2008 Annual Report
Greenland
Capital: Nuuk
Greenland (Kalaallisut: Kalaallit Nunaat, meaning
“Land of the Greenlanders”; Danish: Grønland)
is a self-governing Danish province
located
between the Arctic and Atlantic Oceans, east of
the Canadian Arctic Archipelago. Greenland is,
by area, the world’s largest island which is not a
Population (July 2007 est): 56,344.
continent in its own right.
Though ethnically an Arctic island nation and
A further self-government referendum will be held
geographically a part of the continent of North
in Greenland on 25 November 2008. The further
America, politically and historically Greenland
increase in the level of self government would
is associated with Europe, specifically Iceland,
not entail a withdrawal from the Danish state but
Norway, and Denmark. In 1978, Denmark granted
the assumption of further areas of responsibility,
home rule to Greenland.
including mining and minerals law.
Source: Wikipedia
1
CORPORATE DIRECTORY
DIRECTORS
Dr. Hans Kristian (Hank) Schønwandt
Mr Simon Cato
Mr Roderick McIllree
Mr Jeremy Whybrow
Mr Malcolm Mason
Mr Simon Stafford-Michael
Mr Tony Ho
COMPANY SECRETARY
Mr Bruce Acutt
BUSINESS OFFICE
Ground Floor
33 Colin Street
West Perth, Western Australia, 6005
Telephone: +61 8 9226 1100
Facsimile: +61 8 9226 2299
GREENLAND OFFICE
Narsaq
Telephone: +299 661 494
Facsimile: +299 662 494
WEBSITE
www.ggg.gl
AUSTRALIAN SOLICITORS
Fairweather & Lemonis
Level 9
172 St Georges Terrace
Perth, Western Australia, 6000
GREENLAND SOLICITORS
Nuna Law
Qullilerfix 2, 6
Post Box 59
3900 Nuuk, Greenland
AUDITORS
Mack & Co
Level 2
47 Havelock Street
West Perth, Western Australia, 6005
SHARE REGISTRY
Advanced Share Registry Services
110 Stirling Highway
Nedlands, Western Australia, 6009
2
CONTENTS
Company Objectives
Letter from the Chairman
Review of Operations
The Kvanefjeld Project
The 2007 Field Season
Environmental Studies
The 2008 Field Season
Mineralogical Studies
Occupational Health and Safety
Rare Earths at Kvanefjeld
‘Rare Earths at the crossroads’
- reprint of a recent article in Industrial Minerals magazine
Spectral Gamma Logging
Directors Report
Audit Independence Declaration
Income Statement
Balance Sheets
Statement of Change in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors Declaration
Independent Audit Report
Corporate Governance Statement
Tenement List
ASX additional information
Table of Signficant Events
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Company Objectives
THIS YEAR
Acquisition~ The first key objective achieved during the year was to acquire and fund
exploration for the Kvanefjeld multi element project in Greenland.
Funding~ During the financial year we raised in excess of $35,000,000 of which approximately
half has been used to acquire the project and fund exploration to date.
Resource identification~ The major key exploration objective achieved for this financial year
was to identify a major Joint Ore Reserve Committee compliant rare earth and sodium fluoride
resource at Kvanefjeld and to confirm the previous known occurrence of uranium.
In May (ASX announcement 5 May 2008) we announced our first resource statement:
338mt @ 0.03% U3O8 (150ppm U3O8 cutoff), 90mt @ 1.09% REO, 79mt @ 1.69% NaF.
Equating to inferred mineral resources of: 104,000t U3O8, 980,000t REO and 1.3mt NaF.
In August (ASX announcement 26 August 2008) this was increased to: 334mt @ 0.03%
U3O8 (150ppm U3O8 cutoff), 215mt @ 1.21% REO, 201mt @ 1.11% NaF.
Equating to inferred mineral resources of: 100,960t U3O8, 2.59mt of REO and 2.21mt NaF.
Regional exploration~ Other exploration successes included a regional program which
demonstrated the widespread presence of lujavrite, (the main mineral bearing rock type at
Kvanefjeld) within our tenement.
Identifying multi element mineralisation~ We were also able to identify the other
main economic minerals at Kvanefjeld as having potentially a much greater value than the
uranium previously known to exist. This makes Kvanefjeld a truly multi element resource
which includes many specialty metals necessary for a cleaner, greener world.
NEXT YEAR
Exploration~ The exploration focus will be on the wider regional setting with an objective of
finding further Kvanefjeld sized resources from the number of firm leads obtained by regional
exploration drilling using uranium as a pathfinder.
Development~ The development focus will be on scoping studies and a prefeasibility study
examining the economics of mining at Kvanefjeld.
Investigation of key markets~ We will continue to investigate market opportunities for our
rare earths and sodium fluoride. The scale of our resource means that once in production we
may well be a world leader in the production of these commodities.
Corporate~ Listing in Canada, Europe or North America will bring us into closer contact with
key players who understand our resource and its importance.
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Rare Earth Elements
Speciality Metals for a Greener World
Today’s world faces many challenges, but perhaps the greatest concern is the state of our environment.
The earth’s atmosphere is warming at an alarming rate, a phenomenon that scientists largely attribute
to the burning of hydrocarbons, or fossil fuels. This is altering the composition of the atmosphere to
produce the so-called greenhouse effect, and will inevitably have a profound impact on the world as
we know it. In addition to the greenhouse effect, the burning of hydrocarbons releases numerous
toxic gasses into the atmosphere, poisons which are then inhaled by all terrestrial life forms.
Means and ways to combat mans influence on climate change is now a major political issue.
Drastic changes to transportation methods and energy sources, in an effort to reduce greenhouse
gas emissions, cannot be implemented instantly due to social, economic and political constraints.
However, gradual changes are taking place; changes that are being facilitated by the emergence of
new technologies.
In the automotive industry, a number of key new environmentally-friendly applications rely on the
unique physical and chemical properties of rare earth elements. Of particular note are hybrid vehicles,
which utilize rare earth elements in both the electric engines as well as the rechargeable batteries
that power them.
Rare earth elements are also used in catalytic converters fitted to
the exhaust system of a combustion engine reduce the toxicity of
emissions. These converters reduces toxic nitrogen oxides to harmless
nitrogen and oxygen, oxidizes toxic carbon monoxide to carbon
dioxide, and additionally oxidizes unburnt hydrocarbons. Tighter
vehicle emission laws are being introduced throughout the world,
and by 2010 it is predicted that 95% of all cars manufactured will
have catalytic converters.
Rare earth elements are also used in another form of catalyst,
Global demand for Rare Earth
Elements is already out-
weighing supply. The world
needs new, long-term stable
suppliers of REEs to meet the
burgeoning demand.
commonly referred to as a fluid-cracking catalyst. These are being utilised increasingly in the oil
industry as they enhance the efficiency of separating various fractions from oil during the refining
process.
The use of REEs in magnets, rechargeable batteries and catalysts accounts for over 60% of REE
consumption with demand expected to increase significantly in all these areas. Global demand for
REEs is already outweighing supply. China currently contributes over 90% of global REE supply, and
already consumes over 60%. With significant growth forecast for many applications that utilize REEs,
the world needs new, long-term stable suppliers of REEs to meet the burgeoning demand.
The Kvanefjeld REE deposit in southern Greenland is growing rapidly to become one of, if not the
largest deposit of REEs in the world. It has the potential to meet the world’s rapidly growing demand
for REEs, and in doing so, can become a major contributor to the Greenland economy for decades to
come. At Greenland Minerals and Energy, we believe that the Kvanefjeld deposit is a truly world class
ore body, that can be developed in a responsible, environmentally conscious manner, to become one
of the world’s major sources of rare earth elements – “Specialty Metals for a Greener World”.
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Letter from
the Chairman
The financial year
ending 30 June 2008
has been momentous
for the company.
Not only did we settle the acquisition of the Kvanefjeld project we also completed
one very successful exploration season, commenced another season and also,
following completion of sufficient assays of the 2007 season drilling, outlined,
world class rare earths and sodium fluoride resources which we had predicted
were coincident with the known uranium resource at Kvanefjeld.
In the same time rare earth commodity prices have increased substantially and the “in ground” value
of our known JORC compliant, inferred resources of rare earths is now substantially above that of
uranium. An initial JORC compliant resource of the rare earths, sodium fluoride and uranium was
announced in May 2008. Since then a further major upgrade has been announced based on further
assays from the 2007 season.
We have been able to truly substantiate the multi-element aspect of Kvanefjeld.
To the date of this report we have completed another 19,334 metres of diamond drilling at Kvanefjeld
in the 2008 season. The stored core from holes drilled by the Danish exploration teams have also
been made available to us. We expect, following assay of the 2008 season core and historical core to
have a further sizeable upgrade in the scale of all elements in our resource.
As Chairman it falls to me to pay tribute to the immense amount of
work done by our employees and our board this year. In particular
our directors and key employees spent long periods overseeing and
completing the vital exploration we carried out during this financial
year in Greenland.
The success of our exploration program hinged on support from the
people of Narsaq; who welcomed us to their town and provided
accommodation and many services. Townspeople were also active in
our operations. Our service company in Greenland provided drilling
crews, equipment, helicopter access and logistic support; at all times
to a high international standard
The 2009 season
We are looking forward to the 2009 season. Reviewing the achievements of the 2007 and 2008
seasons, (both of which occurred substantially within the financial year to which this report relates),
which were attained from a virtual standing start, we believe we have an excellent base for a further
exploration and development push next year. Our goals for next year are set out on page 2 of this
annual report. We are already putting in place the team required to achieve them.
Mr Hank Schønwandt
(Chairman)
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Review of Operations by
the Managing Director
Introduction to the Company
Greenland Minerals and Energy Limited is an exploration company with a majority interest in the
Kvanefjeld Project. Kvanefjeld is an advanced multi element exploration project in Greenland.
The Company called a comprehensive shareholder meeting held on the 31 July 2007 to approve the
acquisition of a joint venture interest (now 61%) in our Kvanefjeld project as well as a number of
ancillary resolutions relating to raising capital, changes to the board and issues of shares and options
to a number of parties including directors. All resolutions were passed at the meeting.
Our drilling program revealed
for the first time that the rare
earth and sodium fluoride
resources were extensive and
it also confirmed by chemical
assay the uranium resource
previously identified by
spectral analysis.
The Company considers this project as being one of the most
exciting multi-element deposits in the world.
The Kvanefjeld project
The Kvanefjeld project, (“the project”) is located on the south
west tip of Greenland and is one of the largest undeveloped multi-
element occurrences of uranium and rare earth elements (REE) in
the world.
The project has been the subject of numerous published scientific
papers written by bodies that include Danish and Greenlandic
governmental agencies, and independent scientific researchers
including the OECD International Atomic Energy Agency (IAEA).
The project had been extensively explored prior
to 2007 with work including more than 11,000
metres of diamond drilling, bulk metallurgical
testing, driving a 960m exploratory adit, surface
mapping, ground
radiometry and
surface
sampling.
From June 2007 to September 2008 the Company
carried out two exploration programs which
included another 30,000 metres of diamond
drilling. Principally designed to test for the
occurrences of rare earths, sodium fluoride, and
other economic minerals exploration confirmed
and extended the historical uranium resources.
Project locality map
The rare earths and sodium fluoride were predicted to be coincident with the previously identified
uranium resource. However no previous work had been done to confirm the scale and grade of the
coincident rare earth and sodium fluoride resources.
Our drilling program revealed for the first time that the rare earth and sodium fluoride resources
were extensive and it also confirmed by chemical assay the uranium resource previously identified
by spectral analysis.
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Above: The town of Narsaq.
Middle: Camp facilities on
Kvanefjeld Plateau.
Bottom: Office and operations
facilities in Narsaq.
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Review of Operations by
the Managing Director
This has been a major achievement and has in one year effectively placed Kvanefjeld among the
largest rare earth resources in the world. It also changes the focus at Kvanefjeld from being simply
another uranium project to being a major source of rare earths outside China.
Current resource
334mt @ 0.03% (U3O8 at 150ppm cutoff)
215mt @ 1.21% REO
201mt @ 1.11% NaF
Total inferred resources: 2.59mt of REO, 2.21mt of NaF and 100,960t of U3O8.
Importantly for shareholders the identification of the rare earths also vastly increases the potential
economic value of the resource. The in ground value of the rare earths now exceeds that of uranium
by a considerable margin.
Later in this annual report we explain in detail the rare earth characteristics of the deposit and also
the current relevance of these very important minerals to the world economy.
Financial position
We currently have more than $16,000,000 on deposit after meeting the costs of most of the 2008
exploration program. This is more than sufficient for the planned 2009 program; however the board
will retain a flexible approach to ensure we always have sufficient funds for our activities.
Above: Rod McIllree and John Mair in the field.
Board and management
The board consists of:
• Mr Hank Schønwandt
• Mr Roderick McIllree
• Mr Simon Cato
• Mr Jeremy Whybrow
• Mr Malcolm Mason
• Mr Tony Ho
• Mr Simon Stafford-Michael
(Chairman)
(Managing Director)
(Executive Director)
(Exploration Director)
(Technical Director)
(Non Executive Director)
(Non Executive Director)
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Top: Radio shack at the
Kvanefjeld campsite.
Left: Malcolm Mason in the
Greenland office.
Below: Jeremy Whybrow and
Hank Schønwandt in the field.
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Review of Operations by
the Managing Director
Operations at Kvanefjeld - 2007 and 2008 field seasons
This annual report is for the year 1 July 2007 to 30 June 2008 we have therefore reported on the
total work in the two seasons.
Summary of Earlier Work (pre 2007)
Historical work had focused on seeking an economic deposit of uranium. Rare earths and sodium
fluoride (as well as a number of other minerals) although noted at the time were considered sub-
economic (rare earth demand 30 years ago was entirely different to today) or not of priority. No
systematic chemical assaying of the old drill core was ever undertaken. Uranium mineralisation was
routinely estimated by spectral radiometry of core.
Operations first commenced in 1955 and followed by drilling programs in 1956, 1962, 1969 and
1977; which delineated mineralisation in two areas termed the “Mine Area” and the “Northern
The main objective for
the 2007 program was to
collect sufficient data to
allow a resource estimate
to JORC standard
Area”. A total of 66 holes were drilled at Kvanefjeld for an advance of just
over 10,000m. The “Mine Area” has been drilled on an irregular pattern at
approximately 50m spacing to around 100m depth. The “Northern Area”
was drilled on a more regular pattern with holes nominally on a 160m x
160m pattern with almost all holes reaching 200m below surface.
This exploration identified a uranium resource of approximately 50,700
tonnes of U3O8.
There followed an extended hiatus in exploration with no activities between
1983 and early 2007.
The 2007 Field Season
Field operations commenced in May with the mobilisation of the camp and
office facilities in Narsaq. Greenland Mining Services, our service provider,
quickly had all facilities in working order.
The first drill rig arrived early in June and after unpacking and assembly was
transported to the inaugural drill-hole; the first core being recovered on the
13th June. A second drill rig arrived on the 7th of July when the operation
Shipping samples from Narsaq.
moved to four drilling shifts per day.
In 2007 the Company completed 43 holes for a total of 10,022m of drilling. The deepest hole reached
398m. Most holes were drilled to approximately 300m. All drill holes intersected the mineralised
lujavrite unit.
The main objective for the 2007 program was to collect sufficient data to allow a resource estimate
to JORC standard.
Drilling was initially concentrated on the “Mine Area” and “Northern Area”. This would allow
comparison to the resource estimates carried out pre-1981.
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Field operations.
Review of Operations by
the Managing Director
In addition drilling was to extend into untested areas in order to delineate new mineralisation and
add to the already significant resource, as shown on page 15.
• Drilling between the “Mine Area” and “Northern Area” (i.e. merging the two areas).
• Drilling southwards of the “Mine Area” and “Northern Area” (i.e. a lateral extension).
• Drilling to depth (i.e. depth extensions especially beneath the shallow historical ‘Mine Area”
drilling pattern).
Drilling operations
were completed on
the 4 October and all
equipment dismantled,
transported to Narsaq
and stored ready for
the 2008 season.
As drilling progressed it became obvious that mineralisation was more extensive
than originally appreciated and many holes were completed in mineralisation.
It was therefore determined that where possible & without jeopardising the
original plans, drill holes would continue to 300m depth. The nominal spacing
of 160m x 160m of deeper intersections would allow the deeper mineralisation
to be included in the resource estimate.
Mid-season, a low level helicopter borne spectral radiometric and magnetic
survey was undertaken. The survey, with a line spacing of 100m over Kvanefjeld
showed significant anomalies extending to the south-west for at least 1,000m.
Clearly an important development it was decided that drilling should extend into this area to allow
inclusion of this mineralisation into the Resource estimate. It
also pinpointed the Steenstrupfjeld area and others as regional
targets for next year.
Seven holes tested the “Mine Area”, while a total of 27
holes were completed in the “Northern Area” and between
“Northern Area” and “Mine Area”. Eight holes were drilled in
the new “Campsite Area” to the south-west.
Drilling operations were completed on the 4 October and all
equipment dismantled, transported to Narsaq and stored ready
for the 2008 season.
To the credit of all personnel, consultants and service providers
all of our objectives (original and later inclusions) were attained
within a short field season where weather proved trying.
Field reconnaissance in early June recovered all but one of the
70 historical diamond drill-hole collars. Those holes drilled in
1958, all in the “Mine Area”, were uncased open and generally found to be blocked near surface.
Holes drilled between 1962 and 1977 had been secured with steel-casing and capped. Almost all of
these holes were opened and found suitable for down-hole spectral radiometric logging.
It was hoped that valuable data could be obtained about these holes by gaining access to the original
core stored at RISO in Denmark (for lithological logging and assaying of samples) and by spectral
radiometric logging down the now open holes. This logging was to be carried out with a state of art
spectral logging system; then (May - June, 2007) under construction by the Auslog Company; which
is domiciled in Brisbane, Australia.
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Review of Operations by
the Managing Director
Radiometric logging 2007 season
After successful testing and calibration in the Adelaide test-pits Auslog’s newly constructed prototype
spectral logging system arrived on-site in July 2007. Radiometric logging continued with success
through to the 14 October when all equipment was brought to the Narsaq office, checked and
stored ready for the 2008 season.
Apart from a few inaccessible holes, logging was completed to full depth down most holes drilled in
the 2007 season.
Perhaps even more significant was the successful logging of many of the 1960 – 1977 era drill holes.
At 46mm these were significantly smaller in diameter than the 56mm holes of the 2007 campaign.
The specifically designed 33mm probe proved an ideal tool and 21 holes were logged. Logging of
the historical holes has allowed comparison with data collected by the early explorers and inclusion
of this data into the current database.
Core logging
Company geologists logged all core using a standardised set of lithological codes compiled by
personnel familiar with the geology. Knowledge advanced as each hole was logged and was to be
of great value when logging and reinterpreting the historical core commenced. This logging was
interpreted onto sections and finally become the wireframe used in the resource estimate.
Routine colour photography was completed on
all drill-core and is of sufficient quality as to allow
re-interpretation of any core when questions
later arose. These photographs proved to be a
valuable and easily accessible documentation of
the drilling.
The bulk density of mineralisation (and to a
lesser extent country rock) needs to be accurately
known
in three dimensions; especially for
resource tonnage estimation.
Some sections of the multi-element mineralisation
contain significant quantities of villiaumite (NaF).
Since NaF readily dissolves in water and is strongly
corrosive sections of the core are not amenable
to the wet method. To solve this issue an innovative dry method of estimation was devised.
These two methods of determining bulk density are now routinely used at Kvanefjeld.
The dry method involves measuring the dry weight and volume of a piece of core and dividing the
weight in gms by the volume in ccs. A micrometer screw gauge averages the diameter of the core
to 0.1mm and a ruler the average length to 1mm.
The wet method involves measuring the weight of a piece of core in air and in water. Dividing the
weight in air by the difference in weight wet and dry gives the density.
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10000
1000
1000
10
Dy ppm
Nd ppm
SN_FUS ppm
Zn ppm
Nb ppm
Pd ppm
U(Fus) ppm
Zr ppm
K O 95-44
K O 95-47
K O 95-50
K O 95-53
K O 95-56
K O 95-59
K O 95-62
K O 95-65
K O 95-68
K O 95-71
K O 95-74
K O 95-77
K O 95-80
K O 95-83
K O 95-86
K O 95-89
K O 95-92
K O 95-95
K O 95-98
K O 95-101
K O 95-104
K O 95-107
K O 95-110
K O 95-113
K O 95-116
K O 95-119
K O 95-122
K O 95-125
K O 95-128
K O 95-131
K O 95-134
K O 95-137
K O 95-140
K O 95-143
K O 95-146
K O 95-149
K O 95-152
K O 95-155
K O 95-158
K O 95-161
K O 95-164
Uranium as a pathfinder mineral
We have set out above a diagram plotting uranium and various elements encountered at Kvanefjeld
Rare earth values dip with falling uranium values.
against a range of rare earths. This shows how the rare earths coincide with the radioactive element and
supports previous work and our use of radioactive elements as a pathfinder mineral.
