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Stantec Contents
Chairman’s Report
Managing Director’s Report
Review of Operations
Native Title
Corporate Governance Statement
Glossary of Terms
Directors’ Report
Auditor’s Independence Declaration
Income Statement
Balance Sheet
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
Shareholder Information
Corporate Directory
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Ramelius Resources Limited
ACN 001 717 540
ABN 51 001 717 540
Annual General Meeting
The 2006 Annual General Meeting will be
held at the office of
Ramelius Resources Limited
140 Greenhill Road Unley,
South Australia on 24 November 2006
commencing at 11am.
A formal notice is mailed to shareholders
with the distribution of this report.
Stock Exchange
The Company is listed on the Australian
Stock Exchange Limited.
The Home Exchange is Adelaide.
ASX codes:
Shares: RMS
Options: RMSO / RMSOA
Chairman’s Report
01
Dear Fellow Shareholder,
It is with pleasure that I present to you the 2006 Annual
Report of Ramelius Resources Limited.
It is a particular pleasure to advise that your Company is now
a successful gold producer generating a revenue stream.
With this revenue, we are now very well positioned to
pursue the wealth of mineral resources that we believe lie
hidden within what is undoubtedly one of the most
prospective gold and nickel belts in Australia, our
Spargoville Belt.
Subsequent to the end of the financial year, Ramelius
acquired additional nickel interests within the Spargoville
Belt enhancing its position even further.
Earlier this year the Company issued a Shareholder
Purchase Plan, funds from which were mainly used to
bridge the gap between commencement of mining and
cash flow from the Wattle Dam Gold Mine.
The Company also issued free bonus options to reward
shareholders for their ongoing support of the Company.
The future looks bright for Ramelius with plans for rapid
growth from solid foundations.
“...to establish an early revenue stream from low risk/low
cost advanced projects anticipating that early production
will support the ongoing exploration and development of
major projects.”
It may have taken a little longer than envisaged but that is
precisely what we have done.
I believe the next stage of the journey is to become what
was recently described as the Holy Grail for gold investors
and that is “a high-grade multi mine company with a rising
production profile.”
I believe we are half way there.
I take this opportunity to sincerely thank our Managing
Director Mr Joe Houldsworth, Reg Nelson, Dom Francese
and all our employees and consultants for their untiring
efforts throughout the year. I also thank all shareholders for
their loyalty and support and I look forward to sharing our
next exciting growth phase.
frequently remind myself of the “Company’s Aim” as
I
stated in the original prospectus:
Bob Kennedy
Chairman
Managing Director’s Report
02
~40,000 oz which equates to ~$32,000,000
at current gold prices.
Gold sales to date are $8,500,000 which
resulted from the ~30,000 tonnes of ore
which was treated in July 2006 and returned
~10,000 oz gold.
A second treatment campaign is scheduled
to commence in November 2006 to treat
~50,000 tonnes of ore and is expected to
return ~15,000 oz or ~$12,000,000 at current
gold prices.
The mining of the current ore stockpile is
paid for, we have no debt, and expect in the
short term to generate cash flow greater
than the Company’s market capitalisation.
in
I believe we have the most exciting and
prospective ground
the Spargoville
Regional Project Area for both gold and
nickel and Ramelius is finally in a position to
be able to fully fund the exploration pro-
grams that the area deserves.
The forthcoming year should see Ramelius
consolidate its position as a successful
explorer and gold producer.
I would like to take this opportunity to thank
the Company’s Staff, Consultants and
Contractors for their outstanding efforts over
the past year. I also thank my fellow
directors for their ongoing support and
particularly our Company Secretary Mr. Dom
Francese who has constantly burned the
midnight oil in order to cope with the rapid
increase in the Company’s administrative
matters.
Dear Shareholder
It has been a very exciting and rewarding
year with the Company making the transition
from Explorer to Gold Producer.
As foreshadowed at last year’s AGM, the
development of the Wattle Dam Gold Mine
has started to generate significant cash flow
with the mine performance exceeding all
expectations.
Wattle Dam Gold Mine will continue to
generate significant cash flow for some time
and I expect the Company to have a
presence there far longer than originally
expected. We are about to commence
further drilling at the mine to evaluate both
the cut-back and underground potential.
I am confident that we will also discover and
develop other mineral resources within the
Spargoville Project Area as we have only just
started to scratch the surface.
The Company is now adequately funded to
systematically and thoroughly explore the
whole of its Spargoville Regional Project
Area without dilution of shareholder interests
through capital raisings.
Wattle Dam revenue has enabled the
Company to accelerate its exploration
schedule and results so far confirm our
strong belief in the high prospectivity of the
Spargoville belt.
The following are some interesting Mining
and Production statistics as at the end of
September 2006.
•
133,822 tonnes of ore have been mined
at a cumulative grade of ~10 grams/tonne
for an estimated 40,000 oz gold. This is
to a depth of 40 metres, only two thirds
of the designed pit depth of 60 metres.
• Gold stocks (milled and stockpiled)
as at the end of September 2006, are;
Joe Houldsworth
Managing Director
Review of Operations
03
Financial Highlights
Gross funds of $1.3m were raised in August 2005 from a
placement of 8,666,666 ordinary fully paid shares at $0.15
per share and 4,333,333 free attaching options exercisable
fast-track
at $0.18687 by 31 December 2007
development of the Wattle Dam discovery; expand regional
exploration in the Spargoville belt and for working capital.
to
A further placement of 1,923,076 ordinary fully paid shares
at $0.13 per share and 961,538 free attaching options
exercisable at $0.18687 was made in March 2006 to raise
gross funds of $250,000 to help fund start-up costs for mining
at the Wattle Dam 7800N Gold Project in Western Australia.
A Share Purchase Plan (“SPP”) in early May 2006 which
enabled eligible shareholders to purchase up to $5,000
worth of fully paid ordinary shares in Ramelius at $0.115 per
share was fully subscribed and raised $2.4 million.
Following a parcel of 5,400 tonnes of low grade ore which
was processed in June 2006 and produced a total of 690
fine ounces (21.5 kilograms) of fine gold at a reconciled
head grade of 4.5 grams per tonne of gold and an 89%
recovery, the Company made its first gold sales resulting in
gross gold revenue to the end of June 2006 of $395,000.
Operational Highlights
• Mining at Wattle Dam Gold Mine
Commenced March 2006.
• Producing well in excess of Mine Plan.
• Gold Stocks at 31st August 2006,
(excluding gold sales) ~37,000 oz.
• Assessing Cut-Back and Underground
Potential.
• Positive results from Accelerated
Exploration Program.
Review of Operations
04
Wattle Dam Gold Mine
Mining
Mining at the Wattle Dam Gold Mine commenced in
March 2006 two years after the mining lease was
granted and four months after the Directors gave
the go ahead for the mining development. The mining
and haulage contract for Wattle Dam was awarded
to Kalgoorlie-based Barcon Logistics Pty Ltd.
To 30th June 2006, 25,000 tonnes of ore with an
estimated grade of 6.9 g/t gold (based on un-cut
grades from the grade control drilling) had been
mined from the first six flitches (15 metres depth) of
the open pit. This is approximately 30% of the total
ore that was expected to be mined from the pit.
Additionally, 13,597 tonnes of low-grade material
has been mined of which 5,348 tonnes has since
been processed.
A total of 288,000 BCM of waste has been mined to
the end of June 2006. This is approximately 55% of
the total waste expected to be mined from the pit.
Gold Treatment
The ore treatment is undertaken at Higginsville
Mining Pty Ltd’s Greenfield’s plant at Coolgardie.
Two milling campaigns (a trial low-grade parcel and
a 30,000 tonne ROM parcel) have been undertaken
with the 30,000 tonne parcel commencing on the
29th June 2006.
Low-Grade Trial
A 5,348 tonne trial parcel that had been designated
as Low-Grade Ore was processed in May.
un-cut grade of this material determined from the
grade control drilling was only 1.4 g/t gold, a
significant overcall was expected due to a coarse
gold component (nuggets) recovered by the
company from metal detecting on the low grade
stockpile. Therefore the opportunity was taken to
process this material as a separate parcel and to
confirm the metallurgical performance of the Wattle
Dam Ore before a major Ore Milling Campaign began.
This Trial Parcel returned 160 ounces of gold from
the gravity circuit and 530 ounces recovered via the
CIL circuit for a total of 690 fine ounces (21.5
Kilograms Fine Gold).
represents a
Reconciled Head Grade of 4.5 g/t gold with 89%
recovery from the 5,348 tonne parcel, a substantial
overcall.
This
from
First Run Of Mine Treatment Campaign
The first high grade ore milling campaign of 30,000
tonnes
the Wattle Dam Gold Mine
commenced on the 29th June 2006. As it takes
several days milling to charge the treatment plant
and for gold to be recovered there are no
production figures to 30th June 2006 applicable to
this ROM campaign.
Recovery of Nuggets and Specimen Gold
The company, being aware that there is a
considerable coarse gold component to the
mineralisation at Wattle Dam instigated a procedure
to metal detect the floor of the open pit after each
flitch is mined, the ROM and low grade stockpiles
and the feed conveyor at the Greenfield plant.
This low-grade material was mined from the upper
most flitches of the open pit, incidental to the Run of
Mine Ore and was stockpiled for use as a Flushing
Medium to clean any residual gold from the plant
after the routine Ore Milling Campaigns. Whilst the
An estimated 10 kilograms of gold in nuggets and
specimen stone has been collected. It is yet to be
catalogued where after it is proposed to sell this
material as specimen material thereby attracting a
substantial margin to the value of the physical gold.
Production Statistics (Excluding nuggets and specimen stone)
Wattle Dam Gold Mine Production Statistics – To 30 June 2006
ORE MINED - HIGH GRADE
Predicted Grade (Grade Control - uncut)
Reconciled Head Grade
Total Recovery
Total Gold Production
Total Gold Production
Unit
tonnes
g/t Gold
g/t Gold
%
oz
kg
Mined
25,000
6.9
Processed
Approx 1,500
Review of Operations
05
ORE MINED - LOW GRADE
Predicted Grade (Grade Control - uncut)
Reconciled Head Grade
Total Recovery
Total Gold Production
Total Gold Production
Waste Removed
Vertical Advance
Unit
tonnes
g/t Gold
%
oz
kg
bcm
metres
Mined
13,597
1.4
288,000
15
Processed
5,348
4.5
89
690
21.5
Subsequent Gold Production
The first ROM Ore Milling Campaign commenced on 29th June 2006, and concluded 31st July 2006 treating 28,386 dry tonnes of high
grade ore and 843 dry tonnes of flushing material. This campaign returned 9,555 fine ounces of gold (297 Kilograms Fine Gold), a
recovered grade of 10.5 g/t. This is a 52% overcall in the grade as compared to the 6.9 g/t predicted by the grade control drilling.
Mining has continued at the Wattle Dam Gold Mine with a total to 31st August 2006, of 120,173 tonnes of ore mined from the
first fourteen flitches (36.5 metres) at a cumulative grade of 10.1 g/t gold estimated from “un-cut” grade control drilling.
Spectacular gold grades continue to be returned from the grade control drilling with one hole through the ninth and tenth
flitches returning a grade of 3,100 g/t gold. The Mine Plan takes the pit to a depth of 60 metres.
Wattle Dam Gold Mine Production Statistics to 31 August 2006
Excludes an estimated 20kg of nuggets and specimen stone
ORE MINED - HIGH GRADE
Predicted Grade (Grade Control - uncut)
Reconciled Head Grade
Total Recovery
Gold Production
Gold Production
ORE MINED - LOW GRADE
Predicted Grade (Grade Control - uncut)
Reconciled Head Grade
Total Recovery
Gold Production
Gold Production
TOTAL GOLD PRODUCTION
TOTAL GOLD PRODUCTION
Unit
tonnes
g/t Gold
g/t Gold
%
oz
kg
tonnes
g/t Gold
g/t Gold
%
oz
kg
Mined
Processed
Stockpiled
120,173
28,386
10.1
14,666
1.1
oz
kg
6.9
10.5
94
9,555
297
5,348
1.4
4.5
89
10,245
318.5
91,787
11.1
9,318
0.9
690
21.5
Review of Operations
06
Waste Removed
Vertical Advance
Unit
bcm
Mined
401,000
metres
36.5
Processed
Stockpiled
Gold stocks at 31 August 2006
Gold sales to 31st August 2006 were 4000 oz at an
average price of $854 for a total of $3,418,000.
Gold stocks, excluding an estimated 20 kilograms
of nuggets and specimen, are:-
Refined Gold
6,245 oz
In stockpiles (mine and mill) (approx)
31,000 oz
Total
37,245 oz
Comment
The initial mine plan was to mine approximately
70,000 tonne at 6 g/t gold for 13,500 oz to a depth
of 60 metres. With the production of 10,245 oz gold
to the end of August, 75% of the anticipated gold
production has already been recovered while an
estimated 31,000 oz is contained in ore stockpiles.
This combined recovered gold and gold contained
in stockpiles totals approximately 41,000 oz and is
to a depth of 36.5 metres. It is intended to mine to
a depth of 60 metres.
To 31st August 2006, tonnes of ore per vertical
metre are 3,292 tonnes, whereas the mine plan was
1,250 tonnes, with gold ounces per vertical metre
being 1,070 oz in contrast to the mine plan of 225
oz. The ore recovery per vertical metre was almost
three times the mine plan and the ounces per per
vertical metre were more than four times that
determined in the mine plan. Should the ore
recovery continue at this rate to 60 metres, there is
a potential recovery of approximately 60,000 oz.
In the Mine Plan the ore zones were drawn around
exploration and evaluation drill hole intersections
that exceeded a grade greater than 1 g/t over six
metres down hole (approximately 3 metres wide
horizontally) and were separated by at least 4
metres from another ore zone. As the mine
developed it was evident that this degree of
selectivity was not practical and the mining practise
became, when there are multiple ore zones, to take
both ore zones and the intervening lower grade
zone. Additionally it was recognised very early in
the mining operation that coarse native gold as
nuggets and tabular plates were a common feature
of the mineralisation resulting in a spotty distribution
of gold grades. Hence some of the lower grade
zones indicated by the evaluation drilling were in
fact not low grade. Also as abundant coarse gold
is a feature of the mineralisation, the cutting of the
high grade gold values to 50 g/t appears to have
been too harsh and contributed to an under estimation
of the grade. It also appears that there is a greater
presence and wider distribution of high grade
zones and pods than indicated by the exploration
and evaluation drilling and (with respect to the
grade) the grade control drilling.
At the completion of the current mining operation a
reconciliation of tonnes and grade as mined and
treated against the exploration and evaluation
drilling results will be undertaken.
With the mine producing well in excess of plan and
having gained a greater appreciation of the style of
mineralisation, it is most likely that economic gold
mineralisation will extend below the pit floor and into
the western wall of the pit. Additional drilling to
evaluate the potential for a cut-back and possible
underground development have been scheduled to
commence in October 2006, after the conclusion of
mining the current pit.
Review of Operations
07
Exploration
SPARGOVILLE REGIONAL PROJECT
(Various Gold, Nickel and Tantalum Rights)
Ramelius controls the gold rights to some 280 km2 along
more than 30 km strike length covering the Kunanalling
and Spargos Reward Shears. This regional project
contains four project areas, Wattle Dam (100% gold and
tantalum rights and earning 80% nickel and base metals
rights), Hilditch
(90% gold and all minerals),
Logan’s/Larkinville (75% gold and tantalum rights and
earning 80% nickel and base metals rights) and North
Widgie (100% gold rights).
During the year a review of the exploration prospects within
the Spargoville project area recognised in excess of 20
targets for gold, nickel and tantalum. Work has commenced
on many of these targets with positive results being
detailed below.
WATTLE DAM PROJECT
(Gold, Tantalum, Nickel)
(100% Gold, Tantalum and earning 80% Nickel
Rights; PLs 15/3767; 3873; 4479; EL 15/718
[MLAs 15/1769-1773]; MLs 15/1101; 1263; 1264;
MLAs 15/1323; 1338: 100% PLs 4651 – 4653 [MLAs
15/1774-1776])
Acquisition of Nickel Rights - “Wattle Dam
tenement group”
Subsequent to the end of the year Ramelius entered into
an agreement with Pioneer Nickel Limited to acquire 80 %
of Pioneer’s nickel interests in the “Wattle Dam tenement
group” with a twelve month Option Period, anytime during
which it may exercise its option by paying Pioneer a
consideration to exercise the option. Thereafter Ramelius
must sole fund expenditure of no less than $800,000 on
nickel exploration within four years from the commencement
date. The parties will then associate in a nickel joint
venture with Pioneer holding a 20% interest, free carried
up to the completion of a feasibility study.
Many nickel deposits have been identified and mined in
the Widgiemooltha and Spargoville regions since nickel
exploration commenced in 1966. The majority of this
exploration work was focused, with considerable success,
on the eastern ultramafic belt at Spargoville and around
the Widgiemooltha Dome to the south.
