CONTENTS
Corporate Directory
Chairman’s Letter
Review of Operations
Corporate Governance Statement
Directors’ Report
Auditor’s Independence Declaration
IFC
1
2-18
19-24
25-31
32
Financial Report
Directors’ Declaration
Independent Auditor’s Report
Additional Information
Tenement Directory
33-58
59
60-61
62-63
64
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 FCA
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS
Unit 105 Westpoint Centre
396 Scarborough Beach Road
Osborne Park WA 6017
(08) 9444 4976
Telephone:
Facsimile:
(08) 9201 2370
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
chairman’s letter
Dear Shareholder
The past 12 months has been a challenging time for the global nickel business due to concern at the slow growth
in Western economies. Conversely, the continued strength of China, the world’s largest nickel consumer, has again
been strong. Despite the economic environment nickel prices have remained strong and at levels that support the
NiWest Nickel Laterite Project.
During the last year the company completed drilling at a number of its nickel projects which comprise the
NiWest Project with the aim of adding to the high grade zones already identified and exploring for extensions
to mineralisation. The results of this drilling demonstrated the high quality nature of the resource with excellent
drill results. Following this work the respective resources were re-estimated with additional material added to
JORC resources. The resources are in very good shape with significant proportions in the measured and indicated
categories. Further drilling is planned, again, with the aim of improving the tonnage and grade of existing resources
therefore adding directly to the value of the overall project.
The Company undertook drilling at the Linden gold project during the year with very good results. This modest gold
project is taking shape nicely. Further drilling and the development of a resource model are planned. This shallow
high grade project should be amenable to open pit mining and processing at one of a handful of local gold plants.
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.
Your directors remain strongly supportive of the NiWest project and believe that the significant resource the
company has will support a world class project. The company has held preliminary discussions with a number of
parties interested in investing in the project. To date nothing has eventuated however there remains interest in a
number of quarters.
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 have observed a number of potential start up nickel
projects in other parts of the world come under pressure; be it threats of nationalisation or opposition from
competing land users to difficulties in disposal of tailings. Western Australia by contrast presents a very supportive
political and environmental landscape for major resource development.
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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NiWEST NiCkEL LaTERiTE HEaP LEaCH PRojECT
> Good Location, services readily available, great resource and simple process.
The Company’s principal asset is the world class NiWest
Nickel Laterite Heap Leach Project.
Resource
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 79 million tonnes
averaging 1.00% nickel and 0.06% Cobalt (0.8%Ni cut off
grade) have been defined through extensive systematic
drilling programs. The contained nickel metal is over
1 million tonnes
Location
The value of the project is due to its size, location and
amenability to simple heap leaching. 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. This compares very favourably to many
other laterite projects that are located in tropical areas with
inherent issues of difficult access, tailings and waste disposal
problems and also deforestation and other land use pressures.
Economics
The company believes that the heap leach approach
will result in a step change to the capital cost and also
significantly simplify the operating conditions when
compared to the alternative processing options available.
Process Selection
Alternatives include the expensive and complex high pressure
acid leach and variants including atmospheric leaching. In
many parts of the world laterites are roasted to produce a
nickel iron matte product however operating costs due to the
very high energy requirements of this method are prohibitive.
Heap leach of nickel laterite ore has been successfully
demonstrated 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.
Technical Studies
The Company completed a pre-feasibility study (PFS),
produced by 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 approximately 30,000 tonnes
of nickel metal in concentrate per annum.
Services
The project 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.
Experience
The Company has an experienced management team with
100 years plus experience in mining project development
including direct experience with nickel laterite developments.
The Company is now part way through a Feasibility Study
(FS) however this work has been terminated while the
company seeks potential partners for the project.
Project Fundamentals
Company internal pre-feasibility study results provide
the basis for attractive economic fundamentals at current
nickel prices.
Capital Expenditure
US$680 million
Production Rate
3.5 Mtpa producing
30,000t Ni pa
Grade
1% Ni
Recovery
>75% in 120 days
Operating Costs
US$5.00/lb excluding Co credits
Minimum Mine Life
20 years
Operating Margin
$3/lb generating $225M cash
flow pa ( after Cobalt credits)
Table 1 – Project cash flow modelling – GME internal.
Gold
In addition to the nickel project the company has developed
a strong gold portfolio.
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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
Figure 1. Tenement Location Map.
Eucalyptus
LEGEND
NiWest Ltd
Tenements
SealedRoad
GravelRoad
The value of the project is its size,
location and amenability to simple
heap leaching
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GME RESOuRCES LiMiTEd
2011 ANNuAL REpORT
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PREviouS STudiES
Engineering Studies
The Company completed an independent PFS in 2008,
the work was undertaken by internationally recognised
engineering consultants Aker Kvaerner. This study
demonstrated the viability of the heap leach concept.
The Company initiated a feasibility study into a large heap
leach facility 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.
Capital estimates for the project were in the order of $600
to $800M, a step change from the complex and expensive
HPAL alternative.
Metallurgical Test Work
A total of 10 x 4m leach 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, slump is an important measure
for the success of the heap process. Results from the column
test are shown in figure 2.
Process Enhancement Work
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
,
n
o
i
t
c
a
r
t
x
E
80
70
60
50
40
30
20
10
0
0
20
40
60
80
Time, Days
100
120
140
160
Hepi # 1 Comp.
MK North # 1 Comp.
MK Central # 1 Comp.
Mk North # 2
Figure 2. Extraction results for 4 metre column leach tests.
