2014 Annual Report
Corporate Directory
ABN 30 068 263 098
DIRECTORS
Chairman (Non-Executive)
Craig Readhead BJuris LL.B. FAICD
Managing Director (Executive)
Wayne Taylor BE (Min.), MBA, MAusIMM
Director (Executive)
Ian Buchhorn BSc (Hons), DiplGeosci (Min Econ), MAusIMM
Director (Non-Executive)
Stephen Dennis BCom, LL.B., GDipAppFin (Finsia), CFTP
JOINT COMPANY SECRETARIES
Bryan Horan FCCA
Simon Smith CA
REGISTERED AND PERTH MANAGEMENT OFFICE
Level 1, 37 Ord Street
West Perth 6005 Western Australia
Telephone: +61 8 9215 4444
Facsimile:
+61 8 9215 4490
Sydney Study Office
Suite 702, 191 Clarence Street
Sydney 2000 New South Wales
Telephone: +61 2 9299 7800
Facsimile:
+61 2 9299 7500
Woodlawn Site Office
Collector Road, Tarago 2580 New South Wales
Email:
Website:
heron@heronresources.com.au
www.heronresources.com.au
AUDITOR
Butler Settineri (Audit) Pty Ltd
Unit 16, 1st Floor, 100 Railway Road
Subiaco 6008 Western Australia
BANKERS
Westpac Bank
230-236 Hannan Street
Kalgoorlie 6430 Western Australia
SHARE REGISTRY
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross 6153 Western Australia
Telephone: +61 8 9315 2333
Facsimile: +61 8 9315 2233
Email:
TMX Equity Transfer Services Inc.
200 University Avenue, Suite 400
Toronto, Ontario M5H 4H1
Tel: (416) 361-0152
Email: info@tmx.com
registrar@securitytransfer.com.au
SOLICITORS TO THE COMPANY
Allion Legal Pty Ltd
50 Kings Park Road
West Perth 6005 Western Australia
Resources Legal Pty Ltd
1A Rosemead Rd
Hornsby 2077 New South Wales
Peterson & Company, LLP
390 Bay Street, Suite 806
Toronto, Ontario M5H 2Y2
STOCK EXCHANGE
Australian Securities Exchange Limited
2 The Esplanade
Perth 6000 Western Australia
ASX CODE HRR
Toronto Stock Exchange
TMX Group Ltd
The Exchange Tower
130 King Street West
Toronto, Ontario M5X 1J2
TSX CODE HER
SEAT ABBREVIATION
Heron
HOME BRANCH
Perth
INDUSTRY CLASSIFICATION
GICS classification code is 15104020
Diversified Metals and Mining
ISIN AU000 000 HRR6
In 2013 the Company's three principal spheres of
operation were: Business Development, Exploration and
Projects. During the 2014 year Heron maintained a core
focus on Business Development resulting in Heron
merging with TriAusMin in August 2014. This has
enhanced Heron’s business with the addition of the
advanced Woodlawn Zinc-Copper Project and a shift in
focus to the Projects and Exploration spheres.
Highlights
Heron-TriAusMin Merger
1.
The Heron-TriAusMin A$15.6 million all-scrip merger was completed on 5 August 2014 and all integration programs completed in respect
of ASX and TSX listing requirements.
Woodlawn Zinc-Copper Project
(cid:129)
Robust Funding – $32.9M cash and $3.4M in investments as at 30 June 2014
All current drilling and feasibility programs at Woodlawn are fully funded from 2014 Heron cash reserves. Targeted completion of a
Preliminary Economic Assessment (PEA) on the underground project by the end of the March 2015 Quarter.
(cid:129)
Statutory
SML20 mining lease has been transferred to a Heron subsidiary and is undergoing renewal for 21 years.
The purchase of free-hold land covering operational areas has been negotiated.
(cid:129) Woodlawn Underground Project (WUP)
2014 drilling program commenced following up the 2013 WLTD015 intercept in the Kate Lens of 9.0 metres at 16.1% zinc and
2.0% copper, initial three holes:
(cid:129)
(cid:129)
(cid:129)
WNDD01, 14.4 metres of Complex Ore (assays awaited)
WNDD02, 8.8 metres of Complex Ore (assays awaited)
WNDD03, 6.3 metres of Semi Massive Breccia Ore (assays awaited)
Geotechnical studies, mine design and management plans have commenced to re-establish access to the WUP via a boxcut and short
decline to intersect the former underground development infrastructure.
(cid:129) Woodlawn Tailings Retreatment Project (WRP)
Simulus Engineers commenced a WRP optimisation study, with flotation test-work and capital cost review under way.
(cid:129) Woodlawn Exploration Project (WEP)
As a Volcanogenic Massive Sulphide (VMS) centre, Woodlawn can be expected to generate a profusion of mineralised positions. High
priority “brownfields” EM and drill targets have been defined in and around SML20 in the Northwest Corridor immediately NW of Kate
Lens, at Murphy’s immediately NE of the proposed boxcut, Cowley Hills a further 2.5km NE, Willows SE and Area A immediately south
of the mine. In many instances, drill targets are based on 1970s mapping of gossan/alteration occurrences that remain un-tested.
2.
(cid:129)
3.
(cid:129)
Development Project
Kalgoorlie Nickel Project (KNP)
(cid:129)
Simulus Engineers, completed metallurgical testwork using sulphuric acid leaching with reagent recycling on various KNP ore-
types, to produce a 20Ktpa nickel production Scoping Study with A$660 million capex and C1 nickel cost US$4.27 per pound.
Heron subscribed for initial equity in Carbon Friendly Nickel Production (Intellectual Property holder - reagent recycling).
KPMG Corporate Finance is assisting Heron in a partner search.
(cid:129)
(cid:129)
Exploration Projects
New South Wales – Copper-Gold Exploration
Lachlan Transverse Zone
(cid:129)
Lewis Ponds Gold-Copper Project, numerous highly prospective geochemical and VTEM targets require follow-up
exploration, highly regarded for its base and precious metal potential. Recent exploration targeted shear-hosted gold-copper at
Mt Nicholas, shallow 2014 drill-hole MNDD04 returned 1.47 metres at 1.7% copper from an EM plate that remains open at depth,
follow-up planned.
Gilmore Suture
(cid:129)
Overflow Gold-Base Metal Project, shear-hosted target 50km NW along strike from the Mineral Hill mining centre, shallow
2014 drill-hole OFTD01A returned 8.6 metres at 1.4% zinc and 0.3g/t gold, confirms a southerly plunge to the lode, follow-up
planned.
(cid:129) West Australia – Nickel Sulphide Exploration
(cid:129)
(cid:129)
Bedonia Nickel-Copper Project, “Nova-style” magnetic anomalies, 3,280 ppm nickel-435ppb PGM soil auger target.
Mt Zephyr Nickel Project, Mt Windarra nickel sulphide host sequence, 1,020ppm nickel soil auger target.
Heron Resources Limited - Annual Report 2014 - Page 1
Heron Projects
Figure 1: Tenement Holdings
Woodlawn
Zinc-Copper Project
(Zn,Cu,Pb,Ag,Au)
The Heron-TriAusMin merger has brought
together Heron’s cash balance with a
pipeline of high quality base metal assets
featuring the Woodlawn Zinc-Copper Project
in southern NSW.
AUBILS
Below: Key Project Locations, Lachlan Fold Belt, NSW
Left: Enlargement of Kalgoorlie Nickel Project
GHOST ROCKS
BOYCE CREEK
Menzies
JUMP-UP DAM
WESTERN AUSTRALIA
KNP
KALGOORLIE
PERTH
KWINANA
PORT
ESPERANCE
Major Road
Railway
Gas pipeline
Nickel resource area
Heron KNP Tenements
Granite
Greenstone
Ultramafic
SIBERIA NORTH
HIGHWAY
Potential Plant Site
GOONGARRIE HILL
GOONGARRIE SOUTH
BIG FOUR
SIBERIA SOUTH
BLACK RANGE
KALPINI
0
20
40
Kilometres
Cawse Nickel
Laterite Plant
Care and Maintenance
(Wingstar Investments Pty Ltd)
Kalgoorlie
BULONG
Rail to Kwinana Port
(540km)
Coolgardie
Nickel Smelter
(BHP Billiton)
Rail to
Esperance Port
(340km)
Kambalda
Page 2 - Heron Resources Limited - Annual Report 2014
Chairman’s Letter
Dear Shareholders,
2014 has been a “step-change” year for Heron Resources Limited with the completion of its merger with TriAusMin Limited on 5 August 2014.
The merger transaction brought together Heron’s cash balance of $32.9 million as at 30 June 2014, with TriAusMin’s pipeline of high quality
base metal assets featuring the Woodlawn Zinc-Copper Project in southern New South Wales. This is an excellent outcome for both sets
of shareholders.
The Woodlawn Underground Project (WUP) has a published underground mineral resource of 10.1 million tonnes at 10.2% zinc and
1.8% copper and the complementary Woodlawn Tailings Retreatment Project (WRP) has a mineral reserve of 11.2 million tonnes at
2.2% zinc and 0.5% copper. The commodity focus, being zinc and copper, has a particularly favourable market outlook. Both the WUP and
WRP have NSW State government development approval, providing an advanced development opportunity.
For Heron, having expended a great deal of effort since 2008 seeking an advanced-stage minerals project, securing a project of the technical
quality of Woodlawn in a jurisdiction with the stability and available infrastructure of eastern Australia is an outstanding result.
Just as important as the assets in the ground, in merging with TriAusMin, Heron has secured a first-class Management Team led by Wayne
Taylor, who became our Managing Director at merger. Wayne’s background is underground mine management in NSW and WA and base metal
marketing, precisely the skill sets required for Woodlawn’s continuing development.
Both Heron and TriAusMin had very lean staffing levels and complementary skills sets (Heron focus in exploration, TriAusMin in mining), with
the post-merger integration being seamlessly completed. The result is a merged company that is operating efficiently. Indeed, within one
month of the merger completion, an aggressive drilling program is already underway at Woodlawn, with our first three diamond drill-holes all
confirming the style and tenor of the historically mined Woodlawn mineralisation.
Development Project
Post the merger, Woodlawn has become Heron’s total development focus. Heron’s exploration focus is now the Lachlan Fold Belt of southern
New South Wales. The Business Development focus has been scaled back to Australian base metals, preferably in eastern Australia.
The Company is also fortunate in retaining 100% ownership of the Kalgoorlie Nickel Project (KNP). The Company has significantly ramped
up its metallurgical studies on the KNP, focussing on low capital cost opportunities and reagent recycling with the aim of generating
substantial improvements to both the capital and operating characteristics of the KNP.
This strategic direction has led to a close association with Perth-based consultancy Simulus Engineers, developers of the Carbon Friendly
Nickel Production (CFNP) flow sheet. This utilises atmospheric pressure sulphuric acid leaching and reagent recycling, with Heron’s scoping
study in July 2014 indicating vastly improved project economics with 20,000tpa nickel production possible with a A$660 million capital cost
(previously some A$2 billion with a HPAL process).
KPMG Corporate Finance has been retained to assist Heron in securing a KNP development partner, with parties expressing interest.
Exploration Projects
The exploration portfolio is being continually rationalised to focus on the Lachlan Fold Belt of New South Wales, targeting the world-class
styles of zinc-copper and copper-gold mineralisation which characterise the province.
Business Development
The Company has reviewed many opportunities with projects assessed in Australia and world-wide, including North and South America,
Indonesia and eastern Europe. This required very heavy work-loads for our small Business Development Team, and to see their efforts
rewarded with the TriAusMin merger is most gratifying.
The Management and Board are committed to achieving minerals production, initially from the development of Woodlawn and so create
significant value for shareholders. I would like to thank my fellow Directors and the Heron Management team, who have worked diligently
during the year to ensure that we make the most of our assets.
In addition, I would like to acknowledge the outstanding work undertaken by Ian Buchhorn who, post-merger, stepped aside from his role as
Managing Director and continues on as an Executive Director of Heron.
I would also like to thank TriAusMin’s former Chairman Dr Jim Gill for the leadership role he played in bringing our two Companies together.
Jim resigned post-merger, but we look forward to his continued interest as we move Woodlawn forward.
My thanks must go to our loyal shareholders who continue to support us. We also warmly welcome our new North American shareholders.
We bid farewell to long-term supportive shareholders Vale Inco and BHP Billiton, our two cornerstone investors since 2005.
2014 certainly has been a year of change, and with the Heron-TriAusMin merger, our quest to create real value for all shareholders both on
ASX and TSX has taken a major step forward.
Craig Readhead
Chairman
Heron Resources Limited - Annual Report 2014 - Page 3
Directors & Management
CRAIG READHEAD
BJuris LL.B. FAICD
CHAIRMAN (NON-EXECUTIVE)
Craig Readhead is a lawyer with over 30
corporate advisory
years
the
experience with specialisation
resources
the
sector,
large scale mining
implementation of
projects both in Australia and overseas. Mr Readhead is a former
president of the Australian Mining and Petroleum Law Association
and is a Partner of specialist mining and corporate law firm Allion
Legal.
legal and
including
in
STEPHEN DENNIS
BCom, LL.B., GDipAppFin (Finsia), CFTP
DIRECTOR (NON-EXECUTIVE)
Stephen Dennis has been actively involved in
the mining industry for over 30 years. He has
held senior management positions at MIM
Holdings Limited, Minara Resources Limited,
and Brambles Australia Limited. Mr Dennis is
currently the Chief Executive Officer and Managing Director of CBH
Resources Limited, the Australian subsidiary of Toho Zinc Co., Ltd of
Japan.
WAYNE TAYLOR
B.Eng (Mining), MBA
MANAGING DIRECTOR (EXECUTIVE)
Wayne Taylor is a mining engineer with over
25 years experience. He holds a Bachelor of
Engineering
(Mining) degree from the
University of New South Wales and a
Masters of Business Administration from
the University of New England. Mr Taylor has held senior operational
management roles with Western Mining Corporation and Glencore
International’s Australian operations. For the six years prior to
joining TriAusMin he managed Glencore’s base metal business
development based out of Australia which involved assessing mining
projects throughout the world. Mr. Taylor was the Managing
Director/CEO of TriAusMin for 3 years prior to the merger.
IAN BUCHHORN
BSc (Hons), DiplGeosci (Min Econ),
MAusIMM
DIRECTOR (EXECUTIVE)
Ian Buchhorn is a Mineral Economist and
Geologist with over 35 years experience.
Prior to listing Heron in 1996 as founding
Managing Director, Mr Buchhorn worked
with Anglo American Corporation in southern Africa, and Comalco,
Shell/Billiton and Elders Resources in Australia, as well as setting up
and managing Australia's first specialist mining grade control
consultancy. For the last 25 years Mr Buchhorn has developed
mining projects throughout the Eastern Goldfields of Western
Australia and operated as a Registered Mine Manager.
Page 4 - Heron Resources Limited - Annual Report 2014
BRYAN HORAN
FCCA.
FINANCIAL CONTROLLER & JOINT
COMPANY SECRETARY
Bryan Horan was appointed to the position of
Financial Controller in 2008 and Company
Secretary in 2010. Mr Horan joined the
in 2007 as a management
Company
accountant. Mr Horan’s career includes 10 years working in various
accounting positions in London. Since living in Perth Mr Horan has
also held accounting positions with Australian Mines Ltd and Perilya
Ltd.
SIMON SMITH
B.Bus, CA.
CHIEF FINANCIAL OFFICER AND JOINT
COMPANY SECRETARY
Simon Smith is the Chief Financial Officer
and Joint Company Secretary. Mr Smith has
been a Chief Financial Officer of both private
and public companies in Australia and the
USA. He brings 20 years experience as a Chartered Accountant and
holds a Bachelor’s Degree in Business from the University of
Technology Sydney. Mr Smith was the CFO and Company Secretary
for TriAusMin prior to the merger with Heron.
DAVID VON PERGER
BSc (Hons) MAusIMM
GENERAL MANAGER EXPLORATION
David von Perger was appointed 2004. Mr
von Perger is a geologist with some 20 years
experience in mineral exploration. His
experience includes four years as a business
analyst for a major mining group involving
analysis of mining operations, project development and assessment
of new opportunities for an international mining group. Since joining
Heron, Mr von Perger has been responsible for the identification and
acquisition of several new nickel, gold, iron-ore and base-metal
projects.
CHARLIE KEMPSON
MEng (Oxon) MBA GAICD
GENERAL MANAGER STRATEGY &
BUSINESS DEVELOPMENT
Charlie Kempson is a senior corporate
finance executive who was most recently an
equity partner and Director of Azure Capital
Limited, a mining focused corporate advisor.
Prior to his arrival in Australia in 2002 Mr Kempson spent five years
with investment banks Commerzbank AG and Barclays Capital in
London and Germany, and four years working in technical roles for
Logica (now part of CGI Group).
1.0 Managing Director’s Report
As Heron’s fourth Managing Director in its 18 year history, I can confidently say I commence my tenure when the Company is in an
exceptionally strong and promising position:
(cid:129)
(cid:129)
(cid:129)
Cash position at 30 June 2014 of $32.9 million.
Developing the Woodlawn Zinc-Copper Project, total resource 21.8 million tonnes at 5.9% zinc, 1.1% copper, 2.6% lead, 0.4g/t gold
and 56g/t silver, all statutory development approvals in place, 100% unencumbered ownership, excellent regional infrastructure,
significant onsite infrastructure to draw upon, and most importantly, a superb management team.
The Kalgoorlie Nickel Project has made excellent progress during 2014, with firstly a successful scoping study result using the
Carbon Friendly Nickel Production (CFNP) flow-sheet, then design of a Demonstration Plant to test the CFNP Intellectual Property,
equity investment in CFNP, and finally retaining KPMG Corporate Finance to assist in securing a funding partner for the KNP.
WOODLAWN OVERVIEW AND STRATEGY
Heron holds both direct and joint venture interests in a number of exploration properties centred around the past-producing Woodlawn Mine
situated 40km south of Goulburn and 200km south-west of Sydney, in southern NSW (Figure 1). It is Heron’s aim to create a profitable, long
life and low cost mineral processing operation at Woodlawn that produces base and precious metal concentrates.
Historically, the Woodlawn mine operated from 1978 to 1998 and processed 13.8 million tonnes of ore from the Woodlawn open pit,
underground and satellite deposits grading 9.1% zinc, 1.6% copper; 3.6% lead, 0.5g/t gold and 74g/t silver. The mine was closed in March
1998 due to prevailing low metal prices and corporate issues faced elsewhere by the mine owner at the time. TriAusMin prior to the Heron
merger saw the potential of the property and upon closure purchased 100% ownership of the mineral rights contained within the Woodlawn
Mining Licence SML20. Since that time, work has focused on evaluating the potential to re-process the existing tailings left on site from
previous operations (termed the Woodlawn Retreatment Project – WRP), the potential to re-develop the underground mine (the
Woodlawn Underground Project – WUP), and exploring the regional Woodlawn land holdings to discover new, high grade deposits (the
Woodlawn Exploration Project – WEP).
Surface rights to the Woodlawn site were separately purchased by Veolia Environmental Services (Australia) Pty Limited (Veolia) which now
operates a waste management facility and bioreactor at the site. Heron has entered into various agreements with Veolia that provide for the
physical boundaries to the respective working areas (including the steps to excise Veolia’s surface area from SML20), the option for Heron to
either lease or purchase freehold land over its areas of operation and the structure through which aspects requiring a co-operative approach
are addressed and administered.
On 4 July 2013 Heron (then as TriAusMin) was granted final project approval for the WRP and WUP from the NSW Department of Planning
and Infrastructure under Part 3A Major Projects of the NSW Environmental Planning and Assessment. This represents formal approval to
commence a future mining operation.
On 19 March 2014 TriAusMin was notified that the Division of Resources and Energy, NSW Trade and Investment, had approved the transfer
of title in SML20 into the name of Tarago Operations Pty Ltd, a 100% owned subsidiary of Heron. Following the transfer an application was
made to renew the Mining Lease for a further 21 year period. The transfer includes the lease terms and conditions including the security bond
of $3.577 million, that will need to be provided prior to the commencement of on-ground activity.
Heron Resources Limited - Annual Report 2014 - Page 5
1.0 MANAGING DIRECTORS REPORT CONTINUED
Woodlawn Underground Project - WUP
The driving force for Heron at Woodlawn is to re-access the former workings and re-commence underground mining. Prior to the decision to
go underground, Heron will complete limited surface drilling programs in the December 2014 Half Year (Figure 2) in order to:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Re-estimate the WUP Mineral Resources.
Complete a geotechnical analysis of drill core to help optimise future mining methods.
Secure drill core for bench-scale metallurgical studies leading to definition of ore type geo-metallurgy and thus flow-sheet optimisation.
Scheduling of underground access, essentially to determine if it is best to first extract shallow ore positions such as Kate Lens (where
Heron is currently drilling), or expeditiously advance the existing decline to the base of workings at 620 metres, and access the B Lens.
An independent group, SMG Consultants, previously calculated a JORC 2004-compliant Measured plus Indicated Mineral Resource of 10.1
million tonnes at 10.2% zinc, 1.8% copper, 4.0% lead, 0.6g/t gold and 85g/t silver that formed the basis for evaluating the potential to re-
develop the Woodlawn underground mine. This Resource was re-stated in January 2014 by GeoRes to JORC 2012 Code. These Mineral
Resources are detailed in the Statement of Mineral Resources in Section 8 of this report, and were independently estimated and are reported
at a cut-off grade of 7% zinc equivalent.
Based on the calculations by SMG Consultants, 85% of the Mineral Resources are in the Measured and Indicated categories with a significant
proportion of the mineralisation located adjacent to the existing underground workings. It has not yet been determined exactly how much of
this material is recoverable. Quantifying these resources and developing an operations plan to extract the ore is the critical focus of current
Heron Woodlawn work programs.
Previous TriAusMin drill programs from 2012 and 2013 indicate that the high grade ore lenses previously mined do extend below the former
mine workings (as is happening in current Heron drilling at the Kate Lens). Given this, Heron strongly believes that additional resources should
be delineated in this area and would assist in supporting a long life underground mine.
350m
620m
deepest
workings
E Lens
H Lens
Open Pit
(Waste disposal site)
A Lens
W
L
T
D
0
1
5
Kate Lens
J Lens
4.0m @ 3.1% Cu, 8g/t Ag
J Lens
C Lens
Proposed
2H 2014 Drilling
Pierce point
Kate Lens
32m @ 4.6% Zn, 1.8% Cu, 1.2% Pb, 0.6g/t Au, 22g/t Ag
incl 9m @ 16.1% Zn, 2% Cu, 4% Pb, 0.8g/t Au, 52g/t Ag
I Lens
9.45m @ 6.2% Zn, 1.7% Cu, 1.2% Pb, 0.8g/t Au, 14.6g/t Ag
14.5m @ 11.7% Zn, 3.7% Cu, 3.7% Pb, 1.9g/t Au, 121g/t Ag
9.0m @ 8.6% Zn, 2.9% Cu, 4.6% Pb, 2.1g/t Au, 167g/t Ag
NEW I2 Lens
7.3m @ 6.0% Zn, 1.7% Cu, 1.8% Pb, 2.9g/t Au, 54g/t Ag
8.9m @ 6.3% Zn, 2.7% Cu, 3.0% Pb, 1.2g/t Au, 71g/t Ag
D Lens
11.1m @ 8.3% Zn, 0.9% Cu, 3.6% Pb, 0.4g/t Au, 61.2g/t Ag
13m @ 5.5% Zn, 0.2% Cu, 2.2% Pb, 0.2g/t Au, 23.7g/t Ag
8.0m @ 10.7% Zn, 1.2% Cu, 3.9% Pb, 0.6g/t Au, 57g/t Ag
New
D Lens
B Lens
B Lens
4.0m @ 3.3% Cu, 13g/t Ag
13.7m@ 4.3% Cu, 13.4g/t Ag
400m
Figure 2: Woodlawn Oblique View
Looking North
Page 6 - Heron Resources Limited - Annual Report 2014
Woodlawn Retreatment Project - WRP
The WRP is designed to recover base metal concentrates from the 1978-1998 Woodlawn tailings dams using high pressure water jet
monitoring (hydraulic mining). Such process includes pumping the pulped tailings to a conventional concentrator to undergo re-grinding,
thickening, flotation and filtering. The final product after filtering will be separate copper, lead and zinc concentrates. Precious metals (gold
and silver) will mainly report to the lead and copper concentrates however zinc concentrates may also contain payable levels.
The tailings to be processed as part of the WRP are contained in three separate tailings dams which have a combined total Ore Reserve of
11.2 million tonnes at 2.22% zinc, 0.49% copper, 1.31% lead, 0.28g/t gold and 31.05g/t silver (Section 8). It is Heron’s objective for initial
operations to extract tailings from the South Dam, followed by the West Dam and then finally the North Dam. Metallurgical test work
indicates that optimal recovery of copper, zinc and lead will be achieved with finer grinding to 30 micron, compared to 106 micron by the
previous operations.
As a standalone operation the previous WRP’s feasibility study concluded that a planned production rate of 1.5Mtpa was optimal, which would
result in a mine life of approximately 7.5 years.
