Listed Options
As at the date of this report there were a total of 15,218,000 listed options with details as follows -
Number of Options
15,218,000
Exercise Price
20 cents each
Expiry Date
31 December 2006
These options do not entitle the holders to participate in any share issue of the Company or any other body
corporate.
Unlisted Options
As at the date of this report there were no unlisted options.
EVENTS SUBSEQUENT TO BALANCE DATE
There has not arisen in the interval between the end
of the period and the date of this report any item,
transaction or event of a material and unusual nature
likely, in the opinion of the Directors of the
Company, to affect significantly the operations of
the Company, the results of those operations, or the
state of affairs of the Company, in future periods.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS OF OPERATIONS
The Company will focus on the exploration of its
portfolio of mining tenements and the acquisition of
new projects and/or assets.
Further information about likely developments in
the operations of the Company and the expected
results of those operations on future periods has not
been included in this report because disclosure of
the information would be likely to result in
unreasonable prejudice to the Company.
ENVIRONMENTAL REGULATION AND
PERFORMANCE
The Company holds various environmental licences
and authorities to regulate its exploration activities
in Australia. These licences include conditions and
regulations with respect to the rehabilitation of areas
disturbed during the course of its exploration
activities.
So far as the Directors are aware, all exploration
activities have been undertaken in compliance with
all relevant environmental regulations.
15
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
DIRECTORS REPORT
INFORMATION ON DIRECTORS
As at the date of this report, the posiitons of the Directors and their interests in the shares and options of the
Company are as follows:
Director
Position
Howard G Dawson
Malcolm K Smartt
Peter Henry Strachan
Executive Chairman Appointed on 16
December 2003
Non Executive Director
Appointed on 16 December 2003
Non Executive Director
Appointed on 7 July 2004
Director’s
Interests in
Ordinary Shares
3,230,000
Director’s
Interests in
Listed Options
1,575,000
1,060,000
Nil
525,000
Nil
Listed options with an exercise price of 20 cents expiring on 30th December 2006.
Each Directors holdings from the start of the period and movements to the end of the period are detailed at Note
14.
DIRECTORS MEETINGS
The number of meetings of the Company’s held in the period each Director held office during the period and the
number of meetings attended by each Director were:
Director
H G Dawson
M K Smartt
M C Curnow
P H Strachan
Director
Appointed
Resigned
7 Jul 04
7 Jul 04
Meetings whilst Director
Attended
13
13
13
N/A
Held
13
13
13
N/A
DIRECTORS AND EXECUTIVES’ EMOLUMENTS
The Board of Directors is responsible for determining and reviewing compensation arrangements for the Directors
and the executive team. The Board of Directors assesses the appropriateness of the nature and amount of
emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the
overall objective of ensuring maximum benefit from the retention of a high quality Board and executive team. Such
officers are given the opportunity to receive their base emolument in a variety of forms including cash and fringe
benefits such as motor vehicles.
Remuneration of Non-Executive Directors is determined by the Board with the maximum amount approved by the
shareholders from time to time.
Details of the nature and amount of each element of the emoluments of each Director of Ausmet Resources Limited
for the period are as follows:
Director
H G Dawson
(Non-Executive Chairman)
M K Smartt
(Non Executive Director)
M P Curnow
(Non-Executive Director
Base
Emolument
$
Superannuation
Contributions
$
31,844
15,922
7,961
2,685
1,432
716
Non Cash
$
Nil
Nil
Nil
Consultancy
Benefits
$
Nil
Nil
Nil
Total
Fees
$
34,259
17,354
8,677
Other than the Directors disclosed above there were no other executive officers who received emoluments during the
period ended 30 June 2004.
16
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
incurred
The Directors and Officers’ Liability insurance will
provide cover against all costs and expenses that my
in defending civil or criminal
be
proceedings that fall within the scope of the
indemnity and that may be brought against the
officers in their capacity as officers of the Company.
The insurance policy will not contain details of the
premium paid in respect of individual officers of the
company. Disclosure of the nature of the liability
cover and the amount of the premium will be
subject to a confidentiality clause under the
insurance policy.
Signed in accordance with a resolution of the
Directors.
____________________________________
Howard Dawson
Chairman
Dated at Perth this 24th day of September 2004
DIRECTORS REPORT
Indemnification of officers
The Company has agreed to indemnify and keep
indemnified the following officers, Mr H G
Dawson, Mr M K Smartt and Mr P H Strachan
against all liabilities incurred by the Directors as a
director of the Company and all legal expenses
incurred by the Directors as a director of the
Company.
The indemnity only applies to the extent and in the
amount that the Directors are not indemnified
under any other indemnity, including an indemnity
contained in any insurance policy taken out by the
Company, under the general law or otherwise.
The indemnity does not extend to any liability:
to the Company or a related body corporate of
the Company; or
arising out of conduct of the Directors involving
a lack of good faith; or
which was incurred prior to 16 December 2003
and which is in respect of any negligence,
default, breach of duty or breach of trust of
which the Directors may be guilty in relation to
the Company or related body corporate.
