More annual reports from Graco:
2020 ReportPeers and competitors of Graco:
MorningstarDeveloping the world’s premier specialty metals project. 2014 AnnUAl RePORT Corporate Directory DIRECTORS Anthony Ho non-executive Chairman John Mair Managing Director Simon Cato non-executive Director Michael Hutchinson non-executive Director Jeremy Whybrow non-executive Director CHIEF FINANCIAL OFFICER/ COMPANy SECRETARy Miles Guy REGISTERED AND HEAD OFFICE Unit 6, 100 Railway Road Subiaco WA 6008 Greenland nuugaarmiunt B-847 3921 narsaq, Greenland HOME STOCK ExCHANGE Australian Securities exchange, Perth Code: GGG GGGOA AUDITORS Deloitte Touche Tohmatsu SHARE REGISTRy Advanced Share Registry 110 Stirling highway nedlands WA 6009 COMPANy WEBSITE www.ggg.gl Greenland Minerals and enerGy lTd - AnnUAl RePORT 2014 Contents Introduction Highlights of 2014 Review of Operations 1 3 4 Greenland Minerals and energy – 4 nFC: A Strong Rare earth Business Taking Shape 6 Stakeholder engagement Program Technical Developments in 2014 7 historic Kvanefjeld Drill Cores – An Important In-Fill Dataset 8 environment and Social Impact Assessments (eIA and SIA) The eURARe Rare earth Program Corporate Company Research Political and Regulatory Developments Summary Table of Identified Mineral Resources 1 General information 2 Significant accounting policies 3 Critical accounting estimates and judgments 4 Segment information 5 Revenue 6 expenditure 7 Income tax 8 Cash and equivalents 9 Trade and other receivables 10 11 12 13 13 14 16 17 Annual Financial Report 18 Corporate Governance Statement 22 Directors’ report 44 Auditor’s independence declaration 45 Independent auditor’s report 47 Director’s declaration Statement of profit and loss and comprehensive income 48 49 Statement of financial position 50 Statements of changes in equity 51 Statement of cash flows 52 Notes to the accounts 52 52 61 61 62 62 63 64 65 65 65 66 67 68 68 68 69 70 70 71 71 72 72 73 76 79 80 84 84 85 85 87 10 Other assets 11 Property, plant and equipment 12 Capitalised exploration and evaluation expenditure 13 Trade and other payables 14 Other liabilities 15 Provisions 16 Issued capital 17 Reserves 18 Dividends 19 Accumulated losses 20 loss per share 21 Commitments for expenditure 22 Subsidiaries 23 Notes to the statement of cash flows 24 Share based payments 25 Financial instruments 26 Key management personnel compensation 27 Key management personnel equity holdings 28 Transactions with related parties 29 Parent company information 30 Remuneration of auditors 31 Subsequent events Additional stock exchange information 89 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Introduction In 2014, Greenland Minerals and Energy Limited (‘GMEL’ or ‘the Company’) made significant progress in advancing the company’s flagship Kvanefjeld rare earth – uranium project toward the development pipeline. The year’s achievements set a solid platform for 2015, which will see the company positioned to finalise and submit all documentation to commence the permitting process for Kvanefjeld, and ultimately move toward receiving an exploitation license. As a precursor to progressing through the feasibility study and environmental and social impact assessments, the development strategy for Kvanefjeld was set early in 2014. This was achieved through considered input from a cross-section of stakeholders in Greenland, and resulted in the preferred development strategy to feature both the concentrator and refinery stages in Greenland. Greenland Minerals and enerGy lTd - AnnUAl RePORT 2014 1 Introduction (continued) Over recent years, GMEL has looked to identify and engage appropriate development partners for Kvanefjeld. In early 2014, following an extensive dialogue, GMEL signed a Memorandum of Understanding with China Non-Ferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd. (NFC) to evaluate and pursue the establishment of a global rare earth business partnership. The dialogue between GMEL and NFC had identified both a synergy and opportunity; combining the cost-competitive production of critical rare earth intermediate products from Kvanefjeld with NFC’s expertise and capacity in downstream rare earth separation. In addition, NFC is a highly-reputed engineering, procurement and construction (EPC) contractor, with the clear capacity to participate in the construction of the mine and processing facilities for Kvanefjeld. In mid-2014 GMEL conducted a fully-underwritten rights issue to raise $8.9M. The rights issue was designed to raise moneys to fund the Kvanefjeld feasibility study and the environmental and social impact assessments, which collectively comprise the necessary documents for project permitting. Through the latter half of 2014, focus was largely on advancing the components that make up the feasibility study. Numerous study components were complete by year end, with the remainder scheduled for completion through the first quarter of 2015. Importantly, concerted efforts were made by the Greenland and Danish governments to address regulatory matters that are required in order for Greenland to produce and export uranium. These endeavours continue in 2015, and will play an important role in firming the development timeline for the Kvanefjeld project. A snap election was called in Greenland late in 2014, which caused some minor delays to advancing the regulatory matters concerning uranium. However, the election saw the Siumut Party continuing to lead government with a new coalition, which was quick to indicate its commitment to providing a stable backdrop to secure foreign investment and develop mining projects, and importantly, is of a clear, pro-uranium position. GMEL maintained an active stakeholder engagement program through 2014. With the priority development strategy set for Kvanefjeld early in the year, the company conducted a public pre-hearing for the project in accordance with Greenland’s regulations. This allows for public comment and opinion prior to finalising the exploitation (mining) license application and impact assessments. In summary, 2014 proved to be a highly productive year in which several key developments were made in progressing Kvanefjeld toward the development pipeline. 