467 Canning Highway
Como
Western Australia 6152
Postal: Post Office Box 920
CANNING BRIDGE WA 6953
Phone: (618) 93132144
Fax: (618) 93132188
www.gmeresources.com.au
ASX Announcement – 12 October 2010
The Companies Announcement Office
ASX Limited
Level 4, 20 Bridge Street
SYDNEY NSW 2000
Dear Sirs,
2010 ANNUAL REPORT
Please see attached the following document for immediate release to ASX and lodgement with
ASIC:
• The 2010 Annual Report incorporating the Audited Financial Statements for GME Resources
Limited and its Controlled Entities for the Year ended 30 June 2010
Yours sincerely
David Varcoe
Managing Director
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www.gmeresources.com.au
GME Resources Limited ABN 62 009 260 315
CONTENTS
Corporate Directory
Chairman’s Letter
Review of Operations
Corporate Governance Statement
Directors’ Report
Auditor’s Independence Declaration
IFC
1
2-14
15-20
21-28
29
Financial Report
Directors’ Declaration
Independent Auditor’s Report
Additional Information
Tenement Directory
30-56
57
58-59
60-61
62
CORPORATE DIRECTORY
DIRECTORS
Chairman
Michael Delaney PERROTT AM B.Com
Managing Director
David John VARCOE B.Mining Engineering (Hons), M.AusIMM
Executive Director
James Noel SULLIVAN FAICD
Director
Peter Ross SULLIVAN BE, MBA
Director
Geoffrey Mayfield MOTTERAM B.MetE(Hons), M.AusIMM
COMPANY SECRETARY
Mark Pitts B.Bus CA
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS
467 Canning Highway
Como WA 6152
PO Box 920
Applecross WA 6953
(08) 9313 2144
Telephone:
Facsimile:
(08) 9313 2188
Web Site: www.gmeresources.com.au
AUDITORS
HLB Mann Judd
Chartered Accountants
Level 4, 130 Stirling Street
Perth WA 6000
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
SECURITIES EXCHANGE LISTING
The Company’s shares are quoted on the Official List of Australian Securities Exchange Limited Ticker code: GME
STATE OF REGISTRATION
Western Australia
2010 AnnuAL REpoRt
CHAIRMAN’S LETTER
Dear Shareholder
The past 12 months have presented an interesting and at the same time challenging environment. At the end of this
period the Company is in good standing and has continued to enhance the value of its key asset, the NiWest nickel
laterite project.
Nickel metal prices have remained strong during the year and global nickel stocks have continued to decline. We are of the
opinion that the outlook for nickel and hence for the project remain bright as global economies recover.
Your Directors remain strongly supportive of the NiWest project and believe that the significant resource the company has
will support a world class project.
During the year we continued to progress various studies into the project. This included geological modelling of 4 key areas
based on updated drilling. We now have a very solid resource base that will support the project through the process of a
feasibility study. The resource base has a high percentage of material in the Measured and Indicated category.
In the coming year we will focus on adding to the high grade resource and the feasibility study into a world class heap leach
facility. We will also continue to review options to add value through ore sales and other exploitive strategies.
The project is very well located in the north eastern goldfields and sits adjacent to the Murrin Murrin Operation being
the second largest nickel producer in Australia. We believe that heap leaching of nickel laterites represents a significant
improvement over other options and we are encouraged to see other companies progressing this technology. Not all laterite
ore types are amenable to heap leaching, the fact that the NiWest project can be processed in this manner presents a
significant strategic advantage to GME.
I would like to thank my fellow Board members for their strong involvement in the management of the company and the
development of the project. We look forward to seeing you at our Annual General Meeting.
Yours faithfully
MICHAEL PERROTT AM
Chairman
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GME REsouRcEs LiMitEd
2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
340,000mE
380,000mE
6,840,000mN
Waite Kauri
10 kilometres
Murrin North
Mertondale
Wanbanna
o a d
R
n
L a v e rt o
420,000mE
30°
Meekatharra
Wiluna
Mt Magnet
Geraldton
30°
PERTH
Leinster
Leonora
Project
Area
Laverton
Kalgoorlie
Norseman
Esperance
250 km s
Albany
Malcolm Rail
Siding
Hepi
Leonora
e
e li n
P i p
s
G a
Minara Resources
Nickel Laterite Plant Site
6,800,000mN
Mt Kilkenny
Macey Hill
NiWest Proposed
Plant Site
Kookynie
6,760,000mN
Eucalyptus
LEGEND
NiWest Ltd
Tenements
SealedRoad
GravelRoad
Figure 1. Tenement Location Map.
NiWest Nickel Laterite Heap
Leach Project
Over the reporting period the Company continued to
develop and investigate options for the NiWest Nickel
Laterite Heap Leach Project. This is potentially a world class
project due to its size, location and amenability to simple
heap leaching.
The company believes that heap leach approach will result
in a step change to the capital cost and also significantly
simplify the operating conditions when compared to the
HPAL alternative. Heap leach of nickel laterite ore has been
successfully trialled by Minara Resources and is proposed
for use by European Nickel at their Caldag facility. Not all
laterite ore types are amenable to heap leach processing,
the fact that test work shows the NiWest ores can be heap
leached adds significant advantage to the project.
GME REsouRcEs LiMitEd
Back to contents
2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
In 2007 the Company completed a pre-feasibility study
(PFS), produced by independent Engineering Consultants
Aker Kvaerner, which demonstrated the project was
technically feasible and economically very attractive. During
2008 the scale of the project was reviewed and as has been
previously reported – the optimum size was determined
to be 3.5 million tonnes per annum (Mtpa) of ore stacked
and leached, producing between 30,000 and 35,000 tonnes
of nickel metal per annum. This represents a significant
increase on the production capacity envisaged by the PFS.
The Company is now part way through a Feasibility Study
(FS). We are pleased to advise that the Company came
through the GFC unscathed and is now looking forward to
picking up where it left off with the NiWest project.
The NiWest Nickel Laterite Project comprises seven
separate project areas in the Murrin Murrin region of the
North Eastern Goldfields of Western Australia. Located on
granted mining leases, total resources of 110 million tonnes
averaging 0.93% nickel and 0.06% Cobalt (0.7%Ni cut off
grade) have been defined through extensive systematic
drilling programs. The contained nickel metal is over 1
million tonnes. To put this figure in to perspective it is a
similar quantity of nickel to the total production from the
Kambalda Dome which has been in production since the
1960’s.
The area is well suited to Heap Leach processing being
located in low rainfall, semi desert environment that is
sparsely vegetated and generally flat open country. Our
neighbour Minara Resources has shown the applicability of
the local ore types to successful treatment by either Heap
Leach or the more complex HPAL route.
The area is well serviced with infrastructure such as railway
linked to deep water ports, bitumen road, and gas pipeline
and is in close proximity to the township of Leonora. The
Company has successfully explored for water suitable for
large scale processing in the area.
In addition to the nickel project the company has developed
a strong gold portfolio.
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GME REsouRcEs LiMitEd
2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
Metallurgical Test Work
> Positive test results
Metallurgical test work completed at SGS
includes:
in Perth,
• A total of 10 x 4m columns of ore blends from Mount
Kilkenny, Hepi and Eucalyptus drill core samples have
been completed. Nickel and Cobalt recovery were
very high and column slump was minimal which is an
important measure for the success of the Heap process.
Technology
> Strategic advantage developed.
Previous Studies
> Advanced studies by world class engineers
The Company funded an independent PFS in 2007, the work
was undertaken by internationally recognised engineering
consultants Aker Kvaerner. This study demonstrated the
viability of the heap leach concept.
The Company is undertaking a Feasibility study into a large
heap leach facilty with its own acid supply. The work to
date has identified an optimised heap leach flowsheet.
The flowsheet includes an acid regeneration step likely
to have a significant impact on acid consumption. The
flowsheet concept is to produce a highly marketable mixed
sulphide product containing over 50% nickel and cobalt. The
product is readily transportable to international markets.
In 2009 GME Resources submitted two Australian and
International patent applications related to the GME Nickel
Heap Leach and Downstream Processes. These patents are
being examined at present.
• Acid Regeneration – This process is designed to reduce
acid consumption by regenerating some of the acid and
re-using the acid on the heap leach. In the process iron
is precipitated from the leach solution and regenerated
acid is returned to the heap leach.
• Ore preparation conditioning (pelletising) – This patent
describes a method for conditioning the ore to improve
the nickel recovery and stability of the heap. Based
upon the laboratory column leach tests, percolation and
permeability supported by both Golder Associates and
SGS tests on the ore from GME tenements.
Nickel Extraction v Time
%
i
N
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o
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c
a
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t
x
E
Chart 1. Extraction results for 4 metre column leach tests.
Time, Days
GME REsouRcEs LiMitEd
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2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
Geological Resource Base
> Significant global resource
> Strong high grade zones
> Four new areas modelled, resource is now ready
to support the BFS
> Independent JORC Resource with high percentage
in measured-Indicated category
> 0,000 metres drilled to date
(replacement cost of over $M)
Cut off
(%Ni)
0.50%
0.70%
0.80%
1.00%
1.20%
Tonnes
(Millions)
%
Nickel
%
Cobalt
208.31
109.28
76.00
32.60
10.45
0.78
0.93
1.00
1.16
1.34
0.05
0.06
0.07
0.08
0.09
Ni Metal
1,618,903
1,011,484
761,152
379,050
139,475
Co Metal
103,442
67,492
49,827
25,307
9,478
Measured and
Indicated Resource
72%
68%
74%
87%
88%
Table 1. Global resource estimate.
