GREENLAND MINERALS AND ENERGY LIMITED
ACN 118 463 004
ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2010
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Contents
Corporate governance statement
Directors’ report
Auditor’s independence declaration
Independent auditor’s report
Director’s declaration
Statement of comprehensive income
Statement of financial position
Statements of changes in equity
Statement of cash flows
Notes to the financial statements
1 General information
2 Significant accounting policies
3 Critical accounting estimates and judgments
4 Segmented information
5 Revenue
6 Loss for year before tax
Income tax expense
7
8 Cash and equivalents
9 Trade and receivables
Issued capital
10 Other assets
11 Property plant and equipment
12 Capitalised exploration and evaluation expenditure
13 Trade and other payables
14 Provisions
15
16 Reserves
17 Dividends
18 Accumulated loss
19 Earnings per share
20 Non-controlling interest
21 Commitments for expenditure
22 Contingent liabilities
23 Notes to the statement of cash flows
24 Jointly controlled operations
25 Subsidiaries
26 Share based payments
27 Financial instruments
28 Key management personnel compensation
29 Key management personnel equity holdings
30 Related party transactions
31 Parent company information
32 Remuneration of auditors
33 Subsequent events
Additional stock exchange information
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Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
CORPORATE GOVERNANCE
Principles of Best Practice Recommendations commentary
The Board of Directors is responsible for the overall strategy, governance and performance of
Greenland Minerals & Energy Limited (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 commercialisation 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.
Principles of Best Practice Recommendations
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 period. Where GGG
has not followed a recommendation, this has been identified and an explanation for the departure has
been given.
Principle 1: Lay solid foundations for management and oversight
The Board has established a framework within the Group that:
clarifies the respective roles and responsibilities of Board members and senior executives;
enables it to provide strategic guidance and effective supervision of management;
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 Consolidated group has been delegated to the Managing
Director, Mr Roderick McIllree. With the appointment of Mr Michael Hutchinson as Executive
Chairman on the 10 February 2010, Mr Hutchinson has also been delegated with executive
responsibilities.
The executives (whether or not a director) have clearly identified areas of responsibility and report
directly to an executive director or the Managing Director who monitors their role.
The Board has also adopted a Board Charter which details the functions and responsibilities of the
Board and those delegated to management. In addition, each executive director and senior executive
has signed an employment agreement. A copy of the Board Charter has been placed on the
Company’s website. The Board intends to review and update it’s Board Charter to take into account
the changed role of the Chairman from the previous Non Executive to an Executive role.
Principle 2: Structure the Board to add value
The Board has been structured 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. With the prior consultation with the
Chairman, each Director is entitled to receive independent professional advice at the Company’s
expense.
Mr Anthony Ho and Mr Jeremy Whybrow are non-executive Directors who fulfill the independence
criteria outlined in the guidelines. Mr Schønwandt resigned as a non executive director on 9 March
2010 and Mr Malcolm Mason resigned as a non executive director on 28 September 2010. Mr
Michael Hutchinson was an independent Director as the Non-executive Chairman, up to 10 February
2010, when he became Executive Chairman.
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.
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Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
CORPORATE GOVERNANCE
The role of the Chairman is fulfilled by Mr Michael Hutchinson and Mr Rod McIllree fills the role of
Managing Director and Chief Executive Officer.
The board acknowledges the departure from the requirements of Principle 2.2, of the Principles of
Best Practices Recommendations, that recommends the chairman should be independent. Mr
Michael Hutchinson acts in a limited executive capacity in the United Kingdom, where Mr Hutchinson
is a resident. Giving consideration to his limited executive role, it is the Board’s opinion, that Mr
Michael Hutchinson retains a sufficient level of independence.
The Board has convened an Audit and Risk Committee as well as a Remuneration Committee.
The Board maintains the role of Nomination to itself as it considers the Company not appropriate in
size to justify this as a separate committee.
The executive director board members have full time, executive responsibility for the operations of the
Company.
The responsibilities are split into 3 sections:
In Conjunction with the Executive Chairman, the Managing Director’s roles include allocating
priorities and tasks to the executives of the Company, leading the Company generally, raising
capital as required and public relations at all levels.
The exploration and development effort.
Other corporate support.
The executive directors are responsible for exploration and development and other corporate support,
report on their activities to the Managing Director, who monitors their role and then reports to the
board as required. The board as a whole monitors the Executive Chairman’s and the Managing
Director’s performance.
Principle 3: Promote ethical and responsible decision-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 Managing
Director 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 recognizes legal ethical and other obligations to all legitimate stakeholders and the
requirement to act in accordance with these obligations. The Company has formalized its policies
accordingly.
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 adopt these policies during the reporting period. The
Company will largely comply with these recommendations during future reporting periods.
The Company has formalized its policy accordingly.
A copy of the Code of Conduct and Securities Trading Policy have been placed on the Company’s
website.
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Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
CORPORATE GOVERNANCE
Principle 4: Safeguard integrity in financial reporting
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.
The Company’s financial statements are reviewed or audited, at a minimum, each half year. The
financial statements are reviewed by the Board which operates under formal terms of reference. The
Board Charter is placed on the website.
The Board has requested that the Managing director as the Chief Executive Officer and Chief
Financial Officer 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 that,
The financial records have been properly maintained in accordance with s286 of the
Corporations Act 2001
The financial statements are in accordance with the Corporations Act 2001, comply with
relevant Accounting Standards and Corporation Regulations 2001.
The financial statements are founded on sound system of risk management, as outlined in
principle 7.
Principle 5: Make timely and balanced disclosure
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.
Principle 6: Respect the rights of shareholders
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.
Shareholders generally participate in shareholder meetings through the appointment of a proxy. The
Company’s external Auditor is invited to attend these meetings.
Principle 7: Recognise and manage risk
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 Company as part of
its risk management, formally established an Audit and Risk Committee
The Company’s executives and senior management, through the Managing Director are responsible
for the identification of material risks to the business and the design and implementation of internal
control systems to manage the identified risks.
The Board has received from management, reports on the effectiveness of the Company’s
management of its material business risks.
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Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
CORPORATE GOVERNANCE
The Board has obtained a written confirmation from the Managing Director and the Chief Financial
Officer that the statement in relation to principle 4, that the financial reports are founded on a sound
system of risk management and internal compliance and control and the Company’s risk
management and internal compliance control systems are operating efficiently and effectively in all
material respects.
The principle areas of risk for the Company are in the areas of:
Occupational health and safety and work related safety risks
Environment risks
Security of tenure over tenements
Financial risk in the areas of maintaining sufficient funding for the continuation of operations
and risks related to fraud, misappropriation and errors.
The Company has implemented and maintains adequate policies to monitor these areas and to
reduce risk exposure.
Principle 8: Remunerate fairly and responsibly
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.
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.
A copy of the Code of Conduct has been placed on the Company’s website.
Page | 4
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
The directors of Greenland Minerals and Energy Limited submit herewith the annual financial report
for the financial period ended 31 December 2010, in order to comply with the provisions of the
Corporations Act 2001. The directors report the following:
Directors
The names of directors in office at any time during or since the end of the financial year are:
Michael Hutchinson, Executive Chairman
Roderick Claude McIllree, Managing Director
Simon Kenneth Cato, Executive Director
Jeremy Sean Whybrow, Non-Executive Director (i)
Anthony Ho, Non-Executive Director
Malcolm Geoffrey Mason, Non-Executive Director – resigned 28 September 2010
Hans Kristian Vinding Schønwandt, Non-Executive Director – resigned 9 March 2010
(i) Mr Jeremy Whybrow stood down as Exploration Director on the 1 April 2010 and became a
Non-Executive Director as of this date.
Company Secretary
The following person held the position of Company secretary at the end of the financial year:
Miles Simon Guy – Miles Guy is an accountant with 15 years experience in both public practice and
commercial environments. Mr Guy is also currently the Chief Financial Officer for Greenland Minerals
and Energy Limited.
Principal Activities
The principal activity of the Consolidated group during the financial year was mineral exploration and
project evaluation.
There were no significant changes in the nature of the Consolidated group’s principal activities during
the financial period.
Operating Results
The net loss attributable to members of the Consolidated group after providing for income tax
amounted to $7,163,998 (December 2009: loss $3,823,380)
Significant Changes in State of Affairs
During the financial year, there were no significant changes in the state of affairs of the Consolidated
group.
Subsequent Events
On the 18 February 2011, Greenland Minerals and Energy (Trading) A/S (GME), the Company’s
Greenland subsidiary was served a writ by Westrip Holdings Limited (Westrip). In the writ Westrip
challenges the validity of decisions made at the GME Extraordinary General Meeting on 23 November
2010, on the grounds it has allegedly been unfairly prejudiced by reason of four proposals that were
raised by Westrip, not being supported. The board of GME and the Company did not support these
proposals as it was viewed they were not in the best interests of GME.
Legal advice has been sought on this matter and based on this advice the Company is satisfied the
claims contained in the writ are without merit. Further more if the claims are advanced they can not
give rise to either serious damages claims or otherwise affect the Company’s underlying interest or
the conduct of operations in Greenland in any material way.
Greenland Minerals and Energy (Trading) A/S will vigorously defend this vexatious writ.
Page | 5
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
There has not been any other matter or circumstance occurring subsequent to the financial period
that has significantly affected, or may significantly affect, the operations of the consolidated group, the
results of those operations, or the state of affairs of the Consolidated group in future years.
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.
Environmental Regulations
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 Greenland and 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 period covered by this report.
Dividends
In respect of the financial year ended 31 December 2010, 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 period. No dividends were paid in the comparative period ended 31
December 2009.
Shares
During the period ended 31 December 2010, the following ordinary shares of Greenland Minerals and
Energy Limited were issued, as detailed in Note 15 to the financial report.
The total number of ordinary shares on issue at 31 December 2010 was 288,672,163 (31 December
2009: 226,825,555).
The total number of shares issued during the current 12 month period was 61,846,608. .
There is no other class of shares issued by the Company and the Company has no un-issued shares.
Details of shares issued during the year or since the end of the financial year as a result of exercised
options are:
Issuing entity
Greenland Minerals
and Energy limited
Greenland Minerals
and Energy limited
Greenland Minerals
and Energy limited
Number of
shares
issued
Class of share
Amount paid for
shares
Amount unpaid
on shares
42,349,546
Ordinary shares
750,000
Ordinary shares
300,000
Ordinary shares
$0.20
$0.10
$0.50
-
-
-
Options
During the year ended 31 December 2010 the number of options of Greenland Minerals and Energy
Limited that were issued are detailed in Note 26 to the financial report.
Page | 6
DIRECTORS’ REPORT
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Details of unissued shares or interests under options at the date of this report are:
Exercise price of
option
Number of shares
under option
Issuing entity
Class of
shares
Expiry date of
option
Greenland Minerals
and Energy Limited
Greenland Minerals
and Energy Limited
Greenland Minerals
and Energy Limited
Greenland Minerals
and Energy Limited
Greenland Minerals
and Energy Limited
102,553,501
Ordinary shares
$0.20
30 June 2011
19,800,000
Ordinary shares
$0.20
30 June 2011
5,450,000
Ordinary shares
$0.50
30 June 2011
6,250,000
Ordinary shares
$1.00
30 June 2011
2,388,840
Ordinary shares
$1.50
30 June 2011
No share options were granted during the current financial year.
The holders of these options do not have the right, by virtue of being holders, to participate in any
share issue or interest issue of the Consolidated group or of any other body corporate.
Review of operations
The Consolidated group is a mineral exploration and development consolidated group actively
exploring in southern Greenland.
The Consolidated group is primarily focused on exploring its license area over the northern
Ilimaussaq Intrusive Complex; a unique geological entity with extraordinary resource potential.
Kvanefjeld has a JORC-compliant resource, estimated to contain 4.9 million tones of rare earth oxides
(REO) and 120,000 tones of uranium oxide. This resource inventory defines Kvanefjeld as the
world’s largest REO resource by either JORC or Canadian NI 43-101 standards.
The Consolidated group’s vision is to be a significant producer of commodities of fundamental
strategic importance and value to tomorrow’s world. Rare earth elements (REEs) are now recognised
as being critical to the global manufacturing base of many emerging consumer items. However, China
has successfully monopolised global REE supply, raising serious concerns to non-Chinese
consumers over the long-term stability of REE supply and pricing. Electricity from nuclear power
continues to gain acceptance internationally as the clean base-load energy supply of the future; owing
to rapidly increasing power demands coupled with concerns over carbon-based energy sources,
greenhouse gas emissions and global warming. As the nuclear renaissance continues to gain
momentum, the strategic importance of uranium resources will continue to emerge.
The northern Ilimaussaq Complex offers the potential for multi-element resources of unparalleled
scale; resources that could restore balance to the global supply of rare earth elements, and contribute
to the energy security of Europe for many decades
Pre-feasibility Study – Interim Report
Details of the pre-feasibility study - interim report were announced to the market on the 1 February
2010.
The study proposes a multi-element mining operation, utilizing the process flow sheet developed in
conjunction with AMEC Minproc and the Australian Nuclear Science and Technology Organisation
(ANTSO), and draws on extensive studies conducted by the Danish Atomic Energy Commission
(Risø). This flow sheet, in Figure 1, and associated engineering and mining studies are considered
as a base-case for the Kvanefjeld project.
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Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Review of operations (cont’d)
The interim report provides a clear indication Kvanefjeld could be developed as an economically
robust, large scale mining operation to produce a rare earth concentrate and uranium oxide. The
exploitation of uranium is subject to a change of current Greenland government policy of “no uranium
mining”. Initial estimates indicate that the REE output at Kvanefjeld could rival that of Bayan Ebo in
China, currently the world’s largest REE producing mine. The project would also be a globally
significant producer of uranium, should it proceed to production.
The work commissioned by the consolidated group for the report, has been carried out by
international consulting firms covering a wide range of disciplines, and in particular:
Resource definition and mine plans
Coffey Mining, Hellman and Schofield
Metallurgy and process development
AMEC Minproc, ANSTO, SGS Lakefield Oretest, CSIRO, Battery Limits
Environmental baseline and Environmental Impact Assessment
Coffey Environments, Orbicon (Denmark)
Plant engineering design, infrastructure, capital development
AMEC Minproc, NIRAS (Denmark)
Marketing
BCC Research, IMCOA, World Nuclear Association, MGMT Group
Figure 1. The conceptual process flow-sheet that is considered a ‘base case’ for the Kvanefjeld multi-
element project. The flow sheet builds on historic test-work with recent metallurgical studies that have
been conducted by Greenland Minerals over the last 12 months. The circuit incorporates a whole-of-ore
alkaline pressure leach circuit that extracts uranium, which is followed by a floatation circuit to
concentrate rare earth element-rich minerals that are subsequently leached with dilute acid to then
generate a rare earth product.
Page | 8
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Review of operations (cont’d)
Key outcomes
At a processing rate of 10.8 MT pa, nominal forecast annual production is equivalent to
43,729t of rare earth oxide (REO) and 3,895t of uranium. Life of mine (LOM) throughput is
239.3mt at an average grade of 1.1%TREO (REO plus yttrium oxide) and 314ppm U3O8.
