Helix Energy Solutions Group
Annual Report 2008

Plain-text annual report

HELIX RESOURCES LIMITED annual report 2008 Contents Chairman’s Review...............................................................................2 Review Of Operations ...........................................................................3 Yalleen Iron Ore Joint Venture – Western Australia ...................................3 Glenburgh Gold Project – Western Australia ............................................8 Lake Everard (Incl. Tunkillia) Project – South Australia............................. 11 Parachilna Project - South Australia ................................................... 15 Booyeema Nickel Joint Venture – Western Australia ................................ 17 West Pilbara Project – Western Australia.............................................. 19 Corporate Governance ........................................................................ 22 Directors’ Report ............................................................................... 26 Auditor’s Independence Declaration ....................................................... 31 Independent Audit Report.................................................................... 32 Directors’ Declaration......................................................................... 34 Balance Sheet ................................................................................... 35 Income Statement.............................................................................. 36 Cash Flow Statement .......................................................................... 37 Statement Of Changes In Equity............................................................. 38 Notes To The Financial Statements ........................................................ 39 Number Of Shares Held ....................................................................... 60 Tenement Schedule............................................................................ 63 Corporate Directory ........................................................................... 65 Helix Resources Limited Annual Report 2008 1 Chairman’s Review Dear Shareholder I am pleased to present the 2008 Annual Report for the Company. Firstly, I wish to thank the Board and Staff of Helix for their efforts during the year and as a team look forward to continuing to create value for our shareholders through mineral exploration and development. I also welcome as a significant shareholder AMCI/First Reserve Corporation, who acquired a 15% interest via a placement at $0.485 to raise $8.245 million in December 2007, and have subsequently moved to 19.9% via on-market purchases. The Company’s strategy is to acquire large tenement holdings in prospective mineral provinces and utilise our corporate and geological expertise to create and extract value for the benefit of our shareholders. We currently have exposure to 112 million tonnes of iron ore grading 56% through our Yalleen JV in the Pilbara, as well as over 900,000 oz gold in our Tunkillia JV and Glenburgh Projects, with each Project having exploration upside. I outline below graphs which highlight our recent performance. Significant Events over the last 4 years 1. 18th July 06 – New Executive Management Team 2. 13th Dec 06 – CID (iron ore) intersected at Yalleen 3. 24th Oct 07 –Positive results continue at Yalleen Kumina and Robe Exit Prospects 4. 5th Dec 07 – Placement at 48.5 cents to AMCI/First Reserve to raise $8.245 million 5. 3rd June 08 – Maiden inferred resource for Yalleen JV – 112Mt grading 56% Fe. I draw your attention to the Operational Report which discusses our Mineral assets in detail and encourage you to visit our website at www.helix.net.au for the latest information regarding our activities. I look forward to your attendance at the forthcoming Annual General Meeting. Yours faithfully Greg J Wheeler Executive Chairman Helix Resources Limited Annual Report 2008 2 Review of Operations YALLEEN IRON ORE JOINT VENTURE – WESTERN AUSTRALIA Helix Resource Limited (30%), API (AMCI/Aquila) (70%) iron ore rights Helix Resources Limited 100% other minerals EL 47/1169-1171 Project Summary (cid:190) 600km² tenement area located in the Pilbara region of WA, 50km SE of Pannawonica; Initial Inferred Resource of 112 Mt @ 55.6% Fe for Kumina Creek and Robe Exit prospects based on drilling to December 2007 released to ASX on 3rd June 2008; Resource estimate provides confidence regarding the overall potential of several hundred million tonnes of iron ore once the other identified prospects have been drilled, assessed and included; Drilling since January 2008 continues to mineralisation. Better intercepts have included: intersect broad zones of CID • 27.55 metres at 58.67% Fe from 17.25 metres in YATX206; • 20.05 metres at 58.52% Fe from 18.35 metres in YATX207; and • 20.3 metres at 58.38% Fe from 35.2 metres in YABA055. $4.1M budget through to Q2 2009 for drilling and assessing extensions to Kumina Creek and Robe Exit Prospects, 200m x 400m drill coverage of the 8km² Bonham Prospect and commencement of metallurgical, engineering and environmental studies; Internal desktop studies by Helix based on available data for other Pilbara iron ore companies suggest the project economics for Yalleen are positive. (cid:190) (cid:190) (cid:190) (cid:190) (cid:190) Project Background The Yalleen Iron Ore JV Project covers approximately 600km² of the upper reaches of the Robe River drainage system. Pisolitic iron mineralisation in buried palaeodrainage systems developed from erosion of iron rich strata in the Hamersley Range to create a series of channel deposits within the drainage basins. These deposits are variably covered by younger unconsolidated alluvial sediments. The Brockman and Marra Mamba Formations, host to many of the major iron ore deposits in the Pilbara region of WA, form the main exposure in the project area. The Yalleen Joint Venture is managed by API Management Pty Ltd (API) for the Australian Premium Iron JV (Aquila/AMCI) and forms part of their larger West Pilbara Iron Ore Project (WPIOP) which in March 2008 estimated a total (measured, indicated and inferred) resource of 493Mt at 57% Fe from deposits in separate joint ventures with Red Hill Iron Ltd and Cullen Resources Limited and their own projects (AQA ASX release 7 March 2008). These projects are approximately 50-70 km southwest of the Yalleen Project area. API’s exploration on Yalleen throughout 2005 and 2006 concentrated on assessing the buried channel iron deposits (CID) potential within the ancient Fortescue Valley area, Helix Resources Limited Annual Report 2008 3 focusing on targets identified from a HoistEM geophysical survey that has been useful in identifying palaeochannels. A program of drilling completed at the first target - Kumina Creek - in December Quarter 2006 successfully identified a buried CID over 2,700m by 900m and up to 30 metres thick grading up to 60% Fe. Work in 2007 and 2008 has concentrated on definition and drilling of known channel iron targets at the Kumina Creek and Robe Exit prospects and bedded iron mineralisation at the Bonham prospect. Figure 1 – Yalleen Iron Ore JV location plan Helix Resources Limited Annual Report 2008 4 Resource Estimate Runge Pty Ltd was commissioned by Helix to carry out a resource estimation for the Yalleen Project in May 2008, covering all drilling up to December 2007. The Runge Mineral Resource Estimates for the Kumina Creek and the Robe Exit Iron Ore deposits are summarised in Table A. Table A: Yalleen Project May 2008 Inferred Mineral Resource at 50% Fe Cut off Deposit Kumina Creek Robe Exit Grand Total Tonnes MT 68.7 43.5 112.1 Fe % 56.16 54.65 55.57 SiO2 Al2O3 % 6.60 6.84 6.69 % 4.20 4.58 4.35 P % 0.058 0.065 0.060 S % 0.02 0.01 0.02 LOI % 8.23 9.97 8.91 Mn % 0.06 0.08 0.07 MgO % 0.14 0.16 0.15 The Mineral Resource estimate complies with recommendations in the Australian Code for Reporting of Mineral Resources and Ore Reserves (2004) by the Joint Ore Reserves Committee (JORC). Therefore it is suitable for public reporting. The estimate is based on data from surface Reverse Circulation (RC) and Diamond (DD) drill holes, all of which all were completed by API to December 2007. Drilling at the Kumina Creek deposit has been carried out at 100m hole spacings on 200m section spacings. Drilling at the Robe Exit deposit is more broadly spaced and is typically at 200m hole spacings on 400m line spacings. Mineralised envelopes were created using the logged channel geology and a 50% Fe cut-off grade. The deposits were estimated using a standard Surpac block model with inverse distance squared grade interpolation for all elements. Inspecting core trays at Yalleen The geological model and grade distribution evident at the Yalleen project conform to well understood CID deposits which are exploited in the region. Drill data is relatively sparse so geological and grade continuity is assumed rather than verified. Consequently the resources have been classified as an Inferred Mineral Resource for each deposit. A resource estimate with a higher grade cut off of 55% Fe was also calculated to assess the tonnes and grade on tighter parameters, the estimates are summarised in Table B: Helix Resources Limited Annual Report 2008 5 Table B: Yalleen Project May 2008 Inferred Mineral Resource at 55% Fe Cut off Deposit Kumina Creek Robe Exit Grand Total Tonnes MT 51.7 18.1 69.8 Fe % 56.97 56.22 56.78 SiO2 Al2O3 % 5.91 5.34 5.76 % 3.98 4.16 4.02 P % 0.059 0.065 0.061 S % 0.02 0.01 0.02 LOI % 8.08 9.81 8.53 Mn % 0.05 0.08 0.06 MgO % 0.13 0.14 0.13 No Al2O3 cut-off has been applied to this resource estimation. Full details on the resource estimate parameters can be viewed in the 3 June 2008 ASX release on the Company’s website: www.helix.net.au The information in this announcement that relates to Mineral Resources at the Yalleen Iron Ore Project is based on information compiled by Mr P Payne who is a member of the Australian Institute of Mining and Metallurgy and employee of Runge Limited. Mr Payne has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Payne consents to the inclusion in the report of the matters based on the information in the form and context in which it appears. Helix Assessment of Yalleen Project Fe Target Potential The Yalleen Project comprises multiple CID and BID targets identified from historical drilling, the HoistEM geophysical survey completed by API in 2006, as well as drilling results by the managers API since 2006. Based on the Runge Inferred Resource estimate of 112Mt at 55.6% Fe on the Kumina Creek and Robe Exit prospects, there is a good level of confidence for an exploration target* potential of several hundred million tonnes of iron ore for the Project once the other identified deposits have been similarly assessed and included. *Note 1: The Exploration Target discussed above should not be misinterpreted as an estimate of Mineral Resources or Ore Reserves. While the company remains optimistic that the joint venture will be in a position to report resources in the future, any discussion in relation to targets, resources, reserves or ‘ore’ is only conceptual in nature as there has been insufficient drilling to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. We are encouraged by the technical and financial viability results of API’s JV’s to the West as outlined in their Pre-Feasibility Study released to the ASX in May 2008. Whilst not specific to the Yalleen Project, their cost structure EBITDA estimates of +US$40/tonne at expected 2008 iron ore prices, their production development focus for 2012 1st shipment and the expected benefits which would emerge from access to API Stage 1 infrastructure given API’s 70% interest in Yalleen and Aquila and AMCI’s shareholding interests in Helix are positive. Yalleen field visit June 2008 Helix Resources Limited Annual Report 2008 6 Also, with the Rio Pannawonica rail line situated less than 12kms from the Kumina Creek deposit and the 3rd party infrastructure access debate escalating, alternates for transport may emerge which may lessen capital expenditure and potentially shorten any future development timelines. Internal desktop studies by Helix based on available data for Pilbara iron ore companies suggest the project economics for Yalleen are positive, although significant work is required to be completed by the JV Manager and appropriately qualified experts prior to the release of economic studies confirming this preliminary assessment. HELIX’S IRON ORE EXPOSURE In the context of the West Pilbara Iron Ore Project (WPIOP) Aquila Resources Limited Aquila Resources Limited (Direct or via controlled entity) (Direct or via controlled entity) API Management Pty Ltd API Management Pty Ltd (Australia Premium Iron JV) (Australia Premium Iron JV) AMCI Australia Pty Ltd AMCI Australia Pty Ltd (Direct or via controlled entity) (Direct or via controlled entity) 50% 50% WPIOP WPIOP Stage 1 Stage 2 AQA Shareholding* AQA Shareholding* AMCI: 8.5% AMCI: 8.5% CUL Shareholding* CUL Shareholding* AQA: 16% AQA: 16% AMCI: 17% AMCI: 17% 70% Mt Stuart JV Mt Stuart JV Cullen Resources NL Cullen Resources NL contributing at 30% contributing at 30% 60% (earning 80%) Red Hill JV Red Hill JV Red Hill Iron Ltd Red Hill Iron Ltd Diluting to 20% Diluting to 20% 70% Yalleen Iron Ore JV Yalleen Iron Ore JV Helix Resources Ltd Helix Resources Ltd Contributing at 30% Contributing at 30% 100% Mt Elvire Mt Elvire DBAE Royalty DBAE Royalty Cullen CID +79Mt Resource Red Hill CID +350Mt Resource RHI Shareholding* RHI Shareholding* AQA: 19% AQA: 19% AMCI: 19.85% AMCI: 19.85% Stage 1 WPIOP Stage 1 WPIOP PFS Completed May 2008 PFS Completed May 2008 US$3.9 Billion Capex US$3.9 Billion Capex US$20/t Opex US$20/t Opex *Shareholdings at 30 June 2008 Kumina Creek (CID) Inferred 69Mt @ 56% Fe Robe Exit (CID) Inferred 43Mt @ 55% Fe Bonham (BID) 8km² target Several untested CID & BID Targets HLX Shareholding* HLX Shareholding* AQA: 6% AQA: 6% AMCI: 19.6% AMCI: 19.6% Helix Resources Limited Annual Report 2008 7 GLENBURGH GOLD PROJECT – WESTERN AUSTRALIA Helix Resources Limited 100% EL 09/1325, 09/1079, 09/1281-1289, P09/424-427 Project Summary (cid:190) (cid:190) (cid:190) (cid:190) 1500km² tenement area located in the Southern Gascoyne region of WA, 250km east of Carnarvon; Inferred Resource of 1.1Mt @ 3.1g/t for 108,000oz Au – (May 2005); Results from 2007/2008 drilling programs have been reviewed by Helix geologists and are to be assessed by independent resource consultants for the updating of the project resource estimate; Internal scoping study commenced to determine potential mining and development scenarios. Project Background The Glenburgh Gold Project is situated in the Southern Gascoyne Province of WA ~250km east of Carnarvon. The project consists of a gold mineralised shear system hosted in remnants of Archaean terrane in a Proterozoic