NiWest represents a significant independent nickel source
Project controlled by major mining house
Independent - Project in Production
Independent- Project in Development
8
7
6
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NiWest represents a significant independent nickel source
Project controlled by major mining house
Independent - Project in Production
Independent- Project in Development
6
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3
5
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Chart 2. Independent , Pure Nickel Company.
N
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The Company has engaged
independent consultants
o
C
Ravensgate Minerals Industry Consultants (Ravensgate)
as its resource managers and geologists. Ravensgate have
developed Krigged resource models for the 7 project areas
that make up the NiWest resource base. Four of these were
developed during the last year and further work has been
completed on identifying sources and drivers for additional
high grade tonnes. These resource models are the product
of industry best practice for geological modelling which
provides greater confidence for the project. The work
incorporates the most recent drilling and mapping.
At a production rate of 3.5Mtpa the measured and indicated
resource in Table 2 supports a long life operation with the added
bonus of being able to increase feed grades in early years.
The Chart above demonstrates the strong global position of
the project which is still independent of the major mining
houses. The Company will continue to develop its 0.8% cut-
off resource base to support a long life operation. Further
exploration on the very prospective holding of the company
would significantly add to this high grade resource.
Back to contents
GME REsouRcEs LiMitEd
2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
Ore Sales Options
> Significant value opportunity with processing
plants within haulage distance
Hepi Starter Pit Identified
> Ready to mine
The GME project is located within a reasonable haulage
distance of four nickel processing plants. Although this option
is not as favourable as establishing a standalone facility it does
demonstrate the potential value of the resource. Nickel ore
sales grading 1 to 2% are marketed in many locations at price
ranges of 5 to 10% of the contained nickel value. Results of
this valuation are presented in Table 2 below:
Total Ore Zone
Cut off grade
(%Nickel)
0.8%
1.0%
Tonnes
(millions)
ore
76
32.6
Revenue based
on 5% Nickel
contained value
$A 738 Million
$A 368 Million
Table 2. Parameters: Nickel price $16500 USD/t, $A/$US 0.85.
(Consensus prices) Excludes Cobalt value.
This approach provides an alternative valuation of the
resource at NiWest.
Close spaced RC Grade control drilling and mine design
work have been completed for the Hepi pit. The grade
control drilling defined a resource of 289,000 tonnes of high
grade ore at 1.53% Ni (0.8 % Ni Cut-off).
The Mining proposal for the starter pit has been approved
for either trail mining or possible high grade ore sales.
Figure 3. Showing Hepi starter pit with an ore block model- approved
and ready to mine.
Pit Optimisation
> Expect a high conversion to reserves
Pit optimisation work completed during the year showed
very encouraging results based on the current Resource
position. The Company will continue to refine this work
in line with more detailed operating cost data and updated
Resource categories following further drilling and modelling.
Optimum pit shells are shown in the projects section of this
report.
Water Exploration
> A valuable asset with a .0 GL Licence secured
Four production bores and seven monitoring bores have
been drilled on the Mining Tenements. Test pumping
on these bores indicated that significant water should
be available from this area, with modelling by Coffey
Geoscience indicating 2.0GL per year from the Kilkenny
mine area.
Figure 2. Map showing the location of the 4 nickel processing plants in
WA and the respective ore feed grades.
The Company has been granted a 2.0GL per year water
license based on this drilling.
GME REsouRcEs LiMitEd
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2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
of acceptances at 70%. With the assistance of Azure
Capital the balance of the shares were placed.. The issue
raised $1.92million. Funds raised net of offer costs will be
directed to further high grade ore definition and progressing
a number of development options with the assistance of
consultants.
Nickel Market Fundamentals
> Nickel market remains strong
Nickel metal prices have shown great resilience over the
past year in the face of difficult economic conditions. Prices
have generally been above $US8.00 per pound against a low
in the previous year of $5.00/lb. Furthermore the Company
is pleased to observe a decline in global stocks with a
corresponding increase in price in the later part of the year.
Environmental Studies
> Making progress on the environmental
approvals process
Environmental surveys for both Flora and Fauna have been
undertaken at Hepi, Mt Kilkenny, Murrin North. Further
work is planned in the coming year. The work is well
advanced at Hepi with an initial approval to mine having
been granted and bonds lodged with the Department of
Mines and Petroleum.
Entitlement Issue May 00
> Strong shareholder support
The Company undertook a Non-renounceable entitlement
issue in May 2010. A total of 27,463,842 new shares were
offered to shareholders on the basis of 1 new share for
every 10 held. The issue closed with a very pleasing level
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Nickel Stock
Nickel Price
Cobalt Price
Chart 3. Nickel and Cobalt price information.
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GME REsouRcEs LiMitEd
2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
Project Location
The Map below shows the Northern project area adjacent to
the Murrin Murrin Joint Venture (MMJV) (Minara Resources
Limited). This proximity clearly demonstrates that the GME
tenements host similar resources to those at the MMJV and
gives the company great confidence that the ore types will
be amenable to economic recovery via either heap leach or
HPAL processing. This fact is supported by our own test
work. The MMJV has been in operation for 11 years and is
Australia’s second largest nickel producer.
Figure 4.
GME REsouRcEs LiMitEd
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2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
Mining Project Areas
Hepi
Wanbanna
Tenements M39/717, M39/718 and M39/819
Tenements M/0
Total Area 1434 Hectares
Total metres of drilling 14,500 m in 800 holes
Total Area Hectares
Total metres of drilling ,000 m in 0 holes
Hepi is located adjacent to the sealed Leonora to Laverton
highway.
M39/460 is located approximately 11 km north of Hepi and
5 km west of the Murrin Murrin Nickel refinery.
Geological RESOURCES for HEPI
Cut Off
Tonnes (Millions)
0.8
1
1.2
3.08
0.98
0.39
Table 3. Hepi Resource.
Ni %
1.02
1.25
1.50
The Wanbanna prospect area contains a significant inferred
nickel laterite resource and is considered to be highly
strategic as it abuts the Company’s Murrin North project
and provides a material increase in the overall resources
held in the NiWest Nickel Laterite project. The geological
resource for this are was updated during the year based on
drilling undertaken in the previous year.
Geological RESOURCES for Wanbanna
Cut Off
Tonnes (Millions)
0.8
1
1.2
10.68
4.84
1.31
Ni %
1.00
1.14
1.31
Table 4. Wanbanna Resource The deposits is hosted within the laterite
developed from weathered Archaean serpentinised- peridotite rocks.
Figure 5. Hepi Resource (0.8% Ni Cut-off) within the optimum pit.
Figure 6. (Below) Showing the modelled Wanbanna resource adjacent to
Minara’s recently mined open pit.
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GME REsouRcEs LiMitEd
2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
Murrin North
Eucalyptus
Tenements M/
Total Area Hectares
Total metres of drilling ,00 m in holes
Tenements M/ , M/ , M/ ,
M/0, M/ , M/0 , M/, M/,
M/, M/, M/ E/0, E/0,
E/0, E/
M39/758 is located adjacent to the Wanbanna resource.
It is 11km north of Hepi and 4 km from the Murrin Murrin
Nickel refinery.
Total Area Hectares
Total metres of drilling ,00 m in 0 holes
The geological resource for this area was updated during
the year based on drilling undertaken in the previous year.
Eucalyptus is located 50 km South East of Hepi.
Geological RESOURCES for Eucalyptus
Cut Off
Tonnes (Millions)
Geological RESOURCES for Murrin North
Cut Off
Tonnes (Millions)
0.8
1
1.2
3.65
1.25
0.30
Table 5. Murrin North Resource.
Mount Kilkenny
0.8
1
1.2
28.12
11.51
3.09
Table 7. Eucalyptus resource.
Ni %
0.97
1.14
1.34
Ni %
0.98
1.14
1.32
Tenements M/, M/, M/, E/ ,
E/0, E/0, E/, E/, E/,
E/0, P/, P/
Total Area , Hectares
Total metres of drilling ,00 m in 0 holes
Figure 8. Part of the Eucalyptus Resource (0.8%Ni cut-off) within the
optimum pit.
The Mount Kilkenny area is located 18 km south of Hepi and
25 km from the Murrin Murrin Nickel Refinery.
Waite Kauri
Tenements M/
Geological RESOURCES for Mt Kilkenny
Cut Off
Tonnes (Millions)
0.8
1
1.2
23.61
11.29
4.41
Table 6. Mt Kilkenny Resource.
Total Area Hectares
Total metres of drilling ,00 m on Holes
The geological resource for this area was updated during
the year based on drilling undertaken in the previous year.
Ni %
1.03
1.19
1.34
Geological RESOURCES for Waite Kauri
Cut Off
Tonnes (Millions)
0.8
1
1.2
1.88
0.52
0.23
Table 8. Waite Kauri Resource.
Ni %
0.98
1.25
1.46
Figure 7. Mt Kilkenny Resource (0.8%Ni cut-off) within the optimum pit.
Figure 9. Waite Kauri Resource (0.8%Ni cut-off) within the optimum pit.
0
GME REsouRcEs LiMitEd
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2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
Mertondale
Duck Hill
Tenements M/
Tenements E/
Total Area Hectares
Total metres of drilling ,00 m Holes
Total Area Hectares
Total metres of drilling ,00 m in holes
M37/591 contains a nickel laterite bearing ultramafic with a
strike length of over eight kilometres long.
E31/733 was granted on 16th September 2008. This
tenement contains a nickel laterite bearing ultramafic over
six kilometres of strike length.
The geological resource for this area was updated during
the year based on drilling undertaken in the previous year.
Geological RESOURCES for Mertondale
Cut Off
Tonnes (Millions)
0.8
1
1.2
1.96
0.77
0.20
Table 9. Mertondale Resource.