2 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 2014 hIGhlIGhTS Samples from GMEL’s Kvanefjeld project are to be utilised in upcoming large-scale demonstration plant operations in 2015. The Kvanefjeld project has been selected as one of the main projects for the demonstration of rare earth production from EU-related mineral deposits. In 2014, the Greenland and Danish governments continued to work towards identifying and implementing the necessary safeguards and regulations to produce and export uranium from Greenland. In parallel to a focus on project permitting, GMEL will continue to advance relations with NFC as a primary development partner for the Kvanefjeld project. In March 2014, GMEL signed a Memorandum of Understanding with China Non-Ferrous Metal Industry’s Foreign Engineering and Construction Co. Ltd. (NFC) to evaluate and pursue the establishment of global rare earth business partnership. These forums provided an excellent opportunity for NFC to introduce their capabilities in EPC contracting globally, their advantageous position in the rare earth industry, and their progress in cooperation with GMEL to Greenlandic stakeholders. Upon completion of the Tetra Tech engineering design work for Kvanefjeld in November, 2014, NFC commenced work on cost estimations for the Tetra Tech design outputs, with a feasibility-level cost estimate expected by the end of Q1 2015. Tetra Tech undertook civil, mechanical and structural design of both the concentrator and refinery process-plant facilities for Kvanefjeld. The comprehensive package of design information was subsequently handed over to NFC for cost estimation. Technical work programs continued to de-risk the process flow sheet, and demonstrate the production of high-purity rare earth concentrates, which completed the process design for Kvanefjeld. The mineral resource update was released in January, 2015, with 143 million tonnes of high-grade, near-surface material shifted into the ‘measured’ category; an excellent result as a precursor to generating the initial mine reserve. 3 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Review of Operations Greenland Minerals and Energy – NFC: A Strong Rare Earth Business Taking Shape In March 2014, GMel signed a Memorandum of Understanding with China non- Ferrous Metal Industry’s Foreign engineering and Construction Co. ltd. (nFC) to evaluate and pursue the establishment of global rare earth business partnership. This business will utilize the Kvanefjeld product as the raw material feedstock for a new separation facility based in Xinfeng, China. The rare earth products would be jointly marketed by GMel and nFC. Importantly, the nFC delegation attended meetings with a cross section of key stakeholder groups and representatives that included government ministers, representatives of the Greenland Business Association and the Labour Union, a Greenland law-firm, and the deputy mayor of the Kujalleq Municipality (South Greenland). These forums provided an excellent opportunity for nFC to introduce their capabilities in ePC contracting globally, their advantageous position in the rare earth industry, and their progress in cooperation with GMel to Greenlandic stakeholders. Upon completion of the Tetra Tech engineering design work for Kvanefjeld in november, 2014, nFC commenced work on cost estimations for the Tetra Tech design outputs, with a feasibility- level cost estimate expected by the end of Q1 2015. Figure 1. GMEL and NFC representatives at the company’s operations base in Narsaq. Importantly, the strategy provides access to rare earth separation, and a path to market for high- value end products. On signing the MoU, both parties commenced working through a substantial information exchange, as a basis to establish a future Strategic Cooperation Agreement. A number of visits were made to China by senior GMel personnel to progress the dialogue on the cooperation strategy with nFC, and members of GMel’s technical team conducted a number of visits to meet with representatives of Zhujiang Rare earth Co; nFC’s rare earth subsidiary. In August, a delegation of nFC’s senior technical rare earth experts visited GMEL’s head office in Perth. This visit was aimed to review the technical development of the Kvanefjeld Project and major testwork programs, with an emphasis on understanding the operational cost structure. Visits were conducted to the laboratories where key work metallurgical programs have been conducted, including AMMTeC and SGS. Presentations were made by representatives of both laboratories on the development of the beneficiation circuit (flotation), and the hydrometallurgical circuit. The Perth office of Tetra Tech was also visited, where an update was provided on the engineering design component of Feasibility Study. At the start of September, a second nFC delegation joined senior GMel personnel for a visit to Greenland. This delegation included a Vice President of nFC, the General Manager for resource development, Chief and Assistant Geologists, and the Chief engineer for project layouts from nFC’s engineering institute neRIn. The Greenland trip included a visit to the capital nuuk along with a visit to south Greenland in order to understand the Kvanefjeld project geography including mineral resource locations and upside, infrastructure options, and general logistical considerations. 