Spectral logs
Uranium unlike Thorium does not emit gamma rays but its daughter products do. Among them
Bismuth214 and Lead214 are the strongest emitters showing strong peaks at 352keV, 609keV, 1120keV
and 1764keV. The excellent energy resolutions produces precise data.
All the loggers work by picking up the entire gamma spectrum and then software analyses the spectrum
for the uranium signature as indicated below.
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Review of Operations by
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A number of samples in each hole are measured by both techniques and compared graphically.
Remarkably good correlation was obtained through all holes and those estimates by wet method
alone can be accepted to be of high accuracy.
The mineralised rock at Kvanefjeld is Lujavrite, which has an average density between 2.75 to 2.80.
Naujaite a common associate has a density of 2.4 – 2.5. Country rock is generally a basic extrusive
that varies in composition from a near pure feldspar rock to normal basaltic rocks. This variation is
reflected in the density, which varies from 2.7 to 3.1.
Geographic location of drill data is of paramount importance particularly for the resource estimation.
All drill locations were initially set out by hand held GPS and once sites are permanent (such as drill
hole collars) their location picked up by the Company’s RTK (real time kinematic) DGPS with an
accuracy to a few centimetres.
Chemical Assays
Samples are taken by longitudinally splitting the core with a hand powered blade press and then
transported to Perth for analysis by UltraTrace and Genalysis Laboratories. Standard quality assurance
is undertaken involving internal and external routine testwork. Hellman and Schofield, our resource
consultants audit the quality of the results by reviewing and monitoring all aspects.
Each sample was analysed for Be, Ga, Li, Mo, Pb, Rb, Se, Sn, Ta, Th, U, Y, Zr, Zn, Na, S, Al, Ca, K, Mn,
Mg Se (Fus), Sn (Fus), Ta (Fus), Th (Fus), U (Fus), Y (Fus), Zr (Fus), La, Ce, Pr, Nd, Sm, Eu, Gd, Tb, Dy,
Ho, Er, Tm, Yb, Lu, Hf, Nb. Fe, P, Ti & F.
Resource Calculations
Hellman & Schofield were retained to complete
the resource estimation at the Kvanefjeld project
for the Company. The resources were estimated
by ordinary kriging with the search aligned parallel
to the strike and dip of the mineralisation. The
strike was set at 036 with an undulating to flat dip
mimicking the layered sequence of the intrusive
complex as shown in the diagram to the left.
U3O8 ppm, REO ppm, F ppm, Na ppm, NaF ppm,
Sn ppm, Th ppm, Ti ppm, Zr ppm, Li ppm, Ta ppm,
Zn ppm were estimated using a block size of 35m
by 70m by 1mRL
The initial resource estimate was completed in May 2008 and contained 338Mt @ 0.03% U3O8
(@150ppm cut-off), inclusive of 90Mt @ 1.09% REO, and 79Mt @ 1.69% NaF. The resource model
was under sampled awaiting the remainder of the assays and this is why the tonnages for the REO
and NaF is below the uranium tonnage.
The metal content of the orebody increased from 50,700 tonnes of U3O8, to 104,000 tonnes of
U3O8, and 988,000 tonnes of REO, and 1.3Mt of NaF.
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Above: Packing core boxes.
Left: Field exposure of
naujaite (white) and
lujavrite (black) at one of
the Company’s regional
drill targets.
Below: Core box showing
naujaite (top four rows)
and lujavrite (bottom two
rows). Core from the 2007
- 2008 seasons is held in
approximately 6,000 core
boxes.
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Review of Operations by
the Managing Director
Airborne Radiometry
Airborne radiometry were completed over the Kvanefjeld area; but due to inclement weather was
not extended to the southern part of the Project area. The uranium channels, illustrated by red
and yellow colouring, showed significant anomalies over the known Kvanefjeld and Steenstrupfjeld
mineralisation and to the south of Lake Taseq. At Kvanefjeld the area of the anomaly extended
south and westwards past the campsite. Subsequent drilling proved that significant mineralisation
occurred beneath these anomalous areas.
The results from the survey provided the Company with several walk up drill targets for the 2008
field season.
The graphics on this page show the regional air radiometrics to the left and above a panoramic
photograph of a portion of the area surveyed. The black scree is lujavrite and is the material drilled
in one of the regional drill holes (S001).
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Above: Black rock
at the front of the
panorama photo is
lujavrite.
Left: Regional
radiometrics on DTM
showing lujavrite as
hot spot.
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Review of Operations by
the Managing Director
Environmental Studies
Matters pertaining to the environment form an important part of any mineral exploration or
exploitation program. Knowledge of the “Environmental Baseline” i.e. definition of the current
environmental situation is a necessary prerequisite. Comparison to the Environmental Baseline allows
estimation of any changes due to exploration, exploitation or for that matter any third party effects
(such as climate change). These studies are studies of change with time and necessarily require
collection of baseline information over a number of years.
The Company obtained the services of Orbicon, a Greenland based environmental consultant and
during a compressed field season they were able to collect sufficient samples from surrounding
fjords, streams and hills to form a detailed database of samples. Many samples are stored until later
when they are tested and investigated to give a total knowledge without incurring the costs of a full
investigation before it is certain that the operation may proceed to exploitation.
The Company benefits from access to earlier environmental studies completed by previous explorers
and have been advised that this could hasten the approvals process.
This baseline study will continue for a number of years.
Matters pertaining to the
environment form an important
part of any mineral exploration
or exploitation program.
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Review of Operations by
the Managing Director
The 2008 Field Season
The 2008 Field season began early in March with the processing of several thousand metres of core
from the historical drilling at Kvanefjeld. This core was shipped from Denmark to the Company
facilities in Narsaq and processed in accordance with the standard methods used on core from the
2007 drilling program.
This early start allowed the Company to prepare its personnel and equipment for what was to be an
aggressive exploration program; which included an intensive drilling campaign.
Camp mobilisation began in May with the cold weather causing some minor problems. The re-sited
camp, now visible from town and within mobile telephone range was more user friendly for the
exploration staff and equipped with all modern facilities.
The drill rig already in Greenland from last season was prepared upon arrival of the drillers from
Canada. A second drill arrived in Greenland not long after and by the 22nd of May continuous
drilling operations were underway with double shifting on both rigs.
Drilling commenced south of the camp area, proximal to the camp such that teething problems and
weather interruptions could be kept to minimum during the early colder part of the season.
Drilling resources were then concentrated on the more challenging eastern and northern
flanks of Kvanefjeld; taking advantage of the best available weather conditions and
before water resources began to dry out.
Drilling then moved into the main Kvanefjeld area carrying out:
a.
infill drilling, to better define mineralisation,
b.
extending drilling to depth in some areas; where holes had stopped prematurely,
c.
check drilling, such as twinning and close spaced drilling to show continuity of
mineralisation over short intervals,
d. deep stratigraphic holes to define the rock types and structure beneath the known
mineralisation.
In mid-season one of the rigs was sent out to the regional areas; firstly the nearby
Steenstrupfjeld Prospect then to N2N, S1 and finally the Lake Taseq area.
A total of 76 holes, all vertical, were completed for an advance of 19,334 metres. The deepest holes
were K174 at Kvanefjeld which reached 500m, S001 which reached 389m and V001 at Lake Taseq
which attained 500 metres.
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Review of Operations by
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Regional Exploration Program
The regional exploration program was developed in Perth; based upon results from the 2007
exploration program, the 2007 aerial magnetic and radiometric survey and historical mapping. Six
coherent prospects were targeted for ground based surveys; the targets to be further refined based
upon these results. General prospecting was to be completed as time permitted in areas displaying a
similar geological setting to Kvanefjeld.
Results from the regional exploration far exceeded expectations. Wide zones of mineralisation of
long strike extent were defined at surface and thick mineralised intersections at all prospects drilled.
All warrant extensive drilling in 2009 sufficient to allow a JORC resource estimate.
Ground based GPS controlled radiometric traversing was completed on all 6 prospects. Significant
radiometric anomalies were found at three of the prospects and in-filled with closer spaced lines.
All had anomalies with strike lengths of greater that 500m. Surface geological mapping was
commissioned on two targets. Three of the targets were drilled when a rig was released from
Kvanefjeld. The third target to be drilled had the best results but due to its precarious location only
one scout hole was drilled. The other prospects showed anomalism but were prioritised into next
year’s drilling campaign.
Results from the Regional
Exploration far exceeded
expectations. All
prospects drilled warrant
extensive drilling in 2009
sufficient to allow a JORC
Resource Estimate.
The first prospect to be tested was the historically documented prospect
Steenstrupfjeld, where in 1977 two inclined holes and two vertical holes
(K044, K051-3) were drilled. This prospect was a radiometric anomaly
only partially covered by the 2007 low level aerial helicopter survey. This
provided an opportunity to confirm the aerial survey by ground survey and
seven ground radiometric traverses were carried out.
The anomaly was defined over a strike of 650m and width of 250m and
coincided with a ridge top parallel to the adjacent near vertical intrusive
contact.
The ridge top was interpreted to comprise the more highly mineralised area and had not been
tested by previous explorers. Their 4 holes had drilled beneath the high grade ridge top thus only
intersecting lower grade units.
The Company sited four vertical holes upon the ridge top. As expected the top 50m of these four
holes (K152-4 & K156) were well mineralised; the grade moderating at depth. The holes drilled had
mineralised lujavrite as their main constituent.
During drilling three of the historical holes in the prospect were located in good standing and were
probed for inclusion in the resource estimate.
The second target to be tested regionally was Prospect N2N; which was located by Company
geologists when a planned traverse missed an expected lujavrite horizon. Field checking to the
north of the planned traverse found outcropping black lujavrite over 700m and in places it was
more than 300m wide. Eleven traverses were sited on this prospect; with a line spacing down to
approximately 50m.
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Review of Operations by
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Mapping of this prospect suggested a massive block of basalt wall had dropped back into the still
fluid intrusive forcing mineralised lujavrite upwards through naujaite and as such had a an irregular
base brecciated with naujaite. Five drill holes (N001-5) were sited into this target and again all holes
intersected mineralised lujavrite, N003 for the majority of its 215m length. The drilling conditions
were difficult due to the nature of the geology (generally steeply dipping rocks with many micro-
breccia shear zones and open joints/alteration zones; in part relating to a deep water table). Only one
hole reached target depth.
Kvanefjeld deposit and Steenstrupfjeld and N2N Prospects are all located adjacent to the intrusive
enclosing meta-basalt contact and near the roof of the intrusive. Regional target S1 was the first to
be located well within and away from the contact zone of the intrusive.
Regional drill hole (S001) was drilled on a small aerial radiometric anomaly and near coincident very
high ground based radiometric anomaly. Literature research found mention of Steenstrupine rich
lujavrite bands nearby; interpreted to be a target at the top of the hole.
S001 hole was drilled to 389m intersecting broad zones of well mineralised lujavrite to full depth.
Intervening rock was naujaite. This was the first hole to intersect good grade mineralisation away
from the intrusive contact and is the longest sequence of multi-element mineralisation intersected
to date.
Surface mapping by Dr John Fergusson had interpreted lujavrite as a flat lying
unit beneath outcropping naujaite throughout the main, undeformed areas of
he intrusive. Hole V001 was drilled on the shore of Lake Taseq to 500m.
Mineralised lujavrite was intersected from approx 300m to end of the hole. The
hole confirms that mineralised lujavrite underlies most of the naujaite zones
of the intrusive. Radiometric logging to approx 315m (hole blocked at this
depth) tested only the top few metres of the lujavrite but returned U/Th values
indicative of grades similar to those intersected at Kvanefjeld and the other
drilled prospects. There is little doubt that the entire area underlain by
the intrusive on the company’s licence is prospective for multi-element
mineralisation. Exploration next year will be aiming at locating those areas where
lujavrite is present outcropping or at shallow depth.
Surface Geological Mapping
Was carried out at Kvanefjeld, Steenstrupfjeld and N2N Prospects as time allowed and utilised the
services of several geologists from Curtin University WA and one from Calgary, Canada.
Kvanefjeld had been mapped at a scale of 1:5,000 in 1971. The mapping was of good quality but
needed checking in the field and then expanded to cover areas such as the contact zone; which had
not been mapped. In particular the season was planned to refine the understanding of the geological
control of the mineralisation and locate the contact positions more accurately; thence adding to
sectional interpretation. This is important for both geological and elevation control to give sufficient
confidence to raise the JORC resource estimate category.
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Regional drill hole (S001) was the
first hole to intersect good grade
mineralisation away from the
intrusive contact and is the
longest sequence of multi-element
mineralisation intersected to date.
Steenstrupfjeld two km north-east along the intrusive contact from Kvanefjeld was mapped for the
first time. Mineralised lujavrite outcropped along a 1km ridge separated from the contact by a steeply
dipping sheared zone containing varied and mixed rock types.
Prospect N2N adjacent and parallel to the Intrusive eastern contact is located 7km east of Kvanefjeld.
Mapping showed a large slab of country rock had sheared off and dropped into the still plastic intrusive.
Lujavrite had intruded upwards through the less dense naujaite forming a now outcropping complexly
dipping body surrounded by naujaite. Drilling & mapping confirmed that mineralised lujavrite extended
along strike for over 1,000m and to depths of at least 180m below surface.
Review of Operations by
the Managing Director
Resource Estimate
An updated resource was completed in August 2008 and contained 334Mt @ 0.03% U3O8, inclusive
of 215Mt @ 1.21% REO, and 201 million tonnes @ 1.11% NaF. The REO component of the model is
under sampled compared against the geophysical results available for the uranium grade.
The metal content of the orebody changed from 104,000 tonnes of U3O8, and 988,000 tonnes of
REO, and 1.3Mt of NaF, to 100,960 tonnes of U3O8, and 2.59 million tonnes of REO, and 2.21 million
tonnes of NaF.
Processing of Core
The processing of core at the Company facilities in Narsaq was to be similar to that conducted during
the 2007 field season but with some specific refinements and streamlining. It was recognised early
that additional personnel would be required to be dedicated to the task of processing the core to a
high standard such that they were not interrupted by other tasks.
The core after being slung to the office was laid out on tables where it was appraised for errors and all
abutting pieces joined where possible. Following this the core was measured, based on drillers’ runs
and metre marks were drawn onto the core with wax pencil. The boxes were then labelled with hole
number, box number, and the metres from and to present in the box.
Pieces to be measured for specific gravity work were marked as were fractures
in the core from natural breaks (ie by geological processes and not by drillers
breaking the core). The specific gravities were then measured by either dry or wet
method based on lithology and depth.
The core was geologically logged for lithology and structural defects of note.
The geologist would then mark the metres to be sampled and where 50mm long
petrological samples were to be taken from the core.
Geo-mechanical samples
RQD (rock quality descriptors) are measured from each run of core based on the
cumulative length of pieces of core greater than 10cm long not including breaks
Geological logging of core samples.
caused by the drilling process. The results generated by this process become
important when mine design begins and stability of wall angles has to be predicted. The lack of
overburden and nature of the intrusive rocks bodes well for stable walls.
Where continuous lengths of core are to be split (generally in mineralisation) core sections of
approximately 200mm are left every 10 to 20m. These samples are available for rock strength and
other geo-mechanical testing.
Each core box is then photographed in order both while dry and then once sprayed with water. These
photos have proved invaluable as a record of the drill holes and also to correlated geology and as a
check on the logging.
The core which is to be sampled was then longitudinally split using a manual splitter and replaced in
the tray. Samples are then taken from selected whole metre intervals and placed in calico bags. Several
calico bags are placed in larger plastic bags; these are loaded into barrels, which are in-turn loaded
into a container for transport to Perth.
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Top: Splitting cores using manual splitters. Below: Loading core for transport.
Review of Operations by
the Managing Director
The samples are prepared robotically at Genalysis and are then digested in a mixture of four acids to
simulate complete digestion. The samples were tested for the following elements: Be, Ga, Li, Mo,
Pb, Rb, Se, Sn, Ta, Th, U, Y, Zr, La, Ce, Pr, Nd, Sm, Eu, Gd, Tb, Dy, Ho, Er, Tm, Yb, Lu, Hf, Nb are
determined by Inductively Coupled Plasma (ICP) Mass Spectrometry. Zn, Na, S, Al, Ca, K, Mn, Mg Fe,
P, Ti are determined by Inductively Coupled Plasma (ICP) Optical Emission Spectrometry. F has been
determined using specific ion electrode.
The Company uses both Genalysis and UltraTrace to complete the required assays. Part of the
assaying process is to include duplicates, blanks and standards into assay jobs and also to check labs
by submitting one sample in ten to the other lab.
The cased 70 historical holes offered an opportunity for gathering further information. Some 35
of these holes were drilled in the Northern Area and had steel standpipes and bolted on steel caps.
Removal of these caps gave access for down-hole logging. The remaining holes, of a much earlier
vintage, were drilled in the Mine Area and were uncased (without a stand pipe or cap). A wooden
plug had originally sealed the hole but often had been removed or weathered away. All holes are
now equipped with a standpipe and steel cap.
Many of these holes were partially filled with cuttings and debris which has
accumulated over the years.
A method was devised to:
a. remove this debris to gain access to the full depth of the hole,
b. wash the top air filled portion of the hole down to the water level,
c. replace the column of water with fresh lake water.
Water is initially pumped into the collar of the hole in order to displace any radon
gas and wash any radioactive daughter products from the hole walls. Then a hose
is inserted down the hole by hand as far as possible. Water from the nearest lake is
pumped down the hole washing debris etc out of the hole or into the adjacent wall
rocks. The hose is then pushed further down the hole and the process repeated until
the hole is flushed clean to the bottom and the water column replaced. With radon
and daughter products removed the holes can then be accurately logged by the spectral probe. This
is followed by the deviation probe which measures the course of the hole.
Holes are currently being renovated to a maximum of 200m. The hose and fittings are then transported
by helicopter to the next site; an imposing scene with over 250m of hose and sling-line hanging far
beneath the helicopter.
To further the knowledge of the mineralisation at a close spacing the Company has drilled both
duplicate holes and also a series of holes on a much closer spacing that in other places in the deposit.
This information will give an indication of the internal variability of the mineralisation and vital to
refine that statistics and continuity of the mineralisation.
To test the depth extent of the mineralisation at Kvanefjeld a drill hole was placed in a low stratigraphic
position and drilled to 500m. This drill hole intersected lujavrite below where it has been previously
encountered and it ended in mineralised lujavrite.
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Far left: Pumping lake water
into the collar of the drill
holes.
Left: Capped 2007 drill hole.
Below: Core handling at the
Narsaq office.
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Review of Operations by
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Environmental Studies
The environmental baseline studies were continued this season with the consultants arriving in
August for one week of intensive collection of data and samples. All objectives were completed. The
company is in a good standing with its environmental commitments.
Other Studies
Mineralogical Studies
The Kvanefjeld deposit occurs within the Ilimaussaq Intrusive; which comprises a suite of minerals that
are unusual, rare and in some cases unique. The mineralogy and petrology is therefore uncommon
and in addition has been rarely worked on in the past decades. The Company has been most fortunate
in being able to secure the services of Dr. Roger Townend, one of the few mineralogist/petrologists
with significant experience on Ilimaussaq.
He has been appointed as the Company’s Consultant with objectives of:
1. Identifying the many minerals that are present and training company geologists to recognise
them by the naked eye, under the hand lens or binocular microscope and in core, hand specimen
or outcrop. This allows accurate lithological logging of drill core and surface rocks leading to
compilation of good quality geological drill logs, cross sections and geological maps.
2. Determining the mineral composition of the rock types that make up the
intrusive or comprise the older country rock. This is especially important
at Kvanefjeld as some rock types occur in different spatial or structural
positions and are accordingly ascribed a different rock name.
3. Determining any different phases (or types) of each rock type. Particular
attention being paid to the mineralised rock type (Lujavrite). Lujavrite is
the rock type that contains the multi-elements of economic interest. It is
a rock that varies widely in appearance and mineral composition. It has
been formed at differing periods; varies widely in colour, grain size, mineral
species and ratio of minerals present.
4. Investigating samples submitted for metallurgical investigation. Identifying the different
economic minerals & elements present, their relationship to surrounding minerals & importantly
where they “present to” during metallurgical testing.
Rock types outside of the intrusive have now been described in hand specimen and microscopically
such that training of new personnel is now routine and has led to a much clearer understanding of
the geology at Kvanefjeld and regionally.