Ni %
0.99
1.16
1.41
Geological RESOURCES for Duck Hill
Cut Off
Tonnes (Millions)
0.7
1
3.94
1.50
Table 10. Duck Hill Resource.
Ni %
0.96
1.27
RC infill drilling will be completed to verify and upgrade this
resource in due course.
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GME REsouRcEs LiMitEd
2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
GOLD
Gold Assets
> 0 Million ounces of Gold produced in the
Northern Goldfields region
> Hosts world class projects Sunrise Dam, Granny
Smith and Sons of Gwalia
> Significant drill results
> Walk up targets
> large gold plants in the region
GME and its subsidiary Golden Cliffs NL own a number
of prospective gold projects in the Leonora – Laverton
region. The amount of work previously undertaken on
the respective areas varies from soil sampling through to
diamond drilling and resource definition.
The majority of the tenements that make up the gold assets
have undergone reversion to new granted prospecting
licenses. Several new tenements were applied for that either
adjoined existing holdings or were considered prospective
for gold or base metals. The tenements are in an area that
has produced significant gold production over the last 100
years – see Figure 10.
The portfolio of tenements prospective for gold is in excess
of 150 square kilometres. A number of tenements contain
resource calculations that although not JORC compliant
may potentially support profitable small scale mining
activity for ore sales to third parties. Better drill results are
tabulated on page 13.
Drilling
is historical, undertaken by GME and other
companies. Better results are shown to highlight the
potential of the area. Drill methods include RC, diamond
and RAB. 1 metre samples were taken. Not all holes have
accurate survey data and therefore results are indicative but
may require follow-up drilling.
300,000mE
350,000mE
6,850,000mN
Tarmoola
Leonora East
Mertondale
400,000mE
Cork Tree Well
Delta
450,000mE
Laverton Downs
Fairfield
Abednego
Lancefield
(1.7 m Oz)
Admiral Hill
Laverton
Barnicoat
Windara
R o a d
L averto n
Cardinya
Murrin Murrin
Mt Marvin
Mt Morgans
(1.5m Oz)
Hawk Nest
6,800,000mN
Ironstone Well
Harbour Lights
Leonora
Tower Hill
Sons of Gwalia
(5m Oz)
Federation
Homeward Bound
e
e l i n
P i p
Kiang
s
G a
Forgotten Four
Michaelangelo
Historical production of 45g/t
d
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Menzies
e
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Orient
Well
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a
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6,750,000mN
LEGEND
GMEResources Gold Project
Tenements
Sealed Road
Gravel Road
(Histrorical Production)
20 kilometres
Figure 10. Gold Projects.
Granny Smith
(5m Oz)
Wallaby
Mt Morgan South
Sunrise Dam
(10m Oz)
Linden
Red October
(0.5m Oz)
Devon - Olympic
Fortitude
Linden
Historical production of 45g/t
Mt Celia
GME REsouRcEs LiMitEd
Back to contents
Project
Abednego
Abednego
Abednego
Abednego
Abednego
Hawk Nest
Hawk Nest
Mount Morgans
Mount Morgans
Laverton Downs
Laverton Downs
Laverton Downs
Leonora East
Leonora East
Linden
Linden
Table 11.
2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
Intercept
Grade (g/t)
From depth
Hole ID
7
2
4
4
6
12
2
1
7
4
4
3
10
4
8
6
6.08
14.75
6.45
10.2
7.1
3.1
59.7
51
3.14
9.75
23.1
15
5.1
3.2
145.3
15.26
17
30
8
12
36
8
22
23
13
24
49
34
28
8
30
34
FRC1
FRC8
HRB8
HRB9
ABR93
HNC1
HNC5
95MCRC025
MM150
FR6
FRC7
FRC12
GER079
TWAC001
OCP-17
OCP-15
Abednego
The Abednego Project is situated on the western margin of
the Murrin Murrin Tectonic Zone (MMTZ) within the Murrin
Domain of the Kurnalpi Terrane. Locally the Abednego
Project tenements are centred over the Federation Shear, a
northeast trending splay off the northwest trending Keith
Kilkenny Tectonic Zone located some 15 kilometres to the
southwest of the project area. Historical records show that
the Federation and Homeward Bound mines produced 1823
ounces from 1240 tonnes of ore (average grade of 45 g/t).
Figure 11. Abednego Project prospective gold trends.
(includes Federation and Homeward Bound Projects)
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GME REsouRcEs LiMitEd
2010 AnnuAL REpoRt
REVIEW OF OPERATIONS
Laverton Downs
The project area consists of a sequence of Archaean
Greenstones intruded by granitic rocks, and lies directly on
the north-south trending Laverton Tectonic Zone which
hosts significant gold deposits including the 1.7 million
ounce Lancefield mining centre to the south and the plus
Cork Tree Well deposit to the north.
Leonora East
The Leonora East project area lies across a portion of the
north west trending Keith-Kilkenny Tectonic Zone, host to
the major gold deposits in the Leonora area including the
Sons of Gwalia-Gwalia Deeps system (5 million ounces),
Tower Hill (1.5Moz) and Harbour Lights, which occur
adjacent to the granite greenstone contact along the
western margin of the greenstone belt. The Tenements are
approximately 2.5 km East of the Sons of Gwalia Mine ( St
Barbara Mines) .
Linden Project
The Linden Project tenements are situated over the Laverton
Greenstone Belt within the Central Laverton Domain of
the Laverton Tectonic Zone. The Sunrise Dam (>10 million
ounces) and Red October (>0.5 million ounces) deposits
occur some 15 km and 5 km respectively north of Linden.
Significant drilling has identified strong mineralisation over
a 700m strike length. A non- JORC resource was calculated
for the project and follow up drilling is planned to enable a
Figure 12. Laverton Downs Project Area.
resource to be reported. Past production records indicate
that the Devon mine yielded 10,832 tonnes of ore at an
average grade of 19.57g/t Au. The Olympic-Danube mining
area within P39/4637 has recorded production of nearly 1500
tonnes grading 44g/t. Total recorded historic production
from the Linden area is in excess of 44,000 ounces.
Competent Persons Statement
The information in this report that relates to Exploration
Results and Mineral Resources is based on information
compiled by Mr Stephen Hyland, Mr Bill Hill and Mr Steve
Goertz who are members of The Australasian Institute of
Mining and Metallurgy. Mr Hyland is a Principal Consultant
with Ravensgate Minerals
Industry Consultants who
consults to the Company. Mr Hill is self employed and
consults to the Company as and when required, Mr Hill
and Mr Hyland have sufficient experience, which is relevant
to the style of mineralization and type of deposit under
consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2004
Edition of the “Australasian Code for Reporting of Mineral
Resources and Ore Reserves. Mr Hill, Mr Goertz and Mr
Hyland consent to the inclusion in the report of the matters
based on information provided in the form and context in
which it appears.
GME REsouRcEs LiMitEd
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2010 AnnuAL REpoRt
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 five directors, but up to 10 directors can serve on the board. Mr David Varcoe and Mr James Sullivan
are the only executives, the remainder are non executive. Currently the five directors are:
Michael D Perrott
David J Varcoe
James N Sullivan
Peter R Sullivan
Geoffrey M Motteram
Chairman
Managing Director
Executive Director
Director
Director
64 years
47 years
49 years
54 years
61 years
Director since 1996
Director since 2008
Director since 2004
Director since 1996
Director since 1997
Mr Perrott, Mr Motteram and Mr P Sullivan are considered Independent Directors on the Board according to the definitions
by the Australian Securities Exchange Corporate Governance Council (“Council”).
The Managing Director, Mr D Varcoe is a full time executive, and Mr J Sullivan is also an executive of the Company.
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GME REsouRcEs LiMitEd
15
2010 AnnuAL REpoRt
CORPORATE GOVERNANCE STATEMENT
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 AM. 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;
• 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.
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GME REsouRcEs LiMitEd
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2010 AnnuAL REpoRt
CORPORATE GOVERNANCE STATEMENT
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;
• 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 Securities 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 Chief Financial Officer 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.
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GME REsouRcEs LiMitEd
17
2010 AnnuAL REpoRt
CORPORATE GOVERNANCE STATEMENT
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.
Timely and Balanced Disclosure to Australian Securities 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 Securities 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 for communications with Australian
Securities Exchange. This role includes responsibility for compliance with the continuous disclosure requirements of the
Australian Securities Exchange Listing Rules and overseeing and coordinating information disclosures to Australian Securities
Exchange, analysts, brokers, shareholders the media and the public.
All disclosures to Australian Securities Exchange are posted on the Company’s website soon after clearance has been received
from Australian Securities 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 Securities Exchange;
• Distribution of the annual report to shareholders together with a notice of meeting;
• Posting of half-yearly results and all Australian Securities 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 considered
appropriate.
On the Company’s website, information about the Company’s projects is 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.
18
GME REsouRcEs LiMitEd
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2010 AnnuAL REpoRt
CORPORATE GOVERNANCE STATEMENT
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 Securities Exchange.
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.
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
Directors 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.
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GME REsouRcEs LiMitEd
19
2010 AnnuAL REpoRt
CORPORATE GOVERNANCE STATEMENT
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.
20
GME REsouRcEs LiMitEd
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2010 AnnuAL REpoRt
DIRECTORS’ REPORT
Your directors present their report of GME Resources Limited and its controlled entities for the financial year ended 30 June
2010.