mobile belt. Glenburgh was a grass roots discovery by Helix from regional stream sampling in the 1990’s. Exploration Update Reverse Circulation (RC) drilling was completed at the Glenburgh Gold Project in late May 2008. A total of 59 holes for 5,324 metres of drilling were completed on the Icon, Mustang, Hurricane, NE3, NE4, NE5, NE6, Zone 102, Zone 126 and Zone 120 Prospects. This drilling provided first-pass, infill and extensional drilling on several known prospects and areas of significant soil geochemistry generated in the past 12 months on the Victoria Bore Grid. RC Drilling at Glenburgh 2008 The drilling program has successfully identified additional zones of mineralisation at several prospects which are yet to be incorporated into the resource model. Drilling at the eastern end of the Icon Prospect was particularly encouraging with wide zones of mineralisation remaining open along strike to the east. The 2007/2008 drilling data has been augmented into the project database and is currently with resource consultants for an independent review to establish a new resource estimation for the project. An internal scoping study examining potential development and mining scenarios for the Glenburgh Project will follow this process. The critical project milestone is to increase the current inferred resource estimation of 1.1Mt @ 3.1g/t for 108,000oz Au to a resource level that can support a stand alone operation. Helix Resources Limited Annual Report 2008 8 Table C: Significant Glenburgh RC drilling intercepts 2008 drilling Hole ID Prospect VRC341 VRC342 VRC342 VRC342 VRC342 VRC343 VRC346 VRC347 VRC347 VRC347 VRC348 VRC349 VRC349 Icon Icon Icon Icon Icon Icon Icon East 10750 10750 North 10070 10095 10750 10850 10850 10130 10105 10135 10850 10950 10165 10075 VRC350 Icon 10950 10100 VRC350 VRC350 VRC351 VRC352 VRC352 Icon Icon 10950 10950 10140 10180 VRC357 Mustang VRC374 Hurricane VRC378 Hurricane VRC379 Hurricane VRC381 Hurricane VRC389 Zone 102 VRC389 VRC390 Zone 102 VRC391 Zone 102 VRC391 VRC393 Zone 126 VRC394 NE 4 14545 15050 15150 15150 15235 15850 9990 10180 10190 10220 10200 9990 15850 15850 10030 10070 16350 17050 10000 9890 From (m) Intercept (Au) 1 0 27 50 92 33 4 48 60 5m @ 1.0g/t 2m @ 2.2g/t 14m @ 2.0g/t 3m @ 1.8g/t 6m @ 1.2g/t 4m @ 1.1g/t 4m @ 1.0g/t 3m @ 1.4g/t 25m @ 2.1g/t 117 3m @ 2.2g/t (EOH) 98 33 46 47 81 98 18m @ 2.2g/t 6m @ 1.1g/t 3m @ 3.8g/t 3m @ 1.4g/t 6m @ 1.1g/t 3m @ 2.5g/t 113 25m @ 3.1g/t 71 88 46 41 2 41 3m @ 5.2g/t 14m @ 1.1g/t 8m @ 2.3g/t 2m @ 2.7g/t 5m @ 1.0g/t 13m @ 2.0g/t 108 2m @ 3g/t 9 24 64 84 115 18 2 4m @ 2.7g/t 2m @ 3.2g/t 12m @ 3g/t 2m @ 2.2g/t 4m @ 20g/t 2m @ 3g/t 1m @ 5g/t All holes drill to local grid south at 60 inclination. Significant Intercepts >4 gram x metres for 2008 Glenburgh RC Drilling received to date. (NB all intercepts have been calculated using a 0.5g/t lower cut, minimum 1m interval and max 2m internal dilution) Helix Resources Limited Annual Report 2008 9 Figure 2: Location plan of recent RC drill collars on Victoria Bore Grid and Icon Section 10950E Helix Resources Limited Annual Report 2008 10 LAKE EVERARD (INCL. TUNKILLIA) PROJECT – SOUTH AUSTRALIA Helix Resources Limited 100%, Minotaur Exploration Limited earning 51% Toro Energy Limited earning 51% of Uranium Rights EL 3403, ELA2006/389 and EL 3335 GOLD Project Summary (cid:190) (cid:190) (cid:190) Resource inventory of 800,000oz Au and 1,600,000oz Ag; Minotaur has spent $4.3M and are required to spend $5M to earn 51% by 31 March 2009; Exploration targets remain untested. Project Background Helix discovered the project in the mid 1990’s while exploring for gold under cover in the Gawler Craton of South Australia. The Tunkillia discovery, which was announced in late 1996, was one of the first gold discoveries in the Gawler Craton and the 20 square kilometre Tunkillia Prospect remains the largest robust gold-in-calcrete anomaly in the region. Subsequent exploration (1998- 2002) was carried out in joint venture, initially with Acacia Resources Limited and later with AngloGold Limited following its takeover of Acacia. In June 2003, Helix finalised the acquisition of AngloGold’s 49% interest in the Lake Everard Project, returning 100% ownership of the Project to Helix for the first time since 1998. During Helix 2003/2004 completed a drill out of the Area 223 prospect, estimating a JORC resource of 720,000 ounces of gold. the Tunkillia By mid 2004, it became clear that Project required a major injection of funds to give the project the critical mass required to enter into a feasibility study. The Helix Board decided at this time to seek a JV partner and in March 2005 Minotaur Exploration Ltd agreed to expend $5M to earn a Figure 3: Lake Everard JV location Plan 51% interest. Helix Resources Limited Annual Report 2008 11 Since 2005 Minotaur have spent approximately $4.3M carrying out additional drilling at Area 223 and several brownfields exploration campaigns using geophysics, geochemistry and drilling to test targets. In June 2007, Minotaur released a revised combined measured, indicated and inferred estimate inventory of 800,000oz Au and 1,600,000oz Ag within the Area 223 deposit. Geology The Gawler Craton is broadly divided into three main geological units, Archaean crystalline basement, highly deformed Palaeoproterozoic metasediments and granites, and less deformed Mesoproterozoic volcanics, clastic sediments and granite. Almost all gold and copper mineralisation found in the Gawler Craton is directly associated with Mesoproterozoic magmatism. The host rocks to the Tunkillia prospect are medium- to coarse-grained granitoids of the Tunkillia Suite, that have been intensely sheared and brecciated within the Yarlbrinda Shear Zone. Tunkillia RC Sampling In a regional context, the Tunkillia area shows evidence of extensive alteration. Large zones of demagnetisation (alteration of primary magnetite to ilmenite) are observed in aeromagnetic images, from which Helix defined a western and eastern demagnetised zone within the northern Yarlbrinda Shear Zone. Area 223 is located within the western demagnetised zone along which large volumes of fluid were focused, particularly along the margins of the shear zone producing the gold deposit and alteration. At the prospect scale, gold mineralisation at Tunkillia is associated with zones of intense sericite alteration, and quartz and sulphide veining. Resources Oxide: 5.7Mt @ 1.3g/t for 230,000 oz Gold (0.5g/t cutoff) Measured: 1.2Mt @ 1.8 g/t Au – 66,000oz Indicated: 2.0Mt @ 1.3g/t Au – 86,000oz Inferred: 2.5Mt @ 1.0g/t Au – 77,000oz Primary: 8.6Mt @ 2.1g/t for 570,000 oz Gold (1.0g/t cutoff) Indicated: 4.2Mt @ 2.0 g/t Au – 270,000oz Inferred: 4.4Mt @ 2.1 g/t Au – 300,000oz 8.6Mt @ 5.7g/t for 1,600,000 oz Silver (estimated for blocks with >1g/t Au) Indicated: 4.2Mt @ 5.7g/t Ag – 770,000oz Inferred: 4.4Mt @ 5.7g/t Ag – 810,000oz Helix Resources Limited Annual Report 2008 12 The current resource consists of a mineralisation inventory of 800,000oz gold and 1,600,000oz silver to a depth of 200m below surface. Full details of the methodology were released by Minotaur in June 2007. The resource estimation was made after additional drilling by Minotaur during 2006/2007 highlighted an extended area of gold mineralisation within the oxide zone and increased the level of confidence in the coherence of the oxide zone capping to the Tunkillia mineralisation. Higher grade intersections are generally spatially associated with a highly weathered mafic dyke which strikes approximately grid N-S through Area 223. Helix Resources Limited Annual Report 2008 13 TORO URANIUM JV Project Summary (cid:190) (cid:190) JV Partner Toro Energy is earning 51% of the uranium rights of our Gawler Craton tenements by spending $2M prior to 24 March 2009, with $231,000 spent to date. Toro Energy have advised they remain in negotiations regarding environmental approvals and heritage clearances prior to drill testing the extensive palaeochannel targets Project Background Toro has defined a significant portion of the Kingoonya Palaeochannel System on the Yellabinna JV (EL3335) area utilising airborne EM and plans to explore several “previously unexplored radiometric anomalies” located within a 50 kilometre long target zone along the palaeochannel course. Historical drilling in the area by Dampier Mining Company for coal confirmed the presence of Tertiary palaeochannel sequences. These sequences contain sands, which may provide porous and transmissive zones for possible uranium bearing solutions, and carbonaceous mudstone lithologies which could provide an important chemical trap component to the roll front model being pursued. The airborne EM survey conducted by Toro in 2006 resulted in the identification of five priority palaeochannel on uranium EL3335. targets Toro Energy Ltd is yet to carry out ground based activities as a result of slow negotiations with South Australian the Department of Environment over access permits. This process has delayed exploration activities for over 18 months. The target area is the eastern edge of South Yellabinna Australia’s Regional Reserve. located on Figure 4: Toro Uranium JV target positions on airborne EM image Helix Resources Limited Annual Report 2008 14 PARACHILNA PROJECT - SOUTH AUSTRALIA Helix Resources Limited 100% EL3814 Project Summary (cid:190) (cid:190) (cid:190) Generative exploration model in historic high-grade copper mining province; $100,000 PACE Funding to test exploration model; 7,500 line kilometre detailed aeromagnetics survey completed; IP survey underway. Historic Project Background The Parachilna Project was identified by Helix for the series of large diapiric domes present in Adelaidean Stratigraphy in the and area. occurrences are hosted in these structures including the Blinman Copper Mine, where approximately 200,000 tonnes of copper ore grading +5% Cu was mined to a depth of 165m from surface in the late 1800’s and early 1900’s. copper mines Looking south from historic Blinman mine Exploration Update Field work during the year has concentrated on four prospect areas (Blinman North, China Wall, Breakneck Gorge and Mafic Alley). Mapping and sampling was carried out during the 2007-2008 field season. This was followed by a 7,500 line kilometre detailed aeromagnetic survey covering the central portion of the tenement including coverage over the Blinman and Nuccaleena domal structures. An IP survey is presently being carried out on several target zones under shallow cover. This ongoing work is being assessed to define a series of lithological and structural targets for drill testing later in 2008. The detailed mapping has identified a mineralised dolomitic package similar to the Blinman Mine-type dolomite at several of the prospects as well as numerous other altered sediments with iron enrichment, alteration and copper sulphides visible in rock samples. The mapping suggests the units in the Blinman dome are more continuous and better preserved than the broad regional mapping implies with only localised brecciation (10-50m scale) rather than kilometre scale brecciation. The dome is affected by variable colluvium and carbonate-rich deflated soils cover which may account for the historical “large diapir” interpretation. Helix’s exploration model considers the domes in this region to be dynamic fluid conduits. The possibility of intrusives in or below the domes controlling metal rich alteration fluids in the reactive host sediments is evidenced by the presence of hydrothermal alteration, contact skarn style mineralogy, remobilised high-grade hematite and exotic metal suites (incl. elevated As, Mo, Bi, Sb, Hg, V and Co). Helix Resources Limited Annual Report 2008 15 This project has been selected to receive a grant of $100,000 toward drilling under the 2008 South Australian Government sponsored PACE initiative. Figure 5: Prospect location plan in the Blinman Dome – Parachilna Project Helix Resources Limited Annual Report 2008 16 BOOYEEMA NICKEL JOINT VENTURE – WESTERN AUSTRALIA E47/1090 and ELA47/1089 (Anglo American earning 80%) The Company recently announced a Joint Venture Agreement with Anglo American Exploration (Australia) Pty Ltd [“Anglo American”] covering tenements E47/1090 and ELA47/1089, located approximately 50 km south west of Karratha in the West Pilbara region. The terms of the JV are as follows:- (cid:190) to complete a Low Anglo American Temperature (LT) SQUID EM geophysics survey within 9 months; On completion of LT SQUID EM survey, Anglo American has an option to earn an 80% interest in each of the tenements by incurring expenditure of $5 million (inclusive of cost of the LT SQUID EM survey) within 5 years; The option would lapse if Anglo American does not expend $2 million within the first 3 years. Sampling in the West Pilbara (cid:190) (cid:190) Project Background The Booyeema Project is considered prospective for sulphide nickel accumulations in mafic/ultramafic intrusives under Fortescue Formation cover. A detailed aeromagnetic survey was completed over the granted tenement in the target area by Helix, as part of the Company’s broader base metal exploration strategy for its West Pilbara projects in early 2008. The survey has confirmed and defined several discrete magnetic bodies associated with a regional NE structural corridor. Anglo American will target these anomalies using its LT SQUID EM technology to identify buried metal accumulations for drill testing. This JV reflects Helix’s ongoing strategy of identifying and securing large tenement holdings in frontier exploration regions. Attracting resource major JV partners such as Anglo American provides Helix shareholders with access to cutting-edge technologies and expertise whilst mitigating discovery risks. Typical access tracks – West Pilbara Helix Resources Limited Annual Report 2008 17 Figure 6: Booyeema Nickel JV location map Helix Resources Limited Annual Report 2008 18 WEST PILBARA PROJECT – WESTERN AUSTRALIA Helix Resources Limited 100% E47/1075, 1169-1171(All minerals other than Fe - subject to Yalleen JV), 1144-1145 ELA’s 47/1146 &1175-76, MLA47/786-794 Background Helix holds approximately 800 km² of greenfields tenements targeting precious and base metals in a corridor spanning from the Proterozoic Fortescue formation into the Hamersley basin to the South. The projects are prospective for VMS/VHMS style copper-lead-zinc in the mixed volcanic/volcano- sedimentary lithologies of the Fortescue Group and manganese ± base metals in the basal sequences of the Hamersley Group. Rock chip sampling West Pilbara Exploration Update A detailed aeromagnetic survey completed in Q12008 has assisted in defining target areas for the follow up surface geochemistry. (cid:190) (cid:190) (cid:190) Area 1 – covering E47/1144 & E47/1145 –VMS/VHMS prospective lithologies over 20km of strike with coincident base metal geochemical anomalism and along strike from Fox Resources’ VTEM