HELIX RESOURCES LIMITED
ANNUAL REPORT 2011
Drilling at the Joshua Project 2011
Contents
Chairman’s Review ............................................................................. 2
Review Of Operations ......................................................................... 3
Corporate Governance ....................................................................... 14
Directors’ Report .............................................................................. 18
Auditor’s Independence Declaration ...................................................... 24
Independent Audit Report ................................................................... 25
Directors’ Declaration ........................................................................ 28
Statement Of Financial Position ............................................................ 29
Statement Of Comprehensive Income ..................................................... 30
Statement Of Cash Flows .................................................................... 31
Statement Of Changes In Equity ............................................................ 32
Notes To The Financial Statements ........................................................ 33
Number Of Shares Held ...................................................................... 55
Tenement Schedule ........................................................................... 57
Corporate Directory ........................................................................... 58
Joshua Project
Chile
Drilling at
Canbelego, NSW
Helix Resources Limited Annual Report 2011
1
Chairman’s Review
Dear Shareholder
I am pleased to present the 2011 Annual Report for the Company.
Helix has had a very successful year of exploration, adding an inferred 100,000 oz gold resource to
our NSW Projects, confirming the magnetite potential at our Olary Project in South Australia and
commencing our first field season on our exciting projects in Chile; including drilling a copper
mineralised porphyry system at the Joshua Project.
Helix has continued with our business strategy of securing large advanced exploration acreage with a
particular focus on two key commodities, gold and copper, and utilising leading edge exploration
techniques under the guidance of a skilled Board and Management team to create shareholder wealth
whilst managing risks.
We have achieved geographical diversity through our operations in Chile and have secured six (6)
Projects in which we hold 100%, and are actively seeking to acquire more advanced projects where
we can use our exploration and commercial expertise to move the Projects further up the ‘value
curve’. Our 1st drilling program at the Joshua Copper Project has confirmed excellent copper mineral
prospectivity, and our Santiago office now comprises a team of 7.
Shareholders who participated in the non-renounceable Option issue in July 2009 at $0.015 had the
potential to realize their investment via ASX trading up to 11 cents in 4Q10. I am pleased that 98% of
optionholders exercised them at $0.0508 before 31 May 2011 which raised $2.6M, which means we
have ±$4M in liquid assets to continue to advance our Projects.
I would like to thank the Board and Staff for their strong contributions in 2010/11 and ongoing
commitment.
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 2011
2
COPPER & GOLD PROJECTS - NSW
BACKGROUND: Helix has established a significant ground holding in Central NSW covering 1,500km² of
tenements through joint ventures it controls and tenement acquisitions. The area has been targeted
for its Cu and Au mineral prospectivity, excellent infrastructure [including nearby copper and gold
processing plants, some with excess capacity]; and the presence of mining-focused companies in the
district (Straits; Mincor; Glencore; YTC; OZ Minerals, Polymetals).
Review of Operations
Figure 1: Helix's NSW project location map
RESTDOWN JV & MURIEL TANK JV PROJECTS
EL 6140, EL6501 & EL6739:- Helix Resources 70%; Glencore International AG 30%
The Projects are located 40km to 70 km SE of Cobar in Central Western NSW with the tenement
package covering an area of ~278km² (Restdown JV Project 188km², Muriel Tank JV Project 90km²).
RESTDOWN GOLD PROJECT
The Restdown Project is located approximately 20 km SW of the historic Mt Boppy Gold Mine
[produced ≈500,000 oz at +10g/t Au] now owned by Polymetals and 40 km to the NW is NewGold’s
Peak Mine; while YTC’s Nymagee and Hera development projects are approximately 30 km S.
Helix drilling on the Restdown JV has confirmed the presence of broad gold intersections associated
with altered sediments within a regionally significant anticline. Results illustrate that gold is present
at significant grade and widths in the area and gold mineralisation to date is not depth constrained
and is open down dip.
Helix Resources Limited Annual Report 2011
3
Sunrise Prospect
The Sunrise Prospect is defined at a +10ppb Au in soils level as anomalous over a strike of +500m and
up to 300m wide, which remains open in all directions.
Better results from the two drilling programs to date included:-
o 13m @ 4.2g/t Au HRRC006
o 18m @ 2.3 g/t Au & 4m @ 4.4g/t Au HRRC008
o 42m @ 1.5g/t Au (incl. 5m @ 3.3g/t, 6m @ 3g/t and 7m @ 2.7g/t) HRRC025
o 32m @ 1.0g/t Au (incl. 5m @ 5.4g/t) HRRC012
o 14m @ 2.0g/t (incl. 5m @ 4.0g/t) HRRC018
and formed the basis of the Inferred resource estimation of 2.6 Mt @ 1.2g/t Au for 100,000 oz Au.
Details of the resource estimation parameters are outlined in the ASX release dated 17 August 2011.
Figure 2: Interpreted cross section of mineralisation and lithology at Sunrise Prospect
Good Friday Prospect
Historical data identified the presence of gold mineralization at Good Friday with one RC drill hole
recording 56m @ 11.7g/t Au from 5m including 23m @ 24g/t Au from 32m.
Drilling has confirmed the system is mineralised over a strike of +200m, and open in all directions.
The majority of gold results from the RC program are from within the oxide to transition zone.
Weathering extends to a depth of 60-70m (the base of oxidation). Gold mineralisation is not depth
constrained and may continue down dip. Extensions of these intersections will be tested in future
programs. A review of the down-hole geology indicates that the gold mineralisation is hosted in
sericite altered sandstones and siltstones, with higher grades correlating well with silica content.
Helix Resources Limited Annual Report 2011
4
Regional Prospectivity
The excellent results from drilling to date, the existence of historic workings scattered throughout
the area; the aeromagnetic survey data and geochemical sampling program results provides
confidence the project has the potential to host economic gold mineralisation elsewhere in the
identified zone of interest which is +20km long by up to 9km wide (Figure 3).
A series of criteria including lithological controls, interaction of structural directions, and multi-
element geochemistry appears to provide the key to higher tenor of gold in the region and these
criteria will be used to prioritise targets defined from this regional geochemical sampling for drilling.
Figure 3: Significant regional prospectivity exists - Zone of interest with soil program on detailed aeromagnetics
CANBELEGO PROJECT JV – NSW
EL 6105:- Helix Resources Ltd 51%, moving to 70%, Straits Resources 49%
Project Summary
The Canbelego Project is located 45km SE of Cobar. Helix to date has defined an Initial inferred
resource for the Canbelego Project at a 0.3% Cut off grade of 1.5 million tonnes at 1.2% Cu for
18,000t Contained Copper (refer ASX announcement 1st October 2010).
Field work is concentrating on defining additional drill targets near the existing resource and in the
region to improve technical and economic viability.
FIVEWAYS PROSPECT - NSW
At the 100% owned Fiveways Project, three RC holes were drilled (477m) in 2Q11 to test a series of
discrete bulls-eye magnetic anomalies modelled from detailed magnetic surveys undertaken by Helix.
Holes were assayed for gold and basemetals with samples collected at 4m intervals. Results returned
were encouraging, with anomalous gold (up to 4m @ 0.4g/t Au) and elevated base metals over broad
intercepts in the holes drilled.
Helix Resources Limited Annual Report 2011
5
CHILE - COPPER AND GOLD PROJECTS
Helix has identified Chile as a country with a low rate of ASX listed resource company participation, a
suitable risk profile and excellent prospectivity for copper and gold, to add geographical
diversification to our exploration and development portfolio. Helix has established a 100% owned
Chilean subsidiary with an in-country general manager, an exploration manager, senior geologist and
associated staff to progress its current Projects below and secure new Projects:-
Joshua Copper Project
• 100% owned exploration concession targeting Cu/Au porphyry systems.
•
• 1st RC drill program completed with better drill results:-
Surrounds the Carmelita Mine which is artisanally mining ~2.5% Cu oxide material (Excised).
o 243m @ 0.25% Cu to EOH, incl. 27m @ 0.51% Cu + 0.1g/t Au in ARJS11-005 from 0m
o 177m @ 0.15%Cu, incl. 23m @ 0.21% Cu to EOH in ARJS11-004 from 57m
o 156m @ 0.20% Cu + 0.1g/t Au in ARJS11-001 from 0m
o 147m @ 0.22% Cu + 0.1g/t Au in ARJS11-002
•
•
Interpretation of assays, lithologies, alteration and geochemistry supports our Exploration target*
of +400Mt for the Project; and the overall system may be much larger.
IP survey and ground magnetics are underway to cover the 10km² main target zone.
Figure 4 : Joshua Project location and geological map
Helix Resources Limited Annual Report 2011
6
Talca Gold Project
• 100% owned exploration concession adjacent and along strike to local gold mining operations
covering 97km2 of gold prospective ground within the mining district of Punta De Talca (Region
IV). The district has been only ever been artisanally mined, producing +800,000 oz gold since
colonial times.
• Opportunity to use modern exploration methods and drilling to assess scope for larger scale
developments based on known gold exploited from high-grade quartz tension veins [average >5-
10g/t Au] bounded by parallel NW trending shears, traceable for 5-10km along strike.
•
Initial geochemistry and mapping has confirmed regional prospectivity with rock chips up to
15.2g/t Au.
• Detailed ground magnetic survey completed to assist with defining structural targets to drill, with
trenching expected to assist in defining targets in 4Q11.