As operations have expanded away from Kvanefjeld many new rock types (especially near the
intrusive contact) have been encountered and described.
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Steenstrupine in lujavrite from hole 089 from 210m depth
Lujavrite with sphalerite (zinc sulphide, villaumite NaF, and sodalite from
hole K073 from 145m depth
Vitusite from drill-hole K075 at depth 77m a Rare Earth Phospho-silicate
with no uranium.
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Review of Operations by
the Managing Director
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The mineragraphy work is helping in a number of areas and is still at an early stage of understanding.
Lujavrite the main mineralised rock type has been especially scrutinised. Examples of success to date
are.
a. NaF (villaumite) is now clearly defined as occurring only below the water table.
b. It is well known that U content of lujavrite decreases with depth, while Zr increases and Th
decreases at a more rapid rate than U. The Th:U ratio changes from 2:1 near surface to as low
as 1:2 below 150m. This can now be equated to changes in the mineralogy. Steenstrupine (rich
in U, Th REE) is dominant near surface but decrease with depth while a new unknown Zr, U rich
silicate mineral takes over.
c. Several new minerals have been identified. Cerite and vitusite are REE rich minerals which are
important economical minerals.
d. A list of minerals identified at Kvanefjeld is set out on page 37.
This improved knowledge has resulted in a much better understanding of the complexity of the
metallurgical response of the lujavrite mineralisation.
A viable whole ore flow sheet was developed for Kvanefjeld ore in early the 1980’s.
Extensive and intensive metallurgical studies have been undertaken on Kvanefjeld
ores by the Danish Ministry of Energy at their Riso National Laboratory; particularly
in the period from 1978-1983. Uranium was the only product sought. A number of
other elements were considered to be of interest; amongst which were tin, niobium,
lithium, beryllium, zirconium, yttrium and REE. No resource estimates or metallurgical
investigations were carried out for these elements.
The dominant rock is lujavrite (a nepheline syenite) containing the dominant multi-
element bearing mineral Steenstrupine (a phospho-silicate).
Sealed entrance to the 1980 tunnel.
Beneficiation of the lujavrite was investigated; testing a number of methods including
flotation, gravity & magnetic separation. Results were generally poor, variable and
inconclusive and further metallurgical investigations used “direct ore” with no pre-concentration.
Initial uranium extraction trials focussed on acid leaching; using a gaseous sulphate roasting process.
This process gave poor recoveries generally less than 50%; even at high temperature and pressures.
Reports suggest that an unreactive rind formed around the uranium bearing steenstrupine, inhibiting
further attack. In effect the sodium rich silicate minerals are broken down by the acid more easily
than the steenstrupine consuming an inordinate amount of the acid.
Acid leaching was not considered further and attention moved to alkali leaching methods; in
particular carbonate pressure leaching (CPL). CPL was developed at Riso; culminating in construction
of a pilot plant.
Representative ore samples for uranium extraction trials were first obtained from a 20m adit driven
in the mine area. However the larger sample required for the pilot plant resulted in driving of a 960m
long tunnel (in 1980) through the deposit. The tunnel was located half way up the cliff face at an
elevation of 480m above sea level and at an average depth of 150m below surface.
36
It passed through the full width of the Mine & Northern Areas. A bulk sample of round 4,000 tonne
was extracted and transported by ship to Denmark.
The pilot plant comprised a pipe reactor 2,550m in length and heat exchange of +4,000m length. A
chemical-mechanical process formed the core of the method. The Steenstrupine was mechanically
disintegrated rather than dissolved by the sodium carbonate/bi-carbonate reagents. Extraction rates
were affected by chemical factors (reaction temperature, carbonate concentration, oxygen pressure)
and mechanical factors (comminution grain size, liquid/solid ratio and turbulence.
The trial results confirmed Kvanefjeld ore can be processed on a commercial scale by then
available technology and equipment at a recovery of 80% of the uranium.
The fall in the price of uranium in the 1980’s heralded a long period of inactivity at Kvanefjeld.
Not until the Company’s arrival in 2007 did an interest in Kvanefjeld reappear. Such a period of
inactivity has led to a dearth of specialists with a comprehensive knowledge of Kvanefjeld metallurgy.
Even metallurgists with a experience in uranium, let alone REE were few and far between.
A search by the Company led to the appointment of Peter Bartsch an experienced metallurgist
who has a comprehensive knowledge and experience with uranium deposits such as Ranger, Lake
Maitland/Centipede, and Honeymoon, rare earth deposits such as Mt Weld and of multi-element
REE/Uranium bearing deposits in particular Olympic Dam.
He was appointed metallurgical consultant to the Company in late 2007 with the aim of identifying
a process route to produce REE, uranium and sodium fluoride. Other minor products such as tin,
zinc, lithium, were to be investigated as appropriate. He formulated and has supervised the current
studies; searching first for and refining a beneficiation route for the Kvanefjeld ore and then a
process route for metal extraction.
Current Metallurgical Investigations
The objective of the 2007/8 metallurgical investigation is to demonstrate a viable flow sheet
sufficiently robust to form the basis of a Scoping/Pre-feasibility Study.
The workable Flow Sheet demonstrated in 1983 was aimed only at uranium in addition the intervening
25 years has seen the advent of new technologies, reagents and experience particularly in the area
of REE’s it therefore was agreed to start from scratch and look for better alternatives, i.e. the full
spectrum of new opportunities were to be come part of the investigation.
The basic generic steps which make up a flow sheet are:
1. Beneficiation of the mineralised rock to form a concentrate.
2. Extraction of the minerals/elements of economic interest from the concentrate. In our case
bringing them into solution.
3. Recovery of the economic elements/minerals from solution in a form that is saleable or suitable
for a refining stage.
Efforts were first directed to obtaining and reviewing all results from historical metallurgical
investigations.
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Review of Operations by
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Beneficiation was of immediate interest as known technologies had been significantly improved and
new techniques introduced. Beneficiation would form the foundation element of the new round of
metallurgical investigations. Clearly removal of any gangue minerals would give a concentrate, which
would use more economical, smaller sized equipment and consume much less reagents.
Beneficiation attempts commence by identifying the presence of any gangue minerals. Lujavrite,
the rock which carries the Kvanefjeld multi-element bearing minerals, comprises a number of non-
mineralised gangue minerals. These include albite feldspar, potassium feldspar, arfvedsonite, aegerine
& naujakasite and are collectively termed gangue minerals.
The next step in beneficiation is to identify a way to remove a significant proportion of one or more
of the gangue minerals; retaining the majority of the economically interesting minerals.
Historically steenstrupine was considered to be the only major mineral of economic interest. Within
a short time it became obvious that other minerals carried uranium and REE and were present
in significant quantities. Cerite, vitusite and an unnamed previously unknown mineral have been
identified. A number of minor minerals have also been located.
Lujavrite does have pre-requisites for effective beneficiation. It is fine to coarse grained with a poor
to little foliation. The mineral species do have differing densities, colour, magnetic susceptibility etc
and thereby offer a number of beneficiating avenues that warrant investigation.
T1, the first series of tests, was aimed at investigating the simplest method of separation, gravity.
A bulk sample was formed by compositing a number of metre intervals from K092. Results were
disappointing agreeing with results of beneficiation testwork of the 1970s-80’s. There was a
concentration of Arfvedsonite (Black & iron rich) into the denser fractions and the feldspars tended
to remain behind. However REE’s and U were spread throughout. Results of testwork beneficiation
by magnetic separation gave similar results.
It was recognised that a majority of the uranium & REE’s were hosted by phospho-silicates offering
the potential for successfully flotation by phosphate collectors. Flotation became the primary focus
of T2 using a bulk sample by compositing individual 1m samples from K095. Flotation testwork
successfully collected the majority of the REE’s, and around 75% of the uranium.
This successful beneficiation is considered an important breakthrough for Kvanefjeld ore.
The concentrate also preferentially collected arfvedsonite.
Investigations to improve the uranium recovery identified a previously unknown uranium bearing,
colourless mineral carrying no phosphorous and little REE’s. Promising testwork continues.
T3 testwork was aimed at refining the method of beneficiation by flotation and then producing
sufficient concentrate as to allow Stage two of the Flow Sheet to go ahead. I.e. treating the concentrate
to extract the sought after elements into solution. This time two composite samples were produced.
One low in NaF the other with high NaF content. Individual samples from 5 holes scattered around
the deposit were composited. As in previous tests each of the samples were washed; removing all
of the NaF; the only Fluorine being present tied up in the silicate lattice (and therefore insoluble in
water). Recoveries into the flotation product were the same as for T2. The metallurgical response is
pH dependant in particular affecting the NaF rich mineralisation.
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Further refinement of the beneficiation method is continuing.
T1 & T2 testwork was carried out by AMDEL (Adelaide) and T3 by SGS-Lakefield (Perth). Both
organisations carried out their work to very high standards as is now expected of any Australian
based organisation operating in the mineral industry.
In October the company’s metallurgical expertise has been further strengthened with the appointment
of Project Manager Shaun Bunn; a qualified metallurgist.
Metallurgical investigations will continue as a high priority through 2009 and steady progress as
experienced in 2008 is anticipated.
Kvanefjeld minerals, their chemical composition and some physical characteristics
Density
(g/cm3)
Colour
Mineral and Chemical Formula
2.2
2.3
2.6
2.6
2.6
2.6
3.0
3.2
3.0
3.6
4.9
5.0
5.0
4.0
3.5
3.4
2.8
light
light
light
light
light
dark
dark
dark
dark
light
light
dark
dark
dark
dark
dark
water
soluble
Analcime NaAlSi 2O6.H2O
Sodalite Na 4Si 3Al3O12Cl
Albite NaAlSi 3O8
Nepheline (Na,K)AlSiO4
Microcline KAlSi 3O8
Litvinskite Na 2(Na,Mn)Zr(Si 6O12(OH,O) 6)
Eudialyte Na 15Ca 6Fe 3Zr3Si 26O73 (O,OH,H 2O) 3 (Cl,OH) 2
Neptunite KNa 2Li(Fe,Mg,Mn) 2Ti2Si 8O24
Steenstrupine Na 14(Ce,Th,U) 6Mn2Fe 2Zr(PO 4)7Si 12O36(OH) 2.3H 2O
Vitusite-(Ce) Na 3(Ce,La,Nd)(PO 4)2
Cerite-(La) (La,Ce,Ca) 9(Mg,Fe +++)(SiO 4)6[SiO 3(OH)](OH) 3
Monazite-(Ce) (Ce,La,Nd,Th)PO 4
Thorite (Th,U)SiO 4
Sphalerite ZnS
Aegirine NaFeSi 2O6
Arfvedsonite Na 3(Fe +2,Mg) 4Fe +2Si 8O22(OH, F) 2
Villiaumite NaF
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Review of Operations by
the Managing Director
Scoping/Project Feasibility Study
A Pre-feasibility study was carried out 1981-83; the results of which were published in a comprehensive
series of reports in 1983. Due to the low price of uranium the project did not proceed and all
operations ceased.
The company has now collected sufficient data such that a scoping study can commence. This is an
important development and necessarily requires obtaining the services of a well respected project
manager. It is pleasing to report that Mr Shaun Bunn will help put together and head up the scoping
study team.
Groundwater
Ground water levels vary dramatically through Kvanefjeld reflecting in part the steep variable
topography. However it is common to find the water level in drill holes to be much deeper than the
water level of a lake which may be only a few meters away; while just a short distance away the
opposite is true.
An initial water level survey has now been completed with all accessible holes reaching the water
table having been measured. It is intended to carry out further surveys at the beginning (May) middle
(July) and end (September) next year.
The Kvanefjeld area has been subject to intensive glaciations, which have
carved out deep pockets now lakes filled with water from annual rain and
snow. The underlying rocks carry widely spaced fractures and rare alteration
zones; which means that not all the groundwater is interconnected; hence
explaining the presence of perched water tables.
The water table varies from as little as 5m below surface to as deep as 120m.
The main visual change is the presence of small holes through the core above
the water table. Here villaumite has been dissolved by water percolating
through the rock mass.
Porosity
Porosity of the rocks at Kvanefjeld has been investigated by measuring the weight of water saturated
core and the weight of oven dries core when all of the pore water has been removed. Results show
that below the water table the porosity of the rocks are low being at about 0.2-4%.
Only above the water table do we have measureable porosity. Lujavrite is the only rock with significant
porosity and that relates directly to the original villaumite content. The cavities left by the villaumite
equate to the original villaumite content. Porosities are still low and rarely attain a few percent.
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The camp, the
lake and weather
station.
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Review of Operations by
the Managing Director
Occupational Health and Safety
The occupational health and safety of our employees and contractors employees is of great
importance to us.
Our exploration planning from the start has taken into account two fundamental issues relevant to
exploration at Kvanefjeld. These are the need to measure the effects of exposure to the low level
radiation emitted by the radioactive elements of the resource and also to ensure we control exposure
to the sodium fluoride known from the beginning to be a component of the resource.
All safety plans have been submitted and approved of by The Bureau of Minerals and Petroleum
in Greenland. In both seasons we were visited by personnel from the Bureau who examined safety
issues among other matters.
Radiation monitoring
We have had in place for both seasons a comprehensive radiation management plan prepared and
overseen by experts from Australia. We assess exposure of all staff who regularly visit the exploration
camp and also have taken steps to ensure that the camp is located in a radioactive low.
Sodium fluoride
Sodium fluoride can be poisonous in concentrated amounts and all our core recovery, handling and
core splitting work has been done to industry standard protocols.
Exploration footprint
Our exploration footprint results in a very small surface footprint. For example all drill movements are
helicopter assisted so we have done no road works. Clean up of all drill and exploration sites is a part
of the Company’s normal operating procedures.
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Above: Hank with
the tunnel miners.
Community life
around Narsaq.
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Rare Earths at Kvanefjeld
Rare Earths
Introduction
The purpose of this section is to identify the rare earths, explain why our deposit of rare earths is
different (chemically and geologically) to many other rare earth deposits, then to explain the uses and
major products for rare earths.
We will also examine the economic impact of the rare earths on the multi element complex at
Kvanefjeld.
What are the rare earths
By strict definition the thirty rare earth elements are composed of the lanthanide and actinide series.
One element of the lanthanide series and most of the elements in the actinide series are called “trans-
uranium”, which means synthetic or man-made in this context. All of the rare earth metals are found
in group 3 of the periodic table.
1
IA
New
Original
Alkali metals
Actinide series
C
Solid
Alkaline earth metals
Poor metals
Transition Metals
Nonmetals
Br
Liquid
H
Gas
Lanthanide series
Noble gases
Tc
Synthetic
3
IIIB
4
IVB
5
VB
6
VIB
7
VIIB
8
_____
9
VIIIB
10
IIA
11
IB
12
IIB
13
IIIA
14
IVA
4
B
Boron
10.811
13
Al
Aluminium
26.981538
(cid:19)
(cid:20)
(cid:19)
(cid:25)
(cid:20)
6
C
Carbon
12.0107
14
Si
Silicon
28.0855
2
IIA
4
Be
Beryllium
9.012182
12
Mg
Magnesium
24.3050
(cid:19)
(cid:19)
(cid:19)
(cid:25)
(cid:19)
20
Ca
Calcium
40.078
38
Sr
Strontium
87.62
56
Ba
Barium
137.327
88
Ra
Radium
(226)
(cid:19)
(cid:25)
(cid:25)
(cid:19)
2
8
18
8
2
2
8
18
8
2
2
8
18
32
18
8
2
(cid:19)
(cid:25)
(cid:26)
(cid:19)
2
8
18
9
2
21
Sc
Scandium
44.955910
39
Y
Yitrium
88.90585
57 to 71
89 to 103
22
Ti
Titanium
47.867
40
Zr
Zirconium
91.224
72
Hf
Hafnium
178.49
104
Rf
Rutherfordium
(261)
2
8
10
2
2
8
18
10
2
2
8
18
32
10
2
2
8
18
32
32
10
2
23
V
Vanadium
50.9415
41
Nb
Niobium
92.90638
73
Ta
Tantaium
180.9479
105
Db
Dubnium
(262)
2
8
11
2
2
8
18
12
1
2
8
18
32
11
2
2
8
18
32
32
11
2
2
8
13
2
2
8
18
13
2
24
Cr
2
8
13
1
25
Mn
Choromium
51.9961
Manganese
54.938049
2
8
14
2
26
Fe
Iron
55.8457
42
Mo
2
8
18
13
1
Molybdanum
95.94
74
W
Tungsten
183.84
106
Sg
Seaborgium
(266)
2
8
18
32
12
2
2
8
18
32
32
12
2
43
Tc
44
Ru
2
8
18
15
1
Technetium
(98)
Ruthenium
101.07
75
Re
Rhenium
186.207
107
Bh
Bohrium
(264)
2
8
18
32
13
2
2
8
18
32
32
13
2
76
Os
Osmium
190.23
108
Hs
Hassium
(269)
2
8
18
32
14
2
2
8
18
32
32
14
2
27
Co
Cobalt
58.933200
45
Rh
Rhodium
102.90550
77
Ir
Iridium
192.217
109
Mt
Meitnerium
(268)
2
8
15
2
2
8
18
16
1
2
8
18
32
15
2
2
8
18
32
32
15
2
28
Ni
Nickel
58.6934
46
Pd
Palladium
106.42
78
Pt
Platinum
195.078
110
Ds
Darmstadtium
(271)
2
8
16
2
2
8
18
18
0
2
8
18
32
17
1
2
8
18
32
32
17
1
29
Cu
Copper
63.546
47
Ag
Silver
107.8682
79
Au
Gold
196.96655
111
Rg
Roentgenium
(272)
2
8
18
1
2
8
18
18
1
2
8
18
32
18
1
2
8
18
32
32
18
1
30
Zn
Zinc
65.409
48
Cd
Cadmium
112.411
80
Hg
Mercury
200.59
112
Uub
Ununbium
(285)
2
8
18
2
2
8
18
18
2
2
8
18
32
18
2
2
8
18
32
32
18
2
31
Ga
Gallium
69.723
49
In
Indium
114.818
81
Ti
Thalilium
204.3833
2
8
18
3
2
8
18
18
3
2
8
18
32
18
3
32
Ge
Germanium
72.64
50
Sn
Tin
118.710
82
Pb
Lead
207.2
2
8
18
18
4
2
8
18
32
18
4
(cid:19)
(cid:21)
(cid:19)
(cid:25)
(cid:21)
2
8
18
4
15
VA
7
N
Nitrogen
14.00674
15
P
(cid:19)
(cid:22)
(cid:19)
(cid:25)
(cid:22)
Phosphorous
30.973761
33
As
Arsenic
74.92160
51
Sb
Antimony
121.760
83
Bi
Bismuth
208.98038
2
8
18
5
2
8
18
18
5
2
8
18
32
18
5
16
VIA
8
O
Oxygen
15.9994
16
S
Sulphur
32.066
34
Se
Selenium
78.96
52
Te
Tellurium
127.60
84
Po
Polonium
(209)
116
Uuh
(cid:19)
(cid:23)
(cid:19)
(cid:25)
(cid:23)
2
8
18
6
2
8
18
18
6
2
8
18
32
18
6
(cid:19)
(cid:25)
(cid:25)
(cid:18)
1
2
3
4
5
6
7
(cid:18)
(cid:19)
(cid:18)
(cid:19)
(cid:25)
(cid:18)
(cid:19)
(cid:25)
(cid:25)
(cid:18)
1
H
Hydrogen
3
Li
Lithium
6.941
11
Na
Sodium
22.989770
19
K
Potassium
39.0983
37
Rb
Rubidium
85.4678
55
Cs
Cesium
132.90545
87
Fr
Francium
(223)
2
8
18
8
1
2
8
18
18
8
1
2
8
18
32
18
8
1
18
VIIIA
2
He
Helium
a2
10
Ne
Neon
20.1797
18
Ar
Argon
39.948
36
Kr
Kryton
83.798
54
Xe
Xenon
131.293
86
Rn
Radon
(222)
17
IIB
(cid:19)
(cid:24)
9
F
Fluorine
18.9984032
17
Cl
Chlorine
35.453
35
Br
Bromine
79.904
53
I
Iodine
126.90447
85
At
Astatine
(210)
(cid:19)
(cid:25)
(cid:24)
2
8
18
7
2
8
18
18
7
2
8
18
32
18
7
(cid:19)
(cid:44)
(cid:19)
(cid:25)
(cid:44)
(cid:45)
(cid:19)
(cid:25)
(cid:25)
(cid:44)
(cid:45)
(cid:46)
2
8
18
8
2
8
18
18
8
2
8
18
32
18
8
(cid:44)
(cid:45)
(cid:46)
(cid:47)
(cid:44)
(cid:45)
(cid:46)
(cid:47)
(cid:48)
(cid:44)
(cid:45)
(cid:46)
(cid:47)
(cid:48)
(cid:49)
(cid:44)
(cid:45)
(cid:46)
(cid:47)
(cid:48)
(cid:49)
(cid:50)
113
Uut
Ununtrium
(284)
114
Uuq
Ununquadium
(289)
115
Uup
Ununpentium
(288)
Ununhexium
(292)
117
Uus
Ununseptium
118
Uuo
Ununoctium
Atomic masses in parentheses are those of the most stable or common isotope.