Directors
The names of directors in office at any time during or since the end of the year are:
Michael Delaney Perrott
David John Varcoe
James Noel Sullivan
Peter Ross Sullivan
Geoffrey Mayfield Motteram
Mark Edward Pitts
(Non executive - Chairman)
(Managing Director)
(Executive Director)
(Non executive - Director)
(Non executive - Director)
(Company Secretary)
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 Group for the financial year to 30 June 2010 amounted to
$635,852 (2009: $628,861).
Overview of operating activity
The Company is developing the NiWest nickel laterite Heap Leach project in the NE Goldfields. The Company has explored
and developed a significant resource base containing over 1 million tonnes of nickel metal.
The Company believes that the optimal size of the NiWest Heap leach Project is 3.5 million tonnes per annum (Mtpa) of ore
processed, producing between 30,000 and 35,000 tonnes of nickel metal per annum. The Company envisages constructing a
world class Nickel and Cobalt processing plant in the Northern Goldfields.
The Company is encouraged by the strong Nickel price over the last year to levels that make the proposed NiWest Heap
Leach project an attractive proposition.
The Company has raised funds during the year and is continuing to add value to the project by reviewing the resources and
refining process options.
Financial Position
At the end of the financial year the consolidated entity had $1,957,866 (2009: $356,187) in cash and at call deposits.
Carried forward exploration and evaluation expenditure was $30,261,011 (2009: $29,138,670).
During the year issued capital increased from 253,373,931 to 302,352,750 shares at the end of 2010. The movement related
to a non-renounceable rights issue as announced on 13 April 2010 .
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GME REsouRcEs LiMitEd
21
2010 AnnuAl RepoRt
DIRECTORS’ 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
There were no significant changes in the state of affairs of the consolidated entity during the financial year.
After Balance Date Events
No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly
affect the Group’s operations, the results of those operations or the Group’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 activities 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 Group, 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 Group.
22
GMe ResouRces liMited
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2010 AnnuAl RepoRt
DIRECTORS’ REPORT
Information on Directors and Company Secretary
Michael Delaney Perrott AM BCom FAIM
(Chairman) 64 Years
Director since 1996
Mr Perrott has been involved in the construction and contracting industry since 1969. He is currently Chairman and director
of various listed and unlisted public and private companies. Mr Perrott is also a member of the Board of Notre Dame
University and SANE Australia and a council member for the State Ministerial Council for Suicide prevention.
Mr Perrott has been Chairman of the Company since his appointment as a director in 1996.
other current directorships of listed companies
Director of Schaffer Corporation Limited since February 2005 and VDM Group Ltd since July 2009.
Former directorships of listed companies in last 3 years
Non executive chairman of Gage Roads Brewing Co Limited from November 2006 to October 2007. Director of Port Bouvard
Limited from 1998 until April 2009, and Director of Portman Limited from June 1997 until December 2008.
David John Varcoe B. Mining Engineering (Honours) MAusIMM
(Managing Director) 47 Years
Director since 2008
Mr Varcoe is a mining engineer with over 20 years experience that includes extensive senior managerial and technical
positions with Australia and international resource companies. His experience includes positions at Sons of Gwalia,
Centaur, WMC, and Goldfields St Ives and for the period prior to joining GME as Principal Consultant for Rio Tinto based
in the United Kingdom and Perth WA.
Mr Varcoe has not been a Director of any other public listed entities during the past three years.
James Noel Sullivan FAICD
(Executive Director) 49 Years
Director since 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.
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GMe ResouRces liMited
23
2010 AnnuAl RepoRt
DIRECTORS’ REPORT
Peter Ross Sullivan BE, MBA
(Non Executive Director) 54 years
Director since 1996
Mr Sullivan is an engineer and has been involved in the management and strategic development of resource companies and
projects for more than 20 years.
Mr Sullivan has been a director of the Company since his appointment in 1996.
other current directorships of listed companies
Mr Sullivan has been a director of Resolute Mining Limited since June 2001.
Geoffrey Mayfield Motteram BMetE (Hons), MAusIMM
(Non Executive Director) 61 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 Anaconda 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 a non executive director of the Company since 1997, and provides technical support to the
Company.
Former directorships of listed companies in last 3 years
Mr Motteram was a director of Mount Magnet South Limited from 31 May 2006 to 14 September 2010.
Mr Mark Edward Pitts B.Bus CA
(Company Secretary) 48 Years
Mr Pitts was appointed to the position of Company Secretary in February 2009. Mr Pitts is a Chartered Accountant with
over twenty years experience in statutory reporting and business administration. He has been directly involved with, and
consulted to a number of public companies holding senior financial management positions. He is a partner in the corporate
advisory firm Endeavour Corporate. Endeavour offers professional services focused on Company Secretarial support,
corporate advice, supervision of ASIC and ASX reporting and compliance requirements, and commercial and financial
support.
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GMe ResouRces liMited
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2010 AnnuAl RepoRt
DIRECTORS’ REPORT
Remuneration Report (Audited)
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, Executive 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.
At the date of this report the Company had not entered into any packages with Directors or senior executives which include
performance based components.
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 as appropriate when reviewing remuneration packages.
Details of nature and amount of each element of the emoluments of directors and executives of the Company (and each of
the officers of the Company and the consolidated entity receiving the highest remuneration) are:
2010
Executive Directors
David J Varcoe
James N Sullivan
Non-Executive Directors
Michael D Perrott
Geoffrey M Motteram
Peter R Sullivan
Executives
Mr Mark Pitts
Short Term
Benefits
Salary & Fees
$
Post Employment
Benefits
Superannuation
$
Long Term
Benefits
Options
$
218,091
24,000
32,500
24,000
24,000
32,244
354,835
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
218,091
24,000
32,500
24,000
24,000
32,244
354,835
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GMe ResouRces liMited
25
2010 AnnuAl RepoRt
DIRECTORS’ REPORT
2009
Executive Directors
David J Varcoe
James N Sullivan
Non-Executive Directors
Michael D Perrott
Geoffrey M Motteram
Peter R Sullivan
Executives
Bradley J Wynne
(ceased 11 Feb 2009)
John R Harris (ceased 30 Nov 2008)
Mr Mark Pitts
(appointed 11 Feb 2009)
Short Term
Benefits
Salary & Fees
$
Post Employment
Benefits
Superannuation
$
Long Term
Benefits
Options
$
174,818
24,000
12,755
-
30,000
27,600
24,000
91,017
82,275
23,750
-
-
-
8,192
7,405
-
Total
$
187,573
24,000
30,000
27,600
24,000
99,209
89,680
23,750
505,812
-
-
-
-
-
-
-
-
-
The Company and its subsidiaries had one employee as at 30 June 2010.
477,460
28,352
Service Agreements
There are no service agreements with any of the Company’s Directors.
Share Based Compensation
There is currently no provision in the policies of the consolidated entity for the provision of share based compensation to
directors. The interest of Directors in shares and options is set out elsewhere in this report.
Directors and Executives 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
Michael D Perrott
David J Varcoe
James N Sullivan
Peter R Sullivan
Geoffrey M Motteram
Ordinary Shares
Opening
Balance
12,317,182
75,000
12,154,676
11,737,481
4,862,356
Net Change
1,026,431
179,375
2,174,894
2,249,677
405,196
Ordinary Shares
Closing
Balance
13,343,613
254,375
14,329,570
13,987,158
5,267,552
26
GMe ResouRces liMited
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2010 AnnuAl RepoRt
DIRECTORS’ REPORT
Meetings of Directors
During the year, 4 meetings of directors were held. Attendances were:
Name
Michael D Perrott
David J Varcoe
James N Sullivan
Peter R Sullivan
Geoffrey M Motteram
Loans to Directors and Executives
Number
Eligible to Attend
4
4
4
4
4
Number
Attended
4
4
4
4
3
There were no loans entered into with Directors or executives during the financial year under review.
Related party transactions with directors and executives are set out in Note 19 to the Financial Report.
Unlisted Options
At the date of this report the number of unlisted Options on issue were as follows:
• 2,000,000 Options exercisable at $0.70 each, expiring 30 Sept 2010;
• 5,000,000 Options exercisable at $0.13 each, expiring 28 Feb 2012;
• 5,000,000 Options exercisable at $0.18 each, expiring 28 Feb 2012
There were no shares issued during the year or since the end of the year upon exercise of options.
Audit Committee
The Board reviews the performance of the external auditors on an annual basis and meets with them during the year to
review findings and assist with Board recommendations.
The Board does not have a separate Audit Committee with a composition as suggested in the best practice recommendations.
The full Board carries out the function of an audit committee.
The Board believes that the Company is not of a sufficient size to warrant a separate committee and that the full board is
able to meet objectives of the best practice recommendations and discharge its duties in this area.
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.
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27
2010 AnnuAl RepoRt
DIRECTORS’ REPORT
Environmental Regulation
The consolidated entity’s exploration and mining tenements are located in Western Australia. There are significant regulations
under the Western Australian Mining Act 1978 and the 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 auditors’
expertise and experience with the Company or consolidated entity are important.
During the year HLB Mann Judd, performed no other services in addition to their statutory audit duties.
Auditors’ Independence Declaration
A copy of the auditor’s 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.
David J Varcoe
Managing Director
Perth, Western Australia
28 September 2010
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2010 AnnuAl RepoRt
AUDITOR’S INDEPENDENCE DECLARATION
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29
2010 AnnuAl RepoRt
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2010
Note
Consolidated
2010
$
2009
$
Other income
2
123,891
248,037
Depreciation expense
Exploration written down
Management and consulting fees
Administration expenses
Loss before income tax benefit
Income tax benefit
Net loss for the year
Other comprehensive income
Income tax relating to components of other comprehensive income
Other comprehensive income for the year, net of tax
230,712
234,302
59,111
-
300,637
488,035
169,283
320,977
635,852
795,277
3
-
(166,416)
635,852
628,861
-
-
-
-
-
-
Total comprehensive result for the year
635,852
628,861
Basic loss per share
(cents per share)
Diluted loss per share
(cents per share)
The accompanying notes form part of this financial statement.