The work to date has identified an optimised
heap leach flowsheet
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GEoLoGiCaL RESouRCE BaSE
> Significant global resource (joRC compliant)
developed by independent consultants
> New drilling undertaken and resource updated
> Contains over 1 million tonnes of nickel metal
> Significant high grade core to the resource
> 130,000 metres drilled to date to support the BFS
0.7% Ni CoG
Category
Total
Measured
indicated
inferred
Combined
0.8% Ni CoG
Category
Total
Measured
indicated
inferred
Combined
1.0% Ni CoG
Category
Total
Measured
indicated
inferred
Combined
1.2% Ni CoG
Category
Total
Measured
indicated
inferred
Combined
Tonnes
(Millions)
45.86
32.28
30.32
108.46
Tonnes
(Millions)
34.73
23.81
20.68
79.23
Tonnes
(Millions)
16.68
9.61
6.46
32.74
Tonnes
(Millions)
6.80
2.60
1.56
10.96
%Ni
0.96
0.92
0.89
0.93
%Ni
1.04
0.99
0.96
1.00
%Ni
1.20
1.14
1.13
1.17
%Ni
1.37
1.31
1.28
1.34
%Co
0.06
0.06
0.06
0.06
%Co
0.07
0.06
0.06
0.06
%Co
0.08
0.08
0.07
0.08
%Co
0.10
0.09
0.08
0.09
Ni Metal
(Tonnes)
Co Metal
(Tonnes)
441,692
295,631
270,250
1,007,573
Ni Metal
(Tonnes)
360,304
235,394
198,770
794,467
Ni Metal
(Tonnes)
200,253
109,587
73,134
382,974
Ni Metal
(Tonnes)
93,232
34,017
20,035
147,284
28,229
18,502
19,600
66,331
Co Metal
(Tonnes)
23,367
15,045
12,266
50,677
Co Metal
(Tonnes)
13,456
7,272
4,736
25,464
Co Metal
(Tonnes)
6,496
2,255
1,314
10,065
Table 1. Global resource estimate of different Cut Off Grades (COG).
independent consultants
The Company has engaged
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. A number of
these were updated 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 –
see the project area for more information.
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reVieW OF OPeratiOns
Figure 3. Independent , Pure Nickel Company.
At a production rate of 3.5Mtpa the measured and indicated
resource in Table 1 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% Ni
cutoff 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.
oRE SaLES oPTioNS
> Significant value opportunity with 4 processing
plants within haulage distance
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% nickel are
marketed in many locations at price ranges of 5 to 10% of
the contained nickel value
This approach provides an alternative valuation of the
resource at NiWest, figure 4 shows plants inside a reasonable
haulage distance to the NiWest project.
Figure 4. Map showing the location of the 4 nickel processing plants in
WA and the respective ore feed grades.
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reVieW OF OPeratiOns
HEPi STaRTER PiT idENTiFiEd
> Ready to mine
Close spaced RC grade control drilling, mine design work and
environmental permitting 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 and processing or possible high grade
ore sales.
Figure 5. Showing Hepi project area layout as approved to commence operations.
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PiT oPTiMiSaTioN
> Expect a high conversion to reserves
Pit optimisation work 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.
Figure 6. Optimum pit shell and resource outline.
Test pumping on
these bores indicated
that significant water
should be available
from this area
WaTER ExPLoRaTioN
> a valuable asset with a 2.0 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.
The Company has been granted a 2.0GL per year water
license based on this drilling.
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2011 ANNuAL REpORT
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ENviRoNMENTaL STudiES
> Making progress with
environmental approvals
Environmental surveys for both flora and fauna have been
undertaken at Hepi, Mt Kilkenny, Eucalyptus and Murrin
North. During the period further work was undertaken at
Hepi supporting an approval to mine.
ENTiTLEMENT iSSuE
> Strong shareholder support
On 18 April 2011 the Company announced a capital
raising via a 1:15 non-renounceable entitlement issue at 8
cents per share, to raise up to approximately $1.61 million.
Shareholders showed strong support for the issue taking
up over 65% of it and the entire shortfall was subsequently
placed. The Company will use the funds to continue the
development of the NiWest nickel- cobalt project, its gold
projects and for general working capital purposes.
NiCkEL MaRkET FuNdaMENTaLS
> Nickel market remains strong
Nickel metal prices have shown strength in the face
of difficult economic conditions. Prices have generally
been above $US20, 000 per tonne or $US9.00 per pound.
The company believes that the nickel industry has a very
positive outlook. On the demand side most commentators
see a 5 to 6% growth in global demand driven by strong
growth from developing economies. China’s most recent
five-year plan calls for $US50 billion to be spent on
upgrading the country’s power grid and an another $110
billion on building 13,000 kilometres of high-speed railways.
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$
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P
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a
t
e
M
45000
40000
35000
30000
25000
20000
reVieW OF OPeratiOns
Stainless steel is the main end use for nickel however there
is forecast to be strong growth in high tech applications
such as high temperature turbines, new generation nuclear
reactors, batteries and large scale wind and solar farms.
The supply side is driven by the growth in nickel sourced
from laterites and the slow decline in nickel sourced from
sulphides. The last major sulphide discovery was Voisey’s
Bay discovered in 1994. Meanwhile other mines suffer from
declining grades and the need to mine deeper ore sources.
Nickel laterites account for approximately 50% of global
supply with ferronickel accounting for at least 25%. This is
significant as nickel produced using smelting (ferronickel)
has high energy requirements and naturally high unit costs
of production. The effect of significant supplies coming
from the high cost producers with operating costs linked
directly to energy at $US8 to 10 per pound is to put a floor
on the nickel price of $10 per pound. The long term price
outlook adds to the economics of the NiWest project and
provides a strong basis on which to develop the project.
Cobalt Price
Nickel Price
1
1
-
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0
1
-
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Figure 7. Nickel and Cobalt price information. Source LME.
l
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d
m
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reVieW OF OPeratiOns
PRojECT LoCaTioN
The Map below shows the 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 12 years and is
Australia’s second largest nickel producer.
Figure 8. Project area map.
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MiNiNG PRojECT aREaS
Hepi
Tenements M39/717, M39/718 and M39/819
Total area 1426 Hectares
Total metres of drilling 15,050 m in 818 holes
Hepi is located adjacent to the sealed Leonora to Laverton
highway. Drilling at Hepi during the year provided excellent
results and added to the quality of the geological resource.
The metal inventory at Hepi increased by 12%. Significant
drill results included;
•
•
•
•
6 metres @ 1.98% Ni from 17 m in HPC212
9 metres @ 1.77% Ni from 17 m in HPC219
6 metres @ 1.72% Ni from 15 m in HPC214
9 metres @ 1.71% Ni from 8 m in HPC215
The resource summary is reported below with 87% in the
JORC measured and indicated categories.
