GEOPACIFIC RESOURCES NL
ACN 003 208 393
and controlled entities
ASX code; GPR
Annual Report
for the year ended 31 December 2010
CONTENTS
Corporate Directory
Letter from the Chairman
Review of Projects
2010 Technical Highlights
Technical Activities
Field Work during 2010
Nabila Project
Nadi South Project
Nuku Project
Cakaudrove Project
Corporate
Directors Report
Remuneration Report
Lead Auditor’s Independence Declaration Under Section 307C of the
Corporations Act 2001
Independent Auditors' Report
Directors' Declaration
Financial Report
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Corporate Governance Statement
ASX Information
Schedule of Tenements
Page
1
3
5
5
5
13
21
22
22
23
29
36
41
43
45
46
47
48
49
50
88
93
96
GEOPACIFIC RESOURCES NL
and Controlled Entities
CORPORATE DIRECTORY
GEOPACIFIC RESOURCES NL
(a public, listed Company incorporated in New South Wales in 1986)
ACN 003 208 393
Directors in Office
(as at the date of this
Report)
ST Biggs, Chairman (Appointed 18.2.2010)
I J Pringle, Managing Director
I N A Simpson, Non-Executive Director
CB Bass Non-Executive Director (Appointed 18.2.2010)
R J Fountain Non-Executive Director
R H Probert, (Alternate Director to Mr I N A Simpson)
Registered Office
Level 4, 425 Elizabeth Street, Surry Hills, NSW 2010, Australia
Postal Address
P.O. Box 477, Surry Hills, NSW 2010
Phone: 61 2 8622 1691, Fax: 61 2 8622 1694
E-mail: ianp@geopacific.com.au
Company Secretary
Mr Grahame Clegg
Auditor
K.S. Black & Co., Level 6, 350 Kent Street
Sydney, NSW, 2000, Australia
Bankers
Westpac Banking Corporation, 50 Pitt Street, Sydney, NSW
GEOPACIFIC LIMITED
(a private Company incorporated in Fiji)
Directors
Fiji Operations Office
R H Probert (Chairman)
I J Pringle
I N A Simpson
3 Brewer Street, Martintar, Nadi, Fiji
Tel: 679 6 727150 Fax: 679 6 727152
All mail to: P O Box 9975, Nadi Airport, Fiji
E-mail: munika@geopacific.com.au
Company Secretary
I N A Simpson, P.O. Box 9975, Nadi Airport, Fiji
Tel: 679 6 727150 Fax: 679 6 727152
E-mail: munika@geopacific.com.au
Registered Office
3 Brewer Street, Martintar, Nadi, Fiji
Banker
Westpac Banking Corporation, Main Street, Nadi, Fiji
1
GEOPACIFIC RESOURCES NL
and Controlled Entities
CORPORATE DIRECTORY
BETA LIMITED
(a private company incorporated in Fiji)
Directors
Company Secretary
I J Pringle
I N A Simpson
I N A Simpson, P.O. Box 9975, Nadi Airport, Fiji
Tel: 679 6 727150 Fax: 679 6 727152
E-mail: munika@geopacific.com.au
Registered Office
3 Brewer Street, Martintar, Nadi, Fiji
MILLENNIUM MINING (FIJI) LIMITED
(a private company incorporated in Fiji)
Directors
Company Secretary
I J Pringle
I N A Simpson
R H Probert
I N A Simpson, P.O. Box 9975, Nadi Airport, Fiji
Tel: 679 6 727150 Fax: 679 6 727152
E-mail: munika@geopacific.com.au
Registered Office
3 Brewer Street, Martintar, Nadi, Fiji
2
GEOPACIFIC RESOURCES NL
and Controlled Entities
LETTER FROM THE CHAIRMAN
Dear Shareholders,
2010 was a milestone year for Geopacific – following new funding from share placements and shareholder
share purchase arrangements Geopacific was able to complete a state of the art geophysical survey over
most of our exploration ground in Fiji. The helicopter survey included a recently developed electromagnetic
system called ZTEM which has been developed in Canada to search for large, deep mineral deposits such as
porphyry copper gold systems which may only have a small surface expression and could extend to
considerable depths of more than a kilometer. The ZTEM results together with conventional
electromagnetic surveys (VTEM), radiometric, magnetic and geological data have enabled Geopacific to
locate a number of highly prospective and large buried targets in several of our projects. Computer
enhancement of the database is underway and these targets will be more clearly defined during the next
few months to allow prioritization for ground follow-up and drill testing.
The theme of our exploration in 2010 was summarized as “hunting for elephants” with the geophysical
survey anchoring a review of all the projects in our portfolio - some 778 square kilometers of tenements.
Our technical team, with the help of consultants, has now compiled all historical technical data to
supplement the survey. This has been a significant task and is crucial for future exploration success.
Drilling at the Faddy’s Gold Deposit continued during 2010 with the completion of 22 diamond drill holes
for a total of 3,770 metres of diamond core drilling. This work showed that high grade zones of the Faddy’s
mineralization continue at depth to the northwest and along strike trend to the southwest.
The Company continued to cement strong relationships within Fiji at all levels - Ministerial, regional, local
communities and landowners. The entire board presented to the Minister and his staff at the Mineral
Resource Department (MRD) to explain how the airborne strategy would benefit our operations. This, along
with regular meetings with the MRD staff both in Suva and on site, has strengthened our relationship and
information exchange. Our Company policies to respect the environment, work with landowners and
support Fiji customs while conducting exploration activities have enabled Geopacific to operate without
incident in the field.
I am very pleased to report that Geopacific has made good progress during the year, this a direct result of
the hard work and effort of our staff - highlighted in part by the completion of the state of the art airborne
survey operations and logistics ahead of time and within budget.
3
GEOPACIFIC RESOURCES NL
and Controlled Entities
LETTER FROM THE CHAIRMAN
On behalf of the board of Geopacific I thank staff for their commitment, and shareholders for their support
over the past year. We start the new year with a significant technical and historical database, this database
is a crucial tool allowing us to “hunt the elephant” and unlock economic value for shareholders from our
highly prospective portfolio.
Tim B iggs
Chairman
4
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
Review of Projects
Significant progress during 2010 included:
1. Summary of Highlights
2010 Technical Highlights
Airborne ZTEM and VTEM geophysical surveys were completed over most of Geopacific’s project areas
during the last half of 2010 and ongoing processing and evaluation of the data has located prospective
targets for assessment. The ZTEM system is very recently developed technology designed to seek
large, buried mineral deposits to depths of up to 1.5 to 2 kilometres. Most of Geopacific’s exploration
properties in Fiji have been included in the survey which is designed to target large ‘world class’
deposits and appropriate drill targets. The results show many interesting features which include:
1. Two potentially large buried conductor targets at Nuku. These have been mapped and
correspond to areas of clay-pyrite alteration and quartz-magnetite veining which could
reflect underlying porphyry copper type deposits.
2. A deep resistivity anomaly south of the Faddy’s Gold Deposit (extends to over 500 metres
depth) and could indicate an underlying gold mineralised system.
3. A deep resistivity target at Cakaudrove which is located beneath surface gold and pyrite
occurrences and may be the expression of a large gold-mineralised intrusive system.
4. Numerous other anomalous features which are being assessed.
Other highlights include the following high grade gold (often with elevated silver, lead and zinc) in
drill core intersections at the Faddy’s Gold Deposit where 22 diamond drill holes for 3,770 metres of
drilling were completed.
• 5 metres of 7.43g/t gold in FAD032,
•
including 1 metre from 74m of 23.5g/t gold.
• 8 metres of 4.18g/t gold in FAD033,
•
including 1 metre from 87m of 19.3g/t gold.
• 13 metres of 4.48g/t gold in FAD034,
• including 2 metres from 91m of 12.07g/t gold.
• 8 metres of 7.66 g/t gold in FAD036,
•
including 1 metre from 89m of 41.0g/t gold, 348g/t silver, 10.75% zinc, 7.85% lead
and 2.13% copper.
• 25.85 metres of 3.80g/t gold in FAD038,
•
including 1.25 metres from 178.15m of 19.81g/t gold, 174g/t silver, 4.89% zinc,
3.09% lead and 1.16% copper, and
• 1 metre from 191m of 17.70g/t gold, 106g/t silver, 2.59% zinc, 2.04% lead and
0.38% copper.
• 2.2 metres of 22.29g/t gold from 282.6m in FAD039
• 11 metres of 4.24g/t gold from 156m in FAD040 including;
• 1.0m of 13.0g/t gold, 72g/t silver, 4.43% zinc, 2.06% lead and 0.62% copper from
166m
• 0.60 metres of 60.0g/t gold, 282g/t silver, 16.95% zinc, 5.17% lead and 0.92% copper from
116.3m in FAD043.
5
CX Malomalo
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
2. Technical Activities
Helicopter-Borne Z-Axis Tipper Electromagnetic (ZTEM) and Aeromagnetic Geophysical
2.1
Survey
Geopacific commissioned helicopter geophysical surveys at it’s Fiji projects using Geotech Airborne
Limited’s (“Geotech”) recently developed ZTEM electromagnetic system and an AS350B3 helicopter
contracted from McDermott Aviation Pty Ltd. Mobilisation of equipment commenced in mid July and
the surveys were completed in late August.
The recently developed ZTEM system is state-of-the-art technology which is able to map resistivity
contrasts associated with structure and alteration that are typically associated with porphyry copper
systems and other large mineral deposits to considerable depths, exceeding 1-2 kilometres. ZTEM has
only recently become commercially available in Australia.
ZTEM surveys were undertaken at Nabila, Nadi South, RakiRaki, Vuda and Cakaudrove. Geotech also
completed VTEM surveys at several Fiji projects (Nuku, Nadi South, Vuda) where shallower, massive
sulphide deposits were targeted (Figure 2).
About ZTEM
The ZTEM or Z-Axis Tipper Electromagnetic system is an innovative airborne EM system
which uses the natural or passive earth fields as the source of transmitted energy and does
not require a man-made transmitter. The ZTEM survey instrumentation consists of a single
vertical-dipole receiver coil that is towed about 75m below a helicopter, at a 100m nominal
flight height, and is flown over the survey area in a grid pattern, similar to other regional
airborne surveys. ZTEM data is closely related to resistivity/conductivity mapping of the
subsurface. In some applications it has a depth of penetration for exploration of over 2,000
metres and with the low frequency of 22 Hertz has penetration through conductive cover
to allow detection of large alteration systems typical of porphyry copper deposits.
About VTEM
Geotech’s VTEM is a time-domain airborne electromagnetic system which has a high signal
to noise ratio and excellent conductance discrimination for high conductance targets.
VTEM has been designed to detect and discriminate between moderate to excellent
conductors such as skarn or other massive sulphide deposit types using a low base
frequency, long pulse width, and derived B-Field.
The principal geophysical sensors included a Z-Axis Tipper electromagnetic (ZTEM) system, and a
caesium magnetometer. Ancillary equipment included a GPS navigation system and radar altimeter. A
total of 2288.4 line-kilometres were completed in the survey which covered a total area of 960 square
kilometres.
Preliminary and final data processing, including generation of final digital data and map products were
undertaken at the offices of Geotech in Aurora, Ontario. In late 2010 Geotech reported the results of
the work and these are summarised below. Further processing and interpretation of the data is
currently being undertaken by Southern Geoscience Consultants Pty Ltd (“SGC”) of Perth.
7
RakiRaki
Vuda
Nabila
Cakaudrove
Nuku VTEM
Nadi South
Figure 2. Location of ZTEM Survey areas and Nuku VTEM area
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
The assessment and interpretation of the results of the survey is part of an ongoing appraisal, however
high priority exploration targets generated from the work include promising anomalies detected at
depth in the following areas.
2.1.1
Nabila Project ZTEM Survey
SPL1216 - 100% Millennium Mining (Fiji) Ltd (subsidiary of GPR)
SPL1415 - 100% Millennium Mining (Fiji) Ltd (subsidiary of GPR)
CX691 (application) - 100% Millennium Mining (Fiji) Ltd (subsidiary of GPR)
Four distinctive conductive trends were identified by Geotech. Two closely follow the trend of the two
main mountain ridges in the area. Magnetic data show two large, semicircular magnetic blocks on
both sides of one of the conductive features and another small circular magnetic anomaly was also
identified. The conductive features include shallow, narrow zones as well as deeper conductive bodies.
The Faddy’s gold deposit is located at the northern end of the surveyed block characterised by a
contrasting high resistive area (Figure 3), potentially related to intrusive rocks and/or silica alteration
zones, capped by more conductive layer-like conductive areas, which may indicate argillic alteration
and/or marly rocks. ZTEM inversion of the Faddy’s – old Mistry Gold Mine area shows that a two
kilometre long resistivity anomaly is oriented north-south and is located between both deposits. The
resistive feature may represent a deep sulphide target and is clearly anomalous at depths of over 475
metres. The anomaly has a steep westerly dip.
2.1.2
Nadi South Project ZTEM Survey
SPL1434 - 100% Geopacific Ltd (subsidiary of GPR)
Eight distinct conductive trends were identified by Geotech and six trend north east. They are located in
the north of the Project area and can be interpreted across all frequencies. The magnetic signal in the
south of the area is higher than in the north and shows small scattered magnetic anomalies trending
west to east.
At shallow depths, all of the conductive trends are associated with local, modeled conductive anomalies
and as the depth of each increases the modeled resistivity distribution show a large, conductive volume
in the north in contact with moderate to large resistive blocks in the south.
Geopacific’s Togo porphyry prospect is marked by a plume of relative high chargeabilty values located
near ground surface to depths greater than 400 metres and a large area of low resistivity, located west
and north of the chargeability anomaly, flanks a small zone of higher resistivity values.
2.1.3 Vuda and Sabeto Project ZTEM Survey
SPL1368 Geopacific Ltd (subsidiary of GPR) has an option to purchase 80%
SPL1361 Geopacific Ltd (subsidiary of GPR) has an option to purchase 100%
Geotech has recognised eight conductive trends in the survey area and these correlate with high
topography and magnetic highs. An interesting circular high resistivity anomaly occurs in the western
part of the area and corresponds with a topographic basin.
9
Pacific Ocean
8025000mN
Faddy’s Gold Deposit
Road to Nadi
Mistry Gold Mine
(abandoned in 1957)
8023000mN
5
3
0
0
0
0
m
E
Scale bar is 1 kilometre
5
3
2
0
0
0
m
E
Figure 3. ZTEM inversion showing a depth plan at -475 metres RL (475m below sea level).
A resistivity anomaly oriented north-south is located between the Faddy’s Gold Deposit and
the old Mistry Gold Mine. The Mistry deposit has a recorded production of 23.2kg of gold,
6.4kg of silver and 20.3t of lead from 1,720 tonnes of ore between 1947 and 1957 (average
gold grade of 13.5 g/t).
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
Near the centre of the surveyed block, magnetic anomalies align in three distinctive trends with west-
east directions. In the east, the most prominent alignment changes to a northwest strike and one
conductor is underlain by a high resistive body that widens with depth. In the west, three conductive
trends appear to be shallow anomalies which become poorly resolved at depth. Geotech noted an
interesting circular, high-resistivity anomaly in the south-central part of the survey area and this
corresponds to an isolated magnetic high.
Geotech described a comparison of resistivity patterns from east to west that may relate to mineralized
areas. Vuda has numerous surface gold mineralised prospect areas (including Natalau, Ista’s, Teitei, and
Crown) with soil and shallow gold anomalies correlated with structural trends and alteration zones. In
this area, Geotech’s resistivity map at 350 metre depth shows a potential association of conductivity
trends with geological structures. Geotech also noted two eastern areas of interest and these are
associated with high resistivity anomalies.
2.1.4 RakiRaki Project ZTEM Survey
SPL1231, SPL1373, SPL1436
50% Beta Ltd (subsidiary of GPR) - Operator
50% Peninsula Minerals Ltd
Six conductive trends were highlighted by Geotech and at high frequencies each of these appears as a
distinctive, narrow stripe which correlates with high topography. At low frequencies the conductive
trends become broader and connect. A few high magnetic anomalies are scattered over the RakiRaki
area and a low magnetic band with northwest strike is located in the southwest.
At shallow depths, four of the conductive lineaments are represented by narrow modelled conductive
features. One is moderately conductive, and appears to dip to the north. Another has no indication of
any conductor close to ground surface, but at depth the resistivity decreases.
Resistivity patterns near the known mineralized area of the BR Grid (which contains near surface gold at
prospects including Qalau and 4300E) show a potential correlation of conductive trends with structural
features (Figure 4). Geotech also identified an anomalous area with a similar structural setting to the
east of the BR Grid.
2.1.5 Cakaudrove Project ZTEM Survey (Malomalo Application area)
CX691 (application) - 100% Geopacific Ltd (subsidiary of GPR)
Geotech identified four conductive trends and all appear as distinctive stripes coinciding with higher
topography. A resistivity high with a possibly circular shape is bounded by two of the conductive trends.
The west side of the survey has a regional magnetic low. Near the resistivity high, magnetic anomalies
become more pronounced and steep in gradient.
In the east of the Cakaudrove survey area, isolated magnetic highs are widely distributed and a
prominent deep resistivity anomaly is apparent (Figure 5). This is located directly beneath a known gold
(Dakuniba Gold Prospect) and pyrite-quartz vein occurrences which have been investigated by shallow
trenching by Fiji Government geologists but which have not been explored by modern geochemical
surveys or deep drill testing. Geopacific plans to undertake mapping and sampling as initial follow-up of
this target and others in the Cakaudrove survey area. Future exploration may include deep drilling to
test the depth extent of this large anomaly.
11
Figure 4. RakiRaki Survey Area.
The top image shows the location of the main surface gold prospects (central white oval) on a
map of the 25 Hz total phase rotated in phase (TRP IP) data from Geotech.
The central oval contains the near-surface gold mineralisation of the BR Grid area (drill tested
during previous Geopacific work).
The smaller circle to the right is an area of similar geophysical character.
The bottom figure is a three dimensional block diagram view looking towards the northeast
showing the possible depth extension of the BR grid structure.
N
m
0
0
0
0
6
1
8
8 1 0 0 0 0 m E
8 0 0 0 0 0 m E
d
e
t
a
c
o
l
p
e
e
d
L
R
m
5
7
5
-
t
a
e
c
i
l
s
h
t
p
e
d
a
f
o
p
a
m
n
o
s
r
e
v
n
I
i
M
E
T
Z
.
5
e
r
u
g
F
i
e
g
r
a
l
a
s
i
a
e
r
a
d
e
r
e
h
T
.
a
e
r
a
y
e
v
r
u
s
e
v
o
r
d
u
a
k
a
C
e
h
t
f
o
d
n
e
n
r
e
t
s
a
e
e
h
t
t
a
i
j
i
F
y
b
d
e
p
p
a
m
s
e
c
n
e
r
r
u
c
c
o
l
i
a
r
e
n
m
e
c
a
f
r
u
s
e
r
a
s
r
a
t
S
l
.
y
a
m
o
n
a
y
t
i
v
i
t
s
s
e
r
i
s
e
r
t
e
m
o
l
i
k
5
:
E
L
A
C
S
d
n
a
t
c
e
p
s
o
r
P
l
d
o
G
i
a
b
n
u
k
a
D
e
h
t
s
i
r
a
t
s
w
o
l
l
e
y
(
i
s
t
s
g
o
o
e
g
l
t
n
e
m
n
r
e
v
o
G
.
)
s
e
c
n
e
r
r
u
c
c
o
e
t
i
r
y
p
e
r
a
s
r
a
t
s
e
g
n
a
r
o
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
2.2
Helicopter-Borne VTEM Geophysical Survey at the Nuku Project
SPL1377 - 100% Geopacific Ltd (subsidiary of GPR)
CX667 (application) – 100% Geopacific Ltd (subsidiary of GPR)
Two prominent conductive anomalies were located by the VTEM (electromagnetic) survey undertaken
at Nuku (Figure 1). The Nuku VTEM survey was flown at the time of the ZTEM work by Geotech Ltd and
utilised the same helicopter and geophysical crew.
Conductor anomaly A (Figure 6) is located in the southern central part of the tenement and extends for
approximately 1.5 kilometres along a NW-SE trend. The conductive rock is a possible clay alteration
zone which could cap a deposit of porphyry copper type mineralisation. Anomalous metals occur at
surface including elevated gold, zinc and silver and geologic mapping during late 2010 has shown that
the anomaly corresponds to a clay and quartz-pyrite-clay altered dioritic intrusive rock with zones of
vein stock working of quartz-pyrite-magnetite (Figure 6, top right). Anomaly A includes two small
magnetic features and is surrounded by larger magnetic high anomalies between 0.5 kilometres to a
kilometre long. Outcropping gold and zinc mineralisation occurs at Wailoaloa skarn, the eastern
magnetic feature and Wailoaloa as well as the other magnetic, non conductive anomalies are
interpreted as skarn deposits which appear to radiate from a central, porphyry system centred beneath
the clay alteration at Anomaly A.