Heron is focussing on operating both the WUP and WRP concurrently. Current work programs are aimed at finalizing a WUP+WRP feasibility
study following the Preliminary Economic Assessment on the WUP scheduled for the March 2015 Quarter.
Woodlawn Exploration - WEP
The exploration potential for additional discoveries in the region surrounding the Woodlawn Mine is very good, given the highly prospective
Silurian volcanic geology, the fact that Volcanogenic Massive Sulphide (VMS) deposits tend to occur as localised clusters and the positive
results from previous exploration. The targeted aim of the WEP is to identify high grade base metal satellite feed opportunities within trucking
distance of the proposed Woodlawn processing plant.
The exploration projects that comprise the WEP include EL 7257 ‘Woodlawn’, EL 7469 ‘Mulloon’, EL 7468 ‘Cullarin South’ and EL 7954 ‘Cullarin
JV’, being 418 km2 in and around the Woodlawn site, covering prospective Silurian-aged felsic volcanics.
In terms of Heron Exploration and Business Development, the focus is
now clearly on tenement consolidation within the Lachlan Fold Belt to
support future Woodlawn operations, and in M&A the focus is eastern
Australia base metals, again in support of Woodlawn.
Heron Resources Limited - Annual Report 2014 - Page 7
2.0 Operations Report
HEALTH, SAFETY, ENVIRONMENT AND COMMUNITY (HSEC)
Heron Resources Limited continues to demonstrate its commitment to “Zero Harm” to the Company’s employees, contractors, the
communities in which Heron works and to the environment. This is achieved by all employees and contractors being inducted into promoting
and maintaining a safe and healthy working environment.
HEALTH AND SAFETY
Heron had no Lost Time Injuries (LTI) during 2014. The LTI gauge of performance demonstrates an outstanding result for Heron and reinforces
the employees’ and contractors’ commitment to the highest level of safety standards. The result also re-affirms that the systems implemented
throughout the Company are effective and that exploration activities can be undertaken safely. Continuing vigilance is required to maintain
this performance, particularly now that work is focused on the Woodlawn mine site.
Routine Fitness-for-Work (FFW) testing continues to play an important part in keeping Heron’s work sites safe and free from the risk of injury.
Again, in 2014, no negative results occurred.
ENVIRONMENT
Heron’s HSEC Management System has continued to demonstrate its value in assisting staff to identify environmental impacts, not only
meeting our commitment to minimising environmental impacts, but also ensuring that business activities remain in regulatory compliance. Our
activities continue to be scrutinised by internal audits and checks and have also been subject to external audits by government regulators.
Heron’s robust environmental management systems ensured compliance with statutory requirements during the year.
COMMUNITY AND STAKEHOLDER ENGAGEMENT
The Company continued to promote educational opportunities for the Communities in which we operate. This has been Heron’s fourteenth
year of donations to the Central Goldfields Education Trust (CGET) (established by Heron in 2000), and has to date donated over $220,000,
benefiting numerous Indigenous students. The Trust encourages the students to progress their schooling into their senior years and become
good role models. With significant changes during 2014 to the Goldfields Native Title Claimant groupings, the CGET now needs to be
refreshed, and the Company is in consultation to optimise our continuing Community support.
2.0 OPERATIONS REPORT CONTINUED
DEVELOPMENT PROJECTS (100% HERON)
WOODLAWN UNDERGROUND PROJECT
To provide a functional site presence, a drill core processing facility and office has been established on site, in consultation with Veolia
Environmental Services who operate the co-located bioreactor at Woodlawn.
Diamond drilling commenced for the WUP on 9 September 2014. The first stage of drilling is designed to enable estimation of an Inferred
Mineral Resource and in combination with the existing resource base will form the basis of a Scoping Study/PEA aiming at completion in the
March 2015 Quarter. The first phase of the proposed drilling consists of some 7,200 metres of diamond core (15 holes) and up to 5,000 metres
of RC (25 holes):
(cid:129)
Three DDH holes completed to date at the Kate Lens for 1,323.2 metre advance. Intercepts include (Figure 3):
(cid:129)
(cid:129)
(cid:129)
(cid:129)
WNDD0001: 14.4 metres of Complex Massive Sulphide from 373.6 metres (Kate Lens).
WNDD0002: 1.5 metres of Complex Massive Sulphide from 216.8 metres (edge of H Lens).
WNDD0002: 8.8 metres of Complex Massive Sulphide from 373.9 metres (Kate Lens).
WNDD0003: 6.3 metres of Semi Massive Breccia Sulphide from 397.2 metres (Kate Lens)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Five RC holes have been completed into the up-dip position of the A Lens, with sulphides intersected in predicted positions. The RC rig
has experienced significant issues with inflow of water.
Geological interpretation from historic mine mapping plans is continuing in preparation for resource modeling.
Verification of the historic mine void model has commenced, using the existing model and historic operations mine survey plans.
Planning has been completed for drilling geotechnical core holes required for the box-cut and decline positioning.
Down Hole EM planning for the current round of drilling is well advanced and a detailed review of the geophysical layers of the mine
area is being undertaken to generate immediate drill targets.
Woodlawn Longsection
Looking East
Plane of Kate Lens
WNDD02
8.8m of massive sulphides
from 373.9m depth
E Lens
Surface at 2800mRL
E Lens directly to the
east of Kate Lens,
showing mined
stopes & remaining
mineralisation
2,600mRL
100m
WNDD01 first drillhole
in 2014 program
14.4m of massive
sulphides (pyrite,
sphalerite, galena
& chalcopyrite) from
373.6m depth
W60 NSR
LEGEND
Drillhole pierce points
NSR
No significant results
m
0
0
6
,
9
1
Figure 3: Woodlawn Long-section
WLTD0015 downhole intercept from 376m
32m @ 4.6%Zn, 1.8% Cu, 1.2% Pb, 0.6g/t Au, 9.7g/t Ag
inc. 9m @ 16.1% Zn, 2.0% Cu, 4.0% Pb, 0.8g/t Au, 22.9g/t Ag
53m
W59 NSR
W110 3m of minor
sulphides
2,400mRL
Modelled EM Plates
for Kate Lens
WLTD012 NSR
defined original
EM Plate and
m
Target
0
0
4
,
9
1
WNDD03
6.3m of semi massive breccia
sulphide from 397.2m
m
0
0
2
,
9
1
Long-section looking east in the plane of the Kate Lens showing previous drilling and recent massive-sulphide intercepts. Additional holes
are to be drilled after DHEM is completed on the preceding holes.
Heron Resources Limited - Annual Report 2014 - Page 9
2.0 OPERATIONS REPORT CONTINUED
WOODLAWN RETREATMENT PROJECT
Heron’s clear focus at Woodlawn is the Underground Project, notably securing access as soon as
possible. However, the lower grade Retreatment Project (Figure 4) fully complements the high grade
Underground Project, with both amenable to processing through a single flotation plant. The WRP
has the potential to effectively fund the WUP plant, and additionally going forward acts as a “low
grade stockpile” for the WUP.
The key attributes of the WRP are:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Proven & Probable Reserves at surface, fully quantified, no further drilling.
Feasibility, technical and business case studies all completed, with a strong business case –
capital cost estimated at A$92.8 million and operating costs A$26 per tonne.
Proven hydraulic mining method, standard sulphide flotation processing – extensive
metallurgical test work completed, Heron currently fine-tuning the flow-sheet.
Water, power, access, spent tails disposal site all in place, strong community support and
locally available skilled work force.
As a standalone project, annual production 49Kt zinc concentrate at 45% zinc, 14Kt copper
concentrate at 22% copper and 15Kt lead concentrate at 35% lead, with gold / silver credits.
WOODLAWN EXPLORATION PROJECT
The Heron priority since merging with TriAusMin has been to implement the WUP drilling program.
The Woodlawn Project includes a 418km2 exploration portfolio, all prospective for VMS style
mineralisation. Heron’s initial Woodlawn exploration focus (Figure 5) is:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Cowley Hills (2.5km NE of Woodlawn) – EM target directly west of previously-mined deposit
requires review and possible drill testing.
Currawang (10km NW of Woodlawn) – data and report compilation has generated two drill-
ready near-mine targets. Recommended ground EM follow-up targeting pyrrhotite/base metal
lenses prior to drill testing.
Pylara/Willows (directly SE of Woodlawn) – data compilation and appraisal is underway
including site sampling.
Cullarin Joint Venture (Heron 78.9%) (45km NNW of Woodlawn) – AEM survey was
completed and appraisal of data is awaited for definition of ground EM targets.
Figure 4: Woodlawn Retreatment Ponds in
lower left of photo
Currawang
::::::::::::::::::::::::::::::::::::::::::::::::
%
%
ELA 5066
ELA 5066
Northwest Structural Corridor
Montrose
Geology Legend
%
NW Extensions
Devonian Ellenden granite
Devonian Covan Creek sandstone
Devonian siltstone and sandstone
•
Silurian Currawang basalt
Silurian black shale (upper)
Silurian Woodlawn volcanics
Silurian black shale (lower)
Ordovician sediments
%
Mineral Deposit
Prospect / Target
0
kilometres
Area A
4
%
:::::::::::::::::::::::::::::::::::::::::::::::::
•
•
•
•
•
%
SML20
SML20
:::::::::::::::::::::::::::::::::::::::::::::::::
•
WOODLAWN
%
ELA 7257
ELA 7257
Cowley Hills
ELA 5066
•
Murphy’s
Willows
Figure 5: Woodlawn Key Exploration Targets
2.0 OPERATIONS REPORT CONTINUED
KALGOORLIE NICKEL PROJECT (100% Heron)
The concept and implementation of the Kalgoorlie Nickel Project (KNP) by Heron commenced in 1997. The journey has been one of challenges,
including a hostile bid for Heron in 2000, a competitive process that brought in Vale Inco as partner in 2005, and finally the Global Financial
Crisis in 2008 leading to the withdrawal of Vale Inco from the partnership in 2009.
Vale Inco PFS 2009 commentary:“one of the most prospective nickel laterite tenement packages in the world”
Since 2010, Heron been continually reviewing processing refinements, and in 2013 engaged with Simulus Engineers in Perth to test the
applicability of their Carbon Friendly Nickel Production flow-sheet to the KNP. Test-work and subsequent financial modeling has led to a
potential step-change for the KNP.
Metallurgical Test Work Programs and Scoping Studies
Simulus Engineers completed an initial Scoping Study in April 2014 on treating KNP ore with Atmospheric Leaching and acid recovery at a
production rate of 10Ktpa nickel in a Mixed Hydroxide Product (MHP) (Figures 6, 7).
Simulus estimated a processing plant capital cost of A$236 million (+/-30%), with Heron estimating total capital cost including all
infrastructure at A$356 million (+/-30%) for the 10Ktpa nickel production scenario. This equated to a capital intensity of US$14.54 per annual
pound of nickel production, a potential “step-change” improvement for nickel laterite (Table 1).
Based on these encouraging results, the Simulus Scoping Study and Heron’s cost model were revised, through up-scaling of the 10Ktpa to
20Ktpa, with additional bench-scale acid leach tests, and further consideration of the mining inputs. Additionally, Simulus completed work on
an initial Front End Engineering Design (FEED) for a 1.5 tonne per hour Demonstration Plant to treat nickel residues and KNP laterite ore (Figure
6).
The essence of the process is the recovery and re-use of the key reagents used in leaching and purification. The Simulus reagent recovery
process can be matched up with any front-end leach process such as high pressure acid leach, atmospheric tank leach, or heap leach. A range
of intermediate products or refined metal can also be produced as required.
The 20Ktpa Scoping Study delivered excellent technical and financial results (Table 1):
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Confirms the potential for the KNP to be developed as a large scale, very long life mine using the Carbon Friendly Nickel Production
sulphuric acid leaching and recycling process.
Based on the KNP JORC 2012-compliant Mineral Resource of 795.9 million tonnes at 0.70% nickel and 0.048% cobalt, an initial
mining inventory of 123.8M tonnes has been modeled at a Leach Feed Grade (LFG) of 1.16% nickel and 0.06% cobalt, with a Production
Target of 683,600 tonnes of nickel in concentrate over a 35 year mine life.
Significant scope exists to increase the Production Target. Based on the total mining inventory from the 2010 Pre-feasibility Study, the
project could be in production for more than 50 years or alternatively be scaled up further.
Processing rate of 2.0Mtpa for annual production averaging a contained 19,500 tonnes nickel and 900 tonnes cobalt, with an average
production over the first 10 years of 20,200 tonnes of nickel, shipped as Mixed Hydroxide Product.
Capital costs of A$660 million inclusive of a 10% contingency, confirming a low capital intensity of US$13.82 per annual pound of nickel
production compared to a traditional HPAL process route of around US$40/lb.
Total revenue (including by-product credits) of A$12.6 billion and pre-tax net cash flow of A$4.3 billion over the initial 35 years of
operation – based on a nickel price of US$9.00 per pound (A$/US$ 0.90).
Over the first 10 years of operation, C1 cost US$3.71/lb nickel and averaging US$4.27/lb nickel over the
35 year mine life, comparable to the published C1 cost of the established Ravensthorpe HPAL project
but at a much lower initial capital cost.
C3 cost of US$5.90/lb nickel over the initial 35 year mine life.
The KNP provides significant exposure to long-term, low cost nickel production
in a highly stable and mining-orientated jurisdiction.
Significant leverage to the nickel price, with an increase in the
nickel price assumption of US$1.00/lb increasing the pre-tax
project net cash flow by approximately A$1.4 billion.
Figure 6: Demonstration Plant
A Demonstration Plant engineering design was completed,
and Heron subscribed to an equity investment in CFNP as
part funding of the proposed Demonstration Plant.
High grade residues have been secured by Heron as a base
load feed stock.
Heron Resources Limited - Annual Report 2014 - Page 11
2.0 OPERATIONS REPORT CONTINUED
Milling
Single stage crushing, beneficiation and scrubbing,
followed by milling.
Leaching
Atmospheric leach (4-6 agitated tanks).
Acid recovery
Two stages of membrane recovery and medium
pressure autoclave for iron removal and supporting
plant.
Trim neutralisation
Neutralisation tanks (SO2 and magnesia based).
MHP production
Precipitation tanks, thickening and filtration, bagging
and storage.
Supporting processes
Raw and process water supply and distribution,
power, acid production, water recovery and magnesia
regeneration, ancillary processes.
Figure 7: Kalgoorlie Nickel Project
Optimised Flowsheet
Mill
Leach
Filtration
Tailings
store/stack
Acid regen
and recovery
Trim
neutralisation
MHP
production
MgO/SO2
production
Acid Plant
Main process
Recovered magnesia
Recovered water
Recovered/regenerated acid
Comparing the July 2014 Simulus 20Ktpa Scoping Study to each of the Vale Inco 2009, Heron 2010 and Simulus 10Ktpa study outcomes:
Table 1: Comparison of Simulus Estimates with Previous Heron KNP Studies
Parameter
Vale PFS
January 2009
HRR PFS
Revision
February 2010
10Ktpa Scoping
Study
April 2014
20Ktpa Scoping
Study
July 2014
Capacity Mtpa Leach Feed
Mine Life (years)
Average Ni Production tpa in MHP
Overall Opex US$/lb Ni (C1 cost)
Pre-production Capex A$M
Overall Capex US$/annual lb Ni
2.5
34
22,200
4.54
2,102
40.45
3.75
35
36,700
4.17
2,834
36.10
1.0
22
10,000
3.56
356
14.54
2.0
35
19,500
4.27
660
13.82
Please refer to Heron’s announcements of 8, 22 and 23 April 2014 and 31 July 2014 for details of the material assumptions underlying these
outcomes. These assumptions all remain valid between the four studies.
The KNP already combines a premium resource base with excellent
infrastructure, a benign environment and strong community support.
Securing the Carbon Friendly Nickel Production flow-sheet is the project
step-change to long-term, low cost nickel production.
Page 12 - Heron Resources Limited - Annual Report 2014
KNP Partner Search
Heron has mandated KPMG Corporate Finance to assist in securing a funding partner to commercialise the “KNP Optimised Flow-sheet”,
including a potential funding role for the Demonstration Plant.
A full data room has been established by Heron to facilitate KNP due diligence as part of the partner search, with expressions of interest
current.
KNP Field Programs
Screen Upgrade Testing
In Heron’s 20Ktpa KNP Scoping Study, conservative
assumptions were made in respect of the screen upgrade
performance of the ore (assumption of average 1.16% Ni
Leach Feed Grade). The project economics were found to
be highly sensitive to screen upgrade performance.
Accordingly, bench-scale programs commenced at Simulus
Engineers
the screen upgrade
performance of the KNP siliceous ore.
to better quantify
Figure 8 shows screen upgrade of sonic drill core, Siberia
North siliceous ore. At 63 micron, the upgrade is 200%,
representing a doubling of the Leach Feed Grade compared
to Head Grade. This is consistent with historical plant
performance at the Cawse Nickel Operation when treating
“KNP style” siliceous ore.
Mining Operations
Figure 8: KNP Screen upgrade data
Beneficiation Upgrade (O14-SS2)
250
200
150
100
50
0
>3030 >1030 > 415 > 150 > 105 > 77
> 63
> 43
< 43
Ni
Co
Fe
Si
Mass
100
80
60
40
20
0
)
%
(
y
r
e
v
o
c
e
R
s
s
a
M
)
%
(
e
d
a
r
g
p
U
Heron has granted chrysoprase mining rights over various KNP tenements to two separate parties, one of whom has commenced mining
operations at Goongarrie Hill. This excavation is in siliceous style nickel laterite, and is providing useful information on the expected
excavating performance of the KNP ore.
Heron Resources Limited - Annual Report 2014 - Page 13
2.0 OPERATIONS REPORT CONTINUED
EXPLORATION PROJECTS
During July 2013 to June 2014, Heron completed the following drilling programs:
Table 2: Heron Drilling Activity, 2014
Prospect
Drill
Type
Holes Metres Comments
Drilled Drilled
Lachlan Fold Belt, NSW
Lachlan Transverse Zone
Lewis Ponds-Mt Nicholas
Eurow
Gilmore Suture
Overflow Mine
Spooky Hill
Sussex
WA
Albany Fraser
Bedonia
Kalgoorlie Greenstone
Emu Lake
Siberia
Horse Rocks
Total
DD
RAB
RC
DD
RC
RAB
RAB
RC
RAB
RC
RAB
RAB
RC
RAB
RAB
3
44
6
2
4
82
11
4
25
2
60
46
6
21
11
554
729
736
216
160
4040
351
814
1066
318
1009
1003
570
481
217
327
12,263
lode style quartz-chalcopyrite-pyrrhotite-sphalerite veins, DHEM planned
ironstone skarn, follow-up planned
lode style quartz-sphalerite veins, DHEM planned
altered but barren, tenure unit relinquished
follow-up RAB required
follow-up auger planned
open gold targets
tenure relinquished
2.0 OPERATIONS REPORT CONTINUED
NEW SOUTH WALES COPPER-GOLD PROJECTS (all projects 100% Heron)
The Company continues to focus its exploration activities in the Lachlan Fold Belt of NSW (Figure 9) with diamond and RC drilling (Table 2),
Electro-Magnetic (EM) and soil auger sampling surveys being completed in the 2014 year. Tenement acquisition is focused on the proximity
to existing resource areas, being Woodlawn, Lewis Ponds and Overflow.
Girilambone
Sussex
Endeavour
Canbelego
Tritton
COBAR
Peak
Mt Boppy
Avoca Tank
Girilambone
NYNGAN
Great Australian
Basin
NEFB
Wonawinta
Wagga Tank
Farm-out
Mt Allen
Murray Basin
Nymagee
Gilgunnia
Overflow
Tottenham
Trundle
Mineral Hill
GILGANDRA
DUBBO
Parkes
Rast
Peak Hill
Copper Hill
Yellow Mountain
Farm-out
Northparkes
Ophir
PARKES
Copper Hill
Calarie
ORANGE
Cadia Ridgeway
LAKE CARGELLIGO
Cowal
Eurow
BATHURST
Cargo
West Wyalong
Farm-out
WEST WYALONG
Lachlan Fold Belt
Temora
YOUNG
Kangiara
Sydney
Basin
MUDGEE
Lewis Ponds
Sunny Corner
Farm-out
SYDNEY
Gundagai
GOULBURN
Cullarin
Farm-out
Woodlawn
Adelong
CANBERRA
Woodlawn
DENILIQUIN
LEGEND
WAGGA WAGGA
Perseverance
ALBURY
Heron Tenements
VICTORIA
COOMA
Golden Cross Tenements
(Heron has 19.9% equity holding in Golden Cross)
Silurian-Devonian Volcanics
Ordovician Volcanics
Copper/base-metal
/gold mines and
significant occurrences
Quidong
Lachlan Transverse Zone
Lewis Ponds Gold-Base Metal Project
0
100
kilometres
Figure 9:
Lachlan Fold Belt,
Heron tenement
locations and regional
mineralised centres
Lewis Ponds is located 15km E of Orange, within a farming area. The project contains the Lewis Ponds massive sulphide deposit with 6.6
million tonnes at 2.4% Zn, 0.2% Cu, 1.4% Pb, 1.5g/t Au and 69g/t Ag (Section 8), consisting of Main Zone and Tom’s Zone which occur in a
sequence of deformed Silurian felsic to intermediate volcanics and marine sediments.
The project area is prospective for Volcanogenic Massive Sulphide, lode and shear-hosted gold (immediately NW along strike from the
McPhillamy gold deposit) and possibly porphyry copper-gold style deposits. Tenure has recently been renewed in full for 3 years (to 2017), to
facilitate a systematic drill upgrade of the project.
During 2014, a three hole diamond drilling program totaling 553.6 metres (Table 3) and targeting a VTEM conductor was completed at the
Mount Nicholas Prospect. All holes intersected multiple zones of stringer to semi-massive pyrrhotite±pyrite-chalcopyrite±sphalerite of up
to 2 metres true width and strong pyrrhotite veining and alteration. Moderate to high copper grades with anomalous silver and zinc were
returned (Table 3). These results (see next page) are most encouraging, and follow-up is planned.
Heron Resources Limited - Annual Report 2014 - Page 15
2.0 OPERATIONS REPORT CONTINUED
Table 3: Mt Nicholas drilling results
Hole Number
MNDD002
incl.
MNDD002
incl.
MNDD003
MNDD003
MNDD003
MNDD004
incl.
From
(m)
60.00
60.50
151.00
151.90
36.00
157.10
191.50
58.70
59.40
To
(m)
61.13
61.13
152.85
152.22
37.00
157.70
192.00
60.17
60.17
Downhole
Width (m)
1.13
0.63
1.85
0.32
1.00
0.60
0.50
1.47
0.77
Zn
%
0.78
1.30
1.37
5.19
0.10
0.69
2.38
1.74
3.24
Cu
%
0.63
0.45
0.10
0.29
1.77
0.10
0.13
0.23
0.43
Ag
g/t
8.0
8.2
12.4
49.9
14.3
9.2
16.0
13.5
19.6
Eurow Copper-Gold Project
Eurow is located 40km SE of Parkes in central NSW. Eurow is proximal to the intersection of the Narromine-Coolac Fault Zone and the Lachlan
Transverse Zone. The project was acquired for the historic Eurow-Vychan copper-gold workings where a small non-JORC compliant resource
has been previously reported. Previous drilling below the workings included intercepts of 8 metres at 2.94% copper and 0.85g/t gold from 47
metres, 3 metres at 4.0% copper and 1.25g/t gold from 73 metres, and 4.4 metres at 1.57% copper and 0.63g/t gold from 212 metres. The
mineralisation is planar and stratiform and associated with pyrrhotite sulphides (highly conductive and magnetic).
Heron completed a program of aircore drilling (44 holes for 729 metres). Anomalous results from north of old workings included:
(cid:129)
(cid:129)
(cid:129)
EURB05: 20 metres at 0.02% copper from 4 metres.
EURB06b: 12 metres at 0.03% copper from surface.
EURB35: 10 metres at 0.04% copper from 4 metres to EOH (with weakly anomalous gold, silver and zinc).
Kamandra Iron-Copper Project
The Kamandra Iron-Copper prospect is located 10km SE of Parkes.
Heron completed a program of RC drilling (6 holes for 741 metres) in 2014 and intersected magnetite-pyrrhotite-pyrite-(chalcopyrite) zones.
Anomalous results include:
(cid:129)
(cid:129)
(cid:129)
KMRC03: 32 metres at 0.04% copper and 28% iron from 92 metres.
KMRC04: 8 metres at 0.05% copper and 45% iron from 92 metres.
KMRC06: 4 metres at 0.09% copper and 44% iron from 100 metres.
Gilmore Suture
Overflow Gold-Base Metal Project
Overflow is located 115km SE of Cobar. The project contains numerous polymetallic mineralised occurrences and widespread hydrothermal
alteration, including the historic Overflow Mine (gold, silver, lead with minor copper and zinc). Mineralisation is considered to be mid-
sulphidation epithermal (Mineral Hill style).
A VTEM survey was completed in 2011, with numerous EM anomalies still to follow-up.