15
(0.23)
(0.23)
(0.25)
(0.25)
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2010 AnnuAl RepoRt
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2010
Note
Consolidated
2010
$
2009
$
11(b)
4
5
1,957,866
48,670
8,250
356,187
7,291
8,250
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other financial assets
TOTAL CURRENT ASSETS
2,014,876
371,728
NON CURRENT ASSETS
Plant and equipment
Deferred exploration and evaluation expenditure
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EqUITY
Issued capital
Financial assets reserve
Option reserve
Accumulated losses
TOTAL EqUITY
The accompanying notes form part of this financial statement.
6
7
8
9
9
9
263,283
30,261,011
493,995
29,138,670
30,524,294
29,632,665
32,539,170
30,004,393
79,450
79,450
102,756
102,756
79,450
102,756
32,459,720
29,901,637
47,487,575
(1,125)
973,537
(16,000,267)
44,526,381
(1,125)
740,796
(15,364,415)
32,459,720
29,901,637
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31
2010 AnnuAl RepoRt
STATEMENT OF CHANGES IN EqUITY
FOR THE YEAR ENDED 30 JUNE 2010
CONSOLIDATED
Note
Balance at 1 July 2008
Loss for the year
Total comprehensive income for
the year
Transaction with owners in their
capacity as owners
Issue of unlisted options
Shares issued (net of costs)
Balance at 30 June 2009
Loss for the year
Total comprehensive income for
the year
Transaction with owners in their
capacity as owners
Issue of unlisted options
Shares issued (net of costs)
Balance at 30 June 2010
9
9
Ordinary
Shares
44,518,381
-
-
Financial
Assets
Reserve
(1,125)
-
-
Option
Reserve
Accumulated
Losses
Total
740,796
-
(14,735,554)
(628,861)
30,522,498
(628,861)
-
(628,861)
(628,861)
-
8,000
44,526,381
-
-
(1,125)
-
-
740,796
-
-
(15,364,415)
-
8,000
29,901,637
-
-
-
-
-
-
(635,852)
(635,852)
(635,852)
(635,852)
-
2,961,194
47,487,575
-
-
(1,125)
232,741
-
973,537
-
-
(16,000,267)
232,741
2,961,194
32,459,720
The accompanying notes form part of this financial statement.
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2010 AnnuAl RepoRt
STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 30 JUNE 2010
Consolidated
Note
2010
$
2009
$
100,508
(1,468,406)
23,383
(1,344,515)
11(a)
266,416
(5,207,693)
148,037
(4,793,240)
-
-
(5,597)
(5,597)
2,978,193
-
(31,999)
2,946,194
-
5,000
-
5,000
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Interest received
Net cash outflow from operating activities
Cash flows from investing activities
Acquisition of Plant and equipment
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from sale of assets
Payment of costs associated with issue of shares
Net cash inflow from financing activities
Net increase/(decrease)in cash and cash equivalents
1,601,679
(4,793,837)
Cash and cash equivalents held at the start of the year
356,187
5,150,024
Cash and cash equivalents held at the end of the year
11(b)
1,957,866
356,187
The accompanying notes form part of this financial statement.
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33
2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1.
STATEMENT OF ACCOUNTING POLICIES
GME Resources Limited (‘the Company’) is a listed public company, incorporated and domiciled in Australia. The
consolidated financial statements of the Company for the financial year ended 30 June 2010 comprise the Company
and its subsidiaries (together referred to as ‘the Group’).
(a) Basis of Preparation
The financial statements are a general-purpose financial report, which have been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and Interpretations and complies with
other requirements of the law. The financial statements have also been prepared on a historical cost basis.
The financial statements are presented in Australian dollars.
The Company is a listed public company, incorporated in Australia and operating in Australia. The entity’s principal
activities are mineral exploration and investment.
The group has applied the revised AASB 101 Presentation of Financial Statements which became effective on 1
January 2009. The revised standard requires the separate presentation of a statement of comprehensive income
and a statement of changes in equity. All non-owner changes in equity must now be presented in the statement
of comprehensive income. As a consequence, the group had to change the presentation of its financial statements.
Comparative information has been re-presented so that it is also on conformity with the revised standard.
(b) Adoption of New and Revised Standards
In the year ended 30 June 2010, the Group has adopted all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after
1 July 2009. Details of the impact of the adoption of these new accounting standards are set out in the individual
accounting policy notes set out below.
The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective
for the year ended 30 June 2010. As a result of this review the Directors have determined that there is no impact,
material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change
necessary to Group accounting policies.
(c)
Significant Accounting Judgements and Key Estimates
The preparation of financial statements requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense.
Actual results may differ from these estimates.
The recoverability of the carrying amount of exploration and evaluation costs carried forward has been reviewed by
the directors. In conducting the review, the recoverable amount has been assessed by reference to the higher of “fair
value less costs to sell” and “value in use”. In determining value in use, future cash flows are based on:
• Estimates of ore reserves and mineral resources for which there is a high degree of confidence of economic
extraction.
• Estimated production and sales levels.
• Estimate future commodity prices.
• Future costs of production.
• Future capital expenditure.
• Future exchange rates.
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1.
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
(c)
Significant Accounting Judgements and Key Estimates (Continued)
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period
in which the estimate is revised if it affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
The cashflow model used to support the assessment is calculated over a period of 20 years, being the estimated life of
the mine. The discount rate is 8% and for the purpose of this exercise, future nickel and cobalt prices of USD16,500
and USD 44,000 per tonne respectively have been assumed with a long term AUD/USD exchange rate of $0.85.
Variations to expected future cash flows, and timing thereof, could result in significant changes to the impairment
test results, which in turn could impact future financial results.
The accounting policies and methods of computation adopted in the preparation of the financial statements are
consistent with those adopted and disclosed in the company’s financial statements for the financial year ended 30
June 2009.
(d) Going Concern
As disclosed in the financial statements, the consolidated entity recorded an operating loss of $635,852 and a cash
outflow from operating activities of $1,344,515 for the year ended 30 June 2010 and at balance date, had net current
assets of $1,935,426.
The Board considers that the consolidated entity is a going concern and recognises that additional funding is required
to ensure that the consolidated entity can continue to fund its operations and further develop its mineral exploration
and evaluation assets during the twelve month period from the date of these financial statements. Such additional
funding can be derived from sources including:
• The placement of securities under the ASX Listing Rule 7.1 or otherwise;
• An excluded offer pursuant to the Corporations Act 2001; or
• The sale of assets.
Accordingly, the Directors believe that subject to prevailing equity market conditions, the consolidated entity will
obtain sufficient funding to enable it to continue as a going concern and that it is appropriate to adopt that basis
of accounting in the preparation of the financial statements. Should the consolidated entity be unable to obtain
sufficient funding as outlined above, there is significant uncertainty whether or not the consolidated entity will be
able to continue as a going concern and therefore, whether it will realise its assets and extinguish its liabilities in the
normal course of business and at the amounts stated in the financial statements.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded
asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated
entity not continue as a going concern.
(e) Statement of Compliance
The financial statements were authorised for issue on 28th September 2010.
The financial statements comply with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial statements,
comprising the financial statements and notes thereto, complies with International Financial Reporting Standards
(IFRS).
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1.
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
(f) Basis of Consolidation
The consolidated financial statements comprise the financial statements of GME Resources Limited and its
subsidiaries as at 30 June each year (the Group).
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses
and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date
on which control is transferred out of the Group. Control exists where the Company has the power to govern the
financial and operating policies of an entity so as to obtain benefit from its activities.
Business combinations have been accounted for using the purchase method of accounting. Unrealised gains or
transactions between the Group and its associates are eliminated to the extent of the Group’s interests in the
associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with
the policies adopted by the Group.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group
and are presented separately in the statement of comprehensive income and within equity in the consolidated
statement of financial position. Losses are attributable to the non-controlling interests even if that results in a deficit
balance.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions
with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any
difference between the amount of the adjustment to non-controlling interests and any consideration paid or received
is recognised within equity attributable to owners of GME Resources Limited.
When the Group ceases to have control, joint control or significant influence, any retained interest in the entity
is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the
initial carrying amount for the purposes of subsequently accounting for the retained interests as an associate, joint
controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This
may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
Changes in accounting policy
The group has changed its accounting policy for transactions with non-controlling interests and the accounting for
loss of control, joint control or significant influence from 1 July 2009 when a revised AASB 127 Consolidated and
Separate Financial Statements became operative.
Previously, transactions with non-controlling interests were treated as transactions with parties external to the
Group. Disposals therefore resulted in gains and losses in profit and loss and purchases resulted in the recognition
of goodwill. On disposal or partial disposal a proportionate interest in reserves attributable to the subsidiary were
reclassified to profit or loss or directly to retained earnings.
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1.
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
(f) Basis of Consolidation (Continued)
Changes in accounting policy (Continued)
Previously when the Group ceased to have control, joint control or significant influence over an entity the carrying
amount of the investment at the date control, joint control or significant influence ceased became its cost for the
purposes of subsequently accounting for the retained interests in associates, jointly controlled entity or financial
assets. The Group has not applied the new policy prospectively to transactions occurring on or after 1 July 2009.
As a consequence, no adjustments were necessary to any of the amounts previously recognised in the financial
statements.
(g) Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised:
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial asset.
