GBM Resources Annual Report 2014

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FY2014 Annual Report · GBM Resources

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Annual Report
2014

ABN 91 124 752 745

Secured rights to graphite at Sevastapol Graphite Prospect

Construction of Lubuk Mandi Tailings Treatment Plant

New Tenement and Project Status at Mount Morgan

Lubuk Mandi G.M. Joint Venture

Cu-Au targets identified at Mayfield

Contents

Chairman’s Report

GBM Projects

2014 Highlights Summary

Review of Operations

Annual Mineral Resources Statement

Sustainable Development

Tenement Schedule

Corporate Governance Statement

Directors’ Report

4-30

34-38

39-46

IRGS with tungsten and molybdenite at Monkey Gully,Yea

Auditor’s Independence Declaration

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

Directors’ Declaration

Independent Auditor’s Report

ASX Additional Information

Corporate Directory

52-76

78-79

80-81

New Cu-Au porphyry-style mineralisation
at Sandy Creek, Mount Morgan

Acquired Limonite Hill IRGS-porphyry Mount Morgan

IOCG Discovery at Bronzewing Bore

REE Cu-U Resource defined at Milo, Brightlands

Malmsbury resource increased to 104,000 ozs Au

Mitsui Corporation joint Cloncurry Farm-in
– Joint Venture

Pan Pacific Copper Cloncurry Farm-in
– Joint Venture Agreement

Phosphate identified at Burke Bore, Bungalien

New tenements acquired at Mount Morgan

Purchase of Bungalien, Brightlands, Mount Margaret
and Talawanta-Grassy Bore tenements, Mount Isa region

Drilling commences at Malmsbury IRGS

GBM listed on ASX

2014

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2007

Chairman’s Report

Dear Fellow Shareholder,

This last year has been a transformational one for all the Company’s shareholders and employees as a number
of significant changes have been made which have set your Company on a new course.

During 2013 the Board determined that an acquisition of near term gold production assets would assist in securing
the companies long term future and compliment and support our exploration strategy. In August 2013 the Company
completed the acquisition of a 40% share of the Lubuk Mandi gold Mine in Malaysia. This strategy remains in place
and the company has continued to pursue other opportunities throughout the year.

GBM has maintained an extremely high level of activity during the year resulting in the advancement of the Lubuk
Mandi Gold Mine in Peninsular Malaysia, of which GBM has a 40% interest through it’s investment in Angka Alamjaya
Sdn Bhd (AASB), towards gold production from retreatment of tailings dumps from previous mining. The JORC
Compliant Resource for the tailings is 1.5 million tonnes containing 34,700 ounces of gold.

Our Joint Venture partners, AASB, are now constructing a treatment plant which is expected to be in steady state
production in early 2015. AASB is currently estimating a resource to potentially support recommencing hardrock
mining operations at Lubuk Mandi. The Board believe that a planned Initial Public Offering of AASB on the
Singapore Stock Exchange is a key value driver to GBM.

Importantly, this project re-enforces GBM’s commitment to development and early production assets.

Significant progress was also achieved on the Cloncurry Joint Venture Projects (which are subject to a Farm-in
agreement with our Japanese partners, PPC and Mitsui Corporation). The company has also been active with recent
ground acquisition and target identification at our 100% owned Mount Morgan Gold Project together with identifying
the graphite potential at Mt Margaret on the Sevastapol and Rhea Prospects.

The company is proud to confirm that this has been achieved with a zero harm record in safety and environment
in 2014. This is the third consecutive year that GBM has achieved zero harm, a record the Board and management
are proud to uphold and determined to continue into the future. We like to recognize the efforts of our employees
and contractors who are key in achieving these outcomes.

The Company continues to remain focussed on the discovery and development of its projects in the shortest
possible timeframe.

During the year the Board was restructured and we appointed Mr Frank Cannavo as Executive Director.
Two Directors stepped down from the Board and I would like to thank Mr Cameron Switzer and Mr Sunny Loh
for their respective contributions to the Company during their tenure.

We continue to operate within a strong cash position and recently completed a placement of $860,000 bringing
a total of $2m now raised by the Company since the end of the financial year.

The placement allows us to continue our exploration programme on our 100% owned exploration assets for 2014
and 2015, and key areas for testing in the current field season are graphite on the Mount Margaret Project area
and copper and gold on the Mount Morgan project.

On behalf of the Board I would like to thank all of our Shareholders for their continued support throughout the
year and we remain committed to managing the Company’s operations in a safe, sustainable manner, socially
and environmentally responsible, with minimal impact on the communities on which we operate.

Yours sincerely

Peter Thompson
Executive Chairman

GBM Resources Annual Report 2014

2 GBM Resources Annual Report 2014

2014 Highlights Summary

Vision

GBM Resources Limited (GBM) remains strongly focused on delivery of shareholder

value through discovery, acquisition and development in the key commodities
of gold and copper. The Company is determined to achieve this in a safe and
responsible manner with the highest regard for the environment and communities
in which we operate.

Company highlights for the 2014 financial year included:

n Zero LTI’s and Environmental incidents during the year.

n Delineation of 36,000 ounce tailings resource at the Lubuk Mandi Gold Project in Malaysia.

n Commencement of drilling to test the hard rock potential at the Lubuk Mandi Gold Project.

n Commencement of construction of the tailings treatment plant at the Lubuk Mandi Gold Project.

n Graphite potential identified and mineral rights for Sevastapol and Rhea Graphite Prospects secured.

n Mountain Maid Gold Mine area included in new EPM application at Mount Morgan Project.

Figure 1: GBM Resources Tenement map.

GBM Resources Annual Report 2014

Review of Operations

1.0 Exploration Strategy

As the worldwide downturn in exploration continues, the number of companies competing for the reduced pool of
exploration funding continues to fall. The ASX contained over 1,100 listed junior exploration companies at the height
of the mineral exploration boom, this figure had reduced to 865 in early September 2014. This creates opportunities
for companies able to secure funding and willing to commit to actively exploring quality exploration targets.
There will be more quality projects on offer, and expectations are now returning to realistic levels.

The Board of GBM Resources annually reviews the key drivers for exploration success. This year we have
not changed our view as the drivers previously identified remain constant and are seen as a sound basis
for exploration success and adding to shareholder value.

Seven key drivers are summarised as follows:

Identifying opportunities for early production and
cashflow in deposits with potential for major resource growth

GBM has reviewed several opportunities throughout the year and consider it likely that current difficult conditions
for explorers may present further opportunities for those with access to funding.

Focus on the discovery of world class gold and copper-gold deposits

While there has been some recent weakness in pricing, most forecasts appear to present a positive medium
to long term outlook for these commodities. The Company continues to target mineralisation styles capable
of delivering large deposits in these commodities. Discovery of a new deposit(s) is the key to adding significant
value to shareholders.

Competent, rapid and cost effective evaluation of discoveries

The continuing trend to exploration under cover requires smarter exploration. However ensuring that evaluation
of discoveries is cost effective and timely is essential to unlock value for shareholders in the most favourable
timeframe.

Applying a systematic approach to mineral exploration

In conventional exploration in outcropping areas, the importance of this approach, in ‘seeing what others
have not’, cannot be emphasised too strongly. In areas where the host rocks are obscured by later sequences
it is even more relevant as we need to understand where in the mineralising system the first drill holes are as
we attempt to ‘vector in’ on the prize.

Exploring in regions with historic production offers a higher probability of new discovery

GBM’s main focus during the year has been on regions of eastern Australia, which, apart from being highly
prospective from a mineral exploration perspective, offer the opportunity to acquire quality tenure in areas
with good infrastructure and access to an experienced workforce.

Strengthen GBM’s executive and technical capabilities

GBM employs a small group of specialist geoscientists, who along with a group of specialist consultants,
form the core of GBM’s business and is essential for successful mineral exploration. The Board believes that
highly experienced and highly motivated people are the cornerstone for successful exploration and will be vital
in realising GBM’s development and growth plans in the coming years. The intellectual capacity to identify
opportunities to apply new technology in exploration, mining and processing will provide GBM with sound
growth options.

Maximising in-ground exploration expenditure

With reduced exploration budgets the challenge to ensure that a high percentage of exploration funding is
channelled into direct, in-ground exploration becomes increasingly difficult. GBM has met this challenge by
finding further ways to reduce funding by employees taking voluntary salary reductions and continuing to
operate from a small exploration base in regional Victoria, minimising company overheads.

4 GBM Resources Annual Report 2014

2.0 Introduction

GBM is a successful mineral exploration company which since listing on the ASX in 2007 has:

n Defined a gold resource at the Malmsbury Gold Project and a polymetallic

Cu-U-M-P-REE resource at the Milo IOCG Project.

n Discovered IOCG mineralisation at Bronzewing Bore in the Bungalien Project area.

Identified potential for phosphate mineralisation at Burke Bore.

Identified a significant graphite occurrence at Sevastapol in the Mount Margaret West Project area.

Throughout that period a number of targets have been tested and rejected in addition to the quality projects that
have been retained. The Company now holds an extensive portfolio of mineral exploration tenements including
licences and applications covering an area of greater than 4,200 square kilometres in the Northwest Mineral Province,
Lachlan fold Belt and Drummond Basin, all fertile mineral terrains. Exploration remains focussed on the discovery
of significant gold and copper-gold deposits.

The Company remains committed to acquiring and exploring tenements which combine location in prospective
mineral provinces and high quality targets. It is convinced that this in conjunction with innovative technology and
a high level of exploration activity provide GBM with excellent prospects for the discovery of one or more world
class deposits within this high quality tenement package.

GBM and CED geologists examinng BNG008 core in Cloncurry.

GBM Resources Annual Report 2014

Review of Operations

3.0 Exploration Expenditure and Assets

During the financial year, GBM has completed: geophysical surveys and drilling programs in the Mount Margaret West
and Bungalien Projects in Queensland, resource drilling on both tailings and hardrock targets at the Lubuk Mandi
gold Project in Malaysia, geophysical and geochemical modelling and ground acquisition on the Mount Morgan
Project in the Queensland.

The main activity in Australia included a total of four diamond drillholes in a combination of 1,172 metres of mud
rotary drilling and 928 metres of diamond core. Soil sampling has been completed at FC2, FC6 and FC4S prospects
(Mt Margaret) and Burke Bore Prospect on Bungalien for a total of 1,646 MMI samples. A significant database
relating to these tenements continues to grow as new tenements are acquired and data becomes available.

In Malaysia, at Lubuk Mandi, an addition 84 drill holes were drilled for a total of 6,813 metres as well as 340 metres
of trench channel sampling and an additional 68 rock samples collected.

Total exploration expenditure on the Company’s
tenements (excluding GBM’s contribution to
the Lubuk Mandi Gold Project) for 2014 was
$2.3 million compared to a total of $5.8 million
in the 2013 year.

GBM has maintained a solid level of expenditure
and manages to ensure a high percentage of
‘on ground’ exploration and maintains a low cost
base. These factors continue to position GBM
well for future discovery and value creation.

M
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Annual Exploration Expenditure

2008

2009

2010

2011

2012

2013

2014

4.0 Mount Morgan Intrusive Related Gold Project

(EPM16057, EPM17105, EPM17163,
EPMA17734 & EPMA18366)

The Mount Morgan Project hosts multiple high order
geochemical and geophysical anomalies surrounding
the world class Mount Morgan deposit (8M ounces Gold
and 420,000 tonnes of Copper). GBM has had a long
term presence in the region, progressively acquiring key
areas as they became available with the result that GBM
now holds a large strategic tenement position in the area.
The wholly-owned project portfolio covering an area of
860km2 includes many prospective mineralised targets.
In May 2014 this year GBM’s permits were granted
project status by the Queensland Department of Natural
Resources and Mines. In addition, a more recent permit
application covers a large magnetic low, interpreted to
represent a buried felsic intrusive. This feature is overlain
by shallow alluvial cover and the permit also contains the
second largest historic gold producer in the immediate
area, the Mountain Maid Mine.

The company has identified fifteen advanced high order
gold and gold copper anomalies targeted with outlines
of system boundaries defined. These anomalies range
from stream sediment to geophysical and include direct
drill targets.

The project focus is Gold and Copper-Gold targets
and the anomalies present suggest that these
metal bearing systems are large. There has been
limited previous exploration activity within many
of these anomalous areas.

Several of these targets have received significant
geochemical exploration by GBM in recent years.
The fifteen anomalies can be grouped into metallogenic
suites: Gold Targets (Kyle Mohr, T1 and T2, Mount
Usher), Copper-Gold Targets (Sandy Creek, Dee Copper
Mines), Smelter Returns, Oakey Creek, Mount Victoria,
Copper-Gold-Moly Targets (Limonite Hill, San Jose,
T3, Mt Gordon, Moonmera East) and Gold-Base Metals
Targets (Black Range). Some of the key target areas
are discussed below.

SMELTER RETURnS

Data compilation and field work during 2011 confirmed
the Smelter Returns area and the host wedge of
Devonian volcanics trending NE towards Mt Morgan
as prospective for large porphyry Cu-Au deposits.
The south-western end of the Smelter Return Au-Cu
anomaly was first defined by previous explorers in the
early 1990s from regional stream and rock sampling.
Twenty four shallow RC holes (60m maximum depth)
were completed for best results of 8m @ 0.33% Cu

6 GBM Resources Annual Report 2014

and 0.84g/t Au from 32m in DRP08 and 4m @ 0.68%
Cu from 16m in DRP09 2 (GBM Quarterly Activities
Report September 2011). Widespread propyllitic
alteration was mapped surrounding local zones of
potassic alteration, silicification and stratabound skarn.
Previous explorers recognised numerous dyke phases
and alteration styles and considered these as possible
evidence for the existence of an intrusive porphyry and
porphyry style mineralisation at depth.

GBM continued the pre-existing soil grid to the north
east and completed detailed prospect-scale mapping
during the 2012 field season. Almost 1,000 soil samples
on a 100m x 100m grid have been collected and
assayed to date at Smelter Return. Gold anomalism
at >150 ppb Au is present over a 3.5km x 2.5km area,
open in three directions. Within that zone an area of
almost 1km2 has returned assays >0.3g/t Au including
a number of samples greater than 1g/t Au.

Whilst some of the gold-copper in the soil samples
may be derived from overlying Jurassic sandstones
and possibly wind-blown smelter dust from the mine,
evidence of significant alteration in basement Devonian
rocks from recent mapping along with anomalous
Au-Cu in historic drilling results at both ends of the
prospect point to a possible local basement source
for the soil anomaly. Given the scale and tenor of the
anomaly, such a basement source would likely be of
considerable size.

LIMOnITE HILL PROSPECT

This prospect area is associated with a broad and
diffuse magnetic low, one of a number of mag lows
defining an E-W trend about 8km in length through
the Bajool Quartz Diorite Complex. A second cluster
of magnetic lows within the Bajool Diorite is located
directly south of the EW corridor.

In total 12 anomalies have been defined from TMI
RTP magnetic analysis and historic exploration data
within the Bajool Project. Two of the mag lows have
outcropping large quartz pipes (Ultimo, San Jose)
or limonite cappings (Limonite Hill) with associated
mineralised alteration envelopes.

Existing data suggests a porphyry Cu-Mo system
is present at Limonite Hill and Ultimo and possibly
San Jose, which may represent the outflow
portions of a larger more productive Cu-Mo
porphyry system at T4.

Thin but extensive Quaternary cover masks the
Permo-Triassic diorites across most of the prospect
area. Drilling by previous explorers intersected
hydrothermal alteration and brecciation in most
drilling. Mineralisation is hosted by intense quartz
breccia in albitised granite with significant intervals
of greater than one percent copper recorded.

Figure 2: Mount Morgan tenement plan with key target areas and linears shown.

GBM Resources Annual Report 2014

Review of Operations

OAkEy CREEk
GBM ranked the prospect area for attention on
the strength of a linear K:Th airborne radiometric
anomaly parallel to the regional structural trend along
with the presence of some historic copper oxide
workings located near the centre of the K:Th anomaly.
Reconnaissance mapping revealed an extensive zone of
porphyry-style propyllitic alteration consisting of epidote,
potassic feldspar, quartz, carbonate and specularite
completely replacing the host fine-grained volcanic
rock. The alteration zone is at least 3.2km x 1km in size,
and is parallel to and partly overlapping the radiometric
anomaly. The linear nature of the alteration zone and its
orientation suggests fault control to the system. Pods
or dykes of a felsic feldspar porphyry rock are scattered
throughout the alteration zone and may have a genetic
relationship to the alteration and mineralisation.

Localised zones of intense copper-bearing hydrothermal
breccia were also observed within the main alteration
envelope. The breccia is dominated by a quartz, epidote
and hematite matrix hosting angular fine grain green
clasts up to 10cm. Copper oxide and native copper is
primarily hosted at the boundaries of the angular clasts.
The copper in soil anomaly generally correlates well with
the broad alteration zone and the breccia. It was noted
that alteration and mineral assemblage is similar to that
observed at Sandy Creek. The anomaly is open to the
north where alteration is known to continue beyond
the extent of the current soil grid.

Rock-chip sampling within the alteration and breccia
units produced a number of assays returning greater

than 0.3% Cu. The best results were 6.74% Cu,
39.8 ppm Ag, and 52 ppb Au. Anomalous gold in soil
is also present within the soil survey area with a peak
assay of 0.2ppm Au and 31 of the total sample set
returning greater than 100ppb Au. (GBM Quarterly
Review of operations, June 2012).The pattern of gold
in soil does not correlate particularly well with copper
and the low level gold response in the rock-chip samples
means more work is required to understand the gold
anomalism at Oakey Creek.

THE MOOnMERA EAST PROSPECT
This prospect lies entirely within GBM’s recently
granted Limonite Hill lease. The prospect is defined by
a large and pronounced linear magnetic low located
approximately 5km ENE from the Moonmera Cu-Mo
low-grade porphyry deposit, another similar magnetic
low, outside GBM ground. Moonmera East is almost
entirely obscured by thin Cainozoic cover sediments.

The Moonmera Porphyry consists of pyrite-chalcopyrite-
molybdenite mineralisation occurring as disseminations
and fracture coatings in Bouldercombe Igneous
Complex intrusives as well as the adjacent wall rocks.
This deposit is characterised by an anomalously low
magnetic response probably caused by the destruction
of magnetite during alteration of the host rocks during
mineralisation.

The Moonmera deposit has indicative results published
from previous drilling indicating extensive low grade
copper and molybdenum mineralisation. Minimal
exploration has occurred over Moonmera East and
the magnetic feature has never been drill tested

Figure 3: Mount Morgan tenement plan underlain by TMI rtp magnetic image with key target areas and linears shown.

8 GBM Resources Annual Report 2014

5.0 Mayfield IOCG Project

A new exploration permit EPM19483 was granted on 14 March 2014 and replaces previously held permit
EPM14111. The Mayfield Project area surrounds the Trekelano Copper Mine and extends southwards to within
close proximity of the Tick Hill Gold Mine. The Trekelano Copper mine which is a high-grade structurally hosted
copper gold deposit with a known metal inventory (production and resources) of 63,000 tonnes of copper
and 73,000 ounces of gold. Trekelano is currently being explored by Ivanhoe Australia who have recently
reported high grade copper intersections including 44 metres @ 5.7% Cu & 1.4g/t Au (TRNQ53, Presentation
to Global Resources Conference on 26-27 September 2011). Tick Hill gold Mine has produced 513,333 ounces
from 705,000 tonnes of ore at an average grade of 22.6g/t Au ranking it as one of the highest grade significant
gold producers in Australia’s modern mining era.

Preliminary research by the company has identified a number of promising results in data obtained from open file
exploration reports. These include significant copper intersections from the Clarries Prospect including 79m at
0.27% Cu and base metal mineralisation at Maiden Creek Prospect including 48m averaging 1.23% Zn, 0.17%
Pb, 0.1% Cu and 7.4g/t Ag. In addition, a soil geochemical survey at Kiama indentified a semi circular feature at
plus 100ppm Cu which is 1.2 kilometres long and 120 metres wide located immediately south of an untested
magnetic high.

The agreement with Newcrest requires GBM to make a cash payment of $10,000 and to expend $100,000
on exploration of the area within 18 months of the title being transferred. Newcrest also retain a 2% royalty
over minerals produced from the licence area.

Figure 4: Location plan for the Mayfield Project showing key prospect locations
and basement geology (based on GSQ data).

GBM Resources Annual Report 2014

Review of Operations

6.0 Lachlan Fold Belt Intrusive Related
Gold Projects

6.1 yEA PROjECT
(EL5292, EL5293 & EL5347)

During the year New tectonic models for Eastern
Australia have unveiled new orogenic gold and base
metal opportunities in the Lachlan and Delamarian Fold
Belts of Eastern Australia. Victoria may host parts
of two mineralised arc systems.

The Yea Project tenements were acquired by GBM
after it recognised potential for IRGS in an area which
had largely escaped attention by previous explorers,
and which contained a number of interesting targets
for gold and other minerals often associated with IRGS.

In the west, a Cambrian Andean-style system –
the Miga Arc which would include the Willaura Project
area, and in the east, the Ordovicain Macquarie Arc
which to the north is host to giant porphyry Cu-Au ore
systems at Cadia and North Parkes. These models have
been developed by the Geological Survey of Victoria
in conjunction with Geoscience Australian and New
South Wales and South Australian Surveys.

The Miga Arc contains the Stavely Volcanics which
are known to host porphyry style mineralisation at
Thursday’s Gossan which is currently being drilled by
Stavely Minerals. Early drilling is confirming prorphyry
style veining and copper mineralisation consistent with
the outer areas of a large porphyry driven hydrothermal
mineralising system.

Porphyry systems worldwide are known to form clusters
and already additional systems are known in Western
Victoria. This is a new and exciting mineral province at
the early stages of exploration by modern, system based
approach. Through the Willaura Project, GBM is well
positioned for discovery in this area.

The Lachlan Fold Belt hosts many intrusive related
mineral systems and supports the potential of the
Yea and Willaura Projects.

