EMP IRE RESOURCES LIMITED
AN D CO N TROLLED ENTITIES
AB N 32 092 47 1 513
Annual Report
FOR TH E YEAR ENDED 30 JUN E 2012
Empire Resources Limited is a Perth
based copper and gold focused explorer
with deposits in Western Australia.
TA BLE OF CONTENTS
PAGE
1. Corporate Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IFC
2. Highlights of 2011-2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Corporate Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Chairman’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. Review of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6. Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7. Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8. Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9. Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10. Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11. Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12. Directors’ Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
13. Auditor’s Independence Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
14. Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
15. Corporate Governance Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
16. Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
1. COR POR ATE DIRECTOR Y
DIRECTORS
Tom Revy BAppSc – Chairman
David Sargeant BSc – Managing Director
Adrian Jessup BSc(Hons) – Executive Director
MANAGEMENT
David Ross BSc(Hons) MSc –
Exploration Manager
COMPANY SECRETARY
Simon Storm BCom, BCompt(Hons), CA, FCIS
REGISTERED and PRINCIPAL OFFICE
53 Canning Highway
Victoria Park 6100
Western Australia
Phone +61 (0)8 9361 3100
Facsimile +61 (0)8 9361 3184
Email info@resourcesempire.com.au
Website www.resourcesempire.com.au
ABN 32 092 471 513
SHARE REGISTRY
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross 6153
Western Australia
AUDITOR
HLB Mann Judd
Level 4
130 Stirling Street
Perth 6000
Western Australia
STOCK EXCHANGE LISTING
The Company is listed on the
Australian Stock Exchange Limited.
Home Exchange Perth
ASX Code: Shares ERL
Page IFC
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
2.
Highlig hts 2011 – 2012
> Strong progress on multiple fronts as the company builds on its portfolio
of five copper-gold projects in Western Australia.
> Yuinmery and Penny’s Find projects expected to create substantial value
for our shareholders in the short term.
Yuinmery
> An extensive drilling program during the year has confirmed the
company’s flagship Yuinmery project supports a major mineralisation
system.
> Significant high grade copper-gold and zinc intersections at the A Zone
prospect which remain open at depth. The results include:
• 6m @ 3.0% Cu, 1.7g/t Au including 3m @ 4.0% Cu, 3.3g/t Au
• 6m @ 2.2% Cu, 1.2g/t Au including 3m @ 3.0% Cu, 2.0g/t Au
• 5m @ 2.8% Cu within 10m @ 1.8% Cu
• 3m @ 8.2% Zn within 8m @ 4.0% Zn
> Confidence in Yuinmery continues to grow with the project on track to
outline a second resource estimate at A Zone.
Penny’s Find (60% interest)
> Renegotiated joint venture terms represents a win-win for Empire and
partner Brimstone Resources Ltd. High grade gold intersections confirm
the underground potential of the project, with mineralisation remaining
open at depth and a new hanging wall lode also enhancing the project
economics. Current resource of 314,000 tonnes @ 5.18 g/t Au defined
to a vertical depth of 150m and remains open at depth. Recent
significant intersections include:
• 6m @ 13.34g/t Au from 113m, including 4m @ 19.43g/t Au
• 2m @ 12.95g/t Au from 101m, within 8m @ 4.02g/t Au
• 3m @ 14.42g/t Au from 143m to EOH
> Positive outlook with mining operations hoping to commence mid-2013.
> Penny’s Find Mining Lease granted to 2033.
Wynne
> Grassroots exploration success at the Wynne project with oxide copper
mineralisation discovered.
Damperwah
> Copper sulphide mineralisation discovered at the Damperwah project.
SUBSEQUENT TO 30 JUNE 201 2
> Commencement of a major 3000 metre reverse circulation and diamond
drilling program at Penny’s Find to expand the size of the resource and
aid in mine planning.
> Brimstone Resources have stated they plan to commence open pit
mining at the Penny’s Find gold deposit within 12 months.
> Induced Polarisation survey completed at Yuinmery identifies three priority
drill targets.
3.
Corporate Objective s
Empire Resources Ltd has a
long term objective to become
a successful mining house
built on the discovery and
development of world class
mineral deposits.
In the short term, Empire
Resources is committed
to enhancing value for
shareholders by obtaining cash
flow from the Company’s
existing copper, gold and
platinum deposits.
Empire’s options for realising
value include delineating
reserves and commencing
mining operations; entering
into significant farm-out or
royalty arrangements or by
acquiring new opportunities to
provide an early cash flow.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 1
4. CHAIR MAN’S R EPORT
Dear Shareholders
The 2012 financial year has been another busy and exciting year for Empire Resources, with the Company’s work
predominantly focused on expanding the A Zone prospect within the Yuinmery Project in Western Australia. Major
advances were made at A Zone through an extensive drilling program which intersected wide copper intersections
which remain open beyond 200 metres depth. Some of the better results from this program included 5m at 4.4% copper
within 19m at 1.8% copper, 0.3g/t gold, 4m at 4.7% copper, 0.5g/t gold and 3m at 8.2% zinc.
Such strong and consistent results underline the Company’s view that the Yuinmery Project is part of a large
mineralized system which offers significant opportunities for Empire going forward. This coming year will see drilling
continue at A Zone with the aim of outlining a maiden resource there, adding to the Just Desserts resource of 1.07
million tonnes at 1.8% copper and 0.8g/t gold already outlined.
In addition, recently completed geophysics has enhanced Empire’s knowledge of the geological and structural controls
immediately adjacent to the Just Desserts and A Zone project areas. Empire remains confident that this understanding
will assist in adding to the Company’s resource base during 2013.
While your Company was very encouraged by the results, the stock market was in a period of decline and Empire’s
shares were not immune. Investors have felt the effects of softer economic activity around the world. As a consequence,
Empire Resources has prudently managed expenditure to ensure it continues to focus on the key components of an
attractive mining project: proven and relevant management, a region of high prospectivity, mainstream commodities,
quality resources and simple mining and metallurgy.
In line with the Company’s philosophy to reduce risk through project diversity, during the 2011/12 year Empire
also explored numerous other regions to provide shareholders with opportunities to add to its projects portfolio. This
included exploration activity at the Wynne project in the Gascoyne region of Western Australia and the Damperwah
project, also in Western Australia.
During the course of the year, Empire also renegotiated the joint venture terms associated with its interest in the
Penny’s Find gold project located in the Eastern Goldfields of Western Australia. This represented a win-win for both
Empire and its partner Brimstone Resources Limited. High grade gold intersections have confirmed the underground
potential of the project and with mineralization open at depth and a new hanging wall lode identified, development
plans are likely to be studied and reviewed during 2012/13.
The coming year is shaping up as a very exciting time with follow up drilling at A Zone and Penny’s Find and exciting
results continuing to flow. Your board believes that the Company’s policy of systematically exploring several projects at
once is paying off and plans on testing several new prospects over the coming year.
The 2013 financial year will see the Company maintain its strategic focus on increasing shareholder value in
combination with prudent financial management. I remain confident that the management of the Company will
continue to operate in this manner and I would like to thank them all for their efforts during 2011/12.
Finally, I would also like to thank our shareholders for their support, patience and input during what has been a
challenging year for us all. We look forward to making further progress on our projects during the forthcoming year
which we hope will translate into increasing value for all shareholders.
Thomas Revy
Chairman
REGISTERED and PRINCIPAL OFFICE
53 Canning Highway, Victoria Park WA 6100 (cnr Taylor Street)
Phone +618 9361 3100 Fax +618 9361 3184
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
5.
REVIEW OF OP ERATIONS
Empire Resources Ltd listed on the Australian Stock
Exchange in February 2007 with a focus on copper
and gold exploration and driven by a team with
extensive resource development experience.
In a short five year history, Empire Resources has
continuously shown an ability to locate new projects,
by reinterpreting existing data and securing tenements
with unrealised potential.
This knack of sourcing projects and then following
through with solid drilling programs has seen the
company rack up six major mineral discoveries in the
resource-rich state of Western Australia, with JORC
compliant resources at two of these.
An ability to think outside the square in a competitive
resources market, has resulted in Empire Resources
securing a portfolio of projects with copper, gold, zinc
and platinum group metals, which will add real value
to shareholders as the opportunities are developed.
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Project Location Map
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
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Yuinmery – Copper, Gold, Zinc, Platinum Group Metals Project
(100% interest and option to earn over 88.9% interest on adjoining tenements)
The flagship project for Empire Resources is the 100 percent owned, multi-mineral Yuinmery project, located 475
kilometres northeast of Perth in Western Australia.
The Yuinmery project sits in the base metal rich, but underexplored Youanmi Greenstone Belt with the principal target
being volcanogenic massive sulphide (VMS) deposits. Elsewhere in the world, VMS deposits typically occur as a cluster
of individual prospects which are often mined to great depths. Similar VMS deposits are found at the Golden Grove
mine to the west and Jaguar mine to the east underlining the potential of Yuinmery.
The excitement of Yuinmery springs from the calibre of intersections, with a string of high grade copper-gold results at
two of the projects most advanced prospects – Just Desserts and A Zone.
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
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Yuinmery – Just Desserts Prospect
Interest in Yuinmery increased after excellent drilling
results in 2007-2008 discovered high grade copper-
gold zones at the Just Desserts prospect. Assay results
included 23m @ 2.7% Cu, 1.3g/t Au; 14m @ 2.6% Cu,
1.9g/t Au; 13m @ 2.6% Cu, 1.7g/t Au; 6m @ 3.8% Cu,
12.9g/t Au and 10m @ 4.2% Cu, and 6.0g/t Au.
Based on the above drilling an indicated and inferred
JORC resource of 1.07 million tonnes @ 1.8% Cu, 0.8g/t
Au was estimated for Just Desserts. This resource lies
between 50 and 250 metres below surface.
During 2012 four reverse circulation holes were
drilled at Just Desserts to test beneath the existing
resource for additional high grade deposits.
One hole intersected 6m @ 2.3% Cu, 1.0g/t Au within
22m @ 1.3% Cu, 0.4g/t Au confirming mineralisation
continues at depth. Further drilling is planned around
and also within the currently defined resource itself to
upgrade inferred resources to indicated.
In September 2010 Empire Resources entered into an
option agreement to purchase an interest in adjoining
tenements held by La Mancha Resources Ltd. This
deal means Empire’s tenement holding has increased
to 308 km2 in this base metal rich province, giving the
project significant scope as it develops.
Of major interest to Empire Resources was an
airborne electromagnetic survey completed by
La Mancha over their tenements which revealed
numerous untested conductive zones for base metal
sulphides.
The deal has paid dividends, with subsequent
exploration on the La Mancha tenements leading to
the discovery of significant copper-gold mineralisation
at the A Zone prospect and large widths of low grade
platinum – palladium mineralisation (PGM) at the
Constantine prospect which included intersections of
up to 80m @ 0.49 g/t Pt+Pd.
During the past year Empire Resources has targeted
its reverse circulation and diamond drilling programs
at 14 different prospects on both Empire’s and La
Mancha’s tenements, with a focus on the A Zone
prospect.
Fifty holes totaling 10,785m of reverse circulation
drilling and seven diamond core tails totaling 939m
were completed during fiscal 2012, mostly at the A
Zone prospect.
Page 6
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
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Yuinmery – A Zone Prospect
The A Zone prospect is located 1.3 kilometres north of Just Desserts, where drilling in 2012 has reinforced the view
that A Zone hosts a major copper-gold deposit.
Intersections at A Zone include:
• 5m @ 4.4% Cu, 0.4g/t Au within 19m @ 1.8% Cu, 0.3g/t Au
• 4m @ 4.7% Cu, 0.5g/t Au within 7m @ 3.2% Cu, 0.3g/t Au
• 3m @ 8.2% Zn within 8m @ 4.0% Zn
• 7m @ 2.2% Cu, 0.6g/t Au within 12m @ 1.8% Cu, 0.5g/t Au
• 3m @ 4.0% Cu, 3.3g/t Au within 6m @ 3.0% Cu, 1.7g/t Au
• 5m @ 2.8% Cu, 1.2g/t Au within 10m @ 1.8% Cu, 0.9g/t Au
The copper–gold and zinc mineralisation at A Zone occurs in two horizons which dip eastwards and plunge to the
north. The Upper Horizon hosts the major mineralisation and remains open down plunge.
Ongoing drilling will allow Empire Resources to calculate a maiden resource at A Zone which will expand the total
resource base of Yuinmery, lifting the economics of the total project and triggering a development plan.
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Yuinmery – YC5 Prospect
Previous down-hole electromagnetic surveys detected a large anomaly at the YC5 prospect which is located 1.4
kilometres north of A Zone.
The top part of this anomaly was tested by a single deep reverse circulation hole during the year which confirmed the
anomaly is due to the presence of sulphides. Hole YRC11-15 intersected three metres of banded pyrite mineralisation
containing anomalous copper and zinc values.
A diamond tail is planned to test the centre of this large anomaly based on the VMS model of a pyrite halo surrounding
a base metal rich core.
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(cid:89)(cid:117)(cid:105)(cid:110)(cid:109)(cid:101)(cid:114)(cid:121)(cid:32) (cid:80)(cid:114)(cid:111)(cid:106)(cid:101)(cid:99)(cid:116)
(cid:89)(cid:67)(cid:53)(cid:32) (cid:80)(cid:82)(cid:79)(cid:83)(cid:80)(cid:69)(cid:67)(cid:84)
(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:32) (cid:83)(cid:69)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 9
Page 10
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Yuinmery – Augustus
Yuinmery – Other Prospects
Reverse circulation drilling at the Augustus prospect
intersected 18m @ 0.5% Cu at 200metres vertical
depth. Future reverse circulation drilling will test the
shallower, potentially higher grade supergene blanket
above this significant intersection.
Reverse circulation and diamond drilling at the
Trajan, Smith Well, Hadrian, Lorne Gossan, YC6,
YC11 and YC14 prospects intersected zones of weak
copper and/or zinc mineralisation associated with
chloritised pyritic tuffs and volcanogenic sediments.
One reverse circulation hole was also completed 500
metres north of the Constantine prospect testing the
same platinum group metals (PGM) bearing horizon.
This hole intersected 8m @ 0.2% Cu, 0.3% Ni and
0.6g/t Pt+Pd from 96 metres depth. Future work will
concentrate on the PGM horizon to the south of
Constantine to locate high grade zones of PGMs.
In the coming year exploration drilling will target
a number of other geophysical and/or geochemical
anomalies which have strong potential for hosting
base metal sulphide mineralisation. These include the
YC3A, YC10, YC16, YC23 YC24 and Maximus
prospects.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 11
Penny’s Find (WA) – Gold Project
60% interest
The first discovery for the company in 2007 was
Penny’s Find, a near surface, high grade gold deposit
situated in the Eastern Goldfields of Western Australia,
within close proximity to the gold mining centres of
Kalgoorlie and Kanowna Belle.
Initial drilling at Penny’s Find outlined a JORC
compliant resource of 314,000 tonnes at 5.2 g/t gold
to 150 metres remaining open at depth. Drilling
results both confirmed the high grade nature of the
project and underlined its potential.
PENNY’S FIND MINERAL RESOURCE
Category
Measured
Indicated
Inferred
TOTAL
Tonnes
79,000
132,000
103,000
314,000
Grade* (g/t Au)
Ounces
4.40
3.98
7.33
5.18
11,120
16,880
24,313
52,313
* Grades are based on a minimum cut-off of 0.5 g/t Au and
high assays cut to 25 g/t Au.
• In February 2012 Empire Resources revisited its
staged sale agreement with 40 percent equity owner,
unlisted company Brimstone Resources Ltd. The
new agreement comprises either – A total cash
payment by Brimstone of $3 million by June 2013
for a 100 percent interest in the project, together
with royalty payments on any gold produced in
excess of 52,500 oz. This includes a non-refundable
payment of $500,000 already made to Empire for
the initial 40 percent interest in the project.
Or
• Brimstone may increase its project interest to 51
percent through the expenditure of $750,000 by
30 September 2012, with further expenditure of
an additional $750,000 by June 2013 to increase
its interest to 75 percent. In either case, Empire’s
mining establishment costs would be carried and
repayable from production.
The renegotiated terms gives Brimstone additional
time to devote to the project, while Empire will gain
$3 million from the full sale of the project, or retain a
25 percent interest in the event of a partial sale.
Recent take-over interest in Brimstone Resources
by Singapore listed LionGold Corp Ltd sees the
company cashed up and focused on its Penny’s Find
drilling program, with a positive outlook of defining
ore reserves and commencing mining operations at
Penny’s Find by the middle of 2013.
