Level 2, 907 Canning Highway
Mt Pleasant
Western Australia 6153
Postal: Post Office Box 920
CANNING BRIGDE
APPLECROSS WA 6953
Phone: (618) 93159057
Fax: (618) 93159037
Email: enq@gmeresources.com.au
BY E-MAIL
GME RESOURCES LTD
ABN 62 009 260 315
29 September 2005
The Companies Announcement Office
Australian Stock Exchange Limited
Level 10 Exchange Centre
20 Bond Street
SYDNEY NSW 2000
Dear Sirs
2005 ANNUAL REPORT
Please find attached the following documents for immediate release to ASX and lodgement with
ASIC:
• The 2005 Annual Report incorporating the Audited Financial Statements for GME
Resources Limited and Controlled Entities for the Year ended 30 June 2005; and
• The ASIC Form 388.
Yours faithfully
MARK PITTS
Company Secretary
C:\Documents And Settings\Mark Pitts\My Documents\Client Files\Co Sec Files\GME\ASX\G-36 2005 Annual Report 0905.Doc:29/9/05
G M E R E S O U R C E S L T D
ABN 62 009 260 315
ANNUAL REPORT
2005
CONTENTS
PAGE
CORPORATE DIRECTORY ..............................................................
1
CHAIRMAN’S LETTER ....................................................................
2
REVIEW OF OPERATIONS .............................................................
3
CORPORATE GOVERNANCE ........................................................ 12
DIRECTORS’ REPORT .................................................................... 19
AUDITORS INDEPENDENCE DECLARATION ................................ 27
FINANCIAL REPORT ...................................................................... 28
DIRECTORS’ DECLARATION ........................................................ 49
INDEPENDENT AUDIT REPORT .................................................... 50
SHAREHOLDER INFORMATION ................................................... 52
TENEMENT DIRECTORY ............................................................... 54
GME RESOURCES LTD
CORPORATE DIRECTORY
DIRECTORS
Chairman
Michael Delaney PERROTT B.Com
Managing Director
James Noel SULLIVAN FAICD
Director
Peter Ross SULLIVAN BE, MBA
Technical Director
Geoffrey Mayfield MOTTERAM B.MetE(Hons), M.AusIMM
COMPANY SECRETARY
Mark Edward PITTS B.Bus, C.A.
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS
Level 2,
907 Canning Highway
Mt Pleasant WA 6153
PO Box 920
Applecross WA 6953
Telephone:
Facsimile:
E-Mail:
Web Site:
(08) 9315 9057
(08) 9315 9037
enq@gmeresources.com.au
www.gmeresources.com.au
AUDITORS
HLB Mann Judd
Chartered Accountants
15 Rheola Street
West Perth WA 6005
SHARE REGISTRY
Computershare Registry Services Pty Ltd
Level 2, Reserve Bank Building
45 St George’s Terrace
Perth WA 6000
GPO Box D182
Perth WA 6001
Telephone:
Facsimile:
(08) 9323 2000
(08) 9323 2033
STOCK EXCHANGE LISTING
The Company’s shares are quoted on the
Official List of Australian Stock Exchange Limited
STATE OF REGISTRATION
Western Australia
- 1 -
ANNUAL REPORT 2005
GME RESOURCES LTD
CHAIRMAN’S LETTER
27 September 2005
Dear Shareholders
Your company has continued to add value to its asset base with prudent drilling through the
year. This has increased the quantity of high grade ore which has been brought to indicated
status.
It is expected that the company’s ongoing drill programs will continue to add to and improve the
status of our lateritic nickel resource base. With continuing strength in the commodity markets
the value of this resource base continues to increase. The most recent drilling results
demonstrate the extent of our high grade resource.
Since the end of the financial year a further capital raising was completed and it was
noteworthy that almost 90% of the known shareholders responded in full to the rights issue.
The Directors were delighted with this response.
The Company under the leadership of the Managing Director, Jamie Sullivan, has worked
modestly yet expeditiously from a new office in Mt Pleasant and with the addition of a senior
geologist, the results have been pleasing.
The completion of successful negotiations with various native title claimants was a further
milestone for the Company. We welcome the claimants as shareholders of our Company.
We all continue to note with interest the continued performance of the Murrin Murrin Joint
Venture refinery. This is strategically located to our resource base and with the magnitude and
grade of our resources becoming better known, the interest of various other parties has been
stimulated.
I would like to acknowledge and thank our Managing Director, Mr Jamie Sullivan, and my fellow
directors. Mr Niels Kroyer retired as Company Secretary after many years of service on
30 June 2005 and we would like to thank Mr Kroyer for his dedication and assistance.
Yours faithfully
MICHAEL PERROTT
Chairman
- 2 -
ANNUAL REPORT 2005
GME RESOURCES LTD
REVIEW OF OPERATIONS
Since the acquisition of the remaining 60% interest in NiWest Ltd from the receiver manager of
Western Metals Ltd in April 2004, significant progress has been made in advancing the
development options for the company’s nickel laterite project.
NiWest Limited owns and controls mining tenements covering approximately 510 square
kilometers in the North Eastern goldfields of Western Australia that host extensive low saline
laterised ultramafics. The combined resources within the tenement holding contain significant
nickel and cobalt resources. NiWest’s nickel project comprises nine separate resource areas,
seven of these resources are strategically located within a 55 kilometre radius of the Murrin
Murrin Joint Venture (MMJV) nickel refinery. The company’s combined nickel resources (0.7%
nickel cut off grade) stand at 128 million tonnes grading 1.00% nickel and 0.06% cobalt. Within
this is a high grade resource of 40.6 million tonnes grading 1.25% nickel.
Since completion of the acquisition of the remaining shares in NiWest Ltd and capital raising in
April 2004, the company has been working on a number of fronts to unlock the value of the
company’s resources for the benefit of its shareholders.
A key milestone achieved this year was the successful negotiation and execution of agreements
with the native title parties affecting the company’s mining tenements. Mining Leases were
subsequently granted over the majority of the projects areas, clearing the path to progress to
mining activities. The agreement with the Wongatha people includes a designated area covering
approximately 8,500 square kilometers between Leonora and Laverton. The agreement
provides for additional mining, exploration and miscellaneous tenements that may be required in
the future. The company would like to acknowledge the efforts of the native title claimants to
resolve this matter and welcome them as shareholders in the company.
The company’s exploration objective over the past year has been to upgrade resources from
inferred to indicated status. Four infill reverse circulation drilling campaigns for a total of 10,545
metres were undertaken. The programs to date have seen 48% of the inferred high grade
resources (1% cut off grade) being upgraded to indicated status. The conversion rate from
inferred to indicated status has been highly encouraging. In particular the Mt Kilkenny project
has achieved 100% conversion combined with a grade increase of 0.2% nickel. Significant
potential exists to upgrade further resources as the majority of the drilling undertaken was
focused on the Eucalyptus and Mt Kilkenny projects.
The company has approved an exploration budget of $850,000 this year. Approximately 14,000
metres of reverse circulation drilling will be completed on the project areas located near the
Murrin Murrin nickel refinery. Exploration will be centered on identifying additional high grade
resources within the Eucalyptus area combined with upgrading the remainder of the resources
to indicated status. High resolution aeromagnetics have been flown at the Mt Kilkenny and
Eucalyptus projects. The new data will assist with the targeting of nickel laterite mineralisation at
both projects. The aeromagnetic data will also be useful in delineating potential nickel sulphide
targets.
Overall it has been a busy year for the company. In addition to the rolling drill campaigns, the
company moved offices in May and appointed a new company secretary in June. With the
successful capital raising completed in August 2005, shareholders can expect to see the
company continue to advance the development options for the nickel project.
Further information pertaining to work programs undertaken throughout the year are
summarised in the following pages.
- 3 -
ANNUAL REPORT 2005
GME RESOURCES LTD
Resources Statement
As a result of a number drilling programs at the Mt Kilkenny and Eucalyptus projects, in March
2005, the company released an updated resource statement. Whilst the statement of resources
has not changed substantially, the company has decided to include two higher cut off grades to
provide more detailed information on the total resource as the cut off grade is increased
incrementally.
For the purposes of information contained in Table 1, the Mt Kilkenny and Eucalyptus projects
are the only areas where resources have been calculated at 1.10% and 1.20% cut of grades.
The total resource tonnes under these categories will increase as the remaining project areas
are upgraded to indicated status. Table 2 provides a break down of the combined resources
base at a 1.00% nickel cut off grade.
Table 1 Total nickel resources at various nickel cut off grades
Ni Cut Off Grade %
0.50
0.70
1.00
*1.10
*1.20
Million Tonnes
227.55
128.10
40.66
23.14
18.17
Grade Ni %
0.81
1.00
1.25
1.30
1.38
Grade Co %
0.05
0.06
0.10
0.10
0.10
* Mt Kilkenny & Eucalyptus Only
Table 2 High grade nickel resources by project area at 1.00% nickel cut off grade
Project
Mt Kilkenny
Mt Kilkenny
Eucalyptus
Eucalyptus
Waite Kauri
Murrin Murrin North
Hepi
Mertondale
Macey Hill
Duck Hill
Total
Total
Combined
Category
Indicated
Inferred
Indicated
Inferred
Measured
Inferred
Inferred
Inferred
Inferred
Inferred
Indicated/Measured
Inferred
Tonnes
9,300,000
3,250,000
9,250,000
9,260,000
1,300,000
2,700,000
2,600,000
1,200,000
300,000
1,500,000
19,850,000
20,810,000
40,660,000
% Ni
1.30
1.13
1.23
1.21
1.33
1.26
1.26
1.24
1.40
1.27
1.27
1.23
1.25
% Co
0.11
0.08
0.085
0.066
0.14
0.11
0.10
0.08
0.15
0.30
0.10
0.10
0.10
- 4 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NiWest project areas and tenement holding in relation to the Murrin Murrin Joint Venture
tenements.
Summary of Work Programs
Throughout the year exploration progressed steadily with four reverse circulation drilling
campaigns completed between September and May for a total of 10,545 metres. Exploration
and resource drilling was undertaken on five of the company’s project areas. Following is a brief
summary of exploration work carried out on the respective project areas.
Mt Kilkenny Project
E39/688 ML39/878 – 879 ELA 39/1107-09 P39/4404 – 4407 P39/4412-4417
E39/990 Joint Venture Jindalee Resources Ltd
The Mt Kilkenny project is located 35 kilometres south west of the MMJV nickel refinery and five
kilometres south of the Murrin South project currently being mined by the MMJV. The Mt
Kilkenny project hosts the company’s largest single resource. Drilling at the project over the past
year has been focused on the northern ultramafic unit, where, previous wide spaced drilling
intercepted continuous high grade mineralisation up to 400 metres in width and over 2.5
kilometres in strike length. As a result of the successful infill drilling campaigns, the Mt Kilkenny
North resource has been upgraded to indicated status and contains 9.3 million tonnes grading
1.30% Nickel and 0.11% Cobalt.
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ANNUAL REPORT 2005
GME RESOURCES LTD
The resource is open to the north and recently acquired aeromagnetics show that the underlying
ultramafics continue for approximately 700 metres into new tenement applications lodged by the
company. This area of ultramafic is untested by drilling. A recent drill program covering 2.5
kilometres of strike at the Mt Kilkenny Central area has intercepted additional high grade
mineralisation.
Further drilling will be undertaken on the central and southern ultramafics over the course of the
year. Once this work is completed and all data has been complied the company will release an
updated resource statement for the Mt Kilkenny project.
The high resolution aeromagnetics has also identified at least three other untested areas within
the project area that have potential to host mineralisation. Work will progress on these areas in
the near future.
- 6 -
ANNUAL REPORT 2005
GME RESOURCES LTD
Eucalyptus Project
P39/3459 - 3460 converted to MLA39/744 ELA39/703
ML39/666 ML39/430 and ML39/344 ML39/665 - 666 and ML 39/674 M39/313 E39/480
converted to MLA39/803 - 804
MLs 39/568, 39/570, 39/616 and 39/802 M39/289
The Eucalyptus project is located 55 kilometres south east of the MMJV nickel refinery and
hosts a number of significant resources. Drilling at Eucalyptus has targeted three areas where
previous high grade mineralisation had been intercepted. Drilling at Eucalyptus Central,
Eucalyptus North and Camelback resulted in all three areas being upgraded to indicated status.
- 7 -
ANNUAL REPORT 2005
GME RESOURCES LTD
The combined indicated resource at the Eucalyptus project now stands at 9.25 million tonnes
grading 1.23% Nickel and 0.085% Cobalt.
All of the resources remain open on strike in both directions and will be the focus of further
drilling over the next year.
Several other areas subjected to infill drilling near to high grade intercepts returned significant
results. At Eucalyptus West, further mineralisation in excess of 1.20% nickel has been
intersected in a number of drill holes along a narrow near surface structure over 1.3 kilometres
of strike length.