The target for this project is large IRGS-style Au, W, Mo,
Cu deposits related to the Marysville Igneous Complex
and hosted within the Black Range Granodiorite and
its associated hornfelsed sedimentary envelope south-
east of Yea, and ring dykes of the Cerberean Cauldron
near Taggerty and Buxton townships.

A number of prospects have been defined by
previous exploration work. Geologoical mapping of
intrusives in the Monkey Gully area was a positive
encouragement, and subsequent work initiated by
GBM has confirmed that the Yea Pluton is a multiphase
intrusive rather than a simple single pulse intrusive as
indicated by existing regional scale mapping.

The most advanced prospect is at Monkey Gully
where previous W-Mo drill intercepts and large
geochemical corridor requires further testing.

GBM completed one diamond drillhole in 2012 – results
for Tungsten and Molybdenum from GBM’s drilling at
Monkey Gully include 17 metres averaging 0.15% W2O3
and 262ppm Mo and 2 metres averaging 0.27% W2O4
and 1,067ppm Mo. The peak value for tungsten was
5,030ppm from 166 to 167 metres and for molybdenum
1,850ppm from 131 to 132 metres.

Drilling at Monkey Gully Prospect, part of the Yea Project, in 2012.

10 GBM Resources Annual Report 2014

Figure 5: Yea Project tenement location plan showing target locations.

Copper is also anomalous throughout most of the hole
(peak assay 784ppm Cu). Logging of the two hole drill
program confirmed the existence of a stockwork of
thin quartz comprised of several generations of veining.
Molybdenum and tungsten mineralisation was observed
as coarse molybdenite and scheelite with associated
pyrrhotite and chalcopyrite. The mineralisation is
within and adjacent to an interpreted high temperature
vein set consistent with observations of occasional
surface outcrops.

Results from the company’s soil sampling programs
indicate that W-Mo-Cu soil anomalism extends for at
least 1,000m in a NW orientation across the prospect.
Detailed mapping in 2012 revealed a series of narrow
parallel tonalite and dacite dykes in the centre of the
prospect, parallel to the soil anomaly strike and the
regional structural grain. A program of ridge and spur
soil and rock-chip sampling was completed in the
Monkey Gully area concurrently with the drilling.

The program was designed to test whether a larger
IRGS system is present beneath Monkey Gully and the
nearby existing Mumbil Au-Bi-W prospect. Mumbil is
and trenching a zone of high-grade gold mineralisation
defined by soil sampling located 2km NE of Monkey
Gully (within GBM’s EL5293).

GBM’s recent work confirmed anomalous Au at the
Mumbil prospect in tourmalinised metasediments
hosting extensive comb quartz veining (0.67g/t Au peak)

and anomalous Au-As-Bi in soils in the area between
the two prospects.

The drilling results at Monkey Gully when considered
with the extensive Au-As soil anomalism and Au-Bi in
tourmaline-altered metasediments within the prospect
area are considered strongly supportive of the existence
of an IRGS in the Monkey Gully area.

Compilation and assessment of the previous data has
defined nine prospects and anomalies in the region that
require follow up exploration activity. These additional
targets include: Ault Beeac, Tin Creek, Powerline,
Snob’s Creek, Bill’s Dyke and Mumbil.

The Yea Project is located in central Victoria between
the townships of Yea, Alexandra and Marysville,
approximately 100km north-east of Melbourne.

The first drill hole completed by GBM in 2012
intersected Tungsten and Molybdenum mineralisation
which is coarse grained of potentially economic grade.
Monkey Gully is a new Tungsten Molybdenum discovery,
and the area still retains potential for IRGS style gold
mineralisation.

The Yea project includes three exploration licences
EL5292 Tin Creek, EL5293 Monkey Gully and
EL5347 Rubicon which cover an area of approximately
740 square kilometres. The project area is centred
on two separate intrusive systems: the Black Range
Granodiorite and the Marysville Intrusive Complex.

GBM Resources Annual Report 2014 11

Review of Operations

6.2 MALMSBURy PROjECT
(EL4515 and EL5120)

GBM’s Malmsbury Project hosts a large area of
alteration and mineralisation associated with a
demonstrated endowment of almost 200,000 ounces
within 200 metres of surface. IRGS systems are known
to persist to much greater depths in other regions
and GBM considers the Malmsbury Project (located
in Central Victoria) has the potential to host a large
IRGS in a world class gold province.

GBM has previously supported structural studies
which note a valid comparison of the architecture
of the fault and reef system at Malmsbury with the
Fosterville System which hosts over 3 million ounces
of gold, and identified additional strong North East
trending structures similar to the Leven Star Zone,
supported by reprocessed magnetic data which
highlights a clear complex magnetic feature with
a similar trend.

Extensive soil sampling program completed during
2012 confirms an intense geochemical anomaly
centred over the historic workings of Belltopper
Hill. In addition to gold, coincident anomalism in
elements including Bismuth (a signature mineral of
IRGS) further support the existence of a large IRGS
in the Malmsbury Project area.

Completion of a 12 hole diamond drilling program
during 2008 which targeted the Leven Star Zone,
part of the Malmsbury Project, resulted in the deposit’s

Inferred Resource increasing to 0.8Mt at an average
grade of 4.0g/t Au containing 104,000 ounces of
gold using a 2.5g/t Au cut off grade (see table below).
This cut off was chosen to reflect a grade, which
based on experience is considered to be applicable
to extraction by underground mining methods.

This resource is contained within a 450 metre section
of the Leven Star Zone within the Drummond North
Goldfield which has an identified strike length of over
4,000 metres. The resource is considered open both
to depth and along strike. Details of the parameters
used are contained in the resource statement.

Resource
Classification

Inferred

Tonnes
(x103)

820

Au
(g/t)

4.0

Au
(x103 ounces)

104

Note: Cut-off grade of 2.5g/t Au anticipated to reflect underground
mining production costs.

Table 1: 2008 Leven Star Gold Resource Estimate.

Available historical, recent exploration and mining data
indicate a known gold endowment of 195,000 ounces
of gold in the near surface (approximately 150 metres
from surface) portion of the structurally controlled
mineralised zones explored or mined to date.
This endowment is based on mineralisation within a
2 kilometre section of the Drummond North Goldfield
which remains open in all directions.

Welding of large storage tanks at the Lubuk Mandi Gold Mine, Malaysia.

12 GBM Resources Annual Report 2014

Figure 6: Malmsbury plans. Left: Magnetic feature and major cross structures related to gold mines and resources.
Right: Related to gold soil geochemistry. Gold in soils defines a strong anomaly at 50 ppb centred on the intersection
of known mineralisation, but trending north wards to areas not previously drill tested. At low levels (10ppb) this
anomaly is continuous over the 2km covered by the initial survey and remains open to both the East and West.

This endowment comprises 91,000 ounces of historical production and 104,000 ounces of the current
Leven Star Resource.

At this time, historical production from a number of shafts in the project area is still unknown. Many zones remain
to be drill tested and resources evaluated. The current estimate of gold endowment is considered incomplete
in the near-surface environment.

A one kilometre deep diamond drill hole was completed in March 2010 with assistance from the Victorian
Government RDV grants program. Results strongly support the conclusion that the Malmsbury Gold Project
is part of a large Intrusive Related Gold System (IRGS) centred on Belltopper Hill.

Competent Person’s Statement for Exploration Results and Mineral Resources for Malmsbury included in this report that
were previously reported pursuant to JORC 2004: This information has not been updated since to comply with the JORC
Code 2012 on the basis that the information has not materially changed since it was last reported.

The information in this report that relates to Mineral Resources (Malmsbury) is based on information compiled by Kerrin
Allwood, who is a Member of The Australasian Institute of Geoscientists Mining and Metallurgy. Mr Allwood is a full-time
employee of Geomodelling Pty Ltd a New Zealand based consultancy. Mr Allwood has sufficient experience which is
relevant to the style of mineralisation 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 Exploration Results,
Mineral Resources and Ore Reserves’. Mr Allwood consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.

GBM Resources Annual Report 2014 13

Review of Operations

6.3 WILLAURA PROjECT
(EL4631 and EL5346)

The Stavely Belt in western Victoria
has become a current regional focus
due to the recent interpretation of the
area as an ancient Andean style arc,
now referred to as the Miga Arc.

The region has a number of identified
porphyry copper occurrences, and
whilst an economic discovery has to
date been elusive, recent exploration
and ore system modeling by several
companies is now being tested by
deep drilling. These companies,
including Stavely Minerals have
provided expert interpretation
supporting the potential for porphyry
copper mineralisation to occur at
depth below that tested by previous
exploration drilling.

GBM’s Willaura Project area straddles
one of the state’s major deep crustal
structures, the Moysten Fault, and lies
within the newly identified Miga Arc
(similar area to the Stavely Grampians
Strucural Zone).

GBM holds two granted exploration
licences within the Willaura Project
covering an area of approximately
226 square kilometres included
in granted exploration licences.
The Company is targeting a
large copper-gold system in the
Stavely Grampians Zone.

Figure 7: Willaura tenement plan showing location of key target areas.

The Project recognises the prospective and
under-explored nature of the Stavely-Grampians
Zone as a potential host to intrusive related
Cu-Au deposits of the Mount Lyell or Cadia
styles. Discrete magnetic features covered
by recent basalt cover offer potential for
new discoveries.

Due to the extensive tertiary basalt covering
much of the Willaura target area, modern
and advanced “deep seeing” exploration
techniques must be employed to identify
suitable drill targets.

14 GBM Resources Annual Report 2014

Figure 8: Detail of magnetic feature defining Anomaly D,
the northern most anomaly in the Willaura Project area.

7.0 Milo IOCG REE Project
(EPM14416)

The scoping study released by GBM in November 2012
highlighted that Milo hosts a significant polymetallic
resource containing rare earth oxides, copper, phosphate
and uranium. This resource remains open at depth and
along strike. In addition, recent geochemical surveys
confirm the existence of a number of additional targets
in the Milo area with similar geochemical signatures.
GBM believe that Milo is part of a very large mineralising
system and that significant future exploration is
warranted. In the case of the Milo West target, the
geochemical response is more intense than the Milo
area itself. These anomalies are considered to be part
of the large system operating at Milo and represent
high priority targets for future exploration.

The mineralisation is hosted in a northwest striking,
highly brecciated and altered rock coincident with
magnetic highs within a broader magnetic low anomaly
that has been interpreted as a possible buried granite
source for the IOCG & REE mineralisation. The REE
and yttrium mineralisation (REEY) appears to overprint
and envelope the IOCG style Cu-Au-Ag-Mo-U-Co
mineralisation. Drilling shows that the mineralisation dips
steeply to the east, is possibly fault related, and that
higher grade copper mineralisation plunges to the north.
The mineralisation at Milo is considered to be closely
linked to the Cloncurry Flexure, a deep structural feature
in the region.

Uranium is a significant credit for the Milo
Project, and the recent announcement by the
Queensland Government that it is moving to allow
the recommencement of uranium mining in that
State is very significant for the project. The Milo
inferred resource contains over 14 Mlbs of U3O8
making it one of the largest undeveloped uranium
deposits in Queensland.

The Milo Project on Brightlands EPM14416 is located
due east of Mount Isa, and just 20 kilometres west
of Cloncurry on the Barkley Highway, far northwest
Queensland.

A total of 32 drillholes have been drilled on Milo so far,
with each phase of drilling extending the main resource
to the north and south. The drilling has delineated
continuous Cu and REE mineralisation over a strike
length of 1 kilometre and up to 200 metres wide. The
resource is still open-ended to the north, south and at
depth. Drilling from the 2012 drilling program intersected
some high grade Cu mineralisation including 2 metres
@ 6.19% Cu at 163 metres downhole in MIL015,
one of the most southern drilled holes.

A total of 1,594 soil samples and 295 rock samples
have been collected on the Milo prospect to date.
From the data collected it is possible that the total
strike length of the Milo mineralisation could extend
for up to two kilometres.

Figure 9: Milo conceptual pit outline over soil geochemistry highlighting the location
of additional high priority target area to the west of the known deposit.

GBM Resources Annual Report 2014 15

Review of Operations

Soil sampling in 2012 identified a number of soil
geochemical anomalies within the Milo Prospect area.
A number of parallel zones of coincident Cu-Au-La
soil anomalism have been defined north west of the
resource area and adjacent to drillhole BTD014 where
peak downhole grades of 4,550ppm Cu, 650ppm La,
and 0.7ppm Au were returned. It is likely that these
anomalous zones will extend further with additional
soil sampling, that they may be structurally related,
and that drill testing may discover new mineralisation.

Additionally, there is a large Cu-La soil geochemical
anomaly west of the Milo prospect that returned peak
assay results of 1.44% Cu, 0.35ppm Au, and 120ppm
La that is associated with a coincident strong magnetic
and topographic high.

The Milo mineralisation is still open-ended to the north,
south and at depth. Further soil sampling and follow-up
drilling will be required to determine the extent of
mineralisation.

The Milo mineral resource estimates were based on
data from 31 holes drilled in a roughly 100m by 50m
grid pattern. These holes total 11,572m, comprising
3,503m of RC drilling and 8,069m of DD drilling.

Of the total, 9,878m was sampled at largely 1 metre
intervals and assayed for a comprehensive suite
of elements.

Milo is a large IOCG breccia style deposit with a
TREEYO-enriched halo. Base and precious metal
(Cu-Au-Ag-Mo-Co-U) mineralisation occurs as
moderate to steeply east dipping, sulphide rich breccia
zones striking northwest. The mineralogy of this
domain includes massive to semi-massive pyrite with
lesser amounts of (in order of abundance) pyrrhotite,
chalcopyrite and sphalerite. The sulphide rich zone
forms a large, well defined body up to 200 metres wide.
Base and precious metal grades are variable within the
sulphide rich zone.

A zone of TREEYO-P2O5 enrichment overprints and
forms a halo to the base metal mineralisation. The REE
zone occurs as a moderate to steeply east dipping,
northwest striking zone with a width of 100m to 200m.
This zone is very continuous at low grades (<200ppm
TREEYO) and has a simple shape. The TREEYO (total rare
earth elements and yttrium as oxides) and phosphate (P2O5)
resource above a 300ppm TREEYO cutoff is estimated as
176Mt at 620ppm TREEyO and 0.75% P2O5.

Drill site at the Milo IOCG REE Project, North West Queensland.

16 GBM Resources Annual Report 2014

cutoff
(TREEYO
ppm)

tonnes
(Mt)

TREEYO
(ppm, t)

Grades

300

176

620

P2O5
(%, t)

0.75

LREEO

HREEy

CeO2
(ppm, t)

La2O3
(ppm, t)

Nd2O3
(ppm, t)

Pr2O3
(ppm, t)

Sm2O3
(ppm, t)

Eu2O3
(ppm, t)

Gd2O3
(ppm, t)

Y2O3
(ppm, t)

Dy2O3
(ppm, t)

Er2O3
(ppm, t)

Others
(ppm, t)

260

150

Contained Metal

108,000 1,330,000 46,140 26,460 13,850 4,230

2,170

710

1,780

9,150

1,480

850

1,620

Table 2: Milo Inferred TREEYO resource, at a 300ppm TREEYO cut-off. Red designates elements
assessed as being in critical supply by the US Dept. of Energy, Dec 2011: Critical Materials Strategy, P4.

As a result of the 2012 drilling campaigns, the Inferred JORC resource for the REEY component of the Milo Project
from the maiden 103 million tonnes at 760ppm for approximately 82,500 tonnes of TREEYO (based on a 400ppm
cut-off grade) increased to 187 million tonnes at 610ppm for 113,360 tonnes (based on a 300ppm cut-off grade).
This represents an 82% increase in total resource tonnes and a 25% increase in the total REEYO tonnes.

During 2012 a maiden copper equivalent resource was announced. This inferred resource is estimated at a 0.1% copper
equivalent cut-off as 88Mt at 0.11% Cu, 0.04g/t Au, 1.6g/t Ag, 65ppm Mo, 130ppm Co and 60ppm U, containing
300Kt of CuEq metal.

While commodity prices have fallen since the initial resource estimation for Milo, the company believes that the
long term nature of the project and the positive outlook for the key commodities to be produced, combined
with favourable exchange rate movements provide firm support for the future development of Milo.

cutoff
(CuEQ %)

0.10

tonnes
(Mt)

88.4

CuEQ
(%, t)

0.34

Au
(ppm, ozs)

0.04

Cu
(ppm, t)

1090

Ag
(ppm, ozs)

Mo
(ppm/t)

1.63

Co
(ppm/t)

130

U3O8
(ppm/Mlbs)

301,000

126,000

96,500

4,638,000

5,700

11,700

14.0

Resource

Contained Metal

Table 3: Inferred copper equivalent resource (above 0.1% copper equivalent).

For a complete summary, please refer to ASX announcement dated 22 November 2012, ’Scoping Study Confirms Strong
Commercial Opportunity at GBM’s Milo IOCG-REE Project’.

Explanatory Notes
* Copper Equivalent calculation represents the total metal value for each metal, multiplied by the conversion factor, summed and
expressed in equivalent copper percentage. These results are exploration results only and no allowance is made for recovery
losses that may occur should mining eventually result. However it is the company’s opinion that elements considered here have
a reasonable potential to be recovered. It should also be noted that current state and federal legislation may impact any potential
future extraction of Uranium. Prices and conversion factors used are summarised below, rounding errors may occur.

Commodity

copper

gold

cobalt

silver

uranium

Price

6836

1212

40000

molybdenum

38000

Units

US$/t

US$/oz

US$/t

$/oz

US$/lb

US$/t

Unit value

68.36

38.97

0.04

0.58

0.08

0.04

Unit

US$/%

US$/ppm

Conversion factor
(unit value/Cu % value)

1.0000

0.5700

0.0006

0.0085

0.0012

0.0006

Table 4: Milo Project conversion factors used in copper equivalent calculations.

Competent Person’s Statement for Exploration Results and Mineral Resources for Milo included in this report that were previously
reported pursuant to JORC 2004: This information has not been updated since to comply with the JORC Code 2012 on the basis
that the information has not materially changed since it was last reported.

The information in this report that relates to Mineral Resources (Milo) is based on information compiled by Kerrin Allwood, who is a
Member of The Australasian Institute of Geoscientists Mining and Metallurgy. Mr Allwood is a full-time employee of Geomodelling
Pty Ltd a New Zealand based consultancy Mr Allwood has sufficient experience which is relevant to the style of mineralisation 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 Exploration Results, Mineral Resources and Ore Reserves’. Mr Allwood
consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

GBM Resources Annual Report 2014 17

Review of Operations

8.0 Pan Pacific Copper and Mitsui Farm-in
Iron-Oxide-Copper-Gold (IOCG) Style Projects
in the Mount Isa Region

This year marked the commencement of the fifth
year of a farm-in agreement with our partners Pan
Pacific Copper and Mitsui Corporation to explore for
IOCG deposits under cover in the North West Mineral
Province of Queensland. This exploration programme
is largely exploring areas of the ancient Proterozoic
Mount Isa Inlier basement where it is covered by
younger sediments. This programme has already
resulted in the discovery of IOCG style mineralisaiton at
the Bronzewing Bore Prospect in the Bungalien Project,
and in addition a number of exciting targets have been
identified in the Mount Margaret West Project area.

Over 80% of the Australian continent is covered by
younger sediments which obscure basement hosted
mineralisation from explorers and make discovery more
difficult. However modern exploration techniques are
continuing to evolve and have the capacity to ‘see’
through deeper and deeper layers of overlying cover
sequences. The discovery of IOCG mineralisation at
Bronzewing Bore under almost 400 metres of cover
by the company has lead to the advancement of
current geophysical techniques and inversion software.
These programmes are at the forefront of pushing the
boundaries of existing technology and the company
is proud of its progress in this area.

The North West mineral Province is recognised
as one of the most prolific terrains in the world for
base metal and other minerals, and yet, there are
virtually no discoveries in this terrain where it is
covered to even relatively shallow depths. This is
seen by the company and our partners as presenting
a tremendous opportunity for discovery by applying modern exploration technology to these areas. The potential for
hidden deposits in the covered portions of the NW Mineral Province has also been highlighted recently in initiatives
by UNCOVER, a new collaborative venture to promote and facilitate exploration of such regions throughout Australia.

Figure 10: Mt Isa Inlier Project Location Plan.

The following sections summarise progress on the key projects that form part of the Pan Pacific and Mitsui
Farm-in Agreement.

Diamond drill hole (BNG008) drill site at Bronzewing Bore Prospect.

18 GBM Resources Annual Report 2014

8.1 BUnGALIEn-HORSE CREEk PROjECT
(EPM17849, EPM18207, EPM18208 & EPMA25213)

Work at the Bungalien Project continued into the fourth consecutive field season since the discovery of broad
intervals of IOCG style low-grade copper mineralisation in 2011 below almost 400 metres of cover rocks in drillhole
BNG001. Extensive geophysical surveys have been completed and a total of eight deep diamond holes drilled in the
search for economic mineralisation within the broadly mineralised and IOCG-altered highly prospective Bronzewing
Bore Prospect.

The Bungalien Project area consists of: EPM18207 Bungalien 2, EPM18208 Horse Creek 2, and EPM17849
Limestone Creek, and EPMA25213 The Brothers and covers an area of 393km2 located approximately 100km
southwest of Cloncurry. The Bungalien 2 and Horse Creek 2 tenements were granted in 2012 and incorporated
and replaced the existing enclosed permits with new titles.

Historical exploration in the Bungalien tenements has been limited to broad-spaced regional-scale magnetic and
gravity surveys and very minor drilling into the basement and a small soil survey. Most of the previous activity is
concentrated along the Pilgrim Fault zone to the west, and around the basin margin testing for phosphate or uranium.
Only two historical holes were drilled into the basement on the JV tenements prior to CED JV activities.