A single 180 metre diamond hole was drilled in 2014 at the Overflow Mine to test for two possible ore shoot geometries and to fill a gap
between historic drill-holes. The drilling intersected the lode horizon and returned the following intercept:
(cid:129)
OFTD001A: 8.6 metres at 0.28g/t gold, 8.1g/t silver, 0.06% copper, 0.27% lead and 1.35% zinc from 124 metres.
Au ppm
0.059 to 0.116
0.026 to 0.059
0.008 to 0.026
0.004 to 0.008
0.002 to 0.004
0 to 0.002
(7)
(5)
(12)
(22)
(33)
(26)
Cu ppm
44 to 64
25 to 44
16 to 25
11 to 16
8 to 11
5 to 8
(8)
(13)
(29)
(25)
(20)
(10)
Gundagai Gold-Copper Project
The Gundagai tenements and applications covering some
500km2 are located 315km SW of Sydney. Several old gold
workings hosted by mineralised porphyry units exist in the
Heron tenement area with mining dating back to 1842.
Heron drilling in 2013 returned a best intercept of 20 metres
at 1.58g/t gold.
Soil auger sampling was completed. An anomaly trends in a
NNW direction over some 300 metres of strike and is 100
metres wide. Peak gold result was 116ppb and peak copper
result was 64ppm, with peak arsenic 37ppm (Figure 10).
Figure 10: Gundagai Gold-Copper Project:
Gold and Copper anomalism
Page 16 - Heron Resources Limited - Annual Report 2014
WESTERN AUSTRALIA EXPLORATION (all projects 100% Heron)
KNP Nickel Sulphide Initiatives
Kalpini Nickel Project
The Kalpini ultramafic belt which hosts KNP nickel laterite
resources additionally has several documented fertile nickel
sulphide ultramafic contacts, with a best result of 2 metres at 6.2%
nickel, 1.78% copper and 2.17g/t Platinum Group Metals reported
by the previous explorers. Heron’s project generation studies
through the belt have generated several nickel sulphide targets.
400RL
E
m
0
0
1
3
0
4
E
m
0
0
2
3
0
4
E
m
0
0
3
3
0
4
E
m
0
0
4
3
0
4
Pd anomaly
200-687ppb
Cu anomaly
500-1,300ppm
Ni anomaly
2,000-6,060ppm
K
P
R
C
0
0
0
B0001
1
R
P
K
B0002
R
P
K
B0003
B0004
R
P
K
R
P
K
B0005
R
P
K
B0006
B0007
R
P
K
R
P
K
B0008
B0009
R
P
K
R
P
K
B0010
R
P
K
Base of Oxidation
Top of Fresh Rock
A two hole RC program was completed over the Emu Lake Prospect
nickel sulphide target (Figure 11). The RC program was designed to
target coincident copper, nickel and palladium RAB anomalies. The
best RC result was:
(cid:129)
KPRC001: 5 metres at 0.27% nickel, 0.04% copper, 146ppb
Pt+Pd from 80 metres.
Hole KPRC0001 was drilled to 258 metres total depth and
intersected disseminated nickel sulphides at 80 metres and 135
metres. The geology appears to be sub vertical with the final
ultramafic footwall contact being at 245 metres depth down hole.
KNP Gold Initiatives
Anomalous Sulphides
5m@0.27%Ni, 146ppm Pt+Pd,
376ppm Cu from 80m
300RL
200RL
Cross
Cutting
Mafic
Dyke
Mesocumulate
Fine grained
sediments
Figure 11:
Diorite
0
5
2
Emu Lake Prospect
Cross Section
Work focused on the Siberia and Big Four Project areas, with several soil auger anomalies defined for follow-up.
Mt Zephyr Gold And Base-Metal Project, Western Australia
The Mt Zephyr Project is located 80km NNE of Leonora and represents a 5 kilometre strike of volcanics with strong indications of Volcanogenic
Massive Sulphide (VMS) style mineralisation. The Company is currently seeking a joint venture partner to drill a sequence of deeper holes
down-dip from the distal style VMS mineralisation. The Mt Zephyr tenure is a contiguous greenstone package, and remains highly prospective.
Nickel sulphide targets are currently being assessed to the north of the Two Bills Well prospect along a well defined ultramafic
stratigraphy, being the inferred Mt Windarra nickel sulphide host sequence.
The area is also highly prospective for gold mineralisation with high-grade laminated quartz reefs in the north of the project area.
Heron Resources Limited - Annual Report 2014 - Page 17
2.0 OPERATIONS REPORT CONTINUED
Albany Fraser Mobile Zone
Bedonia Nickel-Copper Project
The Bedonia Project covers 1,500km2 and is located 75km east of Norseman, Western Australia. The project is some 60km west of the Nova-
Bollinger nickel-copper deposit (owned by Sirius Resources NL), and straddles the Archaean-Proterozoic boundary along the margin of the
Albany Fraser Mobile Zone. Heron is in transaction discussions for Bedonia, which divestment will allow greater focus on the Lachlan Fold
Belt exploration.
NORTHWEST QUEENSLAND COPPER-GOLD PROJECT
(100% Heron)
The Company has acquired a tenement portfolio covering some
in the Mt Isa Inlier of northwest Queensland, targeting
1,700km2
copper-gold-REE mineralisation in Iron Oxide Copper Gold (IOCG)
settings (Figure 12).
The Mt Isa Inlier is a world-class Proterozoic mining province hosting
the large copper, lead and zinc mines at Mt Isa and George Fisher and
the copper-gold mines at Ernest Henry and Osborne plus several other
significant mines and development projects. The potential for new
economic discoveries in the area is high.
The Company is currently seeking expressions of interest from parties
who would be interested in farming into or acquiring the tenements. An
Information Memorandum on the project areas was completed and has
been forwarded to potential interested parties.
Figure 12: Cloncurry region, Heron tenement
locations and mineralised centres
JOINT VENTURE PROJECTS, WESTERN AUSTRALIA
Mount Oxide
Mammoth
19122
19168
Bluff
Mount Kelly
Watta
Live Heron Tenements
Pending Heron Tenements
Gold/Copper Deposits
Hidden Treasure
19043
Mount Cuthbert
0
50
kilometres
Victoria
Mount Roseby
Valhalla
Dugald River
Bikini
Hilton George Fisher
Blockade
Mount Quamby
Ernest Henry
19054
Monakoff
MOUNT ISA
Mary Kathleen
CLONCURRY
Mount Isa Copper Mine
Black Mountain
Gilded Rose
King
Mount Philp
Wee Macgregor
Mount Freda
Eloise
Kalman
Sierra
Greenmount
Mount Mccabe
Heron has farmed out various of the KNP nickel laterite tenure for gold exploration, again as a means to assist in keeping the KNP in good
standing with the WA Department of Mines and Petroleum (DMP).
Bulong Gold Project (Heron 20%, Southern Gold Limited 80%; Heron retains 100% of nickel laterite rights at Bulong East)
Southern Gold Limited has earned its 80% interest in the two joint venture areas at Bulong (30km east of Kalgoorlie) through meeting the
required expenditure commitments. At Bulong East, Heron is free carried at 20% interest until a pre-feasibility study is completed and $8
million has been expended. At Bulong South, Heron is free carried at 20% interest until the completion of Bankable Feasibility Study.
Work completed in the last year included a Sub-audio Magnetics (SAM) survey that has highlighted and delineated a number of shear zone
targets coincident with previously reported gold-in-soil anomalies.
Rocky Gully Nickel-Copper Prospect (100% Heron, PLD Corporation right to purchase 90%)
At Rocky Gully, 85km NW of Albany, the target is nickel-copper sulphide mineralisation associated with mafic/ultramafic intrusions. Previous
Heron reconnaissance drilling in the area identified nickel-copper mineralisation in laterite as well as nickel-copper sulphides in the bedrock
sequence (comparable initial exploration history to the Nova nickel sulphide discovery).
The Company granted a 12 month option to PLD Corporation Limited to purchase a 90% interest in Rocky Gully at PLD’s election for either
$230,000 cash or the issue of 28.75 million shares in PLD.
BUSINESS DEVELOPMENT
The Company’s growth strategy in 2014 was aligned to seeking out new Business Development opportunities , and in parallel pursuing a more
active Exploration effort. With the TriAusMin merger, the Business Development and Exploration focus became the Lachlan Fold Belt, NSW.
Competent Person’s Statement
The information in this report that is related to Heron’s exploration activities is based on information compiled by David von Perger who is a member of
Australian Institute of Mining and Metallurgy. David von Perger is a full time employee of Heron Resources Limited and has sufficient experience that is
relevant to the style of mineralisation and type of deposit under consideration, and to the exploration activity that is being undertaking to qualify as
Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
David von Perger consents to the inclusion in this report of the matters based on his information in the form and context that it appears. The information in
this report is derived from Heron and TriAusMin announcements variously released on ASX and TSX during the course of FY 2014 which contain material
details of assumptions which assumptions continue to remain valid as at the date of this report.
Page 18 - Heron Resources Limited - Annual Report 2014
Heron Resources Limited
ABN 30 068 263 098
Annual Report 30 June 2014
Statutory Information
3.0
CORPORATE PROFILE ..........................................................................................20
CORPORATE GOVERNANCE STATEMENT...............................................................20
4.0
DIRECTORS’ REPORT ...........................................................................................30
AUDIT INDEPENDENCE DECLARATION ..................................................................37
5.0
FINANCIAL STATEMENTS ..................................................................................38
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND
OTHER COMPREHENSIVE INCOME .......................................................................39
CONSOLIDATED STATEMENT OF FINANCIAL POSITION........................................40
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ........................................41
CONSOLIDATED STATEMENT OF CASH FLOWS ....................................................42
NOTES TO AND FORMING PART OF THE ACCOUNTS ...........................................43
DIRECTORS’ DECLARATION ....................................................................................61
6.0
7.0
8.0
9.0
INDEPENDENT AUDIT REPORT .........................................................................62
SHAREHOLDER INFORMATION .........................................................................64
STATEMENT OF MINERAL RESOURCES ..........................................................66
INTEREST IN MINING TENEMENTS.................................................................72
10.0 GLOSSARY .............................................................................................................75
Heron Resources Limited - Annual Report 2014 - Page 19
3.0 Corporate Profile
HERON RESOURCES LIMITED (“Heron” or “the Company”) is engaged in the exploration and development of base and precious metal
deposits in Australia. Following a recent merger with TriAusMin Limited (TriAusMin), the Company is focused on the development of the
high grade Woodlawn Zinc-Copper Project located 250km southwest of Sydney in New South Wales. Heron also owns the Kalgoorlie
Nickel Project located north of Kalgoorlie in Western Australia, and holds a number of other quality base metal and copper-gold exploration
properties located in the Lachlan Fold Belt of New South Wales.
KEY DEVELOPMENTS
On 5 August 2014, TriAusMin merged with Heron to create a well-funded company focused on the development of the high-grade Woodlawn
Zinc-Copper Project located in the Lachlan Fold Belt of New South Wales.
Woodlawn is a Volcanogenic Massive Sulphide (VMS) deposit that was previously mined resulting in the processing of 13.8 million tonnes
grading 9.1% zinc, 3.6% lead, 1.6% copper, 74 g/t silver and 0.5 g/t gold. The mine operated between 1978 and 1998 and since its closure
and subsequent acquisition, TriAusMin has established a significant underground resource as well as a reserve centered on the tailings
generated by the previous operations.
Initially, the merged entity will undertake an exploration program targeting an expansion of the current resource base at Woodlawn, and
conduct a feasibility study in relation to the potential development of the project.
In addition to Woodlawn, Heron holds the Kalgoorlie Nickel Project (KNP), a very large nickel laterite project located north of Kalgoorlie in
Western Australia. Simulus Engineers completed an initial Scoping Study on treating KNP ore using an atmospheric leaching process at a
production rate of 10Ktpa nickel to produce a Mixed Hydroxide Product (MHP). The process developed by Simulus incorporates steps for
recovering sulphuric acid which is a key input to the leaching process, and encouragingly this has resulted in significantly lower capital and
operating costs than for conventional High Pressure Acid Leach (HPAL) plants.
In April 2014 Simulus estimated that a processing plant would have a capital cost of A$236 million (+/-30%). Based on the Simulus estimate,
Heron then determined that the total capital cost of developing a project with 10Ktpa nickel production capacity ,including all infrastructure,
is estimated at A$356 million (+/-30%). This equates to a capital intensity of US$14.54 per annual pound of nickel production, a “step-change”
improvement in the capital cost of developing HPAL nickel laterite plants.
Based on these encouraging results, the production rate was then up-scaled from 10Ktpa to 20Ktpa, with results for a 20Ktpa Scoping Study
demonstrating an enhanced business case for the larger scale project. The capital cost for a 20Ktpa development is estimated to be A$660
million (+/- 30%), which equates to a capital intensity of US$13.82 per annual pound of nickel production. Additionally, Simulus has completed
work on an initial Front End Engineering Design (FEED) for a 1.5 tonne per hour Demonstration Plant to treat nickel residues and KNP laterite
ore.
Heron has also commenced a process seeking a potential funding partner to commercialise the “KNP Optimised Flowsheet”. KPMG Corporate
Finance has been mandated to assist in this process.
In December 2013, Heron purchased a 19.9% interest in Golden Cross Resources Limited (GCR). The Heron investment facilitated a major
commitment to the drilling out and expansion of the JORC-compliant Mineral Resource for the Copper Hill copper-gold deposit in the central
Lachlan Fold Belt in New South Wales. Drilling commenced in May 2014, focusing on quantifying the shallow higher grade resource within
the central Copper Hill “phyllic carapace” mineralisation. Additionally, deep drilling on 100m spaced sections is targeting
Northparkes/Ridgeway-style high grade “potassic” pipes beneath the currently defined “phyllic carapace”.
CORPORATE GOVERNANCE STATEMENT
The Board of Heron is committed to achieving and demonstrating the highest standards of Corporate Governance. The Board is responsible
to its Shareholders for the performance of the Company and seeks to communicate extensively with Shareholders. The Board believes that
sound Corporate Governance practices will assist in the creation of Shareholder wealth and provide accountability.
Following the merger with TriAusMin on 5 August 2014 and the subsequent listing of the Company on the Toronto Stock Exchange (“TSX”)
which became effective on 19 August 2014, the Company is required to comply with both the ASX and the TSX Corporate Governance
requirements. While there are many similarities between the practices of the two jurisdictions, wherever they differ, the Company has
adopted what it considers to be the “best practice” of the two requirements. The principle area of difference between the ASX and TSX
Corporate Governance requirements is that under the TSX Listing rules, it is a mandatory requirement that the Company establish an Audit
Committee, a Remuneration Committee and a Corporate Governance and Nominating (“CGN”) Committee and that the minimum three
members of the Committee all be Independent. Prior to the merger with TriAusMin, the Company had an existing Audit Committee. Following
the merger, the Company has established a Remuneration Committee and a CGN Committee.
Page 20 - Heron Resources Limited - Annual Report 2014
3.0 CORPORATE PROFILE CONTINUED
As a result of the Company using the services of Allion Legal and Mr Readhead, Heron's Chairman, being a Partner of Allion Legal, he is
deemed to be not Independent under Canadian Securities Law. Following the resignation of Dr. Gill on 19 August 2014, the Company has one
Independent Director. The Board is in the process of identifying candidates to fill the new Independent Director roles so that it satisfies the
minimum three member requirement of the Committees.
The Statement below outlines the main corporate governance practices which are in place at Heron. Where the Board supports a particular
recommendation, but is yet to fully implement it, a complementary policy or practice has also been identified. For ease of disclosure, the
Company has used the ASX Corporate Governance “8 Principles” summarised below and where the Company does not comply (or partly
complies), the reasons and action items are noted in the main section of the disclosure.
The following additional information about the Company's Corporate Governance practices is set out on the Company's website at
www.heronresources.com.au:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Audit Committee Charter;
Board Charter;
Code of Business Conduct & Ethics;
Communication with Shareholders Policy;
Corporate Governance Committee Charter;
Disclosure and Confidentiality Policy;
Diversity Policy;
Health, Safety, Environment & Community Policy;
Remuneration Committee Charter;
Risk Management Policy;
Securities Trading Policy; and
Whistle Blower Policy.
Principle ASX Corporate Governance Council Recommendations - 2nd Edition (summary)
Comply
1.
1.1
1.2
Lay solid foundations for management and oversight
The Company should establish the functions reserved to the Board and those delegated to senior executives
and disclose those functions.
The Company should undertake checks before appointing a person as a candidate for election as a Director.
1.3
The Company should have a written agreement with each Director and Senior Executive.
Complies
Complies
Complies, although being
amended as part of
integration post-merger
1.4
1.5
1.6
1.7
2.
2.1
2.2
2.3
2.4
2.5
2.6
The Company Secretary should be accountable directly to the Board, on all matters to do with proper functioning of the Board.
Complies
The Company should have a Diversity Policy and disclose at the end of each reporting period the proportions of men and women
on the board, in executive roles and in the whole organisation.
Complies
The Company should have a process of evaluating the performance of the Board.
The Company should have a process of evaluating the performance of its Senior Executives.
Structure the Board to add value
The Board should establish a nomination committee.
The Company should have and disclose a Board skills matrix.
The Company should disclose information regarding the independence of Directors.
A majority of the Board should be independent Directors.
The Chairman of the Board should be an independent Director.
Does not comply
Complies
Partly complies
Does not comply
Complies
Does not comply
Does not comply
The Company should have program for inducting new Directors and professional development.
Complies
Heron Resources Limited - Annual Report 2014 - Page 21
3.0 CORPORATE PROFILE CONTINUED
Promote ethical and responsible decision making
The Company should establish a code of conduct and disclose the code or a summary of the code as to:
(cid:129) the practices necessary to maintain confidence in the Company’s integrity
(cid:129) the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders
(cid:129) the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.
Complies
Safeguard integrity in financial reporting
The Board should establish an audit committee.
Partly complies
The Board should, prior to it approving the entities financial statements, receive from its CEO and CFO a declaration that,
in their opinion, the financial statements are “true and fair”.
The Company should ensure that its external Auditor attends the AGM.
Complies
Complies
Make timely and balanced disclosure
Establish written policies and procedures designed to ensure compliance with ASX and TSX Listing Rule disclosure
requirements and to ensure accountability at a senior management level for that compliance.
Complies
Respect the rights of shareholders
The Company should provide information about itself and its governance policies via its website.
Complies
The Company should implement an investor relations program.
The Company should have a process to facilitate and encourage participation at meetings of security holders.
The Company should give security holders the option to receive and send communications electronically.
Complies
Complies
Complies
Recognise and manage risk
The Company should establish a risk committee and disclose the policies and procedures it uses to manage risk.
Does not comply
The Board should review the risk management framework at least annually.
The Company should disclose if it does or does not have an internal audit function and if not how it manages
internal control processes.
The Company should disclose whether it has any material economic, environmental and social sustainability risks
and how it manages them.
Complies
Partly complies
Complies
Remunerate fairly and responsibly
The Board should establish a remuneration committee.
Partly complies
The Company should disclose its remuneration policies regarding remuneration of non-executive Directors,
executive Directors and other Senior Executives.
A company which has an equity based remuneration scheme, should disclose whether participants are permitted into
transactions which limit the economic risk of the scheme.
Complies
Complies
3.
3.1
4.
4.1
4.2
4.3
5.
5.1
6.
6.1
6.2
6.3
6.4
7.
7.1
7.2
7.3
7.4
8.
8.1
8.2
8.3
Page 22 - Heron Resources Limited - Annual Report 2014
3.0 CORPORATE PROFILE CONTINUED
Principle 1. Lay Solid Foundations for Management and Oversight
Council Recommendation 1.1
A listed entity should disclose:
a)
b)
the respective roles and responsibilities of its board and management; and
those matters expressly reserved to the board and those delegated to management.
The Company complies with this recommendation.
The Company has established the functions reserved for the Board and for Senior Executives by the adoption of a formal written Board Charter
that details those functions and responsibilities. Section 2 of the Charter details the functions and responsibilities of the Board and Section
6 of the Charter details the functions and responsibilities of the Management or Senior Executives. A copy of this Charter is publicly available
for review in the Corporate Governance section of the Company’s website.
Council Recommendation 1.2
A listed entity should:
a)
b)
undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director;
and
provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a
director.
The Company complies with this recommendation.
The Company undertakes appropriate checks or appoints a consultant to do those checks before appointing or putting forward to security
holders a new candidate for election as a Director. Information regarding Directors or new candidates is contained in the annual report and/or
the notice of meeting. In accordance with the TSX Corporate Governance practices, the Company has established a Corporate Governance
and Nominating Committee which has the role of undertaking appropriate checks before putting forward to security holders a candidate for
election.
Council Recommendation 1.3
A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.
The Company complies with this recommendation.
Each Director or senior executive has a letter of appointment or service contract setting out their role and responsibilities. Currently
agreements are being revised pursuant to the merger with TriAusMin.
Council Recommendation 1.4
The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper
functioning of the board.
The Company complies with this recommendation.
The Company Secretary organises and attends each board and committee meeting to ensure adherence to proper procedure and report on any
corporate governance matters as necessary.
Council Recommendation 1.5
A listed entity should:
a)
b)
c)
have a diversity policy which includes requirements for the board or a relevant committee of the board to set measureable objectives
for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them;
disclose that policy or a summary of it; and
disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant
committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them, and either:
1)
2)
the respective proportions of men and women on the board, in senior executive positions and across the whole organisation
(including how the entity has defined “senior executive” for these purposes); or
if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality
Indicators”, as defined in and published under the Act.
A copy of the Company’s Diversity Policy is available on the website.
The Company complies with this recommendation.
Heron Resources Limited - Annual Report 2014 - Page 23
3.0 CORPORATE PROFILE CONTINUED
As at the date of this report, the Company had the following number of women employed in:
Whole organisation
Management positions
Board members
Number of
women
4
1
-
Total
employees
18
7
4
Proportion of
women
22%
14%
-
The Company does not presently have set targets for the representation of women employees in Senior Executive positions and the Board.
However, the Company will seek to promote and increase diversity within the organisation as positions and appropriately skilled candidates
are available. The Company is not a “relevant employer” under the Workplace Gender Equality Act.
Council Recommendation 1.6
A listed entity should:
a)
b)
have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and
disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance
with that process.
The Company does not currently comply with this recommendation.
The Company does not have a formal process for evaluation of the performance of the Board. At present the Board’s performance is evaluated
on an ongoing basis by the Chairman and the Managing Director. The Managing Director’s performance is formally evaluated by the Chairman
and Non-Executive Directors on an annual basis at 30 June.
Council Recommendation 1.7
A listed entity should:
a)
b)
have and disclose a process for periodically evaluating the performance of its senior executives; and
disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance
with that process.
The Company complies with this recommendation.
Senior Executives are evaluated informally on an ongoing process as well as formally on a periodical basis. The formal evaluation comprises
the Executive and his or her immediate supervisor separately completing a detailed evaluation form covering performance compared to job
description, areas requiring improvement, areas being performed to expectation, areas being performed in excess of expectations and goals
for the next 12 months. The Executive and his or her supervisor then exchange forms and meet to discuss them before signing off on an agreed
evaluation. A formal performance evaluation was not undertaken in the reporting period.
To comply with the Corporate Governance requirements of the TSX, the Company has established a Remuneration Committee. A responsibility
of the Committee will be to evaluate the performance of Senior Executives and make recommendations as to short and long term
remuneration. As of the date of this report, the Remuneration Committee met once.
Principle 2. Structure the Board to Add Value
Council Recommendation 2.1
The board of a listed entity should:
a)
b)
have a nomination committee which:
1)
2)
has at least three members, a majority of whom are independent directors; and
is chaired by an independent director,
and disclose:
3)
4)
5)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or
if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to
ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge
its duties and responsibilities effectively.
The Company partly complies with this recommendation.
To comply with the Corporate Governance requirements of the TSX, the Company has established a Corporate Governance and Nominating
Committee. The charter for the Corporate Governance and Nominating Committee is in the Corporate Governance section on the Company
website. As at the date of this report the Committee has only two members.
Page 24 - Heron Resources Limited - Annual Report 2014
3.0 CORPORATE PROFILE CONTINUED
The Corporate Governance and Nominating Committee is currently undergoing a search for a new Independent Director and once appointed
the Company will comply with Recommendation 2.1.
Council Recommendation 2.2
A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking
to achieve in its membership.
The Company does not currently comply with this recommendation.
The Company is in the process of establishing a formal board skills matrix. The skills and diversity of the current Board members is disclosed
in the Directors Report.
Council Recommendation 2.3
A listed entity should disclose:
a)
b)
the names of the directors considered by the board to be independent directors;
if a director has an interest, position, association or relationship of the type that might cause doubts about their independence but the
board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or
relationship in question and an explanation of why the board is of that opinion; and
c)
the length of service of each director.
The Company complies with this recommendation.
The Board considers Mr Readhead and Mr Dennis to be independent directors within the ASX Corporate Governance Guidelines. Their length
of service is 13 years for Mr Readhead and 8 years for Mr Dennis. Due to the Company receiving Legal advice from Allion Legal, of which Mr
Readhead is a Partner, Mr Readhead is not considered to be an Independent Director under Canadian Securities Law.