(h) Borrowing Costs
Borrowing costs are recognised as an expense when incurred except those that relate to the acquisition, construction
or production of qualifying assets where the borrowing cost is added to the cost of those assets until such time as
the assets are substantially ready for their intended use or sale.
(i) Cash and Cash Equivalents
Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand. Cash
equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as
defined above, net of outstanding bank overdrafts.
(j) Trade and Other Receivables
Trade receivables, which generally have 30-90 day terms, are recognised and carried at original invoice amount less an
allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence
that the Group will not be able to collect the debts. Bad debts are written off when identified.
(k)
Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1.
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
(k)
Income Tax (Continued)
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised,
except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profit will be available against which the
temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax
asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
Tax consolidation legislation
GME Resources Limited and its 100% owned Australian resident subsidiaries have implemented the tax consolidation
legislation. Current and deferred tax amounts are accounted for in each individual entity as if each entity continued
to act as a taxpayer on its own.
GME Resources Limited recognises both its own current and deferred tax amounts and those current tax liabilities,
current tax assets and deferred tax assets arising from unused tax credits and unused tax losses which it has assumed
from its controlled entities within the tax consolidated group.
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1.
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
(k)
Income Tax (Continued)
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
payable or receivable from or payable to other entities in the Group. Any difference between the amounts receivable
or payable under the tax funding agreement are recognised as a contribution to (or distribution from) controlled
entities in the tax consolidated group.
(l) Other Taxes
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.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
(m) Plant and Equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such
cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is
incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the
plant and equipment as a replacement only if it is eligible for capitalisation.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Plant and equipment – over 4 to 5 years.
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
(i)
Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable
amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the
cash-generating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair
value.
An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable
amount. The asset or cash-generating unit is then written down to its recoverable amount
For plant and equipment, impairment losses are recognised in the income statement in the cost of sales line item.
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39
2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1.
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
(m) Plant and Equipment (Continued)
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits
are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
(n)
Investments and Other Financial Assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as
either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or
available-for-sale investments, as appropriate. When financial assets are recognised initially, they are measured at
fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transactions
costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and
appropriate, re-evaluates this designation at each financial year-end.
All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group
commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under
contracts that require delivery of the assets within the period established generally by regulation or convention in
the marketplace.
(i)
Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit
or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near
term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on investments held for trading are recognised in profit or loss.
(ii) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-
maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held
for an undefined period are not included in this classification. Investments that are intended to be held-to-maturity,
such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised
minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any
difference between the initially recognised amount and the maturity amount. This calculation includes all fees
and points paid or received between parties to the contract that are an integral part of the effective interest rate,
transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are
recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation
process.
(iii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses
are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the
amortisation process.
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1.
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
Investments and Other Financial Assets (Continued)
(n)
(iv) Available-for-sale investments
Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or
are not classified as any of the three preceding categories. After initial recognition available-for sale investments are
measured at fair value with gains or losses being recognised as a separate component of equity until the investment
is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss
previously reported in equity is recognised in profit or loss.
The fair value of investments that are actively traded in organised financial markets is determined by reference
to quoted market bid prices at the close of business on the balance date. For investments with no active market,
fair value is determined using valuation techniques. Such techniques include using recent arm’s length market
transactions; reference to the current market value of another instrument that is substantially the same; discounted
cash flow analysis and option pricing models.
(o) Exploration and Evaluation Expenditure
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and evaluation
assets on an area of interest basis. Costs incurred before the Group has obtained the legal rights to explore an area
are recognised in the statement of comprehensive income.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
(i) the expenditures are expected to be recouped through successful development and exploitation of the area of
interest; or
(ii) activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if:
•
•
sufficient data exists to determine technical feasibility and commercial viability, and
facts and circumstances suggest that the carrying amount exceeds the recoverable amount (see impairment
accounting policy 1(p)).
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to
which the exploration activity relates. The cash generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment
and then reclassified to mining property and development assets within property, plant and equipment.
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41
2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1.
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
(p)
Impairment of Assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the
asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be
close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it
belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or
cash-generating unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses relating to continuing operations are recognised in those expense categories consistent with the
function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is
treated as a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount
is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case
the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for
the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in
which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted
in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its
remaining useful life.
(q) Trade and Other Payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services.
(r)
Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1.
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
(s) Earnings per Share
Basic EPS is calculated as net result 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 result 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.
(t)
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors of GME Resources Limited.
Change in accounting policy
The Group has adopted AASB 8 Operating Segments from 1 July 2009. AASB 8 replaces AASB 114 Segment Reporting.
The new standard requires a ‘management approach’, under which segment information is presented on the same
basis as that used for internal reporting purposes. This has not resulted in a change in the number of reportable
segments presented by the Group as operating segments are reported in a manner that is consistent with internal
reporting provided to the chief operating decision maker.
(u) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as operating leases.
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where
another systematic basis is more representative of the time pattern in which economic benefits from the leased asset
are consumed.
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GMe ResouRces liMited
43
2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
2. REVENUE AND ExPENSES
(a)
Revenue
Operating Activities
Interest received
Proceeds from:
Facilitation fee for
prospecting rights
Other
Total revenue
(b)
Expenses:
3.
(a)
Depreciation – plant and
equipment
INCOME TAx
Income tax recognised in profit and loss
The major components of tax expense are:
Adjustments recognised in the current year in relation to
the current tax – R&D tax offset
Total tax benefit calculated at 30%
The prima facie income tax expense on pre-tax
accounting result from operations reconciles to the
income tax provided in the financial statements as
follows:
Accounting loss before tax from continuing operations
Income tax benefit calculated at 30%
Unused tax losses and tax offset not recognised as
deferred tax assets
Adjustments in respect of deferred income tax of
previous years
R&D Tax concession
Unrecognised deferred tax assets/liabilities
Under provision for income tax benefit in prior years
Other
Tax refund received (R&D Offset)
Income tax benefit reported in the consolidated
statement of comprehensive income.
Consolidated
2010
$
2009
$
23,383
148,037
100,000
508
100,000
-
123,891
248,037
230,712
234,302
-
-
(166,416)
(166,416)
(635,852)
(190,756)
464,186
-
19,556
(273,547)
(19,439)
-
-
-
(795,277)
(238,583)
2,543,274
491,654
(158,723)
(2,143,947)
(491,654)
(2,021)
(166,416)
(166,416)
44
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
3.
INCOME TAx (CONTINUED)
(b) Unrecognised deferred tax balances
Unrecognised deferred tax assets comprise:
Losses available for offset against future taxable income
Capital raising costs
Provision for non-recovery of investments
Accrued expenses and liabilities
Unrecognised deferred tax liabilities comprise:
Exploration expenditure
Capital allowance differences
Consolidated
2010
$
2009
$
10,137,109
7,605
1,169,023
9,900
11,323,637
9,078,303
61,110
9,139,413
9,672,923
13,586
1,169,023
3,000
10,858,532
8,741,601
123,347
8,864,948
Income tax benefit not recognised directly in equity:
Capital raising costs
98,191
98,191
Potential deferred tax assets attributable to tax losses and capital losses carried forward have not been brought to
account because directors do not believe it is appropriate to regard realisation of the future tax benefit as probable.
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.
4. TRADE AND OTHER RECEIVABLES (CURRENT)
Sundry debtors
GST Refundable
The average credit period on sale of goods and
rendering of services is 30 days.
6,327
42,433
48,760
7,291
-
7,291
5. OTHER FINANCIAL ASSETS (CURRENT)
Available-for-sale
Listed investments
8,250
8,250
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GMe ResouRces liMited
45
2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
6. PLANT AND EqUIPMENT (NON CURRENT)
Plant and equipment - at cost
Less accumulated 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
Consolidated
2010
$
781,697
(518,414)
263,283
493,995
-
-
(230,712)
263,283
2009
$
781,697
(287,702)
493,995
727,948
5,597
(5,248)
(243,302)
493,995
7. DEFERRED ExPLORATION AND EVALUATION ExPENDITURE
(NON CURRENT)
Deferred exploration and evaluation
expenditure - at cost
Movements:
Balance at beginning of the year
Direct expenditure
Less expenditure written off
29,138,670
1,181,452
30,320,122
(59,111)
30,261,011
25,119,793
4,018,877
29,138,670
-
29,138,670
The ultimate recoupment of the above deferred exploration and evaluation expenditure is dependent on the
successful development and commercial exploitation or, alternatively, sale of the respective areas at amounts
sufficient to recover the investment.
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8. PAYABLES (CURRENT)
Trade payables and accruals
2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
Consolidated
2010
$
2009
$
79,450
79,450
102,756
102,756
Trade payables and accruals are non interest bearing and normally settled on 30 day terms.
Details of exposure to interest rate risk and fair value in respect of liabilities are set out in note 18. There are no
secured liabilities as at 30 June 2010.
9. CONTRIBUTED EqUITY AND RESERVES
Issued and paid up capital
302,352,750 (2009: 253,373,931) ordinary shares,
fully paid
47,487,575
44,526,381
Ordinary shares
Balance at the beginning of the year
Issue of shares pursuant to acquisition of tenements (a)
Entitlement issue (b)
Entitlement issue (c)
Costs associated with entitlement issue
Issue of shares in lieu of placement fee (d)
Balance at the end of the year
44,526,381
15,000
1,055,725
1,922,469
(49,533)
17,534
47,487,575
No of
Shares
44,518,381
8,000
-
-
-
-
44,526,381
No of
Shares
Balance at the beginning of the year
253,373,391
253,173,931
Issue of shares pursuant to acquisition
of tenements (a)
Entitlement issue (b)
Entitlement issue (c)
Issue of shares in lieu of placement fee (d)
Balance at the end of the year
150,000
200,000
21,114,494
27,463,842
250,483
302,352,750
-
-
-
253,373,931
(a) During the year, the company issued 150,000 shares as consideration for mining rights and legal interests in
tenements adjacent to and part of its existing portfolio.