Review of Operations
08
The “Wattle Dam tenement group” surrounds the Spargoville 1A
and Spargoville 5A, B & D nickel deposits held by Breakaway
Resources Limited and the strike continuation of the ultramafic
units that host the adjacent North Widgiemooltha Nickel Deposits
(Zable, McEwen and Armstrong). It also holds a 12 kilometre strike
length of a second ultramafic belt along which the recently
discovered Hilditch nickel occurrences and the historical 1Z
prospect are located.
Ramelius has used detailed ironstone (gossan) sampling coupled
with modern geochemical analysis to locate nickel sulphide
mineralisation outcropping as gossan at its Hilditch Nickel Project.
The same approach will be used across all the outcrop and sub
outcropping areas in the Spargoville area. Priority areas are north
of Hilditch, along strike from the 1A deposit and north, along strike
from the 5D.
Detailed auger geochemistry also
used with great effect at Hilditch to
identify potentially nickel sulphide
bearing ultramafics, will be applied
to areas of outcrop, sub outcrop and
residual soil cover.
comprehensive
A
geophysical
(detailed aeromagnetics and ground
EM) and geochemical data base
has been compiled by Pioneer,
particularly over
eastern
Spargoville area. An extensive
review of the geophysics in particu-
lar will be applied to the prospective
nickel sulphide horizons identified
above, along with additional areas
identified by the above techniques.
the
The continuing assessment of the
1A north and south prospects
commenced by Pioneer will be
prioritised into the work program.
Review of Operations
09
Lefroy Tantalum
An infill auger sampling program of 313 samples was
conducted in the Lefroy area to follow up anomalous
Tantalum/Niobium values that were returned in a previous
regional auger sampling program. Two lines of this follow
up auger program were located within the Hilditch
tenements adjacent to their northern boundary with E15/718.
Enhanced and anomalous Tantalum and Niobium values
occur at three locations
•
In the north western corner of the Hilditch tenements
and extending northwards 400 metres into E15/718.
The two peak values returned were 81ppm Ta/100ppm
Nb and 20ppm Ta/156ppm Nb whereas background is
in the order of 0.4ppm Ta and 1.0ppm Nb. This location
is yet to be field checked.
• Associated with an outcropping pegmatite at 6538500N
354900E.
• On a 200 metre long linear trend centred at 6539000N
355100E.
Rock chip sampling and if appropriate RAB drilling is to be
undertaken to advance these prospects.
LOGAN’S LARKINVILLE PROJECT
(Gold, Tantalum, Nickel)
(Earning 75% Gold and Tantalum, earning 80%
Nickel Rights; PLs 15/4464; 4213 & 4214; EL15/689;
EL15/742; MLA 15/1449)
Logan’s
Three trends of anomalous and enhanced gold in soil have
been identified using the historical soil sampling data and
two auger sampling programs undertaken during the year.
Two of these trends, Groper North and Mistletoe South are
located along mafic rocks and have strike lengths of 4 and
6.5 kilometres respectively with peak values of 50 to 80ppb
gold within a background of 2 to 5ppb gold. Enhanced
gold values over 800 metres strike length were returned
from a zone 1.5 kilometres north east of the Groper North
trend.
The third trend, termed Larkinville West is located in the
eastern portion of the southern sector of E15/689 partially
within and adjacent to, the east of P15/4214. The anomaly
with values to 100ppb gold within a background of 2 to 5
ppb gold is in two parts. The northern portion extends over
a north-south strike length of 1 kilometre while the southern
portion lies 1 kilometre to the south and has a 600 metres
north-south strike length. This anomalous trend has a very
strong association with arsenic which forms a co-incident
geochemical anomaly. The anomalous zone lies within
sedimentary units in proximity to the contact with a mapped
ultramafic unit. Field checking across this anomalous trend
showed the area to be residual soils.
This Larkinville West trend is an immediate target for RAB
drilling while the other trends require field checking and
assessment.
Guest Leases
The area known as the “Guest Leases” is
located approximately 5 kilometres to the
west of Widgiemooltha. Minor historical
gold workings are located within the
licence area.
An auger sampling program conducted on lines spaced
100 metres apart with a sampling interval along the lines of
20 metres returned strong gold anomalism to 800ppb gold
over one kilometre along strike and up to 500 metres wide.
This anomalous zone lies within mafic lithologies, in an
erosional regime and it is considered that the anomaly is
derived from an underlying bed rock source. This is
supported by limited rock chip sampling, undertaken
during the field checking of the anomaly, with values to
13.8 g/t gold.
A program of RC drilling is to be undertaken at this
project.
Review of Operations
10
Acquisition of Nickel Rights - “Logans/Larkinville
tenement group”
Similar to Wattle Dam and subsequent to the end of
the year, Ramelius entered into an agreement with
Pioneer Nickel Limited to acquire 80% of Pioneer’s
nickel interests in the “Logans/Larkinville tenement
group” with a twelve month Option Period, anytime
during which it may exercise its option by paying
Pioneer a consideration to exercise the option.
Thereafter Ramelius must sole fund expenditure of
no less than $200,000 on nickel exploration within
four years from the commencement date. The
parties will then associate in a nickel joint venture
with Pioneer holding a 20% interest, free carried up
to the completion of a feasibility study.
Many nickel deposits have been identified and
mined in the Widgiemooltha and Spargoville
regions since nickel exploration commenced in
1966. The majority of this exploration work was
focused, with considerable success, on the eastern
ultramafic belt at Spargoville and around the
Widgiemooltha Dome to the south. Limited
attention appears to have been paid to the western
ultramafic belt that lies within the Logans/Larkinville
tenement group.
The initial exploration will use detailed ironstone
(gossan) sampling coupled with modern geochemical
identify
and detailed auger geochemistry to
potentially nickel sulphide bearing ultramafics in
areas of outcrop, sub outcrop and residual soil cover.
NORTH WIDGIEMOOLTHA BLOCKS
(100% Gold Rights)
(MLs 15/97; 15/99; 15/100; 15/101; 15/102;
15/653; MLA 15/1271; PL15/3666)
Ground Lark Area
This target area of approximately 12 km2 aligned in
an east-south-east direction, and located in the
southern portion of the North Widgie project area is
named after the historical Ground Lark gold mine.
It was identified using aeromagnetic data from
which east-west thrusting associated with the
Widgiemooltha Dome was inferred coupled with
subtle east west trending gold anomalism in the
regional soil geochemistry and the presence of gold
workings along the trend of the thrusts.
Auger sampling was undertaken across this area
on north-south lines spaced 200 metres apart at a
sample interval of 40 metres along the lines.
Assessment of the analytical results shows an
east–west alignment of enhanced values along the
thrusts with anomalous gold associated with the
intersection of north-south trends and the thrusts to
the immediate north of Ground Lark and at a
location 5km to the south east.
GROUND LARK ACQUISITION
(Gold, Tantalum, Nickel)
(100% M15/1290)
With effect from the 30th June 2006, Ramelius
acquired the mining lease, M15/1290 that covers
Review of Operations
11
the Ground Lark gold mine from Rand Exploration NL for a
royalty consideration. This lease is 3.26ha in area. Gold
mineralisation is located within an east-west trending quartz
vein shear zone between granite to the north and mafic
rocks to the south. In a regional sense the lease is located
at the junction of the north-south trending shear system that
passes through the Wattle Dam Gold Deposit and an east-
west trending thrust. Historical gold production is reported
as 3,200 oz.
HILDITCH PROJECT (Nickel, Gold and Tantalum)
(90% PLs 15/4127 – 4130; MLA 15/1448)
Hilditch North Nickel Prospect
A Study of the geology and geochemistry of the nickel
sulphide intersections and host rocks within the previous
drilling was conducted to distinguish between magmatic
and remobilised sulphides and determine the spatial
distribution and geochemical characteristics of the host
rocks to the nickel sulphides. In particular the Ni/Mg and
Fe/Mg ratios were used in the study.
The Ni/Mg ratio identified more representative zones of
nickel anomalism, than defined by using the standard 0.3%
Ni cut-off and also distinguished between magmatic and
remobilised anomalous intervals. The Fe/Mg ratio
highlighted the more Mg rich and therefore more
prospective component
identified ultramafic
to
cumulate sequence. A southerly plunge to both the
remobilised and magmatic nickel anomalism was interpreted
from the results of the study.
the
Extending 700 metres to the south of this area of known
nickel sulphides, a detailed auger sampling program of 153
samples was undertaken on lines spaced 50 metres apart
with a sample interval of 10 metres along the line. This
identified a 160 metre long zone with anomalous Nickel,
Copper and Platinum/Palladium values within ultramafic
cumulate rocks 300 metres along strike from the ultramafic
cumulate unit associated with the known nickel sulphides.
At this location the ultramafic cumulate rocks occupy what
is considered to be a hanging wall, interflow position.
Similar anomalous values were returned from several sites
further to the west of the above anomalism, which may be
associated with the basal contact of the ultramafic
cumulate sequence.
Subsequent to the end of the year a total of 16 RC drill holes
were completed for 1488 metres in order to evaluate the
auger nickel, copper and platinum/palladium anomalous
zones addressed above. A maximum result of 17 metres @
0.35% nickel from 31 metres was received from HRC061,
which was targeted to test an anomalous auger result
associated with the interpreted basal ultramafic cumulate
contact. Encouraging elevated copper values associated
with the interval support an interpreted nickel sulphide
source whilst the Fe/Mg ratio suggests a magmatic source
to the nickel sulphides. Several discrete, low grade values
were returned from the drilling of the eastern more
coherent auger anomaly (in the hanging wall), including
3 metres @ 0.37% nickel from 11 metres from HRC067.
All significant results returned from the drilling are tabulated
below.
Hole
Number
Northing
(GDA)
Easting
(GDA)
Az
Dip
Depth From
(m)
(m)
HRC057
6536820
355320
270
-60
110
HRC060
6536840
355315
270
-60
HRC061
6536840
355265
270
-60
92
92
HRC062
6536860
355310
270
-60
101
HRC067
6536940
355260
270
-60
92
HRC068
6536960
355255
270
-60
HRC070
6536980
355245
270
-60
92
92
99
72
31
51
55
64
71
11
89
12
62
72
80
To
(m)
100
73
48
53
57
65
73
14
90
14
63
73
81
Length
(m)
Ni
(%)
Cu
(ppm)
Comments
1
1
0.31
185
0.31
144
Hanging Wall
Cumulate
Sequence
17
0.35
246
Basal
Cumulate
Sequence
Hanging Wall
Cumulate
Sequence
2
2
1
2
3
1
2
1
1
1
0.31
0.35
0.34
0.47
0.37
0.35
0.31
0.3
0.38
0.33
207
136
117
140
110
107
84
67
120
277
Diamond drilling, targeting the interpreted southerly plunge to mineralisation at Hilditch North is planned.
Review of Operations
12
Hilditch Central Nickel Prospect
The previous drilling completed within this area was re-evaluated using Ni/Mg and
Fe/Mg ratios. Although less drill data was available for interrogation, the geochemical
review indicated that further drill testing was required to the north and south of the prospect.
Hilditch South-West Nickel Prospect
With priority being assigned to the anomalous auger geochemistry RC drilling further to the east, the EM
targets at this prospect remain to be drill tested.
Review of Operations
13
BONNIEVALE (Gold)
(100% M15/70; 85% M15/220)
IDA FAULT PROJECT (Gold)
(Earning 75% E16/269)
Following an auger and a bulk surface sampling program of
tailings from historical gold mining and treatment activities, a
900 tonne parcel was taken for use as a flushing medium in the
treatment plant after the Wattle Dam ore parcel was campaigned.
With the success of this trial it is proposed to continue this
practice after each subsequent campaign.
BLACK CAT PROJECT (Gold)
(90% M16/34, M16/115 )
In view of the increase in the gold price and that the
optimisation study commissioned last year on both Black Cat
North and Black Cat South resources shows a positive return
even at the A$550 gold price, an evaluation RC drilling program
to advance the confidence in the resources commenced late in
the year. It is being conducted in two stages with the initial 50
priority holes for a total advance of 1977 metres being completed
subsequent to the end of the year.
Auger sampling confirmed and better defined the gold
geochemistry results obtained from previous surveys. A
subsequent ground check was made of an anomalous zone
where previous drilling had failed to return any significant gold
intersections. From these observations it is considered that the
gold anomaly lies within transported colluvium and that the
east-west alignment of the anomalous and enhanced gold
values is an erosional effect rather than a localised bed rock
source. Accordingly the source of the gold mineralisation may
be displaced some hundreds of metres from its surface
expression and further investigation is required.
Review of Operations
Interests in Mining Tenements
Project
Location
Tenement
Status
Associated
Tenement
ID
Acquiring
%
14
Area
Acquired Registered Beneficial
Owner
Owner
%
Coolgardie
M16/34
Granted
90%
Ramelius
Ramelius
341.25 ha
Coolgardie
M16/115
Granted
90%
Ramelius
Ramelius
228.80 ha
Jaurdi/Black
Cat
Jaurdi/Black
Cat
Hilditch
Hilditch
Hilditch
Hilditch
Hilditch
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
Wattle Dam
North Widgie
North Widgie
North Widgie
North Widgie
North Widgie
North Widgie
North Widgie
North Widgie
Larkinville
Larkinville
Larkinville
Larkinville
Larkinville
Larkinville
Larkinville
Coolgardie M15/1448
P15/4127
Coolgardie
P15/4128
Coolgardie
P15/4129
Coolgardie
P15/4130
Coolgardie
Coolgardie
E15/718
Coolgardie M15/1101
Coolgardie M15/1263
Coolgardie M15/1264
Coolgardie M15/1323
Coolgardie M15/1338
Coolgardie M15/1769
Coolgardie M15/1770
Coolgardie M15/1771
Coolgardie M15/1772
Coolgardie M15/1773
Coolgardie M15/1774
Coolgardie M15/1775
Coolgardie M15/1776
P15/3767
Coolgardie
P15/3873
Coolgardie
P15/4479
Coolgardie
P15/4651
Coolgardie
P15/4652
Coolgardie
P15/4653
Coolgardie
M15/97
Coolgardie
M15/99
Coolgardie
M15/100
Coolgardie
M15/101
Coolgardie
M15/102
Coolgardie
Coolgardie
M15/653
Coolgardie M15/1271
P15/3666
Coolgardie
E15/689
Coolgardie
E15/742
Coolgardie
Coolgardie M15/1449
Coolgardie
Coolgardie
Coolgardie
Coolgardie
P15/4213
P15/4214
P15/4464
P15/4790
Application P15/4127-4130
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Granted
Granted
Granted
Application
Granted
Granted
Granted
Application
M15/1448
M15/1448
M15/1448
M15/1448
M15/1769-1776
P15/3767
P15/3873
E15/718
E15/718
E15/718
E15/718
E15/718
P15/4653
P15/4651
P15/4652
M15/1323
M15/1338
P15/3666
M15/1271
P15/4213-
4214
M15/1449
M15/1449
Reversion
P15/4464
Bonnievale
Bonnievale
Coolgardie
Coolgardie
M15/70
M15/220
Granted
Granted
Ida Fault
Coolgardie
E16/269
Granted
Bullabulling
Bullabulling
Bullabulling
Coolgardie
Coolgardie
Coolgardie
P15/4435
P15/4436
P15/4437
Granted
Granted
Granted
90%
90%
90%
90%
90%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Gold Rights
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Kiloran
Ramelius
Ramelius
Ramelius
ANM
ANM
ANM
ANM
ANM
ANM
ANM
ANM
Pioneer
Pioneer
Pioneer
Pioneer
Pioneer
Pioneer
Pioneer
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Ramelius
Pioneer
Pioneer
Pioneer
Pioneer
Pioneer
Pioneer
Pioneer
418.00 ha
102.58 ha
114.57 ha
95.67 ha
104.34 ha
18.00 bk
519.00 ha
217.00 ha
85.00 ha
50.00 ha
87.00 ha
327.00 ha
995.00 ha
780.00 ha
452.00 ha
41.00 ha
33.00 ha
30.00 ha
194.00 ha
60.00 ha
84.00 ha
138.00 ha
29.00 ha
193.50 ha
33.00 ha
675.85 ha
984.05 ha
957.80 ha
964.25 ha
931.90 ha
999.10 ha
485.70 ha
121.40 ha
28.00 bk
7.00 bk
243.00 ha
121.60 ha
121.40 ha
22.00 ha
22.00 ha
100%
85%
Ramelius
Ramelius
Ramelius
Ramelius
52.58 ha
25.02 ha
Pioneer
Pioneer
36.00 bk
Pioneer
Pioneer
Pioneer
Pioneer
Pioneer
Pioneer
162.20 ha
190.03 ha
187.20 ha
75%
75%
75%
75%
75%
75%
75%
75%
75%
75%
75%
Review of Operations
Interests in Mining Tenements
Project
Location
Tenement
Status
Associated
Tenement
ID
Acquiring
%
15
Area
Acquired Registered Beneficial
Owner
Owner
%
Bullabulling
Bullabulling
Bullabulling
Coolgardie
Coolgardie
Coolgardie
P15/4438
P15/4439
P15/4440
Granted
Granted
Granted
75%
75%
75%
Pioneer
Pioneer
Pioneer
Pioneer
Pioneer
Pioneer
192.00 ha
200.00 ha
27.40 ha
Cuddingwarra
Murchison
M20/79
Granted
80%
Ramelius
Ramelius
219.00 ha
Troy Creek
Warburton
E69/1921
Granted
100%
Ramelius
Ramelius
33.00 bk
West Rhodes
Warburton
E69/1924
Granted
Eucalyptus
Mt Margaret M39/464
Application
Eucalyptus
Mt Margaret M39/465
Application
Eucalyptus
Mt Margaret M39/466
Application
Eucalyptus
Mt Margaret
E39/480
Granted
M39/803-804
Eucalyptus
Mt Margaret M39/803
Application
E39/480
Eucalyptus
Mt Margaret M39/804
Application
E39/480
Lake Seabrook
Lake Seabrook
Yilgarn
Yilgarn
M77/943
E77/1103
Application
Application
Ground Lark
Yilgarn
M15/1290
Granted
Parker Range
Parker Range
Yilgarn
Yilgarn
M77/1085
P77/3481
Application
Application
80%
50%
50%
50%
50% of
Gold Rights
50% of
Gold Rights
50% of
Gold Rights
Ramelius
Ramelius
32.00 bk
Audax &
Enterprise
Audax &
Enterprise
Audax &
Enterprise
NiWest
Ramelius
520.00 ha
Ramelius
898.00 ha
Ramelius
398.00 ha
Ramelius
4.00 bk
NiWest
Ramelius
599.00 ha
NiWest
Ramelius
598.00 ha
90%
100%
100%
100%
100%
Enterprise
Ramelius
Far Corners Ramelius
60.00 ha
1.00 bk
Rand
Ramelius
4.00 ha
Ramelius
Ramelius
Ramelius
Ramelius
768.00 ha
38.00 ha
Changes in interests in mining tenements year ending 2006
Interests in mining
tenements relinquished,
reduced or lapsed
Interests in mining
tenements acquired or
increased
Tenement
reference
E77/955
P15/4507
P15/4508
E69/1549
E69/1653
E16/762
M15/1769
M15/1770
M15/1771
M15/1772
M15/1773
M15/1774
M15/1775
M15/1776
P15/4790
M15/1290
Nature of interest
Interest at
beginning
of the year
Interest at
end of
the year
Surrendered 10 October 2005
Surrendered 3 March 2006
Surrendered 3 March 2006
Surrendered 29 May 2006
Surrendered 29 May 2006
Withdrawal 23 June 2006
Applied for 1 February 2006
Applied for 1 February 2006
Applied for 1 February 2006
Applied for 1 February 2006
Applied for 1 February 2006
Applied for 1 February 2006
Applied for 1 February 2006
Applied for 1 February 2006
Applied for 19 April 2006
Acquired 30 June 2006
100%
100%
100%
80%
80%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
75%
100%
Review of Operations
16
Royalty Interests
The Current status of the Company’s Royalty Interests is as follows.