Four reverse circulation holes have been recently
drilled to test the main lode in an area beneath
the base of a potential open pit with all four holes
intersecting significant gold mineralisation.
These include:
• 8m @ 4.0 g/t Au from 100 metres
• 6m @ 13.3g/t Au from 113 metres
• 15m @ 1.3g/t Au from 105 metres
• 3m @ 14.4g/t Au from 143 metres to EOH
Also intersected was a possible new hanging wall lode
which assayed 16m @ 2.3g/t Au from 20 metres
down hole. This shallow mineralisation currently
remains open along strike to the southeast and could
significantly enhance the project economics.
In the main lode, high grade, coarse gold
mineralisation is hosted by quartz veins at the contact
between shale and basalt. Metallurgical test work
has shown both oxide and fresh mineralisation to
be free milling with a high gravity recoverable gold
component of >60% and a total gold recovery of
>96%.
The Penny’s Find resource located on granted
mining lease M27/156 was recently granted a 21 year
extension to 2033.
Page 12
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
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Penny’s Find Location Map
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 13
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Page 14
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
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Wynne (WA) – Copper Project
100% interest
During 2012 Empire Resources initiated drilling at
its Wynne base metals project in Western Australia’s
Gascoyne region, located 260 kilometres northeast of
Carnarvon. The Wynne project is made up of two
exploration licences covering an area of 105 km2.
Surface sampling identified base metal gossans
outcropping in three horizons, over at least a 7 km
strike length. Assays in various samples showed up
to 0.25% Cu, 0.39% Pb, 0.14% Zn, 0.5g/t Au, 4.6% As,
347ppm Bi, 114ppm Mo and 128ppm W.
During the past year Empire Resources completed
a 15 hole, 1746 metre reverse circulation drilling
program to test these gossan horizons. This program
was part-funded under the Western Australian
Government’s co-funded drilling program.
The best intersection came from hole WRC12-01
where abundant visible secondary copper minerals
were intersected at a shallow depth between
5–6metres. This interval assayed 1m @ 3.9% Cu.
Another significant intersection came from hole
WRC12-08 which assayed 8m @ 0.56% Pb, 3g/t Ag
from 84 metre depth. The drilling revealed highly
altered and sheared mafic rocks containing small
amounts of sulphides containing copper, lead and zinc.
Examination by thin section of selected rocks from the
recent drilling revealed rocks and sulphides similar to
those of the Eastern Creek succession at Mt Isa. The
host rocks at Mount Isa are silicified, carbonaceous
dolomitic shale, but here the higher metamorphic
grade may convert such rocks to actinolite-calcite rich
calc-silicates like that found in our drilling.
Significant copper and lead mineralisation has been
identified in the first round of drilling at Wynne and
future work will follow up on this.
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 15
Damperwah(WA) – Copper Project
Earning 70% interest
Empire Resources added to its discovery portfolio in
2012 by identifying the Damperwah project which sits
in an area of volcanogenic massive sulphide copper
mineralisation in the Warriedar Fold Belt in Western
Australia, 320 kilometres northeast of Perth and 60
kilometres southwest of the Golden Grove copper-
zinc mine.
Gossan at Sears Prospect
An agreement was negotiated where Empire can
earn a 70% interest in an exploration licence held
by prospectors by reimbursing past expenditure and
spending a total of $1,000,000 over a 5 year period.
Sampling by Empire uncovered three gossanous
ironstone lenses in areas where only minimal previous
exploration had been undertaken. The gossanous
ironstones are geochemically anomalous in copper
with rock chip values up to a maximum of 2,880 ppm
Cu. The largest gossanous zone, the Sears prospect, has
a strike length in excess of 250 metres and a width up
to 15 metres.
Initial drilling of four reverse circulation holes, totaling
430 metres, at Damperwah during 2012 were aimed at
testing the Sears prospect.
Beneath the gossan zone, drilling intersected a
15 metre thick garnet bearing meta-sedimentary
horizon carrying minor amounts of finely disseminated
pyrite throughout. At the base of this horizon a
three metre interval contained minor disseminated
chalcopyrite (CuFeS2) mineralisation which assayed
2m @ 0.16% Cu.
It is Empire’s intention to conduct both down-hole
and surface electromagnetic geophysical surveys to
locate any accumulations of massive copper sulphide
mineralisation in the vicinity of these encouraging
initial intersections.
Any significant anomalies detected will then be drill
tested.
Page 16
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
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(cid:55)(cid:32) (cid:48)(cid:48)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:32) (cid:109)(cid:78)
(cid:53)
(cid:48)
(cid:48)(cid:32)
(cid:48)
(cid:48)
(cid:48)(cid:32)
(cid:109)
(cid:69)
(cid:69)
(cid:50)(cid:48)
(cid:52)(cid:48)
(cid:54)(cid:48)
(cid:56)(cid:48)
(cid:49)(cid:48)(cid:48)
(cid:49)(cid:50)(cid:48)
(cid:83)(cid:69)(cid:82)(cid:80)(cid:69)(cid:78)(cid:84)(cid:73)(cid:78)(cid:73)(cid:84)(cid:69)
(cid:71)(cid:65)(cid:66)(cid:66)(cid:82)(cid:79)
(cid:77)
(cid:82)
(cid:69)
(cid:32)(cid:32)(cid:76)(cid:65)(cid:89)
(cid:32)
(cid:72)(cid:32)
(cid:77)
(cid:32)(cid:32)(cid:32)(cid:32)(cid:32)(cid:32)
(cid:32)(cid:32)
(cid:83)
(cid:69)(cid:84)(cid:73)(cid:84)(cid:69)(cid:32)(cid:32)(cid:32)(cid:32)(cid:82)(cid:73)(cid:67)
(cid:78)
(cid:71)
(cid:65)
(cid:48)
(cid:53)(cid:48)(cid:32) (cid:109)(cid:101)(cid:116)(cid:114)(cid:101)(cid:115)
(cid:85)
(cid:82)(cid:79)
(cid:70)(cid:69)
(cid:69)(cid:84)(cid:73)
(cid:78)
(cid:65)(cid:82)
(cid:71)
(cid:32)(cid:115) (cid:101) (cid:111) (cid:102)
(cid:66) (cid:97)
(cid:87) (cid:104) (cid:101) (cid:114) (cid:105)
(cid:101) (cid:97) (cid:116)
(cid:110) (cid:103)
(cid:78)(cid:84)
(cid:69)
(cid:68)(cid:73)(cid:77)
(cid:69)
(cid:83)
(cid:65)
(cid:84)
(cid:69)
(cid:49)(cid:51)(cid:50)(cid:109)
(cid:68)(cid:79)(cid:76)(cid:69)(cid:82)(cid:73)(cid:84)(cid:69)
(cid:49)(cid:48)(cid:48)(cid:109)
(cid:77)(cid:73)(cid:78)(cid:69)(cid:82)(cid:65)(cid:76)(cid:73)(cid:90)(cid:69)(cid:68)
(cid:72)(cid:79)(cid:82)(cid:73)(cid:90)(cid:79)(cid:78)
(cid:53)(cid:32) (cid:45)(cid:32) (cid:49)(cid:48)(cid:37)(cid:32) (cid:83)(cid:85)(cid:76)(cid:80)(cid:72)(cid:73)(cid:68)(cid:69)(cid:83)
(cid:68)(cid:97)(cid:109)(cid:112)(cid:101)(cid:114)(cid:119)(cid:97)(cid:104)(cid:32) (cid:80)(cid:114)(cid:111)(cid:106)(cid:101)(cid:99)(cid:116)
(cid:78)(cid:79)(cid:82)(cid:84)(cid:72)(cid:69)(cid:82)(cid:78)(cid:32) (cid:76)(cid:73)(cid:78)(cid:69)
(cid:67)(cid:82)(cid:79)(cid:83)(cid:83)(cid:32) (cid:83)(cid:69)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)
Sears Prospect Cross Section
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 17
(cid:32)
(cid:32)
Troy Creek (WA) – Copper, Gold, Platinum Group Metals Project
45% interest
The Troy Creek project is made up of tenements
covering 270km2 located 180 kilometres northeast
of Wiluna in Western Australia, where in 2008 a
discovery of high grade copper sulphide mineralisation
was made.
Several prominent geochemical and magnetic targets
have been identified in sedimentary rocks within
Empire’s tenements. These include a large zone of
multi-element anomalous geochemistry in sedimentary
rocks which extend along strike for a distance of more
than 20 kilometres. This zone, defined by rock chip
sampling, soil geochemistry and limited drilling, is
anomalous in copper, gold, platinum group metals,
arsenic, silver and antimony.
Reverse circulation drilling during 2008 and 2009 at
the Main Gossan prospect, which lies within this zone,
intersected high grade copper sulphide mineralisation.
Drill intersections have included 36m @ 0.76% Cu
including 2m @ 4.65% Cu and 3m @ 1.97% Cu; 8m @
1.47% Cu and 4m @ 3.04% Cu.
The copper mineralisation consists of fine grained
stratiform copper and iron sulphides in graphitic
and calcareous shale and shows some similarities to
“Kupferscheifer Style” mineralisation which forms
world class copper deposits in Germany and southwest
Poland.
(cid:50)(cid:48)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:109)(cid:69)
(cid:50)(cid:53)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:109)(cid:69)
(cid:51)(cid:48)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:109)(cid:69)
(cid:51)(cid:53)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:109)(cid:69)
(cid:52)(cid:48)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:109)(cid:69)
(cid:55)(cid:32) (cid:50)(cid:48)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:109)(cid:78)
(cid:84)(cid:82)(cid:79)(cid:89)(cid:32) (cid:67)(cid:82)(cid:69)(cid:69)(cid:75)(cid:32) (cid:80)(cid:82)(cid:79)(cid:74)(cid:69)(cid:67)(cid:84)
(cid:82)(cid:111)(cid:117)(cid:116)(cid:101)
(cid:70)(cid:111)(cid:114)(cid:98)(cid:101)(cid:115)(cid:32) (cid:79)(cid:117)(cid:116)(cid:99)(cid:97)(cid:109)(cid:112)
(cid:107)
(cid:111)(cid:99)
(cid:116)
(cid:83)
(cid:55)(cid:32) (cid:49)(cid:53)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:109)(cid:78)
(cid:55)(cid:32) (cid:49)(cid:48)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:109)(cid:78)
(cid:77)(cid:101)(cid:101)(cid:107)(cid:97)(cid:116)(cid:104)(cid:97)(cid:114)(cid:114)(cid:97)
(cid:49)(cid:56)(cid:48)(cid:107)(cid:109)
(cid:48)
(cid:83)(cid:99)(cid:97)(cid:108)(cid:101)
(cid:50)(cid:53)
(cid:53)(cid:48)(cid:107)(cid:109)
(cid:68)(cid:65)(cid:84)(cid:85)(cid:77)(cid:58)(cid:32)
(cid:32) (cid:71)(cid:68)(cid:65)(cid:57)(cid:52)(cid:32)
(cid:32) (cid:90)(cid:111)(cid:110)(cid:101)(cid:32) (cid:53)(cid:49)
(cid:55)(cid:32) (cid:48)(cid:53)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:109)(cid:78)
(cid:76)(cid:101)(cid:105)(cid:110)(cid:115)(cid:116)(cid:101)(cid:114)(cid:32) (cid:49)(cid:53)(cid:48)(cid:107)(cid:109)
(cid:87)(cid:105)(cid:108)(cid:117)(cid:110)(cid:97)
(cid:71)(cid:114)(cid:97)(cid:110)(cid:105)(cid:116)(cid:101)(cid:32) (cid:80)(cid:101)(cid:97)(cid:107)(cid:32) (cid:83)(cid:116)(cid:110)
(cid:69)(cid:97)(cid:114)(cid:97)(cid:104)(cid:101)(cid:101)(cid:100)(cid:121)(cid:32) (cid:83)(cid:116)(cid:110)
(cid:110)(cid:103)
(cid:105)
(cid:110)
(cid:110)
(cid:97)
(cid:67)
(cid:77)(cid:97)(cid:100)(cid:109)(cid:97)(cid:110)(cid:32) (cid:79)(cid:117)(cid:116)(cid:99)(cid:97)(cid:109)(cid:112)
(cid:84)(cid:82)(cid:79)(cid:89)(cid:32) (cid:67)(cid:82)(cid:69)(cid:69)(cid:75)
(cid:84)(cid:82)(cid:79)(cid:89)(cid:32) (cid:67)(cid:82)(cid:69)(cid:69)(cid:75)
(cid:80)(cid:82)(cid:79)(cid:74)(cid:69)(cid:67)(cid:84)
(cid:80)(cid:82)(cid:79)(cid:74)(cid:69)(cid:67)(cid:84)
(cid:84)(cid:114)(cid:111)(cid:121)(cid:32) (cid:67)(cid:114)(cid:101)(cid:101)(cid:107)(cid:32) (cid:80)(cid:114)(cid:111)(cid:106)(cid:101)(cid:99)(cid:116)
(cid:76)(cid:79)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)
(cid:74)(cid:117)(cid:108)(cid:121)(cid:32) (cid:50)(cid:48)(cid:48)(cid:57)
Page 18
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
(cid:32)
These similarities include stratiform mineralisation
over large areas, the presence of adjacent haematitic
oxidized rocks and comparable geochemistry
- anomalous copper, silver, arsenic, and zinc,
with adjacent but discrete platinum group metals
mineralisation, for example 7m @ 0.59g/t Pt + Pd.
Zodiac Resources Pty Ltd, who are currently earning
an interest in the project, commenced exploration
activity this year on the Troy Creek tenements with a
17 hole reverse circulation (RC) drill program totalling
2685m at the Main Gossan prospect. The program
was designed to extend the zone of copper sulphide
mineralisation intersected previously by Empire near
the northwest end of a 1 kilometre long gossan-chert
unit hosted by pyritic black shale.
The drill intercepts, up to 6m @ 1.8% Cu within
21m @ 0.6% Cu, basically replicated those obtained
previously by Empire Resources but did not
significantly extend the mineralisation along strike.
A review of previous exploration data by Zodiac
Resources has revealed that the Main Gossan prospect
area is part of a regionally extensive zone of pyritic
black shale and gossan-chert outcrops containing
anomalous copper and gold in surface rock chip
samples and shallow drill holes.
Several zones more highly anomalous than the Main
Gossan outcrop are evident and require further
definition followed by drill testing.
(cid:55)(cid:32) (cid:50)(cid:48)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:109)(cid:78)
(cid:69)
(cid:109)
(cid:48)
(cid:48)
(cid:48)
(cid:48)(cid:32)
(cid:50)
(cid:51)
(cid:71)(cid:111)(cid:115)(cid:115)(cid:97)(cid:110)(cid:32) (cid:97)(cid:110)(cid:100)(cid:47)(cid:111)(cid:114)(cid:32)
(cid:67)(cid:117)(cid:44)(cid:32) (cid:65)(cid:115)(cid:44)(cid:32) (cid:65)(cid:117)(cid:44)(cid:32) (cid:80)(cid:71)(cid:77)(cid:32) (cid:105)(cid:110)(cid:32) (cid:100)(cid:114)(cid:105)(cid:108)(cid:108)(cid:32) (cid:104)(cid:111)(cid:108)(cid:101)(cid:115)
(cid:32) (cid:97)(cid:110)(cid:111)(cid:109)(cid:97)(cid:108)(cid:111)(cid:117)(cid:115)
(cid:77)(cid:97)(cid:103)(cid:110)(cid:101)(cid:116)(cid:105)(cid:99)(cid:32) (cid:116)(cid:97)(cid:114)(cid:103)(cid:101)(cid:116)(cid:115)
(cid:70)(cid:114)(cid:101)(cid:114)(cid:101)(cid:32) (cid:70)(cid:111)(cid:114)(cid:109)(cid:97)(cid:116)(cid:105)(cid:111)(cid:110)
(cid:89)(cid:101)(cid:108)(cid:109)(cid:97)(cid:32) (cid:70)(cid:111)(cid:114)(cid:109)(cid:97)(cid:116)(cid:105)(cid:111)(cid:110)
(cid:77)(cid:97)(cid:105)(cid:110)(cid:32) (cid:71)(cid:111)(cid:115)(cid:115)(cid:97)(cid:110)
(cid:83)(cid:99)(cid:97)(cid:108)(cid:101)
(cid:48)
(cid:50)(cid:48)(cid:48)(cid:48)(cid:109)(cid:101)(cid:116)(cid:114)(cid:101)(cid:115)
(cid:84)(cid:114)(cid:111)(cid:121)(cid:32) (cid:67)(cid:114)(cid:101)(cid:101)(cid:107)(cid:32) (cid:80)(cid:114)(cid:111)(cid:106)(cid:101)(cid:99)(cid:116)
(cid:69)(cid:88)(cid:80)(cid:76)(cid:79)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:32) (cid:84)(cid:65)(cid:82)(cid:71)(cid:69)(cid:84)(cid:83)
(cid:77)(cid:97)(cid:121)(cid:32) (cid:50)(cid:48)(cid:48)(cid:57)
(cid:67)(cid:111)(cid:108)(cid:108)(cid:105)(cid:110)(cid:115)(cid:32) (cid:66)(cid:111)(cid:114)(cid:101)
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 19
Yarlarweelor (WA) – Uranium Project
28% indirect interest
The Yarlarweelor uranium project is located 125km
north of Meekatharra in Western Australia.