OFFICERS’ INDEMNITIES AND
INSURANCE
The company is actively seeking an underwriter for
is
Directors and Officers’ Insurance and
anticipated that the Company will pay an insurance
premium to insure certain officers of the Company.
The officers of the Company covered by the
insurance policy will include the Directors named in
this report.
it
17
A u s m e t – A n n u a l R e p o r t 2 0 0 4
●
●
●
AUSMET RESOURCES LIMITED
STATEMENT OF FINANCIAL PERFORMANCE
For the Period 16 December 2003 to 30 June 2004
Interest revenue
Total revenue
Expenses from ordinary activities
Employee expense
Depreciation and amortisation expense
Exploration expenditure written off
Administration expenses
Loss from ordinary activities before
related income tax expense
Income tax relating to ordinary activities
Net loss attributable to members of
the Company
Basic loss per share (cents)
NOTE
2
2
3
3
3
3
4
12
20
2004
$
36,750
_________
36,750
_________
(60,743)
(271)
(626,002)
(44,107)
_________
(694,373)
Nil
_________
(694,373)
=========
(5.17)
========
The statement of financial performance is to be read in conjunction with the Notes to the Financial Statements
18
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
STATEMENT OF FINANCIAL POSITION
CURRENT ASSETS
Cash assets
Receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Capitalised mineral exploration
and evaluation expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Accumulated losses
TOTAL EQUITY
As at 30 June 2004
NOTE
5
6
7
8
9
10
11
12
2004
$
3,145,469
81,391
_________
3,226,860
_________
2,669
–
_________
2,669
_________
3,229,529
_________
21,365
–
_________
21,365
_________
21,365
_________
3,208,164
_________
3,902,537
(694,373)
_________
3,208,164
The statement of financial performance is to be read in conjunction with the Notes to the Financial Statements
19
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
STATEMENT OF CASH FLOW
For the Period 16 December 2003 to 30 June 2004
NOTE
2004
$
Cash flows from operating activities
Receipts from customers
Interest received
Payments to suppliers and employees
Tax paid (GST)
Net cash used in operating activities
21(b)
Cash flows from investing activities
Payments for exploration and evaluation
Payments for projects
Payments for property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Capital Raising Costs
Proceeds from the issue of shares
Net cash provided by financing activities
Net increase in cash held
Cash at the beginning of
the period
Cash at the end of
the period
21
25,947
(83,307)
(70,766)
_________
(128,126)
_________
(126,002)
(100,000)
(2,940)
(228,942)
_________
(224,170)
3,726,707
_________
3,502,537
_________
3,145,469
-
_________
3,145,46
========
The statement of cash flow is to be read in conjunction with the Notes to the Financial Statements
20
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant policies, which have been adopted in the preparation of this financial report, are:
(a)
Basis of Accounting
This financial report has been prepared on the basis of accounting principles applicable to a going
concern, which assumes the commercial realisation of the future potential of the Company’s assets
and the discharge of their liabilities in the normal course of business.
The financial report is a general purpose financial report that has been prepared in accordance with
applicable Accounting Standards, Urgent Issues Group Consensus Views, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
The financial report has been prepared on the basis of historical costs and does not take into account
changing money values or, except where stated, current valuations of non-current assets.
(b)
Principles of Consolidation
The Company has no wholly-owned controlled entities; therefore there is currently no consolidation.
(c)
Income Tax
The Company adopts the income statement liability method of tax effect accounting. Income tax
expense is calculated as the operating result adjusted for permanent differences between taxable and
accounting income. The tax effect of timing differences, which arise from items being brought to
account in different periods for income tax and accounting purposes, is carried forward in the
statement of financial position as a future income tax benefit or a provision for deferred income tax.
Future income tax benefits are not brought to account unless realisation of the asset is assured beyond
reasonable doubt. Future income tax benefits in relation to tax losses are not brought to account
unless there is virtual certainty of realisation of the benefit.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation that
the Company will derive sufficient future assessable income to enable the benefit from the deductions
to be realised and will continue to comply with the conditions of deductibility imposed by the law.
(d)
Non-Current Assets
Depreciable non-current assets, other than freehold land, are depreciated over their expected
economic life using the straight line method. Profits and losses on disposal of non-current assets are
taken into account in determining the operating loss for the year. The depreciation rate used for each
class of assets is as follows:
Plant and equipment
13 – 40%
The carrying amounts of non-current assets are reviewed to determine whether they are in excess of
their recoverable amount at balance date. If the carrying amount of a non-current asset exceeds the
recoverable amount, the asset is written down to the lower amount. In assessing recoverable
amounts, the relevant cash flows have not been discounted to their present value.
(e)
Acquisition of Assets
The cost method of accounting is used for all acquisitions of assets regardless of whether shares or
other assets are acquired. Cost is determined as the fair value of the assets given up at the date of
acquisition plus costs incidental to acquisition. Costs relating to the acquisition of new areas of
interest are classified as exploration and evaluation expenditure, development properties or mine
properties based upon the stage of development reached at the date of acquisition.