The Bungalien tenements are within the Quamby-Malbon Zone of the Mt Isa Block Eastern Fold Belt. The Proterozoic
basement is dominated by felsic and mafic volcanics and quartzite intruded by a large pluton and associated stocks
of Wimberu Granite. The Wimberu Granite is a member of the 1550-1500Ma Williams Batholith plutonic suite which
has a close spatial relationship to copper-gold mineralisation in the Eastern Succession. The Bungalien Project is
bound on the west by the Pilgrim Fault zone, a major north-south trending fault separating Cambrian cover rocks
in the east from outcropping Proterozoic rocks in the west.

The eastern margin of the block is marked by the Overhang Shear that separates the voluminous felsic and mafic
volcanics and quartzite from the slates, shales and ironstones hosting the IOCG deposits along the Starra trend
(Starra, Mount Elliot, Mount Dore and
Osborne). Cambrian to Middle Ordovician
marine sedimentary rocks of the Georgina
Basin, typically on the order of 100-500m
thickness obscure the Proterozoic
basement.

The focus of activity during the 2014 field
season was at the Bronzewing Bore and
Burke Bore prospects. Detailed infill gravity
and magnetotellurics (MT) surveys were
completed over Bronzewing Bore and
a targeted MMI partial leach soil survey
completed at Burke Bore.

The eighth drillhole at Bronzewing Bore
(BNG008) was completed late in the year.

Figure 11: Bungalien Project Area tenement location plan showing the subsurface interpreted geology.
Key exploration target areas in white outlines.

GBM Resources Annual Report 2014 19

Review of Operations

Bronzewing Bore Prospect

Diamond drill hole (BNG008) at the Bronzewing
Bore Prospect was designed based on an analysis
of previous drilling and of all existing geophysics,
especially 3D inversion models of gravity and MT data.
A schematic geological cross-section was created to
aid in interpretation of the basement and positioning
of the collar.

The hole targeted a both the high magnetic and gravity
feature successfully tested by drillhole BNG001 and
an interpreted mineralised NW-SE trending structural/
lithological contact zone between Wimberu Granite and
older felsic and mafic volcanics. BNG008 was sited close
to BNG001 in which an encouraging 200m mineralised
interval at approximately 0.1% Cu was intersected
(chalcopyrite and magnetite disseminated in granite).
Hole BNG008 reached a final depth of 712m.

Hole BNG008 intercepted a zone of intense magnetite,
red feldspar and chlorite alteration within host Wimberu
granite from the top of basement at 382m. The top
of the magnetite ‘skarn’ zone at the unconformity
is characterised by intense brecciation and apatite
mineralisation. Minor pyrite and chalcopyrite is
observed locally throughout the skarn zone and also

within carbonate veining scattered throughout the hole.
Core cutting and sampling of BNG008 was underway
at the end of the reporting period.

The magnetite skarn zone and the apatite breccia
zone above it in BNG008 appears to correlate with
similar intervals in BNG001. This suggests that a broad
band of magnetite alteration (and probably sulphide
mineralisation) is dipping to the NNE.

The amount of magnetite intersected in BNG008 was
surprising and indicates that the extent of the magnetite
alteration is larger than just the area immediately
surrounding BNG001. Detailed core and geophysical
analysis is required to provide vectors for future
follow-up drilling.

Of the eight holes now drilled into the basement at
Bronzewing Bore, all have intersected anomalous Cu
mineralisation associated with IOCG-style mineralisation,
veining and alteration.

The best visible intersections occur within holes BNG001,
BNG005 and now BNG008 and the prospectivity for
large IOCG deposits remains high under deep cover
at Bronzewing Bore.

Figure 12: Bronzewing Bore Prospect compilation
of geophysical anomalies and structural trends
in the vicinity of mineralised drillhole BNG001.
The drill-hole trace for BNG008 is shown over
background image of TMI_RTP. Depth slice
contours at ca -265mRL also shown through
3D gravity and MT inversion models.

Figure 13: Bronzewing Bore Prospect cross-section with
schematic target model through BNG001 & BNG008 showing
drill-hole lithology and magnetic susceptibility for both, and Cu
assays for BNG001. The inferred NNW-SSE trending contact zone
with country rock (in this case foliated felsic volcanic or shallow
intrusive). Note magnetic susceptibility is not directly comparable
between holes as a different instrument was used for BNG001.

20 GBM Resources Annual Report 2014

The Brothers Prospect

Two target areas have been identified at
‘The Brothers’ prospect. The first is a discrete
circular magnetic anomaly of similar size and
intensity to that drill-tested by BNG001 to
the NE. An attempt was made to test this
anomaly via drillhole BNG003 in 2011 however
this missed the centre of the magnetic target
(only moderately magnetic core intersected).
This was due to the centre of the anomaly
being located to the south of the Bungalien 2
tenement boundary. Since that time GBM (on
behalf of the CED JV) has applied for the ground
to the south (‘The Brothers’ application) and
this is expected to be granted late in 2014.

As significant Cu was intersected in BNG001,
the look-a-like magnetic high at ‘The Brothers’
is a highly-rated target under ca. 400m of cover
and a tentative drill-target has been designed.
As this area is still an application this proposed
hole has not been included in the 2014 budget.

The second area of interest is an apparent,
discrete, high-order gravity anomaly ca 800m
to the south of the magnetic anomaly described
above. This area is the subject of ongoing
analysis of existing gravity, magnetic and 3DMT
models. The ground gravity coverage needs
to be expanded to help to define and increase
confidence in the anomaly. The cover-rocks are
likely to be >400m thick over the target based
on the results from BNG003 ca 1km to the north.

Figure 14: Burke Bore Prospect Site B. Thematic map of MMI
Ag (ppb) including infill assay data. Ag anomaly is adjacent to
the NW flank of a gravity high and overlapping magnetic high.

Burke Bore Prospect

A Mobile Metal Ion (MMI) soil survey was completed in late
2013 at the Burke Bore prospect over geophysical anomalies
at three sites on the Burke Bore prospect. A follow-up survey
was then completed to infill an area of highly anomalous
silver-in-soil at Area ‘B’.

The soil anomaly is adjacent to and partly overlapping a linear
basement gravity and magnetic anomaly obscured under
thin cover sediments. The gravity, magnetic and silver-in-
soil anomalies are scheduled for RC drill testing in the
next field season.

8.2 MOUnT MARGARET WEST PROjECT
(EPM16398, EPM16622, EPM19834, EPMA18172, EPM18174, EPMA25544 & EPMA25545)

The Mount Margaret West group of tenements consist of Mt Malakoff Ext EPM16398, Dry Creek EPM18172,
Dry Creek Ext EPM18174, Mt Marge EPM19834 and Cotswold EPM16622 (all granted). Tenements Tommy Creek
EPMA25544 and Corella EPMA25545 are recent applications, applied for in April 2014. Both applications have
received work plan approval and are currently progressing through the Native Title process.

In very close proximity to the Mt Margaret West tenements, less than four kilometres south from EPM16398,
lies Ernest Henry. Ernest Henry was discovered in 1991 using aeromagnetics and has a global resource estimated
at 220Mt @ 1.2% Cu and 0.4g/t Au. The mineralisation is located in an ovate SSE plunging breccia pipe with
dimensions measuring 300m by 250m. The breccia has been intersected at depths of 1200m below surface
to date with consistent mineralisation over this entire distance.

The exploration strategy is to identify areas with promising structural settings, host lithology and/or encouraging drill
results associated with near contiguous magnetic highs that hold scope for further discovery. In particular areas where
further detailed modern geophysical surveys, in particular gravity and electrical geophysical techniques may be beneficial.

Work completed during the year began with the continued compilation and review of the large historic open-file
dataset in the Mount Margaret area. This work has in previous years resulted in the definition of a number of IOCG-
style drill targets. Field work included the drilling of three diamond holes at FC2W prospect, the completion of a large
MMI soil survey at FC2 and FC4S and the interpretation of soils data at FC2, FC2W, FC12 and FC15. A gravity survey
was completed at FC15 and 3D inversions of magnetic and gravity data created for the entire Mount Margaret project
area. A detailed airborne magnetics survey was flown over FC2 and FC2W in the last quarter and the results merged
with the regional dataset. Assay results were received for drill holes MMA005 and 006, drilled at FC2W late last year
and a 3D inversion of the detailed MT survey data collected at FC4S in 2013 was completed.

GBM Resources Annual Report 2014 21

Review of Operations

FC4S Prospect

Work completed during 2012 and 2013 confirmed the
potential for significant IOCG-style mineralisation to exist
within the heavily explored terrain immediately north of
Ernest Henry mine. A number of geophysical surveys were
completed, including MT, IP and gravity, exhaustive historic
data collation and interpretation was undertaken, and three
diamond holes were drilled into two targets during 2013.

Hole MMA003 was designed to follow up the promising
low grade Cu intersection in MMA001 drilled during
2012, targeting an interpreted east dipping mineralised
system of Ernest Henry affinity. MMA003 intersected the
magnetic target where expected though mineralisation
was lower than that observed in the adjacent MMA001.
However, overall, the presence of Ernest Henry style
IOCG alteration, shearing and mineralisation within the
same magnetic/gravity belt that hosts the mine gives
confidence that this horizon is highly prospective at
FC4S and inadequately tested by historic drilling.

An infill MT geophysical survey at FC4S has confirmed at
least two, possibly three, large and discrete conductivity
anomalies beneath an area of strongly anomalous gold
mineralisation defined by historic drilling.

To date, these targets have not been drill tested,
however both targets show a spatial relationship
with the distribution of gold mineralisation. The priority
target is scheduled for drill testing next year.

FC2 and FC2W Prospects

Analysis of the historic geophysical and drilling data
over the FC2 magnetic-gravity anomaly suggests the
prospect may be prospective for Starra/Selwyn-style
ironstone-hosted gold and copper mineralisation. Prior
to the 2014 year, the JV completed detailed ground
gravity over FC2W, and MMI soils and 2DIP over FC2.

An aeromagnetic survey was commissioned during the
Jun 2014 quarter for the FC2 and FC2W prospect areas
to provide more detailed magnetic data over prospective
drill target areas. A detailed 3D magnetic inversion using
the recent 100m flight line data has been initiated for
FC2W and FC2 prospect.

During the year, three shallow diamond drill holes were
completed at FC2W, designed to test combined MMI
soil and gravity and/or magnetic anomalies. Locations
of the drillholes are shown in Figure 16 below. MMA004
was designed to test an intense gravity bulls-eye
feature within a north-south trending magnetic belt in

Figure 15: FC2 & FC2W Prospect area. Completed
airborne magnetics survey extent. Background image
is TMI-RTP. Historic drill collars (black) and JV drill
collars (blue and labelled) also shown. Contours are
merged JV and state bouguer gravity (HP5k, 0.2mgal).
Proposed MMI soil grid in northern prospect area
(black stars).

Figure 16: FC2W Prospect Site ’B’ target area showing
collar for MMA004 and proposed CDI drillholes (pink dots).
Background image is TMI RTP from existing aeromagnetic
data, stretched to highlight the arcuate magnetic feature
SW and W of the gravity bullseye. Thematic map of
Cu-Au-Ag for completed regional partial leach (MMI)
soil grid shown (400x400m), along with planned infill
MMI sampling (small dots), and interpreted shear zones
as dashed lines.

22 GBM Resources Annual Report 2014

the northern portion of the prospect area. The hole
returned anomalous copper, vanadium and titanium
throughout the basement host dense mafic rock.
Copper averaged 745ppm and vanadium 0.11% over
71m to the base of hole with peaks of 0.13% Cu and
0.19% V. The untested magnetic high immediately to
the SW of the gravity bullseye and a possible faulted
contact between the two anomalies are considered
highly prospective drill targets for IOCG mineralisation
and will be scheduled for drill testing next year.

Drillholes MMA005 and MMA006 reported anomalous
copper values up to 1,600ppm Cu in isolated samples.
The holes, which were drilled 4km apart within a large
prospect area with no prior drilling, confirmed lithological
indicators (rock type, alteration, sulphides) for IOCG
style deposits were present. Drilling confirmed that the
cover sequence in the area is less than 60 metres thick
and Induced Polarisation geophysics should be an
effective next step in locating conductivity/chargeability
features associated with IOCG style mineralisation.

FC15 Prospect

Figure 17: FC15 Prospect. Image shows the detailed
gravity contours data from the recent survey and
the detailed TMI-RTP magnetics incorporating
the historical aeromagnetic data.

The FC15 prospect is characterised by an large circular gravity high and coincident magnetic high showing limited
prior drill testing and a maximum recorded basement depth of 46m. The mineral assemblages and alteration style
identified in the historical drilling indicate the area is potentially prospective for IOCG style mineralisation.

The JV completed a detailed ground gravity survey of 483 points in the September 2013 quarter over the prospect.
Historic aeromagnetic data was also located and merged with the regional dataset and the combination shows
a complex dense magnetic circular anomaly. More work is required to generate potential drill targets at FC15.

Figure 18: Mount Margaret West tenement and target plan.

GBM Resources Annual Report 2014 23

Review of Operations

8.3 CHUMvALE PROjECT
(Part EPM14416
Project is part of the CED Farm-in Agreement)

8.4 TALAWAnTA-GRASSy BORE PROjECTS
(EPM15406, EPM19256 & EPMA19255
Projects are part of the CED Farm-in agreement)

The Chumvale Breccia project is an 8km2 block within
the larger Brightlands tenement (EPM14416) that is
held by GBM Resources and is located 15km west
of Cloncurry.

The Chumvale prospect covers a prominent outcropping
ridge of breccia (Chumvale Breccia) that is locally coated
in hydrated Mn- and Fe-oxides. The breccia ridge is
located along a broad WNW_ESE structural corridor
termed ‘The Cloncurry Flexure’.

The chemical analyses for all drill holes completed by
GBM in 2013 confirmed the widespread anomalous
Zn within the Chumvale breccia body. The assays
for BTD045 and BTD046 returned highly anomalous
Zn in the upper parts of the holes (from surface),
whereas minor Cu occurred locally.

High zinc values appear in the upper weathered
breccia zone of both holes with the Zn concentration
decreasing down-hole in both BTD045 and BTD046.
In BTD044 Zn is common throughout the upper 228m
of the hole with values typically in the 0.1-0.3wt% range
(peak value of 0.72wt%).

The Talawanta-Grassy Bore project consists of
two large granted exploration permits: EPM15406
(Talawanta) and recently granted EPM19256 (Grassy
Bore2). Grassy Bore (EPM15681) was conditionally
surrendered in favour of Grassy Bore2 (EPM19256).
Talawanta is located approximately 220kms north of
Cloncurry and Grassy Bore2 approximately 180kms
NNW of Cloncurry.

An overlying application for additional ground around
Talawanta has also been lodged. The total area under
licence and application in this project is over 640km2
and is subject to a farm-in agreement with PPC and
Mitsui Corporation.

The Talawanta and Grassy Bore tenements lie within
a north-south trending zone of prominent magnetism
commonly associated with gravity highs that are
believed to reflect Proterozoic basement features
beneath ca. 300 to 650m of younger Carpentaria Basin
cover rocks. The magnetic ridges can be traced back
to the Cloncurry area.

CED and GBM Geologists on site at BBNG008, Bronzewing Bore Prospect.

24 GBM Resources Annual Report 2014

Ground gravity surveys over areas of coincident
or near coincident magnetic and gravity highs
in 2010 and 2011 in the Grassy Bore tenement
(Ibis and Landing Ground areas) and over most
of the Talawanta EPM where large gravity highs
were situated in broad areas of elevated magnetic
response. Regional-scale 3D magnetic and
gravity inversion models were also created over
the target areas. Regional-scale 3D magnetic
and gravity inversion models were also
created over the target areas.

Between 2011 and 2012 the CED JV drilled
five scout drillholes into selected targets. Two
JV scout drill holes at the Ibis and Ibis-south
prospects (Grassy Bore) intersected extensive
magnetite-bearing alteration systems, and a JV
scout hole at Talawanta (Happy Valley) intersected
an altered magnetite rich gabbro with a high
background Cu content.

In 2012 two scout-holes were drilled into near
coincident gravity and magnetic highs on the
Landing Ground prospect in the central part of
the Grassy Bore EPM. Minor magnetite and trace
sulphide mineralisation occurred in both holes.

Talawanta Project

The gravity survey (500m spacing) completed
on Talawanta defined large, discrete gravity
highs within a broader magnetic high, adjacent
to a large gravity and magnetic low, interpreted
as a granite. As a result of the survey, four
geological drill targets were defined, one of
which was selected for scout drill testing in
latter part of 2011.

The first scout hole on the Talawanta tenement
(TGD003) targeted a discrete, gravity and
magnetic high, at the southern end (but separated from) a north-south trending gravity high. The diamond drill
passed through the unconformity at ca. 640m and intersected a weathered chloritic, magnetite-bearing meta-gabbro.
The gabbro showed unusually high background Cu averaging 152ppm Cu from 60 samples assayed.

Figure 19: Talawanta and Grassy Bore tenement areas
with GBM drillholes labelled.

Grassy Bore Project

A 48 point magneto-telluric (MT) survey over the Landing Ground Prospect was carried out during the year.
The survey was designed to see if any apparent conductive zones occurred in the basement within or adjacent
to the pair of near-coincident gravity and magnetic highs that had been targeted by two scout drillholes in 2012
(TGD004, TGD005). Both scout holes intersected strongly altered magnetite-rich mafic and granitic rocks.

A 3DMT resistivity model over Landing Ground north was conducted over the tenement as well as 1D and 2D
inversions of single lines over Landing Ground south. The 3DMT model over Landing Ground north indicates
an apparent basement conductive zone to the west of the 2012 scout drillhole TGD005.

A new inversion model of the gravity data over the Landing Ground area was generated. The new model suggests
the main basement gravity anomaly is located ca 400m to the NE of the scout drillhole TGD004 at LGS.

A further 3D inversion model of the gravity data over the Landing Ground was also created and confirmed that
the centre of higher density mass is ca 400m NNE of TGD004. A ca 0.8mGal gravity anomaly is also indicated
in basement to the east of Landing Ground.

GBM Resources Annual Report 2014 25

Review of Operations

8.0 Lubuk Mandi Orogenic Gold jv Project, Malaysia (GBM 40% Interest)

InTRODUCTIOn
GBM announced on 11 June 2013 that it had entered a binding agreement to acquire a 40% interest in Anka
Alamjaya Sdn Bhd (AASB), a sole purpose Malaysian company which owns mining rights to the Lubuk Mandi Gold
Project in Malaysia. This agreement was ratified at a meeting of GBM shareholders on 22 July 2013. Lubuk Mandi
is located approximately 2km from the coast near Kuala Terengganu in Terengganu State, Peninsular Malaysia.
Malaysia has a long history of mining, a skilled workforce and stable government.

The Lubuk Mandi Gold Mine operated as an open cut mine between 1993 and 1999 with recorded production of
108,000 ounces of gold. While gold has been known in Terengganu for centuries, alluvial mining at Lubuk Mandi
appears to have only commenced in 1989, and virtually no modern exploration for gold has been conducted in
this region which is now recognised as part of a new gold belt in Malaysia.

TAILInGS PROjECT
Drilling and sampling tailings from previous mining at Lubuk Mandi resulted in estimation of a total resource of
1.5M tonnes averaging 0.7g/t Au and containing 34,700 ounces of gold. This resource was estimated after
completion of a 29 hole core drilling programme during September 2013. The drill program tested the Tailings
Dam on a 50 metre grid pattern yielding 439 tailings samples which were analysed to provide the primary database.
This was in line with GBM’s initial assessment and development plan identified an exploration target (GBM ASX
11 June 2013) for the Tailings Dam Project of between 1Mt at 0.7g/t Au containing 23,000 ounces of gold and
1.4Mt at 0.9g/t Au containing 38,000 ounces of gold based on limited available data from previous operators
at the site (refer ASX release 11 June 2013).

Indicated + Inferred

Tonnes

Indicated

Inferred

Total

Contained Gold

1,445,000

87,000

Grammes

1,009,000

72,000

1,532,000

1,081,400

Ounces

32,400

2,300

34,800

Grade
(ppm Au)

0.70

0.80

0.70

Tonnage
%

94%

100%

Table 5: Resource summary for Lubuk Mandi tailings deposit (ASX announcement 24 October 2013).

Old tailings storage areas from Lubuk Mandi treatment plant site, March 2013.

26 GBM Resources Annual Report 2014

Following this and completion of metallurgical testwork
utilising samples generated from the drilling programme,
an internal scoping study was completed recommending
construction of a combined flotation and CIP plant
to reprocess these tailings at 600,000 tpa. As a
result of design changes by AASB, the plant will be
commissioned at an initial rate of approximately 300,000
tpa with scope to increase production incrementally once
the initial phase is complete. This plant is scheduled to
be commissioned late in 2014 with steady state gold
production planned from early 2015.

Final design, construction and commissioning are being
implemented by AASB. During June site preparation was
completed and construction of large material holding
tanks had commenced. Agreements for provision of
other equipment have been signed with Yantai Jinpeng
Machinery Co. Ltd of Shandong Province in North
Eastern China and delivery of most key components is
expected during October. Upgrading of power and water
supply are on track to be completed in time to support
commissioning and operations. Earthworks had also

commenced on the stage one waste storage facility.
This facility is a compacted earth wall which will reach
an ultimate height of 9 metres and provide storage for
waste from tailings treatment produced during the first
12 months of operations. A larger stage two facility is
planned to commence immediately on completion of
stage one and will provide storage for the balance of
waste materials to be produced for the life of the tailings
retreatment operations.

The information in this report that relates to Mineral Resources
is based on information compiled by Scott McManus, who is a
Member of The Australasian Institute of Mining and Metallurgy.
Mr McManus is a full-time employee of Skandus. Mr McManus
has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to
the activity which he is undertaking to qualify as a Competent
Person as defined in the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Mr McManus consents to the inclusion in the report
of the matters based on his information in the form and context
in which it appears.

Figure 20: Lubuk Mandi mine layout plan showing exploration target locations.