Geological Resources for Hepi
Cut off
0.8
1
1.2
Tonnes (Millions)
3.3
1.27
0.6
Ni %
1.04
1.27
1.54
Co%
0.067
0.083
0.092
reVieW OF OPeratiOns
Figure 9. Hepi Resource (0.8% Ni Cut-off) within the optimum pit.
Figure 10. Hepi cross section 6,806,525 North.
High Grade Ore
Ore Zone
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Mount kilkenny
Eucalyptus
Tenements M39/845, M39/878, M39/879, E37/
878, E39/1266, E39/1267, P39/4571, P39/4827
Total area 5850 Hectares
Total metres of drilling 34,300 m in 870 holes
The Mount Kilkenny area is located 18 km south of Hepi and 25
km from the Murrin Murrin Nickel Refinery. Additional drilling
completed during the year included some very good results.
•
•
25 metres @ 1.46% Ni from 0 m in MKC0661
20 metres @ 1.07% Ni from 14 m in MKC0658
The resource was updated during the year with a slight increase
in the overall tonnage particularly the higher grade zones.
Geological Resources for Mt kilkenny
Cut off
0.8
1
1.2
Tonnes (Millions)
23.2
11.4
4.8
Ni %
1.04
1.20
1.36
Co%
0.065
0.083
0.10
Tenements M39/289 , M39/313 , M39/344,
M39/430, M39/568 , M39/570 , M39/616,
M39/665, M39/666, M39/674, M39/744
E39/802, E39/803, E39/804, E39/1419
Total area 7356 Hectares
Total metres of drilling 34,400 m in 1150 holes
Eucalyptus is located 50 km South East of Hepi adjacent
to the recently developed Murrin East project operated
by Minara resources. Drilling and a resource update are
planned for 2011.
Geological Resources for Eucalyptus
Cut off
0.8
1
1.2
Tonnes (Millions)
28.1
11.5
3.1
Ni %
0.98
1.14
1.32
Co%
0.062
0.072
0.081
Figure 11. Mt Kilkenny Resource (0.8%Ni cut-off) within the
optimum pit.
Figure 12. Part of the Eucalyptus Resource (0.8%Ni cut-off)
within the optimum pit.
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reVieW OF OPeratiOns
Wanbanna
Tenements M39/460
Murrin North
Tenements M39/758
Total area 945 Hectares
Total metres of drilling 11,000 m in 200 holes
Total area 811 Hectares
Total metres of drilling 9,300 m in 215 holes
M39/758 is located adjacent to the Wanbanna resource. It is
11km north of Hepi and 4 km from the Murrin Murrin Nickel
refinery. 99% of the resource is in the JORC measured and
indicated categories.
Geological Resources for Murrin North
Cut off
0.8
1
1.2
Tonnes (Millions)
3.7
1.3
0.3
Ni %
0.97
1.14
1.34
Co%
0.06
0.07
0.08
M39/460 is located approximately 11 km north of Hepi and
5 km west of the Murrin Murrin Nickel refinery.
The Wanbanna prospect area contains a significant 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.
93% of the resource is in the Indicated category.
Geological Resources for Wanbanna
Cut off
0.8
1
1.2
Tonnes (Millions)
10.7
4.8
1.3
Ni %
1.00
1.14
1.31
Co%
0.066
0.079
0.091
The deposit is hosted within the laterite developed from
rocks.
weathered Achaean
serpentinised- peridotite
Figure 13. Showing the modeled Wanbanna resource adjacent to Minara’s recently mined open pit.
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reVieW OF OPeratiOns
Waite kauri
Mertondale
Tenements M37/1216
Tenements M37/591
Total area 234 Hectares
Total metres of drilling 14,000m on 403 Holes
Total area 885 Hectares
Total metres of drilling 7,956 m 380 Holes
Drilling was undertaken at Waite Kauri during the year,
some of the better results are shown below.
The resource model was updated with a slight increase
in tonnes and grade. 98% of the resource is in the JORC
measured and indicated category. Significant results included;
M37/591 contains a nickel laterite bearing ultramafic with
a strike length of over eight kilometres long. Additional
drilling was undertaken at Mertondale with better results
including;
•
•
5 metres @ 1.38% Ni from 9 m in MDRC107
11 metres @ 1.33% Ni from 3 m in MDRC105
•
•
•
11 metres @ 1.11% Ni from 19 m in WKRC0310
3 metres @ 1.39% Ni from 8 m in WKRC0318
3 metres @ 1.32% Ni from 11 m in WKRC0313
The geological resource for this area was updated based on
this drilling.
Geological Resources for Waite kauri
Geological Resources for Mertondale
Cut off
0.8
1
1.2
Tonnes (Millions)
1.9
0.5
0.24
Ni %
0.98
1.25
1.46
Co%
0.052
0.080
0.11
Cut off
0.8
1
1.2
Tonnes (Millions)
1.9
0.7
0.20
Ni %
0.98
1.15
1.36
Co%
0.077
0.09
0.12
duck Hill
Tenements E31/733
Total area 1793 Hectares
Total metres of drilling 6,200 m in 153 holes
This tenement contains a nickel laterite bearing ultramafic
over six kilometres of strike length.
Geological Resources for duck Hill
Cut off
0.7
1
Tonnes (Millions)
3.94
1.50
Ni %
0.96
1.27
Co%
0.077
0.09
Figure 14. Waite Kauri Resource (0.8%Ni cut-off) within the
optimum pit.
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reVieW OF OPeratiOns
GoLd
Gold assets
> Priority gold project being developed
> 30 Million ounces of Gold produced in the
Northern Goldfields region
> Hosts world class projects Sunrise dam, Granny
Smith and Sons of Gwalia
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.
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
> Significant drill results
> Walk up targets
> 5 large gold plants in the region
has produced significant gold production over the last 100
years – see Figure 15.
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.
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
a
o
Menzies R
e
i
l
r
o
o
g
l
a
K
Orient
Well
y
a
w
l
i
a
R
6,750,000mN
LEGEND
GMEResources Gold Project
Tenements
Sealed Road
Gravel Road
(Histrorical Production)
20 kilometres
Figure 15. Gold Projects.