PROJECT NAME
CURRENT HOLDER
NATURE OF
RAMELIUS’ ROYALTY
COMMENTS
SANDSTONE*
– Gold
Troy Resources NL
Production based
Royalty Capped
at $300,000
No Current Activity by
Holder on the Royalty
Tenements
BULONG*
– Gold
Yilgarn Gold Ltd
Production based
Royalty Not Capped
SPARGOS REWARD*
– Gold
Breakaway
Resources Ltd
3% Gross Gold Royalty
SIBERIA*
– Gold/Nickel
Siberia Mining Corp Ltd Nickel and Gold Royalty
Collectively capped
at $100,000
No Current Activity by
Holder on the Royalty
Tenements
No Current Activity by
Holder on the Royalty
Tenements
No Current Activity by
Holder on the Royalty
Tenements
EDJUDINA
– Gold
Saracen Mineral
Holdings Ltd
Production based Royalty
Capped at $500,000
Currently Subject to
Feasibility Study
EUCALYPTUS*
– Nickel
GME Resources Ltd
Option to purchase on
commencement of
mining Nickel Laterites
at $0.10/tonne
of Proven Ore.
No Current Activity by
Holder on the
Royalty Tenements
* These royalty assets have been impaired and their carrying costs written off.
The information in this report that relates to Mineral Resources is based on information compiled by G.J.Dunbar of Dunbar Resource
Management, who is a Fellow of the Australasian Institute of Mining and Metallurgy and who has sufficient experience which is rel-
evant 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 1999 Edition of the “Australasian Code for Reporting of Mineral Resources and Ore Reserves”.
G.J.Dunbar consents to the inclusion in the report of the matters based on their information in the form and context in which it
appears.
The Information in this report that relates to Exploration Results is based on information compiled by Matthew Svensson and Gordon
Dunbar.
Gordon Dunbar who is a Fellow of the Australian Institute of Mining and Metallurgy, is employed by Rangewest Pty Ltd, trading as
Dunbar Resource Management. Gordon Dunbar has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of
the Australasian Code for Reporting on Exploration Results. Gordon Dunbar consents to the inclusion in the report of the matters
based on his information in the form and context in which it appears.
Matthew Svensson is a Member of the Australian Institute of Geoscientists and is a Competent Person
as defined in the 2004 Edition of the Australasian Code for Reporting on Exploration Results. Matthew
Svensson is a full-time employee of the company and consents to the inclusion in the report of the
matters based on his information in the form and context in which it appears.
The information in this report that relates to the Pit Optimisation Studies was compiled by Gary
McCrae of Minecomp Pty Ltd which is a corporate member of the Australian Institute of Mining
and Metallurgy. Gary McCrae is a qualified mining engineer who 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 Mineral Resources and Ore Reserves”. Gary McCrae consents to the inclusion in the report
of the matters based upon the information in the form and context in which it appears.
Native Title Statement
17
Exploration areas held by the Company may be subject to
issues associated with Native Title. Whilst it is not
appropriate to comment in any detail upon specific
negotiations with Native title parties, the directors of
Ramelius believe it is important to state the Company’s
policy and approach to Native Title and dealings with
indigenous communities. The directors believe that the
following native title policy statement summarises the
Company’s desire to develop a spirit of co-operation in its
dealings with indigenous people, create goodwill, mutual
awareness and understanding and most importantly,
respect and commitment.
have an obligation to consult its people in
order to determine their opinions and wishes
and that this may often not be achieved as
quickly as is desired, Ramelius uses its best
endeavours to expedite the process and
ensure that its commercial interests are not adversely
impacted. The Company also uses its best endeavours to
ensure reasonable rights of consultation and continued
access to land are facilitated and the integrity of land is
preserved. The company is committed to taking appropriate
steps to identify and reduce the effects of any unforseen
impacts from its activities.
Recognition and Respect
Ramelius recognises Aboriginal regard for land and
respects their culture, traditions and cultural sites.
Understanding and Trust
Ramelius listens to Aboriginal community representatives in
order to understand their views and beliefs. Recognising
that communities may not be fully appreciative of how the
Company’s business and industry operates, Ramelius
works towards increasing their understanding, respect and
trust and to promote the Company’s obligations and
economic constraints amongst indigenous communities.
Ramelius ensures that its employees and contractors
approach the Company’s activities at local sites with
respect and a clear understanding of important issues and
priorities.
Communication and Commitment
Ramelius adopts practical measures to develop trust.
Acknowledging that community leaders and representatives
Achievements
During the past year, Ramelius carried out a Heritage
Survey in respect of a number of specific tenements with
the following parties:
•
The Widji People
The Company also made royalty equivalent payments in
respect of a Deferred Production Agreement with the following
parties:
•
•
The Widji People
The Central West Goldfields People
Acknowledgement
The directors of Ramelius wish to publicly acknowledge the
co-operation and goodwill shown by the Birriliburu,
Ballardong, Widji and Central West Goldfields People and
their representatives in the course of negotiations with the
Company during the year.
Corporate Governance Statement
18
During 2003
the Australian Stock Exchange
Corporate Governance Council
(“ASXCGC”)
released its best practice recommendations based
on ten core principles for corporate governance.
These recommendations are not intended to be
prescriptions to be followed by all ASX listed
companies, but rather guidelines designed to
produce an efficient, quality or integrity outcome.
The Corporate Governance Council has recognised
that a “one size fits all” approach to Corporate
Governance is not required. Instead, it states
aspirations of best practice for optimising corporate
performance and accountability in the interests of
shareholders and the broader economy. A company
may consider that a recommendation is inappropriate
to its particular circumstances and has flexibility not
to adopt it and explain why. Except for those
specifically identified and disclosed below, the
Company has not to date adopted all ASXCGC best
practice recommendations because the Board
believes it cannot justify the necessary cost given
the size and early stage of the entity’s life as a
public listed exploration company. The Board is,
nevertheless, committed to ensuring that appropriate
Corporate Governance practices are in place for the
proper direction and management of the Company.
the main Corporate
This statement outlines
Governance practices of the Company disclosed
under the principles outlined by the ASXCGC,
including those that comply with best practice and
which unless otherwise disclosed, were in place
during the whole of the financial year ended
30 June 2006.
Principle 1 – Lay solid foundations for
management and oversight
Role of the Board
The Board is governed by the Corporations Act
2001, ASX Listing Rules and a formal constitution
adopted by the company in 2002 on its conversion
from a proprietary limited company to a public
company limited by shares.
The Board’s primary role is the protection and
enhancement of long-term shareholder value.
The Board takes responsibility for the overall
Corporate Governance of the Company including
its strategic direction, management goal setting
and monitoring, internal control, risk management
this
and
responsibility, the Board seeks to take into account
the interests of all key stakeholders of the
Company, including shareholders, employees,
customers and the broader community.
In discharging
reporting.
financial
In June 2005 the Board adopted a formal Board
Charter in accordance with ASXCGC best practice
recommendation 1.1. The Board Charter details the
functions and responsibilities of the Board of
Directors.
the
The Board of Directors is responsible for the overall
Corporate Governance of the Company. The Board
formulation of strategies and
overviews
participates in setting objectives for the Company
and the establishment of policies to be implemented
by management. The Board monitors the activities
of the Company and ensures the entity is accountable
to external stakeholders.
The Board’s responsibilities are extensive and
include the following.
• Determining the size and composition of the
Board of Directors, remuneration of directors
(subject to the maximum aggregate amount as
approved from time to time by the company in
general meeting) and assessing the effectiveness
of individual directors and the Board as a
whole;
• Establishing committees of the Board and
determining terms of reference and reporting
requirements;
• Selecting and appointing (and where appropriate,
removing) the Chief Executive, determining
conditions of service including remuneration
and
reviewing performance against key
objectives;
• Ratifying the appointment (and where appropriate,
removal) of senior management including the
Chief Financial Officer and Company Secretary
and approving conditions of service including
remuneration and performance monitoring;
• Reviewing senior management succession
planning and development;
• Approving strategic directions and performance
objectives for the Company and monitoring
implementation by management;
• Ensuring adequate
resources are available
Company’s objectives;
financial and human
the
to achieve
• Delegating appropriate levels of authority to
management;
• Overseeing the activities of the Company and
ensuring effective systems of audit, risk
management and internal controls are in place
to protect the entity’s assets and minimise
operations beyond
regulatory
requirements or acceptable risk thresholds;
• Monitoring compliance with legal and other
regulatory requirements including accounting
standards, continuous disclosure and ASX
Listing Rules;
legal and
• Approving and monitoring financial budgets,
capital management, major expenditures and
significant acquisitions and divestments;
Corporate Governance Statement
19
• Approving and monitoring financial and other reporting;
• Approving and monitoring appropriate policies,
procedures, codes of conduct and ethical standards for
directors and employees;
• Ensuring effective communication and reporting to
shareholders and other key stakeholders of the
Company.
Board processes and management
The Board has an established framework for the management
of the entity including a system of internal control, a
business risk management process and appropriate ethical
standards. To assist in the execution of its responsibilities,
the Board has an Audit Committee to deal with internal
control; ethical standards and financial reporting. The Audit
Committee’s role and responsibilities, composition,
structure and membership are set out in a formal Charter.
The Board appoints a Managing Director responsible for
the day to day management of the Company. The role of
the Managing Director is documented in the Board Charter
(refer Principle 2 below).
Principle 2 – Structure the Board to add value
Composition of the Board
The names of the directors of the Company and terms in
office at the date of this Statement together with their skills,
experience and expertise are set out in the Directors’ Report
section of this report. The directors’ terms in office are
considered appropriate in light of the fact that the Company
was a dormant company prior to its ASX listing in March
2003.
The composition of the Board consists of three directors of
whom two, including the Chairman, are non-executives.
Mr Kennedy’s role as Chairman of the Board is separate
from that of the Managing Director, Mr Houldsworth who is
responsible for the day to day management of the
Company and is in compliance with the ASXCGC best
practice recommendation 2.3 that these roles not be
exercised by the same individual.
The Company’s constitution specifies the number of
directors must be at least three and at most ten. The Board
may at any time appoint a director to fill a casual vacancy.
Directors appointed by the Board are subject to election by
shareholders at the following annual general meeting and
thereafter directors (other than the Managing Director) are
subject to re-election at least every two years. The tenure
for executive directors is linked to their holding of executive
office.
Formal deeds were entered into by the Company with
directors whereby all directors are entitled to take such
legal advice as they require at any time and from time to
time on any matter concerning or in relation to their rights,
duties and obligations as directors in relation to the affairs
of the Company.
The Board Charter details the roles of the Chairman and
Managing Director as follows.
Role of the Chairman
The role of Chairman is non executive and central to the
effective corporate governance of the Company. The
Chairman leads the Board and General Meetings of the
Company and is instrumental in ensuring effective
communications exist between the Board of Directors and
senior management. The Chairman is also responsible for
the following.
• Ensuring the Company has an effective Board and that
there are appropriate procedures in place to evaluate
the performance of the Board as a whole, its individual
directors and committees;
• Ensuring that meetings of the Board are conducted
efficiently and effectively and that the quality of agenda
and Board papers properly inform directors on the
operations of the Company so as to facilitate effective
review, analysis, discussion and decision making by
directors;
• Promoting high standards of integrity and ethics;
• Establishing and maintaining a close working relationship
with the Managing Director and providing ongoing
support and advice;
• Overseeing communications with shareholders and
other key stakeholders and representing the Board of
Directors as required.
Role of the Managing Director
The role of the Managing Director is separate from the
Chairman and is appointed by the non executive directors
of the Board. The responsibilities of the Managing Director
include the following.
• Recommending strategic directions and implementing
business plans approved by the Board;
• Managing the day to day operations of the Company
including its financial, physical and human resources;
• Developing and
implementing risk management
procedures;
• Developing and implementing internal control and
•
regulatory compliance policies and procedures;
Providing timely, accurate and relevant information to
the Board.
Principle 3 – Promote ethical and responsible
decision making
Ethical standards
The Company aims to a high standard of corporate
governance and ethical conduct by directors and
employees.
All directors have signed deeds with the Company which
require them to provide the Company with details of all
securities registered in the director’s name or an entity in
which the director has a relevant interest within the meaning
of section 9 of the Corporations Act 2001 and details of all
contracts, other than contracts to which the Company is a
party to which the director is a party or under which the
Corporate Governance Statement
20
director is entitled to a benefit, and that confer a
right to call for or deliver shares in the Company
and the nature of the director’s interest under the
contract.
The Audit Committee is generally responsible for
the integrity of the Company’s financial reporting
and overseeing the performance and independence
of the external auditor.
Directors are required to disclose to the Board any
material contract in which they may have an
interest. In accordance with Section 195 of the
Corporations Act 2001, a director having a material
personal interest in any matter to be dealt with by
the Board, will not be present when that matter is
considered by the Board and will not vote on that
matter.
Trading in the Company’s Securities
Directors, officers and employees are not permitted
to trade in securities of the Company at any time
whilst in possession of price sensitive information
not readily available to the market. Section 1043A of
the Corporations Act 2001 also prohibits the
acquisition and disposal of securities where a person
possess information that is not generally available
and which may reasonably be expected to have a
material effect on the price of the securities if the
information was generally available.