21
A u s m e t – A n n u a l R e p o r t 2 0 0 4
●
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(f)
Exploration and Evaluation Expenditure
All exploration and evaluation expenditure is expensed as incurred.
(g)
Intangibles
Goodwill
Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase
price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed
to its net assets at date of acquisition. Both purchased goodwill and goodwill on consolidation are
amortised on a straight line basis over the period of 10 years. The balances are reviewed annually and
any balance representing future benefits for which the realisation is considered to be no longer
probable are written off.
(h)
Joint Ventures
Interests in joint ventures have been brought to account by including the appropriate share of the
relevant assets, liabilities and costs of the joint ventures in their relevant categories in the financial
statements. Details of these interests are shown in Note 13.
(i)
Receivables and Revenue Recognition
Interest income on short term investments is recognised as it accrues.
The gross proceeds of asset sales are included as revenue of the Company.
(j)
Employee Entitlements
Liabilities for employees’ entitlements to wages and salaries, annual leave, and other current employee
entitlements are accrued at nominal amounts on the basis of the expected wage and salary rates at the
time of payment.
Liabilities for other employee entitlements, which are not expected to be paid or settled within 12
months of balance date, are accrued, where material, in respect of all employees at the present values
of future amounts expected to be paid.
Contributions to employee superannuation plans are charged as an expense as the contributions are
paid or become payable.
(k)
Cash Flows
Cash on hand and in banks and short term deposits are stated at nominal value.
For the purpose of the statement of cash flows, cash includes cash on hand and deposits at call which
are readily convertible to cash on hand and which are used in the cash management function on a
day-to-day basis.
22
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(l)
Payables
These amounts represent liabilities for goods and services provided to the Company prior to the end
of the period and which are unpaid. The amounts are unsecured and are usually paid within 30 days
of recognition.
(m)
Interest-Bearing Liabilities
Loans are carried at their principal amounts and if applicable, interest is accrued over the period it becomes
due and payable and is recorded as part of trade creditors.
(n)
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except
where the amount of GST incurred is not recoverable from the Australian Taxation Office (“ATO”).
In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part
of an item of the expense.
Receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability
in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows
arising from investing and financing activities which are recoverable from, or payable to, the ATO are
classified as operating cash flows.
(o)
Leases
Leases are classified at their inception as either operating or finance leases based on the economic
substance of the agreement so as to reflect the risks and benefits incidental to ownership. T h
e
minimum lease payments of operating leases, where the lessor effectively retains substantially all of
the risks and benefits of ownership of the leased item, are recognised as an expense on a straight line
basis.
(p)
Contributed Equity
Issued capital is recognised as the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a
reduction of the share proceeds received.
(q)
Earnings per Share
Basic EPS are calculated based upon the net loss divided by the weighted average number of shares.
Diluted EPS are calculated as the net loss divided by the weighted average number of shares and
dilutive potential shares.
(r)
Comparative Amounts
There are no comparative figures as the Company was only incorporated on 16 December 2003. The
operating results and cash flows are prepared for the period 16 December 2003 to 30 June 2004.
23
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
2.
REVENUE
Revenue from
operating activities
Interest received
Revenue from outside
operating activities
3.
EXPENSES
The loss from ordinary activities before
income tax expense has been determined after
charging the following items:
Auditors’ remuneration
Other administration expenses
Contributions to employee
superannuation plans
Employee expenses
Depreciation
Mineral exploration and
evaluation expenditure written off
2004
$
36,750
–
________
36,750
========
6,000
38,107
5,015
60,743
271
626,002
========
24
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
2004
$
(694,373)
==========
(208,312)
156,000
–
52,312
________
–
=========
52,312
=========
4.
INCOME TAX
(a)
Reconciliation
The aggregate amount of income
tax attributable to the financial
year differs by more than 15%
from the prima facie tax benefit
on the operating loss.
The differences are reconciled
as follows:
Operating loss
Prima facie tax benefit at 30%
Tax effect of permanent differences:
Exploration expenditure
written off
Other non-deductible expenditure
Future income tax benefits
not brought to account
Income tax expense attributable
to ordinary activities
(b)
Future income tax benefits
The future income tax benefits not brought
to account at 30% relating to income tax
losses, the benefits of which will only be
realised if the conditions for deductibility
as set out in Note 1(c) occur, are as follows:
Tax losses
25
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
5.
6.
CASH ASSETS
Cash
Bank Bills
RECEIVABLES
GST recoverable and due
Accrued Interest
Other
7.
PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
2004
$
66,841
3,078,628
________
3,145,469
=========
70,76
10,623
2
________
81,391
=========
2,940
(271)
________
2,669
=========
Reconciliation
There were no assets at the beginning of the period and only additions and no disposals during the period.
8.
CAPITALISED MINERAL EXPLORATION
EXPENDITURE
Company incorporation – 16 December 2003
Purchase Price for Tenements
Exploration Expenditure
Total
Less: Expenditure written off
during the year
Total Amount Capitalised as at 30 June 2004
Nil
500,000
126,002
________
626,002
________
(626,002)
________
–
=========
26
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
9.