Drilling at Camelback North also returned high nickel and cobalt grades over 1.5 kilometres of
strike. It is evident that in addition to the larger mineralised structures present at Eucalyptus that
there are a number of narrow (75m – 100m) zones that host high grade mineralisation. The
cumulative total of these resources could significantly improve the resource grade within the
Eucalyptus project.
The company has recently completed a high resolution aeromagnetic survey of the Eucalyptus
project. The aeromagnetic data will be a valuable tool in targeting these narrow high grade
zones as well as identifying new potential zones of mineralisation within the project area.
Future work programs at Eucalyptus will include resource expansion drilling at Camelback
South and Eucalyptus North East where at both areas, wide spaced drilling has encountered
sporadic results on over three kilometres of laterised ultramafics. Screen upgrade test work is
yet to be undertaken at the chrysoprase area where extensive silica banding is present in old
pits and costeans.
Murrin North Project
ML39/758 MLA39/757 and MLA39/759
The Murrin North inferred resource stands at 2.7 million tonnes grading 1.26%Ni and 0.11%Co
and is located four kilometres to the north west of the MMJV nickel refinery.
The project has been the focus of recent drilling following an exceptionally high grade intercept
averaging 4.66 % nickel over two metres in width. The two metre intercept was within an eleven
metre intercept grading 1.96% Ni. Coinciding with the two metres of 4.66% Ni was an unusually
high copper value of 0.73%.
A further two metre intercept grading 4.20% nickel was intersected down dip of the first result in
the follow up drill program. More drilling is planned to test the strike length and down dip
extension of the zone. Several angle holes will be drilled to test for continuity of the high grade
below the base of oxidisation. A number of vertical holes are also planned to complete the
upgrade of resource from inferred to indicated status. The company expects to release the
upgraded indicated resource statement before December 2006. Any further deep drilling at the
project will be dependant on the success of the angle holes designed to intersect the high grade
zone below sixty metres in vertical depth.
Waite Kauri Project
P37/4149 converted to MLA37/580 P37/5264 converted to MLA37/1091 PL37/5555
The project is located approximately 20 kilometres to the north west of the MMJV treatment
plant and contains a measured resource quoted at 1.3 million tonnes grading 1.33%Ni and
0.14%Co. The Waite Kauri project has been held up somewhat by Native title heritage issues.
- 8 -
ANNUAL REPORT 2005
GME RESOURCES LTD
However, the company has now received the necessary clearances to proceed with the planned
exploration program.
The project contains a measured high grade limonitic resource. Laboratory testing of reverse
circulation drill cuttings indicates that wet screening of the laterite ore can produces an
upgraded nickel laterite concentrate. The test work has shown that the nickel grades in the
concentrate can be upgraded by as much as 80%.The most significant result was an upgrade in
nickel value from 1.60% to 3.01% nickel.
Further work is now being planned to collect a larger cross section of the Waite Kauri ore to
confirm and expand on these initial screen upgrade test results.
Hepi Project
ML 39/717 – 718 ML39/819
The Hepi project is located approximately 12 kilometres south west of the MMJV treatment
plant. The heavy haulage road which is currently being used by MMJV to transport ore from
their Murrin South project is located several hundred metres to the south of the project area.
The projects inferred resource stands at 2.6 million tonnes grading 1.26%Ni and 0.10%Co.
A small reverse circulation drill program was undertaken in August 2004. The program was
designed to compare the validity of previous RAB drilling results and infill several lines of wide
spaced drilling. Both aspects of the program were achieved with RC holes twinned next to RAB
holes producing correlating results.
Further drilling is planned at Hepi to upgrade the resource to indicated status by June 2006.
Nickel Sulphide Initiatives
In December 2004, the company engaged consultants to undertake a review of the nickel
sulphide potential within the ultramafic units from which the nickel laterite resources have been
formed. The areas selected for the review were the Eucalyptus, Mt Kilkenny and Waite Kauri
projects. Many of these ultramafic units represent serpentinised, olivine rich komatiites of the
kind that host large bodies of disseminated nickel sulphides of the Mt Keith type and massive
nickel sulphide bodies of the Kambalda type.
Historical exploration directed at nickel sulphides was conducted at both Eucalyptus and Waite
Kauri projects. Programs at both projects areas were abandoned despite the existence of
untested targets. At Mt Kilkenny there is little evidence of exploration for nickel sulphides, with
the majority of earlier exploration work focused towards base metals and gold.
The review has identified a number of potential targets for nickel sulphide at all of the areas
considered. At Eucalyptus, petrology analysis of diamond drilling core by a previous company
encountered small accumulations of millerite associated with nickel assays grading 0.50%
between 193 metres and 226 metres depth. No follow up work has been undertaken as yet.
At the Mt Kilkenny project, analysis of bottom of hole geochemistry has identified four potential
targets for further investigation. The untested ultramafic unit is at least six kilometres in length
and is mostly buried 60 metres below surface. Over the past six months a number of vertical
drill holes targeting nickel laterite have been drilled deeper to collect samples from below the
base of oxidisation. Petrology analysis of these samples has identified trace nickel sulphides in
the form of millerite and pentlandite.
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ANNUAL REPORT 2005
GME RESOURCES LTD
The company is continuing to build on its information base regarding nickel sulphide
mineralisation. Exploration programs designed to identify nickel laterite are reviewed and
modified to test deeper zones of mineralisation where it is considered potential for nickel
sulphide may exist
Murrin Murrin (Minara)
M39/426, 456, 552, 569
Minara Resources Limited on behalf of the Murrin Murrin Joint Venture has rights to nickel-
cobalt mineralisation on the above tenements. GME retains the rights to precious metals or
other base metals discovered on these tenements, including nickel sulphides. To maintain
these rights Minara pays the company a fee of $100,000 per year and, in addition to this, a
royalty of $0.20 cents per tonne on all nickel laterite mined from the tenements. No royalty
payments were received by the company over the past year. Although ore was processed from
the tenements it was not sufficient to trigger the threshold payment. It is anticipated that a
further royalty payment can be expected in the coming year as additional ore is processed, as a
result an amount of $100,000 was accrued to reflect the royalty anticipated and based on
information supplied by Minara.
Statement of Resources located on Minara Resources Tenements
Deposit
MM4
MM4
MM4E
MM13
Total
Million
Tonnes
5.6
4.8
3.8
7.2
21.4
%Ni
1.03
0.97
1.07
1.11
1.05
%Co
0.07
0.07
0.09
0.07
0.07
Cut-off
%Ni
0.8
0.8
0.8
0.8
Resource
Status
Measured
Indicated
Inferred
Inferred
LEONORA – LAVERTON GOLD PROJECTS
LINDEN
P39/3417-18 GME 100%
P39/2974-76, MLA39/500 Haoma 90% GME 10%
Based on previous drilling, an inferred undiluted gold resource of 240,000 tonnes at 7.15 g/t
(55,179 oz) has been calculated at the Devon deposit. Exploration at the Linden tenements was
limited to several field trips for recognisance purposes.
ABEDNEGO
GOLDEN CLIFFS NL 100%
MLA 39/427, MLA39/823 -825
The Abednego Gold project is located adjacent to and adjoining the company’s Murrin Murrin
and Hepi projects. The project area covers approximately 30 square kilometres. Placer have
advised the company of their intention to withdraw from the joint venture subject to a number of
conditions. In general the project ownership will revert back to Golden Cliffs NL with Placer
retaining a royalty and the right to claw back a 70% interest in the project should a resource
greater than 300,000 ounces be established.
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ANNUAL REPORT 2005
GME RESOURCES LTD
The project comprises five independent prospect areas. All of the prospects have been drilled
to varying degrees. Located at the historical Federation/Homeward Bound mines in the centre
of the project area, is a gold resource of 70,000 tonnes grading 2.7 g/t. The Sonex prospect,
which is located in the south eastern portion of the project area, has returned a number of
encouraging drill intersections. The prospect has been drilled along a 700-metre strike and is
open to the south where the shear runs into the NiWest Hepi project area. Some of the better
intersections at the Sonex prospect are listed in the table below.
Other than several field inspections no exploration was required on the project as mining lease
titles have not been granted. The company intends to apply for reversions back to new
prospecting licences through the proposed amendments to the mining act.
ARB29
ARB93
ARB24
5 metres @ 5.42 g/t
15 metres @ 3.2 g/t
3 metres @ 2.29 g/t
ARB13
ARB26
ARB60
5 metres @ 15.0 g/t
1 metre @ 6.66 g/t
6 metres @ 2.62 g/t
OTHER LEONORA – LAVERTON GOLD PROJECTS
Hawks Nest
M38/218 P38/2515
The Hawks Nest project contains an undiluted inferred gold resource of 58,000 tonnes grading
3.19 grams per tonne. The resource is open in all directions, field inspection and sampling
program of the existing open pit was undertaken March 2005. Assaying from the pit wall has
confirmed two sub parallel zones of mineralisation intersected in previous drilling contain
economic gold values close to surface. Drilling has intersected these lodes at 40 metres below
surface. Significant assays recorded from the sampling program are listed in the following table.
Further work will be carried out to meet minimum expenditure commitments in the coming year.
Description
Main Lode North Wall
Main Lode South Wall
Hanging Wall
Intercept
3 metres
4 metres
2 metres
Grade g/t
2.76
3.31
1.48
There were no substantial field activities on the Chain Bore, Mt Morgans South and Pyke Hill
projects over the period.
OTHER REGIONAL PROJECTS
Ilgarari
EL52/1482 GME 100% All minerals other than copper.
In July 2004 the company entered into an option agreement to sell the copper rights to the
Illgarari project for $100,000. In January 2005 Murchison Copper Mines exercised the option to
acquire these rights and the tenement was subsequently transferred. The company has retained
rights to all other minerals and a royalty from copper mining capped at $100,000
The project area is prospective for manganese, uranium and zinc. A review of historical work
undertaken on the project in the 1980 -1990 period has revealed that a soil and rock chip
sampling program identified a number of highly anomalous manganese samples that returned
assays between 25% and 38%. Uranium assays as high as 280ppm were also recorded in a
number of samples. Work carried out by BHP also discusses an elevated uranium channel
evident on airborne data. Drilling by previous explorer also reported 18 metres grading 0.57%
zinc between 24 and 41 metres. The company is currently reviewing the potential of this project.
- 11 -
ANNUAL REPORT 2005
GME RESOURCES LTD
CORPORATE GOVERNANCE STATEMENT
Introduction
The Board of Directors of GME Resources Limited has adopted the following Corporate
Governance Principles and is responsible for the adherence to these Principles. These
Principles and Practices are reviewed regularly and upgraded or changed to reflect changes in
law and what is regarded as best practice. A description of the Company's main Corporate
Governance Principles and Practices is set out below.
Role of the Board
The Board has adopted the following Statement of Matters for which the Board will be
responsible:
(1) Reviewing and determining the Company's strategic direction and operational policies;
(2) Review and approve business plans, budgets and forecasts and set goals for
management;
(3) Appoint and remunerate Chief Executive Officer and Senior Staff;
(4) Review performance of Chief Executive Officer and Senior Staff;
(5) Review financial performance against Key Performance Indicators on a monthly basis;
(6) Approve acquisition and disposal of tenements;
(7) Approve exploration and mining programs;
(8) Approve capital, development and other large expenditures;
(9) Review risk management and compliance;
(10) Oversee the Company's control and accountability systems;
(11) Reporting to shareholders; and
(12) Ensure compliance with environmental, taxation, Corporations Act and other laws and
regulations.
Managing Director
GME's most senior employee is the Managing Director who is appointed and subject to annual
reviews by the Board. The Managing Director recommends policies, strategic direction and
business plans for the Board's approval and is responsible for managing the Company's day-to-
day business.
Board Independence
The Board consists of four directors, but up to 10 directors can serve on the board. Mr James
Sullivan is the only executive the remainder are non executive. Currently the four directors are:
(cid:131) Michael D Perrott
Chairman
(cid:131) James N Sullivan
Managing Director
(cid:131) Peter R Sullivan
Director
(cid:131) Geoffrey M Motteram Director
59 years
Director since 1996
44 years Director since 2004
Director since 1996
49 years
Director since 1997
56 years
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ANNUAL REPORT 2005
GME RESOURCES LTD
Mr Motteram is the only director considered Independent on the Board according to the
definitions by the Australian Stock Exchange Corporate Governance Council ("Council").
The Managing Director, Mr J Sullivan is a full time executive, and is also a substantial
shareholder of the Company. Both, the Chairman, Mr Perrott, and Mr P Sullivan are also not
considered "Independent" by the definitions of the Council as they are both directly or indirectly
substantial shareholders in the Company.