Principle 4 – Safeguard integrity in
financial reporting
CEO/CFO declarations on financial reports
In accordance with ASXCGC best practice
recommendation 4.1 the Chief Executive Officer
and Chief Financial Officer are required to provide
written declarations to the Board stating that in their
opinions the Company’s financial reports present a
true and fair view, in all material respects, of the
financial
Company’s
performance are in accordance with relevant
accounting standards.
financial position and
Audit Committee
Ramelius is not a Company required by ASX Listing
Rule 12.7 to have an Audit Committee during the
year although it is a best practice recommendation
of the ASXCGC. Notwithstanding the Listing Rule
requirement, the Company has an Audit Committee
in accordance with ASXCGC best practice
recommendation 4.2 to oversee the Company’s
internal controls, ethical standards,
financial
reporting and external accounting and compliance
procedures.
In June 2005 the Board adopted a formal Charter
for the Audit Committee in accordance with
ASXCGC best practice recommendation 4.4. The
Charter details the Audit Committee’s role and
responsibilities, composition and membership
requirements. The role of the Chairman of the Audit
Committee is also detailed in the Charter.
Members of the Audit Committee have full rights to
access all information and records of the Company
and to discuss any matter with the external auditor
and senior management. The Committee also has
the right to seek external professional advice at the
cost of the Company.
The Audit Committee’s responsibilities are as
follows.
• Overseeing establishment, maintenance and
reviewing the effectiveness of the Company’s
internal control and ensuring efficacy and
efficiency of operations, reliability of financial
reporting and compliance with applicable
Accounting Standards, Regulations and ASX
Listing Rules;
• Reviewing, assessing and making recommen-
dations to the Board on the annual and half year
financial reports and other financial information
or
formal announcements published or
released by the Company;
• Assessing and ensuring that any significant
transactions and related party dealings are
properly recognised, recorded and disclosed in
the Company’s financial reports;
• Obtaining and reviewing statements from the
Chief Executive Officer and Chief Financial
Officer expressing opinions on whether the
Company’s financial records have been properly
maintained and whether financial statements
comply with accounting standards and present
a true and fair view;
• Reviewing the effectiveness of the Company’s
risk management and internal compliance
systems;
• Approving and monitoring appropriate policies,
procedures, codes of conduct and ethical
standards for directors and employees and
receiving and assessing management reports
on any deficiencies or weaknesses that may
arise;
Liaising and discussing any relevant issues with
the Chief Executive Officer and Chief Financial
Officer;
•
• Assessing the scope of the annual audit and
half year review, ensuring emphasis is placed
on any areas requiring special attention;
Liaising with and reviewing all reports of the
external auditor
reports,
independence
management
declarations;
including audit
letters and
•
Corporate Governance Statement
21
• Reviewing performance and assessing independence
of the external auditor having regard for the provision of
any non audit services and where necessary, making
recommendations relating to audit fees, selection
process, appointment, and removal of the Company’s
external auditor;
• Obtaining and reviewing statements confirming the
external auditor’s independence;
• Reviewing and monitoring management’s response to
findings and
any significant external auditor
recommendations;
• Reporting generally to the Board on the activities of the
Committee and making any necessary recommendations
relating to areas of improvement;
• Reviewing the contents of statements to be included in
the annual report on the activities of the Committee;
• Ensuring effective communication and reporting of the
role of the Committee to shareholders and other key
stakeholders of the Company;
• Reviewing and assessing annually the performance of
the Committee and the adequacy of this charter.
The Audit Committee currently consists of the two non
executive Board directors, Messrs Kennedy & Nelson, and
chaired by Mr Nelson. Mr Kennedy is a qualified Chartered
Accountant. Details of these directors’ qualifications and
attendance at meetings are set out in the Directors’ Report
section of this report.
The role of Chairman is non executive and central to the
effectiveness of the Audit Committee and its contribution to
the Board’s overall responsibility for the Corporate
Governance of the Company. The Chairman leads the
Committee and its meetings and is instrumental in ensuring
effective communications exist between the Committee and
the Board of Directors, senior management and external
auditor. The Chairman is also responsible for the following.
•
•
• Ensuring
the Audit Committee has appropriate
procedures in place to evaluate the performance and
effectiveness of the Committee as a whole and its
individual Members;
• Ensuring that meetings of the Audit Committee are
conducted efficiently and effectively and that the
quality of agendas and papers properly inform
Members on matters before the Committee that
facilitates effective review, analysis, discussion and
decision making by Members of the Committee;
• Promoting high standards of integrity and ethics;
• Maintaining a close working relationship with the
Managing Director, senior management and external
auditor so as to facilitate an effective flow of relevant
and appropriate information to the Committee;
• Ensuring that the Board is kept informed on all matters
relating to the activities of the Committee and overseeing
any communications concerning its activities with
shareholders and other key stakeholders.
The Committee meets at least two times per annum and
reports to the Board. The Managing Director, Chief
Financial Officer and external auditor may by invitation
attend meetings at the discretion of the Committee.
Principle 5 – Making timely and balanced
disclosure
Continuous Disclosure
The Company operates under the continuous disclosure
requirements of the ASX Listing Rules and ensures that all
information which may be expected to affect the value of
the Company’s securities or influence investment decisions
is released to the market in order that all investors have
equal and timely access to material information concerning
the Company. The information is made publicly available on
the Company’s website following release to the ASX.
Principle 6 – Respect the rights of
shareholders
The Role of Shareholders
The Board aims to ensure that shareholders are informed of
all major developments affecting the Company’s state of
affairs. In accordance with the ASXCGC best practice
recommendation 6.1, information is communicated to
shareholders as follows:
•
the annual financial report which includes relevant
information about the operations of the Company
during the year, changes in the state of affairs of the
entity and details of future developments, in addition to
the other disclosures required by the Corporations Act
2001;
the half yearly financial report lodged with the Australian
Stock Exchange and thereby the Australian Securities
and Investments Commission and sent to all shareholders
who request it;
notifications relating to any proposed major changes in
the Company which may impact on share ownership
rights that are submitted to a vote of shareholders;
notices of all meetings of shareholders;
•
• publicly released documents including full text of
notices of meetings and explanatory material made
available on the Company’s internet web-site at
www.rameliusresources.com.au and sent by email to
shareholders who request to receive such information
electronically; and
disclosure of the Company’s Corporate Governance
practices and communications strategy on the entity’s
internet web-site.
•
The Board encourages full participation of shareholders at
the Annual General Meeting to ensure a high level of
accountability and identification with the Company’s strategy
and goals. Important issues are presented to the
shareholders as single resolutions. In accordance with
ASXCGC best practice recommendation 6.2 the external
auditor of the Company is also invited to the Annual
General Meeting of shareholders and is available to answer
any questions concerning the conduct, preparation and
Corporate Governance Statement
22
content of the auditor’s report. Pursuant to section
249K of the Corporations Act 2001, the external
auditor is provided with a copy of the notice of
meeting and related communications received by
shareholders.
Principle 7 – Recognise and
manage risks
Risk Assessment and Management
The Board recognises that there are inherent risks
associated with the Company’s operations including
mineral exploration and mining, environmental, title
and native title, legal and other operational risks.
The Board endeavours to mitigate such risks by
continually reviewing the activities of the Company
in order to identify key business and operational
risks and ensuring that they are appropriately
assessed and managed.
Principle 8 – Encourage enhanced
performance
Performance Evaluation
The Board evaluates the performance of the
Managing Director and Company Secretary on a
regular basis and encourages continuing profes-
sional development. The Company’s remuneration
practices are disclosed in the Remuneration Report
section of the Directors Report.
Principle 9 – Remunerate fairly
and responsibly
Remuneration Policy
In accordance with ASXCGC best practice
recommendation 9.1 the Company’s remuneration
practices are set out as follows.
The Company’s Constitution specifies that the total
amount of remuneration of non executive directors
shall be fixed from time to time by a general
meeting. The current maximum aggregate
remuneration of non executive directors has been
set at $200,000 per annum. Directors may
apportion any amount up to this maximum amount
amongst the non executive directors as they
determine. Directors are also entitled to be paid
reasonable travelling, accommodation and other
expenses incurred in performing their duties as
directors. The remuneration of the Managing
Director is determined by the non-executive
directors on the Board as part of the terms and
conditions of his employment which are subject to
review from time to time. The remuneration of other
executive officers and employees is determined by
the Managing Director subject to the approval of
the Board.
In accordance with ASXCGC best practice
recommendation 9.3 non-executive director
remuneration is by way of fees and statutory
superannuation contributions. Non-executive
directors do not participate in schemes designed
for remuneration of executives nor do they receive
options or bonus payments and are not provided
with retirement benefits other than salary sacrifice
and statutory superannuation.
The Company’s remuneration structure is based on
a number of factors including the particular
experience and performance of the individual in
meeting key objectives of the Company. The Board
is responsible for assessing relevant employment
market conditions and achieving the overall, long
term objective of maximising shareholder benefits,
through the retention of high quality personnel.
The Company does not presently emphasise
payment for results through the provision of cash
bonus schemes or other incentive payments based
on key performance indicators of Ramelius given
the nature of the Company’s business as a recently
listed mineral exploration entity and the current
status of its activities. However the Board may pay
cash bonuses from time to time in order to reward
individual executive performance in achieving key
objectives as considered appropriate by the Board.
Cash bonuses may be paid to employees including
the Managing Director and Company Secretary in
accordance with this policy as disclosed in the
Remuneration Report section of the Directors
Report.
The Company also has an Employee Incentive Plan
approved by shareholders that enables the Board
to offer eligible employees ordinary fully paid shares
and/or options to ordinary fully paid shares in the
Company. Under the terms of the Plan, shares
and/or options to shares may be offered to the
Company’s eligible employees by way of interest
free loans repayable in accordance with the terms
and conditions of the Plan. The objective of the
Plan is to align the interests of employees and
shareholders by providing employees of the
Company with the opportunity to participate in the
equity of the Company as an incentive to achieve
greater success and profitability for the Company
and to maximise the long term performance of the
Company.
Details of options issued to employees during or
since the end of the financial year are set out in the
Remuneration Report section of the Director’s
Report.
Corporate Governance Statement
23
The employment conditions of the Managing Director,
Mr Houldsworth and specified executives are formalised in
contracts of employment commencing 1 July 2005 and
expiring on 30 June 2008. The Company may terminate the
contracts without cause by providing six months written
notice or making a termination payment in lieu of
notice of an amount equal to half of the remuneration to be
paid for the remainder of the contract with a minimum
termination payment equal to twelve months remuneration
under the contract. However any such termination payment
is subject to the requirements of ASX Listing Rule 10.19,
and in the event that the value of termination benefits to be
paid and the value of all other termination benefits that are
or may be payable to all officers of the Company together
exceed 5% of the equity interests of the Company as set out
in the latest accounts given to the ASX, the payment shall
be pro-rata based on the maximum total termination
benefits allowable under ASX Listing Rule 10.19.
Termination payments are not generally payable on
resignation or dismissal for serious misconduct.
Details of directors’ and executive’s/officers’ remuneration,
superannuation and retirement payments are set out in the
Remuneration Report section of the Directors’ Report.
Employee Share/Option Scheme
The Company has an Employee Incentive Plan approved
by shareholders that enables the Board to offer eligible
employees ordinary fully paid shares and/or options to
ordinary fully paid shares in the Company in accordance
with ASXCGC best practice recommendation 9.4. The
non-executive directors are not eligible to participate in the
Plan. No shares or options were issued to employees
during the 2006 financial year. Further details of the terms of
the Plan are disclosed in the Remuneration Report section
of the Directors’ Report.
Principle 10 – Recognise the legitimate
interests of stakeholders
Code of Conduct
The Company requires all its directors and employees to
abide by the highest standards of behaviour, business
ethics and in accordance with the law. In discharging their
duties, Directors of the Company are required to:
•
•
•
•
•
•
•
•
act in good faith and in the best interests of the Company;
exercise care and diligence that a reasonable person in
that role would exercise;
exercise their powers in good faith for a proper purpose
and in the best interests of the Company;
not improperly use their position or information
obtained through their position to gain a personal
advantage or for the advantage of another person to
the detriment of the Company;
disclose material personal interests and avoid actual or
potential conflicts of interests;
keep themselves informed of relevant Company
matters;
keep confidential the business of all directors meetings;
and
observe and support the Board’s Corporate Governance
practices and procedures.
Glossary of Terms
24
Adsorption:
Aeromagnetics:
Air-Core:
Anomalous:
Archaean:
Auriferous:
Auger:
ASX:
Au:
Az:
BCM:
BERM:
Base Metal:
Calcrete:
Carbonate:
Cil Circuit:
Company:
Costean:
Cut:
Dip:
The attraction of molecules (of gold) in solution to the surface of solid
bodies (carbon).
A geophysical technique measuring changes in the earth's magnetic field
from an airborne craft.
A method of rotary drilling whereby rock chips are recovered by air flow
returning inside the drill rods rather than outside, thereby providing
usually reliable samples.
A departure from the expected norm. In mineral exploration this term
is generally applied to either geochemical or geophysical values
higher or lower than the norm.
The oldest rocks of the Earth's crust - older than 2,400 million years.
Gold bearing material.
A screw-like boring or drilling tool for use in clay or soft sediments.
The Australian Stock Exchange Limited (ACN 008 629 691)
Gold.
Azimuth, a surveying term, the angle of horizontal difference, measured
clockwise, of a bearing from a standard direction, as from north.
Bank Cubic Metre. Usually refers to the volume of waste measured in
situ.
A horizontal bench left in the wall of an open pit to provide stability to
the wall.
Non precious metal, usually referring to copper, zinc and lead.
Soil and superficial material cemented by calcium carbonate.
A common mineral type consisting of carbonates of calcium, iron
and/or magnesium.
That part of the gold treatment plant where gold is dissolved from the
pulverised rock and subsequently adsorbed onto carbon particles
from which the gold is ultimately recovered.
Ramelius Resources Limited (ACN 001 717 540)
A trench dug through soil to expose the bedrock.
A term used when referring to average assays where the grade of a
particularly high-grade interval is reduced to a lesser value.
The angle at which rock stratum or structure is inclined from the
horizontal.
Disseminated:
Usually referring to minerals of economic interest scattered or diffused
through out the host rock.
Dyke:
EL:
ELA:
Tabular igneous intrusive cutting the bedding or planar features in the
country rock.
Exploration Licence.
Exploration Licence Application.
Glossary of Terms
25
EM:
EOH:
Fault:
F.C.I:
Felsic:
Electromagnetic, a geophysical technique used to detect conductive material in the earth.
End of Hole.
A fracture in rocks along which rocks on one side have been moved relative to the
rocks on the other.
Free carried interest.
Light coloured rock containing an abundance of any of the following: - feldspars,
felspathoids and silica.
Ferruginous:
Containing iron.
Flitch:
A Mining Term for the different levels in an open pit.
Geochemical Exploration:
Used in this report to describe a prospecting technique, which measures the content
of certain metals in soils and rocks and defines anomalies for further testing.
Geophysical Exploration:
The exploration of an area in which physical properties (e.g., Resistivity, gravity,
conductivity and magnetic properties) unique to the rocks in the area quantitatively
measured by one or more geophysical methods.
g/t:
g/cc:
Gossan:
Gravity Circuit
grams per tonne.
grams per cubic centimetre.
The oxidised, near surface part of underlying primary sulphide minerals.
Part of the Gold Treatment Plant where gold particles are accumulated by virtue of their
density.
Gross Gold Royalty:
A royalty payment based on the total amount of product (gold) produced.
Grade:
g/t - grams per tonne, ppb - parts per billion, ppm - parts per million.
Graticular Block:
With respect to Exploration Licences, that area of land contained within one minute of
Latitude and one minute of Longitude.
GSWA:
ha:
JORC:
km:
Komatiite:
Lag:
Laterite:
Leachwell:
The Geological Survey of Western Australia.
Hectare.
The Australasian Code for Reporting of Mineral Resources and Ore Reserves.
Kilometre.
An ultramafic rock with high magnesium content extruded from a volcano.
A residual deposit remaining after finer particles have been blown away by wind.
Highly weathered residual material rich in secondary oxides or iron and/or aluminium.
An analytical method.
Lode Deposit:
A vein or other tabular mineral deposit with distinct boundaries.
Massive:
Mineralised:
M:
M Tonnes:
ML:
MLA:
Large in mass, having no stratification. Homogeneous structure.
Rock impregnated with minerals of economic importance.
metre.
million tonnes.
Mining Lease.
Mining Lease Application.
Glossary of Terms
26
Native Title:
Native Title is the recognition in Australian law of indigenous Australian's
rights and interests in land and waters according to their own traditional
laws and customs. In June 1992, the High Court of Australia, in the
case of Mabo v Queensland (1992) 175 Commonwealth Law Reports
1, overturned the idea that the Australian continent belonged to no one
at the time of European arrival. It recognised for the first time that
indigenous Australians may continue to hold native title. Indigenous
Australians may now make native title claimant applications seeking
recognition under Australian law of their native title rights.
Native Title Tribunal:
The Native Title Tribunal set up under the Native Title Act 1993.