A pre-tax internal rate of return of 24% and a cash payback period of just over 5 years (which
includes the pre mining construction period of 2 years), using long term prices of US$13.0kg
for rare earth carbonates and US$80/lb for U3O8 based on independent market analyses.
The net present value (NPV) for the Kvanefjeld project is estimated at US$2.18 billion (pre-tax
and discounted using 10%) and takes into account complete payback of the initial capital
costs. This NPV is based upon REO initial recoveries of just 34% and uranium recoveries of
84%.
Total capital costs are estimated at US$2.31 billion. This includes mine infrastructure,
processing and refining capacity for both RE carbonate production and the uranium oxide at
10.8Mtpa, new port and power generation facilities, roads and an accommodation village.
This figure includes a US$382.6m contingency, equivalent to 20% of the total cost. In
addition, construction labour costs have been increased by a factor of 30% to allow for the
estimated incremental cost of construction in Greenland. The Consolidated group is confident
that this first pass estimation can be reduced as the level of certainty is increased.
In total the project is estimated to generate a cumulative operating surplus of US$8.93 billion,
generating an average operating surplus of US$615M per annum for the first 5 years of
production, peaking at approximately US$665M in years 2 and 3, with a mine life of greater
than 23 years.
The revenues achieved from the sale of either rare earth (RE) carbonate or uranium oxide is
expected to be sufficient to cover the total cost of production of both products. In other words,
over the LOM, the by-product credit that is earned from the sale of uranium oxide exceeds the
cost of producing the RE carbonates: effectively making the cost of producing RE carbonate
free.
Construction, subject to approval from the Greenland government is scheduled to commence
in 2013 with first production in 2015.
Mining studies propose a conventional open pit mine with low waste to ore ratio (0.8:1.0
respectively for LOM) with the highest grades occurring at surface. Ore widths of greater than
100m are common. The mine will be located 7 km from tidewater, with deep fjords running
directly to the North Atlantic shipping lanes.
Engineering studies identify a processing route which will allow extraction of uranium prior to
the production of RE carbonate, thereby negating the effects of a contaminated RE product.
This creates separate uranium and rare earth processing and recovery steams. A carbonate
pressure leach (CPL) circuit extracts uranium. REEs remain host minerals through the CPL
process and can then be concentrated by froth floatation, leach acid and then refined to
produce RE carbonate. The CPL process for recovery of uranium was first developed by
Risø in the 1970s and the Consolidated group’s recent test work has confirmed the viability of
this method. The RE Extraction and recovery has been developed in conjunction with
ANSTO and AMEC Minproc.
Importantly, from an environmental perspective the Danish work also clearly demonstrated,
during their piloting plant work on the CPL process, the positive environmental aspects. Both
the fluorine and thorium present in the ore are converted to insoluble compounds. This has
positive implications for tailings storage and management.
Page | 9
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Review of operations (cont’d)
The Consolidated group conducts its work programs in accordance with recent license changes as
discussed below which explicitly allow work on the multi element resource to continue. The
Consolidated group is working closely with the relevant authorities to define acceptable development
scenarios.
Exploration
The 2010 work program in Greenland was undertaken in the period of mid-June to late-August, and
was the fourth significant work program undertaken by the consolidated group since it commenced
operations in Greenland in 2007.
The drilling was focused on the increasing of inferred to indicated resources to fill holes in the mine
schedule, and also to test the lateral extent of previously discovered regional targets that show
significant mineralization Sterilisation drilling was conducted to provide data that is pertinent to mine
plans. In total, 9375 metres of core was drilled during the program.
Community
The Consolidated group has continued to work closely with the Greenland Government, community
groups and other stakeholders to ensure all parties are fully informed regarding the consolidated
group’s activities.
Through 2010, GMEL has been conducting presentations to stakeholder and community groups, with
the aim of providing factual information about the Kvanefjeld project as well as providing a forum for
members of the public to discuss any issues associated with the project. The meetings continue to
provide a great opportunity to build the dialogue between GMEL and Greenlandic stakeholders, and
in particular, discuss upcoming environmental and social impact studies and the definitive feasibility
process.
Open Day
On August 8th 2010 GMEL held an open day at the company’s operations base in Narsaq, south
Greenland. The open day provided an opportunity for residents of Narsaq and nearby settlements to
learn more about the work programs that are underway on the Kvanefjeld project, as well as learning
about the mining life‐cycle in general.
Consultants to GMEL from Orbicon (environmental) and Grontmij/Carl Bro (social) presented on the
environmental and social impact assessment process, and the heads of Greenland’s mining and trade
schools discussed available courses with visitors. The open day was well attended with hundreds of
south Greenland residents visiting through the course of the day.
Strong local community support from Narsaq and across the southern Greenland business community
allowed the Consolidated group to positively engage with the Greenland Government.
License changes
On 10 September 2010 an amendment was made by the Government of Greenland to the Standard
Terms for Exploration for mineral licenses.
Licenses from that time allowed for the inclusion of radioactive elements as exploitable minerals for
the purpose of thorough evaluation and reporting. The change came after an ongoing dialogue
between the Greenland government and Company representatives. The change only applies to
projects with substantial recognized resources.
Page | 10
DIRECTORS’ REPORT
Review of operations (cont’d)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
The GMEL operations base in Narsaq transformed into a display centre for the
open day. Hundreds of south Greenland residents visited the open day to learn
more about the Kvanefjeld project and the mining life cycle in general.
This critical development provided a clear framework for the Company’s Kvanefjeld multi‐element
project (rare earth elements, uranium and zinc) to proceed to development via the completion of a
definitive feasibility study conducted in close cooperation with the Greenland government and
stakeholder groups.
The definitive feasibility study, inclusive of environmental and social impact assessments, along with
technical and economic studies, will generate the necessary information to determine development
parameters for Kvanefjeld.
This change to license terms was applied to the Company’s license for Kvanefjeld (2010/2) on 14
December 2010.
The permit was issued following a hearing process in Greenland that involved the National
Environmental Research Institute, the Ministry for Health, the Ministry of Domestic Affairs, Nature and
Environment (NNPAN) as well as the South Greenland municipality. The permit is supplementary to
the exploration license that covers Kvanefjeld and the broader northern Ilimaussaq complex (license
2010/02).
Critical components of a definitive, or bankable, feasibility study are the Environmental and Social
Impact Assessments, which are to follow the guidelines established by Greenland’s Bureau of
Minerals and Petroleum (BMP). At the completion of the definitive feasibility study, including the
environmental and social impact assessments the Company will lodge an application for an
exploitation license with the BMP.
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Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Review of operations (cont’d)
The amendments to the Standard Terms for Exploration for mineral licenses, is a significant milestone
in the progression of the project to the development stage. It should be noted though that the
Greenland Government maintains a zero tolerance uranium policy and the Company will need to
apply for and obtain a Mineral Exploitation License, before it is able to move to development and
potentially production.
2011 Work Programs
Work programs will include:
Continue social and environmental impact studies: The success of any large-scale mining
operation is contingent on the project meeting all social and environmental standards. The
Consolidated group is working closely with the Greenlandic authorities to plan the scope of
these studies and is aiming to commence the studies by mid 2011.
Beneficiation studies: As the Consolidated group has developed a more in-depth
understanding of the mineralogy of the Kvanefjeld resource, new opportunities have been
identified that could remove gangue minerals prior to the leaching circuit thereby increasing
both RE and uranium head grades to the main processing plant.
Improve rare earth recoveries: While the current nominal production estimates would see
Kvanefjeld rival Bayan Ebo as the largest RE producing mine in the world, there is scope to
increase RE recoveries through the removal of acid consuming gangue minerals, as well as
optimising the leaching conditions applied to the RE-bearing minerals.
Further investigate Zinc recovery: There is potential to generate a sphalerite (ZnS)
concentrate with flotation that not only would see another product generated, but also has
potential downstream benefits in the form of operating costs savings in both the CPL and RE
circuits.
Improve geological resource model: Further development of the geological resource model
and detailed mine studies may result in less dilution in the mine schedule that could see an
increase in the average RE and uranium head grades over the life-of-mine.
Convert Inferred to Indicated Resources: At present, the mine schedule is based on
indicated resources. Conversion of higher grade inferred resources to indicated through
increasing the drill hole density, will extend the mine life.
Define New Multi-Element Resources: There is genuine scope to define new multi-element
resources within the Consolidated group’s license area that are of the same ore-type to that at
Kvanefjeld.
Exploration drilling 2011
The drilling for the 2011 season will be primarily focused on the delineation of resources at least 3
regional targets and the continuation of sterilisation drilling for potential infrastructure.
The regional targets, Zone 2 and Zone 3, are excellent potential satellite resources that could be
used to supplement processing feed to assist in raising the feed grade and thus the potential
economics of the project. Zone 3 displays excellent tenor of mineralisation and is located proximal
to the northern contact of the intrusion. This deposit is likely to exhibit a very low strip ratio. Zone
2 also displays good tenor and some very long intercepts of mineralisation. Its location at
approximately 600m above sea level on a very steep slope makes it more challenging to access.
Page | 12
DIRECTORS’ REPORT
Review of operations (cont’d)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Exploration camp at Kvanefjeld
The final regional target is Steenstrupfjeld which is located adjacent to the main Kvanefjeld
mineralisation. This deposit is likely to contain thin zones of mineralisation near surface in an area
that is generally considered the best topographical locality for the processing facility.
Some sterilisation drilling will occur in other localities where our consultants have designed
potential infrastructure locations. These locations are still being defined and the number of
metres is likely to be only a small component of the total metres to be drilled.
Mapping of the intrusion to date has been confined to Kvanefjeld on a project scale. This field
season a concerted effort will be placed on mapping areas within the complex outside of our
areas of interest to date. This program is expected to take the majority of the season and it could
be reasonably expected that one or two potential drill targets could be defined.
Local training will be a high priority for the Company this year with drillers to be selected from
previous years drill assistants. These drillers will be supervised by a trainer and will be placed on
some of the shorter drill holes so that they can gain some vital experience that will assist them in
future years. The Company will also be planning to train 4 tradesmen. We will also take university
students for vocational training.
Page | 13
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Review of operations (cont’d)
Statement of identified mineral resources, Kvanefjeld multi-element project, Greenland
At U3O8%
Tonnes
U3O8%2
U3O8 lb/t
TREO%3
Zn%
Resource
cutoff
grades1
(million)
0.015
0.020
0.025
365
92
457
276
63
339
207
43
250
0.028
0.027
0.028
0.032
0.031
0.032
0.035
0.036
0.035
0.62
0.59
0.62
0.70
0.69
0.70
0.77
0.78
0.77
1.06
1.12
1.07
1.13
1.21
1.14
1.20
1.31
1.22
0.22
0.22
0.22
0.23
0.24
0.23
0.23
0.25
0.24
Note: Figures quoted may not sum due to rounding.
category
Indicated
Inferred
TOTAL
Indicated
Inferred
TOTAL
Indicated
Inferred
TOTAL
1. There is greater coverage of assays for uranium than other elements owing to
historic spectral assays. U3O8 has therefore been used to define the cutoff grades to
maximise the confidence in the resource calculations.
2. Additional decimal places do not imply an added level of precision.
3. Total Rare Earth Oxide (TREO) refers to the rare earth elements in the Lanthanide
series plus yttrium.
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves
is based on information compiled by Jeremy Whybrow, who is a Member of The Australasian Institute
of Mining and Metallurgy.
Jeremy Whybrow is a director of the company.
Jeremy Whybrow 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’. Jeremy Whybrow consents to the inclusion in the report of the
matters based on his information in the form and context in which it appears.
Financial Position
The net assets of the Consolidated group were $52,779,766 as at 31 December 2010 (2009:
$46,912,666).
The Consolidated group is 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 Greenland’s resources sector.
Page | 14
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Information on Directors
Michael Hutchinson
Appointed
Special responsibilities
-
-
-
Qualifications
Experience
Executive Chairman
25 November 2008
Member of the Remuneration Committee (Chairman)
Member of the Audit Committee –resigned 10February 2010
BSc (Hons) Geography
-
- Mr Hutchinson has more than 30 years experience in non-ferrous metal
trading. He was a long standing Director of LME Holdings Limited and The
London Metal Exchange Limited, the world’s largest market in options and
futures contracts on base and other metals.
He was formerly non-Executive Chairman of RBS Sempra Metals Limited
('RBS Sempra'), having previously served as its Chairman and Chief
Executive Officer. RBS Sempra
the successor company of
Metallgesellschaft Limited, which became MG Plc and floated on the
London Stock Exchange in September 1999. Mr Hutchinson was also the
former Chairman of Wogen Plc a trader of off exchange metals that
sources metals worldwide for industrial end users.
is
Interest in shares & options
Directorships held in other listed
entities
- 4,000,000 unlisted options
- Chairman of;
Metalloyd Limited – since Jan 2010
Non-executive director of;
Mecom Plc – since April 2009
Armajaro Limited – since December 2009
Former directorships in other-
listed entities in the last 3 years
LME Holdings Limited – April 2005 to August 2009
RBS Sempra Metals Limited – January 2005 to August 2009
Wogen Plc – July 2009 to November 2009
Roderick McIllree
Appointed
Special responsibilities
Qualifications
Experience
Interest in shares & options
-
-
-
-
Managing Director
23 March 2007
Member of the Remuneration Committee
B.Sc. (Mineral Exploration and Mining Geology), G.Cert. (Mineral
Economics) MAus IMM.
- 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
initiated several
international capital raisings having
successful mining companies with assets both domestically and overseas.
He was instrumental in sourcing the Kvanefjeld Project for the Company.
- 3,331,095 ordinary shares of Greenland Minerals and Energy Limited,
in
2,522,000 listed options and 6,600,000 unlisted unvested options.
Directorships held in other listed
entities
- Executive director of;
Convergent Minerals Limited – from July 2006 to 30 September 2010
Non Executive director of
Convergent Minerals Limited – from 1st October 2010
Page | 15
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Information on Directors (cont’d)
Simon Kenneth Cato
Appointed
Qualifications
Experience
Executive Director
21 February 2006
-
-
- B.A.
- Mr Cato has 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.
During the last 19 years he has been an executive director and/or
responsible executive of 3 stock broking 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 Limited,
Directorships held in other listed
entities
Former directorships in other-
listed entities in the last 3 years
800,100 options and 6,600,000 unvested unlisted options.
- Current Chairman of;
Convergent Minerals Limited - since July 2006.
Advanced Share Registry Limited - since August 2007.
Director of:
Bentley International Limited – since February 2004
Queste Communications Limited – since February 2008
QED Occtech Limited – since February 2010
Sofcom Limited – January 2004 to March 2008
Scarborough Equities Limited – November 2004 to March 2009
Jeremy Sean Whybrow
Appointed
Special responsibilities
Qualifications
Non-executive Director (i)
21 February 2006
-
-
- Member of the Audit Committee – Appointed 28 September 2010
- B.Sc. (Mineral Exploration and Mining Geology), G.Cert(Minerals
Economics), MAus IMM
Experience
- Mr Whybrow has over 14 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.
the operational
environment and includes significant exposure 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.