GBM Resources Annual Report 2014 27

Review of Operations

HARD ROCk DRILLInG PROGRAM
A two stage diamond drilling programme to confirm previous drilling beneath the existing shallow open pit and
for further potential at deeper levels. Phase 1 drilling was completed in February with a total of ten holes and
2,080 metres of diamond drilling. Phase 2 had commenced at year’s end.

Results from Phase 1 confirmed gold mineralisation associated with deformed zones with extensive quartz
veining and elevated arsenic values. The best intersection was drillihole LMD010 which returned an intersection
of 19.5 metres downhole from 162.3 metres averaging 11.1g/t gold. This included a 1.9 metre downhole interval
from 168.9 metres comprising three samples each over 60g/t Au and averaging (length weighted) 66.4g/t Au
(ASX announcement 23 June 2014).

At year’s end, three diamond drill rigs were on site completing stage 2 drilling.

10.0 Rhea and Sevastapol Graphite Prospects

GBM has identified extensive areas of graphite bearing shales at the Sevastopol and Rhea Extended Prospects on
EPM16398 in the Mount Margaret West tenement group. Very large scale graphitic shale deposits have been defined
from historic base-metal drilling and reprocessed Induced Potential (IP) geophysical data. The graphitic shale deposit
is near surface – only 3-30m of cover sediments and is located close to Ernest Henry mine and related infrastructure.

Under an addendum to the Farm-in Agreement with Cloncurry Exploration and Development signed on 30 July 2014,
GBM has 100% ownership rights over the two Prospects for graphite and plan to progress investigation of the
potential of these areas in the coming year.

Figure 21: Location of Sevastapol and Rhea Graphite Prospects within the Mount Margaret West tenement group.

28 GBM Resources Annual Report 2014

11.0 Bungalien Phosphate Project

GBM’s Phosphate Project located in the Georgina
Basin, southeast of Mount Isa in North Queensland,
is adjacent to Australia’s largest phosphate deposit
at Phosphate Hill.

GBM has completed 43 shallow RC drill holes for
a total of 1,436 metres during two stages on the
Bungalien Phosphate project. Both drilling campaigns
are very encouraging and confirm the extent of
phosphate prospectivity in the area.

Peak phosphate results returned values exceeding
25% P2O5 and include many intersections of significant
widths of greater than 10% P2O5 mineralisation. In
addition phosphate mineralisation was intersected in
scout drill holes on GBM’s Horse Creek EPM18208
and Limestone Creek EPM17849 tenements; PRC026
on Horse Creek intersected 7m @ 4.19% P2O5, and
PRC024 on Limestone Creek intersected 9m @ 2.14%
P2O5. These holes demonstrate that further substantial
areas of these large tenements hold potential for
untested phosphate mineralisation at shallow depths.

Bungalien Project remains a highly prospective area for
discovery of rock phosphate resources. The Georgina
Basin sediments which overlay the Proterozoic
basement continues to emerge as one of the world’s
major phosphate provinces with phosphate resources
currently identified totalling over three billion tonnes.

Figure 22: Location of the Burke Bore phosphate project
within EPM18207.

Figure 23: Hole location, best grades and geology of the Burke Bore phosphate prospect.

GBM Resources Annual Report 2014 29

Review of Operations

12.0 Tenements

GBM has continued to assess opportunities to add
quality exploration targets to its portfolio by acquisition
of new tenements. The Company currently holds
37 tenements in nine project areas that cover a total
area of approximately 4,200km2 in some of Australia’s
most prospective mineral provinces. This includes
eight applications in Queensland totalling 581km2.

Four new tenements were granted during 2013/2014.
One in the Mt Morgan region, Central Queensland
(Limonite Hill East EPM19288) and three in the Mt
Isa region, North West Queensland (Grass Bore2
EPM19256, Brightlands West EPM18051 and
Mayfield EPM19483). In order for the granting of
Grassy Bore2 EPM19256 and Mayfield EPM19483,
Grassy Bore EPM15681 and Mayfield2 EPM14111
were conditionally surrendered.

Applications that were lodged during the year include
Bajool EPMA25362 and Mountain Maid EPMA25678
in the Mount Morgan Region, Central Queensland, and
Tommy Creek EPMA25544 and Corella EPMA25545
in the Mount Margaret West Region, North West
Queensland.

All of these licences and applications (see tenement
schedule) are held 100% by the Company (or its
wholly owned subsidiaries), however all tenements
in the Talawanta-Grassy Bore, Mount Margaret and
Bungalien Projects are subject to a farm-in agreement
with Cloncurry Exploration and Development Pty Ltd
(owned by Pan Pacific Copper and Mitsui Corporation).
Application EPMA18672 is a competing application and
GBM have priority.

EPMA19255 and EPMA14111 are overlying applications
encompassing existing, granted tenements. On grant
of overlying application EPM19256, EPM15681 was
conditionally surrendered.

In addition GBM has signed agreements with Newcrest
to acquire EPMA19483 Mayfield and Cotswold
EPM16622 in the Mount Isa area. This is subject to the
transfer being approved by the Queensland Department.

A summary of GBM’s tenements is provided
on page 33 of this report.

Abbreviations
CuEq

Copper Equivalent, as defined in note
in Milo Section.

REE(O)

Electro Magnetic (geophysical surveys)

Induced Polarisation (geophysical surveys)

Reverse circulation drilling

Rare Earth Elements (oxides).
There are 14 rare earth elements:
Lanthanum (La), Cerium (Ce),
Praseodymium (Pr), Neodymium (Nd),
Samarium (Sm), Europium (Eu),
Gadolinium (Gd), Terbium (Tb),
Dysprosium (Dy), Holmium (Ho), Erbium (Er),
Thulium (Tm), Ytterbium (Yb), Lutetium (Lu)
but excluding Promethium (Pm)

TREEY(O) Total Rare Earth element and Yttrium (oxides).

(Yttrium (Y) is not always considered as a
Rare Earth Element but does have many
similar properties)

Exploration Results Previously Reported
under JORC 2004
Competent Person’s Statement for Exploration Results
included in this report that were previously reported
pursuant to JORC 2004: This information has not been
updated since to comply with the JORC Code 2012 on
the basis that the information has not materially changed
since it was last reported.

The information in this report that relates to Exploration
Results is based on information compiled by Neil
Norris, who is a Member of The Australasian Institute
of Mining and Metallurgy and The Australasian Institute
of Geoscientists. Mr Norris is a full-time employee of
the company, and is a holder of shares and options in
the company. Mr Norris has sufficient experience which
is relevant to the style of mineralisation 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 Exploration Results, Mineral Resources and
Ore Reserves’. Mr Norris consents to the inclusion in the
report of the matters based on his information in the form
and context in which it appears.

Exploration Results and Mineral Resources
Previously Reported under JORC 2012
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the relevant market announcements and
that all material assumptions and technical parameters
underpinning the estimates in the relevant market
announcements continue to apply and have not
materially changed.

30 GBM Resources Annual Report 2014

Annual Mineral Resources Statement

The following Annual Statement of Mineral resources statement reflects GBM’s mineral the company’s resources
as at the 30th of June 2014. Details of the competent person for each of these resources is provided separately
in the relevant section of this annual report.

For the purpose of preparing this Annual Statement of Mineral resources as at 30th of June 2014, GBM has
completed a review of each resource taking into account long term metal price, foreign exchange rates, cost
assumptions based on current industry conditions, any changes that may affect the capability for these resources
to be exploited or which may result in material changes to cut-off grades and physical mining parameters.

Malmsbury Gold Project Resources

Resource
Classification

Inferred

Tonnes
(x103)

820

Au
(g/t)

4.0

Au
(x103 ounces)

104

Note: there has been no change in the resource for the Malmsbury Project from the previous year.

Lubuk Mandi Tailings Resource (GBM 40% interest)

Indicated
+ Inferred

Tonnes
(t)

Grade
(g/t Au)

Indicated

1,445,000

Inferred

Total

87,000

1,532,000

0.70

0.80

0.70

Gold
(ounces)

32,400

2,300

34,800

Note: The Lubuk Mandi Tailings resource was first reported during the current reporting year.

Milo IOCG Project

TREEyO Inferred Resource

cutoff
(TREEYO
ppm)

tonnes
(Mt)

TREEYO
(ppm, t)

Grades

300

176

620

P2O5
(%, t)

0.75

CeO2
(ppm, t)

La2O3
(ppm, t)

Nd2O3
(ppm, t)

Pr2O3
(ppm, t)

Sm2O3
(ppm, t)

Eu2O3
(ppm, t)

Gd2O3
(ppm, t)

Y2O3
(ppm, t)

Dy2O3
(ppm, t)

Er2O3
(ppm, t)

Others
(ppm, t)

260

150

LREEO

HREEy

Contained Metal

108,000 1,330,000 46,140 26,460 13,850 4,230

2,170

710

1,780

9,150

1,480

850

1,620

Copper Equivalent Resource

cutoff
(CuEQ %)

0.10

tonnes
(Mt)

88.4

CuEQ
(%, t)

0.34

Au
(ppm, ozs)

0.04

Cu
(ppm, t)

1090

Ag
(ppm, ozs)

1.63

Mo
(ppm/t)

Co
(ppm/t)

130

301,000

126,000

96,500

4,638,000

5,700

11,700

U3O8
(ppm/Mlbs)

14.0

Resource

Contained Metal

Note: There has been no change to Milo Resources during the current reporting year.

The Company has not changed its governance and internal controls with regards to each of the estimates of mineral
resources since previous reporting as no change was warranted, pending commencement of any new estimation.

The information in this Annual Mineral Resources Statement is based on and fairly represents information and
supporting documentation prepared by the competent persons named in the relevant sections of this Annual Report.

The information in this Annual Mineral Resources Statement as a whole that relates to Mineral Resources is based on information
compiled by Neil Norris, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Norris is a holder of shares
and options in the company and is a full-time employee of the company. Mr Norris has sufficient experience which is relevant
to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’. Mr Norris consents to the inclusion in the Annual report of the matters based on this information in the form
and context in which it appears.

GBM Resources Annual Report 2014 31

Sustainable Development

GBM Resources Ltd strives to operate in a manner that puts the health and safety of our people first, is
environmentally responsible, supports the communities in which we operate, and maintains effective relationships
with suppliers and customers. As we extend our operations and exploration projects, we are mindful of the need
to establish and maintain our excellent reputation. We seek to build and maintain enduring relationships with our
employees, host communities, suppliers and customers, based on recognition and respect for human rights,
trust and active partnerships.

GBM Resources is focused on maintaining a safe workplace. We discover, build, develop and operate in line with
good environmental practices and we embrace a strong sense of commitment to local communities. We aim to
minimise the impact on ecosystems in which we operate.

We recognise that economic participation around our exploration sites by host communities creates opportunities
to contribute to their broader social development objectives. We also seek opportunities for sustainable economic
development beyond the direct relationship with the mine, plant or exploration site.

GBM achieved an exceptional level of safety performance for the year. The current 12-month rolling total lost time
injury frequency rate (LTIFR) is 0.0, based on combined GBM and contracting partners’ working hours (18,850.3).
This compares to the 2012 average LTIFR published by Safe Work Australia for the Exploration sector of 6.6.

GBM is committed to safe and responsible development of Australia’s mineral resources.

The Company’s continued focus on safety has resulted in improved safety performance during the year with no
LTI’s recorded. GBM strongly believes that the health and safety of personnel and the environment in which we
operate are of the highest priority in all of our operations.

SAFETy & TRAInInG

A range of training programmes was completed throughout the year as part of the Company’s commitment to
the safety of our people. GBM remains committed to a process of continuous improvement of its standards
procedures and work practices.

Training completed during 2013/2014 included Job Safety Analysis and First Aid.

COMMUnITy & EnvIROnMEnT

GBM is committed to working with the communities in which we operate with the aim of reducing our Environmental
impact whilst achieving mutually acceptable rehabilitation outcomes.

GBM will identify and show consideration for the rights, beliefs and concerns of relevant landholders and all other
parties that have a legitimate interest in our exploration activities. To achieve this we will ensure that all of our
employees and contractors are aware of their role in implementing company environmental responsibilities,
policies and commitments.

Each exploration site undergoes a rigorous examination for the environmental aspect prior to, during and after work
has been conducted on the site.

STATISTICS/ACHIEvEMEnTS:
n No lost time injuries were sustained during operations in 2013/14

(LTI frequency rate of 0.0 against an industry average of 6.6 in 2012),

n No medically treated injury was sustained during operations in 2013/14.

n No environmental incidents were sustained in the reporting period.

n Refresher First Aid Courses were undertaken during the year for all staff members.

n Ongoing reviews of GBM’s Risk Register and procedures continued this year.

32 GBM Resources Annual Report 2014

Tenement Schedule

Project/Name

Tenement No.

Owner

Interest

Status

Granted

Expiry

Approx
Area (km2)

Sub-
blocks*3

EL5346
EL5423

EL4515
EL5120

EL5293
EL5292
EL5347

EPM16057
EPM17105
EPM17734
EPM18366
EPM18811
EPM19288
EPM18812
EPMA25177
EPMA25362
EPMA25678

vICTORIA
Malmsbury
Belltopper
Lauriston
Willaura
Willaura
Lake Bolac2
Yea
Monkey Gully
Tin Creek
Rubicon
QUEEnSLAnD
Mount Morgan
Dee Range
Boulder Creek
Black Range
Smelter Return
Limonite HiII
Limonite Hill East
Mt Hoopbound
Mt Victoria
Bajool
Mountain Maid
Mount Isa Region
Talawanta-Grassy Bore
Talawanta
Talawanta2
Grassy Bore2
Mount Margaret
Mt MaIakoff Ext
Cotswold
Mt Marge
Dry Creek
Dry Creek Ext
Corella
Tommy Creek
Brightlands
Brightlands
Brightlands West
Brightlands West Ext EPMA18672
Wakeful
Highway
Bungalien
Limestone Creek
Bungalien 2
Horse Creek 2
The Brothers
Mayfield
Mayfield
MALAySIA
Lubuk Mandi

EPM16398
EPM16622
EPM19834
EPM18172
EPM18174
EPMA25545
EPMA25544

EPM17849
EPM18207
EPM18208
EPMA25213

EPM15406
EPMA19255
EPMA19256

EPM18454
EPM18453

EPM14416
EPM18051

EPMA19483

GBMR*1/Belltopper HiII
GBMR

100% Granted
100% Granted

06-0ct-05
17-Dec-08

05-0ct-15
16-Dec-15

GBMR
GBMR

GBMR
GBMR
GBMR

GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR

100% Granted
100% Granted

02-Jun-11
03-Dec-12

01-Jun-14
02-Dec-17

100% Granted
100% Granted
100% Granted

23-Mar-11
23-Mar-11
27-Feb-12

22-Mar-16
22-Mar-16
26-Feb-17

26-Sep-14
27-Sep-07
26-Mar-08
25-Mar-15
20-May-09 19-May-16
20-Jun-17
21-Jun-12
20-Nov-17
21-Nov-12
30-0ct-18
31-0ct-13
25-Jul-17
26-Jul-12

100% Granted
100% Granted
100% Granted
100% Granted
100% Granted
100% Granted
100% Granted
Appl’n
100%
Appl’n
100%
Appl’n
100%

GBMR*2/Isa Tenements
GBMR*2/lsa Tenements
GBMR*2/lsa Tenements

100% Granted
100% Proposal
100% Granted

15-Jan-08

14-Jan-15

27-Jun-14

26-Jun-18

GBMR*2/Isa Tenements
GBMR*2,4/lsa Tenements
GBMR/Isa Tenements
GBMR/Isa Tenements
GBMR/Isa Tenements
GBMR/Isa Tenements
GBMR/Isa Tenements

100% Granted
100% Granted
100% Granted
100% Granted
100% Granted
Appl’n
100%
Appl’n
100%

19-0ct-10
30-Nov-12
04-Mar-13
13-Jul-12
25-0ct-11

18-0ct-15
29-Nov-17
03-Mar-18
12-Jul-17
24-0ct-14

GBMR*2/lsa Brightlands
GBMR/Isa Brightlands
GBMR/Isa Brightlands
GBMR/Isa Brightlands
GBMR/Isa Brightlands

100% Granted
100% Granted
100%
Appl’n
100% Granted
100% Granted

5-Aug-05
22-0ct-13

4-Aug-14
21-0ct-18

23-Jan-12
23-Jan-12

22-Jan-17
22-Jan-17

GBMR/Isa Tenements
GBMR*2/lsa Tenements
GBMR*2/lsa Tenements
GBMR/Isa Tenements

100% Granted
100% Granted
100% Granted
Appl’n
100%

20-0ct-10
19-0ct-15
24-May-12 23-May-17
1-Aug-17
2-Aug-12

GBMR*2,4/Isa Tenements

100% Granted

11-Mar-14

10-Mar-19

25
8

8
218

316
329
104

46
88
81
98
260
29
23
3
110
26

325
325
322

85
46
3
189
39
59
33
452
254
7
16
13
20

59
163
163
10
718
302

25
8

8
218

316
329
104

14
27
25
30
80
9
7
1
34
8

100
100
99

26
14
1
58
12
18
10

78
2
5
4
6

18
50
50
3

CEDJV
CEDJV
CEDJV

CEDJV
CEDJV
CEDJV
CEDJV
CEDJV
CEDJV
CEDJV

CED JV*6

CEDJV
CEDJV
CEDJV
CEDJV

ML1/2007 & ML2/2007 AASB*5

Granted

March 2017 2.215

notes:

*1 Subject to a 2.5% net smelter royalty to vendors.
*2 Subject to a 2% net smelter royalty is payable to Newcrest Mining Ltd on all or part of the tenement area.
*3 For Q’ld tenements, 1 sublock ~3.2km2. Underlined areas indicate the tenement is contained in new application area.
*4 Subject to approval by DME of transfer from Newcrest.
*5 GBM holds approximately 40% of AASB.
*6 Chumvale prospect within GBM’s Brightlands tenement.

Table 6: GBM Resources Limited tenement summary at 30 June 2014.

GBM Resources Annual Report 2014 33

Corporate Governance Statement

Introduction

Since the introduction of the ASX Corporate Governance
Council’s Principles of Good Corporate Governance
and Best Practice Recommendations (“ASX Guidelines”
or “the Recommendations”), GBM Resources Limited
(“Company”) has made it a priority to adopt systems
of control and accountability as the basis for the
administration of corporate governance. Some of these
policies and procedures are summarised in this report.
Commensurate with the spirit of the ASX Guidelines, the
Company has followed each Recommendation where
the Board has considered the Recommendation to be
an appropriate benchmark for corporate governance
practices, taking into account factors such as the
size of the Company, the Board, resources available
and activities of the Company. Where, after due
consideration, the Company’s corporate governance
practices depart from the Recommendations, the Board
has offered full disclosure of the nature of, and reason
for, the adoption of its own practice.

The Board of the Company is committed to
administering the policies and procedures with openness
and integrity, pursuing the true spirit of corporate
governance commensurate with the Company’s needs.

Further information about the Company’s corporate
governance practices is set out on the Company’s
website at www.gbmr.com.au. In accordance with the
recommendations of the ASX, information published
on the Company’s website includes:

Board Charter
Nomination Committee Charter
Remuneration Committee Charter
Audit and Risk Committee Charter
Corporate Code of Conduct
Performance Evaluation Policy
Continuous Disclosure Policy
Risk Management Policy
Guidelines for Trading in Company Securities
Shareholder Communication Strategy
Diversity Policy

Corporate Governance Council Recommendation 1
Lay Solid Foundations for Management
and Oversight

Role of the Board of Directors
The role of the Board is to increase shareholder value
within an appropriate framework which safeguards the
rights and interests of the Company’s shareholders
and ensure the Company is properly managed.

In order to fulfil this role, the Board is responsible for
the overall corporate governance of the Company
including formulating its strategic direction, setting
remuneration and monitoring the performance of
Directors and executives. The Board relies on senior
executives to assist it in approving and monitoring
expenditure, ensuring the integrity of internal controls
and management information systems and monitoring
and approving financial and other reporting.

In complying with Recommendation 1.1 of the Corporate
Governance Council, the Company has adopted a Board
Charter which clarifies the respective roles of the Board
and senior management and assists in decision making
processes. A copy of the Board Charter is available
on the Company’s website.

Board Processes
An agenda for the meetings has been determined to
ensure certain standing information is addressed and
other items which are relevant to reporting deadlines
and or regular review are scheduled when appropriate.
The agenda is regularly reviewed by the Executive
Chairman and the Company Secretary.

Evaluation of Senior Executive Performance
The Company has not complied with Recommendation
1.2 of the Corporate Governance Council. Due to
the early stage of development of the Company it is
difficult for quantitative measures of performance to be
established. As the Company progresses its projects,
the Board intends to establish appropriate evaluation
procedures. The Chairman assesses the performance
of the Executive Directors on an informal basis.

Corporate Governance Council Recommendation 2
Structure the Board to Add Value

Explanation for Departures from Best Practice
Recommendations

During the Company’s 2013/2014 financial year the
Company has sought to comply with the Corporate
Governance Principles and the corresponding Best
Practice Recommendations as published by the ASX
Corporate Governance Council (“Corporate Governance
Principles and Recommendations”) and has adopted the
revised Principles and Recommendations taking effect
from reporting periods beginning on or after 1 January
2008. Significant policies and details of any significant
deviations from the principles are specified below.

Board Composition
The Constitution of the Company provides that the
number of Directors shall not be less than three. There
is no requirement for any share holding qualification.

The membership of the Board, its activities and
composition is subject to periodic review. The criteria
for determining the identification and appointment of
a suitable candidate for the Board shall include the
quality of the individual, background of experience and
achievement, compatibility with other Board members,
credibility within the scope of activities of the Company

34 GBM Resources Annual Report 2014

Corporate Governance Council Recommendation 2
Structure the Board to Add Value (continued)

intellectual ability to contribute to Board duties and
physical ability to undertake Board duties
and responsibilities.

Directors are initially appointed by the Board and are
subject to re-election by shareholders at the next
general meeting. In any event one third of the Directors
are subject to re-election by shareholders at each
general meeting.