Pelusa Gold Project
• 100% owned exploration concessions 15-25km NW of Talca Project
• Area has same geological and structural setting to Talca and has artisanal mining along strike.
• Adds regional upside, if potential for larger tonnage deposits in the Talca goldfield are defined.
Loa Project
• 100% owned exploration concession targeting Cu porphyry systems. Licence 23km2 situated ~40km
west of the Chucquicamata Copper Mine and 40km along strike north of Spence Copper Mine in
Region II. The exploration concessions, covering an area with variable shallow cover, were
targeted for the possible interaction of major N-S lineaments with secondary NW and NE
structures, crucial elements for porphyry emplacement in this region. The project is abutted by
BHP, Vale and several local mid-cap mining companies.
• Helix has been in ongoing discussions to source available geophysical platforms to undertake a
detailed airborne aeromagnetic survey and an IP survey on the Project to define drill targets
Drilling at Joshua Project, Chile
Helix Resources Limited Annual Report 2011
7
OLARY PROJECT – SA
Helix Resources Ltd 100% EL4022; EL3956
Summary
• Results from 1st regional 11 hole RC drill program (1500m) testing the magnetite rich Braemar
Iron Formation provides confidence a large iron ore system is present
• Better drill results include:
124m @ 31.2% Fe from Surface to EOH in OLRC004
140m @ 29.8% Fe from 4m in OLRC005
• Potential access to the Broken Hill-Port Pirie railway network that transects the Helix tenements
Background
The Olary Region is an emerging iron ore province in the ENE of South Australia. A number of
companies have reported encouraging drilling results from various prospects scattered in a belt south
of the Barrier Highway from the township of Yunta to the New South Wales border and beyond (refer
Figure 5). The iron occurrences are all associated with the folded and deformed Braemar Iron
Formation.
Helix has a strategic tenement holding in the area with significant exploration potential and direct
access to infrastructure (Rail & Highway) in a region that is being considered as a new frontier for the
development of magnetite iron ore.
Helix is in the process of carrying out a series of metallurgical and petrological studies to gain a
better understanding of the mineral attributes, possible recoveries and characteristics of the iron ore
intersected as well as using the results from the drilling to model the detailed aeromagnetics and
determine priority drill targets on the project.
Figure 5: Olary Project location map with other Projects in the region
Helix Resources Limited Annual Report 2011
8
Table 1: Olary Drilling information- Significant XRF Iron results from RC drilling (>4m @ 20%Fe)
HOLE ID
EAST
(MGA-Zn54)
NORTH
(MGA-Zn54)
RL(m)
AZI (grid)
DIP
HOLE
DEPTH(m)
Depth
From
RESULT
COMMENTS
OLRC001
462500
6412370
248
20
-60
OLRC002
464000
6414000
231
0
-90
OLRC003
OLRC004
OLRC005
OLRC006
OLRC007
OLRC008
OLRC009
463720
463365
463152
462880
460205
461765
460170
6413490
248
6414230
247.5
6414373
6413800
6415765
6414995
256
247
255.5
275.5
6414420
254
180
0
180
350
210
210
185
-60
-90
-60
-60
-60
-60
-60
OLRC010
460950
6414290
249
0
-60
OLRC011
461400
6414000
256.5
0
-60
120
and
120
and
150
124
150
120
150
150
150
and
Incl.
150
and
Incl.
150
and
64m
96m
12m
12m @ 33.2% Fe
12m @ 33.2% Fe
8m @ 20.8% Fe
104m
16m @ 41.6% Fe
to End of Hole
52m
36m @ 33.2% Fe
0m
4m
124m @ 31.2% Fe
to End of Hole
140m @ 29.8% Fe
84m
24m @ 34.7% Fe
108m
20m @ 34.8% Fe
-
0m
56m
88m
68m
NSR
Target not reached
20m @ 30.3% Fe
60m @ 23.4% Fe
24m @ 31.8% Fe
12m @ 31.5% Fe
104m
48m @26.0% Fe
to End of Hole
116m
20m @ 31.2% Fe
16m
120
20m @ 20.6% Fe
12m @ 35.0% Fe
Assays are 4m Spear samples, Samples were sent to Ultratrace Perth for crushing, splitting and fusion XRF analysis, reporting Fe as a percentage.
Intercepts are reported from 4m composites with grades >15% Fe, no internal dilution to give total intercept results of >20% Fe.
Total Drilled
1,534m
Figure 6: Location of Maiden 11 hole RC Program on detailed first vertical derivative magnetics - magnetic highs represent Braemar
Formation targets for future drill testing
Helix Resources Limited Annual Report 2011
9
YALLEEN IRON ORE JOINT VENTURE – WESTERN AUSTRALIA
Helix Resources Limited (30%), API (AMCI/Aquila) (70%) iron ore rights E47/1169-1171
Helix Resources Limited 100% other minerals
Summary
•
JORC Resource based on drilling during 2007/8 currently stands at 84.3Mt @ 57.2% Fe Channel
Iron(refer to appended resources table)
• Helix prepared Scoping Study in August 2010 reported technical and financial viability for Yalleen
Iron Ore Project [refer 17 August 2010 ASX release detailing assumptions and Disclaimer]
•
Scoping study indicated nearby potential infrastructure solutions for transporting Yalleen sourced
product to port.
• API provided 1Q11 certain information regarding development options but not in a Scoping Study
format. Whilst Helix awaits further information from API to determine the impact on their
Scoping Study released August 2010, preliminary comments emerging from the API studies
include:-
A conceptual level mine plan at 8Mtpa ore production rate indicates a potential recoverable
resource of 61Mt at an ore strip ratio of 2.65:1
A potential product specification comparable to the API’s West Pilbara Fines target grades
Yalleen ore has the potential to be beneficiated by washing to reduce impurities and improve
grade
Preferred ore transport options: private heavy haul road [capable of handling 510T trucks] or
light rail option to API Stage 1 rail link 75kms W or heavy haul rail to Robe River rail link 12
kms N
• Recent Fe price modeling by API, together with other Pilbara studies in the marketplace, has led
Helix to use a LOM average ‘real’ price of $79/t
•
Infrastructure access charge discussions have commenced
Helix awaits release of the WPIOP Stage 1 DFS together with Project Development Approval and
Funding updates to determine the impact on the Yalleen JV.
LAKE EVERARD (INCL. TUNKILLIA) PROJECT – SOUTH AUSTRALIA
Helix Resources Limited 46%, Minotaur Exploration Limited 54%
EL 3403, ELA2006/389 and EL 3335 [excluding uranium rights]
GOLD
Project Summary
Resource inventory of 803,000oz Au and 1,658,000oz Ag (*Refer appended resource table);
Minotaur continues to sole fund their proposed work programs whilst Helix dilute. Minotaur has
to sole fund a further $10M from their initial 51% equity position to dilute Helix to ±24%;
Background
Helix discovered the deposit 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 km² 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.
Helix Resources Limited Annual Report 2011
10
Since the Project became the subject of an Earn-In & Joint Venture in 2005, Minotaur have spent
+$6M carrying out additional drilling at Area 223 and several exploration campaigns using geophysics,
geochemistry and drilling. In August 2009, Minotaur released an updated combined measured,
indicated and inferred estimate inventory of 803,000oz Au and 1,658,000oz Ag within the Area 223
deposit.
Minotaur advise they continue to complete regional drilling and further geotechnical, structural and
metallurgical testing together with economic studies on the Project.
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.
zones
In a regional context, the Tunkillia area
shows evidence of extensive alteration.
Large
demagnetisation
of
(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.
the
prospect
At
gold
mineralisation at Tunkillia is associated
with zones of intense sericite alteration,
and quartz and sulphide veining.
scale,
Figure 7: Location of Tunkillia Gold Project
* Note: The term Exploration Target should not be misinterpreted as an estimate of Mineral Resources or Ore Reserves. Whilst the
company remains optimistic that it 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 is insufficient drilling or analysis to define a Mineral Resource and
it is uncertain if further exploration will result in the determination of a Mineral Resource.
Helix Resources Limited Annual Report 2011
11
Helix Project Locations
Helix Resources Limited Annual Report 2011
12
Resources
Commodity
Iron Ore
Category
Indicated
Inferred
Project
Yalleen JV, WA
Interest
30%
(Contributing)
Resource
47.9Mt @ 57.3% Fe (Channel Iron)
36.4Mt @ 57.1% Fe (Channel Iron)
Joint ventured with API Management Pty Ltd (50% Aquila Resources, 50% AMCI) and forms part of
their West Pilbara Iron Ore Project which comprises multiple JV’s. Helix prepared Scoping Study in
August 2010 reports technical and financial viability.
Copper
Inferred
Canbelego JV,
NSW
51%
(Moving to 70%)
(Managing)
1.5Mt @ 1.2% Cu for 18,000t
Contained Cu (at 0.3% Cu Cut-off)
Joint venture with Straits Resources
Gold
Oxide
Measured
Indicated
Inferred
Primary
Indicated
Inferred
Inferred
Total
Tunkillia JV, SA
(Diluting)
46%
1.2Mt @ 1.8 g/t – 66,000 oz
2Mt @ 1.3 g/t – 86,000 oz
2.5 Mt @ 1g/t – 77,000 oz
4.2Mt @ 2 g/t – 270,000 oz
4.4Mt @ 2.1 g/t – 300,000 oz
8.6Mt @ 5.7 g/t – 1.6M oz Silver
0.8M oz Au and 1.6M oz Ag
Minotaur Exploration Ltd has earned ±54% and as JV Manager continue to assess economic and
technical viability of the Project, as well as exploration upside. Whilst Helix has the option to
contribute at any time, Minotaur will need to expend an additional $10 million from their original
spend of $5M for 51% to dilute Helix from the initial 49% interest to 24%.