4 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Greenland - the gateway to the Arctic. Figure 2. An overview of the Arctic region highlighting renowned major mining operations. It stands as an obvious anomaly that Greenland does not yet have a significant mining operation, particularly in consideration of Greenland’s prospective geology. However, with several large-scale projects now moving through the permitting process, this is expected to change in the coming years. The opening up of the Arctic shipping lanes provides increased access to the Asia-Pacific markets, enhancing Greenland’s appeal to Asian investors. 5 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Review of Operations (continued) Stakeholder Engagement Program Stakeholder engagement again was an important component of the GMel’s work program during the 2014 year. GMel conducted important stakeholder meetings in Greenland in January, with follow-up meetings held in April. These forums were aimed to establish a primary development strategy that is endorsed by local community stakeholder groups, as well as government regulatory bodies. This represents part of the process of finalising the exploitation license application for Kvanefjeld, and to ensure that stakeholders are well- informed and have had the opportunity to put forward comment during the process. The meetings highlighted a desire from a broad cross section of stakeholders to conduct mineral beneficiation and initial refining in Greenland. This would see the production of critical rare earth concentrates, and uranium oxide in Greenland, along with the production of lanthanum and cerium products (bulk light rare earths), zinc concentrate and fluorspar. The separation of rare earths into high-purity marketable products will take place offshore, and is a focal point of relationship with nFC. The additional processing in Greenland, in accordance with Greenland’s Mining Act and again, is another important step in finalising the mining license application for Kvanefjeld. Importantly, it allows for all radioactive components to be managed in the broader mine-site environment, which conforms with standard best-practice in mine operation. The Greenland government recently introduced a public pre-hearing period for mining projects as part of the approval of the Terms of Reference (ToR). This is aimed to allow increased input from individuals and stakeholder groups, as projects move into the permitting phase. GMel lodged the ToR documents to the government in late August and a 35 day hearing period ran from September through into October. Comments from 13 stakeholder groups, nGO’s and individuals were compiled by Greenland’s Mineral licensing and Safety Authority (MlSA), and forwarded to GMel. Responses to the questions and comments were compiled by the company, and were returned to the MlSA in early 2015. Figure 3. Tetra Tech completed the detailed engineering design for the Kvanefjeld Project Feasibility Study. From the study Tetra Tech produced images of the proposed infrastructure. This image is of the refinery facility where mineral concentrates will be processed to produce a critical rare earth concentrate, uranium oxide, and lanthanum and cerium products. 6 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Technical Developments in 2014 Technical work programs continued to de-risk the process flow sheet, and demonstrate the production of high-purity rare earth concentrates, which completed the process design for Kvanefjeld. GMel then moved in earnest into a detailed feasibility study. By the end of the year, a number of major technical studies that are critical to the feasibility study were complete, with those outstanding set for completion through Q1 2015. nFC is participating in the Kvanefjeld feasibility study through conducting the capital cost estimates. This is to ensure that material is prepared in consideration of the Chinese bank system. The Kvanefjeld Feasibility Study represents the culmination of technical work programs and stakeholder engagement conducted since 2007. Initial metallurgical studies aimed to identify the optimal process flowsheet for the REE-U mineralisation at Kvanefjeld. Once testwork had confirmed that the unique ore minerals could be effectively concentrated using froth flotation, and then treated with a conventional sulphuric acid leach under atmospheric conditions, the feasibility program moved forward in earnest. The Feasibility Study along with the environmental and social impact assessments form the basis of a mining license application. The engineering design work by Tetra Tech for the Kvanefjeld Project feasibility study was completed in early December, 2014. The engineering design is one of the major work programs that underpin the feasibility study, which is set to be finalised through Q1, 2015. Tetra Tech undertook civil, mechanical and structural design of both the concentrator and refinery process-plant facilities for Kvanefjeld. The comprehensive package of design information was subsequently handed over to nFC for cost estimation. The cost estimation work will be completed in early 2015, as part of the broader Feasibility Study. Blue Water Shipping, a highly-regarded Danish company, has completed a logistics study that has identified an optimal shipping solution for the project. This solution will use vessels travelling between Greenland and a major european port for the transport of reagents into, and products out of Greenland. The Feasibility Study design of the port is being completed by the large engineering consulting company Ramboll. Ramboll is a Denmark-based company with offices located globally, including in Greenland. They have recently completed a port site location study, and the port is now being designed in detail to meet Feasibility Study standards. Plant residue storage facilities are being designed by AMEC out of their office in Ashford, Kent, England. This office has excellent experience in the design of cold climate tailings dams. no issues regarding tailings storage or radioactive elements have been identified