As such, the Company does not comply with the Council's recommendation, Item 2.1, that the
majority of the Company's directors should be Independent Directors. The Board has however
adopted a series of safeguards to ensure that independent judgement is applied when
considering the business of the Board:
• Directors are entitled to seek independent professional advice at the Company's
expense. Prior written approval of the Chairman is required but this is not unreasonably
withheld.
• Directors having a conflict of interest with an item for discussion by the Board must
absent themselves from a board meeting where such item is being discussed before
commencement of discussion on such topic.
• The Independent Director confers on a "needs" basis with the Chairman with such
discussion if warranted and considered necessary by the Independent Director.
• The Board considers Non-executive Directors to be independent even if they have minor
they are not a substantial shareholder.
dealings with
Transactions with a value in excess of 5% of the Company's annual operating costs are
considered material. A director will not be considered independent if he has transactions
in excess of this materiality threshold.
the Company provided
Tenure of the Board
The Directors are expected to review their membership of the Board from time to time taking
into account the length of service on the Board, age, qualification and experience. In light of the
needs of the Company and direction of the Company together with such other criteria
considered desirable for composition of a balanced board and the overall interests of the
Company.
A director is expected to resign if the remaining directors recommend that a director should not
continue in office, but is not obliged to do so.
Chairman
The current Chairman is Mr Michael D Perrott, Mr Perrott brings a wealth of business
experience, connections and drive to the Board.
The Chairman's role is separated from the role of the Managing Director.
The Chairman's role includes:
• Providing effective leadership on formulating the Board's strategy;
• Representing the views of the Board to the public;
- 13 -
ANNUAL REPORT 2005
GME RESOURCES LTD
• Ensuring that that the Board meets at regular intervals throughout the year and that
minutes of meeting accurately record decisions taken and where appropriate the views
of individual directors;
• Guiding the agenda, information flow and conduct of all board meetings;
• Reviewing the performance of the board of directors; and
• Monitoring the performance of the management of the Company.
Committees
Due to the small size of the Company and the number of board members, the Board does not
have a formal nomination committee structure. Any new directors will be selected according to
the needs of the Company at that particular time, the composition and the balance of
experience on the Board as well as the strategic direction of the Company.
Should the need arise to consider a new board member, some or all of the Directors would form
the committee to consider the selection process and appointment of a new director.
At each annual general meeting the following directors retire:
• One third of directors (excluding the Managing Director);
• Directors appointed by the Board to fill casual vacancies or otherwise;
• Directors who have held office for more than three years since the last general meeting
at which they were elected.
Details on Current Directors
Details on current directors including their skills and experience are included in the Directors’
Report.
Ethical and Responsible Decision-making
In making decisions, the Directors of the Company, its officers and employees, take into
account the needs of all stakeholders:
• Shareholders;
• Employees;
• Community;
• Creditors;
• Contractors; and
• Government (Federal, State and Local).
The Directors, officers and employees of the Company are expected to:
• Comply with the laws and regulations both by the letter and in spirit;
- 14 -
ANNUAL REPORT 2005
GME RESOURCES LTD
• Act honestly and with integrity;
• Avoid conflicts of interest by not placing themselves in situations which result in divided
loyalties;
• Use the Company's assets responsibly and in the interests of the Company, not take
advantage of property, information or position for personal gain or to compete with the
Company;
• To keep non-public information confidential except where disclosure is authorised or
legally mandated; and
• Responsible and accountable for their actions and report any unethical behaviour.
Trading in Company Securities
The Directors, officers and employees of the Company must not acquire or dispose of securities
in the Company whilst in possession of price sensitive information not yet released to the
market. Subject to this condition and the trading prohibition applying to periods prior to major
announcements, including announcement of drilling results, announcement of half-yearly and
full year results and the holding of a general meeting, trading can occur at any time.
Directors must advise the Company which in turn advises the Australian Stock Exchange of any
transactions conducted by them in the Company's securities within five business days after the
transaction occurs.
Integrity of Financial Reporting
GME's Managing Director and Company Secretary report in writing to the Board:
• That the Company's financial reports are complete and present a true and fair view, in all
material respects, of the financial condition and operational results of the Company and
Group; and
• That the above statement is founded on a sound system of internal control and risk
management which implements the policies adopted by the Board and that the
Company's risk management and internal controls are operating efficiently in all material
respects.
Audit Committee
The Company does not have a formal audit committee as, in the opinion of the directors, the
scope and size of the Company’s operations do not warrant it. As such the Company is not in
strict compliance of the Council’s Recommendation 4.2 that the Board should establish an audit
committee. It should be noted however that when the Council’s Recommendation was made it
was emphasised that it was more relevant for large companies.
The Board regularly reviews the scope of audits, the level of audit fees and the performance of
auditors.
The Board also is continually assessing to ensure the independence of the external auditor is
maintained. The company will and does, if necessary, use other consultants to avoid any
potential independence issues.
- 15 -
ANNUAL REPORT 2005
GME RESOURCES LTD
Timely and Balanced Disclosure to Australian Stock Exchange
The Company has procedures in place to identify matters that are likely to have a material effect
on the price of the Company's securities and to ensure those matters are notified to the
Australian Stock Exchange in accordance with its listing rule disclosure requirements.
Information to the market and media is handled by the Chairman, the Managing Director or the
Company Secretary. In particular, the Company Secretary has been nominated as the person
responsible
includes
responsibility for compliance with the continuous disclosure requirements of the Australian
Stock Exchange Listing Rules and overseeing and coordinating information disclosures to
Australian Stock Exchange, analysts, brokers, shareholders the media and the public.
for communications with Australian Stock Exchange.
This role
All disclosures to Australian Stock Exchange are posted on the Company's website soon after
clearance has been received from Australian Stock Exchange.
The Chairman, the Managing Director and Company Secretary are monitoring information in the
marketplace to ensure that a false market does not emerge in the Company's securities.
Communication with Shareholders
It is the Company's communication policy to communicate with shareholders and other
stakeholders in an open, regular and timely manner so that the market has sufficient information
to make informed investment decisions on the operations and results of the Company.
The information is communicated to the shareholders through:
• Continuous disclosure announcements made to the Australian Stock Exchange;
• Distribution of the annual report to shareholders together with a notice of meeting;
• Posting of half-yearly results and all Australian Stock Exchange announcements on the
Company's website;
• Posting of all major drilling results;
• Posting of all media announcements on the Company's website; and
• Calling of annual general meetings and other meetings of shareholders to obtain
approval for board action as appropriate.
On the Company's website, information about the Company's projects are shown.
At annual general meetings and other general meetings of shareholders, shareholders are
encouraged to ask questions of the Board of Directors relating to the operation of the Company.
Risk Management
Due to its size of operation and size of the board, there is no formal board committee to identify,
assess and monitor and manage risk. Responsibility for day to day control and risk
management lies with the Managing Director and Company Secretary (financial risk) with
reporting responsibility to the Board. The Board participate and monitor risks including but not
limited to compliance with development and environmental approvals, tendering, contracting
and development, pricing of products, quality, safety, strategic issues, financial risk, joint
venture, accounting and insurance. Any changes in the risk profile for the Company are
communicated to its stakeholders via an announcement to Australian Stock Exchange.
- 16 -
ANNUAL REPORT 2005
GME RESOURCES LTD
Performance
The Board has adopted a self-evaluation process to measure its own performance. The
Chairman evaluates the performance of each director and the Board evaluates the performance
of the Chairman. Performance of senior executives is evaluated by the Managing Director in
cooperation with the Chairman. All performance evaluations are measured against budget,
goals and objectives set.
All directors of the board have access to the Company Secretary who is appointed by the
Board. The Company Secretary reports to the Chairman, in particular to matters relating to
corporate governance.
Once a month an information package on the Company's performance is presented to Board
Members for their review and to assist them in their decision-making.
All board members have access to professional independent advice at the Company's expense
provided they first have obtained the Chairman's approval which will not be unreasonably
withheld.
Remuneration
Managing Director and Non-executive Directors
The directors are remunerated for the services, they render the Company and such services are
normally carried out under normal commercial terms and conditions. Remuneration is also
determined having regard to how directors are remunerated for other similar companies, the
time spent on the Company’s matters and the performance of the Company. Engagement and
payment for such services are approved by the other directors with no interest in the
engagement of services.
The Board has no retirement or termination benefits. Payments to all directors are set out in the
Director's Report.
Senior Executives
The remuneration of senior executives is discussed and determined by the Board upon
receiving advice from the Managing Director. The remuneration packages are set at levels
intended to attract and retain the executives capable of managing the Company's operations.
The remuneration of senior executives where applicable is set out in the Directors’ Report.
General
Due to the staff size and the close involvement of the Board in the operations of the Company,
the Company does not operate a formal remuneration committee. All remuneration paid to the
Chairman, Non-executive Directors, Executive Director and Senior Executives are all reviewed
and discussed by the Board.
The Company does not operate an employee share option plan and there are no options
outstanding issued to directors, employees or former employees.
- 17 -
ANNUAL REPORT 2005
GME RESOURCES LTD
Interests of Stakeholders
It is the Company's objective to create wealth for its shareholders and provide a safe and
challenging environment for employees and for the Company to be a valuable member of the
community as a whole.
The Company's ethical and responsible behaviour is set out under the heading "Ethical and
Responsible Decision-making".
The Company's core values are summarised as follows:
• Provide value to its shareholders through growth in its market capitalisation;
• Act with integrity and fairness;
• Create a safe and challenging workplace;
• Be participative and recognise the needs of the community;
• Protect the environment;
• Be commercially competitive; and
• Strive for high quality performance and development.
- 18 -
ANNUAL REPORT 2005
GME RESOURCES LTD
DIRECTORS’ REPORT
Your directors present their report of GME Resources Limited and its controlled entities for the
financial year ended 30 June 2005.
Directors
The names of directors in office at any time during or since the end of the year are:
Michael Delaney Perrott
James Noel Sullivan
Peter Ross Sullivan
Geoffrey Mayfield Motteram
(Non executive - Chairman)
(Managing Director - appointed Oct 2004)
(Non executive - Director)
(Non executive - Director)
Directors have been in office since the start of the financial year to the date of this report unless
otherwise stated.
Principal Activities
The principal activities of the consolidated entity are mineral exploration and investment.
No significant change in the nature of these activities occurred during the year.
Operating and Financial Review
Operating Results
The net loss after income tax attributable to members of the consolidated entity for the financial
year to 30 June 2005 amounted to $30,538 (2004: $491,788).
Overview of operating activity
Since the acquisition of the remaining 60% interest in NiWest Ltd from the receiver manager of
Western Metals Ltd in April 2004, significant progress has been made in advancing the
development options for the company’s nickel laterite projects.
The consolidated entity owns and controls mining tenements covering approximately 510
square kilometers in the North Eastern goldfields of Western Australia that host extensive low
saline laterised ultramafics. The combined resources within the tenement holding contain
significant nickel and cobalt resources. The consolidated entities nickel assets are comprised of
nine separate resource areas, and seven of these resources are strategically located within a 55
kilometre radius of the Murrin Murrin Joint Venture (MMJV) nickel refinery. The company’s
combined nickel resources (0.7% nickel cut off grade) stand at 128 million tonnes grading
1.00% nickel and 0.06% cobalt. Within this is a high grade resource of 40.6 million tonnes
grading 1.25% nickel.
A key milestone was achieved this year with the successful negotiation and execution of
agreements with the native title parties affecting the company’s mining tenements. Mining
Leases were subsequently granted over the majority of the project areas, clearing the path to
progress to mining activities.
Drilling campaigns for a total of 10,545 metres were undertaken during the year. The programs
resulted in 48% of the inferred high grade resources (1% cut off grade) being upgraded to
indicated status.
- 19 -
ANNUAL REPORT 2005
GME RESOURCES LTD
In addition to the ongoing exploration program, the company moved offices in May and
appointed a new company secretary in June. With the successful capital raising completed in
August 2005, shareholders can expect to see the company continue to advance the
development options for its nickel assets.
A detailed review of operations for the financial year and up to the date of this report is set out in
the Review of Operations and should be read in conjunction with this directors’ report.
Financial Position
At the end of the financial year the consolidated entity had $351,709 (2004 $1,823,419) in cash
and at call deposits. Cash increased subsequent to the end of the financial year with the
successful conclusion of a Renounceable Rights Issue (refer Note 27 in the Financial Report).
Carried forward exploration expenditure was $7,663,965 (2004 $6,028,300).
During the year issued capital increased from 180,555,834 in 2004 to 191,499,384 ordinary
shares at the end of 2005, the movement of 10,943,550 ordinary shares resulted from,
2,193,548 shares issued in part consideration for a land access agreement and the balance to
satisfy the terms of a convertible note which had been issued to major shareholder Retirewise
Capital Australia Pty Ltd. (refer Note 14 of the Financial Report).