Gold
Inferred
Restdown JV,
NSW
70% (Managing)
2.6Mt @ 1.2g/t Au for 100,000oz
gold (at 0.3g/t Au Cut-off)
Joint Venture with Glencore AG
Details of the assumptions underlying the above estimations are contained in previous ASX releases
or at www.helix.net.au
Competent Persons Statements
The information in this announcement that relates to Exploration Results, Mineral Resources or Ore Reserves 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 2011
13
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 2011
14
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 2011
15
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 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 2011
16
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 ISO 31000:2009. The company engages an insurance broking 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.
Helix Management and Chile staff, Chile, August 2011
Helix Resources Limited Annual Report 2011
17
DIRECTORS’ REPORT
In respect of the financial year ended 30 June 2011, 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 thirteen 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, FAIG
Non-Executive Director - Appointed 18 July 2006
Mr Dunbar is a consulting geologist with 40 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.
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
Gordon Dunbar
Company
Adelaide Resources Limited
Gascoyne Resources Limited
Centrex Metals Limited
Gascoyne Resources Limited
Rubianna Resources Limited
Period of directorship
18 April 2005 – current
5 October 2009 – current
1 March 2011 – current
5 October 2009 – current
13 September 2011 - current
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.
Helix Resources Limited Annual Report 2011
18
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 $708,373 (2010: $6,885,378).
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 entity’s activities are contained in releases to the ASX on a quarterly basis, discussed in a separate section of this Annual Report
as well as on our website at www.helix.net.au.
The Company’s strategy continues to focus on prospective gold and copper regions and utilising our corporate and geological expertise to create
and extract value for the benefit of our shareholders.
Mineral Asset Project Highlights include:-
Gold
Restdown Gold Project - NSW - [Helix 70%; Isokind Pty Ltd 30%]
•
1st pass drilling 4Q10 provided ‘significant’ Au intercepts leading to a 6,000m RC program being completed 2Q11 and a maiden Resource of
2.6Mt @ 1.2g/t Au for 100,000 oz gold.
Preliminary assessment of economic and technical viability factors has commenced, with additional RC drilling planned 2H11 to increase the
Resource, subject to approvals and drill rig availability, as well as test regional targets in the identified 9km by 20km zone of interest.
•
Muriel Tank Project - NSW- [Helix 70%; Isokind Pty Ltd 30%]
•
Rockchip samples to 33 g/t Au and aeromagnetic survey results confirm extensive drill targets and prospectivity. RC drilling scheduled for
2H11 subject to approvals and drill rig availability.
Non-Managed JV - Tunkillia Gold Project - SA
•
JV participant and manager Minotaur Exploration continue to fund expenditure whilst Helix dilute from their 46% interest. The project has an
existing Resource at Area 223 – comprising a total of 800,000oz Au and 1,600,000oz Ag; and numerous exploration targets to increase the
regional size of the Resource.
Copper
Joshua Copper Project - Chile
•
Initial 1200m RC drilling program at the priority 1 target confirms copper mineralisation prospectivity. Results including 243m @ 0.25% Cu
+0.1g/t Au and 157m @ 0.2% Cu +0.1g/t Au confirm the potential for an Exploration Target* of +400Mt at this prospect
IP and ground magnetic survey completed and interpretation underway, with diamond drill program scheduled for 4Q11 subject to approvals
and drill rig availability.
•
Canbelego Copper Project- NSW - [Helix 51% and earning 70%; Straits Resources 49% diluting]
•
Initial Inferred Resource of 1.5Mt @ 1.2% Cu established 3Q10 and regional geochemical work and drilling to identify additional resources
continues during 2H11.
Iron Ore
Non Managed JV - Yalleen Project - WA [API (Aquila/AMCI) 70% / Helix 30%]
•
•
•
Resource estimate of 84.3 Mt @ 57.2% Fe for Kumina Creek and Robe Exit
Helix prepared Scoping study August 2010 confirmed technical and economic viability
API development study work continues
Olary Magnetite Project – SA
•
RC drill program confirms potential for a large scale Fe system as evidenced by drilling results including 140m @ 29.8% Fe and 124m @
31.2% Fe.
Corporate
The Group reported a loss of $708,373 during the year after impairment of $127,805 of carried forward exploration costs.
A placement at $0.11 occurred in November 2010 to raise $2.3M before costs, with an additional $2.7M raised in May 2011 via the exercise of 54M
options at $0.0508 which were originally issued to shareholders at $0.015 in 2H09.
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.
Helix Resources Limited Annual Report 2011
19
SUBSEQUENT EVENTS
There has not been any matter or circumstance, other than 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 on 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 [AUDITED]
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 identical in their contents and only differ in remuneration levels. They have durations of twenty four months currently expiring
June 2013 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 against a number of qualitative and quantitative factors.
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
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) 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:
Salary &
Fees
$
Primary
Perfor-
mance
Based
Payment*
$
Post Employment
Equity
Non
Monetary
Super-
annuation
Pre-
scribed
Benefits
$
$
$
Other
Retire-
ment
Benefits
$
Options
% of
Remu-
neration
Other
Benefits
Total
$
%
$
$
2011
Key
Management
Personnel
G J Wheeler
297,592
M H Wilson
247,300**
73,395
50,459
J den Dryver
40,000
G Dunbar
J McNamara
40,000
79,117
-
-
11,010
-
-
-
-
-
33,388
22,921
-
-
8,111
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
704,009
Total Key
Management
Personnel
*The bonus paid in April 2011 was to recognise the voluntary reduction by staff in salaries by ±25% during 2009/10 and ±15% during 2010/11 to
recognise the GFC and to conserve cash.
**During 2011 the Long Service Leave entitlement of MH Wilson was paid out [$48,000]
134,864*
64,420
-
-
-
-
-
-
Field Mapping at Muriel Tank, NSW
Helix Resources Limited Annual Report 2011
404,375
320,680
40,000
40,000
98,238
903,293
20
Salary &
Fees
$
Primary
Perfor-
mance
Based
Payment
$
Post Employment
Equity
Non
Monetary
Super-
annuation
Pre-
scribed
Benefits
$
$
$
Other
Retire-
ment
Benefits
$
Options
% of
Remu-
neration
Other
Benefits
Total
$
%
$
$
2010
Key
Management
Personnel
G J Wheeler
262,040
M H Wilson
169,324
J den Dryver
40,000
G Dunbar
J McNamara
Total Key
Management
Personnel
40,000
50,330
561,694
-
-
-
-
-
-
-
-
-
-
-
-
23,584
15,239
-
-
4,529
43,352
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
285,624
184,563
40,000
40,000
54,859
605,046
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 15,500,000 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
M H Wilson
J den Dryver
G Dunbar
J McNamara
Total
8,000,000 Helix Resources Limited
5,000,000 Helix Resources Limited
1,000,000 Helix Resources Limited
1,000,000 Helix Resources Limited
500,000 Helix Resources Limited
15,500,000
$0.525
$0.525
$0.525
$0.525
$0.525
31.10.2011
31.10.2011
31.10.2011
31.10.2011
31.10.2011
8,000,000
5,000,000
1,000,000
1,000,000
500,000
15,500,000
DIRECTORS’ SHARE AND OPTION HOLDINGS
Director
G J Wheeler
M H Wilson
J den Dryver
G Dunbar
*Fully Paid Ordinary Shares
*Staff Options
16,873,259
2,349,700
600,000
1,050,000
8,000,000
5,000,000
1,000,000
1,000,000
* Directors’ interests in ordinary shares and options of the parent entity are shown at the date of this Directors’ Report.
Helix Resources Limited Annual Report 2011
21
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.
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
3
3
3
3
3
3
3
3
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 auditors did not provide any non-audit services during the financial year.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is included on page 24 of the financial report.
Dated at Perth this 15th day of September 2011.
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 2011
22
Competent Persons Statements
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves on all 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.
* Note: Exploration Target should not be misinterpreted as an estimate of Mineral Resources or Ore Reserves. Whilst the company
remains optimistic that it 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 is insufficient drilling or analysis to define a Mineral Resource and it is
uncertain if further exploration will result in the determination of a Mineral Resource
Helix Resources Limited Annual Report 2011
23
AUDITOR’S INDEPENDENCE DECLARATION
Grant Thornton Audit Pty Ltd
ABN 94 269 609 023
10 Kings Park Road
West Perth WA 6005
PO Box 570
West Perth WA 6872
T +61 8 9480 2000
F +61 8 9322 7787
E admin.wa@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Helix Resources Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of Helix Resources Limited for the year ended 30 June 2011, I declare that, to
the best of my knowledge and belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
b
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY
LTD Chartered Accountants
C A Becker
Director - Audit & Assurance
Perth, 15 September 2011
Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited,
together with its subsidiaries and related entities, delivers its services independently in Australia.