that cannot be effectively managed, and major issues are not expected based on the studies performed to date. Some nearby elevated permanent lakes to the northeast of the plant site have been positively evaluated for hydroelectric power supply. GMel has engaged a company highly experienced in establishing hydropower in Greenland to perform a study to build a hydropower plant specifically for project requirements. This work is being performed currently by Istak/Verkis of Iceland. The use of hydropower will be provided as an option in the Feasibility Study. Initial investigations highlight substantial operating cost benefits as a result of utilising hydropower, as well as providing greenhouse-gas free, sustainable energy for the operations. A geotechnical assessment of the entire project site has been performed by specialist geological consultants 4DG. This will provide suitable locations and design parameters for project facilities and infrastructure to a range of consultants working on the study. Mine design work and scheduling commenced in 2014 and finalised in early 2015, with global mining consultants SRK. They performed a capital and operating cost estimate for the open pit mining operations. Acid plant designs and cost information have already been received from SnC lavalin and Uhde nora and are ready for periphery cost estimation. All capital costs will be estimated by nFC that has a design and construction division along with ownership of a rare earth separation plant in China (Zujiang Rare earth Company in Guangdong). The cost estimate will assume modular construction of the processing plants with installation in Greenland. This project construction methodology is likely to result in a reduced capital cost and reduced construction risks compared to full on site construction. 7 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Review of Operations (continued) Historic Kvanefjeld Drill Cores – An Important In-Fill Dataset Late in the Devember Quarter, GMEL finalised the results of a geochemical assay program on cores drilled historically into the Kvanefjeld rare earth – uranium deposit. The program was undertaken to increase the density of multi- element geochemical data at Kvanefjeld, prior to SRK Consulting updating the mineral resource estimate. The cores were drilled historically by Danish research agencies, and were analysed spectrally for uranium and thorium content at that time, but had not been subject to chemical assay to generate multi-element data. The drill cores were re-logged by GMel, and sampled in accordance with the methodology that the Company has used throughout the resource development programs on the Kvanefjeld project. The assay results are consistent with, and confirm, what is now expected from the lujavrites; the rock-type that hosts the Kvanefjeld, Sørensen and Zone 3 rare earth and uranium deposits. There were sixteen drill cores studied that ranged from 70 – 200m in length, with multiple rare earth and uranium mineralised intercepts returned from each hole. Selected intercepts are listed below. Intercepts K030 – 28m @ 597ppm U3O8, 1.6% TReO, 0.28% Zn K015 – 15m @ 535ppm U3O8, 1.3% TReO, 0.23% Zn K042 – 36m @ 515ppm U3O8, 1.6% TReO, 0.30% Zn K065 – 33m @ 506ppm U3O8, 1.6% TReO, 0.28% Zn K021 – 17m @ 505ppm U3O8, 1.4% TReO, 0.22% Zn K015 – 23m @ 495ppm U3O8, 1.5% TReO, 0.23% Zn K017 – 27m @ 479ppm U3O8, 1.7% TReO, 0.08% Zn K062 – 85m @ 420ppm U3O8, 1.1% TReO, 0.27% Zn K058 – 48m @ 420ppm U3O8, 1.4% TReO, 0.27% Zn The intercepts were calculated at a 250ppm U3O8 cut-off, with a maximum internal waste of 2m, and a minimum intercept of 5m. TReO includes all elements in the lanthanide series plus yttrium, as oxides. The full details of the historical assay program were released to the Australia Securities exchange in a company announcement on December 17th, 2014. Figure 4. Overview of the Kvanefjeld plateau with the outline of the resource model, and the location of drill collars. Cross section lines are also delineated. 8 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 The new geochemical data produced from the assay of historic cores serves to further increase the density of data for the purpose of updating the mineral resource estimate. The resource estimate update will establish initial ‘measured’ category resources at the Kvanefjeld deposit. This is an important requirement in generating a mining reserve. The mineral resource update was subsequently released in January, 2015, with 143 million tonnes of high-grade, near-surface material shifted into the ‘measured’ category; an excellent result as a precursor to generating the initial mine reserve. The last JORC-code compliant mineral resource estimate produced for the overall Kvanefjeld project was conducted in 2011. The updated mineral resource estimate will be compliant with the JORC-code (2012) reporting requirements. The new resource model will be used for producing an updated mine schedule, which will determine the size and duration of the development of the open cut mine so that the required tonnage of ore can be delivered to the concentrator. This represents an important part of the Feasibility Study to further enhance the economics of the Kvanefjeld project. Figure 5. Cross section XS-1 displaying drill strings with historically drilled, recently assayed holes delineated with colour according to grade. Uranium and rare earth grades broadly correlate, such that elevated uranium grades equate to elevated rare earth grades. Drill traces that are depicted in greyscale represent previously assayed holes, with the thicker portions representing intercepts >250ppm U3O8 and 1% total rare earth oxide. The section includes holes located within 100m either side of the section line depicted in Figure 4. Figure 6. Cross section XS-2. The assay results of the historically drilled holes demonstrate the high continuity of mineralisation through the Kvanefjeld deposit. The dataset provided important in-fill data to aid in generating ‘measured’ category resources in the updated mineral resource estimate that was finalised in January 2015. 