BACK TO CONTENTS
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
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reVieW OF OPeratiOns
up drilling has been completed to enable a resource to be
reported. Past production records indicate that the Devon
mine yielded 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.
Better Drill results from 2011 drilling campaign
•
•
•
•
•
•
•
6 metres @ 6.60 g/t Au from 18 m in DVR206
6 metres @ 12.26 g/t Au from 19 m in DVR214
- Including 3m @ 22 g/t Au
2 metres @ 1.77 g/t Au from 8 m in DVR207
3 metres @ 2.07 g/t Au from 8 m in DVR208
1 metre @ 9.70 g/t Au from 42 m in DVR210
4 metres @ 2.45 g/t Au from 19 m in DVR212
2 metres @ 4.84 g/t Au from 34 m in DVR212
Total Gold recovery test work was conducted on two
composites from the recent Devon drilling that were made
up representing the expected mineable grade at 6.0 g/t Au
and potential low grade material at 2.1 g/t gold.
Figure 16. Abednego Project prospective gold trends.
(includes Federation and Homeward Bound Projects)
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).
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. Additional RC drilling for assaying and
metallurgical testing was completed during the year. A non-
JORC resource was calculated for the project and follow
Figure 17. Detailed plan of the Devon project, showing both new
and old drilling. Drillhole coding is based on the average of the best
intercept in each hole above 0.8 g/t Au.
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reVieW OF OPeratiOns
Figure 19. Laverton Downs Project Area.
Figure 18. Cross sections through the Devon project (looking north)
plotted on a local grid.
Testwork on each composite was aimed at defining
potential extractions at local plants, including gravity.
Two grind sizes were used at P80 of 150 micron (Coarse)
and P80 of 106 micron (Medium) grind.
Results showed total extractions of between 91% and
94% with high gravity content and low cyanide and lime
consumptions..
Laverton downs
The project area consists of a sequence of Achaean
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.
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reVieW OF OPeratiOns
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 who is a member 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 Hyland has 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 Hyland consents to the inclusion in the report of the matters based
on information provided in the form and context in which it appears.
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cOrPOrate GOVernance statement
iNTRoduCTioN
The Board of Directors of GME Resources Limited has adopted the following Corporate Governance Principles promulgated
by the ASX Corporate Governance Council 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 is the only executive,
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
Director
Director
Director
65 years
49 years
50 years
55 years
62 years
Director since 1996
Director since 2008
Director since 2004
Director since 1996
Director since 1997
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”) as is the Chairman Mr Perrott.
Non executive director Mr J Sullivan has been an executive in the last three years and as a result he and the Managing
Director, Mr D Varcoe are not considered “Independent” in accordance with the definitions of the Council.
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cOrPOrate GOVernance statement
As such, the Company complies with the Council’s recommendation, Item 2.1, that the majority of the Company’s directors
should be Independent Directors. The Board has in addition adopted a series of safeguards to ensure that independent
judgement is applied when considering the business of the Board:
• Directors are entitled to seek independent professional advice at the Company’s expense. Prior written approval of the
Chairman is required but this is not unreasonably withheld.
• Directors having a conflict of interest with an item for discussion by the Board must absent themselves from a board
meeting where such item is being discussed before commencement of discussion on such topic.
• The Independent Directors confer on a “needs” basis with the Chairman with such discussion if warranted and considered
necessary by the Independent Directors.
• The Board considers Non-executive Directors to be independent even if they have minor dealings with the Company
provided they are not a substantial shareholder. Transactions with a value in excess of 5% of the Company’s annual
operating costs are considered material. A director will not be considered independent if he has transactions in excess
of this materiality threshold.
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.
NoMiNaTioN CoMMiTTEE
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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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
• Be responsible and accountable for their actions and report any unethical behaviour.
TRadiNG iN CoMPaNY SECuRiTiES
The Company encourages Directors and employees to adopt a long-term attitude to their investment in the
Company’s securities. All Directors and employees (including their immediate family or any entity for which they
control investment decisions), must ensure that any trading in securities issued by the Company is undertaken within
the framework set out in the Securities Trading Policy.
The Securities Trading Policy does not prevent Directors or employees (including their immediate family or any entity
for which they control investment decisions) from participating in any share plan or share offers established or made
by the Company. However, Directors or employees are prevented from trading in the securities once acquired if the
individual is in possession of price sensitive information not generally available to all security holders.
In keeping with recent listing rule amendments, additional restrictions are placed on trading by Directors, Executives and
other personnel as determined by the Chairman and Company Secretary from time to time (‘Key Management Personnel’).
Key management personnel must not deal in Company Securities at any time if in possession of any inside information
relating to those securities.
In addition to the overriding prohibition against dealing in the Company’s securities when a person is in possession of
inside information, Key Management Personnel and their associated parties are at all times prohibited from dealing in
the Company’s securities during prescribed ‘closed’ periods. The Company has nominated closed periods to be during
the week prior to the release of the Company’s Quarterly Reports (including the Appendix 5B) unless exceptional
circumstances apply.
The Securities Trading Policy also includes a clause prohibiting Directors and Executives from entering into transactions
in associated products which operate to limit the economic risk of security holdings in the Company over unvested
entitlements.
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cOrPOrate GOVernance statement
TRadiNG iN CoMPaNY SECuRiTiES (CoNTiNuEd)
In accordance with Listing Rules, a director must notify the ASX within 5 business days after any change in the Director’s
relevant interest in securities of the Company or a related body corporate of the Company.
A director must notify the Company Secretary in writing of the requisite information within 2 business days in order for
the Company Secretary to make the necessary notifications to ASIC and ASX as required by the Corporations Act and the
ASX Listing Rules.
iNTEGRiTY oF FiNaNCiaL REPoRTiNG
GME’s Managing Director and Company Secretary report in writing to the Board:
• That the Company’s financial reports are complete and present a true and fair view, in all material respects, of the
financial condition and operational results of the Company and Group; and
• That the above statement is founded on a sound system of internal control and risk management which implements the
policies adopted by the Board and that the Company’s risk management and internal controls are operating efficiently
in all material respects.
audiT CoMMiTTEE
The Company does not have a formal audit committee as, in the opinion of the directors, the scope and size of the Company’s
operations do not warrant it. As such the Company is not in strict compliance of the Council’s Recommendation 4.2 that the
Board should establish an audit committee. It should be noted however that when the Council’s Recommendation was made
it was emphasised that it was more relevant for large companies.