At the start of the 2014 financial year the Board was
comprised of four members, two Non-Executive
and two Executive. The Non-Executive Directors
were Mr Cameron Switzer and Mr Guan Huat Loh.
On 2 September 2013 Mr Chiau Woei Lim was
appointed as a Non-Executive Director. The skills,
experience and expertise of all Directors is set out
in the Directors’ Report.

Subsequent to the end of the financial year
Messrs Switzer and Loh resigned as directors of the
Company and Mr Frank Cannavo was appointed as
an executive director.

The Board has assessed the independence of its Non-
Executive Directors in office during the period according
to the definition contained within the ASX Corporate
Governance Guidelines and has concluded that the
two Non-Executive Directors, Mr Switzer and Mr Loh,
met the recommended independence criteria. Mr Lim
did not meet the recommended independence criteria
due to his substantial shareholding. The Company does
not comply with Recommendation 2.1 of the Corporate
Governance Council.

However, the Board considers that both its structure
and composition are appropriate given the size of the
Company and that the interests of the Company and
its shareholders are well met.

Independent Chairman
The Chairman is not considered to be an independent
director as at the reporting date due to his executive
status, and as such Recommendation 2.2 of the
Corporate Governance Council has not been
complied with.

Roles of Chairman and Chief Executive Officer
The roles of Chairman and Chief Executive Officer are not
currently exercised by different individuals, and as such
the Company does not comply with Recommendation
2.3 of the Corporate Governance Council.

The Board considers that the appointment of Mr
Thompson as Executive Chairman and Chief Executive
Officer is appropriate for the current operations and
activities that the Company is currently undertaking.

Nomination Committee
The Board does not have a separate Nomination
Committee comprising of a majority of independent
Directors and as such does not comply with
Recommendation 2.4 of the Corporate Governance
Council. The selection and appointment process
for Directors is carried out by the full Board. The
Board considers that given the importance of Board
composition it is appropriate that all members of the
Board partake in such decision making. The Company
has adopted a Nomination Committee Charter, which
is available for review on the Company’s website.

Evaluation of Board Performance
The Company has not to date implemented a formal
process for the evaluation of the performance
of the Board and as such does not comply with
Recommendation 2.5 of the Corporate Governance
Council. The Board is of the opinion that the competitive
environment in which the Company operates will
effectively provide a measure of the performance of
the Directors. In addition the Chairman assesses the
performance of the Board, individual directors and
key executives on an informal basis.

Education
All Directors are encouraged to attend professional
education courses relevant to their roles.

Independent Professional Advice
and Access to Information
Each Director has the right to access all relevant
information in respect of the Company and to make
appropriate enquiries of senior management. Each
Director has the right to seek independent professional
advice at the Company’s expense, subject to the
prior approval of the Chairman, which shall not be
unreasonably withheld.

Corporate Governance Council Recommendation 3
Promote Ethical and Responsible Decision Making

The Board actively promotes ethical and responsible
decision making.

Corporate Code of Conduct
The Board has adopted a Corporate Code of
Conduct that applies to all employees, executives and
directors of the Company, and as such complies with
Recommendation 3.1 of the Corporate Governance
Council. This Code addresses expectations for conduct
in accordance with legal requirements and agreed
ethical standards. A copy of the Code is available
on the Company’s website.

GBM Resources Annual Report 2014 35

Corporate Governance Statement

Corporate Governance Council Recommendation 3
Promote Ethical and Responsible Decision Making (continued)

Guidelines for Trading in Company Securities
The Board has committed to ensuring that the Company,
its Directors and executives comply with their legal
obligations as well as conducting their business in a
transparent and ethical manner. The Board has adopted
a procedure on dealing in the Company’s securities
by directors, officers and employees which prohibits
dealing in the Company’s securities when those persons
possess inside information.

The guidelines also provide that the acknowledgement
of the Chairman or the Board should be obtained prior
to trading. A summary of the Guidelines are available
on the Company’s website.

The Company’s policy restricts, notwithstanding
exceptional circumstances, the trading in Company’s
securities by those individuals covered by the policy to
trading windows that are open for 10 days following the
hosting of General Meetings of the Company, the release
of annual, half yearly results and quarterly reports and
after any other public announcement on ASX.

Diversity
The Board has adopted a diversity policy that details
the purpose of the policy and the employee selection
and appointment guidelines, consistent with the
recommendations of the Corporate Governance
Council. The Board believes that the adoption of an
efficient diversity policy has the effect of broadening
the employee recruitment pool, supporting employee
retention, including different perspectives and is socially
and economically responsible governance practice.

The Company employs new employees and promotes
current employees on the basis of performance, ability
and attitude. The Board is continually reviewing its
practices with a focus on ensuring that the selection
process at all levels within the organisation is formal and
transparent and that the workplace environment is open,
fair and tolerant.

The Company, in keeping with the recommendations of
the Corporate Governance Council provides the following
information regarding the proportion of gender diversity
in the organisation as at 30 June 2014:

Females employed in the Company as a whole

Females employed in the Company in senior executive positions

Females appointed as a Director of the Company

Proportion of female/total
number of persons employed

1/13

0/0

0/5

The recommendations of the Corporate Governance Council relating to reporting require a Board to set measurable
objectives for achieving diversity within the organisation, and to report against them on an annual basis.
The Company has implemented measurable objectives as follows:

Measurable Objective

Objective Satisfied Comment

Adoption and promotion of a Formal
Diversity Policy.

To ensure Company policies are consistent
with and aligned with the goals of the
Diversity Policy.

To provide flexible work and salary
arrangements to accommodate family
commitments, study and self-improvement
goals, cultural traditions and other personal
choices of current and potential employees.

To implement clear and transparent policies
governing reward and recognition practices.

To provide relevant and challenging
professional development and training
opportunities for all employees.

Yes

36 GBM Resources Annual Report 2014

The Company has adopted a formal diversity
policy which has been made publicly available
via the ASX and the Company’s website.

The Company’s selection, remuneration and
promotion practices are merit based and as such
are consistent with the goals of the Company’s
Diversity Policy.

The Company does, where considered
reasonable, and without prejudice, accommodate
requests for flexible working arrangements.

The Company grants reward and promotion
based on merit and responsibility as part of its
annual and ongoing review processes.

The Company seeks to continually encourage
self-improvement in all employees, irrespective of
seniority, ability or experience, through external
and internal training courses, regular staff
meetings and relevant on job mentoring.

Corporate Governance Council Recommendation 3
Promote Ethical and Responsible Decision Making
(continued)

The Company has not implemented specific measurable
objectives regarding the proportion of females to
be employed within the organisation or implement
requirements for a proportion of female candidates for
employment and Board positions. The Board considers
that the setting of quantitative gender based measurable
targets is not consistent with the merit and ability based
policies currently implemented by the Company.

The Board will consider the future implementation
of gender based diversity measurable objectives
when more appropriate to the size and nature of
the Company’s operations.

Council Recommendation 4
Safeguarding Integrity in Financial Reporting

Audit Committee
The Board does not have a separate Audit Committee
with a composition as suggested by Recommendations
4.1 and 4.2 of the Corporate Governance Council, and
as such does not comply with those 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. The relevant experience of
Board members is detailed in the Directors’ section
of the Directors’ Report. The Company has adopted
an Audit and Risk Committee Charter and as such
complies with Recommendation 4.3 of the Corporate
Governance Council.

Financial Reporting
The Board relies on senior executives to monitor
the internal controls within the Company. Financial
performance is monitored on a regular basis by the
Executive Chairman who reports to the Board at
the scheduled Board meetings.

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.

In the absence of a formal Audit Committee, Non-
Executive Directors of the Company are available for
correspondence with the auditors of the Company.

Corporate Governance Council Recommendation 5
Make Timely and Balanced Disclosure

Continuous Disclosure
The Board is committed to the promotion of investor
confidence by providing full and timely information
to all security holders and market participants about

the Company’s activities and to comply with the
continuous disclosure requirements contained in the
Corporations Act 2001 and the Australian Securities
Exchange’s Listing Rules. The Company has established
written policies and procedures, designed to ensure
compliance with the ASX Listing Rule Requirements, in
accordance with Recommendation 5.1 of the Corporate
Governance Council.

Continuous disclosure is discussed at all regular Board
meetings and on an ongoing basis the Board ensures
that all activities are reviewed with a view to the necessity
for disclosure to security holders.

In accordance with ASX Listing Rules the Company
Secretary is appointed as the Company’s disclosure
officer.

Corporate Governance Council Recommendation 6
Respect the Rights of Shareholders

Communications
The Board fully supports security holder participation
at general meetings as well as ensuring that
communications with security holders are effective
and clear. This has been incorporated into a formal
shareholder communication strategy, in accordance
with Recommendation 6.1 of the Corporate Governance
Council. A copy of the policy is available on the
Company’s website.

In addition to electronic communication via the ASX
web site, the Company publishes all significant
announcements together with all quarterly reports. These
documents are available in both hardcopy on request
and on the Company web site at www.gbmr.com.au

Shareholders are able to pose questions on the audit
process and the financial statements directly to the
independent auditor who attends the Company Annual
General Meeting for that purpose.

Corporate Governance Council Recommendation 7
Recognise and Manage Risk

Risk Management Policy
The Board has adopted a risk management policy that
sets out a framework for a system of risk management
and internal compliance and control, whereby the
Board delegates day-to-day management of risk to
the Executive Chairman, therefore complying with
Recommendation 7.1 of the Corporate Governance
Council. The Board is responsible for supervising
management’s framework of control and accountability
systems to enable risk to be assessed and managed.

Risk Management and the Internal Control System
The Executive Chairman, with the assistance of
senior management as required, has responsibility for
identifying, assessing, treating and monitoring risks and
reporting to the Board on risk management.

GBM Resources Annual Report 2014 37

Corporate Governance Statement

Corporate Governance Council Recommendation 7
Recognise and Manage Risk (continued)

In order to implement the Company’s Risk Management
Policy, it was considered important that the Company
establish an internal control regime in order to:
n Assist the Company to achieve its strategic

objectives;

n Safeguard the assets and interests of the
Company and its stakeholders; and

n Ensure the accuracy and integrity of external

reporting.

Key identified risks to the business are monitored
on an ongoing basis as follows:
n Business risk management

The Company manages its activities within budgets
and operational and strategic plans.

Internal controls
The Board has implemented internal control
processes typical for the Company’s size and
stage of development. It requires the senior
executives to ensure the proper functioning of
internal controls and in addition it obtains advice
from the external auditors as considered necessary.

Financial reporting
Directors approve a budget for the Company
and regularly review performance against budget
at Board Meetings.
n Operations review

Members of the Board regularly visit the
Company’s exploration project areas, reviewing
both geological practices, and environmental
and safety aspects of operations.

n Environment and safety

The Company is committed to ensuring that sound
environmental management and safety practices
are maintained on its exploration activities.

The Company’s risk management strategy is evolving
and will be an ongoing process and it is recognised that
the level and extent of the strategy will develop with the
growth and change in the Company’s activities.

Risk Reporting
As the Board has responsibility for the monitoring of risk
management it has not required a formal report regarding
the material risks and whether those risks are managed
effectively therefore not complying with Recommendation
7.2 of the Corporate Governance Council. The Board
believes that the Company is currently effectively
communicating its significant and material risks to the
Board and its affairs are not of sufficient complexity to
justify the implementation of a more formal system for
identifying, assessing monitoring and managing risk
in the Company.

The Company does not have an internal audit function.

Chief Executive Officer and Chief Financial Officer
Written Statement
The Board requires the Executive Chairman and the
Company Secretary provide a written statement that
the financial statements of company present a true and
fair view, in all material aspects, of the financial position
and operational results and have been prepared in
accordance with Australian Accounting Standards and
the Corporation Act. The Board also requires that the
Executive Chairman and Company Secretary provide
sufficient assurance that the declaration is founded on a
sound system of risk management and internal control,
and that the system is working effectively.

The declarations have been received by the Board,
in accordance with Recommendation 7.3 of the
Corporate Governance Council.

Corporate Governance Council Recommendation 8
Remunerate Fairly and Responsibly

Remuneration Committee
The Board does not have a separate Remuneration
Committee and as such does not comply with
Recommendations 8.1 and 8.2 of the Corporate
Governance Council. Remuneration arrangements
for Directors are determined by the full Board. The
Board is also responsible for setting performance
criteria, performance monitors, share option schemes,
superannuation, termination and retirement entitlements,
and professional indemnity and liability insurance cover.

The Board considers that the Company is effectively
served by the full Board acting as a whole in
remuneration matters, and ensures that all matters
of remuneration continue to be decided upon in
accordance with Corporations Act requirements, by
ensuring that no Director participates in any deliberations
regarding their own remuneration or related issues.

Distinguish Between Executive and Non-Executive
Remuneration
The Company does distinguish between the
remuneration policies of its Executive and Non-Executive
Directors in accordance with Recommendation 8.3 of
the Corporate Governance Council.

Executive Directors receive salary packages which may
include performance based components, designed to
reward and motivate, including the granting of share
options, subject to shareholder approval and vesting
conditions relating to continuity of engagement.

Non-Executive Directors receive fees agreed on an
annual basis by the Board, within total Non-Executive
remuneration limits voted upon by shareholders at
Annual General Meetings. In the current financial year,
no Non-Executive Director received shares or share
options as remuneration.

38 GBM Resources Annual Report 2014

Directors’ Report

The Directors present their report together with the
consolidated financial statements for the Company
and its controlled entities (‘Group’) for the financial
year ended 30 June 2014.

Directors
The names of Directors in office at any time during
or since the end of the year are:

Peter Thompson
BBus, CPA, FCIS
Executive Chairman

Experience
Mr Thompson is a CPA qualified accountant and
Fellow of Governance Institute of Australia. He has over
30 years experience in the mining industry in Australia,
UK and South America. He has held senior roles with
several major companies including Xstrata Plc, MIM
Holdings Ltd and Mt Edon Gold Mines.

Since 2000, Mr Thompson has been involved in
the development of various infrastructure projects,
including mine and refinery expansions and
establishment of infrastructure including roads,
rail, port and power utilities.

Mr Thompson has held no other directorships of listed
companies in the last 3 years.

neil norris
BSc(Hons), MAIMM, MAIG
Exploration Director – Executive

Experience
Mr Norris is a geologist with over 25 years’ experience
gained in Australia and overseas. Recently he was Group
Exploration Manager for Perseverance Corporation
Limited and spent over ten years with Newmont
Australia Limited holding senior positions in both mining
and exploration areas. A key achievement was his
development of the geological models which contributed
to the discovery of the Phoenix ore body at Fosterville.
Mr Norris was also involved in the discovery of the world
class Cadia and Ridgeway deposits. Mr Norris has a
track record in the successful identification of mineral
deposits and his experience will greatly advance GBM’s
exploration efforts.

Mr Norris has held no other directorships of listed
companies in the last 3 years.

Frank Cannavo
Executive Director (Appointed 5 August 2014)

Experience
Mr Cannavo is an experienced public company director
with significant business and investment experience
working with exploration companies in the mining
industry, and has been instrumental in assisting several
listed and unlisted companies achieve their growth
strategies through the raising of investment capital
and the acquisition of assets.

Mr Cannavo is a visionary entrepreneur with a strong
network of investors and industry contacts in the public
company sector and the mining industry in Australia,
boasts a proven track record of success and has
extensive experience in capital raisings, investment
activities and IPO’s.

He is currently a director of Euro Petroleum Ltd, an
unlisted public company with interests in graphite
exploration assets in Sri Lanka and which is currently
undergoing a merger with ASX company, Viculus Ltd
(ASX:VCL), which is scheduled to complete in Q3 of
2014, and is also a director of Baltic Energy Pty Ltd,
an unlisted private company incorporated to acquire an
interest in, and develop, oil and gas assets in Eastern
Europe, with the aim of an eventual listing on the ASX
in late 2014.

Previously, Mr Cannavo was a founding director of Fortis
Mining Ltd (resigned 23 December 2011) and played
a key role in guiding Fortis Mining Ltd through its early
stages of raising seed capital, acquiring exploration
assets in Western Australia, and achieving a listing
on the ASX in December 2010, through to its growth
phase in 2011 as the company raised significant
investment capital and acquired an interest in two major
potash assets in Kazakhstan. Following completion
of the acquisition of the Kazakhstan potash projects,
Fortis Mining Ltd was renamed to Kazakhstan Potash
Corporation Ltd (ASX: KPC). The IPO of Fortis Mining
was considered one of the most successful IPO’s of
2011. He was also previously a director of a Great
Western Exploration Ltd (resigned 11 October 2013), a
public listed company on the ASX with mining interests
in Western Australia. In addition, he has been a director
of several other ASX – listed companies including
Hannans Reward Ltd (resigned 24 March 2009), Motopia
Ltd (resigned 8 August 2011) and ATOS Wellness Ltd
(resigned 14 January 2011).

Mr Cannavo has held no other directorships of listed
companies in the last 3 years.

GBM Resources Annual Report 2014 39

Directors’ Report

Directors (continued)

Chiau Woei Lim
MBA
Non-Executive Director (Appointed 2 September 2013)

Experience
Mr Lim is managing director and major shareholder
of Angka Alamjaya SDN BHD (AASB) which owns the
Lubuk Mandi Gold Mine in Malaysia. Mr Lim has a wealth
of experience in quarrying, construction and property
development.

He holds a MBA from Leicester University UK and
science degree in Electrical and Computer Engineering
from Oklahoma State University, USA.

Guan Huat (Sunny) Loh
BBA, MBA, ACIS
Non-Executive Director (resigned 5 August 2014)

Experience
Mr Loh is the Managing Director of Swift Venture
Holdings Corporation, an investment Company focussed
on investing in small to mid-sized listed companies and
resources based companies in Asia.

Mr Loh is the Vice Chairman and Board Member of
Shanghai Fortune Capital, a professional investment
banking firm based in Shanghai, which has a focus
on the restructuring and disposal of state owned
companies, as well as merger and acquisition
advisory services.

Mr Lim has held no other directorships of listed
companies in the last 3 years.

Mr Loh has held no other directorships of listed
companies in the last 3 years.

Former Directors

Cameron Switzer
BSc(Hons), MAusMM, MAIG
Non-Executive Director (resigned 5 August 2014)

Experience
Mr Switzer is a geologist with over 24 years of
experience gained in 11 countries. He has held senior
positions with a number of major mining companies
including Senior Project Geologist at Newcrest Mining
Ltd’s Telfer gold mine in Western Australia and Geology
Manager at Acacia Resources Ltd’s Union Reef Gold
Mine in the Northern Territory. Mr Switzer was also
Principal Geologist with MIM Exploration Ltd for seven
years during which time he gained broad experience
with a range of deposits and geological and operating
environments. Mr Switzer has a strong skill base in
Cu Au and most recently coal.

Mr Switzer has a track record in the successful
identification of mineral deposits, highly successful
project generation, exploration management, validation
of resources and the subsequent commercialisation of
resources. Mr Switzer is a geological consultant based
in Queensland.

Mr Switzer is also the President and CEO of TSX.V listed
entity WCB Resources Ltd, a junior explorer focussed
in the Asia Pacific Region.

Mr Switzer has held no other directorships of listed
companies in the last 3 years.

Company Secretary

Mr kevin Hart
BComm FCA

Mr Hart is a Chartered Accountant and was appointed to
the position of Company Secretary on 3 February 2010.
He has over 30 years’ experience in accounting and the
management and administration of public listed entities
in the mining and exploration industry.

He is currently a partner in an advisory firm which
specialises in the provision of company secretarial
services to ASX listed entities.

Meetings of Directors
During the financial year, the following meetings
of Directors (including committees) were held:

Directors’ Meetings

number Eligible
to Attend

number
Attended

P Thompson

C Switzer

N Norris

G Loh

C Lim

Principal Activities
The principal activity of the Group during the financial
year was investment and gold and copper exploration
in Australia.

40 GBM Resources Annual Report 2014

Operating and Financial Review
During the financial year the Group’s activities were
focussed on exploration at its Queensland IOCG
prospects under the farm-in agreement with Mitsui and
Pan Pacific, and on the 40% owned Lubuk Mandi Gold
Project in Malaysia.

Full details are available in the Review of Operations
in the Annual Report.

Operating Results
The net loss after income tax attributable to members
of the Group for the financial year to 30 June 2014
amounted to $4,872,404 (2013: $1,727,043). Including
in the loss for the financial year is $3,510,587 in respect
of exploration costs written off and expensed (2013:
$1,114,163), and the Company’s share in the net loss
of its equity accounted associate amounting to $400,634
(2013: Nil).

Financial Position
At the end of the financial year, the Group had
$527,372 (2013: $1,521,888) in cash on hand and
on deposit. Carried forward exploration expenditure
was $10,569,552 (2013: $13,740,089).

Equity Securities on Issue

30 june 2014 30 June 2013

Ordinary fully paid shares

385,194,121 327,415,003

Options over
unissued shares

134,746,562

–

Ordinary Fully Paid Shares
During the year ended 30 June 2014 the Company
issued 57,779,118 ordinary fully paid shares to acquire a
40% interest in the issued capital of Angka Alamjaya Sdn
Bhd (AASB) (see Significant Changes in State of Affairs
note for further details).

The following ordinary fully paid shares have been issued
since 30 June 2014, (see Events Subsequent to Balance
Date note for further details):

57,000,000 ordinary fully paid shares
on 22 July 2014; and

33,000,000 ordinary fully paid shares
on 17 September 2014.

Other than the above, no shares have been issued
between the end of the financial year and the date
of this report.

Options over Ordinary Shares
At 30 June 2014, there were 134,746,562 options
to acquire ordinary shares on issue.

During the year ended 30 June 2014, no options
were issued pursuant to the terms of the Company’s
Option Plan.