9 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Review of Operations (continued) Environment and Social Impact Assessments (EIA and SIA) The impact assessments form critical components of a mining license application and will be completed in 2015. Respected Danish consultants Orbicon and Grontmij continued their roles as lead consultants on the eIA and SIA respectively. The completion of the eIA and SIA will culminate several years of extensive baseline studies that stand to provide confidence and rigour to the quality of these key studies and the underlying data sets. The final phase of the EIA brings together baseline data collected from the Kvanefjeld Project area over the last 7 years by Orbicon and other specialist groups, and determines the potential impacts on the environment. The eIA will outline management and mitigation strategies for the impacts identified. GMel has appointed DTU nutech to complete the radiation report, with a focus on assessments of (estimated) radiation doses to workers and members of the public as a result of proposed mining activities. This is another important component of the eIA. DTU nutech is the Danish Centre for nuclear Technologies, and continues the work in nuclear technologies of the former Risø national laboratory, which played an integral role in the earlier studies on the Kvanefjeld deposit in the 1960’s, 70’s and 80’s. DhI, a member of the Danish Advanced Technology Group (GTS institutes), has been appointed to investigate the impact of the project on nearby fjord systems. DhI is a strong and well-respected Danish government authorised technological service provider in the scientific community and in the Danish political landscape. The team at DhI have a range of specialised scientific and engineering staff with experience working in Greenland and other arctic environment locations. DhI’s experience and knowledge have been sought to ensure a robust solution is developed for mine water discharge management. The Grontmij team, based in Denmark, has a deep understanding of the social considerations in Greenland and will finalise the collection of information from social ‘focus groups’, and validate existing reports to finalise the development of the impact plan, monitoring plan and SIA for the Kvanefjeld Project. Grontmij have worked with GMel on establishing the baseline studies for the Kvanefjeld SIA since 2010. Figure 7. View down the Narsaq valley that is proposed to host much of the project infrastructure. The edge of the town of Narsaq is visible on the headland. The deep water fjords run directly to the North Atlantic ocean, providing direct shipping access to the Kvanefjeld project area. 10 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 The EURARE Rare Earth Program In June, GMel participated in the latest eURARe meeting held in Aachen, Germany. The Company is a key participant in the eURARe program, which is designed to support the development of a sustainable industry scheme for europe’s rare earth ore deposits, and is funded by the european Union. Samples from GMel’s Kvanefjeld project are to be utilised in upcoming large-scale demonstration plant operations in 2015. Thirty tonnes of ore was collected from the Kvanefjeld project area and shipped in 2014. The bulk sample material is sourced from extensive ore material that was extracted during historic work programs from an adit, which had been driven for over 800m through the middle of the Kvanefjeld resource. Prior investigations by GMel have confirmed the suitability of this material for testwork campaigns. The 30 tonne sample was sent to Outokumpu in Finland for the mineral processing demonstration plant. A crushing, grinding and flotation pilot plant will be performed by GTK Finland. GTK has already performed a number of bench scale flotation tests which show a high upgrade ratio and produced mineral concentrates with grades greater than 15% ReO. These results are in alignment with those achieved by GMel’s prior pilot plant operations. The 30 tonnes of ore is expected to produce around 2 tonnes of mineral concentrate as part of the demonstration plant. The GTK concentrator demonstration plant activities are currently expected to take place in April, 2015. Once the demonstration plant mineral concentrate has been produced, hydrometallurgical refining is needed as the next stage of processing. The EURARE refinery demonstration plant work is planned to take place in Aachen, Germany in the second half of 2015. The refinery demonstration plant will produce a mixed rare earth carbonate, which is suitable as a direct feed to a separation plant. GTK has already performed a number of bench scale flotation tests which show a high upgrade ratio and produced mineral concentrates with grades greater than 15% ReO. MeAB are a world expert in solvent extraction technology based in Sweden and Germany. They have extensive metallurgical laboratories in Aachen, Germany and will be utilised for the Separation Plant demonstration. This involves a large number of stages of solvent extraction. The products from this demonstration plant will be light, middle and heavy fractions of rare earths. From the light fraction is mixture of praeseodymium and neodymium oxide will be produced in significant testwork quantities. RWTH Aachen has significant pyrometallurgical and electro-refining expertise. They will be utilised to convert the mixed praeseodymium and neodymium oxide in metal. This is performed by electrowinning the metals from a molten rare earth fluoride salt. Finally the metal produced will be evaluated as a feedstock for the production of high strength rare earth magnets. This extensive