Council Recommendation 2.4
A majority of the board of a listed entity should be independent directors.
The Company does not currently comply with this recommendation.
The Company complied with this recommendation until the resignation of Dr James Gill on 19 August 2014. The Corporate Governance and
Nominating Committee is currently undergoing a search for new Independent Directors and once appointed the Company will comply with
Recommendation 2.4.
Council Recommendation 2.5
The Chairman of the Board should be an independent director
The company does not comply with this recommendation.
Due to the Company receiving Legal advice from Allion Legal, of which Mr Readhead is a Partner, Mr Readhead is not considered to be an
independent director under Canadian Securities Law.
Council Recommendation 2.6
A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors
to develop and maintain the skills and knowledge needed to perform their role as directors effectively.
The Company complies with this recommendation.
The recently established Corporate Governance and Nominating Committee, has, as one of its Charter responsibilities, the induction of new
Directors and to provide appropriate professional development opportunities for Directors. The Company’s existing Human Resources Manual
is available as a resource for Directors.
Principle 3. Act Ethically and Responsibly
Council Recommendation 3.1
A listed entity should:
a)
b)
have a code of conduct for its directors, senior executives and employees; and
disclose that code or a summary of it.
The Company complies with this recommendation.
The Code of Conduct is publicly available in the Corporate Governance section on the Company’s website.
Heron Resources Limited - Annual Report 2014 - Page 25
3.0 CORPORATE PROFILE CONTINUED
Principle 4. Safeguard integrity in corporate reporting
Council Recommendation 4.1
The board of a listed entity should:
a)
b)
have an audit committee which:
1)
2)
has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and
is chaired by an independent director, who is not the chair of the board,
and disclose:
3)
4)
5)
the charter of the committee;
the relevant qualifications and experience of the members of the committee; and
in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances
of the members at those meetings; or
if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the
integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of
the audit engagement partner.
The Company partly complies with this recommendation.
The Company complied with this recommendation until the resignation of Dr James Gill on 19 August 2014. The Corporate Governance and
Nominating Committee is currently undergoing a search for new Independent Directors and once appointed to the Audit Committee, the
Company will comply with Recommendation 4.1. The Company has an audit committee charter which is available on the Company’s website
and the information about the members is in the Directors Report.
Council Recommendation 4.2
The board of a listed entity, before it approves the entity’s financial statements for a financial period, should receive from its CEO and CFO a
declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply
with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the
opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.
The Company complies with this recommendation.
Council Recommendation 4.3
A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security
holders relevant to the audit.
The Company complies with this recommendation.
Principle 5. Make Timely and Balanced Disclosure
Council Recommendation 5.1
A listed entity should:
a)
b)
have a written policy for complying with its continuous disclosure obligations under the ASX and TSX Listing Rules; and
disclose that policy or a summary of it.
The Company complies with this recommendation.
The continuous disclosure policy is publicly available for review in the Corporate Governance Section of the Company’s website.
Principle 6. Respect the rights of security holders
Council Recommendation 6.1
A listed entity should provide information about itself and its governance to investors via its website.
The Company complies with this recommendation.
Page 26 - Heron Resources Limited - Annual Report 2014
3.0 CORPORATE PROFILE CONTINUED
Council Recommendation 6.2
A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.
The Company complies with this recommendation.
The shareholder communication policy is publicly available for review in the Corporate Governance Section of the Company’s website. The
Company has investor relations contact details on the website for investors to contact the Company in both North America and Australia.
Council Recommendation 6.3
A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security
holders.
The Company complies with this recommendation.
The shareholder communication policy is publicly available for review in the Corporate Governance Section of the Company’s website.
Council Recommendation 6.4
A listed entity should give security holders the option to receive communications from the entity and its security registry electronically.
The Company complies with this recommendation.
Security holders, via the security registry in Australia and North America, are able to receive communications electronically and vote at
security holders meetings electronically.
Principle 7. Recognise and Manage Risk
Council Recommendation 7.1
The board of a listed entity should:
a)
have a committee or committees to oversee risk, each of which:
1)
2)
has at least three members, a majority of whom are independent directors; and
is chaired by an independent director,
and disclose:
3)
4)
5)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or
b)
if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing
the entity’s risk management framework.
The Company does not currently comply with this recommendation.
The Company does not currently comply with this recommendation in that it does not have formal policies for the oversight and management
of material business risks as it believes the internal controls it has in place as disclosed below are sufficient for a company of Heron’s size
and operations.
The Board takes the recognition and management of risk extremely seriously and it examines and considers areas of significant business risk
on an ongoing basis and implement actions to minimise exposure to these risks. The Board is assisted in their review of risk management by
the management team who must report to the Board on all areas of risk in their respective area on a routine monthly basis and sooner if the
matter is urgent.
Arrangements put in place by the Board to oversee and manage the Company’s material business include:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Detailed strategic plans compiled by the Managing Director as part of annual programs and budgets which document the plan and areas
of risk to those plans;
Detailed monthly reporting by the Managing Director and management team in respect of the Company’s operations;
Weekly management meetings designed to monitor each business area within the Company including material business risks within
those areas;
Completion of monthly statements of financial performance, financial position and cash flows compared to budget; and
Periodic formal risk reviews facilitated by a specialist risk consultancy.
The risk management policy of the Company will continue to be developed as its operations and areas of potential risk continue to evolve.
The Managing Director has been nominated as the person responsible for Health, Safety, Environment and Community matters, and the
Managing Director reports to the Board as a specific agenda item at its monthly meeting.
Heron Resources Limited - Annual Report 2014 - Page 27
3.0 CORPORATE PROFILE CONTINUED
Council Recommendation 7.2
The board or a committee of the board should:
a)
b)
review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and
disclose, in relation to each reporting period, whether such a review has taken place.
The Company complies with this recommendation.
The Board requires management to provide a monthly report to the Board which details the activities of the Company. Within this report
management is expected to provide a report on the management of material risks within the Company and how those risks are being handled,
especially in areas such as Health, Safety, Environment and Community. The Board will then raise any queries or questions it has in relation
to those risks directly with the responsible manager. Senior management attends the monthly Board meetings by invitation to present on those
agenda items within their area of responsibility. Further, the audit committee reviews risk management as part of its charter and reports to
the Board with any issues that it identifies.
Council Recommendation 7.3
A listed entity should disclose:
a)
b)
if it has an internal audit function, how the function is structured and what role it performs; or
if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the
effectiveness of its risk management and internal control processes.
The Company currently partly complies with this recommendation.
The Company does not have an internal control function. The process for continually improving the effectiveness of its risk management and
internal control processes is the same as 7.2.
Council Recommendation 7.4
A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does,
how it manages or intends to manage those risks.
The Company complies with this recommendation.
The governance section of the Company web site contains the HSEC policy and risk management policy and there is also a sustainability
section on the web site.
Principle 8. Remunerate Fairly and Responsibly
Council Recommendation 8.1
The board of a listed entity should:
a)
have a remuneration committee which:
1)
2)
has at least three members, a majority of whom are independent directors; and
is chaired by an independent director.
and disclose:
3)
4)
5)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or
b)
if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of
remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.
The Company currently partly complies with this recommendation.
Following the resignation of Dr James Gill on 19 August 2014, the Company currently has a remuneration committee with two members. The
third position on the Committee will be filled once the new Independent Director is elected. The information about the current members of
the Committee is in the Directors report and the charter is in a Corporate Governance section of the Company web site.
Page 28 - Heron Resources Limited - Annual Report 2014
3.0 CORPORATE PROFILE CONTINUED
Council Recommendation 8.2
A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration
of executive directors and other senior executives.
The Company complies with this recommendation.
The Board seeks independent advice on remuneration policies and practices, involving the remuneration packages and terms of employment
of Directors. Remuneration levels are competitively set to attract the most qualified and experienced Directors and Senior Executive Officers
in the context of prevailing market conditions. There is no direct link between Director and Senior Executive remuneration and corporate
performance, other than the performance conditions attaching to certain options.
Council Recommendation 8.3
A listed entity which has an equity-based remuneration scheme should:
a)
b)
have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise)
which limit the economic risk of participating in the scheme; and
disclose that policy or a summary of it.
The Company complies with this recommendation.
The policy of the Company is that participants are not permitted to enter into hedging or other derivative instruments that might limit the
economic risk of the scheme. The policy is in the corporate governance section of the Company website.
Heron Resources Limited - Annual Report 2014 - Page 29
4.0 Directors’ Report
The Directors submit their Report on the Company and its controlled entities for the year ended 30 June 2014.
DIRECTORS
The names and details of the Directors of the Company in office at any time during or since the end of the year are:
Director
Appointed
Position
Craig Leslie Readhead - B.Juris. LL.B.
23 November 2001
Chairman (Non-Executive), Chairman of Remuneration Committee, Chairman of Corporate Governance
& Nominating Committee
Craig Readhead is a lawyer with over 30 years legal and corporate advisory experience with specialisation in the resources
sector, including the implementation of large scale mining projects both in Australia and overseas. Mr Readhead is a former
president of the Australian Mining and Petroleum Law Association and is a Partner of specialist mining and corporate law firm
Allion Legal.
Other current directorships
Chairman of Beadell Resources Limited since 2010
Non-executive Director of General Mining Corporation since 2009
Non-executive Director of Redbank Copper Limited since April 2013
Non-executive Director of Swan Gold Mining Limited since March 2013
Non-executive Director of Western Areas Limited since June 2014
Former directorships in last 3 years
Chairman of Galaxy Resources Limited 2000-2013
Non-executive Director of India Resources Limited 2007-2012
Non-executive Director of Mount Gibson Iron Limited 2002-2011
Non-executive Director of Frankland River Olive Company Limited 2000-2012
Director
Appointed
Position
Wayne Taylor - B.Eng (Mining), MBA
11 August 2014
Managing Director and CEO
Wayne Taylor is a mining engineer with over 25 years experience in the mining industry. He holds a Bachelor of Engineering
(Mining) degree from the University of New South Wales and a Masters of Business Administration from the University of
New England. Mr Taylor has held senior operational management roles with Western Mining Corporation and Glencore
International’s Australian operations. For the six years prior to joining TriAusMin he managed Glencore’s base metal business
development based out of Australia which involved assessing mining projects throughout the world. Mr. Taylor was the
Managing Director and CEO of TriAusMin for the last 3 years prior to the merger.
Other current directorships
None
Former directorships in last 3 years
Managing Director and CEO of TriAusMin until August 2014.
Director
Appointed
Position
Ian James Buchhorn - BSc (Hons), Dip Geosci (Min Econ), MAusIMM.
17 February 1995
Executive Director
Ian Buchhorn is a Mineral Economist and Geologist with over 35 years experience. Prior to listing Heron in 1996 as founding
Managing Director, Mr Buchhorn worked with Anglo American Corporation in southern Africa, and Comalco, Shell/Billiton and
Elders Resources in Australia, as well as setting up and managing Australia's first specialist mining grade control consultancy.
Mr Buchhorn has worked on feasibility studies, bauxite and industrial mineral mining and exploration, gold and base metal
project generation, and in corporate evaluations. For the last 25 years Mr Buchhorn has acquired and developed mining
projects throughout the Eastern Goldfields of Western Australia and operated as a Registered Mine Manager.
Other current directorships
Non-executive Director of Rubicon Resources Limited since August 2005
Non-executive Director of Golden Cross Resources Limited since March 2014
Former directorships in last 3 years
None
Page 30 - Heron Resources Limited - Annual Report 2014
4.0 DIRECTORS’ REPORT CONTINUED
Director
Appointed
Position
Stephen Bruce Dennis - BCom BLLB GDipAppFin(Finsia) CFTP.
05 December 2006
Director (Non-Executive), Chairman of Audit Committee, Member of Remuneration Committee, Member of Corporate
Governance & Nominating Committee
Stephen Dennis has been actively involved in the mining industry for 30 years. He has held senior management positions at
MIM Holdings Limited, Minara Resources Limited, and Brambles Australia Limited.
Mr Dennis is currently the Chief Executive Officer and Managing Director of CBH Resources Limited, the Australian subsidiary
of Toho Zinc Co., Ltd of Japan.
Other current directorships
Managing Director of CBH Resources Limited since November 2007
Non-executive Chairman of Cott Oil and Gas Limited since January 2013
Former directorships in last 3 years
None
Director
Appointed
Position
James Gill - Bsc, Msc, PhD.
11 August 2014 – Resigned 18 August 2014
Deputy Chairman (Non-Executive)
Dr Gill has been involved in the mining business for over 40 years, and his experience ranges from exploration, mine
development and operations, acquisitions to project financing. He founded Aur Resources Inc. in 1981, which grew from an
exploration company into a significant, profitable producing copper mining company under his leadership as its President and
Chief Executive Officer for 26 years until August 2007 when Aur was taken over by Teck Resources. He earned his B.Sc and
M.Sc degrees from McGill University and a Ph.D degree in economic geology from Carleton University.
Other current directorships
Thundermin Resources Inc (TSX:THR)
Former directorships in last 3 years
Orezone Gold (TSX: ORE) until August 2011
TriAusMin Ltd until August 2014
SENIOR EXECUTIVE OFFICERS
Exploration Manager
The Exploration Manager, David von Perger BSc (Hons) MAusIMM was appointed to this position in February 2006. Mr von Perger is a
geologist with some 20 years experience in mineral exploration having worked in several locations around Australia. Mr von Perger has
worked on various styles of mineral deposits including Archaean gold and nickel, and Proterozoic base-metals and iron-ore. His experience
includes four years as a business analyst for a major mining group involving analysis of mining operations, project development and
assessment of new opportunities. Since his appointment with Heron in February 2004, Mr von Perger has been responsible for the
identification and acquisition of several new nickel, gold, iron-ore and base-metal projects.
Financial Controller and Joint Company Secretary
The Financial Controller and Joint Company Secretary is Bryan Horan FCCA. Mr Horan was appointed to the position of Financial Controller
in February 2008 and Company Secretary in November 2010. Mr Horan joined the Company in March 2007 as a management accountant. Mr
Horan’s career includes 10 years working in various accounting positions in London in industries such as media, warehousing & distribution
and pharmaceutical. Since living in Perth Mr Horan has also held accounting positions with Australian Mines Ltd and Perilya Ltd..
Chief Financial Officer and Joint Company Secretary
The Chief Financial Officer and Joint Company Secretary is Simon Smith. Mr Smith has been a Chief Financial Officer (CFO) of both private
and public companies in Australia and the USA. He brings 20 years experience as a Chartered Accountant and holds a Bachelor’s Degree in
Business from the University of Technology Sydney. Mr Smith was the CFO and Company Secretary for TriAusMin prior to the merger with
Heron Resources.
General Manager Strategy & Business Development
Mr Kempson is a senior corporate finance executive who was most recently an equity partner and Director of Azure Capital Limited, a mining
focused leading independent Perth-based corporate advisor, where he worked for nine years advising boards and senior executives across a
range of industries including mining, oil & gas and related services on business development, corporate strategy, finance, and mergers and
acquisitions. Prior to his arrival in Australia in 2002 Mr Kempson spent five years with investment banks Commerzbank AG and Barclays
Capital in London and Germany, and four years working in technical roles for Logica (now part of CGI Group).
Heron Resources Limited - Annual Report 2014 - Page 31
4.0 DIRECTORS’ REPORT CONTINUED
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the year were:
(cid:129)
(cid:129)
Base and precious metal mineral exploration and development through sole funded and joint venture activities; and
The evaluation of various corporate opportunities in the resources industry, leading to the recent merger with TriAusMin.
OPERATING RESULTS
The loss of the consolidated entity for the 2014 financial year after income tax of nil (2013: nil) was $6,389,236 (2013: $10,483,306).
DIVIDENDS
No dividends were paid during the year and the Directors do not recommend the payment of a dividend.
OPERATIONS REVIEW
The detailed review of operations of the Consolidated Entity for the year is contained in Section 2.0 of this Annual Report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than noted below there were no significant changes in the state of affairs of the Consolidated Entity during the year.
Golden Cross Resources Limited Placement
On 16 December 2013 Heron announced that it had submitted a binding proposal to take a strategic equity interest in Golden Cross Resources
Limited (Golden Cross). Heron, subject to the satisfaction of certain limited conditions, offered to subscribe for 375,970,579 Golden Cross new
shares at $0.005 to raise $1,879,853 representing 19.9% of the then issued capital of Golden Cross. Controlling Golden Cross shareholder HQ
Mining subsequently submitted a competing proposal in response to the Heron Offer, and Golden Cross shareholders voted on the two
competing offers at their 27 February 2014 EGM. The Heron placement proposal was adopted, and Ian Buchhorn became a Non-executive
Director of Golden Cross.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Other than noted at the date of this Report there is no matter or circumstance which has arisen since 30 June 2014 that has significantly
affected or may significantly affect:
(cid:129)
(cid:129)
(cid:129)
The operations, in the financial years subsequent to 30 June 2014, of the Consolidated Entity;
The results of those operations; or
The state of affairs, in the financial years subsequent to 30 June 2014, of the Consolidated Entity.
A Scheme of Arrangement with TriAusMin became effective on 5 August 2014. Details of the Scheme of arrangement are contained in the
scheme booklet (ASX release date 6 June 2014) . Following the implementation of the merger, TriAusMin shareholders were issued with 1
Heron share for every 2.33 TriAusMin shares held. This resulted in the issue of 107,891,936 new Heron shares which became available to
trade on both the ASX and TSX effective on 20 August 2014.
OPTIONS
No Options were issued or exercised during the year.
Subsequent to 30 June 2014 the following Options were issued as part of the transfer of TriAusMin options to Heron options based on the
same ratio as the share issue (1 Heron option for every 2.33 TriAusMin options):
Number Issued
171,674
85,836
21,459
21,459
21,459
214,592
85,837
21,459
21,459
858,369
858,369
21,459
21,459
Expiry Date
23 October 17
27 June 16
23 June 15
13 June 17
13 March 18
18 November 15
21 November 17
4 February 17
23 October 17
19 March 16
20 November 18
22 February 18
31 January 19
Exercise Price
$0.14
$0.27
$0.58
$0.22
$0.15
$0.23
$0.23
$0.27
$0.14
$0.37
$0.09
$0.17
$0.09
Page 32 - Heron Resources Limited - Annual Report 2014
4.0 DIRECTORS’ REPORT CONTINUED
The following Options expired during the year:
Number Issued
4,500,000
4,818,776
2,600,000
4,750,000
Expiry Date
5 June 2014
9 June 2014
25 June 2014
23 June 2014
Exercise Price
$2.50
$0.30
$0.425
$0.22
As at the date of this report the Company had the following options on issue:
Date Options Granted
29 November 2006
19 November 2011
19 November 2011
5 October 2012
5 October 2012
5 October 2012
3 April 2013
3 April 2013
3 April 2013
11 August 2014
11 August 2014
11 August 2014
11 August 2014
11 August 2014
11 August 2014
11 August 2014
11 August 2014
11 August 2014
11 August 2014
11 August 2014
11 August 2014
Expiry Date
7 September 2016
23 June 15
23 June 16
16 January 2015
16 January 2016
16 January 2017
5 March 2016
5 March 2017
5 March 2018
23 October 17
27 June 16
23 June 15
13 June 17
13 March 18
18 November 15
21 November 17
4 February 17
19 March 16
20 November 18
22 February 18
31 January 19
Number Issued
5,000,000
2,500,000
2,500,000
333,333
333,333
333,334
1,000,000
1,000,000
1,000,000
193,133
85,836
21,459
21,459
21,459
214,592
85,837
21,459
858,369
858,369
21,459
21,459
Exercise Price
$0.6864
$0.27
$0.31
$0.22
$0.27
$0.31
$0.22
$0.27
$0.31
$0.14
$0.27
$0.58
$0.22
$0.15
$0.23
$0.23
$0.27
$0.37
$0.09
$0.17
$0.09
No option holder has any right under the options to participate in any other share issue of the Company or of any other entity.
LIKELY DEVELOPMENTS
Further information on the likely developments in the operations of the Consolidated Entity and the expected results of those operations have
not been included in this Report because the Directors believe it would be likely to result in unreasonable prejudice to the Consolidated Entity.
DIRECTORS AND KEY MANAGEMENT PERSONNEL SHAREHOLDINGS IN THE COMPANY
As at the date of this Report the interests of the Directors in the Shares of the Company were:
Ordinary Shares
Option over Ordinary Shares
Directors
C L Readhead
I J Buchhorn
S B Dennis
W Taylor
Direct
-
2,518,241
-
168,618
Key Management Personnel
D von Perger
B P Horan
S Smith
C Kempson
296,692
-
72,961
-
Indirect
1,546,958
44,072,718
550,000
627,295
-
-
60,000
2,383,491
Direct
-
2,000,000
-
1,716,738
2,000,000
1,000,000
-
-
Indirect
-
5,000,000
-
-
-
-
-
3,000,000
Heron Resources Limited - Annual Report 2014 - Page 33
4.0 DIRECTORS’ REPORT CONTINUED
DIRECTORS MEETINGS
During the year the Company held 14 meetings of Directors. The attendance of the Directors at meetings of the Board were:
Director
C L Readhead
I J Buchhorn
S B Dennis
REMUNERATION REPORT
Meetings held
while a director
14
14
14
Number of
meetings
attended
14
14
14
Audit
Committee
Meetings
2
2
2
The Board seeks independent advice on remuneration policies and practices, involving the remuneration packages and terms of employment
of Directors. Remuneration packages and levels are competitively set to attract the most qualified and experienced Directors and Senior
Executive Officers in the context of prevailing market conditions. There is no direct link between Director and Senior Executive remuneration
and corporate performance, other than the performance conditions attaching to some options.
Remuneration levels and other terms of employment for Mr Taylor, Mr Smith, Mr Buchhorn, Mr Horan, Mr Kempson and Mr von Perger are
formalised in service agreements/work contracts.
The agreement with Mr Taylor requires the provision of his services as Managing Director and CEO of the Company and contains the following
major provisions:
(cid:129)
(cid:129)
(cid:129)
No fixed term;
Current base salary of $367,000 exclusive of 15% superannuation; and
In the event that the Company terminates Mr Taylor’s employment other than for matters concerning fraud and dishonesty and the like
the Company will pay Mr Taylor the maximum amount lawfully payable in accordance with the provisions of the Corporations Act at the
time that the employment contract was entered into. The length of notice to be given by both parties on termination is six months.
The agreement with Mr Smith requires the provision of his services as CFO and Joint Company Secretary of the Company through Mr Smith’s
consultancy company CFO Source Pty Ltd and contains the following major provisions:
(cid:129)
(cid:129)
(cid:129)
No fixed term;
Payments are set at a daily rate inclusive of superannuation and ancillary employment costs; and
The Company may terminate the agreement with Mr Smith by giving 30 days notice.
The agreement with Mr Buchhorn requires the provision of his services as Executive Director of the Company and contains the following
major provisions:
(cid:129)
(cid:129)
(cid:129)
No fixed term;
Current base salary of $321,000 exclusive of superannuation; and
In the event that the Company terminates Mr Buchhorn’s employment other than for matters concerning fraud and dishonesty and the
like the Company will pay Mr Buchhorn the maximum amount lawfully payable in accordance with the provisions of the Corporations
Act at the time that the employment contract was entered into. The length of notice to be given by both parties on termination is six
months.
The agreement with Mr von Perger requires the provision of his services as Exploration Manager of the Company and contains the following
major provisions:
(cid:129)
(cid:129)
(cid:129)
No fixed term;
Current base salary of $261,000 exclusive of superannuation plus car; and
Termination can be made by either Mr Von Perger or the Company by giving not less than three months notice.
The agreement with Mr Horan requires the provision of his services as Financial Controller of the Company and contains the following major
provisions:
(cid:129)
(cid:129)
(cid:129)
No fixed term;
Current base salary of $202,000 exclusive of superannuation; and
Termination can be made by either Mr Horan or the Company by giving not less than three months notice.
The agreement with Mr Kempson requires the provision of his services as General Manager Strategy and Business Development of the
Company and contains the following major provisions:
(cid:129)
(cid:129)
(cid:129)
No fixed term;
Current base salary of $261,000 exclusive of superannuation; and
Termination can be made by either Mr Kempson or the Company by giving not less than three months notice.
Non-executive Directors, Craig Readhead and Stephen Dennis, received a fixed fee for their services as Directors. Non-executive Directors
fees not exceeding an aggregate of $500,000 per annum have been approved by the Company in a general meeting on the 5 June 2007.
Page 34 - Heron Resources Limited - Annual Report 2014
4.0 DIRECTORS’ REPORT CONTINUED
There is no direct link between non-executive Directors fees and corporate performance. There are no termination or retirement benefits for
non-executive Directors (other than statutory superannuation).
Other than outlined above, since the end of the previous financial year, no Director has received or become entitled to receive a benefit, other
than benefits disclosed in the financial statements.