Liability limited by a scheme approved under Professional Standards Legislation
Helix Resources Limited Annual Report 2011
24
INDEPENDENT AUDIT REPORT
Grant Thornton Audit Pty Ltd
ABN 94 269 609 023
10 Kings Park Road
West Perth WA 6005
PO Box 570
West Perth WA 6872
T +61 8 9480 2000
F +61 8 9322 7787
E admin.wa@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Helix Resources Limited
Report on the financial report
We have audited the accompanying financial report of Helix Resources Limited (the
‘Company’), which comprises the consolidated statement of financial position as at 30 June
2011, and the consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year
ended on that date, a summary of significant accounting policies, other explanatory
notes to the financial report and the directors’ declaration of the consolidated entity
comprising the Company and the entities it controlled at the year’s end or from time to
time during the financial year.
Directors’ responsibility for the financial report
The Directors of the Company are responsible for the preparation and fair presentation
of the financial report in accordance with Australian Accounting Standards and the
Corporations Act 2001. This responsibility includes establishing and maintaining
internal controls relevant to the preparation and fair presentation of the financial report
that are free from material misstatement, whether due to fraud or error. The Directors
also state, in the notes to the financial report, in accordance with Accounting Standard
AASB 101
Presentation of Financial Statements, that compliance with the Australian equivalents to
International Financial Reporting Standards ensures that the financial report,
comprising the financial statements and notes, complies with International Financial
Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit.
We conducted our audit in accordance with Australian Auditing Standards which
require us to comply with relevant ethical requirements relating to audit engagements
and plan and perform the audit to obtain reasonable assurance whether the financial
report is free from material misstatement.
Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together
with its subsidiaries and related entities, delivers its services independently in Australia.
Liability limited by a scheme approved under Professional Standards Legislation
Helix Resources Limited Annual Report 2011
25
INDEPENDENT AUDIT REPORT
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation and fair presentation of the financial report in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of
the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
Auditor’s opinion
In our opinion:
a
the financial report of Helix Resources Limited is in accordance with the
Corporations Act 2001, including:
i
ii
giving a true and fair view of the consolidated entity’s financial position as at 30
June 2011 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001; and
b
the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.
Report on the remuneration report
We have audited the remuneration report included in pages 20 to 21 of the directors’ report
for the year ended 30 June 2011. The Directors of the Company are responsible for the
preparation and presentation of the remuneration report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration
report, based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together
with its subsidiaries and related entities, delivers its services independently in Australia.
Liability limited by a scheme approved under Professional Standards Legislation
Helix Resources Limited Annual Report 2011
26
INDEPENDENT AUDIT REPORT
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of Helix Resources Limited for the year ended 30
June 2011, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY
LTD Chartered Accountants
C A Becker
Director - Audit & Assurance
Perth, 15 September 2011
Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together
with its subsidiaries and related entities, delivers its services independently in Australia.
Liability limited by a scheme approved under Professional Standards Legislation
Helix Resources Limited Annual Report 2011
27
DIRECTORS’ DECLARATION
The Directors of the company declare that:
1.
the financial statements and notes, as set out on pages 29 to 54 are in accordance with the Corporations Act 2001 and:-
a.
b.
comply with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001; and
give a true and fair view of the financial position as at 30 June 2011 and of the performance for the year ended on that date of the
group; and
c.
complies with International Financial Reporting Standards as disclosed in Note 1.
2.
the Chief Executive Officer and Chief Finance Officer have each declared that:-
a.
b.
c.
the financial records of the company for the financial year have been properly maintained in accordance with s 286 of the
Corporations Act 2001;
the financial statements and notes for the financial year comply with the Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view;
3.
In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable;
This declaration is made in accordance with a resolution of the Board of Directors.
On behalf of the Directors
Greg J Wheeler
Executive Chairman
Signed at Perth this 15th day of September 2011.
Helix Resources Limited Annual Report 2011
28
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2011
Note
2
3
4
6
7
5
8
9
9
10
11
12
Current Assets
Cash and Cash Equivalents
Trade and Other Receivables
Other Financial Assets
Total Current Assets
Non-Current Assets
Property, Plant & Equipment
Exploration and Evaluation
Other Financial Assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and Other Payables
Short Term Provisions
Total Current Liabilities
Non- Current Liabilities
Other Long Term Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Share Capital
Reserves
Accumulated Losses
Total Equity
CONSOLIDATED
2011
$
2010
$
4,284,040
3,577,835
160,969
137,946
3,600
57,860
4,448,609
3,773,641
94,225
99,856
9,747,315
6,149,147
1,064,000
426,000
10,905,540
6,675,003
15,354,149
10,448,644
343,842
107,119
450,961
65,845
65,845
135,035
122,541
257,576
24,469
24,469
516,806
282,045
14,837,343
10,166,599
59,145,439
53,571,624
825,600
1,037,930
(45,133,696)
(44,442,955)
14,837,343
10,166,599
Notes to the financial statements are included on pages 33 to 54
Helix Resources Limited Annual Report 2011
29
STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
Revenue from Continuing Operations
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
Profit on Disposal of Fixed Assets
Revaluation of Shares in Listed Companies
Loss on Distribution of Capital at Fair Value
Other General and Admin expenses
Loss before income tax
Income tax expense
Loss for the year
Other Comprehensive Income
Fair value movements on available for sale
financial assets
Income tax relating to comprehensive income
Other comprehensive income, after tax
Total Comprehensive Loss attributable to
members of Helix Resources Limited
Earnings Per Share
Basic (cents per share)
Diluted (cents per share)
Note
13
14
7
19
21
21
CONSOLIDATED
2011
$
2010
$
353,478
431,802
(536,692)
(306,714)
(31,848)
(45,046)
(80,000)
(35,381)
(32,005)
(9,732)
(80,000)
(51,298)
(127,805)
(5,818,552)
(41,111)
131,119
(20,270)
112,013
(164,901)
(143,811)
(6,790)
(18,171)
-
240
-
(105,465)
(708,373)
-
(2,251)
(4,232)
16,816
49,440
(900,000)
(126,584)
(6,885,378)
-
(708,373)
(6,885,378)
588,000
176,000
-
588,000
176,000
(120,373)
(6,709,378)
(0.48)
(0.48)
(5.23)
(5.23)
Notes to the financial statements are included on pages 33 to 54
Helix Resources Limited Annual Report 2011
30
STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
CONSOLIDATED
2011
$
2010
$
(687,691)
(622,763)
203,924
165,017
204,460
301,028
(318,750)
(117,275)
(3,746,492)
(1,347,962)
(29,751)
(55,619)
-
32,000
60,081
(100,000)
(50,000)
(50,000)
(3,766,162)
(1,521,581)
4,927,737
(136,620)
4,791,117
858,277
(2,159)
856,118
706,205
(782,738)
3,577,835
4,360,573
4,284,040
3,577,835
Note
Cash Flow From Operating Activities
Payments to suppliers and employees
Interest received
Other receipts
Net cash used in operating activities
2(b)
Cash Flow From Investing Activities
Payments for capitalised exploration &
evaluation expenditure
Payment for property, plant & equipment
Proceeds from sale of property, plant &
equipment
Proceeds / (Payment) for investments
(Payments) / Proceeds from security deposits
Net cash used in investing activities
Cash Flow From Financing Activities
Proceeds from issue of shares and options
Share issue costs paid
Net cash provided by / (used in) financing
activities
Net increase / (decrease) in cash and cash
equivalents held
Cash and cash equivalents at beginning
of financial year
Cash and cash equivalents at End
of Financial Year
2(a)
Notes to the financial statements are included on pages 33 to 54
Helix Resources Limited Annual Report 2011
31
CONSOLIDATED
2011
Total equity at the beginning of the financial
year
Shares issued during the financial year
Share Issue Costs
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
Share Capital
Ordinary
Other Reserves
$
$
Accumulated
Losses
$
Total
$
53,571,624
1,037,930
(44,442,955)
10,166,599
2,277,000
(136,620)
-
-
-
-
-
2,277,000
(136,620)
2,650,737
Exercise of options during the financial year
3,433,435
(782,698)
Expiry of options during the financial year
Total Comprehensive Income for the year
-
-
Total equity at the end of the financial year
59,145,439
(17,632)
588,000
825,600
17,632
-
(708,373)
(120,373)
(45,133,696)
14,837,343
CONSOLIDATED
2010
Total equity at the beginning of the financial
year
Shares issued during the financial year
Options issued during the financial year
Share Issue Costs
Exercise of options during the financial year
Share Capital
Ordinary
Other Reserves
$
$
Accumulated
Losses
$
Total
$
55,815,856
61,600
(37,557,577)
18,319,879
48,290
-
(2,160)
9,658
-
800,330
-
-
-
-
-
-
-
-
48,290
800,330
(2,160)
9,658
(2,300,020)
Capital Distribution via Distribution in-specie
(2,300,020)
Total Comprehensive Income for the year
-
176,000
(6,885,378)
(6,709,378)
Total equity at the end of the financial year
53,571,624
1,037,930
(44,442,955)
10,166,599
Drilling at Canbelego October 2010
Notes to the financial statements are included on pages 33 to 54
Helix Resources Limited Annual Report 2011
32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011
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 financial statements for Helix Resources
Limited as the Consolidated Entity (Group) consisting of Helix Resources Limited and its subsidiaries.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing
relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures
that the financial statements and notes also comply with International Financial Reporting Standards.