demonstration work is funded by the european Union through eURARe. The production of final products through a complete european processing chain using european technology will be a significant achievement for the eURARe program. The Kvanefjeld project has been selected as one of the main projects for the demonstration of rare earth production from eU-related mineral deposits. The knowledge gained during eURARe development work will build the expertise of eU institutions in rare earth production. Importantly, GMel’s involvement in the eURARe program is independent of the projected timeline for the Kvanefjeld project, and the progression of discussions with strategic development partners. however, the program of work will serve to consolidate the ongoing technical de-risking of the Kvanefjeld project, and also serves to complement GMel’s extensive and rigorous testwork conducted over a multi-year process development campaign. GMel is pleased to be part of the eURARe program and contributing through the provision of sample material for test work, as well as expertise developed through the course of the Kvanefjeld feasibility program. 11 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Review of Operations (continued) Corporate On 3rd July, GMel closed an underwritten rights issue that was oversubscribed to raise $8.9M (before costs). The Company was very pleased with the outcome and the level of support it received from its shareholders, particularly in difficult market conditions. A significant number of shareholders applied for allocations in excess of their entitlement and a large number of rights traded so the issue closed oversubscribed. The Board believes this reflects the world class quality of the Company’s flagship Kvanefjeld rare earth – uranium project, and the exciting milestones that GMel aims to achieve in the near future. net proceeds in conjunction with existing cash reserves at the time have been utilised to finalise the feasibility study. The rights issue was priced at 10 cents and for every new share applied investors received one new option which are quoted under the ASX code GGGOA. The rights issue was managed by Patersons Securities limited, with Wimmer Financial and CPS Securities as co-managers. GMel also announced transitionary changes to the company’s board of directors in September. Mr Roderick McIllree resigned from the position of Managing Director. Dr John Mair, a long-standing executive director of GMel was appointed Managing Director. Chairman Mr Michael hutchinson relinquished the role of Chairman but continues to serve as a non-executive director. Mr. Tony ho, an independent non-executive director and previous chairman of the Audit Committee, was appointed by the board as the new independent chairman of the Company. Figure 8. An overview of the proposed infrastructure layout for the Kvanefjeld Project. The layout follows extensive stakeholder input and takes into account environmental considerations. A public pre-hearing was conducted late in 2014 as part of setting the Terms of Reference for the Project. This provided an opportunity for both individuals and groups to put forward queries and comments prior to finalising the exploitation (mining) license application in 2015. 12 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Company Research Political and Regulatory Developments Blue Ocean equities, the Sydney-based boutique financial services group, updated research on Greenland Minerals and energy ltd in April 2014, following the signing of MoU with nFC. The research note provides the most up-to- date coverage of GMel’s current position and recent developments. Research analyst Dr Trent Allen outlines the significance of GMEL’s alignment with NFC; a world-leader in rare earth separation technology with large capacity expansion planned and approved. This development followed the repeal of a long-standing zero-tolerance uranium policy in Greenland in late-2013 that has cleared the path for GMel’s Kvanefjeld Project to soon enter the permitting stage. Dr Trent Allen noted: GGG’s Kvanefjeld is one of the biggest deposits of rare earths and uranium in the world. This fact, along with its strategic location in Greenland and potentially low operating costs, means the resource is likely to reach production. nFC could be the ideal development partner for GGG, as it has the financial and technical heft required to push the project forward. In 2014, the Greenland and Danish governments continued to work towards identifying and implementing the necessary safeguards and regulations to produce and export uranium from Greenland. In September the Danish Institute for International Studies (DIIS) hosted a one- day workshop on Transport of Uranium which was attended by a wide range of government, academic, and industry participants in Copenhagen. The workshop was facilitated by The World nuclear Transport Institute (WnTI) and covered all aspects of the international transport of uranium concentrates. The workshop provided an opportunity for participants to become up to date on the global transport system for class 7 (radioactive) cargoes and to be reassured that the uranium industry has a sophisticated and solid system for managing all transport modes for uranium movements. The transport workshop was a sequel to the successful Uranium - Best Practice workshop, also hosted by DIIS, in Greenland in June as part of the familiarisation process for Greenland and Danish authorities as they prepare the regulations and standards to permit the export of uranium from Greenland in full compliance with all international treaties and conventions. The December Quarter 2014, saw a shift of focus onto political events in Greenland with an election held on november 28th, after a series of events had led to instability in the sitting government, which had come to power in early 2013. The election saw the Siumut Party win most overall votes, then move to form a coalition with the Demokraatic and Atassut Parties. The new coalition government has a parliamentary majority with 17 of the 31 seats. Mr Kim Kielsen, head of the Siumut Party, is the new Premier of Greenland. The new government quickly moved to emphasise a commitment to resource extraction and creating a stable investment environment. The parties that form the coalition are all of a pro-uranium position, and for advancing initiatives with Denmark on regulatory matters associated with uranium production, which had progressed considerably through 2014. GMel sees the election outcome as clearly positive for Greenland; for foreign investment; and in particular, the successful future development of the Kvanefjeld project. 