PAYABLES
Current
Unsecured
Trade creditors and accruals
Superannuation
Amounts owed to Directors and/or
Director-related entities
10.
PROVISIONS
Current
Employee entitlements
Number of employees at year end
2004
$
15,120
5,015
1,230
________
21,365
=========
–
=========
1
=========
27
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
11.
CONTRIBUTED EQUITY
(a)
Ordinary Shares - 30,436,000
(b)
Share Movements During The Year
Balance at the beginning of
the period
Seed Capital
Promoter Shares
Ordinary shares issued
under a Prospectus
Shares issued as payment
for Project
Less:
Capital Raising Costs
Balance at the end of the period
(c)
Options
Listed options issued under a Prospectus
$ 3,902,537
==========
Shares
Nil
4,200,000
5,075,000
$
Nil
294,000
507
3,432,200
17,161,000
400,000
4,000,000
(224,171)
_________
3,902,537
=========
_________
30,436,000
=========
The listed options were issued during this period and are as follows -
Number of Options Issued
Exercise Price
Expiry Date
15,218,000
20 cents
31 December 2006
Unlisted options
There are no unlisted options.
(d)
Terms and Conditions of Contributed Equity
Ordinary Shares
Ordinary shares have the right to receive dividends as declared and, in the event of a winding up of
the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the
number of shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the
Company.
12.
ACCUMULATED LOSSES
Accumulated losses at the beginning
of the period
Net loss attributable to members
of the Company
Accumulated losses at the end of the
period
–
694,373
________
694,373
=========
28
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
13.
INTERESTS IN JOINT VENTURES
Joint venture agreements have been entered into with third parties, whereby the Company can earn an
interest in exploration areas by expending specified amounts in the exploration areas. The Company’s
percentage interests in the future output of the joint ventures, if all its obligations are fulfilled are as follows:
Joint Venture
Batchelor Project
Joint Venture
Partner
Location
New World Alloys
Northern Territory
The terms of this agreement are that there is a minimum expenditure of $75,000 and a total of $600,000 to
earn 60%. If the Company continues this Joint Venture beyond 20 February 2005 they must pay New
World Alloys a further $30,000.
14.
DIRECTORS AND EXECUTIVES’ REMUNERATION
Remuneration Disclosures
Ausmet Resources Limited
Period Ended: 30 June 2004
Primary
Salary
& Fees
Cash
Bonus
Non-
cash
Post Employment
Equity
Super-
annuation
Retirement
Benefits
Options
Other
Benefits
TOTAL
$
–
–
–
–
–
31,844
Specified Directors
Dawson, H. Chairman (Executive)
2003
2004
Smartt, M. Non Executive Director
2003
2004
Curnow, M. Non Executive Director (Resigned 7 July 2004)
2003
2004
Totals
–
7,961
55,727
–
716
4,833
–
15,922
–
1,432
–
2,685
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
34,529
–
17,354
–
8,677
60,560
Share Trading Disclosures
Ausmet Resources Limited – Period Ended 30 June 2004
Number of Shares held: Specified Directors & Executives
Balance
16 Dec 03
Issued during
Period
Options
Exercised
Net Change
Other
Balance
30 Jun 04
Specified Directors
Dawson, H.
Smartt, M.
Strachan, P.
Totals
–
–
–
–
3,150,000
1,050,000
–
4,200,000
–
–
–
–
66,000
10,000
–
76,000
3,216,000
1,060,000
–
4,276,000
Option Trading Disclosures
Ausmet Resources Limited – Period Ended 30 June 2004
Number of Shares held: Specified Directors & Executives
Balance
16 Dec 03
Issued during
Period
Options
Exercised
Net Change
Other
Balance
30 Jun 04
Specified Directors
Dawson, H.
Smartt, M.
Strachan, P.
Totals
–
–
–
–
1,575,000
525,000
–
2,100,000
–
–
–
–
29
–
–
–
–
1,575,000
525,000
–
2,100,000
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
15.
AUDITORS’ REMUNERATION
Audit Services
Other
16.
RELATED PARTY TRANSACTIONS
There were no related party transactions.
2004
$
6,000
Nil
17.
EMPLOYEE ENTITLEMENTS AND SUPERANNUATION COMMITMENTS
The Chairman is the Company’s only employee at this time and utilises consultants. The Company
contributes to Director Superannuation plans at the statutory rate.
18.
EXPENDITURE COMMITMENTS
The Company has certain obligations to perform minimum exploration work on mineral leases held. These
obligations may vary over time, depending on the Company’s exploration programs and priorities. As at
balance date, total exploration expenditure commitments on tenements held by the Company which have
not been provided for in the financial statements and which cover the following twelve month period amount
to $139,600 (2003: N/A) respectively. These obligations are also subject to variations by farm-out
arrangements or sale of the relevant tenements.
As from 1 September, 2004 the Company has committed to a lease for accommodation and it is anticipated
that the 3 year lease will total approximately $70,000.
19.
SEGMENT INFORMATION
The Company operates predominantly in one segment involved in the mineral exploration and development
industry. Geographically, the Company operates in Australia only.
20.