During the year ended 30 June 2014, the following
options were issued by the Company:

50,000,000 options issued, exercisable at 3.5 cents
each on or before 30 June 2016, pursuant to a
share placement;

20,000,000 options issued, exercisable at 3.5 cents
each on or before 30 June 2016, pursuant to a
corporate services agreement; and

64,746,562 options issued, exercisable at 3.5 cents
each on or before 30 June 2016, pursuant to a
priority entitlement offer which closed on
13 August 2013.

During the year ended 30 June 2014 no ordinary shares
were issued on exercise of options.

There were no options lapsed unexercised during the
financial year.

No options have been issued, exercised or cancelled
between the end of the financial year and the date
of this report.

Performance Share Rights
The Company’s Performance Share Rights Plan was
approved by Shareholders at the Company’s Annual
General Meeting held on 30 November 2010.

At 30 June 2014, there were nil performance share rights
to acquire ordinary shares on issue.

During the year ended 30 June 2014, there were no
performance share rights issued, becoming vested,
exercised or cancelled.

No performance share rights have been issued,
becoming vested, exercised or cancelled between the
end of the financial year and the date of this report.

Significant Changes in State of Affairs
Other than the following, there were no significant
changes in the state of affairs of the Group during the
financial year, not otherwise disclosed in this Directors’
Report or in the Review of Operations.

n During the year ended 30 June 2014 the Company
issued 57,779,118 ordinary fully paid shares to
nominees of Angka Alamjaya Sdn Bhd (AASB) in
respect of the acquisition of a 40% interest in the
share capital of AASB, which holds the Lubuk
Mandi gold project mining concession. AASB is
an associate of the Company, and its Managing
Director Mr Chiau Woei Lim is a Non-Executive
Director of GBM Resources Limited.

GBM Resources Annual Report 2014 41

Environmental Issues
The Group holds participating interests in a number of
exploration tenements. The various authorities granting
such tenements require the tenement holder to comply
with the terms of the grant of the tenement and all
directions given to it under those terms of the tenement.
There have been no known breaches of the tenement
conditions, and no such breaches have been notified
by any government agencies during the year ended
30 June 2014.

Remuneration Report (Audited)
The remuneration report is set out in the following
manner:

n Policies used to determine the nature and amount

of remuneration
n Details of remuneration
n Service agreements
n Share based compensation

Remuneration Policy
The Board of Directors is responsible for remuneration
policies and the packages applicable to the Directors of
the Company. Whilst 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 Board has consciously been
focused on conserving the Company’s funds to ensure
the maximum amount is spent on exploration, and this
is reflected in the modest level of Director fees.

The policy of the Group is to offer competitive salary
packages which provide incentive to Directors and
executives and are designed to reward and motivate.
Total remuneration for all Non-Executive Directors was
voted on by shareholders, whereby it is not to exceed
in aggregate $200,000 per annum. Non-Executive
Directors receive fees agreed on an annual basis by
the Board.

At the date of this report, the Company had not entered
into any remuneration packages with Directors or
senior executives which include performance-based
components.

Directors’ Report

Events Subsequent to Balance Date
Other than the following, there has not arisen in the
interval between the end of the financial year and the
date of this report any item, transaction or event of a
material and unusual nature likely, in the opinion of the
Directors of the Company to affect substantially the
operations of the Group, the results of those operations
or the state of affairs of the Group in subsequent
financial years:

n On 22 July 2014 and 5 August 2014 the Company
announced that it had entered into agreements
to place 100,000,000 shares at $0.02 per share
to raise $2,000,000, before costs. In addition
the Company would issue free attaching options
exercisable at 3.5 cents each and expiring 30 June
2016, on the basis of 1 option for each share
subscribed for in the share placement.

The first tranche of 57,000,000 shares were
issued on 22 July 2014 under the Company’s 15%
placement capacity pursuant to ASX Listing Rule
7.1. A second tranche of 33,000,000 shares was
issued pursuant to the placement on 17 September
2014, following shareholder approval of the issue.

n On 5 August 2014 the Company appointed

Mr Frank Cannavo as an Executive Director of
the Company. In addition Non-Executive Directors,
Mr Cameron Switzer and Mr Sunny Loh resigned
from the Board.

Dividends
No dividends were paid during the year and the Directors
recommend that no dividends be paid or declared for
the financial year ended 30 June 2014.

Likely Developments and
Expected Results of Operations
Comments on expected results of the operations
of the Company are included in this report under
the Review of Operations.

Disclosure of other information regarding likely
developments in the operations of the Company in
future financial years and the expected results of those
operations is likely to result in unreasonable prejudice
to the Company. Accordingly, this information has not
been disclosed in this report.

42 GBM Resources Annual Report 2014

Remuneration Report (Audited) (continued)

Details of Remuneration for Directors and Executive Officers
The remuneration of each Director of the Company and relevant executive officers (together known as
Key Management Personnel or KMP) are set out in the attached Table.

Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors and
senior executives. The Board of Directors obtains independent advice when appropriate in reviewing remuneration
packages.

During the year, there were no senior executives who were employed by the Company for whom disclosure
is required.

Short term

Post
Employment

Share Based
Payments

Salary
and fees
$

214,1362

36,000

Other
$

–

Super-
annuation
$

19,808

–

198,2962

20,037

18,342

36,000

–

Share Based
Payments
as % of
remuneration
%

–

Options/
shares
$

–

Total
$

233,944

36,000

236,675

36,000

–

542,619

Total Directors

484,432

20,037

38,150

1 From 1 July 2013 total remuneration payable to the Executive Directors Peter Thompson and Neil Norris was
reduced on a temporary basis, by $90,000 per annum as part of the Company’s cash conservation measures
implemented during the 2012/13 financial year. From 1 April 2014 remuneration payable to the Executive Directors
was further reduced, on a temporary basis, to $125,000 per annum, exclusive of superannuation.
2 Includes payments for unused annual leave.

See disclosure relating to service agreements for further details of remuneration of executive directors.

Total Directors

622,458

20,037

49,542

Short term

Post
Employment

Share Based
Payments

Salary
and fees
$

275,229

36,000

Other
$

–

Super-
annuation
$

24,771

–

275,229

20,037

24,771

36,000

–

Share Based
Payments
as % of
remuneration
%

–

Options/
shares
$

–

Total
$

300,000

36,000

320,037

36,000

692,037

GBM Resources Annual Report 2014 43

2014

Remuneration
of kMP

Directors

P Thompson1

C Switzer

N Norris1

G Loh

C Lim

2013

Remuneration
of kMP

Directors

P Thompson

C Switzer

N Norris

G Loh

Directors’ Report

Remuneration Report (Audited) (continued)

Options Provided as Remuneration
During the years ended 30 June 2014 and 30 June 2013
no options have been granted and issued
to Directors or Senior Executives of the Company.

No shares were issued to Directors or Senior Executives
of the Company in respect of the exercise
of options previously granted as remuneration.

Service Agreements
Remuneration and other terms of employment for the
Managing Director and Executive Director are set out
in Service Agreements:

Peter Thompson – Executive Chairman
The service agreement has a term of 12 months from
1 July 2014. Total remuneration under the contract of
$300,000 per annum inclusive of superannuation has
been temporarily reduced to $235,425 per annum as
part of the Company’s cost reduction program. The
reduced remuneration level will remain in place until
otherwise decided by the Board.

The Service agreement contains certain provisions
typically found in contracts of this nature. The Company
may terminate the Service Agreement without cause by
providing nine months written notice to the individual
or by making a payment in lieu of notice. The Service
Agreement may be terminated immediately in the case
of serious misconduct.

The Service Agreement is subject to annual review.

There is no specific cash bonus or other performance
based compensation contemplated in the agreement.
Long term and short term incentives, may be awarded
subject to Board discretion.

Neil Norris – Exploration Director
The service agreement has a term of 12 months from
1 July 2014. Total remuneration under the contract of
$300,000 per annum inclusive of superannuation has
been temporarily reduced to $217,000 per annum
as part of the Company’s cost reduction program.
The reduced remuneration level will remain in place
until otherwise decided by the Board. In addition the
Exploration Director is given the use of a company
vehicle.

The Service Agreement is subject to annual review.

There is no specific cash bonus or other performance
based compensation contemplated in the agreement.
Long term and short term incentives, may be awarded
subject to Board discretion.

Frank Cannavo – Executive Director
The service agreement has a term of 12 months from
31 July 2014. Total remuneration under the contract is
$202,575 per annum inclusive of superannuation.

The Service Agreement is subject to annual review.

There is no specific cash bonus or other performance
based compensation contemplated in the agreement.
Long term and short term incentives, may be awarded
subject to Board discretion.

Share Based Compensation
At the date of this report the Company has not entered
into any agreements with Directors or Senior Executives
which include performance based components. Options
issued to Directors are approved by shareholders and
were not the subject of an agreement or issued subject
to the satisfaction of a performance condition. Options
are issued to provide an appropriate level of incentive
using a cost effective means given the Company’s size
and stage of development.

44 GBM Resources Annual Report 2014

Remuneration Report (Audited) (continued)

DIrectors’ Interests
The relevant interest of each Director in the ordinary shares and options issued by the Company as notified
by the Directors to the Australian Securities Exchange at the date of this report, is set out in the table below.

Ordinary shares
held at
1 july 2013

Movement
during the
financial year

Ordinary Shares
held at
30 june 2014

Ordinary shares held
at the date of the
Directors’ Report

Ordinary Shares

Director

P Thompson

C Switzer (resigned 5/8/14)

N Norris

9,862,582

6,693,750

9,550,000

G Loh1 (resigned 5/8/14)

12,888,065

C Lim (appointed 2/9/13)2

F Cannavo
(appointed 5/8/14)

1 Shares acquired on market.

–

968,643

24,077,285

9,862,582

6,693,750

9,550,000

13,856,708

24,077,285

9,862,582

6,693,7503

9,550,000

13,856,7083

24,077,285

–

2 Shares issued to Mr Lim as nominee and shareholder of Angka Alamjaya Sdn Bhd (AASB), for the acquisition
of 40% interest in AASB by the Company.

3 Shares held on ceasing to be a director of the Company on 5 August 2014.

Options

Director

P Thompson

C Switzer (resigned 5/8/14)

N Norris

G Loh (resigned 5/8/14)

C Lim (appointed 2/9/13)

F Cannavo
(appointed 5/8/14)

Options
held at
1 july 2013

Movement
during the
financial year4

Options
held at
30 june 2014

Options held at
the date of the
Directors’ Report

–

2,468,763

1,878,126

1,546,818

8,900,000

–

2,468,763

1,878,126

1,546,818

8,900,000

–

2,468,763

1,878,126

1,546,818

8,900,000

–

4 Options acquired during the period pursuant to a priority entitlement offer.

Loans to Directors and Executives
There were no loans entered into with Directors or executives during the financial year under review.

Other Transactions with key Management Personnel
During the financial year the Company issued 57,779,118 ordinary fully paid shares to nominees of Angka Alamjaya
Sdn Bhd (AASB) to acquire a 40% interest in the issued capital of AASB, a Company associated with Mr Chiau Woei
Lim. As a nominee of AASB, Mr Lim received 24,077,285 shares in GBM Resources. Mr Lim is a shareholder and
director of AASB. The fair value of shares issued to nominees of AASB to acquire the 40% interest was $2,831,177.

During the financial year the Company incurred costs of $1,237,364 in respect of AASB’s operations on a
reimbursable basis. As at 30 June 2104 an amount of $732,491 has been reimbursed to the Company by AASB.
An amount of $504,873 is payable to the Company by AASB as at 30 June 2014.

Other than the above, there are no transactions with Directors, or Director related entities or associates.

End of Remuneration Report

GBM Resources Annual Report 2014 45

Directors’ Report

Indemnification and Insurance
of Officers and Auditors
During the year, the Company paid an insurance
premium to insure certain officers of the Company.
The officers of the Company covered by the insurance
policy include the Directors named in this report.

The Directors and Officers Liability insurance provides
cover against all costs and expenses that may be
incurred in defending civil or criminal proceedings that
fall within the scope of the indemnity and that may be
brought against the officers in their capacity as officers
of the Company. The insurance policy does not contain
details of the premium paid in respect of individual
officers of the Company. Disclosure of the nature of the
liability cover and the amount of the premium is subject
to a confidentiality clause under the insurance policy.

Proceedings on Behalf of the Company
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Company, or to intervene
in any proceedings to which the Company is a party,
for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings.

No proceedings have been brought or intervened in on
behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.

Non-Audit Services

No non-audit services were provided by the external
auditors in respect of the current or preceding
financial year.

Other than the above, the Group has not, during or
since the end of the financial year, given an indemnity
or5entered an agreement to indemnify, or paid or agreed
to pay insurance premiums for the Directors, officers
or auditors of the Company or the controlled entity.

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.

Signed in accordance with a resolution of the Board of Directors.

Dated this 30th day of September 2014

Peter Thompson
Executive Chairman

46 GBM Resources Annual Report 2014

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the consolidated financial report of GBM Resources Limited
for the year ended 30 June 2014, I declare that to the best of my knowledge and belief,
there have been no contraventions of:

the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and

b) any applicable code of professional conduct in relation to the audit.

Perth, Western Australia
30 September 2014

L Di Giallonardo
Partner

HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of

International, a worldwide organisation of accounting firms and business advisers.

GBM Resources Annual Report 2014 47

Consolidated Statement of Comprehensive Income
For the Year Ended 30 June 2014

Revenue

Consulting and professional services
Corporate and project assessment costs
Share of net loss of Associate
Depreciation
Employee benefits expense
Employee share based payments
Exploration expenditure written off and expensed
Other share based payments
Travel expenses
Administration and other expenses

Loss before income tax

Income tax benefit

Loss for the year

Note

11
4
4
15
4
15

Consolidated

2014
$

2013
$

273,469

430,401

(184,573)
(111,716)
(400,634)
(36,439)
(315,813)
–
(3,510,587)
(400,000)
(164,043)
(169,792)

(203,394)
(179,741)
–
(39,663)
(435,636)
(23,333)
(1,114,163)
–
(130,417)
(316,047)

(5,020,128)

(2,011,993)

147,724

284,950

(4,872,404)

(1,727,043)

Other comprehensive income

–

Total comprehensive loss for the year

(4,872,404)

(1,727,043)

Basic loss per share
Diluted loss per share

6
6

(1.3)
(1.3)

(0.7)
(0.7)

Cents

The accompanying notes form part of these financial statements

48 GBM Resources Annual Report 2014

Consolidated Statement of Financial Position
As at 30 June 2014

Current assets
Cash and cash equivalents
Trade and other receivables
Assets held for sale

Total Current Assets

non-current assets
Trade and other receivables
Exploration and evaluation expenditure
Property, plant and equipment
Investments accounted for using the equity method

Total Non-current Assets

TOTAL ASSETS

Current liabilities
Trade and other payables

Total Current Liabilities

TOTAL LIABILITIES

nET ASSETS

Equity
Issued capital
Option reserve
Share based payments reserve
Accumulated losses

Consolidated

2014
$

527,372
570,943
308,499

1,406,814

2013
$

1,521,888
134,795
–

1,656,683

30,936
10,569,552
100,033
2,438,523

43,608
13,740,089
444,971
–

13,139,044

14,228,668

14,545,858

15,885,351

446,066

446,085

446,066

446,085

14,099,792

15,439,266

23,927,441
323,733
400,000
(10,551,382)

21,118,244
–
–
(5,678,978)

Note

20
7
8

7
9
10
11

13
15
15
15

TOTAL EQUITy

14,099,792

15,439,266

The accompanying notes form part of these financial statements

GBM Resources Annual Report 2014 49

Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2014

Consolidated

Note

Issued
capital
$

Option
reserve
$

payments Accumulated

reserve
$

losses
$

Total
$

Share
based

Balance at 1 July 2012

18,228,936

698,146

920,638

(5,559,052) 14,288,668

Share based payments

Shares issued

Loss attributable to
members of the Company

Transfer to issued capital
on exercise of
performance rights

Transfer to accumulated
losses on expiry of options

–

2,854,308

–

35,000

–

(35,000)

–

(698,146)

(908,971)

1,607,117

–

23,333

–

23,333

2,854,308

–

(1,727,043)

Balance at 30 June 2013

21,118,244

Balance at 1 july 2013

21,118,244

Share based payments

Shares issued

Options issued pursuant
to priority entitlement offer

Loss attributable to
members of the Company

–

2,809,197

–

323,733

–

(5,678,978) 15,439,266

–

(5,678,978) 15,439,266

400,000

–

400,000

2,809,197

323,733

–

(4,872,404)

Balance at 30 june 2014

23,927,441

323,733

400,000

(10,551,382) 14,099,792

The accompanying notes form part of these financial statements

50 GBM Resources Annual Report 2014

Consolidated Statement of Cash Flows
For the Year Ended 30 June 2014

Note

Cash flows from operating activities
Interest received
Research and development concession refund
JV management fee income
Payments to suppliers and employees

Net cash flows (used in) operating activities

20(b)

Cash flows from investing activities
Proceeds on redemption of security bonds
Payments on acquisition of equity investments
Funds provided by JV partner under Farm-in agreement
Payments for exploration and evaluation,
including JV Farm-in spend
Payments to acquire property, plant and equipment
Payments made on behalf of associate
Proceeds received on reimbursement by associate

Consolidated

2014
$

21,416
147,724
250,447
(942,688)

(523,101)

14,277
(7,980)
2,087,059

(2,261,651)
–
(1,237,364)
732,491

2013
$

43,743
543,642
383,737
(1,151,823)

(180,701)

–
–
3,528,289

(5,838,058)
(32,784)
–
–

Net cash flows (used in) investing activities

(673,168)

(2,342,553)

Cash flows from financing activities
Proceeds from the issue of shares and options
Share issue costs

Net cash flows from financing activities

323,733
(121,980)

2,544,200
(89,882)

201,753

2,454,318

Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning
of the financial year

Cash and cash equivalents at the end
of the financial year

20(a)

(994,516)

(68,936)

1,521,888

1,590,824

527,372

1,521,888

The accompanying notes form part of these financial statements

GBM Resources Annual Report 2014 51

Notes to the Financial Statements
For the Year Ended 30 June 2014

1. Statement of Significant Accounting Policies

GBM Resources Limited (‘the Company’) is a listed public company domiciled in Australia. The consolidated financial
report of the Company for the financial year ended 30 June 2014 comprises the Company and its subsidiaries
(together referred to as the ‘Group’).

The following is a summary of the material accounting policies adopted by the Group in the preparation of the
financial report. The accounting policies have been consistently applied, unless otherwise stated.

a) Basis of Preparation

The financial report is a general purpose financial report, which has been prepared in accordance with
the requirements of the Corporations Act 2001, and Australian Accounting Standards and Interpretations.
The financial report has also been prepared on an historical cost basis, unless otherwise stated.
The financial report is presented in Australian dollars.

Adoption of New and Revised Standards –
Changes in accounting policies on initial application of accounting standards
In the year ended 30 June 2014, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group’s operations and effective for the current
annual reporting period. It has been determined by the Directors that there is no impact, material or otherwise,
of the new and revised Standards and Interpretations on the Group’s business and, therefore, no change is
necessary to Group accounting policies.

The Directors have also reviewed all new Standards and Interpretations that have been issued but are not
yet effective for the year ended 30 June 2014. 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 the
Group’s business and, therefore, no change necessary to Group accounting policies.

Going Concern Basis for Preparation of Financial Statements
The financial statements have been prepared on the going concern basis which contemplates the continuity
of normal business activities and the realisation of assets and discharge of liabilities in the normal course of
business. The ability of the Group to continue to adopt the going concern assumption will depend on future
successful capital raisings, the successful exploration and subsequent exploitation of the Group’s tenements
and/or sale of non-core assets.

As disclosed in Note 25, subsequent to the balance date the Company has raised $2,000,000 before costs by
way of share placements. The Directors are confident that the proceeds of these share placements, together
with the Group’s current cash balances, will enable the Group to continue as a going concern.

b) Statement of Compliance

The financial report was authorised for issue on 30 September 2014.

The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial Reporting Standards
(IFRS).

c) Principles of Consolidation

The consolidated financial statements comprise the financial statements of GBM Resources Limited and its
subsidiaries as at 30 June each year (the Group). The financial statements for 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 the control is transferred out of the Group.

The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The
purchase method of accounting involves allocating the cost of the business combination to the fair value of
the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly,
the consolidated financial statements include the results of subsidiaries for the period from their acquisition.
Minority interests represent the portion of profit and loss and net assets in subsidiaries not held by the Group
and are presented separately in the consolidated statement of comprehensive income and within equity in
the consolidated statement of financial position.

52 GBM Resources Annual Report 2014

1. Statement of Significant Accounting Policies (continued)

d) 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 Revenue
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial asset.

Management Fees
Revenue from farm-in management fees is recognised at the time the fees are invoiced.

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.

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 re-assessed 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.

GBM Resources Annual Report 2014 53

Notes to the Financial Statements
For the Year Ended 30 June 2014

1. Statement of Significant Accounting Policies (continued)

f) Other Taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

• when the GST incurred on a purchase of goods and services is not recoverable from the taxation

authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part
of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.

•

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the consolidated statement of financial position.

g) Financing Costs

Net financing costs comprise interest payable on borrowings calculated using the effective interest method.

Borrowing costs are expensed as incurred and included in net financing costs.

h) 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.

Assets held under finance leases are initially recognised at their fair value or, if lower, the present value of the
minimum lease payments, each determined at the inception of the lease. The corresponding liability to the
lessor is included in the consolidated statement of financial position as a finance lease obligation.

Lease payments are apportioned between finance charges and reduction of the lease obligation so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly
against income, unless they are directly attributable to qualifying assets, in which case they are capitalised in
accordance with the general policy on borrowing costs – refer Note 1(g).

Finance leased assets are depreciated on a straight line basis over the estimated useful life of the asset.

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.

i) Cash and Cash Equivalents

Cash and short-term deposits in the consolidated 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 consolidated statement of cash flows, cash and cash equivalents consist of cash
and cash equivalents as defined above, net of outstanding bank overdrafts.