Anomaly B is located above a zone of quartz-magnetite-pyrite veining and alteration which may also
reflect underlying rocks with potential for a large low grade porphyry copper type target. This anomaly
corresponds with a magnetic high zone which may suggest a considerable depth to potential underlying
mineralisation. Interpretation of Anomaly B is made difficult due to the location of a regional electrical
transmission line which crosses the project area in the northern part of the feature.
2.3_
Field Work during 2010
2.3.1 Nabila Project
SPL1216 - 100% Millennium Mining (Fiji) Ltd (subsidiary of GPR)
Drill testing of Faddy’s Gold Deposit south of Nadi was undertaken and a diamond drilling program
completed twenty two diamond holes (FAD029 to FAD050 (Table 1, Figure 7). All have been drilled with
PQ3 diameter core.
The drilling has confirmed the continuity of the high grade gold horizon within a mineralised shallow
dipping structural zone close to the contact between dolerite and underlying tuff and where results
from previous drilling by other companies returned variable and often conflicting data due to sample
loss of soft and broken intervals in drill core and poor sample recoveries of percussion drilling.
The drill holes were located mostly within the west, south west and north of the Faddy’s deposit,
several hundred metres from the NE Gossan area where drilling and trenching by Geopacific during
2008 and 2009 intersected high-grade gold mineralisation up to 313g/t Au, in, and beneath surface
gossan outcrops.
14
n
o
i
t
a
r
e
t
l
a
y
a
l
c
-
e
t
i
r
y
p
-
z
t
r
a
u
Q
e
v
i
s
u
r
t
n
i
i
c
i
t
i
r
o
d
c
i
t
i
r
y
h
p
r
o
P
e
t
i
t
e
n
g
a
m
-
e
t
i
r
y
p
-
z
t
r
a
u
Q
k
r
o
w
k
c
o
t
s
n
e
v
i
-
z
t
r
a
u
q
-
e
t
i
r
y
P
t
l
u
a
f
l
-
e
t
i
r
o
h
c
-
e
t
o
d
p
e
i
n
o
i
t
a
r
e
t
l
a
e
t
i
t
e
n
g
a
m
n
o
i
t
a
r
e
t
l
a
y
a
l
c
e
n
o
t
s
e
m
i
l
e
n
i
l
r
e
w
o
P
N
0
0
0
5
3
0
8
a
i
c
c
e
r
b
d
n
a
f
f
u
t
c
i
n
a
c
l
o
v
c
i
t
l
a
s
a
B
N
0
0
0
1
3
0
8
n
r
a
k
s
l
a
o
a
o
l
i
a
W
a
e
r
a
p
a
m
y
g
o
o
e
G
l
.
a
e
r
a
t
c
e
j
o
r
P
u
k
u
N
e
h
t
f
o
n
o
i
t
r
o
p
h
t
u
o
s
e
h
t
l
f
o
y
g
o
o
e
g
d
n
a
M
E
.
6
e
r
u
g
F
i
t
e
g
r
a
t
r
o
t
c
u
d
n
o
c
i
n
a
m
i
g
n
w
o
h
s
e
g
a
m
i
T
d
/
B
d
c
e
s
m
4
6
.
1
M
E
T
V
:
e
d
i
s
t
f
e
L
e
h
T
.
n
o
i
t
c
e
r
i
d
h
t
u
o
s
-
h
t
r
o
n
a
n
i
n
w
o
l
f
e
r
e
w
s
e
n
i
l
t
h
g
i
l
F
.
)
B
d
n
a
A
(
s
a
e
r
a
e
t
e
r
c
s
d
i
e
r
a
s
e
n
i
l
t
u
o
e
u
B
l
.
n
o
i
t
a
r
e
t
l
a
e
t
i
r
y
p
d
n
a
y
a
c
l
t
c
e
l
f
e
r
s
e
i
l
a
m
o
n
a
.
n
r
a
k
s
u
C
-
u
A
-
n
Z
l
a
o
a
o
l
i
a
W
g
n
d
u
c
n
l
i
i
,
)
s
n
r
a
k
s
l
e
b
a
b
o
r
p
(
s
e
i
l
a
m
o
n
a
c
i
t
e
n
g
a
m
e
h
t
i
g
n
s
r
e
v
a
r
t
e
n
i
l
r
e
w
o
p
e
h
t
m
o
r
f
e
c
n
e
r
e
f
r
e
t
n
i
e
m
o
s
s
i
e
r
e
h
t
t
a
h
t
e
t
o
N
.
B
t
e
g
r
a
t
f
o
n
o
i
t
r
o
p
n
r
e
h
t
r
o
n
A
t
e
g
r
a
t
r
o
t
c
u
d
n
o
c
f
o
p
a
m
n
o
i
t
a
r
e
t
l
a
d
n
a
y
g
o
o
e
G
l
:
t
h
g
i
r
p
o
T
6 3 1 0 0 0 E
e
r
t
e
m
o
l
i
k
1
:
E
L
A
C
S
B
A
6 2 8 0 0 0 E
6
4
0
D
A
F
5
4
0
D
A
F
4
4
0
D
A
F
l
d
o
g
n
a
m
i
f
o
t
n
e
t
x
E
h
t
p
e
d
t
a
n
e
p
o
7
4
0
D
A
F
8
4
0
D
A
F
9
4
0
D
A
F
n
o
i
t
a
s
i
l
a
r
e
n
M
i
g
n
i
l
l
i
r
d
y
b
d
e
n
i
f
e
d
e
n
o
z
m
0
0
1
:
e
l
a
c
S
r
o
f
n
o
i
t
c
e
s
f
o
e
n
i
L
8
e
r
u
g
F
i
0
5
0
D
A
F
.
)
s
t
o
d
d
e
r
y
b
n
w
o
h
s
(
0
1
0
2
n
i
d
e
t
e
l
p
m
o
c
s
e
l
o
h
l
l
i
r
d
f
o
s
n
o
i
t
a
c
o
l
i
g
n
w
o
h
s
s
’
y
d
d
a
F
f
o
w
e
i
v
h
p
a
r
g
o
t
o
h
p
l
a
i
r
A
.
7
e
r
u
g
F
i
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
Ten of the new drill holes (FAD029-FAD035, FAD038-40) were located on grid line 3200E (Figure 7)
within a previously drilled portion of the Faddy’s deposit. Drill hole traces of these holes are shown in
cross section in Figure 8 and drill assay summaries for each hole are given in Table 2. At this section the
Faddy’s mineralisation dips at approximately 30-40 degrees towards the northwest and the drilled
intersections are close to true thicknesses. These defined a shallow dipping gold mineralised zone
which is between 5-12 metres thick. The mineralised zone is thickest and best developed close to
steep, NW dipping faults and was shown to be open at depth to the NW. Four western drill holes
(FAD037-40) were located to test the depth extent of mineralisation close to the northern ends of grid
lines 3200E and 3300E.
Table 1. Drill hole location data for 2010 diamond drilling at Faddy’s Gold Deposit
Hole ID
FAD029
FAD030
FAD031
FAD032
FAD033
FAD034
FAD035
FAD036
FAD037
FAD038
FAD039
FAD040
FAD041
FAD042
FAD043
FAD044
FAD045
FAD046
FAD047
FAD048
FAD049
FAD050
WGS84
East*
530546
530540
530536
530526
530518
530514
530529
530614
530582
530491
530491
530491
530579
530588
530645
530670
530774
530868
530461
530419
530392
530272
WGS84
North*
8025573
8025587
8025601
8025628
8025648
8025664
8025615
8025696
8025783
8025729
8025729
8025729
8025785
8025687
8025745
8025838
8025845
8025867
8025658
8025630
8025552
8025450
RL (m)
Dip
Az (grid)
Total depth
(m)
-60
-60
-60
-60
-60
-60
-60
-90
-80
-80
-85
-65
-65
-80
-70
-70
-85
-80
-80
-80
-60
-90
180
180
180
180
180
180
180
NA
180
180
360
180
180
180
180
180
180
180
180
180
180
NA
80.1
80.2
80.0
110.0
120.5
138.9
90.2
173.3
213.7
216.9
296.3
193.9
161.0
146.3
120.8
197.3
219.8
200.3
224.3
230.3
200.3
275.3
13
10
8
5
4
3
6
9
1
3
3
3
1
4
8
2
5
4
3
5
5
5
17
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
Table 2. Assay summary data for 2010 diamond drilling at Faddy’s Gold Deposit
Drill
Hole
FAD029
FAD030
FAD031
FAD032
FAD033
FAD034
FAD035
FAD036
Gold mineralised intersections (0.5g/t Au cut-off)
from (m)
to (m)
int (m)
16
20
30
incl 31
63.6
20
52
70
51
65
69
66
68
73
incl 74
80
107
84
86
incl 87
99
101
85
incl 91
101
106
50
incl 57
82
56
59
65
81
84
88
incl 88
incl 89
100
113
17
21
35
32
65
21
57
71
52
66
70
67
69
78
75
81
108
85
94
88
100
102
98
93
104
112
62
62
85
57
60
66
82
85
96
91
90
101
115
1
1
5
1
1.4
1
5
1
1
1
1
1
1
5
1
1
1
1
8
1
1
1
13
2
3
6
12
5
3
1
1
1
1
1
8
3
1
1
2
Au (g/t) Ag (g/t)
0.5
0.6
2.8
0.3
4.5
0.8
12
10
7.6
4.8
12
2.6
1.9
42
126
13
10.2
6.3
24
124
2.5
0.7
23
66
12
8.5
5.5
9
2.2
5.5
5.9
5.3
7
5.4
61
156
348
2.1
7.2
0.5
0.81
1.68
4.88
2.63
1.20
1.71
1.60
1.14
1.29
4.00
0.88
0.55
7.43
23.5
2.90
2.07
1.17
4.18
19.3
1.83
0.98
4.48
12.07
2.28
1.75
1.61
2.34
0.72
0.68
0.88
0.83
1.39
0.89
7.66
18.8
41
0.81
1.31
Pb (%)
0.07
0.14
0.06
0.01
0.37
0.16
0.08
0.62
0.39
0.28
0.07
0.02
0.02
0.48
1.69
0.24
0.11
0.09
0.38
1.87
0.07
0.01
0.17
0.41
0.14
0.02
0.39
0.80
0.06
0.52
0.01
0.03
0.00
0.18
1.35
3.55
7.85
0.02
0.66
Zn (%)
0.17
0.20
0.16
0.02
0.02
0.30
0.07
0.27
0.84
1.23
0.06
0.05
0.11
0.85
2.80
0.21
0.21
0.22
0.78
3.64
0.18
0.04
0.31
0.94
0.18
0.05
0.56
1.10
0.14
0.60
0.02
0.04
0.03
0.36
1.85
4.82
10.75
0.04
0.31
Cu (%)
0.03
0.03
0.01
0.01
0.01
0.07
0.03
0.03
0.03
0.01
0.00
0.00
0.00
0.03
0.09
0.02
0.08
0.00
0.05
0.06
0.02
0.01
0.03
0.08
0.02
0.01
0.05
0.08
0.01
0.11
0.01
0.01
0.01
0.12
0.37
0.95
2.13
0.02
0.13
18
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
Table 2. Assay summary data for 2010 diamond drilling at Faddy’s Gold Deposit
Drill
Hole
FAD037
FAD038
FAD039
FAD040
FAD041
FAD042
FAD043
FAD044
from (m)
165
170
173
159
163
172
178.15
incl 178.15
incl 191
207
108
221
249
incl 249
256
269
282.6
120
149
156
incl 157
incl 161
incl 166
136.3
incl 136.3
20.5
66
91
119
incl 119
74.5
109
incl 109
115
incl 116.3
134
146.3
Gold mineralised intersections (0.5g/t Au cut-off)
to (m)
int (m)
166
171
174
160
164
173
204
179.4
192
208
109
222
252
250
260
274
284.8
120.2
151
167
158
163
167
148
138.4
21
67
92
127
120
87
112
110
116.9
116.9
141
147
1
1
1
1
1
1
25.85
1.25
1
1
1
1
3
1
4
5
2.2
0.2
2
11
1
2
1
11.7
2.1
0.5
1
1
8
1
12.5
3
1
1.9
0.6
7
0.7
Au (g/t) Ag (g/t)
5.5
3.2
3.6
5.8
6.2
6.7
24
174
106
4
3.2
3.8
7.8
16.3
3.9
3.8
77
4.4
5.2
25
59
45
72
14.5
68
19
1.9
6.5
9.2
31
3.7
18
44.5
92.5
282
11
3.2
1.16
0.84
0.69
1.07
1.67
1.25
3.80
19.81
17.70
1.17
0.66
0.84
1.56
3.26
0.88
0.78
22.29
0.56
0.85
4.24
10.70
7.42
13.00
1.96
7.85
1.50
0.52
1.35
1.38
4.40
0.60
2.39
6.09
19.25
60.00
1.87
0.58
Pb (%)
0.18
0.05
0.01
0.07
0.06
0.28
0.37
3.09
2.04
0.06
0.01
0.05
0.12
0.15
0.05
0.04
0.38
0.02
0.15
0.76
1.52
1.60
2.06
0.70
3.88
0.12
0.01
0.11
0.14
0.57
0.20
0.54
1.55
2.74
5.17
0.09
0.01
Zn (%)
0.32
0.10
0.03
0.10
0.11
0.38
0.60
4.89
2.59
0.14
0.12
0.09
0.09
0.12
0.04
0.13
0.58
0.46
0.24
1.16
1.56
2.29
4.43
0.59
2.89
0.08
0.04
0.09
0.26
1.27
0.43
0.50
1.24
5.40
16.95
0.16
0.01
Cu (%)
0.03
0.00
0.00
0.01
0.01
0.06
0.10
1.16
0.38
0.03
0.01
0.01
0.02
0.02
0.02
0.01
0.06
0.04
0.03
0.44
0.29
1.28
0.62
0.26
1.41
0.06
0.01
0.04
0.03
0.12
0.06
0.03
0.09
0.31
0.92
0.02
0.01
19
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
Table 2. Assay summary data for 2010 diamond drilling at Faddy’s Gold Deposit
Drill
Hole
FAD045
FAD046
FAD047
FAD048
FAD049
FAD050
Gold mineralised intersections (0.5g/t Au cut-off)
from (m)
to (m)
int (m)
43
60
73
78.5
99
109
121
131.3
178.9
198.1
126.6
133
89
118
126
138.4
142.7
151
155
178.1
184.7
144
160.7
194.9
201.7
211.3
140.9
47.9
incl 48.5
99.6
186.6
226.8
257
44
62
74
78.8
100
111.7
129.2
132.25
179.2
199.3
127.7
134
90.6
119
126.6
139
143.7
153
156
178.7
185.4
145.1
161.7
195.5
202.3
213.8
141.5
49.1
49.1
100
187.6
227
258.1
1
2
1
0.3
1
2.7
8.2
0.95
0.3
1.2
1.1
1
1.6
1
0.6
0.6
1
2
1
0.6
0.7
1.1
1
0.6
0.6
2.5
0.6
1.2
0.6
0.4
1
0.2
1.1
Au (g/t) Ag (g/t)
2.8
2.3
15
23
6.7
4.9
12
6.1
7
17
9.3
5.4
5.3
5.6
6.4
27
32
20
5.1
6.6
176
8
3.8
32.3
5.4
3.48
43.2
49.7
73.1
1.9
4
5.7
2.5
2.49
3.51
2.55
2.19
0.65
0.54
1.34
1.19
0.69
4.79
2.00
0.83
1.09
1.33
1.36
6.19
7.79
3.23
1.04
1.07
31.00
9.05
0.98
4.99
1.00
0.90
7.21
14.17
21.70
0.47
0.64
0.62
0.62
Pb (%)
0.10
0.07
0.12
0.08
0.05
0.02
0.26
0.27
0.17
0.31
0.22
0.21
0.00
0.01
0.19
0.04
0.17
0.10
0.03
0.17
6.86
0.15
0.06
2.03
0.45
0.68
2.09
0.17
0.25
0.16
0.00
0.00
0.06
Zn (%)
0.07
0.27
0.16
0.06
0.22
0.05
0.32
0.63
0.32
0.25
0.26
0.48
0.01
0.01
0.07
0.03
0.36
0.13
0.08
0.35
2.70
0.32
0.10
1.74
0.57
0.28
3.22
0.28
0.15
0.19
0.03
0.03
0.10
Cu (%)
0.02
0.02
0.02
0.02
0.25
0.08
0.09
0.06
0.04
0.05
0.07
0.08
0.02
0.00
0.01
0.01
0.02
0.02
0.00
0.32
0.99
0.06
0.02
0.01
0.03
0.07
0.53
0.09
0.06
0.05
0.11
0.01
0.00
High-grade gold mineralisation was intersected between 156-167 metres in FAD040 and this interval
averaged 4.24g/t gold. It included a 1.0 metre zone between 166-167 metres of 13.0g/t gold, 72g/t
silver, 4.43% zinc, 2.06% lead and 0.62% copper. FAD039 was drilled from the same collar location as
FAD040 to test the down-dip continuity of this zone for a further 50 metres towards grid north (Figure
7). High grade gold was intersected between 282.6-284.8 metres and this 2.2 metre drilled interval
averaged 22.29g/t gold (Table 2).
20
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
These deep intersections confirm that the Faddy’s deposit continues at depth towards the north. The
gold and base metal mineralisation intersected in FAD039 and FAD040 is a down dip continuation of
high grade gold intersected in FAD029-34 and extends this zone from near surface to 400m down-dip
to the FAD039 high grade intersection at about 280m vertical depth (Figure 8). The mineralised zone
remains open at depth. The drilling shows that high grade gold mineralisation occurs both up-dip and
down-dip from drill hole FAD038 (Reported in an ASX release of 25 June) which contains high gold
within a 25.85 metre wide zone of 3.80g/t gold and 24g/t silver between 178.15-204 metres.
Near the north of the deposit two drill holes intersected significant gold mineralisation. FAD044
intersected 7.0 metres of 1.87g/t gold below 134.0 metres and 2.0 metres of 3.57g/t gold was
intersected below 60.0 metres in FAD045.
Several holes peripheral to the known mineralisation (FAD047-FAD050) intersected narrow, high-grade
mineralised intervals and confirmed that the deposit extends for at least 200 metres south west along
strike as well as to the north of the deposit (Figure 7).
FAD050, located to the south west of Faddy’s contained 1.20 metres (from 47.9m) of 14.17g/t gold and
49.7g/t silver including 0.6 metres of 21.7g/t Au from 48.5 metres. High grades were also intersected in
FAD049 where 0.60 metres of 7.21g/t gold, 43.2g/t silver, 3.22% zinc, 2.09% lead and 0.53% copper
was returned between 140.9-150.5 metres in FAD049 and 0.60 metres of 4.99g/t gold, 32.3g/t silver,
1.74% zinc and 2.03% lead occurs between 194.9-195.5 metres in FAD048. Drill hole FAD047 also
intersected 0.7 metres of 31.0g/t gold, 176g/t silver, 2.70% zinc, 6.86% lead and 0.99% copper from
below 184.7 metres.
Gold mineralisation occurs close to the contact between dolerite and underlying tuffaceous
volcanoclastic sediment (ignimbritic pyroclastics) within a shallow, north-west dipping zone of quartz-
pyrite-sericite alteration. High gold values occur in vuggy quartz vein stockwork and clay and pyrite
altered rocks which are commonly strongly brecciated. Disseminated and fracture fill galena (lead) and
sphalerite (zinc) mineralisation is associated with gold mineralisation and can be abundant in some
zones. Chalcopyrite (copper) is common although generally in minor amounts.
The drilling was designed to both test for extensions to the known mineralisation as well as to test
ambiguous drill results of previous drilling by other companies which reported considerable differences
in assay results between percussion and diamond drill core samples due to difficulties in obtaining
acceptable drill sample recovery of mineralised zones. These are characteristically clay altered and often
strongly broken and brecciated. Extensive drilling programs by previous companies involved both
diamond drilling and percussion/reverse circulation drilling techniques and their reported sample
recoveries was often very low in key zones with a suspected significant loss of gold. Also, reverse
circulation percussion drilling, mainly below the water table appears to have often resulted in extensive
down-hole contamination of gold values. This has formed wide, low grade intercepts which could have
exaggerated the true thickness of the mineralised zone. Because of these limitations, and lack of quality
control data on sampling and assaying, data from the previous work is not considered suitable for
resource estimation and reporting under the JORC code.
Complete core recovery for the drill holes was important and Exploration Drilling Services Pty Ltd (EDS)
provided excellent drill core recoveries of close to 100% throughout. Drill core from mineralized
intervals of each hole was sampled (cut as half core) and forwarded to the ALS Chemex sample
preparation laboratory in Suva where each sample was processed and sent to Australia for gold, silver
and base metal analyses.
21
Figure 8. Cross section along grid line 3200E of the Faddy’s Gold Deposit showing
drill traces and significant mineralised intersections. Hole numbers in black are
previous drill holes. Red hole numbers are drill core holes completed by Geopacific
Resources NL.