Empire Resources sold 100 percent of the
Yarlarweelor project in April 2010 to FYI Resources
Ltd. As part of the sale agreement, Empire Resources
emerged with a direct 32 percent stake in FYI
Resources and two seats on its Board.
This project shows potential to host large tonnages of
primary uranium mineralisation.
Previous exploration during the early 1980’s
discovered primary uranium mineralisation in the form
of uraninite at five locations within the project area.
Four of these are from within the Archaean Despair
Granite where limited drilling showed the uraninite
mineralisation to be hosted in multiple parallel shear
zones and the surrounding granites.
(cid:54)
(cid:48)
(cid:48)
(cid:48)
(cid:48)
(cid:48)
(cid:109)
(cid:69)
(cid:54)
(cid:50)
(cid:48)
(cid:48)
(cid:48)
(cid:48)
(cid:109)
(cid:69)
(cid:69)(cid:53)(cid:50)(cid:47)(cid:50)(cid:52)(cid:55)(cid:56)
(cid:55)(cid:32) (cid:49)(cid:56)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:32) (cid:109)(cid:78)
(cid:69)(cid:53)(cid:50)(cid:47)(cid:50)(cid:48)(cid:57)(cid:53)
(cid:77)(cid:105)(cid:99)(cid:97)
(cid:66)(cid:111)(cid:114)(cid:101)
(cid:68)(cid:111)(cid:114)(cid:105)(cid:115)
(cid:78)(cid:111)(cid:114)(cid:116)(cid:104)
(cid:68)(cid:111)(cid:114)(cid:105)(cid:115)
(cid:75)(cid:97)(cid:110)(cid:103)(cid:97)(cid:114)(cid:111)(cid:111)
(cid:82)(cid:105)(cid:100)(cid:103)(cid:101)
(cid:75)(cid:97)(cid:110)(cid:103)(cid:97)(cid:114)(cid:111)(cid:111)
(cid:86)(cid:97)(cid:108)(cid:108)(cid:101)(cid:121)
(cid:85)(cid:114)(cid:97)(cid:110)(cid:105)(cid:117)(cid:109)(cid:32) (cid:80)(cid:114)(cid:111)(cid:115)(cid:112)(cid:101)(cid:99)(cid:116)
(cid:80)(cid:114)(cid:111)(cid:116)(cid:101)(cid:114)(cid:111)(cid:122)(cid:111)(cid:105)(cid:99)(cid:32) (cid:115)(cid:101)(cid:100)(cid:105)(cid:109)(cid:101)(cid:110)(cid:116)(cid:115)(cid:32) (cid:97)(cid:110)(cid:100)(cid:32) (cid:118)(cid:111)(cid:108)(cid:99)(cid:97)(cid:110)(cid:105)(cid:99)(cid:115)
(cid:65)(cid:114)(cid:99)(cid:104)(cid:97)(cid:101)(cid:97)(cid:110)(cid:32) (cid:68)(cid:101)(cid:115)(cid:112)(cid:97)(cid:105)(cid:114)(cid:32) (cid:71)(cid:114)(cid:97)(cid:110)(cid:105)(cid:116)(cid:101)
(cid:65)(cid:114)(cid:99)(cid:104)(cid:97)(cid:101)(cid:97)(cid:110)(cid:32) (cid:103)(cid:114)(cid:97)(cid:110)(cid:105)(cid:116)(cid:101)(cid:44)(cid:32) (cid:103)(cid:110)(cid:105)(cid:101)(cid:115)(cid:115)(cid:32) (cid:97)(cid:110)(cid:100)(cid:32) (cid:115)(cid:99)(cid:104)(cid:105)(cid:115)(cid:116)
(cid:70)(cid:97)(cid:117)(cid:108)(cid:116)
(cid:48)
(cid:53)(cid:107)(cid:109)
(cid:71)(cid:68)(cid:65)(cid:57)(cid:52)(cid:32) (cid:90)(cid:111)(cid:110)(cid:101)(cid:32) (cid:53)(cid:48)
(cid:89)(cid:97)(cid:114)(cid:108)(cid:97)(cid:114)(cid:119)(cid:101)(cid:101)(cid:108)(cid:111)(cid:114)(cid:32) (cid:80)(cid:114)(cid:111)(cid:106)(cid:101)(cid:99)(cid:116)
(cid:71)(cid:69)(cid:79)(cid:76)(cid:79)(cid:71)(cid:89)
Page 20
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
(cid:32)
(cid:32)
(cid:32)
(cid:32)
Since the completion of the Yarlarweelor sale, FYI
Resources has drilled four diamond holes, at the
Kangaroo Ridge and Doris prospects. These holes
intersected wide zones of uranium mineralisation
associated with biotite rich shear zones in granite,
confirming the presence of significant uranium
mineralisation at Yarlarweelor.
Results from the drilling at Kangaroo Ridge included:
• 35m @ 503ppm U3O8 including 5m @ 1,069ppm U3O8
• 7.8m @ 588ppm U3O8 including 1m @ 1,873ppm U3O8
• 14m @ 221ppm U3O8 including 1m @ 844ppm U3O8
(cid:87)(cid:101)(cid:115)(cid:116)
(cid:48)(cid:32) (cid:82)(cid:76)
(cid:75)
(cid:82)
(cid:80)
(cid:75)
(cid:82)
(cid:80)
(cid:49)
(cid:49)
(cid:51)
(cid:50)
(cid:70)(cid:114)(cid:101)(cid:115)(cid:104)(cid:32) (cid:82)(cid:111)(cid:99)(cid:107)
Results from a previous airborne radiometric survey
and geological mapping indicate shear zones with a
combined strike length in excess of 25 kilometres exist
within FYI’s tenements and may be prospective for
uranium mineralisation. A program of field checking
and sampling of aerial radiometric anomalies has
confirmed significant uranium anomalies exist to the
north and west of Kangaroo Ridge, none of which
have been drill tested to date.
(cid:69)(cid:97)(cid:115)(cid:116)
(cid:81)(cid:117)(cid:97)(cid:114)(cid:116)(cid:122)(cid:45)(cid:66)(cid:105)(cid:111)(cid:116)(cid:105)(cid:116)(cid:101)
(cid:83)(cid:99)(cid:104)(cid:105)(cid:115)(cid:116)
(cid:71)(cid:114)(cid:97)(cid:110)(cid:105)(cid:116)(cid:101)
(cid:83)(cid:99)(cid:97)(cid:108)(cid:101)
(cid:48)
(cid:53)(cid:48)(cid:109)(cid:101)(cid:116)(cid:114)(cid:101)(cid:115)
(cid:49)(cid:56)(cid:109)(cid:32) (cid:64)(cid:32) (cid:50)(cid:55)(cid:51)(cid:112)(cid:112)(cid:109)(cid:32) (cid:85) (cid:79)(cid:51)
(cid:56)
(cid:56)(cid:57)(cid:109)
(cid:72)(cid:111)(cid:108)(cid:101)(cid:32) (cid:75)(cid:82)(cid:68)(cid:49)(cid:48)(cid:45)(cid:48)(cid:50)
(cid:51)(cid:53)(cid:109)(cid:32) (cid:64)(cid:32) (cid:53)(cid:48)(cid:51)(cid:112)(cid:112)(cid:109)(cid:32) (cid:85) (cid:79)(cid:51)
(cid:105)(cid:110)(cid:99)(cid:108)(cid:115)(cid:32) (cid:53)(cid:109)(cid:32) (cid:64)(cid:32) (cid:49)(cid:44)(cid:48)(cid:54)(cid:57)(cid:112)(cid:112)(cid:109)(cid:32) (cid:85) (cid:79)(cid:51)
(cid:40)(cid:111)(cid:98)(cid:108)(cid:105)(cid:113)(cid:117)(cid:101)(cid:32) (cid:105)(cid:110)(cid:116)(cid:101)(cid:114)(cid:115)(cid:101)(cid:99)(cid:116)(cid:105)(cid:111)(cid:110)(cid:41)
(cid:56)
(cid:56)
(cid:50)(cid:49)(cid:109)(cid:32) (cid:64)(cid:32) (cid:52)(cid:48)(cid:52)(cid:112)(cid:112)(cid:109)(cid:32) (cid:85) (cid:79)(cid:51)
(cid:105)(cid:110)(cid:99)(cid:108)(cid:115)(cid:32) (cid:56)(cid:109)(cid:32) (cid:64)(cid:32) (cid:55)(cid:48)(cid:56)(cid:112)(cid:112)(cid:109)(cid:32) (cid:85) (cid:79)(cid:51)
(cid:56)
(cid:56)
(cid:49)(cid:54)(cid:57)(cid:109)
(cid:89)(cid:97)(cid:114)(cid:108)(cid:97)(cid:114)(cid:119)(cid:101)(cid:101)(cid:108)(cid:111)(cid:114)(cid:32) (cid:85)(cid:114)(cid:97)(cid:110)(cid:105)(cid:117)(cid:109)(cid:32) (cid:80)(cid:114)(cid:111)(cid:106)(cid:101)(cid:99)(cid:116)
(cid:75)(cid:97)(cid:110)(cid:103)(cid:97)(cid:114)(cid:111)(cid:111)(cid:32) (cid:82)(cid:105)(cid:100)(cid:103)(cid:101)(cid:32) (cid:80)(cid:114)(cid:111)(cid:115)(cid:112)(cid:101)(cid:99)(cid:116)
(cid:83)(cid:69)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:32) (cid:49)(cid:51)(cid:51)(cid:56)(cid:48)(cid:78)
(cid:53)(cid:48)(cid:109)
(cid:49)(cid:48)(cid:48)(cid:109)
(cid:49)(cid:53)(cid:48)(cid:109)
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 21
(cid:69)(cid:53)(cid:50)(cid:47)(cid:50)(cid:52)(cid:55)(cid:56)
(cid:54)
(cid:48)
(cid:48)
(cid:48)
(cid:48)
(cid:48)
(cid:109)
(cid:69)
(cid:65)(cid:78)(cid:79)(cid:77)(cid:65)(cid:76)(cid:89)(cid:32) (cid:50)
(cid:50)(cid:44)(cid:52)(cid:55)(cid:48)(cid:112)(cid:112)(cid:109)(cid:32) (cid:85) (cid:79)(cid:51)
(cid:56)
(cid:65)(cid:78)(cid:79)(cid:77)(cid:65)(cid:76)(cid:89)(cid:32) (cid:49)(cid:51)
(cid:49)(cid:44)(cid:51)(cid:50)(cid:51)(cid:112)(cid:112)(cid:109)(cid:32) (cid:85) (cid:79)(cid:51)
(cid:56)
(cid:65)(cid:78)(cid:79)(cid:77)(cid:65)(cid:76)(cid:73)(cid:69)(cid:83)(cid:32) (cid:49)(cid:56)(cid:32) (cid:38)(cid:32) (cid:50)(cid:52)
(cid:49)(cid:53)(cid:48)(cid:48)(cid:109)(cid:32) (cid:76)(cid:79)(cid:78)(cid:71)(cid:32) (cid:90)(cid:79)(cid:78)(cid:69)(cid:32) (cid:79)(cid:70)
(cid:66)(cid:73)(cid:79)(cid:84)(cid:73)(cid:84)(cid:69)(cid:32) (cid:83)(cid:72)(cid:69)(cid:65)(cid:82)(cid:83)
(cid:55)(cid:32) (cid:49)(cid:56)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:32) (cid:109)(cid:78)
(cid:69)(cid:53)(cid:50)(cid:47)(cid:50)(cid:48)(cid:57)(cid:53)
(cid:68)(cid:111)(cid:114)(cid:105)(cid:115)
(cid:78)(cid:111)(cid:114)(cid:116)(cid:104)
(cid:68)(cid:111)(cid:114)(cid:105)(cid:115)
(cid:68)(cid:101)(cid:115)(cid:112)(cid:97)(cid:105)(cid:114)(cid:32) (cid:71)(cid:114)(cid:97)(cid:110)(cid:105)(cid:116)(cid:101)
(cid:69)(cid:120)(cid:105)(cid:115)(cid:116)(cid:105)(cid:110)(cid:103)(cid:32) (cid:85)(cid:114)(cid:97)(cid:110)(cid:105)(cid:117)(cid:109)(cid:32) (cid:80)(cid:114)(cid:111)(cid:115)(cid:112)(cid:101)(cid:99)(cid:116)(cid:115)
(cid:78)(cid:101)(cid:119)(cid:32) (cid:85)(cid:114)(cid:97)(cid:110)(cid:105)(cid:117)(cid:109)(cid:32) (cid:68)(cid:114)(cid:105)(cid:108)(cid:108)(cid:32) (cid:84)(cid:97)(cid:114)(cid:103)(cid:101)(cid:116)(cid:115)
(cid:55)(cid:32) (cid:49)(cid:55)(cid:48)(cid:32) (cid:48)(cid:48)(cid:48)(cid:32) (cid:109)(cid:78)
The coming year will see exploration efforts
concentrate again on the Doris – Kangaroo Ridge
trend and on uranium anomalies to the immediate
north and west of Kangaroo Ridge.
David Sargeant
Managing Director
13 September 2012
(cid:54)
(cid:50)
(cid:48)
(cid:48)
(cid:48)
(cid:48)
(cid:109)
(cid:69)
(cid:65)(cid:78)(cid:79)(cid:77)(cid:65)(cid:76)(cid:89)(cid:32) (cid:50)(cid:50)
(cid:51)(cid:53)(cid:109)(cid:32) (cid:64)(cid:32) (cid:49)(cid:56)(cid:50)(cid:112)(cid:112)(cid:109)(cid:32) (cid:85) (cid:79)(cid:51)
(cid:56)
(cid:75)(cid:97)(cid:110)(cid:103)(cid:97)(cid:114)(cid:111)(cid:111)(cid:32) (cid:82)(cid:105)(cid:100)(cid:103)(cid:101)
(cid:53)(cid:109)(cid:32) (cid:64)(cid:32) (cid:49)(cid:44)(cid:48)(cid:54)(cid:57)(cid:112)(cid:112)(cid:109)(cid:32) (cid:85) (cid:79)(cid:51)
(cid:52)(cid:109)(cid:32) (cid:64)(cid:32) (cid:49)(cid:44)(cid:48)(cid:49)(cid:48)(cid:112)(cid:112)(cid:109)(cid:32) (cid:85) (cid:79)(cid:51)
(cid:56)
(cid:56)
(cid:75)(cid:97)(cid:110)(cid:103)(cid:97)(cid:114)(cid:111)(cid:111)
(cid:86)(cid:97)(cid:108)(cid:108)(cid:101)(cid:121)
(cid:48)
(cid:48)
(cid:50)(cid:107)(cid:109)
(cid:50)(cid:107)(cid:109)
(cid:71)(cid:68)(cid:65)(cid:57)(cid:52)(cid:32) (cid:90)(cid:111)(cid:110)(cid:101)(cid:32) (cid:53)(cid:48)
(cid:71)(cid:68)(cid:65)(cid:57)(cid:52)(cid:32) (cid:90)(cid:111)(cid:110)(cid:101)(cid:32) (cid:53)(cid:48)
(cid:89)(cid:97)(cid:114)(cid:108)(cid:97)(cid:114)(cid:119)(cid:101)(cid:101)(cid:108)(cid:111)(cid:114)(cid:32) (cid:80)(cid:114)(cid:111)(cid:106)(cid:101)(cid:99)(cid:116)
(cid:85)(cid:82)(cid:65)(cid:78)(cid:73)(cid:85)(cid:77)(cid:32) (cid:68)(cid:82)(cid:73)(cid:76)(cid:76)
(cid:84)(cid:65)(cid:82)(cid:71)(cid:69)(cid:84)(cid:83)
Competent Person’s Statement
The information in this Annual Report that relates to Exploration
Results and Resources have been compiled by Mr. David Ross
B.Sc. M.Sc., who is an employee of the Company. He is a
member of the Australasian Institute of Mining and Metallurgy and
the Australian Institute of Geoscientists. He has sufficient experience
which is relevant to the style of mineralisation and type of deposits
under consideration and to the activity to which he is undertaking
to qualify as a Competent Person as defined in the 2004 Edition
of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves”. David Ross consents to
the inclusion in this Annual Report of the matters based on his
information in the form and context in which it appears.