Impact of legislation and other external requirements
From 1 July 2005 the consolidated entity is required to comply with Australian equivalents to
International Financial Reporting Standards (AIFRS) issued by the Australian Accounting
Standards Board. The expected impact of the resulting changes in accounting policies are
disclosed in Note 26 of the Financial Report.
Dividends
No dividends have been paid or declared since the start of the financial year. No
recommendation is made as to dividends.
Significant Changes in State of Affairs
The significant changes in the state of affairs of the consolidated entity during the financial year
were:
On 26 November 2004 the Company issued 2,000,000 ordinary shares and 193,548 ordinary
shares to the Wongatha and Wutha Native Title Claimants respectively. These shares were
issued as part compensation for the execution of a Land Access Agreement with the Company.
On 7 December 2004 the Company allotted 4,375,001 shares to Retirewise Capital Australia
Pty Ltd. 2,500,000 ordinary shares at 6 cents to Retirewise Capital Australia Pty Ltd
(Retirewise) following the partial conversion of its convertible loan debt and the subsequent
issue of 416,667 ordinary shares at 6.5 cents and 1,458,334 ordinary shares at 8 cents, both to
Retirewise under its entitlement to subscribe for further shares as provided for in the Convertible
Note Deed dated 22 May 1997.
On 14 June 2005 the Company allotted a further 4,375,001 shares to Retirewise Capital
Australia Pty Ltd. 2,500,000 ordinary shares at 6 cents to Retirewise Capital Australia Pty Ltd
(Retirewise) following the conversion of the balance of its convertible loan debt and the
subsequent issue of 416,667 ordinary shares at 6.5 cents and 1,458,334 ordinary shares at 8
cents, both to Retirewise under its entitlement to subscribe for further shares as provided for in
the Convertible Note Deed dated 22 May 1997.
- 20 -
ANNUAL REPORT 2005
GME RESOURCES LTD
The agreement with Retirewise Capital Australia Pty Ltd allows them to exercise their right to
subscribe for shares as if they had participated in any rights issue since the date of the
convertible note. The Deed under which the Convertible Notes were issued was approved by
the shareholders in a meeting held on 26 August 1997.
After Balance Date Events
On 29 June 2005, Directors announced a 1 for 15 Renounceable Rights Issue at 15 cents. The
rights issue was not underwritten, and on 12 August 2005 the offer closed with almost 90%
acceptances. The Company’s share registry received acceptances for 11,307,831 ordinary
shares at an issue price of 15 cents per share raising a total of $1,696,175.65.
The Company elected not to place the shortfall of 1,458,795 shares or 11.4%.
Other than the Renounceable Rights Issue as referred to, no matters or circumstances have
arisen since the end of the financial year which significantly affected or may significantly affect
the consolidated entity’s operations, the results of those operations, or the consolidated entity’s
state of affairs in future financial years.
Likely Developments
The consolidated entity’s areas of interest are in the exploration stage, and although the results
of work carried out to date are encouraging it is not possible to predict the likely developments.
The consolidated entity will continue its mineral exploration and investment with the object of
finding further mineralised resources and exploiting those already discovered.
The Board is following a strategic plan for the growth of the consolidated entity, however, further
information about likely developments future prospects and business strategies as they pertain
to the operations and expected results of those operations have not been included in this report,
as the Directors’ reasonably believe that disclosure of this information would be likely to result in
unreasonable prejudice to the consolidated entity.
Information on Directors and Company Secretary
Michael Delaney Perrott BCom FAIM
(Chairman) 59 Years
Director since 1996
Mr Perrott has been involved in industries associated with construction, contracting, mining and
land development since 1969. He is currently Chairman and director of various listed and
unlisted public and private companies. He is a member of the Board of Notre Dame University
and a council member of National Advisory Council for Suicide Prevention and Community Life.
Mr Perrott has been Chairman of the Company since his appointment as a director in 1996.
Other current directorships of listed companies
Director of Port Bouvard Limited since 1998 and Chairman since December 2000, director of
Portman Limited since June 1997 and Schaffer Corporation Limited since February 2005.
Former directorships of listed companies in last 3 years
Chairman of Bone Medical Limited from May 2001 to August 2005 and Asset Backed Holdings
Limited from October 2000 to October 2003.
- 21 -
ANNUAL REPORT 2005
GME RESOURCES LTD
James Noel Sullivan
(Managing Director) 44 Years
Director since 2004
Mr Sullivan was appointed Managing Director of the Company in October 2004. Mr Sullivan has
over 20 years experience in commerce providing services to the mining and allied industries.
Mr Sullivan was instrumental in establishing and managing the Golden Cliffs Prospecting
Syndicate which acquired and pegged a number of prospective tenements in the Eastern
Goldfields. The Golden Cliffs Prospecting Syndicate was subsequently acquired by the
company in 1996. Mr Sullivan has extensive knowledge in mining and prospecting in the North
Eastern Goldfields and in particular on matters involving tenement administration, native title
negotiation and supply and logistics of services. Mr Sullivan’s practical knowledge in these
areas will be of great benefit to the Company as it seeks to develop its assets for the benefit of
its shareholders.
Mr Sullivan has not been a Director of any other public listed entities during the past three
years.
Peter Ross Sullivan BE, MBA
(Non Executive Director) 49 years
Director since 1996
Mr Sullivan is an engineer and has been involved in the development of resource companies
and projects for more than 16 years.
His project engineering experience was followed by four years in corporate finance with an
investment bank and two years in a corporate development role with an Australian resource
group. Mr Sullivan has considerable experience in the management and strategic development
of resource companies.
Mr Sullivan has been a director of the Company since his appointment as a director in 1996.
Other current directorships of listed companies
Director (currently Managing Director) of Resolute Mining Limited since June 2001,
Former directorships of listed companies in last 3 years
Director of Spinifex Gold Limited March 2002 to February 2003.
Geoffrey Mayfield Motteram BMetE(Hons), MAusIMM
(Technical Director) 56 years
Director since 1997
Mr Motteram is a metallurgical engineer with over 30 years’ experience in the development of
projects in the Australian resources industry.
He has extensive experience in gold and base metals having been involved with WMC’s
Kwinana Nickel Refinery and Kalgoorlie Nickel Smelter. He subsequently joined BHP, and later
Metals Exploration, where he was involved in the evaluation of gold and base metal projects.
Since 1989 he has acted as a Mining Project and Metallurgical Consultant. He was involved in
the formation of Minara Resources Limited (formerly Ananconda Nickel Limited) in 1994 and
controlled the technical development of the Murrin Murrin Joint Venture until the end of 1997.
He is a former director of Minara Resources Limited.
Mr Motteram has been technical director of the Company since 1997, during the past three
years Mr Motteram has not been a Director of any other public listed entities.
- 22 -
ANNUAL REPORT 2005
GME RESOURCES LTD
Mr Mark Pitts B.Bus CA
(Company Secretary) 43 Years
Mr Pitts was appointed to the position of Company Secretary in June 2005. Mr Pitts is a
Chartered Accountant who has been providing financial accounting, assurance and governance
advice for 20 years. He is currently a Partner in an advisory firm which specialises in the
provision of company secretarial services to ASX listed entities.
Remuneration report
The remuneration report is set out in the following manner:
• Policies used to determine the nature and amount of remuneration.
• Details of remuneration
• Service agreements
• Share based compensation
Remuneration policy
The Board of Directors is responsible for remuneration policies and the packages applicable to
the Directors of the Company. The broad remuneration policy is to ensure that packages
offered properly reflect a person’s duties and responsibilities and that remuneration is
competitive and attracts, retains, and motivates people of the highest quality.
The Managing Director and Non-executive Directors are remunerated for the services they
render to the Company and such services are carried out under normal commercial terms and
conditions. Engagement and payment for such services are approved by the other directors
who have no interest in the engagement of services.
There are no retirement or termination benefits payable to the Board or senior executives.
At the date of this report the Company had not entered into any packages with Directors or
senior executives which include performance based components, the Company does not
operate an employee share option plan and there are no options outstanding issued to
directors, employees or former employees.
(Refer to the Corporate Governance Statement for more detail on the Board’s policy in this
area.)
Details of remuneration for Directors’
Remuneration levels are competitively set to attract and retain appropriately qualified and
experienced Directors and senior executives. The Board of Directors obtains independent
advice when appropriate when reviewing remuneration packages.
During the year there were no senior executives which were employed by the Company for
whom disclosure is required.
- 23 -
ANNUAL REPORT 2005
GME RESOURCES LTD
Details of nature and amount of each element of the emoluments of each director of the
Company (and each of the officers of the Company and the consolidated entity receiving the
highest remuneration) are:
Managing Director
Fees
2005
$
James N Sullivan (appointed Oct 2004)
92,999
Non – Executive Directors
Michael D Perrott
Geoffrey M Motteram
Peter R Sullivan
Fees
2005
$
30,000
18,000
24,000
Fees
2004
$
19,773
Fees
2004
$
30,000
18,000
24,000
The Company and its subsidiaries had no employees as at 30 June 2005.
Service agreements
There are no service agreements with any of the Company’s Directors.
Share based compensation
There is currently no provision in policies of the consolidated entity for the provision of share
based compensation to directors or senior executives. The interest of Directors in shares and
options is set out elsewhere in this report.
Directors’ Interests
The relevant interests of directors either directly or through entities controlled by the directors in
the share capital of the company as at the date of this report are:
Director
Ordinary
Shares
Balance
1/7/04
Net
Change
(i)
Ordinary
Shares
Balance
30/6/05
Share issue
subsequent
to Balance
Date
(ii)
Ordinary
Shares
Balance at
the date of
this Report
Michael D Perrott
17,012,294
(7,815,327)
James N Sullivan
9,341,212
Peter R Sullivan
11,540,147
Geoffrey M Motteram
3,885,050
-
-
-
9,196,967
9,341,212
11,540,147
3,885,050
613,132
9,810,099
631,011
9,972,223
769,344
12,309,491
259,004
4,144,054
(i) Net change – for Mr Perrott comprises a transaction in which he transferred his beneficial
interest in the shares owned by an entity, in which he was a part owner, to another entity which
he controls. This transaction was announced to shareholders via the ASX on 21st April 2005.
(ii) Renounceable Rights Issue refer Note 27.
- 24 -
ANNUAL REPORT 2005
GME RESOURCES LTD
Meetings of Directors
During the year, 6 meetings of directors were held. Attendances were:
Name
Michael D Perrott
James N Sullivan
Peter R Sullivan
Geoffrey M Motteram
Number
Eligible to
Attend
Number
Attended
6
5
6
6
6
5
6
3
Share Options
At the date of this report the number of Options on issue are as follows:
•
•
•
2,000,000 Options exercisable at $0.20 each;
2,000,000 Options exercisable at $0.30 each; and
1,000,000 Options exercisable at $0.40 each.
All of the above Options will expire on 30 June 2007.
Loans to Directors and Executives
There were no loans entered into with Directors or executives during the financial year under
review.
Related party transactions are set out in Note 25 to the Financial Report.
Audit Committee
The Company does not have an audit committee as, in the opinion of the directors, the scope
and size of the Company’s operations do not warrant it.
Indemnifying Officers or Auditors
The company has not, during or since the financial year, in respect of any person who is or has
been an officer or the auditor of the Company or of a related body corporate:
•
•
indemnified or made any relative agreement for indemnifying against a liability incurred
as an officer or auditor, including costs and expenses in defending legal proceedings; or
paid or agreed to pay a premium in respect of a contract insuring against a liability
incurred as an officer or auditor for the costs or expenses to defend legal proceedings.
- 25 -
ANNUAL REPORT 2005
GME RESOURCES LTD
Environmental Regulation
The consolidated entity’s exploration and mining tenements are located in Western Australia
and Queensland. There are significant regulations under the Western Australian Mining Act
1978 and the Queensland Mineral Resources Act 1989 and both states’ Environmental
Protection Acts that apply. Licence requirements relating to ground disturbance, rehabilitation
and waste disposal exist for all tenements held.
The directors are not aware of any significant breaches during the period covered by this report.
Proceedings on Behalf of Company
No person has applied for leave of Court, pursuant to section 237 of the Corporations Act 2001,
to bring proceedings on behalf of the Company or 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
any part of those proceedings.
The Company was not a party to any such proceedings during the year.
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 or consolidated
entity are important.
During the year HLB Mann Judd, has performed certain other services in addition to their
statutory audit duties, details of all amounts paid or payable to the auditor are set out in Note 18.
The board has considered the non-audit services provided during the year by the auditor and is
satisfied that the provision of those non-audit services during the year by the auditor is
compatible with and did not compromise, the auditor independence requirements of the
Corporations Act 2001.
Auditors’ independence declaration
A copy of the auditors’ independence declaration as required under section 307C of the
Corporations Act 2001 is set out on the following page.
This report is signed in accordance with a Resolution of Directors.