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
Induced Polarisation (IP) Ground Geophysical Survey
An Induced Polarisation survey (IP) completed in the area surrounding Faddy’s identified several
promising targets for priority drill testing. Four areas (Targets A-D) included high chargeability
responses indicating the occurrence of sulphide accumulations.
• Target A is located approximately 1.5km SE of Faddy’s and is a doughnut shaped feature about
600 metres in diameter with a central area of lower chargeability. Three angled drillholes
(UBD001-3) were completed to test this feature and these are described below.
• Target B is a twin anomaly located midway between A and C within sugar cane fields.
• Target C is located about 300 metres west of the old Mistry Gold Mine where a small high-grade
deposit has a reported production of 23.2kg of gold, 6.4kg of silver and 20.3t of lead from 1,720
tonnes of ore between 1947 and 1958 at an average gold grade of 13.5 g/t.
• Target D is a small conductivity high located between Faddy’s and Target B. It occurs within an
east-west trending zone containing several other small areas of elevated chargeability.
Elliot Geophysics International Pty Ltd of Perth completed the IP survey (dipole-dipole) across the local
grid which covers Faddy’s and the old Mistry gold mine. Modeling of the data was undertaken by
Montana GIS.
Drill testing at IP Target A
Three drill holes were completed at Target A (UBD001-3). All holes penetrated an extensively sheared
sequence of dolerite and volcanogenic sediments with abundant chorite, epidote and pyrite alteration
and carbonate-quartz veining.
Base metal mineralisation was intersected in UBD001 where a carbonate-quartz-pyrite-anhydrite vein
zone between 141.8-146.2m averaged 0.3g/t Au, 17.5g/t Ag, 1.13% Cu, and 1.42% Zn. UBD002
intersected a narrow fault breccia (174.5-175.1m) with chalcopyrite (0.64% Cu). Trace copper was
recorded in UBD003 where minor chalcopyrite occurs in fractures (up to 0.3% Cu between 170.0-
172.2m). Abundant pyrite occurs over wide intervals within all three holes and this is clearly the feature
that the IP survey has identified at Target A.
UBD004 was drilled at Target B within in pyritic and carbonate-(quartz) veined diorite. Minor basemetal
mineralisation (sphalerite-galena-chalcopyrite) occurs in silicified groundmass disseminations and
quartz stockwork veining spread through several zones of UBD004 and disseminated pyrite is
conspicuous throughout the drill core.
2.3.2 Nadi South Project
SPL1434 100% Geopacific Ltd (subsidiary of GPR)
Two diamond drill holes (RRD001 and RRD002) were completed at the Red Ridge Prospect in the Nadi
South Project. Both were drilled beneath gossanous and ferruginous basaltic volcanics with surface
gold mineralisation in a steep dipping fracture zone. Costean surface samples on the ridge north of
RRD001 and 2 were collected by CRA Exploration Pty Limited in 1988 and included 50 metres averaging
3.28g/t Au and 35 metres averaging 6.6g/t Au.
23
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
RRD001 was completed to 177.5 metres and RRD002 was finished at 254.3 metres. Both drill holes
intersected strongly fractured basaltic volcanic rocks intruded by basic dykes. Wide zones of chlorite-
quartz-magnetite-epidote alteration were intersected. Assays of drill core of both holes were
completed in mid January. Gold assays were generally low with five intervals recording more than
0.5g/t gold (Table 3). The drilling results confirm that the high-grade gold located by soil sampling and
trenching is supergene enriched.
2.3.3 Nuku Project
SPL1377 - 100% Geopacific Ltd (subsidiary of GPR)
Field follow-up of the VTEM survey at the Nuku Project (SPL1377) included the collation and evaluation
of previous work and preliminary field evaluation during late 2010. Field mapping of outcropping zones
of alteration at the two prominent conductive anomalies (A and B) identified during the survey was
commenced and results of early work are summarised in Figure 6.
Conductor anomaly A, located in the southern central portion of SPL1377 is a possible clay alteration
zone which could cap a deposit of porphyry copper type mineralisation. Recent mapping identified clay
and quartz-pyrite-clay altered dioritic intrusive rock with zones of vein stock working of quartz-pyrite-
magnetite.
Within conductor anomaly B volcanic and intrusive rocks have quartz-magnetite-pyrite veining and
alteration which may indicate a large buried low grade porphyry copper type target.
2.3.4 Cakaudrove Project (Malomalo application area)
CX691 (application) - 100% Geopacific Ltd (subsidiary of GPR)
Geopacific has lodged an application for a new Special Prospecting License (SPL) over a prospective
exploration area on the Cakaudrove Peninsular in eastern Vanua Levu (Figure 1). CX691 was included in
the ZTEM survey (refer previous section).
Geopacific plans to explore this area for copper and gold and believes that the geological setting has
potential to host porphyry and epithermal styles of mineralization in addition to structurally controlled
gold mineralization. The results of the ZTEM work have confirmed that CX691 has potential to host a
large mineral deposit and preliminary interpretation has identified high priority targets for priority
follow-up (Figure 5).
24
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
3. Corporate
3.1
Relocation of Geopacific’s Sydney office
During late 2010, Geopacific’c Sydney office was relocated and new contact details are:
Level 4, 425 Elizabeth Street, Surry Hills, Sydney NSW 2010
The postal address for the company remains the same:
PO Box 477 Surry Hills, NSW 2010
New telephone/fax numbers are:
Telephone: 02 8622 1691, Facsimile: 02 8622 1694
3.2
Changes to the Board of Directors
On the 4th February 2010 Willie (Bill) Brook stepped down as a Non-Executive Director of Geopacific
Resources NL and as Director of Geopacific Ltd, Beta Ltd and Millennium Mining (Fiji) Ltd. During his roles
as an Officer of the Company, Managing Director or Executive Director of the Company for almost 20
years, Bill took a major role in selecting, planning and implementing exploration at many of the
Company’s projects. The Board of Directors appreciate Bill’s many years of toil and tireless service to
establish and build Geopacific during this time and wish Bill well in his future endeavours.
On the 19th February 2010 two new Directors, Mr Charles Bennett (Charlie) Bass and Mr Stephen Timothy
(Tim) Biggs were appointed to the Board.
Mr Craig McCabe resigned as Alternate Director for Mr Ian Simpson and the Board acknowledges Craig’s
valued service to the company. Mr Harvie Probert resigned as a Non-Executive Director and has been
appointed as an Alternate Director for Mr Ian Simpson.
On 20th April 2010 Dr Russell Fountain resigned from the position of Chairman and commenced as a Non-
Executive Director and Mr Tim Biggs was appointed Chairman of the Board. The Directors thank Russell
for his services and contributions to the Company in his capacity of Chairman of Geopacific since 23
September 2005.
3.3
Senior Management
During 2010 Geopacific engaged two experienced geological consultants to assist with the Company’s
increasing exploration activities. Dr Craig Rugless constructed new server architecture for Geopacific’s
historical and current exploration data and is researching various aspects of the Company’s projects and
exploration targets. Craig has over 40 years of wide ranging minerals exploration experience and is
expected to provide ongoing consulting advice and assistance to Geopacific’s technical team.
Erik Conaghan joined Geopacific as Exploration Manager to undertake and supervise field exploration
activities in February 2010. Erik left Geopacific at the end of February 2011.
25
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
3.4
Placement of $780,000
The Company completed placement of 13 million shares at $0.06 per share to sophisticated and
professional investors. The $780,000 placement is to provide additional working capital and to
accelerate Geopacific’s exploration efforts and was approved by shareholders at the Company’s Annual
General Meeting on 20th April 2010.
3.5
Consolidate capital on a one for five basis
Geopacific recognized the potential for ongoing support and funding from off-shore (in particular North
American investors) and has undertaken a reduction of the number of shares on issue. A consolidation
of the capital of Geopacific on the basis of 1 new share for every 5 existing shares was approved by
shareholders at the Company’s Annual General Meeting on 20 April.
3.6
Share Purchase Plan
On 24th June 2010 the Company initiated a Share Purchase Plan in which each existing eligible
Geopacific Shareholder was able to purchase up to $15,000 worth of shares at 60 cents per share, free
of brokerage and commissions. 288,500 shares were issued raising $173,100. The shortfall to a
maximum of $500,000 ( $326,900) has been underwritten by two of the company’s directors, Tim Biggs
and Charlie Bass.
3.7
Share Placement
In late June, 2010 Geopacific completed a share placement of 15% of its issued capital (4,166,666
shares, at 60 cents per share) to raise approximately $2,500,000 before expenses. The shares were
placed by Southern Cross Equities in respect of 2,500,000 shares and by Hartleys in respect of 1,666,666
shares.
3.8
Dealing with Securities
Geopacific reviewed its policy in relation to dealing in the company’s securities by directors and
executives and provided the following policy as an ASX release on the 30 December 2010 and an update
on 2 February 2011.
Background – Insider Trading:
The insider trading provisions of Australian Law work on the basis that a person must not (whether as
principal or agent) subscribe for, purchase or sell, or “engage in dealings” of any securities in Geopacific
Resources NL (‘GPR’) if;
a)
and
b)
The person possesses information that a reasonable person would expect to have a material
effect on the price of the securities if the information were generally available;
The person knows, or ought reasonably to know, that:
i. The information is not generally available; and
ii. If it were generally available, it might have a material effect on the price of the securities.
26
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
A person does not need to be directly associated with GPR to be guilty of insider trading in relation to
securities of the Company. The prohibition extends to dealings through nominees, agents or their
associates, such as family members, family trusts or family companies (“Related Third Parties”).
Policy:
Directors, officers and employees of GPR and its subsidiary companies shall not engage in any
1.
dealings in the securities of GPR without giving prior notice as follows:
Party seeking to deal in securities
Prior Notice to be Given to:
Employees of GPR or subsidiary companies
and consultants and advisors involved in the
management of projects for and on behalf of
GPR (or their Related Third Parties)
Directors of GPR or subsidiary companies (or
their Related Third Parties)
The Chairman and Company Secretary of
GPR
The Company Secretary of GPR who shall
provide details to the Chairman of GPR
2.
The procedures for notification are as follows;
a) Before trading in the company’s securities the Director, officer or employee must
• notify the chairman (or in his absence the managing director) and company secretary, in
writing, of their intention to trade in securities;
•
•
confirm they do not have insider information; and
confirm that there is no known reason to preclude trading in the company’s securities
The notification is only valid for the period of its operation, being from the date of notification until the
earlier of 10 business days after the notification, the start of a closed period or the date on which the
Director, officer or employee becomes aware of insider information.
b) After trading in the company’s securities Director, officer or employee must
• notify the company secretary (who will notify the chairman) in writing, that the trade
has been completed; and
•
in the case of directors of the company, provide sufficient information to enable the
company to comply with the requirements to notify a change of interests to ASX. Such
information to include - Type of dealing, Date of dealing, Number of securities, Seller,
Purchaser and Price;
3. Directors, officers and employees shall not engage in any dealings in GPR securities during the
period:
27
GEOPACIFIC RESOURCES NL
and Controlled Entities
REVIEW OF OPERATIONS
a) two weeks prior to and within 24 hours after the date of the announcement to the ASX of the
Company’s annual or half year results;
b) two weeks prior to and within 24 hours after the date of the announcement to the ASX of the
Company’s quarterly activities reports;
c) notwithstanding a) or b), at any time while in possession of inside information.
Directors, officers and employees are prohibited from trading in financial products issued or
4.
created over or in respect of the entity’s securities.
Exceptions to policy:
The following are the only exceptions to the above policy:
Directors, officers and employees may trade in financial products issued or created over or in respect of
the entity’s securities outside the parameters of the above trading policy only in the following
circumstances:
1.
2.
3.
4.
transfers of securities of the entity already held into a superannuation fund or other saving
scheme in which the Director, officer or employee is a beneficiary;
undertakings to accept, or the acceptance of, a takeover offer;
trading under an offer or invitation made to all or most of the security holders, such as, a
rights issue, a security purchase plan, a dividend or distribution reinvestment plan and an
equal access buy-back, where the plan that determines the timing and structure of the offer
has been approved by the board. This includes decisions relating to whether or not to take
up the entitlements and the sale of entitlements required to provide for the take up of the
balance of entitlements under a renounceable pro rata issue;
the exercise (but not the sale of securities following exercise) of an option or a right under an
employee incentive scheme, or the conversion of a convertible security, where the final date for
the exercise of the option or right, or the conversion of the security, falls during a prohibited
period and the entity has been in an exceptionally long prohibited period or the entity has had a
number of consecutive prohibited periods and the Director, officer or employee could not
reasonably have been expected to exercise it at a time when free to do so.
28
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
The Directors present their report together with the financial report of the Geopacific Group, being
Geopacific Resources N.L. (“Geopacific”) (“the Company”) and its controlled entities for the financial
year ended 31 December 2010, and the auditors’ report thereon.
1 DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are:
Stephen Timothy Biggs – Chairman, (Appointed 18 February 2010)
Tim Biggs has been involved in the financing of listed companies in Australia since 1993.
Tim commenced his career with Pembroke Josephson Wright stockbrokers in Brisbane, Australia –
the firm specialised in raising equity capital for natural resource companies. In 1997 Tim moved to
Sydney to work for Robert Fleming and Company and subsequently for Credit Suisse First Boston
gaining valuable experience in equity derivatives, convertible and Equity capital markets functions.
Since departing CSFB in 2003, Tim has worked privately investing in junior and mid-cap listed
companies.
Mr Biggs is the Chairman of Directors.
Ian James Pringle, B.Sc. (Hons.), Ph.D, Managing Director
Dr Pringle was appointed Managing Director of the Company on 23 September, 2005. Ian is an
exploration geologist with over 25 years of specialist expertise in exploration for silver, gold, and
copper, mostly in Australia and SE Asia.
Ian has a doctorate from the University of Otago in Dunedin, New Zealand in 1981 where he
researched the petrology, mineralogy and geochemistry of metamorphosed volcanic rocks.
During his career, Ian has worked in mineral exploration programmes that have resulted in many
successful mineral discoveries. These include; Northern Australia with Elf Aquitaine, the Lerokis Au-
Cu-Ag deposit (Indonesia) with CSR Minerals, the Girilambone copper deposit (NSW) with Nord
Resources, and in Australia, the Philippines and Cyprus as Exploration Manager for Golden
Shamrock Mines, Cobar Mines Ltd and Oxiana Ltd (Oz Minerals Ltd).
As Exploration Manager with Oxiana Ltd he coordinated technical due diligence studies and assisted
in negotiations to purchase the Sepon Project (Laos) from RTZ Ltd. Ian supervised resource drilling
of the main gold and copper deposits at Sepon which is now a world-class copper and gold
producer.
Ian’s recent and current work includes exploration and resource evaluation of the Bowdens Silver
Deposit, near Mudgee, NSW, an epithermal-style mineralised system which contains over 80 million
ounces of silver and which is owned by Silver Standard Resources Inc of Canada, one of the few
publicly traded companies focused exclusively on the discovery and acquisition of silver-dominant
projects.
Ian is a director of Silver Standard Australia Pty. Ltd. He holds membership of the Australasian
Institute of Mining and Metallurgy, the Australian Institute of Geoscientists, the Geological Society
of Australia, the Geological Society of New Zealand and the Australian Institute of Company
Directors.
29
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
Ian Neville Aston Simpson, Non - Executive Director
Mr Simpson was appointed a Director of the Company in March 2001. Ian recently retired as the
Managing Director of Pacific Crown Aviation (Fiji) Ltd, which operates a helicopter service based out
of Nadi Airport in Fiji. Ian received his training as a helicopter pilot and engineer in the Royal Navy,
and as such has been involved with the exploration industry in Fiji since 1970. Ian has been
associated with GPL since 1981 and has been a Director since 1994. He is also a Director of Beta Ltd
and Millennium Mining Fiji Ltd. Mr Simpson is a citizen of Fiji.
Mr Simpson is a member of the audit committee and the remuneration committee.
Charles Bennett Bass, Non-executive Director, (Appointed 18 February 2010)
Charles Bass has well over 35 years of experience in mineral exploration, development and
production in Australia, Canada and the United States. He has been actively involved as executive
and director or several publicly listed companies since the early 1990’s.
In March 2001, Mr Bass co-founded Australian-listed Aquila Resources Limited (AQA:ASX), remains a
director and substantial shareholder in the multi-billion dollar market capitalisation coal and iron
ore company.
Between 1993 and 1997, Mr. Bass was co-founder, substantial shareholder and a Managing Director
of Eagle Mining Corporation Pty Ltd. Under Mr Bass, Eagle discovered, developed and built the
Nimary gold mine and plant in Western Australia. The mine and plant were built in a record four
months from ground breaking to first pour, and produced at over 100,000 oz/yr. Nimary was one of
Australia’s highest grade and lowest cost producers of its time.
Mr Bass is also currently the CEO and an executive director of an unlisted (about to be listed)
Canadian-based exploration company, ExplorationSyndicate
Inc which has a major VMS
Cu/Zn/Pb/Au discovery in the Flin Flon district of Manitoba/Saskatchewan, Canada,
Mr Bass has a B.Sc. Geology from Michigan Technological University and a M.Sc. Mining Engineering
from Queen’s University, Canada. He is a Fellow of the Institute of Geoscientists and the AusIMM.
He is also a member of the Australian Institute of Company Directors
Mr Bass is a member of the audit committee and the remuneration committee.
Russell John Fountain, B.Sc., Ph.D, F.A.I.G., Non-executive Director
Dr Fountain was appointed a Director and Chairman of the Company on 23 September, 2005.
Russell is a Sydney-based consulting geologist with 42 years of international experience in all
aspects of mineral exploration, project feasibility and mine development. Previous positions include
President, Phelps Dodge Exploration Corporation; Exploration Manager, Nord Pacific Ltd and Chief
Geologist, CSR Minerals. Russell has had global responsibility for corporate exploration programs
with portfolios targeting copper, gold, nickel and mineral sands.
Russell has played a key role in the grassroots discovery of mines at Granny Smith (Au in WA),
Osborne (Cu-Au in Qld) and Lerokis (Au-Cu in Indonesia) and the development of known prospects
into mines at Girilambone (Cu in NSW) and Waihi (Au in NZ). Russell holds a PhD in Geology from
30
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
the University of Sydney (1973), with a thesis based on his work at the Panguna Mine (Cu-Au in
PNG). He worked as a project geologist on the Namosi porphyry copper deposit in Fiji from 1972 to
1976. Russell is a Fellow of the Australian Institute of Geoscientists, and Executive Chairman of
Finders Resources Ltd.
Mr Fountain is a member of the audit committee and the remuneration committee.
Roger Harvie Probert, - Alternate Director to Mr Simpson
Harvie Probert was elected chairman of GPL in 1997. In 1970-71 he served for one year as a field
manager for Barringer Research in a mineral exploration programme in Fiji. In 1972 he joined The
Fiji Gas Co. Ltd., and was appointed general manager and chief executive in 1983. He is also general
manager and a Director of the associated companies, Fiji Chemicals Ltd and Tonga Gas Ltd. Harvie
served as a Board member of the Civil Aviation Authority of Fiji, Capital Markets Development
Authority, Fiji Islands Revenue and Customs Authority and chairman of Airports Fiji Ltd. He is also
chairman of the Mining Council of Fiji and was president of the Fiji Institute of Management (1989-
91) and the Fiji Employees Federation (1993-95). He is Chairman of Geopacific Ltd and a Director of
Millennium Mining Fiji Ltd. Mr Probert is a citizen of Fiji.
Willie Anthony Brook, B.Sc., M.A.I.G., Executive Director (Resigned as Director 4 February 2010)
Craig Kingsley McCabe, B.Ec., F.A.I.B.F., A.I.M.M. - Alternate Director to Mr Simpson (Resigned 18
February 2010)
COMPANY SECRETARY
Mr Grahame Clegg, JP, BCom., CA, ACIS., MAICD,FTIA, AFAIM, FNTAA, SAFin.
Mr Clegg was appointed to the position of Company Secretary on 14 July 2006 and has over 38 years
experience in audit, financial and corporate roles including 18 years in Company secretarial roles for
ASX-listed companies. He is a director of Oakhill Hamilton Pty Ltd, and Taen Pty Ltd, companies
which provide secretarial, accounting and corporate advisory services to a range of listed and
unlisted companies.
2 Principal Activity
The principal activity of the Group is exploration for gold and gold-copper deposits in Fiji.
There was no significant change in the nature of this activity of the Group during the financial year.
3 Operating Results and Financial Review
The loss of the Group for the year ended 31 December 2010 was $432,882 (2009: loss $396,389).
Information on the operation and financial position of the Group and its business strategies and
prospects are set out in the review of operations.
31
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
4 Financial Position
The net assets of the consolidated group have increased to $10,146,769 at 31 December 2010
from $7,826,917 at 31 December 2009 as a result of the following factors:
• Placement of $780,000
The Company completed placement of 13 million shares at $0.06 per share to sophisticated and
professional investors. The $780,000 placement is to provide additional working capital and to
accelerate Geopacific’s exploration efforts and was approved by shareholders at the Company’s
Annual General Meeting on 20th April 2010.