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) 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:

Office furniture and equipment
Plant and equipment
Motor Vehicles

2.5-20 years
0-40 years
8 years

The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate,
at each financial year end.

54 GBM Resources Annual Report 2014

1. Statement of Significant Accounting Policies (continued)

k) Plant and Equipment (continued)

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.

ii) De-recognition and Disposal
An item of property, plant and equipment is de-recognised upon disposal or when no further future economic
benefits are expected from its use or disposal.

Any gain or loss arising on de-recognition 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
de-recognised.

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 de-recognised or impaired, as well as through the amortisation process.

GBM Resources Annual Report 2014 55

Notes to the Financial Statements
For the Year Ended 30 June 2014

1. Statement of Significant Accounting Policies (continued)

Investments and Other Financial Assets (continued)

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.

v) Investment in Associated Entities
The Group’s investment in its associate is accounted for using the equity method of accounting in the
consolidated financial statements, after initially being recognised at cost. The associate is an entity in which the
Group has significant influence and which is neither a subsidiary nor a joint venture. Significant influence is the
power to participate in the financial and operating decisions of the investee but is not control or joint control
over those policies.

Under the equity method, the investment in the associate is carried in the consolidated statement of financial
position at cost plus post-acquisition changes in the Group’s share of net assets of the associate. Goodwill
relating to an associate is included in the carrying amount of the investment and is not amortised. After
application of the equity method, the Group determines whether it is necessary to recognise any additional
impairment loss with respect to the Group’s net investment in the associate.

Goodwill included in the carrying amount of the investment in an associate is not tested separately; rather
the entire carrying amount of the investment is tested for impairment as a single asset. If an impairment is
recognised, the amount is not allocated to the goodwill of the associate.

The consolidated statement of comprehensive income reflects the Group’s share of the results of operations of
the associate, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative
post-acquisition movements are adjusted against the carrying amount of the investment.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any
unsecured long-term receivable and loans, the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.

Upon disposal of an associate that results in the Group losing significant influence over that associate, any
retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial
recognition as a financial asset in accordance with AASB 139. The difference between the previous carrying
amount of the associate attributable to the retained interest and its fair value is included in the determination
of the gain or loss on disposal of the associate. In addition, the Group accounts for all amounts previously
recognised in other comprehensive income in relation to that associate on the same basis as would be required
if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously
recognised in other comprehensive income by that associate would be reclassified to profit or loss on disposal
of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a
reclassification adjustment) when it loses significant influence over that associate.

When a Group entity transacts with its associate, profits and losses resulting from those transactions with the
associate are recognised in the Group’s consolidated financial statements only to the extent of interests in the
associate that are not related to the Group.

56 GBM Resources Annual Report 2014

1. Statement of Significant Accounting Policies (continued)

m) Exploration and Evaluation Expenditure

Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an
exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:

i)
ii)

the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
a)

the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
exploration and evaluation 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 initially measured at cost and include acquisition of rights to explore,
studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation
and amortised of assets used in exploration and evaluation activities. General and administrative costs are only
included in the measurement of exploration and evaluation costs where they are related directly to operational
activities in a particular area of interest.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable
amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated
being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss
(if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for
the asset in previous years.

Where a decision has been made to proceed with development in respect of a particular area of interest,
the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified
to development.

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 re-valued amount (in which case
the impairment loss is treated as a re-valuation decrease).

An assessment is also made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a
change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss
unless the asset is carried at re-valued amount, in which case the reversal is treated as a re-valuation 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.

GBM Resources Annual Report 2014 57

Notes to the Financial Statements
For the Year Ended 30 June 2014

1. Statement of Significant Accounting Policies (continued)

o) 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.

Interest Bearing Liabilities
All loans and borrowings are initially recognised at the fair value of the consideration received less directly
attributable transaction costs.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the effective interest method.

Gains and losses are recognised in profit or loss when the liabilities are de-recognised.

q) Employee Benefits

i) Wages, Salaries, Annual Leave and Sick Leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and non-accumulating sick
leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect
of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when
the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
are measured at the rates paid or payable.

ii) Long Service Leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the
present value of expected future payments to be made in respect of services provided by employees up to the
reporting date using the projected unit credit method. Consideration is given to expected future wage and salary
levels, experience of employee departures, and period of service. Expected future payments are discounted
using market yields at the reporting date on national government bonds with terms to maturity and currencies
that match, as closely as possible, the estimated future cash outflows.

r) Share Based Payments

Equity Settled Transactions:
The Group provides benefits to employees (including senior executives) of the Group in the form of share based
payments, whereby employees render services in exchange for shares or rights over shares (equity-settled
transactions).

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value of options is determined by using a Black
and Scholes model. Share rights are valued at the underlying market value of the ordinary shares over which
they are granted.

In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of GBM Resources Limited (market conditions) if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number
of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant
date. The charge or credit to the consolidated statement of comprehensive income for a period represents
the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.

58 GBM Resources Annual Report 2014

1. Statement of Significant Accounting Policies (continued)

r) Share Based Payments (continued)

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any modification that increases the total fair value of
the share based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification.

If an equity-settled award is cancelled, the cumulative expense recognised in respect of that award is transferred
from its respective reserve to accumulated losses. However, if a new award is substituted for the cancelled
award and designated as a replacement award on the date that it is granted, the cancelled and new awards are
treated as if they were a modification of the original award, as described in the previous paragraph.

s) Share 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.

t) Earnings Per Share

Basic earnings per share (“EPS”) is calculated by dividing the net profit or loss attributable to members of the
Company for the reporting period, after excluding any costs of servicing equity (other than ordinary shares
and converting preference shares classified as ordinary shares for EPS calculation purposes), by the weighted
average number of ordinary shares of the Company, adjusted for any bonus element.

Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs
associated with dilutive potential ordinary shares and the effect on revenues and expenses of conversion, by
the weighted average number of ordinary shares and potential dilutive ordinary shares, adjusted for any bonus
element.

u) Critical Accounting Estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the Group and that are believed
to be reasonable under the circumstances.

Accounting for capitalised mineral exploration and evaluation expenditure
The Group’s accounting policy is stated at 1(m). A regular review is undertaken of each area of interest
to determine the reasonableness of continuing to carry forward costs in relation to that area of interest.

Share based payments
The Group uses independent advisors to assist in valuing share based payments.

Estimates and assumptions used in these valuations are disclosed in the notes in periods when these share
based payments are made.

GBM Resources Annual Report 2014 59

Notes to the Financial Statements
For the Year Ended 30 June 2014

2. Financial Risk Management

The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents
information about the Group’s exposure to the specific risks, and the policies and processes for measuring and
managing those risks. Further quantitative disclosures are included throughout this financial report. The Board
of Directors has overall responsibility for the risk management framework.

a) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from transactions with customers and investments.

Trade and other receivables
The Group has no investments and the current nature of the business activity does not result in trading
receivables. The receivables that the Group recognises through its normal course of business are short term
in nature and the most significant (in quantity) is the receivable from the Australian Taxation Office and interest
receivable. The risk of non recovery of receivables from this source is considered to be negligible.

Cash deposits
The Group’s primary banker is Commonwealth Bank. At balance date all operating accounts and funds held on
deposit are with this bank. The Directors believe any risk associated with the use of only one bank is mitigated
by its size and reputation. Except for this matter the Group currently has no significant concentrations of
credit risk.

b) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation.

The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management
is cognisant of the future demands for liquid finance resources to finance the Group’s current and future
operations, and consideration is given to the liquid assets available to the Group before commitment is made
to future expenditure or investment.

c) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective
of market risk management is to manage and control market risk exposures within acceptable parameters,
while optimising any return.

Currency risk
The Group is not exposed to any currency risk other than the respective functional currencies of each Company
within the Group, the Australian dollar (AUD).

Interest rate risk
As the Group has significant interest bearing assets, the Group’s income and operating cash flows are materially
exposed to cshanges in market interest rates. The assets are short term interest bearing deposits, and no
financial instruments are employed to mitigate risk (Note 18 – Financial Instruments).

d) Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Board of Directors monitors capital
expenditure and cash flows as mentioned in (b).

60 GBM Resources Annual Report 2014

3. Revenue

Interest income
Joint venture management fee

4. Expenses

Employee expenses
Gross employee benefit expense:
Wages and salaries
Directors’ fees
Superannuation expense
Other employee costs

Less amount allocated to exploration

Net consolidated statement of comprehensive income
employee benefit expense

Depreciation expense:
Office equipment and software
Site equipment
Motor vehicles

Exploration costs:
Unallocated exploration costs
Exploration costs written off

Note

10
10
10

Consolidated

2014
$

23,022
250,447

273,469

2013
$

46,664
383,737

430,401

1,264,570
102,000
116,359
17,543

1,500,472
(1,184,659)

1,668,099
72,000
147,137
78,504

1,965,740
(1,530,104)

315,813

435,636

18,027
2,083
16,329

36,439

121,118
3,389,469

3,510,587

21,250
2,083
16,330

39,663

136,381
977,782

1,114,163

5. Income Tax

Income tax recognised in profit and loss

a)
The prima facie tax benefit on the operating result is reconciled
to the income tax provided in the financial statements as follows:

Accounting loss before income tax from continuing operations

(5,020,128)

(2,011,993)

Income tax benefit calculated at 30%
Share based payments
Share of net loss of equity accounted associate
Capital raising costs claimed
Exploration costs written off
Unused tax losses and temporary differences
not recognised as deferred tax assets
R&D tax concession

Income tax (benefit) reported in the
consolidated statement of comprehensive income

(1,506,038)
120,000
120,190
(58,908)
1,016,841

307,915
(147,724)

(603,598)
7,000
–
(58,789)
293,335

362,052
(284,950)

(147,724)

(284,950)

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities
on taxable profits under Australian tax law. There has been no change in the corporate tax rate when compared with
the previous reporting period.

GBM Resources Annual Report 2014 61

Notes to the Financial Statements
For the Year Ended 30 June 2014

5. Income Tax (continued)

b) Unrecognised deferred tax assets and liabilities
The following deferred tax assets and liabilities
have not been brought to account:

Unrecognised deferred tax assets relate to:
Losses available for offset against future taxable income
Capital raising costs
Accrued expenses and liabilities

Unrecognised deferred tax liabilities relate to:
Exploration expenditure

Net unrecognised deferred tax asset

Consolidated

2014
$

2013
$

5,718,137
78,199
35,960

5,832,296

5,484,166
130,512
73,976

5,688,654

(3,170,866)

(4,122,027)

(3,170,866)

(4,122,027)

2,661,430

1,566,627

The deductible temporary differences and tax losses do not expire under current tax legislation. Potential deferred
tax assets attributable to tax losses carried forward have not been brought to account because the Directors do
not believe it is appropriate to regard realisation of the future tax benefit as probable.

The potential future income tax benefit will only be obtained if:

ii)

iii)

the Group derives future assessable income of a nature and an amount sufficient to enable the benefit to be
realised in accordance with Division 170 of the Income Tax Assessment Act 1997;

the Group companies continue to comply with the conditions for deductibility imposed by the law; and

no changes in tax legislation adversely affect the Group in realising the benefits.

6. Loss Per Share

Loss used in calculation of loss per share

(4,872,404)

(1,727,043)

Consolidated

2014
$

2013
$

Basic earnings/(loss) per share

Weighted average number of shares used
in the calculation of earnings per share

Cents

(1.3)

(0.7)

375,696,184

266,121,118

Options and performance share rights
Options and share rights to acquire ordinary shares granted by the Company and not exercised at the reporting date
have been included in the determination of diluted earnings per share to the extent to which they are dilutive.

62 GBM Resources Annual Report 2014

7. Trade and Other Receivables

Current
Amounts due from farm-in partner
Amounts due from Associate (Note 24)
GST recoverable
Other debtors

non-current
Security and environmental bonds

8. Assets Held For Sale

Land reclassified as held for sale

Consolidated

2014
$

29,932
504,873
36,138
–

570,943

30,936

2013
$

95,129
–
36,118
3,548

134,795

43,608

308,499

–

During the financial period the Board made the decision to dispose of the freehold land held at its Malmsbury Gold
Project in Victoria. The carrying value of $308,499 has been reclassified from non-current assets (property, plant
and equipment) to current assets. (Refer Note 10).

9. Exploration and Evaluation Expenditure

Exploration and evaluation phase:
Capitalised costs at the start of the financial year
Costs capitalised during the financial year
Capitalised costs written off during the financial year

Note

Consolidated

2014
$

2013
$

13,740,089
218,932
(3,389,469)

13,202,731
1,515,140
(977,782)

Capitalised costs at the end of the financial year

10,569,552

13,740,089

Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful
development and commercial exploitation or alternatively, sale of the respective areas.

GBM Resources Annual Report 2014 63

Notes to the Financial Statements
For the Year Ended 30 June 2014

10. Property, Plant and Equipment

Note

Consolidated

2014
$

2013
$

–
–

–

153,402
(141,114)

12,288

22,545
(8,883)

13,662

130,633
(56,550)

74,083

100,033

308,499
(308,499)

–

30,315
–
(18,027)

12,288

15,745
(2,083)

13,662

90,412
(16,329)

74,083

100,033

308,499
–

308,499

153,402
(123,087)

30,315

22,545
(6,800)

15,745

130,633
(40,221)

90,412

444,971

308,499
–

308,499

45,492
6,073
(21,250)

30,315

17,828
(2,083)

15,745

106,742
(16,330)

90,412

444,971

Carrying values at 30 june:
Land:
Cost
Depreciation

Office equipment and software:
Cost
Depreciation

Site equipment and plant:
Cost
Depreciation

Motor vehicles:
Cost
Depreciation

Total

Reconciliation of movements:
Land:
Opening net book value
Transferred to assets held for sale (Note 8)

Closing net book value

Office equipment and software:
Opening net book value
Cost of additions
Depreciation

Closing net book value

Site equipment and plant:
Opening net book value
Depreciation

Closing net book value

Motor vehicles:
Opening net book value
Depreciation

Closing net book value

Total

64 GBM Resources Annual Report 2014

11. Investments Accounted for
Using the Equity Method

a) Carrying value of investments
Associated companies

Consolidated

2014
$

2013
$

2,438,523

–

b) Details of associated companies

Ownership Interest

Carrying Amount
of investment

Name

Angka Alamjaya
Sdn Bhd (AASB)

Country of
Incorporation

30 jun
2014
%

30 Jun
2013
%

30 jun
2014
$

30 Jun
2013
$

Malaysia

Ord

40%

Nil

$2,438,523

Nil

During the period the Company acquired a 40% interest in the ordinary share capital of Angka Alamjaya Sdn Bhd
(AASB), a Malaysian company that holds the mining concession for the Lubuk Mandi Gold Project in Malaysia.
Consideration for the acquisition was 57,779,118 fully paid GBM Resources Ltd shares at a fair value of 4.9 cents
per share (Note 23).

Movements during the period in equity accounted
investments in associated companies

Consolidated

Note

Balance at the beginning of the financial period
Initial investment in AASB during the period – issue of
57,779,118 ordinary fully paid shares @ 4.9 cents per share
Share of AASB loss after tax for the financial period
Other movements for the financial period1

Balance at the end of the financial period

1 Other costs for the financial period relate to costs
associated with the acquisition of the initial 40% interest
in the share capital of Angka Alamjaya Sdn Bhd (AASB).

d) Associate’s summarised statement

of comprehensive income

Revenue
Loss from continuing operations
Other comprehensive income for the period

Total comprehensive loss for the period

e) Associate’s summarised assets and liabilities
Current assets
Non-current assets
Current liabilities
Non-current liabilities1

Net assets

2014
$

–

2,831,177
(400,634)
7,980

2,438,523

–
(1,001,584)
–

(1,001,584)

2,267,480
10,475,867
(1,661,466)
(4,985,573)

6,096,308

2013
$

–

–
–
–

–

–
–
–

–

–
–
–
–

–

1 Note, non-current liabilities include convertible debt funding of $4,985,573 (2013: Nil).

GBM Resources Annual Report 2014 65

Notes to the Financial Statements
For the Year Ended 30 June 2014

11. Investments Accounted for

Using the Equity Method (continued)

f) Reconciliation of the above summarised financial information

to the carrying amount of the investment in Associate
recognised in the consolidated financial statements

Net assets of Associate
Proportion of Group’s ownership interest in Associate

Carrying amount of the Group’s ownership interest in Associate

12. Trade and Other Payables

Current
Trade creditors
Sundry creditors and accruals
Employee leave liabilities

Consolidated

2014
$

2013
$

6,096,308
40%

2,438,523

–
–

–

290,049
101,149
54,868

446,066

141,486
208,012
96,587

446,085

Issue
price

2014
no.

2013
No.

2014
$

2013
$

13. Issued Capital

Issued capital at the balance date

385,194,121 327,415,003

23,927,441

21,118,244

Movements in issued capital:
On issue at the start of the year
Share purchase plan
Share placement
Shares issued to acquire
phosphate rights
Shares issued on the exercise of
vested performance rights
Share placement
Shares issued to acquire interest
in AASB (Note 11)
Share issue costs

$0.05
$0.05

$0.05

$0.10
$0.02

327,415,003 236,181,003
10,884,000
20,000,000

–
–

21,118,244
–
–

18,228,936
544,200
1,000,000

–

–
–

10,000,000

350,000
50,000,000

–

–
–

500,000

35,000
1,000,000

$0.049

57,779,118
–

–
–

2,831,177
(21,980)

–
(189,892)

On issue at the end of the reporting year

385,194,121 327,415,003

23,927,441

21,118,244

Shares Subject to Restriction Agreement
At balance date there were no ordinary shares subject to any restrictions.

66 GBM Resources Annual Report 2014

14. Options and Performance Rights

Details of the Company’s Incentive Option Scheme are provided at Note 16.

a) Options over unissued shares
Options on issue at the balance date

Movements in options:
Options on issue at the start of the year
Options issued for corporate services (Note 15)
Options issued pursuant to priority entitlement offer
Options issued attaching to share placement
Options cancelled on expiry

2014
no.

2013
No.

134,746,562

–

–
20,000,000
64,746,562
50,000,000
–

129,493,124
–
–
–
(129,493,124)

Options on issue at the end of the reporting year

134,746,562

–

i) Options Issued, Exercised and Expired During the Year
During the financial year the Company issued and granted 134,746,562 options over unissued shares (2013: nil).
During the year, no options over unissued shares were exercised (2013: Nil).
During the year, no options were cancelled on expiry of their exercise term (2013: 129,493,124).

ii) Options on Issue at the Balance Date
The number of options outstanding over unissued ordinary shares at 30 June 2014 is 134,746,562 (2013: nil).

iii) Subsequent to the Balance Date
No options have been issued, exercised or cancelled between the end of the financial year and the date
of this report.

iv) Basis and assumptions used in the valuation of options granted in the period

Date Issued

Number of
Options Issued

Exercise
Price ($)

Expiry Date

Valuation of Options

30 August 2013

20,000,000

$0.035

30 June 2016

$400,000. Market value of listed
option (GBZO) issued on
30 August 2013 was $0.05.

Other options issued during the financial year were issued as free attaching securities to a share placement and
options issued pursuant to a priority entitlement off to holders of options expiring on 30 June 2013. Participants in
the priority entitlement offer subscribed a total of $323,733, being 0.5 cents per option. This subscription amount
is recognised in the Company’s option reserve (Note 15).

b) Performance Share Rights
Details of the Company’s Performance Rights Plan are provided at Note 16.

Performance rights on issue at the balance date

Movements in share rights:
Share rights on issue at the start of the year
Vested share rights exercised during the year

Number of vested performance share rights

at the end of the reporting year

2014
no.

–

–
–

–

2013
No.

–

350,000
(350,000)

–

GBM Resources Annual Report 2014 67

Notes to the Financial Statements
For the Year Ended 30 June 2014

14. Options and Performance Rights (continued)

b) Performance Share Rights

i) Performance share rights Issued, Exercised and Expired during the Year
During the financial year the Company granted nil performance share rights (2013: nil)
During the year, no vested share rights were exercised into ordinary fully paid shares (2013: 350,000).
No unvested performance share rights were cancelled on cessation of employment (2013: nil).

ii) Performance share rights on Issue at the Balance Date
The number of share rights, vested unexercised and un-vested at 30 June 2014 is nil (2013: nil).

iii) Subsequent to the Balance Date
No share rights have been granted, exercised or cancelled subsequent to the reporting date.

iv) Basis and assumptions used in the valuation of share rights granted in the period
Share rights are valued at the underlying market value of the ordinary shares over which they are granted.

15. Reserves and Accumulated Losses

Share based payments reserve(i)
Opening balance
Employee share based payments – performance rights vesting
Share based payments – options issued for corporate services (Note 14)
Transferred to issued capital on exercise of performance rights
Transferred to accumulated losses on cancellation of expired options

Closing balance

Option reserve(ii)
Opening balance
Options issued pursuant to priority entitlement offer (Note 14)
Transferred to accumulated losses on cancellation of expired options

Closing balance

Consolidated

2014
$

2013
$

–
–
400,000
–
–

400,000

–
323,733
–

323,733

920,638
23,333
–
(35,000)
(908,971)

–

698,146

(698,146)

–

Accumulated losses
Opening balance
Net loss attributable to the members of the Company
Transferred from reserves on cancellation of expired options

Closing balance

(5,678,978)
(4,872,404)
–

(5,559,052)
(1,727,043)
1,607,117

(10,551,382)

(5,678,978)

i) Share based payments reserve
The share based payments reserve represents the fair value of performance share rights and options, issued
as consideration for services to employees or consultants as remuneration, or to third parties for the acquisition
of assets, goods or services.

ii) Option reserve
The option reserve represents the proceeds received on the issue of options.

68 GBM Resources Annual Report 2014

16. Employee Benefits

Details of the Company’s share right and option plans, under which share rights and options are issuable to
employees, directors and consultants are summarised below. Details of share rights and options issued to Directors
and executives are set out in Note 23.