Open Pit:
Ore Grade:
Overcall:
Oxidised:
oz:
Pedogenic:
Pentlandite:
Petrological:
Percussion Drilling:
PL:
PLA:
Porphyry:
ppb:
Primary Gold:
A mine excavation produced by quarrying or other surface earth-moving
equipment.
The grade of material that can be (or has been) mined and treated for
an economic return.
Refers to more metal (gold) being recovered than anticipated.
Near surface decomposition by exposure to the atmosphere and
groundwater, compare to weathering.
Troy ounce = 31.103477 grams.
The development of soil.
An important ore of nickel (FeNi)9S8
Pertains to a study of the origin, distribution, structure and history of
rocks.
Method of drilling where rock is broken by the hammering action of a
bit and the cuttings are carried to the surface by pressurised air
returning outside the drill pipe.
Prospecting Licence.
Prospecting Licence Application.
A felsic or sub volcanic rock with larger crystals set in a fine groundmass.
parts per billion.
Gold mineralisation that has not been subject to weathering processes,
as opposed to Secondary Gold.
Proterozoic:
The Precambrian era after Archaean.
Pyrite:
Pyrrhotite:
Quartz:
RAB Drilling:
A common, pale bronze iron sulphide mineral.
An iron sulphide mineral.
Mineral species composed of crystalline silica.
Rotary Air Blast Drilling: Method of drilling in which the cuttings from
the bit are carried to the surface by pressurised air returning outside
the drill pipe. Most “RAB” drills are very mobile and designed for
shallow, low-cost drilling of relatively soft rocks.
Glossary of Terms
27
RC Drilling:
Regolith:
Reidel Fault:
Reserve:
Resource:
Reverse Circulation Drilling: A method of drilling whereby rock chips are recovered by
air flow returning inside the drill rods rather than outside, thereby providing usually
reliable samples.
A layer of fragmented and unconsolidated material that overlies or covers basement.
A slip surface that develops during the early stage of shearing.
The mineable part of a resource to which a tonnage and grade has been assigned
according to the JORC code.
Mineralisation to which a tonnage and grade has been assigned according to the
JORC code.
Rock Chip Sample:
A series of rock chips or fragments taken at regular intervals across a rock exposure.
Secondary Gold:
Gold mineralisation that has been subject to and usually enriched by weathering
processes.
Sedimentary Rocks:
Rocks formed by deposition of particles carried by air, water or ice.
Shear Zone:
A generally linear zone of stress along which deformation has occurred by translation
of one part of a rock body relative to another part.
Silicified:
Alteration of a rock by introduction of silica.
Stratigraphy:
The study of formation, composition and correlation of sedimentary rocks.
Strike:
Sulphides:
t:
TEM:
Toll Treatment:
Tonne:
Tremolite:
Ultramafic:
Uncut:
The direction of bearing of a bed or layer of rock in the horizontal plane.
Minerals consisting of a chemical combination of sulphur with a metal.
tonnes.
Transient Electromagnetic, a geophysical technique used to detect conductive
material in the earth.
The treatment of ores where payment is made to the operator of the treatment plant
according to the amount of material being treated.
32,125 Troy ounces.
A pale coloured amphibole mineral.
An igneous rock comprised chiefly of mafic minerals.
A term used when referring to average assays where the grade
of a particularly high-grade interval is not reduced to a lesser value.
Vacuum Drilling:
A method of rotary drilling where the drill cuttings are recovered inside the drill rods by
a vacuum system.
Directors’ Report
30
The directors present their report together with the financial report of Ramelius Resources Limited (“the Company”) for the
year ended 30 June 2006 and the auditor’s report thereon.
Directors
The directors of the Company at any time during or since the end of the financial year are as set out below. Details of
directors’ qualifications, experience and special responsibilities are as follows.
Joseph Fred Houldsworth
Chief Executive Officer and
Managing Director.
Board member since 18 February
2002. Extensive practical experi-
ence in the resource industry
having worked in the mining and
exploration industry for more
than 30 years at both operational
and management levels primarily
in the Western Australian Goldfields. Instrumental in turning
around the troubled Nevoria Gold Mine in 1993. Former
consultant for 10 years to insolvency specialists on both
mining and exploration and has considerable experience in
asset management for various mining entities.
Special responsibilities include acquisition of the Ramelius
portfolio and directing the Company’s exploration program.
Nicholas John Smart
Alternate Director. Alternate
Director for Mr RM Kennedy
during the period 1 August 2005
to 5 September 2005.
Held positions as a General
Manager in France and Australia
in the wool, textile, leather and
meat industries with responsibilities
resources,
including human
factory operations, currency movements and commodity
trading. Previously a full Associate Member of the Sydney
Futures Exchange, Managing Director of Goldsmith Futures
Pty Ltd and client advisor with sharebroking firm, D&D-
Tolhurst Ltd with experience in the corporate area including
capital raising. Other experience includes start up companies
in technology development such as laser shearing of sheep
skins, commercialisation of the Synroc process for safe
storage of high level nuclear waste and controlled
temperature and atmosphere transport systems. Current
consultant to various public and private companies.
Mr Smart is a director of GTL Energy Limited.
Robert Michael Kennedy
ASAIT, Grad, Dip (Systems
Analysis), FCA, ACIS, Life
member AIM, FAICD.
Non-Executive Chairman. Board
member since 1 November 1995
as a Non-Executive Chairman.
A Chartered Accountant and
Consultant to Kennedy & Co,
Chartered Accountants, a firm he
founded. Special responsibilities include membership of
the Audit Committee.
Other listed company directorships are: Chairman of Beach
Petroleum Limited (since 1995 and a director since 1991),
(since 2001) Maximus
Flinders Diamonds Limited
Resources Limited (since 2004) and Monax Mining Limited
(since 2004). Mr Kennedy’s appointment to public company
boards has been to provide an independent view. His
background as an official liquidator, management consultant
and in litigation support has provided the necessary skills
for that purpose. He has also been involved in making
takeover offers and defending them. Mr Kennedy’s
appointment as Chairman of several public and private
company boards is a result of his inclusive leadership style
and his emphasis on corporate governance.
Reginald George Nelson
BSc, Hon Life Member Society
of Exploration Geophysicists,
FAusIMM, FAICD.
Non-Executive Director. Board
member since 1 November
1995. An exploration geophysicist
with 36 years experience in the
minerals and petroleum industries
and Chairman of the Australian
Petroleum Production and Exploration Association Council.
He has wide experience in technical, corporate and
government affairs. Experience in gold exploration and
mining operations in Western Australia, the Northern
Territory and South Australia. Former Chairman of the
Nevoria Gold Mine Joint Venture in Western Australia.
Special responsibilities include membership of the Audit
Committee.
Other listed company directorships are: Managing Director
of Beach Petroleum Limited (since 1992) and director of
Anzon Australia Limited (between 2004 to December 2005)
and Monax Mining Limited (since 2004).
Directors’ Report
31
Directors’ meetings
The Company held 18 meetings of directors (including committees of directors) during the financial year. The number of
directors’ meetings and number of meetings attended by each of the directors of the Company (including committees of
directors) during the financial year were as follows:
Directors’
Meetings
Audit Committee
Meetings
Number Eligible
to Attend
Number
Attended
Number Eligible
to Attend
Number
Attended
Director
Robert Michael Kennedy
Reginald George Nelson
Joseph Fred Houldsworth*
Nicholas John Smart
(alternate for Mr Kennedy)
16
16
16
2
14
16
16
2
2
2
N/A
N/A
2
2
N/A
N/A
* Mr Houldsworth is not a member of the Audit Committee.
Company Secretary
The following person held the position of Company Secretary at the end of the financial year.
Domenico Antonio Francese
B.Ec., FCA, FFin, ACIS.
Appointed Company Secretary on 21 September 2001. A Chartered Accountant with an audit and
investigations background and more than 12 years experience in a regulatory and supervisory role
with ASX. He has been employed by Ramelius since 1 April 2003 and appointed Chief Financial
Officer in June 2005. He is also Company Secretary and Chief Financial Officer of Monax Mining
Limited. (since December 2005).
Principal activities
The Company’s principal activity is gold and minerals exploration and production.
Review and results of operations
A review of operations of the Company during the financial year and the results of those operations is contained elsewhere
in the annual report.
Results
The net loss after income tax was $907,365.
Dividends
No dividends have been paid or provided by the Company since the end of the previous financial year. The Directors do not
recommend payment of a dividend in respect of the 2006 financial year.
Directors’ Report
32
State of affairs
Significant changes in the state of affairs of the Company during the year were as follows:
• Effective from 1 July 2005, the Company entered into three year employment agreements with Messrs Houldsworth and
Francese in respect to their services as Managing Director and Company Secretary respectively.
• On 5 August 2005 the company raised gross funds of $1.3m from a placement of 8,666,666 ordinary fully paid shares
at $0.15 per share and 4,333,333 free attaching options for the purpose of fast-tracking the development of the
Company’s Wattle Dam discovery, expand regional exploration in the Spargoville belt and for working capital. The placement
was to a major Canadian institutional investor, Sprott Asset Management.
• Subsequently, on 23 November 2005 the company issued 4,333,333 options to Sprott Asset Management pursuant to
the placement in August 2005 following shareholder approval at the Company’s Annual General Meeting. The options are
exercisable at $0.18687 each by the expiry date of 31 December 2007.
• On 16 March 2006 the company raised $250,000 from a placement of 1,923,076 ordinary fully paid shares at $0.13 per
share and 961,538 free attaching options to help fund start-up costs for the maiden mining of the Company’s Wattle
Dam 7800N Gold Project in Western Australia. The placement was made to sophisticated Investors. The options are
exercisable at $0.18687 each and have an expiry date of 31 December 2007.
• On the same day the Company announced that following receipt of all the necessary statutory approvals, Ramelius had
commenced mining the Wattle Dam 7800N gold deposit.
• On 16 March 2006 500,000 options with an exercise price of $0.18687 were issued to an employee under an Employee
Share Option Plan. These options are not quoted on ASX and may be exercised at any time until 12 April 2011. The
underlying shares to be issued on exercise of the options will rank equally with existing shares upon issue.The option
have a fair value of $500.
• On 31 March 2006, the Company unveiled an intensive exploration program of its Spargoville gold and nickel tenements.
Ramelius also introduced the Company’s first Share Purchase Plan in order to bridge the gap between the commencement
of the Spargoville exploration program and cash flow from the Wattle Dam Gold Mine and to assist with working capital.
Under the Share Purchase Plan (“SPP”) eligible shareholders had the opportunity to purchase up to $5,000 worth of fully
paid ordinary shares (“SPP Shares”) in Ramelius at a discount to the market price without brokerage costs. The SPP
was fully subscribed and 20,883,305 ordinary fully paid shares at $0.115 per share were issued on 8 May 2006 raising
$2.4 million.
In June 2006 the Company processed a parcel of 5,400 tonnes of low grade ore which produced a total of 690 fine
ounces (21.5 kilograms of fine gold) representing a reconciled head grade of 4.5 grams per tonne of gold with an 89%
recovery from the processed parcel. On the basis of the predicted uncut grade of 1.4 grams per tonne gold determined
from the grade control drilling, the gold outturn indicated that there would be a substantial overcall on the expected
production from the Wattle Dam Gold Mine.
•
Adoption of Australian Equivalents to IFRS
As result of the introduction of Australian equivalents to International Financial Reporting Standards (AIFRS), the Company’s
financial report has been prepared in accordance with those Standards. A reconciliation of adjustments arising on the
transition to AIFRS is included in Note 2 to this report.
Directors’ Report
33
Events subsequent to balance date
Since 30 June 2006, the Company;
•
Issued 45,049,668 options over unissued shares to shareholders on the basis of one free Bonus Option for every two
Shares held at 30 June 2006. The options are exercisable at $0.175 each and have an expiry date of 30 June 2007;
• Entered into two Agreements with Pioneer Nickel Limited to acquire 80% of Pioneer’s nickel interests in both the “Wattle
Dam tenement group” and the “Logans/Larkinville tenement group”. The Agreements give Ramelius a twelve month
Option Period, during which it may at anytime exercise its option to acquire an 80% interest in Pioneer’s nickel rights over
the two areas of interest (Wattle Dam tenement group and the Logans/Larkinville tenement group). Ramelius will pay
Pioneer a fee for the option of $50,000 and $20,000 for the two areas of interest respectively and a consideration of
$500,000 and $200,000 respectively to exercise the options. On exercising the option, Ramelius must sole fund
expenditure of no less than $1,000,000 on nickel exploration collectively on both areas, within four years from the
commencement date. The parties will then associate in a nickel joint venture with Pioneer holding a 20% interest, free
carried up to the completion of a feasibility study; and
Issued 750,000 incentive options exercisable at $0.18687 by 31 December 2007 to the Wattle Dam Mine Manager. The
fair value of the options issued is $54,750.
•
Apart from the above, there has not arisen in the interval between 30 June 2006 and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect
significantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future
years.
Likely developments
Further information about likely developments in the operations of the company and the expected results of those
operations in future years has not been included in this report because disclosure of the information would be likely to result
in unreasonable prejudice to the Company.
Directors’ Report
34
Remuneration Report
Remuneration of Directors and Key Management Personnel
(a) Directors and Key Management Personnel
The names and positions held by directors and key management personnel of the Company during the financial year are:
Directors
Positions
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth
Mr NJ Smart*
Key Management Personnel
Mr DA Francese
Chairman – Non-Executive
Director – Non-Executive
Managing Director - Executive
(alternate for RM Kennedy)
Chief Financial Officer / Company Secretary
* Mr Smart was appointed as an alternate director for Mr Kennedy for the period 1 August 2005 to 5 September 2005.
(b) Directors’ Remuneration
2006 Primary Benefits
Directors
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth
Mr NJ Smart
2005 Primary Benefits
Directors
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth
Mr NJ Smart
Directors
Fees
$
Salary
$
Cash
Bonus
$
Super
Contributions
$
Non Cash
Benefits
$
Total
$
64,167
30,940
-
-
-
-
161,042
-
95,107
161,042
-
-
-
-
-
13,692
2,785
14,494
-
30,971
-
-
-
-
-
77,859
33,725
175,536
-
287,120
Directors
Fees
$
Salary
$
Cash
Bonus
$
Super
Contributions
$
Non Cash
Benefits
$
70,000
30,000
-
-
-
-
150,000
-
-
-
5,769
-
100,000
150,000
5,769
6,300
2,700
14,019
-
23,019
-
-
-
-
-
Total
$
76,300
32,700
169,788
-
278,788
No shares or options over unissued ordinary shares were granted to directors or director related entities during the financial
year. No options previously granted to directors or director related entities were exercised during the year.
(c) Directors’ Service Agreement
During the financial year the Company entered into a three year employment agreement with Mr Houldsworth in respect to
his services as Managing Director commencing 1 July 2005. The salary was set at $171,675 per annum inclusive of
superannuation guarantee contributions to be reviewed annually. In the event that the Company terminates the agreement
without six months notice, Mr Houldsworth is entitled to a termination payment equal to half the remuneration to be paid for
the remainder of the employment period with a minimum termination payment equal to twelve months remuneration.
However any such termination payment is subject to the requirements of ASX Listing Rule 10.19, and in the event that the
value of termination benefits to be paid and the value of all other termination benefits that are or may be payable to all
officers of the Company together exceed 5% of the equity interests of the Company as set out in the latest accounts given
to the ASX, the payment shall be pro-rata based on the maximum total termination benefits allowable under ASX Listing Rule
10.19.
Apart from the potential termination payment referred to above, there are no other post-employment benefits payable to directors.
Directors’ Report
35
Director Related Entities
During the year to 30 June 2005 the Company paid $2,000 for the acquisition of a mining tenement from an entity that is a
director related entity of the Managing Director, Mr Houldsworth.
(d) Key Management Personnel
2006 Primary Benefits
Key Management Personnel
excluding Directors
Mr DA Francese*
2005 Primary Benefits
Key Management Personnel
excluding Directors
Mr DA Francese
Salary
$
Bonus
$
Super
Contributions
$
Non Cash
Benefits
$
Total
$
142,737
-
12,846
-
155,583
Salary
$
Bonus
$
Super
Contributions
$
Non Cash
Benefits
$
Total
$
125,000
4,808
11,683
-
141,491
* During the financial year Mr Francese was appointed as a Company Secretary and Chief Financial Officer of another
listed entity. Refer to Note 25 for details of payments received from that listed entity in relation to his services.
Key Management Personnel Service Contract
During the financial year the Company entered into a three year employment agreement with Mr Francese in respect to his
services as Company Secretary commencing 1 July 2005. The salary was set at $143,062 per annum inclusive of
superannuation guarantee contributions to be reviewed periodically. In the event that the Company terminates the
agreement without six months notice, Mr Francese is entitled to a termination payment equal to half the remuneration to be
paid for the remainder of the employment period with a minimum termination payment equal to twelve months remuneration.