Accounting policies
Material 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 incorporate the assets, liabilities and results of entities controlled by Helix Resources Limited at the
end of the reporting period. A controlled entity is any entity over which Helix Resources Limited has the power to govern the financial and
operating policies so as to obtain benefits from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly
through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings
of actual and potential voting rights are also considered.
Where controlled entities have entered or left the Group during the year, the financial performance of those entities are included only for the
period of the year that they were controlled. A list of controlled entities is contained in Note 4 to the financial statements.
In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated group
have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with those adopted by the parent entity.
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 Statement of Cash Flows, 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 2011
33
d) Plant and Equipment
Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from
these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s
employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining
recoverable amounts.
The depreciation rates used for each class of depreciable assets are:
Plant and equipment
Motor Vehicles
Straight line 10% - 33%
Diminishing Value 20% - 40%
Diminishing Value 22.5%
e) Exploration and evaluation
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs
are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where
activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the
area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to
the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to
that area of interest.
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) 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 reporting 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 reporting date which are classified as non-current assets.
Loans and receivables are included in receivables in the Statement of Financial Position.
(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 reporting 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
statement of comprehensive income 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 statement of
comprehensive income as gains and losses from investment securities.
Helix Resources Limited Annual Report 2011
34
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 securi-
ties), 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 reporting 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 statement of comprehensive income. Impairment
losses recognised in the statement of comprehensive income on equity instruments are not reversed through the statement of
comprehensive income.
h) 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.
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 reporting 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.
Interest in Joint Venture Operations
i)
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.
Revenue Recognition
j)
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.
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the
instrument and is net of GST.
k) 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.
Receivables
l)
Other receivables are recorded at amounts due less any specific provision for doubtful debts.
m) 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 statement of cash flows 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.
Helix Resources Limited Annual Report 2011
35
Impairment of Non-financial Assets
n)
Non-financial 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).
Fair Value Estimation
o)
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 reporting 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
reporting 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.
p) Critical Accounting Estimates and Other Accounting Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. The Group is of the view that there are no critical accounting
estimates and judgements in this financial report, other than accounting estimates and judgements in relation to the carrying value of
mineral exploration expenditure.
Exploration and Evaluation Expenditure
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or
where the activities have not reached a stage which permits a reasonable assessment of the existence of resources or
reserves. While there are certain areas of interest from which no reserves have been extracted, the directors are of the
continued belief that such expenditure should not be written off since feasibility studies in such areas have not yet
concluded. Such capitalised expenditure is carried at the end of the reporting period at $9.747m.
q) 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 statement of comprehensive income 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.
r) Adoption of New and Revised Accounting Standards
AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for
future reporting periods and which the Group has decided not to early adopt. A discussion of those future requirements
and their impact on the Group is as follows:
AASB 9: Financial Instruments (December 2010) (applicable for annual reporting periods commencing on or
after 1 January 2013).
This Standard is applicable retrospectively and includes revised requirements for the classification and
measurement of financial instruments, as well as recognition and derecognition requirements for financial
instruments. The Group has not yet determined any potential impact on the financial statements.
The key changes made to accounting requirements include:
-
-
-
-
simplifying the classifications of financial assets into those carried at amortised cost and those carried at
fair value;
simplifying the requirements for embedded derivatives;
removing the tainting rules associated with held-to-maturity assets;
removing the requirements to separate and fair value embedded derivatives for financial assets carried
at amortised cost;
Helix Resources Limited Annual Report 2011
36
-
-
-
allowing an irrevocable election on initial recognition to present gains and losses on investments in
equity instruments that are not held for trading in other comprehensive income. Dividends in respect of
these investments that are a return on investment can be recognised in profit or loss and there is no
impairment or recycling on disposal of the instrument;
requiring financial assets to be reclassified where there is a change in an entity’s business model as
they are initially classified based on: (a) the objective of the entity’s business model for managing the
financial assets; and (b) the characteristics of the contractual cash flows; and
requiring an entity that chooses to measure a financial liability at fair value to present the portion of the
change in its fair value due to changes in the entity’s own credit risk in other comprehensive income,
except when that would create an accounting mismatch. If such a mismatch would be created or
enlarged, the entity is required to present all changes in fair value (including the effects of changes in
the credit risk of the liability) in profit or loss.
s) New standards and interpretations which may impact the Company not yet adopted
Whilst amendments to the Accounting Standards and Australian Accounting Interpretations have been considered, the Group does not
anticipate early adoption of any of the reporting requirements and does not expect these requirements to have any material effect on the
Group’s financial statements.
Hado Project field visit, Chile 2011
Helix Resources Limited Annual Report 2011
37
2. NOTES TO THE CASH FLOW STATEMENT
a) Reconciliation of Cash
For the purposes of the statement of cash flows and statement of financial position, 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 statement
of cash flows is reconciled to the related items in the statement of financial position as follows:
Cash at Bank
Cash at Bank – Chile
Cash on deposit
Total Cash
b) Reconciliation of loss after income tax to cash flows used in operations
Loss after income tax
Non-cash flows in Loss
Depreciation
Impairment of Exploration and evaluation
(Gain) / Loss on sale of investments
Gain on revaluation of investments
Gain on disposal of property, plant and equipment
Loss on capital distribution
Changes in Net Assets and Liabilities
(Increase)/Decrease in Assets
(Increase)/decrease in trade and other receivables
Increase/(Decrease) in Liabilities
Increase in trade and other payables
Increase in provisions
Net Cash used in Operations
c) Non-cash Transactions
Nil.
3. TRADE AND OTHER RECEIVABLES
Prepayments - Insurances
Other
Total Current Receivables
CONSOLIDATED
2011
$
10,399
139,581
2010
$
21,960
-
4,134,060
3,555,875
4,284,040
3,577,835
CONSOLIDATED
2011
$
(708,373)
2010
$
(6,885,378)
35,381
127,805
14,940
(240)
-
-
51,298
5,818,552
(5,272)
(49,440)
(16,816)
900,000
(23,023)
20,950
208,807
25,953
5,365
43,466
(318,750)
(117,275)
CONSOLIDATED
2011
$
26,406
134,563
160,969
2010
$
26,145
111,801
137,946
Helix Resources Limited Annual Report 2011
38
4. OTHER FINANCIAL ASSETS
Current:
Held for trading financial assets:
Shares in listed corporations – at fair value
through profit or loss
Total Current Financial Assets
4(a) Shares in subsidiaries
Name
CONSOLIDATED
2011
$
2010
$
3,600
3,600
57,860
57,860
Country of Incorporation
Percentage Held
Percentage Held
Olary Magnetite Pty Ltd
Oxley Exploration Pty Ltd
Leichhardt Resources (QLD) Pty Ltd
Helix Resources (Overseas) Pty Ltd
Helix Resources Chile Limitada
Australia
Australia
Australia
Australia
Chile
2011
100%
100%
100%
100%
100%
2010
-
100%
100%
100%
100%
5. OTHER FINANCIAL ASSETS
Non-Current
Security Deposits
Available for Sale Financial Assets:
Shares in Listed Companies
Total Other Assets – Non-Current
CONSOLIDATED
2011
$
2010
$
200,000
150,000
864,000
1,064,000
276,000
426,000
Muriel Tank Battery, February 2011
Helix Resources Limited Annual Report 2011
39
6. PROPERTY, PLANT AND EQUIPMENT
2011
Gross Carrying Amount
Balance at 30 June 2010
Additions
Disposals
Balance at 30 June 2011
Accumulated Depreciation
Balance at 30 June 2010
Disposals
Depreciation
Balance at 30 June 2011
Net Book Value
30 June 2010
30 June 2011
2010
Gross Carrying Amount
Balance at 30 June 2009
Additions
Disposals
Balance at 30 June 2010
Accumulated Depreciation
Balance at 30 June 2009
Disposals
Depreciation
Balance at 30 June 2010
Net Book Value
30 June 2009
30 June 2010
CONSOLIDATED
Plant & Equipment
$
Motor Vehicles
$
168,798
20,387
(65,232)
123,953
149,629
(65,232)
13,576
97,973
19,169
25,980
164,721
9,363
-
174,084
84,034
-
21,805
105,839
80,687
68,245
CONSOLIDATED
Plant & Equipment
$
Motor Vehicles
$
165,411
3,387
-
168,798
129,440
-
20,189
149,629
35,971
19,169
171,520
52,232
(59,031)
164,721
96,773
(43,847)
31,108
84,034
74,747
80,687
Total
$
333,519
29,750
(65,232)
298,037
233,663
(65,232)
35,381
203,812
99,856
94,225
Total
$
336,931
55,619
(59,031)
333,519
226,213
(43,847)
51,297
233,663
110,718
99,856
Helix Resources Limited Annual Report 2011
40
7. EXPLORATION AND EVALUATION EXPENDITURE (NON-CURRENT)
Balance at beginning of the financial year
Expenditure incurred during the year
Sale of Glenburgh Tenements
Impairment losses
Balance at the end of the financial year
CONSOLIDATED
2011
$
6,149,147
3,725,973
-
(127,805)
9,747,315
2010
$
13,815,868
1,351,831
(3,200,000)
(5,818,552)
6,149,147
The Directors' assessment of carrying amount was after consideration of prevailing market conditions; previous expenditure carried out on the tene-
ments; and the potential for mineralisation based on both the entity's and independent geological reports. The ultimate value of these assets is de-
pendent 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
203,923,618 Fully Paid Ordinary Shares (2010:
131,943,746)
Balance at end of financial year
CONSOLIDATED
2011
$
2010
$
343,842
135,035
107,119
107,119
65,845
65,845
122,541
122,541
24,469
24,469
59,145,439
53,571,624
59,145,439
53,571,624
Fully Paid Ordinary Shares
Balance at beginning of financial year
Captial Distribution via Distribution In - specie
Share Issue Costs
Exercise of Options to Fully Paid Shares @ $0.075
Exercise of Options to Fully Paid Shares @ $0.05*
Share Placement
Balance at end of financial year
2011
2010
No.