(b) In July 2009, 21,114,494 shares were issued under a non-renounceable rights issue at 5c per share.
(c) In May 2010, 27,463,842 shares were issued under a non-renounceable rights issue at 7c per share.
(d) In May 2010, 250,483 shares were issued in lieu of a placement fee relating to the shortfall of shares placed under
entitlement issue (c) above.
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GMe ResouRces liMited
47
2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
9. CONTRIBUTED EqUITY AND RESERVES
Options over Unissued Capital
Exercise price
Balance at the beginning of the year
Expired
Issued
Balance at the end of the year
$0.70
2,000,000
-
-
2,000,000
$0.13
-
-
5,000,000
5,000,000
$0.18
-
-
5,000,000
5,000,000
The unlisted 70 cent Options outstanding at year end will expire on 30 September 2010. The 5,000,000 13c and
5,000,000 18c options outstanding at year end will expire on 28 February 2012.
Reserves
nature and purpose
The financial assets reserve is used to record movements in the fair value of available for sale assets.
The option reserve is used to record the fair value of options issued.
During the year 10,000,000 options were granted to Azure Capital Limited upon their appointment as advisor.
The model inputs for the options are set out below.
The level of volatility anticipated for the purposes of the model was 85% for all options, The expected price volatility
is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to
future volatility due to publicly available information. Dividends were assumed to be NIL.
Grant
24.03.10
24.03.10
Expiry
Date
28.02.12
28.02.12
Vesting
Date
24.03.10
24.03.10
Exercise
Price
$0.13
$0.18
Options
5,000,000
5,000,000
Share Price
at Grant
$0.077
$0.077
Risk Rate Consideration
6.00%
6.00%
nil
nil
10. 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)
2010
%
100
100
100
100
2009
%
100
100
100
100
Company’s
Cost of
Investment
2010
$
2009
$
-
-
-
-
616,893
4,561,313
5,178,206
616,893
4,561,313
5,178,206
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
11. STATEMENT OF CASH FLOWS
(a) Reconciliation of cash flows from operating activities
Loss from ordinary activities after tax
Depreciation / amortisation
Exploration costs written off
Exploration costs capitalised (excluding creditors)
Decrease/(increase) in receivables
Increase/(decrease) in sundry creditors
Other non cash transactions (including issue of options)
Net cash flows from operating activities
(b)
Reconciliation of cash and cash equivalents
Cash balance comprises:
Cash at bank
Deposits at call
Consolidated
2010
$
(635,852)
230,712
59,111
(1,225,368)
964
(6,824)
232,742
(1,344,515)
2009
$
(628,861)
234,302
-
(4,301,940)
191,744
(288,485)
-
(4,793,240)
335,044
1,622,822
1,957,866
159,340
196,847
356,187
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short term deposits are made for varying periods between 3 to 6 months depending on the immediate cash
requirements of the Group, and earn interest at the respective short-term deposit rates
12. AUDITOR’S REMUNERATION
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 Group
- other services in relation to the
company and any other entity in the
Group
34,925
32,654
3,429
38,354
-
32,654
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GMe ResouRces liMited
49
2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
13. SEGMENT REPORTING
Group has adopted AASB 8 Operating Segments which requires operating segments to be identified on the basis
of internal reports about components of the Group that are reviewed by the chief operating decision maker, being
the Board of GME Resources Limited, in order to allocate resources to the segment and assess its performance.
The Board of GME Resources Limited reviews internal reports prepared as consolidated financial statements and
strategic decisions of the Group are determined upon analysis of these internal reports. During the period, the
Group operated predominantly in one business and geographical segment being the resources sector in Australia.
Accordingly, under the ‘management approach’ outlined only one operating segment has been identified and no
further disclosure is required in the notes to the consolidated financial statements.
14. EARNINGS PER SHARE
Consolidated
2010
$
2009
$
Basic and diluted loss per share (cents)
(0.23)
(0.25)
Loss used in calculation of basic and diluted
earnings per share
635,852
628,861
Weighted average number of ordinary shares outstanding
during the year used in calculation of basic and diluted
earnings per share
275,601,101
253,296,671
No adjustment was made for the 12,000,000 options on issue at 30 June 2010 (2009: 2,000,000) as they are not
considered to be dilutive.
15. DIRECTORS’ AND ExECUTIVES DISCLOSURES
(a) Details of Key Management Personnel
(i) directors
Michael Delaney Perrott
David John Varcoe
James Noel Sullivan
Peter Ross Sullivan
Geoffrey Mayfield Motteram
(ii) executives
Mark Pitts
– Non executive Chairman
– Managing Director
– Executive Director
– Non executive Director
– Non executive Director
– Company Secretary
(b)
Compensation of Key Management Personnel
(i) compensation policy
The Board of Directors is responsible for remuneration policies and the packages applicable to the Directors
of the Company. The Board 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.
50
GMe ResouRces liMited
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
15. DIRECTORS’ AND ExECUTIVES DISCLOSURES (CONTINUED)
(b)
(ii)
Compensation of Key Management Personnel (Continued)
compensation of Key Management personnel for the year ended 30 June 2010
2010
Executive Directors
David J Varcoe
James N Sullivan
Non-Executive Directors
Michael D Perrott
Geoffrey M Motteram
Peter R Sullivan
Executives
Mr Mark Pitts
Short Term
Benefits
Salary & Fees
$
Post Employment
Benefits
Superannuation
$
Long Term Benefits
Options
$
Total
$
218,091
24,000
32,500
24,000
24,000
32,244
354,835
-
-
-
-
-
-
-
-
-
-
-
-
-
-
218,091
24,000
32,500
24,000
24,000
32,244
354,835
(iii) compensation of Key Management personnel for the year ended 30 June 2009
2009
Executive Directors
David J Varcoe
James N Sullivan
Non-Executive Directors
Michael D Perrott
Geoffrey M Motteram
Peter R Sullivan
Executives
Bradley J Wynne
(ceased 11 Feb 2009)
John R Harris
(ceased 30 Nov 2008)
Mr Mark Pitts
(appointed 11 Feb 2009
Short Term
Benefits
Salary & Fees
$
Post Employment
Benefits
Superannuation
$
Long Term Benefits
Options
$
Total
$
174,818
24,000
30,000
27,600
24,000
91,017
82,275
23,750
477,460
12,755
-
-
-
-
8,192
7,405
-
28,352
-
-
-
-
-
-
-
-
-
187,573
24,000
30,000
27,600
24,000
99,209
89,680
23,750
505,812
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51
2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
15. DIRECTORS’ AND ExECUTIVES DISCLOSURES (CONTINUED)
(c)
Shareholdings of Key Management Personnel (Consolidated)
Michael Delaney Perrott
David John Varcoe
James Noel Sullivan
Peter Ross Sullivan
Geoffrey Mayfield Motteram
Ordinary Shares
1/7/2009
Net Change
Ordinary Shares
30/6/2010
12,317,182
75,000
12,154,676
11,737,481
4,862,356
1,026,431
179,375
2,174,894
2,249,677
405,196
13,343,613
254,375
14,329,570
13,987,158
5,267,552
(d) Other transactions and balances with Key Management Personnel
There were no other transactions with key management personnel during this financial year.
16. FINANCIAL INSTRUMENT DISCLOSURES
Financial risk management objectives
The group is exposed to market risk (including interest rate), credit risk and liquidity risk.
The Group does not issue derivative financial instruments, nor does it believe that it has exposure to such trading or
speculative holdings through its investments in associates.
Risk management is carried out by the Board as a whole, which provides the principles for overall risk management,
as well as policies covering specific areas such as foreign exchange risk, interest rate risk, and liquidity risk. The group
uses different methods to measure different types of risk to which it is exposed. Where appropriate these methods
will include sensitivity analysis in the case of interest rate, and other price risks and aging analysis for credit risk.
(a) Categories of financial instruments
Fixed Interest Rate
Maturing
Weighted
Average
Effective
Interest Rate
2010
Financial Assets
Floating
Interest
Rate
$
Within 1
year
$
Over 1
year
$
Non-interest
Bearing
$
Total
$
Cash assets
Other financial
assets
Trade and other
receivables
Payables
3.22%
335,044
1,622,822
-
-
-
-
-
-
-
335,044
1,622,822
-
-
-
-
-
-
-
-
-
-
1,957,866
8,250
8,250
42,433
50,683
79,450
79,450
42,433
2,008,549
79,450
79,450
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
16. FINANCIAL INSTRUMENT DISCLOSURES (CONTINUED)
Fixed Interest Rate
Maturing
Weighted
Average
Effective
Interest Rate
Floating
Interest Rate
$
Within 1
year
$
Over 1
year
$
Non-interest
Bearing
$
Total
$
6.43%
159,340
196,847
-
-
-
-
-
-
-
159,340
196,847
-
-
-
-
-
-
-
-
-
-
-
356,187
8,250
7,291
15,541
102,756
102,756
8,250
7,291
371,728
102,756
102,756
2009
Financial Assets
Cash assets
Other financial
assets
Trace and other
receivables
Payables
(b)
Interest rate risk sensitivity analysis
The Company and the Group are exposed 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, in respect of the cash balances and deposits.
The sensitivity analyses below have been determined based on the exposure to interest rates for instruments at
the reporting date and the stipulated change taking place at the beginning of the financial year and held constant
throughout the reporting period. A 50 basis point increase or decrease is used when reporting interest rate risk
internally to key management personnel and represents management’s assessment of the change in interest rates.