Note: The subgroup numbers 1-18
were adopted in 1984 by the
International Union of Pure and
Applied Chemistry. The names of
elements 112-118 are the Latin
equivalents of those numbers.
57
La
Lanthanium
138.9055
89
Ac
Actinium
(227)
2
8
18
18
9
2
2
8
18
32
32
10
2
58
Ce
Cerium
140.116
90
Th
Thorium
232.0381
2
8
18
19
9
2
2
8
18
32
18
10
2
59
Pr
Praseodymium
2
8
18
21
8
2
91
Pa
Protactinium
231.03588
2
8
18
32
20
9
2
60
Nd
Neodymium
144.24
92
U
Uranium
238.02891
2
8
18
22
8
2
2
8
18
32
21
9
2
61
Pm
Promethium
(145)
93
Np
Neptunium
(237)
2
8
18
23
8
2
2
8
18
32
22
9
2
62
Sm
Samarium
150.36
94
Pu
Plutonium
(244)
2
8
18
24
8
2
2
8
18
32
24
8
2
63
Eu
Europium
151.964
95
Am
Americium
(243)
2
8
18
25
8
2
2
8
18
32
25
8
2
64
Gd
Gadolinium
157.25
96
Cm
Curium
(247)
2
8
18
25
9
2
2
8
18
32
25
9
2
65
Tb
Terbium
158.92534
97
Bk
Berkelium
(247)
2
8
18
27
8
2
2
8
18
32
27
8
2
66
Dy
Dysprosium
162.500
2
8
18
28
8
2
98
Cf
Californium
(251)
2
8
18
32
28
8
2
67
Ho
Holmium
164.93032
99
Es
Einsteinium
(252)
2
8
18
29
8
2
2
8
18
32
29
8
2
68
Er
Erbium
167.259
100
Fm
Fermium
(257)
2
8
18
30
8
2
2
8
18
32
30
8
2
69
Tm
Thulium
168.93421
2
8
18
31
8
2
101
Md
Mendelevium
(258)
2
8
18
32
31
8
2
70
Yb
Ytterbium
173.04
102
No
Nobelium
(259)
2
8
18
32
82
2
8
18
32
32
8
2
71
Lu
Lutetium
174.967
2
8
18
32
9
2
103
Lr
Lawrencium
(262)
2
8
18
32
32
9
2
For our purposes the rare-earth elements we are concerned with are a group of chemical elements
composed of scandium, yttrium, and the lanthanides. The lanthanides are a group of 15 chemically
similar elements with atomic numbers 57 through 71, inclusive. Although not a lanthanide, Yttrium,
atomic number 39, is included in the rare earths because it often occurs with them in nature, having
similar chemical properties. Promethium (Pm) atomic number 61 is the trans-uranium element on the
Lanthanide series. It is not stable in nature has been only synthetically produced in small quantities. It is
highly radioactive and not relevant in our rare earth discussion.
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Despite their name rare earths in the Lanthanide series are not particularly “rare” in the sense that gold
and silver are rare although they have only been relatively recently known to man. Of the Rare Earths
we are interested in the earliest element discovered was Yttrium (1789), followed by Cerium (1803) the
last discovered was Neodymium (1925). However it is only in recent times that useful applications in
electronics and many other specialised fields have prompted larger scale usage
Rare-earths production is often derived from the rare-earths ores bastnasite, monazite, xenotime, and
ion-adsorption clay. Bastnasite is the world’s principal source of rare earths and is the source of most
Rare Earths produced in China and the United States. Significant quantities of rare earths are also
recovered from the mineral monazite. Xenotime and ion-adsorption clays account for a much smaller
part of the total production but are important sources of yttrium and other heavy-group rare earths.
Rare earths and the Kvanefjeld multi element deposit
The Kvanefjeld multi element deposit is unusual as it occurs within the Ilimaussaq Complex a primary
alkaline intrusive which intruded into an existing granitic and gneissic basement and a continental series
of sandstones and lavas during the Precambrian period, about 1,042mya. This nepheline syenite (1)
complex comprises three separate intrusions. Firstly, an augite2 syenite which forms a shell along the
roof and sides, an alkali granite/alkali syenite near the top of the body, and finally the largest part and
centre of the intrusion comprising a layered series of under-saturated syenite rocks.
The complex is rich in a variety of elements including radioactive elements, lithium, beryllium, zirconium
and REEs. The area is also prospective for sodalite (sodium aluminium silicate) tugtupite (beryllosodalite)
a gemstone, fenite which is a source of niobium, tantalum, copper and zinc, commonly occurring as
strata bound lenses, and eudialyte, a complex mineral containing sodium, zirconium, niobium, tantalum
and REEs.
The rare earths are also contained in a series of unique minerals called steenstrupine, vitusite and cerite.
These are distinct from bastnasite, monazite and xenotime as the Kvanefjeld minerals are more complex
with many different elements in their make up.
The unusual mineral types at Kvanefjeld are partly the result of the minerals forming in a silica poor
environment, creating different crystals to those forming in more “normal” (silica rich) environments.
The silica poor environment makes the deposit softer than normal intrusions allowing for faster drilling
speeds and perhaps, in the future, slightly lower mining costs.
Ion –adsorption clay deposits are deposits which over time have selectively absorbed rare earths through
a process of ion exchange. It is known that clay deposits and other weathered and oxide deposits are
more costly to treat because they are relatively more impermeable to liquids that material ground to a
desired size from original magmatic rocks. The Kvanefjeld deposit may have an advantage over ionic
clays and other weathered deposits because of this although beneficiation and metallurgical testing is
yet to be completed.
1. Nepheline, also called nephelite is a feldspathoid: a silica-undersaturated aluminosilicate, Na3KAl4Si4O16, that
occurs in intrusive and volcanic rocks with low silica.
Syenite is a coarse-grained intrusive igneous rock of the same general composition as granite but with the quartz
either absent or present in relatively small amounts.
2. Augite is a single chain inosilicate mineral described chemically as (Ca,Mg,Fe)SiO3 or calcium magnesium
iron silicate.
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This article is a reprint of a recent article in Industrial Minerals magazine.
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Spectral Gamma Logging
Spectral Natural Gamma Logging
At Kvanefjeld the gamma radiation is predominantly from uranium and thorium isotopes. The gamma
radiation from potassium is much smaller and considered to be a constant. The challenge was how
to separate the uranium gamma radiation from the thorium and scattered thorium gamma radiation.
This mixture of gamma radiation forms a ‘spectrum’ from high energy gamma rays to low energy
gamma rays.
In other spectral logging systems the usual practice has been to acquire the data in four windows.
These were a total spectrum window and discrete potassium, uranium and thorium windows. The
discrete windows were placed over the dominant potassium, uranium and thorium peaks. Stripping
factors were then calculated from calibration information, such that the resulting potassium, uranium
and thorium gamma radiation was free from the scattered radiation from each of the other two. The
use of fixed narrow windows meant that the spectral response of the tools had to be very stable and
drift free. This is not easy to achieve in practice. The new spectral logging tools used at Kvanefjeld
measures the whole gamma ray spectrum into 4,000 channels and is very stable and drift free.
To use the same processing windows for the Kvanefjeld spectral data could have resulted in some
very low counting statistics in the windows. Although the new spectral tools have low drift due to
temperature and/or high count rates, a small error in the fixed, but narrow windows could result
in large errors in calculated grades. An alternative approach was to sum the counts in all channels
between the main thorium peak at 2615keV and the combined uranium and thorium peak near
600keV. This provided a sum of the gamma ray count rates in approximately 2,500 channels. This
provided much better counting statistics and less error in the positioning of the window boundaries.
A broad window over the thorium peak at 2615kev provided the thorium reference level for stripping
from the larger uranium plus thorium window.
Using this approach we were able to accurately match the assay data for some of the test holes and
provide much greater detail than possible from the assays.
Spectral Natural Gamma probe calibrations in Colorado
Calibration in Adelaide in 2007 had proved sufficient for the initial work in 2007 however Colorado
offered a variety of better test pits including for thorium work and greater accuracy overall, enhancing
our standard of ore grade extimation.
Between May 18th to 25th Consultant Geophysicist David Wilson and the Company’s Technical
Director visited the USA Government’s facility for calibration of down-hole radiometric logging tools
(probes). The facility boasts many different “calibration pits” containing a variety of zones of natural
radioactive material with precisely know grades and thicknesses. The facility is arguably the premier
location for calibration of spectral logging tools and ideally suited to calibrating the Company’s two
38mm and one 33mm diameter probes.
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Spectral Gamma Logging
The following calibration procedures were carried out:
1. U, Th & K grade estimation:
a. Uranium Grade Calibration: Several holes containing uranium (& no other naturally radioactive
elements), of known but differing grades, were logged. The amount of radiation measured by
the probe is directly proportional to the amount (i.e. grade) of uranium present. The amount of
radiation was measured for each hole for a particular probe and then plotted on a graph against
the known grades. A line of best fit can then be constructed; which can also be represented
as a simple mathematical equation. By logging and measuring the amount of natural gamma
radiation, in a hole containing only uranium the grade of that uranium can be estimated by that
particular (calibrated) probe.
Note: The amount of radiation measured by any probe is primarily proportional to the volume
of the radiation collecting crystal and to a lesser extent the probes circuitry and construction.
For this reason each probe needs to be calibrated individually.
b. Thorium Grade Calibration: Thorium is intimately associated with the Kvanefjeld multi-element
mineralisation; often occurring in greater concentrations than uranium. A similar procedure was
therefore applied with each probe being run down holes containing pure Th and a calibration
graph (factor) constructed.
c. Potassium Grade (factor) Calibration: Calibration logging for K was also undertaken as K
(potassium) is the third of the three elements that are radioactive and naturally emit gamma
rays. K emits much less radiation than U & Th.
2. Hole Size Factor: Water absorbs gamma radiation. The thicker the water column between the
probe and that rock the more radiation is absorbed (attenuated). The rate of attenuation of
radiation is directly proportional to the diameter of the hole and the same factor will apply to all
probes. Therefore one of the probes was employed to log several water filled holes of different
diameter; which holes had penetrated a zone of mineralisation of constant grade. The logging
results allowed construction of a graph and calculation of a ”Hole Size Factor”.
3. Air factor: Drill holes generally comprise two sections. That part which is full of water (ie below
the water table) and that above which comprises an air column. Air does not significantly
attenuate natural gamma radiation. To calculate the Air Correction Factor water was drained
from the same holes as above and relogged. The correction factor is constant ie unrelated to
the size of the hole or the particular probe.
4. Casing factor: Steel absorbs gamma radiation; the greater the thickness of steel the greater the
absorption. Casing of varying thickness were hung in a hole of constant diameter and the change
in radiation measured and plotted against the thickness of the casing. Thence a casing factor
calculated.
5. Lanthanum Correction Factor: The measuring crystal of the probe includes Lanthanum in its
construction. This is slightly radioactive and being part of the crystal does add some minor but
constant radiation to that measured during logging. A probe was placed within a very thick metal
pipe and the radiation measured over a long period of time. This amount of radiation proved to be
so small that no formal correction factor was deemed necessary.
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Onsite Down-hole logging
Down-hole spectral natural gamma and deviation logging was carried out during the 2008 season
using the companies Auslog logging system. Equipment comprises two winch systems with 600m
and 300m of cable respectively. Each is housed in purpose built insulation lined aluminium boxes.
The boxes are self contained and along with an electrical generator are transported form drill site
to drill site by helicopter. A single technician operates from inside the box allowing logging in even
adverse conditions.
The operator has access to 2 x 38mm diameter spectral probes, a 33mm diameter spectral probe and
a 33mm diameter deviation probe.
Once a hole has reached full depth the driller washes the hole ensuring it is clean of cuttings and
the water column is fresh lake water. Once the platform has been dragged clear of the collar (about
half way through a rig shift) the box is slung onto site and logging commences. A spectral probe is
the first tool used except where a hole is “unsafe”. The hole may be unsafe for a variety of reasons
including shear/alteration zones, closely spaced joints or abandoned drilling items. In this case the
deviation tool would be run first.
The 38mm diameter tool is preferred except where the hole may be deemed unsafe or the
hole is of small diameter. Many vof the 1950 era holes are of small diameter.
The spectral probe is run down the hole at a rapid speed (7 metres/minute “m/m”) until full
depth is reached. The expected drilled depth (as estimated by the drillers) is usually accurate
though errors of 3m (i.e. miss labelling a 3m run somewhere in the hole) does occur. The
probe is then retrieved at 0.8m/m while measuring the gamma radiation.
The deviation probe is then run down the hole and back up again. Measurements at 7m/m
are taken on the way up and on the way down. The time taken to complete logging varies
according to depth. Apart for the 30-60min to set up and rig down logging takes about
180min/100m depth of the hole. Logging was completed as soon as possible leading to the
operator often working late into the night.
Radon gas, formed from the breakdown of Th & U bearing minerals is present throughout
the areas drilled during the year. Radon being a gas can move through the rock mass and
tends to accumulate in open water filled (or air filled cavities above the water table). Joints
& fractures can allow radon gas to move into the open drill holes and can accumulate to
levels that will affect the spectral logging measurements. For this reason spectral logging
is undertaken as soon as is practical after drilling ceases. If logging takes place after an elapse of
greater than 48 hours the results are scrutinised and set aside if there are indications of radon
affecting the results.
In rare cases holes were not logged due to lack of time. In other cases holes were not logged or only
partially logged due being blocked by abandoned rod strings, or partial blockage of the hole (rock
fragment lodged).
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Spectral Gamma Logging
Responsibility Statement
The information in this report that relates to calculated uranium grades is based on information
compiled by David Wilson BSc MSc MAusIMM from 3DExploration Ltd based in Western Australia.
• Diamond drill holes at Kvanefjeld were logged with an Auslog spectral gamma tool. The gamma
tool was calibrated in Adelaide at the Department of Water, Land and Biodiversity Conservation
and at the Department of Energy, Grand Junction, Colorado, USA calibration pits. The
Department of Water, Land and Biodiversity Conservation calibration pits constructed under the
supervision of CSIRO. The Department of Energy, Grand Junction, Colorado, USA calibration pits
were constructed a various times (1969 to 1981) by supervising scientists from the Department
of Energy and its predecessors. The gamma tool measures the total gamma ray flux in the drill
hole. Readings are typically averaged over 7.5 centimetre intervals and the reading and depth
recorded on a portable computer.
• At Kvanefjeld, there is a contribution to the gamma radiation from the decay of thorium. The
thorium spectral signature is dominated by a high energy gamma radiation peak and lower
energy gamma radiation resulting from the scattering of the high energy gamma rays with the
surrounding rocks. This thorium spectrum is measured by the spectral tool and ‘stripped’ from
the uranium gamma radiation spectrum. The remaining uranium spectral gamma ray readings
are then converted to equivalent U3O8esp readings by using the calibration factors derived in
the Adelaide calibration pits. These factors also take into account differences in hole-size and
water content. The grade and calibration was calculated by David Wilson.
• The gamma radiation used to calculate the equivalent U3O8esp is predominately from the
daughter products in the uranium decay chain. When a deposit is in equilibrium, the measurement
of the gamma radiation from the daughter products is representative of the uranium present.
It takes approximately 2.4M years for the uranium decay series to reach equilibrium. Thus, it is
possible that these daughter products, such as radium, may have moved away from the uranium
or not yet have achieved equilibrium if the deposit is younger than 2.4M years. In these cases
the measured gamma radiation will over or under estimate the amount of uranium present. The
Kvanefjeld deposit is approximately 1,000M years old and is considered to be in radiometric
equilibrium. Tests conducted by the Danish Government have confirmed that the deposit is in
equilibrium.
• The calculated uranium grades, of this report, are based on information compiled by David
Wilson BSc MSc MAusIMM from 3D Exploration Ltd based in Western Australia.
• Mr. Wilson is a full-time employee of 3D Exploration Pty Ltd, a consultant to Greenland Minerals
and Energy Limited. Mr. Wilson 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. Wilson consents to the inclusion in the report of the matters based on their information in
the form and context in which it appears.
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55
Director’s ReportGREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
DIRECTORS’ REP ORT
Your directors present their report on the Company and its consolidated entity for the year ended
30 June 2008.
On 2 August 2007 the Company changed its name from The Gold Company Ltd to Greenland
Minerals and Energy Ltd.
Directors
The names of directors in office at any time during or since the end of the year are:
Simon Kenneth Cato
Jeremy Sean Whybrow
Miles Simon Guy
Roderick Claude McIllree
Hans Kristian Vinding Schonwandt - appointed on August 9 2007
- appointed on August 9 2007
Malcolm Geoffrey Mason
- appointed on August 9 2007
Anthony Ho
- appointed on August 9 2007
Simon Alexander Stafford Michael
- appointed on February 21 2006
- appointed on February 21 2006
- appointed on April 12 2006, resigned 23 March 2007
- re-appointed on 23 March 2007
Company Secretary
The following person held the position of Company secretary at the end of the financial year:
Bruce Richard Acutt – Bruce trained and worked as an accountant with major accounting firms in the
audit and resources sector. He has been associated with the mining and exploration sector for over
twenty years.
Principal Activities
The principal activity of the consolidated group during the financial year was resources mineral
exploration.
There were no significant changes in the nature of the consolidated group’s principal activities during
the financial year.
Operating Results
The net loss of the consolidated group after providing for income tax amounted to $38,355,139.
Subsequent Events
For disclosure of events occurring subsequent to year end, refer to note 18 of the financial statements.
Future Developments
Disclosure of information regarding likely developments in the operations of the consolidated group in
future financial periods and the expected results of those operations is likely to result in unreasonable
prejudice to the consolidated group. Accordingly, this information has not been disclosed in this
report.
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56
1
Director’s Report
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
DIRECTORS’ REP ORT
Environmental Issues
The consolidated group operates within the resources sector and conducts its business activities with
respect for the environment while continuing to meet the expectations of shareholders, customers,
employees and suppliers. The consolidated group’s exploration activities are currently regulated by
significant environmental regulation under laws of the Commonwealth and states and territories of
Australia. The consolidated group aims to ensure that the highest standard of environmental care is
achieved, and that it complies with all relevant environmental legislation.
The directors are not aware of any particular or significant environmental issues, which have been
raised in relation to the consolidated group’s operations during the year covered by this report.
Dividends
In respect of the financial year ended 30 June 2008, no dividends have been paid or declared since the
start of the financial year and the directors do not recommend the payment of a dividend in respect of
the financial year.
Review of Operations
On 20 June 2006 the Company’s shares commenced trading on ASX.
In December 2006 we were suspended from trading at our request to allow us to concentrate on due
diligence and contract negotiations leading to our agreeing to enter into the Kvanefjeld project.
On 23 May 2007 we were reinstated to quotation after completing due diligence and entering into the
agreements which following shareholder approval on 31 July 2007 saw us acquire our interest in the
Kvanefjeld project. Specific details of the contracts are summarized in the Subsequent Events section
of these accounts.
From June 2007 we commenced our exploration program in Greenland at Kvanefjeld, this exploration
is still continuing as at the date of this report.
Exploration announcements have been made to the market as and when they are available on both
projects during the year.
Significant Changes in State of Affairs
The following significant changes in the state of affairs of the Company occurred during the financial
year.
1.
2.
The acquisition of the Kvanefjeld project as described above.
The sale of our Three Sisters project in Queensland.
Financial Position
The net assets of the consolidated group were $111,076,416 at year end arising as a result of capital
raisings and acquisition of a mineral tenement.
The consolidated group was in a strong financial position at the end of the financial year with sufficient
financial resources to undertake its objectives. The consolidated group’s objective is to locate new
mineral discoveries that significantly upgrade the value of its projects and consider other opportunities
in the resources sector.
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2
Director’s ReportGREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
DIRECTORS’ REP ORT
Information on Directors
Simon Kenneth Cato
Qualifications
Experience
- Executive Director
- B.A.
- Appointed a director on 21 February 2006.
Mr Cato has had over 25 years capital markets experience in broking,
regulatory roles and as director of listed companies. He initially was
employed by the ASX in Sydney and in Perth.