Short-term
---------benefits--------
Cash salary Non-cash
Post-employment
--------benefits-------
Retirement
Super
Termination
payments
Directors
C L Readhead
I J Buchhorn
S B Dennis
1
W Taylor
Key Management Personnel
D von Perger
B Horan
C Kempson
S Smith
1
& fees
$
100,000
321,101
73,000
-
261,468
201,835
261,468
-
$
$
-
4,085
-
-
10,041
-
-
-
-
29,702
6,753
-
24,186
18,670
24,186
-
Total
1,218,872
14,126
103,497
$
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
Share-
based
payment
options
$
-
276,404
-
-
30,815
15,407
111,160
-
Total
$
100,000
631,292
79,753
-
326,510
235,912
396,814
-
433,786
1,770,281
1 Mr Taylor and Mr Smith became a Key Management Personnel effective from 5 August 2014
Fair values for the options at grant date, as included in the previous table, were determined using Black and Scholes and/or Binomial models
that took into account the exercise price of the Option, the term of the Option, the vesting and performance criteria, the non-tradable nature
of the Option, the Share price at grant date and the expected price volatility of the underlying Share and the risk-free interest rate for the term
of the Option.
Share based payments included above for Mr Buchhorn is 89% performance related. Share based payments for key management personnel
are not performance related. The share based payment remuneration not performance related is based on 1, 2 or 3 year vesting period.
The share based payment options included as remuneration of the Directors and Key Management Personnel, vest upon the following
conditions:
Conditions
The Company must achieve Full Ramp Up (production rate of equal to or greater than the
design capacity for at least one quarter) for the KNP laterite project within ten years.
Vesting two years after 23 June 2011
Vesting three years after 23 June 2011
Vesting one year after 5 March 2013
Vesting two years after 5 March 2013
Vesting three years after 5 March 2013
Number Issued
5,000,000
2,500,000
2,500,000
1,000,000
1,000,000
1,000,000
13,000,000
Details of options held by Directors and Key Management Personnel affecting their remuneration are as follows:
Name
Number
Grant
date
Vesting
date
Expiry
date
Exercise
price
Performance
achieved
Bryan Horan
Ian Buchhorn
29-Nov-06
19-Nov-11
19-Nov-11
19-Nov-11
19-Nov-11
Dave Von Perger 19-Nov-11
19-Nov-11
3-Apr-13
3-Apr-13
3-Apr-13
Charlie Kempson
n/a
23-Jun-13
23-Jun-14
23-Jun-13
23-Jun-14
23-Jun-13
23-Jun-14
5-Mar-14
5-Mar-15
5-Mar-16
7-Sep-16
23-Jun-15
23-Jun-16
23-Jun-15
23-Jun-16
23-Jun-15
23-Jun-16
5-Mar-16
5-Mar-17
5-Mar-18
$0.6864
$0.27
$0.31
$0.27
$0.31
$0.27
$0.31
$0.22
$0.27
$0.31
5,000,000
1,000,000
1,000,000
500,000
500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
No
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Option
value at
grant date
$0.4791
$0.075
$0.082
$0.075
$0.082
$0.075
$0.082
$0.066
$0.07
$0.076
%
vested
in year
0%
0%
100%
0%
100%
0%
100%
100%
0%
0%
Heron Resources Limited - Annual Report 2014 - Page 35
4.0 DIRECTORS’ REPORT CONTINUED
INSURANCE OF OFFICERS
During the financial year the Company has paid an insurance premium in respect of a Directors’ and Officers’ Liability Insurance Contract. The
insurance premium relates to liabilities that may arise from an officers position within the Company, with the exception of conduct involving
a willful breach of duty or improper use of information or position to gain personal advantage.
The officers covered by the insurance policies are the Directors and Officers of the Company.
The contract of insurance prohibits the disclosure of the nature of the liabilities and the amount of premium.
CORPORATE GOVERNANCE
The Company has undertaken a thorough review of its Corporate Governance practices and policies in accordance with both the TSX and ASX
Corporate Governances Best Practices Recommendations. The Consolidated Entity’s Corporate Governance Statement is contained in Section
3.0, the Corporate Profile section of the Annual Report.
ENVIRONMENTAL REGULATION
The Consolidated Entity is subject to and compliant with all aspects of environmental regulation in respect of its exploration and development
activities. The Directors are not aware of any environmental regulation which is not being complied with.
ABORIGINAL CULTURE AND HERITAGE
The Consolidated Entity is subject to and compliant with all aspects of Aboriginal Heritage regulation in respect of its exploration and
development activities. The Directors are not aware of any regulation which is not being complied with. The Directors are committed to
cultural respect in undertaking business activities of the Company.
NON-AUDIT SERVICES
The Consolidated Entity has not employed the auditor on any assignments additional to their statutory audit duties.
AUDITOR
The Audit Committee of the Company recommended the approval of Ms Lucy Gardner of Butler Settineri (Audit) Pty Ltd as auditor of the
Company for two successive financial years in addition to the five successive years mentioned in s324DA(1) of the Corporations Act.
The Audit Committee is satisfied that the approval:
i)
ii)
is consistent with maintaining the quality of the audit provided to the company
would not give rise to a conflict of interest situation (as defined in s324CD)
ROUNDING OFF
The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the
financial report and directors' report have been rounded off to the nearest thousand dollars, unless otherwise stated.
Signed in accordance with a resolution of Directors
C L READHEAD
Chairman
Perth, 26 September 2014
Page 36 - Heron Resources Limited - Annual Report 2014
Heron Resources Limited - Annual Report 2014 - Page 37
5.0 Financial Statements
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2014
REVENUES FROM CONTINUING ACTIVITIES
Accountancy fees
Audit
Consultants
Depreciation expense
Directors fees
Wages, salaries & employee benefits
Insurance
Legal
Equity settled share based payments
Other expenses from ordinary activities
Exploration expenditure expensed as incurred
Exploration expenditure written off
Exploration & evaluation impairment
Investment impairment
PROFIT (LOSS) FROM ORDINARY ACTIVITIES BEFORE INCOME TAX EXPENSE
INCOME TAX EXPENSE
PROFIT (LOSS) FROM ORDINARY ACTIVITIES AFTER INCOME TAX EXPENSE
NET PROFIT (LOSS) ATTRIBUTABLE TO MEMBERS OF THE PARENT ENTITY
OTHER COMPREHENSIVE INCOME
Changes in market value of financial assets
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Basic earnings per Share
Diluted earnings per Share
Notes
2
3(a)
14(b)
3(b)
9
9
9
6(a) & (b)
4
14(c)
21
21
Consolidated Entity
2013
$'000
2014
$'000
1,389
1,869
(26)
(38)
(155)
(54)
(173)
(309)
(57)
(183)
(449)
(598)
(3,497)
(405)
-
(1,834)
(6,389)
-
(6,389)
(6,389)
-
(6,389)
$
(0.02526)
(0.02526)
(4)
(43)
(339)
(110)
(202)
(571)
(61)
(457)
(1,322)
(726)
(2,971)
(108)
(1,600)
(3,450)
(10,095)
-
(10,095)
(10,095)
(388)
(10,483)
$
(0.03990)
(0.03990)
The financial statements of the Company are International Financial Reporting Standards (IFRS) compliant.
The accompanying notes form part of these financial statements
Page 38 - Heron Resources Limited - Annual Report 2014
5.0 FINANCIAL STATEMENTS CONTINUED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Investments
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Investments
Property, plant and equipment
Exploration and evaluation costs carried forward
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions - employee entitlements
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Revaluation reserve
Option reserve
Accumulated losses
TOTAL EQUITY
Notes
15(c)
5
6(a)
7
6(b)
8
9
10
11
12
14(c)
14(b)
14(a)
Consolidated Entity
2013
$'000
2014
$'000
32,915
337
1,359
34,611
35
3,321
58
4,578
7,992
42,603
281
560
841
841
39,597
371
61
40,029
35
3,275
97
5,070
8,477
48,506
347
457
804
804
41,762
47,702
116,035
-
2,441
(76,714)
41,762
116,035
-
5,591
(73,924)
47,702
The accompanying notes form part of these financial statements
Heron Resources Limited - Annual Report 2014 - Page 39
5.0 FINANCIAL STATEMENTS CONTINUED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Notes
As at 30 June 2013
Total comprehensive income for the year
Issue of share capital
Option reserve transfer on exercise
Option reserve write back
Cost of share based payments
As at 30 June 2014
12
12
14(b)
14(b)
Accumulated
Losses
$’000
Revaluation
Reserve
$’000
Issued
Capital
$’000
116,035
-
-
-
-
-
(73,924)
(6,389)
-
-
3,599
-
116,035
(76,714)
As at 30 June 2012
116,035
Total comprehensive income for the year
Issue of share capital
Option reserve transfer on exercise
Option reserve write back
Cost of share based payments
As at 30 June 2013
14(b)
14(b)
-
-
-
-
-
116,035
(67,799)
(10,095)
-
-
3,970
-
(73,924)
Option
Reserve
$’000
5,591
-
-
-
(3,599)
449
2,441
8,239
-
-
-
(3,970)
1,322
5,591
Total
$’000
47,702
(6,389)
-
-
-
449
41,762
56,863
(10,483)
-
-
-
1,322
47,702
-
-
-
-
-
-
-
388
(388)
-
-
-
-
-
The accompanying notes form part of these financial statements
Page 40 - Heron Resources Limited - Annual Report 2014
5.0 FINANCIAL STATEMENTS CONTINUED
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received
Payments to suppliers
NET CASH USED IN OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Exploration expenditure
Purchase of investments
Sale of investments
Acquisition of plant and equipment
Proceeds from sale of plant and equipment
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Loans to controlled entities
Proceeds from issue of shares
NET CASH PROVIDED BY FINANCING ACTIVITIES
NET INCREASE / (DECREASE) IN CASH HELD
Cash at the beginning of the reporting period
CASH AT THE END OF THE REPORTING PERIOD
Notes
15(a)
6
6
15(c)
Consolidated Entity
2013
$'000
2014
$'000
1,419
(1,516)
(97)
(3,402)
(3,180)
3
(15)
9
1,796
(2,342)
(546)
(3,168)
-
146
(10)
4
(6,585)
(3,028)
-
-
-
(6,682)
39,597
32,915
-
-
-
(3,574)
43,171
39,597
The accompanying notes form part of these financial statements
Heron Resources Limited - Annual Report 2014 - Page 41
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 1. STATEMENT OF ACCOUNTING POLICIES CONTINUED
NOTES TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2014
NOTE 1.
STATEMENT OF ACCOUNTING POLICIES
The Company is a public company limited by shares. The Company was incorporated in Western Australia.
The Company is a for profit entity for the purpose of preparing the financial statements.
The following is a summary of the material accounting policies adopted by Heron Resources Limited and its controlled entities (the
Company) in the preparation of the financial statements.
a)
Basis of preparation
The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards
(AASB's) (including Australian interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act
2001.
The financial report complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB).
In the application of IFRS, management is required to make judgments, estimates and assumptions about carrying values of assets and
liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical
experience and various factors that are believed to be reasonable under the circumstances, the results of which form the basis of
making judgment. Actual results may differ from these estimates.
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale
financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit and loss, certain classes of
property, plant and equipment and investment property.
The consolidated financial statements are presented in Australian Dollars which is the consolidated entity's functional and presentation
currency.
The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts
in the financial report and directors' report have been rounded off to the nearest thousand dollars, unless otherwise stated.
b)
Basis of consolidation
Subsidiaries are entities controlled by the Company. Control exists when the company is exposed to, or has rights to, variable returns
from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial
statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the
date that control ceases.
Investments in subsidiaries are carried at their cost of acquisition in the Company's financial statements.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting
policies.
All inter-company balances and transactions between entities in the Company, including any unrealised profits or losses, have been
eliminated on consolidation.
c)
Income tax
The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the notional income
tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between
the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are
recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The
relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax
asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability.
No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a
business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and
when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity
has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability at the
same time.
The resulting deferred tax assets of the Company are currently not recognised and included as an asset because recovery is considered
not probable in the next five years.
Heron Resources Limited and its wholly owned Australian controlled entities have implemented the tax consolidated legislation as of
1 July 2003.
Page 42 - Heron Resources Limited - Annual Report 2014
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 1. STATEMENT OF ACCOUNTING POLICIES CONTINUED
d)
Segment reporting
A segment is a distinguishable component of the Company that is engaged in the minerals industry in Australia. The Company's
activities are divided into three main categories:
KNP - Tenements related to the Kalgoorlie Nickel Project.
Yerilla - Tenements related to Jump up Dam, Boyce Creek and Aubils.
Exploration - Tenements not KNP or Yerilla related, and are predominantly located in the Lachlan Fold Belt of NSW.
e)
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns,
duties and taxes paid. The main revenue is interest received, which is recognised on an accrual basis.
f)
Property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses where
applicable.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment.
Depreciation and amortisation on assets is calculated using the straight-line method to allocate their cost or revalued amounts, net of
their residual values, over their estimated useful lives, are as follows:
Motor Vehicles
Fixtures and Fittings
Plant and Equipment
Land and Buildings
3-5 years
5-15 years
5-15 years
15-25 years
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All
other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
g)
Exploration, evaluation, development and restoration costs
Exploration, evaluation and development expenditure incurred is expensed immediately unless it relates to a specific project in which
case it is carried forward to the extent that it is expected to be recouped through the successful development of the area, or by its sale.
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.
Accumulated costs are not carried forward in respect of any area of interest unless rights to tenure of that area are current.
Restoration costs that are expected to be incurred are provided for as part of the cost of the exploration, evaluation and development
phases that give rise to the need for restoration.
h)
Investments
Investments held by the Company are classified as being available-for-sale financial assets and are stated at fair value, being the
market value of the shares held at balance date. Where a reduction in value is significant or prolonged it is recognised as impairment
in the consolidated statement of comprehensive income, with any other resultant gain or loss recognised in equity and included in other
comprehensive income. Where these investments are derecognised, the cumulative gain and loss previously recognised directly in
equity is recognised in profit and loss. Where these investments are interest bearing, interest calculated using the effective interest
method is recognised in the income statement.
Financial instruments classified as held for trading or available-for-sale investments are recognised/derecognised by the Company on
the date it commits to purchase/sell the investment. Securities held to maturity are recognised/derecognised on the day they are
transferred to/by the Company.
i)
j)
Investments in associated entities
Interests in associated entities are accounted for under the equity accounting method.
Trade and other receivables
Trade and other receivables are stated at their cost and are due for settlement no more than 30 days from the date of invoicing.
k)
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with the banks, other short term liquid investments with original
maturities of three months or less, and bank overdrafts. Bank overdrafts, if any, are shown within short-term borrowings on the balance
sheet.
Heron Resources Limited - Annual Report 2014 - Page 43
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 1. STATEMENT OF ACCOUNTING POLICIES CONTINUED
l)
Impairment
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject
to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less cost to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).
m)
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transactions costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in
the income statement over the period of the borrowings on an effective interest basis.
n)
Employee benefits
(i)
Wages and salaries, annual leave
Liabilities for wages and salaries and annual leave are recognised as employee benefits in respect of employee's services up to the
reporting date and are measured at the amounts to be paid when the liabilities are settled.
(ii)
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected
future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected
future wage and salary levels, experience of employee departures and periods of service and final average salary.
o)
Share-based payment transactions
The Company provides benefits to the Directors, employees and consultants of the Company in the form of share based payment
transactions, whereby services are rendered in exchange for shares or rights over shares ("Equity-settled transactions").
There is currently one plan in place to provide these benefits being an Employee Share Option Plan ("ESOP") which provides benefits to
Directors, employees and consultants.
The cost of these equity-settled transactions is measured by reference to fair value at the date at which they are granted. The fair value
is determined by using either the Black-Scholes or Binomial model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of
the shares of Heron Resources Limited ("market conditions").
The cost of equity-settled securities is recognised, together with a corresponding increase in equity, over the period in which the
performance conditions are fulfilled, ending on the date on which the relevant individual becomes fully entitled to the award ("vesting
date").
Where the Company acquires some form of interest in an exploration tenement or an exploration area of interest and the consideration
comprises share-based payment transactions, the fair value of the equity instruments granted is measured at grant date. The cost of
equity securities is recognised within capitalised mineral exploration and evaluation expenditure, together with a corresponding
increase in equity.
p)
Provisions
Provisions for legal claims and service warranties are recognised when: the Group has a present legal or constructive obligation as a
result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been
reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one
item included in the same class of obligations may be small.
q)
Trade and other payables
Trade and other payables are stated at cost. The amounts are unsecured and are usually paid on 30 days.
r)
Dividends
No dividends have been paid or proposed during or since the end of the year.
s)
Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST
incurred is not recoverable from the taxation authority. 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 with the amount of GST included. 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.
Page 44 - Heron Resources Limited - Annual Report 2014
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 1. STATEMENT OF ACCOUNTING POLICIES CONTINUED
t)
Contributed equity
Incremental costs directly attributed to the issue of new shares or options are shown in the equity as a deduction, net of tax, from the
proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included
in the cost of the acquisition as part of the purchase consideration.
(i)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares on issue during the year.
(ii)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
u)
Critical accounting estimates and assumptions
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of
future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom
equal the related actual results.
v)
Significant accounting judgments, estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The
key estimates and assumptions that have a significant risk of causing material adjustment to the carrying amounts of certain assets and
liabilities within the next annual reporting period are:
Capitalisation of exploration and evaluation expenditure
Under AASB 6 Exploration for and Evaluation of Mineral Resources the Group has the option to either expense exploration and
evaluation expenditure as incurred or to capitalise such expenditure provided that certain conditions are satisfied. The Group's policy
is closer to the former as outlined in note 1 (g).
Impairment of property, plant and equipment
Property, plant and equipment is reviewed for impairment if there is any indication that the carrying amount may not be recoverable.
Where a review for impairment is conducted, the recoverable amount is assessed by reference to the higher of ”value in use” (being
net present value of expected future cash flows of the relevant cash generating unit) and 'fair value less costs to sell'.
Share based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at
the date at which they are granted. The fair value is determined by using either the Black-Scholes or Binomial methodology.
w) New accounting standards and interpretations
The Australian Accounting Standards Board has published various pronouncements that are not mandatory for the 30 June 2014
reporting period. The Company has reviewed all these pronouncements and assessed their applicability and the likely impact on the
Company’s accounting policies. While several pronouncements do not apply to the Company’s current activities the expected impact of
those relevant to the Company are set out below:
AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 (effective from
1 January 2015)
AASB 9 Financial Instruments addresses the classification and measurement of financial assets and is not likely to affect the Company’s
accounting for its financial assets.
AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, Materialty and Financial Instruments
(effective from 1 January 2014)
This standard withdraws the substantive content in AASB 1031 and provides signpost references to materiality in other Australian
Accounting Standards and is not likely to affect the Company.
AASB 2014-1 Amendments to Australian Accounting Standards (effective from 1 July 2014)
AASB 2014-1 makes amendments to particular Australian Accounting Standards to delete their references to AASB 1031 Materiality
as each standard is amended for another purpose and is not likely to affect the Company.
IFRS 9 Financial Instruments (effective from 1 January 2018)
IFRS 9 has revisions to the classification and measurement of financial assets, reducing the number of categories and simplifying the
measurement choices and is not likely to affect the Company.
IFRS 15 Revenue from contracts with customers (effective from 1 January 2017)
IFRS 15 makes changes to revenue recognition requirements and is not likely to affect the Company.
IAS 27 Equity method in separate financial statements (effective from 1 January 2016)
IAS 27 will allow entities to use the equity method to account for its interest in subsidiaries, joint venture and associates in separate
financial statements and is not likely to affect the Company.
Heron Resources Limited - Annual Report 2014 - Page 45
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 1. STATEMENT OF ACCOUNTING POLICIES CONTINUED
x)
Capital risk management
The Group's and the parent entity's objectives when managing capital are to safeguard their ability to continue as a going concern, so
that they can continue to fund exploration activities and develop or secure access to a cash producing asset.
Consistent with others in the industry, the Group and the parent entity monitor capital on the basis of working capital requirements.
During 2014 the Group's strategy, which was unchanged from 2013, was to maintain a current account balance sufficient to meet the
Company's day to day expenses with the balance held in term deposits.
Consolidated Entity
2013
$'000
2014
$'000
NOTE 2.
REVENUE FROM ORDINARY ACTIVITIES
Revenues from continuing activities
Sale of tenements
Sale of fixed assets
Profit / (loss) on sale of investments
Interest received - other persons/corporations
Sundry income
Total revenues from continuing activities
-
8
-
1,331
50
1,389
NOTE 3.
PROFIT / (LOSS) FROM ORDINARY ACTIVITIES
The profit / (loss) before income tax expense has been determined after charging a number of items including the following:
a)
Depreciation expense
Plant & equipment
Office equipment & furniture
Motor vehicles
b)
Other expenses includes the following:
Payroll tax
Rental expenses
Stock exchange
Travel & accommodation
Office expenses and supplies
Computer support services
Report expenses and printing
Conferences and seminars
Donations
Miscellaneous expenses
Total other expenses
NOTE 4.
INCOME TAX
a)
Temporary differences carried forward
Current Tax
Deferred tax
(17)
(20)
(17)
(54)
(7)
(264)
(46)
(52)
(79)
(48)
(25)
(10)
(20)
(47)
(598)
-
-
-
34
3
9
1,818
5
1,869
(61)
(25)
(24)
(110)
(29)
(243)
(50)
(89)
(102)
(72)
(52)
(8)
(21)
(60)
(726)
-
-
-
The Heron Resources Limited group of companies tax was consolidated on 1 July 2003 - there are no tax sharing and/or tax funding
agreements in place.
The parent entity made a tax loss and on consolidation the group made a tax loss. The parent and the subsidiaries have substantial tax
losses carried forward.
Page 46 - Heron Resources Limited - Annual Report 2014
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 4. INCOME TAX CONTINUED
The Directors are of the view that there is insufficient probability that the parent entity and its subsidiaries will derive sufficient income in
the foreseeable future to justify recognising the tax losses and temporary differences as deferred tax assets and deferred tax liabilities.
Heron Resources Limited is the head entity for the group.
Consolidated Entity
2013
$'000
2014
$'000
b)
Numerical reconciliation of income tax expense to prima facie tax payable is as follows:
Profit (loss) from operations before income tax expense
Tax at Australian tax rates of 30% (2013 also 30%)
Tax effect of non-temporary differences
Tax effect of equity raising costs debited to equity
Over or under provision from previous years
Tax effect of tax losses and temporary differences not recognised
Income tax expense
(6,389)
(1,917)
203
-
-
1,714
-
There is no amount of tax benefit recognised in equity as the tax effect of temporary differences has not been booked
c)
d)
Tax Losses - Revenue
Unused tax losses for which no tax loss has been booked as a
DTA adjusted for non temporary differences
Potential tax benefit at 30%
e)
Unrecognised temporary differences
Non deductible amounts as temporary differences
Accelerated deductions for tax compared to book
Total at 100%
Potential effect on future tax expense for temporary differences at 30%
f)
There are no franking credits available for future years
NOTE 5.
TRADE AND OTHER RECEIVABLES – CURRENT
Prepayment - rent
Prepayment - software
Prepayment - subscriptions
Prepayment - insurance
Accrued interest
Goods & services tax paid
Sundry Debtors
(10,095)
(3,029)
557
-
-
2,472
-
73,801
22,140
(5,924)
282
(5,642)
(1,693)
23
7
7
-
245
21
68
371
77,535
23,261
(7,130)
(493)
(7,623)
(2,287)
23
4
-
4
157
24
125
337
NOTE 6(a). INVESTMENTS IN ENTITIES - CURRENT
Southern Cross Goldfields Limited (SXG) is an Australian listed public exploration with 887,450,815 fully paid ordinary shares on issue.
Heron holds 5,875,528 fully paid shares at 30 June 2014, which have been valued at the closing price on that day.
Radar Iron Limited (RAD) is an Australian listed public exploration company with 98,540,070 fully paid ordinary shares on issue. Heron
held 75,000 fully paid shares which were sold in January 2014.
TriAusMin Limited was an Australian listed public exploration company prior to merging with Heron Resources Limited. Heron purchased
1.3 million convertible notes which are carried at face value and will eliminate on consolidation post merge.
Heron Resources Limited - Annual Report 2014 - Page 47
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 6 (a). INVESTMENTS IN ENTITIES - CURRENT CONTINUED
Consolidated Entity
2013
$'000
2014
$'000
1,092
(1,033)
59
14
(12)
(2)
-
1,300
1,300
2,392
(1,033)
-
1,359
1,092
(1,033)
59
14
(12)
-
2
-
-
1,106
(875)
(170)
61
Investments in other entities at fair value
Southern Cross Goldfields Limited:
Cost
Impairment
Carrying value
Radar Iron Limited:
Cost
Impairment
Disposal
Carrying value
TriAusMin Limited:
Cost
Carrying value
Summary
Total cost of investments
Impairment brought forward
Impairment for year ended June 2014
Total carrying value
NOTE 6(b). INVESTMENTS IN ENTITIES - NON CURRENT
A1 Consolidated Gold Limited (AYC) is an Australian listed public exploration company with 176,683,522 fully paid ordinary shares on
issue. Heron holds 26,200,000 fully paid shares at 30 June 2014, which have been valued at the closing price on that day.