$
No.
$
131,943,746
53,571,624
131,299,886
55,815,856
-
-
-
-
(136,620)
-
-
-
643,860
52,179,872
19,800,000
3,433,435
2,277,000
-
-
(2,300,020)
(2,160)
57,948
-
-
203,923,618
59,145,439
131,943,746
53,571,624
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
Helix Resources Limited Annual Report 2011
41
to fully paid ordinary shares.
* Non-renounceable rights issue at $0.015 per option, exercisable at $0.05 before 31 May 2011
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
17,600,000 employee options were issued in October 2008 following approval at the 2008 AGM. The options were valued under Black and
Scholes at 0.35 cents each ($61,600) and were in substitute of a cash bonus.
Value at Grant Date [also Issuance Date] of 10th October 2008
A Black & Scholes calculation [www.blobek.com] of the notional value of the Incentive Options is outlined below based on the following
assumptions:
a.
b.
c.
d.
e.
f.
g.
the Incentive Options expire on 31 October 2011 and are exercisable at $0.55 each;
a current price per Share of $0.08;
a volatility factor of 70%;
an interest rate of 5.38%;
a discount factor of 50% has been applied due to the lack of marketability of the Incentive Options;
the valuations ascribed to the Incentive Options may not necessarily represent the market price of the Incentive Options at the date of
the valuation; and
the valuation date for the Incentive Options was 10th October 2008.
Applying the 50% discount factor as described in (e) above, the value for each Incentive Option is therefore $0.0035 at 10th October 2008, the date
of issuance.
There were 17,600,000 employee options outstanding at 30 June 2011.
11. OTHER RESERVES
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
Employee Incentive Options
Balance at beginning of financial year
Issue of Employee Incentive Options
Exercise of Employees Incentive Options
Expiry of Terminated Employee Incentive Options
2011
2010
No.
$
No.
$
53,355,308
(1,175,436)
-
800,330
(17,632)
-
(52,179,872)
(782,698)
-
-
-
-
53,999,168
(643,860)
53,355,308
-
-
809,988
(9,658)
800,330
2011
2010
No.
$
No.
$
17,600,000
61,600
17,600,000
61,600
-
-
-
-
-
-
-
-
-
-
-
-
17,600,000
61,600
Balance at end of financial year
The Options Reserve records items recognised as expenses on valuation of employee incentive options.
17,600,000
61,600
Helix Resources Limited Annual Report 2011
42
Financial Assets Reserve
Balance at beginning of financial year
Fair Value of Gascoyne Resources shares
Balance at end of financial year
The financial asset reserve records revaluation of financial assets.
12. ACCUMULATED LOSSES
Balance at beginning of financial year
Net Loss attributable to members of the parent entity
Expiry of Listed Options
Balance at end of financial year
13. REVENUE
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 / (Loss) on sale of investments
Total Non – Operating Revenue
Total Revenues
14. LOSS FOR THE YEAR
Expenses
Depreciation of non-current assets: Property, plant and
equipment
Impairment of exploration and evaluation expenditure
Operating lease rental expenses: Minimum lease
payments
Loss for the year
CONSOLIDATED
2011
$
2010
$
176,000
588,000
764,000
-
176,000
176,000
(44,442,955)
(37,557,577)
(708,373)
(6,885,378)
17,632
-
45,133,696
(44,442,955)
CONSOLIDATED
2011
$
2010
$
203,401
72,775
92,242
368,418
(14,940)
(14,940)
353,478
174,398
65,818
186,314
426,530
5,272
5,272
431,802
CONSOLIDATED
2011
$
35,381
127,805
151,811
2010
$
51,298
5,818,552
132,914
708,373
6,885,378
Helix Resources Limited Annual Report 2011
43
15. COMMITMENTS
a)
Operating Lease Commitments
Not later than 1 year
Later than 1 year but not later than 2 years
Later than 2 years but not later than 5 years
123,444
36,307
-
159,751
99,756
104,744
22,321
226,821
The lease is for a 4 year term with a 2 year option to extend. As at reporting date there was a balance of 1 year and 3 months remaining on the
office lease.
b) Exploration Expenditure Commitments
In order to maintain current rights of tenure to exploration tenements, the Group is 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 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 $66,280 (2010:$83,305) and exploration expenditure of $2,274,000 (2010: $1,250,000). JV parties are expected to fund $1,000,000 of
these commitment costs.
16. KEY MANAGEMENT PERSONNELS’ REMUNERATION
Please refer to disclosures contained in the Remuneration Report section of the Directors’ Report.
The totals of remuneration paid to key management personnel of the Group during the year are as follows:
Short term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share Based payments
Total
2011
$
838,873
64,420
-
-
-
903,293
2010
$
561,694
43,352
-
-
-
605,046
17. EXECUTIVE SHARE OPTION PLAN
As at 30 June 2011 the Company had issued 15,500,000 share options (30 June 2010 15,500,000). 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.
Further details are disclosed below:
Executive Share Option Plan
Balance at beginning of financial year (i)
Cancelled during the financial year (ii)
Granted during the financial year (iv)
Exercised during the financial year (v)
Balance at end of financial year (vi)
Expired during the financial year (iii)
2011
exercise price
No. Weighted average
$0.525
15,500,000
2010
exercise price
No. Weighted average
$0.525
15,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,500,000
$0.525
15,500,000
$0.525
Helix Resources Limited Annual Report 2011
44
(i) Balance at beginning of financial year
Options - Series No. Vested Unvested Grant Date Expiry Date Exercise
Price
grant date
$ Fair value at
0.35c per
option
$0.525
Issued 9 Oct 2008
15,500,000
15,500,000
15,500,000
15,500,000
-
-
9 Oct 2008
31 Oct 2011
(ii) Cancelled during the financial year
There were no options cancelled during the financial years ended 30 June 2011 and 2010.
(iii) Expired during the financial year
No options expired during the financial year ended 30 June 2011 and 2010.
(iv) Granted during the financial year
There were no options granted during the financial year ended 30 June 2011 and 2010.
(v) Exercised during the financial year
There were no executive options exercised during the financial years ended 30 June 2011 and 2010.
(vi) Balance at end of the financial year
Options Series
Issued 9 Oct 2008 15,500,000
15,500,000
No.
Vested
Unvested
Grant Date
Expiry Date
Exercise
Price
$
Fair value at
grant date
15,500,000
15,500,000
-
-
9/10/08
31/10/11
$0.525
0.35c 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 (2010: $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 $nil (2010 $60,000) 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 2011 to Mr Greg Wheeler.
b) Transactions with Gascoyne Resources Limited
Helix Resources provided equipment rental, accommodation and employee services to Gascoyne Resources on normal commercial terms and
conditions to the value of $90,389 (2010: $168,785). There was no outstanding balance at 30 June 2011 (2010: $6,103).
Helix Resources Limited Annual Report 2011
45
c) Key Management Personnels’ Equity Holdings
Fully paid ordinary shares issued by Helix Resources Limited
2011
Granted as
remuneration
Balance @
1/7/10
No.
No.
Received on
exercise of
options
No.
Net other
change
No.
Balance @
30/6/11
Balance held
nominally
No.
No.
Key Management
Personnel
G J Wheeler
M H Wilson
J den Dryver
G Dunbar
J McNamara
Total
2010
Key Management
Personnel
G J Wheeler
M H Wilson
J den Dryver
G Dunbar
J McNamara
Total
7,248,839
233,133
-
300,000
94,833
7,876,805
-
-
-
-
-
-
9,624,420
2,116,567
600,000
750,000
47,417
13,138,404
Balance @
1/7/09
Granted as
remuneration
No.
No.
Received on
exercise of
options
No.
Net other
change
No.
7,248,839
233,133
-
300,000
94,833
7,876,805
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16,873,259
2,349,700
600,000
1,050,000
142,250
21,015,209
-
-
-
-
-
-
Balance @
30/6/10
Balance held
nominally
No.
No.
7,248,839
233,133
-
300,000
94,833
7,876,805
-
-
-
-
-
-
Options
vested
during
year
No.
Executive Share Options issued by Helix Resources Limited
2011
Exercised
Bal @
1/7/10
Granted as
remuneration
Other
change
Bal @
30/6/11
Bal vested
@ 30/6/11
Vested but
not
exerciseable
Vested and
exercisable
No.
No.
No.
No.
No.
No.
No.
No.