Over the last 17 years he has been an executive director and/or
responsible executive of 3 stockbroking firms and in those roles he
has been involved in many aspects of broking including management
issues such as credit control and reporting to regulatory bodies in the
securities industry. As a broker he has also been involved in the
underwriting of a number of initial public offers and has been through
the process of an initial public offer listing in a dual role of broker and
director. Currently he holds a number of executive and non executive
roles with listed companies in Australia.
Interest in Shares & Options - 920,100 Ordinary Shares in Greenland Minerals and Energy Ltd,
800,100 options and 6,600,000 unvested unlisted options.
Special Responsibilities
Directorships held in other
listed entities
- Mr Cato is an executive director of the Company.
- Mr Cato is a director of Bentley International Limited, Convergent
Minerals Limited, Scarborough Equities Limited and Queste
Communications Ltd.
Mr Cato is a Chairman of Convergent Minerals Limited (since 25
July 2006) and Advanced Share Registry (since 22 August 2007).
Jeremy Sean Whybrow
Qualifications
- Exploration Director
- B.Sc. (Mineral Exploration and Mining Geology), G.Dip(Minerals
Economics), M.Aus.I.M.M
Experience
- Mr Whybrow has had over 12 years experience in the mining
industry both domestically and internationally.
Mr Whybrow has worked for companies such as Sons of Gwalia
Ltd, PacMin Ltd, Teck Australia Ltd, Mount Edon Gold Mines Ltd
and Croesus Mining NL. His experience has been mainly in the
operational environment and
to
exploration and mining operations, project evaluation and feasibility
studies.
Previously, Mr Whybrow has worked internationally in China, Africa
and the Philippines as well as numerous localities in Australia.
includes significant exposure
Interest in Shares & Options - 750,100 Ordinary Shares of Greenland Minerals and Energy Ltd,
Directorships held in other
entities
710,100 listed options and 6,600,000 unvested unlisted options.
- Mr Whybrow is also an executive director of Convergent Minerals
Limited.
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3
Director’s Report
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
Hans Kristian Vinding
Schonwandt
Qualifications
Experience
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DIRECTORS’ REP ORT
- Executive Chairman
to
the committee which
- Nil
- Dr Schønwandt has been involved in mineral exploration and
geological mapping in Greenland since 1963. He has contributed to
the mining society’s attention to Greenland’s mineral potential
through numerous international publications and presentations at
mining conferences.
As head of the Department of Economic Geology he streamlined the
Geological Survey’s service to the mining industry by a number of
initiatives including a mineral database, core library, and a quick
presentation of survey data through the “Open file Report” and an
archive for the mining industries assessment reports. He was
technical adviser
recommended a
modernisation of the Mineral Resource Act for Greenland in 1990, a
modernisation which became the starting point of an increased
mineral exploration activity in Greenland.
As associate professor Dr Schønwandt consulted for various mining
companies in Greenland and elsewhere. He was a permanent
consultant for the Nordic Mining Company Ltd on activities in
Greenland and was also permanent consultant for Norsk Hydro Ltd’s
Prospecting Department in Oslo, Norway where he was deeply
involved in the discovery and development of porphyry molybdnium
deposits in the Oslo Rift.
As deputy minister he was responsible for establishing the Bureau of
Minerals and Petroleum (BMP) in Nuuk, Greenland and to advise the
politicians in Greenland and Denmark on all aspects concerning the
raw material sector. He took the initiative and was responsible for the
authority’s strategy within the hydrocarbon and mineral sector which
was approved by the government of Greenland and the government
of Denmark in 2003 and 2004 respectively.
Interest in Shares & Options - 1,000,000 Ordinary Shares of Greenland Minerals and Energy Ltd.
Directorships held in other
entities
- Nil
Roderick McIllree
Qualifications
- Managing Director
- B.Sc. (Mineral Exploration and Mining Geology), Grad Dip.
Experience
(Mineral Economics) MAusIMM.
- Mr McIllree graduated from Curtin University of Technology in 1996
with a Bachelor of Science degree (Mineral Exploration and Mining
Geology) and commenced a career in the mining industry where he
worked for major mining companies both domestically and
internationally, gaining experience in mineral exploration and in all
facets of mining.
Mr McIllree moved to the finance sector in 2000 and worked as an
analyst and advisor for broking houses active in capital markets. Mr
McIllree has experience in international capital raisings having
initiated several successful mining companies with assets both
domestically and overseas. He was instrumental in sourcing the
Kvanefjeld Project for the Company.
59
4
Director’s ReportGREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
DIRECTORS’ REP ORT
Interest in Shares & Options - 3,102,295 Ordinary Shares of Greenland Minerals and Energy Ltd,
Directorships held in other
entities
2,112,000 listed options and 6,600,000 unlisted unvested options.
- Executive director of Convergent Minerals Limited.
Simon Stafford Michael - Non-Executive Director
Qualifications
Experience
- Nil
- Mr Stafford-Michael practised as a barrister in the United Kingdom
from 1982 to 2005. He developed a commercial practice, with
particular emphasis on financial services, banking, tax, corporate and
commercial and insurance and reinsurance.
Mr Stafford-Michael had a substantial advisory practice in the United
Kingdom concerning regulation and compliance issues arising under
the Banking, Financial Services and Insurance (Companies) Acts and
the rules and regulations of the securities markets; compliance with
the Money Laundering Regulations; the conduct of fraud and money
laundering investigations; and the duties and liabilities of Company
directors and their professional advisers under the Companies and
Insolvency Acts.
His corporate clients included a substantial number of major oil and
mining corporations, particularly in connection with insurance claims
predicated on environmental risks.
Interest in Shares & Options - 1,000,000 Ordinary Shares of Greenland Minerals and Energy Ltd.
Directorships held in other
entities
- Nil
Tony Ho
Qualifications
Experience
- Non-Executive Director
- B.Comm, CA, FAICD, FCIS
- Mr Ho is an experienced Company director having held executive
directors and chief financial officer roles with a number of publicly
listed companies. Tony was executive director of Arthur Yates & Co
Limited, retiring from that position in April 2002. His corporate and
governance experience include being chief financial officer/finance
director of M.S. McLeod Holdings Limited, Galore Group Limited,
the Edward H O'Brien group of companies and Volante Group
Limited.
Mr Ho was a past non-executive director of Brazin Limited
(September 1997 to January 2007) where he was also a member of
the Audit and Remuneration Committees.
Prior to joining commerce, Mr Ho was a partner of Cox Johnston &
Co, Chartered Accountants, which has since merged with Ernst &
Young.
Mr Ho holds a Bachelor of Commerce degree from the University of
New South Wales and is a member of the Institute of Chartered
Accountants in Australia and a fellow of both the Chartered Institute
of Company Secretaries and the Institute of Company Directors.
Interest in Shares & Options - 50,000 Ordinary Shares of Greenland Minerals and Energy Ltd.
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60
Director’s Report
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
DIRECTORS’ REP ORT
Directorships held in other
entities
Malcolm Mason
Qualifications
Experience
- Non-executive director of Dolomatrix International Limited where he
chairs the Audit and Compliance Committee. He is also the non-
executive chairman of St George Community Housing Limited, the
largest community housing Company
in New South Wales.
Chairman of Esperance Minerals NL from September 1 2008.
Director of Quality Improvements Council Limited.
- Technical Director
- B.Sc Hons and MAus IMM
- Mr Mason has had more than 40 years experience in the Australian
and international exploration and mining industries. His experience
covers gold, base metals and non-metallic minerals.
Since 1995 he has specialised in uranium. As a principal he has
investigated many known deposits in Australia and overseas. His
depth of experience extends from acquiring projects and prospects
through application or negotiation to mounting intensive and
extensive exploration into evaluation programmes and completing
feasibility studies.
In 1996, Mr Mason formed Acclaim Uranium NL, which
successfully listed on the ASX.
As Managing Director he
implemented his “uranium only” strategy and acquired an extensive
portfolio of Australian uranium projects. Among the projects were
Millipede/Abercromby, Nowthanna and Lake Maitland calcrete
deposits.
In 1998, Mr Mason helped identify the Langer Heinrich deposit for
Acclaim Uranium NL which then drilled and completed a feasibility
study.
In early 2005 he joined Redport Limited as Strategic Adviser, assisted
the Company to acquire the Lake Maitland uranium deposit, and was
involved in its exploration and evaluation.
Interest in Shares & Options - 600,000 Ordinary Shares of Greenland Minerals and Energy Ltd,
180,000 options and 3,000,000 unvested options.
Directorships held in other
entities
- Nil
Remuneration Report - Audited
This report details the nature and amount of remuneration for each director of Greenland Minerals and
Energy Ltd and for the executives receiving the highest remuneration.
Remuneration Policy
The remuneration policy of Greenland Minerals and Energy Ltd has been designed to align director and
executive objectives with shareholder and business objectives by providing a fixed remuneration
component and offering specific long-term incentives based on key performance areas affecting the
consolidated group’s financial results. The board of Greenland Minerals and Energy Ltd believes the
remuneration policy to be appropriate and effective in its ability to attract and retain the best executives
and directors to run and manage the consolidated group, as well as create alignment of interests
between directors, executives and shareholders.
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6
Director’s ReportGREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
DIRECTORS’ REP ORT
The board’s policy for determining the nature and amount of remuneration for board members and
senior executives of the consolidated group is as follows:
�
All executives receive a base salary (which is based on factors such as length of service and
experience) and superannuation.
The executive directors and executives receive a superannuation guarantee contribution required by the
government, which is currently 9% and do not receive any other retirement benefits.
All remuneration paid to directors and executives is valued at the cost to the Company and expensed.
Shares given to directors and executives are valued as the difference between the market price of those
shares and the amount paid by the director or executive. Options are valued using the Black-Scholes
methodology.
The board policy is to remunerate non-executive directors with a base fee and, for special exertion, at
market rates for time, commitment and responsibilities. The board as a whole, fulfilling the role of the
remuneration committee determines payments to the non-executive directors and reviews their
remuneration annually, based on market practice, duties and accountability. The maximum aggregate
amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the
Annual General Meeting. Fees for non-executive directors are not linked to the performance of the
Company. However, to align directors’ interests with shareholder interests, the directors are
encouraged to hold shares in the Company.
Details of Remuneration
The remuneration for each director and each of the executive officers of the entity receiving the highest
remuneration during the year was as follows:
Short-term
Post-
employment
Superannuation
2008
Simon Kenneth Cato
Jeremy Sean Whybrow
Roderick Claude McIllree
Simon Stafford-Michael
Anthony Ho
Hans Kristian Vinding
Schonwandt
Malcolm Mason
Total
Salary
$
64,052
197,600
199,990
-
-
171,500
157,527
790,669
Shares/
Options
$
Directors
Fees
$
40,000 11,385,000 *
- 11,385,000 *
- 11,385,000 *
33,980
40,678
1,300,000
-
1,300,000
40,000
40,000
-
194,658 36,755,000
2007
Simon Kenneth Cato
Jeremy Sean Whybrow
Miles Simon Guy
Roderick Claude McIllree
Total
* Options subject to vesting conditions as detailed in Note 20.
40,000
90,495
15,000
17,873
163,368
-
-
-
-
-
-
-
-
-
-
7
Total
$
11,496,702
11,592,050
11,595,340
1,333,980
44,339
1,511,500
197,527
37,771,438
43,600
94,095
16,350
18,773
172,818
$
7,650
9,450
10,350
-
3,661
-
-
31,111
3,600
3,600
1,350
900
9,450
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Director’s Report
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Director’s ReportGREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
DIRECTORS’ REP ORT
Employment Contracts and arrangements
Hank Schønwandt, Non Executive Chairman
�
�
�
Term of contract – service agreement for 3 years.
Director fee excluding superannuation for the year ended 30 June 2008 of $40,000.
Entitled to a living allowance and a daily rate for performing and part of their services outside the
country’s residence of 6,000 Danish Kroner per day.
Simon Stafford-Michael, Non Executive Director
�
�
�
Term of contract – service agreement for 3 years.
Director fee excluding superannuation for the year ended 30 June 2008 of $30,000.
Entitled to a living allowance and a daily rate for performing and part of their services outside the
country’s residence of £600 per day.
Roderick McIllree, Managing Director
�
�
Term and type of contract – service agreement subject to annual review.
Base salary, inclusive of superannuation for the year ended 30 June 2008 of $230,000 and is
paid monthly in arrears.
Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the performance
of their duties including relating to travel, entertainment, accommodation, meals and telephone.
Either the Company or the director may terminate their engagement without cause by giving the
other party three months written notice.
The Company has issued 6,600,000 incentive options with an exercise price of 20 cents and an
expiry date of 30 June 2011.
Remuneration will be reviewed every 12 months or as otherwise agreed between the parties.
Jeremy Whybrow, Managing Director
�
�
Term and type of contract – service agreement subject to annual review.
Base salary, inclusive of superannuation for the year ended 30 June 2008 of $180,000 and is
paid monthly in arrears.
Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the performance
of their duties including relating to travel, entertainment, accommodation, meals and telephone.
Either the Company or the director may terminate their engagement without cause by giving the
other party three months written notice.
The Company has issued 6,600,000 incentive options with an exercise price of 20 cents and an
expiry date of 30 June 2011.
Remuneration will be reviewed every 12 months or as otherwise agreed between the parties.
�
�
�
�
�
�
�
�
Simon Cato, Managing Director
�
Term and type of contract – service agreement limited to a maximum of 80 hours per month
subject to annual review.
Base salary, inclusive of superannuation for the year ended 30 June 2008 of $90,000 and is paid
monthly in arrears.
Entitled to receive a separate directors fee of $40,000 per annum.
Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the performance
of their duties including relating to travel, entertainment, accommodation, meals and telephone.
Either the Company or the director may terminate their engagement without cause by giving the
other party three months written notice.
The Company has issued 6,600,000 incentive options with an exercise price of 20 cents and an
expiry date of 30 June 2011.
Remuneration will be reviewed every 12 months or as otherwise agreed between the parties.
�
�
�
�
�
�
64
9
Director’s Report
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
DIRECTORS’ REP ORT
Tony Ho, Non-Executive Director
�
�
No fixed term.
$80,000 per annum.
Malcolm Mason, Technical Director
�
�
Term of contract – consultancy service agreement with Missoni Investments Pty Ltd.
Engagement is for a minimum term of 18 months within which the Company may only terminate
the agreement upon limited events akin to poor performance, misconduct or incapacity.
After the minimum term either party may terminate the agreement upon three months written
notice.
�
� Missoni Investments Pty ltd will be paid a consultancy fee of $1,500 per day when services are
performed overseas and $1,000 per day when services performed in Australia subject to a
maximum of $180,00 in each 12 month period.
� Missoni Investments Pty Ltd will be reimbursed for all out of pocket expenses necessarily
incurred in the performance of the services including reasonable expenses relating to travel,
entertainment, accommodation, meals and telephone.
� Mr Mason will be paid a separate directors fee of $40,000.
�
The Company has issued 3,000,000 incentive options with an exercise price of 20 cents and an
expiry date of 30 June 2011.
Company performance, shareholder wealth and director and executive remuneration
The remuneration policy has been tailored to align the interests of shareholders, directors and
executives. To achieve this aim, the entity may issue options to the majority of directors and executives
to encourage the alignment of personal and shareholder interests. The Company notes that all directors
are shareholders at present and that the Company has no present intention to issue incentive shares or
options to directors.
The following table shows the gross revenue and profits for the period from incorporation to 30 June
2008 for the listed entity, as well as the share price at the end of the financial year.
Remuneration Report
Revenue
Net Loss
Share Price at Year-end
2008
1,334,340
(38,346,379)
0.66
2007
228,241
(199,700)
1.76
Non-audit Services
The board of directors, is satisfied that the provision of non-audit services during the year is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001. The
directors are satisfied that the services disclosed below did not compromise the external auditor’s
independence for the following reasons:
�
�
all non-audit services are reviewed and approved by the audit committee prior to commencement
to ensure they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor
independence as set out in the Institute of Chartered Accountants in Australia and CPA
Australia’s Professional Statement F1: Professional Independence
10
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65
Director’s ReportGREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
DIRECTORS’ REP ORT
$4,200 for non-audit services were paid/payable to the external auditors during the year ended 30 June
2008 for tax advice.
Meetings of Directors
During the financial year, 4 meetings of directors were held. Attendances by each director during the
year were as follows:
Director
Directors Meetings
S K Cato
J S Whybrow
R McIllree
H K V Schonwandt
M G Mason
A Ho
S A S Michael
Number eligible to
attend
4
4
4
4
4
4
4
Number
attended
4
4
4
4
4
4
4
Indemnifying Officers
During or since the end of the financial year the Company has given an indemnity or entered into an
agreement to indemnify, or paid or agreed to pay insurance premium to insure the directors against
liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of
their conduct while acting in the capacity of the director of the Company, other than conduct involving
a wilful breach of duty in relation to the Company.
Shares
During the year ended 30 June 2008, the following ordinary shares of Greenland Minerals and Energy
Ltd were issued as detailed in Note 11 to the financial report.
The total number of shares on issue was 193,008,540 (2007: 37,201,931).
The total number of shares issued during the year was 155,806,609.
Options
During the year ended 30 June 2008 the options of Greenland Minerals and Energy Limited were
issued as detailed in Note 12(a) to the financial report.
No person entitled to exercise the option had or has any right by virtue of the option to participate in
any share issue of any other body corporate.
As at the date of this report there are 169,020,902 options on issue, including the directors options.
A total of 137,222,233 were issued during the year.
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11
Director’s Report
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
DIRECTORS’ REP ORT
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene
in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf
of the Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2008 has been received and is
included in the financial report.
Signed in accordance with a resolution of the Board of Directors.
Date: 30 September 2008
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12
Auditor’s Independence Declaration
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
AU DITOR’S I NDE PENDE NCE DECLARATION
UN DER SECTION 307C OF THE CORP O RATIONS ACT 2001
TO THE DIRECTORS OF GREENLAND MI NERALS AND ENERGY LTD
AN D C ONTROLLED ENTITIES
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2008 there have
been:
(i)
(ii)
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
___________________________
Mack & Co
Chartered Accountants
2nd Floor, 35 Havelock Street
West Perth WA 6005
___________________________
N A Calder, Partner
___________________________
Date:
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13
Income Statement
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
INC OME STATEMENT
F OR THE YEAR ENDE D 30 J U NE 2008
Note Consolidate
Parent
d
2008
$
2008
$
2007
$
Revenue
2
1,334,340
1,334,332
228,241
Directors’ fees and salaries
(373,778)
(373,778)
(132,630)
Occupancy expenses
Share based payments
Expenses
(73,981)
(73,981)
(45,981)
(37,162,550) (37,162,550)
-
3
(2,079,170)
(2,056,700)
(249,330)
Loss before income tax expense
(38,355,139) (38,332,676)
(199,700)
Income tax expense
Loss after related income tax expense
4
3
-
-
-
(38,355,139) (38,332,676)
(199,700)
Loss attributable to minority equity interest
8,760
-
-
Loss attributable to members of the parent
entity
(38,346,379)
(38,332,676)
(38,322,676)
Basic loss per share
Diluted loss per share
Cents
(0.24)
(0.24)
Cents
(0.24)
(0.24)
Cents
(0.62)
(0.62)
The accompanying notes form part of these financial statements.
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14
Balance Sheet
As at 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
BALANCE S HEET
AS AT 30 J UNE 2008
CURRENT AS SETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NO N C URRENT AS SETS
Trade and other receivables
Plant and equipment
Exploration, evaluation and development
expenditure
Financial assets
TOTAL NON CURRENT ASSETS
Note Consolidate
Parent
d
2008
2008
$
2007
$
5
6
6
7
8
9
22,665,063
561,401
23,226,464
22,658,805
469,469
23,128,274
2,411,392
72,158
2,483,550
-
404,522
35,000,000
404,522
-
119,425
87,704,929
-
88,109,451
13,272,035
39,500,000
88,176,557
2,728,811
-
2,848,236
TOTAL AS SETS
111,335,915 111,304,831
5,331,786
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
10
259,499
259,499
248,845
248,845
152,754
152,754
TOTAL LIABILITIES
259,499
248,845
152,754
NET AS SETS
EQUITY
Issued capital
Reserves
Accumulated losses
Minority interest
TOTAL EQUITY
111,076,416 111,055,986
5,179,032
11
12
114,896,075 114,896,075
34,692,611
34,692,602
(38,546,403) (38,532,700)
-
34,142
5,238,229
140,827
(200,024)
-
111,076,416 111,055,986
5,179,032
The accompanying notes form part of these financial statements.