• Share Purchase Plan
On 24th June 2010 the Company initiated a Share Purchase Plan in which each existing eligible
Geopacific Shareholder was able to purchase up to $15,000 worth of shares at 60 cents per
share, free of brokerage and commissions. 288,500 shares were issued raising $173,100. The
shortfall to a maximum of $500,000 ($326,900) has been underwritten by two of the company’s
directors, Tim Biggs and Charlie Bass.
• Share Placement
In late June, 2010 Geopacific completed a share placement of 15% of its issued capital
(4,166,666 shares, at 60 cents per share) to raise approximately $2,500,000 before expenses.
The shares were placed by Southern Cross Equities in respect of 2,500,000 shares and by
Hartleys in respect of 1,666,666 shares.
• Capitalised Exploration Expenditure
Capitalised mineral exploration and evaluation expenditure carried forward was $7,547,611
(2009 $6,545,554)
4 Dividends
The Directors do not recommend the payment of a dividend.
Dividends paid or declared since the end of the previous year were $Nil.
5 State of Affairs
In the opinion of the Directors there were no significant changes in the state of affairs of the Group
that occurred during the financial year under review, not otherwise disclosed in this report.
32
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
6 Events Subsequent to Reporting Date
No other matter or circumstance has arisen since 31 December 2010 that has significantly affected,
or may significantly affect:
(a) the Group’s operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the Group’s state of affairs in future financial years.
7 Directors’ Interests and Benefits
The beneficial interest of each Director in the ordinary share capital of the Company as at the date
of this report is:
R J Fountain
I J Pringle
I N A Simpson
R H Probert (Alternate)
C B Bass
S T Biggs
8 Directors’ Meetings
Direct
Indirect
Shares
Options
Shares
Options
4,000
6,400
658,539
129,509
Nil
Nil
1,000
301,600
560,000
5,800
Nil
Nil
62,000
167,450
36,380
Nil
1.680,002
5,025,000
3,000
32,000
2,845
Nil
833,334
Nil
During the year ended 31 December 2010 a total of five Directors’ Meetings and two Audit
Committee Meetings were held. Directors’ attendance record is tabulated below.
Record of Directors’ Attendance at Meetings
Director
S T Biggs
I J Pringle
C B Bass
R J Fountain
I N A Simpson
R H Probert (alternate
to I. Simpson)
W A Brook
C K McCabe (alternate
to I. Simpson)
Service
Appointed 18.2.2010
All year
Appointed 18.2.2010
All year
All year
Alternate from
18.2.2010
Retired 8.1.2010
Resigned 18.2.2010
Directors Meetings
Audit Committee
Meetings
Attended *
3
5
3
4
5
Eligible to
Attend
3
5
3
5
5
Attended *
-
-
2
2
2
Eligible to
Attend
-
-
2
2
2
4
1
1
5
1
1
-
-
-
-
-
-
*
Either in person, or by electronic means.
The Board of Directors takes ultimate responsibility for corporate governance including the functions
of establishing compensation arrangements of the Managing Director and its senior executives and
officers, appointment and retirement of non-executive Directors, appointment of auditors, areas of
business risk, maintenance of ethical standards and Audit and Remuneration/Nomination
Committees. The Board seeks independent professional advice as necessary in carrying out its duties
and responsibilities.
33
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
9
Likely Developments, Prospects and Business Strategies
The Group will continue to develop its existing exploration tenements and seek to increase its
tenement holdings by acquiring further projects.
10 Environment Regulations
Entities in the Group are subject to normal environmental regulations in areas of operations. There
has been no breach of these regulations during the financial year, or in the period subsequent to the
end of the financial year and up to the date of this report.
11 Share Options
There are 9,152,106 options over unissued shares unexercised at 31 December 2010 ( 2009 –
9,152,106 (after 1 for 5 share consolidation)).
Issues in current year
There were no issues in the current year.
The options on issue were affected by the 1 for 5 share consolidation by reducing the number of
shares by dividing the number on issue at 31 December 2009 by 5 and by increasing the exercise
price by multiplying it by 5.
12 Insurance of Officers
The Company has, by Deed of Access, Indemnity and Insurance, paid a premium to insure the
Directors and Company Secretary of the Group in respect of certain legal liabilities, including costs
and expenses in successfully defending legal proceedings, whilst they remain as Directors and for
seven years thereafter. The insurance contract prohibits the disclosure of the total amount of the
premiums and a summary of the nature of the liabilities.
13 Lead Auditor’s Independence Declaration
The lead auditor’s independence declaration is set out on page 39 and forms part of the Directors’
report for the financial year ended 31 December 2010.
34
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ REPORT
14 Auditor
KS Black & Co was appointed as auditor on 22 September 2009 and continues in office in
accordance with section 327 of the Corporations Act 2001.
During the year the following fees were paid or payable for services provided by the auditor of the
Company, its related practices and non-related audit firms:
Assurance services
1. Audit services
KS Black & Co Australian firm:
Audit of the financial report and other audit work under the
Corporations Act 2001
- Current year
Total remuneration for audit services
2.
Other assurance services
Ernst & Young Fijian firm:
Audit and review of financial reports
Total remuneration for other assurance services
Total remuneration for assurance services
Taxation services
KS Black & Co Australian firm:
Tax compliance services, including review of Company income tax
returns
Total remuneration for taxation services
15 Non-audit Services
Consolidated
2010
$
2009
$
30,600
30,600
24,658
24,658
-
-
30,600
4,484
4,484
29,142
-
-
1,980
1,980
The Group may decide to employ the auditor on assignments additional to their statutory audit
duties where the auditor's expertise and experience with the Company and/or the Group are
important.
Details of the amounts paid or payable to the auditor for audit and non-audit services provided
during the year are set out below.
The Board of Directors has considered the position and is satisfied that the provision of the
non-audit services is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by
the auditor, as set out below, did not compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
•
•
all non-audit services have been reviewed by the Board to ensure they do not impact the
impartiality and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence,
including reviewing or auditing the auditor's own work, acting in a management or a
decision-making capacity for the Company, acting as advocate for the Company or jointly
sharing economic risk and rewards.
35
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
17 Remuneration Report (Audited)
The remuneration report is set out under the following main headings:
A Principles used to determine the nature and amount of remuneration
B Details of remuneration
C Service agreements
D Share-based compensation
The information provided under headings A-D includes remuneration disclosures that are required
under Accounting Standard AASB 124 Related Party Disclosures. These disclosures have been
transferred from the financial report and have been audited.
A Principles used to determine the nature and amount of remuneration
The objective of the Group’s executive reward framework is to ensure reward for performance,
being the development of the Geopacific Resources exploration tenements. The framework aligns
executive reward with achievement of strategic objectives and the creation of value for
shareholders, and conforms with market best practice for delivery of reward. The Board ensures
that executive reward satisfies the following key criteria for good reward governance practices:
competitiveness and reasonableness;
•
• acceptability to shareholders;
• performance linkage / alignment of executive compensation;
•
•
transparency; and
capital management.
The Group has structured an executive remuneration framework that is market competitive and
complimentary to the reward strategy of the organisation.
Alignment to shareholders’ interests:
• has economic profit as a core component of plan design;
•
focuses on sustained growth in shareholder wealth, consisting of dividends and growth in
share price, and delivering constant return on assets as well as focusing the executive on
key non-financial drivers of value; and
• attracts and retains high calibre executives.
Alignment to programme participants’ interests:
rewards capability and experience;
reflects competitive reward for contribution to growth in shareholder wealth;
•
•
• provides a clear structure for earning rewards; and
• provides recognition for contribution.
The framework provides a mix of fixed and variable pay, and a blend of short and long-term
incentives. As executives gain seniority with the Group, the balance of this mix shifts to a higher
proportion of ''at risk'' rewards.
Remuneration of executive and non-executive directors is not related to the performance of the
company.
36
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
Non-executive Directors
Fees and payments to non-executive Directors reflect the demands, which are made on, and the
responsibilities of, the Directors. The Board reviews Non-executive Directors’ fees and payments
annually. The Board may from time to time seek the advice of independent remuneration consultants
to ensure non-executive Directors’ fees and payments are appropriate and in line with the market. The
Chairman’s fees are determined independently to the fees of non-executive Directors based on
comparative roles in the external market. The Chairman is not present at any discussions relating to
determination of his own remuneration.
Directors’ fees
The current base remuneration was last reviewed with effect from 1 January 2010 and will be reviewed
in September 2011.
Non-executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is
periodically recommended for approval by shareholders. The maximum currently stands at $200,000
per year in aggregate.
Executive pay
The executive pay and reward framework has four components:
• base pay and benefits;
•
•
short-term performance incentives;
long-term incentives through participation in the Geopacific Resources NL Employee Option
Plan (Geopacific Resources Option Plan); and
• other remuneration such as superannuation.
The combination of these comprises the executive’s total remuneration.
Base pay
Structured as a total employment cost package, which may be delivered as a combination of cash and
prescribed non-financial benefits at the executives’ discretion.
Executives are offered a competitive base pay that comprises the fixed component of pay and rewards.
Base pay for senior executives is reviewed annually to ensure the executive’s pay is competitive with
the market. An executive’s pay is also reviewed on promotion.
There are no guaranteed base pay increases included in any senior executives’ contracts.
Geopacific Resources NL Employee Option Plan
Information on the Geopacific Resources Option Plan is set out in note 23.
37
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
B Details of remuneration
Details of the remuneration of the Directors and the key management personnel (as defined in AASB
124 Related Party Disclosures) of Geopacific Resources and the Geopacific Resources NL Group are set
out in the following tables.
The key management personnel of Geopacific Resources and the Group include the Directors:
Remuneration paid to key management personnel of Geopacific Resources and of the Group
2010
Name
Non-executive Directors
C B Bass
S T Biggs
I N A Simpson
R J Fountain
R H Probert
C K McCabe (alt. to I.
Simpson)
Sub-total non-
executive Directors
Executive Directors
I J Pringle
W A Brook (note 1)
Totals
2009
Non-executive Directors
I N A Simpson
R J Fountain
R H Probert
C K McCabe (alt. to I.
Simpson)
Sub-total non-
executive Directors
Executive Directors
I J Pringle
W A Brook (note 1)
Totals
Short-term benefits
Post-employment
benefits
Share-based
payment
Directors’
Fees
$
Consulting
Fees
$
Superannuation
$
Termination
Payments
(note 2)
$
Options
$
Total
$
-
-
-
6,250
-
-
6,250
-
-
6,250
-
-
-
-
-
-
-
170,796
-
170,796
24,000
-
24,000
24,000
-
25,000
-
-
72,000
25,000
-
-
72,000
112,400
87,066
224,466
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,000
60,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,250
-
-
6,250
- 170,796
-
60,000
- 237,046
-
-
-
-
-
24,000
25,000
24,000
24,000
97,000
4,136 116,536
87,066
4,136 300,602
-
Note 1 Mr Brook was paid by Geopacific Ltd.
Note 2 A termination payment of A$60,000 was made to Mr Brook on his retirement as a director.
38
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
C
(i)
Service agreements
Mr Ian Pringle - Managing Director
A Consultancy Agreement dated 16 February 2006 has been entered into between the Company and Ian J
Pringle & Associates Pty Ltd (“Consultant”), being a Company controlled by Dr Pringle. The consulting
services are to be provided by the Consultant making available the services of Dr Pringle for between 150
and 185 days per annum (or as otherwise agreed). The Agreement commenced on 1 March 2005 for an
initial term of two years, with an option for the Company to extend the term for two further periods of two
years each, unless the consultancy is terminated earlier in accordance with the agreement. The Consultant
may terminate the agreement on not less than 4 months notice.
The Consultant may also terminate the agreement immediately without notice if the Company becomes
insolvent or requires the Consultant to perform services outside the scope of the agreement for a period of
more than 100 days in any year or if the Company fails to pay moneys due under the Agreement within 14
days of demand and the Company shall pay to the Consultant the termination payment referred to below.
The Company may terminate the agreement immediately without notice for serious or persistent breach,
bankruptcy, fraud or wilful neglect, total and permanent incapacitation or mental illness of the Consultant
or Dr Pringle (as the case may be), and may terminate the agreement at any time on 1 months notice
without disclosure of any reason, by payment of a lump sum termination payment equivalent to the
amount which the Consultant would have received for providing the services for one half of the Term then
remaining or 6 months, whichever is the greater. The consultancy fee is $400 per day (prior to Listing) and
$800 per day (post Listing), plus bonuses and expenses and subject to annual review by the Company. Dr
Pringle will receive fees for services rendered to the Company in his capacity as a contractor to Ian J Pringle
& Associates Pty Ltd.
(ii)
Non-executive Directors
Directors are entitled to remuneration out of the funds of the Company but the remuneration of the non-
executive Directors may not exceed in any year the amount fixed by the Company in general meeting for
that purpose. Directors are also entitled to be paid reasonable travelling, accommodation and other
expenses incurred in consequence of their attendance at Board meetings and otherwise in the execution of
their duties as Directors.
Service agreements summary
Start Date
Term of
Agreement
Director
I J Pringle
1 March 2005
2 years with
options to
extend for 2
further terms
of 2 years each
Fees payable
2010
$
Notice period
for termination
(months)
$800 per day
Company
1
Employee
4
Redundancy
payment
6 months
fees
39
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
D
Share-based compensation
Options
Options are granted on the recommendation of the Directors.
Options are granted for no consideration. Options are granted for a five year period, and are exercisable
immediately after the vesting date. The options issued to Mr Ian Pringle vest on the first, second and third
anniversaries of the listing date.
The terms and conditions of each grant of options affecting remuneration in the previous, this or future
reporting periods are as follows:
Grant date
Expiry date
8 May 2006
8 May 2006
8 May 2006
8 May 2012
8 May 2013
8 May 2014
Number of
Options
100,000
100,000
100,000
Exercise
price
$0.20
$0.25
$0.30
Value per option
at grant date
$0.0843
$0.0757
$0.0708
Date vesting
8 May 2007
8 May 2008
8 May 2009
No options were exercised during the year.
Options granted carry no dividend or voting rights.
When exercisable, each option is convertible into one ordinary share.
The exercise price of options is based on the weighted average price at which the Company’s shares are
traded on the Australian Stock Exchange during the five trading days immediately before the options are
granted.
Details of options over ordinary shares in the Company provided as remuneration to each director of
Geopacific Resources and each of the key management personnel of the Group are set out below. Further
information on the options is set out in notes 16 and 24 to the financial statements.
Directors of Geopacific Resources NL
Name
I J Pringle
W A Brook
I N A Simpson
R J Fountain
R H Probert
C K McCabe
Number of options granted
during the year
Number of options vested
during the year
2010
-
-
-
-
-
-
2009
-
-
-
-
-
2010
-
-
-
-
-
-
2009
100,000
-
-
-
-
-
The assessed fair value at grant date of options granted is allocated equally over the period from grant
date to vesting date, and the amount is included in the remuneration tables above. Fair values at grant
date are independently determined using a Black-Scholes option pricing model that takes into account
the exercise price, the term of the option, the impact of dilution, the share price at grant date and
expected price volatility of the underlying share, the expected dividend yield and the risk-free interest
rate for the term of the option.
40
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS REPORT
REMUNERATION REPORT
Shares provided on exercise of remuneration options
No ordinary shares in the Company were provided as a result of the exercise of remuneration options
to each director of Geopacific Resources NL and other key management personnel of the Group.
Share options granted to Directors and the most highly remunerated officers
Options over unissued ordinary shares of the Company granted during or since the end of the financial
year to the Directors and the most highly remunerated officers of the Company as part of their
remuneration were as follows:
Directors of Geopacific
Resources NL
Name
CB Bass
ST Biggs
I J Pringle
W A Brook
I N A Simpson
R J Fountain
R H Probert
C K McCabe
A
Remuneration
consisting of
options
-
-
-
-
-
-
-
-
B
Value at
vesting date
$
-
-
-
-
-
-
-
-
C
Value at
exercise date
$
-
-
-
-
-
-
-
-
D
Value at
lapse date
$
-
-
-
-
-
-
-
-
E
Total of
columns B-D
$
-
-
-
-
-
-
-
-
A = The percentage of the value of remuneration consisting of options, based on the value at grant
date set out in column B.
B = The value at grant date calculated in accordance with AASB 2 Share-based Payment of options
granted during the year as part of remuneration.
C = The value at exercise date of options that were granted as part of remuneration and were
exercised during the year.
D = The value at lapse date of options that were granted as part of remuneration and that lapsed
during the year.
Shares issued on the exercise of options
No ordinary shares of the Company were issued during the year ended 31 December 2010 on the
exercise of options granted. No further shares have been issued since that date. No amounts are
unpaid on any of the shares.
The Directors Report, including the Remuneration Report, is signed in accordance with a resolution of
the Directors:
Dr I J Pringle
Managing Director
Sydney, Australia
Dated: 17 March 2011
41
LEAD AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
42
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF
GEOPACIFIC RESOURCES NL
Report on the financial report
We have audited the accompanying financial report of Geopacific Resources NL, and Geopacific Resources
NL and controlled entities (the consolidated group) which comprises the statement of financial position as
at 31 December 2010, and the statement of comprehensive income, statement of changes in equity and
statement of cash flows for the year ended on that date, a summary of significant accounting policies, other
explanatory notes (1 to 28), and the directors’ declaration (set out on pages 45 to 87), of the Group
comprising the Company and the entities it controlled at the year’s end or from time to time during the
financial year.
We have also audited the remuneration disclosures contained in the Directors’ report. As permitted by the
Corporations Regulations 2001, the Company has disclosed information about the remuneration of
Directors and executives (“remuneration disclosures”), required by Australian Accounting Standard AASB
124 Related Party Disclosures, under the heading “Remuneration Report” in pages 36 to 41 of the Directors’
report and not in the financial report.
Directors’ responsibility for the financial report and the remuneration report contained in the Directors’
report
The Directors of the Company are responsible for the preparation and fair presentation of the financial
in accordance with Australian Accounting Standards (including the Australian Accounting
report
Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining
internal control relevant to the preparation and fair presentation of the financial report that is free from
material misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances. In note 1, the
Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial statements and notes, complies with International Financial
Reporting Standards (IFRS).
The Directors of the Company are also responsible for the remuneration report contained in the Directors’
Report in accordance with s300A of the Corporations Act 2001.
Auditors’ responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance whether the financial report is free from material misstatement and that the
remuneration report in the Directors Report is in accordance with Australian Auditing Standards..
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditors’ judgment, including the assessment of
the risks of material misstatement of the financial report, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the Group’s preparation and fair
presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’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 and the remuneration disclosures contained in the Directors’ report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
43
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF
GEOPACIFIC RESOURCES NL
(Continued)
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001.
Auditors’ opinion on the financial report
In our opinion:
a
the financial report of Geopacific Resources NL and Geopacific Resources NL and controlled entities
is in accordance with the Corporations Act 2001, including:
i
ii
giving a true and fair view of the Company’s and the Group’s financial position as at 31
December 2010 and of their performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001.
the financial report of the Group and Company also comply with International Financial Reporting
b
Standards as disclosed in note 1.
Auditors’ opinion on the remuneration report contained in the directors’ report
In our opinion, the remuneration disclosures that are contained in pages 36 to 41 of the Directors’ Report
comply with s300A of the Corporations Act 2001..
44
GEOPACIFIC RESOURCES NL
and Controlled Entities
DIRECTORS’ DECLARATION
The Directors of Geopacific Resources NL declare that,:
1
the financial statements and notes, set out on pages 46 to 87 are in accordance with the
Corporations Act 2001, including:
a. comply with Accounting Standards, which, as stated in Accounting Policy Note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial
Reporting Standards (IFRS); and
b. give a true and fair view of the financial position as at 31 December 2010 and of the
performance for the year ended on that date of the company and consolidated group;
2
the Chief Executive Officer and Chief Finance Officer have each declared that:
a. the financial records of the company for the financial year have been properly maintained in
accordance with s 286 of the Corporations Act 2001;
b. the financial statements and notes for the financial year comply with Accounting Standards;
and
c.
the financial statements and notes for the financial year give a true and fair view;
3
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.
This declaration is made in accordance with a resolution of the Directors:
Dr I J Pringle
Managing Director
Sydney, Australia
Dated: 17 March 2011
45
GEOPACIFIC RESOURCES NL
and Controlled Entities
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2010
Revenue from continuing operations
Administration expenses
Consultancy expense
Depreciation expense
Employee benefits expense
Occupancy Expenses
Other expenses
(Loss) profit before income tax
Note
Consolidated
2009
$
2010
$
5
6
6
6
136,124
3,611
(280,337)
(144,447)
(13,471)
(69,775)
(40,660)
(20,316)
(165,499)
(68,300)
(4,813)
(106,835)
(39,858)
(14,695)
(569,006)
(400,000)
(432,882)
(396,389)
Income tax expense
8
-
-
(Loss) profit for the year attributable to members of the
parent company
(432,882)
(396,389)
Other comprehensive income:
Exchange differences on translating foreign controlled
entities
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to
members of the parent entity
Basic loss per share
Diluted loss per share
(486,029)
(486,029)
(1,888,634)
(1,888,634)
24
24
(918,911)
(1.33)
(2,285,023)
(2.73)
(1.33)
(2.73)
The above statement of comprehensive income should be read
in conjunction with the accompanying notes.