EARNINGS/(LOSS) PER SHARE
The following reflects the loss and share
data used in the calculations of basic and
diluted earnings/(loss) per share:
Earnings/(loss) used in calculating basic
and diluted earnings/(loss) per share
Weighted average number of ordinary
shares used in calculating basic
earnings/(loss) per share:
2004
$
(694,373)
2004
Number of Shares
13,443,190
A diluted earnings per share has not been included, as it results in a more favourable loss per share than the
basic loss per share.
30
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
21.
NOTES TO THE STATEMENTS
OF CASH FLOWS
Reconciliation of Cash
Cash at the end of the period
as shown in the statement of cash flows
is reconciled to the related items in the
statement of financial position as follows:
Cash at bank
Cash on hand
Deposits at call
Reconciliation of the loss from ordinary
activities after income tax to the net
cash flows used in operating activities
Loss from ordinary activities after
income tax
Non-cash items:
Depreciation
Exploration written off
Change in operating assets and liabilities:
(Decrease)/increase in trade creditors
Increase)/ decrease in receivables
Net cash outflows used in
operating activities
2004
$
66,641
200
3,078,628
_________
3,145,469
=========
(694,373)
271
626,002
21,365
(81,391)
_________
(128,126)
=========
31
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
22.
FINANCIAL INSTRUMENTS
Interest Rate Risk
The Company’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, is as follows:
Note
21(a)
5
9
-
-
Weighted
Average
Effective
Interest
%
5.29%
3.51%
0%
s
-
-
Floating
Interest
Rate
$
3,078,628
66,841
_________
3,145,469
Fixed Interest
Rate Maturing
Non Interest
Bearing
Total
12 months
or less
$
12 – 60
months
$
$
$
-
-
-
_____
-
-
-
-
______
-
-
-
81,391
________
81,391
3,078,628
66,841
81,391
_________
3,226,860
-
_________
_________
-
========
-
_____
-
_____
-
______
-
______
=====
=====
21,365
________
21,365
________
-
=====
21,365
_________
21,365
_________
3,205,495
=========
Financial Assets
Cash assets - Bills
Cash Assets -
Receivables
Total Financial Asset
Financial Liabilities
Payables
Total Financial Liabilities
Net Financial Assets
(b)
Credit Risk
The Company’s maximum exposures to credit risk at balance date in relation to each class of recognized
financial asset is the carrying amount of those assets as indicated in the statement of financial position.
(c)
Net Fair Values
The net fair value of financial assets and liabilities at balance date approximates their carrying amount.
23.
CONTINGENT LIABILITIES
On 23 June 2004 Deep Yellow Limited and its subsidiaries went into voluntary administration. Under the
Dingo Range agreement, all rehabilitation liabilities that may have existed over the Dingo Range area were
to be assumed by Deep Yellow Limited. As a result of the Company being placed in administration, any
rehabilitation liabilities that may exist could pass to Ausmet Resources. The Directors are unable to quantify
the extent of these liabilities as none have been raised at the date of this report. The Directors will explore
all legal avenues to ensure Deep Yellow Limited honors its obligations under the Dingo Range agreement.
24.
SUBSEQUENT EVENTS
There has not arisen in the interval between the end of the period and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company,
to affect significantly the operations of the Company, the results of those operations, or the state of affairs of
the Company, in future periods.
32
32
A u s m e t – A n n u a l R e p o r t 2 0 0 4
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the Period 16 December 2003 to 30 June 2004
IMPACT OF ADOPTING AASB EQUIVALENTS TO IASB STANDARDS
23.
The Australian Accounting Standards Board is adopting the Standards of the International Accounting Standards
Board for application to reporting periods beginning on or after 1 January 2005. Pending Accounting standard
AASB 1 ‘First-time Adoption of Australian Equivalents to International Financial Reporting Standards’ prescribes
transitional provision for first-time adopters.
AASB 1047 ‘Disclosing the Impacts of Adopting Australian Equivalents to International Financial Reporting
Standards’ requires financial reports to disclose information about the impacts of any changes in accounting policies
in the transition period leading up to the adoption date and will apply for June 2004 reporting.
The company has allocated internal resources and in conjunction with its auditors is assessing those accounting
policies and key areas that are likely to be impacted by the transition to International Financial Reporting Standards
(IFRS). As the company has a 30 June year-end, priority has been given to the consideration of the impact of the
Australian equivalents to the IFRS and the preparation of a balance sheet in accordance with those Australian
equivalent standards as at 30 June 2004. This will form the basis of accounting for Australian equivalents of IFRS
in the future, and is required when the company prepares its first fully IFRS compliant report for the year ended 30
June 2006. As required by AASB 1047, the key accounting policies, which will change and may have an impact on
the financial report of the company is set out below.
Exploration and evaluation expenditure
In terms of the exposure drafts issued by the International Accounting Standards Board (IASB) and the Australian
Accounting Standards Board (AASB) on exploration and evaluation expenditure, entities are permitted to continue
their previous accounting policies but all exploration and evaluation expenditure would be subject to an annual
impairment test. Under the impairment test, exploration and evaluation expenditure would be carried at recoverable
value which will be determined at the higher of fair value less costs to sell, and value in use. The likely impact is that
exploration and evaluation expenditure will not meet the recoverable value test and will need to be written off in the
year incurred.