His experience has been mainly
in
Interest in shares & options
- 900,100 ordinary shares of Greenland Minerals and Energy Limited,
710,100 listed options and 6,600,000 unvested unlisted options.
Directorships held in other listed
entities
- Executive Director of:
Convergent Minerals Limited. – since July 2006
(i) Mr Jeremy Whybrow stood down as Exploration Director on the 1 April 2010 and became a
Non-Executive Director as of this date.
Page | 16
DIRECTORS’ REPORT
Information on Directors (cont’d)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Anthony Ho
Appointed
Special responsibilities
-
-
-
Non-executive Director
9 August 2007
Member of the Audit Committee (Chairman)
Member of the Remuneration Committee
B.Comm, CA, FAICD, FCIS
Qualifications
Experience
-
- Mr Ho is an experienced director having held executive directorship and
chief financial officer roles with a number of publicly listed companies. Mr
Ho 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.
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 Australia and the Australian Institute of Company Directors.
Interest in shares & options
- 250,000 ordinary shares of Greenland Minerals and Energy Limited.
Directorships held in other listed
entities
1,000,000 Unlisted options
- Non executive Director of;
Dolomatrix International Limited – since April 2007; Chairman of Audit
Committee.
Non executive Chairman of;
Apollo Minerals Limited – since July 2009; Member of Audit Committee.
Former directorships in other-
listed entities in the last 3 years
- Brazin limited – September 1997 to January 2007
Non-executive Chairman Esperance Minerals Limited – July 2008 to
March 2010
Malcolm Mason
Appointed
Special responsibilities
Qualifications
Experience
Non-Executive Director
9 August 2007 – resigned 28 September 2010
Member of the Audit Committee
B.Sc. (Hons), FAus IMM
-
-
-
-
- Mr Mason has 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
- 610,000 ordinary shares of Greenland Minerals and Energy Limited,
Directorships held in other listed
-
entities
Nil
3,680,000 options.
Page | 17
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Information on Directors (cont’d)
Hans Kristian Vinding
Schønwandt
Appointed
Qualifications
Experience
Non-Executive Director
9 August 2007 – resigned 9 March 2010
-
-
- PhD (Economic Geology)
- 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.
Interest in shares & options
- 1,500,000 ordinary shares of Greenland Minerals and Energy Limited and
1,000,000 listed options
Directorships held in other listed
entities
Directorships held in other listed
entities
- Nil
- Director of;
London Mining Plc – since January 2006
Remuneration Report – Audited
This remuneration report, which forms part of the directors’ report, details the nature and amount of
remuneration for each director of Greenland Minerals and Energy Limited and senior management,
for the twelve months ended 31 December 2010.
Director and senior management details
The following persons acted as directors of the Company during or since the end of the financial year:
Michael Hutchinson, Executive Chairman
Roderick Claude McIllree, Managing Director
Simon Kenneth Cato, Executive Director
Jeremy Sean Whybrow, Non-Executive Director
Anthony Ho, Non-Executive Director
Malcolm Geoffrey Mason, Non-Executive Director – resigned 28 September 2010
Hans Kristian Vinding Schønwandt, Non-Executive Director – resigned 9 March 2010
The term ‘senior management’ is used in this remuneration report to refer to the following persons.
Except as noted, the named persons held their current position for the whole of the financial year and
since the end of the financial period:
Shaun Bunn, Chief Operations Officer
Miles Guy, Chief Financial Officer and Company Secretary
John Mair, General Manager
Remuneration Policy
The remuneration policy of Greenland Minerals and Energy Limited has been designed to align
director and senior management objectives with shareholder and business objectives by providing a
fixed remuneration component and offering specific long-term incentives based on key performance
indicators affecting the Consolidated group’s financial results. The board of Greenland Minerals and
Energy Limited believes the remuneration policy to be appropriate and effective in its ability to attract
and retain the best senior management and directors to run and manage the Consolidated group, as
well as create alignment of interests between directors, senior management and shareholders.
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:
Page | 18
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Remuneration report (cont’d)
All senior management receives a market rate base salary (which is based on factors such as length
of service and experience) and superannuation.
The directors and senior management, where applicable 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 senior management is valued at the cost to the Consolidated
group and expensed. Shares issued to directors and senior management at the market price of those
shares. Options are valued at grant date using appropriate valuation techniques.
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 rates, their specific duties and responsibilities.
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. The current shareholder approved cap on
these fees is $400,000 per annum. Fees for non-executive directors are not linked to the
performance of the Consolidated group. However, to align directors’ interests with shareholder
interests, the directors are encouraged to hold shares in the Company.
Details of Remuneration
The remuneration for the directors and senior management of the Company during the year was as
follows:
Short-term
employee benefits
Salary
Directors
Fees
Share based payments
Post-
employment
Shares
Options
Superannuation
Total
$
$
$
$
$
$
127,500
199,500
50,000
-
-
-
-
337,500
90,000
200,000
1,004,500
10,000
12,500
30,000
59,000
190,462
43,333
-
-
-
345,295
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,375
19,080
7,200
4,500
-
-
149,875
231,080
87,200
63,500
190,462
43,333
-
-
337,500
-
98,100
8,100
18,000
218,000
69,255 1,419,050
12 months ended
31 December 2010
Executive Directors
Simon Kenneth Cato
Roderick Claude McIllree
Jeremy Sean Whybrow
Non-executive Directors
Anthony Ho
Michael Hutchinson
Malcolm Mason (i)
Hans Kristian Vinding
Schønwandt (ii)
Senior Management
Shaun Bunn
Miles Guy
John Mair
Total
(i)
(ii)
Resigned 28 September 2010
Resigned 9 March 2010
Page | 19
DIRECTORS’ REPORT
Remuneration report (cont’d)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Short-term
employee benefits
Salary
Directors
Fees
Share based payments
Post-
employment
Shares
Options
Superannuation
Total
45,000
81,000
75,000
-
-
-
-
20,000
25,000
25,000
20,000
49,545
30,000
20,000
180,000
33,000
100,000
514,000
-
-
-
189,545
-
-
-
-
-
-
-
-
-
-
-
-
156,430
-
-
5,850
9,540
9,000
1,800
-
-
70,850
115,540
109,000
178,230
49,545
30,000
-
-
20,000
72,100
-
72,100
300,630
-
2,970
9,000
252,100
35,970
181,100
38,160 1,042,335
6 months ended
31 December 2009
Executive Directors
Simon Kenneth Cato
Roderick Claude McIllree
Jeremy Sean Whybrow
Non-executive Directors
Anthony Ho
Michael Hutchinson
Malcolm Mason
Hans Kristian Vinding
Schønwandt
Senior Management
Shaun Bunn
Miles Guy (i)
John Mair
Total
(i)
Appointed on 21 August 2009
No director or senior management person appointed during the current or prior period received a
payment as part of his consideration for agreeing to hold the position.
Employee share option plan (‘ESOP’)
Greenland Minerals and Energy limited operates an ownership-based scheme for senior management
and employees of the Consolidated group. In accordance with the provisions of the ESOP, as
approved by shareholders at the general meeting on the 25 June 2009, eligible employees can be
offered participation in the ESOP, at the discretion of the Board. The Board’s discretion will be based
on the consideration of, among other things, seniority of the person, length of service of the eligible
employee with the consolidated group and the potential contribution of the eligible employee to the
growth of the Consolidated group.
On exercise, each employee share option converts into one ordinary share of Greenland Minerals and
Energy Limited. No amounts are paid or payable by the recipient on receipt of the option. The
options carry, neither dividends or voting rights. There are no additional vesting conditions attached
to the options and the options may be exercised at any time up to the date of expiry. The expiry date
of the options issued under the employee share option plan, is 30 June 2011. The ESOP will
continue until such time that all existing option holders have dealt with their option entitlements. At
that time the ESOP will formally cease. No further options will be issued to employees pursuant to
the ESOP.
Employee performance rights plan
On 11 February 2011, the Board approved the implementation of an Employee Performance Rights
Plan (“EPRP”). The plan is a result of a comprehensive remuneration review the Company
conducted, in consultation with independent consultants. The aim of the plan is to assist in the
retention of existing staff and the recruitment of future employees.
Under the EPRP, the Company will issue incentive shares to employees as part of their total
remuneration package. The plan will result in a direct cost saving to the Company through a
reduction in the salary component payable in remuneration packages.
Page | 20
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Remuneration report (cont’d)
A total of 3,005,000 performance rights will be issued upon satisfying of vesting conditions, converting
into one ordinary share of Greenland Minerals and Energy Limited. To meet the vesting criteria, the
employee must remain an employee of the Company for a minimum of two years and will be issued in
tranches based on the Company’s market capitalisation meeting the following vesting hurdles:
Tranche
Tranche 1
Tranche 2
Tranche 3
Market capitalisation vesting
hurdle
$600,000,000
$800,000,000
$1,000,000,000
No rights have been issued as at the date of signing of the Directors’ report.
A proposal for the participation of directors in the EPRP will be put to shareholders at the Company’s
Annual General Meeting.
Additional rights maybe issued at a future date, which may require additional shareholder approval at
the time.
Share based payments granted as compensation for the current financial period
No share based payments were granted as compensation during the current financial year.
The follow options were exercised by directors and senior management during the current financial
year. Each options converts into one ordinary share of Greenland Minerals and Energy Limited.
M Mason
S Bunn
Date
28/01/2010
25/11/2010
Number
Exercised
Exercise
Price
Share
price @
exercise
date
Amount
paid
$
Amount
unpaid
$
400,000
750,000
$0.20
$0.10
$0.70
$0.945
80,000
75,000
-
-
No options issued to directors or senior management lapsed during the year.
During the financial period, the following share-based payment arrangements were applicable;
Options series
3
4
9
10
13
14
15
16
17
18
Grant date Expiry date
30/06/2011
31/07/2007
30/06/2011
31/07/2007
30/06/2011
28/11/2008
30/06/2013
28/11/2008
30/06/2011
25/06/2009
30/06/2011
25/06/2009
30/06/2011
20/08/2009
30/06/2011
20/08/2009
30/06/2011
10/11/2009
30/06/2011
10/11/2009
Grant date
fair value
25,260,513
3,827,350
240,000 (i)
190,893
371,200
258,600
387,267
261,756
88,442
67,988
Vesting date
(ii)
30/06/2009
28/11/2008
28/11/2008
25/06/2009
25/06/2009
20/08/2009
20/08/2009
10/11/2009
10/11/2009
(i)
This amount includes $160,000 representing the fair value of options granted to Mr Hans
Kristian Schønwandt as a replacement equity instrument upon cancellation of an equity
instruments previously granted under a director service agreement. The fair value of the
replacement equity instrument has not been brought to account or included in Mr
Schønwandt’s remuneration for the year as it has been determined that the fair value is less
than the net fair value of the original cancelled equity instrument as determined at the date of
cancellation.
Page | 21
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Remuneration report (cont’d)
(ii) The following vesting conditions are attached to the options issued.
Tranche Number of options
1
2,200,000
2
3
2,200,000
2,200,000
Vesting hurdle
The volume weighted average share price on the ASX of the
Company’s fully paid shares is 50 cents or more for 20 consecutive
trading days
The volume weighted average share price on the ASX of the
Company’s fully paid shares is $1.00 or more for 20 consecutive
trading days
The volume weighted average share price on the ASX of the
Company’s fully paid shares is $1.50 or more for 20 consecutive
trading days
There are no further service or performance criteria that need to be met in relation to any of the above
option series.
The following table summarises the value of options granted, exercised or lapsed during the current
year to directors and senior management:
Name
M . Mason
S. Bunn
Value of options at
grant date (i)
$
Value of options
exercised at the
exercise date
$
-
-
200,000
633,750
Value of options lapsed
at the date of lapse (ii)
$
-
-
(i)
The value of options granted during the period is recognised in compensation over the vesting
period of the grant, in accordance with Australian accounting standards.
(ii) The value of options lapsed during the period due to the failure to satisfy a vesting condition is
determined assuming the vesting condition had been satisfied.
Consolidated group performance, shareholder wealth and director and senior management
remuneration
The remuneration policy has been tailored to align the interests of shareholders, directors and senior
management. To achieve this aim, the entity may issue options to directors and senior management.
Any issue of options is based on the performance of the Consolidated group and or individual and is
limited to the achievement of clearly defined bench marks and milestones. These bench marks and
milestones include:
Share price and or the market capitalisation of the Company exceeding pre-determined
levels.
Completion of specific projects or pre-determined stages of projects.
Periods of service with the Company.
Accretion of shareholder value.
The Company notes that all directors are current shareholders. There is no Board policy in relation to
limiting the recipient exposure to risk in relation to options issued to any individual.
Page | 22
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
The following table shows the gross revenue and profits for the period from 30 June 2007 to 31
December 2010 for the listed entity, as well as the share price at the end of each financial period.
Remuneration Report
Revenue
Net loss before and after tax
Share price at beginning of
period
Share price at end of period
Dividend
Basic loss per share
Diluted loss per share
12 Month
period ended
31 Dec
2010
$717,276
12 month
period ended
30 Jun
2008
$1,334,337
$(7,163,998) $(3,823,380) $(4,014,473) $(202,767,366)
6 Month
period ended
31 Dec
2009
$387,977
12 Month
period ended
30 Jun
2009
$1,279,120
12 month
period ended
30 Jun
2007
$228,241
$(199,700)
$0.58
$1.20
-
$0.03
$0.03
$0.36
$0.58
-
$0.02
$0.02
$0.66
$0.36
-
$0.02
$0.02
$1.75
$0.66
-
$1.25
$1.25
$0.26
$1.75
-
$0.62
$0.62
Key terms of employment contracts
Michael Hutchinson, Executive Chairman – appointed Executive Chairman 10 February 2010
Director fee excluding superannuation for the period ended 31 December 2010 of £100,000
per annum
Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation, meals
and telephone.
No fixed term.
Roderick McIllree, Managing Director
Term and type of contract – service agreement subject to annual review.
Base salary, for the period ended 31 December 2010 of $212,000 per annum and is paid
monthly in arrears quarterly, six weeks in advance and six weeks in arrears.
Superannuation at 9% is payable on the base salary.
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, there are no other specific payout
clauses
Remuneration will be reviewed every 12 months or as otherwise agreed between the
parties.
Simon Cato, Executive Director
Term and type of contract – service agreement limited to a maximum of 80 hours per
month subject to annual review.
Base salary, for the period ended 31 December 2010 of $140,000 per annum and is paid
quarterly, six weeks in advance and six weeks in arrears.
Superannuation at 9% is payable on the base salary.
Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his 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, there are no other specific payout
clauses.
Remuneration will be reviewed every 12 months or as otherwise agreed between the
parties.
Page | 23
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Jeremy Whybrow, Non- Executive Director
No fixed term.