The Board regularly reviews the scope of audits, the level of audit fees and the performance of auditors.
The Board also is continually assessing to ensure the independence of the external auditor is maintained. The company will
and does, if necessary, use other consultants to avoid any potential independence issues.
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.
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cOrPOrate GOVernance statement
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.
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 monitors 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.
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cOrPOrate GOVernance statement
REMuNERaTioN (CoNTiNuEd)
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.
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.
divERSiTY PoLiCY
The Board has implemented a Diversity Policy in line with the ASX’s Corporate Governance guidelines. The Group believes
that the promotion of diversity on its Boards, in senior management and within the organisation generally is good practice.
The Diversity Policy seeks to attract and retain people by promoting an environment where employees are treated with
fairness and respect and have equal access to opportunities as they arise. Diversity within the workforce includes such
factors as religion, race, ethnicity, language, gender, disability and age.
Gender diversity
The Corporate Governance recommendation 3.2 is effective from 1 July 2011 and requires the Board to set ‘measureable
objectives’ for achieving gender diversity and to report against them on an annual basis. The Board is currently reviewing its
practices and will put measures in place to assess the success of the policy during the coming financial year.
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DirectOrs’ rePOrt
Your directors present their report of GME Resources Limited and its controlled entities for the financial year ended 30 June 2011.
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
(Non executive - Chairman)
(Managing Director)
(Non executive - Director)
(Non executive - Director)
(Non executive - Director)
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
Principal activities
The principal activities of the consolidated entity are mineral exploration and investment.
No significant change in the nature of these activities occurred during the year.
operating and Financial Review
operating Results
The net loss after income tax attributable to members of the Group for the financial year to 30 June 2011 amounted to
$587,602 (2010:$635,852).
overview of operating activity
The Company is examining alternatives to enable it to develop 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. During the year the company undertook more exploration to further enhance the mineral resource.
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. The Company is actively seeking a strategic partner to assist with the development of the project.
Financial Position
At the end of the financial year the consolidated entity had $1,759,613 (2010: $1,957,866) in cash and at call deposits.
Carried forward exploration and evaluation expenditure was $31,797,475 (2010: $30,261,011).
During the year issued capital increased from 302,352,750 to 322,635,902 shares at the end of 2011. The movement related
to a non-renounceable rights issue as announced in April 2011.
dividends
No dividends have been paid or declared since the start of the financial year. No recommendation is made as to dividends.
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DirectOrs’ rePOrt
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.
information on directors and Company Secretary
Michael delaney Perrott AM BCom FAIM
(Chairman) 65 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
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) 49 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.
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DirectOrs’ rePOrt
james Noel Sullivan FaiCd
(Non Executive director) 50 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.
Peter Ross Sullivan BE, MBA
(Non Executive director) 55 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) 62 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.
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DirectOrs’ rePOrt
information on directors and Company Secretary (Continued)
Mr Mark Edward Pitts B.Bus FCA
(Company Secretary) 49 Years
Mr Pitts was appointed to the position of Company Secretary in February 2009. Mr Pitts is a Chartered Accountant with
over twenty five 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.
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.
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DirectOrs’ rePOrt
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:
2011
Executive directors
David J Varcoe
Non-Executive directors
James N Sullivan
Michael D Perrott
Geoffrey M Motteram
Peter R Sullivan
Executives
Mr Mark Pitts
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
$
254,675
25,000
24,000
30,000
24,000
24,000
60,000
416,675
-
-
-
-
-
25,000
-
-
-
-
-
-
-
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
$
279,675
24,000
30,000
24,000
24,000
60,000
441,675
Total
$
218,091
24,000
32,500
24,000
24,000
32,244
354,835
The Company and its subsidiaries had three employees as at 30 June 2011.
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DirectOrs’ rePOrt
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
13,343,613
254,375
14,329,570
13,987,158
5,267,552
Net Change
889,574
19,958
955,302
932,475
351,169
ordinary Shares
Closing
Balance
14,233,187
271,333
15,284,872
14,919,633
5,618,721
Meetings of directors
During the year, 6 meetings of directors were held. Attendances were:
Name
Michael D Perrott
David J Varcoe
James N Sullivan
Peter R Sullivan
Geoffrey M Motteram
Number
Eligible to attend
6
6
6
6
6
Number
attended
6
6
6
6
5
Loans to directors and Executives
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 17 to the Financial Report.
unlisted options
At the date of this report the number of unlisted Options on issue were as follows:
• 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.
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DirectOrs’ rePOrt
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.
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
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined
in Note 12 to the financial statements. The directors are satisfied that the provision of non-audit services is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit services
have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none of the services
undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics
for Professional Accountants issued by the Accounting Professional & Ethical Standards Board.
auditor’s 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
29 September 2011
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auDitOr’s inDePenDence
DeclaratiOn
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statement OF cOmPrehensiVe incOme
FOr the Year enDeD 30 June 2011
Note
Consolidated
2011
$
2010
$
Other income
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
2
7
3
165,758
123,891
216,478
230,712
166,124
59,111
171,116
300,637
199,642
169,283
587,602
635,852
-
-
587,602
635,852
-
-
-
-
-
-
Total comprehensive result for the year
587,602
635,852
Basic loss per share
(cents per share)
Diluted loss per share
(cents per share)
14
(0.19)
(0.19)
(0.23)
(0.23)
The accompanying notes form part of this financial statement.