Taxation
Under the Australian equivalent to IAS 12 “Income Taxes”, a balance sheet approach will be adopted for calculating
taxation, replacing the “statement of financial performance approach”. This method recognizes deferred tax balances
for all temporary differences arising between the carrying value of an asset or liability and its tax base. Whilst there
will be enhanced disclosure of the composition of the deferred tax assets and liabilities it is not expected that there
will be any significant impact in terms of the statement of financial position or performance.
Financial Instruments
Under AASB 139 ”Financial Instruments: Recognition and Measurement” financial instruments will be required to
be classified into five categories and to be measured based on the nature of the classification. The five categories and
basis of measurement are:
Financial asset or financial liability measured at fair value through the statement of financial performance
Held to maturity investments measured at amortised cost, subject to impairment
Loans and receivables measured at amortised cost, subject to impairment
Available for sale assets measured at fair value with changes in fair value measured directly in equity
Financial liability measured at amortised cost
This will result in a change in the current accounting policy that does not classify financial instruments.
Impairment of Assets
Under the Australian equivalent to IAS 36 “Impairment of Assets” the recoverable amount of an asset is determined
as the higher of net selling price and value in use. This will result in a change to the company’s current accounting
policy which determines recoverable amount of an asset on the basis of undiscounted cash flows. Under the new
policy it is likely that the impairment of assets will be recognized sooner and the amount of write downs will be
greater.
33
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
DIRECTORS’ DECLARATION
The Directors of Ausmet Resources Limited declare that:
(a)
the financial statements and notes as set out on pages 16 to 31 are in accordance with the Corporations Act
2001, including:
(i)
(ii)
complying with Accounting Standards in Australia and the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
giving a true and fair view of the financial position of the Company as at 30 June 2004 and of their
performance, as represented by the results of their operations and their cash flows, for the period
ended on that date.
(b)
in the Directors opinion there are reasonable grounds to believe that Company will be able to pay its debts
as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Howard Dawson
Chairman
Signed at Perth this 24th day of September 2004
34
A u s m e t – A n n u a l R e p o r t 2 0 0 4
AUSMET RESOURCES LIMITED
AUSMET RESOURCES LIMITED
STANTON PARTNERS
1 HAVELOCK STREET
WEST PERTH 6005
WESTERN AUSTRALIA
TELEPHONE: (08) 9481 3188
Facsimile: (08) 9321 1204
e-mail: australia@stanton.com.au
INDEPENDENT AUDIT REPORT
TO THE MEMBERS OF
AUSMET RESOURCES LIMITED
SCOPE
The financial report and directors’ responsibility
The financial report comprises the statement of financial position, statement of financial performance, statement
of cash-flows, accompanying notes to the financial statements, and the director’s declaration for Ausmet
Resources Limited (the Company), for the period 16 December 2003 to 30 June 2004.
The directors of the Company are responsible for the preparation and true and fair presentation of the financial
report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate
accounting records and internal controls that are designed to prevent and detect fraud and error, and for the
accounting policies and accounting estimates inherent in the financial report.
Audit approach
We conducted an independent audit in order to express an opinion to the members of the Company. Our audit
was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance as to
whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such
as the use of professional judgement, selective testing, the inherent limitations of internal control, and the
availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material
misstatements have been detected.
We performed procedures to assess whether in all material respects the financial report presents fairly, in
accordance with the Corporations Act 2001, including compliance with Accounting Standards and other
mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of
the Company’s financial position, and of its performance as represented by the results of its operations and cash
flows.
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AUSMET RESOURCES LIMITED
AUSMET RESOURCES LIMITED
We formed our opinion on the basis of these procedures, which included:
examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the
financial report, and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant
accounting estimates made by the directors.
While we considered the effectiveness of management’s internal controls over financial reporting when
determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal
controls.
INDEPENDENCE
In conducting our audit, we followed applicable independence requirements of Australian professional ethical
pronouncements and the Corporations Act 2001.
AUDIT OPINION
In our opinion, the financial report of Ausmet Resources Limited is in accordance with:
a)
the Corporations Act 2001, including:
(i)
giving a true and fair view of the Company’s financial position as at 30 June 2004 and of its
performance for the period ended on that date; and
(ii)
complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
b)
other mandatory professional reporting requirements in Australia.
STANTON PARTNERS
J P Van Dieren
Partner
Perth, Western Australia
24 September 2004
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AUSMET RESOURCES LIMITED
CORPORATE GOVERNANCE STATEMENT
GOOD GOVERNANCE AND PRACTICE RULES
The Australian Stock Exchange Corporate Governance Council has determined a total of ten Governance and Good
Practice Rules, and although not mandatory at this time, these rules must be listed and an explanation provided on
whether the Company Complies with the rule, or a reason why it does not.
Full details of the Company Corporate Governance can be viewed on the internet at www.ausmet.com.au or contact
the Ausmet Office 08 9322 4855 and a copy of the full Corporate Governance will be sent to you.