anomalies on their neighbouring tenements. Area 2 – E47/1075 has a continuation of the Area 1 style targets as well as an untested +4km long greater than three times background nickel in a surface geochemistry anomaly. Area 3 – E47/1169-1170 Covers a series of sulphur-rich sediments and possibly manganese-rich sequences in the top of the Fortescue Formation and the base of the Hamersley Range sequence. Field crews will continue to systematically sample the target areas in a series of field campaigns through to the end of 2008. Fly Camp in the West Pilbara Helix Resources Limited Annual Report 2008 19 Figure 7: West Pilbara Base Metal Project targets on aeromagnetic images Helix Resources Limited Annual Report 2008 20 PROJECT LOCATION MAP The information in this announcement that relates to exploration results in respect of the Yalleen JV is based on information compiled by Mr Stuart H Tuckey who is a member of the Australian Institute of Mining and Metallurgy. Mr Tuckey is full-time employee of Australian Premium Iron Mr Tuckey has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Tuckey consents to the inclusion in the report of the matters based on their information in the form and context in which it appears. The information in this announcement that relates to Exploration Results, Mineral Resources or Ore Reserves on other Helix projects is based on information compiled by Mr M Wilson who is a full time employee of Helix Resources Limited and a Member of The Australasian Institute of Mining and Metallurgy. Mr M Wilson has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr M Wilson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Helix Resources Limited Annual Report 2008 21  CORPORATE GOVERNANCE The directors of Helix Resources Limited believe that effective corporate governance improves company performance, enhances corporate social responsibility and benefits all stakeholders. Governance practices are not a static set of principles and the company assesses its governance practices on an ongoing basis. Changes and improvements are made in a substance over form manner, which appropriately reflect the changing circumstances of the company as it grows and evolves. Accordingly, the Board has established a number of practices and policies to ensure that these intentions are met and that all shareholders are fully informed about the affairs of the Company. The Company has a corporate governance section on the website at www.helix.net.au. The section includes details on the company’s governance arrangements and copies of relevant policies and charters. ASX Corporate Governance Council Best Practice Principles and Recommendations (2nd Edition) For ease of comparison to the recommendations, the Corporate Governance statement addresses each of the 8 principles in turn. Where the company has not followed a recommendation this is identified with the reasons for not following the recommendation. This disclosure is in accordance with ASX listing rule 4.10.3. The following table outlines which of the ASX recommendations the Company has not complied with. Reasons for non-compliance are explained in this report. ASX Recommendation Description 2.1 2.2 2.3 2.4 4.1 4.2 8.1 A majority of the board should be independent directors The chair should be an independent director The roles of chair and chief executive officer should not be exercised by the same individual The board should establish a separate nomination committee The board should establish a separate audit committee The audit committee should be structured so that it: • consists only of non-executive directors • consists of a majority of independent directors • is chaired by an independent director, who is not chair of the board • has at least 3 members The board should establish a separate remuneration committee PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT BY THE BOARD The board operates in accordance with broad principles set out in its charter which is available from the corporate governance section of the company’s website. The directors formally adopted the board charter in August 2006. Broadly the key responsibilities of the board are: 1. Setting the strategic direction of the company with management and monitoring management implementation of that strategy; 2. Evaluating, approving and monitoring major capital expenditure, capital management and all major corporate transactions; 3. Approving the annual operating budget, annual shareholders report and annual financial accounts; 4. Appointing, monitoring, managing the performance of, and if necessary terminating the employment of the Chief Executive Officer; 5. Approving and monitoring the company’s risk management framework; 6. Ensuring compliance with the Corporations Act 2001, ASX listing rules and other relevant regulations. All directors and key executives reporting to the CEO of the company have been given formal letters of appointment outlining key terms and conditions of their appointment. Performance evaluations for senior executives are carried out annually by either the Chief Executive Officer or the Technical Director. Performance during the previous 12 months is assessed against relevant performance indicators, and role expectations and goals are set for the following year. Performance evaluations have been completed for all executives during the reporting period in accordance with approved processes. Helix Resources Limited Annual Report 2008 22 PRINCIPLE 2 – STRUCTURE THE BOARD TO ADD VALUE Board Members Details of board members, their experience, expertise, qualifications, term in office and independence status are set-out in the Directors’ Report. The structure of the board does not comply with ASX recommendation 2.1 in that a majority of the directors are not independent. Currently the board consists of four directors of which Mr Gordon Dunbar and Mr John den Dryver are considered independent within the ASX’s definition. The board charter is available from the company’s website. The Company does not comply with ASX recommendations 2.2 and 2.3 in that the Chairman is not an independent director, and the roles of Chairman and Chief Executive Officer are performed by the same person. The board believes the current structure is appropriate at this stage of the company’s activities. The board has formalised various policies on securities trading, disclosure and codes of conduct, which assist in providing a stronger governance framework for the Company. These of course are in addition to the Company’s requirements under the Corporations Act 2001 and ASX Listing Rules. Board structure and composition will be reviewed as and when the company’s strategic directions and activities change. The Company will only recommend the appointment of additional Directors to your board where it believes the expertise and value added outweighs the additional cost. During the year no new directors were appointed to the Helix board. A copy of the Director Nomination and Induction Policy is available from the corporate governance section of the company’s website. Nomination Committee The company does not comply with ASX recommendation 2.4 in that there is no separate nomination committee. Given the board comprises four directors it has been decided that there are no efficiencies to be gained from forming a separate nomination committee. The current board members carry out the roles that would otherwise be undertaken by a nomination committee and each director excludes himself from matters in which he has a personal interest. Each Director completes an annual formal evaluation of the Board’s performance including the Chief Executive Officer and Technical Director. The Chairman conducts an informal evaluation of the board members at least once per annum. Further information on the performance assessment process for the board and senior executives can be found in the Directors’ Report. Details of director’s attendance at board, audit committee and remuneration committee meetings are detailed in the Directors’ Report. A copy of the Nomination Committee Charter is available from the corporate governance section of the company’s website. Independent Advice A director of the Company is entitled to seek independent professional advice (including but not limited to legal, accounting and financial advice) at the Company’s expense on any matter connected with the discharge of his or her responsibilities, in accordance with the procedures and subject to the conditions set out in the board’s charter PRINCIPLE 3 – PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING Code of Conduct The board adopted a code of business conduct in August 2006. The code has formalised policies and practices that were in place prior to formal adoption of the code by the company. A copy of the code is made available to all employees of the company. This code expresses certain basic principles that the Company and employees should follow in all dealings related to the Company. They should show the highest business integrity in their dealings with others, including preserving the confidentiality of other peoples’ information and should conduct the Company’s business in accordance with law and principles of good business practice. A copy of the code of conduct is available from the corporate governance section of the company’s website. Securities Trading Policy A formal Securities Trading Policy has been in place since August 2006. Prior to this date there was an understanding among executives of when it was appropriate to trade in the Company’s securities. The policy which has now been adopted has been strengthened, as certain key executives (“Restricted Persons”) are prevented from trading in the company’s shares 2 weeks prior to the announcement of quarterly, half-year and the full-year reports. This is a restriction over and above the requirement to not trade in the Company’s securities when in possession of inside information. A copy of the Securities Trading Policy is available from the corporate governance section of the company’s website. Helix Resources Limited Annual Report 2008 23 PRINCIPLE 4 – SAFEGUARD INTEGRITY IN FINANCIAL REPORTING The Chief Executive Officer and Chief Financial Officer have made the following certifications to the board; • That the company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the company and group and are in accordance with relevant accounting standards; • That the reports were founded on a sound system of financial risk management and internal compliance and control. Audit Committee The company does not comply with ASX recommendations 4.1 and 4.2 in that there is no separate audit committee, and it is not comprised only of non-executive Directors. Given the board comprises four directors it has been decided that there are no efficiencies to be gained from forming a separate audit committee. The current board members carry out the roles that would otherwise be undertaken by an audit committee. The board adopted a formal audit charter in August 2006. Prior to this date the audit committee carried out many of the roles and responsibilities outlined in the charter. The charter sets out the roles and responsibilities of the audit committee and contains information on the procedures for the selection and rotation of the external auditor. A full copy of the Audit Committee Charter is available from the corporate governance section of the Company’s website. The board believes the audit committee structure is appropriate given the company’s size. The composition of the audit committee will be assessed on an ongoing basis in light of the company’s overall board structure and strategic direction. PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE Continuous Disclosure The board adopted a formal disclosure policy outlining procedures for compliance with ASX continuous disclosure requirements in August 2006. Informal procedures were in place prior to this time and these have been formulated and strengthened into the written policy. The policy is based upon the Company’s desire to promote fair markets, honest management and full and fair disclosure. The disclosure requirements must be complied with in accordance with their spirit, intention and purpose. The purpose of the policy is to: • summarise the Company’s disclosure obligations; • explain what type of information needs to be disclosed; • identify who is responsible for disclosure; and • explain how individuals at the Company can contribute. The Company Secretary is responsible for ensuring disclosure of information to the ASX. A copy of the Disclosure Policy is available from the corporate governance section of the company’s website. PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS Shareholder Communication Strategy The board adopted a formal shareholder communication guidelines policy in August 2006. The policy formalises many of the practices that were in place already but has also resulted in some additional information being made available on the website. All information disclosed to the ASX is posted on the company’s website as soon as it is disclosed to the ASX. When analysts are briefed on aspects of the group’s operations, the material used in the presentation is released to the ASX and posted on the company’s website. Procedures are in place to determine where price sensitive information has been inadvertently disclosed, and if so, this information is released to the ASX. The company’s website underwent a significant overhaul in 2006 and again in 2008 to make it more user friendly and informative for shareholders and other visitors to the site. The website continues to be updated and refined as appropriate. The external auditor attends the annual general meeting and is available to respond to questions about the conduct of the audit and content of the independent audit report. A full copy of the shareholder communication policy is available from the corporate governance section of the company’s website. Helix Resources Limited Annual Report 2008 24 PRINCIPLE 7 – RECOGNISE AND MANAGE RISK Risk assessment and management The company does not have a separate Risk Management committee. Given the current size of the company and board, the directors believe there are no efficiencies in forming a separate committee and the board as a whole performs this role. The company does not have a single specific risk management policy, but rather, financial and operating risks are addressed through individual approved policies and procedures covering financial, contract management, safety and environmental activities of the company. In addition to financial audits, the company’s operations in Australia are subjected to annual Risk Management reviews in accordance with Risk Management Standard AS/NZS 4360: Risk Management. The company engages an insurance brokering firm as part of the company’s annual assessment of the coverage for