Golden Cross Resources Limited (GCR) is an Australian listed public exploration company with 1,889,299,391 fully paid ordinary shares
on issue. Heron holds 375,970,579 fully paid shares at 30 June 2014, which have been valued at the closing price on that day. Golden
Cross completed a 1 for 20 share consolidation subsequent to 30 June 2014, so at report date Heron holds 18,798,529 shares.
Investments in other entities at fair value
Golden Cross Resources:
Cost
Impairment
Revaluation
Carrying value
A1 Consolidated Gold:
Cost
Impairment
Revaluation
Carrying value
Summary:
Total cost of investments
Impairment brought forward
Impairment for year ended June 2014
Total carrying value
Page 48 - Heron Resources Limited - Annual Report 2014
1,880
-
-
1,880
6,555
(5,114)
-
1,441
8,435
(3,280)
(1,834)
3,321
-
-
-
-
6,555
(3,280)
-
3,275
6,555
(3,280)
-
3,275
5.0 FINANCIAL STATEMENTS CONTINUED
Consolidated Entity
2013
$'000
2014
$'000
NOTE 7.
TRADE AND OTHER RECEIVABLES - NON CURRENT
Employee share option plan – non-recourse loan
NOTE 8.
PROPERTY, PLANT AND EQUIPMENT
Plant and equipment at cost
Accumulated depreciation
Office equipment & furniture at cost
Accumulated depreciation
Motor vehicles at cost
Accumulated depreciation
Total property, plant and equipment
Reconciliation
Plant and equipment:
Carrying amount at 1 July
Additions
Disposals
Depreciation Expense
Carrying value at 30 June
Office equipment and furniture:
Carrying amount at 1 July
Additions
Disposals
Depreciation Expense
Carrying value at 30 June
Motor vehicles:
Carrying amount at 1 July
Additions
Disposals
Depreciation Expense
Carrying value at 30 June
NOTE 9.
EXPLORATION, EVALUATION AND DEVELOPMENT COSTS CARRIED FORWARD
Balance at beginning of year
Acquisition costs
Exploration and evaluation costs incurred during the year (net of research & development rebate)
Exploration and evaluation costs expensed as incurred
Exploration and evaluation impairment
Exploration and evaluation costs written off
Balance at end of year
35
35
259
(235)
24
530
(496)
34
180
(180)
-
58
31
12
(2)
(17)
24
49
5
-
(20)
34
17
-
-
(17)
-
5,070
53
3,357
(3,497)
-
(405)
4,578
35
35
620
(589)
31
579
(530)
49
180
(163)
17
97
92
1
(2)
(60)
31
65
10
-
(26)
49
42
-
(1)
(24)
17
6,716
62
2,971
(2,971)
(1,600)
(108)
5,070
The ultimate recoupment of costs carried forward is dependent upon the successful development and/or commercial exploitation or
alternatively sale of respective areas of interest.
Heron Resources Limited - Annual Report 2014 - Page 49
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 10.
TRADE AND OTHER PAYABLES – CURRENT
Trade creditors and accruals - Exploration activities
Trade creditors and accruals - Other
Trade creditors are non-interest bearing and are normally settled on 30 day terms.
NOTE 11.
PROVISIONS – CURRENT
Employee entitlements
NOTE 12.
CONTRIBUTED EQUITY
Consolidated Entity
2013
$'000
2014
$'000
166
115
281
560
560
229
118
347
457
457
Ordinary shares are fully paid and have no par value. They entitle the holder to participate in dividends and the proceeds on winding up of
the Company in proportion to the number of and amounts paid on the shares. On a show of hands every holder of ordinary shares present at
a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
Shares
Issued and paid up capital 252,985,787 (2013: 252,985,787)
Ordinary shares fully paid
Prior years in specieshare distributions
Option reserve transfer on exercise
Less: prior years capital raising expenses
Movements in issued and paid up capital of the parent entity during the year are as follows:
Contributed equity balance at beginning of year
Shares issued during the year
Transfer from option reserve
Contributed equity balance at end of year
Option reconciliation to 30 June 2014
Opening balance at 1 July 2013
Options issued
Options expired/lapsed
Closing balance at 30 June 2014
Consolidated Entity
2013
$'000
2014
$'000
121,782
(3,845)
514
(2,416)
116,035
2014
No. of Shares
252,985,787
-
-
121,782
(3,845)
514
(2,416)
116,035
2014
$’000
116,035
-
-
252,985,787
116,035
Number of options
31,168,776
-
(17,168,776)
14,000,000
The weighted average remaining contractual life of options on issue at 30 June 2014 is 729 days.
Page 50 - Heron Resources Limited - Annual Report 2014
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 12. CONTRIBUTED EQUITY CONTINUED
Options
The following options expired/lapsed during the year:
Number
4,500,000
4,818,776
2,600,000
4,750,000
250,000
250,000
Expiry date
5 June 2014
9 June 2014
25 June 2014
23 June 2014
23 June 2015
23 June 2016
As at 30 June 2014 the Company had the following options on issue:
Number
5,000,000
2,500,000
2,500,000
333,333
333,333
333,334
1,000,000
1,000,000
1,000,000
14,000,000
Expiry date
7 September 2016
23 June 2015
23 June 2016
16 January 2015
16 January 2016
16 January 2017
5 March 2016
5 March 2017
5 March 2018
Exercise price
$2.50
$0.30
$0.4250
$0.22
$0.27
$0.31
Exercise price
$0.6864
$0.27
$0.31
$0.22
$0.27
$0.31
$0.22
$0.27
$0.31
Details of options as at the beginning and end of the reporting period and movements during the year are set out below:
Grant date
Expiry date
price
Exercise Number of
Options at
the beginning
of the year
Options
expired /
lapsed this
year
Options
Issued
this
year
Number
of Options
at the end
of the year
Options
Exercisable
at the end
of the year
2014 Consolidated and parent entity
29 November 2006
5 June 2007
25 June 2009
9 June 2009
19 November 2011
19 November 2011
19 November 2011
5 October 2012
5 October 2012
5 October 2012
3 April 2013
3 April 2013
3 April 2013
7 September 2016
5 June 2014
25 June 2014
9 June 2014
23 June 2014
23 June 2015
23 June 2016
16 January 2015
16 January 2016
16 January 2017
5 March 2016
5 March 2017
5 March 2018
Weighted average exercise price
$0.6864
$2.50
$0.425
$0.30
$0.22
$0.27
$0.31
$0.22
$0.27
$0.31
$0.22
$0.27
$0.31
5,000,000
4,500,000
2,600,000
4,818,776
4,750,000
2,750,000
2,750,000
333,333
333,333
333,334
1,000,000
1,000,000
1,000,000
31,168,776
0.67
-
(4,500,000)
(2,600,000)
(4,818,776)
(4,750,000)
(250,000)
(250,000)
-
-
-
-
-
-
(17,168,776)
0.87
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
-
-
-
-
2,500,000
2,500,000
333,333
333,333
333,334
1,000,000
1,000,000
1,000,000
14,000,000
0.42
-
-
-
-
-
2,500,000
2,500,000
333,333
333,333
-
1,000,000
-
-
6,666,666
0.28
Heron Resources Limited - Annual Report 2014 - Page 51
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 13.
SEGMENT REPORTING
Segmental information for consolidated statement of comprehensive income
Year ended June 2014
Corporate
Sale of fixed assets
Interest received - other persons/corporations
Option fee
Total revenues
Depreciation
Exploration expenditure expensed as incurred
Exploration expenditure written off
Other expenses
Profit / (loss)
-
1,331
-
1,331
(20)
-
-
(3,822)
(2,511)
Year ended June 2013
Corporate
Sale of tenements
Sale of fixed assets
Sale of investments
Interest received - other persons/corporations
Sale of data -
Sundry income
Total revenues
Depreciation
Exploration expenditure expensed as incurred
Exploration expenditure written off
Impairment of exploration expenditure
Other expenses
Profit / (loss)
-
-
9
1,818
-
5
1,832
(26)
-
-
-
(7,175)
(5,369)
KNP
Project
-
-
-
-
-
(2,011)
(405)
-
(2,416)
KNP
Project
-
-
-
-
-
-
-
-
(964)
(105)
(1,600)
-
(2,669)
Yerilla
Project
6
-
-
6
(4)
(118)
-
-
(116)
Yerilla
Project
-
3
-
-
-
-
3
(38)
(227)
-
-
-
(262)
Segmental information for consolidated balance sheet
Balance at June 2014
Corporate
Total current assets
Property, plant and equipment
Exploration and evaluation costs carried forward
Other non-current assets
Total non-current assets
Total assets
Total liabilities
34,611
34
-
3,356
3,390
38,001
195
KNP
Project
-
Yerilla
Project
-
-
4,578
-
4,578
4,578
-
2
-
-
2
2
-
Exploration
Total
2
-
50
52
(30)
(1,368)
-
-
(1,346)
8
1,331
50
1,389
(54)
(3,497)
(405)
(3,822)
(6,389)
Exploration
Total
34
-
-
-
-
-
34
(46)
(1,780)
(3)
-
-
(1,795)
34
3
9
1,818
5
1,869
(110)
(2,971)
(108)
(1,600)
(7,175)
(10,095)
Exploration
Total
-
22
-
-
22
22
34,611
58
4,578
3,356
7,992
42,603
646
841
Page 52 - Heron Resources Limited - Annual Report 2014
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 13. SEGMENT REPORTING CONTINUED
Movement for the year to June 2014
Corporate
Total current assets
Property, plant and equipment
Exploration and evaluation costs carried forward
Other non-current assets
Total non-current assets
Total assets
Total liabilities
(5,418)
(15)
-
46
31
(5,387)
23
Balance at June 2013
Corporate
Total current assets
Property, plant and equipment
Exploration and evaluation costs carried forward
Other non-current assets
Total non-current assets
Total assets
Total liabilities
40,029
49
-
3,310
3,359
43,388
172
Movement for the year to June 2013
Corporate
Total current assets
Property, plant and equipment
Exploration and evaluation costs carried forward
Other non-current assets
Total non-current assets
(3,988)
(17)
-
(3,668)
(3,685)
KNP
Project
-
Yerilla
Project
-
-
(492)
-
(492)
(492)
-
(5)
-
-
(5)
(5)
-
KNP
Project
-
Yerilla
Project
-
-
5,070
-
5,070
5,070
-
KNP
Project
-
-
(1,646)
-
(1,646)
7
-
-
7
7
-
Yerilla
Project
-
(39)
-
-
(39)
(39)
-
Exploration
Total
-
(19)
-
-
(19)
(19)
14
(5,418)
(39)
(492)
46
(485)
(5,903)
37
Exploration
Total
-
41
-
-
41
41
40,029
97
5,070
3,310
8,477
48,506
632
804
Exploration
Total
-
(46)
-
-
(46)
(46)
(96)
(3,988)
(102)
(1,646)
(3,668)
(5,416)
(9,404)
(243)
Total assets
Total liabilities
(7,673)
(1,646)
(147)
-
Heron Resources Limited - Annual Report 2014 - Page 53
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 14. ACCUMULATED LOSSES AND RESERVES
a)
Accumulated Losses
Balance at the beginning of the year
Write back of expense for expired/lapsed options
Net profit/(loss)
Balance at end of the year
The Company has retained a loss as at 30 June 2014.
b)
Option Reserve
Balance at the beginning of the year
Cost of share based payments
Write back lapsed options expense
Balance at end of the year
Consolidated Entity
2013
$'000
2014
$'000
(73,924)
3,599
(6,389)
(76,714)
5,591
449
(3,599)
2,441
(67,799)
3,970
(10,095)
(73,924)
8,239
1,322
(3,970)
5,591
The option reserve is used to recognise the fair value of options issued and expensed over the vesting period and credited to this reserve.
The shares will reverse against the share capital when the underlying options are exercised.
c)
Revaluation Reserve
Balance at the beginning of the year
A1 Consolidated Gold shares
Movement for the year
Balance at end of the year
-
-
-
-
388
(388)
(388)
-
The revaluation reserve is used to recognise the fair value of financial assets classified as available-for-sale assets.
Amounts are recognised in the income statements when the associated assets are sold.
NOTE 15.
STATEMENT OF CASH FLOWS
a)
Reconciliation of operating loss after income tax to the net cash flows from operations:
Operating loss after income tax
Add/(less)
Exploration and evaluation costs written off
Depreciation
Share based payments
(Profit)/loss on sale of shares
(Profit)/loss on sale of tenements
(Profit)/loss on sale of fixed assets
(Profit)/loss on option fee
Investment Impairment
Exploration & Evaluation Impairment
Increase/(decrease) in prepayments and debtors
(Increase)/decrease in accrued interest and GST
Increase/(decrease) in creditors, accruals and provisions
Page 54 - Heron Resources Limited - Annual Report 2014
(6,389)
(10,095)
3,902
54
447
-
-
(8)
(50)
1,834
-
6
85
22
(97)
3,079
110
1,322
(9)
(34)
(3)
-
3,450
1,600
(8)
(160)
202
(546)
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 15. CASH FLOW STATEMENTS CONTINUED
b)
c)
During the year there were no non cash transactions.
Reconciliation of Cash
Cash on hand and at bank
Closing cash balance
Consolidated Entity
2013
$'000
2014
$'000
32,915
32,915
39,597
39,597
Cash security for environmental bonds of $477,000 (2013 : $477,000) is included in cash on hand and at bank. This is not available to the
Company for ordinary activities.
Property bonds of $46,545 (2013 : $46,545) are included in cash on hand and at bank. This amount is held as a security term deposit and is
not available to the Company for ordinary activities.
NOTE 16.
RELATED PARTY TRANSACTIONS
The Directors of the Company during the financial year were:
Non-Executive Directors
Craig Leslie Readhead
Stephen Bruce Dennis
Executive Directors
Ian James Buchhorn
The Key Management Personnel other than Executive Directors for the financial year were:
Exploration Manager
David von Perger
Financial Controller and Joint Company Secretary
Bryan Horan
General Manager Strategy and Business Development
Charlie Kempson
Detailed remuneration disclosures are provided in the remuneration report on pages 34-35 of the Directors report.
Shares
Directors
CL Readhead
IJ Buchhorn
SB Dennis
W Taylor
Key Management Personnel
BP Horan
D von Perger
C Kempson
S Smith
Held at Purchased
on market
1 July 2013
Sold
Held at
30 June 2014
844,709
45,486,240
450,000
-
238,263
1,054,719
100,000
-
-
211,692
250,000
-
-
15,000
604,992
-
-
-
-
-
-
-
-
-
1,082,972
46,540,959
550,000
-
-
226,692
854,992
-
Heron Resources Limited - Annual Report 2014 - Page 55
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 16. RELATED PARTY TRANSACTIONS CONTINUED
Options
Expiry Date
Exercise
Price
Held at
1 July 2013
Issued
Expired
/lapsed
Held at
30 June 2014
Directors
C L Readhead
I J Buchhorn
5 June 2014
7 September 2016
5 June 2014
23 June 2014
23 June 2015
23 June 2016
S B Dennis
5 June 2014
Key Management Personnel
D von Perger
B P Horan
C Kempson
25 June 2014
23 June 2014
23 June 2015
23 June 2016
25 June 2014
23 June 2014
23 June 2015
23 June 2016
5 March 2016
5 March 2017
5 March 2018
$2.50
$0.6864
$2.50
$0.22
$0.27
$0.31
$2.50
$0.425
$0.22
$0.27
$0.31
$0.425
$0.22
$0.27
$0.31
$0.22
$0.27
$0.31
750,000
5,000,000
3,000,000
1,000,000
1,000,000
1,000,000
750,000
1,000,000
1,000,000
1,000,000
1,000,000
600,000
500,000
500,000
500,000
1,000,000
1,000,000
1,000,000
21,600,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(750,000)
-
(3,000,000)
(1,000,000)
-
-
(750,000)
(1,000,000)
(1,000,000)
-
-
(600,000)
(500,000)
-
-
-
-
-
-
5,000,000
-
-
1,000,000
1,000,000
-
-
-
1,000,000
1,000,000
-
-
500,000
500,000
1,000,000
1,000,000
1,000,000
(8,600,000)
13,000,000
Other related party transactions during the financial year were:
(cid:129)
(cid:129)
payment of $73,800 (2013 : $72,450) to an entity related to Mr IJ Buchhorn for the provision of office accommodation on normal
commercial terms and conditions;
payment of $123,856 (2013 : $238,914) to Allion Legal of which Mr CL Readhead is a partner for legal services on normal commercial
terms and conditions;
Heron Resources Limited is the ultimate parent entity. Heron Resources Limited is a listed public company incorporated and domiciled in
Australia. Ownership interest in the controlled entities is as set out in Note 20.
NOTE 17. FINANCIAL INSTRUMENTS
a)
Terms, conditions and accounting policies
The Company's accounting policies, including the terms and conditions of each class of financial asset, financial liability and equity
instrument, both recognised and unrecognised at the balance sheet date, are as follows:
Accounting Policies
Terms and Conditions
Recognised Financial Statement
of Financial
Instruments
Position
Notes
i) Financial assets
11am Call Accounts
Term Deposits
Environmental Bonds
11am Call Accounts are carried
at cost.
Term Deposits are carried at cost.
Environmental Bonds are carried
at cost.
Property Bonds
Property Bonds are carried at cost.
Accrued Interest
Goods & Services
Tax Paid
5
5
Recognised on an accruals basis.
Recognised on an accruals basis.
Page 56 - Heron Resources Limited - Annual Report 2014
The 11am Call Accounts are at call
with an interest rate of 1.75% (2013 : 0.37%)
Term Deposits are secured with a 3 month term with
an interest rate of 3.52% (2013 : 4.06%)
Environmental Bonds are security
term deposits with a 6 month term with an interest
rate of 3.39% (2013 : 3.95%)
Property Bonds are security term deposits
with an 6 month term with an interest rate of
3.54% (2013 : 4.13%)
Interest is credited periodically.
Business Activity Statements are lodged
on a monthly basis.
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 17. FINANCIAL INSTRUMENTS CONTINUED
Recognised Financial Statement
of Financial
Instruments
Position
Notes
ii) Financial liabilities
Trade creditors
and accruals
iii) Equity
Ordinary Shares
10
12
Accounting Policies
Terms and Conditions
Liabilities are recognised for amounts
to be paid in the future for goods and
services received, whether or not
billed to the consolidated entity.
Trade liabilities are normally settled
on 30 day terms.
Ordinary share capital is recognised
at the fair value of the consideration
received by the Company.
Details of the shares issued and the terms and
conditions of the options outstanding over ordinary
shares at balance sheet date are set out in Note 12
b)
c)
The carrying value of financial assets and liabilities approximates fair value.
Financial risk management
The Company's activities expose it to a variety of financial risks; market risk (fair value interest rate risk and price risk), credit risk,
liquidity risk and cash flow interest rate risk. The Company's overall risk management program focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the financial performance of the Company.
(i)
Market risk
Price risk
The Company is exposed to equity securities price risk. This arises from investments held by the Group and classified on the balance
sheet either as available-for-sale or at fair value through profit or loss. The Company is not exposed to commodity price risk.
Foreign exchange risk
The Company is not exposed to foreign exchange risk.
(ii)
Credit risk
The maximum credit risk is total current assets of which the vast majority is cash which is all A1+ rated. The largest part of trade and
other receivables is interest.
(iii)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an
adequate amount of committed credit facilities and the ability to close-out market positions.
(iv)
Cash flow and fair value interest rate risk
As the Company has no interest-bearing liabilities, the Group's cash out flows are not exposed to changes in market interest rates. The
Group maintains a current account balance sufficient to meet day to day expenses with the balance held in A1+ rated commercial paper
investments or term deposits.
NOTE 18. AUDITORS' REMUNERATION
Amounts received or due and receivable for:
Butler Settineri (Audit) Pty Ltd - Audit services
Consolidated Entity
2013
$'000
2014
$'000
38
45
Heron Resources Limited - Annual Report 2014 - Page 57
5.0 FINANCIAL STATEMENTS CONTINUED
Consolidated Entity
2013
$'000
2014
$'000
NOTE 19. COMMITMENTS FOR EXPENDITURE
a)
Exploration Commitments
In order to maintain current rights of tenure to exploration and mining tenements, the Company estimates the following annual
discretionary exploration expenditure requirements up until expiry or relinquishment of the mining tenure. Due to the Company's
operation in exploring and evaluating areas of interest, exploration expenditure beyond twelve months cannot be reliably determined.
These obligations are not provided for in the financial statements and are payable based on granted tenements:
Not later than 1 year
3,668
3,489
If the Company decides to relinquish certain leases and/or does not meet these obligations, assets recognised in the balance sheet may
require review to determine the appropriateness of carrying values. The sale, transfer or farm-out of exploration rights to third parties
will reduce or extinguish these obligations. Those amounts detailed above include expenditure commitments which are the
responsibility of earn-in / joint venture partners. If those joint venture partners continue to meet the expenditure commitments under
respective joint venture / earn-in agreements, the estimates detailed above will reduce.
b)
Operating Lease Commitments
The Company has leased two office premises under non-cancellable operating leases for periods of five years and one year. Lease
amounts include a base amount, plus variable outgoings and car parking and are subject to an annual rent review by way of the
consumer price index at the time of review.
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
389
358
-
332
582
-
c)
Capital Commitments
The Company has no capital commitments at 30 June 2014.
NOTE 20. INVESTMENTS IN CONTROLLED ENTITIES
Country of
Name of
Registration
Entity
Class of
Shares
Cost of Consolidated
Entity’s Investment
2013
2014
Cost of Parent
Entity’s Investment
2014
$
2013
$
Hampton Nickel Pty Limited
Ochre Resources Pty Limited
Atriplex Pty Limited
Yerilla Nickel Pty Limited
Kalgoorlie Nickel Project Pty Limited
Woods Point Gold Mines Pty Limited
Australia
Australia
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
10
100
10
100
100
100
10
100
10
100
100
100
Regent Resources Pty Limited (“Regent”) was registered on 10 April 2002. Regent Resources Limited name was changed on the 19 August
2005 to Hampton Nickel Limited and is being used by the Company to hold the Bulong nickel properties and to acquire further nickel
properties in the Bulong district.
Ochre Resources Pty Limited ("Ochre") was registered on 7 February 2005 to seek and acquire iron ore properties in the course of the
Company's base metal exploration activities.
Atriplex Pty Limited ("Atriplex") was registered on 7 April 2005 to seek and acquire nickel-copper sulphide properties (outside the Eastern
Goldfields) in the course of the Company's exploration activities.
Yerilla Nickel Pty Limited ("Yerilla") was registered on 22 December 2006 as a potential holding company for the Jump-up Dam heap leach
Project north east of Kalgoorlie.
Kalgoorlie Nickel Project Pty Limited ("KNP") was registered on 24 June 2009 as a holding company for the KNP properties.
Woods Point Gold Mines Pty Limited was registered on 24 June 2009 as a holding company for the Woods Point Gold Mine.
Page 58 - Heron Resources Limited - Annual Report 2014
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 21.
EARNINGS PER SHARE
Basic earnings per Share
Weighted average number of ordinary shares outstanding during
the year used in the calculation of basic earnings per share
Diluted earnings per Share
Weighted average number of ordinary shares outstanding during
the year used in the calculation of diluted earnings per share.
Earnings profit/(loss) used in calculating basic and diluted earnings
profit/(loss) per share
The 14,000,000 (2013: 31,168,776) options are not considered to be dilutive.
NOTE 22.
EMPLOYEE ENTITLEMENTS
a)
Employee Entitlements
The aggregate employee entitlement is comprised of:
Provisions (Current)
b)
Employee Share Scheme
Consolidated Entity
2013
$'000
2014
$'000
(0.02526)
(0.03990)
252,985,787
252,985,787
(0.02526)
(0.03990)
252,985,787
252,985,787
(6,389,236)
(10,095,306)
560
457
An Employee Share Option Plan has been established for Heron Resources Limited, where employees, Directors and Officers of the
Company are issued with options over ordinary shares of Heron Resources Limited. At the General Meeting on 5 June 2007 approval by
shareholders for adoption of Employee Share Option Plan was given. The options, issued for no consideration, are in general exercisable at
a fixed price at commencement date, unless otherwise stated and ending on the expiry date.
Following the merger with TriAusMin there are currently 18 employees, directors and officers eligible to participate in this scheme.
The Options cannot be transferred and will not be quoted on the ASX.
During the year 17,168,776 options expired under the Employee Options Plan Number 3.