(cid:32)
(cid:32)
(cid:32)
(cid:32)
E MPIRE RESOURCES LIMITED AND CONTROLL ED ENT IT Y ABN 32 092 471 513
FOR THE YEAR ENDED 30 JUNE 2 0 12
FINANCIAL STATEMENTS Page 24
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
EMPIRE RESOURCES LIMITED
Empire Resources Limited
Directors' Report
6. DIRECTORS’ R EPORT
Directorsʼ Report
Your directors submit their report on Empire Resources Limited (the “Company”) and its controlled entity (the “Group”)
for the financial year ended 30 June 2012.
Directors
The company’s directors in office during the financial period and until the date of this report are as follows. Directors
were in office for the entire period unless otherwise stated.
Thomas Revy - Chairman (Non-Executive) – BAppSc. Grad Dip Bus.
Mr Revy is a mining professional with in excess of 28 years experience in the mining industry to date including
operations, process design and commissioning, technical and general management, business development, project
and company evaluation and corporate management. Countries where extensive work has been undertaken include
Australia, PNG, Southern and Central Africa, Central and South America and China.
David Sargeant - Managing Director - BSc. MAusIMM
Mr Sargeant – who holds a Bachelor of Science degree in economic geology from the University of Sydney – has
more than 40 years experience as a geologist, consultant and company director. As such, he has been involved in
numerous mineral exploration, ore deposit evaluation and mining development projects and is a member of AusIMM
and the Geological Society of Australia.
During his career, Mr Sargeant has held a range of senior positions, including that of senior geologist with Newmont
Pty Ltd and senior supervisory geologist with Esso Australia Ltd at the time of the Harbour Lights Gold Mine discovery
and development. Further, Mr Sargeant was the first chief geologist at Telfer Gold Mine during exploration,
development and production at that project. In addition, he was exploration manager for the Adelaide Petroleum NL
group of companies, manager of resources development for Sabminco NL and a technical director of Western Reefs
Limited during the period in which that company became a successful producer at the Dalgaranga Gold Project.
Mr Sargeant has been a director of the following listed companies during the past three years.
Company
Position
Appointed
FYI Resources Ltd
Non-executive Director
30/11/2009
Adrian Jessup - Executive Director - BSc. MAusIMM
Mr Jessup also holds a Bachelor of Science degree (with honours) in economic geology from the University of Sydney
and has more than 40 years continuous experience as a geologist, company director and consultant involved in
mineral exploration, ore deposit evaluation and mining. He is a member of AusIMM, the Geological Society of
Australia and the Australian Institute of Geoscientists.
For the last 16 years, Mr Jessup has operated a geological consulting company. During that time, he was a founding
director of Sylvania Resources Limited and remained on the board for two years. Prior to that, Mr Jessup was
managing director of Giralia Resources NL for eight years, from the company's inception in 1987. Previously, he had
worked for AMAX Exploration Inc., as a senior geologist and as regional manager in charge of that company's mineral
exploration in Western Australia.
Mr Jessup has been a director of the following listed companies during the past three years.
Company
Position
Appointed
FYI Resources Ltd
Non-executive Director
30/11/2009
Management
Simon Storm - Company Secretary – BCom. BCompt(Hons). CA, FCIS
Mr Storm is a Chartered Accountant with over 28 years of Australian and international experience in the accounting
profession and commerce. He commenced his career with Deloitte Haskins & Sells in Africa then London before
joining Price Waterhouse in Perth.
He has held various senior finance and/or company secretarial roles with listed and unlisted entities in the banking,
resources, construction, telecommunications and property development industries. In the last 10 years he has
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 25
1
EMPIRE RESOURCES LI MI TED
DIRECTORS’ REPORT
Empire Resources Limited
Directors' Report
provided consulting services covering accounting, financial and company secretarial matters to various companies in
these sectors.
David Ross – Exploration Manager – BSc(Hons). MSc. MAusIMM
Mr Ross holds a Bachelor of Science degree (with honours) in geology from Aberdeen University, Scotland and a
Master of Science degree in economic geology from McMaster University in Canada. He is a member of the AusIMM,
the Geological Society of Australia and the Australian Institute of Geoscientists.
With over 25 years experience as an exploration geologist in Western Australia his career has seen him involved with
numerous mineral exploration, ore deposit evaluation and mine development projects for both gold and base metals.
He has held senior geologist positions with Brunswick NL and Giralia Resources and was geological superintendent
for Australian Resources at the Gidgee Gold Mine. Most recently he held the position of chief geologist with De Grey
Mining Ltd where he was instrumental in the discovery of the Orchard Well VMS deposits.
Principal Activities
During the period the principal activities of the Company consisted of mineral exploration and evaluation of properties
in Australia. There has been no significant change in these activities during the financial period.
Dividends
No dividends have been paid during the period and no dividends have been recommended by the directors.
Result for the Financial Period
Loss from ordinary activities after provision for income tax was $3,027,693 (2011: $1,907,860).
Review of Operations
During the year, the Company continued exploration activities at its various exploration projects:
Highlights 2011 – 2012
•
Western Australia
•
term
Strong progress on multiple fronts as the company builds on its portfolio of five copper-gold projects in
Yuinmery and Penny’s Find projects expected to create substantial value for our shareholders in the short
Yuinmery
The flagship project for Empire Resources is the 100 percent owned, multi-mineral Yuinmery project, located 475
kilometres northeast of Perth in Western Australia.
The Yuinmery project sits in the base metal rich, but underexplored Youanmi Greenstone Belt with the principal
target being volcanogenic massive sulphide (VMS) deposits. Elsewhere in the world, VMS deposits typically occur
as a cluster of individual prospects which are often mined to great depths. Similar VMS deposits are found at the
Golden Grove mine to the west and Jaguar mine to the east underlining the potential of Yuinmery.
The excitement of Yuinmery springs from the calibre of intersections, with a string of high-grade copper gold results
at two of the projects most advanced prospects – Just Desserts and A Zone.
Significant high grade copper-gold and zinc intersections at the A Zone prospect remain open at depth. Intercepts
include
•
•
•
•
6m @ 3.0% Cu, 1.7g/t Au including 3m @ 4.0% Cu, 3.3g/t Au
6m @ 2.2% Cu, 1.2g/t Au including 3m @ 3.0% Cu, 2.0g/t Au
5m @ 2.8% Cu within 10m @ 1.8% Cu
3m @ 8.2% Zn within 8m @ 4.0% Zn
Confidence in Yuinmery continues to grow with the project on track to outline a second resource estimate at A Zone.
Pennyʼs Find
The first discovery for the company in 2007 was Penny’s Find, a near surface, high grade gold deposit situated in the
Eastern Goldfields of Western Australia, within close proximity to the gold mining centres of Kalgoorlie and Kanowna
Belle Mine.
Initial drilling at Penny’s Find outlined a JORC compliant resource of 314,000 tonnes at 5.2 g/t gold to 150 metres
and open at depth. Drilling results both confirmed the high grade nature of the project and underlined its potential.
Page 26
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
EMPIRE RESOURCES LI MI TED
Empire Resources Limited
DIRECTORS’ REPORT
Directors' Report
In February 2012 Empire Resources revisited its staged sale agreement with 40 percent equity owner, unlisted
company Brimstone Resources Ltd. The new agreement comprises either –
A total cash payment by Brimstone of $3 million by June 2013 for a 100 percent interest in the project,
•
together with royalty payments on any gold produced in excess of 52,500 oz. This includes a non-refundable
payment of $500,000 already made to empire for the initial 40 percent interest in the project.
or
•
September 2012, with further expenditure of an additional $750,000 by June 2013 to increase its interest to 75
percent. In either case, Empire’s mining establishment costs would be carried and repayable from production.
The renegotiated terms gives Brimstone additional time to devote to the project, while Empire will gain $3 million for
the full sale of the project, or an additional 25–49 percent interest in the event of a partial sale.
Brimstone may increase its project interest to 51 percent through the expenditure of $750,000 by 30
Project economics at the Penny’s Find (60 percent owned) project have been enhanced by recent high grade gold
intersections and a possible new hanging wall lode
•
•
•
6m @ 13.34g/t Au from 113m, including 4m @ 19.43g/t Au
2m @ 12.95g/t Au from 101m, within 8m @ 4.02g/t Au
3m @ 14.42g/t Au from 143m to EOH
The current resource has been defined to a vertical depth of 150m and remains open at depth. The Penny’s Find
Mining Lease is granted to 2033.
Wynne
•
Grassroots exploration success at the Wynne project with oxide copper mineralisation discovered
Damperwah
•
Copper sulphide mineralisation discovered at the Damperwah project
Corporate
•
the issue of 15 million shares at $0.082
•
company raised $1,230,000 in capital, before costs, through a share placement during September 2011, with
conducted a share purchase plan and raised $387,500 through the issue of 7.75 million shares at $0.05.
Significant Changes in State of Affairs
In the opinion of the Directors there were no other significant changes in the state of affairs of the Company.
Remuneration Report (Audited)
This report details the amount and nature of remuneration of each director of the Company and other key
management personnel.
Remuneration Policy
The principles used to determine the nature and amount of remuneration are applied through a remuneration policy
which ensures the remuneration package properly reflects the person’s duties and responsibilities and that the
remuneration is competitive in attracting, retaining and motivating people of the highest quality.
The remuneration policy, setting the terms and conditions for the executive directors has been developed by the
board after seeking professional advice and taking into account market conditions and comparable salary levels for
companies of a similar size and operating in similar sectors.
The remuneration policy is to provide a fixed remuneration component. The board believes that this remuneration
policy is appropriate given the stage of development of the Company and the activities which it undertakes and is
appropriate in aligning Directors’ objectives with shareholder and businesses objectives.
The remuneration framework has regard to shareholders’ interests in the following ways:
•
•
Focuses on sustained growth as well as focusing the directors on key non-financial drivers of value, and
Attracts and retains high calibre directors.
The remuneration framework has regard to directors’ interests in the following ways:
•
•
Rewards capability and experience,
Reflects competitive reward for contributions to shareholder growth,
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
3
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EMPIRE RESOURCES LI MI TED
Empire Resources Limited
DIRECTORS’ REPORT
Directors' Report
•
•
Provides a clear structure for earning rewards, and
Provides recognition for contribution.
Non-executive directors
The board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The Board determines payments to the non-executive director and reviews their
remuneration annually, based on market practice, duties and accountability. Independent external advice is sought
when required. The maximum aggregate amount of fees that can be paid to directors is subject to approval by
shareholders at a General Meeting. Fees for non-executive directors are not linked to the performance of the Group.
However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the
Company and may receive options.
The Directors have resolved that non-executive director’s fees will be $30,000 per annum for the Chairman, inclusive
of statutory superannuation contributions. Shareholders have approved aggregate remuneration for all non-executive
directors at an amount of $100,000 per annum. Where applicable, superannuation contributions of 9% are paid on
these fees as required by law.
Share-based compensation
To ensure that the Company has appropriate mechanisms to continue to attract and retain the services of Directors
and Employees of a high calibre, the Company has established the Empire Resources Limited Share Plan (“SP”) and
the Empire Resources Option Plan.
The Directors consider the plans are an appropriate method to:
a) reward Directors and Employees for their past performance;
b) provide long-term incentives to participate in the Company’s future growth;
c) motivate Directors and Employees and generate loyalty in Employees; and
d) assist to retain the services of valuable Employees.
The value attributed to the share based compensation for the year is as follows:
Year
granted
Vested
%
Forfeited %
Financial years in
which
shares/options
may vest
Total value of
grant vested
$
Minimum total
value of grant yet
to vest
$
Maximum total
value of grant
yet to vest
$
Directors
Mr T Revy
Mr D Sargeant
Mr A Jessup
Specified
Executives
Mr S Storm
2010
2011
2010
2011
2010
2011
2010
2011
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2010-13
2012
2010-13
2012
2010-13
2012
2010-13
2012
-
-
-
-
-
-
-
-
7,500
13,500
7,500
13,500
7,500
13,500
7,500
10,000
7,500
13,500
7,500
13,500
7,500
13,500
7,500
10,000
Page 28
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
EMPIRE RESOURCES LI MI TED
DIRECTORS’ REPORT
Empire Resources Limited
Directors' Report
A
Remuneration
consisting of
shares
B
Value at issue
date
$
C
Value at exercise
date
$
D
Value at lapse
date
$
E
Total of
columns B-D
$
35%
7%
7%
23%
13,500
13,500
13,500
10,000
-
-
-
-
-
-
-
-
13,500
13,500
13,500
10,000
Directors
Mr T Revy
Mr D Sargeant
Mr A Jessup
Specified Executives
Mr S Storm
A =
B =
C =
D =
The percentage of the value of remuneration consisting of shares, based on the value of shares expensed
during the current year.
The value at issue date calculated in accordance with AASB 2 Share-based Payment of shares issued
during the year as part of remuneration.
The value at exercise date of shares that were issued as part of remuneration and were exercised during
the year, being the intrinsic value of the shares at that date.
The value at lapse date of shares that were issued as part of remuneration and that lapsed during the year.
Lapsed shares refer to shares that vested but expired due to the term of the loan expiring.
No shares were issued during the year upon the exercise of options.
Executives
Executive Directors receive either a salary plus superannuation guarantee contributions as required by law, currently
set at 9%, or provide their services via a consultancy arrangement. Directors do not receive any retirement benefits.
Individuals may, however, choose to sacrifice part of their salary to increase payments towards superannuation.
Options are not issued as part of remuneration for long term incentives.
All remuneration paid to directors and executives is valued at cost to the Company and expensed.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
5
Page 29
EMPIRE RESOURCES LI MI TED
DIRECTORS’ REPORT
Empire Resources Limited
Directors' Report
Compensation of Key Management Personnel for the year ended 30 June 2012.
The following table discloses the remuneration of the Key Management Personnel (Directors and executive officers)
of the Company. The information in this table is audited.
Directors
Fees
Consulting
Fees
Short-term
Benefits
Post-
employment
benefits
Share-based
payments
Value of
shares &
options
Directors
Non-Executive
Mr T Revy
Executive
Mr D Sargeant
Mr A Jessup
Total Directors
Executives
Mr S Storm
Total Executives
$
$
Total
$
$
$
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
2012
2011
30,000
30,000
-
-
-
-
-
-
211,200
180,000
211,200
140,000
30,000
422,400
30,000
320,000
-
-
-
-
40,980
37,800
40,980
37,800
-
30,000
30,000
211,200
180,000
211,200
140,000
452,400
350,000
40,980
37,800
40,980
37,800
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
-
16,007
46,007
2,500
32,500
16,007
227,207
31,511
211,511
16,007
227,207
21,841
161,841
48,021
500,421
55,852
405,852
12,507
53,487
16,039
53,839
12,507
53,487
16,039
53,839
Page 30
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EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
EMPIRE RESOURCES LI MI TED
Empire Resources Limited
DIRECTORS’ REPORT
Directors' Report
Employment contracts
– Mr D Sargeant
By agreement dated 24 October 2009, the Company and Kirkdale Holdings Pty Ltd (ACN 009 096 388) ('Kirkdale')
agreed the terms and conditions under which Kirkdale would provide the services of Mr Sargeant as Managing
Director of the Company.
The agreement has:
(a)
(b)
(c)
a term of three years;
requires the payment to Kirkdale of a fee of $15,000 (GST excl) per month (increasing by 10% each year)
and reimbursement of expenses;
provisions requiring the payment of a termination benefit of 50% of the amount due on termination of the
agreement.
– Mr A Jessup
By agreement dated 24 October 2009, the Company and Murilla Exploration Pty Ltd (ACN 068 277 190) ('Murilla')
agreed the terms and conditions under which Murilla would provide the services of Mr Jessup as an executive officer
of the Company.
The agreement has:
(a)
(b)
(c)
a term of three years;
requires the payment to Murilla of a fee of $15,000 (GST excl) per month (increasing by 10% each year) and
reimbursement of expenses;
provisions requiring the payment of a termination benefit of 50% of the amount due on termination of the
agreement.