insured assets and risks. The results of all the various reviews and insurances are reported to the board at least annually. The integrity of Helix’s financial reporting relies upon a sound system of risk management and control. Accordingly, the Chief Executive Officer and Chief Financial Officer, to ensure management accountability, are required to provide a statement in writing to the board that the financial reports of Helix are based upon a sound risk management policy. The board believes that it has a thorough understanding of the Company’s key risks and is managing them appropriately. A copy of the company’s risk management committee charter is available from the corporate governance section of the company’s website. PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY Remuneration committee The Company does not comply with ASX recommendation 8.1 in that it has not established a separate remuneration committee. Given the current size of the company and board, the directors believe there are no efficiencies in forming a separate committee and the board as a whole performs this role. The board of directors reviews and approves recommendations in terms of compensation and incentive plan arrangements for directors and senior executives, having regard to market conditions and the performance of individuals and the consolidated entity. Remuneration Policies The Company’s remuneration policies are detailed in the Remuneration report in the Directors’ Report. Non-Executive Director Remuneration Non-executive directors are remunerated by way of director’s fees. Apart from compulsory superannuation entitlements, non-executive directors are not eligible to receive retirement benefits. A copy of the Remuneration Policy is available from the corporate governance section of the company’s website. RC Drilling at Glenburgh 2008 Helix Resources Limited Annual Report 2008 25 DIRECTORS’ REPORT In respect of the financial year ended 30 June 2008, the Directors of Helix Resources Limited, (the parent entity), submit the financial report. In order to comply with the provisions of the Corporations Act 2001, the Director’s report as follows: DIRECTORS The following persons held office as Directors of Helix Resources Limited during or since the end of the financial year and up to the date of this report: Greg J Wheeler BCom; FCA; SF Fin; GAICD Executive Chairman; Managing Director and Chief Financial Officer – 14th July 2006 to present Non-Executive Director – 25 October 2004 to 14th July 2006 Mr Wheeler is a Fellow of the Institute of Chartered Accountants in Australia and the Financial Services Institute of Australasia, and has operated in many of the major accounting practices for the past 25 years in Australia and overseas. Greg was a Partner at the Chartered Accounting practices of Grant Thornton [1990 to 1999] and Deloitte Touche Tohmatsu [1999 to 2002], before establishing his own consulting firm in 2002. His skills include:- company and business valuations, advice to directors/shareholders; shareholder wealth strategies, capital raisings and broker presentations, acquisitions and divestitures, corporate governance; commercial negotiations and risk assessment and mitigation. Michael Wilson B Ec; B Sc (Hons); MAusIMM Executive Technical Director - 1st June 2007 to present Mr Wilson has been with the company for twelve years and has played major roles at Tunkillia on the Gawler Craton, South Australia and in the exploration for gold, platinum group metals and base metals in the Proterozoic Terranes of New South Wales and South Australia, and the Proterozoic and Archaean Terranes in Western Australia. Michael’s experience includes project management; mineral exploration using geology, geochemistry, geophysics and drilling; ore resource drilling, ore resource estimation and evaluation programs; and monitoring joint venture projects. Michael leads our team of experienced geologists and technical staff and is also completing his Masters of Business Administration and Masters of Mineral Economics part-time at Curtin University. John den Dryver BE (Mining) MSc FAusIMM (CP) Non-Executive Director - Appointed 25 October 2004 Mr den Dryver is a mining engineer with some 30 years mining experience in operational and corporate management. John joined Mount Isa Mines in 1973. In 1982, John joined North Flinders Mines as the Company Mining Engineer. He became the Operations Manager for North Flinders after the mine was commissioned in 1986 and over the next 10 years managed the operations as well as developing the further discoveries in this region including the Callie Mine. In 1987 he was invited to join the Board of North Flinders to become Executive Director- Operations. In 1997 after Normandy Mining took over North Flinders, John was appointed Executive General Manager-Technical leading a team of specialist geologists, mining engineers and metallurgists in operational support, technical review and due-diligence activities. In 2003, after the takeover of Normandy by Newmont Corporation John set up his own mining consultancy business. Gordon Dunbar BSc (Hons), MSc, FAusIMM (CP), FAIG Non-Executive Director - Appointed 18 July 2006 Mr Dunbar is a consulting geologist with forty years experience in the Australian minerals industry managing project development, mineral exploration and evaluation programmes, mine geology, financial studies, production assessment and monitoring joint venture projects. Gordon’s experience includes exploration and mining geology roles at Kambalda with WMC, the evaluation of the Golden Grove base metal deposit in WA, the Chief Geologist at Rosebery Mine in Tasmania and management roles with BP Australia undertaking financial studies, monitoring the evaluation of the Olympic Dam deposit and as Exploration manager for BP Minerals. Gordon formed his own consulting group in 1990 to provide advice on exploration, evaluation, mining geology, project assessment and pre- feasibility studies, particularly those involving gold, base metals and nickel. He has worked on projects within Australia and Internationally. Helix Resources Limited Annual Report 2008 26 DIRECTORSHIPS OF OTHER LISTED COMPANIES Directorships of other listed companies held by directors in the 3 years immediately before the end of the financial year are as follows: Name John den Dryver Greg J Wheeler Company Nustar Mining Corporation Limited Adelaide Resources Limited Platina Resources Ltd Period of directorship 23 December 2003 – 31 May 2007 18 April 2005 – current 28 March 2006 – 31 January 2007 JOINT COMPANY SECRETARIES Greg J Wheeler Joneen McNamara Mr Wheeler is a Chartered Accountant with over 25 years experience in accounting, company secretarial and corporate management. Mrs McNamara is an Accountant and has completed Chartered Secretaries Australia’s Graduate Diploma in Applied Corporate Governance. She is a member of the Institute of Chartered Secretaries and Administrators. PRINCIPAL ACTIVITIES The principal activity of the Group constituted by Helix Resources Limited and the entities it controlled during the year consisted of gold, iron ore and base metal mineral exploration. There has been no significant change in the nature of these activities during the year. FINANCIAL RESULTS The net consolidated loss of the Group for the financial period, after provision for income tax was $628,512 (2007: $187,904). DIVIDENDS No dividend has been paid since the end of the previous financial year and no dividend is recommended for the current period. REVIEW OF OPERATIONS The Consolidated entities activities are contained in releases to the ASX on a quarterly basis. Highlights include:- Iron Ore • JV partner API (Aquila/AMCI) completed their $1.5m expenditure commitment at the Yalleen Iron Ore Joint Venture in November 2007 to earn a 70% interest in iron ore rights. Helix contributing at 30% to expenditure programs. Channel iron (CID) and bedded iron (BID) targets identified from the 2006 Hoist EM survey and field mapping confirmed by subsequent drilling which intersected channel iron (CID), at depth and close to surface. Yalleen Iron Joint Venture partners complete 10,000m drilling in a $3.2m exploration program for the 2007-2008 field season. Runge Ltd commissioned by Helix as Expert who determined an Inferred Resource of 112 Mt @ 55.6% Fe for Kumina Creek and Robe Exit which was released to the ASX 3rd June 2008. This initial resource estimate provides confidence regarding the overall potential of the Yalleen Project once the other identified deposits have been drilled, assessed and included. The Bonham target preliminary assessment from API is 8km2 of goethitic type ore grading up to 52% Fe. Helix has assessed this represents a significant Exploration target and drilling is scheduled for 2008/2009. • • • • Gold • Glenburgh Project - Two drilling programs occurred during the year on targets defined from gold in soil anomalies at Firebird (up to 2.5g/t Au), Barracuda East (up to 3.1g/t Au), Barracuda South (up to 0.6g/t Au), Challenger (up to 0.8g/t Au) and North East 3 (up to 0.6 g/t Au). The Company expects the drilling will upgrade the existing Resource of 108,000 oz and has commissioned an external consultant to calculate a new Resource. • Tunkillia Project - JV partner and manager Minotaur Exploration calculated a new resource for Area 223 – comprising a total of 800,000oz Au and 1,600,000oz Ag to a depth of 200m from surface. Minotaur have expended ±$4.3 million and are required to expend $5 million prior to 31 March 2009. Minotaur have indicated economic studies are underway. Uranium • Uranium JV partner - Toro Energy have advised they still await environmental approvals before testing five (5) priority palaeo-channel uranium targets on Helix’s Lake Everard tenements identified in 2007. Toro are required to expend $2 million prior to 24 March 2009 to earn a 51% interest in the uranium rights and to date have expended $230,634. Base Metals • A JV with AngloAmerican was concluded with respect to prospective nickel targets on two of our West Pilbara tenements. The terms are AngloAmerican can earn an 80% interest by funding $5 million of expenditure within 5 years. Generative • Field examination of the South Australian Adelaidian Projects has identified a series of base metal targets including copper mineralisation on the Parachilna Project, gold/tungsten anomalism at the Fleurieu Project and gold, base metal and uranium targets on our Olary tenements. PACE funding approval for $100,000 towards drilling costs for the Blinman prospect has been received and a drilling program is scheduled for 2H08. • Helix Resources Limited Annual Report 2008 27 Corporate • The Company placed 17 million shares at $0.485 in December 2007 to AMCI / First Reserve to raise $8.245 million before costs. The Group reported a loss of $628,512 during the year after writing off $0.292m of carried forward exploration costs and realising $0.184m from investments. SIGNIFICANT CHANGES IN STATE OF AFFAIRS In the opinion of the Directors, other than disclosed elsewhere in this Report, there were no significant changes in the state of affairs of the Group that occurred during the period under review. SUBSEQUENT EVENTS There has not been any matter or circumstance, other than that referred to in the financial statements or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. FUTURE DEVELOPMENTS Disclosure of information regarding likely developments in the operations of the Group in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Group. Accordingly, this information has not been disclosed in this report. REMUNERATION REPORT The Company’s Executive Officers’ remuneration policy is set to ensure that remuneration packages properly reflect the duties and responsibilities of the senior executives and are sufficient to attract, retain and motivate personnel of the requisite quality. The policy is administered by the Remuneration Committee, which is comprised of all board members. The Executive Officers of the Company are employed under Service Agreements which are all identical in their contents and only differ in remuneration levels. They have durations of thirty six months from 19th June 2008 and renew automatically unless terminated by either the Company by giving a minimum of twelve months notice to the individual; or by the individual by giving six months notice to the Company. Whilst the level of remuneration is not dependent on the satisfaction of any performance condition, the performance of Executives is reviewed on an annual basis. Non-executive Directors are remunerated by fees determined by the Board within the aggregate Directors’ fee pool limit of $150,000 approved by shareholders in April 1996. The pool limit is not at present fully utilised. In setting the fees, account is taken of the responsibilities inherent in the stewardship of the Company and the demands made of Directors in the discharge of their responsibilities. Advice is taken from independent consultancy sources where appropriate to ensure remuneration accords with market practice. The company has largely adopted the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations and decided to remunerate its non-executive directors on an ongoing basis with no accrual or entitlement to a retirement benefit. Remuneration packages contain the following key elements: a) Primary benefits – salary / fees and performance based bonuses; b) Post employment benefits – prescribed retirement benefit; and c) Equity – share options granted under the executive share option plan as disclosed in note 17 to the financial statements. The following table discloses the remuneration of the directors and executives of the company: Post Employment Equity Salary & Fees $ Primary Perfor- mance Based Payment $ 2008 Key Management Personnel G J Wheeler 237,200 150,000 M H Wilson 171,254 100,000 48,333 48,333 - - J den Dryver G Dunbar Total Key Management Personnel Non Monetary Super- annuation Pre- scribed Benefits $ $ $ Other Retire- ment Benefits $ - - - - 36,000 15,413 - - - - - - - - - - 505,120 250,000 51,413 Helix Resources Limited Annual Report 2008 Options % of Remu- neration Other Benefits Total $ - - - - % - - - - $ - - - - $ 423,200 286,667 48,333 48,333 806,533 28 KEY MANAGEMENT PERSONNELS’ SHARE OPTIONS Pursuant to approval at Shareholders’ meetings, executives and employees are entitled to subscribe for ordinary shares on the terms agreed to by the Shareholders. At the date of this report current directors and executives are entitled to purchase an aggregate of 4,335,000 ordinary shares of Helix Resources Limited according to the following terms: Key Management Personnel Number of Executive Options Held Issuing Entity Exercise Price Expiry Date Number of ordinary shares under option G J Wheeler 2,000,000 Helix Resources Limited M H Wilson M H Wilson M H Wilson M H Wilson 70,000 Helix Resources Limited 70,000 Helix