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15
Statement of Changes in Equity
As at 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
STATEMENT OF CHA NGE S I N EQUITY
AS AT 30 J UNE 2008
Parent Entity
Balance at 1 July 2006
Loss for year
Contributions of equity net of
transaction costs
Issue of options net of transaction
costs
Balance at 30 June 2007
Loss for year
Contributions of equity net of
transaction costs
Issue of options net of transaction
costs
Balance at 30 June 2008
Is sued
Capital
$
Option
Reserve
$
Accumulate
d Losses
$
Total
$
4,050,844
-
1,187,385
-
-
-
(324)
(199,700)
4,050,520
(199,700)
-
1,187,385
-
5,238,229
140,827
140,827
-
(200,024)
140,827
5,179,032
-
- (38,332,676) (38,332,676)
109,657,846
-
- 109,657,846
-
114,896,075
34,551,784
34,551,784
34,692,611 (38,532,700) 111,055,986
-
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Is sued
Capital
Option
Reserve
Accumulate
d Losses
$
$
$
Foreign
Currency
Translation
Reserve
$
Total
$
5,238,229
-
140,827
(200,024)
- (38,346,379)
5,179,032
-
-- (38,346,379)
109,657,846
-
-
- 109,657,846
- 34,551,784
-
-
-
34,142
- 34,551,784
34,142
-
-
-
-
(9)
(9)
114,896,075 34,692,611 (38,512,261)
(9) 111,076,416
Consolidated Group
Balance at 1 July
2007
Loss for year
Contributions of equity net
of transaction costs
Issue of options net of
transaction costs
Minority Interest
Adjustments from
translation of foreign
controlled entities
Balance at 30 June
2008
The accompanying notes form part of these financial statements.
16
71
Statement of Cash Flow
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
STATEMENT OF C AS H FL OWS
F OR THE YEAR ENDE D 30 J U NE 2008
CASH FLOWS FROM OPERATING
ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Payments for set up of subsidiaries
Note Consolidate
d
2008
$
Parent
2008
$
2007
$
14,637
(2,330,955)
1,023,588
(157)
(24,500)
14,629
(2,330,951)
1,023,588
(157)
(24,500)
-
(284,561)
193,979
-
-
Net cash used in operating activities
14
(1,317,387)
(1,317,391)
(90,582)
CASH FLOWS FROM INVESTING
ACTIVITIES
Payments for property, plant and equipment
Payments for exploration and development
Payments for acquisition of subsidiary
(366,938)
(366,938)
(10,518,724) (10,518,724)
(1,000,000)
(3,000,000)
(133,024)
(2,396,944)
-
Net cash used in investing activities
(13,885,662) (11,885,662)
(2,529,968)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of shares/options
Share/option issue expenses
Loans to related parties
Loans from related parties
Net cash provided by in financing activities
38,915,538
(3,363,876)
(101,196)
6,254
38,915,538
(3,363,876)
(2,101,196)
-
1,340,828
(12,617)
-
-
35,456,720
33,450,466
1,328,211
Net increase/(decrease) in cash held
20,253,671
20,247,413
(1,292,339)
Cash and cash equivalents at beginning of
financial year
2,411,392
2,411,392
3,703,731
Cash and cash equivalents at end of financial
year
5
22,665,063
22,658,805
2,411,392
The accompanying notes form part of these financial statements.
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17
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 1: S UM M AR Y OF SI G NI FIC ANT ACC OU NTING P OLICIES
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001.
The financial report covers Greenland Minerals and Energy Ltd is a listed Company, trading on the
Australian Securities Exchange, limited by shares, incorporated and domiciled in Australia.
The financial report of Greenland Minerals and Energy Ltd complies with Australian Accounting
Standards and International Financial Reporting Standards (IFRS).
The following is a summary of the material accounting policies adopted by the Company in the
preparation of the financial report. The accounting policies have been consistently applied unless
otherwise stated.
Basis of Preparation
The financial report has been prepared on an accruals basis and is based on historical costs and does
not take into account changing money values or, except where stated, current valuations of non-current
assets. Cost is based on the fair values of the considerations given in exchange for assets.
Accounting Policies
(a)
Income tax
The charge for current income tax expense is based on the profit for the year adjusted for any
non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are
substantively enacted by the balance sheet date.
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Deferred tax is accounted for using the balance sheet liability method in respect of temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in the
financial statements. No deferred income tax will be recognised from the initial recognition of an
asset or liability, excluding a business combination, where there is no effect on accounting or
taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is
realised or liability is settled. Deferred tax is credited in the income statement except where it
relates to items that may be credited directly to equity, in which case the deferred tax is adjusted
directly against equity.
Deferred income tax assets are recognised to the extent it is probable that future tax profits will be
available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation
that the Company will derive sufficient future assessable income to enable the benefit to be
realised and comply with the conditions of deductibility imposed by the law.
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
73
18
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTE 1: S UM M AR Y OF SI G NI FIC ANT ACC OU NTING P OLICIES (cont)
(b) Impairment of assets
At each reporting date, the Company reviews the carrying values of its tangible and intangible
assets to determine whether there is any indication that those assets have been impaired. If such
an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value
less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the
asset’s carrying value over it recoverable amount is expensed to the income statement.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
(c) Revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets.
All revenue is stated net of the amount of goods and services tax (GST).
(d) Trade and other receivables
Collectibility of receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off. A provision for doubtful debts is raised when some doubt as to
collection exits.
(e) Trade and other payables
These amounts represent liabilities for goods and services provided to the entity prior to the end
of the financial period and which are unpaid. The amounts are unsecured and are usually paid
within 30 days of recognition.
(f) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions
and other highly liquid investments with original maturities of three months or less and bank
overdrafts. Bank overdrafts are shown within short term borrowings in current liabilities on the
balance sheet.
(g) Financial instruments
The entity classifies its investments in the following categories: financial assets at fair value
through profit or loss, loans and receivables, and available-for-sale financial assets. The
classification depends on the purpose for which the investments were acquired. Management
determines the classification of its investments at initial recognition and re-evaluates this
designation at each reporting date.
All regular way purchases and sales of financial assets are recognised on the trade date i.e. the
date that the Company 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.
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19
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 1: S UM M AR Y OF SI G NI FIC ANT ACC OU NTING P OLICIES (cont)
(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 Company has the positive intention and ability to
hold to maturity. Investments intended to be held for an undefined period are not included
in this classification. Investments that are intended to be held-to-maturity, such as bonds,
are subsequently measured at amortised cost. This cost is computed as the amount initially
recognised minus principal repayments, plus or minus the cumulative amortisation using
the effective interest method of any difference between the initially recognised amount and
the maturity amount. This calculation includes all fees and points paid or received between
parties to the contract that are an integral part of the effective interest rate, transaction costs
and all other premiums and discounts. For investments carried at amortised cost, gains and
losses are recognised in profit or loss when the investments are derecognised or impaired,
as well as through the amortisation process.
(iii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Such assets are carried at amortised cost
using the effective interest method. Gains and losses are recognised in profit or loss when
the loans and receivables are derecognised or impaired, as well as through the amortisation
process.
(iv) Available-for-sale investments
Available-for-sale investments are those non-derivative financial assets that are designated
as available-for-sale or are not classified as any of the three preceding categories. After
initial recognition available-for sale investments are measured at fair value with gains or
losses being recognised as a separate component of equity until the investment is
derecognised or until the investment is determined to be impaired, at which time the
cumulative gain or loss previously reported in equity is recognised in profit or loss.
The fair value of investments that are actively traded in organised financial markets is determined
by reference to quoted market bid prices at the close of business on the balance sheet date. For
investments with no active market, fair value is determined using valuation techniques. Such
techniques include using recent arm’s length market transactions; reference to the current market
value of another instrument that is substantially the same; discounted cash flow analysis and
option pricing models
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0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
d
t
L
y
g
r
e
n
E
d
n
a
s
l
i
a
r
e
n
M
d
n
a
l
n
e
e
r
G
75
20
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 1: S UM M AR Y OF SI G NI FIC ANT ACC OU NTING P OLICIES (cont)
(h) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the
amount of GST incurred is not recoverable from the Australian Tax Office. In these
circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an
item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST
component of investing and financing activities, which are disclosed as operating cash flows.
(i) Capitalisation of exploration and evaluation expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each
identifiable area of interest. These costs are only carried forward to the extent that they are
expected to be recouped through the successful development of the area or where activities in the
area have not yet reached a stage that permits reasonable assessment of the existence of
economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off to the income statement in the
year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest will be
amortised over the life of the area according to the rate of depletion of the economically
recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of interest.
Costs of site restoration are provided over the life of the facility from when exploration
commences and are included in the costs of that stage. Site restoration costs include the
dismantling and removal of mining plant, equipment and building structures, waste removal, and
rehabilitation of the site in accordance with clauses of the mining or petroleum permits. Such
costs have been determined using estimates of future costs, current legal requirements and
technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining
the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration
due to community expectations and future legislation. Accordingly the costs have been
determined on the basis that the restoration will be completed within 1 year of abandoning the
site.
(j) Acquisition of assets
The purchase method of accounting is used for all acquisitions of assets regardless of whether
equity instruments or other assets are acquired. Cost is determined as the fair value of the assets
given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs
directly attributable to the acquisition.
8
0
0
2
t
r
o
p
e
R
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a
u
n
n
A
d
t
L
y
g
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e
n
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M
d
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a
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G
76
21
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 1: S UM M AR Y OF SI G NI FIC ANT ACC OU NTING P OLICIES (cont)
(k) Share based payments
The fair value of options and shares of the Company is recognised as an expense in the financial
statements in relation to the granting of these options.
(l) Earnings per share
(i) Basic earnings per share
Basic earnings per share is determined by dividing the net profit after income tax
attributable to members of the Company, excluding any costs of servicing equity other than
ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial period, adjusted for bonus elements in ordinary shares issued during the period.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings
per share to take into account the after income tax effect of interest and other financing
costs associated with dilutive potential ordinary shares and the weighted average number of
shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
8
0
0
2
t
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g
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G
(m) Is sued 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. Incremental costs directly attributable to the issue
of new shares or options, or for the acquisition of a business, are included in the cost of the
acquisition as part of the purchase consideration.
(n) Critical accounting estimates and judgement
The directors evaluate estimates and judgements incorporated into the financial report based on
historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic data, obtained both
externally and within the Company.
Key Estimates – Impairment
The Company assesses impairment at each reporting date by evaluating conditions specific to the
Company that may lead to impairment of assets. Where an impairment trigger exists, the
recoverable amount of the asset is determined. Value-in-use calculations performed in assessing
recoverable amounts incorporate a number of key estimates.
(o) Plant and Equipment
Each class of plant and equipment is carried at cost or fair value less, where applicable, any
accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the item. In the event
that settlement of all or part of the purchase consideration is deferred, cost is determined by
discounting the amounts payable in the future to their present value as at the date of acquisition.
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 1: S UM M AR Y OF SI G NI FIC ANT ACC OU NTING P OLICIES (cont)
77
22
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not
in excess of the recoverable amount from these assets. The recoverable amount is assessed on the
basis of the expected net cash flows that will be received from the assets employment and
subsequent disposal. The expected net cash flows have been discounted to their present values in
determining recoverable amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Company and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the Income Statement during the financial period in which they are
incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated over their useful lives to the Company
commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed As set
Plant and equipment
Office furniture and equipment
Depreciation Rate
33%
10%
The estimated useful lives, residual values and depreciation method is reviewed at the end of each
annual reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount.
These gains and losses are included in the Income Statement. When revalued assets are sold,
amounts included in the revaluation reserve relating to that asset are transferred to retained
earnings.
(p) Comparatives
There is no comparatives for the consolidated amounts at 30 June 2007 as the Company had not
made the acquisitions to form a consolidated group.
NOTE 2: OTHER REVENUE
Revenue from outside operating activities
- Interest
- rental income
- other
Revenue
Consolidate
d
2008
$
Parent
2008
$
2007
$
1,324,932
9,400
8
1,334,340
1,324,932
9,400
-
1,334,332
201,641
26,600
-
228,241
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
d
t
L
y
g
r
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n
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a
s
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a
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e
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G
78
23
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
Consolidate
d
2008
$
Parent
2008
$
2007
$
NOTE 3: LOS SES
Loss from operations have been arrived after charging
the following items:
- depreciation of property, plant and equipment
81,841
81,841
13,599
Other Significant Expenses
Employee benefits expense
- salaries
- superannuation
Total employee benefits expense
Finance Costs
-external
-related parties
-other related parties
Total finance costs
Travel and accommodation
Corporate Advisory Fees
Marketing & PR Consultancy
Admin Expense
NOTE 4: INC OME TAX
(a) Tax expense
Current tax
Deferred tax
-
-
138,525
27,450
165,975
4,084
-
-
4,084
893,394
185,000
171,698
268,156
17,300
0
17,300
1,862
-
-
1,862
-
0
0
112,982
Consolidate
d
2008
$
Parent
2008
$
2007
$
-
-
-
-
-
-
-
-
-
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
d
t
L
y
g
r
e
n
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d
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a
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M
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(b) The prima facie income tax expense on pre-tax
accounting profit from operations reconciles to the
income tax expense in the finanical statements as
follows:
Prima facie tax benefit on loss at 30% (2007: 30%)
(11,506,542) (11,499,803)
(59,910)
Add:
Tax effect of:
- other non-allowable items
- share based payments
- provisions and accruals
- revenue losses not recognised
169,415
11,148,765
-
3,455,080
14,773,260
169,415
11,148,765
-
3,448,341
14,766,521
5,255
-
2,319
890,873
898,447
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
79
24
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
d
t
L
y
g
r
e
n
E
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a
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e
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NOTE 4: INC OME TAX(cont)
Less:
Tax effect of:
- exploration, evaluation and development
expenditure
- provisions and accruals
- capital raising costs
- accrued income
Consolidate
d
2008
$
Parent
2008
$
2007
$
3,155,617
5,400
17,596
88,105
3,266,718
3,155,617
5,400
17,596
88,105
3,266,718
818,643
-
17,596
2,298
838,537
Income tax expense
-
-
-
The applicable average weighted tax rates are as
follows:
0%
0%
0%
(c) The following deferred tax balances have not
been recognised:
Deferred tax assets:
At 30%
Carry forward revenue losses
Capital raising costs
Provisions and accruals
4,358,595
35,948
-
4,394,543
4,351,856
35,948
-
4,387,804
903,515
53,544
5,400
962,459
The tax benefits of the above deferred tax assets will only be obtained if:
(a) The Company derives future assessable income of a nature and of an amount sufficient to
enable the benefits to be utilised;
(b) The Company continues to comply with the conditions for deductibility imposed by law;
and
(c) No change in income tax legislation adversely affect the Company in utilising the benefits.
Consolidated
2008
$
Parent
2008
$
2007
$
Deferred tax liabilities:
At 30%
Exploration,
expenditure
Accrued income
evaluation
and
development
3,974,261
3,974,261
90,403
4,064,664
90,403
4,064,664
818,643
2,298
820,941
The above deferred tax liabilities have not been recognised as they have given rise to the carry forward
revenue losses for which the deferred tax asset has not been recognised.
80
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
25
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTE 5: CAS H AN D C AS H
EQUI VALENTS
Cash on hand
Cash at bank
Deposits maturing within 4 months
Monies held in trust
Consolidate
d
2008
$
Parent
2008
$
2007
$
1,000
664,063
21,000,000
1,000,000
22,665,063
1,000
657,805
21,000,000
1,000,000
22,658,805
-
1,178,535
1,232,857
-
2,411,392
Cash at bank is earning interest on floating interest rates between zero and 6.45%.
Deposits are earning interest at rates ranging from 8.03% to 8.10%.
NOTE 6: TRADE AND OT HER
RECEIVABLES
Current
Other debtors (i)
GST recoverable (i)
Loan to related party
Accrued interest
Total Current Trade & Other Receivables
Non current
Loan to subsidiary (ii)
Consolidate
d
2008
$
Parent
2008
$
2007
$
142,247
66,614
51,196
301,344
561,401
50,315
66,614
51,196
301,344
469,469
34,785
37,373
-
-
72,158
-
35,000,000
-
Terms and conditions relating to the above financial instruments:
(i) Trade and sundry debtors are non-interest bearing unsecured and generally on 30 day terms.
(ii) Provided as an interest free and unsecured loan. Refer to note 9 for further details.
8
0
0
2
t
r
o
p
e
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a
u
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A
d
t
L
y
g
r
e
n
E
d
n
a
s
l
i
a
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e
n
M
d
n
a
l
n
e
e
r
G
81
26
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 7: PLANT AND EQUI P ME NT
At cost
Accumulated depreciation
Consolidate
d
2008
$
Parent
2008
$
2007
$
499,962
(95,440)
404,522
499,962
(95,440)
404,522
133,024
(13,599)
119,425
(a) Movements in carrying amounts
Movements in the carrying amounts for each class of plant and equipment between the beginning
and the end of the period.
Plant and equipment
Carrying amount at 1 July 2007
Acquisitions
Depreciation expense
Carrying amount at 30 June 2008
NOTE 8: EXPLOR ATION, EVALUATI ON
AN D DEVELOP MENT EXPENDITURE
Costs carried forward in respect of interests in:
Exploration and/or evaluation phase in the current year
Acquisition of 100% of Chahood Capital Limited (i)
Acquisition of 61% interest in the Kvanefjeld Joint
Venture (ii)
(i) and (ii) Refer to Note 9 for details of acquisitions.
Consolidate
d
2008
$
Parent
2008
$
2007
$
119,425
366,938
(81,841)
404,522
119,425
366,938
(81,841)
404,522
-
133,024
(13,599)
119,425
Consolidate
d
2008
$
Parent
2008
$
2007
$
2,728,811
10,476,118
39,500,000
2,728,811
10,543,224
-
331,867
2,396,944
-
35,000,000
87,704,929
-
13,272,035
-
2,728,811
Please note that the sale of the Three Sisters Project was completed during September 2008, no
adjustment has been made for this sale.
8
0
0
2
t
r
o
p
e
R
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a
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A
d
t
L
y
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d
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a
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G
82
27
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 9: FI NANCI AL AS SETS
(a) On 31 July 2007, Greenland Minerals and Energy Limited acquired 100% of Chahood Capital
Limited.
(i) Purchase consideration
Consideration
Cash
Shares issued
Total costs of consideration
(ii) Assets and liabilities acquired
Cash
Net assets
Number
of shares
Fair Value
per
security
$
35,000,000
1.10
Fair value
$
1,000,000
38,500,000
39,500,000
Acquiree's
carrying
amount
$
2
2
Fair value
$
2
2
(b) On 31 July 2007, Greenland Minerals and Energy Limited acquired a 61% interest in the
Kvanefjeld Joint Venture .
(i) Purchase consideration
Consideration
Cash
Shares issued
Total costs of combination
Number
Fair Value
per security
$
30,000,000
1.10
Fair value
$
2,000,000
33,000,000
35,000,000
8
0
0
2
t
r
o
p
e
R
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a
u
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A
d
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L
y
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a
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83
28
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 10: TRADE AND OT HER P AY AB LES
Trade and other payables
Amounts payable to related parties
Consolidate
d
2008
$
Parent
2008
$
2007
$
253,245
6,254
259,499
248,845
-
248,845
152,754
-
152,754
Terms and conditions relating to the above financial instruments.
(i) Trade creditors are non-interest bearing and generally on 60 day terms.
(ii) Other creditors are non-interest bearing and have no fixed repayment terms.
(iii) Amounts relate to directors fees owing at year end and are payable within 30 days.
NOTE 11: IS S UED C APITAL
Balance brought forward:
Issues of ordinary shares during the year
Ordinary shares issued to corporate advisors for
achievement of milestones
Ordinary shares issued to directors
Ordinary share issued as a result of exercise of options
Less costs of issue
Consolidate
d
2008
$
Parent
2008
$
2007
$
5,238,229
38,225,001
5,238,229
38,225,001
4,330,060
1,189,835
2,600,000
493,321
104,800,000 104,800,000
2,600,000
493,321
(36,480,476) (36,480,476)
114,876,075 114,876,075
-
-
-
(281,665)
5,238,229
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
d
t
L
y
g
r
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n
E
d
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a
s
l
i
a
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M
d
n
a
l
n
e
e
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G
84
29
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 11: IS S UED C APITAL (cont)
Movements in issued capital
Date
Detail
21/02/2006
10/04/2006
14/06/2006
14/06/2006
25/10/2006
25/10/2006
28/06/2007
29/06/2007
29/06/2007
30/06/2007
06/09/2007
08/08/2007
08/08/2007
16/08/2007
17/08/2007
16/10/2007
30/10/2007
17/12/2007
17/12/2007
17/12/2007
18/12/2007
20/12/2007
15/02/2008
11/04/2008
15/05/2008
30/06/2008
Issued on incorporation
Seed capital
Ordinary shares for cash
Ordinary shares for exploration
permit
Options converted
Transfer of options from option
premium reserve
Placement
Options converted
Transfer of options from option
premium reserve
Balance
Less: capital raising costs
Issue of share to corporate advisers
securities issued on achievement of
vesting hurdles
Exercise of options
Placement
Issue of shares
Issue of shares to vendors
Exercise of options
Issue of shares to Corporate
Adviser securities issued on
achievement of milestones.