However any such termination payment is subject to the requirements of ASX Listing Rule 10.19, and in the event that the
value of termination benefits to be paid and the value of all other termination benefits that are or may be payable to all
officers of the Company together exceed 5% of the equity interests of the Company as set out in the latest accounts given
to the ASX, the payment shall be pro-rata based on the maximum total termination benefits allowable under ASX Listing Rule
10.19.
Apart from the potential termination payment referred to above, there are no other post-employment benefits payable to Key
Management Personnel.
Directors’ Report
36
(e) Directors and Key Management Personnel Equity Remuneration, Holdings and Transactions
Shares
Balance
1/7/05
Received
as
Remuneration
Options
Exercised
Net
Change
Other1
Balance
30/6/06
Held by Directors in own name
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth
Mr NJ Smart
-
20,000
2,620,000
-
Held by Directors’ Personally
Related Entities
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth2
Mr NJ Smart
2,640,000
3,198,600
1,627,727
420,000
-
Total held by Directors
7,886,327
Key Management Personnel
excluding Directors
Mr DA Francese
Total
70,000
7,956,327
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43,478
43,478
-
-
63,478
2,663,478
-
86,956
2,726,956
86,956
43,478
(400,000)
-
3,285,556
1,671,205
20,000
-
(182,610)
7,703,717
43,478
113,478
(139,132)
7,817,195
Directors’ Report
37
Options
Held by Directors
in own name
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth
Mr NJ Smart
Directors’ Personally
Related Entities
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth3
Mr NJ Smart
Total held by Directors
9,417,150
Key Management
Personnel excluding Directors
Mr DA Francese
Total
625,000
10,042,150
Balance
1/7/05
Received
as
Options
Exercised Change
Net
Balance
30/6/06
Remuneration
Other
Total
Vested
30/6/06
Total
Exercisable
30/6/06
-
5,000
2,000,000
-
2,005,000
2,707,150
2,705,000
500,000
1,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000
2,000,000
5,000
2,000,000
-
-
5,000
2,000,000
-
-
2,005,000
2,005,000
2,005,000
-
-
-
-
-
2,707,150
2,705,000
500,000
1,500,000
2,707,150
2,705,000
500,000
1,500,000
2,707,150
2,705,000
500,000
1,500,000
9,417,150
9,417,150
9,417,150
-
625,000
625,000
625,000
-
10,042,150 10,042,150 10,042,150
1. Net change other in respect of shares refers to shares purchased and/or sold during the financial year.
2. 1 July 2005 balances included a personally related entity of Mr Houldsworth which held 26.6% of the capital of a tenement
vendor, Far Corners Minerals NL. Mr Houldsworth and his spouse are also directors of that entity.
3. 1 July 2005 balances included a personally related entity of Mr Houldsworth which held 26.6% of the capital of a tenement
vendor, Far Corners Minerals NL. Mr Houldsworth and his spouse are also directors of that entity. As a consequence
Mr Houldsworth has an interest in 500,000 options in the Company through the options held by Far Corners Minerals NL
at 30 June 2006.
Employee Share/Option Scheme
The Company has an Employee Incentive Plan approved by shareholders that enables the Board to offer eligible employees
ordinary fully paid shares and/or options to ordinary fully paid shares in the Company. Under the terms of the Plan, shares
and/or options to shares may be offered to the Company’s eligible employees by way of interest free loans repayable in
accordance with the terms and conditions of the Plan. No shares or options were issued to employees during or since the
end of the financial year under the Employee Share/Option Scheme.
Directors’ Report
38
Remuneration Practices
The Company’s policy for determining the nature and amounts of emoluments of board members and key management
personnel of the Company is as follows.
The Company’s Constitution specifies that the total amount of remuneration of non executive directors shall be fixed from
time to time by a general meeting. The current maximum aggregate remuneration of non executive directors has been set
at $200,000 per annum. Directors may apportion any amount up to this maximum amount amongst the non executive
directors as they determine. Directors are also entitled to be paid reasonable travelling, accommodation and other expenses
incurred in performing their duties as directors. The remuneration of the Managing Director is determined by the non-
executive directors on the Board as part of the terms and conditions of his employment which are subject to review from
time to time. The remuneration of other executive officers and employees is determined by the Managing Director subject
to the approval of the Board.
Non-executive director remuneration is by way of fees and statutory superannuation contributions. Non-executive directors
do not participate in schemes designed for remuneration of executives nor do they receive options or bonus payments and
are not provided with retirement benefits other than statutory superannuation.
The Company’s remuneration structure is based on a number of factors including the particular experience and
performance of the individual in meeting key objectives of the Company. The Board is responsible for assessing relevant
employment market conditions and achieving the overall, long term objective of maximising shareholder benefits, through
the retention of high quality personnel.
The Company does not presently emphasise payment for results through the provision of cash bonus schemes or other
incentive payments based on key performance indicators of Ramelius given the nature of the Company’s business as an
exploration entity and the current status of its activities. However the Board may pay cash bonuses from time to time in order
to reward individual executive performance in achieving key objectives as considered appropriate by the Board. No cash
bonuses were paid during the financial year.
The Company also has an Employee Incentive Plan approved by shareholders that enables the Board to offer eligible
employees ordinary fully paid shares and/or options to ordinary fully paid shares in the Company. Under the terms of the
Plan, shares and/or options to shares may be offered to the Company’s eligible employees by way of interest free loans
repayable in accordance with the terms and conditions of the Plan. The objective of the Plan is to align the interests of
employees and shareholders by providing employees of the Company with the opportunity to participate in the equity of the
Company as an incentive to achieve greater success and profitability for the Company and to maximise the long term
performance of the Company.
During or since the end of the financial year, a total of 1,250,000 options with a fair value of $55,250 were issued to
employees and consultants. These options are not quoted and are exercisable at $0.18687 by 31 December 2007.
The employment conditions of the Managing Director, Mr Houldsworth and key management personnel were formalised in
contracts of employment commencing 1 July 2005 and expiring on 30 June 2008. The Company may terminate the
contracts without cause by providing six months written notice or making a termination payment in lieu of notice of an
amount equal to half of the remuneration to be paid for the remainder of the of the contract with a minimum termination
payment equal to twelve months remuneration under the contract. However any such termination payment is subject to the
requirements of ASX Listing Rule 10.19, and in the event that the value of termination benefits to be paid and the value of all
other termination benefits that are or may be payable to all officers of the Company together exceed 5% of the equity
interests of the Company as set out in the latest accounts given to the ASX, the payment shall be pro-rata based on the
maximum total termination benefits allowable under ASX Listing Rule 10.19. Termination payments are not generally payable
on resignation or dismissal for serious misconduct.
Options Granted as Remuneration
Apart from the options granted under the Company’s Employee Share Option Plan as detailed above, no other options were
granted to directors or key management personnel of the Company during the financial year.
Shares Issued on Exercise of Remuneration Options
No shares were issued to directors or key management personnel as result of the exercise of remuneration options during
the financial year.
Directors’ Report
39
Options
At the date of this report unissued ordinary shares of the Company under option are:
Expiry date*
31 December 2007
30 June 2007
Exercise price
$0.18687**
$0.17500
Total
Number of shares
30,940,521
44,961,190
75,017,711
* All options may be exercised at any time before expiry. Option holders will receive one ordinary share in the capital of
the Company for each option exercised.
**As result of a 1 for 1 Rights Issue of ordinary shares in March 2004, the exercise price of the Company’s options was
reduced from $0.20 to $0.18687 in accordance with the terms of the options.
These options do not entitle the holder to participate in any share issue of the Company or any other body corporate.
During or since the end of the financial year, the Company issued ordinary shares as result of the exercise of options as
follows. There were no amounts unpaid on shares issued.
Number of
shares
290,100
88,478
378,578
Amount paid on each share
$0.18687
$0.17500
During the year ended 30 June 2006, the company issued ordinary shares as a result of the exercise of options as follows:
Number of
shares
40,100
Exercise price
$0.18687
Environmental regulation and performance statement
The Company’s operations are subject to significant environmental regulations under both Commonwealth and Western
Australian legislation in relation to discharge of hazardous waste and materials arising from any mining activities and
development conducted by the Company on any of its tenements. To date the Company has carried out exploration
activities for which there have been no known breaches of any environmental obligations.
Indemnification and insurance of officers
Indemnification
The Company is required to indemnify the directors and other officers of the company against any liabilities incurred by the
directors and officers that may arise from their position as directors and officers of the Company. No costs were incurred
during the year pursuant to this indemnity.
The Company has entered into deeds of indemnity with each director whereby, to the extent permitted by the Corporations
Act 2001, the Company agreed to indemnify each director against all loss and liability incurred as an officer of the Company,
including all liability in defending any relevant proceedings.
Insurance premiums
Since the end of the previous year the Company has paid insurance premiums in respect of directors’ and officers’ liability
and legal expenses’ insurance contracts.
The terms of the policies prohibit disclosure of details of the amount of the insurance cover, the nature thereof and the
premium paid.
Directors’ Report
40
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings. There were no such proceedings brought or interventions on
behalf of the Company with leave from the Court under section 237 of the Corporations Act 2001.
Auditor of the Company
The auditor of the Company for the financial year was Grant Thornton and the audit partner responsible for the audit was
Mr Simon Gray.
Non-audit Services
The Board of directors, in accordance with advice from the Audit Committee, is satisfied that there was no provision of non-
audit services during the year compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. No amounts were paid or payable to the Company’s auditor for non-audit services.
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2006 has been received and can be found
immediately following the end of the directors’ report.
Note
3
3
Income Statement
For the year ended 30 June 2006
Sales
Other Revenues from ordinary activities
Total revenue
Administrative expenses
Change in inventories
Consultant expenses
Depreciation and Amortisation
Diminution of investments
Employment expenses
Exploration costs written off
Impairment of Exploration assets
Listing expenses
Loss on disposal of listed securities
Mine Operating expenses
Occupancy expenses
Other expenses from ordinary activities
Profit/(loss) from ordinary activities before
related income tax expense
Income tax (expense)/benefit relating to
ordinary activities
Profit/(loss) from ordinary activities after
related income tax expense
Total changes in equity other than those
resulting from transactions with owners
as owners
42
2005
$
-
67,827
67,827
(152,602)
-
(22,770)
(3,815)
600
(310,619)
(99,731)
-
(15,741)
(3,833)
-
(35,765)
(10,282)
2006
$
398,963
57,300
456,263
(165,725)
1,957,060
(35,320)
(65,545)
(150)
(363,184)
(140,432)
(275,829)
(23,455)
-
(2,153,141)
(36,614)
(17,978)
(864,050)
(586,731)
(43,315)
-
(907,365)
(586,731)
(907,365)
(586,731)
Basic earnings per share (cents)
8
(1.3)
(1.0)
Balance Sheet
As at 30 June 2006
Current Assets
Cash assets
Trade and other receivables
Inventory
Other Financial Assets
Other
Total current assets
Non-current assets
Property, Plant and Equipment
Exploration and evaluation expenditure
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Short term provisions
Total current liabilities
Non-current liabilities
Long term provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued Capital
Share Options Reserve
Retained profits/(losses)
Total Equity
43
2005
$
442,603
37,868
-
250
23,139
503,860
2006
$
1,461,424
282,648
1,957,060
100
37,426
3,738,658
1,210,397
4,117,469
16,236
4,482,183
5,327,866
4,498,419
9,066,524
5,002,279
1,061,661
74,601
1,136,262
216,106
216,106
187,810
36,287
224,097
15,107
15,107
1,352,368
239,204
7,714,156
4,763,075
10,005,636
2,150
(2,293,630)
6,147,690
1,650
(1,386,265)
7,714,156
4,763,075
Note
9
10
11
12
13
14
15
16
17
17
18
19
20
The accompanying notes form part of these financial statements.
Statement of Changes in Equity
For the year ended 30 June 2006
44
$
Share Capital
Ordinary
Note
$
Share Based
Payments
Reserve
$
Retained
Profits/
(Losses)
$
Total
Balance at 1 July 2004
Fair value of incentive options issued
to consultants
Profit/(loss) attributable to shareholders
6,147,690
-
(799,534)
5,348,156
-
-
1,650
-
-
(586,731)
1,650
(586,731)
Balance as at 30 June 2005
6,147,690
1,650
(1,386,265)
4,763,075
8,666,666 shares issued during the period
at $0.15
1,923,076 shares issued during the period
at $0.13
20,883,305 shares issued during the period
at $0.115
Transaction costs associated with the issue of
shares net of tax
Fair value of incentive options issued to employees
40,100 options exercised during the period
at $0.18687
Profit/(loss) attributable to shareholders
1,300,000
250,000
2,401,581
(101,069)
-
7,434
-
-
-
-
-
500
-
-
-
1,300,000
-
250,000
-
2,401,581
-
-
(101,069)
500
-
(907,365)
7,434
(907,365)
Balance as at 30 June 2006
10,005,636
2,150
(2,293,630)
7,714,156
The accompanying notes form part of these financial statements.
Statement of cash flows
For the year ended 30 June 2006
45
Cash Flows from operating activities
Cash receipts in the course of operations
Cash payments in the course of operations
Interest received
Note
2006
$
2005
$
396,706
(2,140,889)
53,371
15,728
(544,239)
67,007
Net cash provided by/(used in) operating activities
23
(1,690,812)
(461,504)
Cash Flows from investing activities
Payments for Property, Plant and Equipment
Proceeds from sale of Investments
Payments for Mining Tenements & Exploration
Net cash provided by/(used in) investing activities
Cash Flows from Financing activities
Proceeds from issue of shares
Transaction costs from issue of shares
Net cash provided by/(used in) financing activities
Net increase/(decrease) in cash held
Cash at the beginning of the financial year
(75,981)
-
(1,072,684)
(5,174)
18,317
(1,142,542)
(1,148,665)
(1,129,399)
3,959,014
(100,716)
3,858,298
-
-
-
1,018,821
(1,590,903)
442,603
2,033,506
Cash at the end of the financial year
9
1,461,424
442,603
The accompanying notes form part of these financial statements.
Notes to the financial statements
For the year ended 30 June 2006
46
1
Statement of significant accounting policies
The financial report is a general purpose financial report which has been prepared in accordance with Accounting
Standards, Urgent Issues Group Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001.
The financial report covers the economic entity, Ramelius Resources Limited, a listed public company, incorporated
and domiciled in Australia.
The following is a summary of the material accounting policies that have been adopted in the preparation of this
financial report. The accounting policies have been consistently applied unless otherwise stated.
(a)
Basis of preparation
The Company’s financial statements have been prepared in accordance with the Australian Equivalents to
International Financial Reporting Standards (“AIFRS”) from 1 July 2005.
In accordance with the requirements of AASB1: First time Adoption of Australian Equivalents to International
Reporting Standards, adjustments to the Company’s accounts resulting from the introduction of AIRFS have been
applied retrospectively to 2005 comparative figures excluding cases where optional exemptions available under
AASB1 have been applied. These accounts are the first annual financial statements of the Company to be prepared
in accordance with AIFRS.
The accounting policies set out below have been consistently applied.
A reconciliation of the transition from previous Australian GAAP to AIFRS has been included in Note 2 to this report.
It has been prepared on the accruals basis and is based on historical costs modified by the revaluation of selected
non current assets, financial assets and financial liabilities for which the fair value of accounting has been applied.
(b)
Income Tax
The Company adopts the liability method of tax-effect accounting whereby the income tax expense is based on the
profit from ordinary activities adjusted for any non-assessable or disallowed items.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred
income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination,
where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be
credited directly to equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available
against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that
no adverse change will occur in income taxation legislation and the anticipation that the Company will derive
sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility
imposed by the law.
(c)
Inventories
Inventories are measured at the lower of cost and net realisable value.
The cost of mining stocks includes direct materials, direct labour, transportation costs and variable and fixed
overhead costs relating to mining activities.
Notes to the financial statements
For the year ended 30 June 2006
47
(d)
Property, Plant & Equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation and impairment losses.
Plant and Equipment
Plant and equipment are measured on the cost basis less depreciation and impairment losses.
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 assets employment and subsequent disposal. The expected net cash flows have
been discounted to their present values in determining recoverable amounts.
Depreciation
The depreciation of all fixed assets is depreciated on a straight line basis over their useful lives to the economic
entity commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and equipment
Depreciation Rate
5% – 25%
The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and
losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation
reserve relating to that asset are transferred to retained earnings.
(e)
Exploration and Evaluation Expenditure
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 transferred to development
assets.
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.
Costs of site restoration are provided over the life of the facility from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal and rehabilitation of the site in accordance with clauses of the
mining permits. Such costs are determined using estimates of future costs, current legal requirements and
technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations
and future legislation. Accordingly, the costs are determined on the basis that the restoration will be completed
within one year of abandoning the site.