Resources Limited 70,000 Helix Resources Limited 1,325,000 Helix Resources Limited J den Dryver 400,000 Helix Resources Limited G Dunbar Total 400,000 Helix Resources Limited 4,335,000 $0.26 $0.42 $0.46 $0.50 $0.26 $0.26 $0.26 30.11.2008 31.03.2009 31.03.2009 31.03.2009 30.11.2008 30.11.2008 30.11.2008 2,000,000 70,000 70,000 70,000 1,325,000 400,000 400,000 4,335,000 DIRECTORS’ SHARE AND OPTION HOLDINGS Director G J Wheeler M H Wilson J den Dryver G Dunbar *Fully Paid Ordinary Shares *Listed Options^ *Staff Options 6,478,839 93,133 - 300,000 494,838 3,517 - 25,000 2,000,000 1,535,000 400,000 400,000 * Directors’ interests in ordinary shares and options of the parent entity are shown at the date of this Directors’ Report. ^ The listed options are exercisable at $0.30 prior to 30 June 2009. OFFICERS’ INDEMNITY AND INSURANCE During the year the Company paid an insurance premium to insure the Directors and Officers of the Company and related bodies corporate. The Officers of the Company covered by the insurance policy include the Directors named in this report. The Directors’ and Officers’ Liability insurance provides cover against all costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the officers in their capacity as officers of the Company or a related body corporate. The insurance policy does not contain details of the premium paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and the amount of the premium is subject to a confidentiality clause under the insurance policy. The Company has entered into an agreement with the Directors and Officers to indemnify them against any claim and related expenses, which arise as a result of work completed in their respective capacities. The Company has not otherwise, during or since the financial year indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor. ENVIRONMENTAL REGULATIONS The Group is subject to environmental regulations under laws of the Commonwealth and State. The Group has a policy of complying with its environmental performance obligations and at the date of this report, is not aware of any breach of such regulations. Helix Resources Limited Annual Report 2008 29 MEETINGS OF DIRECTORS The number of meetings held during the year by Company Directors (including meetings of committees of Directors) and the number of those meetings attended by each Director was: Board of Directors’ Meetings Remuneration Committee Meetings Audit Committee Meetings Held Attended Held Attended Held Attended 6 6 6 6 6 6 5 6 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 G J Wheeler M H Wilson J den Dryver G Dunbar NON-AUDIT SERVICES The directors are satisfied that the provision of non-audit services, during the year, by the auditor is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note 25. AUDITOR’S INDEPENDENCE DECLARATION The auditor’s independence declaration is included on page 31 of the financial report. Dated at Perth this 22nd. day of August 2008. This report is made and signed in accordance with a resolution of Directors made pursuant to s.298(2) of the Corporations Act 2001. On behalf of the Directors. Greg J Wheeler Executive Chairman Helix Resources Limited Annual Report 2008 30 AUDITOR’S INDEPENDENCE DECLARATION Helix Resources Limited Annual Report 2008 31 INDEPENDENT AUDIT REPORT Helix Resources Limited Annual Report 2008 32 Helix Resources Limited Annual Report 2008 33 . The Directors declare that: DIRECTORS’ DECLARATION a) b) In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; In the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act and Regulations 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Company and of the Group for the financial year ended 30 June 2008; c) The directors have been given the declarations required by s.295A of the Corporations Act 2001. Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001. On behalf of the Directors Greg J Wheeler Executive Chairman Signed at Perth this 22nd day of August 2008. Helix Resources Limited Annual Report 2008 34 BALANCE SHEET AS AT 30 JUNE 2008 CONSOLIDATED COMPANY Note 2008 $ 2007 $ 2008 $ 2007 $ 2 3 4 4 6 7 5 8 9 9 10 11 12 7,479,985 2,822,200 7,479,985 2,822,200 372,139 130,800 261,946 375,000 372,139 130,800 261,946 375,000 7,982,924 3,459,146 7,982,924 3,459,146 - 198,616 2,000 170,937 - 198,616 2,000 170,937 12,158,401 9,201,690 12,158,401 9,201,690 103,406 98,000 103,406 98,000 12,460,423 9,472,627 12,460,423 9,472,627 20,443,347 12,931,773 20,443,347 12,931,773 185,952 21,264 207,216 54,270 54,270 75,862 11,695 87,557 31,585 31,585 185,952 21,264 207,216 54,270 54,270 261,486 119,142 261,486 75,862 11,695 87,557 31,585 31,585 119,142 20,181,861 12,812,631 20,181,861 12,812,631 55,824,908 47,844,351 55,824,908 47,844,351 287,187 284,463 287,187 284,463 (35,930,234) (35,316,183) (35,930,234) (35,316,183) 20,181,861 12,812,631 20,181,861 12,812,631 Notes to the financial statements are included on pages 39 to 59 Helix Resources Limited Annual Report 2008 35 Current Assets Cash and cash equivalents Trade and Other Receivables Financial Assets Total Current Assets Non-Current Assets Financial Assets Property, plant & equipment Exploration and Evaluation Other Total Non-Current Assets Total Assets Current Liabilities Trade and Other Payables Provisions Total Current Liabilities Non- Current Liabilities Provisions Total Non-Current Liabilities Total Liabilities Net Assets Equity Share Capital Other Reserves Accumulated Losses Total Equity INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008 CONSOLIDATED COMPANY 2008 $ 2007 $ 2008 $ 2007 $ 723,451 (646,008) (31,372) (27,280) (96,668) (42,631) (291,738) (19,820) 117,267 (153,560) (20,204) (4,839) (135,110) (628,512) - (628,512) - (628,512) 1,184,299 (733,052) (37,354) (8,669) (110,892) (49,214) (245,664) (26,326) 138,219 (138,375) (46,165) (9,434) (105,277) (187,904) - (187,904) - (187,904) 723,451 (646,008) (31,372) (27,280) (96,668) (42,631) (291,738) (19,820) 117,267 (153,560) (20,204) (4,839) (135,110) (628,512) - (628,512) - (628,512) (0.5) (0.5) 1,184,299 (733,052) (37,354) (8,669) (110,892) (49,214) (245,664) (26,326) 138,219 (138,375) (46,165) (9,434) (105,277) (187,904) - (187,904) - (187,904) (0.2) (0.2) Revenue Employment Costs Audit and Accountancy Corporate Marketing Directors’ Fees Depreciation Impairment of Exploration and Evaluation Assets I T Costs Overhead Allocation to Exploration Premises Costs Professional Services Travel expenses Other General and Admin expenses Loss before income tax Income tax expense Loss from continuing operations Profit /(Loss) from discontinued operations Loss for the year Earnings / (Loss) per share Basic (cents per share) Diluted (cents per share) Note 13 14 19 21 21 Notes to the financial statements are included on pages 39 to 59 Helix Resources Limited Annual Report 2008 36 CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008 CONSOLIDATED COMPANY Note 2008 $ 2007 $ 2008 $ 2007 $ Cash Flow From Operating Activities Payments to suppliers and employees Interest received Other receipts (898,404) (675,370) (898,404) 327,948 102,051 104,588 147,583 327,948 102,051 Net cash used in operating activities 2(b) (468,405) (423,199) (468,405) Cash Flow From Investing Activities Payments for capitalised exploration & evaluation expenditure Payment for property, plant & equipment Payment for investments Proceeds from sale of investments Payments for security deposits Net cash used in investing activities Cash Flow From Financing Activities Proceeds from issue of shares/options Share issue costs paid Net cash provided by financing activities Net increase in cash held Cash and cash equivalents at beginning of financial year Cash and cash equivalents at End of Financial Year (3,248,449) (1,232,135) (3,248,449) (80,542) (39,412) (80,542) (900) 481,130 (5,406) - 511,394 306,137 (900) 481,130 (5,406) (2,854,167) (454,016) (2,854,167) 8,300,463 2,548,387 8,300,463 (319,906) - (319,906) 7,980,557 2,548,387 7,980,557 4,657,985 1,671,172 4,657,985 2,822,000 1,151,028 2,822,000 2(a) 7,479,985 2,822,200 7,479,985 (675,370) 104,588 147,583 (423,199) (1,232,135) (39,412) - 511,394 306,137 (454,016) 2,548,387 - 2,548,387 1,671,172 1,151,028 2,822,200 Notes to the financial statements are included on pages 39 to 59 Helix Resources Limited Annual Report 2008 37 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008 CONSOLIDATED COMPANY 2008 $ 12,812,631 7,925,093 17,187 55,462 (628,512) - 20,181,861 2007 $ 10,216,959 2,705,378 - 78,198 (187,904) - 12,812,631 2008 $ 12,812,631 7,925,093 17,187 55,462 (628,512) - 20,181,861 2007 $ 10,217,882 2,705,378 - 78,198 (187,904) (923) 12,812,631 Total equity at the beginning of the financial year Shares issued during the financial year Issue of Employee Incentive Options Exercise or Expiration of options during the financial year Loss attributable to members of the parent entity Adjustment to Opening Equity Total equity at the end of the financial year Notes to the financial statements are included on pages 39 to 59 Helix Resources Limited Annual Report 2008 38 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008 1. SUMMARY OF ACCOUNTING POLICIES Financial Reporting Framework The financial report is a general-purpose financial report that has been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and complies with other requirements of the law. The financial report includes separate financial statements for Helix Resources Limited as an individual entity and the Consolidated Entity (Group) consisting of Helix Resources Limited and its subsidiaries. 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 periods presented, unless otherwise stated. Historical cost convention These financial statements have been prepared under the historical cost convention, as modified where applicable by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of property, plant and equipment and investment property. A summary of the Group’s significant accounting policies is set out below. a) Principles of Consolidation The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the Group, being the Company (the parent entity) and its subsidiaries as defined in accounting standards. A list of subsidiaries appears in note 4 to the financial statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements. The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity. In preparing the consolidated financial statements, all intercompany balances and transactions, and unrealised profits arising within the Group are eliminated in full. b) Cash and Cash Equivalents Cash on hand and in banks and short term deposits are stated at nominal value. For the purposes of the Cash Flow Statement, cash includes cash on hand and in banks, and money market investments readily convertible to cash within 90 days, net of outstanding bank overdrafts. c) 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 for each jurisdiction 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 which are enacted or substantively enacted for each jurisdiction. 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 assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in subsidiaries where the parent entity 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. Helix Resources Limited Annual Report 2008 39 d) Property, Plant and Equipment Property, plant and equipment is stated at cost and is depreciated at rates based upon their expected useful lives to the Group. The carrying amount of property, plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these assets. Expected net cash flows have not been discounted in determining recoverable amount. The depreciation rates used for each class of depreciable assets are: Plant and equipment Straight line 10% - 33% Diminishing Value 20% - 40% Motor Vehicles Diminishing Value 22.5% e) Exploration and evaluation Exploration and evaluation costs related to areas of interest are carried forward to the extent that: (i) the rights to tenure of the areas of interest are current and the Group controls the area of interest in which the expenditure has been incurred; and (ii) such costs are expected to be recouped through successful development and exploitation of the area of interest, or alternatively by its sale; or (iii) exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. Exploration and evaluation assets will be assessed annually for impairment and where impairment indicators exist, recoverable amounts of these assets will be estimated based on discounted cash flows from their associated cash generating units. The income statement will recognise expenses arising from the excess of the carrying values of exploration and evaluation assets over the recoverable amounts of these assets. Expenditure capitalised under the above policy is amortised over the life of the area of interest from the date that commercial production of the related mineral occurs. In the event that an area of interest is abandoned or if the directors consider the expenditure to be of no value, accumulated costs carried forward are written off in the year in which that assessment is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. f) Leases Lease payments for operating leases where substantially all the risks and benefits remain with the lessor are charged as expenses in the periods in which they are incurred. g) Investments Investments in subsidiaries are held at cost. Other investments are valued at cost or recoverable amount. The carrying amount of investments is reviewed annually by Directors to ensure it is not in excess of the recoverable amount of these investments. The recoverable amount is assessed from the shares' current market value or the underlying net assets in the particular entities. Expected net cash flows have not been discounted in determining recoverable amounts. h) Non-derivative financial instruments Financial instruments are initially measured at cost on trade date, which includes transaction costs. Subsequent to initial recognition, these instruments are measured as set out below. (i) Financial assets at fair value through profit or loss This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss on initial recognition. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. The policy of management is to designate a financial asset if there exists the possibility it will be sold in the short term and the asset is subject to frequent changes in fair value. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the balance sheet date. (ii) Loans and receivables Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables are included in receivables in the balance sheet. Helix Resources Limited Annual Report 2008 40 (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group's management has the positive intention and ability to hold to maturity. (iv) Available-for-sale financial assets Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date. Purchases and sales of investments are recognised on trade-date - the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are included in the income statement in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non monetary securities classified as available-for-sale are recognised in equity in the available-for-sale investments revaluation reserve. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities. The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include reference to the fair values of recent arm's length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer's specific circumstances. The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss - is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement. i) Derivatives Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either; (1) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of highly probable forecast transactions (cash flow hedges). The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items. j) Employee Benefits Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably. Provision is made in respect of wages and salaries, annual leave and other employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Provision made in respect of long service leave which is not expected to be settled within 12 months is measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by the employees up to reporting date. Share-based payments Share-based compensation benefits are provided to employees via various Share Option Plans. The fair value of options granted 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 vesting and performance criteria, the impact of dilution, the non-tradable nature of the option, 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. Helix Resources Limited Annual Report 2008 41 The fair value of the options granted 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 balance sheet date, the entity 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. The market value of shares issued to employees for no cash consideration under the Share Plans is recognised as an employee benefits expense with a corresponding increase in equity when the employees become entitled to the shares. k) Interest in Joint Venture Operations Interest in joint venture operations, where material, are brought to account by including in the respective classifications, the Group's share of the individual assets employed and liabilities and expenses incurred. Details of interests in joint ventures are shown at Note 22. l) Revenue Recognition Revenue from the disposal of assets is recognised when the Group has passed control of the goods or other assets to the buyer. Interest on bank deposits is recognised as income as it accrues. m) Accounts Payable Trade payables and other accounts payable are recognised when the Group becomes obliged to make future payments resulting from the purchase of goods and services. n) Receivables Other receivables are recorded at amounts due less any specific provision for doubtful debts. o) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax GST), except: • • where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. p) Acquisition of Assets The purchase method of accounting is used to account for all acquisitions of assets (including business combinations) regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the value of the instruments is their published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement, but only after a reassessment of the identification and measurement of the net assets acquired. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Helix Resources Limited Annual Report 2008 42 q) Impairment of Assets Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation 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 flows (cash generating units). r) Fair Value Estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. 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. s) Provisions Mine restoration and rehabilitation costs are provided for at the present value of future expected expenditures required to settle the Group’s obligations on commencement of commercial production, discounted using a rate specified to the liability. When this provision is recognised a corresponding asset is also recognised as part of the development costs of the mine to the extent that it is considered that the provision gives access to future economic benefits. On an ongoing basis, the rehabilitation liability is re-measured at each reporting period in line with the changes in the time value of money (recognised as an expense in the income statement and an increase in the provision), and additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability. Provisions for legal claims are recognised when the Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to anyone item included in the same class of obligations may be small. t) New standards and interpretations which may impact the Company not yet adopted The following standards, amendments to standards and interpretations have been identified as those which may impact the entity in the period of initial application. The application date of the new standards is 1 January 2009. The application date for the Company will be 1 July 2009. AASB Amendment AASB 2007–8 Amendments to Australian Accounting Standards AASB 101 Standards Affected Outline of Amendment AASB 101 Presentation of Financial Statements The revised AASB 101: Presentation of Financial Statements issued in September 2007 requires the presentation of a statement of comprehensive income. AASB 101 Presentation of Financial Statements As above Helix Resources Limited Annual Report 2008 43 2. NOTES TO THE CASH FLOW STATEMENT a) Reconciliation of Cash For the purposes of the cash flow statement and balance sheet, cash and cash equivalents include cash on hand and in banks, and investments in money market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows: Cash at Bank Cash on deposit Total Cash CONSOLIDATED COMPANY 2008 $ 2007 $ 2008 $ 2007 $ 21,426 20,355 21,426 20,355 7,458,559 2,801,845 7,458,559 2,801,845 7,479,985 2,822,200 7,479,985 2,822,200 b) Reconciliation of loss after income tax to cash flows used in operations CONSOLIDATED COMPANY 2008 $ 2007 $ 2008 $ 2007 $ (628,512) (187,904) (628,512) (187,904) 42,631 291,738 17,187 (233,831) 10,231 49,214 245,664 234,266 (884,579) 3,777 42,631 291,738 17,187 (233,831) 10,231 49,214 245,664 234,266 (884,579) 3,777 (110,193) 231,588 (110,193) 231,588 110,090 32,254 (468,405) (110,767) (4,458) (423,199) 110,090 32,254 (468,405) (110,767) (4,458) (423,199) Loss after income tax Non-cash flows in Loss Depreciation Impairment of Exploration and evaluation Issuance /(Cancellation) of employee options (Gain)/loss on sale of investments Loss on disposal of property, plant and equipment Changes in Net Assets and Liabilities (Increase)/Decrease in Assets (Increase)/decrease in trade and other receivables Increase/(Decrease) in Liabilities Increase/(decrease) in trade and other payables Increase/(decrease) in Provisions Net Cash used in Operations c) Non-cash Transactions Nil. 3. TRADE AND OTHER RECEIVABLES CONSOLIDATED COMPANY 2008 $ 2007 $ 2008 $ Prepayments - Insurances Prepayments – Tenement application and rents Other Total Current Receivables 37,441 103,969 230,729 372,139 36,589 166,112 59,245 261,946 37,441 103,969 230,729 372,139 Helix Resources Limited Annual Report 2008 2007 $ 36,589 166,112 59,245 261,946 44 4. FINANCIAL ASSETS Current: Held for trading financial assets: Shares in listed corporations – at fair value through profit or loss Total Current Financial Assets Non-Current: Shares in subsidiaries – at cost (4a) Shares in listed corporations – at cost Total Non-Current Financial Assets 4(a) Shares in subsidiaries Name CONSOLIDATED COMPANY 2008 $ 2007 $ 2008 $ 2007 $ 130,800 130,800 - - - 375,000 375,000 - 2,000 2,000 130,800 130,800 - - - 375,000 375,000 - 2,000 2,000 Country of Incorporation Percentage Held Percentage Held Hillview Mining NL Helix Mining Investment P/L Australia Australia 2008 100% 100% 2007 100% 100% 5. OTHER ASSETS Non-Current Security Deposits Total Other Assets – Non-Current CONSOLIDATED COMPANY 2008 $ 2007 $ 2008 $ 2007 $ 103,406 103,406 98,000 98,000 103,406 103,406 98,000 98,000 Helix Resources Limited Annual Report 2008 45 6. PROPERTY, PLANT AND EQUIPMENT 2008 Gross Carrying Amount Balance at 30 June 2007 Additions Disposals Balance at 30 June 2008 Accumulated Depreciation Balance at 30 June 2007 Disposals Depreciation Balance at 30 June 2008 Net Book Value 30 June 2007 30 June 2008 2007 Gross Carrying Amount Balance at 30 June 2006 Additions Disposals Balance at 30 June 2007 Accumulated Depreciation Balance at 30 June 2006 Disposals Depreciation Balance at 30 June 2007 Net Book Value 30 June 2006 30 June 2007 CONSOLIDATED AND COMPANY Plant & Equipment $ Motor Vehicles $ 450,296 21,958 (154,616) 317,638 343,891 (145,326) 25,917 224,482 106,405 93,156 120,336 58,584 (7,400) 171,520 55,804 (6,458) 16,714 66,060 64,532 105,460 CONSOLIDATED AND COMPANY Plant & Equipment $ Motor Vehicles $ 432,744 29,658 (12,106) 450,296 319,854 (8,330) 32,367 343,891 112,890 106,405 110,583 9,753 - 120,336 38,957 - 16,847 55,804 71,626 64,532 Total $ 570,632 80,542 (162,016) 489,158 399,695 (151,784) 42,631 290,542 170,937 198,616 Total $ 543,327 39,411 (12,106) 570,632 358,811 (8,330) 49,214 399,695 184,516 170,937 Helix Resources Limited Annual Report 2008 46 7. EXPLORATION AND EVALUATION EXPENDITURE (NON-CURRENT) Balance at beginning of the financial year Expenditure incurred during the year Impairment losses Balance at the end of the financial year CONSOLIDATED COMPANY 2008 $ 9,201,690 3,248,449 (291,738) 12,158,401 2007 $ 8,215,219 1,232,135 (245,664) 9,201,690 2008 $ 9,201,690 3,248,449 (291,738) 12,158,401 2007 $ 8,215,219 1,232,135 (245,664) 9,201,690 The Directors' assessment of carrying amount was after consideration of prevailing market conditions; previous expenditure carried out on the tenements; and the potential for mineralisation based on both the entity's and independent geological reports. The ultimate value of these assets is dependent upon recoupment by commercial development or the sale of the whole, or part, of the Group's interests in those areas for an amount at least equal to the carrying value. There may exist, on the Group’s exploration properties, areas subject to claim under native title or containing sacred sites or sites of significance to Aboriginal people. As a result, exploration properties or areas within the tenements may be subject to exploration and mining restrictions. 8. TRADE AND OTHER PAYABLES (CURRENT) Trade payables 9. PROVISIONS Current Employee Benefits Balance at end of financial year Non -Current Employee Benefits Balance at end of financial year 10. SHARE CAPITAL 131,299,798 Fully Paid Ordinary Shares (2007: 114,101,589) 14,028,013 Listed Options (2007: nil) Balance at end of financial year CONSOLIDATED COMPANY 2008 $ 2007 $ 2008 $ 2007 $ 185,952 75,862 185,952 75,862 21,264 21,264 54,270 54,270 11,695 11,695 31,585 31,585 21,264 21,264 54,270 54,270 11,695 11,695 31,585 31,585 55,824,908 - 55,824,908 47,844,351 - 47,844,351 55,824,908 - 55,824,908 47,844,351 - 47,844,351 2008 2007 No. $ No. $ Fully Paid Ordinary Shares Balance at beginning of financial year Private Placement – 5 Dec 07 @ $0.485 Share Issue Costs Exercise of Options to Fully Paid Shares @ $0.30 Balance at end of financial year 114,101,589 17,000,000 - 198,209 47,844,351 8,245,000 (319,906) 55,463 131,299,798 55,824,908 95,866,927 - - 18,234,662 114,101,589 Helix Resources Limited Annual Report 2008 45,138,972 - - 2,705,379 47,844,351 47 Listed Options Balance at beginning of financial year Options expired during financial year Options issued during financial year * Exercise of Options to Fully Paid Shares Balance at end of financial year Fully paid ordinary shares have no par value, carry one vote per share and carry the right to dividends. Listed options carry no votes until converted to fully paid ordinary shares. (18,234,662) 19,139,475 14,126,222 14,028,013 (904,813) (98,209) - - - - - - - - - (156,992) - - - 156,992 * Bonus issue of one free option for every eight shares held, exercisable at $0.30 prior to 30 June 2009. Capital Management Management controls the capital of the group in order to maximise the return to shareholders and ensure that the group can fund its operations and continue as a going concern. Management effectively manages the group’s capital by assessing the group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of expenditure and debt levels, distributions to shareholders and share and option issues. There have been no changes in the strategy adopted by management to control the capital of the group since the prior year. Employee Options 275,000 employee options were issued in November 2007 following approval at the 2007 AGM. The options were valued under Black and Scholes at 6.25 cents each ($17,187) and were in substitute of a cash bonus. 11. OTHER RESERVES CONSOLIDATED COMPANY 2008 $ 2007 $ 2008 $ 2007 $ 284,463 17,187 (5,000) (9,463) 287,187 50,197 275,000 - (40,734) 284,463 284,463 17,187 (5,000) (9,463) 287,187 50,197 275,000 - (40,734) 284,463 Options Reserve Balance at beginning of financial year Issue of Employee Incentive Options Exercise of Employees Incentive Options Cancellation of Terminated Employee Incentive Options Balance at end of financial year 12. ACCUMULATED LOSSES Balance at beginning of financial year Net Loss attributable to members of the parent entity (35,316,185) (628,512) (35,129,202) (187,904) (35,316,185) (628,512) (35,128,279) (187,904) Exercise of Employee Incentive Options Cancellation of Employee Incentive Options Adjustment to opening balance Balance at end of financial year 5,000 9,463 - (35,930,234) - 5,000 - - 923 (35,316,183) 9,463 - (35,930,234) - - (35,316,183) Helix Resources Limited Annual Report 2008 48 REVENUE 13. Loss before Income Tax includes the following items of revenue and expense: Operating Activities Interest Revenue Tenement Rental Reimbursements Other Total Operating Revenue Non-Operating Activities Profit from sale of shares in listed companies Revaluation of shares in listed companies Loss on disposal of fixed assets Cancellation of Employee Incentive Options Total Non – Operating Revenue Sale of Mineral Areas Profit from Sale of Lake Throssell and Mt Venn East projects to Crusader Holdings NL Total Revenue from Sale of Mineral Areas Total Revenues 14. LOSS FOR THE YEAR Expenses Depreciation of non-current assets: Property, plant and equipment Exploration and evaluation expenditure written off Operating lease rental expenses: Minimum lease payments CONSOLIDATED COMPANY 2008 $ 2007 $ 2008 $ 2007 $ 457,490 26,331 13,577 497,398 183,384 52,900 (10,231) - 226,053 - - 104,588 132,270 15,313 252,171 511,394 225,000 - 40,734 777,128 155,000 155,000 457,490 26,331 13,577 497,398 183,384 52,900 (10,231) - 226,053 - - 723,451 1,184,299 723,451 104,588 132,270 15,313 252,171 511,394 225,000 - 40,734 777,128 155,000 155,000 1,184,299 42,631 291,738 137,587 49,214 245,664 122,276 42,631 291,738 137,587 49,214 245,664 122,276 Loss for the year (628,512) (187,904) (628,512) (187,904) 15. a) COMMITMENTS Operating Lease Commitments Not later than 1 year Later than 1 year but not later than 2 years 40,600 - 40,600 95,000 40,000 135,000 40,600 - 40,600 95,000 40,000 135,000 As at balance date there was a balance of 5 months remaining on the office lease and Helix will vacate the premises. Helix Resources Limited Annual Report 2008 49 b) Exploration Expenditure Commitments In order to maintain current rights of tenure to exploration tenements, the company and Group are required to perform minimum exploration work to meet the requirements specified by various State governments. These obligations can be reduced by selective relinquishment of exploration tenure or application for expenditure exemptions. Due to the nature of the company and Group’s operations in exploring and evaluating areas of interest, it is very difficult to forecast the nature and amount of future expenditure. It is anticipated that expenditure commitments for the next twelve months will be tenement rentals of $206,000 (2007:$112,000) and exploration expenditure of $3,600,000 (2007: $2,140,000). JV parties earning their interest in various tenements may effectively meet a portion of these commitment costs. 