Director Fees, for the period ended 31 December 2010 of $40,000 per annum and is paid
quarterly, six weeks in advance and six weeks in arrears.
Superannuation at 9% is payable on the directors fee.
Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation, meals
and telephone.
Anthony Ho, Non-Executive Director
$50,000 per annum.
No fixed term.
Superannuation at 9% is payable on the director’s fee
Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation, meals
and telephone.
Malcolm Mason, Non-executive Director
$40,000 per annum.
No fixed term.
Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation,
meals and telephone.
Shaun Bunn, Chief Operations Officer
Term of contract – consultancy service agreement with Shaun Bunn & Associates Pty
Limited, engagement is for a minimum term of 36 months, commencing 30 July 2008.
Either the Company or Shaun Bunn & Associates Pty Limited may terminate their
engagement without cause by giving the other party three months written notice, there
are no other specific payout clauses.
Shaun Bunn & Associates Pty Limited will be paid fee of $30,000 per month.
Shaun Bunn & Associates Pty Limited 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.
Miles Guy, Chief Financial Officer and Company Secretary
Term of contract – consultancy service agreement with Pro Count Pty Limited,
engagement is for no minimum term, and is based on the provision of services 3 days per
week.
Either the Company or Pro Count Pty Limited may terminate their engagement without
cause by giving the other party three months written notice, there are no other specific
payout clauses.
Pro Count Pty Limited will be paid fee of $98,100 per annum, being a pro rata of
$150,000 per annum plus 9% superannuation, based on full time employment.
Pro Count Pty Limited 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.
Page | 24
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
John Mair, General Manager
Term and type of contract – service agreement subject to annual review.
Base salary, for the period ended 31 December 2010 of $200,000 per annum and is paid
quarterly, six weeks in advance and six weeks in arrears.
Superannuation at 9% is payable on the base salary.
Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation,
meals and telephone.
Either the Company or the employee may terminate his engagement without cause by
giving the other party three months written notice, there are no other specific payout
clauses.
Remuneration will be reviewed every 12 months or as otherwise agreed between the
parties.
Meetings of Directors
During the financial year, 15 meetings of directors were held. Attendances by each director during the
year were as follows:
Directors Meetings
Director
M Hutchinson
R McIllree
S K Cato
J S Whybrow
A Ho
M G Mason
H K V Schønwandt
Number of meetings
eligible to attend
15
15
15
15
15
11
2
Number
attended
13
14
15
15
15
11
-
Audit Committee
The audit committee was convened at the Directors’ Board Meeting on the 22 April 2009. The audit
committee members are Anthony Ho (Chairman), Jeremy Whybrow (appointed 28 September 2010).
Michael Hutchinson and Malcolm Mason were members of the audit committee up to the date Mr
Hutchinson was appointed Executive Chairman and the date Mr Mason resigned as a director. The
audit committee is to meet at least twice a year and must have a quorum of two members. There
were 2 audit committee meeting held during the current 12 month reporting period, as follows:
Audit Committee Meetings
Member
A Ho
M Mason – resigned 28 September 2010
M Hutchinson – resigned 9 February 2010
J Whybrow – appointed 28 September 2010
Number of meetings
eligible to attend
2
2
-
-
Number
Attended
2
2
-
-
Remuneration Committee
There were no remuneration committee meetings held during the year.
Indemnifying Officers
During or since the end of the financial period 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 Consolidated group, other than conduct
involving a willful breach of duty in relation to the Consolidated group.
Page | 25
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
DIRECTORS’ REPORT
Proceedings on Behalf of Consolidated group
No person has applied for leave of court to bring proceedings on behalf of the consolidated group or
intervene in any proceedings to which the Consolidated group is a party for the purpose of taking
responsibility on behalf of the consolidated group for all or any part of those proceedings.
The Consolidated group was not a party to any such proceedings during the period.
Non-audit Services
Details of amounts paid to the auditors of the Company, Deloitte Touche Tohmatsu and its related
practices for audit and any non audit for the year, are set out in note 32.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 31 December 2010 has been received and
is included on page 26 the financial report.
Rounding off of amounts
The Consolidated group is a consolidated group of the kind referred to in ASIC Class Order 98/0100,
dated 10 July 1998. In accordance with that Class Order amounts in the directors’ report and the
financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.
Change of reporting period – comparative amounts
During the prior period the Australian Securities and Investment Commission (ASIC) granted the
Company relief under Sec 340 of the Corporations Act 2001. This relief has enabled the move from a
30 June financial year end to a 31 December year end. This was implemented to align the reporting
requirements with the reporting requirements and seasonality of its controlled activities in Greenland.
This financial report covers the period from 1 January 2010 to 31 December 2010, the first full year
since the change in reporting dates was adopted.
All comparative figures in this report, labeled “December 2009” refers to the 6 month period, of 1 July
2009 to 31 December 2009. Readers of this report should be aware that when comparing current
period figures to comparatives, they are comparing the current 12 month period to the previous 6
month period.
Signed in accordance with a resolution of directors, made pursuant to section 298(2) of the
Corporations Act 2001.
On behalf of the Directors.
Simon Cato
Executive Director
Page | 26
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Woodside Plaza
Level 14
240 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
DX 206
Tel: +61 (0) 8 9365 7000
Fax: +61 (0) 8 9365 7001
www.deloitte.com.au
The Board of Directors
Greenland Minerals and Energy Limited
Ground Floor,
Unit 6, 100 Railway Road,
Subiaco WA 6008
28 March 2011
Dear Board Members
Greenland Minerals and Energy Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Greenland Minerals and Energy
Limited.
As lead audit partner for the audit of the financial statements of Greenland Minerals and Energy
Limited for the financial year ended 31 December 2010, I declare that to the best of my
knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Leanne Karamfiles
Partner
Chartered Accountants
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member
firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/au/about for a detailed description of the legal
structure of Deloitte Touche Tohmatsu Limited and its member firms.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Woodside Plaza
Level 14
240 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
DX 206
Tel: +61 (0) 8 9365 7000
Fax: +61 (0) 8 9365 7001
www.deloitte.com.au
Independent Auditor’s Report to the
members of Greenland Minerals and
Energy Limited
Report on the Financial Report
We have audited the accompanying financial report of Greenland Minerals and Energy Limited, which
comprises the statement of financial position as at 31 December 2010, the statement of comprehensive
income, the statement of cash flows and the statement of changes in equity for the year ended on that
date, notes comprising a summary of significant accounting policies and other explanatory
information, and the directors’ declaration of the consolidated entity comprising the company and the
entities it controlled at the year’s end or from time to time during the financial year as set out on pages
30 to 66.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the
directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial statements comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control, relevant to the entity’s
preparation of the financial report that gives a true and fair view, 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.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
Auditor’s Independence Declaration
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,
which has been given to the directors of Greenland Minerals and Energy Limited on 28 March 2011
would be in the same terms if given to the directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of Greenland Minerals and Energy Limited is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 31 December
2010 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the consolidated financial statements also comply with International Financial Reporting
Standards as disclosed in Note 2.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 25 of the directors’ report for the
year ended 31 December 2010. 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.
Opinion
In our opinion the Remuneration Report of Greenland Minerals and Energy Limited for the year ended
31 December 2010, complies with section 300A of the Corporations Act 2001.
DELOITTE TOUCHE TOHMATSU
Leanne Karamfiles
Partner
Chartered Accountants
Perth, 28 March 2011
Directors’ declaration
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
The directors declare that:
(a)
in the directors’ opinion, there are reasonable grounds to believe that the Company will be able
to pay its debts as and when they become due and payable;
in the directors’ opinion, the attached financial statements and notes thereto are in accordance
with the Corporations Act 2001, including compliance with accounting standards and giving a
true and fair view of the financial position and performance of the Consolidated group;
the attached financial statements and notes thereto, are in compliance with International
Financial Reporting Standards as stated in note 2 of the financial statements; and
the directors have been given the declarations required by s.295A of the Corporations Act 2001.
(b)
(c)
(d)
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations
Act 2001.
On behalf of the Directors
Simon Cato
Executive Director
Subiaco, 28 March 2011
Page | 30
Consolidated statement of comprehensive income
for the year ended 31 December 2010
Revenue from continuing operations
Expenditure
Directors benefits
Employee benefits
Legal fees
Marketing & public relations
Occupancy expenses
Other expenses
Loss before tax
Income tax expense
Loss for period
Other comprehensive income
Exchange difference arising on translation of foreign
operations
Income tax relating to components of
comprehensive income
Other comprehensive income for the period
Total comprehensive income for the period
Loss attributable to:
Owners of the parent
Non-controlling interest
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interest
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
12 Month 6 Month
period
ended
31 Dec
2010
$' 000
period
ended
31 Dec
2009
$' 000
717
388
Note
5
6
6
7
7
(1,031)
(1,825)
(1,111)
(630)
(235)
(3,049)
(7,164)
-
(7,164)
(589)
(811)
(1,574)
(262)
(134)
(841)
(3,823)
-
(3,823)
(1,238)
(7)
-
(1,238)
(8,402)
-
(7)
(3,830)
(6,392)
(772)
(7,164)
(7,147)
(1,255)
(8,402)
(3,708)
(115)
(3,823)
(3,715)
(115)
(3,830)
Basic loss per share – cents per share
Diluted loss per share – cents per share
19
2.60
2.60
1.70
1.70
Notes to the financial statements are included on pages 35 to 66
Page | 31
Consolidated statement of financial position
as at 31 December 2010
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Capitalised exploration and evaluation expenditure
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and Other Payables
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
Reserves
Accumulated Losses
Equity attributable to equity holders of the parent
Non-controlling interest
Total Equity
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Dec
2010
$' 000
Dec
2009
$' 000
Note
8
9
10
11
12
13
14
15
16
18
20
11,587
196
1,364
13,147
7,614
1,971
515
10,100
582
42,149
42,731
460
37,129
37,589
55,878
47,689
1,476
1,622
3,098
696
79
775
3,098
52,780
775
46,914
153,754
117,401
(217,076)
54,079
(1,299)
52,780
103,685
153,957
(210,684)
46,958
(44)
46,914
Notes to the financial statements are included on pages 35 to 66
Page | 32
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Consolidated statement of changes in equity
for the year ended 31 December 2010
Issued
capital
Option
reserve
$' 000
98,519
$' 000
156,532
-
-
-
903
-
-
-
-
4,166
(3,380)
97
806
Foreign
currency
translation
reserve
Accumulated
losses
Attributable
to equity
holders of
the parent
Non-
controlling
interest
$' 000
$' 000
$' 000
$' 000
Total
$' 000
6
-
(7)
(7)
-
-
-
(206,976)
48,081
28
48,109
(3,708)
(3,708)
(115)
(3,823)
-
(7)
-
(7)
(3,708)
(3,715)
(115)
(3,830)
-
-
-
903
786
903
43
-
-
946
786
903
103,685
153,958
(1)
(210,684)
46,958
(44)
46,914
Balance at 1 July 2009
Net loss for the period
Other Comprehensive
Income for the period
Total comprehensive
for the period
Issue of shares
net of transaction costs
Issue of shares form
option exercise
Recognition of share
based payments
Balance at 31 December
2009
Balance at 1 January
2010
103,685
153,958
Net loss for the period
Other Comprehensive
income
Total comprehensive
for the year
Issue of shares
net of transaction costs
Issue of shares from
option exercise
Recognition of share
based payments
Balance at 31 December
2010
-
-
-
5,302
-
-
-
-
44,495
(35,801)
272
-
(1)
-
(755)
(755)
-
-
-
(210,684)
46,958
(44)
46,914
(6,392)
(6,392)
(772)
(7,164)
-
(755)
(483)
(1,238)
(6,392)
(7,147)
(1,255)
(8,402)
-
-
-
5,302
8,694
272
-
-
-
5,302
8,694
272
153,754
118,157
(756)
(217,076)
54,079
(1,299)
52,780
Notes to the financial statements are included on pages 35 to 66
Page | 33
Consolidated statement of cash flows
for the year ended 31 December 2010
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Net cash used in operating activities
Cash flows from investing activities
Interest received
Proceeds from advances to other parties
Payments for property, plant and equipment
Payments for exploration and development
Payment for investments
Proceeds from investments
Proceeds from government grant
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares/options
Payment for shares/options issue costs
Repayment of Loans to related parties
Net cash from financing activities
Note
23
Net increase/(decrease) in cash and equivalents
Cash and equivalents at the beginning of the financial
period
Cash and equivalents at the end of the
financial period
Notes to the financial statements are included on pages 35 to 66
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
12 Month
period
ended
31 Dec
2010
$' 000
6 Month
period
ended
31 Dec
2009
$' 000
251
(5,911)
(5,660)
335
1,000
(249)
(6,515)
(467)
560
700
(4,636)
14,695
(426)
-
14,269
123
(3,659)
(3,536)
244
-
(33)
(4,829)
(60)
-
-
(4,678)
1,786
-
3
1,789
3,973
(6,425)
7,614
14,039
8
11,587
7,614
Page | 34
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
1. General information
Greenland Minerals and Energy Limited is a public Company listed on the Australian Securities
Exchange, incorporated in Australia and operating in Greenland with its head office in Perth.
Greenland Minerals and Energy Limited registered office and its principal place of business are as
follows:
Registered office
Unit 6, 100 Railway Road Subiaco WA
Principal place of business
Unit 6, 100 Railway Road Subiaco WA
The Company’s principal activities are mineral exploration and evaluation.
2. Significant accounting policies
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with
the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other
requirements of the law.
The financial report includes the consolidated financial statements of the group.
Accounting Standards include Australian equivalents to International Financial Reporting Standards
(‘A-IFRS’). Compliance with A-IFRS ensures that the financial statements and notes of the
Consolidated group comply with International Financial Reporting Standards (‘IFRS’).
The financial statements were authorised for issue by the directors on 28 March 2011.
Basis of preparation
The financial report has been prepared on the basis of historical cost, except for the revaluation of
certain non-current assets and financial instruments. Cost is based on the fair values of the
consideration given in exchange for assets. All amounts are presented in Australian dollars, unless
otherwise noted.
The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998,
and in accordance with that Class Order amounts in the financial report are rounded off to the nearest
thousand dollars, unless otherwise indicated.
Critical accounting judgments and key sources of estimation uncertainty
In the application of the Consolidated group’s accounting policies, management is required to make
judgments, estimates and assumptions about carrying values of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods. Refer to note 3 for a discussion of critical judgements in applying the
entity’s accounting policies, and key sources of estimation uncertainty.
Adoption of new and revised Accounting Standards
In the current period, the Consolidated group has adopted all of the new and revised Standards and
Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to
its operations and effective for reporting periods beginning on 1 January 2010.