Notes to the financial statements
For the year ended 30 June 2006
48
(f)
(g)
Development Assets
Development costs are amortised over the estimated recoverable reserves.
Leases
Leased 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.
(h)
Financial Instruments
Recognition: Financial instruments are initially measured at cost on trade date, which includes transaction costs,
when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are
measured as set out below.
Financial assets at fair value through profit and loss: 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 and within the
requirement of AASB139: Recognition and Measurement of Financial Instruments. Derivatives are also categorised
as held for trading. Realised and unrealised gains and losses arising from changes in the fair value of these assets
are included in the income statement in the period in which they arise. The Company’s investment in other listed
entities has been designated as a financial asset at fair value through the profit and loss.
Loans and receivables: Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate
method.
Held-to-maturity investments: These investments have fixed maturities, and it is the group’s intention to hold these
investments to maturity. Any held-to-maturity investments held by the Company are stated at amortised cost using
effective interest rate method.
Available-for-sale financial assets: Available for sale financial assets include any financial assets not included in
the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses
arising from changes in fair value are taken directly to equity.
Financial liabilities: Non-derivative financial liabilities are recognised at amortised cost, comprising original debt
less principal payments and amortisation.
Derivative instruments: Derivative instruments are measured at fair value. Gains and losses arising from changes
in fair value are taken to the income statement.
Fair value: Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to
similar instruments and option pricing models.
Impairment: At each reporting date, the Company assess whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value
of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in
the income statement.
(i)
Impairment of Assets
At each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the
asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the
income statement.
Notes to the financial statements
For the year ended 30 June 2006
49
(j)
Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to
balance date. Employee benefits that are expected to be settled within one year are measured at the amounts
expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year
are measured at the present value of the estimated future cash outflows to be made for those benefits.
(k)
(l)
(m)
(n)
Superannuation Contributions: Employees may nominate their own superannuation fund into which the Company
pays superannuation contributions. The Company currently contributes 9% of employee’s salary to each employee’s
nominated fund or where a fund is not nominated by an employee, to a superannuation fund chosen by the
Company.
Share-based payments: The Company has an Employee Incentive Plan where employees may be provided with
options and/or shares in the Company. The bonus element over the exercise price of the employee services
rendered in exchange for the grant of options and/or shares is recognised as an expense in the income statement.
The total amount to be expensed over the vesting period is determined to the fair value of the shares granted.
Provisions
Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts.
Revenue
Revenue from sale of goods or rendering of a service is recognised upon delivery of the goods or service to
customers.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
All revenue is stated net of goods and services tax (GST).
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 Australian Tax Office (ATO). In these circumstances the GST
is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated in the Balance Sheet inclusive of GST.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the
statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows
arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as
operating cash flows.
(o)
Transaction costs on the issue of equity instruments
Transaction costs arising from the issue of equity instruments are recognised directly in equity as a reduction of the
proceeds of the equity instruments to which the costs related. Transaction costs are the costs that are incurred
directly in connection with the issue of those equity instruments and which would not have been incurred had those
instruments not been issued.
Notes to the financial statements
For the year ended 30 June 2006
50
(p)
(q)
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
New Accounting and UIG Interpretations
Certain new accounting standards and UIG interpretations have been published that are not mandatory for 30 June
2006 reporting periods. The company’s assessment of the impact of these new standards and interpretations is that
there would be no material impact on the reported results of the company for the year ended 30 June 2006.
2
First-time Adoption of Australian Equivalents to International Financial Reporting Standards (“AIFRS”)
Reconciliation of Equity at 1 July 2004
Note
$
Previous
GAAP at
1 July 2004
$
Adjustments on
introduction
of AIFRS
$
AIFRS at
1 July 2004
Equity
Issued Capital
Retained Profits/(losses)
Total Equity
(a)
(c)
5,937,938
(589,782)
5,348,156
209,752
(209,752)
6,147,690
(799,534)
-
5,348,156
Reconciliation of Equity at 30 June 2005
Note
$
Previous
GAAP at
30 June 2005
$
Adjustments on
introduction
of AIFRS
$
AIFRS at
30 June 2005
Equity
Issued Capital
Reserves
Retained Profits/(losses)
Total Equity
(a)
(b)
(c)
5,937,938
-
(1,174,863)
4,763,075
209,752
1,650
(211,402)
6,147,690
1,650
(1,386,265)
-
4,763,075
Reconciliation of Profit and Loss for the year
to 30 June 2005
Note
Profit/(loss) from ordinary activities after related
income tax expense
$
Previous
GAAP at
30 June 2005
$
Adjustments on
introduction
of AIFRS
$
AIFRS at
30 June 2005
(585,081)
(1,650)
(586,731)
Notes to the financial statements
For the year ended 30 June 2006
51
Notes to the Reconciliations of Equity and Profit
and Loss at 30 June 2005
(a) Contributed equity comprise:
Temporary tax differences associated with
costs of capital raisings previously taken
directly to equity under previous GAAP
(b)
(c)
Reserves comprise:
Share Based Payments Reserve for recognition
of the fair value of equity based payments to
consultants
Retained Profit/(losses) comprise:
Temporary tax differences associated with
costs of capital raisings (refer note 2(a))
Share based payments expense (refer note 2(b))
$
30 June 2005
209,752
1,650
(209,752)
(1,650)
(211,402)
Note
2006
$
2005
$
3
Revenue from ordinary activities
Revenues:
From operating activities
Refined Gold Sales
Gold Nugget Sales
Total Revenue
Other Income
Interest received from other parties
Other Revenue
Total Other Income
4
Profit from ordinary activities before income tax
expense has been determined after
Expenses
Depreciation and Amortisation of Non Current Assets
Plant and equipment - depreciation
Mining Operation - depreciation & amortisation
Finance Costs
Interest paid to external entities
Rental Expense on Operating Leases
Minimum lease payments
Write off of capitalised Exploration & Evaluation Expenditure
Impairment of Exploration & Evaluation assets
Impairment of financial assets
Provision in employee entitlements
395,000
3,963
398,963
56,560
740
57,300
5,274
60,271
65,545
81
20,000
140,432
275,829
150
18,099
-
-
-
65,198
2,629
67,827
3,815
-
3,815
-
17,702
99,731
-
600
15,529
Notes to the financial statements
For the year ended 30 June 2006
Note
Significant Revenue and Expenses
Consideration on disposal of listed securities
Carrying amount of listed securities sold
Net loss on disposal
5
Income tax expense
The components of tax expense comprise:
Current income tax charge
Tax portion of capital raising costs
Income tax expense reported in the income statement
The prima facie tax on profit from ordinary activities before
income tax is reconciled to the income tax as follows:
Prima facie income tax benefit calculated at 30%
on loss from ordinary activities
Deferred tax asset in respect of tax losses not
brought to account
Tax portion of capital raising costs
Income tax expense attributable to loss from ordinary activities
Deferred tax asset arising from carried forward tax losses
not recognised at reporting date as the asset
is not regarded as meeting the probable criteria
- tax losses at 30%
52
2005
$
18,317
(22,150)
3,833
-
-
-
2006
$
-
-
-
-
43,315
43,315
259,215
176,019
(259,215)
(176,019)
43,315
43,315
-
-
611,674
352,459
6
Directors and Key Management Personnel Remuneration
(a) Directors and Key Management Personnel
The names and positions held by directors and key management personnel of the Company during the
financial year are:
Directors
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth
Mr NJ Smart*
Key Management Personnel
Mr DA Francese
Positions
Chairman – Non-Executive
Director – Non-Executive
Managing Director - Executive
(alternate for RM Kennedy)
Chief Financial Officer / Company Secretary
* Mr Smart was appointed as an alternate director for Mr Kennedy for the period 1 August 2005 to 5 September 2005.
(b) Directors’ Remuneration
2006 Primary Benefits
Directors
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth
Mr NJ Smart
Directors
Fees
$
Salary
$
Cash
Bonus
$
Super
Contributions
$
Non Cash
Benefits
$
Total
$
64,167
30,940
-
-
-
-
161,042
-
95,107
161,042
-
-
-
-
-
13,692
2,785
14,494
-
30,971
-
-
-
-
-
77,859
33,725
175,536
-
287,120
Notes to the financial statements
For the year ended 30 June 2006
53
2005 Primary Benefits
Directors
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth
Mr NJ Smart
Directors
Fees
$
Salary
$
Cash
Bonus
$
Super
Contributions
$
Non Cash
Benefits
$
Total
$
70,000
30,000
-
-
-
-
-
-
150,000
5,769
-
-
6,300
2,700
14,019
-
100,000
150,000
5,769
23,019
-
-
-
-
-
76,300
32,700
169,788
-
278,788
No shares or options over unissued ordinary shares were granted to directors or director related entities during the
financial year. No options previously granted to directors or director related entities were exercised during the year.
(c) Directors’ Service Agreement
During the financial year the Company entered into a three year employment agreement with Mr Houldsworth
in respect to his services as Managing Director commencing 1 July 2005. The salary was set at $171,675 per
annum inclusive of superannuation guarantee contributions to be reviewed annually. In the event that the
Company terminates the agreement without six months notice, Mr Houldsworth is entitled to a termination
payment equal to half the remuneration to be paid for the remainder of the employment period with a minimum
termination payment equal to twelve months remuneration. However any such termination payment is subject
to the requirements of ASX Listing Rule 10.19, and in the event that the value of termination benefits to be paid
and the value of all other termination benefits that are or may be payable to all officers of the Company together
exceed 5% of the equity interests of the Company as set out in the latest accounts given to the ASX, the
payment shall be pro-rata based on the maximum total termination benefits allowable under ASX Listing Rule
10.19.
Apart from the potential termination payment referred to above, there are no other post-employment benefits
payable to directors.
Director Related Entities
During the year to 30 June 2005 the Company paid $2,000 for the acquisition of a mining tenement from an
entity that is a director related entity of the Managing Director, Mr Houldsworth.
(d) Key Management Personnel
2006 Primary Benefits
Key Management Personnel
excluding Directors
Mr DA Francese*
2005 Primary Benefits
Key Management Personnel
excluding Directors
Mr DA Francese
Salary
$
Cash
Bonus
$
Super
Contributions
$
Non Cash
Benefits
$
Total
$
142,737
-
12,846
-
155,583
Salary
$
Cash
Bonus
$
Super
Contributions
$
Non Cash
Benefits
$
Total
$
125,000
4,808
11,683
-
141,491
* During the financial year Mr Francese was appointed as a Company Secretary and Chief Financial Officer of
another listed entity. Refer to Note 22 for details of payments received from that listed entity in relation to his services.
Notes to the financial statements
For the year ended 30 June 2006
54
Key Management Personnel Service Contract
During the financial year the Company entered into a three year employment agreement with Mr Francese in respect
to his services as Company Secretary commencing 1 July 2005. The salary was set at $143,062 per annum inclusive
of superannuation guarantee contributions to be reviewed periodically. In the event that the Company terminates the
agreement without six months notice, Mr Francese is entitled to a termination payment equal to half the remuneration
to be paid for the remainder of the employment period with a minimum termination payment equal to twelve months
remuneration. However any such termination payment is subject to the requirements of ASX Listing Rule 10.19, and
in the event that the value of termination benefits to be paid and the value of all other termination benefits that are or
may be payable to all officers of the Company together exceed 5% of the equity interests of the Company as set out
in the latest accounts given to the ASX, the payment shall be pro-rata based on the maximum total termination
benefits allowable under ASX Listing Rule 10.19.
Apart from the potential termination payment referred to above, there are no other post-employment benefits payable
to Key Management Personnel.
(e) Directors and Key Management Personnel Equity Remuneration, Holdings and Transactions
Shares
Balance
1/7/05
Received
as
Remuneration
Options
Exercised
Net
Change
Other1
Held by Directors in own name
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth
Mr NJ Smart
Held by Directors’ Personally
Related Entities
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth2
Mr NJ Smart
-
20,000
2,620,000
-
2,640,000
3,198,600
1,627,727
420,000
-
Total held by Directors
7,886,327
Key Management Personnel
excluding Directors
Mr DA Francese
Total
70,000
7,956,327
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance
30/6/06
-
63,478
2,663,478
-
-
43,478
43,478
-
86,956
2,726,956
86,956
43,478
(400,000)
3,285,556
1,671,205
20,000
-
-
(182,610)
7,703,717
43,478
113,478
(139,132)
7,817,195
Notes to the financial statements
For the year ended 30 June 2006
55
Balance
1/7/05
Received
as
Remuneration
Options
Exercised Change
Net
Balance
30/6/06
Other
Total
Vested
30/6/06
Total
Exercisable
30/6/06
Options
Held by Directors
in own name
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth
Mr NJ Smart
-
5,000
2,000,000
-
2,005,000
Directors’ Personally
Related Entities
Mr RM Kennedy
Mr RG Nelson
Mr JF Houldsworth3
Mr NJ Smart
2,707,150
2,705,000
500,000
1,500,000
Total held by Directors 9,417,150
Key Management
Personnel excluding
Directors
Mr DA Francese
Total
625,000
10,042,150
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000
2,000,000
5,000
2,000,000
-
-
5,000
2,000,000
-
2,005,000
2,005,000
2,005,000
2,707,150
2,705,000
500,000
1,500,000
2,707,150
2,705,000
500,000
1,500,000
2,707,150
2,705,000
500,000
1,500,000
9,417,150
9,417,150
9,417,150
625,000
625,000
625,000
10,042,150 10,042,150 10,042,150
1. Net change other in respect of shares refers to shares purchased and/or sold during the financial year.
2. 1 July 2005 balances included a personally related entity of Mr Houldsworth which held 26.6% of the capital of a
tenement vendor, Far Corners Minerals NL. Mr Houldsworth and his spouse are also directors of that entity.
3. 1 July 2005 balances included a personally related entity of Mr Houldsworth which held 26.6% of the capital of a
tenement vendor, Far Corners Minerals NL. Mr Houldsworth and his spouse are also directors of that entity. As a
consequence Mr Houldsworth has an interest in 500,000 options in the Company through the options held by Far
Corners Minerals NL at 30 June 2006.
Employee Share/Option Scheme
The Company has an Employee Incentive Plan approved by shareholders that enables the Board to offer eligible
employees ordinary fully paid shares and/or options to ordinary fully paid shares in the Company. Under the terms
of the Plan, shares and/or options to shares may be offered to the Company’s eligible employees by way of interest
free loans repayable in accordance with the terms and conditions of the Plan. No shares or options were issued to
employees during or since the end of the financial year under the Employee Share/Option Scheme.
Options Granted as Remuneration
Apart from the options granted under the Company’s Employee Share Option Plan as detail above, no other options
were granted to directors or key management personnel of the Company during the financial year.
Shares Issued on Exercise of Remuneration Options
No shares were issued to directors or key management personnel as result of the exercise of remuneration options
during the financial year.
Note
2006
$
2005
$
7
Auditors’ remuneration
Audit services:
Auditors of the Company – Grant Thornton
Audit and review of the financial reports
Other regulatory audit services
13,250
-
13,250
12,300
-
12,300
Notes to the financial statements
For the year ended 30 June 2006
56
8
Earnings per share
(a) Classification of securities
All ordinary shares have been included in basic earnings per share.
Note
2006
$
2005
$
(b) Classification of securities as potential ordinary shares
All options on issue exercisable at 18.687 cents by 31 December 2007 are not considered potential ordinary
shares as their exercise will result in a reduction of the loss per share.
(c) Earnings used in the calculation of earnings per share
Profit/(loss) from ordinary activities after
related income tax expense
(907,365)
(586,731)
(d) Weighted average number of shares used as the denominator
Number for basic earnings per share
Ordinary shares
Cash assets
Cash
Deposits at call*
70,281,883
59,016,275
(31,361)
1,492,785
1,461,424
18,419
424,184
442,603
*
Includes a deposit of $182,900 provided as security against unconditional bank guarantees in favour of
the Western Australian Government in respect of restoration costs required for the Wattle Dam Mine.
9
10
11
Trade and Other Receivables
Current
Trade debtors
Other debtors
Amounts receiveable from director related entities
Inventory
Current
Gold Nuggets at cost
Raw Materials - Unprocessed Gold Ore at cost
Finished Goods - Gold Bullion at cost
12
Other Financial Assets
Current
Investments in listed options
26,372
233,521
22,755
282,648
29,109
1,830,471
97,480
1,957,060
-
37,868
-
37,868
-
-
-
-
100
250
50,000 options (2005: 50,000) were held in a listed entity whose principal activity was gold exploration. The shares
were received in the previous financial year as part consideration for the sale to the listed entity of mining tenement
M20/245 and the options were acquired during the previous financial year pursuant to a 1 for 3 non-renounceable
entitlement at $0.005 per option.