Exercise of options
Placement
Issue of shares to directors
Placement
Placement
Options Exercised
Options Exercised
Options Exercised
Options Exercised
Balance
Less: capital raising costs
Issue
price
0.20
0.01
0.20
0.20
0.20
0.005
0.25
0.20
0.005
1.02
0.20
1.00
0.25
1.10
0.20
1.20
0.20
1.25
1.30
1.25
1.25
0.20
0.20
0.20
0.20
Number
$
300
11,000,000
20,000,000
60
110,000
4,000,000
1,100,000
22,900
-
3,200,000
1,878,731
-
37,201,931
220,000
4,580
115
800,000
375,746
9,394
5,519,895
(281,666)
5,238,229
15,000,000
99,141
8,800,000
30,000,000
65,000,000
830,057
15,300,000
19,828
8,800,000
7,500,000
71,500,000
166,011
15,000,000
1,224,047
5,180,000
2,000,000
12,320,000
40,001
67,651
80,900
50,000
114,812
18,000,000
244,809
6,475,000
2,600,000
15,400,000
50,001
13,530
16,180
10,000
22,962
193,008,540 151,356,550
(36,480,476)
114,876,075
Capital Management
Management controls the capital of the Company in order to maintain a good debt to equity ratio,
provide the shareholders with adequate returns and ensure that the Company can fund its operations
and continue as a going concern.
8
0
0
2
t
r
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e
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a
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A
d
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L
y
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n
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85
30
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 11: IS S UED C APITAL (cont)
There are no externally imposed capital requirements.
Management effectively manages the Company’s capital by assessing the Company’s financial risk and
adjusting its capital structure in response to changes in these risks and in the market. These responses
include the management of debt levels and share issues.
There have been no changes in the strategy adopted by management to control the capital of the
Company since the prior year.
Consolidate
d
2008
$
Parent
2008
$
2007
$
NOTE 13: RESERVES
a) Option premium reserve
Balance at beginning of financial period
Issue of options to corporate advisors
Issue of options to directors
Issue of options to consultants
Options converted
Cost of raising options to corporate advisors
Balance at end of financial period
140,827
82,500,000
34,155,000
407,550
(10,766)
140,827
82,500,000
34,155,000
407,550
(10,766)
(82,500,000) (82,500,000)
34,692,611
34,692,611
160,502
-
-
-
(9,509)
(10,166)
140,827
The option premium reserve records items recognised as expenses on valuation of employee share
options.
31
8
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86
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 12: RESERVES (cont)
Movements during the period:
Date
Detail
Issue pursuant to prospectus
13/07/2006
25/10/2006 Options converted
28/06/2007
29/06/2007 Options converted
30/06/2007 Balance
06/09/2007
Placement
08/08/2007
16/08/2007
23/08/2007
16/10/2007
30/10/2007
Issue of options to corporate advisers
securities issued on achievement of
vesting hurdles.
Exercise of options
Issue of 15mil free attaching options
(with the issue of 30mil shares)
Issue of unlisted options to directors
Issue of unlisted options to directors
Exercise of options
Issue of options to Corporate Adviser
securities issued on achievement of
milestones.
Issue of options to Grant Wilson
Issue of options to Martin Helean
Issue of options to Bill Peters
Exercise of options
Issue of options
28/11/2007
28/11/2007
28/11/2007
17/12/2007
20/12/2007
15/02/2008 Options Excercised
12/03/2008 Options issued as part of capital raising
fee exercised at $1.50
11/04/2008 Options exercised
15/05/2008 Options Exercised
30/06/2008
Options Exercised
Balance
Less: option issue costs
b) Foreign currency translation reserve
Balance at beginning of financial period
Adjustments from translation of foreign controlled
entities
Balance at end of financial period
32
Issue Price
$
0.005
0.20
0.20
0.20
0.20
0.20
0.20
0.20
1.50
1.50
1.50
0.20
1.50
0.20
-
0.20
0.20
0.20
Number
$
32,100,300
(22,900)
1,600,000
(1,878,731)
31,798,669
160,502
(115)
-
(9,394)
150,993
75,000,000
(99,141 )
56,250,000
(496 )
15,000,000
19,800,000
3,000,000
(830,057)
-
34,155,000
(4,150)
25,000,000
200,000
200,000
150,000
(1,224,047 )
1
(67,651)
1,338,840
(80,900)
(50,000)
(114,812)
169,020,902
26,250,000
148,200
148,200
111,150
(6,120 )
-
-
-
-
-
-
117,202,777
(82,510,166)
34,692,611
Consolidate
d
2008
$
Parent
2008
$
2007
$
-
(9)
(9)
-
-
-
-
-
-
8
0
0
2
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a
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G
87
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 12: RESERVES (cont)
Option premium reserve
The option premium reserve is used to accumulate proceeds received from the issuing of options and
accumulate the value of options issued in consideration for services rendered and to record the fair
value of options issued but not exercised. The reserve is transferred to accumulated losses upon expiry
or recognised as share capital if exercised.
Foreign currency translation reserve
The foreign currency translation reserve is used to record currency differences arising from the
translation of the financial statements of the foreign subsidiary.
NOTE 13: DI VI DE NDS
No dividends have been proposed or paid during the year.
NOTE 14: NOTE TO STATEMENT OF
CAS H FLOWS
Reconciliation of cash flows from operations with loss
after income tax.
Loss after income tax
Non cash items
Depreciation
Share based payments
Changes in operating assets and liabilities
Consolidate
d
2008
$
Parent
2008
$
2007
$
(38,355,139) (38,332,676)
(199,700)
81,841
37,162,550
81,841
37,162,550
13,599
-
Decrease/(increase) in trade and other receivables
Decrease/(increase) in other assets
Increase/(decrease) in trade and other payables
Prior year correction to option premium reserve
(284,304)
(24,500)
106,745
(4,580)
(296,117)
(24,500)
96,091
(4,580)
(22,141)
-
117,660
-
Net cash from/(used in) operating activities
(1,317,387)
(1,317,391)
(90,582)
NOTE 15: FI NANCI AL RIS K M A NA GEMENT AND P OLICIES
The Company’s principal financial instruments comprise cash and short term deposits. The main
purpose of the financial instruments is to earn the maximum amount of interest at a low risk to the
economic entity. The Company also has other financial instruments such as trade debtors and creditors
which arise directly from its operations. For the period under review, it has been the Company’s
policy not to trade in financial instruments
8
0
0
2
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88
33
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 15: FI NANCI AL RIS K M A NA GEMENT AND P OLICIES (cont)
The main risks arising from the Company’s financial instruments are interest rate risk and credit risk.
The board reviews and agrees policies for managing each of these risks and they are summarised
below:
(a) Interest Rate Risk
The Company is exposed to movements in market interest rates on short term deposits. The
policy is to monitor the interest rate yield curve out to 120 days to ensure a balance is maintained
between the liquidity of cash assets and the interest rate return. The Company does not have
short or long term debt, and therefore this risk is minimal.
(b) Credit Risk
Credit risk refers to the risk that a counter party will default on its contractual obligations
resulting in financial loss to the Company. The Company has adopted the policy of only dealing
with credit worthy counterparties and obtaining sufficient collateral or other security where
appropriate, as a means of mitigating the risk of financial loss from defaults.
The Company does not have any significant credit risk exposure to any single counterparty or
any Company of counterparties having similar characteristics. The carrying amount of financial
assets recorded in the financial statements, net of any provisions for losses, represents the
Company’s maximum exposure to credit risk.
(c) Liquidity Risk
The Company manages liquidity risk by monitoring forecast cash flows.
NOTE 16: FI NANCI AL INSTRUMENTS
(a) Interest rate risk exposures
The Company’s exposure to interest rate risk, which is the risk that a financial instruments value will
fluctuate as a result of changes in market interest rates and the effective weighted average interest rates
on those financial assets and financial liabilities in as follows:
Consolidated
30 June 2008
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
Total financial assets
FINANCIAL LIABILITIES
Trade and other payables
Total financial liabilities
Average
Effective
Interest
Rate
%
5.88
-
-
-
Floating
Interest Rate
Non-Interest
Bearing
$
$
22,665,063
-
-
22,665,063
-
561,401
-
561,401
-
-
259,499
259,499
Fixed Interest
Maturing
Less Than 1
Year
$
Total
$
-
-
-
-
-
-
22,665,063
561,401
-
23,226,464
259,499
259,499
8
0
0
2
t
r
o
p
e
R
l
a
u
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n
A
d
t
L
y
g
r
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a
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a
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G
89
34
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 16: FI NANCI AL INSTRUMENTS (cont)
Parent
30 June 2008
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
Total financial assets
FINANCIAL LIABILITIES
Trade and other payables
Total financial liabilities
30 June 2007
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
Other assets
Total financial assets
FINANCIAL LIABILITIES
Trade and other payables
Total financial liabilities
Average
Effective
Interest
Rate
%
6.40
Floating
Interest Rate
Non-Interest
Bearing
$
$
22,658,805
-
-
22,658,805
-
409,469
35,000,000
35,469,469
-
-
248,845
248,845
5.96
2,411,392
-
-
2,411,392
-
72,158
-
72,158
-
-
152,754
152,754
Consolidate
d
2008
$
Fixed Interest
Maturing
Less Than 1
Year
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
22,658,805
469,469
35,000,000
58,128,274
248,845
248,845
2,411,392
72,158
-
2,483,550
152,754
152,754
Parent
2008
$
2007
$
Trade and sundry payables are expected to be paid as
follows:
Less than 6 months
(b) Financial assets
259,499
248,845
152,754
Trade receivables from other entities are carried at nominal amounts less any provision for
doubtful debts.
Other receivables are carried at nominal amounts due. Interest is taken up as income on an
accruals basis.
(c) Financial liabilities
Liabilities are recognised for amounts to be paid in the future for goods and services received,
whether or not billed to the Company.
8
0
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2
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90
35
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 16: FI NANCI AL INSTRUMENTS (cont)
(d) Equity
Ordinary share capital is recognised at the fair value of the consideration received by the
Company.
(e) Credit risk exposures
The credit risk on financial assets of the Company has been recognised on the balance sheet and
is generally the carrying amount net of any provisions for doubtful debts.
The Company does not have any material credit risk exposure to any single debtor or group of
debtors under financial instruments entered into.
(f) Net fair value of financial assets and liabilities
The carrying amount of financial assets and liabilities approximates fair value because of their
short-term maturity.
(g) Sensitivity analysis
Interest Rate Risk, Foreign Currency Risk and Price Risk
The Company has performed sensitivity analysis relating to its exposure to interest rate risk at
balance date. This sensitivity analysis demonstrates the effect on the current year results and
equity post tax which could result from a change in these risks.
Interest Rate Sensitivity Analysis
At 30 June 2008, the effect on profit and equity as a result of changes in the interest rate, with all
other variables remaining constant would be as follows:
Change in profit
Increase in interest rate by 1% (100 basis points)
Decrease in interest rate by 1% (100 basis points)
Change in equity
Increase in interest rate by 1% (100 basis points)
Decrease in interest rate by 1% (100 basis points)
Consolidate
d
2008
$
Parent
2008
$
2007
$
226,650
(226,650)
226,650
(226,650)
24,114
(24,114)
226,650
(226,650)
226,650
(226,650)
24,114
(24,114)
NOTE 17: SEGMENT INF OR M ATION
The Company operates in one geographical segment, being Greenland, and in one business segment
being exploration for minerals.
NOTE 18: EVENTS S UB SEQUE NT TO BAL ANCE DATE
On the 8 September 2008 the Company received full settlement of the outstanding amounts due for the
sale of its Three Sisters Project in Queensland.
8
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2
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91
36
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 19: COM MITMENTS F OR EXPENDITURE
In order to maintain current rights of tenure to exploration licences, the Company is required to perform
minimum exploration work to meet the minimum expenditure requirements.
If the Company decides to relinquish certain licences and/or does not meet these obligations, assets
recognized in the balance sheet may require review to determine the appropriateness of the carrying
values. The sale, transfer or farm-out of exploration rights to third parties will reduce or extinguish
these obligations.
Not longer than 1 year
Longer than 1 year, but not longer than 5 years
Longer than 5 years
Consolidate
d
2008
$
Parent
2008
$
2007
$
200,000
800,000
-
1,000,000
200,000
800,000
-
1,000,000
63,885
157,721
-
221,606
NOTE 20: RELATED P ARTIES
Key management personnel
On the 23 August 2007 the composition of the board became:
Dr. Hans Kristian (Hank) Schønwandt Chairman
Mr Roderick McIllree Managing director
Mr Simon Cato Executive director
Mr Jeremy Whybrow Exploration director
Mr Malcolm Mason Technical director
Mr Tony Ho Non-Executive director
Mr Simon Stafford-Michael Non-Executive director
Director Incentive Options
At the 31st July 2007 General Meeting incentive Options were approved to be issued to Simon Cato,
Roderick McIllree and Jeremy Whybrow as existing Directors and to Malcolm Mason as a proposed
Director.
The Options to be issued to each of Messrs Cato, McIllree and Whybrow were issued on the 23
August 2007 but will be constituted by three tranches. Details of the vesting hurdles and the exercise
price of the three tranches for each of Messrs Cato, McIllree and Whybrow are as follows:
Tranche Number of
Vesting Hurdle*
1st
2nd
3rd
Options
2,200,000
2,200,000
2,200,000
The volume weighted average price of the Shares is
50 cents or more for 20 consecutive trading days
The volume weighted average price of the Shares is
$1.00 or more for 20 consecutive trading days
The volume weighted average price of the Shares is
$1.50 or more for 20 consecutive trading days
Exercise
Price
20 cents
20 cents
20 cents
8
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92
37
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 20: RELATED P ARTIES (cont)
Once the Share price criteria is satisfied, the Options will only vest upon delivery of subsequent written
notification of vesting from the Option holder to the Company.
The Options to be issued to Malcolm Mason or his nominee were issued on the 23 August 2007 but
will be constituted by two tranches. Details of the vesting hurdles and the exercise price of the two
tranches are as follows:
Tranche Number of
Options
2,000,000
1st
2nd
1,000,000
Vesting Hurdle*
Malcolm Mason continues to serve as a Director of
the Company for 12 consecutive months and makes
himself available to provide technical geological
services including field services upon the Kvanefjeld
Project
Malcolm Mason continues to serve as a Director of
the Company for 18 consecutive months and makes
himself available to provide technical geological
services including field services upon the Kvanefjeld
Project.
Exercise
Price
20 cents
20 cents
* The vesting criteria will be waived so that the criteria is satisfied in the event a takeover or scheme of
arrangement is successfully completed in relation to the Company or Malcolm Mason dies. Once the
vesting criteria is satisfied, the Options will only vest upon delivery of subsequent written notification
of vesting from the Option holder to the Company.
Otherwise, the terms of the Options to be issued to each of Messrs Cato, McIllree, Whybrow and
Mason are as follows:
(a)
(b)
(c)
(d)
(e)
(f)
Each Option entitles the holder to one Share.
Subject to the vesting, the Options are exercisable at any time prior to 5pm Western
Standard Time on 30 June 2011 (Expiry Date).
The exercise price of the Options is 20 cents per Option.
Until the Options are vested, the Options will be unlisted and will not be transferable except
with the approval of the Board. Once the Options are vested, the Company will apply to
have the Options listed and the Options will be freely transferable.
The Company will provide to each Options holder a notice that is to be completed when
exercising the Options (Notice of Exercise). Subject to these terms, the Options may be
exercised wholly or in part by completing the Notice of Exercise and delivering it together
with payment to the secretary of the Company to be received any time prior to the Expiry
Date. The Company will process all relevant documents received at the end of every
calendar month.
Upon the exercise of an Option and receipt of all relevant documents and payment, the
holder in accordance with paragraph (e) will be allotted and issued a Share ranking pari
passu with the then issued Shares.
38
8
0
0
2
t
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93
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
8
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0
2
t
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NOTE 20: RELATED P ARTIES (cont)
(g)
(h)
(i)
(j)
There will be no participating rights or entitlements inherent in the Options and the holders
will not be entitled to participate in new issues of capital which may be offered to
Shareholders during the currency of the Options. However, the Company will ensure that
for the purposes of determining entitlements to any such issue, the record date will be at
least 7 business days after the issue is announced. This will give Optionholders the
opportunity (where available) to exercise their Options prior to the date for determining
entitlements to participate in any such issue.
If there is a bonus issue (Bonus Issue) to Shareholders, the number of Shares over which
an Option is exercisable will be increased by the number of Shares which the holder would
have received if the Option had been exercised before the record date for the Bonus Issue
(Bonus Shares). The Bonus Shares must be paid up by the Company out of profits or
reserves (as the case may be) in the same manner as was applied in the Bonus Issue, and
upon issue will rank equally in all respects with the other Shares on issue as at the date of
issue of the Bonus Shares.
In the event of any reconstruction (including consolidation, sub-division, reduction or
return) of the issued capital of the Company prior to the Expiry Date, all rights of an
Optionholder are to be changed in a manner consistent with the Listing Rules.
In the event that the Company makes a pro rata issue of securities, the exercise price of the
Options will be adjusted in accordance with the formula set out in Listing Rule 6.22.2.
Loans to key management personnel and their related parties
There were no loans outstanding at the reporting date to key management personnel and their related
parties.
Other transactions with the Company
No director has entered into a material contract (apart from employment) with the Company since the
incorporation of the Company and there were no material contracts involving directors’ interests
subsisting at year end.
Director related entities
� Whybrow Consulting, a Company which Mr Jeremy Whybrow is a director was paid director
fees of $92,600. Of that total, $70,800 was related to consultancy fees.
�
Roderick Millree, a Company of which Mr Roderick Mcillree is a director was paid director fees
of $84,990 during the year. Of this amount, $62,100 was related to consultancy fees.
� Westrip Holdings Ltd a Company of which Mr Simon Stafford Michael is a director was paid
directors and consultancy fees of $33,980 during the year. This amount is included in the
remuneration report.
� Mineralhunt Services APL a Company of which Mr Hans Kristian Vinding Schonwandt is a
director was paid directors and consultancy fees of $211,500 during the year. This amount is
included in the remuneration report.
� Missoni Investments Pty Ltd a Company of which Mr Malcolm Mason is a director was paid
directors and consultancy fees of $197,527 during the year. This amount is included in the
remuneration report.
�
94
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
39
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTE 21: AUDITOR S’ REM UNERATION
Amounts received or due and receivable by Mack & Co
for:
- an audit of the financial report
- taxation matters
Consolidate
d
2008
$
Parent
2008
$
2007
$
31,050
4,200
35,250
31,050
4,200
35,250
31,000
1,850
32,850
NOTE 22: CRITICAL ACC OUNTI NG ES TIM ATES & JUD GEMENTS
In preparing this Financial Report the Company has been required to make certain estimates and
assumptions concerning future occurrences. There is an inherent risk that the resulting accounting
estimates will not equate exactly with actual events and results.
a)
Significant accounting judgements
In the process of applying the Company's accounting policies, management has made the
following judgements, apart from those involving estimations, which have the most significant
effect on the amounts recognised in the financial statements:
Capitalisation of exploration and evaluation expenditure
The Company has capitalised significant exploration and evaluation expenditure on the basis
either that this is expected to be recouped through future successful development (or alternatively
sale) of the Areas of Interest concerned or on the basis that it is not yet possible to assess
whether it will be recouped.
Deferred tax assets
The Company expects to have carried forward tax losses which have not been recognised as
deferred tax assets as it is not considered sufficiently probable at this point in time, that these
losses will be recouped by means of future profits taxable in the relevant jurisdictions.
b) Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of certain assets and liabilities within the
next annual reporting period are:
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a
number of factors, including whether the Company decides to exploit the related lease itself or, if
not, whether it successfully recovers the related exploration and evaluation asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources,
future technological changes, costs of drilling and production, production rates, future legal
changes (including changes to environmental restoration obligations) and changes to commodity
prices.
As at 30 June 2008, the carrying value of capitalised exploration expenditure is $847,594.
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NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
40
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTE 23: CHANGE I N ACC OUNTI NG P OLICY
The following Australian Accounting Standards have been issued or amended and are applicable to the
Company but are not yet effective. They have not been adopted in preparation of the financial
statements at reporting date.