The following new and revised Standards and Interpretations have been adopted in the current
period:
- AASB 3 Business Combinations (2008), AASB 127 Consolidated and Separate Financial
Statements (2008), and AASB 2008-3 Amendments to Australian Accounting Standards
arising from AASB 3 and AASB 127
- AASB 2008-6 Further Amendments to Australian Accounting Standards arising from the
Annual Improvements Project
Page | 35
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
- AASB 2009-4 Amendments to Australian Accounting Standards arising from the Annual
Improvements Project
- AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the
Annual Improvements Project
- AASB 2009-7 Amendments to Australian Accounting Standards
The adoption of these standards and interpretations did not have any effect on the financial position
or performance of the Consolidated group.
The Consolidated group has not elected to early adopt any new standards or amendments.
At the date of authorisation of the financial report, a number of Standards and Interpretations were in
issue but not yet effective:
AASB 124 ‘Related Party Disclosures’(2009), AASB
2009-12 Amendments to Australian Accounting
Standards
AASB 9 ‘Financial Instruments’, AASB 2009-11
Amendments to Australian Accounting Standards arising
from AASB 9’
AASB 9 ‘Financial Instruments’ (December 2010), AASB
2010-7 Amendments to Australian Accounting Standards
arising from AASB 9 (December 2010)’
AASB 1053 Application of Tiers of Australian Accounting
Standards and AASB 2010-2 Amendments to Australian
Accounting Standards arising from Reduced Disclosure
Requirements
Effective for
annual reporting
periods
beginning on or
after
Expected to be
initially applied in
the financial year
ending
1 January 2011
31 December 2011
1 January 2013
31 December 2013
1 January 2013
31 December 2013
1 July 2013
31 December 2014
AASB 2010-3 Amendments to Australian Accounting
Standards arising from the Annual Improvements Project
1 July 2010
31 December 2011
AASB 2010-4 Further Amendments to Australian
Accounting Standards arising from the Annual
Improvements Project
1 January 2011
31 December 2011
AASB 2010-5 Amendments to Australian Accounting
Standards
1 January 2011
31 December 2011
AASB 2010-6 Amendments to Australian Accounting
Standards – Disclosures on Transfers of Financial Assets
1 July 2011
31 December 2012
AASB 2010-8 Amendments to Australian Accounting
Standards – Deferred tax: Recovery of Underlying Assets
1 January 2012
31 December 2012
Interpretation 19 Extinguishing Liabilities with Equity
Instruments
1 July 2010
31 December 2011
Page | 36
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
The directors note that the impact of the initial application of the Standards and Interpretations is not
yet known or is not reasonably estimable. These Standards and Interpretations will be first applied in
the financial report of the Consolidated group that relates to the annual reporting period beginning on
or after the effective date of each pronouncement.
The following significant accounting policies have been adopted in the preparation and presentation of
the financial report:
(a) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities (including special purpose entities) controlled by the Company (its subsidiaries). Control
is achieved where the Company has the power to govern the financial and operating policies of
an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the
consolidated statement of comprehensive income from the effective date of acquisition and up
to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring
their accounting policies into line with those used by other members of the Consolidated group.
All intra-group transactions, balances, income and expenses are eliminated in full on
consolidation.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity
therein. The interests of non-controlling shareholders may be initially measured either at fair
value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s
identifiable net assets. The choice of measurement basis is made on an acquisition-by-
acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is
the amount of those interests at initial recognition plus the non-controlling interests’ share of
subsequent changes in equity. Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Consolidated group’s interests in subsidiaries that do not result in a loss of
control are accounted for as equity transactions. The carrying amounts of the Consolidated
group’s interests and the non-controlling interests are adjusted to reflect the changes in their
relative interests in the subsidiaries. Any difference between the amount by which the non-
controlling interests are adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to owners of the Company.
(b) Joint venture arrangements
Jointly controlled operations
Where the Consolidated group is a venturer and so has joint control in a jointly controlled
operation, the Consolidated group recognises the assets that it controls and the liabilities and
expenses that it incurs, as a party to the joint venture.
(c) Foreign currency
The individual financial statements of each group entity are presented in its functional currency
being the currency of the primary economic environment in which the entity operates. For the
purpose of the consolidated financial statements, the results and financial position of each entity
are expressed in Australian dollars, which is the functional currency of Greenland Minerals and
Energy Limited and the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other
than the entity’s functional currency are recorded at the rates of exchange prevailing on the
dates of the transactions. At each balance sheet date, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the balance sheet date. Non-monetary
items carried at fair value that are denominated in foreign currencies are retranslated at the
rates prevailing on the date when the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not retranslated.
Page | 37
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
Exchange differences are recognised in profit or loss in the period in which they arise except for:
exchange differences on monetary items receivable from or payable to a foreign
operation for which settlement is neither planned or likely to occur, which form part of
the net investment in a foreign operation, and which are recognised in the foreign
currency translation reserve and recognised in profit or loss on disposal of the net
investment.
On consolidation, the assets and liabilities of the Consolidated group’s foreign operations are
translated into Australian dollars at exchange rates prevailing on the balance sheet date.
Income and expense items are translated at the average exchange rates for the period, unless
exchange rates fluctuated significantly during that period, in which case the exchange rates at
the dates of the transactions are used. Exchange differences arising, if any, are classified as
equity and transferred to the Consolidated group’s foreign currency translation reserve. Such
exchange differences are recognised in profit or loss in the period in which the foreign operation
is disposed.
(d) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax
(GST), except:
i.
where the amount of GST incurred is not recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of an asset or as part of an item of expense;
or
for receivables and payables which are recognised inclusive of GST.
ii.
The net amount of GST recoverable from, or payable to, the taxation authority is included as
part of receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of
cash flows arising from investing and financing activities which is recoverable from, or payable
to, the taxation authority is classified within operating cash flows.
(e) Revenue
Revenue is measured at the fair value of the consideration when received or receivable.
Interest revenue
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the
effective interest rate applicable, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that asset’s net carrying amount.
Rental income
Revenue from operating sub-leases is recognised in accordance with the Consolidated group’s
accounting policy.
(f) Share-based payments
Equity-settled share-based payments with employees and others providing similar services are
measured at the fair value of the equity instrument at the grant date. Fair value is measured by
use of an appropriate valuation method. The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of non-transferability, exercise
restrictions, and behavioural considerations. Further details on how the fair value of equity-
settled share-based transactions are in note 26.
The fair value determined at the grant date of the equity-settled share-based payments is
expensed on a straight-line basis over the vesting period, based on the Consolidated group’s
estimate of equity instruments that will eventually vest.
At each reporting date, the Consolidated group revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is
recognised in profit or loss over the remaining vesting period, with corresponding adjustment to
the equity-settled employee benefits reserve.
Equity-settled share-based payment transactions with other parties are measured at the fair
value of the goods and services received, except where the fair value cannot be estimated
reliably, in which case they are measured at the fair value of the equity instruments granted,
measured at the date the entity obtains the goods or the counterparty renders the service.
Page | 38
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
(g)
Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in
respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws
that have been enacted or substantively enacted by reporting date. Current tax for current and
prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the balance sheet liability method. Temporary differences
are differences between the tax base of an asset or liability and its carrying amount in the
balance sheet. The tax base of an asset or liability is the amount attributed to that asset or
liability for tax purposes.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred
tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be
available against which deductible temporary differences or unused tax losses and tax offsets
can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial recognition of assets and liabilities (other
than as a result of a business combination) which affects neither taxable income nor accounting
profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary
differences arising from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with
investments in subsidiaries and interests in joint ventures except where the Consolidated group
is able to control the reversal of the temporary differences and it is probable that the temporary
differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible
temporary differences associated with these investments and interests are only recognised to
the extent that it is probable that there will be sufficient taxable profits against which to utilise the
benefits of the temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period(s) when the asset and liability giving rise to them are realised or settled, based on tax
rates (and tax laws) that have been enacted or substantively enacted by reporting date. The
measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Consolidated group expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the
same taxation authority and the Company/Consolidated group intends to settle its current tax
assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the income statement,
except when it relates to items credited or debited directly to equity, in which case the deferred
tax is also recognised directly in equity, or where it arises from the initial accounting for a
business combination, in which case it is taken into account in the determination of goodwill or
excess.
(h) Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly
liquid investments that are readily convertible to known amounts of cash, which are subject to
an insignificant risk of changes in value and have a maturity of three months or less at the date
of acquisition.
(i)
Financial assets
Financial assets are recognised and derecognised on trade date where the purchase or sale of
a financial asset is under a contract whose terms require delivery of the financial asset within
the timeframe established by the market concerned, and are initially measured at fair value, net
of transaction costs except for those financial assets classified as at fair value through profit or
loss which are initially measured at fair value.
Financial assets are classified into the following specified categories: ‘Financial assets at fair
value through profit and loss (FVTPL)’, ‘available-for-sale’ financial assets, and ‘loans and
receivables’. The classification depends on the nature and purpose of the financial assets and is
determined at the time of initial recognition.
Page | 39
Notes to the accounts
2. Significant accounting policies (cont’d)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset
and of allocating interest income over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash receipts (including all fees on points paid or
received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the financial asset, or, where appropriate, a
shorter period.
Income is recognised on an effective interest rate basis for debt instruments other than those
financial assets ‘at fair value through profit or loss’.
Financial assets at fair value through profit or loss
Financial assets are classified as financial assets at fair value through profit or loss where the
financial asset:
has been acquired principally for the purpose of selling in the near future;
is a part of an identified portfolio of financial instruments that the Consolidated group
manages together and has a recent actual pattern of short-term profit-taking; or
is a derivative that is not designated and effective as a hedging instrument.
Financial assets at fair value through profit or loss are stated at fair value, with any resultant
gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss
incorporates any dividend or interest earned on the financial asset. Fair value is determined in
the manner described in note 10.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that
are not quoted in an active market are classified as ‘loans and receivables’. Loans and
receivables are measured at amortised cost using the effective interest method less impairment.
Interest income is recognised by applying the effective interest rate.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each balance sheet date. Financial
assets are impaired where there is objective evidence that as a result of one or more events that
occurred after the initial recognition of the financial asset the estimated future cash flows of the
investment have been impacted.
For financial assets carried at amortised cost, the amount of the impairment is the difference
between the asset’s carrying amount and the present value of estimated future cash flows,
discounted at the original effective interest rate.
The carrying amount of financial assets including uncollectible trade receivables is reduced by
the impairment loss through the use of an allowance account.
Subsequent recoveries of amounts previously written off are credited against the allowance
account. Changes in the carrying amount of the allowance account are recognised in profit or
loss.
With the exception of available-for-sale equity instruments, if, in a subsequent period, the
amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised, the previously recognised impairment loss
is reversed through profit or loss to the extent the carrying amount of the receivable at the date
the impairment is reversed does not exceed what the amortised cost would have been had the
impairment not been recognised.
In respect of available-for-sale equity instruments, any subsequent increase in fair value after an
impairment loss is recognised directly in equity.
Derecognition of financial assets
The Consolidated group de-recognises a financial asset only when the contractual rights to the
cash flows from the asset expire, or it transfers the financial asset and substantially all the risks
and rewards of ownership of the asset to another entity. If the Consolidated group neither
transfers nor retains substantially all the risks and rewards of ownership and continues to control
the transferred asset, the Consolidated group recognises its retained interest in the asset and
an associated liability for amounts it may have to pay. If the Consolidated group retains
substantially all the risks and rewards of ownership of a transferred financial asset, the
Consolidated group continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
Page | 40
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
(j) Property, plant and equipment
Plant and equipment and leasehold improvements are stated at cost less accumulated
depreciation and impairment. 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.
Depreciation on plant and equipment is calculated on a diminishing value basis so as to write off
the net cost or other devalued amount of each asset over its expected useful life to its estimated
residual value. Leasehold improvements are depreciated over the period of the lease or
estimated useful life, whichever is the shorter, using the diminishing value method. The
estimated useful lives, residual values and depreciation method are reviewed at the end of each
annual reporting period, with the effect of any changes recognised on a prospective basis.
Assets held under finance leases are depreciated over their expected useful lives on the same
basis as owned assets or, where shorter, the term of the relevant lease.
The gain or loss arising on disposal or retirement of an item of property, plant and equipment is
determined as the difference between the sales proceeds and the carrying amount of the asset
and is recognised in profit or loss.
The following useful lives are used in the calculation of depreciation:
Leasehold improvements
Plant and equipment
10 – 15 years
4 – 10 years
(k) Leased assets
Leases are classified as finance leases when the terms of the lease transfer substantially all the
risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are
classified as operating leases.
Group as lessor
Rental income from operating leases is recognised on a straight-line basis over the term of the
relevant lease. However, contingent rentals arising under operating leases are recognised as
income in a manner consistent with the basis on which they are determined.
Initial direct costs incurred in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
(l) Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries,
annual leave, long service leave, and sick leave when it is probable that settlement will be
required and they are capable of being measured reliably.
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal
values using the remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits, are measured as the present
value of the estimated future cash outflows to be made by the Consolidated group in respect of
services provided by employees up to reporting date.
(m) Financial instruments issued by the Consolidated group
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the
substance of the contractual arrangement. An equity instrument is any contract that evidences a
residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments
issued by the Consolidated group are recorded at the proceeds received, net of direct issue
costs.
Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’
or other financial liabilities.
Page | 41
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
(n)
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of
transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective
interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash payments through the expected life of the financial
liability, or, where appropriate, a shorter period.
Impairment of long-lived assets excluding goodwill
At each reporting date, the Consolidated group reviews the carrying amounts of its assets to
determine whether there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Consolidated group estimates the recoverable
amount of the cash-generating unit to which the asset belongs. Where a reasonable and
consistent basis of allocation can be identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-
generating unit) is increased to the revised estimate of its recoverable amount, but only to the
extent that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset (cash-generating unit)
in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
(o) Capitalisation of exploration and evaluation expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are
recognised as an exploration and evaluation asset in the year in which they are incurred where
the following conditions are satisfied:
(i) the rights to tenure of the area of interest are current; and
(ii) at least one of the following conditions is also met:
(a)
(b)
the exploration and evaluation expenditures are expected to be recouped through
successful development and exploration of the area of interest, or alternatively, by its
sale; or
exploration and evaluation activities in the area of interest have not, at the reporting
date, reached a stage which permits a reasonable assessment of the existence or
otherwise of economically recoverable reserves, and active and significant operations
in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights
to explore, studies, exploratory drilling, trenching and sampling and associated activities and an
allocation of depreciation and amortisation of assets used in exploration and evaluation
activities. General and administrative costs are only included in the measurement of exploration
and evaluation costs where they are related directly to operational activities in a particular area
of interest.
Page | 42
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
Exploration and evaluation assets are assessed for impairment when facts and circumstances
suggest that the carrying amount of an exploration and evaluation asset may exceed its
recoverable amount. The recoverable amount of the exploration and evaluation asset (or the
cash-generating unit(s) to which it has been allocated, being no larger than the relevant area of
interest) is estimated to determine the extent of the impairment loss (if any). Where an
impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in previous years.
Where a decision is made to proceed with development in respect of a particular area of
interest, the relevant exploration and evaluation asset is tested for impairment and the balance
is then reclassified to development.