46
GEOPACIFIC RESOURCES NL
and Controlled Entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2010
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration expenditure
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
9
10
11
12
Consolidated
2009
$
2010
$
2,173,259
358,460
2,333,243
70,934
2,531,719
2,404,177
7,547,611
113,052
5,545,554
20,373
7,660,663
5,565,927
10,192,382
7,970,104
13
45,613
144,187
45,613
144,187
45,613
144,187
10,146,769
7,825,917
14
16
17
15,215,954
117,474
(5,186,659)
11,976,191
603,503
(4,753,777)
10,146,769
7,825,917
The above statement of financial position should be read
in conjunction with the accompanying notes.
47
GEOPACIFIC RESOURCES NL
and Controlled Entities
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDING 31 DECEMBER 2010
Consolidated
Issued
Capital
Forfeited
Shares
Reserve
Share Based
Payments
Reserve
$
$
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Total
Equity
$
$
At 1 January 2009
9,428,218
4,623
425,081
2,058,297
(4,357,388)
7,558,831
Transactions with
owners in their capacity
as owners
Shares issued during the
year
2,705,641
Capital raising costs
(157,668)
Share based payments
-
-
-
-
-
-
4,136
-
-
-
-
-
-
2,705,641
(157,668)
4,136
11,976,191
4,623
429,217
2,058,297
(4,357,388) 10,110,940
Comprehensive loss for
the period
-
-
-
(1,888,634)
(396,389)
(2,285,023)
At 31 December 2009
11,976,191
4,623
429,217
169,663
(4,753,777)
7,825,917
At 1 January 2010
11,976,191
4,623
429,217
169,663
(4,753,777)
7,825,917
Transactions
with
owners in their capacity
as owners
Shares issued during the
year
3,453,100
Capital raising costs
(213,337)
-
-
-
-
-
-
-
-
3,453,100
(213,336)
15,215,954
4,623
429,217
169,663
(4,753,777) 11,065,680
Comprehensive loss for
the period
-
-
-
(486,029)
(432,882)
(918,911)
At 31 December 2010
15,215,954
4,623
429,217
(316,366)
(5,186,659) 10,146,769
The above statement of changes in equity should be read
in conjunction with the accompanying notes.
48
GEOPACIFIC RESOURCES NL
and Controlled Entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDING 31 DECEMBER 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts in the course of operations
Cash payments in the course of operations
Interest received
Other income
Note
Consolidated
2009
$
2010
$
-
(925,177)
99,692
15,668
-
(325,972)
248
-
Net Cash used in Operating Activities
28(c)
(809,817)
(325,724)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Proceeds from sale of plant and equipment
Loans advanced / repaid to related parties
Exploration expenditure
Net Cash used in Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue
Share issue costs
Net Cash from Financing Activities
NET (DECREASE)/INCREASE IN CASH HELD
Effect of exchange rates on cash held in foreign currencies
Cash and Cash Equivalents at the Beginning of the Financial
Year
CASH AND CASH EQUIVALENTS AT THE END OF THE
FINANCIAL YEAR
(109,440)
7,596
-
(2,461,846)
(3,350)
450
(10,693)
(299,099)
(2,563,690)
(312,692)
3,453,100
(213,337)
2,700,356
(157,668)
3,239,763
2,542,688
(133,744)
(26,240)
1,904,272
-
2,333,243
428,971
28(a)
2,173,259
2,333,243
The above statement of cash flows should be read
in conjunction with the accompanying notes.
49
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
Contents of the notes to the financial statements
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Summary of significant accounting policies
Financial risk management
Critical accounting estimates and judgments
Parent company information
Revenue
Expenses
Remuneration of auditors
Taxation
Current assets - Cash and cash equivalents
Current assets - Trade and other receivables
Non-current assets – Exploration expenditure
Non-current assets - Property, plant and equipment
Current liabilities - Trade and other payables
Contributed equity
Options
Reserves
Accumulated losses
Contingent Liabilities
Commitments
Particulars relating to controlled entities
Key management personnel disclosures
Related party transactions
Share-based payments
Loss per share
Events occurring after the year end
Financial reporting by segment
Financial instruments disclosures
Notes to the statement of cash flows
50
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial report are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated. These
consolidated financial statements and notes represent those of Geopacific Resources NL and its controlled
entities (the “ Group” ).
The separate financial statements of the parent entity, Geopacific Resources NL, have not been presented
within this financial report as permitted by amendments made to the Corporations Act 2001 effective as at
28 June 2010.
Basis of preparation
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting
Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.
Standards, Australian Accounting
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to
which they apply. Compliance with Australian Accounting Standards ensures that the financial statements
and the notes thereto also comply with International Financial Reporting Standards.
The financial statements have been prepared on an accruals basis and are based on historical costs,
modified where applicable, by the measurement at fair value of selected non-current assets, financial
assets and financial liabilities.
Changes to accounting policies
Adoption of New and Revised Accounting Standards
During the current year the Group adopted all of the new and revised Australian Accounting Standards and
Interpretations applicable to its operations which became mandatory.
The adoption of these Standards has not impacted the recognition, measurement and disclosure of any
transactions.
The following is an explanation of the impact the adoption of these Standards and Interpretations has had
on the financial statements of Geopacific Resources NL.
AASB 3: Business Combinations
The Australian Accounting Standards Board has revised AASB 3 and as a result some aspects of business
combination accounting have changed. The changes apply only to business combinations which occur in
annual reporting periods commencing from 1 July 2009. The following is an overview of the key changes.
Recognition and measurement impact
Recognition of acquisition costs — The revised version of AASB 3 requires that all costs associated with a
business combination be expensed in the period in which they were incurred. Previously such costs were
capitalised as part of the cost of the business combination.
Measurement of contingent consideration — The revised AASB 3 requires that contingent consideration
associated with a business combination be included as part of the cost of the business combination. This is
recognised at the fair value of the payment calculated having regard to probability of settlement. Any
subsequent changes in the fair value or probability of payment are recognised in the statement of
comprehensive income except to the extent where they relate to conditions or events existing at
acquisition date, in which case the consideration paid is adjusted. The previous version of AASB 3 allowed
such changes to be recognised as a cost of the combination impacting goodwill.
51
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Measurement of non-controlling interest — For each business combination, the acquirer must measure any
non-controlling interest in the acquiree either at the fair value of the non-controlling interest (the full
goodwill method) or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable
assets. Under the previous version of AASB 3 only the latter option was permitted.
Recognition of contingencies — The revised AASB 3 prohibits entities from recognising contingencies
associated with a business combination, unless they meet the definition of a liability.
Business combinations achieved in stages — The revised AASB 3 requires that where a business
combination is achieved in stages, any previously held equity interest is to be remeasured to fair value and
the resulting gain or loss, being the difference between fair value and historical cost, is to be recognised in
the statement of comprehensive income. The previous version of AASB 3 accounted for each exchange
transaction separately, using cost and fair value information at the date of each exchange to determine the
amount of any goodwill associated with the acquisition. It was therefore possible to compare the cost of
each individual investment with the fair value of identifiable net assets acquired at each step.
Disclosure impact
The revised AASB 3 contains a number of additional disclosure requirements not required by the previous
version of AASB 3. The revised disclosures are designed to ensure that users of the Group’s financial
statements are able to understand the nature and financial impact of any business combinations on the
financial statements.
Corporations Regulations 2M.3.01
This regulation states that, where paragraph 295 (2) (b) of the Act applies to a parent entity, only limited
disclosures are required to be made in a note to the accounts in respect of the parent entity.
Disclosure impact
In accordance with the regulation, these accounts are presented with consolidated amounts only. The
disclosures required in respect of the parent entity are contained in note 4.
Significant accounting policies
Material accounting policies adopted in the preparation of this financial report are presented below. They
have been consistently applied unless otherwise stated.
(a) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred.
(b) Borrowing costs
Borrowing costs are expensed as incurred.
(c) Cash and cash equivalents
For statement of cash flows presentation purposes, cash and cash equivalents includes cash at
bank.
52
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as
a deduction from the proceeds.
(e) Employee benefits
(i) Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected
to be settled within 12 months of the reporting date are recognised in other payables in
respect of employees’ services up to the reporting date and are measured at the amounts
expected to be paid when the liabilities are settled.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and
measured as the present value of expected future payments to be made in respect of services
provided by employees up to the reporting date. Consideration is given to expected future
wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on national
government bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outflows.
(iii) Share-based payments
The fair value of options granted to Directors and employees is recognised as an employee
benefit expense with a corresponding increase in equity. The fair value is measured at grant
date and recognised over the period during which the employees become unconditionally
entitled to the options.
The fair value at grant date is independently determined using a Black-Scholes option pricing
model that takes into account the exercise price, the term of the option, the impact of dilution,
the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option
The fair value of the options granted is adjusted to reflect market vesting conditions, but
excludes the impact of any non-market vesting conditions (for example, profitability and sales
growth targets). Non-market vesting conditions are included in assumptions about the number
of options that are expected to become exercisable. At each year end, the Company revises its
estimate of the number of options that are expected to become exercisable. The employee
benefit expense recognised each period takes into account the most recent estimate.
Upon the exercise of options, the balance of the share-based payments reserve relating to
those options is transferred to share capital and the proceeds received, net of any directly
attributable transaction costs, are credited to share capital.
(f)
Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes.
The nominal value less estimated credit adjustments of trade receivables and payables are
assumed to approximate their fair values. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future contractual cash flows at the current market
interest rate that is available to the Group for similar financial instruments.
53
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g)
Financial Instruments
Recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions to the instrument. For financial assets, this is equivalent to the date that
the company commits itself to either the purchase or sale of the asset (ie trade date accounting is
adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified ‘at fair value through profit or loss’, in which case transaction costs are
expensed to profit or loss immediately.
Derecognition
Financial assets are derecognised when the right to receive cash flows from the financial assets
have expired or been transferred. Financial liabilities are derecognised when the related
obligations are either transferred, discharged or expired. The difference between the carrying
value of the financial liability extinguished or transferred to another party and the fair value of
consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised
in profit or loss.
Classification and subsequent measurement
Financial assets are categorised as either financial assets at fair value through profit or loss, loans
and receivables, held-to-maturity investments, or available-for-sale financial assets. The
classification depends on the purpose for which the investments were acquired. Designation is
re-evaluated at each financial year end, but there are restrictions on reclassifying to other
categories.
(i) Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category “financial assets at
fair value through profit or loss”. Financial assets are classified as held for trading if they are
acquired for the purpose of selling in the near term with the intention of making a profit.
Gains or losses on financial assets held for trading are recognised in profit or loss and the
related assets are classified as current assets in the statement of financial position.
(ii) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are
classified as held-to-maturity when the Group has the positive intention and ability to hold to
maturity. Investments intended to be held for an undefined period are not included in this
classification.
(iii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Such assets are carried at amortised cost
using the effective interest method.
54
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(iv) Available-for-sale securities
Available-for-sale investments are those non-derivative financial assets that are designated
as available-for-sale or are not classified as any of the three preceding categories. They
comprise investments in the equity of other entities where there is neither a fixed maturity
nor fixed or determinable payments.
(v) Financial liabilities
Non derivative financial liabilities (excluding financial guarantees) are subsequently measured
at amortised cost using the effective interest method.
Fair values
Fair values are determined by reference to market bid prices for all quoted investments. Valuation
techniques are applied to determine the fair value for all unlisted securities including recent arm's
length market transactions, reference to the current market value of similar instruments and
option pricing models.
Impairment
At each reporting date the Group assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged
decline in the value of the financial instrument is considered to determine whether an impairment
has arisen. Impairment losses are recognised in the statement of comprehensive income.
(h) Foreign currency transactions and balances
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using
the currency of the primary economic environment in which the entity operates (‘the
functional currency’). The consolidated financial statements are presented in Australian
dollars, which is Geopacific Resources NL’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognised in the
statement of comprehensive income.
(iii) Group companies
The financial results and position of foreign operations, whose functional currency is different
from the Group’s presentation currency, are translated as follows:
— assets and liabilities are translated at year-end exchange rates prevailing at that reporting
date;
— income and expenses are translated at average exchange rates for the period; and
— retained earnings are translated at the exchange rates prevailing at the date of the
transaction.
—
55
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Foreign currency transactions and balances (Continued)
Exchange differences arising on translation of foreign operations are transferred directly to the
Group’s foreign currency translation reserve in the statement of comprehensive income. These
differences are recognised in the statement of comprehensive income in the period in which the
operation is disposed.
(i) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST
incurred is not recoverable from the taxation authority. In this case it is recognised as part of the
cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the taxation authority is included with other
receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from
investing or financing activities which are recoverable from, or payable to the taxation authority,
are presented as operating cash flows.
(j)
Impairment of assets
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows from other assets or groups of assets
(cash-generating units). Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at each reporting date.
(k) Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable
income based on the national income tax rate adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of assets and liabilities and
their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates
expected to apply when the assets are recovered or liabilities are settled, based on those tax rates.
The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary
differences to measure the deferred tax asset or liability. An exception is made for certain
temporary differences arising from the initial recognition of an asset or a liability. No deferred tax
asset or liability is recognised in relation to these temporary differences if they arose in a
transaction, other than a business combination, that at the time of the transaction did not affect
either accounting profit or taxable profit or loss.
Deferred tax liabilities and assets are not recognised for temporary differences between the
carrying amount and tax bases of investments in controlled entities where the Company is able to
control the timing of the reversal of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also
recognised directly in equity.
56
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
1
(l)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Loss per share
(i) Basic loss per share
Basic loss per share is calculated by dividing the result attributable to equity holders of the
Company, excluding any costs of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year.
(ii) Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic loss per share to
take into account the after income tax effect of interest and other financing costs associated
with dilutive potential ordinary shares and the weighted average number of shares assumed to
have been issued for no consideration in relation to dilutive potential ordinary shares.
(m) Mineral Tenements and Deferred Mineral Exploration Expenditure
The Group has adopted the area of interest method for capitalising the costs of procurement,
exploration and evaluation of areas where applications have been made for Prospecting Licences.
The ultimate recoupment of such costs is dependent on sale of the tenement(s) or successful
development and commercial exploitation of the areas. Amortisation charges are to be made over
the life of the areas of interest and will be determined on a basis so that the rate of amortisation
shall not lag behind the rate of depletion of the economically recoverable reserves in the areas of
interest.
The areas of interest are each of the Special Prospecting Licences in which companies in the Group
have an interest. Where exploration expenditure has been incurred during the period, it will be
carried forward in the Statement of financial position together with procurement costs as deferred
mineral exploration expenditure until the Directors are of the opinion that a tenement should be
abandoned as it shows no potential for recovery of expenditure incurred, in which case the said
expenditure is written off in the Statement of Comprehensive Income.
(n) Plant and equipment
Plant and equipment is stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Cost may also include
transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the statement of comprehensive income during the financial period in
which they are incurred.
Depreciation on assets is calculated using the straight-line method to allocate their cost or revalued
amounts, net of their residual values, over their estimated useful lives, as follows:
- Plant, vehicles and equipment 10 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each year
end.
57
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n) Plant and equipment (continued)
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount (note 1(j)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These
are included in the statement of comprehensive income. When revalued assets are sold, it is Group
policy to transfer the amounts included in other reserves in respect of those assets to retained
earnings.
(o) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
Geopacific Resources NL (“ the Company”) as at 31 December 2010 and the results of all
subsidiaries for the year then ended. Geopacific Resources NL and its subsidiaries together are
referred to in this financial report as the Group.
Subsidiaries are all those entities over which the Group has the power to govern the financial
and operating policies, generally accompanying a shareholding of more than one-half of the
voting rights. The existence and effect of potential voting rights that are currently exercisable
or convertible are considered when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group
companies are eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Investments in subsidiaries are accounted for at cost in the individual financial statements of
Geopacific Resources NL.
A list of subsidiaries is contained in note 20.
Business combinations
Business combinations occur where an acquirer obtains control over one or more businesses
and results in the consolidation of its assets and liabilities.
A business combination is accounted for by applying the acquisition method, unless it is a
combination involving entities or businesses under common control. The acquisition method
requires that for each business combination one of the combining entities must be identified as
the acquirer (ie parent entity). The business combination will be accounted for as at the
acquisition date, which is the date that control over the acquiree is obtained by the parent
entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to
certain limited exceptions, the fair value of the identifiable assets acquired and liabilities
assumed. In addition, contingent liabilities of the acquiree will be recognised where a present
obligation has been incurred and its fair value can be reliably measured.
58
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o) Principles of consolidation (continued)
Business combinations (continued)
The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The
method adopted for the measurement of goodwill will impact on the measurement of any non-
controlling interest to be recognised in the acquiree where less than 100% ownership interest is
held in the acquiree.
Goodwill
Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the
excess of the sum of:
(i)
the consideration transferred;
(ii) any non-controlling interest; and
(iii) the acquisition date fair value of any previously held equity interest;
over the acquisition date fair value of net identifiable assets acquired.
The acquisition date fair value of the consideration transferred for a business combination plus
the acquisition date fair value of any previously held equity interest shall form the cost of the
investment. Consideration may comprise the sum of the assets transferred by the acquirer,
liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests
issued by the acquirer.
Included in the measurement of consideration transferred is any asset or liability resulting from
a contingent consideration arrangement. Any obligation incurred relating to contingent
consideration is classified as either a financial liability or equity instrument, depending upon
the nature of the arrangement. Rights to refunds of consideration previously paid are
recognised as a receivable. Subsequent to initial recognition, contingent consideration
classified as equity is not remeasured and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset or a liability is remeasured each
reporting period to fair value through the statement of comprehensive income unless the
change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the
consolidated statement of comprehensive income.
The value of goodwill recognised on acquisition of each subsidiary in which the Group holds
less than a 100%
in measuring the
interest will depend on the method adopted
aforementioned non-controlling interest. The Group can elect to measure the non-controlling
interest in the acquiree either at fair value (full goodwill method) or at the non-controlling
interest’s proportionate share of the subsidiary’s identifiable net assets (proportionate interest
method). The Group determines which method to adopt for each acquisition.
59
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o) Principles of consolidation (continued)
Goodwill (continued)
Under the full goodwill method, the fair values of the non-controlling interests are determined
using valuation techniques which make the maximum use of market information where
available. Under this method, goodwill attributable to the non-controlling interests is
recognised in the consolidated financial statements.
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition
of associates is included in investments in associates.
Goodwill is tested for impairment annually and is allocated to the Group’s cash-generating
units or groups of cash-generating units, which represent the lowest level at which goodwill is
monitored but where such level is not larger than an operating segment. Gains and losses on
the disposal of an entity include the carrying amount of goodwill related to the entity sold.
Changes in the ownership interests in a subsidiary are accounted for as equity transactions and
do not affect the carrying values of goodwill.
(p) Revenue recognition
(i) Sale of Goods and Disposal of Assets
Revenue from the sale of goods and disposal of other assets is recognised when the Group has
passed the risks and rewards of ownership to the buyer.
(ii) Interest Income
Interest income is recognised on an accrual basis.
(iii) Other Income
Other income is recognised on receipt.
(iv) General
All revenue is stated net of goods and services tax (GST).
(q) Trade receivables
Trade receivables are recognised initially at fair value.
(r) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of
financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition.
New accounting standards and UIG interpretations for application in future periods
The AASB has issued new and amended accounting standards and interpretations that have mandatory
application dates for future reporting periods.
The Group has decided against early adoption of these standards.
A discussion of those future requirements and their impact on the Group follows:
60
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
Operative date 1 February 2010 with an application date for the group of 1 January 2011.
AASB
Summary
AASB 2009–10
Amendments to Australian
Standards —
Accounting
Classification of Rights Issues
[AASB 132]
These amendments clarify that rights, options or
warrants to acquire a fixed number of an entity’s
own equity instruments for a fixed amount in any
currency are equity instruments if the entity offers
the rights, options or warrants pro-rata to all
existing owners of the same class of its own non-
derivative equity instruments.
Impact on group
These
amendments
are not expected to
impact the Group.
Operative date 1 July 2010 with an application date for the group of 1 January 2011.
Impact on group
These amendments
are not expected to
impact the Group.
These amendments
are not expected to
impact the Group.
This Interpretation is
not
to
expected
impact the Group.
AASB
Summary
AASB 2009–13
Amendments
to Australian
Accounting Standards arising
from Interpretation 19 [AASB 1]
This standard makes amendments to AASB 1
arising from the issue of Interpretation 19. The
amendments allow a first-time adopter to apply
the transitional provisions in Interpretation 19.