13
Other current assets
Current
Prepayments
37,426
23,139
Notes to the financial statements
For the year ended 30 June 2006
57
Note
2006
$
2005
$
14
Property, plant and equipment
Plant and equipment
At cost
Accumulated depreciation
Net book value
Development Expenditure
Production Phase at cost
Accumulated amortisation
Net book value
Total property, plant and equipment
(i)
(ii)
98,690
(13,712)
84,978
1,183,733
(58,314)
1,125,419
1,210,397
Reconciliations
Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below:
(i) Reconciliation
Plant and equipment
Carrying amount at beginning of year
Additions
Disposals
Depreciation
Carrying amount at end of year
(ii) Reconciliation
Development Expenditure
Carrying amount at beginning of year
Transfer from Exploration and Evaluation Expenditure
Provision for restoration costs
Amortisation
Carrying amount at end of year
16,236
75,981
-
(7,239)
84,978
-
1,000,833
182,900
(58,314)
1,125,419
22,709
(6,473)
16,236
-
-
-
-
14,994
5,057
-
(3,815)
16,236
-
-
-
-
-
15
Exploration and evaluation expenditure
Costs carried forward in respect of areas of interest in:
Exploration and/or evaluation
(i)
4,117,469
4,482,183
Total Exploration and evaluation expenditure
4,117,469
4,482,183
The ultimate recoupment of costs carried forward for exploration phase is dependent on the successful development
and commercial exploitation or sale of the respective areas.
(i) Reconciliation
A reconciliation of the carrying amount of Exploration and/or evaluation phase expenditure is set out below.
Carrying amount at beginning of year
Additional costs capitalised during the year
Exploration costs written off during the year
Amounts transferred to Development expenditure
4,482,183
1,052,381
(416,262)
(1,000,833)
3,393,227
1,188,687
(99,731)
-
Carrying amount at end of year
4,117,469
4,482,183
16
Trade and Other Payables
Trade creditors
Other creditors and accruals
Amounts payable to director related entities
896,398
151,692
13,571
1,061,661
125,117
60,171
2,522
187,810
Notes to the financial statements
For the year ended 30 June 2006
58
17
Provisions
Current
Employee entitlements
Non Current
Employee entitlements
Restoration Costs
18
Issued Capital
Note
1(e)
2006
$
2005
$
74,601
36,287
33,206
182,900
216,106
15,107
-
15,107
Issued and paid-up share capital
90,529,422 (2005: 59,016,275) ordinary shares,
fully paid
(a) Ordinary shares
Balance at the beginning of year
Shares issued during the year
8,666,666 shares issued at $0.15
1,923,076 shares issued at $0.13
20,883,305 shares issued through
share purchase plan at $0.115
Less transaction costs arising from
share issues for cash net of tax
40,100 shares issued to Option-holders
on exercise of options at $0.18687 in cash
18(a)
10,005,636
6,147,690
6,147,690
6,147,690
1,300,000
250,000
2,401,581
(101,069)
7,434
-
-
-
-
-
Balance at end of year
10,005,636
6,147,690
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at shareholders’ meetings.
In the event of winding up of the Company ordinary shareholders rank after all creditors and are fully entitled to any
proceeds of liquidation.
(b) Options
(i)
For information relating to the Ramelius Resources Limited Employee Share / Option Scheme including
details of any options issued, exercised and lapsed during the financial year, refer to Note 19.
(ii) For information relating to share options issued to executive directors during the financial year refer to Note 6.
At 30 June 2006, there were 30,440,521 (30 June 2005: 24,685,750) unissued shares for which options were
outstanding. All options are exercisable at $0.18687 and have an expiry date of 31 December 2007.
19
Share Based Reserves
The following share-based payment arrangements existed at 30 June 2006:
•
On 13 March 2006, 500,000 incentive share options were granted to an employee to take up ordinary shares
at an exercise price of $0.18687 each. The options are exercisable on or before 31 December 2007. The
options are non transferable and are not quoted securities. At balance date, no share options had been
exercised. The fair value of these options was $500.
On 6 October 2004, 1,500,000 incentive share options were granted to consultants to take up ordinary shares
at an exercise price of $0.18687 each. The options are exercisable on or before 31 December 2007. The
options are non transferable and are not quoted securities. At balance date, no share options had been
exercised. The fair value of these options was $1,650.
•
All options granted to key management personnel are over ordinary shares in Ramelius Resources Limited, which
confer a right of one ordinary share for every option held.
Notes to the financial statements
For the year ended 30 June 2006
59
2006
2005
Number of
Options
1,500,000
500,000
-
-
-
Outstanding at the
beginning of the year
Granted
Forfeited
Exercised
Expired
Outstanding at year-end
2,000,000
Exercisable at year-end
2,000,000
Weighted
Average
Exercise Price
$
0.18687
0.18687
-
-
-
0.18687
0.18687
Number of
Options
1,500,000
-
-
-
-
1,500,000
1,500,000
Weighted
Average
Exercise Price
$
0.18687
-
-
-
-
0.18687
0.18687
The weighted average fair value of the options granted during the year was $0.010. This price was calculated by
using Black Scholes option pricing model applying the following inputs:
Weighted average exercise price
Weighted average life of the option
Underlying share price
Expected share price volatility
Risk free interest rate
$0.18687
658 days
$0.12
19.3%
5.0%
The life of the options is based on the days remaining until expiry.
Included under employee benefits expense in the income statement is $500 (2005: $1,650), and relates, in full, to
equity-settled share-based payment transactions.
Note
2006
$
2005
$
20
Retained profits / (losses)
Retained losses at beginning of year
Net loss attributable to members of the company
(1,386,265)
(907,365)
(799,534)
(586,731)
Retained profits/(losses) at the end of the year
(2,293,630)
(1,386,265)
21
Financial instruments disclosure
(a)
Interest rate risk
The company has no long term financial assets or liabilities upon which it earns or pays interest. Cash is held
in an interest yielding cheque account and on short term call deposit where the interest rate can vary from day
to day. The weighted average interest rate achieved was 5.12% (2005: 3.71%)
(b) Credit risk exposures
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.
The credit risk on financial assets, excluding investments, of the entity which have been recognised in the
statement of financial position, is the carrying amount, net of any provision for doubtful debts.
(c) Net fair values of financial assets and liabilities
Valuation approach
Net fair values of financial assets and liabilities are determined by the entity on the following bases:
Recognised financial instruments
Monetary financial assets and financial liabilities not readily traded in an organised financial market are carried
at book value and where relevant adjusted for any changes in exchange rates. Other than listed investments,
the Company does not have any financial assets or liabilities that are readily traded on organised markets in a
standardised form. The net fair values of listed investments have been valued at the quoted market bid price
at balance date.
Notes to the financial statements
For the year ended 30 June 2006
60
Note
2006
$
2005
$
22
Commitments & Contingent liabilities
Exploration expenditure commitments
In order to maintain current rights of tenure to exploration tenements, the Company is required to perform minimum
exploration work to meet the minimum expenditure requirements specified by the State Government of Western
Australia. These obligations are subject to renegotiation when application for a mining lease is made and at other
times. These obligations are not provided for in the financial report and are payable as follows.
Within one year
One year or later and no later than five years
Later than five years
451,120
1,069,000
1,394,200
512,820
1,499,481
1,272,143
2,914,320
3,284,444
The company sub-leases a serviced office in Adelaide under a non cancellable annual operating lease expiring in
October 2006.The Company also leases office accommodation in Perth under a non-cancellable operating lease
expiring in March 2007. The lease generally provides the Company with a right of renewal for a further year after
which time all terms are renegotiated. Lease payments comprise a base amount plus an incremental contingent
rental. Contingent rentals are based on movements in the Consumer Price Index and operating criteria.
Non-cancellable operating lease
expense commitments
Future operating lease commitments not provided
for in the financial statements and payable:
Within one year
One year or later and no later than five years
Later than five years
25,084
15,000
-
40,084
18,204
20,000
-
38,204
The details and estimated maximum amounts of contingent liabilities (excluding unquantifiable royalties) that may
become payable are set out below. The contingent liabilities arise from various agreements for the acquisition or
earning interests in mining tenements that are subject to certain precedent conditions being satisfied. At the date of
this report there is no certainty that these liabilities will crystallise and therefore no provisions are included in the
financial statements in respect of these matters. These obligations may be subject to renegotiation, farm-out or
relinquishment. In addition to the contingent liabilities detailed below, the Company is also required under various
agreements to maintain tenements in good standing and pay all rates, rents and taxes and do all things necessary
to renew tenements during the conditions precedent period.
Contingent Liabilities
Replacement of Performance Bonds
Exploration / Farm-in expenditure to earn
interests in tenements in addition to minimum
exploration expenditure commitment disclosed
above
22(a)
22(b)
182,900
39,900
544,734
544,734
402,787
442,687
(a) Mining tenements
The Company has certain mining tenements which it acquired in September 2003 for a cash consideration, a
production based royalty up to a maximum of $1 million that may also become payable but which cannot be
presently quantified and a replacement performance bond of $39,900. The Company has placed $39,900 cash on
deposit with its bankers as security against an unconditional performance bond for $39,900 having been issued in
favour of the Minister for State Development in Western Australia. During the year the Company has placed an
additional amount of $143,000 cash on deposit to cover additional performance bonds required in respect of the
Wattle Dam Development.
(b) Exploration/Farm-in expenditure
Exploration/Farm-in expenditure is to be made over periods between 1 and 4 years in accordance with terms set out
in the relevant agreements. The Company may elect not to proceed to acquire or earn an interest in the relevant
tenements provided it has first carried out the minimum exploration expenditure required. Total minimum exploration
expenditure specified in an agreement over this period is $150,000 (which had been spent at 30 June 2006) with
a minimum of $50,000 per year.
Notes to the financial statements
For the year ended 30 June 2006
61
Note
2006
$
2005
$
23
Notes to the statement of cash flows
Reconciliation of profit from ordinary activities
after income tax to net cash provided by
operating activities
Profit/(Loss) from ordinary activities after income tax
(907,365)
(585,081)
Add/(less) non cash items
Depreciation
Amortisation of development expenditure
(Increase)/decrease in prepayments
(Increase)/decrease in receivables
(Increase)/decrease in inventories
(Increase)/decrease in non-current assets
(Decrease)/increase in accounts payable
(Decrease)/increase in provisions
(Decrease)/increase in investments
Income Tax – Non cash
7,239
58,314
(8,956)
(236,514)
(1,957,060)
416,254
836,897
56,414
150
43,815
3,815
-
(1,847)
9,661
-
21,858
71,328
15,528
3,233
-
Net cash provided by/(used in) operating activities
(1,690,812)
(461,505)
24
Employee entitlements
Aggregate liability for employee entitlements,
including on-costs
Current
Non-current
17
17
Number of employees
Number of employees at year end
25
Related parties
74,601
33,206
107,807
36,287
15,107
51,394
6
3
Directors’ transactions with the Company
A number of directors of the Company, or their director-related entities, held positions in other entities during the
financial year that result in them having control or significant influence over the financial or operating policies of those
entities.
The terms and conditions of the transactions with directors and their director related entities were no more favourable
to the directors and their director related entities than those available, or which might reasonably be expected to be
available, on similar transactions to non-director related entities on an arm’s length basis.
The aggregate amounts recognised during the year (excluding re-imbursement of expenses incurred on behalf of
the Company) relating to directors and their director-related entities were as follows:
Director
Transaction
Note
2006
$
2005
$
RM Kennedy
& RG Nelson
Amount received from a director
related entity for Company Secretarial
services and associated costs.
(i)
RM Kennedy
Payments to an information
technology entity of which the
director is a director and shareholder
for website maintenance.
$50,555
-
-
3,569
Notes to the financial statements
For the year ended 30 June 2006
62
Note
2006
$
2005
$
JF Houldsworth Payments to an entity of which the
director is a director in respect of
labour & equipment hire.
Payments to an entity of which the
director is a director in respect of
vehicle & trailer hire.
Payments to an entity of which the
director is a director for acquisition
of a mining tenement.
65,311
48,564
7,998
13,664
-
2,000
(i) This amount relates to the services of Mr Francese who was appointed as a Company Secretary and Financial
Officer of listed entity, Monax Mining Limited in December 2005 (a company associated with RM Kennedy and
R G Nelson). Monax Mining Limited reimburses the Company 50% of his remuneration, on-costs and associated
expenses relating to the secretarial and financial services provided to them.
Amounts receivable from and payable to directors and their director-related entities at balance date arising from
these transactions were as follows:
Current receivables
Current payables
Trade creditors
Other creditors and accruals
27,455
13,57
-
13,571
-
1212
2,250
2,462
26
27
Segment Reporting
The Company operates in the mineral exploration and mining business segment located in Australia.
Interests in Joint Ventures
(a) The Company has a direct interest in a number of unincorporated joint ventures, the details of which are
disclosed in the Review of Operations section of the Annual Report.
(b) The Company’s share of assets in unincorporated joint ventures is as follows:
Non Current Assets
Exploration and evaluation expenditure (included in Note 15)
Total Assets employed in joint ventures
28
Events subsequent to balance date
Since 30 June 2006, the Company;
2,312,115
2,312,115
2,272,120
2,272,120
•
•
Issued 45,049,668 options over unissued shares to shareholders on the basis of one free Bonus Option for
every two Shares held at 30 June 2006. The options are exercisable at $0.175 each by the expiry date of 30 June
2007;
Entered into two Agreements with Pioneer Nickel Limited to acquire 80% of Pioneer’s nickel interests in both the
“Wattle Dam tenement group” and the “Logans/Larkinville tenement group”. The Agreements give Ramelius a
twelve month Option Period, during which it may at anytime exercise its option to acquire an 80% interest in
Pioneer’s nickel rights over the two areas of interest (Wattle Dam tenement group and the Logans/Larkinville
tenement group). Ramelius will pay Pioneer a fee for the option of $50,000 and $20,000 for the two areas of
interest respectively and a consideration of $500,000 and $200,000 respectively to exercise the options. On
exercising the option, Ramelius must sole fund expenditure of no less than $1,000,000 on nickel exploration
collectively on both areas, within four years from the commencement date. The parties will then associate in a
nickel joint venture with Pioneer holding a 20% interest, free carried up to the completion of a feasibility study;
•
Issued 750,000 incentive options exercisable at $0.18687 by 31 December 2007 to the Wattle Dam Mine
Manager with a fair value of $54,750.
Apart from the above, there has not arisen in the interval between 30 June 2006 and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect
significantly the operations of the Company, the results of those operations, or the state of affairs of the Company,
in future years.
Directors’ declaration
63
Directors’ declaration
1
In the opinion of the directors of Ramelius Resources Limited:
(a)
the financial statements and notes, as set out on pages 42 to 62, are in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the financial position of the Company as at 30 June 2006 and of its
performance, as represented by the results of its operations and its cash flows, for the twelve months
ended on that date; and
(ii)
complying with Accounting Standards and the Corporations Regulations 2001; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2
The Managing Director and Chief Financial Officer have given the Directors the declarations required by section 295A
of the Corporations Act 2001.
Shareholder Information
66
Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this
report is set out below.
Shareholdings as at 20 September 2006
Substantial shareholders
The number of shares held by substantial shareholders and their associates as disclosed in substantial holding notices given
to the Company are set out below:
Substantial shareholder
Number of fully paid ordinary shares held
Beach Petroleum Limited
Sprott Asset Management Inc.
13,400,002
8,666,666
Voting rights
Fully paid ordinary shares
Subject to any rights or restrictions attached to any class of shares, at a meeting of members, on a show of hands, each
member present (in person, by proxy, attorney or representative) has one vote and on a poll, each member present (in
person, by proxy, attorney or representative) has one vote for each fully paid share they hold.
Options
Details of options on issue by the Company are as follows.
Expiry date
30/06/2007
31/12/2007
Exercise price
$0.175
$0.18687
Number of Options
44,961,190
30,940,521
Option holders will be entitled on payment of the exercise price shown above to be allotted one ordinary fully paid share in
the Company for each Option exercised. Options are exercisable in whole or in part at any time until the expiry dates. Any
Options not exercised before expiry will lapse.
Distribution of equity security holders
Category
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Holders of
Ordinary
shares
Holders of
30 June 2007
$0.175 Options
Holders of
31 December 2007
$0.18687 Options
57
104
235
737
119
58
279
174
528
42
1
270
88
105
35
499
Total Number of security holders
1,252
1,081
The number of shareholders holding less than a marketable parcel of ordinary shares is 60.
On market buy-back
There is no current on-market buy-back.
Twenty largest shareholders
The names of the 20 largest holders of fully paid ordinary shares constituting a class of quoted equity securities on the
Australian Stock Exchange Limited including the number and percentage held by those holders at 20 September 2006 are
as follows.
Shareholder Information
67
Name
Number of fully paid ordinary
shares held
Percentage held
Beach Petroleum Limited
ANZ Nominees Limited
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