Directors may be paid additional fees for special duties or services outside the scope of the ordinary duties of a
Director. Directors will also be reimbursed for all reasonable expenses incurred in the course of their duties.
End of Remuneration Report.
Share Options
At the date of this report unissued ordinary shares of the Company under option are:
Grant Date
02-Jun-10
25-Jun-10
09-Aug-11
28-Nov-11
Date of
Expiry
02-Jun-13
25-Jun-13
09-Aug-14
28-Nov-14
Exercise
Price
$
Number
under
Option
0.15
0.14
0.09
0.10
8,227,729
2,700,000
1,500,000
1,500,000
13,927,729
Directorsʼ Interest
The relevant interest of each director in the shares and options over shares issued by the Company at the date of this
report is as follows:
Director
Mr T Revy
Mr D Sargeant
Mr A Jessup
Company Performance
Number of Ordinary Shares
Indirect
Direct
Number of Options
Direct
Indirect
350,000
-
922,222
360,000
6,400,000
1,645,333
1,000,000
-
500,000
-
1,000,000
500,000
Comments on performance are set out in the review of operations.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
7
Page 31
EMPIRE RESOURCES LI MI TED
DIRECTORS’ REPORT
Empire Resources Limited
Directors' Report
Significant Changes in the State of Affairs
There were no other significant changes in the state of affairs of the Company other than those noted in the review of
operations.
Likely Developments and Expected Results
Disclosure of likely developments in the operations of the Company and the expected results of those operations in
future financial years, and any further information, has not been included in this report because, in the reasonable
opinion of the Directors to do so would be likely to prejudice the business activities of the Company.
Environmental Regulation
The Company’s operations were subject to environmental regulations under both Commonwealth and State
legislation in relation to its exploration activities.
The directors are not aware of any breaches during the period covered by this report.
Meetings of Directors
The following table sets out the number of meetings of the Company’s directors held during the period ended 30 June
2012 and the number of meetings attended by each director.
Director
Mr Thomas Revy
Mr David Sargeant
Mr Adrian Jessup
A - meetings attended
B - meetings held whilst a director
Directorsʼ Meetings
B
6
6
6
A
6
6
6
As at the date of this report the Company has not formed any committees as the directors consider that at present the
size of the Company does not warrant such. Audit, corporate governance, director nomination and remuneration
matters are all handled by the full board.
Proceedings on Behalf of the Company
No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of the proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under Section
237 of the Corporations Act 2001.
Indemnification and Insurance of Directors and Officers
Indemnification
The Company has agreed to indemnify current directors and officers and past directors and officers against all
liabilities to another person (other than the Company or a related body corporate), including legal expenses that may
arise from their position as directors and officers of the Company and its controlled entity, except where the liability
arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full
amount of any such liabilities, including costs and expenses.
Insurance
The directors have not included details of the amount of the premium paid in respect of the directors’ and officers’
liability insurance contracts, as such disclosure is prohibited under the terms of the contract.
Events subsequent to reporting date
No matter or circumstance has arisen, since the end of the financial year, which significantly affected, or may
significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in
subsequent financial years.
Non-audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or the Group are important.
Page 32
8
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
EMPIRE RESOURCES LI MI TED
Empire Resources Limited
DIRECTORS’ REPORT
Directors' Report
Details of the amounts paid or payable to the auditor (HLB Mann Judd) for audit and non-audit services provided
during the year are set out below.
During the period, the following fees were paid or payable for services
provided by the auditors of the parent entity HLB Mann Judd, its related
practices and non-related audit firms:
Assurance Services
HLB Mann Judd (Current Auditor)
1. Audit services
Audit and review of financial reports and other audit work under the
Corporations Act 2001
Total remuneration for audit services
2. Other assurance services
Tax related
Total remuneration for other assurance services
Total remuneration for assurance services
Auditors Independence Declaration
Consolidated
Year ended
30 June 2012
$
Year ended
30 June 2011
$
20,650
20,650
19,025
19,025
-
-
-
-
20,650
19,025
Section 307C of the Corporations Act 2001 requires the company’s auditors, HLB Mann Judd, to provide the directors
with a written Independence Declaration in relation to their audit of the financial report for the year ended 30 June
2012. This written Auditor’s Independence Declaration is attached to the Auditor’s Independent Audit Report to the
members and forms part of this Director’s Report.
Signed in accordance with a resolution of Directors.
_________________
D Sargeant
Managing Director
Perth, Western Australia
13 September 2012
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
9
Page 33
EMPIRE RESOURCES LIMITED
EMPIRE RESOURCES LI MI TED
7. STA TEME NT O F COMPREHE NS I V E I NCOME FOR TH E Y EA R EN DE D 30 J UN E 20 12
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2012
Revenue from continuing operations
Depreci ation expense
Exploration expen se
Employee benefits expense
Managemen t fee expense
Directors fees
Accou nting expense
Consul tancy expense
Share-ba sed payment
ASX expense
Corporate relations expense
Insura nce expense
Other expense s
Share of loss of equity accounted investees
Loss be fore income tax
Income tax benefit
Net loss for the year
Other comprehensive in come
Share of comprehensive loss of equity accounte d investees
Income tax relating to components o f other comprehensive
income
Other compre hensive loss for the year, net of tax
Total comprehensive loss for the year
Basic and diluted loss per share (cents per share)
Consolidated
Note
2012
$
201 1
$
2
3
3
8
4
5
72,799
523,311
(17,798)
(2,089,807)
(59,991)
(422,400)
(30,000)
(61,962)
(17,599)
(84,037)
(27,126)
(87,879)
(17,956)
(156,449)
(158,832)
(3,159,037)
131,344
(3,027,693)
(20,691)
(1,575,018)
(27,215)
(315,254)
(30,000)
(58,073)
(26,825)
(108,270)
(17,127)
(48,203)
(15,639)
(139,124)
(253,754)
(2,111,882)
20 4,022
(1,907,860)
-
(139,664)
-
-
(3,027,693)
-
(139,664)
(2,047,524)
(2.13)
(1.65)
The above Statement of Comprehensive Income
should be read in conjunction with the accompanying notes.
10
Page 34
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
EMPIRE RESOURCES LIMITED
EMPIRE RESOURCES LI MI TED
8. STATEM EN T OF FI NA NCIAL POSIT ION A S AT 3 0 J UNE 2 012
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2012
ASSETS
CURRENT ASSETS
Cash and cash equ ivalents
Trade and other receivabl es
Total Current Assets
NON-CURRENT ASSETS
Investments accounted for using the equity method
Plant a nd equipment
Total Non-Current Ass ets
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Consolidated
Note
201 2
$
2011
$
6
7
8
9
10
11
12
64 0,807
19 3,802
83 4,609
70 4,395
5,893
71 0,288
1,781,147
310,855
2,092,002
863,227
23,691
886,918
1,54 4,897
2,978,920
237,477
237,477
297,851
297,851
237,477
297,851
1,307,420
2,681,069
16,08 6,707
93 1,481
(15,710,768)
14,516,700
847,444
(12,683,075)
1,30 7,420
2,681,069
The above Statement of Financial Position
should be read in conjunction with the accompanying notes.
11
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 35
EMPIRE RESOURCES LIMITED
EMPIRE RESOURCES LIMITED
9. STATEMENT O F CHAN GES IN EQ UITY FOR THE YEAR ENDED 30 J UNE 2 01 2
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2012
Balance at 1 July 2010
Shares issued during the year
Options issued during the year
Equity issue expenses
Loss for the year
Other comprehensive loss for the year
Balance at 30 June 2011
Balance at 1 July 2011
Shares issued during the year
Options issued during the year
Equity issue expenses
Loss for the year
Balance at 30 June 2012
Consolidated
Accumulated
Losses
$
Option
Reserves
$
Issued Capital
$
11,723,878
2,977,700
-
(184,878)
-
-
14,516,700
14,516,700
1,647,500
-
(77,493)
-
16,086,707
(10,635,551)
-
-
-
(1,907,860)
(139,664)
(12,683,075)
(12,683,075)
-
-
-
(3,027,693)
(15,710,768)
739,174
-
108,270
-
-
-
847,444
847,444
-
84,037
-
-
931,481
Total
$
1,827,501
2,977,700
108,270
(184,878)
(1,907,860)
(139,664)
2,681,069
2,681,069
1,647,500
84,037
(77,493)
(3,027,693)
1,307,420
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes
12
Page 36
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
EMPIRE RESOURCES LIMITED
EMPIRE RESOURCES LIMITED
10. STATE MENT OF CASH FLOWS FOR TH E Y EA R ENDED 3 0 J UNE 2012
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2012
Cashflows from Operating Activities
Payments to suppliers and employees
Interest received
Other - R&D tax offset
Consolidated
Note
2012
$
2011
$
(839,289)
98,493
204,022
(683,871)
41,932
-
Net cash used in operating activities
6(i)
(536,774)
(641,939)
Cash Flows from Investing Activities
Purchase of plant and equipment
Sale of prospect
Exploration and evaluation expenditure
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from issue of equity securities
Equity securities issue costs
-
-
(2,143,573)
(9,955)
500,000
(1,453,408)
(2,143,573)
(963,363)
1,617,500
(77,493)
2,977,700
(186,925)
Net cash provided by financing activities
1,540,007
2,790,775
Net increase / (decrease) in cash held
Cash at the beginning of the financial year
(1,140,340)
1,781,147
1,185,473
595,674
Cash at the end of the financial year
6
640,807
1,781,147
The above Statement of Cash Flows should be read in conjunction
with the accompanying notes.
13
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 37
Empire Resources Limited
EMPIRE RESOURCES LI MI TED
11. NO TES TO THE FI NA NCIAL STA TEMENTS 3 0 J UNE 2 01 2
Notes to the Financial Statements 30 June 2012
1.
Statement of Significant Accounting Policies
The financial report covers the consolidated entity of Empire Resources Limited and its controlled entity
(“Group”) and Empire as an individual parent entity (“Empire”). Empire is a listed public company limited by
shares, incorporated and domiciled in Australia.
The following is a summary of the material accounting policies adopted by the Group in the preparation of the
financial report. The accounting policies have been consistently applied by the controlled entity and are
consistent with those in the June 2011 financial report.
(a)
Basis of Preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards,
Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001. It is prepared on the basis of historical costs. The
financial report is presented in Australian dollars.
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the consolidated
financial report, comprising the financial statements and notes thereto, complies with the International Financial
Reporting Standards (IFRS).
The financial report was authorised for issue by the Board on 8 September 2012.
(b)
Going Concern
As disclosed in the Statement of Comprehensive Income, the Group recorded operating losses of $3,027,693
(2011: $1,907,860) and as disclosed in the Statement of Cash Flows, the Group recorded cash outflows from
operating activities of $536,774 (2011: $641,939), investing activities of $2,143,573 (2011: $963,363) and a
cash inflow from financing activities of $1,540,007 (2011: $2,790,775). Cash flows from financing activities
arose from capital raisings that are disclosed in Note 11(a). After consideration of these financial conditions, the
Directors have assessed the following matters in relation to the adoption of the going concern basis of
accounting by the Group:
The Group has successfully completed capital raisings during the year as disclosed in Note 11(a) and has
the ability to continue doing so on a timely basis, pursuant to the Corporations Act 2001, as is budgeted to
occur in the twelve month period from the date of this financial report;
The Group has net current assets of $597,132 (2011: $1,794,151) at balance date and expenditure
commitments for the next 12 months of $403,921 (2011: $344,299), as disclosed in Note 14 (ii), and
retains the ability to scale down its operations to conserve cash, in the event that the capital raisings are
delayed or partial; and
The Company and Group have the ability, if required, to undertake mergers, acquisitions or restructuring
activity or to wholly or in part, dispose of interests in mineral exploration and development assets.
Due to the above matters, the Directors believe that it is reasonably foreseeable that the Company and Group
will continue as a going concern and that it is appropriate that this basis of accounting be adopted in the
preparation of the financial statements.
(c)
Basis of Consolidation
A controlled entity is any entity that Empire Resources Limited has the power to control the financial and
operating policies of the entity so as to obtain benefits from its activities.
Details of the controlled entity are contained in Note 8 to the financial statements. The controlled entity has a
June financial year end.
All inter-company balances and transactions between entities in the consolidated Group, including any
unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have
been changed where necessary to ensure consistencies with those policies applied by the parent entity.
Where a controlled entity enters or leaves the consolidated Group during the year, their operating results are
included/excluded from the date control was obtained or until the date control ceased.
Page 38
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
14
Empire Resources Limited
EMPI RE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
1.
Statement of Significant Accounting Policies (continued)
Business Combinations
Business combinations occur where control over another business is obtained and results in the consolidation
of its assets and liabilities. All business combinations, including those involving entities under common control,
are accounted for by applying the purchase method. The purchase method requires an acquirer of the business
to be identified and for the cost of the acquisition and fair values of identifiable assets, liabilities and contingent
liabilities to be determined as at acquisition date, being the date that control is obtained. Cost is determined as
the aggregate of fair values of assets given, equity issued and liabilities assumed in exchange for control
together with costs directly attributable to the business combination. Any deferred consideration payable is
discounted to present value using the entity’s incremental borrowing rate.
(d)
Investment in associated entities
The Group’s investment in its associate is accounted for using the equity method of accounting in the
consolidated financial statements, after initially being recognised at cost. The associate is an entity in which the
Group has significant influence and which is neither a subsidiary nor a joint venture.
Under the equity method, the investment in the associate is carried in the consolidated statement of financial
position at cost plus post-acquisition changes in the Group's share of net assets of the associate. Goodwill
relating to an associate is included in the carrying amount of the investment and is not amortised. After
application of the equity method, the Group determines whether it is necessary to recognise any additional
impairment loss with respect to the Group’s net investment in the associate. Goodwill included in the carrying
amount of the investment in associate is not tested separately, rather the entire carrying amount of the
investment is tested for impairment as a single asset. If an impairment is recognised, the amount is not
allocated to the goodwill of the associate.
The consolidated statement of comprehensive income reflects the Group's share of the results of operations of
the associate, and its share of post-acquisition movements in reserves is recognised in reserves. The
cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends
receivable from associates are recognised in comprehensive income as a component of other income.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any
unsecured long-term receivable and loans, the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
The balance dates of the associate and the Group are identical and the associate's accounting policies conform
to those used by the Group for like transactions and events in similar circumstances.
(e)
Plant and Equipment
Plant and equipment is measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant & equipment is reviewed annually by directors to ensure it is not in excess of the
recoverable amount from those assets. Recoverable amount is assessed on the basis of the expected net cash
flows which will be received from the asset’s employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining recoverable amounts.
Depreciation is calculated on the straight line basis and is brought to account over the estimated useful lives of
all plant and equipment from the time the asset is held ready for use. The depreciation rates used are:
Office furniture
Office computer equipment
Motor vehicles
15-33%
33%
20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
An asset’s carrying amount is written down immediately to its recoverable amount if the assets carrying amount
is greater than its estimated recoverable amount. Gains and losses on disposal are determined by comparing
proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive
income. When revalued assets are sold, amounts included in the revaluation reserve relating to the assets are
then transferred to accumulated losses.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 39
15
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
1.
(f)
Statement of Significant Accounting Policies (continued)
Income Tax
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income
based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period in the countries where the company’s subsidiaries and associates operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and
it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be
utilised, except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
(g)
Cash & Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown
within short-term borrowings in current liabilities on the Statement of Financial Position.
(h)
Acquisition of Assets
The purchase 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 the acquisition
16
Page 40
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
1.
Statement of Significant Accounting Policies (continued)
plus costs incidental to the acquisition. Transaction costs arising on the issue of equity instruments are
recognised directly in equity.
(i)
Impairment of assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is
compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is
expensed to the Statement of Comprehensive Income.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
(j)
Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured
as set out below.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are stated at amortised cost using the effective interest rate method.
Available-for-sale financial assets
Available for sale financial assets include any financial assets not classified as loans and receivables, held to
maturity investments or fair value through profit or loss. Available-for-sale financial assets are reflected at fair
value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal
payments and amortisation.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,
reference to similar instruments and option pricing models.
Impairment
At each reporting date, the Company assesses whether there is objective evidence that a financial instrument
has been impaired. In the case of available-for sale financial instruments, a prolonged decline in the value of
the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised
in the statement of comprehensive income.
(k)
Exploration and Development Expenditure
Exploration, evaluation and acquisition costs are expensed in the year they are incurred. Development costs
are capitalised. Amortisation is not charged on costs carried forward in respect of areas of interest in the
development phase until production.