Referenc
e
Title
Summary
Applicatio
n date of
standard
1 January
2009
Amending standard
issued as a consequence
of AASB 8 Operating
Segments
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AASB
2007-3
Amendments to
Australian
Accounting
Standards arising
from AASB 8
[AASB 5, AASB
6, AASB 102,
AASB 107,
AASB 119,
AASB 127,
AASB 134,
AASB 136,
AASB 1023 &
AASB 1038]
AASB 8 Operating
Segments
AASB
2007-6
Amendments to
Australian
Accounting
Standards arising
from AASB 123
[AASB 1, AASB
101, AASB 107,
AASB 111,
AASB 116 &
AASB 138 and
Interpretations 1
& 12]
This new standard will
replace AASB 114
Segment Reporting and
adopts a management
approach to segment
reporting.
Amending standard
issued as a consequence
of AASB 123 (revised)
Borrowing Costs.
1 January
2009
1 January
2009
41
Applicatio
n date of
Company
1 July 2009
1 July 2009
1 July 2009
Impact on
Company
financial
report
AASB 8 is a
disclosure
standard so will
have no direct
impact on the
amounts
included in the
Group’s
financial
statements.
However the
new standard
may have an
impact on the
segment
disclosures
included in the
Group’s
financial report.
Refer to AASB
2007-3 above.
As the Group
does not
currently
construct or
produce any
qualifying assets
which are
financed by
borrowings the
revised standard
will have no
impact.
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 23: CHANGE I N ACC OUNTI NG P OLICY (cont)
Applicatio
Referenc
n date of
e
standard
Summary
Title
AASB
123
Borrowing Costs AASB 123 previously
1 January
2009
1 January
2009
Impact on
Company
financial
report
Refer to AASB
2007-6 above.
Applicatio
n date of
Company
1 July 2009
1 July 2009
These
amendments are
only expected to
affect the
presentation of
the group’s
financial report
and will not have
a direct impact
on the
measurement
and recognition
of amounts
disclosed in the
financial report.
The group has
not determined at
this stage
whether to
present a single
statement of
comprehensive
income or two
separate
statements.
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permitted entities to
choose between
expensing all
borrowing costs and
capitalizing those that
were attributable to the
acquisition,
construction or
production of a
qualifying asset. The
revised version of
AASB 23 requires
borrowing costs to be
capitalized if they are
directly attributable to
the acquisition,
construction or
production of a
qualifying asset.
Introduces a statement
of comprehensive
income.
Other revisions include
impacts on the
presentation of items in
the statement of
changes in equity, new
presentation
requirements for
restatements or
reclassifications of
items in the financial
statements, changes in
the presentation
requirements for
dividends and changes
to the titles of the
financial statements.
42
AASB
101
(revised)
and AASB
2007-8
Presentation of
Financial
Statements and
consequential
amendments to
other Australian
Accounting
Standards
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 23: CHANGE I N ACC OUNTI NG P OLICY (cont)
Applicatio
Referenc
n date of
e
standard
Summary
Title
1 January
2009
Applicatio
n date of
Company
1 July 2009
Impact on
Company
financial
report
The group does
not make share
based payments.
As such there
will be no
financial impact.
1 July 2009 The group has
1 July 2009
no planned
business
combinations.
As such there
will be no
financial impact.
1 July 2009 Refer to AASB
3 (revised) and
AASB 127
(revised) above.
1 July 2009
1 July 2008
The amendments clarify
the definition of
‘vesting conditions’,
introducing the term
‘non-vesting
conditions’ for
conditions other than
vesting conditions as
specifically defined and
prescribe the accounting
treatment of an award
that is effectively
cancelled because a
non-vesting condition is
not satisfied.
The revised standard
introduces a number of
changes to the
accounting for business
combinations
Amending standard
issued as a consequence
of revisions to AASB 3
and AASB 127.
AASB
2008-1
Amendments to
Australian
Accounting
Standard – Share-
based Payments:
Vesting
Conditions and
Cancellations
AASB 3
(revised)
Business
combinations
AASB
2008-3
AASB
2007-2
Amendments to
Australian
Accounting
Standards arising
from AASB 3
and AASB 127
Amendments to
Australian
Accounting
Standards arising
from AASB
Interpretation 12
Amending standard
issued as a consequence
of AASB Interpretation
12 Service Concession
Arrangements.
1 January
2008
As the Group
currently has no
service
concession
arrangements or
public-private-
partnerships
(PPP), it is
expected that this
Interpretation
will have no
impact on its
financial report.
43
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98
Notes to the Financial Statements
For the year ended 30 June 2008
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
NOTES TO THE FINA NCI AL STATEMENTS
F OR THE YEAR ENDE D 30 J U NE 2008
NOTE 24: CONTINGE NT AS SETS / LIABILITIES
Subject to further review of the Western Australian Payroll Tax Assessment Act 2002 and how it may
apply to the equity and remuneration of employees, the Company may have a contingent liability in
respect of the granting of those equity instruments of approximately $1,100,000.
NOTE 25: COM P A N Y DETAILS
The registered office and principal place of business of the Company is:
Ground Floor
33 Colin Street
West Perth, WA, 6005.
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44
Directors’ Declaration
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
D I R EC T OR S ’ D EC L AR A T I O N
The directors of the Company declare that:-
(a) The financial statements, notes and the additional disclosures included in the directors’ report
designated as audited, of the Company are in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Company’s financial position as at 30 June 2008 and of
their performance for the period ended on that date; and
(ii)
comply with Accounting Standards and Corporations Regulations 2001; and
(b)
the Chief Executive Officer and Chief Financial Officer have declared that:
(i)
(ii)
the financial records of the Company for the financial year have been properly
maintained in accordance with section 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with the Accounting
Standards; and
(iii)
the financial statements and notes for the financial year give a true and fair view.
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable; and
The directors have been given the declarations required by s.295A of the Corporations Act 2001 for the
financial period ended 30 June 2008.
This declaration is made in accordance with a resolution of the directors.
Date: 30 September 2008
45
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100
Independent Audit Report
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
INDE PENDENT AUDIT REPORT
TO THE MEMBERS OF GREENLAND M INERALS AND ENERGY LTD
Report on the Financial Report
We have audited the accompanying financial report of Greenland Minerals and Energy Ltd (the
Company) and Controlled Entities (the Consolidated Entity) which comprises the balance sheet as at 30
June 2008, and the income statement, statement of changes in equity and cash flow statement for the
year ended on that date, a summary of significant accounting policies and other explanatory notes and
the directors’ declaration.
Directors’ Responsibility for the Financial Report
The directors of the Company are responsible for the preparation and fair presentation of the financial
report in accordance with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Act 2001. This responsibility includes establishing and
maintaining internal control relevant to the preparation and fair presentation of the financial report that
is free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note
1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of
Financial Statements, that compliance with the Australian equivalents to International Financial
Reporting Standards (IFRS) ensures that the financial report, comprising the financial statements and
notes, complies with IFRS.
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. These Auditing 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 judgment, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial report in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by the directors, as well as
evaluating the overall presentation of the financial report.
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. We confirm that the independence declaration required by the Corporations Act 2001,
provided to the directors of Greenland Minerals and Energy Ltd would be on the same terms if
provided to the directors as at the date of this auditor’s report.
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46
Independent Audit Report
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
INDE PENDENT AUDIT REPORT
TO THE MEMBERS OF GREENLAND M INERALS AND ENERGY LTD
Audit Opinion
In our opinion:
a.
the financial report of Greenland Minerals and Energy Ltd and its Controlled Entities is in
accordance with the Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the Company’s and Consolidated Entiy’s financial position
as at 30 June 2008 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
b.
the financial report also complies with International financial Reporting Standards as disclosed in
Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report under the heading
“Remuneration Report – Audited” for the year ended 30 June 2008.
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.
Audit Opinion
In our opinion the remuneration report of Greenland Minerals and Energy Ltd for the year ended 30
June 2008 complies with section 300A of the Corporations Act 2001.
___________________________
Mack & Co
Chartered Accountants
2nd Floor, 35 Havelock Street
West Perth WA 6005
___________________________
N A Calder, Partner
___________________________
Date:
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47
Corporate Governance
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
CORP OR A T E G O V E R N A NC E
P r inciples o f B est P r a c tic e R e commendations commenta ry
The Board of Director’s are responsible for the overall strategy, governance and performance of
Greenland Minerals & Energy Ltd. (hereafter GGG or the Company). The Company is an exploration
Company whose strategy is to add substantial shareholder value through the acquisition, exploration,
development and commercialization of projects in Greenland with a focus on the Kvanefjeld project. The
Board has adopted a corporate governance framework which it considers to be suitable given the size,
history and strategy of the Company.
P r inciples o f B est P r a c tic e R e commendations
In accordance with ASX Listing Rule 4.10, GGG is required to disclose the extent to which it has
followed the Principles of Best Practice Recommendations during the financial year. Where GGG has not
followed a recommendation, this has been identified and an explanation for the departure has been
given.
P r inciple 1: Lay solid foundations for manage ment and ove rsight
The Board has established a framework within the Group that:
� enables it to provide strategic guidance and effective supervision of management;
� clarifies the respective roles and responsibilities of Board members and senior executives;
� ensures a balance of authority so that no single individual has unfettered powers; and
�
identifies significant business risks and ensures that those risks are well managed.
The day-to-day management of the Group has been delegated to the Chief Executive Officer, Mr
Roderick McIllree.
The Board has also adopted a Board Charter which details the functions and responsibilities of the Board
and those delegated to management. In addition, letters of appointment have been signed by non-
executive directors and each executive director has signed an employment agreement. A copy of the
Board Charter has been placed on the Company’s website.
P r inciple 2: S tructur e the Boa rd to add va lue
The Board has been structures so that it has effective composition, size and commitment to adequately
discharge its responsibilities and duties. The names and qualifications of the Directors are stated in the
annual report along with the date of appointment. Each Director is entitled to receive independent
professional advice at the Company’s expense.
Mr Tony Ho, Mr Simon Stafford-Michael and Mr Hank Schønwandt are independent Directors who
fulfill the independence criteria outlines in the guidelines.
Mr Schønwandt has been appointed Chairman by the board on 22nd August 2007.
The Board believes that it is able to exercise independence and judgment and does possess the necessary
skills, expertise and experience required to effectively discharge their duties. The focus has been on the
ability of the Board to add value by effectively exercising independence and discharging their duties,
rather than on meeting the independence test in the guidelines.
The roles of the Chairman and the Chief Executive Officer are exercised by Mr Schønwandt and Mr Rod
McIllree.
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48
Corporate Governance
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
CORP OR A T E G O V E R N A NC E
The Board maintains the roles of Audit, Nomination and Risk Management Committees to itself as it
considers the Company not appropriate in size to justify these as subcommittees.
P r inciple 3: P romote e thic a l and r e sponsible d e c ision-making
Ethical and responsible decision-making is promoted by the Board in a top-down approach.
The Board has adopted a Code of Conduct to guide the Directors, the Chairman, the Chief Executive
Officer and other key executives as to practices necessary to maintain confidence in the Company’s
integrity and to the responsibility and accountability of individuals for reporting and investigating
reports of unethical behavior.
The Board has also adopted a Securities Trading Policy, to guide investment decisions. The Company has
not adopted compliance standards and procedures to facilitate the implementation and assessment of the
Code of Conduct and Securities Trading Policy. Given the Company’s size, history and strategy it was
not considered appropriate to adopts these policies during the reporting period. The Company will
largely comply with these recommendations during future reporting periods.
A copy of the Copy of Conduct and Securities Trading Policy has been placed on the Company’s
website.
P r inciple 4: S a f egua rd integrity in f inanc ia l r eporting
The integrity of the Company’s financial reporting is a critical aspect of GGG’s corporate governance
and structures have been implemented during the reporting period to verify and safeguard the integrity
of the Company’s financial reporting.
It is the policy of the Board that the Company’s financial statements be reviewed or audited, at a
minimum, each half year. The financial statements are reviewed by the Board which operates under
formal terms of reference which is placed on the website.
The Board has requested that the Chief Executive Officer and Finance Director state in writing that the
financial statements present a true and fair view, in all material respects, of the Company’s financial
condition and operational results and are prepared in accordance with International Financial Reporting
Standards.
P r inciple 5: M ake timely and balanc ed disc losur e
The Board promotes timely and balanced disclosure of all material matters concerning the Company.
The Company has formalized its policy to promote a culture whereby all senior management understands
the processes in relation to the timely disclosure of information.
A copy of the Reporting Policy has been placed on the Company’s website.
P r inciple 6: R espe c t the r ights o f sha r eholde r s
The Board respects the rights of all shareholders and, to facilitate the effective exercise of those rights,
the Company is committed to effective communication with shareholders. This occurs by electronic ASX
releases to the market, through GGG e-list email communications (registration is available via the
Company’s website) and by the provision to shareholders of balanced and understandable information in
relation to corporate proposals.
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49
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
CORP OR A T E G O V E R N A NC E
Shareholders generally participate in shareholder meetings through the appointment of a proxy. The
Company’s external Auditor is invited to attend these meetings.
P r inciple 7: R e cognise and manage r isk
The Company recognizes the importance of managing risk and has established systems to assess, monitor
and manage risk based on the Company’s size, history and strategy. The exploration and development of
natural resources is a speculative activity that involves a high degree of financial risk.
The Company has formalized its policy to identify, monitor and manage risk.
The Chief Executive Officer and Company Secretary are responsible for the identification and
management of business risks. The Board has obtained a written confirmation from the Chief Executive
Officer and the Company Secretary that the statement in relation to principle 4 above is founded on a
sound system of risk management and internal compliance and control. The Board has obtained a
statement confirming that the systems are operating efficiently and effectively in all material respects.
P r inciple 8: Encour age enhanc ed pe r formanc e
The board is principally made up of executives who have full time, executive responsibility for the
operations of the Company.
The operations are split into 3 sections:
The Managing Directors role in allocating priorities and tasks to the executives of the Company, leading
the Company generally, raising capital as required and public relations at all levels.
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The exploration and development effort.
Other corporate support.
Each executive (whether or not a director) reports on his activities to the Managing Director who
monitors their role and then reports to the board as required. The board as a whole monitors the
Managing Directors work.
The board will undertake annual performance reviews of the director’s performance.
P r inciple 9: R emune r ate f a ir ly and r e sponsibly
The Board is committed to ensuring that the level and composition of remuneration is sufficient and
reasonable and that its relationship to corporate and individual performance is defined.
Executive Remuneration Policy
The Company remunerates its senior executives in a manner that is market competitive, consistent with
best practice and aligned to the interests of shareholders. Remuneration comprises a fixed salary,
determined from a market review, to reflect core performance requirements and expectations of the
relevant position and statutory superannuation where applicable.
50
105
Corporate Governance
GREENLAND MI NERALS AN D ENERGY LTD
(F OR MERLY THE GOLD C OM P A NY LTD)
AN D C ONTROLLED ENTITIES
A.B. N. 85 118 463 004
CORP OR A T E G O V E R N A NC E
Non-Executive Remuneration Policy
Non-Executive Directors are paid a fixed fee out of the maximum aggregate amount which has been
approved by shareholders. Non-executive Directors are entitled to statutory superannuation where
applicable.
There are no schemes for retirement benefits, other than statutory superannuation, for any non-executive
Director.
P r inciple 10: Re cognise the legitima te inte r est o f stakeholde rs
The Board recognizes legal and other obligations to all legitimate stakeholders. The Company has
formalized its policy accordingly.
A copy of the Code of Conduct has been placed on the Company’s website.
Tenement List
Exploration License 2008/28
Substantial Shareholders
1
2
3
GCM Nominees Limited
Westrip Holdings Limited
Gravner Limited
35,000,000
30,000,000
29,000,000
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
d
t
L
y
g
r
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n
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51
Shareholder Information
Shares Spread
Holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 999,999,999
58
219
294
381
116
Total
1,068
Units
42,961
664,894
2,625,843
13,679,959
175,994,883
193,008,540
Top 20 Listing
For Class Greenland Minerals and Energy Ltd Fully Paid Shares
RANK
NAME
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
GCM Nominees Limited
Westrip Holdings Limited
Gravner Limited
Citicorp Nominees Pty Limited
ANZ Nominees Limited
HSBC Custody Nominees
National Nominees Limited
Falfaro Investments Ltd
Mr Roderick Claude Mcillree
Worldpower Pty Ltd
Rochford Limited
NEFCO Nominees Pty Ltd
NIDD Valley Company Limited
Mr Garry William Thomas and Mrs Nancy-Lee Thomas
Mr Cameron John French
South Asian Commodity Holdings Limited
Mr Paul Gabriel Sharbanee
Mr Simon Stafford-Michael
Mr Hans Kristian Schonwandt
Mr Jeffrey Maxwell Jones
Percent
0.02%
0.34%
1.36%
7.09%
91.19%
100.00%
UNITS
35,000,000
30,000,000
29,000,000
10,097,296
20,194,592
9,031,320
7,275,160
3,000,000
2,756,095
2,190,000
2,079,600
1,953,000
1,900,000
1,620,000
1,478,000
1,457,504
1,000,000
1,000,000
1,000,000
920,000
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
d
t
L
y
g
r
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107
Shareholder Information
Options Spread
Holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 999,999,999
Total
9
78
155
210
78
530
Units
5,732
311,484
1,425,979
8,873,166
133,715,701
144,332,062
Top 20 Listing
For Class Greenland Minerals and Energy Ltd Options
RANK
NAME
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Gravner Limited
Citicorp Nominees Pty Limited
Mr Cameron John French
NEFCO Nominees Pty Ltd
South Asian Commodity Holdings
Worldpower Pty Ltd
Mr John Lefroy Mair
Rochford Limited
Mr Roderick Claude Mcillree
Mr Garry William Thomas and Mrs Nancy-Lee Thomas
NIDD Valley Company Limited
RBC Dexia Investor Services
Mr Jeffrey Maxwell Jones
Mr Richard Homsany and Mrs Rosa Diana Marisa Homsany
Mr Stephen Frederick Schmedje
Mr Jeremy Sean Whybrow
The Old Brewery Company Pty Ltd
Redmont Resources Pty Ltd
Mr Mario Claude Frichot
Mr Simon Kenneth Cato
8
0
0
2
t
r
o
p
e
R
l
a
u
n
n
A
d
t
L
y
g
r
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Percent
0.00%
0.22%
0.99%
6.15%
92.64%
100.00%
UNITS
84,700,000
5,760,000
5,517,439
4,433,200
2,939,295
2,535,000
2,500,000
1,839,800
1,647,000
1,620,000
950,000
939,875
920,000
850,000
800,000
710,100
650,000
650,000
585,000
550,100
Table of Significant Events
Corporate Event
Contract signature and
announcement of acquisition
intention.
Re quotation of the
company.
Exploration services
agreements signed
Preparation, approval and
issue of the notice of
meeting .
Organisation of the
8,800,000 share issue at
$1.00 per share
Preparation, approval and
issue of the prospectus.
Shareholder approval
Settlement of the capital
raisings and the acquisitions.
Re-quotation as Greenland
Minerals and Energy Limited
GEUS agrees to allow access
to old core
Drilling
Geophysics
Auslog commissioned to
supply Spectral tools
Exploration Event
Other
Initial recon trip to
Greenland
Camp established, field
operations commence
Radiation safety
measurement badges
distributed
Old holes located, new
holes sited
First rig arrives and drilling
commences
Second drill arrives
Cumulative 5,000 metres
drilled
Down-hole spectral logger
arrives in Greenland and
logging begins
Aerial Geophysical survey
commences
H&S contracted to complete
resource estimation
Cumulative 10,000 metres
drilled
Drilling ceases 42 holes
drilled.
Down-hole spectral logging
ends
First samples dispatched
to Perth for assay
Probe calibration
Commencement of field
season
First 1,000 metres drilled
Commence logging
Cumulative7,000 metres
drilled
Log deepest hole 500m
Cumulative 15,000 metres
reached
First batch of historical
core sampled
Camp mobilisation
Initial resource estimate
338Mt @ 0.03% U3O8
90Mt @ 1.09% REO
79Mt @ 1.69% NaF
Regional Drilling
commenced
upgrade
Resource
334Mt @ 0.03% U3O8
215Mt @ 1.21% REO
201Mt @ 1.11% NaF
Regional drilling completed
May-07
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
8
0
0
2
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109
Above left: Marty Helean (Operations
Manager) in the West Perth office.
Above right: Roderick McIllree (Managing
Director), Simon Cato (Executive Director)
and Jeremy Whybrow (Exploration Director)
at the Narsaq office.
Greenland Minerals and Energy Limited
ACN 85 118 463 004
BUSINESS OFFICE
Ground Floor
33 Colin Street
West Perth, Western Australia, 6005
Telephone: +61 8 9226 1100
Facsimile: +61 8 9226 2299
GREENLAND OFFICE
PO Box
Narsaq
Telephone: +299 661 494
Facsimile: +299 662 494
WEBSITE
www.ggg.gl