AASB 2010–3
Amendments
to Australian
Accounting Standards arising
from the Annual Improvements
Project [AASB 3, AASB 7, AASB
121, AASB 128, AASB 131, AASB
132 & AASB 139]
AASB Interpretation 19
Extinguishing
Liabilities
Instruments
with
Financial
Equity
This standard makes amendments
-
-
that
recognition
and/or
requiring
adjustment of contingent consideration for
acquisitions preceding 1 July 2009 be
recognised against the cost of acquisition
clarifying the accounting for replacement
share-based payments awarded to the
acquiree’s employees as part of the cost of
the combination service, or in the case of
non-replaced and unvested share-based
payments of the acquiree that do not form
part of the exchange, an allocation to both
and post-
the
combination services on the basis of a
market-based measure; and
acquisition
cost of
- making sundry transitional amendments to
various Standards
the
This Interpretation deals with how a debtor
would account for the extinguishment of a
liability through the issue of equity instruments.
The Interpretation states that the issue of equity
should be treated as the consideration paid to
extinguish
the equity
instruments issued should be recognised at their
fair value unless fair value cannot be measured
reliably in which case they shall be measured at
the fair value of the liability extinguished. The
Interpretation deals with situations where either
partial or full settlement of the liability has
occurred.
liability, and
61
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1.
New accounting standards and UIG interpretations for application in future periods (continued)
Operative date 1 January 2011 with an application date for the group of 1 January 2011.
AASB
AASB 124
Related
Disclosures
Party
Summary
Impact on group
This standard removes the requirement for government
related entities to disclose details of all transactions with the
government and other government related entities and
clarifies the definition of a related party to remove
inconsistencies and simplify the structure of the standard..
These
amendments are
not expected to
the
impact
Group.
These
amendments are
not expected to
impact
the
Group.
These
amendments are
not expected to
impact
the
Group.
These
amendments are
not expected to
the
impact
Group.
to
AASB 2009–12
Amendments
to
Australian Accounting
Standards [AASBs 5,
8, 108, 110, 112, 119,
133, 137, 139, 1023
&
and
1031
Interpretations 2, 4,
16, 1039 & 1052
AASB 2009–14
Amendments
Australian
Interpretation
—
Prepayments of a
Funding
Minimum
Requirement
[AASB
Interpretation 14]
AASB 2010–4
Further Amendments
to
Australian
Accounting Standards
arising
the
Annual
Improvements
1,
Project
AASB 7, AASB 101 &
AASB
and
134
Interpretation 13]
[AASB
from
This standard makes a number of editorial amendments to a
range of Australian Accounting Standards and Interpretations,
including amendments to reflect changes made to the text of
International Financial Reporting Standards by the IASB. The
standard also amends AASB 8 to require entities to exercise
judgment in assessing whether a government and entities
known to be under the control of that government are
considered a single customer for the purposes of certain
operating segment disclosures.
to address
standard amends
This
unintended consequences that can arise from the previous
accounting requirements when an entity prepays future
contributions into a defined benefit pension plan.
Interpretation 14
This Standard details numerous non-urgent but necessary
changes to Accounting Standards arising from the IASB’s
annual improvements project. Key changes include:
-
Australian-Accounting-Standards
clarifying the application of AASB 108 prior to an entity’s
first
financial
statements;
adding an explicit statement to AASB 7 that qualitative
in the context of the
disclosures should be made
quantitative disclosures to better enable users to
evaluate an entity’s exposure to risks arising from
financial instruments;
amending AASB 101 to the effect that disaggregation of
changes
in each component of equity arising from
transactions recognised in other comprehensive income
is required to be presented, but is permitted to be
presented in the statement of changes in equity or in the
notes;
adding a number of examples to the list of events or
transactions that require disclosure under AASB 134; and
to various
sundry editorial amendments
-
-
-
- making
Standards and Interpretations.
62
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
1.
New accounting standards and UIG interpretations for application in future periods (continued)
Operative date 1 July 2013 with an application date for the group of 1 January 2014.
Impact on group
These Standards
are
applicable
retrospectively
and amend the
classification and
measurement of
financial assets.
The Group has
not
yet
determined
impact
potential
on the financial
statements.
AASB
Summary
AASB 9
Financial Instruments
and
AASB 2009–11
Amendments
to Australian
Accounting Standards arising
from AASB 9
The changes made to accounting requirements
include:
-
for embedded
irrevocable election on
simplifying the classifications of financial assets
into those carried at amortised cost and those
carried at fair value;
simplifying the requirements
derivatives;
removing the tainting rules associated with held-
to-maturity assets;
removing the requirements to separate and fair
value embedded derivatives for financial assets
carried at amortised cost;
initial
allowing an
recognition to present gains and
losses on
investments in equity instruments that are not
held for trading in other comprehensive income.
Dividends in respect of these investments that
are a return on investment can be recognised in
profit or loss and there is no impairment or
recycling on disposal of the instrument; and
reclassifying financial assets where there is a
change in an entity’s business model as they are
initially classified based on the objective of the
entity’s business model
the
financial assets and the characteristics of the
contractual cash flows.
for managing
-
-
-
-
-
of
AASB 1053
of
Tiers
Application
Australian
Accounting
Standards and AASB 2010–2:
Amendments
to Australian
Accounting Standards arising
from
Reduced Disclosure
Requirements [AASB 1, 2, 3, 5,
7, 8, 101, 102, 107, 108, 110,
111, 112, 116, 117, 119, 121,
123, 124, 127, 128, 131, 133,
134, 136, 137, 138, 140, 141,
1050
and
Interpretations 2, 4, 5, 15, 17,
127, 129 & 1052]
1052
&
This Standard establishes a revised differential
financial reporting framework consisting of two tiers
of financial reporting requirements for those entities
preparing general purpose financial statements:
Tier 1: Australian Accounting Standards; and
-
Tier 2: Australian Accounting Standards —
-
Reduced Disclosure Requirements.
This
Standard
deems the Group
to be a Tier 1
entity and hence
there
no
is
accounting
impact
be
to
considered going
forward.
63
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
2 FINANCIAL RISK MANAGEMENT
The Group's activities expose it to a variety of financial risks; market risk (including currency risk, fair value
interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Group's
overall risk management programme focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Group.
(a) Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and
liabilities are denominated in a currency that is not the Group’s functional currency.
(b) Credit risk
There is negligible credit risk on financial assets of the Group since there is no exposure to
individual customers or countries.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of
funding through an adequate amount of committed finance facilities.
(d) Cash flow and fair value interest rate risk
The Group is exposed to a risk of changes to cash flows due to changes in interest rates.
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated and are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the Group and that are
believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. There are no estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year.
Key judgments
Exploration and evaluation expenditure
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be
recoverable or where the activities have not reached a stage which permits a reasonable assessment of the
existence of reserves. While there are certain areas of interest from which no reserves have been
extracted, the directors are of the continued belief that such expenditure should not be written off since
feasibility studies in such areas have not yet concluded. Such capitalised expenditure is carried at the end of
the reporting period at $7,547,611.
64
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
PARENT INFORMATION
4.
The following information has been extracted from the books and
records of the parent and has been prepared in accordance with
Accounting Standards.
2010
$
2009
$
STATEMENT OF FINANCIAL POSITION
ASSETS
Current assets
Non current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
EQUITY
Issued capital
Forfeited shares reserve
Share based payments reserve
Accumulated losses
TOTAL EQUITY
STATEMENT OF COMPREHENSIVE INCOME
Total loss
TOTAL COMPREHENSIVE INCOME (LOSS)
2,306,160
6.724.889
9,031,049
2,326,436
4,454,627
6,781,063
37,349
37,349
134,928
134,828
15,215,954
4,623
429,217
(6,656,094)
8,993,701
11,976,191
4,623
429,217
(5,763,896)
6,464,135
(892,198)
(892,198)
(1,898,202)
(1,841,154)
Guarantees
Geopacific Resources NL has not entered into any guarantees, in the current or previous financial year, in
relation to the debts of its subsidiary.
Contingent liabilities
At 31 December 2010, Geopacific Resources NL had no contingent liabilities.
Contractual commitments
At 31 December 2010, Geopacific Resources NL had not entered into any contractual commitments for the
acquisition of property, plant and equipment.
5 REVENUE
Interest income – other persons
Management Fees Raki Raki Joint Venture
Gain on disposal of plant and equipment
Other income
65
Consolidated
2009
$
2010
$
116,150
14,084
4,306
1,584
136,124
248
1,841
-
1,522
3,611
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
6
EXPENSES
Consolidated
Consultancy expenses
Consultants Fees
Less allocated to exploration expenditure
Employee benefits expense
Wages and salaries
Termination payments
Share based payments
Less allocated to exploration expenditure
2010
$
304,941
(160,494)
144,447
133,957
60,000
-
193,597
(123,822)
69,775
2009
$
224,466
(156,166)
68,300
222,403
-
4,136
226,539
(119,704)
106,835
Depreciation
13,471
4,813
7 REMUNERATION OF AUDITORS
Assurance services
A. Audit services
KS Black & Co Australian firm:
Audit of the financial report and other audit work under the
Corporations Act 2001
- Current year
- Prior year
Review of the half-year financial report
Total remuneration for audit services
Total remuneration for audit services
B. Other assurance services
Ernst & Young Fijian firm:
Audit and review of financial reports
Total remuneration for other assurance services
-
21,650
8,950
30,600
-
16,608
7,850
24,658
30,600
24,658
-
-
4,484
4,484
Total remuneration for assurance services
30,600
29,142
C. Taxation services
Nexia Court & Co Australian firm:
Tax compliance services, including review of Company income tax
returns
Total remuneration for taxation services
-
-
1,980
1,980
66
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
8 INCOME TAX
a
Income tax expense
Prima facie income tax benefit calculated at 30% on the loss /
(profit) from ordinary activities
Decrease in income tax benefit due to:
Tax benefit on losses not recognised
Income tax expense
b Deferred tax assets
Future income tax benefit not taken into account
The potential future income tax benefit arising from tax losses
and temporary differences has not been recognised as an asset
because recovery of tax assets is not probable.
Tax losses carried forward
Temporary differences
Consolidated
2010
$
2010
$
(129,865)
(118,917)
129,865
118,917
-
-
1,878,998
87,692
1,966,690
491,207
86,346
577,553
The potential future income tax benefit will only be obtained if:
i.
the Group and the Company derive future assessable income of a nature and an amount
sufficient to enable the benefit to be realised;
the Group and the Company continue to comply with the conditions for deductibility imposed by
the law; and
ii.
iii. no changes in tax legislation adversely affect the realising of the benefit.
9
CASH AND CASH EQUIVALENTS
Current
Cash at bank
10
TRADE AND OTHER RECEIVABLES
Current
Security deposits
Sundry debtors
Interest receivable
GST receivable
67
Consolidated
2009
$
2010
$
2,173,259
2,333,243
19,328
174,834
16,458
147,840
39,530
30,252
-
47,682
358,460
117,464
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
11
EXPLORATION EXPENDITURE
Non-Current
Tenement
Beneficial Interest of the Group
SPL 1216 Nabila
SPL 1361 Sabeto
SPL 1368 Vuda
SPL 1377 Nuku
SPL 1415 Kavukavu
SPL 1434 Nadi South
CX 667 Nadovu
CX 750 Cakaudrove
Project evaluation
Millennium
100%
Option to acquire 100%
Option to acquire 80%
100%
100%
100%
100%
100%
100%
Rakiraki Joint Venture(SPL 1231, 1373,1436) 50%
Movement
Carrying value – beginning of year
Additions
Exchange rate variations
Recoveries from joint venture parties
Amounts written off
Carrying value – end of year
12 PROPERTY, PLANT AND EQUIPMENT
Non-Current
Plant, vehicles and equipment
At Directors’ valuation of market value at 1 January 1999
At Cost
Less: Provision for depreciation
Movement
Carrying value – beginning of year
Additions
Disposals
Depreciation (included in profit and loss)
Exchange rate variations
2010
$
2,592,010
204,899
1,063,570
773,981
415,048
1,126,691
9,841
19,938
77,032
624,555
6,907,865
639,746
7,547,611
Consolidated
2009
$
1,372,382
96,475
943,370
675,699
347,157
954,123
10,280
-
-
624,555
5,024,041
521,513
5,545,554
5,545,554
2,461,848
(319,948)
(139,843)
-
7,547,611
7,077,487
299,099
(1,814,417)
(16,615)
-
5,545,554
-
133,298
(20,246)
113,052
20,373
109,440
(2,800)
(13,471)
(490)
9,639
21,745
(11,011)
20,373
28,626
3,350
(221)
(4,813)
(6,569)
Carrying value – end of year
113,052
20,373
13 TRADE AND OTHER PAYABLES
Current
Trade creditors and accruals
45,613
45,613
144,187
144,187
68
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
14 ISSUED CAPITAL
Issued Capital
Issues during period:
Group and Parent
Balance as at 1 January
Shares issued pursuant to a placement at 6 cents
(2009 - 3 cents)
Share consolidation (1 for 5)
Shares issued under Share Purchase Plan at 60
cents (2009 - 4 cents)
Shares issued pursuant to a placement at 6 cents
Shares issued in lieu of payment for services
rendered at 4 cents (2009 4 cents)
Shares issued pursuant to rights issue at 3 cents
Shares issued on sale of forfeited shares at 1 cent
Less share issue costs
Balance as at 31 December
2010
$
15,215,954
Consolidated
2009
$
11,976,191
2009
2010
Shares issued
144,893,717
$
Shares
issued
11,976,191 56,775,146
$
9,428,218
780,000
9,446,225
283,337
13,000,000
157,893,717
(126,314,929)
31,578,788
288,500
4,166,669
173,100
2,500,000
6,104,868
-
244,195
-
-
-
-
36,033,957
132,132
72,421,060
14,286
-
-
-
(213,337)
5,285
2,172,632
143
(157,619)
15,215,954 144,893,717 11,976,191
On 30 April 2010 the company’s share capital was consolidated on a 1 for 5 basis.
15 OPTIONS
Consolidated 2010
Issue
Date
Expiry
Date
Lapsed
during
year
Granted
during
year
Exercised
during
year
Number
on issue
31 December
2009 (c)
23.12.2009 16.12.2011
08.05.2006 08.05.2012
08.05.2006 08.05.2013
18.09.2009 01.08.2013
08.05.2006 08.05.2014
06.06.2009
06.06.2009
Number
on issue
31 December
2010
7,242,106
100,000
100,000
610,000
100,000
800,000
200,000
9,152,106
a) The Options held by the Optionholder are exercisable in whole or in part, not later than five years after
the defining on Faddy’s Gold Deposit of a JORC compliant ore reserve of over 200,000 ounces of contained
gold.
Exercise
Price (c)
$0.30
$1.00
$1.25
$0.50
$1.50
$2.50
$5.00
7,242,106
100,000
100,000
610,000
100,000
800,000
200,000
9,152,106
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(a)
(b)
(b) The Options held by the Optionholder are exercisable in whole or in part, not later than ten years after
the defining on Faddy’s Gold Deposit of a JORC compliant ore reserve of over 1,000,000 ounces of
contained gold.
(c) The options on issue were affected by the 1 for 5 share consolidation by reducing the number of shares
by dividing the number on issue at 31 December 2009 by 5 and by increasing the exercise price by
multiplying it by 5. The opening balance numbers and exercise prices reflect the impact of the share
consolidation.
69
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
16 RESERVES
(a)
Reserves
Forfeited share reserve
Foreign currency translation reserve
Share-based payments reserve
(b) Movements
Share-based payments reserve
Balance 1 January
Option expense
Balance 31 December
Foreign currency translation reserve
Balance 1 January
Exchange gains (losses) during year
Balance 31 December
Forfeited share reserve
Balance 1 January
Shares forfeited during year
Balance 31 December
Total reserves
(c)
Nature and purpose of reserves
Share-based payments reserve
2010
$
4,623
(316,366)
429,217
Consolidated
2009
$
4,623
169,663
429,217
117,474
603,503
429,217
-
425,081
4,136
429,217
429,217
169,663
(486,029)
(316,366)
2,058,297
(1,888,634)
169,663
4,623
-
4,623
4,623
-
4,623
117,474
603,503
The share-based payments reserve records the value of options issued to employees and Directors
which have been taken to expenses and the value of options issued on acquisition of Millennium
Mining (Fiji) Ltd.
Foreign currency translation reserve
The foreign currency translation reserve records unrealised exchange gains and losses on
translation of subsidiaries accounts during the year.
Forfeited shares reserve
The forfeited shares reserve records the amount of paid up capital received on shares which have
been forfeited due to non payment of calls.
17 ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Profit (loss) for the year
Other comprehensive income (loss) for the year
Accumulated losses at the end of the year
70
2010
$
(4,753,777)
(432,882)
-
(5,186,659)
Consolidated
2009
$
(4,357,388)
(396,389)
-
(4,753,777)
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
18 CONTINGENT LIABILITIES
There are no contingent liabilities.
19
COMMITMENTS
(a) Tenement Commitments
Entities in the Group are committed for expenditure by way of cash expenditure to retain their
interest in areas over which Special Prospecting Licenses are held.
The following expenditure proposals for 2011 are being considered.
Tenement
SPL1216
SPL 1231/1373
Renewal Application
lodged to
31 December, 2011
31 December, 2011
SPL 1361
SPL 1368
SPL 1377
SPL 1415
SPL 1434
SPL 1436
31 December, 2011
31 December, 2011
31 December, 2011
Kavukavu Project
16 March 2011
16 March 2011
SPL application CX 667
(enclosing SPL 1377)
First 12 month period
after granting
(b) Option acquisition commitments
Expenditure $F
Comments
300,000
150,000
75,000
75,000
75,000
75,000
75,000
75,000
50,000
50% to be met by JV partner
Imperial Mining (Fiji) Ltd
50% to be met by JV partner
Imperial Mining (Fiji) Ltd
It is expected that CX 667 will be
granted in 2011
The company has entered into an agreement with a landowner to acquire the following tenements
SP1361 Sabeto for FJD116,555 plus interest, to be paid by payments of FJD15,000 per quarter.
-
SP1368 Vuda for AUD353,669 plus interest, to be paid by payments of AUD40,000 per quarter.
-
Payable not later than one year
Payable later than one year, but not later than two years
Consolidated
2010
$
191,805
223,649
415,454
2009
$
-
-
-
20 PARTICULARS RELATING TO CONTROLLED ENTITIES
Class of Share
Ordinary
Beta Limited
Geopacific Limited
Ordinary
Millennium Mining (Fiji) Limited Ordinary
Holding Company
2009
2010
%
%
100
100
100
100
100
100
Amount of Investment
2010
$
15,372
1,866,993
684,907
2,567,272
2009
$
15,372
1,866,993
684,907
2,567,272
Geopacific Limited , Beta Limited and Millennium Mining (Fiji) Limited are companies incorporated
and carrying on business in Fiji.
71
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
21 KEY MANAGEMENT PERSONNEL DISCLOSURES
(a)
Directors
The names of each person holding the position of Director of Geopacific Resources NL during the
financial year were:
I J Pringle
CB Bass (appointed 18 February 2010)
ST Biggs (appointed 18 February 2010)
R J Fountain
R H Probert (alternate for INA Simpson)
I N A Simpson
W A Brook (retired 8 January 2010)
C K McCabe (alternate for INA Simpson) (resigned 18 February 2010)
(b)
Other key management personnel
All Directors are identified as key management personnel under AASB 124 “Related Party Disclosures”.
There are no other staff that meet the definition of key management personnel.
(c)
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2010
$
177,046
58,046
-
235,092
2009
$
296,466
-
4,136
300,602
The Company has taken advantage of the relief provided by the Corporations Regulations and has
transferred the detailed remuneration disclosures to the Directors’ Report. The relevant information can
be found in the remuneration report included in the Directors Report.
(d)
Equity instrument disclosures relating to key management personnel
(i)
Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and shares issued on the exercise of such options,
together with terms and conditions of the options, can be found in the remuneration report included
in the Directors Report.
72
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
21 KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(d)
(ii)
Equity instrument disclosures relating to key management personnel (continued)
Option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each
Director of the Company and other key management personnel of the Group, including their personally
related parties, are set out below.
Granted
during the
year as
compensation
Exercised
during the
year
Other
changes
during the
year (1)
Balance
at the
end of
the year
Vested and
exercisable
at the end
of the year
2010
Balance at
the start of
the year(1)
Name
Directors of Geopacific Resources Ltd
333,600
833,334
-
4,000
5,800
562,845
333,600
I J Pringle
833,334
CB Bass
-
ST Biggs
4,000
R J Fountain
5,800
R H Probert
562,845
I N A Simpson
(1) The options on issue were affected by the 1 for 5 share consolidation by reducing the number of shares
by dividing the number on issue at 31 December 2009 by 5 and by increasing the exercise price by
multiplying it by 5. The opening balance numbers reflect the impact of the share consolidation.
- 333,600
- 833,334
-
-
4,000
-
-
5,800
- 562,845
-
-
-
-
-
-
-
-
-
-
-
-
No options are vested and unexercisable at the end of the year.