(p) Provisions
Provisions are recognised when the Consolidated group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Consolidated group will be
required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at reporting date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the cashflows estimated to
settle the present obligation, its carrying amount is the present value of those cashflows.
When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, the receivable is recognised as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable can be measured reliably.
3: Critical accounting estimates and judgments
In preparing this Financial Report the Consolidated group 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)
b)
Significant accounting judgments
In the process of applying the Consolidated group's accounting policies, management has
made the following judgments, 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 Consolidated group 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. If ultimately the area of interest is abandoned or is
not successfully commercialised, the carrying value of the capitalised exploration and
evaluation expenditure would be written down to its recoverable amount.
Deferred tax assets
The Consolidated group 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.
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:
Page | 43
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
3: Critical accounting estimates and judgments (cont’d)
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 Consolidated group 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 and
political changes, (including obtaining the right to mine and changes to environmental
restoration obligations) and changes to commodity prices.
As at 31 December 2010, the carrying value of capitalised exploration expenditure is
$42,149,145 (2009: $37,129,405) refer to note 12.
Legal claims
A contingent liability has been disclosed, refer to note 22, relating to an estimate of the liability
that will be incurred by the Consolidated group in defending writs, issued to the Company by
Westrip Holdings Limited and Rimbal Pty Limited. The liability is based on an estimation by
directors after obtaining legal opinions.
4: Segment information
AASB8 requires operating segments to be identified on the basis of internal reports about
components of the entity that are regularly reviewed by the managing director (chief operating
decision maker) in order to allocate resources to The segment and assess performance.
The Consolidated group undertakes mineral exploration and evaluation in Greenland, associated
wholly with the Kvanefjeld project.
Given the Consolidated group has one reporting segment, operating results and financial information
are not separately disclosed in this note.
5: Revenue
Interest - Bank deposits
Operating lease revenue - Sub lease
Other revenue
12 Month
period ended
31 Dec
2010
$' 000
6 Month
period ended
31 Dec
2009
$' 000
320
136
261
717
208
74
106
388
Page | 44
Notes to the accounts
6: Loss for the period before tax
Loss for the period has been arrived at
after charging the following items
(a) Gains and losses
Gain on disposal of investments
Loss on disposal of leasehold assets
Changes in fair value of held for trading assets
Loss on foreign currency exchange
(b) Other expenses
Legal costs
Marketing & PR consulting
Occupancy expenses
Accounting expenses
Consulting expenses
Depreciation expense
Insurance
Operating lease rental expenses
Stock exchange fees
Travel expenses
Payroll tax
Other expenses
Directors’ fees and salary expense
Directors’ share based payments
Employee benefits
Employee share based payments
7: Income tax
(a) Tax expense
Current tax
Deferred tax
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
12 Month
period ended
31 Dec
2010
$' 000
6 Month
period ended
31 Dec
2009
$' 000
93
-
378
(267)
(1,111)
(630)
(235)
(196)
(337)
(127)
(99)
(136)
(83)
(717)
(1,198)
(645)
(1,031)
-
(1,031)
(1,825)
-
(1,825)
-
(31)
58
(22)
(1,574)
(262)
(134)
-
(21)
(47)
(24)
(74)
(32)
(332)
-
(316)
(433)
(156)
(589)
(162)
(649)
(811)
12 Month
period ended
31 Dec
2010
$' 000
6 Month
period ended
31 Dec
2009
$' 000
-
-
-
-
-
-
-
-
Page | 45
Notes to the accounts
7: Income tax (cont’d)
(b)
the prima facie income tax expense on
pre-tax accounting profit from operations reconciles to the
income tax expenses in the financial statements as follows;
Loss for period
Prima facie tax benefit on loss at 30%
add:
Tax effect of:
other non-allowable items
provisions and accruals
accrued income
revenue loss not recognised
Less:
Tax effect of:
Exploration, evaluation and development expenditure
provisions and accruals
capital expenditure write off
Other deductions
Income tax expense
The following deferred tax balances have not been
recognised:
Deferred tax assets:
at 30%
Carry forward revenue losses
Capital raising costs
Less: offset against deferred tax liability
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
12 Month
period ended
31 Dec
2010
$' 000
6 Month
period ended
31 Dec
2009
$' 000
(7,164)
(2,149)
(3,823)
(1,147)
391
530
12
3,704
4,637
(1,946)
(173)
(247)
(122)
(2,488)
-
12,396
345
12,741
(7,060)
5,681
529
129
12
2,191
2,861
(1,290)
(175)
(237)
(12)
(1,714)
-
8,692
458
9,150
(5,102)
4,048
The tax benefits of the above deferred tax assets will only be obtained if;
a) The Consolidated group derives future assessable income of a nature and amount sufficient
to enable the benefits to be utilized,
b) The Consolidated group continues to comply with the conditions of deductibility imposed by
law, and
c) No change in income tax legislation adversely affects the consolidated group’s ability to utilise
the benefits.
Page | 46
Notes to the accounts
7: Income tax (cont’d)
Deferred tax liabilities:
at 30%
Exploration, evaluation and development expenditure
Accrued income
less offset against deferred tax assets
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Dec
2010
$' 000
Dec
2009
$' 000
7,048
12
7,060
(7,060)
-
5,090
12
5,102
(5,102)
-
The above deferred tax liabilities have been offset against the deferred tax assets, noted above.
8: Cash and equivalents
Cash at bank
Cash on deposit
Dec
2010
$' 000
Dec
2009
$' 000
744
10,843
11,587
2
7,612
7,614
The Consolidated group’s financial risk management objectives and policies are discussed further at
note 27.
9: Trade and other receivables
(a) Current
Trade debtors (i)
Accrued interest
Research and development rebate
GST refundable
Funds held in trust (ii)
Dec
2010
$' 000
Dec
2009
$' 000
54
26
-
86
30
196
92
41
700
97
1,040
1,971
(i)
(ii)
Trade debtors and sundry debtors are non-interest bearing, unsecured and generally on
30 day terms. As at 31 December 2010 and 31 December 2009 no amounts were past
due but not impaired. Additionally there was no allowance for doubtful debts at either 31
December 2010 or 31 December 2009.
Funds held in trust consist of $30,441 (2009: $40,826) being held by the Consolidated
group’s London based lawyers as a retainer in relation to funding the minority
shareholders of Westrip Holdings Limited in their dispute with the major shareholders. A
deposit of $1,000,000 was also held in trust by Gravner Limited at 31 December 2009.
The money is being held as a deposit whilst Gravner Limited negotiated on behalf of the
Company for the purchase of the 4%. These funds were repaid to the Company during
the current financial year.
Page | 47
Notes to the accounts
10: Other assets
Deposit bonds
Prepayments
Funds held in trust for un-issued shares (i)
Investments carried at fair value:
Shares in listed companies
Changes in fair value (ii)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Dec
2010
$' 000
Dec
2009
$' 000
159
365
146
400
294
1,364
111
188
-
300
(84)
515
(i)
(ii)
Funds held in trust, relate to funds received for the issue of shares through the exercise
of options where the shares were not issued at 31 December 2010.
Movement in market value is based on the closing price on the Australian Securities
Exchange, of the shares held on the reporting date.
11: Property, plant and equipment
Plant and Equipment (cost)
Accumulated depreciation
Leasehold improvements (cost)
Accumulated depreciation
Dec
2010
$' 000
Dec
2009
$' 000
877
(349)
65
(11)
582
637
(228)
57
(5)
460
(a) Movements in the carrying amounts
Movement in the carrying values for each class of property, plant and equipment between the
beginning and the end of the period.
Plant and Equipment
Carrying value at beginning of period
Acquisitions
Depreciation expense
Carrying value at end of period
Leasehold improvements
Carrying value at beginning of period
Acquisitions
Disposals
Depreciation expense
Carrying value at end of period
Total property, plant and equipment carrying value at end of
period
Dec
2010
$' 000
Dec
2009
$' 000
408
242
(122)
528
52
7
-
(5)
54
582
425
27
(44)
408
81
5
(31)
(3)
52
460
Page | 48
Notes to the accounts
12: Capitalised exploration and evaluation expenditure
Balance at beginning of period
Exploration and/or evaluation phase in
current period:
Capitalised expenses (i)
Less:
Effects of currency translation
Government grant
Balance at end of period
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Dec
2010
$' 000
Dec
2009
$' 000
37,129
33,694
6,482
43,611
(1,462)
-
42,149
4,135
37,829
-
(700)
37,129
(i) On the 31 July 2007, Greenland Minerals and Energy Limited acquired a 61% interest in the
Kvanefjeld Project. As part of the acquisition, the Company entered into an un-incorporated
joint venture with Westrip Holdings Limited (Westrip), a UK based company to carry out the
exploration and evaluation of Kvanefjeld. The Consolidated Entity holds a 61% interest in the
joint venture with Westrip holding the balance. Under the initial acquisition agreement,
Greenland Minerals and Energy Limited, for the first 2 years from the date of acquisition was
required to fully fund the exploration and evaluation expenditure, while maintaining the 61%-
39% holding interest. From 17 August 2009 both joint venture parties are required to
contribute to the exploration expenditure, in proportion to their respective interests in the joint
venture. To date Greenland Minerals Energy Limited has continued to fully fund the
exploration expenditure and the Company has not to date made a claim against Westrip
Holdings Limited for its share of the exploration expenditure post 17 August 2009.
(ii)
(iii)
The recoverability of the Consolidated group’s carrying value of the capitalized exploration
and evaluation expenditure relating to the Kvanefjeld Project is subject to the successful
development and exploitation of the exploration property. The Consolidated Entity will carry
out a definitive feasibility study including among other areas, environmental and social impact
studies, with the intention of applying for the right to mine. Alternatively recoverability could
result from the sale of the tenement at an amount at least equal to the carrying amount.
The Greenland Government currently has a zero tolerance approach to the exploration and
exploitation of uranium. In September 2010, the Greenland government announced an
amendment to the Standard Terms for Exploration Licenses in Greenland. This amendment
allowed, upon application the inclusion of radioactive elements as exploitable minerals, for the
purpose of thorough evaluation and reporting. The Consolidated group has successfully made
an application and received approval from the Greenland government to fully evaluate the
Kvanefjeld multi element project, inclusive of radioactive elements. This will enable the
inclusion of these elements in the planned definitive feasibility studies.
in
The Consolidated group and
consultations with stakeholders, regarding the social and environmental aspects of the project
and potential further changes to the Greenland Government’s uranium policy. Based on
these facts, as well as the continued approval of the Consolidated group’s exploration
program, the Consolidated Entity has a positive outlook regarding its ability to successfully
develop the project, as a multi element project including uranium. The Consolidated group
will continue to explore and evaluate the project, with the view of moving to development,
subject to approval to mine uranium. This will be done in a manner that is in accord with both
Greenland Government and local community expectations.
the Greenland Government are currently
involved
Page | 49
Notes to the accounts
13: Trade and other payables
Accrued expenses (i)
Trade creditors (ii)
Sundry creditors (ii)
Funds held in trust (iii)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Dec
2010
$' 000
Dec
2009
$' 000
287
969
74
146
1,476
389
277
30
-
696
(i)
(ii)
(iii)
(iv)
Accrued expenses related to services and goods provided to the Consolidated group prior
to the period end, but the Consolidated group was not charged or invoiced for these
goods and services by the supplier at period end. The amounts are generally payable
and paid within 30 Days and are non-interest bearing.
Trade and sundry creditors are non-interest bearing with the exception of amounts owed
on corporate credit cards and after 30 days interest is charged at rates ranging between
15% and 18%. All trade and sundry creditors are generally payable on terms of 30 days.
Funds held in trust, relate to funds received for the issue of shares from the exercise of
options where the shares had not been issued at 31 December 2010.
The financial risk related to trade and other payables is managed by ensuring sufficient at
call cash balances are maintained by the Consolidated group to enable the settlement in
full of all amounts as and when they become due for payment.
14: Provisions
Provision for annual leave
Provision for payroll tax (i)
Dec
2010
$' 000
201
1,421
1,622
Dec
2009
$' 000
79
-
79
(i)
The Company has previously disclosed a contingent liability for payroll tax of $1,500,000.
This contingent liability related to a potential payroll tax liability on options issued to directors
in 2007. Based on the outcome of a review of this matter by the West Australian Office of
State Revenue (“OSR”), the Company has considered it appropriate to record $1,355,900 as
a provision for payroll tax payable. A provision for pay-roll tax for the year ended 31
December 2010, was also recorded.
Page | 50
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
15: Issued capital
Changes to the then Corporations Law abolished the authorised capital and par value concept in
relation to share capital from 1 July 1998. Therefore, the consolidated group does not have a limited
amount of authorised capital and issued shares do not have a par value.
Fully paid ordinary shares carry one vote per share and carry the right to dividends
Balance brought forward
Issue of ordinary shares through capital
raisings
Issue of ordinary shares for equity based
payments (refer to note 26)
Issue of ordinary shares as a result of
exercised options:
$0.10 exercise price options
$0.20 exercise price options
$0.50 exercise price options
Less costs associated with shares issues
Balance at end of financial period
16: Reserves
a) Option reserve
Balance brought forward
Issue of options to directors (i)
Issue of options to senior management (i)
Issue of options to staff (i)
Options exercised – transferred to share capital:
$0.10 exercise price options
$0.20 exercise price options
$0.50 exercise price options
Balance at end of financial period
(i) Refer to note 26
Dec 2010
Dec 2009
No
' 000
226,826
$' 000
103,685
No
' 000
218,509
17,647
6,000
4,000
800
272
388
750
42,349
300
-
288,672
266
44,030
199
(698)
153,754
-
3,929
-
-
226,826
$' 000
98,519
903
97
-
4,166
-
-
103,685
Dec
2010
$' 000
Dec
2009
$' 000
153,958
-
-
-
(191)
(35,561)
(49)
118,157
156,532
156
144
506
-
(3,380)
-
153,958
The option reserve arises from the grant of share options to executives, employees and consultants.
Amounts are transferred out of the reserve and into issued capital when the options are exercised.
Further information about share-based payments to directors and senior management is made in note
26 to the financial statements.
b) Foreign currency translation reserve
Balance brought forward
Current period adjustment from currency translation of foreign
controlled entities
Balance at end of period
Dec
2010
$' 000
Dec
2009
$' 000
(1)
(755)
(756)
6
(7)
(1)
Page | 51
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
16: Reserves (cont’d)
The foreign currency translation reserve records the foreign currency differences arising from the
translation of the foreign subsidiary’s accounts from Danish Kroner, the functional currency of
Greenland Minerals and Energy (Trading) A/S, to Australian dollars.
c) Total reserves
Option reserve
Foreign currency translation reserve
Dec
2010
$' 000
Dec
2009
$' 000
118,157
(756)
117,401
153,958
(1)
153,957
17: Dividends
No dividends have been proposed or paid during the period or comparative period.