Key
Management
Personnel
G J Wheeler
M H Wilson
J denDryver
G Dunbar
8,000,000
5,000,000
1,000,000
1,000,000
J McNamara
500,000
Total
15,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,000,000
8,000,000
5,000,000
5,000,000
1,000,000
1,000,000
1,000,000
1,000,000
500,000
500,000
15,500,000
15,500,000
-
-
-
-
-
-
8,000,000
5,000,000
1,000,000
1,000,000
500,000
15,500,000
-
-
-
-
-
-
Helix Resources Limited Annual Report 2011
46
2010
Bal @
1/7/09
Granted as
remuneration
Exercised
Other
change
Bal @
30/6/10
Bal vested
@ 30/6/10
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
8,000,000
5,000,000
1,000,000
1,000,000
J McNamara
500,000
Total
15,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,000,000
8,000,000
5,000,000
5,000,000
1,000,000
1,000,000
1,000,000
1,000,000
500,000
500,000
15,500,000
15,500,000
-
-
-
-
-
-
8,000,000
5,000,000
1,000,000
1,000,000
500,000
15,500,000
-
-
-
-
-
-
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 17 to the financial statements.
Listed Share Options issued by Helix Resources Limited
Exercised
2011
Bal @
1/7/10
Granted as
remuneration
Other
change
Bal @
30/6/11
Bal
vested @
30/6/10
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
9,624,420
2,116,567
600,000
750,000
J McNamara
47,417
13,138,404
Total
2010
Key
Management
Personnel
G J Wheeler
M H Wilson
J denDryver
G Dunbar
J McNamara
Total
-
-
-
-
-
-
9,624,420
2,116,567
600,000
750,000
47,417
13,138,404
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bal @
1/7/09
Granted as
remuneration
Exercised
Other
change
Bal @
30/6/10
Bal vested
@ 30/6/10
Vested but
not
exerciseable
Vested and
exercisable
No.
No.
No.
No.
No.
No.
No.
No.
Options
vested
during
year
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,624,420
9,624,420
9,624,420
2,116,567
2,116,567
2,116,567
600,000
600,000
600,000
750,000
750,000
750,000
47,417
47,417
47,417
13,138,404
13,138,404
13,138,404
-
-
-
-
-
-
9,624,420
2,116,567
600,000
750,000
47,417
13,138,404
-
-
-
-
-
-
Helix Resources Limited Annual Report 2011
47
19. INCOME TAX
Accounting profit / (loss) before tax from continuing operations
Accounting profit / (loss) loss before tax from discontinuing operations
Accounting profit / (loss) before tax
Reconciliation of Income Tax Expense / (Benefit) to Accounting Profit / (Loss)
Prima facie tax payable / (benefit) at Australian rate of 30% (2010 – 30%)
Prima facie tax payable / (benefit) at Chilean rate of 20%
Adjusted for tax effect of the following:
- non-deductible expenses
- revaluation of investments
- taxable gain on sale of investments
- loss on capital distribution
- taxable gain on expiry of options
- capital raising costs put to equity
Current year tax losses not recognised in current period
Income tax expense / (benefit)
Statement of Comprehensive Income
Current income tax charge
Deferred income tax
Relating to origination and reversal of temporary differences
Current year tax losses not recognised / (recognised) in the current period
Prior year tax losses recognised in current period
Income tax expense / (benefit) reported in statement of comprehensive income
Unrecognised Deferred Tax Balances:
Australian deferred tax asset losses
Chilean deferred tax asset losses
Australian deferred tax assets other
Australian deferred tax liabilities
Chilean deferred tax liabilities
Net Unrecognised deferred tax assets
CONSOLIDATED
2011
$
2010
$
(708,373)
(6,885,378)
-
-
(708,373)
(6,885,378)
(201,065)
(2,065,613)
(7,631)
-
1,637
(72)
10,350
-
5,290
697
(14,832)
1,575
270,000
-
(28,066)
(31,380)
219,557
1,839,553
-
-
-
-
(966,643)
(2,321,276)
966,643
(1,839,553)
-
-
(481,723)
-
14,212,583
13,254,063
227,631
58,734
-
56,036
(2,596,777)
(1,847,484)
(220,000)
-
11,682,171
11,462,615
Helix Resources Limited Annual Report 2011
48
20. SEGMENT INFORMATION
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (Chief
Operating decision makers) in assessing performance and determining the allocation of resources.
The Group is managed on the basis it is a mineral exploration company operating predominately in the geographical region of Australia, mainly in
Western Australia, New South Wales and South Australia, with a developing operation in Chile which currently represents ±10% of mineral asset
expenditure. The mineral assets held via outright ownership or joint venture are considered one business segment and the minerals currently being
targeted include gold, copper, iron ore and other base metals. Decisions are made on a prospectivity basis, not a geographical or commodity
basis.
Australia
Chile
Total
2011
2010
2011
2010
2011
2010
4,144,460
3,577,835
139,580
-
4,284,040
3,577,835
Current Assets
Cash
Non-Current Assets
Mineral Assets
8,736,964
11,868,251
1,138,156
99,448
Impairment
(89,649)
(5,818,552)
(38,156)
-
Carrying Amount
8,647,315
6,049,699
1,100,000
99,448
9,875,120
(127,805)
9,747,315
11,967,699
(5,818,552)
6,149,147
21. EARNINGS PER SHARE
Basic loss per share
Diluted loss per share
COMPANY
2011
Cents Per share
(0.48)
(0.48)
2010
Cents Per share
(5.23)
(5.23)
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:
2011
2010
$
Earnings / (loss) (a)
(708,373)
(6,885,378)
2011
No.
2010
No.
Weighted average number of ordinary shares (b)
147,916,287
131,653,710
(a) Earnings used in the calculation of basic earnings per share is net loss after tax of $708,373 (2010: $6,885,378).
(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)
2011
$
(708,373)
2010
$
(6,885,378)
12 months to 30 June 2011
12 months to 30 June 2010
No.
No.
Helix Resources Limited Annual Report 2011
49
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 $708,373 (2010: $6,885,378).
(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:
131,653,710
147,916,287
Executive options
Listed options
2011
No.
15,000,000
-
2010
No.
15,000,000
53,355,308
INTEREST IN JOINT VENTURES
22.
The parent entity has entered into the following unincorporated joint ventures:
Joint Venture Project
Tunkillia
Yalleen
Restdown JV
Percentage Interest
46.2% (2010: 48.32%) (Minotaur Exploration)
30% (2010: 30%) (API Management Pty Ltd 70% Iron Ore rights)
70% (2010: 0%) (Isokind Pty Ltd)
Principal Exploration Activities
Gold
Iron Ore
Gold
Canbelego
51% (2010: 51%) (Straits Resources)
Copper / Gold
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 as follows:
Non-Current Assets
Mineral Assets
Impairment
Carrying Amount
Yalleen JV
30%
Tunkillia JV
46.2%
Restdown JV
70%
Canbelego JV
51%
2,623,169
3,012,234
1,414,212
-
-
-
2,623,169
3,012,234
1,414,212
530,942
-
530,942
The recoverability of the carrying amount of the mineral assets is dependent on successful development and commercial exploitation, or
alternatively, sale of the respective areas of interest.
Drill sampling at Canbelego October 2010
Helix Resources Limited Annual Report 2011
50
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
$
2011
Financial Assets
Other Receivables (incl tenement appl.)
Held for trading assets
Cash and cash equivalent assets
Security deposits and deposits at financial
institutions
Available for sale assets
5.25
6.03
Financial Liabilities
Trade Payables (all payable within 30
days)
-
-
-
-
-
2,284,040
2,000,000
-
-
200,000
-
2,284,040
2,200,000
-
-
-
-
-
-
-
-
-
-
-
-
160,969
3,600
-
-
864,000
160,969
3,600
4,284,040
200,000
864,000
1,028,569
5,512,609
343,842
343,842
343,842
343,842
Floating Interest Rate Maturity
Average
Interest
Rate
%
Fixed
Interest Rate
Less than 1
year
More than 1
Year
Non Interest
Bearing
$
$
$
$
Total
$
-
-
-
-
5.0%
1,077,835
2,500,000
3.75%
-
-
150,000
-
1,077,835
2,650,000
-
-
-
-
-
-
-
-
-
-
-
-
137,946
57,860
-
-
276,000
471,806
135,035
135,035
137,946
57,860
3,577,835
150,000
276,000
4,199,641
135,035
135,035
2010
Financial Assets
Other Receivables (incl tenement appl.)
Held for trading assets
Cash and cash equivalent assets
Security deposits and deposits at financial
institutions
Available for sale assets
Financial Liabilities
Trade Payables (all payable within 30
days)
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.
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a fair value
hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels:
—
quoted prices in active markets for identical assets or liabilities (Level 1);
Helix Resources Limited Annual Report 2011
51
—
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly
(derived from prices) (Level 2); and
— inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
2011
Financial Assets
Held for trading assets
Available for sale assets
2010
Financial Assets
Held for trading assets
Available for sale assets
Level 1
3,600
864,000
867,600
Level 1
57,860
276,000
333,860
Total
$
3,600
864,000
867,600
Total
$
57,860
276,000
333,860
Included within Level 1 of the hierarchy are listed investments. The fair values of these financial assets have been based on the closing quoted bid
prices at reporting date, excluding transaction costs.
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. The Board is responsible for
the financial risk management.