James N Sullivan
Managing Director
Perth, Western Australia
27 September 2005
- 26 -
ANNUAL REPORT 2005
Auditors’ Independence Declaration
As lead auditor for the audit of the financial report of GME Resources Ltd for the year ended
30 June 2005, I declare that to the best of my knowledge and belief, there have been:
a)
b)
no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the
audit.
This declaration is in respect of GME Resources Ltd.
Perth, Western Australia
27 September 2005
N G NEILL
Partner, HLB Mann Judd
HLB Mann Judd (WA Partnership)
15 Rheola Street West Perth 6005. PO Box 263 West Perth 6872 Western Australia. DX 238 (Perth) Telephone +61 (08) 9481 0977. Fax +61 (08) 9481 3686.
Email: hlb@mjwa.com.au. Website: http://www.hlb.com.au
Partners: Ian H Barsden, Terry M Blenkinsop, Litsa Christodulou, Wayne M Clark, Lucio Di Giallonardo, Colin D Emmott, Trevor G Hoddy, Norman G Neill, Peter J Speechley
HLB Mann Judd (WA Partnership) is a member of
International and the HLB Mann Judd National Association of independent accounting firms
- 27 -
ANNUAL REPORT 2005
GME RESOURCES LTD
FINANCIAL REPORT
For the year ended 30 June 2005
Contents of Financial Report Page
Statements of Financial Performance
Statements of Financial Position
Statements of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
29
30
31
32
49
50
The financial report provides information for both
GME Resources Limited in its own right and the
consolidated entity being GME Resources Limited
and its controlled entities. The financial report is
presented in Australian currency.
GME Resources Limited is a public company, it was
incorporated and is domiciled in Australia and is listed
on the Australian Stock Exchange.
- 28 -
ANNUAL REPORT 2005
GME RESOURCES LTD
STATEMENTS OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2005
Note
Consolidated
Parent Entity
2005
$
2004
$
2005
$
2004
$
Revenues from ordinary activities
Interest expense
Carrying value of tenements sold
Depreciation expense
Write down in value of carried forward
exploration expenditure
Write down in value of investments
2
3
3
3
3
3
379,512
794,600
179,512
198,533
19,104
62,984
19,104
62,984
-
2,109
-
750
6,359
43
74,212
896,466
-
2,109
-
750
6,359
43
74,212
896,466
Management and consulting fees
223,000
149,625
223,000
145,500
Other expenses from ordinary activities
165,087
96,699
165,067
89,527
Loss from ordinary activities before
income tax expense
Income tax expense relating to ordinary
activities
4
30,538
491,788
230,518
1,076,558
-
-
-
-
Loss from ordinary activities after
related income tax
Net loss attributable to members of the
parent entity
30,538
491,788
230,518
1,076,558
15
30,538
491,788
230,518
1,076,558
Earnings Per Share
Basic earnings per share
(cents per share)
Diluted earnings per share
(cents per share)
20
20
(0.02)
(0.43)
(0.02)
(0.43)
The accompanying notes form part of these financial statements.
- 29 -
ANNUAL REPORT 2005
GME RESOURCES LTD
STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2005
CURRENT ASSETS
Cash assets
Receivables
Other financial assets
Other
Note
Consolidated
Parent Entity
2005
$
2004
$
2005
$
2004
$
17(b)
5
6
7
351,709
166,289
9,375
-
1,823,419
41,218
10,125
2,395
351,709
43,282
9,375
-
1,808,315
35,097
10,125
2,395
TOTAL CURRENT ASSETS
527,373
1,877,157
404,366
1,855,932
NON CURRENT ASSETS
Receivables
Other financial assets
Plant and equipment
Exploration costs carried forward
8
9
10
11
-
-
32,489
7,663,965
-
-
599
6,028,300
3,916,610
2,615,950
32,489
1,080,246
2,465,152
2,615,950
599
1,022,118
TOTAL NON CURRENT ASSETS
7,696,454
6,028,899
7,645,295
6,103,819
TOTAL ASSETS
8,223,827
7,906,056
8,049,661
7,959,751
CURRENT LIABILITIES
Payables
Interest bearing liabilities
12
13
166,267
-
312,307
425,152
1,178,774
-
1,352,695
425,152
TOTAL CURRENT LIABILITIES
166,267
737,459
1,178,774
1,777,847
TOTAL LIABILITIES
166,267
737,459
1,178,774
1,777,847
NET ASSETS
EQUITY
Contributed equity
Accumulated losses
TOTAL EQUITY
8,057,560
7,168,597
6,870,887
6,181,904
14
15
21,549,718
(13,492,158)
20,630,217
(13,461,620)
21,549,718
(14,678,831)
20,630,217
(14,448,313)
8,057,560
7,168,597
6,870,887
6,181,904
The accompanying notes form part of these financial statements.
- 30 -
ANNUAL REPORT 2005
GME RESOURCES LTD
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2005
Cash Flows From Operating Activities
Proceeds from mining royalties
Payments for:
Exploration and evaluation
Administration
Proceeds from facilitation fee for
prospecting rights
Interest received
Interest paid
Proceeds from sale of shareholder
rights
Payment of proceeds of shareholder
rights
Other
Net Operating Cash Flows
Cash Flows From Investing Activities
Payments for:
Equity investments (net of cash
acquired)
Plant and equipment
Proceeds from sale of prospects
Loans to associated entity
Loans repaid on behalf of controlled
entity to other entity
Net Investing Cash Flows
Cash
Activities
Flows
From
Financing
Proceeds from issue of shares
Payment of costs associated with issue
of shares
Loans funds from wholly owned entities
Loan funds to wholly owned entities
Loans repaid to other persons
Net Financing Cash Flows
Note
Consolidated
Parent Entity
2005
$
2004
$
2005
$
2004
$
-
400,000
-
-
(1,613,948)
(406,252)
(255,796)
(228,436)
(224,661)
(406,894)
(33,534)
(224,311)
110,000
57,971
(5,264)
100,000
134,770
(207,503)
-
57,971
(5,264)
-
38,704
(207,503)
-
61,370
-
61,370
-
282
(1,857,211)
17(a)
(61,370)
579
(56,386)
-
282
(578,566)
(61,370)
579
(426,065)
-
(33,999)
132,000
-
(1,244,266)
(642)
7,500
(77,247)
-
(33,999)
132,000
(1,255,048)
(642)
7,500
(77,247)
-
98,001
(1,265,025)
(2,579,680)
(1,263,541)
(1,165,540)
(1,265,025)
(2,590,462)
287,500
4,814,822
287,500
4,814,822
-
-
-
-
287,500
(234,407)
-
-
(273,464)
4,306,951
-
-
-
-
287,500
(234,407)
605,781
(240,424)
(273,464)
4,672,308
Net Increase/(Decrease) in Cash Held
(1,471,710)
1,670,885
(1,456,606)
1,655,781
Cash at the Beginning of the Year
1,823,419
152,534
1,808,315
152,534
Cash at the End of the Year
17(b)
351,709
1,823,419
351,709
1,808,315
The accompanying notes form part of these financial statements.
- 31 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
1. STATEMENT OF ACCOUNTING POLICIES
The financial report is a general purpose financial report that has been prepared in accordance with
Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements
of the Australian Accounting Standards Board and the Corporations Act 2001.
The financial report covers the consolidated entity of GME Resources Ltd and controlled entities,
and GME Resources Ltd as an individual parent entity. The financial report has been prepared on
an accruals basis and is based on historical costs and does not take into account changing money
values or, except where stated, current valuations of non-current assets. Cost is based on the fair
values of the consideration given in exchange for assets.
The following is a summary of the material accounting policies adopted by the consolidated entity in
the preparation of the financial report. The accounting policies have been consistently applied,
unless otherwise stated.
(a) Principles of Consolidation
The consolidated financial statements have been prepared by combining the financial
statements of all the entities that comprise the consolidated entity, being the Company (the
parent entity) and its controlled entities as defined in AASB1024, “Consolidated Accounts”. A
list of controlled entities appears in Note 16. Consistent accounting policies have been
employed in the preparation and the presentation of the consolidated financial statements.
The consolidated financial statements include the information and results of each controlled
entity from the date on which the Company obtains control and until such time as the
Company ceases to control such entity.
In preparing the consolidated financial statements, all inter Company balances and
transactions and unrealised profits arising within the consolidated entity are eliminated in full.
(b) Exploration and Development Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of
each identifiable area of interest. These costs are only carried forward to the extent that they
are expected to be recouped through the successful development of the area or where
activities in the area have not yet reached a stage which permits reasonable assessment of
the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full in the year in which
the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are
amortised over the life of the area according to the rate of depletion of the economically
recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of interest.
- 32 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
1. STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
(b) Exploration and Development Expenditure (Continued)
Costs of site restoration are provided over the life of the facility from when exploration
commences and are included in the costs of that stage. Site restoration costs include the
dismantling and removal of mining plant, equipment and building structures, waste removal,
and rehabilitation of the site in accordance with clauses of the mining permits. Such costs
have been determined using estimates of future costs, current legal requirements and
technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In
determining the costs of site restoration, there is uncertainty regarding the nature and extent of
the restoration due to community expectations and future legislation. Accordingly the costs
have been determined on the basis that restoration will be completed within one year of
abandoning the site.
(c)
Income Tax
The consolidated entity adopts the liability method of tax-effect accounting whereby the
income tax expense is based on the operating result before income tax adjusted for any
permanent differences.
Timing differences which arise due to the different accounting periods in which items of
revenue and expense are included in the determination of operating result before income tax
and taxable income are brought to account as either a provision for deferred income tax or an
asset described as future income tax benefit at the rate of income tax applicable to the period
in which the benefit will be received or the liability will become payable.
Future income tax benefits are not brought to account unless realisation of the asset is
assured beyond reasonable doubt. Future income tax benefits in relation to tax losses are not
brought to account unless there is virtual certainty of realisation of the benefit.
The amount of benefits brought to account or which may be realised in the future is based on
the assumption that no adverse change will occur in income taxation legislation and the
anticipation that the consolidated entity will derive sufficient future assessable income to
enable the benefit to be realised and comply with the conditions of deductibility imposed by
law.
(d) Plant and Equipment
Plant and equipment is measured on the cost basis.
The depreciable amount of plant and equipment is depreciated over the estimated useful life
of each asset commencing from the time the asset is held ready to use. Predominantly, the
straight line method of depreciation has been used.
Class of fixed assets
Depreciation rate
Plant and equipment
20 - 25%
- 33 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
1. STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
(e)
Investments
Shares in listed companies held as current assets are valued by directors at those shares’
market value at each balance date. The gains or losses, whether realised or unrealised, are
included in result from ordinary activities before income tax.
Non-current investments are measured on the cost basis. The carrying amount of non-current
investments is reviewed annually by directors to ensure it is not in excess of the recoverable
amount of these investments. The recoverable amount is assessed from the quoted market
value for listed investments or the underlying net assets of other non-listed investments.
(f)
Investments in Associates
Investments in associate companies are recognised in the financial statements by applying the
equity method of accounting.
(g) Cash
For the purpose of the statements of cash flows, cash includes deposits which are readily
convertible to cash on hand and which are used in the cash management function on a day to
day basis, net of outstanding bank overdrafts.
(h) Revenue Recognition
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets.
Other revenue is recognised when all obligations by the consolidated entity have been fulfilled
and the right to the revenue has been established.
(i)
Converting Financial Instruments
Convertible notes are recorded as a liability. On conversion, ordinary shares issued are
recognised at the aggregate of the carrying amounts of the liability, together with any amount
received on conversion.
(j) 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.
- 34 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
1. STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
(k) Earnings per share
Basic EPS is calculated as net profit attributable to members, adjusted to exclude 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 EPS is calculated as net profit attributable to members, adjusted for:
•
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with potential dilutive
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 potential dilutive ordinary
shares, adjusted for any bonus element.
- 35 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
Consolidated
Parent Entity
2005
$
2004
$
2005
$
2004
$
2. REVENUE FROM ORDINARY ACTIVITIES
Operating Activities
Interest received
57,971
134,771
57,971
38,704
Proceeds from:
Facilitation fee for prospecting
rights
Royalty fees
Other revenue
Non Operating Activities
Proceeds from disposal of
tenements
100,000
100,000
1,541
100,000
533,000
-
-
-
133,000
579
1,541
579
259,512
768,350
59,512
172,283
120,000
26,250
120,000
26,250
Total revenue
379,512
794,600
179,512
198,533
3. LOSS FROM ORDINARY ACTIVITIES
Loss from ordinary activities
before income tax has been
determined after:
(a) Charging as an expense:
Depreciation – plant and
equipment
Write down in value of carried
forward expenditure
Interest – other persons
Carrying value of tenements sold
Write down in value of
investments
(b) Net gains
2,109
43
2,109
43
-
19,104
-
74,212
62,984
6,359
-
19,104
-
74,212
62,984
6,359
750
896,466
750
896,466
Profit on sale of tenements
-
19,891
-
19,891
- 36 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
Consolidated
Parent Entity
2005
$
2004
$
2005
$
2004
$
4.