(l)
Employee Entitlements
Salaries, wages and annual leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within twelve months of the reporting date are recognised in other creditors in respect to
employees’ services up to the reporting date and are measured at the amounts expected to be paid when the
liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
measured at the rates paid or payable.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 41
17
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
1.
Statement of Significant Accounting Policies (continued)
Equity settled transactions
The Group provides benefits to employees (including senior executives) of the Group in the form of share-
based payments, whereby employees render services in exchange for shares or rights over shares (equity-
settled transactions).
There are currently two plans in place to provide these benefits:
the Employee Share Option Plan (ESOP), which provides benefits to directors and senior executives; and
the Employee Share Loan Plan (ESLP), which provides benefits to all employees, excluding senior
executives and directors.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by an external valuer
using a Black Scholes model, further details of which are given in Note 18. In valuing equity-settled
transactions, no account is taken of any performance conditions, other than conditions linked to the price of the
shares of Empire Resources Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each balance date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of
equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as
at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms
had not been modified. In addition, an expense is recognised for any modification that increases the total fair
value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the
date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for
the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and
new award are treated as if they were a modification of the original award, as described in the previous
paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings per share (see Note 5).
The Group expenses equity-settled share-based payments such as share and option issues after ascribing a
fair value to the shares and/or options issued. The fair value of option and share plan issues of option and
share plan shares are recognised as an expense together with a corresponding increase in the share based
payments reserve or the share option reserve in equity over the vesting period. The proceeds received net of
any directly attributable transaction costs are credited to share capital when options are exercised.
The value of shares issued to employees financed by way of a non recourse loan under the employee Share
Plan is recognised with a corresponding increase in equity when the company receives funds from either the
employees repaying the loan or upon the loan termination, pursuant to the rules of the share plan. All shares
issued under the plan with non recourse loans are considered, for accounting purposes, to be options.
(m)
Trade and other receivables
All trade receivables are recognised at the amounts receivable as they are due for settlement no more than 30
days from the date of recognition.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible
are written off. An allowance for doubtful debts is raised where some doubt as to collection exists.
Page 42
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
18
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
1.
Statement of Significant Accounting Policies (continued)
(n)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of the
financial period and which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition.
(o)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
(p)
Leases
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee
substantially all the risks and benefits incidental to ownership of leased non-current assets, and operating
leases under which the lessor effectively retains substantially all such risks and benefits
Operating lease payments are charged as expenses in the periods in which they are incurred, as this
represents the pattern of benefits derived from the leased assets.
(q)
Revenue Recognition
Amounts disclosed as revenue are net of duties and taxes paid. Revenue is recognised as follows:
(i)
Interest
Interest earned is recognised as and when it is receivable, including interest which is accrued and is readily
convertible to cash within two working days. Accrued interest is recorded as part of other debtors.
(ii)
Sundry income
Sundry income is recognised as and when it is receivable. Income receivable, but not received at balance date,
is recorded as part of other debtors.
(r)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. 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 in the
Statement of Financial Position are shown inclusive of GST.
(s)
Critical accounting estimates and judgements
The directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the group.
Key Estimates — Impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the group that may
lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is
determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of
key estimates.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined using the Black and
Scholes model, using the assumptions detailed in Note 18.
The Group measures the cost of cash-settled share-based payments at fair value at the grant date using the
Black and Scholes formula taking into account the terms and conditions upon which the instruments were
granted, as discussed in Note 18.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 43
19
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
1.
Statement of Significant Accounting Policies (continued)
This fair value is expensed over the period until vesting with recognition of a corresponding liability. The liability
is re-measured to fair value at each balance date up to and including the settlement date with changes in fair
value recognised in profit or loss.
(t)
Adoption of new and revised standards
Changes in accounting policies on initial application of Accounting Standards
In the year ended 30 June 2012, the Group has reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to its operations and effective for the current annual
reporting period.
It has been determined by the Group that there is no impact, material or otherwise, of the new and revised
Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting
policies.
The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet
effective for the year ended 30 June 2012. As a result of this review the Directors have determined that there is
no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and,
therefore, no change necessary to Group accounting policies.
(u)
Segment Reporting
Operating segments are now reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Board of Empire Resources Ltd.
The Group operates only in one business and geographical segment being predominantly in the area of
mineral exploration in Western Australia. The Group considers its business operations in mineral exploration
to be its primary reporting function.
(v)
Earnings per share
Basic earnings per share is calculated as net profit or loss attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the
weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit or loss attributable to members of the parent, adjusted for:
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any bonus element.
(w)
Parent Entity Financial Information
The financial information for the parent entity, Empire Resources Limited disclosed in Note 22 has been
prepared on the same basis as the Group.
2.
Revenue
Revenue
Interest received
Sale of tenement
Consolidated
2012
$
201 1
$
72,799
-
72,799
68,766
4 54,545
5 23,311
20
Page 44
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Empire Resources Limited
Notes to the Financial Statements 30 June 2012
3.
Loss from ordinary activities
Loss before income tax
The loss from ordinary activities before income tax
has been determined after:
(a) Expenses
Depreciation
Consolidated
2012
$
2011
$
17,798
20,691
Exploration costs expensed
2,089,807
1,575,018
4.
(a)
Income tax
Income tax recognised in loss
No income tax is payable by the parent or consolidated group as they both recorded losses for income tax
purposes for the year.
(b)
Numerical reconciliation between income tax expense and the loss before income tax.
Loss before tax
Income tax benefit at 30% (2011:30%)
Tax effect of:
- deductible capital raising expenditure
- non deductible expenditure
- deductible temporary differences
- share based payment
Deferred tax asset not recognised
R&D tax offset payment from prior year
Income tax benefit attributable to loss from
ordinary activities before tax
Consolidated
2012
$
2011
$
(3,159,037)
(2,111,882)
947,711
633,565
20,875
(48,648)
(3,809)
(25,211)
(890,918)
131,344
45,204
(76,686)
3,981
(32,481)
(573,583)
204,022
131,344
204,022
(c) Unrecognised deferred tax balances
Tax losses attributable to members of the Group -
revenue
Potential tax benefit at 30%
Deferred tax asset asset not booked
Amounts recognised in statement of
comprehensive income
-employee provisions
-other
-R&D tax offset
Amounts recognised in equity
- share issue costs
11,614,456
8,975,065
3,484,337
2,692,520
7,769
4,350
-
2,160
6,150
-
62,142
48,676
Net unrecognised deferred tax asset at 30%
3,558,598
2,749,506
21
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 45
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
4.
Income tax (continued)
A deferred tax asset attributable to income tax losses has not been recognised at balance date as the
probability criteria disclosed in Note 1(f) is not satisfied and such benefit will only be available if the conditions
of deductibility also disclosed in Note 1(f) are satisfied.
5.
Loss per share
Basic and diluted loss per share (cents per share)
Consolidated
2012
Cents
(2.13)
201 1
Ce nts
(1.65)
Loss used in the calculation of basic EPS
(3,027,693)
(1,907,860)
Weighted average number of shares outstanding
during the year used i n calculations of basic loss
per sh are
Diluted loss per share has not been disclosed as it
is no t materially different from basic loss pe r share
141,968,11 3
11 5,668,524
6.
Cash and cash equivalents
Cash at bank and in hand
Consolidated
2012
$
201 1
$
640,807
1,7 81,147
640,807
1,7 81,147
(i) Reconciliation of cash flow from operations with loss after income tax
Loss after income tax
Sale of tenement
Depreciation
Share based payments expense
Exploration expenditure not capitalised
Income tax benefit
Share of loss of equity accounted investees
Changes in assets and liabilities, net of the effects
of purchase of subsidiaries:
(Increase)/decrease in trade and other receivables
(Decrease)/increase in trade and other payables
(Decrease)/increase in employee benefits
Consolidated
2012
$
2011
$
(3,027,693)
-
(1,907,860)
(454,545)
17,798
84,037
2,089,807
(131,344)
158,832
(808,563)
20,691
108,270
1,453,408
(204,022)
253,754
(730,304)
228,819
23,810
19,160
(69,406)
166,984
(9,213)
Net cash outflow from operating activities
(536,774)
(641,939)
22
Page 46
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
7.
Trade and other Receivables
Current
Trade receivables
Other receivables
Consolidated
2012
$
201 1
$
15,927
177,875
26,360
2 84,495
193,802
3 10,855
Provision for impairment of receivables
Current trade receivables are non-interest bearing and generally on 30 day terms. A provision for impairment
is recognised when there is objective evidence that an individual trade receivable is impaired.
8.
Investments
(a) Investments accounted for using the Equity Method
Consolidated
2012
$
2011
$
Reconciliation of movements in investments
acco unted for usi ng the equity method:
Balance at 1 July
Share of loss
Movement in a ssociates's reserves
Balance at 30 June
863,227
(158,832)
-
704,395
1,256,645
(253,754)
(139,664)
863,227
Name of entity
Principal activity
Associated entity
Ownership interest
Market Value
2012
2011
2012
2011
Country of
incorporation
%
%
$
$
FYI Resources Ltd
Mineral exploration
Australia
28%
28%
516,569
774,104
The Group has reviewed the carrying value of its investment in FYI Resources Ltd and considers that it is not
stated in excess of its recoverable amount in the accounts. The carrying value is supported by the initial
independent valuations of Yarlarweelor, the net assets of FYI Resources Ltd and there is ongoing expenditure
on the tenements by FYI Resources.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 47
23
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
8.
Investments (continued)
Summa rised financial information of associates:
Financial positio n
Total assets
Total liabilities
Net assets
Group’s share of associates’ n et assets
Financial performa nce
Total revenu e
Total loss for the year
Group’s share of associate’s p rofit/(loss)
Group’s share of associate’s compehensive loss
Capital commitments and co ntingent
asso ciate:
Share of capital commitments incurred jointl y with
other i nvestors
Share of contingent liabilities incurred jointly with
other i nvestors
liabilities of
Consolidated
2012
$
2011
$
3,113,199
117,368
2,995,831
838,833
25,191
(570,706)
(158,832)
3,689,651
169,589
3,520,062
985,617
50,709
(867,439)
(253,754)
-
(139,664)
491,102
370,570
-
-
(b) Investments in subsidiary
Controlled entity
Parent En tity:
Empire Resources Li mited
Subsidiary of Empire Resources Limited:
Torrens Resources Pty Ltd
Country of
incorporation
Percentage
Ow ned
Percentage
Owned
2012
%
2011
%
Australia
Australia
-
100
-
100
Page 48
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
24
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Empire Resources Limited
Notes to the Financial Statements 30 June 2012
9.
Plant & equipment
Plant and Equipment
Cost
Accumulated depreciation
Motor Vehicles
Cost
Accumulated depreciation
Consolida ted
2012
$
2011
$
37,153
(31 ,260)
5,893
90,217
(90 ,217)
-
37,153
(27,618 )
9,535
90,217
(76,061 )
14,156
Total Plant and Equipment
5,893
23,691
Movements in the carrying amounts of each class of property, plant & equipment at
the be ginning and end of the current financial period is as set out b elow:
Plant and Equipment
Balance at the beginning of year
Additions
Depreci ation expense
Carrying amount at the end of the year
Motor Vehicles
Balance at the beginning of year
Depreci ation expense
Carrying amount at the end of the year
10. Trade and other payables
Trade payables and accruals
Employee benefits
Consolida ted
2012
$
2011
$
9,535
-
(3 ,642)
5,893
14,156
(14 ,156)
-
2,129
9,955
(2,549 )
9,535
32,298
(18,142 )
14,156
Consolida ted
2012
$
2011
$
204,293
33,184
237,477
283,827
14,024
297,851
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 49
25
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
11.
Issued capital
(a) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company
in proportion to the number of and amounts paid on the shares.
On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to
one vote, and upon a poll each share is entitled to one vote.
150,645,921 (2011: 127,295,921) fully paid
ordinary shares
(i) Ordinary shares - number
- 15,700,000 on 7 December
- 5,000,000 on 26 November
At 1 July
Share placement - 9,400,000 on 13 October 2010
at $0.062
Share placement
2010 at $0.062
Share placement
2010 at $0.12
Share placement - 15,000,000 on 23 September
2011 at $0.082
Shares issued ERL share Plan - 7,750,000 on 14
February 2012 at $0.05
Shares issued pursuant
to a Farm-in and JV
Agreement - 600,000 on 20 February 2012 at
$0.05
Consolidated
2012
$
2011
$
16,086,707
14,516,700
Consolidated
2012
No.
2011
No.
127,295,921
97,195,921
-
-
-
9,400,000
5,000,000
15,700,000
15,000,000
7,750,000
600,000
-
-
-
Balance at 30 June
150,645,921
127,295,921
Page 50
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
26
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Empire Resources Limited
Notes to the Financial Statements 30 June 2012
11.
Issued capital (continued)
(ii) Ordinary shares – value
- 15,700,000 on 7 December
- 5,000,000 on 26 November
At 1 July
Share placement - 9,400,000 on 13 October 2010
at $0.062
Share placement
2010 at $0.062
Share placement
2010 at $0.12
Shares issued ERL share Plan - 2,450,000 on 8
May 2011 at $0.0821
Share placement - 15,000,000 on 23 September
2011 at $0.082
Shares issued ERL share Plan - 7,750,000 on 14
February 2012 at $0.05
Shares issued pursuant
to a Farm-in and JV
Agreement - 600,000 on 20 February 2012 at
$0.05
Less share issue costs
Balance at 30 June
Consolidated
2012
$
2011
$
14,516,700
11,723,878
-
-
-
-
1,230,000
387,500
582,800
310,000
1,884,000
200,900
-
-
30,000
(77,493)
16,086,707
-
(184,878)
14,516,700
Note 1 - In May 2008, 2,450,000 shares were issued under the Company's share plan and the loans were
repaid pursuant to the share plan in May 2011.
(b) Options
As at 30 June 2012 (30 June 2011: 10,927,729) the Company had the following options on issue over
ordinary shares:-
Grant Date
02-Jun-10
25-Jun-10
09-Aug-11
28-Nov-11
Date of
Expiry
02-Jun-13
25-Jun-13
09-Aug-14
28-Nov-14
Exercise
Price
$
Number
under
Option
0.15
0.14
0.09
0.10
8,227,729
2,700,000
1,500,000
1,500,000
13,927,729
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 51
27
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
12. Reserves
Reserves
931,481
847,444
Consolida ted
2012
$
2011
$
Reserves comprise the following:
Options res erve
Balance as at start of financial year
Share-ba sed payment
Balance as at end of the financial year
847,444
84,037
739,174
108,270
931,481
847,444
Details of certain components of the option reserve arising as a consequence of equity based payments are
included in Note 18.
13. Financial risk management
The Group’s financial situation is not complex. It’s activities may expose it to a variety of financial risks in the
future: market risk (including currency risk and fair value interest rate risk), credit risk, liquidity risk and cash
flow interest rate risk. At that stage the Group’s overall risk management program will focus on the
unpredictability of the financial markets and seek to minimise potential adverse effects on the financial
performance of the Group.
Risk management is carried out under an approved framework covering a risk management policy and internal
compliance and control by management. The Board identifies, evaluates and approves measures to address
financial risks.
The Group hold the following financial instruments:
Financial assets
Cash and cash equ ivalents
Trade and other receivabl es
Financial liabilities
Trade and other payables
Consolida ted
2012
$
2011
$
640,807
193,802
1,781,147
310,855
834,609
2,092,002
237,477
297,851
Page 52
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
28
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
13. Financial risk management (continued)
(a) Market risk
Cash flow and fair value interest rate risk
The Group’s main interest rate risk arises from cash deposits to be applied to exploration and development of
areas of interest. Deposits at variable rates expose the Group to cash flow interest rate risk. Deposits at fixed
rates expose the Group to fair value interest rate risk. During 2012 and 2011, the Group’s deposits at variable
rates were denominated in Australian Dollars.
As at the reporting date, the Group had the following variable rate deposits and there were no interest rate
swap contracts outstanding:
Deposit
Other cash available
Net exposure to cash flow interest
rate risk
%
%
$
20,000
620,807
$
1,520,000
261,147
4.7%
640,807
5.1%
1,781,147
The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
the renewal of existing positions.
Sensitivity – Consolidated and Parent entity
During 2011, if interest rates had been 1% higher or lower than the prevailing rates realised, with all other
variables held constant, there would be an immaterial change in post-tax profit for the year. Equity would not
have been impacted.