Details of options as at the beginning and end of the reporting date and movements during the year are set out below:
Grant date
Expiry date
price
Exercise Number of
options at
the beginning
of the year
Options
expired
this
year
Options
Issued
this
year
Number
of options
at the end
of the year
Options
exercisable
at the end
of the year
2014 Consolidated and parent entity
29 November 2006
5 June 2007
25 June 2009
9 June 2009
19 November 2011
19 November 2011
19 November 2011
5 October 2012
5 October 2012
5 October 2012
3 April 2013
3 April 2013
3 April 2013
7 September 2016
5 June 2014
25 June 2014
9 June 2014
23 June 2014
23 June 2015
23 June 2016
16 January 2015
16 January 2016
16 January 2017
5 March 2016
5 March 2017
5 March 2018
Weighted average exercise price
$0.6864
$2.50
$0.425
$0.30
$0.22
$0.27
$0.31
$0.22
$0.27
$0.31
$0.22
$0.27
$0.31
5,000,000
4,500,000
2,600,000
4,818,776
4,750,000
2,750,000
2,750,000
333,333
333,333
333,334
1,000,000
1,000,000
1,000,000
31,168,776
$0.67
-
(4,500,000)
(2,600,000)
(4,818,776)
(4,750,000)
(250,000)
(250,000)
-
-
-
-
-
-
(17,168,776)
$0.87
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
-
-
-
-
2,500,000
2,500,000
333,333
333,333
333,334
1,000,000
1,000,000
1,000,000
14,000,000
$0.42
-
-
-
-
-
2,500,000
2,500,000
333,333
333,333
-
1,000,000
-
-
6,666,666
$0.28
Heron Resources Limited - Annual Report 2014 - Page 59
5.0 FINANCIAL STATEMENTS CONTINUED
NOTE 23. SUBSEQUENT EVENTS
Other than noted below there is no matter or circumstance which has arisen since 30 June 2014 that has significantly affected or may
significantly affect:
a)
b)
c)
The operations, in the financial years subsequent to 30 June 2014, of the Company;
The results of those operations; or
The state of affairs, in the financial years subsequent to 30 June 2014, of the Company.
A Scheme of Arrangement with TriAusMin Limited became effective on 5 August 2014. Details of the Scheme of arrangement are contained
in the scheme booklet (ASX release date 6 June 2014) . Following the implementation of the merger, TriAusMin shareholders were issued
with 1 Heron share for every 2.33 TriAusMin shares held. This resulted in the issue of 107,891,936 new Heron shares which became
available to trade on both the ASX and TSX effective on 20 August 2014.
NOTE 24. CONTINGENT LIABILITIES
Native title claims have been made with respect to areas which include tenements in which the consolidated entity has interests. The
consolidated entity is unable to determine the prospects for success or otherwise of the claims and, in any event, whether or not and to
what extent the claims may significantly affect the consolidated entity or its projects. Agreement is being reached with native title
claimants regarding certain areas in which the consolidated entity has interests.
Rehabilitation of the Jump Up Dam tenements would cost up to $1 million if the Company were to surrender the tenements.
NOTE 25. PARENT ENTITY INFORMATION
The following information relates to the parent entity, Heron Resources Limited, at 30 June 2014. The information presented here has been
prepared using accounting policies consistent with those presented in Note 1.
2014
$’000
34,339
5,471
39,810
838
838
116,035
-
2,441
(79,504)
38,972
(5,723)
-
(5,723)
2013
$’000
39,834
5,904
45,738
680
680
116,035
-
5,591
(76,568)
45,058
(7,886)
(388)
(8,274)
a)
Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Contributed equity
Fair value reserve
Option reserve
Accumulated losses
Total equity
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Guarantees entered into by the Parent
b)
c)
d)
Heron Resources Limited has not entered into a deed of cross guarantee with its wholly owned subsidiaries.
Contingent liabilities of the Parent
Heron Resources Limited’s contingent liabilities are consistent with those disclosed in note 24.
Capital commitments of the Parent
Heron Resources Limited’s capital commitments are disclosed in note 19c.
Page 60 - Heron Resources Limited - Annual Report 2014
Directors’ Declaration
In accordance with a resolution of the Directors of Heron Resources Limited it is declared that:
a)
b)
The financial statements and notes comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
Give a true and fair view of the Company's and the Consolidated Entity's financial position as at 30 June 2014 and of their performance,
as represented by the results of their operations, for the financial year ended on that date.
In the Directors' opinion:
a)
b)
c)
The financial statements and notes are in accordance with the Corporations Act 2001; and
At the date of this declaration there are reasonable grounds to believe that the Company will be able to pay its debts when they become
due and payable; and
The Directors have been given the declarations by the Chief Financial Officer and Chief Executive Officer required by section 295A of
the Corporations Act 2001.
On behalf of the Board
C L READHEAD
Chairman
Perth, 26 September 2014
Heron Resources Limited - Annual Report 2014 - Page 61
Page 62 - Heron Resources Limited - Annual Report 2014
Heron Resources Limited - Annual Report 2014 - Page 63
7.0 Shareholder Information
AT 22 SEPTEMBER 2014
1.
a)
Issued Shares and Options
Distribution of Shareholders:
Size of Holding
1
1,001
5,001
10,001
100,001
-
-
-
-
-
1,000
5,000
10,000
100,000
Number of Holders
318
828
543
1,148
241
3,078
Shares Held
184,136
2,535,229
4,335,207
40,118,077
313,705,074
360,877,723
b)
c)
d)
e)
The twenty largest shareholders hold 64.6% of the issued fully paid capital of the Company.
Substantial Shareholders including related parties who have notified the Company:
Holder
I Buchhorn & related parties
Sprott Inc & related parties
Number of Shares
46,590,959
37,577,126
%
12.91%
10.41%
There were 778 shareholders who held less than a marketable parcel.
No securities have been classified by ASX as restricted.
VOTING RIGHTS
In accordance with the Company's constitution, voting rights are on the basis of a show of hands, one vote for every registered holder and
on a poll, one vote for each share held by registered holders.
Twenty largest shareholders as at 22 September 2014
Canadian Register
1
Hazurn Pty Ltd
2
Kurana Pty Ltd
3
Citicorp Nominees Pty Limited
4
Jetosea Pty Ltd
5
MBM Corporation Pty Ltd
6
Chaos Investments Pty Limited
7
Fremont Cat Pty Ltd
8
Mr David James Wardle
9
J P Morgan Nominees Australia
10
Sheerwater Pty Ltd
11
12
Koltai Holdings PL
13 Mr Olivier Robert Dupuy
14 Mr Ian James Buchhorn
Valueinvest Pty Ltd
15
16 Ms Trudi Ann Kempson
HSBC Custody Nominees
17
18
Kimlex Investments Pty Ltd
19 Mrs Pamela Jean Buchhorn
20
BGK Investments Pty Limited
TOTAL
Number of Shares
118,541,239
23,532,480
16,576,556
13,578,031
10,000,000
9,999,830
5,972,854
4,205,476
4,070,000
3,494,396
3,071,500
2,973,179
2,675,107
2,518,241
2,395,830
2,383,491
2,244,749
2,200,000
2,137,690
2,000,000
234,570,649
Page 64 - Heron Resources Limited - Annual Report 2014
%
32.85%
6.52%
4.59%
3.76%
2.77%
2.77%
1.66%
1.17%
1.13%
0.97%
0.85%
0.82%
0.72%
0.70%
0.66%
0.66%
0.62%
0.61%
0.59%
0.55%
64.99%
7.0 SHAREHOLDER INFORMATION CONTINUED
f)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Distribution of Option holders
5,000,000
exercisable on or before 7 September 2016 for a payment of $0.6864 per option
2,500,000
exercisable on or before 23 June 2015 for a payment of $0.27 per option
2,500,000
exercisable on or before 23 June 2016 for a payment of $0.31 per option
333,333
exercisable on or before 16 January 2015 for a payment of $0.22 per option
333,333
exercisable on or before 16 January 2016 for a payment of $0.27 per option
333,334
exercisable on or before 16 January 2017 for a payment of $0.31 per option
1,000,000
exercisable on or before 5 March 2016 for a payment of $0.22 per option
1,000,000
exercisable on or before 5 March 2017 for a payment of $0.27 per option
1,000,000
exercisable on or before 5 March 2018 for a payment of $0.31 per option
193,133
exercisable on or before 23 October 2017 for a payment of $0.14 per option
85,836
exercisable on or before 27 June 2016 for a payment of $0.27 per option
21,459
exercisable on or before 23 June 2015 for a payment of $0.58 per option
21,459
exercisable on or before 13 June 2017 for a payment of $0.22 per option
21,459
exercisable on or before 13 March 2018 for a payment of $0.15 per option
214,592
exercisable on or before 18 November 2015 for a payment of $0.23 per option
85,837
exercisable on or before 21 November 2017 for a payment of $0.23 per option
21,459
exercisable on or before 4 February 2017 for a payment of $0.27 per option
858,369
exercisable on or before 19 March 2016 for a payment of $0.37 per option
858,369
exercisable on or before 20 November 2018 for a payment of $0.09 per option
21,459
exercisable on or before 22 February 2018 for a payment of $0.17 per option
21,459
exercisable on or before 31 January 2019 for a payment of $0.09 per option
Size of Holding
1
1,001
5,001
10,001
100,001
-
-
-
-
-
1,000
5,000
10,000
100,000
Summary of option holders as at 22 September 2014
1
2
3
4
5
Employees & directors
Alan Snowden
James Gill
Robert Valliant
William Killinger
TOTAL
Number of Holders
-
-
-
7
9
16
Number of Options
15,909,869
85,837
214,592
85,837
128,755
16,424,890
Options Held
-
-
-
364,805
16,060,085
16,424,890
% of Issued Options
96.87%
0.52%
1.31%
0.52%
0.78%
100.00
Heron Resources Limited - Annual Report 2014 - Page 65
8.0 Statement of Mineral Resources
SUMMARY OF HERON MINERAL RESOURCES, LACHLAN FOLD BELT, NSW
Woodlawn + Lewis Ponds Mineral Resources - Combined Summary
Project
Measured + Indicated Mineral Resource
Woodlawn Retreatment Project (WRP)
Woodlawn Underground Project (WUP)
Lewis Ponds Project
Total Measured +
Indicated Mineral Resource
Inferred Mineral Resources
Woodlawn Retreatment Project (WRP)
Woodlawn Underground Project (WUP)
Lewis Ponds Project
Total Inferred Mineral Resource
Total Mineral Resource
Million
tonnes
9.40
8.58
6.35
24.33
2.25
1.52
0.27
4.04
28.37
Zn
%
2.33
10.25
2.40
5.14
2.10
9.60
3.00
4.98
5.12
8.1 Woodlawn Underground Project (WUP) - Mineral Resources
Classification
Measured
Indicated
Total Measured +
Indicated Mineral Resource
Total Inferred Mineral Resource
Total Mineral Resource
Refer to TriAusMin press release on 29 January 2014.
Million
tonnes
3.60
4.98
8.58
1.52
10.10
Zn
%
10.38
10.16
10.25
9.60
10.15
Cu
%
0.52
1.80
0.20
0.89
0.44
1.65
0.10
0.87
0.89
Cu
%
1.82
1.79
1.80
1.65
1.78
Pb
%
1.36
4.02
1.40
2.31
1.30
4.08
1.90
2.39
2.32
Pb
%
3.99
4.04
4.02
4.08
4.03
Au
g/t
0.30
0.54
1.50
0.70
0.27
0.61
1.10
0.45
0.67
Au
g/t
0.53
0.55
0.54
0.61
0.55
Ag
g/t
32
84
68
60
31
87
96
56
59
Ag
g/t
85
84
84
87
85
Woodlawn Underground Project
The independently estimated JORC-compliant Mineral Resources for the WUP consists of 8.58 Mt of Measured and Indicated Mineral Resources plus a further
1.52 Mt of Inferred Mineral Resources. The cut-off grade applied to the calculation of WUP Mineral Resources was 7.0% zinc equivalent. Block densities were
individually calculated from block Zn, Pb and Fe values, with the average lens density ~3.7 t/m3 and zinc equivalent values were calculated from all the
interpolated block grades (excluding Fe) using a formula based on metal prices.
The metal prices used to calculate the zinc equivalent values applied to the Mineral Resource estimate were:
US Cents/lb
US Cents/lb
US Cents/lb
152.0
333.4
63.5
or
or
or
Zinc
Copper
Lead
Gold
Silver
3,350
7,350
1,400
570
11
USD/t
USD/t
USD/t
USD/oz
USD/oz
The technical information in this report relating to the Woodlawn Underground Mineral Resources is based on information compiled by Mr Robin Rankin, who
is a Member of The Australasian Institute of Mining and Metallurgy (AusIMM) and accredited by the AusIMM since 2000 as a Chartered Professional (CP) in
the geology discipline. Mr Rankin provided information to his Client TriAusMin (now Heron) as paid consulting work in his capacity as Principal Consulting
Geologist and operator of independent geological consultancy GeoRes. He and GeoRes are professionally and financially independent in the general sense and
specifically of their Client and of the Client’s project. The consulting was provided on a paid basis, governed by a scope of work and a fee and expenses
schedule, and the results or conclusions reported were not contingent on payments. . He has sufficient experience, which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition
of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (the JORC Code) and “Qualified Person” as this term is
defined in Canadian National Instrument 43-101 (“NI 43-101”). Mr Rankin consents to the inclusion in this report of the information in the form and context in
which it appears.
Page 66 - Heron Resources Limited - Annual Report 2014
8.0 STATEMENT OF MINERAL RESOURCES CONTINUED
8.2 Woodlawn Retreatment Project (WRP) - Mineral Resources
Resource Class
Million
tonnes
Measured + Indicated Mineral Resource
North Dam
Measured
Indicated
Sub-Total
South Dam
Measured
Indicated
Sub-Total
West Dam
Measured
Indicated
Sub-Total
All Dams
Measured
Indicated
Total Measured +
Indicated Mineral Resource
Inferred Mineral Resources
North Dam
South Dam
West Dam
0.83
1.38
2.21
2.43
1.17
3.60
2.05
1.54
3.59
5.31
4.09
9.40
0.87
0.90
0.48
Total Inferred Mineral Resource
Total Mineral Resource
2.25
11.65
Refer to TriAusMin press release 11 November 2009.
Zn
%
2.35
2.68
2.56
2.60
2.44
2.55
2.00
1.93
1.97
2.33
2.33
2.33
2.03
2.32
1.83
2.10
2.29
Cu
%
0.43
0.45
0.44
0.48
0.48
0.48
0.60
0.60
0.60
0.52
0.52
0.52
0.33
0.47
0.61
0.44
0.50
Note: Zn denotes zinc; Cu denotes copper, Pb denotes lead, Au denotes gold, and Ag denotes silver.
8.3 Woodlawn Retreatment Project (WRP) - Ore Reserves
Dam
Classification
South
West
North
Proven
Probable
Proven + Probable
Proven
Probable
Proven + Probable
Proven
Probable
Proven + Probable
All Dams
Proven
Probable
Million
tonnes
2.43
1.86
4.29
2.05
1.88
3.93
0.83
2.20
3.03
5.31
5.94
Proven + Probable
11.25
Refer to TriAusMin press release 30 November 2009.
Zn
%
2.52
2.32
2.43
1.94
1.85
1.9
2.28
2.36
2.34
2.26
2.19
2.22
Cu
%
0.47
0.47
0.47
0.59
0.59
0.59
0.42
0.39
0.40
0.51
0.48
0.49
Pb
%
1.43
1.44
1.44
1.19
1.19
1.19
1.46
1.51
1.48
1.33
1.40
1.36
1.33
1.19
1.47
1.30
1.35
Pb
%
1.15
1.15
1.15
1.42
1.46
1.44
1.39
1.37
1.38
1.30
1.33
1.31
Au
g/t
0.29
0.29
0.29
0.22
0.22
0.22
0.39
0.39
0.39
0.30
0.31
0.30
0.25
0.23
0.38
0.27
0.30
Au
g/t
0.21
0.21
0.21
0.36
0.36
0.36
0.27
0.26
0.26
0.28
0.28
0.28
Ag
g/t
35
40
38
25
23
24
36
37
36
31
34
32
37
24
34
31
32
Ag
g/t
23.89
22.86
23.44
34.63
35.08
34.85
34.89
37.69
36.92
29.76
32.22
31.05
Heron Resources Limited - Annual Report 2014 - Page 67
8.0 STATEMENT OF MINERAL RESOURCES CONTINUED
Woodlawn Retreatment Project - Mineral Resource
The independently estimated JORC-compliant Mineral Resources contained in the North, South and West Tailings Dams at Woodlawn includes 9.4 Mt in the
Measured and Indicated categories and 2.3 Mt of Inferred Mineral Resources. No cut-off grade was applied to the calculation of the Mineral Resources as it
was assumed that all tailings would be re-processed as part of the Woodlawn Retreatment Project. .
This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis
that the information has not materially changed since it was last reported.
The technical information in this report relating to the Woodlawn Tailings Mineral Resources is based on information compiled by Mr Robin Rankin, a
Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy (AusIMM) and accredited by the AusIMM since 2000 as a
Chartered Professional (CP) in the geology discipline. Mr Rankin consults to TriAusMin (now Heron) as Principal Consulting Geologist of independent geological
consultancy GeoRes. He has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results and
“qualified person” as this term is defined in Canadian National Instrument 43-101 (“NI 43-101”). Mr Rankin consents to the inclusion in this report of the
matters based on his information in the form and context in which it appears.
Woodlawn Retreatment Project - Ore Reserve
The information on Ore Reserves was extracted from the Woodlawn Tailings Retreatment Project Technical Report NI 43-101 – 15 December 2009 authored
by the independent international multi-disciplinary consulting firm, Roscoe Postle Associates (RPA) (formerly Scott Wilson Roscoe Postle Associates Inc.).
An earlier GeoRes mineral resource model was converted to a Surpac model for mine planning. In Scott Wilson RPA’s opinion the Inferred Mineral Resources
as estimated by GeoRes should be reclassified as Indicated Mineral Resources to give a total Measured and Indicated Resource of 11.65Mt @ 2.29% Zn, 0.50%
Cu, 1.35% Pb, 0.30g/t Au and 31.9g/t Ag. The review of the resource block model showed some blocks that would not be recoverable by the proposed hydraulic
mining method. The block model was modified to exclude these blocks. The resource block model was then adjusted to allow for dilution and recovery. Mining
recovery was based on an average expected loss of 20 cm of tailings material in contact with other material. Additionally, a dilution value equivalent to 10 cm
average vertical gain was added back to the product stream, with no grade to account for potential contamination from the original ground surface. The
remaining mineralisation was included in an economically viable life of mine plan and, in Scott Wilson RPA’s opinion, constitutes Ore Reserves as summarised
in Table 8.2
This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis
that the information has not materially changed since it was last reported.
The information in this report relates to Ore Reserves associated with the Woodlawn Retreatment Project is based on information compiled by qualified person,
Mr. Richard Lambert, P.E. a professional engineer and Registered Member of SME. Mr. Richard Lambert is Principal Mining Engineer and Executive Vice
President of Roscoe Postle Associates, Inc. He is independent of TriAusMin (now Heron) applying the test set out in Section 1.4 of NI 43-101. He has sufficient
experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he is undertaking, to qualify as a Competent
Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code)
and by reason of his education, affiliation with a professional association (as defined in NI43-101) and past relevant work experience, fulfills the requirements
to be a "qualified person" for the purposes of NI43- 101.
Notes:
1. CIM definitions were followed for Mineral Reserves.
2. Ore Reserves are estimated at a zero cut-off grade.
3. Ore Reserves estimated using bulk density of 1.7 t/m3 for TDS, 1.85 t/m3 for TDW, 1.6 t/m3 for TDNU, and 1.35 t/m3 for TDNR.
4. Columns and rows may not add exactly due to rounding.
Page 68 - Heron Resources Limited - Annual Report 2014
8.0 STATEMENT OF MINERAL RESOURCES CONTINUED
8.4 Lewis Ponds Project - Mineral Resource
Classification
Indicated Mineral Resource
Main Zone
Tom’s Zone
Total Indicated Mineral Resource
Inferred Mineral Resources
Main Zone
Tom’s Zone
Total Inferred Mineral Resource
Total Mineral Resource
Million
tonnes
5.82
0.54
6.35
0.17
0.10
0.27
6.62
Zn
%
2.1
5.5
2.4
1.7
5.0
3.0
2.4
Cu
%
0.1
0.3
0.2
0.1
0.2
0.1
0.2
Pb
%
1.1
3.8
1.4
0.8
3.6
1.9
1.4
Au
g/t
1.5
1.7
1.5
0.9
1.4
1.1
1.5
Ag
g/t
59
172
68
47
174
96
69
Refer to TriAusMin press release 6 October 2005.
Lewis Ponds Project
The independently estimated JORC-compliant Mineral Resource at Lewis Ponds is divided into resources from two zones, Main Zone and Tom’s Zone.
The cut-off grade applied to the calculation of Lewis Ponds Mineral Resources was 3.0% zinc equivalent. The following metal prices were used to calculate
zinc equivalent values applied to the kriged Mineral Resource estimate.
Zinc
Copper
Lead
Gold
Silver
1240
2860
900
430
6.75
USD/t
USD/t
USD/t
USD/oz
USD/oz
or
or
or
56.2
129.7
40.8
US Cents/lb
US Cents/lb
US Cents/lb
This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis
that the information has not materially changed since it was last reported.
The information in this report relates to the mineral resource for Lewis Ponds is based on information compiled by Mr Robert Cotton, who is a Fellow of the
Australasian Institute of Mining and Metallurgy. Mr Cotton is a full time employee of Mineral Appraisals Pty Ltd, consultant to TriAusMin (now Heron). Mr
Cotton has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves” and “qualified person” as this term is defined in Canadian National Instrument 43-101 (“NI 43-101”). Mr Cotton consents to the inclusion
in this report of the information in the form and context in which it appears.
Heron Resources Limited - Annual Report 2014 - Page 69
8.0 STATEMENT OF MINERAL RESOURCES CONTINUED
SUMMARY OF HERON’S MINERAL RESOURCE, KALGOORLIE NICKEL PROJECT, WA
8.5 Kalgoorlie Nickel Project Mineral Resource
Region
Prospect
Goongarrie Goongarrie South*
Goongarrie South*
Goongarrie South*
Highway
Highway
Ghost Rocks
Goongarrie Hill
Big Four
Big Four
Scotia
Sub-Total Goongarrie
Siberia
Siberia South
Siberia North
Siberia North
Black Range
Sub-Total Siberia
Total KNP West
Bulong
Taurus
East
East
Sub-Total Bulong
Hampton
Kalpini
Sub-Total Hampton
Total KNP East
Yerilla
Jump Up Dam‡
Jump Up Dam
Jump Up Dam
Boyce Creek
Aubils**
Sub-Total KNP Yerilla
Million
tonnes1
5.8
54.2
34.4
52.9
38.4
24.8
53.6
42.6
12.4
11.2
330.3
104.4
10.8
60.0
20.4
195.6
525.9
14.2
15.9
24.3
54.4
75.4
75.4
129.8
3.8
41.7
18.5
26.8
49.4
140.2
Ni
%
1.08
0.79
0.63
0.66
0.63
0.67
0.60
0.69
0.62
0.77
0.68
0.65
0.64
0.66
0.75
0.66
0.67
0.83
0.89
0.78
0.83
0.73
0.73
0.77
0.94
0.79
0.64
0.77
0.70
0.74
Co
%
0.102
0.065
0.042
0.042
0.040
0.047
0.037
0.052
0.054
0.080
0.049
0.034
0.051
0.040
0.102
0.044
0.044
0.051
0.046
0.053
0.050
0.044
0.044
0.047
0.048
0.044
0.035
0.058
0.066
0.053
Resource
Category
Estimation
Method
Estimate
Source
Measured
Indicated
Inferred
Indicated
Inferred
Inferred
Inferred
Indicated
Inferred
Inferred
Inferred
Indicated
Inferred
Inferred
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Krige
Study
Period
Post PFS
Post PFS
Post PFS
Post PFS
Post PFS
Pre PFS
Post PFS
Post PFS
Post PFS
Pre PFS
Heron
Heron
Heron
Heron
Heron
Snowden
Heron
Heron
Heron
Snowden
Snowden
Snowden
Snowden
Snowden
Pre PFS
Post PFS
Post PFS
Pre PFS
Inferred
Indicated
Inferred
Krige
Krige
Krige
Snowden
Snowden
Snowden
Pre PFS
Pre PFS
Pre PFS
Inferred
Krige
Snowden
Pre PFS
Measured
Indicated
Inferred
Inferred
Inferred
Krige
Krige
Krige
Krige
Krige
Snowden
Snowden
Snowden
Heron
Heron
PFS
PFS
PFS
PFS
PFS
Company Total
795.9
0.70
0.048
* Includes 33.4 million tonnes at 0.70% nickel and 0.040% cobalt located on a pending mining lease.
** Includes 49.4 million tonnes at 0.70% nickel and 0.066% cobalt located on a pending mining lease.
‡ Includes approximately 20,000 tonnes at 1.3% nickel and 0.050% cobalt in stockpiles from the 2006 trial.