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statement OF Financial POsitiOn
as at 30 June 2011
CuRRENT aSSETS
Cash and cash equivalents
Trade and other receivables
Other financial assets
ToTaL CuRRENT aSSETS
NoN CuRRENT aSSETS
Note
Consolidated
2011
$
2010
$
11(b)
4
5
1,759,613
6,242
8,250
1,957,866
48,760
8,250
1,774,105
2,014,876
Plant and equipment
Deferred exploration and evaluation expenditure
6
7
27,236
31,797,475
263,283
30,261,011
ToTaL NoN CuRRENT aSSETS
31,824,711
30,524,294
ToTaL aSSETS
CuRRENT LiaBiLiTiES
33,598,816
32,539,170
Trade and other payables
8
120,950
ToTaL CuRRENT LiaBiLiTiES
120,950
79,450
79,450
ToTaL LiaBiLiTiES
120,950
79,450
NET aSSETS
EquiTY
Issued capital
Financial assets reserve
Option reserve
Accumulated losses
ToTaL EquiTY
The accompanying notes form part of this financial statement.
33,477,866
32,459,720
9
9
9
49,093,323
(1,125)
973,537
(16,587,869)
47,487,575
(1,125)
973,537
(16,000,267)
33,477,866
32,459,720
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statement OF chanGes in eQuitY
FOr the Year enDeD 30 June 2011
CoNSoLidaTEd
Note
ordinary
Shares
Financial
assets Reserve
option
Reserve
accumulated
Losses
Total
Balance at 30 june 2009
44,526,381
(1,125)
740,796
(15,364,415)
29,901,637
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
Loss for the year
Total comprehensive income for
the year
Transaction with owners in their
capacity as owners
Shares issued (net of costs)
Balance at 30 june 2011
9
9
-
-
-
-
-
-
(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
-
-
-
-
-
-
(587,602)
(587,602)
(587,602)
(587,602)
1,605,748
49,093,323
-
(1,125)
-
973,537
-
(16,587,869)
1,605,748
33,477,866
The accompanying notes form part of this financial statement.
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35
statement OF cashFlOWs
FOr the Year enDeD 30 June 2011
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
Note
Consolidated
2011
$
2010
$
107,862
(1,967,352)
57,896
(1,801,594)
100,508
(1,468,406)
23,383
(1,344,515)
11(a)
(7,907)
(7,907)
-
-
1,612,548
5,500
(6,800)
1,611,248
2,978,193
-
(31,999)
2,946,194
Net increase/(decrease)in cash and cash equivalents
(198,253)
1,601,679
Cash and cash equivalents held at the start of the year
1,957,866
356,187
Cash and cash equivalents held at the end of the year
11(b)
1,759,613
1,957,866
The accompanying notes form part of this financial statement.
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
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 2011 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.
(b) Adoption of New and Revised Standards
In the year ended 30 June 2011, the Group has reviewed all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to its operations and effective for the current annual reporting period.
It has been determined by the Group that there is no impact, material or otherwise, of the new and revised
Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting
policies.
The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet
effective for the year ended 30 June 2011. 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 of the consolidated entity’s deferred
exploration and evaluation expenditure of $29,074,766 relating to the NiWest nickel laterite project 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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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
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
USD 20,000 and USD 40,000 per tonne respectively have been assumed with a long term AUD/USD exchange
rate of $0.95.
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 2010.
(d) Going Concern
The financial report has been prepared on the going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement of liabilities in the normal course of business.
As disclosed in the financial statements, the consolidated entity recorded an operating loss of $587,602 and a
cash outflow from operating activities of $1,801,594 for the year ended 30 June 2011 and at balance date, had
net current assets of $1,653,155.
The Board considers that the consolidated entity is a going concern taking into account the existing cash
resources of the Company and the ability of the Company to raise funds 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.
In addition the Directors are confident that the major shareholders who have supported the entity in the past
will continue to support it with future funding when required. 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.
(e) Statement of Compliance
The financial statements were authorised for issue on 29th September 2011.
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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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
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.
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
1.
STaTEMENT oF aCCouNTiNG PoLiCiES (CoNTiNuEd)
(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.
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.
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
1.
STaTEMENT oF aCCouNTiNG PoLiCiES (CoNTiNuEd)
(k)
Income Tax (Continued)
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.
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.
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
1.
STaTEMENT oF aCCouNTiNG PoLiCiES (CoNTiNuEd)
(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 statement of comprehensive income.
(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.
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
1.
STaTEMENT oF aCCouNTiNG PoLiCiES (CoNTiNuEd)
(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.
(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.
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2011 ANNuAL REpORT
43
nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
1.
STaTEMENT oF aCCouNTiNG PoLiCiES (CoNTiNuEd)
(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.
(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).
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
1.
STaTEMENT oF aCCouNTiNG PoLiCiES (CoNTiNuEd)
(p)
Impairment of Assets (Continued)
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.
(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.
(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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45
nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
2.
REvENuE aNd ExPENSES
(a) Revenue
Operating Activities
Interest received
Proceeds from:
Facilitation fee for prospecting rights
Other
Total revenue
(b) Expenses:
Consolidated
2011
$
2010
$
57,896
23,383
100,000
7,862
100,000
508
165,758
123,891
Depreciation – plant and equipment
216,478
230,712
3.
iNCoME Tax
(a)
Income Tax Recognised in Profit and Loss
-
-
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
(587,602)
(635,852)
Income tax benefit calculated at 30%
Unused tax losses and tax offset not recognised as
deferred tax assets
R&D Tax concession
Unrecognised deferred tax assets/liabilities
Under provision for income tax benefit in prior years
Income tax benefit reported in the consolidated
statement of comprehensive income.
(176,281)
522,532
-
(401,823)
55,572
-
(190,756)
464,186
19,556
(273,547)
(19,439)
-
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
3.
iNCoME Tax (CoNTiNuEd)
(b) Unrecognised Deferred Tax Balances
Unrecognised deferred tax assets comprise:
Losses available for offset against future taxable income
Capital allowance differences
Capital raising costs
Provision for non-recovery of investments
Accrued expenses and liabilities
Unrecognised deferred tax liabilities comprise:
Exploration expenditure
Capital allowance differences
Consolidated
2011
$
2010
$
10,659,641
4,869
15,764
1,169,023
14,809
11,864,106
9,539,242
-
9,539,242
10,137,109
-
7,605
1,169,023
9,900
11,323,637
9,078,303
61,110
9,139,413
Income tax benefit not recognised directly in equity:
Capital raising costs
118,122
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.