(b) Credit risk
The Group has no significant concentrations of credit risk. Cash transactions are limited to high credit quality
financial institutions.
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and
financial institutions, as well as credit exposures on outstanding receivables and committed transactions. In
relation to other credit risk areas management assesses the credit quality of the customer, taking into account
its financial position, past experience and other factors.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as
summarised at the beginning of this note.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an
adequate amount of committed credit facilities and the ability to close-out market positions. The Group
manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities. The Group will aim at maintaining flexibility in funding by accessing
appropriate committed credit lines available from different counterparties where appropriate and possible.
Surplus funds when available are generally only invested in high credit quality financial institutions in highly
liquid markets.
Financing arrangements
The Consolidated and Parent entity have no borrowing facilities.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 53
29
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
13. Financial risk management (continued)
30 June 2012
Financial Assets:
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Financial Liabilities:
Trade and other payables
Total financial liabilities
30 June 2011
Financial Assets:
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Financial Liabilities:
Trade and other payables
Total financial liabilities
Weighted
Average
Effective
Interest Rate
Floating
Interest Rate
Fixed Interest
Rate Maturing
Within Year
Non-interest
bearing
Total
$
$
$
$
4.7%
620,807
20,000
-
-
620,807
20,000
-
193,802
193,802
640,807
193,802
834,609
-
-
-
-
237,477
237,477
237,477
237,477
Weighted
Average
Effective
Interest Rate
Floating
Interest Rate
Fixed Interest
Rate Maturing
Within Year
Non-interest
bearing
Total
$
$
$
$
5.1%
1,761,147
20,000
-
1,781,147
-
-
1,761,147
20,000
310,855
310,855
310,855
2,092,002
-
-
-
-
297,851
297,851
297,851
297,851
Maturities of financial assets and liabilities
The note above analyses the Consolidated and parent entity's financial liabilities. The liabilities comprise trade
and other payables, are non interest bearing and will mature within 12 months. The amounts disclosed are the
contractual undiscounted cash flows. There are no derivatives.
Maturity analysis of financial assets and liability based on management’s expectation
Year ended 30 June 2012
<6 months
6-12 months 1-5 years
>5 years
Total
Consolidated
Financial assets
Cash & cash equivalents
Trade & oth er receivables
Financial liabilities
Trade & oth er payables
Net maturity
640,807
193,802
834,609
237,477
597,132
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
640,807
193,802
834,609
237,477
597,132
30
Page 54
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
13. Financial risk management (continued)
(d) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or
for disclosure purposes.
The fair value of financial instruments that are not traded in an active market (for example, investments in
unlisted subsidiaries) is determined using valuation techniques or cost (impaired if appropriate). The Group
uses a variety of methods and makes assumptions that are based on market conditions existing at each
balance date.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate
their fair values due to their short-term nature.
14. Capital and Leasing Commitments
(i) Operating Lease Commitme nts
Non-can cellable opera ting leases contracted for
but no t capitalise d in the fina ncial state ments
Payable - minimum le ase payments
- not l ater than 12 months
- between 12 months and 5 years
- greater than 5 years
The company entered into an operating lease on 1
August 20 07 for office space it occupi es in Victoria
Park. The term of the lease is 3 years an d expired
on 1 August 2010. The lease was renewed for a
further 3 years to 31 Ju ly 2013.
Consolidated
20 12
$
2011
$
55,881
-
-
55,881
53,06 9
55,88 1
-
108,95 0
(ii) Expenditure commitments contracted for:
Consolidated
2012
$
2011
$
Exploration Tenements
In order to maintain current rights of
tenure to
exploration tenements, the Company is required to
outlay
the minimum
expenditure requirements. These obligations are
not provided for in the financial statements and are
payable:
to meet
rentals
and
- not later than 12 months
- between 12 months and 5 years
- greater than 5 years
403,921
1,615,685
-
2,019,606
344,299
1,377,196
-
1,721,495
These commitments are based on the Group holding the tenements for the next 5 years.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 55
31
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
15. Directors and other key management personnel
(i) Details of Key Management Personnel
Chairman – non-executive
Mr T Revy (from 8 January 2010)
Managing Director
Mr D Sargeant (from 13 April 2000)
Executive director
Mr A Jessup (from 15 August 2003)
Company Secretary
Mr S Storm (from 30 April 2007)
(ii) Compensation of Key Management Personnel
Short-term employee be nefits
Post-employment bene fits
Share-ba sed payments
Consolidated
2 012
$
2011
$
493,380
-
60,527
553,907
387,800
-
71,891
459,691
The company has taken advantage of the relief provided by AASB 2008-4 Amendments to Australian
Accounting Standard – Key Management Personnel Disclosures by Disclosing Entities, and has transferred
the detailed remuneration disclosures to the directors’ report. The relevant information can be found in the
Remuneration Report on pages 2 to 6.
(iii) Equity instrument disclosures relating to directors and other key management personnel
Shareholdings
The number of ordinary shares in the Company held during the year by each director and other key
management personnel, including their personally related entities or associates, are set out below.
2012 Shareholdings of Key Management Personnel
Directors
Balance at the
start of the
period
Issued under
share plan
On exercise of
options
Shares acquired
Balance at the
end of the
period
Mr T Revy
Mr D Sargeant
Mr A Jessup
Specified Executives
Mr S Storm
710,000
6,100,000
2,067,555
8,877,555
183,000
183,000
-
-
-
-
-
-
32
-
-
-
-
-
-
-
300,000
500,000
800,000
710,000
6,400,000
2,567,555
9,677,555
-
-
183,000
183,000
Page 56
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
15. Directors and other key management personnel (continued)
2011 Shareholdings of Key Management Personnel
Directors
Balance at the
start of the
period
Issued under
share plan
On exercise of
options
Shares acquired
Balance at the
end of the
period
Mr T Revy
Mr D Sargeant
Mr A Jessup
Specified Executives
Mr S Storm
350,000
6,100,000
2,067,555
8,517,555
183,000
183,000
-
-
-
-
-
-
-
-
-
-
-
-
360,000
-
-
360,000
710,000
6,100,000
2,067,555
8,877,555
-
-
183,000
183,000
All equity transactions with key management personnel, which relate to the Company’s listed ordinary shares,
have been entered into on an arms length basis.
Option holdings
Details of shares issued as remuneration can be found in the remuneration report.
The number of options over ordinary shares in the Company held during the reporting period by each director
and key management personnel, including their personally related entities, are set out below.
2011 Option holdings of Key Management Personnel
Issued
Expired
Balance at
the end of the
period
Vested and
exercisable at 30
June 2012
Directors
Mr T Revy
Mr D Sargeant
Mr A Jessup
Specified Executives
Mr S Storm
Balance at
the start of
the period
500,000
500,000
500,000
1,500,000
500,000
500,000
-
-
-
-
-
-
2012 Option holdings of Key Management Personnel
Directors
Balance at
the start of
the period
Issued
Expired
Mr T Revy
Mr D Sargeant
Mr A Jessup
500,000
500,000
500,000
500,000
500,000
500,000
1,500,000 1,500,000
Specified Executives
Mr S Storm
500,000
500,000
500,000
500,000
33
-
-
-
-
-
-
-
-
-
-
-
-
500,000
500,000
500,000
1,500,000
500,000
500,000
-
-
-
-
-
-
Balance at
the end of the
period
Vested and
exercisable at 30
June 2012
1,000,000
1,000,000
1,000,000
3,000,000
1,000,000
1,000,000
-
-
-
-
-
-
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 57
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
16. Related Parties
Directors and specified executives
Disclosures relating to the remuneration and shareholdings of directors and specified executives are set out in
the Directors’ Report and Note 15 respectively.
Other transactions with directors, their associates and director related entities are as follows:
Amounts paid to companies associated with certain
Directors for management services
Kirkdale Holdings Pty Ltd - Mr D Sargeant
Murilla Exploratio n Pty Ltd - Mr A Jessup
Mr T Revy
Total
Amounts payable to Dir ectors for Directors Fees
Mr T Revy
Consolidated
2 012
$
2011
$
211,200
211,200
7,500
429,900
22,500
22,500
180,000
140,000
22,500
342,500
7,500
7,500
The following table provides the total amount of transactions that were entered into with related parties for the
relevant financial year:
Related party
Consol idated
Associate:
FYI Resources Ltd
Revenue from
Related Parties
Reimbursement
of Expe nditure
Related Parties
Amounts owed
by Related
Parties as a t 30
June
$
$
$
Amounts
Owed to
Related
parties as at
30 June
$
2012
2011
-
-
42,880
103,604
15,927
26,360
-
-
Associate
The Group has a 28% interest in FYI Resources Limited (2011: 28%).
Page 58
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
34
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
17. Remuneration of auditors
The auditor of Empire Resources Ltd is HLB Mann Judd.
Amounts receive d or due and re ceivable by HLB
Mann Judd for:
Audit o r review of the financial reports o f the
Compan y
Amounts receive d or due and re ceivable by HLB
Mann Judd audit firms:
Other servi ces
18. Share Based Payments
Consolidated
20 12
$
2011
$
20,650
19,02 5
-
-
20,650
19,02 5
(a) Employee share plan
The Company has established an employee share plan, which is also available to Directors, known as the
2008 Empire Resources Limited Employee Share Plan and was approved by shareholders on 28 November
2007.
The issue price for Shares offered under the Plan is at the discretion of the Board, provided that the issue price
is not less than 1% below the weighted average sale price of Shares sold through ASX during the one week
period up to and including the offer date.
A Director or Employee who is invited to subscribe for Shares under the Plan may also be invited to apply for a
loan up to the amount payable in respect of the Shares accepted, on the following terms:
a) Loans must be made solely to the Participant or their nominee and in the name of either the Participant or
their nominee as the case may be.
b) The principal amount outstanding under a Loan will be interest free.
c) Any loan made available to a Participant shall be applied by the Company directly toward payment of the
issue price of the Shares to be acquired under the Plan.
d) The term of the loan shall be three (3) years from the date of issue of the Shares
e) The Company retains a lien over each share acquired pursuant to the loan until such time as the loan is
repaid.
There was 2,450,000 shares issued to Directors and employees under the Empire Resources Employee
Share Plan on 8 May 2011.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 59
35
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
18.
Share Based Payments (continued)
(b) Option plan
The Company has established an option share plan, which is also available to directors, employees and some
consultants, known as the 2010 Empire Resources Option Plan and was approved by shareholders on 25
June 2010.
The following table illustrates the number and weighted average exercise prices of and movements in share
options issued during the year:
Number
Weighted
average
exercise
price
Number
Weighted
average
exercise
price
2012
2012
2011
2011
Outstanding at the beginning of the year
Granted during the year
Outstanding at the end of the year
2,700,000
3,000,000
5,700,000
$0.14
$0.09
$0.11
2,700,000
-
2,700,000
0.14
$
-
$0.14
Exercisable at the end of the year
-
-
A corporate goal must be met before the options may be exercised: The corporate goal that has been set is
the Company’s market capitalisation reaching $10.77 million (which was the market capitalisation of the
Company at 1 December 2009 plus 50%) and remaining at that level for 50 contiuously traded ASX Business
Days.
The fair value of the equity-settled share options is estimated as at the date of grant using the Black and
Scholes model taking into account the terms and conditions upon which the options were granted.
The following table lists the inputs to the model used for the year ended 30 June 2012:
Grant Date
Expiry
date
Exercise price
Fair value
at grant
date of
options
Vesting
Period
Expected
Volatility Option life
Dividend
yield
Risk-free
interest
rate
Grant
date
share
price
25-Jun-10 25-Jun-13
$0.14
25-Jun-13
$0.02
107%
3 years
0%
4.57% $0.04
09-Aug-11 09-Aug-14
$0.09
09-Aug-14
$0.03
106%
3 years
0%
4.75% $0.05
20-Nov-11 20-Nov-14
25-Jun-10 25-Jun-13
09-Aug-11 09-Aug-14
25-Jun-10 25-Jun-13
09-Aug-11 09-Aug-14
$0.10
$0.14
$0.09
$0.14
$0.09
20-Nov-14
$0.04
106%
3 years
25-Jun-13
$0.02
107%
3 years
09-Aug-14
$0.03
106%
3 years
25-Jun-13
$0.02
107%
3 years
09-Aug-14
$0.03
106%
3 years
0%
0%
0%
0%
0%
4.51% $0.07
4.57% $0.04
4.75% $0.05
4.57% $0.04
4.75% $0.05
Key
Management
Personnel
options
Key
Management
Personnel
options
Key
Management
Personnel
options
Employee
options
Employee
options
Consultant
options
Consultant
options
Page 60
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
36
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
18.
Share Based Payments (continued)
(c) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of
employee benefit expense were as follows:
Shares issued under employee share plan
Options issued
19. Segment Information
Consolidated
2012
$
$
2011
$
$
-
84,037
84,037
94,770
13,500
108,270
Operating segments are reported in a manner that is consistent with the internal reporting provided to the
chief operating decision maker. The chief operating decision maker has been identified as the Board of
Empire Resources Ltd.
Consistent with prior year, the Group operates only in one business and geographical segment being
predominantly in the area of mining and exploration in Australia. The Group considers its business
operations in mineral exploration to be its primary reporting function.
20. Contingent assets
Penny's Find
In September 2010, the Company entered into a staged sale agreement for the Penny’s Find gold project with
Brimstone Resources Limited (Brimstone). At the election of Brimstone, the sale consideration comprises
either:
• Staged cash payments totalling $2.0 million for a 100% interest of the Penny’s Find project. A royalty will also
be payable on gold produced in excess of the current JORC resource of 52,500 ozs gold.
• Staged cash payments totalling $0.5 million together with exploration and development expenditure of up to
$3 million for an 80% interest in the Penny’s Find project. Any additional development costs associated with
the Company's residual 20% interest will carried by Brimstone and repayable from the proceeds of future gold
production.
An initial $500,000 (GST inclusive) payment has been made by Brimstone during the year to earn a 40%
interest in the project. Brimstone must then continue funding exploration and development work by expending
up to $3 million by 31st December 2013 to earn an 80% interest in the project. After expending $1.5 million by
December 2012, Brimstone can elect to purchase 100% of the project for $1.5 million plus a 2% gross royalty
on gold produced in excess of the current JORC resource of 52,500 ozs gold. The royalty would only apply
when the gold price is above A$700/oz and would not exceed A$50 per ounce of gold recovered.
Troy Creek
During the March 2011 quarter, the Company finalised an agreement with unlisted Sydney based company,
Zodiac Resources Ltd, whereby Zodiac may earn a 55% interest by spending $3 million on exploration within
three years and earn a 75% interest by spending an additional $4 million on exploration and development
within 5 years. Zodiac will have the option to acquire a 100% interest in the Troy Creek project within five years
of commencement of the joint venture for a purchase price of $5 million – this amount being separate to the
joint venture commitments.
21. Events after the Balance Date
Since 30 June 2012 there has not been any matter or circumstance not otherwise dealt with in the financial
report that has significantly affected or may significantly affect the Company.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 61
37
Empire Resources Limited
EMPIRE RESOURCES LIMITED
NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2012
Notes to the Financial Statements 30 June 2012
22. Parent Entity Financial Information
The individual financial statements for the parent entity show the following aggregate amounts:
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Total Current Assets
NON-CURRENT ASSETS
Trade and other receivables
Financial assets
Plant and equipment
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Loss before income tax expense
Income tax benefit
Other comprehensive loss for the year, net of tax
Total comprehensive loss for the year
Parent Entity
2012
$
2011
$
640,807
193,802
834,609
240
704,395
5,893
710,528
1,781,147
310,855
2,092,002
13
863,227
23,691
886,931
1,545,137
2,978,933
237,477
237,477
297,851
297,851
237,477
297,851
1,307,660
2,681,082
16,086,707
931,481
(15,710,528)
14,516,700
847,444
(12,683,062)
1,307,660
2,681,082
(3,158,810)
131,344
-
(2,111,869)
204,022
(139,664)
(3,027,466)
(2,047,511)
Page 62
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
38
12. DIRECTORS’ DECL AR ATIO N
DIRECTORSʼ DECLARATION
1. In the directors’ opinion:
(a)
the financial statements and notes set out on pages 10 to 39 are in accordance with the Corporations
Act 2001 including:
34 to 62
(i)
(ii)
complying with Australian Accounting Standards (including
the Australian Accounting
Interpretations), the Corporations Regulations 2001, professional reporting requirements and
other mandatory requirements; and
giving a true and fair view of the Group’s financial position as at 30 June 2012 and of its
performance for the financial year ended on that date; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable; and
(c)
the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2. The directors have been given the declarations by the Chief Executive Officer and the Chief Financial
Officer required by section 295A of the Corporations Act 2001 for the financial year ended 30 June 2012.