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 2011, 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 $79,000 (2010: $79,000) and an increase in equity by $79,000 (2010: $79,000). 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 $79,000 (2010: $79,000) and a decrease in
equity by $79,000 (2010: $79,000).
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.
Helix Resources Limited Annual Report 2011
52
24. EMPLOYEE BENEFITS
The aggregate employee benefits liability recognised and included in the financial statements is as follows:
Provision for employee benefits:
Current (Note 9)
Non-Current (Note 9)
Number of employees at end of financial year
25. CONTINGENT LIABILITIES
CONSOLIDATED
2011
$
2010
$
107,119
65,845
172,964
No
9
122,541
24,469
147,010
No
6
Bank Guarantees
The Company may be required to issue bank guarantees to secure tenement holdings. The Company currently has bank guarantees to the value
of $87,000 (2010: $77,085).
Mineral Rent Resource Tax
In the absence of legislation on this matter the Company is unable to determine whether any liability exists.
Carbon Tax
On 10 July 2011, the Commonwealth Government announced the “Securing a Clean Energy Future – the Australian Government’s Climate Change
Plan”. Whilst the announcement provides further details of the framework for a carbon pricing mechanism, uncertainties continue to exist on the
impact of any carbon pricing mechanism on the Group as legislation must be voted on and passed by both houses of Parliament. In addition, as
the Group will not fall within the “Top 500 Australian Polluters”, the impact of the Carbon Scheme will be through indirect effects of increased prices
on many production inputs and general business expenses as suppliers subject to the carbon pricing mechanism are likely to pass on their carbon
price burden to their customers in the form of increased prices. Directors expect that this will not have a significant impact upon operation costs
within the business, and therefore will not have an impact upon the valuation of assets and/or going concern of the business.
26. REMUNERATION OF AUDITORS
a) Auditor of the Parent Entity
Auditing the financial report
The auditor of Helix Resources Limited for the 2011 financial year is Grant Thornton Audit Pty Ltd.
2011
$
2010
$
23,923
23,923
21,555
21.555
Drilling at Good Friday Prospect, Restdown April 2011
Helix Resources Limited Annual Report 2011
53
27. HELIX RESOURCES LIMITED PARENT COMPANY INFORMATION
Note
8, 9
9
Assets
Current Assets
Non-current Assets
Total Assets
Liabilities
Current Liabilities
Non-current Liabilities
Total Liabilities
Equity
Issued Capital
Accumulated Losses
Reserves
Options Reserve
Financial Assets
Total Equity
Financial Performance
Loss for the year
14
Other comprehensive income
Total Comprehensive Income
2011
$
2010
$
4,309,028
11,045,121
3,773,641
6,675,003
15,354,149
10,448,644
450,961
65,845
516,806
257,576
24,469
282,045
59,145,439
54,371,954
(45,133,696)
(44,442,955)
61,600
764,000
61,600
176,000
14,837,343
10,166,599
(708,373)
588,000
(120,373)
(6,885,378)
176,000
(6,709,378)
28. SUBSEQUENT EVENTS
There has not been any matter or circumstance, other than 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 on the Group in future financial years.
29. ADDITIONAL COMPANY INFORMATION
Helix Resources Limited is a listed public company, incorporated and operating in Australia.
Registered Office
Suite 7, 29 Ord Street
WEST PERTH WA 6005
Tel (08) 9321 2644
Principal Place of Business
Suite 7, 29 Ord Street
WEST PERTH WA 6005
Tel (08) 9321 2644
The financial report for Helix Resources Limited for the year ended 30 June 2011 was authorised for issue in accordance with a resolution of the
directors on the 15 September 2011.
Helix Resources Limited Annual Report 2011
54
Spread of Holdings
1–1000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
Number of shareholders holding less than a marketable parcel
PERCENTAGE HELD BY 20 LARGEST SHAREHOLDERS
Shareholder
1 Yandal Investments
2 Gee Vee Pty Ltd
3 Rubicon Nominees Pty Ltd
4 Brisbane Investments Ltd
5 Wythenshawe Pty Ltd
6 BTX Pty Ltd
7 Blamnco Trading Pty Ltd
8 Berne No 132 Nominees Pty Ltd
9 Niddrie Holdings Pty Ltd
10 Penoir Pty Ltd
11 Technica Pty Ltd
12
JP Morgan Nominees Australia
13 MH Wilson
14 HJH Nominees Pty Ltd
15 Mr Bulent Besim
16 BJF Capital Pty Ltd
17 Loxden Pty Ltd
18 Aotea Minerals Ltd
19 Warramboo Holdings
20 Zero Nominees Pty Ltd
Top 20 Total
AS AT 14th SEPTEMBER 2011
NUMBER OF SHARES HELD
Number of Shares
Number of Shareholders
80
195
322
790
231
1,618
400
30,325
615,976
2,783,392
29,685,529
170,808,396
203,923,618
1,503,076
Number of Shares
% of Issued Capital
21,172,514
16,873,259
13,063,829
13,063,829
5,089,102
4,681,293
4,000,000
3,702,600
3,003,673
3,000,000
2,784,999
2,605,661
2,349,700
2,040,000
2,000,000
2,000,000
1,800,000
1,630,000
1,364,213
1,306,802
10.38
8.27
6.41
6.41
2.50
2.30
1.96
1.82
1.47
1.47
1.37
1.28
1.15
1.00
0.98
0.98
0.88
0.80
0.67
0.64
107,531,474
52.74
VOTING RIGHTS
One vote for each ordinary share held in accordance with the Company's Constitution.
Helix Resources Limited Annual Report 2011
55
SUBSTANTIAL SHAREHOLDERS
Shareholder
Yandal Investments Pty Ltd
Gee Vee Pty Ltd
Rubicon Nominees Pty Ltd
Brisbane Investments Ltd
DIRECTORS' INTEREST IN SHARE CAPITAL
Director
G J Wheeler
M H Wilson
J den Dryver
G Dunbar
Total
Fully Paid Ordinary Shares
16,873,259
2,349,700
600,000
1,050,000
20,872,959
Number of Shares
% of Issued Capital
21,172,514
16,873,259
13,063,829
13,063,829
10.38
8.27
6.41
6.41
Staff Options
8,000,000
5,000,000
1,000,000
1,000,000
15,000,000
Helix Resources Limited Annual Report 2011
56
TENEMENT SCHEDULE
Tenement
Name
Mineral
Ownership
NSW COPPER & GOLD PROJECTS (INCL. CANBELEGO AND RESTDOWN JV's)
EL6105
EL6140
Canbelego
Copper/Gold
HLX 51% (earning 70%), Straits 49%
Restdown
Gold/Copper
Helix 70%, Glencore 30%
EL6501
South Restdown
Copper/Gold
Helix 70%, Glencore 30%
Muriel Tank
Gold/Copper
Helix 70%, Glencore 30%
EL6739
EL7438
EL7439
EL7482
EL7565
EL7566
EL7567
EL7619
EL7745
Quanda
Fiveways
Copper/Gold
Copper/Gold
Little Boppy
Copper/Gold
Arsenal
Copper/Gold
Tottenham
Copper/Gold
Restdown
Copper/Gold
Inverness
Copper/Gold
Koree
Copper/Gold
QUEENSLAND COPPER & GOLD PROJECTS
EPM18363
Landsborough
Copper/Gold
EPM18373
EPM18374
Saxby 2
Saxby 1
Copper/Gold
Copper/Gold
LAKE EVERARD (INCL. TUNKILLIA)
HLX 100%
HLX 100%
HLX 100%
HLX 100%
HLX 100%
HLX 100%
HLX 100%
HXL 100%
HLX 100%
HLX 100%
HLX 100%
EL4596
Yellabinna
Gold/Uranium/Basemetals
HLX 100%, Minotaur 51% all minerals other than uranium
ELA2010/183
Lake Everard
Gold/Uranium/Basemetals
HLX 100%, Minotaur 51% all minerals other than uranium
EL4495
Lake Everard
West
OLARY MAGNETITE
Gold/Uranium/Basemetals
HLX 100%, Minotaur 51% all minerals other than uranium
EL3956
EL4022
Devonborough
Downs
Gold/Copper/Iron Ore
Olary
Gold/Copper/Iron Ore
HLX 100%
HLX 100%
YALLEEN IRON ORE PROJECT
E47/1169-I
E47/1170-I
E47/1171-I
Yalleen
Yalleen
Yalleen
Iron ore/Basemetals
HLX 100%, API Management Pty Ltd 70% iron ore rights
Iron ore/Basemetals
HLX 100%, API Management Pty Ltd 70% iron ore rights
Iron ore/Basemetals
HLX 100%, API Management Pty Ltd 70% iron ore rights
Abbreviations and Definitions used in Schedule:
EL, EPM or E
Exploration Licence
ELA
Exploration Licence Application
Helix Resources Limited Annual Report 2011
57
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
Suite 7, 29 Ord 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
Level 6, 225 Clarence Street
Nedlands Western Australia 6009
Sydney NSW 2000
PO Box 1156 Nedlands Western Australia 6909
PO Box Q1736 Queen Victoria Building NSW 1230
Telephone: +61 8 9389 8033
+61 2 8096 3502
Facsimile: +61 8 9389 7871
Auditor
Grant Thornton Audit Pty Ltd
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
CODE: HLX
Helix Resources Limited Annual Report 2011
58