At reporting date, if interest rates had been 50 basis points higher or lower and all other variables were held constant,
the Group’s net loss before tax and equity would increase by $378 and decrease by $378 respectively (2009:$1,781).
The Group’s sensitivity to interest rates has increased during the current period due to an increase in funds in term
deposits.
(c)
Liquidity risk
The Company manages liquidity risk by continually monitoring cash reserves and cash flow forecasts to ensure that
financial commitments can be met as and when they fall due.
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53
2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
16. FINANCIAL INSTRUMENT DISCLOSURES (CONTINUED)
(d) Credit Risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Group is not significantly exposed to credit risk from its operating activities,
however the Board does monitor receivables as and when they arise. The maximum exposure to credit risk at the
reporting date is the carrying value of each class of financial asset mentioned above. The Group does not hold
collateral as security.
No material exposure is considered to exist by virtue of the possible non performance of the counterparties to
financial instruments and cash deposits.
(e)
Capital management risk
The Company controls the capital of the Group in order to maximise the return to shareholders and ensure that the
Group can fund its operations and continue as a going concern.
The Company effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its
capital structure in response to changes in these risks and the market. These responses include the management of
expenditure and debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the group since the
prior year.
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2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
17. COMMITMENTS AND CONTINGENT LIABILITIES
There were no capital commitments or contingent liabilities, not provided for in the financial statements of the
Group as at 30 June 2010, other than:
(a) Mineral Tenement Leases
In order to maintain current rights of tenure to mining tenements, the Group in its own right or in conjunction with
its joint venture partners may be required to outlay amounts of approximately $5,506,000 (2009: $2,951,417) 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 Group 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
Group’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 Group’s operations.
Native title claims have been made over ground in which the Group 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 Group.
(c) Non Cancellable Operating Lease Commitments
Within one year
One year or later and no later than five years
Consolidated
2010
$
27,676
-
27,676
2009
$
27,676
27,676
55,352
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55
2010 AnnuAl RepoRt
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
18. 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 17 – Commitments and Contingent Liabilities.
19. RELATED PARTIES
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
Current Payables
Loans
20. PARENT ENTITY DISCLOSURE
2010
$
2009
$
11,135,928
10,282,448
1,530,993
1,424,233
As at, and throughout, the financial year ended 30 June 2010 the parent company of the group was GME Resources
Limited.
Results of the parent entity
Loss for the period
Other comprehensive income
Total comprehensive result for the period
Financial position of the parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising of :
Share capital
Option reserve
Financial assets reserve
Accumulated losses
Total Equity
735,854
-
735,854
733,526
-
733,526
2,011,325
32,195,365
1,608,444
1,608,444
214,038
29,653,827
1,524,989
1,524,989
47,487,575
(1,125)
973,538
(17,873,066)
30,586,921
44,526,381
(1,125)
740,796
(17,137,214)
28,128,838
21. SUBSEqUENT EVENTS
No matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the Group’s operations, the results of those operations or the Group’s state of affairs in future
financial years.
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2010 AnnuAl RepoRt
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of GME Resources Limited (the “Company”):
a. The financial statements, notes, and the additional disclosures are in accordance with the Corporations Act
2001 including:
i) giving a true and fair view of the group’s financial position as at 30 June 2010 and of its performance for the year
then ended; and
ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
Corporations Regulations 2001; and
b. there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued
by the International Accounting Standards Board.
2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with
Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2010.
This declaration is signed in accordance with a resolution of the Board of Directors
David J Varcoe
Managing Director
Perth, Western Australia
28 September 2010
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2010 AnnuAl RepoRt
INDEPENDENT AUDITOR’S REPORT
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2010 AnnuAl RepoRt
INDEPENDENT AUDITOR’S REPORT
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2010 AnnuAl RepoRt
ADDITIONAL INFORMATION
FOR LISTED PUBLIC COMPANIES
The following additional information, applicable at 23 September 2010, is required by the Australian Securities Exchange Ltd in respect of listed public
companies only.
Shareholding
a. Distribution of Shareholders
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Number
of Holders
91
344
193
618
229
1475
b. The number of shareholders holding less than a marketable parcel is 456.
c. The names of the substantial shareholders listed in the holding
company’s register as at 23 September 2010 are:
Shareholder
RETIREWISE CAPITAL PTY LTD
MANDALUP INVESTMENTS PTY LTD
RETFORD RESOURCES NL
Number
78,730,407
24,108,044
16,086,642
% of issued
capital
26.04
7.98
5.32
d. Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
—
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy
has one vote on a show of hands.
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2010 AnnuAl RepoRt
ADDITIONAL INFORMATION
FOR LISTED PUBLIC COMPANIES
e.
20 Largest Shareholders — Ordinary Shares
Name
Number of Ordinary
Fully Paid Shares
Held
% Held of
Issued Ordinary
Capital
RETFORD RESOURCES NL
RETIREWISE CAPITAL PTY LTD
RETIREWISE CAPITAL AUSTRALIA PTY LTD
TWO TOPS PTY LTD
EQUITY TRUSTEES LIMITED
1.
2.
3. NEWPORT BLACK TRUST COMPANY LTD
4. MANDALUP INVESTMENTS PTY LTD
5.
6. DUNCRAIG INVESTMENTS SERVICES PTY LTD
7.
8.
9. MR PETER ROSS SULLIVAN
10. HARDROCK CAPITAL PTY LTD
11. MANDALUP INVESTMENTS PTY LTD
12. MR JAMES NOEL SULLIVAN
13. MD NICHOLAEFF PTY LTD
14. GEOMETT PTY LTD
15. PROTAX NOMINEES PTY LTD
16. SULLIVANS GARAGE PTY LTD
17. TUNZA HOLDINGS PTY LTD
18. MS EMILY JESSICA PATTIWAEL
19.
20. MR MERVYN ROSS SULLIVAN + MRS MARY SULLIVAN
INGOT CAPITAL MANAGEMENT PTY LTD
27,433,517
23,316,135
23,117,273
18,976,107
16,086,642
13,343,613
7,590,493
6,653,945
6,594,474
5,685,813
5,131,937
4,288,174
4,089,923
3,250,000
3,200,000
3,105,964
3,088,390
2,590,858
2,535,063
2,510,898
9.07
7.71
7.65
6.28
5.32
4.41
2.51
2.20
2.18
1.88
1.70
1.42
1.35
1.07
1.06
1.03
1.02
0.86
0.84
0.83
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Securities
Exchange Limited. The ASX code is GME.
182,589,219
60.39
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2010 AnnuAl RepoRt
TENEMENT DIRECTORY
Project
Tenements
Company Interest
Comments
Abednego West
P 39/4934, P 39/4716 – 4723, P 39/4729 – 4738,
P 39/4751, P 39/4572, P 39/4496, P 39/4999,
P 39/5000, P 39/5090, M 39/0825, M 39/0427
Golden Cliffs 100%
Placer Royalty 2% Gold
Duck Hill
Eucalyptus
E 31/733
M 39/744
M 39/289, M 39/430 and M 39/344
M 39/665 - 666 and M 39/674
M 39/313 M 39/568, M 39/570, M 39/616
M 39/802 -804
E 39/1419, E 39/1470
Hawk Nest
M 38/218 and P 38/3397
Hepi
M 39/717 – 718, 819
Laverton Downs
E 38/1876, E38/2394
E 38/2066
Leonora East
P 37/7185
P 37/6931-6932
P 37/7279-7282
P 37/7425-7432
E 37/871
Linden
E 39/1375
P 39/4637-4638
P 39/2974 - 2976 converted to MLA 39/500
Macey Hill
Mertondale
M 39/845
M 37/591
Mt Margaret
P39/4971-4972
Mt Kilkenny
Mt Morgan South
E 37/878
E 39/1107- 1108
E 39/1266-1267
P39/4571, P39/4827
M 39/878 – 879
E 39/990
P 39/4639
P 39/4743-4750
Niwest 50%
Murchison Metals 50%
NiWest 100%
NiWest 100%
NiWest 100%
NiWest 100%
GME 100%
Niwest 100%
NiWest 100%
Golden Cliffs 100%
GME 100%
Golden Cliffs
Golden Cliffs
GME
Golden Cliffs 100%
Golden Cliffs 100%
GME 100%
GME 10%
NiWest 100%
NiWest 100%
Golden Cliffs
NiWest 100%
GME
NiWest
NiWest
NiWest
NiWest
GME
Golden Cliffs
Anglo 100% Gold Rights plus
nickel royalty
Minara Royalties
Minara Royalties
Old City 100% gold rights
90% Haoma Mining NL
Retford Resources Royalty
Retford Resources Royalty
Jindalee Royalty
Murrin Murrin
(Minara Resources)
M 39/426, 456, 552, 553 and 569
Golden Cliffs 100% rights
to non nickel laterite
Nickel laterite royalty 20 cents
per tonne
Murrin Murrin North M 39/758
Waite Kauri
M 37/1216
Wanbanna
M 39/460
Misc Licences
L 39/174, L 37/175, L 31/46, L 40/25,
L 39/177, L 39/194
Niwest 100%
Niwest 100%
NiWest 80%
NiWest 100%
20% Wanbanna Pty Ltd
Haul Roads, Ground Water
Resources
LEGEND:
E:
M:
Exploration Licence
P:
Prospecting Licence
PLA: Prospecting Licence Application
Mining Lease
ELA: Exploration Licence Application
L:
Miscellaneous Lease
MLA: Mining Lease Application
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www.gmeresources.com.au
GME Resources Limited ABN 62 009 260 315