INCOME TAX
(a) The prima facie tax on operating
result is reconciled to the income
tax provided
financial
in
statements as follows:
the
Prima facie tax benefit on operating loss
before income tax at 30%
Tax effect of permanent differences:
Non-deductible expenditures
Regarding capital raising, corporate
advice etc
Profit on sale of tenements
Tax loss on sale of tenements
Tax loss on abandoned tenements
Write down in value of investments
Exploration expenditures written off
Overprovision for income tax in prior
year
Tax effect of timing differences
Benefit of prior year losses recouped
Tax losses transferred
Future Income tax benefits not brought
to account
Income tax expense
(b) The directors estimate that the
potential future income tax benefits
not brought to account are:
Exploration expenditures incurred
(489,108)
(9,161)
(144,233)
(69,155)
(322,967)
-
-
-
-
225
-
-
(498,044)
-
(498,044)
-
-
498,044
-
3,973
(5,967)
(28,388)
(24,136)
268,940
22,264
(11,632)
17
80,838
900
81,738
(81,738)
-
-
-
-
-
-
-
225
-
(16,027)
-
(84,957)
-
(84,957)
-
-
84,957
-
3,973
(5,967)
(28,388)
(24,136)
268,940
22,264
(11,505)
17
(97,769)
900
(96,869)
(81,738)
178,607
-
-
1,336,042
837,998
883,120
798,163
The potential future income tax benefit will only be obtained if:
(i) the relevant company derives future assessable income of a nature and an amount sufficient to enable
the benefit to be realised;
(ii) the relevant company continues to comply with the conditions for deductibility imposed by the law; and
(iii) no changes in tax legislation adversely affect the relevant company in realising the benefit.
There are no franking credits available.
Tax Consolidation
Effective 1 July 2003, for the purposes of income taxation, the Company and its 100% wholly-owned
subsidiaries formed a tax consolidated group, the head entity of the tax consolidated group is GME
Resources Limited.
- 37 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
Consolidated
Parent Entity
2005
$
2004
$
2005
$
2004
$
5. RECEIVABLES (CURRENT)
Sundry debtors
166,289
41,218
43,282
35,097
6. OTHER FINANCIAL ASSETS (CURRENT)
Listed investments
Provision for diminution in
investments
18,750
18,750
(9,375)
9,375
(8,625)
10,125
18,750
(9,375)
9,375
18,750
(8,625)
10,125
Listed shares are carried at current market value.
7. OTHER (CURRENT)
Prepayments
-
2,395
-
2,395
8. RECEIVABLES (NON CURRENT)
Loans to controlled entities (wholly
owned)
Provision for non recovery
-
-
-
9. OTHER FINANCIAL ASSETS (NON CURRENT)
Unlisted Investments:
Controlled entities (refer note 17)
Provision for diminution in value
-
-
-
-
-
-
-
-
-
5,239,305
(1,322,695)
3,916,610
3,787,847
(1,322,695)
2,465,152
5,178,206
(2,562,256)
2,615,950
5,178,206
(2,562,256)
2,615,950
All investments comprise ordinary shares and no shares held in related corporations are listed on a
prescribed stock exchange.
The recoverability of the carrying value of shares in controlled and associated entities is dependent on the
successful development and commercial exploration or, alternatively, sale of the respective areas in which
those controlled entities have an interest.
- 38 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
Consolidated
Parent Entity
2005
$
2004
$
2005
$
2004
$
10. PLANT AND EQUIPMENT (NON CURRENT)
Plant and equipment - at cost
Less provision for depreciation
Total Plant and Equipment
Reconciliation of the carrying amount
of plant and equipment:
Carrying amount at the beginning of
the year
Additions
Disposals
Depreciation
Carrying amount at the end of the
year
34,641
(2,152)
32,489
599
33,999
-
(2,109)
32,489
642
(43)
599
-
642
-
(43)
599
34,641
(2,152)
32,489
599
33,999
-
(2,109)
32,489
642
(43)
599
-
642
-
(43)
599
11. EXPLORATION EXPENDITURE CARRIED FORWARD (NON CURRENT)
Deferred exploration expenditure
- at cost
Movements:
Balance at beginning of the year
Acquisition through entity acquired
Direct expenditure
Less carrying value of tenements sold
Less exploration expenditure written
off
6,028,300
-
1,635,665
7,663,965
-
-
7,663,965
1,622,513
4,414,699
71,659
6,108,871
(6,359)
(74,212)
6,028,300
1,022,118
-
58,128
1,080,246
-
-
1,080,246
1,052,560
-
50,129
1,102,689
(6,359)
(74,212)
1,022,118
The ultimate recoupment of the above deferred exploration expenditure is dependent on the successful
development and commercial exploitation or, alternatively, sale of the respective areas.
12. PAYABLES (CURRENT)
Sundry creditors
Unearned income
Amount payable to wholly owned entity
106,267
60,000
-
166,267
252,307
60,000
-
104,267
-
1,074,507
250,000
-
1,102,695
312,307
1,178,774
1,352,695
- 39 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
Note
Consolidated
Parent Entity
2005
$
2004
$
2005
$
2004
$
13.
INTEREST BEARING LIABILITIES (CURRENT)
Unsecured convertible note (i)
Unsecured loan
-
-
-
300,000
125,152
425,152
-
-
-
300,000
125,152
425,152
(i) On 7 December 2004 the Company allotted 2,500,000 shares to Retirewise Capital Australia Pty Ltd, at
6 cents per share relating to the partial redemption of a convertible note of $150,000.
On 14 June 2005 the Company allotted a further 2,500,000 shares to Retirewise Capital Australia Pty
Ltd, at 6 cents per share in satisfaction of the balance of the convertible note of $150,000.
Consolidated
Parent Entity
Note
2005
$
2004
$
2005
$
2004
$
14. CONTRIBUTED EQUITY
Issued and paid up capital
191,499,384 (2004: 180,555,834)
ordinary shares, fully paid
Ordinary shares
Balance at the beginning of the
year
Issue of shares for services
Conversion of convertible note
Rights issue
Costs associated with rights issue
Issue of shares pursuant to a
Native Title Agreement (a)
Conversion of convertible note and
take up of 1998 and 2004 rights (b)
Conversion of convertible note and
take up of 1998 and 2004 rights (c)
21,549,718
20,630,217
21,549,718
20,630,217
20,630,217
-
-
-
-
332,000
293,750
293,751
15,553,431
260,260
236,111
4,814,822
(234,407)
-
-
-
20,630,217
-
-
-
-
332,000
293,750
293,751
15,553,431
260,260
236,111
4,814,822
(234,407)
-
-
-
Balance at the end of the year
21,549,718
20,630,217
21,549,718
20,630,217
- 40 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
14. CONTRIBUTED EQUITY (cont’d)
No of
Shares
No of
Shares
No of
Shares
No of
Shares
Balance at the beginning of the
year
Issue of shares for services
Conversion of convertible note
Rights issue
Issue of shares pursuant to a
Native Title Agreement (a)
Conversion of convertible note and
take up of 1998 and 2004 rights (b)
Conversion of convertible note and
take up of 1998 and 2004 rights (c)
Balance at the end of the year
180,555,834
-
-
-
107,806,334
8,675,333
3,888,889
60,185,278
180,555,834
-
-
-
107,806,334
8,675,333
3,888,889
60,185,278
2,193,548
4,375,001
-
-
2,193,548
4,375,001
-
-
4,375,001
191,499,384
-
180,555,834
4,375,001
191,499,384
-
180,555,834
(a) On 26 November 2004 the Company issued 2,000,000 ordinary shares and 193,548 ordinary shares to
the Wongatha and Wutha Native Title Claimants respectively. These shares were issued as part
compensation for the execution of a Land Access Agreement with the Company.
(b) On 7 December 2004 the Company allotted 4,375,001 shares to Retirewise Capital Australia Pty Ltd.
2,500,000 ordinary shares at 6 cents to Retirewise Capital Australia Pty Ltd (Retirewise) following the
partial conversion of its convertible loan debt and the subsequent issue of 416,667 ordinary shares at
6.5 cents and 1,458,334 ordinary shares at 8 cents, both to Retirewise under its entitlement to subscribe
for further shares as provided for in the Convertible Note Deed dated 22 May 1997.
(c) On 14 June 2005 the Company allotted 4,375,001 shares to Retirewise Capital Australia Pty Ltd.
2,500,000 ordinary shares at 6 cents to Retirewise Capital Australia Pty Ltd (Retirewise) following the
conversion of the balance of its convertible loan debt and the subsequent issue of 416,667 ordinary
shares at 6.5 cents and 1,458,334 ordinary shares at 8 cents, both to Retirewise under its entitlement to
subscribe for further shares as provided for in the Convertible Note Deed dated 22 May 1997
Options over Unissued Capital
At 30 June 2005, 5,000,000 options were on issue. On 1 July 2004, the Company appointed Grange
Securities Limited as Corporate Adviser to the Company for a period of 12 months. In lieu of paying a
corporate advisory fee, the Directors of the Company issued 5,000,000 Options as follows to Grange
Securities Limited:
2,000,000 Options exercisable at $0.20 each;
2,000,000 Options exercisable at $0.30 each; and
1,000,000 Options exercisable at $0.40 each.
All of the above Options will expire on 30 June 2007.
Consolidated
Parent Entity
2005
$
2004
$
2005
$
2004
$
15. ACCUMULATED LOSSES
Accumulated losses at the
beginning of the year
13,461,620
12,969,832
14,448,313
13,371,755
Net loss for the current year
30,538
491,788
230,518
1,076,558
Accumulated losses at the end of
the year
13,492,158
13,461,620
14,678,831
14,448,313
- 41 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
16. CONTROLLED ENTITIES
Name of Controlled Entity/
(Country Of Incorporation)
Percentage
Owned
GME Sulphur Inc (USA)
GME Investments Pty Ltd (Australia)
Golden Cliffs NL (Australia)
NiWest Limited (Australia)
2005
%
100
100
100
100
2004
%
100
100
100
100
Company’s
Cost of
Investment
2005
$
2004
$
-
-
616,893
4,561,313
5,178,206
-
-
616,893
4,561,313
5,178,206
Consolidated
Parent Entity
2005
$
2004
$
2005
$
2004
$
17. STATEMENT OF CASH FLOWS
(a) Reconciliation of the Loss from
Ordinary Activities after Tax to the
Net Cash Flows from Operations
Loss from ordinary activities after tax
Depreciation / amortisation
Write off of exploration expenditure
Exploration costs capitalised (excluding
creditors)
Write down in value of investments
Non cash interest paid
Net gain from sale of non current assets
(excluding creditors and debtors)
Accrued loan interest refinanced as loan
debt
Royalty income converted to loan debt
Decrease/(Increase) in other current
assets
Increase/(Decrease) in sundry creditors
Other non cash transactions
Net Cash Flows from Operating
Activities
(b) Reconciliation of Cash
Cash balance comprises:
Cash at bank
Deposits at call
Decrease/(Increase) in receivables
(100,000)
(30,538)
2,109
-
(1,613,948)
750
13,839
(491,788)
(230,518)
(1,076,558)
43
74,212
(12,532)
896,466
-
2,109
-
(224,661)
750
13,839
43
74,212
(4,041)
896,466
-
(132,000)
19,891
(132,000)
19,891
-
-
(677)
20,492
(17,238)
38,259
-
7,788
(2,395)
(586,330)
-
-
-
-
(677)
20,492
(27,900)
38,259
(133,000)
(21,489)
(2,395)
(217,453)
-
(1,857,211)
(56,386)
(578,566)
(426,065)
340,709
11,000
1,812,419
11,000
340,709
11,000
1,797,315
11,000
351,709
1,823,419
351,709
1,808,315
- 42 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
Consolidated
Parent Entity
2005
$
2004
$
2005
$
2004
$
17. STATEMENT OF CASH FLOWS (CONT’D)
(c) Non Cash Financing and Investing
Activities
(i) Conversion of convertible note debt
to equity
(iii) Conversion of principal loan to
equity
(iv) Conversion of accrued loan interest
to loan principal
(v) Issue of shares to native title
claimants
18. AUDITORS’ REMUNERATION
Amounts paid for auditors, KPMG of
subsidiary accounts
Amounts received or due and receivable
by the auditors of GME Resources Ltd
for:
- an audit or review of the financial
statements of the company and any
other entity in the consolidated entity
- other services in relation to the
company and any other entity in the
consolidated entity
19. SEGMENT REPORTING
300,000
200,000
300,000
200,000
-
-
36,111
38,259
-
-
36,111
38,259
332,000
-
332,000
-
2,000
-
-
-
11,800
12,325
11,800
12,325
-
11,800
3,193
17,518
-
11,800
3,193
15,518
There are no individual segments to be reported as the Company’s operations are predominantly in the
mining industry in Australia.