PRINCIPAL 1: Lay solid foundations for management and
COMPLIANCE OR DETAILS OF PLANNING
1.1
oversight
Formalise and disclose the functions reserved to the
board and those delegated to management
PRINCIPAL 2: Structure the Board to add value
2.1
A majority of the Board should be independent
Directors
The Chairperson should be an independent director
The roles of Chairperson and Chief Executive Officer
should not be exercised by the same individual
2.4 The board should establish a nomination committee
PRINCIPAL 3: Promote ethical and responsible decision-
3.1
making
Establish a code of conduct to guide the director’s, the
Chief Executive Officer (or equivalent), the Chief
Financial Officer (or equivalent) and any other key
executives as to:
3.1.1
the practices necessary to maintain
confidence in the Company’s integrity.
he responsibility and accountability of
individuals for reporting or investigating
reports of unethical practices.
3.2 Disclose the policy concerning trading in Company
securities by Directors. Officers and Employees;
3.1.2
PRINCIPAL 4: Safeguard integrity in financial reporting
4.1
Require the chief executive officer (or equivalent) to
state in writing to the Board that the company’s
financial reports present a true and fair view, in all
material respects, of the company’s financial condition
and operational results and are in accordance with
relevant accounting standards.
The board should establish an audit committee.
2.2
2.3
4.2
4.3
All Board and Management functions fully detailed in a best
practice and responsibility document..
COMPLIANCE OR DETAILS OF PLANNING
Ausmet has a majority of non-executive Directors
The Board considers that the executive role carried out by the
Chairman is in the best interests of the Company. This matter
is constantly reviewed and will be amended if deemed necessary.
The Board considers that the executive role fulfilled by the
Chairman is in the best interests of the Company and is
appropriate for its current stage of development.
The Board fulfills role of Nomination Committee.
COMPLIANCE OR DETAILS OF PLANNING
A comprehensive Code of Conduct has been adopted.
A strict policy has been adopted and is disclosed in the
Corporate Governance Statement.
COMPLIANCE OR DETAILS OF PLANNING
Completed by Chairman in conjunction with Auditor
The role of Audit Committee has been assumed by the two
Non executive Directors and the Company Secretary.
Structure the audit committee so that it consists of:
● Only non-executive Directors
A majority of independent Directors.
An independent chairperson who is not the
chairperson of the Board.
At least three members.
Complied with.
4.4
The audit committee should have a formal operating
charter.
Not appropriate at this time.
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●
●
●
AUSMET RESOURCES LIMITED
GOOD GOVERNANCE AND PRACTICE RULES (CONT)
CORPORATE GOVERNANCE STATEMENT
PRINCIPAL 5: Make timely and balanced disclosure.
5.1
Establish written policies and procedures designed to
ensure compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at a senior
management level for that compliance
PRINCIPAL 6: Respect the rights of shareholders
6.1 Design and disclose a communications strategy to
promote effective communication with shareholders
and encourage effective participation at general
meetings
Request the external auditor to attend the annual
general meeting and be available to answer shareholder
questions about the audit and the preparation and
content of the auditors report.
PRINCIPAL 7: Recognise and manage risk.
7.1
6.2
The Board or appropriate Board committee s h o u l d
establish policies on risk oversight and
management.
The chief executive officer (or equivalent) and the
chief financial officer (or equivalent) should state to
the Board in writing that:
7.2.1 The statement given in accordance with best
practice recommendation 4.1 (the integrity of
financial statements) is founded on a sound
system of risk management and internal
compliance and control which implements
the policies adopted by the Board.
7.2
7.2.2 The company’s risk management and internal
compliance and control system is operating
efficiently and effectively in all material
aspects
PRINCIPAL 8: Encourage enhanced performance.
8.1 Disclose the process for performance evaluation of the
Board, its committees and individuals
Directors, and key executives.
PRINCIPAL 9: Remunerate fairly and responsibly
9.1
Provide disclosure in relation to the company’s
remuneration policies to enable investors to understand
(i) the cost and benefits of these policies and (ii) the
link between remuneration paid to Directors and key
executives and corporate performance.
The Board should establish a remuneration committee.
Clearly distinguish the structure of non-executive
Directors remuneration from that of executives.
Ensure that payment of equity-based executive
remuneration is made in accordance with thresholds set
in plans approved by shareholders.
9.2
9.3
9.4
COMPLIANCE OR DETAILS OF PLANNING
Complied with.
COMPLIANCE OR DETAILS OF PLANNING
Complied with.
Complied with.
COMPLIANCE OR DETAILS OF PLANNING
Complied with.
Complied with.
COMPLIANCE OR DETAILS OF PLANNING
Complied with.
COMPLIANCE OR DETAILS OF PLANNING
Complied with.
Complied with.
Complied with.
Complied with.
PRINCIPAL 10: Recognise the legitimate interest of
stakeholders.
COMPLIANCE OR DETAILS OF PLANNING
10.1 Establish and disclose a code of conduct to guide
compliance with legal and other obligations to
legitimate stakeholders.