2009
Balance at
the start of
the year
Name
Directors of Geopacific Resources Ltd
1,500,000
-
I J Pringle
CB Bass
ST Biggs
R J Fountain
R H Probert
I N A Simpson
-
-
2,500,000
Granted
during the
year as
compensation
Exercised
during the
year
Other
changes
during the
year
Balance at
the end of
the year
Vested and
exercisable
at the end
of the year
-
-
-
-
-
-
-
-
-
-
-
-
168,000 1,668,000
-
-
20,000
29,000
314,225 2,814,225
-
-
20,000
29,000
1,668,000
-
-
20,000
29,000
2,814,225
73
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
21 KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(d)
Equity instrument disclosures relating to key management personnel (continued)
(iii)
Share holdings
The numbers of shares in the Company held at the end of the financial year by each
Director of the Company and other key management personnel of the Group,
including their personally related parties, are set out below. There were no shares
granted during the reporting period as compensation.
2010
Name
Received
during the year
on the exercise
of options
Balance at
the start of
the year
Ordinary shares
Directors of Geopacific Resources Ltd
Share
consolidation
(1 for 5)
Other changes
during the
year
Balance at
the end of
the year
I J Pringle
I N A Simpson
R J Fountain
R H Probert
C B Bass
S T Biggs
869,250
6,349,595
80,000
647,545
6,925,010
24,957,115
-
-
-
-
-
-
(695,400)
(2,679,676)
(64,000)
(518,036)
(5,515,008)
(19,965,692)
-
(2,975,000)
50,000
-
270,000
33,577
173,850
694,919
66,000
129,509
1,680,002
5,025,000
2009
Balance at the start
of the year
Name
Ordinary shares
Directors of Geopacific Resources Ltd
I J Pringle
W A Brook
I N A Simpson
R J Fountain
R H Probert
C K McCabe
158,250
4,277,753
5,721,145
40,000
589,545
595,238
Received during the
year on the exercise
of options
Other changes
during the year
Balance at the
end of the year
-
-
-
-
-
-
711,000
(1,715,858)
628,450
40,000
58,000
404,762
869,250
2,561,895
6,349,595
80,000
647,545
1,000,000
74
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
22 RELATED PARTY TRANSACTIONS
All transactions with related parties are on normal commercial terms and conditions.
Consolidated
2010
$
2009
$
REPAYMENT OF LOANS
A controlled entity, Geopacific Limited, repaid loans from a
director, Mr WA Brook.
-
10,693
INTERCOMPANY LOANS
The Holding Company, Geopacific Resources NL, advanced funds to
controlled entities for exploration expenditure incurred on the
company's tenements.
- Geopacific Limited
- Beta Limited
- Millennium Mining (Fiji) Limited
The Holding Company, Geopacific Resources NL, received funds on
behalf of controlled entities for reimbursement of exploration
expenditure from joint venture parties.
- Beta Limited
INTERCOMPANY LOAN BALANCES
The balance of loans advanced to controlled entities at the end of the
year are:
- Geopacific Limited
- Beta Limited
- Millennium Mining (Fiji) Limited
These balances are eliminated on consolidation.
1,592,470
2,470
2,470
30,000
-
-
-
27,750
4,014,170
1,847,113
1,329,019
2,715,924
1,994,709
1,434,519
23
Employee Option Plan
SHARE-BASED PAYMENTS
(a)
The establishment of the Geopacific Resources NL Employee Option Plan was approved by
shareholders at the 2001 annual general meeting. All staff and consultants are eligible to participate
in the plan.
Options are granted under the plan for no consideration. Options are granted for a five year period.
Options granted under the plan carry no dividend or voting rights.
When exercisable, each option is convertible into one ordinary share.
The exercise price of options is based on the weighted average price at which the Company’s shares
are traded on the Australian Stock Exchange during the five trading days immediately before the
options are granted.
75
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
23
SHARE-BASED PAYMENTS (CONTINUED)
Set out below are summaries of options granted under the plan:
Grant date
Expiry date
Exercise price
8 May 2006
8 May 2006
8 May 2006
8 May 2012
8 May 2013
8 May 2014
$1.00
$1.25
$1.50
Value per option at
grant date
$0.4215
$0.3785
$0.3540
Date vesting
8 May 2007
8 May 2008
8 May 2009
The options on issue were affected by the 1 for 5 share consolidation by reducing the number of
shares by dividing the number on issue at 31 December 2009 by 5 and by increasing the exercise price
by multiplying it by 5.
No options were exercised or forfeited during the periods covered by the above tables.
The weighted average remaining contractual life of share options outstanding at the end of the period
was 1.54 years (2009 – 2.56 years).
The assessed fair value at grant date of options granted to the individuals is allocated equally over the
period from grant date to vesting date, and the amount is included in the remuneration tables above.
Fair values at grant date are independently determined using a Black-Scholes option pricing model
that takes into account the exercise price, the term of the option, the impact of dilution, the share
price at grant date and expected price volatility of the underlying share, the expected dividend yield
and the risk-free interest rate for the term of the option.
24
LOSS PER SHARE
(a)
Basic and diluted loss per share
Consolidated
2009
Cents
2010
Cents
Loss attributable to the ordinary equity holders of the Company
(1.33)
(2.73)
(b)
Reconciliation of loss used in calculating loss per share
Basic and diluted loss per share
2010
$
2009
$
Loss attributable to the ordinary equity holders of the Company used in
calculating basic and diluted loss per share
(432,882)
(396,389)
(c) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in
calculating basic and diluted loss per share. The shares on issue in the
previous year have been adjusted to take into account the 1 for 5
consolidation of shares which took place in April 2010.
The options on issue as stated in note 15 have not been taken into account
for dilution purposes as they are not considered to be dilutive due to the
exercise prices being in excess of the current share price.
2010
Number
2009
Number
32,557,927
14,543,653
76
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
25 EVENTS OCCURRING AFTER THE YEAR END
No matters or circumstances have arisen since 31 December 2010 that have significantly affected or may
significantly affect the Group’s operations in future financial years, or the results of those operations in
future financial years, or the Group’s state of affairs in future financial years.
26. OPERATING SEGMENTS
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used
by the Board of Directors (chief operating decision makers) in assessing performance and determining the
allocation of resources.
The group is managed primarily on the basis of mineral exploration in Fiji. Operating segments are
therefore determined on the same basis.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision makers
with respect to operating segments, are determined in accordance with accounting policies that are
consistent to those adopted in the annual financial statements of the Group.
Inter-segment transactions
An internally determined transfer price is set for all inter-segment sales. This price is reset quarterly and is
based on what would be realised in the event the sale was made to an external party at arm’s length. All
such transactions are eliminated on consolidation of the Group’s financial statements.
Corporate charges are allocated to reporting segments based on the segments overall proportion of
revenue generation within the Group. The Board of Directors believes this is representative of likely
consumption of head office expenditure that should be used in assessing segment performance and cost
recoveries.
Inter-segment loans payable and receivable are initially recognised at the consideration received/to be
received net of transaction costs. If inter-segment loans receivable and payable are not on commercial
terms, these are not adjusted to fair value based on market interest rates. This policy represents a
departure from that applied to the statutory financial statements.
77
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
26.
OPERATING SEGMENTS (CONTINUED)
Basis of accounting for purposes of reporting by operating segments (continued)
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives
majority economic value from the asset. In the majority of instances, segment assets are clearly
identifiable on the basis of their nature and physical location.
Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability
and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the
Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain
direct borrowings.
Unallocated items
The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as
they are not considered part of the core operations of any segment:
impairment of assets and other non-recurring items of revenue or expense;
income tax expense;
•
•
• deferred tax assets and liabilities;
•
current tax liabilities;
• other financial liabilities;
•
intangible assets;
2010
Segment performance
Interest received
Raki Raki joint venture management fee
Gain on sale of plant and equipment
Other income
Total segment revenue
Segment (loss) profit from continuing operations before tax
Reconciliation of segment result to group net profit/loss before tax:
Amounts not included in segment result but reviewed by the Board:
— corporate charges
— depreciation and amortisation
(Loss) profit before tax from continuing operations
Exploration Fiji
2010
$
116,150
14,084
4,306
1,584
136,123
Total
2010
$
116,150
14,084
4,306
1,584
136,123
(139,074)
(139,074)
(280,337)
(13,471)
(432,882)
78
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
OPERATING SEGMENTS (CONTINUED)
26.
2010
Segment Assets
Reconciliation of segment assets to group assets:
Unallocated assets
Group assets
Segment Liabilities
Reconciliation of segment liabilities to group liabilities:
Unallocated liabilities
Group liabilities
2009
Segment performance
Interest received
Raki Raki joint venture management fee
Gain on sale of plant and equipment
Other income
Total segment revenue
Exploration Fiji
2010
$
Total
2010
$
10,192,382
10,192,382
-
10,192,382
45,613
45,613
-
45,613
Total
2009
$
116,150
14,084
4,306
1,584
3,611
Exploration
Fiji
2009
$
248
1,841
10
1,512
3,611
Segment (loss) profit from continuing operations before tax
Reconciliation of segment result to group net profit/loss before tax:
Amounts not included in segment result but reviewed by the Board:
— corporate charges
— depreciation and amortisation
(Loss) profit before tax from continuing operations
(226,077)
(226,077)
(165,499)
(4,813)
(396,389)
2009
Segment Assets
Reconciliation of segment assets to group assets:
Unallocated assets
Group assets
Segment Liabilities
Reconciliation of segment liabilities to group liabilities:
Unallocated liabilities
Group liabilities
79
Exploration Fiji
2009
$
Total
2009
$
7,970,104
7,970,104
-
7,970,104
144,187
144,187
-
144,187
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
27
FINANCIAL INSTRUMENTS DISCLOSURES
(a)
Capital management
The Group considers its capital to comprise its ordinary share capital and accumulated retained
earnings.
In managing its capital, the Group’s primary objective is to ensure its continued ability to provide a
consistent return for its equity shareholders through a combination of capital growth and
distributions. In order to achieve this objective, the Group seeks to maintain a gearing ratio that
balances risks and returns at an acceptable level and also to maintain a sufficient funding base to
enable the Group to meet its working capital and strategic investment needs. In making decisions
to adjust its capital structure to achieve these aims, either through altering its dividend policy, new
share issues, or reduction of debt, the Group considers not only its short-term position but also its
long-term operational and strategic objectives.
It is the Group’s policy to maintain its gearing ratio within the range of 0-25% (2009: 0-25%). The
Group’s gearing ratio at the statement of financial position date is shown below:
Cash and cash equivalents
Net debt
Share capital
Reserves
Accumulated losses
Total capital
Gearing ratio
Consolidated
2010
$
2,173,259
2,173,259
2009
$
2,333,243
2,333,243
15,215,954
117,474
(5,186,659)
10,146,769
11,976,191
603,503
(4,753,778)
7,825,916
0.00%
0.00%
(b)
Financial instrument risk exposure and management
In common with all other businesses, the Group is exposed to risks that arise from its use of
financial instruments. This note describes the Group’s objectives, policies and processes for
managing those risks and the methods used to measure them.
Further quantitative information in respect of these risks is presented throughout these financial
statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note.
80
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
27
(c)
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises,
are as follows:
Financial assets:
Cash assets
Receivables
Financial liabilities:
Payables
Net financial assets (liabilities)
(d)
General objectives, policies and processes
2010
2009
2,173,259
358,460
2,531,719
2,333,243
70,985
2,404,228
(45,613)
(45,613)
(144,187)
(144,187)
2,486,106
2,260,041
The Board has overall responsibility for the determination of the Group’s risk management
objectives and policies and has the responsibility for designing and operating processes that ensure
the effective implementation of the objectives and policies to the Group’s finance function. The
Board receives monthly reports through which it reviews the effectiveness of the processes put in
place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible
without unduly affecting the Group’s competitiveness and flexibility. Further details regarding
these policies are set out below:
(i)
Credit risk
Credit risk arises principally from the Group’s trade receivables and investments in
corporate bonds. It is the risk that the counterparty fails to discharge its obligation in
respect of the instrument.
Other receivables
Other receivables comprise GST receivable, security deposits and sundry receivables. Credit
worthiness of debtors is undertaken when appropriate.
The maximum exposure to credit risk at balance date is as follows :
Security Deposits
Other receivables
GST receivables
81
Consolidated
2010
$
19,328
191,292
147,840
358,460
2009
$
20,455
20,878
29,652
70,985
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
27
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
(d)
General objectives, policies and processes (Continued)
(ii)
Liquidity risk
The Board receives cash flow projections on a quarterly basis as well as information
regarding cash balances. At the year end, these projections indicated that the Group
expected to have sufficient liquid resources to meet its obligations under all reasonably
expected circumstances.
The risk implied from the values shown in the table below, reflects a balanced view of cash
inflows and outflows. Trade payables and other financial liabilities mainly originate from
the financing of assets used in our ongoing operations such as property, plant, equipment
and investments in working capital (e.g., trade receivables). These assets are considered in
the Group's overall liquidity risk.
Carrying
Amount
$
Contractual
Cash flows
$
< 6 mths
$
6- 12
mths
$
1-3
years
$
> 3 years
$
Maturity Analysis - Consolidated - 2010
Financial Liabilities
Trade Creditors
TOTAL
45,613
45,613
Maturity Analysis - Consolidated - 2009
Financial Liabilities
Trade Creditors
TOTAL
144,187
144,187
(iii) Market risk
45,613
45,613
45,613
45,613
144,187
144,187
144,187
144,187
-
-
-
-
-
-
-
-
-
-
-
-
Market risk does not arise as the Group does not use interest bearing, tradable and foreign
currency financial instruments.
(iv)
Interest rate risk
The Group has limited exposure to fluctuations in interest rates that are inherent in financial
investment decisions after considering advice received from
markets. The Board makes
professional advisors.
The Group's exposure to interest rate risk and the effective weighted average interest rate for
classes of financial assets and financial liabilities is set out below:
82
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
27
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
(d)
General objectives, policies and processes (Continued)
(ii)
Interest rate risk (continued)
Floating
Interest
Rate
Fixed interest rate maturing in:
More
Over 1
than 5
to 5
years
years
1 Year
or Less
Non-
interest
bearing
Total
2010
Note
Financial assets:
Cash assets 9
Receivables 10
Weighted average interest rate
Financial liabilities:
Payables 13
Net financial assets (liabilities)
2009
Note
Financial assets:
Cash assets 9
Receivables 10
2,173,259
-
2,173,259
0.50%
-
-
2,173,259
Floating
Interest
Rate
2,333,243
-
2,333,243
0.50%
Weighted average interest rate
Financial liabilities:
Payables 13
-
-
Net financial assets (liabilities)
2,333,243
-
-
-
-
-
-
1 Year
or Less
-
-
-
-
-
-
Over 1
to 5
years
-
-
-
-
-
-
More
than 5
years
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
358,460
358,460
2,173,259
358,460
2,531,719
(45,613)
(45,613)
312,847
Non-
interest
bearing
(45,613)
(45,613)
2,486,106
Total
-
70,985
70,985
2,333,243
70,985
2,404,228
(144,187)
(144,187)
(144,187)
(144,187)
(73,202)
2,260,041
Sensitivity Analysis
2010
Cash assets
Tax charge of 30%
Post tax profit increase / (decrease)
2009
Cash assets
Tax charge of 30%
Post tax profit increase / (decrease)
Carrying amount
2,173,259
2,173,259
2,333,243
2,333,243
83
Consolidated
+2% interest rate
Profit & Loss
-2% interest rate
Profit & Loss
43,465
43,465
(13,040)
30,425
46,665
46,665
(14,000)
32,665
(43,465)
(43,465)
13,040
(30,425)
(46,665)
(46,665)
14,000
(32,665)
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
27
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
(d)
General objectives, policies and processes (Continued)
(v) Currency risk
The Group’s policy is, where possible, to allow Group entities to settle liabilities denominated in
their functional currency (AUD) with the cash generated from their own operations in that
currency. Where Group entities have liabilities denominated in a currency other than their
functional currency (and have insufficient reserves of that currency to settle them) cash already
denominated in that currency will, where possible, be transferred from elsewhere.
The Group’s exposure to foreign currency risk is as follows:
Cash at bank
Net Exposure
Consolidated
2010
$FJ
2009
$FJ
55,222
55,222
17,667
17,667
The following sensitivity analysis is based on the foreign currency risk exposures in existence at the year
end. The below analysis assumes all other variables remain constant.
Sensitivity Analysis
2010
Cash at bank
Tax charge of 30%
Post tax profit increase / (decrease)
2009
Cash at bank
Tax charge of 30%
Post tax profit increase / (decrease)
(vi)
Sovereign risk
Carrying amount
$FJ
55,222
55,222
Consolidated
+10% FJD/AUD
Profit & Loss
AUD$
2,928
2,928
(878)
2,050
17,667
17,667
1,013
(304)
709
19,434
-10% FJD/AUD
Profit & Loss
AUD$
(2,928)
(2,928)
878
(2,050)
(1,013)
304
(709)
1,013
Country or sovereign risk relates to the likelihood that changes in the business environment
will occur that reduce the profitability of doing business in a country. These changes can
adversely affect operating profits as well as the value of assets. Types of country risk include;
Political changes. Governments may change economic policies. Changes in the ruling party in
Australia or Fiji (brought about by elections, coups or wars) may result in major policy changes.
This could result in expropriation of the Company’s exploration leases, inability to repatriate
future profits, higher taxes, higher tariffs and import costs, elimination of FDI incentives,
domestic ownership requirements and local content requirements.
84
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
27
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
(d)
General objectives, policies and processes (Continued)
(vi)
Sovereign risk (continued)
Macroeconomic mismanagement. The Australian and Fiji governments may pursue unsound
monetary and fiscal policies which may lead to inflation, higher interest rates, recession and
hard currency shortage.
Other types of country risk include war and labour unrest which could result in higher costs and
work stoppages.
The Group has maintained a working policy of keeping all relevant Government offices
informed and updated on activities to allow clear avenues of communication with Government
authorities and an understanding of any policy changes and any affects that they may have on
the Group’s work. Regular meetings, field visits and discussion Groups are held with staff of
the Mineral Resources Department of Fiji and these include Ministerial and senior management
briefings.
(e)
Accounting policies
(i)
Financial assets
The Group’s financial assets fall into the categories discussed below, with the allocation
depending to an extent on the purpose for which the asset was acquired. The Group does not
use derivative financial instruments in economic hedges of currency or interest rate risk. The
Group has not classified any of its financial assets as held to maturity.
Unless otherwise indicated, the carrying amounts of the Group’s financial assets are a
reasonable approximation of their fair values.
Loans and other receivables
These assets are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They arise principally though the sale of assets and GST
receivable. They are initially recognised at fair value plus transaction costs that are directly
attributable to the acquisition or issue and subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment.
The effect of discounting on these financial instruments is not considered to be material.
Impairment provisions are recognised when there is objective evidence (such as significant
financial difficulties on the part of the counterparty or default or significant delay in payment
that the Group will be unable to collect all of the amounts due under the terms receivable, the
amount of such a provision being the difference between the net carrying amount and the
present value of the future such provisions are recorded in a separate allowance account with
the loss being recognised within administrative expenses in the statement of comprehensive
income. On confirmation that the trade receivable will not be collectable, the gross carrying
value of the asset is written off against the associated provision.
85
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
27
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
(e)
Accounting policies (Continued)
(i)
Financial assets (Continued)
Available for sale
Non-derivative financial assets not included in the above categories are classified as available
for sale. They are carried at fair value with changes in fair value recognised directly in the
available for sale reserve. Where there is a significant or prolonged decline in the fair value of
an available for sale financial asset (which constitutes objective evidence of impairment), the
full amount of the impairment, including any amount previously charged to equity, is
recognised in the statement of comprehensive income. Purchases and sales of available for
sale financial assets are recognised on settlement date with any change in fair value between
trade date and settlement date being recognised in the available for sale reserve. On sale, the
amount held in the available for sale reserve associated with that asset is removed from equity
and recognised in the statement of comprehensive income. Interest on corporate bonds
classified as available for sale is calculated using the effective interest method and is recognised
in finance income in the statement of comprehensive income.
(ii) Financial liabilities
The Group classifies its financial liabilities as measured at amortised cost. The Group does not
use derivative financial instruments in economic hedges of currency or interest rate risk.
Unless otherwise indicated, the carrying amounts of the Group’s financial liabilities are a
reasonable approximation of their fair values.
These financial liabilities include trade payables and other short-term monetary liabilities,
which are initially recognised at fair value and subsequently carried at amortised cost using the
effective interest method.
(iii) Share capital
Financial instruments issued by the Group are treated as equity only to the extent that they do
not meet the definition of a financial liability. The Groups ordinary shares are classified as
equity instruments.
For the purposes of these disclosures, the Group considers its capital to comprise its ordinary
share capital, and accumulated retained earnings. Neither the available for sale reserve nor the
translation reserve is considered as capital. There have been no changes in what the Group
considers to be capital since the previous period.