Consolidated
2005
$
2004
$
20. EARNINGS PER SHARE
Basic and diluted loss per share (cents)
(0.02)
(0.43)
Loss used in calculation of basic and diluted earnings
per share
Weighted average number of ordinary shares
outstanding during the year used in calculation of basic
and diluted earnings per share
30,538
491,788
183,505,479
113,299,496
- 43 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
21. DIRECTORS’ AND EXECUTIVES DISCLOSURES
All Director and Executive disclosures are included in the Directors Report
The only remuneration received by the directors is fee income.
22. FINANCIAL INSTRUMENT DISCLOSURES
(a) Interest Rate Risk
The consolidated entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value will
fluctuate as a result of changes in market interest rates, and the effective weighted average interest rates on
those financial assets and financial liabilities, is as follows:
2005
Weighted
Average
Effective
Interest Rate
Floating
Interest
Rate
Fixed Interest Rate
Maturing
Within 1
year
Over 1 year
Non-interest
Bearing
Total
Financial Assets
$
$
$
$
$
Cash assets
Receivables
4.79%
340,709
-
340,709
11,000
-
11,000
Financial Liabilities
Payables
-
-
-
-
Fixed Interest Rate
Maturing
-
-
-
-
-
-
166,289
166,289
351,709
166,289
517,998
166,267
166,267
166,267
166.267
2004
Weighted
Average
Effective
Interest Rate
Floating
Interest
Rate
Within 1
year
Over 1 year
Non-interest
Bearing
Total
Financial Assets
$
$
$
$
$
Cash assets
Receivables
4.95%
1,812,419
-
1,812,419
11,000
-
11,000
Financial Liabilities
Payables
Interest bearing
liabilities
7.2%
-
125,152
-
300,000
125,152
300,000
-
-
-
-
-
-
-
41,218
41,218
1,823,419
41,218
1,864,637
312,307
-
312,307
425,152
312,307
737,459
(b) Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, to recognised
financial assets is the carrying amount as disclosed in the balance sheet and notes to the financial statements.
The consolidated entity does not have any material credit risk exposure to any single debtor or group of
debtors under financial instruments entered into by the consolidated entity.
- 44 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
22. FINANCIAL INSTRUMENT DISCLOSURES (CONTINUED)
(c)
Net Fair Values
The net fair value of the financial assets and financial liabilities approximates their carrying value. Other than
listed investments that are measured at the quoted bid price at balance date adjusted for transaction costs
expected to be incurred, no financial assets and financial liabilities are readily traded on organised markets in
standardised form.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in
the balance sheet and in the notes to and forming part of the financial statements.
23. COMMITMENTS AND CONTINGENT LIABILITIES
There were no capital commitments or contingent liabilities, not provided for in the financial statements of the
consolidated entity as at 30 June 2005, other than:
(a) Mineral Tenement Leases
In order to maintain current rights of tenure to mining tenements, the consolidated entity in its own right or in
conjunction with its joint venture partners may be required to outlay amounts of approximately $1,200,000 (2004:
$521,820) per annum on an ongoing basis in respect of tenement lease rentals and to meet the minimum
expenditure requirements of the Western Australian and Queensland Mines Department. These obligations are
expected to be fulfilled in the normal course of operations by the consolidated entity or its joint venture partners
and are subject to variations dependent on various matters, including the results of exploration on the mineral
tenements.
(b) Claims of Native Title
Legislative developments and judicial decisions (in particular the uncertainty created in the area of Aboriginal
land rights by the High Court decision in the “Mabo” case and native title legislation) may have an adverse
impact on the consolidated entity’s exploration and future production activities and its ability to fund those
activities. It is impossible at this stage to quantify the impact (if any) which these developments may have on the
consolidated entity’s operations.
Native title claims have been made over ground in which the consolidated entity currently has an interest. It is
possible that further claims could be made in the future. However, the Company has not undertaken the
considerable legal, historical, anthropological and ethnographic research which would be necessary to
determine whether any current or future claims, if made, will succeed and, if so, what the implications would be
for the consolidated entity.
24. INTERESTS IN BUSINESS UNDERTAKINGS - JOINT VENTURES
The Company has entered into a number of agreements with other companies to gain interests in project areas.
These interests will be earned by expending certain amounts of money on exploration expenditure within a specific
time. The Company can however, withdraw from these projects at any time without penalty. The amounts required to
be expended in the next year have been included in note 23 – Commitments and Contingent Liabilities.
25. RELATED PARTIES
Other transactions with the Company
Some Directors and executives hold positions within other entities which cause them to have control or exert
significant influence over the financial or operating policies of those entities.
A number of these entities transacted with the Company or its subsidiaries during the reporting period. In each
instance normal commercial terms and conditions applied. Terms and conditions were no more favourable than those
available, or which might reasonably be expected to be available, for a similar transaction to unrelated parties on an
arms length basis.
- 45 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
25. RELATED PARTIES (CONTINUED)
Up until June 2005, the Company received management services including, administrative support services,
office facilities, accounting and company secretarial services from Troika Management Limited, Troika
Property Pty Ltd and Port Bouvard Limited entities which are associated with Mr Perrott, to the value of
$60,186 (2004: $60,000).
All consulting and other services provided to the Company are based on normal commercial terms
Amounts outstanding at balance date to director related entities in respect of unpaid fees:
Trade and other creditors and accruals
19,584
41,076
Total amounts receivable and payable from entities in the wholly-owned group at balance date:
Non-Current Receivables
Loans net of provisions for non recovery
3,916,610
2,465,152
Current Payables
Loans
1,074,507
1,102,695
2005
$
2004
$
26.
IMPACTS OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL
FINANCIAL REPORTING STANDARDS
For reporting periods beginning on or after 1 January 2005, the consolidated entity must comply with IFRS.
The AASB will issue AASB equivalents to IFRS. The adoption of the Australian IFRS Equivalents will be
first reflected in the Company’s financial statements for the half-year ending 31 December 2005, and the
year ending 30 June 2006.
The financial report has been prepared in accordance with Australian accounting standards and other financial
reporting requirements (Australian GAAP). The differences between Australian GAAP and IFRS identified to
date as potentially having a significant effect on the consolidated entity’s financial performance and financial
position are summarised in this note.
The consolidated entity has reviewed the transition to Australian equivalent to IFRS. The project is the
responsibility of the Company Secretary who reports to the Managing Director and the board of Directors.
The Company Secretary will be managing the transition to IFRS to achieve compliance with AIFRS reporting
for the financial year commencing 1 July 2005.
The impact of transition to AIFRS, including transitional adjustments disclosed are based on AIFRS standards
that management expect to be in place, or where applicable, early adopted, when preparing the first AIFRS
financial report (being half-year ending 31 December 2005). Only a complete set of financial statements and
notes together with comparative balances can provide a true and fair presentation of the Company’s and
consolidated entity’s financial position, results of operations and cash flows in accordance with AIFRS. This
note only provides a summary, therefore, further disclosure and explanations will be required in the first
complete AIFRS financial report for a true and fair view to be presented under AIFRS.
There is a significant amount of judgement involved in the preparation of the reconciliations from current
Australian GAAP to AIFRS, consequently the final reconciliation presented in the first financial report prepared
in accordance with AIFRS may vary materially from the reconciliations provided in this Note.
- 46 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
26.
IMPACTS OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL
FINANCIAL REPORTING STANDARDS (Continued)
Revisions to the selection and application of the AIFRS accounting policies may be required as a result of:
• Changes in financial reporting requirements that are relevant to the Company’s and consolidated entity’s
first complete AIFRS financial report arising from new or revised accounting standards or interpretations
issued by the Australian Accounting Standards Board subsequent to the preparation of the 30 June 2005
financial report.
• Additional guidance on the application of AIFRS in a particular industry or to a particular transaction.
• Changes to the Company’s and consolidated entity’s operations.
Where the applicable interpretation of an accounting standard is currently being debated, the accounting
policy adopted reflects management’s current assessment of the likely outcome to those deliberations.
The rules for first adoption of AIFRS are set out in AASB 1 First Time Adoption of Australian Equivalents to
International Financial Reporting Standards. In general, AIFRS accounting policies must be applied
retrospectively to determine the opening AIFRS balance sheet as at transition date, being 1 July 2004. The
Standard allows a number of exemptions to this general principle to assist in the transition to reporting under
AIFRS.
The significant changes in accounting policies expected to be adopted in preparing the AIFRS reconciliations
and the elections expected to be made under AASB 1 are set out below.
1.
2.
3.
4.
Exploration and Evaluation - AASB6 Exploration and Evaluation of Mineral Resources has now
been released which grandfathers accounting treatments which have previously been adopted by
AASB1022. No material change is expected from the implementation of this standard.
Impairment of Assets – The recoverable amount of non-current assets will be assessed as the
higher of net selling price and value in use, on a discounted basis. The consolidated entity currently
assesses recoverable amounts of non-current assets based on undiscounted future net cash flows.
The impact of this is not expected to result in a material change.
Restoration, rehabilitation and environmental expenditure – Environmental obligations
associated with the retirement or disposal of long lived assets will be recognised when the
disturbance occurs and is based on the extent of damage incurred. The provision is measured as the
present value of the future expenditure and a corresponding rehabilitation asset is also recognised.
On an ongoing basis the rehabilitation liability will be re-measured in line with the changes in the time
value of money (recognised as an expense in the statement of financial performance and an increase
in the provision) and additional disturbances will be recognised as additions to a corresponding asset
and rehabilitation liability. The rehabilitation asset will be accounted for in accordance with the
accounting policy applicable to the asset to which it relates (ie Exploration and Evaluation).
The consolidated entity will be required to remeasure the existing environmental rehabilitation
provision to the present value of the future expenditure and recognise a related rehabilitation asset.
The consolidated entity currently has no such liabilities, however, it is expected that there will be no
material difference to the liability and therefore no material impact is expected to the accounts.
Income Tax - Under the Australian equivalent to AASB12 Income Taxes, deferred tax balances are
determined using the balance sheet method, which calculates temporary differences based on the
carrying amounts of an entity’s assets and liabilities in the statement of financial position and their
associated tax bases. In addition, current and deferred taxes attributable to amounts recognised
directly in equity are also recognised directly in equity.
This will result in a change to the current accounting policy, under which deferred tax balances are
determined using the income statement method, items are only tax-effected if they are included in the
determination of pre-tax accounting profit or loss and/or taxable income or loss and current and
deferred taxes cannot be recognised directly in equity. Under AIFRS deferred tax assets will be
recognised for the carry forward or unused tax losses to the extent the future taxable profit is
probable rather than virtually certain.
There is expected to be no material impact from this change.
- 47 -
ANNUAL REPORT 2005
GME RESOURCES LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
26.
IMPACTS OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL
FINANCIAL REPORTING STANDARDS (Continued)
5.
Equity-based compensation benefits – Under the Australian equivalent to AASB2 Share-based
Payment, equity-based compensation to employees will be recognised as an expense in respect of
the services received.
Under the current policy, the shares are recognised when the options are exercised and the proceeds
received allocated to share capital. This will result in a change to the current accounting policy.
As there is currently no share based compensation incorporated into the fees paid to officers and
executives of the consolidated entity The impact of this change in the year ended 30 June 2005
would be NIL.
27. EVENTS SUBSEQUENT TO BALANCE DATE
On 29 June 2005, Directors announced a 1 for 15 renounceable rights issue at 15 cents. The rights
issue was not underwritten and on 12 August 2005 the offer closed with almost 90% acceptances.
The Company’s share registry received acceptances for 11,307,831 ordinary shares at an issue
price of 15 cents per share raising a total of $1,696,175.65.
The Company elected not to place the shortfall of 1,458,795 shares or 11.4%.
- 48 -
ANNUAL REPORT 2005
GME RESOURCES LTD
DIRECTORS’ DECLARATION
The directors of the company declare that
1.
the financial statements and notes set out on pages 29 to 48, are in accordance with the
Corporations Act 2001:
(a)
(b)
comply with Accounting Standards and the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
give a true and fair view of the financial position as at 30 June 2005 and of the
performance for the year ended on that date of the company and consolidated entity.
2.
In the directors’ opinion, there are reasonable grounds to believe that the company will be able to
pay its debts as and when they become due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2005.
This declaration is made in accordance with a resolution of the Board of Directors.