16. KEY MANAGEMENT PERSONNELS’ REMUNERATION This note should be read in conjunction with the disclosures contained in the Remuneration Report section of the Directors’ Report. The key management personnel of Helix Resources Limited during the year were: • G J Wheeler J den Dryver • • G Dunbar • M H Wilson – Executive Chairman, CEO and CFO – Non-executive Director – Non-executive Director – Executive Technical Director The Company’s Executive Officers’ remuneration policy is set to ensure that remuneration packages properly reflect the duties and responsibilities of the senior executives and are sufficient to attract, retain and motivate personnel of the requisite quality. The policy is administered by the Remuneration Committee, which is composed of all board members. Remuneration packages are reviewed and determined with due regard to current market rates and are benchmarked against comparable industry salaries. The Executive Officers of the Company are employed under Service Agreements which are all identical in their contents and only differ in remuneration levels. They have durations of thirty six months from 19th June 2008 and renew automatically unless terminated by either the Company by giving a minimum of twelve months notice to the individual; or by the individual by giving six months notice to the Company. Non-executive Directors are remunerated by fees determined by the Board within the aggregate Directors’ fee pool limit of $150,000 approved by shareholders in April 1996. The pool limit is not at present fully utilised. In setting the fees, account is taken of the responsibilities inherent in the stewardship of the Company and the demands made of Directors in the discharge of their responsibilities. Advice is taken from independent consultancy sources to ensure remuneration accords with market practice. Salary & Fees 2007 Primary Perfor- mance Based Payment Non Monetary Supera- nnuation Post Employment Pre- scribed Benefits Other Retire- ment Benefits Equity Options Other Benefits Total Key Management Personnel G J Wheeler M H Wilson J den Dryver G Dunbar R W Mosig R E Vittino Total $ $ $ $ $ $ $ $ $ 82,900 117,355 40,000 40,000 1,916 141,577 423,748 - 7,246 - - - - 7,246 - - - - - - - - 10,562 - - - - 10,562 - - - - - - - - - - - - - - 100,000 66,250 20,000 20,000 - - 206,250 - - - - - - - 182,900 201,413 60,000 60,000 1,916 141,577 647,806 Helix Resources Limited Annual Report 2008 50 Salary & Fees 2008 Primary Perfor- mance Based Payment Non Monetary Supera- nnuation Post Employment Pre- scribed Benefits Other Retire- ment Benefits Equity Options Other Benefits Total Key Management Personnel G J Wheeler M H Wilson J den Dryver G Dunbar Total $ $ $ $ $ $ $ $ $ 237,200 150,000 171,254 100,000 48,333 48,333 - - 505,120 250,000 - - - - - 36,000 15,413 - - 51,413 - - - - - - - - - - - - - - - - - - - - 423,200 286,667 48,333 48,333 806,533 2008 2007 17. EXECUTIVE SHARE OPTION PLAN As at 30 June 2008 the Company had issued 4,335,000 share options (30 June 2007 6,250,000). Share options carry no rights to dividends and no voting rights. The difference between the total market value of options issued during the financial year, at the date of issue, and the total amount received from executives and employees is not recognised in the financial statements except for the purposes of determining key management personnels’ remuneration in respect of that financial year. The amounts are disclosed in remuneration in respect of the financial year in which the entitlement was earned. (i) Balance at beginning of financial year Further details are disclosed below: Executive Share Option Plan exercise price No. Weighted average exercise price No. Weighted average $0.46 3,450,000 $0.46 6,625,000 Balance at beginning of financial year (i) - (950,000) - (2,290,000) Cancelled during the financial year (ii) $0.26 4,125,000 $0.26 - Granted during the financial year (iii) - - - - Exercised during the financial year (iv) $0.36 6,625,000 $0.46 4,335,000 Balance at end of financial year (v) Options - Series No. Vested Unvested Grant Date Expiry Date Exercise grant date $ Fair value at Issued 26 May 1999 283,332 283,332 - 26/5/99 29/3/09 $0.42 Not valued $0.46 Not valued Issued 26 May 1999 283,334 283,334 $0.50 Not valued Issued 26 May 1999 283,334 283,334 Issued 11 Nov 2003 550,001 550,001 - 11/11/03 29/3/09 $0.42 9.36c per option $0.46 8.84c per Issued 11 Nov 2003 550,000 550,000 option Issued 11 Nov 2003 549,999 549,999 $0.50 8.37c per option 6,625,000 6,625,000 29/3/09 29/3/09 26/5/99 26/5/99 Issued 10 April 2007 5c per option 11/11/03 11/11/03 29/3/09 29/3/09 4,125,000 4,125,000 30/11/08 Price 10/4/07 $0.26 - - - - - - (ii) Cancelled during the financial year Helix Resources Limited Annual Report 2008 51 Price 11/11/03 26/5/99 26/5/99 29/3/09 29/3/09 Options - Series No. Vested Unvested Grant Date Expiry Date Exercise grant date $ Fair value at Issued 26 May 1999 263,332 263,332 - 26/5/99 29/3/09 $0.42 Not valued $0.46 Not valued Issued 26 May 1999 263,334 263,334 - $0.50 Not valued Issued 26 May 1999 263,334 263,334 - Issued 11 Nov 2003 500,001 500,001 - 11/11/03 29/3/09 $0.42 9.36c per option $0.46 8.84c per Issued 11 Nov 2003 500,000 500,000 - option $0.50 8.37c per Issued 11 Nov 2003 499,999 499,999 - option 2,290,000 2,290,000 - Options - Series No. Vested Unvested Grant Date Expiry Date Exercise grant date $ Fair value at Issued 26 May 1999 133,333 133,333 - 26/5/99 29/3/09 $0.42 Not valued $0.46 Not valued Issued 26 May 1999 133,333 133,333 - $0.50 Not valued Issued 26 May 1999 133,334 133,334 - Issued 11 Nov 2003 183,334 183,334 - 11/11/03 29/3/09 $0.42 9.36c per option $0.46 8.84c per Issued 11 Nov 2003 183,333 183,333 - option $0.50 8.37c per Issued 11 Nov 2003 183,333 183,333 - option 950,000 950,000 - Cancelled during the year ended 30 June 2007 26/5/99 26/5/99 29/3/09 29/3/09 11/11/03 11/11/03 11/11/03 29/3/09 29/3/09 29/3/09 29/3/09 Price (iii) Granted during the financial year There were no options granted during the financial year ended 30 June 2008. Granted during the year ended 30 June 2007 Options - Series No. Issued 10 April 2007 Grant Date Expiry Date Exercise Price $ Fair Value Received $ - $0.26 30/11/08 - 4,125,000 10/4/07 4,125,000 (iv) Exercised during the financial year There were no executive options exercised during the financial years ended 30 June 2008 and 2007. Helix Resources Limited Annual Report 2008 52 (v) Balance at end of the financial year Options Series No. Vested Unvested Grant Date Expiry Date Issued 26 May 1999 Issued 26 May 1999 Issued 26 May 1999 Issued 11 Nov 2003 Issued 11 Nov 2003 Issued 11 Nov 2003 20,000 20,000 20,000 50,000 50,000 50,000 20,000 20,000 20,000 50,000 50,000 50,000 Issued 10 April 2007 4,125,000 4,125,000 4,335,000 4,335,000 - - - - - - - - 26/5/99 26/5/99 26/5/99 11/11/03 11/11/03 11/11/03 29/3/09 29/3/09 29/3/09 29/3/09 29/3/09 29/3/09 10/4/07 30/11/08 Exercise Price $ $0.42 $0.46 $0.50 $0.42 $0.46 $0.50 $0.26 Fair value at grant date Not valued Not valued Not valued 9.36c per option 8.84c per option 8.37c per option 5c per option Fair value of consideration received is measured as the nominal value of cash receipts on conversion. The fair value of shares at the date of their issue is measured as the market value at close of trade on the date of their issue. Employee share options carry no rights to dividends and no voting rights. In accordance with the terms of the executive share option plan, options may be exercised at any time from the date the vesting period ends to the date of their expiry. The difference between the total market value of options issued during a financial year, at the date of issue, and the total amount received from executives and employees is not recognised in the financial statements except for the purposes of determining key management personnels’ remunerations in respect of that financial year as disclosed in note 16 to the financial statements. The amounts are disclosed in remuneration in respect of the financial years over which the entitlement was earned. Consideration received on the exercise of executive options is recognised in contributed equity. During the financial year no options were exercised, hence no amount was recognised in contributed equity arising from the exercise of executive options (2007: $nil). 18. RELATED PARTY AND DIRECTORS’ DISCLOSURES a) Other Transactions with key management personnel The loss from ordinary activities before income tax includes the following items of expenses that resulted from transactions other than remuneration with key management personnel or their personally-related entities. Transactions between related parties are on normal commercial terms and conditions unless otherwise stated. Greg Wheeler Consulting Pty Ltd provided professional services to the value of $28,000 (2007 $158,869) payable within 30 days from date of invoice (net of GST). Mr Greg Wheeler, a Director, has significant influence in Greg Wheeler Consulting Pty Ltd. There were no balances outstanding at 30 June 2008 to Mr Greg Wheeler. Dunbar Resource Management provided professional services to the value of $3,450 (2007 $4,600) payable within 30 days from date of invoice (net of GST). Mr Gordon Dunbar, a Director, has significant influence in Dunbar Resource Management. There were no balances outstanding at 30 June 2008 to Mr Gordon Dunbar. Den Dryver Mining Consultants Pty Ltd provided professional services to the value of $8,682 (2007 nil) payable within 30 days from date of invoice (net of GST). Mr John den Dryver, a Director, has significant influence in Den Dryver Mining Consultants Pty Ltd. There were no balances outstanding at 30 June 2008 to Mr John den Dryver. Helix Resources Limited Annual Report 2008 53 b) Key Management Personnels’ Equity Holdings Fully paid ordinary shares issued by Helix Resources Limited Granted as remuneration Balance @ 1/7/07 No. No. Received on exercise of options No. Net other change Balance @ 30/6/08 Balance held nominally No. No. No. Key Management Personnel G J Wheeler M H Wilson J den Dryver G Dunbar Total 2,829,501 15,000 - 100,000 2,944,501 - - - - - - - - - - 1,129,201 3,958,702 78,133 - 93,133 - 200,000 300,000 1,407,334 4,351,835 Executive Share Options issued by Helix Resources Limited Bal @ 1/7/07 Granted as remuneration Exercised Other change Bal @ 30/6/08 Bal vested @ 30/6/08 Vested but not exerciseable Vested and exercisable No. No. No. No. No. No. No. No. - - - - - Options vested during year No. Key Management Personnel G J Wheeler M H Wilson J denDryver G Dunbar Total 2,000,000 1,535,000 400,000 400,000 4,335,000 - - - - - - - - - - - - - - - 2,000,000 2,000,000 1,535,000 1,535,000 400,000 400,000 400,000 400,000 4,335,000 4,335,000 - - - - - 2,000,000 1,535,000 400,000 400,000 4,335,000 - - - - - Each executive share option converts into 1 ordinary share of Helix Resources Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option. During the financial year, no executive share options were exercised by key management personnel. Further details of the options granted during the year are contained in note 16 and 17 to the financial statements. Listed Share Options issued by Helix Resources Limited Exercised Bal @ 1/7/07 Granted as remuneration Other change Bal @ 30/6/08 Bal vested @ 30/6/08 Vested but not exerciseable Vested and exercisable No. No. No. No. No. No. No. No. Options vested during year No. Key Management Personnel G J Wheeler M H Wilson J denDryver G Dunbar Total - - - - - - - - - - - - - - - 494,838 494,838 494,838 3,517 3,517 3,517 - - - 25,000 25,000 25,000 523,355 523,355 523,355 - - - - - 494,838 494,838 3,517 3,517 - - 25,000 25,000 523,355 523,355 Helix Resources Limited Annual Report 2008 54 19. INCOME TAX CONSOLIDATED COMPANY Accounting loss before tax from continuing operations Accounting loss before tax from discontinuing operations Accounting loss before tax Income Tax Expense to Accounting Loss Tax expense at the statutory income tax rate of 30% Sundry non-deductible (deductible) expenses - non-deductible expenses - revaluation of investments - taxable gain on sale of tenements - employee incentive options Benefit of tax losses and temporary differences not brought to account Income tax expense Income Statement Current income tax charge Deferred income tax 2008 $ (628,512) - (628,512) 2007 $ (187,904) - (187,904) 2008 $ (628,512) - (628,512) 2007 $ (187,904) - (187,904) (188,554) (56,371) (188,554) (56,371) 1,329 (15,870) 54,000 5,156 143,939 - - (66,956) (12,713) 82,500 53,540 - 1,329 (15,870) 54,000 5,156 143,939 - - (66,956) (12,713) 82,500 53,540 - (1,031,556) (306,962) (1,031,556) (306,962) Relating to origination and reversal of temporary differences Current year tax losses not recognised in the current period Income tax expense reported in income statement 887,617 143,939 - 253,422 53,540 - 887,617 143,939 - Unrecognised Deferred Tax Balances: Unrecognised deferred tax asset losses Unrecognised deferred tax assets other Unrecognised deferred tax liabilities Net Unrecognised deferred tax assets 13,266,510 36,341 (3,713,916) 9,588,935 12,185,130 19,256 (2,809,213) 9,395,173 12,669,266 36,341 (3,713,916) 8,991,691 253,422 53,540 - 11,587,886 19,256 (2,809,213) 8,797,929 Helix Resources Limited Annual Report 2008 55 20. SEGMENT INFORMATION The Group operated predominantly in one geographical segment and one business, being gold and other base metals exploration and development in Western Australia and South Australia. 