18: Accumulated losses
Balance at beginning of financial period
Loss attributable to members of parent entity
Related income tax
Balance at end of financial period
19: Earnings per share
Basic loss per share
From continuing operations
Diluted loss per share
From continuing operations
Dec
2010
$' 000
(210,684)
(6,392)
-
(217,076)
Dec
2009
$' 000
(206,976)
(3,708)
-
(210,684)
Dec
2010
Cents
Per share
Dec
2009
Cents
Per share
2.60
2.60
1.70
1.70
Basic and diluted loss per share
The loss and weighted average number of ordinary shares used in the calculation of the basic and
diluted loss per share are as follows;
Loss for period ($)
Weighted average number of shares used
in the calculation of basic and diluted loss
per share (Number)
Dec
2010
6,391,904
Dec
2009
3,708,455
244,602,938
223,636,945
(i)
There were 136,442,341 potential ordinary shares on issue at 31 December 2010 (31
December 2009: 178,341,887) that are not dilutive and are therefore excluded from the
weighted average number of ordinary shares and potential ordinary shares used in the
calculation of diluted earnings per share.
Page | 52
Notes to the accounts
20: Non-controlling interest
Balance brought forward
Loss attributable to non-controlling interest
for the period
Currency translation movement attributable
to non-controlling interest
Additional equity attributable to non-
controlling interest
Non-controlling interest at the end of
financial period
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Greenland Minerals and
Energy (trading) A/S
Dec
Dec
2009
2010
(44)
(772)
(483)
-
(1,299)
28
(115)
-
43
(44)
21: Commitments for expenditure
Exploration commitments: The consolidated group has one exploration license for which it has
exploration commitments. EL 2010/02 is located in Greenland. The tenement expenditure incurred
during the year ended 31 December 2010 was in excess of the minimum expenditure required to
maintain the tenement in good standing. The excess expenditure can be carried forward for 5 years.
The amount carried forward will be more than sufficient to meet the minimum expenditure
requirements over this period.
Tenement commitments
Not longer than 1 year
Longer than 1 year but not longer than 5 years
Longer than 5 years
Operating leases (i)
Not longer than 1 year
Longer than 1 year but not longer than 5 years
Longer than 5 years
Other contractual obligations (ii)
Not longer than 1 year
Longer than 1 year but not longer than 5 years
Longer than 5 years
Dec
2010
Dec
2009
500
-
500
210
420
-
630
240
640
-
880
500
-
500
121
490
-
611
240
880
-
1,120
(i)
(ii)
The only commitments for operating leases are lease rentals on the Consolidated group’s
Perth head office premises. The current lease expires on the 14 February 2014, and is
non-cancelable, with a 3 year renewal option. No liabilities have been recognised in
relation to operating leases at 31 December 2010 or 31 December 2009.
Relates to ongoing contractual obligations with Gravner Limited for corporate advisory
services.
Page | 53
Notes to the accounts
22: Contingent liabilities
Pay-roll tax (i)
Legal related costs (ii)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Dec
2010
$' 000
-
1,200
1,200
Dec
2009
$' 000
1,500
500
2,000
(i)
The Company has previously disclosed a contingent liability for payroll tax of $1,500,000.
This contingent liability related to a potential payroll tax liability on options issued to
directors in 2007. Based on the outcome of a review of this matter by the West Australian
Office of State Revenue (“OSR”), the Company has considered it appropriate to record
$1,355,900 as a provision for payroll tax payable.
(ii)
Costs associated with defending writs served on the Company by Westrip Holdings
Limited (‘Westrip’) and Rimbal Pty Ltd (‘Rimbal’). The contingent liability is based on an
estimate by directors after obtaining legal opinions.
23: Notes to the statement of cash flows
Reconciliation of loss for the period to net cash flows from operating activities.
Loss for the period
(Gain) loss on sale or disposal of non-current
assets
(Gain) loss on revaluation of fair value through
profit and loss of financial assets
Depreciation
Equity-settled share-based payments
Interest income received and receivable
(Increase)/decrease in assets
Trade and other receivables
Increase (decrease) in liabilities
trade and other payables
in provisions
Net cash used in operating activities
12 Month
period
ended 31
Dec
2010
$' 000
6 month
Period
ended 31
Dec
2009
$' 000
(7,164)
(3,823)
(93)
(378)
127
-
(320)
53
31
(58)
47
805
(208)
10
572
1,543
(5,660)
(382)
42
(3,536)
The Consolidated group has not entered into any other non-cash financing or investing activities.
Page | 54
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
24: Jointly controlled operations
The Group is a venturer in the following jointly controlled operations:
Name of venture
Kvanefjeld Project (i)
Principal activity
Mineral exploration and evaluation
Total interest
Dec
2010
%
61
Dec
2009
%
61
The joint venture is an un-incorporated joint venture between the Consolidated group and Westrip
Holdings Limited as described in Note 12.
(i)
(ii)
There are no assets employed separately in the joint venture or capital commitments
separate from the commitments brought to account by the Consolidated group.
There are no contingent liabilities in relation to the joint venture.
25: Subsidiaries
Name of subsidiary
Chahood Capital Limited
Greenland Minerals and Energy (Trading) A/S
26: Share based payments
Country
of incorporation
Isle of Man
Greenland
Ownership interest
Dec
Dec
2009
2010
%
%
100
100
61
61
(a)The issue of shares for share based payments
The Consolidated group issued 800,000 shares with an issue price of $0.34 during the year as a
share-based payment. During the prior period, the Consolidated group issued 388,000 with an issue
price of $0.25, as a share based payment. These shares were issued in lieu of capital raising fees
brought to account against the relevant issued capital.
Date
20/12/2010
17/12/2010
Number
800,000
388,000
Issue Price
$0.34
$0.25
Value
$272,000
$97,000
There were no share based payment arrangements made, to directors, senior management, staff and
corporate advisors during the current reporting period.
The following share-based payment arrangements, were entered into in the comparative reporting
period:
Series
No
Grant
Date
Expiry
Date
Exercise
Price
Value @
grant Date
$
Dec 2009
15(i)
16(i)
17(i)
18(i)
2,250,000
20/08/2009
30/06/2001
2,250,000
20/08/2009
30/06/2011
500,000
10/11/2009
30/06/2011
500,000
10/11/2009
30/06/2011
$0.50
$1.00
$1.00
$1.50
387,266
261,755
88,442
67,987
(i)
Vested on issue with no additional vesting criteria.
Options were priced using the Black Scholes model. The expected life of the option is based on the
time between grant date of the option and the option expiry date. The expected volatility is based on
the share price volatility over a historical period commensurate to the life of the option concerned.
The weighted average fair value of the share options granted during the comparative period was
$0.15.
Page | 55
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
26: Share based payments (cont)
Input into
model
Series
15
Series
16
Series
17
Series
18
Grant
date
share
price
Exercise
Price
Expected
volatility
Option life
(years)
Dividend
yield
Risk free
rate
$0.35
$0.35
$0.46
$0.46
$0.50
$1.00
$1.00
$1.50
109%
109%
117%
117%
1.86
1.86
1.64
1.64
-
-
-
-
4.42% 4.42% 4.68% 4.68%
Series 15 & 16
Staff incentive options issued in varying numbers to staff and senior management, consisting in total
2,250,000 options with an exercise price of $0.50 and 2,250,000 with an exercise price of $1.00.
There are no further vesting conditions attached to these options. (refer below)
Series 17 & 18
Director options issued to Mr A Ho, 500,000 options with an exercise price of $1.00 and 500,000
options with an exercise price of $1.50. There are no further vesting conditions attached to these
options.
The following options issued to directors and management, were exercised during the financial year
ended 31 December 2010:
M Mason
S Bunn
Date
28/01/2010
25/11/2010
Number
Exercised
Exercise
Price
Share price @
exercise date
400,000
750,000
$0.20
$0.10
$0.70
$0.945
No options issued to directors and senior management were exercised during the financial period
ended 31 December 2009.
Employee share option plan
Greenland Minerals and Energy limited operates an ownership-based scheme for senior management
and employees of the Consolidated group. In accordance with the provisions of the plan, as
approved by shareholders at the general meeting on the 25 June 2009, eligible employees can be
offered participation in the plan, at the discretion of the Board. The Board’s discretion will be based
on the consideration of, among other things, the seniority of the person, the length of service of the
eligible employee with the Consolidated group and the potential contribution of the eligible employee
to the growth of the Consolidated group.
On exercise, each employee share option converts into one ordinary share of Greenland Minerals and
Energy limited. No amounts are paid or payable by the recipient on receipt of the option. The options
carry neither rights to dividends nor voting rights. There are no additional vesting conditions attached
to the options and the options may be exercised at any time up to the date of expiry.
Page | 56
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
26: Share based payments (cont’d)
Options granted under the employee share option plan
Option
Series
Grant date
Number
15
16
20/08/2009
20/08/2009
2,250,000
2,250,000
Expiry date
30/06/2011
30/06/2011
Grant Date
fair value
387,267
261,756
Vesting date
20/08/2009
20/08/2009
(i)
(ii)
500,000 of the series 15 options and 500,000 of the series 16 options were granted to
senior management, the balance of both series was granted to other employees.
The options fully vest on the grant date and have no additional vesting conditions
attached
(v)
(iii)
(iv)
(i)
(ii)
Terms under which the options are issued are as follows:
Each Option entitles the holder to one Share
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 consolidated group to be received any time prior to
the Expiry Date. The consolidated group 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 (i) will be allotted and issued a Share ranking pari
passu with the then issued Shares.
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 consolidated group 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 Option
holders 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 consolidated
group 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
Option holder 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.
(viii)
(vii)
(vi)
Page | 57
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
26: Share based payments (cont)
The following reconciles the outstanding share options granted at the beginning and end of the
financial period.
Dec 2010
Dec 2009
Balance at beginning of the financial
period
Granted during financial period
Forfeited during the financial period
Exercised during the financial period
Expired during the financial period
Exercisable at the end of the financial
period
Weighted
average
exercise
price
Number of
options
Weighted
average
exercise
price
0.25 178,270,890
5,500,000
-
(3,929,003)
-
-
-
(0.20)
-
0.22
0.84
-
(0.20)
-
Number of
options
179,841,887
-
-
(43,399,546)
-
136,442,341
0.27 179,841,887
0.25
The average share price during the current period was $0.92 (2009: $0.49).
The share options outstanding at the end of the financial period had a weighted average exercise
price of $0.27(December 2009: $0.25), and a weighted average remaining contractual life of 181 days
(December 2009: 548 days).
27: Financial instruments
(a) Capital risk management
The Consolidated group manages its capital in order to maintain sufficient funds are available for the
Consolidated group to meet its obligations and that the Group can fund its exploration and evaluation
activities as a going concern.
The Consolidated group’s overall strategy remains unchanged from December 2009.
The capital structure of the consolidated group consists of fully paid shares and options as disclosed
in notes 15 and 16 respectively.
None of the Consolidated group’s entities are subject to externally imposed capital requirements.
(b) Categories of financial instruments
Financial assets
Cash and equivalents
Loans and receivables - current
Fair value through profit and loss – held for trading
Financial liabilities
Amortised cost
Dec
2010
$' 000
Dec
2009
$' 000
11,587
196
694
7,614
1,971
216
1,476
696
(c) Financial risk management objectives
The Group’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 low risk to the
Consolidated group. For the period under review, it is the Consolidated group’s policy not to trade in
financial instruments
The main risks arising from the Consolidated group’s financial instruments are interest rate risk, credit
risk and liquidity risk. The board reviews and agrees policies for managing each of these risks and
they are summarised below:
Page | 58
Notes to the accounts
27: Financial instruments (cont)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
(i)
(ii)
(iii)
(iv)
Interest Rate Risk
The Consolidated group 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 Consolidated group does not have short or long term debt, and
therefore this risk is minimal.
There was no change in managing interest rate risk or the method of measuring risk
from the prior year.
Credit Risk
Credit risk refers to the risk that a counter party will default on its contractual
obligations resulting in financial loss to the Group. The Group 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 Consolidated group has no significant credit risk exposure to any single
counterparty or any consolidated group of counterparties having similar
characteristics. The credit risk on liquid funds is limited because the counterparties
are banks with high credit – ratings assigned by international rating agencies. The
carrying amount of financial assets recorded in the financial statements, net of any
provisions for losses, represents the Consolidated group’s maximum exposure to
credit risk.
There was no change in managing credit risk or the method of measuring risk from
the prior year.
Liquidity Risk
Liquidity risk refers to maintaining sufficient cash and equivalents to meet on going
commitments, as and when they occur. The primary source of liquid funds for the
Consolidated group, are funds the Consolidated group holds on deposit with varying
maturity dates.
The Consolidated group monitors its cash flow forecast and actual cash flow to
ensure that present and future commitments are provided for. As well as matching
the maturity date of funds invested with the timing of future commitments.
There was no change in managing credit risk or the method of measuring risk from
the prior year.
Foreign Currency Risk
The Consolidated group’s risk from movements in foreign currency exchange rates,
relates to funds transferred by the Company to the Greenland subsidiary and the
funds are held in Danish Krone (DKK). This risk exposure is minimised by only
holding sufficient funds in DKK, to meet the immediate cash requirements of the
subsidiary. Once funds are converted to DKK they are only used to pay expenses in
DKK.
Page | 59
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
27: Financial instruments (cont)
(d) Liquidity risk
The following table details the Consolidated group’s expected maturity for its non-derivative financial
assets. The tables below have been drawn up based on the undiscounted contractual maturities of
the financial assets including interest that will be earned on those assets except where the
Company/Consolidated group anticipates that the cash flow will occur in a different period.
Weighted
Average
Effective
interest
rate
< 6
Months
6 – 12
Months
%
$' 000
$' 000
3.1
-
3.2
-
7,187
196
7,383
5,603
1,971
7,574
4,400
-
4,400
2,011
-
2,011
1 - 5
Years
$' 000
> 5
Years
$' 000
Total
$' 000
-
-
-
-
11,587
196
11,783
-
7,614
1,971
9,801
-
-
-
-
Dec 2010
Cash and equivalents
Trade and receivables - current
Dec 2009
Cash and equivalents
Trade and receivables - current
The following table details the Consolidated group’s remaining contractual maturity for its non-
derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows
of financial liabilities based on the earliest date on which the Group can be required to pay. The table
includes both interest and principal cash flows.
Weighted
Average
Effective
interest
rate
%
< 6
Months
$' 000
6 – 12
Months
$' 000
1 – 5
Years
$' 000
> 5
Years
$' 000
Total
$' 000
-
-
1,476
1,476
696
696
-
-
-
-
-
-
-
-
-
-
-
-
1,476
1,476
696
696
Dec 2010
Trade and other payables
Dec 2009
Trade and other payables
(e) Interest rate risk
The Consolidated group is exposed to interest rate risk because it places funds on deposit at variable
rates. The risk is managed by the Consolidated group by monitoring interest rates.
The Consolidated group’s exposures to interest rates on financial assets and financial liabilities are
detailed in the liquidity risk management section of this note.
Page | 60
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
27: Financial instruments (cont)
The Group 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. In the analysis a 1% or 100 basis points movement
has been applied on the assumption that interest rates are unlikely to move up more than that and
less likely to fall. This is taking into account the current interest rate levels and general state of the
economy.