James N Sullivan
Managing Director
Perth, Western Australia
27 September 2005
- 49 -
ANNUAL REPORT 2005
INDEPENDENT AUDIT REPORT
To the members of
GME RESOURCES LIMITED
Scope
The financial report and directors’ responsibility
The financial report comprises the statement of financial position as at 30 June 2005,
statement of financial performance, statement of cash flows and accompanying notes to the
financial statements for the year then ended, and the directors’ declaration of GME
Resources Limited (“the company”). The financial report includes the consolidated financial
statements of the consolidated entity comprising the company and the entities it controlled
at the year’s end or from time to time during the financial year.
The directors of the company are responsible for the preparation and true and fair
presentation of the financial report in accordance with the Corporations Act 2001. This
includes responsibility for the maintenance of adequate accounting records and internal
controls that are designed to prevent and detect fraud and error, and for the accounting
policies and accounting estimates inherent in the financial report.
Audit approach
We conducted an independent audit in order to express an opinion to the members of the
company. Our audit was conducted in accordance with Australian Auditing Standards, in
order to provide reasonable assurance as to whether or not the financial report is free of
material misstatement. The nature of an audit is influenced by factors such as the use of
professional judgement, selective testing, the inherent limitations of internal control, and the
availability of persuasive rather than conclusive evidence. Therefore, an audit cannot
guarantee that all material misstatements have been detected.
We performed procedures to assess whether in all material respects the financial report
presents fairly, in accordance with the Corporations Act 2001, including compliance with
Accounting Standards and other mandatory financial reporting requirements in Australia, a
view which is consistent with our understanding of the company’s and the consolidated
entity’s financial position, and of their performance as represented by the results of their
operations and cash flows.
We formed our audit opinion on the basis of these procedures, which included:
• examining, on a test basis, information to provide evidence supporting the amounts and
disclosures in the financial report, and
• assessing the appropriateness of the accounting policies and disclosures used and the
reasonableness of significant accounting estimates made by the directors.
HLB Mann Judd (WA Partnership)
15 Rheola Street West Perth 6005. PO Box 263 West Perth 6872 Western Australia. DX 238 (Perth) Telephone +61 (08) 9481 0977. Fax +61 (08) 9481 3686.
Email: hlb@mjwa.com.au. Website: http://www.hlb.com.au
Partners: Ian H Barsden, Terry M Blenkinsop, Litsa Christodulou, Wayne M Clark, Lucio Di Giallonardo, Colin D Emmott, Peter M Forbes, Trevor G Hoddy, Norman G Neill, Peter J Speechley
HLB Mann Judd (WA Partnership) is a member of
International and the HLB Mann Judd National Association of independent accounting firms
- 50 -
ANNUAL REPORT 2005
Independent Audit Report
While we considered the effectiveness of management’s internal controls over financial
reporting when determining the nature and extent of our procedures, our audit was not
designed to provide assurance on internal controls.
Independence
In conducting our audit, we followed applicable independence requirements of Australian
professional ethical pronouncements and the Corporations Act 2001.
Audit opinion
In our opinion, the financial report of GME Resources Limited is in accordance with:
(a)
the Corporations Act 2001, including:
(i)
giving a true and fair view of the company’s and consolidated entity’s financial
position as at 30 June 2005 and of their performance for the year then ended;
and
(ii)
complying with Accounting Standards in Australia and the Corporations
Regulations 2001; and
(b) other mandatory financial reporting requirements in Australia.
HLB MANN JUDD
Chartered Accountants
Perth, Western Australia
27 September 2005
N G NEILL
Partner
- 51 -
ANNUAL REPORT 2005
GME RESOURCES LTD
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 19 September 2005.
A.
Distribution of Securities
(a) Analysis of numbers of shareholders by size and holding:
Category
(size of holding)
Ordinary
Shares
-
1
-
1,001
-
5,001
10,001
-
100,000 and over
1,000
5,000
10,000
100,000
316
182
94
353
176
1,121
(b) There were 426 holders of less than a marketable parcel of ordinary shares.
(c) The percentage of the total holding of the twenty largest shareholders is:
Ordinary Shares
67.80%
B.
Voting Rights
The voting rights attaching to each class of shares are set out below:
(a)
Ordinary Shares:
On a show of hands, every member present in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
C.
Substantial Shareholders
Substantial shareholders who have notified the Company as at 19 September 2005, are:
Name
Retirewise Capital Pty Ltd and associated entities
Mandalup Investments Pty Ltd
Guiness Peat Group plc, Mid-East Minerals Limited and
Retford Resources NL
Peter Ross Sullivan
%
27.27
6.90
5.67
6.07
- 52 -
ANNUAL REPORT 2005
GME RESOURCES LTD
SHAREHOLDER INFORMATION
The names of the 20 largest security holders of each class of equity security as at 19 September 2005
are listed below:
ORDINARY SHARES
Name
Number
Issued Shares Held
%
Retirewise Capital Pty Ltd
Mandalup Investments Pty Ltd
Retford Resources NL
Duncraig Investment Services Pty Ltd
ANZ Nominees Limited
Hardrock Capital Pty Ltd
James Noel Sullivan
Peter Ross Sullivan
Geomett Pty Ltd
UBS Nominees Pty Ltd
Armada Trading Pty Ltd
Gravelstone Pty Ltd
Donald Anthony Sullivan
Topsfield Pty Ltd
Ingot Capital Management Pty Ltd
Tunza Holdings Pty Ltd
Mervyn Ross and Mary Sullivan
K Biggs Enterprises Pty Ltd
Clodene Pty Ltd
Douglas Stuart Butcher
44,295,844
14,000,099
11,505,070
9,810,099
8,680,402
7,493,157
6,078,555
4,795,001
4,144,054
3,500,000
3,200,000
2,888,500
2,507,500
2,346,667
2,331,463
2,278,868
2,230,000
2,200,000
1,625,000
1,600,000
21.84
6.90
5.67
4.84
4.28
3.69
3.00
2.36
2.04
1.73
1.58
1.42
1.25
1.16
1.15
1.12
1.10
1.08
0.80
0.79
137,510,279
67.80
- 53 -
ANNUAL REPORT 2005
GME RESOURCES LTD
TENEMENT DIRECTORY
Project
Tenements
Company Interest
Comments
Abednego West
MLA39/427
MLA39/824
MLA 39/825
MLA39/823
MLA37/581
EPMA11575, EPMA11806, EPMA12164
Chain Bore
Clermont
Duck Hill
E31/100 converted to MLA31/214
Eucalyptus
P39/3459 - 3460 converted to MLA39/744
ELA39/703
ML39/666
ML39/430 and ML39/344
ML39/665 - 666 and ML 39/674
M39/313
E39/480 converted to MLA39/803 - 804
MLs 39/568, 39/570, 39/616 and 39/802
M39/289
All tenements 20%
All tenements Delta
Gold 80%
100%
40%
50%
Joint Venture with
Australian Gold Fields
NL (in Liquidation)
GME 50%, Murchison
Metals 50%
Anglo 100%
NiWest 100%
NiWest 100% nickel
rights
Oldcity 100%
NiWest 100%
NiWest 100% nickel
rights
Hawks Nest
M38/218, P38/2515 converted to MLA 38/683
100%
Ilgarari
E52/1452
Laverton Downs
E38/506 converted to MLA38/587 - 588 and 38/782 - 784
Leonora East
P37/4106 converted to MLA37/566
P37/5330 - 5333, P37/5477 converted to MLA37/1059
MLA37/876
Linden
P39/3417 - 3418 converted to MLA39/797 - 798
P39/2974 - 2976 converted to MLA 39/500
Macey Hill
Mertondale
Mt Kilkenny
ML39/845
P37/4201 - 37/4205 converted to MLA37/591
E39/688 ML39/878 – 879
ELA 39/1107-09
P39/4404 – 4407
P39/4412-4417
100% Interest in
non copper
minerals
100% nickel rights
only
All tenements
100%
Copper Royalty
Montrose earning 70%
90% Haoma Mining NL
100%
10%
100%
100%
100%
100%
100%
100%
E39/990 Joint Venture Jindalee Resources Ltd
Earning 70%
Mt Morgan South
MLA39/702 - 703, MLA 39/481, MLA39/777
Murrin Murrin
(Golden Cliffs)
Murrin Murrin
(Minara
Resources)
MLA39/554 and MLA39/457
MLA39/426, 456, 552, 553 and 569
100%
100%
All tenements
100% rights to non
nickel laterite
Nickel laterite royalty 20
cents per tonne
- 54 -
ANNUAL REPORT 2005
Tenements
Company Interest
Comments
GME RESOURCES LTD
Project
Murrin Murrin
HEPI
Murrin Murrin
North
ML 39/717 - 718
ML39/819
ML39/758
MLA39/757 and MLA39/759
Pyke Hill
EL39/633
Waite Kauri
P37/4149 converted to MLA37/580
P37/5264 converted to MLA37/1091
PLA37/5555
All tenements
100%
All tenements
100%
100%
All tenements
100%
LEGEND:
E:
Exploration Licence
P:
Prospecting Licence
EPM:
Exploration Permit for Minerals
M: Mining Lease
ELA: Exploration Licence
Application
EPM
A:
Exploration Permit for Minerals
Application
PLA: Prospecting Licence
Application
MLA: Mining Lease Application
- 55 -
ANNUAL REPORT 2005
ASIC registered agent number
lodging party or agent name
office, level, building name or PO Box no.
street number & name
suburb/city
telephone (
facsimile (
DX number
)
)
state/territory postcode
suburb/city
Australian Securities & Investments Commission
copy of financial statements and reports
388
1/2
18 March 2002
ASS.
CASH.
PROC.
REQ-A
REQ-P
form 388
Corporations Act 2001
294, 295, 298-300, 307, 308, 319, 321, 322
Corporations Regulations
1.0.08
Name
ACN / ARBN / ARSN/PIN
Reason for lodgement of statements and reports
tick the appropriate box
A public company or a disclosing entity which is not a registered scheme or prescribed interest undertaking
A registered scheme*
Amendment of financial statements or directors' report (company)
Amendment of financial statements or directors' report (registered scheme)*
A large proprietary company that is not a disclosing entity
A small proprietary company that is controlled by a foreign company for all or part of the period and where the
company's profit or loss for the period is not covered by the statements lodged with ASIC by a registered foreign
company, company, registered scheme, or disclosing entity
A small proprietary company that is requested by ASIC to prepare and lodge statements and reports
A prescribed interest undertaking that is a disclosing entity
(A)
(B)
(C)
(D)
(H)
(I)
(J)
(K)
Dates on which financial year begins
/
/
and ends
/
/
(d/m/y)
Date of Annual General Meeting (if applicable) / /
Details of large proprietary company
If the company is a large proprietary company that is not a disclosing entity, please complete the following information as at the
end of the financial year for which the financial statements relate:
A What is the consolidated gross operating revenue of the large proprietary company and the entities that it controls?
B What is the value of the consolidated gross assets of the large proprietary company and the entities that it controls?
C How many employees are employed by the large proprietary company and the entities that it controls?
D How many members does the large proprietary company have?..........................................................
Auditor report
Were the financial statements audited? Yes
No
If yes: Does the auditor's report (section 308) for the financial year contain a statement of:
*
*
reasons for the auditor not being satisfied as to the matters referred to in section 307?
details of the deficiency, failure or shortcoming concerning any matter referred to in section 307?
If no:
Is there a class order exemption current for audit relief?
Yes
Yes
Yes
No
No
No
* NOTE: Where a new auditor has been appointed to a Registered Scheme, Form 5137 - Appointment of Scheme Auditor must be lodged
Details of current auditor*
The auditor can be a person or a firm.
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If a person
name (family & given names)
Auditor Registration no:
office
street number & name
suburb / city
date of appointment (d/m/y)
/ /
or
If a firm
name of firm
office
street number & name
suburb / city
Business Registration number
(if applicable)
date of appointment (d/m/y)
/ /
level
state / territory
level
state / territory
building name
postcode
building name
postcode
State / Territory registered in
Statements and reports to be attached to this form
Financial statements for the year (as per ss295(2))
statement of financial performance for the year (profit and loss statement)
statement of financial position as at the end of the year (balance sheet)
statement of cash flows for the year
if required by accounting standards - consolidated profit & loss statement, balance sheet and statement of cash flows
Notes to financial statements (as per ss295(3))
disclosures required by the regulations
notes required by the accounting standards
any other information necessary to give a true and fair view (see s297)
The directors' declaration about the statements and notes (as per ss 295(4))
The directors' report for the year (as per s 298 to 300)
Auditor's report required under sections 308 and 314
Certification
print name
sign here
I certify that the attached documents marked ( ) are a true copy of the annual reports required under Section 319.
capacity
date
* NOTE: Where a new auditor has been appointed to a Registered Scheme, Form 5137 - Appointment of Scheme Auditor must be lodged
Small Business (less than 20 employees), please provide an estimate of the time taken to complete this form
Include
·
·
The time actually spent reading the instructions, working on the question and obtaining the information
The time spent by all employees in collecting and providing this information
hrs
mins