This declaration is made in accordance with a resolution of the directors.
___________________
David Sargeant
Managing Director
Perth, Western Australia
13 September 2012
39
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 63
13. AUDITOR’ S INDEPENDEN CE DECL A RA TI ON
Page 64
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers. 40 AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of Empire Resources Limited for the year ended 30 June 2012, I declare that to the best of my knowledge and belief, there have been no contraventions of: a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) any applicable code of professional conduct in relation to the audit. This declaration is in respect of Empire Resources Limited. Perth, Western Australia 13 September 2012 N G NEILL Partner, HLB Mann Judd
14. INDE PE NDENT A UDITO R’S R EPOR T
TO THE ME MBERS OF EMPIRE R E SOURCE S L IMIT ED
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 65
HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers. 41 INDEPENDENT AUDITOR’S REPORT To the members of Empire Resources Limited Report on the Financial Report We have audited the accompanying financial report of Empire Resources Limited (“the company”), which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for the consolidated entity. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ responsibility for the financial report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1(a), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the consolidated financial report complies with International Financial Reporting Standards. Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. Our audit did not involve an analysis of the prudence of business decisions made by directors or management. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Page 66
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
42 Matters relating to the electronic presentation of the audited financial report and remuneration report This auditor’s report relates to the financial report and remuneration report of Empire Resources Limited for the financial year ended 30 June 2012 published in the annual report and included on the company’s website. The company’s directors are responsible for the integrity of the company’s website. We have not been engaged to report on the integrity of this website. The auditor’s report refers only to the financial report and remuneration report. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report and remuneration report. If users of the financial report and remuneration report are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited financial report and remuneration report to confirm the information contained in this website version of the financial report and remuneration report. Auditor’s opinion In our opinion: (a) the financial report of Empire Resources Limited is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(a). Report on the Remuneration Report We have audited the remuneration report included in the directors’ report for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. Auditor’s opinion In our opinion the remuneration report of Empire Resources Limited for the year ended 30 June 2012 complies with section 300A of the Corporations Act 2001. HLB MANN JUDD Chartered Accountants Perth, Western Australia N G NEILL 13 September 2012 Partner
15. CO RPORATE GOVER NA NCE PRI NCI PL ES
Introduction
Empire Resources Limited (“Company”) has made it a
priority to adopt systems of control and accountability as
the basis for the administration of corporate governance.
Some of these policies and procedures are summarised in
this statement. To the extent that they are applicable, and
given its circumstances, the Company adopts the Eight
Essential Corporate Governance Principles and Best Practice
Recommendations (‘Recommendations’) published by the
Corporate Governance Council of the ASX.
Where the Company’s corporate governance practices
follow a recommendation, the Board has made appropriate
statements reporting on the adoption of the recommendation.
Where, after due consideration, the Company’s corporate
governance practices depart from a recommendation, the
Board has offered full disclosure and reason for the adoption
of its own practice, in compliance with the “if not, why not”
regime.
As the Company’s activities develop in size, nature and scope,
the size of the Board and the implementation of additional
corporate governance structures will be afforded further
consideration.
DISCLOSURE OF CORPORATE GOVERNANCE PRACTICES
Summary Statement
Recommendation
ASX Principles and
Recommendations
If not, why not
Recommendation
ASX Principles and
Recommendations
If not, why not
1.1
1.2
1.3
2.1
2.2
2.3
2.4
2.5
2.6
3.1
3.2
3.3
4.1
4.2
X
X
X
X
√
√
X
X
√
X
√
X
X
Refer (a) below
Refer (a) below
Refer (a) below
Refer (b) below
Refer (b) below
Refer (b) below
Refer (c) below
Refer (d) below
Refer (e) below
Refer (f) below
Refer (g) below
Refer (f) below
Refer (c) below
4.3
4.4³
5.1
5.2
6.1
6.2
7.1
7.2
7.3
7.4
8.1
8.2
8.3
n/a
n/a
n/a
n/a
X
n/a
X
n/a
X
n/a
√
n/a
X
n/a
n/a
n/a
n/a
Refer (h) below
n/a
Refer (i) below
n/a
Refer (j) below
n/a
Refer (k) below
n/a
Refer (l) below
n/a
n/a
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 67
(a)
Principle 1 Recommendation 1.1, 1.2 and 1.3
(b)
Principle 2 Recommendations 2.1, 2.2, 2.3
Notification of Departure
Empire has not formally disclosed the functions
reserved to the Board and those delegated to senior
executives. The appointment of non executive
directors to the Board is not formalised in writing by
way of a letter or other agreement.
Explanation for Departure:
The Board recognises the importance of distinguishing
between the respective roles and responsibilities of the
Board and management. The Board has established
an informal framework for the management of the
Company and the roles and responsibilities of the
Board and management. Due to the small size of
the Board and of the Company, the Board do not
think that it is necessary to formally document the
roles of Board and management as it believes that
these roles are being carried out in practice and are
clearly understood by all members of the Board and
management. The Board is responsible for the strategic
direction of the Company, establishing goals for
management and monitoring the achievement of these
goals, monitoring the overall corporate governance of
the Company and ensuring that Shareholder value is
increased. The Company has two executives, being
the Managing Director and an executive Director.
The Managing Director is responsible for ensuring
that the Company achieves the goals established by the
Board.
The appointments of non executive directors
are formalised in accordance with the regulatory
requirements and the Company’s constitution.
Notification of departure
The Company does not have a majority of
independent directors, with only one of the 3 Board
members being independent.
Explanation for departure
The Board considers that the current composition of
the Board is adequate for the Company’s current size
and operations and includes an appropriate mix of
skills and expertise relevant to the Company’s business.
The current Board structure presently consists of the
independent non- executive chairman, Mr Thomas
Revy, the managing director (Mr David Sargeant) and
one executive director (Mr Adrian Jessup), both of
whom are not independent. The Company considers
that each of the directors possess skills and experience
suitable for building the Company. It is the Board’s
intention to appoint another independent director as
and when the size and complexity of its operations
changes and a suitable candidate is identified.
(c)
Principle 2 Recommendation 2.4 and Principle 4
Recommendations 4.1, 4.2, 4.3, 4.4
Notification of Departure
Separate nomination and audit committees have not
been formed.
Explanation for Departure
The Board considers that the Company is not
currently of a size, or its affairs of such complexity,
that the formation of separate or special committees
is justified at this time. The Board as a whole is able
to address the governance aspects of the full scope of
the Company’s activities and ensure that it adheres to
appropriate ethical standards.
In particular, the Board as a whole considers those
matters that would usually be the responsibility of an
audit committee and a nomination committee. The
Board considers that, at this stage, no efficiencies
or other benefits would be gained by establishing a
separate audit committee or a separate nomination
committee.
Page 68
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
(d)
Principle 2 Recommendation 2.5
Notification of Departure
Empire does not have in place a formal process for
evaluation of the Board, its committees, individual
directors and key executives.
Explanation for Departure
Evaluation of the Board is carried out on a continuing
and informal basis. The Company will put a formal
process in place as and when the level of operations of
the Company justifies this.
(e)
Principle 2 Recommendation 2.6
Companies should provide the information indicated
in the Guide to Reporting on Principle 2.
Disclosure:
Skills, Experience, Expertise and term of office of each
Director
A profile of each director containing their skills,
experience, expertise and term of office is set out in
the Directors’ Report.
Identification of Independent Directors
The independent director of the Company during the
Reporting Period is disclosed in (b) above.
Independence is measured having regard to the
relationships listed in Box 2.1 of the Principles &
Recommendations.
Statement concerning availability of Independent
Professional Advice
To assist directors with independent judgement, it
is the Board’s policy that if a director considers it
necessary to obtain independent professional advice
to properly discharge the responsibility of their office
as a director then, provided the director first obtains
approval for incurring such expense from the Chair,
the Company will pay the reasonable expenses
associated with obtaining such advice.
Nomination Matters
The full Board sits in its capacity as a Nomination
Committee.
Performance Evaluation
During the Reporting Period the performance
evaluations for the Board and individual directors
did occur in accordance with the disclosed process in
Recommendation 2.5.
Selection and Reappointment of Directors
The Board considers the balance of independent
directors on the Board as well as the skills and
qualifications of potential candidates that will best
enhance the Board’s effectiveness.
Each director other than the managing director must
retire from office no later than the longer of the third
annual general meeting of the company or 3 years
following that director’s last election or appointment.
At each annual general meeting a minimum of one
director or a third of the total number of directors
must resign. A director who retires at an annual
general meeting is eligible for re-election at that
meeting. Reappointment of directors is not automatic.
(f)
Principle 3 Recommendation 3.1, 3.3
Notification of Departure
Empire has not established a formal code of conduct.
Explanation for Departure:
The Board considers that its business practices, as
determined by the Board and key executives, are the
equivalent of a code of conduct.
(g)
Principle 3 Recommendation 3.2
Companies should establish a policy concerning
trading in company securities by directors, senior
executives and employees, and disclose the policy or a
summary of that policy.
Disclosure:
The board has adopted a policy which prohibits
dealing the Company’s securities by directors, officers
and employees when those persons possess inside
information. The policy prohibits short term or
speculative trading of the Company’s securities. The
policy provides that permission be obtained from the
Chairman prior to trading.
(h)
Principle 5 Recommendation 5.1, 5.2
Notification of Departure
Empire has not established written policies and
procedures designed to ensure compliance with
ASX Listing Rule disclosure requirements and
accountability for compliance.
Explanation for Departure
The Directors have a long history of involvement
with public listed companies and are familiar with the
disclosure requirements of the ASX listing rules.
The Company has in place informal procedures that
it believes are sufficient for ensuring compliance
with ASX Listing Rule disclosure requirements
and accountability for compliance. The Board has
nominated the Managing Director and the Company
Secretary as being responsible for all matters relating to
disclosure.
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 69
(i)
Principle 6 Recommendation 6.1, 6.2
Notification of Departure
Empire has not established a formal Shareholder
communication strategy.
Explanation for Departure
While the Company has not established a formal
Shareholder communication strategy, it actively
communicates with its Shareholders in order to
identify their expectations and actively promotes
Shareholder involvement in the Company. It achieves
this by posting on its website copies of all information
lodged with the ASX. Shareholders with internet
access are encouraged to provide their email addresses
in order to receive electronic copies of information
distributed by the Company. Alternatively, hard
copies of information distributed by the Company are
available on request.
(j)
Principle 7 Recommendation 7.1, 7.2
Notification of Departure
Empire has an informal risk oversight and management
policy and internal compliance and control system.
Explanation for Departure
The Board does not currently have formal procedures
in place but is aware of the various risks that affect
the Company and its particular business. Section 8
of the prospectus dated 7 November 2006 provides
a summary of the relevant risk factors that may affect
the Company. As the Company develops, the Board
will develop appropriate procedures to deal with risk
oversight and management and internal compliance,
taking into account the size of the Company and the
stage of development of its projects.
(k)
Principle 7 Recommendation 7.3
The Board should disclose whether it has received
assurance from the Chief Executive Officer (or
equivalent) and the Chief Financial Officer (or
equivalent) that the declaration provided in accordance
with section 295A of the Corporations Act is founded
on a sound system of risk management and internal
control and that the system is operating effectively in
all material respects in relation to financial reporting
risks.
Disclosure:
The Chief Executive Officer (or equivalent) and the
Chief Financial Officer (or equivalent) have provided
a declaration to the Board in accordance with section
295A of the Corporations Act and have assured the
Board that such declaration is founded on a sound
system of risk management and internal control and
that the system is operating effectively in all material
respects in relation to financial risk.
(l)
Principle 8 Recommendations 8.1
Notification of departure
Empire does not have a formal remuneration policy
and has not established a separate remuneration
committee. Directors and management may receive
options or shares.
Explanation for Departure
The current remuneration of the Directors is disclosed
in the Directors’ Report. Non executive Directors
receive a fixed fee for their services and may also
receive options or shares. The issue of options
or shares to non executive Directors may be an
appropriate method of providing sufficient incentive
and reward while maintaining cash reserves.
Due to the Company’s early stage of development
and small size, it does not consider that a separate
remuneration committee would add any efficiency to
the process of determining the levels of remuneration
for the Directors and key executives. The Board
believes it is more appropriate to set aside time at
specified Board meetings each year to specifically
address matters that would ordinarily fall to a
remuneration committee. In addition, all matters of
remuneration will continue to be in accordance with
regulatory requirements, especially in respect of related
party transactions; that is, none of the Directors will
participate in any deliberations regarding their own
remuneration or related issues.
Page 70
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at 2 October 2012.
16. ADDITIONA L INFOR MA TION
(a) Distribution of shares
The numbers of shareholders, by size of holding are:
Category (size of holding)
Number of holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
26
71
128
386
227
838
The number of shareholdings held in less than marketable parcels is 237.
(b)
Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
SHAREHOLDERS
TRONES INVESTMENTS PTY LTD
RBJ NOMINEES PTY LTD
BLAMNCO TRADING PTY LTD
KIRKDALE HOLDINGS PTY LTD
AGENS PTY LTD
MEEKAL PTY LTD
ANKAA SPRINGS PTY LTD
A N SUPERANNUATION PTY LTD
WESTORIA RESOURCE INVESTMENTS LTD
MRS SUKHON SUHARITDUMRONG
H WALLACE-SMITH AND CO PTY LTD
CANARY PTY LTD
PURITAN STYLE PTY LTD
MR BRIAN MCCUBBING
FIRST FARLEY PTY LTD
D W SARGEANT PTY LTD
DW SARGEANT PTY LTD
COLTRANGE PTY LTD
DAVBYN PTY LTD
MARTINI 5 PTY LTD
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Number of shares held
Holding (%)
5,915,000
4,450,000
3,562,000
3,300,000
3,275,806
3,098,333
3,056,160
3,000,000
2,700,000
2,268,500
2,110,000
2,000,000
2,000,000
1,900,000
1,700,000
1,550,000
1,550,000
1,527,677
1,500,000
1,470,000
51,933,476
3.93%
2.95%
2.36%
2.19%
2.17%
2.06%
2.03%
1.99%
1.79%
1.51%
1.40%
1.33%
1.33%
1.26%
1.13%
1.03%
1.03%
1.01%
1.00%
0.98%
34.48%
(c)
Stock Exchange Listing
Listing has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian
Stock Exchange Limited except for the following which are not quoted by virtue of restriction agreements.
Quoted shares on ASX and total issued share capital
150,645,921
(d)
Voting rights
All shares carry one vote per unit without restriction.
(e) Unlisted options
Unlisted options (Ex Price 13.7 cents; Exp 25 June 2013)
Unlisted options (Ex Price 15 cents; Exp 2 June 2013)
Unlisted options (Ex Price 9 cents; Exp 9 August 2014)
Unlisted options (Ex Price 9.8 cents; Exp 28 November 2014)
2,700,000
8,227,729
1,500,000
1,500,000
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
Page 71
INT ERESTS IN M ININ G AN D EXPL OR AT ION T ENEMENTS as a t 30 Sep tember 2012
PROJECT
TROY CREEK
PENNY’S FIND
YUINMERY
YUINMERY OPTION
WYNNE
DAMPERWAH
TENEMENT
E69/1729
E69/2357
E69/2358
E69/2485
E69/2869
E69/2870
E69/2904
E69/2905
P69/45
E27/410
E27/420
M27/156
P27/1713
P27/1714
P27/1715
P27/1716
P27/1717
P27/1718
P27/1719
P27/1720
P27/1721
P27/1722
P27/1723
P27/1724
P27/1725
P27/1726
P27/1727
P27/1728
P27/1729
P27/1730
P27/1731
P27/1814
P27/1922
P27/1923
P27/1962
P27/2007
P27/2008
M57/265
P57/1214
P57/1215
P57/1216
P57/1217
E57/735
E57/766
E57/783
E57/840
E57/907
E57/514
E57/524
E57/681
P57/1130
P57/1131
E08/1979
E08/2275
E59/1323
INTEREST
REMARKS
45%
45%
45%
Application not yet granted
Application not yet granted
Application not yet granted
Application not yet granted
Application not yet granted
45%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Application not yet granted
Option for 90% Interest
Option for 90% Interest
Option for 90% Interest
Option for 90% Interest
Option for 90% Interest
100%
Application not yet granted
Option for 70% Interest
Page 72
EMPIRE RESOURCES LIMITED – ANNUAL REPORT 2012
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