There has been no change in managing credit risk or the method of measuring risk from the prior
year.
Interest Rate Sensitivity Analysis
At 31 December 2010, 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:
Dec
2010
$' 000
Dec
209
$' 000
Change in profit
Increase in interest rate by 1% (100 basis points)
196
A 1% or 100 basis points variable has been applied to the interest rate sensitivity analysis, after giving
consideration to the current interest rate levels and general state economy.
95
Fair value of financial instruments
The carrying value of all financial instruments is the approximate fair value of the instruments. This is
based on the fact that all financial instruments have either a short term date of maturity or are loans to
subsidiaries.
The only financial assets or liabilities carried at fair value are the investments held in listed entities as
disclosed in note 10. The fair value of these assets is based on quoted market prices at the reporting
date (being level 1 of the fair value hierarchy).
28: Key management personnel compensation
The aggregate compensation made to key management personnel of the the Consolidated group is
set out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payment
12 Months
ended
31 Dec
2010
$
1,349,795
69,255
-
-
-
1,419,050
6 Months
ended
31 Dec
2009
$
703,545
38,160
-
-
300,630
1,042,335
Refer to the remuneration report included in pages 18 to 25 of the Directors report for more detailed
remuneration disclosures.
Page | 61
Notes to the accounts
29: Key management personnel equity holdings
Fully paid ordinary shares of Greenland Minerals and Energy Limited
Balance
at beginning of period
Granted as
compensation
Received on
exercise of options
Net other change
(i)
Balance
at end of period
Balance held nominally
No.
No.
No.
No.
No.
No.
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Dec 2010
M Hutchinson
R McIllree
S Cato
J Whybrow
A Ho
M Mason (ii)
H Schønwandt (iii)
S Bunn
M Guy
J Mair
Dec 2009
M Hutchinson
R McIllree
S Cato
J Whybrow
A Ho
M Mason
H Schønwandt
S Bunn
M Guy
J Mair
-
3,331,095
920,100
900,100
250,000
610,000
1,500,000
-
200,000
260,000
-
3,231,095
920,100
900,100
200,000
610,000
1,500,000
-
200,000
260,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
400,000
-
750,000
-
-
-
(60,000) (iv)
-
(400,000) (iv)
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
-
-
50,000
-
-
-
-
-
-
3,331,095
920,100
900,100
250,000
950,000
1,500,000
350,000
200,000
260,000
-
3,331,095
920,100
900,100
250,000
610,000
1,500,000
-
200,000
260,000
(i)
(ii)
(iii)
(iv)
Net other change relates to options purchased either on market through the ASX, or through third party off market transactions.
M Mason resigned 28 September 2010.
H Schønwandt resigned 9 March 2010.
Shares sold on market.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Page | 62
Notes to the accounts
29: Key management personnel equity holdings (cont)
Share options of Greenland Minerals and Energy Limited
Balance
at beginning of
period
No.
Granted as
compensation
No.
Exercised
No.
Net other change
(i)
No.
Balance at end of
period
No.
Balance vested at
end of period
No.
Vested and
exercisable
No.
Options vested
during year
No.
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Dec 2010
M Hutchinson
R McIllree
S Cato
J Whybrow
A Ho
M Mason (ii)
H Schønwandt (iii)
S Bunn
M Guy
J Mair
Dec 2009
M Hutchinson
R McIllree
S Cato
J Whybrow
A Ho
M Mason
H Schønwandt
S Bunn
M Guy
J Mair
4,000,000
9,122,000
7,400,100
7,310,100
1,000,000
3,680,000
1,000,000
1,250,000
100,000
5,600,000
4,000,000
8,922,000
7,400,100
7,310,100
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
3,680,000
1,000,000
750,000
100,000
2,600,000
-
-
500,000
-
500,000
-
-
-
-
-
200,000 (iv)
-
-
(400,000)
100,000 (iv)
-
(750,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
200,000
-
-
-
-
-
-
2,500,000
4,000,000
9,322,000
7,400,100
7,310,100
1,000,000
3,380,000
1,000,000
500,000
100,000
5,600,000
4,000,000
9,122,000
7,400,100
7,310,100
1,000,000
3,680,000
1,000,000
1,250,000
100,000
5,600,000
-
2,522,000
800,100
710,100
1,000,000
3,380,000
1,000,000
500,000
100,000
5,600,000
-
2,522,000
800,100
710,100
1,000,000
3,680,000
1,000,000
1,250,000
100,000
5,600,000
-
2,522,000
800,100
710,100
1,000,000
3,380,000
1,000,000
500,000
100,000
5,600,000
-
2,522,000
800,100
710,100
1,000,000
3,680,000
1,000,000
1,250,000
100,000
5,600,000
(i)
(ii)
(iii)
(iv)
Net other change relates to options purchased either on market through the ASX, or through third party off market transactions.
M Mason resigned 28 September 2010.
H Schønwandt resigned 9 March 2010.
Options acquired on market by Roderick McIllree and Malcolm Mason.
All share options issued to key management personnel were made in accordance with the provisions of the employee share option plan.
Further details of the share option plan and of options granted during the current and prior period are contained in note 26.
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
3,000,000
1,000,000
500,000
-
500,000
Page | 63
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Notes to the accounts
30: Transactions with related parties
Simon Cato is a Non-executive Director and Chairman of Advanced Share Registry Limited.
Advanced Share Registry Limited provides share registry services to Greenland Minerals and Energy
Limited. These services are supplied on normal commercial terms and Mr Cato does not receive any
remuneration from Advanced Share Registry Limited based on the supply of share registry services to
the Consolidated group. For the year ended 31 December 2010 $38,516 was paid to Advance Share
Registry Limited for services provided (Dec 2009: $22,798).
Shaun Bunn and Associates Pty Ltd is a company of which Mr Shaun Bunn is a director, was paid
consultancy fees of $337,500 during the current period (Dec 2009: $180,000). This amount has been
disclosed in the details of remuneration paid to Mr Bunn.
In addition Shaun Bunn is a director MGMT Group Pty Ltd, a company that provided management
consultancy services to Greenland Minerals and Energy Limited. These services were not related to
Mr Bunn’s role as Chief Operating Officer or any other services provided by Mr Bunn. For the year
ended 31 December 2010 MGMT Group Pty Ltd was paid $91,049 for services provided (2009: Nil)
Pro Count Pty Ltd is a company of which Mr Miles Guy is a director, was paid or entitled to be paid
fees for the provision of services by Mr Guy as Chief Financial Officer (CFO) and other fees of
$125,200 during reporting period (Dec 2009: $63,720). Of this amount $98,100 (2009: $30,679)
relates to services provided to the Consolidated group by Mr Guy as CFO. The balance of the
amount paid to Pro Count Pty Ltd relates to other accounting services provided to the Consolidated
group by staff of Pro Count Pty Ltd.
Missoni Investments Pty Ltd, a company of which Mr Malcolm Mason is a director, was paid or
entitled to be paid directors and other fees of during the year ended 31 December 2010 of $46,846
(Dec 2009: $37,979). Of this amount, $43,333 related to payments to Mr Mason for services provided
by Mr Mason to the Consolidated group and this amount has been disclosed in the details of
remuneration paid to Mr Mason. The balance of the amount paid to Missoni Investments Pty Ltd,
relates to the payment of rent, charged by Missoni Investments Pty Ltd on storage facilities, provided
by the company.
Page | 64
Notes to the accounts
31: Parent Company information
Financial position
Total Current Assets
Total Non-Current Assets
Total Assets
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
Reserves
Accumulated Losses
Total Equity
Financial Performance
Loss for the year
Total comprehensive income
Contingent liabilities
Pay-roll tax (i)
Legal related costs (ii)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Dec
2010
$' 000
Parent
Dec
2009
$' 000
13,028
46,094
59,122
9,898
38,027
47,925
2,523
2,523
56,599
759
759
47,166
153,754
118,157
(215,313)
56,598
103,685
153,958
(210,477)
47,166
(4,836)
(4,836)
(3,999)
(3,999)
Dec
2010
$' 000
-
1,200
1,200
Dec
2009
$' 000
1,500
500
2,000
(i)
The Company has previously disclosed a contingent liability for payroll tax of $1,500,000.
This contingent liability related to a potential payroll tax liability on options issued to
directors in 2007. Based on the outcome of a review of this matter by the West Australian
Office of State Revenue (“OSR”), the Company has considered it appropriate to record
$1,355,900 as a provision for payroll tax payable.
(ii)
Costs associated with defending writs served on the Company by Westrip Holdings
Limited (‘Westrip’) and Rimbal Pty Ltd (‘Rimbal’). The contingent liability is based on an
estimate by directors after obtaining legal opinions.
Guarantees
In addition Greenland Minerals and Energy Limited has guaranteed the provision of funding and
support to the Company’s 61% held subsidiary, Greenland Minerals and Energy Limited. This funding
forms part of the Consolidated group’s approved budgeted expenditure.
Page | 65
Notes to the accounts
32: Remuneration of auditors
Auditor of the parent entity
Audit or review of the financial report
Preparation of the tax return
Other non-audit services
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Dec
2010
$
120,374
-
22,220
142,594
Dec
2009
$
89,594
-
-
89,594
The auditor of Greenland Minerals and Energy Limited is Deloitte Touche Tohmatsu
33: Subsequent Events
On the 18 February 2011, Greenland Minerals and Energy (Trading) A/S (GME), the Company’s
Greenland subsidiary was served a writ by Westrip Holdings Limited (Westrip). In the writ Westrip
challenges the validity of decisions made at the GME Extraordinary General Meeting on 23 November
2010, on the grounds it has allegedly been unfairly prejudiced by reason of four proposals that were
raised by Westrip, not being supported. The board of GME and the Company did not support these
proposals as it was viewed they were not in the best interests of GME.
Legal advice has been sought on this matter and based on this advice the Company is satisfied the
claims contained in the writ are without merit. Further more if the claims are advanced they cannot
give rise to either serious damages claims or otherwise affect the Company’s underlying interest or
the conduct of operations in Greenland in any material way.
Greenland Minerals and Energy (Trading) A/S will vigorously defend this vexatious writ.
There has not been any other matter or circumstance occurring subsequent to the financial period
that has significantly affected, or may significantly affect, the operations of the Consolidated group,
the results of those operations, or the state of affairs of the Consolidated group in future years.
Page | 66
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Additional stock exchange information as at 15th February 2011
Consolidated group secretary
Miles Guy
Registered office
Unit 6, 100 Railway Road, Subiaco
Western Australia, 6008
Principal administration office
Unit 6, 100 Railway Road, Subiaco
Western Australia, 6008
Share registry
Advanced Share Registry Services
110 Stirling Highway
Nedlands, Western Australia, 6009
Number of holders of equity securities
Ordinary share capital
310,937,808 fully paid ordinary shares are held by 3,382 individual shareholders.
Options
80,687,856 options are held by 452 individual optionholders.
Options do not carry a right to vote.
Substantial Shareholders
Shareholder
1. Citicorp Nominees Pty Limited
2. JP Morgan Nominees Australia Limited
3. National Nominees Limited
4. HSBC Custody Nominees (Australia) Limited
5. Westrip Holdings Limited
Number
59,330,694
48,814,021
42,809,486
24,544,005
17,829,169
Percentage
19.081%
15.699%
13.768%
7.894%
5.734%
Page | 67
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Additional stock exchange information as at 15th February 2011
Distribution of holders of quoted shares
Share Spread
Holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
396
1,240
753
859
134
3,382
Units
276,453
3,873,360
6,337,569
25,985,097
274,465,329
310,937,808
Percentage
0.089%
1.246%
2.038%
8.357%
88.270%
100%
Twenty largest holders of quoted shares
Ordinary shareholders
1. Citicorp Nominees Pty Limited
2. JP Morgan Nominees Australia Limited
3. National Nominees Limited
4. HSBC Custody Nominees (Australia) Limited
5. Westrip Holdings Limited
6. Zero Nominees Pty Limited
7. South Asian Commodity Holdings Limited
8. GCM Nominees Pty Limited
9. Roderick Claude McIllree
10. Merrill Lynch (Australia) Nominees Pty Limited
11. Falfaro Investments Limited
12. UBS Nominees Pty Limited
13. Missoni Investments Pty Limited
14. Advanced Concepts Holdings Limited
15. ABN AMRO Clearing Sydney Nominees Pty Limited
16. Cameron John French
17. Ashabia Pty Limited
18. Wisevest Pty Limited
19. Altinova Nominees Pty Limited
20. Urmas Aavelaid
Fully paid ordinary shares
Number
59,330,694
55,835,184
42,809,486
24,544,005
17,829,169
10,586,676
6,200,000
4,000,000
3,331,095
3,325,312
3,000,000
2,445,680
2,150,000
2,000,000
1,802,430
1,656,911
1,100,000
1,000,000
1,000,000
961,516
Percentage
19.1%
17.9%
13.8%
7.9%
5.7%
3.4%
2.0%
1.3%
1.1%
1.1%
1.0%
0.8%
0.7%
0.6%
0.6%
0.5%
0.4%
0.3%
0.3%
0.3%
244,908,158
78.8%
Page | 68
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2010 Financial Report
Additional stock exchange information as at 15th February 2011
Distribution of holders of quoted options
Option Spread
Holders
Units
Percentage
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
17
90
98
174
73
452
8,859
339,012
889,343
7,935,987
71,514,655
80,687,856
0.011%
0.420%
1.102%
9.835%
88.631%
100%
Twenty largest holders of quoted options
Option Holders
1. Citicorp Nominees Pty limited
2. NGAI Hung Limited
3. Mandarin Securities Limited
4. Mr John Lefroy Mair
5. Roderick Claude McIllree
6. Zero Nominees Pty Limited
7. Michael Bushell
8. Jenny Lee Bushell
9. Martin Ross Helean
10. JP Morgan Nominees Australia Limited
11. Adonis Kiritsopoulos & Jennifer Anne Ford
12. Yarandi Investments Pty Limited
13. Merrill Lynch (Australia) Nominees Pty Limited
14. Richard Hamsany & Rosa Dianna Marisa Hamsany
15. Simon Cato
16. Bond Street Custodians Limited
17. Tadea Pty Limited
18. Shayne Daley & Dr Linda Margaret Daley
19. Nefco Nominees Pty Limited
20. Jeremy Whybrow
$0.20 Listed Options
Number
20,489,366
6,710,000
6,000,000
5,000,000
2,772,000
2,740,000
2,002,000
1,875,000
1,500,000
1,457,300
1,260,667
1,096,666
900,000
850,000
800,100
795,000
735,000
730,000
729,400
710,100
Percentage
25.4%
8.3%
7.4%
6.2%
3.4%
3.4%
2.5%
2.3%
1.9%
1.8%
1.6%
1.4%
1.1%
1.0%
1.0%
1.0%
0.9%
0.9%
0.9%
0.9%
59,152,599
73.3%
Page | 69