13 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Review of Operations (continued) Summary The steps made through 2014 set a robust foundation for GMel to close out the feasibility study on Kvanefjeld, along with the eIA and SIA, and commence the permitting process for the Kvanefjeld project. This will represent one of the most significant milestones in GMEL’s history, as well as an important milestone for Greenland’s resources industry, as it is the culmination of substantial technical, corporate, political/regulatory and stakeholder engagement initiatives. In parallel to a focus on project permitting, GMel will continue to advance relations with nFC as a primary development partner for the Kvanefjeld project. Following the successful cooperation achieved in 2014, 2015 will see an increased focus on commercial aspects of developing the Kvanefjeld project. GMel will also continue the engagement process to identify an optimal uranium partner. In addition, discussions with industrial groups that are interested in participating in the development and operation of support infrastructure for Kvanefjeld will continue. These reasons collectively set the scene for an exciting and productive year in 2015. 14 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Following the successful cooperation achieved in 2014, 2015 will see an increased focus on commercial aspects of developing the Kvanefjeld project. 15 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Table of Identified Mineral Resources Statement of Identified Mineral Resources, Kvanefjeld Multi-Element Project (Independently Prepared by SRK Consulting) Multi-Element Resources Classification, Tonnage and Grade Contained Metal Cut-off Classification (U3O8 ppm)1 Kvanefjeld - February 2015 M tonnes TreO2 U3O8 ppm ppm Mt lreO HREO reO ppm ppm ppm y2O3 ppm Zn ppm TreO HREO y2O3 Mt Mt Mt U3O8 M lbs Zn Mt 150 150 150 150 200 200 200 200 250 250 250 250 300 300 300 300 350 350 350 350 Measured Indicated Inferred Total Measured Indicated Inferred Total Measured Indicated Inferred Total Measured Indicated Inferred Total Measured Indicated Inferred Total 143 308 222 673 111 172 86 368 93 134 34 261 78 100 15 194 54 63 6 12,100 11,100 10,000 10,900 12,900 12,300 10,900 12,100 13,300 12,800 12,000 12,900 13,700 13,300 13,200 13,400 14,100 13,900 13,900 303 10,700 432 11,100 253 205 248 9,800 8,800 9,600 411 10,200 365 9,200 400 10,000 978 899 793 881 2,370 2,290 2,180 2,270 341 11,400 454 11,800 1,048 2,460 318 10,900 416 11,300 256 9,700 339 10,000 310 10,700 409 11,200 970 804 955 2,510 2,500 2,490 363 11,800 474 12,200 1,105 2,480 345 11,300 437 11,700 1,027 2,520 306 10,800 356 11,100 869 2,650 346 11,400 440 11,800 1,034 2,520 379 12,000 493 12,500 1,153 2,500 368 11,700 465 12,200 1,095 2,540 353 11,800 391 12,200 955 2,620 371 11,900 471 12,300 1,107 2,530 403 12,400 518 12,900 1,219 2,550 394 12,200 505 12,700 1,191 2,580 392 12,500 424 12,900 1,037 2,650 122 14,000 398 12,300 506 12,800 1,195 2,570 Sørensen - March 2012 2.67 2.15 1.75 1.44 1.14 0.10 0.07 0.06 0.05 0.04 Zone 3 - May 2012 150 200 250 300 350 Project Total Inferred Inferred Inferred Inferred Inferred 0.22 0.17 0.14 0.12 0.09 95 89 71 47 24 M 162.18 141.28 122.55 105.23 0.63 9,700 398 10,100 0.52 10,200 399 10,600 0.43 10,500 407 10,900 0.36 10,700 414 11,100 895 932 961 983 2,602 2,802 2,932 3,023 85.48 0.28 11,000 422 11,400 1,004 3,080 11,600 11,700 11,900 12,400 13,000 300 10,200 396 10,600 310 10,300 400 10,700 971 989 2,768 2,806 330 10,500 410 10,900 1,026 2,902 358 10,900 433 11,300 1,087 3,008 392 11,400 471 11,900 1,184 3,043 1.72 3.42 2.22 7.34 1.43 2.11 0.94 4.46 1.24 1.72 0.41 3.37 1.07 1.34 0.20 2.60 0.76 0.87 0.09 1.71 2.67 2.15 1.75 1.44 1.14 1.11 1.03 0.84 0.58 0.31 0.06 0.13 0.08 0.27 0.05 0.07 0.03 0.15 0.04 0.06 0.01 0.11 0.04 0.05 0.01 0.09 0.03 0.03 0.00 0.06 0.10 0.07 0.06 0.05 0.04 0.04 0.04 0.03 0.02 0.01 0.14 95.21 0.28 171.97 0.18 100.45 0.59 368.02 0.12 83.19 0.17 120.44 0.07 48.55 0.35 251.83 0.10 74.56 0.14 101.92 0.03 22.91 0.27 199.18 0.09 0.11 65.39 81.52 0.01 11.96 0.21 158.77 0.07 0.07 47.59 54.30 0.01 5.51 0.15 107.45 0.22 0.17 0.14 0.12 0.09 0.09 0.09 0.07 0.05 0.03 162 141 123 105 85 63.00 60.00 51.00 37.00 21.00 0.34 0.71 0.48 1.53 0.27 0.43 0.22 0.92 0.23 0.34 0.09 0.66 0.20 0.26 0.04 0.49 0.14 0.16 0.02 0.31 0.63 0.52 0.43 0.36 0.28 0.26 0.25 0.20 0.14 0.07 Cut-off Classification (U3O8 ppm)1 tonnes TreO2 U3O8 ppm ppm Mt lreO HREO reO ppm ppm ppm y2O3 ppm Zn ppm TreO HREO y2O3 Mt Mt Mt U3O8 M lbs Zn Mt 150 150 150 150 Measured Indicated Inferred 143 308 559 12,100 11,100 10,700 Grand Total 1010 11,000 303 10,700 432 11,100 253 264 266 9,800 9,400 9,700 411 10,200 384 9,800 399 10,100 978 899 867 893 2,370 2,290 2,463 1.72 3.42 6.00 2,397 11.14 0.06 0.13 0.22 0.40 0.14 95.21 0.28 171.97 0.49 325.66 0.90 592.84 0.34 0.71 1.38 2.42 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 Total Rare earth Oxide (TReO) refers to the rare earth elements in the lanthanide series plus yttrium. note: Figures quoted may not sum due to rounding. Competent Person Statement The information in this report that relates to Mineral Resources is based on information compiled by Robin Simpson, a Competent Person who is a Member of the Australian Institute of Geoscientists. Mr Simpson is employed by SRK Consulting (UK) Ltd (“SRK”), and was engaged by Greenland Minerals and Energy Ltd on the basis of SRK’s normal professional daily rates. SRK has no beneficial interest in the outcome of the technical assessment being capable of affecting its independence. Mr Simpson has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Robin Simpson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The mineral resource estimate for the Kvanefjeld Project was updated and released in a Company Announcement on February 12th, 2015. There have been no material changes to the resource estimate since this announcement. 