Incentive Option Plan
The Company has a formal option plan for the issue of options to employees, directors and consultants, which was
approved by shareholders at the Company’s Annual General Meeting on 30 November 2010. Options are granted
free of charge and are exercisable at a fixed price in accordance with the terms of the grant. Options over unissued
shares are issued under the terms of the Plan at the discretion of the Board.

There are no options on issue under the Incentive Option Plan at 30 June 2014 (2013: nil). Refer to Note 14(a).

Performance Rights Plan
The Company has a formal plan for the issue of performance share rights to employees, which was approved by
shareholders at the Company’s Annual General Meeting on 30 November 2010. Share rights are granted free of
charge and are exercisable into ordinary fully paid shares in accordance with the terms of the grant. Share rights
are issued to employees under the terms of the Plan at the discretion of the Board.

There are no share rights on issue under the Performance Rights Plan at 30 June 2014 (2013: nil). Refer to Note 14(b).

17. Segment Reporting

Operating segments are identified and segment information disclosed, where appropriate, on the basis of internal
reports reviewed by the Company’s Board of Directors, being the Group’s Chief Operating Decision Maker,
as defined by AASB 8.

The Group has identified its operating segments based on the internal reports that are reviewed and used by the
Board of Directors in assessing performance and determining the allocation of resources. Reportable segments
disclosed are based on aggregating operating segments, where the segments have similar characteristics. The
Group’s activity is mineral exploration and resource development within Australia, and mineral exploration and
resource development in Malaysia (via the investment in an associate).

The reportable segments are represented as follows:

30 june 2014

Revenue
Joint venture management fee

Total segment revenue

Australia
$

Malaysia
$

Consolidated
$

250,447

–

250,447

Segment net operating loss after tax

(4,471,770)

(400,634)

(4,872,404)

Interest revenue
Share of profit of associates and joint ventures
Depreciation
Exploration expenditure written off and expensed
Income tax benefit

23,022
–
(36,439)
(3,510,587)
147,724

–
(400,634)
–
–
–

23,022
(400,634)
(36,439)
(3,510,587)
147,724

Segment assets

12,107,335

2,438,523

14,545,858

Capital expenditure during period

Segment liabilities

218,932

446,066

–

218,932

446,066

Segment non-current assets

10,700,521

2,438,523

13,139,044

30 june 2013
There was only one reportable segment for the year ended 30 June 2013, being exploration in Australia.

GBM Resources Annual Report 2014 69

Notes to the Financial Statements
For the Year Ended 30 June 2014

18. Financial Instruments

Credit risk
The Directors do not consider that the Group’s financial assets are subject to anything more than a negligible level
of credit risk, and as such no disclosures are made. Refer to Note 2(a).

Impairment losses
The Directors do not consider that any of the Group’s financial assets are subject to impairment at the reporting
date. No impairment expense or reversal of impairment charge has occurred during the reporting period.

Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding
the impact of netting agreements. Refer to Note 2(b):

Consolidated

Carrying
amount
$

Contractual
cash flows
$

6 months
or less
$

6-12
months
$

1-2
years
$

2-5
years
$

More than
5 years
$

30 june 2014
Trade and other payables 290,049

290,049

30 june 2013
Trade and other payables 141,486

141,486

–

The Group does not have any interest bearing liabilities to report a weighted average interest rate.

Currency risk
The Group does not have any direct exposure to foreign currency risk, other than in respect of its impact
on the economy and commodity prices generally. Refer to Note 2 (c).

Interest rate risk
At the reporting date the interest profile of the Group’s interest-bearing financial instruments were:

Fixed rate instruments:
Financial liabilities

variable rate instruments:
Financial assets

Consolidated

2014
$

–

2013
$

–

527,372

1,521,888

Fair value sensitivity analysis for fixed rate investments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss,
and the Group does not designate derivatives as hedging instruments under a fair value hedge accounting model.
Therefore a change in interest rates at the reporting date would not affect profit or loss.

70 GBM Resources Annual Report 2014

18. Financial Instruments (continued)

Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity
and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.

Profit and Loss

Equity

100bp
increase
$

100bp
decrease
$

100bp
increase
$

100bp
decrease
$

5,274

(5,274)

5,274

(5,274)

15,219

(15,219)

15,219

(15,219)

30 june 2014
Variable rate instruments

30 june 2013
Variable rate instruments

Fair values

Fair values versus carrying amounts
The carrying amounts of financial assets and liabilities as described in the consolidated statement of financial
position represent their estimated net fair value.

19. Commitments

a) Exploration
The Group has certain obligations to perform minimum exploration work on mineral leases held. These obligations
may vary over time, depending on the Group’s exploration programmes and priorities. As at balance date,
total exploration expenditure commitments on tenements held by the Group have not been provided for in the
financial statements. These obligations are also subject to variations by farm-out arrangements or sale of the
relevant tenements.

Minimum expenditure requirements for the following 12 months on the Group’s exploration licences
as at 30 June 2014, including licences subject to farm-in arrangements are approximately $1,756,500.

b) Operating Lease Commitments
The Group has no operating lease commitments.

c) Contractual Commitment
The Group has no contractual commitments.

GBM Resources Annual Report 2014 71

Notes to the Financial Statements
For the Year Ended 30 June 2014

20. Notes to the Statement of Cash Flows

a) Cash Assets
Cash at bank and on hand
Bank at call cash account

Total cash and cash equivalents

The Bank at call account holds funds at call subject to certain trading
restrictions and pays interest at an average of 3.30% (2013: 5.20%).

Reconciliation of Loss from Ordinary Activities
after Income Tax to net Cash Used In Operating Activities

Consolidated

2014
$

2013
$

438,765
88,607

527,372

1,389,984
131,904

1,521,888

Profit/(Loss) after income tax

(4,872,404)

(1,727,043)

Add (less) non-cash items:
Depreciation
Share based payments
Exploration expenditure written off and expensed
Share of net loss of equity accounted associate

36,439
400,000
3,510,587
400,634

Changes in assets and liabilities:
Increase/(decrease) in trade creditors and accruals
(Increase)/decrease in sundry receivables
(Increase)/decrease in research and development tax concession receivable

(295)
1,938
–

39,662
23,333
1,114,163
–

18,530
91,962
258,692

Net cash flow from operations

Material non-cash transactions

(523,101)

(180,701)

2014
During the 2014 financial year the Company completed the following material non-cash settled transactions:

•

Issued 20,000,000 listed GBZO options, exercisable at 3.5 cents each and expiring 30 June 2016,
in consideration for corporate advisory and public relations services. The fair value of the options issued
amounted to $400,000.

Issued 57,779,118 ordinary fully paid shares to nominees of Angka Alamjaya Sdn Bhd (AASB) for a 40% interest
in the issued capital of AASB, a Company which holds the mining concession for the Lubuk Mandi Gold Project
in Malaysia. The fair value of the shares issued amounted to $2,831,177 (Note 11).

2013
During the 2013 financial year the Company completed the following material non-cash settled transaction:

•

Issued 10,000,000 ordinary fully paid shares in consideration for the acquisition of the 70% Bungalien
Phosphate rights from Swift Venture Corporation. The value of the shares amounted to $500,000.

21. Auditor’s Remuneration

Amounts received or receivable by HLB Mann Judd for:
– Audit and review of financial reports

72 GBM Resources Annual Report 2014

Consolidated

2014
$

2013
$

30,100

27,750

22. Controlled Entities

a) Particulars in Relation to Ownership of Controlled Entities
Belltopper Hill Pty Ltd
Syndicated Resources Pty Ltd
Willaura Minerals Pty Ltd
Isa Brightlands Pty Ltd
Isa Tenements Pty Ltd
Bungalien Phosphate Pty Ltd

b) GBM Resources Limited – Investments in Controlled Entities
Belltopper Hill Pty Ltd
Syndicated Resources Pty Ltd
Willaura Minerals Pty Ltd
Isa Brightlands Pty Ltd
Isa Tenements Pty Ltd
Bungalien Phosphate Pty Ltd

2014
%

2013
%

100
100
100
100
100
100

2014
$

596,850
100
–
1
1
10

596,962

100
100
100
100
100
100

2013
$

596,850
100
–
1
1
10

596,962

During the 2013 financial year the Company recognised a provision against the investment in Willaura Minerals Pty
Ltd. The fair value of this investment had previously been recognised as fair value acquisition costs on consolidation
in respect of the Willaura Minerals assets acquired on the Company’s initial public offer.

c) Loans to/(from) Controlled Entities
Belltopper Hill Pty Ltd
Syndicated Resources Pty Ltd
Willaura Minerals Pty Ltd
Isa Brightlands Pty Ltd
Isa Tenements Pty Ltd
Bungalien Phosphate Pty Ltd

d) Contribution to Consolidated Result
GBM Resources Limited
Belltopper Hill Pty Ltd1
Syndicated Resources Pty Ltd
Willaura Minerals Pty Ltd
Isa Brightlands Pty Ltd1
Isa Tenements Pty Ltd1
Bungalien Phosphate Pty Ltd

2,228,211
–
–
7,672,176
1,368,324
–

(1,760,069)
(1,254,868)
–
–
(88,514)
(1,368,319)
–

2,204,082
–
–
7,630,888
1,368,324
–

(1,726,492)
–
–
–
–
–
–

Total

(4,471,770)

(1,726,492)

1 Contribution to net result by subsidiary companies relates to previously capitalised exploration costs written off
during the financial year.

GBM Resources Annual Report 2014 73

Notes to the Financial Statements
For the Year Ended 30 June 2014

23. Key Management Personnel Disclosures

a) Details of key Management Personnel
The following were key management personnel of the Group at any time during the year and unless otherwise
stated were key management personnel for the entire year.

Non-Executive Directors
Cameron Switzer – Non-Executive Director
Guan Huat Loh – Non-Executive Director
Chiau Woei Lim – Non-Executive Director (appointed 2 September 2013)

Executive Directors
Peter Thompson – Managing Director/Executive Chairman
Neil Norris – Exploration Director

Total remuneration paid to key management personnel during the year:

Short-term benefits
Post-employment benefits

Consolidated

2014
$

504,469
38,150

542,619

2013
$

642,495
49,542

692,037

b) Other Transactions and Balances with key Management Personnel
During the financial year the Company issued 57,779,118 ordinary fully paid shares to nominees of Angka Alamjaya
Sdn Bhd (AASB) to acquire a 40% interest in the issued capital of AASB, a Company associated with Mr Chiau Woei
Lim. As a nominee of AASB, Mr Lim received 24,077,285 shares in GBM Resources. Mr Lim is a shareholder and
director of AASB. The fair value of shares issued to nominees of AASB to acquire the 40% interest was $2,831,177
(Note 11).

Other than the above, there are no transactions with Directors, or Director related entities or associates, other than
those reported in Note 24.

24. Related Party Transactions

Total amounts receivable and payable from entities in the wholly-owned
group (see Note 22 for details of controlled entities) at balance date:

non-Current Receivables
Loans to controlled entities

non-Current Payables
Loans from controlled entities

Consolidated

2014
$

2013
$

11,268,711

11,203,294

–

Transactions with Associate – Angka Alamjaya Sdn Bhd (AASB)
During the financial year the Company incurred costs of $1,237,364 in respect of AASB’s operations on a
reimbursable basis. As at 30 June 2104 an amount of $732,491 has been reimbursed to the Company by AASB. An
amount of $504,873 is payable to the Company by AASB as at 30 June 2014 (Note 7).

74 GBM Resources Annual Report 2014

25. Events Subsequent to Balance Date

Other than the following, there has not arisen in the interval between the end of the financial year and the date of
this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the
Company to affect substantially the operations of the Group, the results of those operations or the state of affairs of
the Group in subsequent financial years:

• On 22 July 2014 and 5 August 2014 the Company announced that it had entered into agreements to place

100,000,000 shares at $0.02 per share to raise $2,000,000, before costs. In addition the Company would issue
free attaching options exercisable at 3.5 cents each and expiring 30 June 2016, on the basis of 1 option for
each share subscribed for in the share placement.

The first tranche of 57,000,000 shares were issued on 22 July 2014 under the Company’s 15% placement
capacity pursuant to ASX Listing Rule 7.1. A second tranche of 33,000,000 shares was issued on
17 September 2014, following shareholder approval of the issues.

• On 5 August 2014 the Company appointed Mr Frank Cannavo as an Executive Director of the Company.
In addition Non-Executive Directors, Mr Cameron Switzer and Mr Sunny Loh resigned from the Board.

26. Dividends

There are no dividends paid or payable during the year ended 30 June 2014 or the 30 June 2013 comparative year.

27. Contingencies

i) Contingent liabilities
There were no material contingent liabilities not provided for in the financial statements of the Group
as at 30 June 2014 or 30 June 2013.

Ii) Native Title and Aboriginal Heritage
Native title claims have been made with respect to areas which include tenements in which the Group has an
interest. The Group is unable to determine the prospects for success or otherwise of the claims and, in any event,
whether or not and to what extent the claims may significantly affect the Group or its projects. Agreement is being
or has been reached with various native title claimants in relation to Aboriginal Heritage issues regarding certain
areas in which the Group has an interest.

iii) Contingent assets
There were no material contingent assets as at 30 June 2014 or 30 June 2013.

GBM Resources Annual Report 2014 75

Notes to the Financial Statements
For the Year Ended 30 June 2014

28. Parent Entity Information

Financial position

Assets
Current assets
Non-current assets

Total Assets

Liabilities
Current liabilities

Total Liabilities

nET ASSETS

Equity
Issued capital
Option reserve
Share based payments reserve
Accumulated losses

TOTAL EQUITy

Financial performance
Loss for the year
Other comprehensive income

Total comprehensive loss

Contingent liabilities
For full details of contingent liabilities see Note 27.

Commitments
For full details of commitments see Note 19.

Consolidated

2014
$

2013
$

1,406,756
13,139,102

1,656,683
14,228,668

14,545,858

15,885,351

(446,066)

(446,085)

14,099,792

15,439,266

23,927,441
323,733
400,000
(10,551,382)

21,118,244
–
–
(5,678,978)

14,099,792

15,439,266

(4,872,404)
–

(1,726,492)
–

(4,872,404)

(1,726,492)

76 GBM Resources Annual Report 2014

Directors’ Declaration
For the Year Ended 30 June 2014

In the opinion of the Directors:

the accompanying financial statements and notes are in accordance with the Corporations Act 2001
including:

giving a true and fair view of the Group’s financial position as at 30 June 2014 and of its
performance for the year then ended; and

ii.

complying with Accounting Standards and Corporations Regulations 2001.

there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.

the financial statements and notes 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 2014.

This declaration is made in accordance with a resolution of the Board of Directors.

Peter Thompson
Executive Chairman

Dated this 30th day of September 2014

GBM Resources Annual Report 2014 77

INDEPENDENT AUDITOR’S REPORT

To the members of GBM Resources Limited

Report on the Financial Report

We have audited the accompanying financial report of GBM Resources Limited (“the company”),
which comprises the consolidated statement of financial position as at 30 June 2014, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, notes comprising a summary
of significant accounting policies and other explanatory information, and the directors’ declaration for
the consolidated entity. The consolidated entity comprises the company and the entities it controlled
at the year’s end or from time to time during the financial year.

Directors’ responsibility for the financial report

The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that is free from material misstatement, whether due to fraud or error.

In Note 1(b),
the directors also state, in accordance with Accounting Standard AASB 101:
Presentation of Financial Statements, that the financial report complies with International Financial
Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
company’s preparation and fair presentation of the financial report in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors,
as well as evaluating the overall presentation of the financial report.

Our audit did not involve an analysis of the prudence of business decisions made by directors or
management.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.

HLB Mann Judd (WA Partnership) is a member of

International, a worldwide organisation of accounting firms and business advisers.

78 GBM Resources Annual Report 2014

Auditor’s opinion

In our opinion:

(a) the financial report of GBM Resources Limited is in accordance with the Corporations Act

2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June

2014 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards and the Corporations Regulations

2001; and

(b) the financial report also complies with International Financial Reporting Standards as

disclosed in Note 1(b).

Report on the Remuneration Report

We have audited the remuneration report included in the directors’ report for the year ended 30 June
2014. The directors of the company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance
with Australian Auditing Standards.

Auditor’s opinion

In our opinion the remuneration report of GBM Resources Limited for the year ended 30 June 2014
complies with section 300A of the Corporations Act 2001.

HLB Mann Judd
Chartered Accountants

Perth, Western Australia
30 September 2014

L Di Giallonardo
Partner

GBM Resources Annual Report 2014 79

ASX Additional Information

Pursuant to the Listing Rules of the Australian Securities Exchange Limited, the shareholder information set out below
was applicable as at 30 September 2014.

a. Distribution of Equity Securities

Range

1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over

Listed Shares (GBZ)

Listed Options (GBZO)

Number
of Holders

Securities
Held

Number
of Holders

51
77
142
511
283

9,934
297,467
1,249,921
21,935,286
451,701,513

2
3
3
21
81

Securities
Held

1,800
10,500
23,750
854,857
133,855,655

1,064

475,194,121

110

134,746,562

There are 350 shareholders holding less than a marketable parcel of shares.

b. Substantial Shareholders
An extract of the Company’s register of Substantial Shareholders (who hold 5% or more of the issued capital)
is set out below:

Shareholder

Kim Choon Loh
Chiau Woei Lim
Chew Leok Chuan

c. Twenty Largest Shareholders

Shareholder

UOB Kay Hian Pte Ltd
Citicorp Nominees Pty Ltd
Chew Leok Chuan
HSBC Custody Nominees (Australia) Limited
Lion Resources Development Pte Ltd
Superfine Nominees Pty Ltd
Swift Venture Holdings Corporation
Lay Hong Lim
Cheng Ee Huang
Carpentaria Corporation Pty Ltd
Neil Norris
De Gracie Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd
Kevin James Hendry
Nefco Nominees Pty Ltd
Ivan Perry Wu
KH & RL Payne
Vissing Holdings Pty Ltd
Foundation Asset Pty Ltd
Gebrun Pty Ltd

Shares
Held

50,200,000
24,077,285
19,900,000

Shares
Held

171,446,846
61,866,115
19,900,000
18,634,021
10,000,000
9,862,582
8,366,708
6,943,346
5,500,000
4,856,250
4,800,000
3,750,000
3,356,114
2,833,334
2,554,554
2,526,500
2,410,166
2,300,001
2,183,333
2,037,750

% of Issued
Capital

11.35%
6.25%
6.08%

% of Issued
Capital

36.08%
13.02%
4.19%
3.92%
2.10%
2.08%
1.76%
1.46%
1.16%
1.02%
1.01%
0.79%
0.71%
0.60%
0.54%
0.53%
0.51%
0.48%
0.46%
0.43%

Total

346,127,620

72.84%

80 GBM Resources Annual Report 2014

d. Twenty Largest Option Holders

Optionholder

Constance Tan Cai Ai
Chew Leok Chuan
Swift Venture Holdings Corporation
Bell Potter Nominees Limited
Sung Yoon Chon
Lay Hong Lim
Sung Yoon Chon
Alvito Capital Holdings Inc
Tan Hong Huat
KH & RL Payne
Au Sai Chuen
Sin Yew Seng (2004) Pte Ltd
John Saunders
Jason Separovic
ABN Amro Clearing Sydney Nominees Pty Ltd
Phooi Wong Law
Superfine Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited
Rosegate Investments Pty Ltd
Kristin Eileen Franco

Options
Held

22,400,000
10,000,000
8,900,000
6,702,188
6,270,500
6,108,000
5,725,000
5,615,000
4,894,000
4,725,786
2,600,000
2,500,000
2,460,709
2,224,111
2,200,000
2,000,000
1,718,750
1,552,500
1,540,000
1,519,742

% of Issued
Options

16.62%
7.42%
6.61%
4.97%
4.65%
4.53%
4.25%
4.17%
3.63%
3.51%
1.93%
1.86%
1.83%
1.65%
1.63%
1.48%
1.28%
1.15%
1.14%
1.13%

Total

101,656,286

75.44%

e. Voting Rights
In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands
whereby each member present in person or by proxy shall have one vote and upon a poll, each share will have
one vote.

f. Restricted Securities
There are no restricted securities.

GBM Resources Annual Report 2014 81

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82 GBM Resources Annual Report 2014

Corporate Directory

Directors
Peter Thompson
Executive Chairman

Chiau Woei Lim
Non-Executive Director

Neil Norris
Executive Director – Exploration Director

Frank Cannavo
Executive Director

Company Secretary
Kevin Hart

Registered Office
Suite 8, 7 The Esplanade
Mt Pleasant WA 6153
AUSTRALIA
Telephone: +61 8 9316 9100
Facsimile: +61 8 9315 5475

Principal Place of Business
Suite 8, 7 The Esplanade
Mt Pleasant WA 6153
AUSTRALIA
Telephone: +61 8 9316 9100
Facsimile: +61 8 9315 5475

Exploration Office
10 Parker Street
PO Box 658
Castlemaine VIC 3450
AUSTRALIA
Telephone: +61 3 5470 5033

Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
AUSTRALIA

Share Registry
Advanced Share Registry Services
110 Stirling Highway
Nedlands WA 6009
AUSTRALIA
Telephone: +61 8 9389 8033
Facsimile: +61 8 9262 3723

Securities Exchange Listing
GBM Resources Limited – shares & options
are listed on the Australian Securities Exchange
(ASX Code: GBZ, GBZO)

Solicitors
Steinepreis Paganin
Lawyers and Consultants
Level 4, Next Building
16 Milligan Street
Perth WA 6000
AUSTRALIA

Website and email address
Website: www.gbmr.com.au
Email:

admin@gbmr.com.au

Plunging lineation in shale
at Lubuk Mandi

GBM Resources Annual Report 2014 83

Suite 8, 7 The Esplanade, Mt Pleasant WA 6153 Australia
Telephone: +61 8 9316 9100 • Facsimile: +61 8 9315 5475
Website: www.gbmr.com.au • Email: admin@gbmr.com.au