The Group is not subject to any externally imposed capital requirements.
86
GEOPACIFIC RESOURCES NL
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2010
28 NOTES TO THE STATEMENT OF CASH FLOWS
(a)
For the purpose of the Statement of Cash Flows, cash and cash equivalents includes cash at bank.
Cash and cash equivalents at the end of the financial year as shown in the Statement of Cash Flows is
reconciled to the related items in the Statement of Financial Position as follows:
Cash at Bank
(b) Non Cash Financing
Consolidated
2010
$
2009
$
2,173,259
2,333,243
Shares issued in lieu of payment for services rendered
Exchange rate fluctuations in exploration expenditure
-
(319,948)
5,285
(1,814,417)
(c)
Reconciliation of Cash Flows from Operating Activities
Profit (loss) for the year
Depreciation
Options expense
Profit on sale of plant and equipment
Changes in Assets and Liabilities:
(Decrease)/increase in receivables
(Decrease)/increase in payables
Net Cash from Operating Activities
(432,882)
(396,389)
13,471
-
(4,306)
4,813
4,136
10
(287,526)
(98,574)
543
61,163
(809,817)
(325,724)
87
GEOPACIFIC RESOURCES NL
and Controlled Entities
CORPORATE GOVERNANCE STATEMENT
Unless disclosed below, all the best practice recommendations of the ASX Corporate Governance Council
have been applied for the entire financial year ended 31 December 2010.
Board Composition
The skills, experience and expertise relevant to the position of each director who is in office at the date of
the annual report and their term of office are detailed in the directors’ report.
The names of independent directors of the company are:
S Tim Biggs (Chairman)
Ian AS Simpson
Russell J Fountain
Charlie B Bass
When determining whether a non-executive director is independent the director must not fail any of the
following materiality thresholds:
—
less than 10% of company shares are held by the director and any entity or individual directly or
indirectly associated with the director;
no sales are made to or purchases made from any entity or individual directly or indirectly associated
with the director; and
none of the directors’ income or the income of an individual or entity directly or indirectly associated
with the director is derived from a contract with any member of the economic entity other than
income derived as a director of the entity.
—
—
Independent directors have the right to seek independent professional advice in the furtherance of their
duties as directors at the company’s expense. Written approval must be obtained from the chair prior to
incurring any expense on behalf of the company.
The company does not have a formally constituted nomination committee.
Ethical Standards
The Board acknowledges and emphasises the importance of all directors and employees maintaining the
highest standards of corporate governance practice and ethical conduct.
Directors and employees are required to:
•
•
•
•
•
•
act honestly and in good faith;
exercise due care and diligence in fulfilling the functions of office;
avoid conflicts and make full disclosure of any possible conflict of interest;
comply with the law;
encourage the reporting and investigating of unlawful and unethical behaviour; and
comply with the share trading policy outlined in the Code of Conduct.
Directors are obliged to be independent in judgment and ensure all reasonable steps are taken to ensure
due care is taken by the Board in making sound decisions.
88
GEOPACIFIC RESOURCES NL
and Controlled Entities
CORPORATE GOVERNANCE STATEMENT
Trading Policy
Geopacific reviewed its policy in relation to dealing in the company’s securities by directors and executives
and provided the following policy as an ASX release on the 30 December 2010 and an update on 2 February
2011.
Background – Insider Trading:
The insider trading provisions of Australian Law work on the basis that a person must not (whether as
principal or agent) subscribe for, purchase or sell, or “engage in dealings” of any securities in Geopacific
Resources NL (‘GPR’) if;
a)
The person possesses information that a reasonable person would expect to have a material effect
on the price of the securities if the information were generally available;
and
b)
The person knows, or ought reasonably to know, that:
i. The information is not generally available; and
ii. If it were generally available, it might have a material effect on the price of the securities.
A person does not need to be directly associated with GPR to be guilty of insider trading in relation to
securities of the Company. The prohibition extends to dealings through nominees, agents or their associates,
such as family members, family trusts or family companies (“Related Third Parties”).
Policy:
2.
dealings in the securities of GPR without giving prior notice as follows:
Directors, officers and employees of GPR and its subsidiary companies shall not engage in any
Party seeking to deal in securities
Employees of GPR or subsidiary companies and
consultants and advisors involved in the
management of projects for and on behalf of
GPR (or their Related Third Parties)
Directors of GPR or subsidiary companies (or
their Related Third Parties)
Prior Notice to be Given to:
The Chairman and Company Secretary of
GPR
The Company Secretary of GPR who shall
provide details to the Chairman of GPR
2.
The procedures for notification are as follows;
a) Before trading in the company’s securities the Director, officer or employee must
• notify the chairman (or in his absence the managing director) and company secretary, in
writing, of their intention to trade in securities;
•
•
confirm they do not have insider information; and
confirm that there is no known reason to preclude trading in the company’s securities
The notification is only valid for the period of its operation, being from the date of notification until the
earlier of 10 business days after the notification, the start of a closed period or the date on which the
Director, officer or employee becomes aware of insider information.
89
GEOPACIFIC RESOURCES NL
and Controlled Entities
CORPORATE GOVERNANCE STATEMENT
b) After trading in the company’s securities Director, officer or employee must
• notify the company secretary (who will notify the chairman) in writing, that the trade has
been completed; and
•
in the case of directors of the company, provide sufficient information to enable the
company to comply with the requirements to notify a change of interests to ASX. Such
information to include - Type of dealing, Date of dealing, Number of securities, Seller,
Purchaser and Price;
3. Directors, officers and employees shall not engage in any dealings in GPR securities during the period:
a) two weeks prior to and within 24 hours after the date of the announcement to the ASX of the
Company’s annual or half year results;
b) two weeks prior to and within 24 hours after the date of the announcement to the ASX of the
Company’s quarterly activities reports;
c) notwithstanding a) or b), at any time while in possession of inside information.
Directors, officers and employees are prohibited from trading in financial products issued or created
4.
over or in respect of the entity’s securities.
Exceptions to policy:
The following are the only exceptions to the above policy:
Directors, officers and employees may trade in financial products issued or created over or in respect of the
entity’s securities outside the parameters of the above trading policy only in the following circumstances:
1.
2.
3.
4.
transfers of securities of the entity already held into a superannuation fund or other saving
scheme in which the Director, officer or employee is a beneficiary;
undertakings to accept, or the acceptance of, a takeover offer;
trading under an offer or invitation made to all or most of the security holders, such as, a rights
issue, a security purchase plan, a dividend or distribution reinvestment plan and an equal access
buy-back, where the plan that determines the timing and structure of the offer has been
approved by the board. This includes decisions relating to whether or not to take up the
entitlements and the sale of entitlements required to provide for the take up of the balance of
entitlements under a renounceable pro rata issue;
the exercise (but not the sale of securities following exercise) of an option or a right under an
employee incentive scheme, or the conversion of a convertible security, where the final date for the
exercise of the option or right, or the conversion of the security, falls during a prohibited period and
the entity has been in an exceptionally long prohibited period or the entity has had a number of
consecutive prohibited periods and the Director, officer or employee could not reasonably have
been expected to exercise it at a time when free to do so.
90
GEOPACIFIC RESOURCES NL
and Controlled Entities
CORPORATE GOVERNANCE STATEMENT
Audit Committee
The company has a formally constituted audit committee. The committee members are:
Ian AS Simpson
Russell J Fountain
Charlie B Bass
Performance Evaluation
The Board did not conduct a performance evaluation of the Board and all Board members for the financial
year ended 31 December 2010.
Board Roles and Responsibilities
The Board is first and foremost accountable to provide value to its shareholders through delivery of timely
and balanced disclosures.
The Board is ultimately responsible for ensuring its actions are in accordance with key corporate governance
principles.
Shareholder Rights
Shareholders are entitled to vote on significant matters impacting on the business, which include the
election and remuneration of directors, changes to the constitution and receipt of annual and interim
financial statements. Shareholders are strongly encouraged to attend and participate in the Annual General
Meetings of Geopacific Resources NL, to lodge questions to be responded by the Board and/or the CEO, and
are able to appoint proxies.
Risk Management
The Board considers identification and management of key risks associated with the business as vital to
maximise shareholder wealth. An assessment of the business’s risk profile is undertaken on a regular basis
and is reviewed by the Board, covering all aspects of the business from the operational level through to
strategic level risks. The CEO has been delegated the task of implementing internal controls to identify and
manage risks for which the Board provides oversight. The effectiveness of these controls is monitored and
reviewed regularly.
91
GEOPACIFIC RESOURCES NL
and Controlled Entities
CORPORATE GOVERNANCE STATEMENT
Remuneration Policies
The remuneration policy sets the terms and conditions for the key management personnel All executives
receive a base salary, superannuation and retirement benefits. The Board reviews executive packages
annually by reference to company performance and executive performance. The policy is designed to attract
the highest calibre executives and reward them for performance which results in long-term growth in
shareholder value.
Executives are also entitled to participate in the employee share and option arrangements.
The amount of remuneration for all key management personnel for the company are detailed in the
directors report under the heading Key Management Personnel Compensation. All remuneration paid to
executives is valued at the cost to the company and expensed. Shares given to executives are valued as the
difference between the market price of those shares and the amount paid by the executive. Options are
valued using the Black-Scholes methodology.
The Board expects that the remuneration structure implemented will result in the company being able to
attract and retain the best executives to run the consolidated group. It will also provide executives with the
necessary incentives to work to grow long-term shareholder value.
The payment of bonuses, options and other incentive payments are reviewed by the Board as part of the
review of executive remuneration and a recommendation is put to the Board for approval.
Remuneration Committee
The company has a formally constituted remuneration committee. The committee members are:
Ian AS Simpson
Russell J Fountain
Charlie B Bass
92
GEOPACIFIC RESOURCES NL
and Controlled Entities
ASX INFORMATION
The shareholder information set out below was applicable as at 9 March 2011.
A. Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
1
1,001
5,001
10,001
100,001 and over
- 1000
- 5,000
- 10,000
- 100,000
Total
Class of equity security
Ordinary shares
Number
Shares
53
204
74
151
53
535
28,163
590,282
584,598
5,285,717
29,544,837
36,033,957
There were 63 holders of less than a marketable parcel of 1,315 ordinary shares.
B. Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
Ordinary shares
Laguna Bay Capital Pty Ltd
Springtide Capital Pty Ltd
HSBC Custody Nominees (Australia) Limited
Lujeta Pty Ltd
Exploration & Drilling Services Pty Ltd Fiji
Quartz Mountain Mining Pty Ltd
Mr Bruce Gordon Morgan
Mrs Ilean Doidge
L Anderson Investments Pty Ltd
Mr Ian Simpson
John Gordon Patrick White & Christine Lynette White
Mr Richard Bass & Mrs Gail Bass
Sheila Anderson Investments Pty Ltd
Mr Ian Michael Paterson Parker & Mrs Catriona Sylvia Parker
Gandria Capital Pty Ltd
Chellit Pty Ltd
Kurraba Investments Pty Ltd
Mr Paul James Morgan
S C Biggs Pty Ltd
Clodene Pty Ltd
Total of Top 20 shareholders
Other shareholders
Total ordinary shareholders
Number held
5,025,000
5,006,423
2,529,358
2,135,000
1,755,443
1,410,002
808,838
808,334
689,310
658,539
593,376
515,000
510,000
433,290
325,092
325,092
316,900
300,000
279,000
250,000
24,674,037
11,359,920
36,033,957
Percentage of
issued shares
13.945
13.894
7.019
5.925
4.872
3.913
2.245
2.243
1.913
1.828
1.646
1.429
1.415
1.202
0.902
0.902
0.879
0.833
0.774
0.694
68,473
31.527
100.000
93
GEOPACIFIC RESOURCES NL
and Controlled Entities
ASX INFORMATION
C. Substantial holders
Substantial holders in the Company are set out below:
Substantial Shareholder
(extracts from Substantial Shareholder Register)
Ordinary shares
Laguna Bay Capital Pty Ltd
Springtide Capital Pty Ltd
HSBC Custody Nominees (Australia) Limited
Lujeta Pty Ltd
D. Voting rights
Shareholding
Number held Percentage
5,025,000
5,006,423
2,529,358
2,135,000
13.945
13.894
7.019
5.925
The voting rights attaching to each class of equity securities are set out below:
(a)
Fully paid Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote
and upon a poll each share shall have one vote.
(b)
Partly paid Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote
and upon a poll each share shall have one vote in proportion to the amount paid up on the shares.
(c)
There are no voting rights attaching to options.
94
GEOPACIFIC RESOURCES NL
and Controlled Entities
ASX INFORMATION
E
Summary of options issued
No of
options
No of
holders
Options
held
%
Options
Issued
Options expiring 8 May 2012 with an exercise price
of $0.20
Option holders with more than 20% of class
Ian Pringle
Options expiring 8 May 2013 with an exercise price
of $0.25
Ian Pringle
Options expiring 8 May 2014 with an exercise price
of $0.30
Option holders with more than 20% of class
Ian Pringle
Options expiring 16 December 2011 with an
exercise price of $0.06
Option holders with more than 20% of class
Springtide Capital Pty Ltd
Citicorp Nominees Pty Limited
Options expiring 1 August 2013 with an exercise price of
$0.10
Option holders with more than 20% of class
Ian NA Simpson
Options expiring not later than five years after the
defining on Faddy’s Gold Deposit of a JORC compliant
ore reserve of over 200,000 ounces of contained gold
with an exercise price of $0.50
Option holders with more than 20% of class
Exploration Drilling Services (Fiji) Ltd
L Anderson Investments Pty Ltd
Sheila Anderson Investments Pty Ltd
Options expiring not later than ten years after the
defining on Faddy’s Gold Deposit of a JORC compliant
ore reserve of over 1,000,000 ounces of contained gold
with an exercise price of $1.00
Option holders with more than 20% of class
Exploration Drilling Services (Fiji) Ltd
L Anderson Investments Pty Ltd
Sheila Anderson Investments Pty Ltd
100,000
100,000
100,000
1
1
1
6,833,550
1300
510,000
3
800,000
5
200,000
5
100,000
100.00%
100,000
100.00%
100,000
100.00%
2,023,401
2,000,000
27.94%
27.62%
500,000
81.97%
320,000
220,000
180,000
40.00%
27.50%
22.50%
80,000
55,000
45,000
40.00%
27.50%
22.50%
95
GEOPACIFIC RESOURCES NL
and Controlled Entities
SCHEDULE OF TENEMENTS
Tenement Schedule
Tenement
Location
Area
Status
SPL 1434
NADI SOUTH
100% GPL
7 km
SE of Nadi,
Viti Levu
7,450 ha
Granted on 9 June 2005
Reduced to
3,400 ha
Granted on 17th March
2009 to GPL for an initial
12 month period which was
renewed to 16 March 2011.
SPL 1231
RAKI RAKI
Raki Raki
NE Viti Levu
Approx.
7,790 ha
50% Beta
50% Peninsula
Minerals
Reduced to
3,330 ha
SPL 1373
QALAU
Raki Raki
NE Viti Levu
Approx.
3,440 ha
50% Beta
50% Peninsula
Minerals
SPL 1436
TABUKA
50% Beta
50% Peninsula
Minerals
Reduced to
1,843 ha
Raki Raki
NE Viti Levu
Approx.
2,500 ha
SPL 1377 NUKU
100% GPL
50 km NW of
Suva, central
Viti Levu
2,370 ha
Anticipated Work &
Expenditure
F$75,000 is proposed for
2011. Work will consist
of data compilation,
interpretation of the 2010
airborne EM, surface
sampling, then drilling of
any viable targets.
Costs 100% GPL
F$75,000 is proposed.
Entire data compilation,
interpretation of the 2010
EM survey results,
surface reconnaissance
work followed up with
trenching and possibly
drilling.
Costs 50% Beta.
F$75,000 is proposed.
Data compilation, surface
reconnaissance work
followed up with
trenching. Interpretation
and integration of 2010
EM survey results,
possible drilling.
Costs 50% Beta.
Granted on 6 November
1985 to Beta. Peninsula
Minerals has earned
50.0%.
Granted on 12th February
2009. An application for a
12 month renewal to 31
December 2011 has been
lodged with MRD.
Granted on 6 July 1995 to
Beta. Peninsula Minerals
has earned 50.0%.
Granted on 12th February
2009. An application for a
12 month renewal to 31
December 2011 has been
lodged with MRD.
Granted on 17th March
2005 to Beta. Peninsula
Minerals has 50% interest.
2008. Application for a 12
month renewal to 16
March 2011 was lodged
with MRD.
F$75,000 is proposed.
Work programmes may
include surface sampling,
over EM anomalies then
drilling.
Costs 50% Beta.
Granted on 15 August 1996
to GPL. A 12 month
renewal to 31 December
2011 has been lodged with
MRD.
F$100,000 is proposed
for 2011. Work to
include IP geophysics
then diamond drilling.
Costs 100% GPL.
96
GEOPACIFIC RESOURCES NL
and Controlled Entities
SCHEDULE OF TENEMENTS
CX 667
NADOVU
SPL application.
100% GPL
Nuku
Project,
50km NW
Suva, Viti
Levu
Approx.
7,300 ha
9,510 ha
15 km
NNE of
Nadi, Viti
Levu
Reduced to
3,210 ha
Approx.
41,900 ha
Cakaudrove
, 55km
ENE
Savusavu,
Vanua Levu
3,850 ha
16 km NE
of Nadi,
Viti Levu
Reduced to
1,800 ha
2,830 ha
20km SW
Nadi, Viti
Levu
SPL 1368
VUDA
GPL has option
to purchase 80%
by GPL by 22
February 2009
and this has been
extended by
agreement with
quarterly option
payments.
CX 750
CAKAUDROVE
SPL application.
100% GPL
SPL 1361
SABETO
GPL had a three
year option to
purchase 100%
of SPL 1361 by 4
April 2009 and
this has been
extended by
agreement with
quarterly option
payments.
SPL 1216
NABILA
GPR completed
purchase (100%)
of Millennium
Mining (Fiji) Ltd
(MMF) which
owns SPL1216
on 3 June 2008
Application was lodged on
16 March 2005. Notices
appeared in local papers &
the Government Gazette
August 2005. No objections
received by the MRD,
granting expected during
2011. CX 667 has not yet
been granted.
Granted on 18 October 1994.
Ministerial approval for a 3
year option to purchase 80%
was granted on 2 February
2005. Agreement signed 22
February 2005.
Granted on 20th April 2009.
Application for a 12 month
renewal to 31 December 2011
was been lodged with MRD.
Application was lodged with
MRD on 22 Sept 2010. No
objections were received by
the MRD and granting of CX
750 is expected during 2012.
Granted on 6 October 1993.
Ministerial approval for a 3
year option to purchase
100% granted 21 March
2005. Agreement signed 4
April 2005.
Granted 16th February 2009.
An application for a 12
month renewal to 31
December 2011 has been
lodged with MRD.
Granted on 1st April 1984.An
application for a 12 month
renewal to 31 December
2011 has been lodged with
MRD.
F$50,000 is proposed
for first 12 month
period after granting.
Costs 100% GPL
Proposed expenditure of
F$75,000.
Work will consist of
data compilation and
evaluation,
interpretation of the
2010 airborne EM the
drilling of any viable
targets.
Costs 100% GPL.
F$200,000 spent on
airborne EM survey in
late 2010. $50,000 is
proposed for first 12
month period after
granting.
Costs 100% GPL
Proposed expenditure of
F$75,000.
Work will consist of
data compilation and
evaluation,
interpretation of the
2010 airborne EM the
drilling of any viable
targets.
Costs 100% GPL.
Proposed Expenditure
of over $300,000 to
include further diamond
drilling and resource
evaluation of Faddys
Gold Resource
Costs 100% MMF.
97
GEOPACIFIC RESOURCES NL
and Controlled Entities
SCHEDULE OF TENEMENTS
SPL 1415
KAVUKAVU
GPR completed
purchase (100%)
of Millennium
Mining (Fiji) Ltd
(MMF) which
owns SPL1216
on 3 June 2008
CX691
MALOMALO
SPL application.
GPR completed
purchase of
Millennium
Mining (Fiji) Ltd
(MMF) which
applied for
CX691 on 8th
December 2006
28km SSW
of Nadi, Viti
Levu
7,100 ha
Granted on 17th March
2000.
Reduced
to
5,400 ha
Granted on 23rd October
2009. An application for a
12 month renewal to 30
March 2011 has been
lodged with MRD.
1979 ha
20km SW of
Nadi, Viti
Levu
Application submitted to
MRD on 8th December
2006. Notices appeared in
local newspapers and in
the Government Gazette.
No objections were
received by the MRD and
granting of CX 667 is
expected during 2011. CX
691 has not yet been
granted.
Proposed Expenditure of
$75,000.
Work to consist of data
compilation, surface
reconnaissance work
followed up with
trenching. Interpretation
and integration of 2010
EM survey results,
possible drilling
Costs 100% MMF.
F$50,000 is proposed for
first 12 month period
after granting.
Costs 100% MML
98