5. oTHER FiNaNCiaL aSSETS (CuRRENT)
Available-for-sale
Listed investments
6,327
(85)
6,242
6,327
42,433
48,760
8,250
8,250
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
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
Insurance write-off
Depreciation
Carrying amount at the end of the year
Consolidated
2011
$
2010
$
762,129
(734,893)
27,236
263,283
7,907
(5,226)
(22,250)
(216,478)
27,236
781,697
(518,414)
263,283
493,995
-
-
-
(230,712)
263,283
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
30,261,011
1,702,588
31,963,599
(166,124)
31,797,475
29,138,670
1,181,452
30,320,122
(59,111)
30,261,011
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.
8.
PaYaBLES (CuRRENT)
Trade payables and accruals
Consolidated
2011
$
120,950
120,950
2010
$
79,450
79,450
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 16. There are no
secured liabilities as at 30 June 2011.
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
9.
CoNTRiBuTEd EquiTY aNd RESERvES
Issued and paid up capital
$
$
322,635,902 (2010: 302,352,750) ordinary shares, fully paid
49,093,323
47,487,575
Ordinary shares
Balance at the beginning of the year
Entitlement Issue (a)
Shares issued in lieu of placement fee (b)
Issue of shares pursuant to acquisition of tenements (c)
Entitlement issue (d)
Entitlement issue (e)
Costs associated with entitlement issue
Issue of shares in lieu of placement fee (f)
Balance at the end of the year
47,487,575
1,612,548
10,104
-
-
-
(16,904)
-
49,093,323
No of
Shares
44,526,381
-
-
15,000
1,055,725
1,922,469
(49,533)
17,534
47,487,575
No of
Shares
Balance at the beginning of the year
302,352,750
253,373,931
Entitlement Issue (a)
Shares issued in lieu of placement fee (b)
Issue of shares pursuant to acquisition of tenements (c)
Entitlement issue (d)
Entitlement issue (e)
Issue of shares in lieu of placement fee (f)
Balance at the end of the year
20,156,850
126,302
-
-
-
-
322,635,902
-
-
150,000
21,114,494
27,463,842
250,483
302,352,750
(a) In June 2011, 20,156,850 shares were issued under a non-renounceable rights issue at 8c per share.
(b) In June 2011, 126,302 shares were issued in lieu of a placement fee relating to the shortfall of shares
(c) During the prior 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.
(d) In July 2009, 21,114,494 shares were issued under a non-renounceable rights issue at 5c per share.
(e) In May 2010, 27,463,842 shares were issued under a non-renounceable rights issue at 7c per share.
(f) In May 2010, 250,483 shares were issued in lieu of a placement fee relating to the shortfall of shares placed under
entitlement issue (e) above.
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
9.
CoNTRiBuTEd EquiTY aNd RESERvES (CoNTiNuEd)
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 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.
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)
2011
%
100
100
100
100
2010
%
100
100
100
100
Company’s
Cost of
investment
2011
$
-
-
616,893
4,561,313
5,178,206
2010
$
-
-
616,893
4,561,313
5,178,206
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
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
2011
$
2010
$
(587,602)
216,478
166,124
(1,619,819)
(275)
23,500
-
(1,801,594)
(635,852)
230,712
59,111
(1,225,368)
964
(6,824)
232,742
(1,344,515)
205,598
1,554,015
1,759,613
335,044
1,622,822
1,957,866
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
-
Consolidated
2011
$
2010
$
22,750
14,196
36,946
34,925
3,429
38,354
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
13. SEGMENT REPoRTiNG
The 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.
Consolidated
2011
$
2010
$
14. EaRNiNGS PER SHaRE
Basic and diluted loss per share (cents)
(0.19)
(0.23)
Loss used in calculation of basic and diluted earnings per share
587,602
635,852
Weighted average number of ordinary shares outstanding during
the year used in calculation of basic and diluted earnings per share
304,125,651
275,601,101
No adjustment was made for the 10,000,000 options on issue at 30 June 2011 (2010: 12,000,000) 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
– Non executive Chairman
– Managing Director
– Non executive Director
– Non executive Director
– Non executive Director
(ii) Executives
Mark Pitts
– 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.
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FOr the Year enDeD 30 June 2011
15. diRECToRS’ aNd ExECuTivES diSCLoSuRES (CoNTiNuEd)
(b) Compensation of Key Management Personnel (Continued)
The Managing Director and Non-executive Directors are remunerated for the services they render to the Company
and such services are carried out under normal commercial terms and conditions. Engagement and payment for such
services are approved by the other directors who have no interest in the engagement of services.
There are no retirement or termination benefits payable to the Board or senior executives.
At the date of this report the Company had not entered into any packages with Directors or senior executives which
include performance based components. The Company does not operate an employee share option plan.
2011
(ii) Compensation of Key Management Personnel for the year ended 30 June 2011
Post Employment
Benefits
Superannuation
$
Short Term
Benefits
Salary & Fees
$
Long Term Benefits
options
$
Executive directors
David J Varcoe
Non-Executive directors
James N Sullivan
Michael D Perrott
Geoffrey M Motteram
Peter R Sullivan
Executives
Mr Mark Pitts
254,675
25,000
24,000
30,000
24,000
24,000
60,000
416,675
-
-
-
-
-
25,000
(ii) 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
$
218,091
24,000
32,500
24,000
24,000
32,244
354,835
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
279,675
24,000
30,000
24,000
24,000
60,000
441,675
Total
$
218,091
24,000
32,500
24,000
24,000
32,244
354,835
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
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
1/7/2010
13,343,613
254,375
14,329,570
13,987,158
5,267,552
Net Change
889,574
19,958
955,302
932,475
351,169
ordinary Shares
30/6/2011
14,233,187
271,333
15,284,872
14,919,633
5,618,721
(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
2011
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
3.96%
-
205,598
-
1,554,015
-
-
-
-
-
205,598
1,554,015
-
-
-
-
-
-
-
-
-
-
-
8,250
-
1,759,613
8,250
-
8,250
1,767,863
120,950
120,950
120,950
120,950
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
16. FiNaNCiaL iNSTRuMENT diSCLoSuRES (CoNTiNuEd)
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
-
-
-
-
-
-
-
-
-
-
-
8,250
1,957,866
8,250
42,433
42,433
50,683
2,008,549
79,450
79,450
79,450
79,450
Interest Rate Risk Sensitivity Analysis
(b)
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 and all other variables were held constant, the Group’s
net loss before tax and equity would reduce by $8,798 and increase by $8,798 respectively (2010:$9,789). A reduction in the
interest rate would have an equal but opposite effect.