21. EARNINGS PER SHARE Basic loss per share Diluted loss per share COMPANY 2008 Cents Per share (0.5) (0.5) 2007 Cents Per share (0.2) (0.2) Basic Loss per Share The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows: Earnings / (loss) (a) Weighted average number of ordinary shares (b) 2008 $ (628,512) 2008 No. 123,713,739 2007 $ (187,904) 2007 No. 100,425,592 (a) Earnings used in the calculation of basic earnings per share is net loss after tax of $628,512 (2007 : $187,904). (b) The executive share options are not considered to be potential ordinary shares and are therefore excluded from the weighted average number of shares used in the calculation of basic earnings per share. Where dilutive, potential ordinary shares are included in the calculation of diluted earnings per share (refer below). Diluted Loss per Share The earnings and weighted average number of ordinary and potential ordinary shares used in the calculation of diluted earnings per share are as follows: Earnings (a) 2008 $ (628,512) 2007 $ (187,904) 12 months to 30 June 2008 12 months to 30 June 2007 No. No. Weighted average number of ordinary shares and potential ordinary shares (b) (a) Earnings used in the calculation of diluted loss per share is net loss after tax of $628,512 (2007: $187,904). (b) The following potential ordinary shares are not dilutive and are therefore excluded from the weighted average number of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per share: 123,713,739 100,425,592 Executive options Listed options 2008 No. 4,335,000 14,028,013 2007 No. 6,625,000 - Helix Resources Limited Annual Report 2008 56 INTEREST IN JOINT VENTURES 22. The parent entity has entered into the following unincorporated joint ventures: Joint Venture Project Tunkillia Lake Everard Uranium Yalleen Percentage Interest 100% (2007: 100%) Diluting to 49% (Minotaur Exploration) 100% (2007: 100%) Diluting to 49% (Toro Energy) 30% (2007: 100%) (API Management Pty Ltd 70% Iron Ore rights) Principal Exploration Activities Gold Uranium Iron Ore The joint ventures are not separate legal entities but are contractual arrangements between the participants for sharing costs and output and do not in themselves generate revenue and profit. Exploration expenditure is the only asset of the joint ventures. The Group’s interest in exploration expenditure in the above mentioned joint ventures is included in note 7 and at 30 June 2008 is $1,071,078 (2007 : $107,356). 23. FINANCIAL INSTRUMENTS Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial statements. The Group's exposure to interest rate risk and effective weighted average interest rate for classes of financial assets is set out below: Floating Interest Rate Maturity Average Interest Rate % Fixed Interest Rate Less than 1 year More than 1 Year Non Interest Bearing $ $ $ $ Total $ 2008 Financial Assets Other Receivables (incl tenement appl.) Cash and cash equivalent assets Security deposits and deposits at financial institutions 7.4% 6.3% Financial Liabilities Trade Payables (all payable within 30 days) 2007 Financial Assets Other Receivables (incl tenement appl.) Cash and cash equivalent assets Security deposits and deposits at financial institutions 5.5% 6.0% Financial Liabilities Trade Payables (all payable within 30 days) - - 479,985 7,000,000 - 103,406 479,985 7,103,406 - - - 2,822,000 - 2,822,000 - - - - - - 98,000 98,000 - - - - - - - - - - - - - - 372,139 - - 372,139 7,479,985 103,406 372,139 7,955,530 185,952 185,952 185,952 185,952 261,946 200 - 262,146 75,862 75,862 261,946 2,822,200 98,000 3,182,146 75,862 75,862 Other than those classes of assets and liabilities denoted as "listed" in note 4, none of the classes of financial assets and liabilities are readily traded on organised markets in standardised form. Helix Resources Limited Annual Report 2008 57 Financial Risk Exposures and Management The main risks the group is exposed to through its financial instruments are interest rate risk, liquidity risk and credit risk. Interest Rate Risk Interest rate risk is managed by investing cash with major financial institutions in both cash on deposit and term deposit accounts. Interest Rate Risk Sensitivity Analysis At 30 June 2008, the effect on loss and equity as a result of a 2% increase in the interest rate, with all other variables remaining constant would be a decrease in loss by $103,000 (2007:$40,000) and an increase in equity by $103,000 (2007: $40,000). The effect on loss and equity as a result of a 2% decrease in the interest rate, with all other variables remaining constant would be an increase in loss by $103,000 (2007: $40,000) and a decrease in equity by $103,000 (2007: $40,000). Liquidity Risk The group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are maintained. The Group’s operations require it to raise capital on an on-going basis to fund its planned exploration program and to commercialise its tenement assets. If the Group does not raise capital in the short term, it can continue as a going concern by reducing planned but not committed exploration expenditure until funding is available and/or entering into joint venture arrangements where exploration is funded by the joint venture partner. Credit Risk Credit Risk refers to the risk that counterparty will default on, its contractual obligations resulting in financial loss to the Group. The Group has adopted the policy of only dealing with credit worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group measures risk on a fair value basis. The maximum credit risk on financial assets of the Group which have been recognised on the statement of financial position, other than investments in shares, is generally the carrying amount, net of any provisions for doubtful debts. Net Fair Value of Financial Assets and Liabilities The net fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities approximates their carrying value. The net fair value of financial assets and financial liabilities is based upon market prices where a market exists or by discounting the expected future cash flows by the current interest rates for assets and liabilities with similar risk profiles. Listed equity investments have been valued by reference to market prices prevailing at balance date. The market value of listed equity investments has been disclosed in Note 4 to the financial statements. For unlisted equity investments, the net fair value is an assessment by the Directors based on the underlying net assets, future maintainable earnings and any special circumstances pertaining to a particular investment. 24. EMPLOYEE ENTITLEMENTS The aggregate employee entitlement liability recognised and included in the financial statements is as follows: CONSOLIDATED COMPANY Provision for employee entitlements: Current (Note 9) Non-Current (Note 9) Number of employees at end of financial year 25. REMUNERATION OF AUDITORS a) Auditor of the Parent Entity Auditing the financial report 2008 $ No 9 2008 $ 2007 $ 21,264 54,270 75,534 11,695 31,585 43,280 No 9 2007 $ 2008 $ No 9 2008 $ 2007 $ 21,264 54,270 75,534 11,695 31,585 43,280 No 9 2007 $ 19,125 19,125 18,000 18,000 19,125 19,125 18,000 18,000 The auditor of Helix Resources Limited for the 2008 financial year is Grant Thornton (WA) Partnership. Helix Resources Limited Annual Report 2008 58 26. ADDITIONAL COMPANY INFORMATION Helix Resources Limited is a listed public company, incorporated and operating in Australia. Registered Office 9 Richardson Street WEST PERTH WA 6005 Tel (08) 9321 2644 Principal Place of Business 9 Richardson Street WEST PERTH WA 6005 Tel (08) 9321 2644 The financial report for Helix Resources Limited for the year ended 30 June 2008 was authorised for issue in accordance with a resolution of the directors on the 22nd day of August 2008. Helix Resources Limited Annual Report 2008 59 Spread of Holdings 1–1000 1,001–5,000 5,001–10,000 10,001–100,000 100,001 and over Total AS AT 11th AUGUST 2008 NUMBER OF SHARES HELD Number of Shareholders Number of Shares 171 545 415 834 132 102,581 1,799,585 3,502,671 29,827,211 96,067,838 2,097 131,299,886 Number of shareholders holding less than a marketable parcel 335 378,818 PERCENTAGE HELD BY 20 LARGEST SHAREHOLDERS Shareholder 1 FRC AMCI Intermediate BV 2 AMCI Investments Pty Ltd 3 Yandal Investments Pty Ltd 4 Wythenshawe Pty Ltd 5 Aquila Resources Ltd 6 Gee Vee Pty Ltd 7 Blamnco Trading Pty Ltd 8 Technica Pty Ltd 9 Warramboo Holdings Pty Ltd 10 Zero Nominees Pty Ltd 11 ANZ Nominees Ltd 12 Niddrie Holdings Pty Ltd 13 Cairnglen Investments Pty Ltd 14 Mr Maxwell Alfred Kippe 15 Skiptan Pty Ltd 16 Fortis Clearing Nominees Pty Ltd 17 Loxden Pty Ltd 18 Vermar Pty Ltd 19 Mr Abdelaziz Soliman 20 The Whitfield S/F Account Top 20 Total Number of Shares % of Issued Capital 13,063,829 13,063,829 11,172,514 8,000,000 7,681,293 6,478,839 2,000,000 1,856,666 1,750,000 1,456,802 1,370,980 1,229,115 1,200,000 900,000 890,000 864,347 800,000 700,000 687,200 450,000 9.95 9.95 8.51 6.09 5.85 4.93 1.52 1.41 1.33 1.11 1.04 0.94 0.91 0.69 0.68 0.66 0.61 0.53 0.52 0.34 75,615,414 57.57 VOTING RIGHTS One vote for each ordinary share held in accordance with the Company's Constitution. Helix Resources Limited Annual Report 2008 60 SUBSTANTIAL SHAREHOLDERS Shareholder FRC AMCI Intermediate BV AMCI Investments Pty Ltd Yandal Investments Pty Ltd Wythenshawe Pty Ltd Aquila Resources Ltd DIRECTORS' INTEREST IN SHARE CAPITAL Number of Shares % of Issued Capital 13,063,829 13,063,829 11,172,514 8,000,000 7,681,293 9.95 9.95 8.51 6.09 5.85 Director G J Wheeler M H Wilson J den Dryver G Dunbar Total Fully Paid Ordinary Shares Listed Options Staff Options 6,478,839 93,333 - 300,000 6,872,172 494,838 3,517 - 25,000 523,355 2,000,000 1,535,000 400,000 400,000 4,335,000 Helix Resources Limited Annual Report 2008 61 NUMBER OF OPTIONS HELD Spread of Holdings 1–1000 1,001–5,000 5,001–10,000 10,001–100,000 100,001 and over Total PERCENTAGE HELD BY 20 LARGEST OPTIONHOLDERS Shareholder 1 Yandal Investments Pty Ltd 2 Wythenshawe Pty Ltd 3 Aquila Resources Ltd 4 Gee Vee Pty Ltd 5 Mr Manuel Arthur Samios 6 Blamnco Trading Pty Ltd 7 Warramboo Holdings Pty Ltd 8 Ms Tara Louise King 9 Technica Pty Ltd 10 PDS Management Pty Ltd 11 Mr C & Mrs S Bass 12 Ms Vanessa Adrienne Waghorn 13 Zero Nominees Pty Ltd 14 Mr Kym Anthony Burke 15 Niddrie Holdings Pty Ltd 16 Forbar Custodians Ltd 17 Sandwich Holdings Pty Ltd 18 Karalco Pty Ltd 19 Mr GD & Mrs AM Riley 20 Halyburton Super Fund Top 20 Total Number of Shareholders Number of Shares 782 662 154 174 24 340,613 1,543,555 1,072,284 4,216,950 6,854,523 1,796 14,027,925 Number of Shares % of Issued Capital 1,396,564 1,025,001 709,467 494,838 297,639 250,000 250,000 250,000 232,083 210,000 200,000 199,820 182,100 158,125 153,639 151,250 150,000 132,500 125,000 124,500 9.96 7.31 5.06 3.53 2.12 1.78 1.78 1.78 1.65 1.50 1.43 1.42 1.30 1.13 1.10 1.08 1.07 0.94 0.89 0.89 6,692,526 47.72 Helix Resources Limited Annual Report 2008 62 Tenement Name Mineral Ownership TENEMENT SCHEDULE LAKE EVERARD EL3403 EL3335 Lake Everard Yellabinna ELA2006/0389 Lake Everard West Gold, base metals, Uranium Gold, base metals, Uranium Gold, base metals, Uranium HLX 100%, Minotaur earning 51% all minerals other than uranium, Toro earning 51% uranium rights HLX 100%, Minotaur earning 51% all minerals other than uranium, Toro earning 51% uranium rights HLX 100%, Minotaur earning 51% all minerals other than uranium, Toro earning 51% uranium rights PARACHILNA EL3814 ADELAIDIAN ELA2006/0570 EL3956 EL4022 GLENBURGH GOLD EL09/1079 EL09/1281 EL09/1282 EL09/1283 EL09/1284 EL09/1285 EL09/1286 EL09/1287 EL09/1288 EL09/1289 EL09/1325 PL09/0424 PL09/0425 PL09/0426 PL09/0427 Mt Elkington Copper, Gold, base metals HLX 100% Fleurieu Devonborough Downs Copper, Gold, base metals HLX 100% Copper, Gold, base metals HLX 100% Olary Copper, Gold, base metals HLX 100% Glenburgh Warrigal Gold, base metals Gold, base metals Carradarra Well Gold, base metals Deep Well Challenger Minga Yalbra Well Gold, base metals Gold, base metals Gold, base metals Gold, base metals Willagrad Bore Gold, base metals Garden Well Rabbit Bore Glenburgh Gold, base metals Gold, base metals Gold, base metals Gold, base metals Gold, base metals Gold, base metals Gold, base metals HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% BOOYEEMA NICKEL JV EL47/1089 EL47/1090 Munni Munni South Nickel Munni Munni South Nickel HLX 100% , Anglo American earning 80% HLX 100% , Anglo American earning 80% WEST PILBARA EL47/1075 EL47/1144 EL47/1145 ELA47/1146 ELA47/1775 ELA47/1776 MLA47/0786 MLA47/0787 MLA47/0788 MLA47/0789 Munni Munni South Gold, base metals Pinderi Hills Pinderi Hills Gold, base metals Gold, base metals Cooya Pooya Gold, base metals Munni Munni Munni Munni Munni Munni Munni Munni Munni Munni Munni Munni Gold, base metals Gold, base metals Gold, base metals Gold, base metals Gold, base metals Gold, base metals HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% Helix Resources Limited Annual Report 2008 63 Tenement Name Mineral Ownership WEST PILBARA MLA47/0790 MLA47/0791 MLA47/0792 MLA47/0793 MLA47/0794 Munni Munni Munni Munni Munni Munni Munni Munni Munni Munni Gold, base metals Gold, base metals Gold, base metals Gold, base metals Gold, base metals HLX 100% HLX 100% HLX 100% HLX 100% HLX 100% YALLEEN IRON ORE JOINT VENTURE EL47/1169-I EL47/1170-I EL47/1171-I Yalleen Yalleen Yalleen Iron ore, base metals HLX 100%, API Management Pty Ltd 70% iron ore rights Iron ore, base metals HLX 100%, API Management Pty Ltd 70% iron ore rights Iron ore, base metals HLX 100%, API Management Pty Ltd 70% iron ore rights Abbreviations and Definitions used in Schedule: EL ML PL Exploration Licence Mining Lease Prospecting Licence ELA MLA PLA Exploration Licence Application Mining Lease Application Prospecting Licence Application Helix Resources Limited Annual Report 2008 64 CORPORATE DIRECTORY Executive Chairman Non-executive Director Non-executive Director Technical Director Directors Greg J Wheeler John den Dryver Gordon Dunbar Michael Wilson Australian Business Number 27 009 138 738 Head and Registered Office 9 Richardson Street West Perth Western Australia 6005 PO Box 825 West Perth Western Australia 6872 Telephone: +61 8 9321 2644 Facsimile: +61 8 9321 3909 Email: helix@helix.net.au Website: www.helix.net.au Share Registry Advanced Share Registry 150 Stirling Highway Nedlands Western Australia 6009 PO Box 1156 Nedlands Western Australia 6909 Telephone: +61 8 9389 8033 Facsimile: +61 8 9389 7871 Auditor Grant Thornton (WA) Partnership Level 1, 10 Kings Park Road West Perth Western Australia 6005 Telephone: +61 8 9480 2000 Facsimile: +61 8 9322 7787 Stock Exchange The Company Securities are quoted on the Australian Stock Exchange Limited CODES: HLX and HLXO Helix Resources Limited Annual Report 2008 65 

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