16 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 ACN 118 463 004 Greenland Minerals and energy limited and Controlled entities 2014 FInAnCIAl RePORT for the year ended 31 December 2014. 17 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 18 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 19 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 20 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 21 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 22 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 pages 24 to 26. 23 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 24 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 25 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 26 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 27 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 28 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 29 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 30 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 31 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 32 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 33 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 34 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 35 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 36 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 37 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 38 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 39 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 40 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 41 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 42 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 page 44 43 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 44 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 pages 47 to 86. 45 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 pages 31 to 42 46 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 47 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Notes to the financial statements are included on pages 52 to 86. 48 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Notes to the financial statements are included on pages 52 to 86. 49 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Notes to the financial statements are included on pages 52 to 86. 50 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 Notes to the financial statements are included on pages 52 to 86. 51 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 52 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 53 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 54 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 55 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 56 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 57 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 58 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 59 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 60 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 61 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 62 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 63 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 64 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 65 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 66 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 67 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 68 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 69 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 70 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 71 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 72 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 73 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 74 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 75 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 76 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 77 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 78 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 pages 31 to 42 79 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 80 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 81 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 82 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 83 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 84 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 85 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 86 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 87 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 88 Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2014 The fjord system in south Greenland provides direct shipping access to the project area, year round. u a . m o c . y t i c n g s e d i Greenland Minerals and enerGy liMiTed Registered Office & Principal Place of Business Unit 6, 100 Railway Road, Subiaco, Western Australia, 6008 Postal Address PO Box 2006, Subiaco, Western Australia, 6904 Tel: +61 8 9382 2322 Fax: +61 8 9382 2788 www.ggg.gl
Continue reading text version or see original annual report in PDF format above