(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.
(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.
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
16. FiNaNCiaL iNSTRuMENT diSCLoSuRES (CoNTiNuEd)
(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.
(f) Net Fair Values
The net fair value of the financial assets and financial liabilities approximates their carrying value. Other than listed
investments that are measured at the quoted bid price at balance date adjusted for transaction costs expected to
be incurred, no financial assets and financial liabilities are readily traded on organised markets in standardised form.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the
statement of financial position and in the notes to and forming part of the financial statements.
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 2011, 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 $2,424,223 (2010: $5,506,000) 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. The Company has established access agreements with the major claimant groups
in the area. All of the mineral resources are located on granted mining leases. Once granted there is no opportunity
for veto of project development under the Native Title act however owners must adhere to the provisions of the
Aboriginal Heritage Act 1972 which regulates how to deal with specific heritage sites that may exist on the tenement.
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
17. CoMMiTMENTS aNd CoNTiNGENT LiaBiLiTiES (CoNTiNuEd)
(c) Non Cancellable Operating Lease Commitments
Within one year
One year or later and no later than five years
Consolidated
2011
$
32,850
13,687
46,537
2010
$
27,676
-
27,676
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
2011
$
2010
$
13,706,097
11,135,928
1,441,784
1,530,993
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nOtes tO the Financial statements
FOr the Year enDeD 30 June 2011
20. PaRENT ENTiTY diSCLoSuRE
As at, and throughout, the financial year ended 30 June 2011 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
21. SuBSEquENT EvENTS
2011
$
687,601
-
687,601
2010
$
735,854
-
735,854
1,770.556
33,165,804
1,660,734
1,660,734
2,011,325
32,195,365
1,608,444
1,608,444
49,093,323
(1,125)
973,538
(18,560,667)
31,505,069
47,487,575
(1,125)
973,538
(17,873,066)
30,586,922
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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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 2011 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 2011.
This declaration is signed in accordance with a resolution of the Board of Directors.
david j varcoe
Managing Director
Perth, Western Australia
29th September 2011
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inDePenDent auDitOr’s rePOrt
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inDePenDent auDitOr’s rePOrt
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aDDitiOnal inFOrmatiOn
FOr listeD PuBlic cOmPanies
The following additional information, applicable at 21 September 2011, 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
90
339
175
578
228
1,410
b.
c.
d.
The number of shareholders holding less than a marketable parcel is 456.
The names of the substantial shareholders listed in the holding
company’s register as at 21 September 2011 are:
Shareholder
ALCF PTY LTD (FORMERLY RETIREWISE)
MANDALUP INVESTMENTS PTY LTD
Number
% of issued
capital
85,729,092
25,715,246
26.6
8.0
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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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
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
RETIREWISE CAPITAL PTY LTD
RETIREWISE CAPITAL AUSTRALIA PTY LTD
NEWPORT BLACK TRUST COMPANY LTD
MANDALUP INVESTMENTS PTY LTD
RETFORD RESOURCES NL
DUNCRAIG INVESTMENTS SERVICES PTY LTD
EQUITY TRUSTEES LIMITED
TWO TOPS PTY LTD
MR PETER ROSS SULLIVAN
HARDROCK CAPITAL PTY LTD
MANDALUP INVESTMENTS PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
PROTAX NOMINEES PTY LTD
MR JAMES NOEL SULLIVAN
MD NICHOLAEFF PTY LTD
MR DOUGLAS STUART BUTCHER
NAVIGATOR AUSTRALIA LTD
GEOMETT PTY LTD
TUNZA HOLDINGS PTY LTD
SULLIVANS GARAGE PTY LTD
29,262,418
24,870,544
24,658,424
20,241,180
16,086,642
14,233,187
11,408,024
8,096,525
7,034,105
6,064,867
5,474,066
5,249,140
4,413,333
4,288,174
4,077,170
4,000,400
3,565,471
3,466,666
3,088,390
2,855,964
9.07
7.71
7.64
6.27
4.99
4.41
3.54
2.51
2.18
1.88
1.70
1.63
1.37
1.33
1.26
1.24
1.11
1.07
0.96
0.89
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.
202,434,690
62.74
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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
P 39/5093, P 39/5094
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
Golden Cliffs 100%
Placer Royalty 2% Gold
NiWest 100%
GME 50%
NiWest 100%
NiWest 100%
NiWest 100%
Murchison Metals 50%
Anglo 100% Gold Rights plus
nickel royalty
Minara Royalties
Minara Royalties
Old City 100% gold rights
E 39/1419, E 39/1470, E 39/1527, E 39/1552
NiWest 100%
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
Linden
P 37/7185
P 37/6931-6932
P 37/7279-7282
P 37/7425-7432
E 37/871
E 39/1375
P 39/4637-4638
MLA 39/1077-1078
P 39/2974 - 2976 converted to MLA 39/500
Mertondale
M 37/591
Mt Margaret
P39/4971-4972
Mt kilkenny
E 37/878
E 39/1266-1267
P 39/4571, P39/4827
M 39/878 – 879
M 39/845
Mt Morgan South
P 39/4639
P 39/4743-4750
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 100%
GME 10%
NiWest 100%
Golden Cliffs
NiWest 100%
NiWest 100%
NiWest 100%
NiWest 100%
NiWest 100%
GME
Golden Cliffs
90% Haoma Mining NL
Retford Resources 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 39/194, L 39/215
Niwest 100%
Niwest 100%
NiWest 80%
NiWest 100%
20% Wanbanna Pty Ltd
Haul Roads, Ground Water
Resources
LEGENd
E:
Exploration Licence
P:
Prospecting Licence
PLA: Prospecting Licence Application
M:
Mining Lease
ELA: Exploration Licence Application
L:
Miscellaneous Lease
MLA: Mining Lease Application
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