Complied with.
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AUSMET RESOURCES LIMITED
CORPORATE GOVERNANCE STATEMENT
BOARD OF DIRECTORS
The Board is responsible for the overall Corporate Governance of the Company including the strategic direction,
establishing goals for management and monitoring the achievement of these goals. The Board has also established
a framework for the management of the Company including setting levels of remuneration for Directors and senior
personnel, an overall framework of internal control and the establishment of appropriate ethical standards.
The Board regularly reviews the Company’s operational and financial performance and reviews and approves detailed
budgets and investment opportunities. The Board works closely with executive management to identify and manage
operational, financial and legislative risks.
To ensure the Board is well equipped to discharge its responsibilities it has established guidelines for the nomination
and selection of Directors and for the operation of the Board.
COMPOSITION OF THE BOARD
Principle 2 of the Good Governance and Practice Rules recommends that;
The Chairperson should be an independent and Non-Executive Director.
Whilst the Chairman and Chief Executive Officer roles are exercised by the same person, the Board recognises that
at this time such an arrangement is appropriate for economic reasons and the efficient management and growth of
the Company.
When a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the
services of a new Director with particular skills, the Board selects a candidate or panel of candidates with the
appropriate expertise and experience. The Board then appoints the most suitable candidate who must stand for
election at the next general meeting of shareholders. The Company does not have a formal Nomination Committee
and that role is fulfilled by the whole Board..
The full Board currently holds scheduled meetings each year plus any extraordinary meetings at such other times as
may be necessary to address any specific significant matters that may arise.
BOARD RESPONSIBILITIES
As the Board acts on behalf of and is accountable to the shareholders, the Board seeks to identify the expectations
of shareholders, as well as other regulatory and ethical expectations and obligations. In addition, the Board is
responsible for identifying areas of significant business risk and ensuring arrangements are in place to adequately
manage those risks. The Board seeks to discharge these responsibilities in a number of ways.
The responsibility for the operation and administration of the Company is delegated by the Board to the executive
team. The Board ensures that this team is appropriately qualified and experienced to discharge their responsibilities
and has in place procedures to assess the performance of the executive team.
The Board is responsible for ensuring that managements’ objectives and activities are aligned with the expectations
and risks identified by the Board.
MONITORING OF THE BOARD’S PERFORMANCE AND COMMUNICATION TO SHAREHOLDERS
The Board aims to ensure that the shareholders, on behalf of whom they act, are informed of all information
necessary to assess the performance of the Directors. Information is communicated to the shareholders through:
the annual report which is distributed to all shareholders;
the half-yearly report; and
the annual general meeting and other meetings so called to obtain approval for board action as appropriate.
All documents that are released publicly are made available on the Company’s website at www.ausmet.com.au
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AUSMET RESOURCES LIMITED
CORPORATE GOVERNANCE STATEMENT
INDEPENDENT PROFESSIONAL ADVICE
Each Director has the right to seek independent professional advice at the Company’s expense. However, prior
approval of the Chairman is required, which should not be unreasonably withheld.
REMUNERATION
Remuneration levels are set by the Board in accordance with industry standards to attract suitably qualified and
experienced Directors and senior executives.
ETHICAL STANDARDS
All Directors and employees are expected to act with the utmost of integrity and objectivity, striving at all times to
enhance the reputation and performance of the Company.
CONFLICT OF INTEREST
In accordance with the Corporations Act 2001 and the Company’s Constitution, Directors must keep the Board
advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the
Board believes that a significant conflict exists the Director concerned does not receive the relevant board papers and
is not present at the meeting whilst the item is considered. There are no director related entity transactions with the
Company.
DIRECTORS DEALINGS IN COMPANY SHARES
The Constitution permits Directors to acquire shares in the Company. Company policy prohibits Directors from
dealing in Company shares whilst in possession of price sensitive information. Directors must notify the Company
Secretary once they have bought or sold shares in the Company or exercised options over ordinary shares. In
accordance with the provisions of the Corporations Act 2001 and the Listing Rules of the Australian Stock
Exchange, the Company on behalf of the Directors must advise the Australian Stock Exchange of any transactions
conducted by them in shares and/or options in the Company.
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AUSMET RESOURCES LIMITED
ASX ADDITIONAL INFORMATION
Pursuant to the Listing Requirements of the Australian Stock Exchange Limited, the shareholder information set
out below was applicable as at 10 September 2004.
Number of Shares and Options Holders
30,436,000 Ordinary Shares (AME)
15,218,000 Options (AMEO) Exercisable at 20 cents and expiring 31 December 2006.
Distribution of Equity Securities
Analysis of numbers of shareholders by size of holding:
Distribution
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
More than 100,000
Totals
Number of
Shareholders
0
3
78
305
44
430
Number of Option
Holders
0
77
45
259
20
401
Holders of Non Marketable Parcels
There were zero holders of less than a marketable parcel of ordinary shares.
Substantial Shareholders
The following shareholders are recorded in the register of Substantial Shareholders
Deep Yellow Limited
Mr Howard Dawson & M/s Leighth Dawson
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