Page 70 - Heron Resources Limited - Annual Report 2014
8.0 STATEMENT OF MINERAL RESOURCES CONTINUED
KNP Mineral Resources by Category - 2013
Resource Deposit
Category
Measured Goongarrie South
Indicated
Inferred
Jump Up Dam
Subtotal
Big Four
Bulong East
Goongarrie South
Highway
Jump Up Dam
Siberia North
Subtotal
Aubils
Big Four
Black Range
Boyce Creek
Bulong East
Ghost Rocks
Goongarrie Hill
Goongarrie South
Highway
Jump Up Dam
Kalpini
Scotia
Siberia North
Siberia South
Taurus
Subtotal
Combined Total
Tonnes Nickel Cobalt
(%)
1.08
0.94
1.02
0.69
0.89
0.79
0.66
0.79
0.64
0.74
0.70
0.62
0.75
0.77
0.78
0.67
0.60
0.63
0.63
0.64
0.73
0.77
0.66
0.65
0.83
0.68
0.70
(Mt)
5.8
3.8
9.6
42.6
15.9
54.2
52.9
41.7
10.8
218.1
49.4
12.4
20.4
26.8
24.3
24.8
53.6
34.4
38.4
18.5
75.4
11.2
60.0
104.4
14.2
568.3
795.9
(%)
0.102
0.048
0.081
0.052
0.046
0.065
0.042
0.044
0.051
0.051
0.066
0.054
0.102
0.058
0.053
0.047
0.037
0.042
0.040
0.035
0.044
0.080
0.040
0.034
0.051
0.047
0.048
Kalgoorlie Nickel Project
Nickel Laterite Tenements
GHOST ROCKS
AUBILS
Kalgoorlie Nickel Project
Yerilla
Menzies
HIGHWAY
Kalgoorlie
Nickel Project
West
BOYCE CREEK
JUMPUP DAM
SIBERIA NORTH
GOONGARRIE HILL
GOONGARRIE SOUTH
BIG FOUR
SIBERIA SOUTH
Major Road
Railway
Gas pipeline
Cawse Nickel
Laterite Plant
(Under Care
and Maintenance)
Kalgoorlie Nickel Project West
Kalgoorlie Nickel Project East
Kalgoorlie Nickel Project Yerilla
GINDALBIE
KALPINI
Kalgoorlie
Nickel Project
East
Kalgoorlie
BULONG
Coolgardie
Nickel Smelter
(BHP Billiton)
WESTERN AUSTRALIA
Project Area
KALGOORLIE
PERTH
Kalgoorlie Nickel Project
Notes:
Kambalda
0
20
40
Kilometres
Note: Resources based on a 0.5% Ni Cutoff. Rounding errors occur.
See full ASX announcement 18 Oct 2013.
1.
2.
3.
Tonnage (dry) and grade estimates have been rounded to reflect the estimation precision.
Economic parameters for the KNP are based on a Pre-feasibility Study completed by Vale Inco under farm-in arrangements between April 2005 and July
2009, and re-optimised by Heron between August 2009 and May 2010. The Vale Inco farm-in ended in July 2009 and Vale Inco has no retained rights
in respect of the KNP tenements.
Economic parameters for Yerilla are based on a Pre-feasibility Study completed by Heron between June 2006 and April 2009, and re-optimised by
Shanshan under joint venture between May 2009 and May 2011. The Shanshan joint venture expired in May 2011. Shanshan currently has no retained
rights in respect of the Yerilla tenements.
Attribution Statement
The information in this report that relates to Mineral Resources for the Highway, Goongarrie Hill, Goongarrie South, Big Four, Aubils and Boyce Creek Prospects
is based on information originally compiled by a former Heron Resources Limited resource geologist and validated by Steve Jones in 2013. Both are Members
of the Australasian Institute of Mining and Metallurgy. Steve Jones is a full time employee of Heron Resources Limited and has sufficient experience that is
relevant to the style of mineralisation and type of deposit under consideration and to the resource estimation activity that he is undertaking to qualify as a
Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Steve
Jones consents to the inclusion in this report of the matters based on his information in the form and context that it appears. Note that Mineral Resources
that are not Ore Reserves do not have demonstrated viability.
The information in this report that relates to Mineral Resources for the Siberia North, Bulong East, Siberia, Black Range, Taurus and Jump Up Dam Prospects
is based on information compiled by Snowden Mining Industry Consultants by members of the Australian Institute of Mining and Metallurgy. Snowden Mining
Industry Consultants had sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the resource
estimation activity. All resources were internally audited by Snowden and signed off by a person of sufficient experience to qualify as a Competent Person
as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Steve Jones validated
the Snowden Mining Siberia North estimate in 2013. Note that Mineral Resources that are not Ore Reserves do not have demonstrated viability.
The information in this report that relates to exploration and resource data (including drilling data, database quality, geological interpretation and density
modelling) is based on information originally compiled by Steve Jones and other previous full time employees of Heron Resources Limited. Steve Jones has
sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the exploration activities undertaken to
qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Steve Jones has validated the original estimates during 2013. Steve Jones consents to the inclusion in this report of the matters based on his
information in the form and context that it appears.
Heron Resources Limited - Annual Report 2014 - Page 71
9.0 Interest in Mining Tenements
Tenement
Location
Heron Interest Status Note
Tenement
Location
Heron Interest Status Note
(%)
WA Tenements
E15/01344
E15/01405
E15/01406
E16/00332
E24/00158
E27/00524
E27/00529
E28/01224
E28/02311
E28/02324
E28/02372
E29/00850
30km SE of Coolgardie
60km NE of Norseman
65kn NE of Norseman
62km NW of Kalgoorlie
78km NW of Kalgoorlie
67km NE of Kalgoorlie
72km NE of Kalgoorlie
63km NE of Kalgoorlie
70km E of Norseman
70km E of Norseman
86km NE of Norseman
105km NNW of Kalgoorlie
100
100
100
100 of Ni only
100
100
100
100
100
100
100
100
Live
Pending
Pending
Live
Live
Pending
Pending
Live
Pending
Pending
Pending
Live
E29/00889
78km NW of Kalgoorlie
100
Live
E39/01706
E39/01817
E63/01355
E63/01518
E63/01643
E63/01670
E63/01678
E70/02801
E70/04543
E80/04262
M24/00541
M24/00634
M24/00658
M24/00660
M24/00663
M24/00664
M24/00665
M24/00683
M24/00686
M24/00731
M24/00732
M24/00744
M24/00757
M24/00772
M24/00778
M24/00797
M24/00845
M24/00846
M24/00847
M24/00848
M24/00915
M24/00916
M24/00917
M25/00059
70km NW of Laverton
170km NNE of Kalgoorlie
80km ENE of Norseman
70km E of Norseman
70km E of Norseman
80km ENE of Norseman
42km ENE of Norseman
85km NW of Albany
105km NW of Albany
114km SW Fitzroy Cross
67km NNW of Kalgoorlie
78km NW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
78km NW of Kalgoorlie
75km NW of Kalgoorlie
70km NNW of Kalgoorlie
70km NNW of Kalgoorlie
75km NNW of Kalgoorlie
63km NW of Kalgoorlie
71km NW of Kalgoorlie
70km NNW of Kalgoorlie
78km NW of Kalgoorlie
71km NW of Kalgoorlie
71km NW of Kalgoorlie
71km NW of Kalgoorlie
71km NW of Kalgoorlie
78km NW of Kalgoorlie
78km NW of Kalgoorlie
75km NW of Kalgoorlie
34km E of Kalgoorlie
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
100
100
100 of Ni only
100 of Ni only
100 of Ni only
100 of Ni only
100
100
100
100 Ni Lat
Pending
Pending
Live
Live
Pending
Pending
Pending
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Page 72 - Heron Resources Limited - Annual Report 2014
3
2
4
4
4
3
3
3
3
6
(%)
100
100
100
100
100
100
100
100
100
100
87.5
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100 Ni Lat
100 Ni Lat
100 Ni Lat
100 Ni Lat
100 Ni Lat
100
100
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Pending
Live
Live
Live
Live
Pending
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Pending
Live
Live
Live
Live
Live
Live
Live
Live
5
5
5
5
1
6
6
6
6
6
M27/00395
M28/00199
M28/00201
M28/00205
M29/00167
M29/00202
M29/00214
M29/00272
M29/00278
M29/00312
M29/00416
M29/00423
M31/00475
M31/00477
M31/00479
M31/00483
P16/02811
P16/02811
P24/04202
P24/04203
P24/04204
P24/04205
P24/04206
P24/04207
P24/04208
P24/04219
P24/04220
P24/04221
P24/04243
P24/04395
P24/04396
P24/04400
P24/04401
P24/04402
P24/04403
P24/04435
P24/04437
P24/04438
P24/04531
P24/04652
P24/04653
P25/01853
P25/02050
P25/02062
P25/02170
P25/02171
P25/02232
P25/02251
68km NE of Kalgoorlie
65km NE of Kalgoorlie
65km NE of Kalgoorlie
66km NE of Kalgoorlie
87km NNW of Kalgoorlie
86km NNW of Kalgoorlie
100km NNW of Kalgoorlie
77km NNW of Kalgoorlie
74km NNW of Kalgoorlie
78km NW of Kalgoorlie
90km NNW of Kalgoorlie
76km NNW of Kalgoorlie
129km NE of Kalgoorlie
129km NE of Kalgoorlie
129km NE of Kalgoorlie
146km NNE of Kalgoorlie
100km NNW of Kalgoorlie
100km NW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
70km NW of Kalgoorlie
70km NW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
70km NW of Kalgoorlie
70km NW of Kalgoorlie
70km NW of Kalgoorlie
70km NW of Kalgoorlie
70km NW of Kalgoorlie
70km NW of Kalgoorlie
70km NW of Kalgoorlie
70km NW of Kalgoorlie
70km NW of Kalgoorlie
67km NNW of Kalgoorlie
75km NW of Kalgoorlie
75km NW of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
9.0 INTEREST IN MINING TENEMENTS CONTINUED
Tenement
Location
Heron Interest Status Note
Tenement
Location
Heron Interest Status Note
M25/00111
M25/00134
M25/00145
M25/00151
M25/00161
M25/00162
M25/00171
M25/00187
M25/00206
M25/00207
M25/00208
M25/00209
M25/00210
M25/00220
M25/00234
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
38km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
Queensland Tenements
EPM19043
EPM19054
46km SE of Gunpowder
30km N of Cloncurry
NSW Tenements
EL7951
EL7955
EL8057
EL8061
EL8086
EL8088
EL8105
EL8192
EL8202
EL8221
EL 7023
EL 7257
EL 5878
72km NW of Nyngan
27km NW of Nyngan
50km E of Cobar
Gundagai
57km E of Cobar
10km N of Mount Hope
25km E of Holbrook
23km SE of Parkes
63km SE of Cobar
15km SE of Gundagai
10km N of Forbes
40km SSW of Goulburn
100km NW of Condobolin
(%)
100 Ni Lat
100 Ni Lat
100 Ni Lat
100
100 Ni Lat
100 Ni Lat
100 Ni Lat
100
100 Ni Lat
100 Ni Lat
100 Ni Lat
100 Ni Lat
100 Ni Lat
100 Ni Lat
100 Ni Lat
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
HERON RETAINED RIGHTS, WA
METALIKO: HERON RETAINS NICKEL RIGHTS
100% to Ni
63km NNW of Kalgoorlie
M24/00919
100% to Ni
55km NNW of Kalgoorlie
P24/04198
100% to Ni
55km NNW of Kalgoorlie
P24/04199
100% to Ni
62km NNW of Kalgoorlie
P24/04200
100% to Ni
62km NNW of Kalgoorlie
P24/04201
100% to Ni
70km NNW of Kalgoorlie
P24/04210
100% to Ni
62km NNW of Kalgoorlie
P24/04212
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
6
6
6
6
6
6
6
6
6
6
6
6
6
7
7
7
7
7
7
7
PIONEER: HERON RETAINS NICKEL LATERITE
E27/00273
E27/00278
66km NE of Kalgoorlie
61km NE of Kalgoorlie
Ni Lat 100
Ni Lat 100
Live
Live
P25/02252
P25/02253
P25/02254
P25/02255
P25/02256
P25/02257
P25/02258
P29/02264
P29/02265
P29/02266
P29/02267
P31/02038
P31/02039
P31/02040
P31/02040
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
40km E of Kalgoorlie
90km NNW of Kalgoorlie
90km NNW of Kalgoorlie
90km NNW of Kalgoorlie
90km NNW of Kalgoorlie
113km NE of Kalgoorlie
113km NE of Kalgoorlie
113km NE of Kalgoorlie
113km NE of Kalgoorlie
EPM19122
EPM19168
16km E of Gunpowder
10km SE of Gunpowder
EL8223
EL8267
ELA4964
ELA4975
ELA4978
ELA5005
EL7941
EL 7954
EL 5583
SML20
ML 739
EL 7468
EL 7469
41km E Cobar
70km SE of Cobar
5km N of Forbes
70km SE of Cobar
15km E of Tarago
27km NNE of Yass
100km NW of Condobolin
25km W of Goulburn
15km E of Orange
40km SSW of Goulburn
10km N of Forbes
5km E of Collector
15km E of Bugendore
(%)
100 Ni Lat
100 Ni Lat
100 Ni Lat
100 Ni Lat
100 Ni Lat
100 Ni Lat
100 Ni Lat
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Live
Pending
Pending
Pending
Pending
Pending
Live
Live
Live
Pending
Pending
Pending
Pending
Live
Live
Live
Live
Live
Live
Live
P24/04215
P24/04216
P24/04217
P24/04218
P24/04222
P24/04488
60km NNW of Kalgoorlie
60km NNW of Kalgoorlie
55km NNW of Kalgoorlie
55km NNW of Kalgoorlie
55km NNW of Kalgoorlie
71km NW of Kalgoorlie
100% to Ni
100% to Ni
100% to Ni
100% to Ni
100% to Ni
100% to Ni
Live
Live
Live
Live
Live
Live
E28/01746
P28/01120
62m NE of Kalgoorlie
62km NE of Kalgoorlie
Ni Lat 100
Ni Lat 100
Live
Live
6
6
6
6
6
6
6
7
7
7
7
7
7
Heron Resources Limited - Annual Report 2014 - Page 73
9.0 INTEREST IN MINING TENEMENTS CONTINUED
Tenement
Location
Heron Interest Status Note
Tenement
Location
Heron Interest Status Note
(%)
(%)
RAMELIUS: HERON PRE-EMPTIVE RIGHT TO NICKEL LATERITE
E27/00300
M15/01101
M15/01263
48km N of Kalgoorlie
65km S of Kalgoorlie
65km S of Kalgoorlie
preempt Ni Lat
preempt Ni Lat
preempt Ni Lat
M15/01264
M15/01323
M15/01338
Live
Live
Live
65km S of Kalgoorlie
65km S of Kalgoorlie
65km S of Kalgoorlie
preempt Ni Lat Live
preempt Ni Lat Live
preempt Ni Lat Live
ST IVES GOLD MINING, HERON RETAINS ROYALTY ON GOLD PRODUCTION
AND RIGHT TO EXPLORE AND MINE BASE METALS
E15/00927
E15/01005
E15/01010
68km SE of Kalgoorlie
70km SE of Kalgoorlie
60km SSE of Kalgoorlie
Royalty
Royalty
Royalty
Live
Live
Live
E15/01040
68km SE of Kalgoorlie
YARRI BATTERY AND RESOURCES: HERON RETAINS A ROYALTY ON GOLD PRODUCTION
Live
E31/00859
Live
E31/00887
Live
P31/01788
Live
P31/01789
Live
P31/01790
170km NE of Kalgoorlie
160km NE of Kalgoorlie
136km NE of Kalgoorlie
136km NE of Kalgoorlie
136km NE of Kalgoorlie
137km NE of Kalgoorlie
141km NE of Kalgoorlie
141km NE of Kalgoorlie
141km NE of Kalgoorlie
P31/01791
P31/01792
P31/01793
P31/01794
Royalty
Royalty
Royalty
Royalty
Royalty
Royalty
Live
Royalty
Royalty
Royalty
Royalty
Live
Live
Live
Live
SOUTHERN GOLD LTD: HERON RETAINS 20% FREE CARRIED TO BFS
E25/00250
32km ESE of Kalgoorlie
E25/00361
Live
20
KCGM: HERON RETAINS A ROYALTY ON GOLD PRODUCTION
E26/00124
P26/03481
P26/03757
P26/03758
P26/03360
P26/03361
14km N of Kalgoorlie
14km N of Kalgoorlie
10km NE of Kalgoorlie
10km NE of Kalgoorlie
6km NNE of Kalgoorlie
6km NNE of Kalgoorlie
Royalty
Royalty
Royalty
Royalty
Royalty
Royalty
Live
Live
Live
Live
Live
Live
P26/03362
P26/03493
P26/03494
P26/03495
P26/03496
30km E of Kalgoorlie
20
Live
6km NNE of Kalgoorlie
6km NNE of Kalgoorlie
6km NNE of Kalgoorlie
6km NNE of Kalgoorlie
6km NNE of Kalgoorlie
Royalty
Royalty
Royalty
Royalty
Royalty
Live
Live
Live
Live
Live
CLIFF ASIA PACIFIC: HERON RETAINS A ROYALTY ON IRON ORE PRODUCTION
E29/00710
E30/00368
104km WNW of Menzies
130km N of Southern Cross
E29/00736
M27/00272
Royalty
Royalty
104km WNW of Menzies
20km NW of Kalgoorlie
live
live
Royalty
100% to Ni
Live
Live
Notes:
1.
2.
3.
4.
5.
6.
7.
Britannia Gold Ltd retained precious metal rights.
Impress Ventures Ltd has a 10% equity free-carried interest to a decision to mine.
Swan Gold Limited holds the tenement, Heron retains nickel rights.
Placer Dome Australia Limited (Norton Goldfields) retains certain gold rights.
Heron previously entered a binding framework agreement with Ningbo Shanshan Co Ltd, Shanshan had the right to earn a 70% interest
in the Yerilla Nickel-Cobalt Project. The JV ended in May 2011.
Subject to Farm In agreement with Southern Gold Ltd (who have earned an 80% interest). Heron retains 100% of nickel laterite.
Metalliko holds the tenement, Heron retains nickel rights.
Page 74 - Heron Resources Limited - Annual Report 2014
10.0 Glossary
10.1 Corporate / General Definitions
ASIC means Australian Securities and Investments Commission
ASX means ASX Limited (ABN 98 008 624 691) or the Australian Securities Exchange, as appropriate
Australian Registry means Security Transfer Registrars Pty Ltd of 770 Canning Highway, Applecross WA
Canadian Registry means TMX Equity Transfer Services Inc. of 200 University Avenue, Suite 300, Toronto ON M5H 4H1
CIM Standards means Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council on 20 August 2000
Heron or HRR means Heron Resources Limited (ABN 30 068 263 098)
HRR : ASX is the Heron code on ASX
HER : TSX is the Heron code on TSX
IFRS means International Financial Reporting Standards
OSC means Ontario Securities Commission
SML 20 Transaction Documents means
(a)
(b)
(c)
Deed to Assign Special Mining Lease dated 30 November 2011 made between Veolia Environmental Services (Australia) Pty Ltd
(ACN 051 316 584) (Veolia), Tarago Operations Pty Ltd (ACN 127 810 413) (Tarago) and TriAusMin;
Deed of Option dated 30 November 2011 made between Veolia and Tarago; and
Co-operation Deed dated 30 November 2011 made between Veolia, Tri Origin Mining Pty Ltd (ACN 115 529 112), Tarago and
TriAusMin
Subsidiary means has the meaning given to that term in section 9 of the Corporations Act
TriAusMin or TRO means TriAusMin Limited (ABN 22 062 002 475)
TSX means the Toronto Stock Exchange
VWAP means Volume weighted average price
WEP means Woodlawn Exploration Project
WRP Woodlawn Retreatment Project
WUP Woodlawn Underground Project
10.2 Technical Definitions
Ag means Silver
Au means Gold
Anomaly means a value higher or lower than expected, which outlines a zone of potential exploration interest but not necessarily of
commercial significance.
Archaean means a period of geological time spanning 3.8 to 2.5 billion years before present
Cu means Copper
Decline means a declined tunnel accessing an ore body
Feasibility Study means a study with three progressively more detailed stages:
Scoping Study is an Australian term and means a first pass estimate of engineering requirements and costs of a mining operation,
processing plant and plant infrastructure. Included in the cost estimates will be infrastructure, tailings disposal, power supply, and
owner's costs. The plant design may change as a result of test-work analysis, optimisation studies and engineering improvements
performed during execution of the follow-up Pre-feasibility Study. Operating and capital cost estimates are to an order of magnitude
accuracy of ± 30%.
PEA means Preliminary Economic Assessment, and is a Canadian term for a TSX-based mineral project evaluation which has two key
elements that distinguish it from other studies, firstly, it cannot be a PFS or FS, and secondly, a PEA can only demonstrate the potential
viability of mineral resources. PFS and FS are more comprehensive studies and, therefore, are sufficient to demonstrate the technical
and economic viability of a mineral project (section 2.3(1)(b) of NI 43-101 does not allow issuers to include inferred mineral resources in
a PFS-level economic analysis, whereas section 2.3(3) of NI 43-101 allows issuers to include inferred mineral resources in a PEA). PEA
is more advanced than an ASX “Scoping Study”.
Pre-feasibility Study (PFS) is an Australian term and means an engineering and cost study of a mining operation, processing plant and
plant infrastructure. Included in the cost estimates will be infrastructure, tailings disposal, power supply, and owner's costs. The plant
design may change as a result of test-work analysis, optimisation studies and engineering improvements performed during execution of
the Pre-feasibility Study. Operating and capital cost estimates are to an accuracy of ± 25%.
Bank Feasibility Study (BFS) is an Australian term and means a feasibility study undertaken to a high degree of accuracy which may
be used as a basis for raising finance for the construction of a project.
Typically operating and capital cost estimates are to an accuracy of +/- 15-20%. A BFS is the standard of report required by primary debt
funders to demonstrate the technical and commercial viability of a project.
Heron Resources Limited - Annual Report 2014 - Page 75
10.0 GLOSSARY CONTINUED
KNP means Kalgoorlie Nickel Project, a nickel laterite project located through an arc 30 to 150km north-north west to east of Kalgoorlie
Level means Horizontal series of developments all at the same distance measured from the surface
m means metre and km means kilometres
Mt means Million tonnes
Mineralisation means in economic geology, the introduction of valuable elements into a rock body
Ni means Nickel
Nickel Laterite means Nickel occurring as an oxidised hydrated iron oxide, ferruginous clay, smectite clay, chlorite and serpentine
assemblage overlying weathered ultramafic rock
Saprolite Ore means nickel laterite mineralisation consisting of hydrated magnesium silicate minerals with nickel and cobalt occurring
in association with the silicate phases. The ore is a weathered clay-rich rock which retains original rock textures, and is significantly
more competent than Nontronite, Manganiferous, Goethite or Siliceous Ore
Nickel Sulphide means nickel and copper occurring as an un-oxidised sulphide assemblage associated with fresh ultramafic rock
Pb means Lead
Project means a grouping of prospects within a specific geographic location, often with a common geological setting
Prospect means a target upon which exploration programs are planned or have commenced
Province means a grouping of projects within a geological district defined by a major mineralised crustal structure
RAB means Rotary Air Blast drilling technique in which a sample is returned to surface outside the rod string by compressed air. Sample
quality is poor
RC means Reverse Circulation drilling method employing a rotating or hammering action on a drill bit which returns a sample to the surface
inside the rod string by compressed air. Sample quality is very good, particularly if the drill hole is dry
Reserves or Ore Reserves or Mineral Reserves as defined by JORC Code, NI43-101 or CIM Standards.
Proven or Proved Ore Reserve means the economically mineable part of a Measured Mineral Resource. It includes diluting materials
and allowances for losses which may occur when the material is mined. Appropriate assessments, which may include Feasibility Studies,
have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing,
legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could
reasonably be justified. The term "economic" implies that extraction of the Ore Reserve has been established or analytically
demonstrated to be viable and justifiable under reasonable investment assumptions.
Probable Ore Reserve is the economically mineable part of an Indicated Mineral Resource.
Resource or Mineral Resource means a Mineral Resource as defined by JORC Code, NI43-101 or CIM Standards and is a concentration or
occurrence of material of intrinsic economic interest in or on the earth’s crust in such form, quality and quantity that there are reasonable
prospects for eventual economic extraction. Mineral Resources are further sub-divided, in order of increasing geological confidence, into
Inferred, Indicated and Measured categories.
Measured Resource means a ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality),
densities, shape and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to
support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed
and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes, and is sufficient to confirm geological and grade (or quality) continuity between points of observation where
data and samples are gathered. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated
Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proved Ore Reserve or under certain circumstances to a
Probable Ore Reserve
Indicated Resource means an ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality),
densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in
sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from
adequately detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes, and is sufficient to assume geological and grade (or quality) continuity between points
of observation where data and samples are gathered. An Indicated Mineral Resource has a lower level of confidence than that applying
to a Measured Mineral Resource and may only be converted to a Probable Ore Reserve.
Inferred Resource means an ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade (or quality) are
estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological
and grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drill holes. An Inferred Mineral Resource has a lower level of confidence
than that applying to an Indicated Mineral Resource and must not be converted to an Ore Reserve. It is reasonably expected that the
majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continue exploration.
Resource Categories:
JORC (2012 edition) means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and is a
professional code of practice that sets minimum standards for Public Reporting of minerals Exploration Results, Mineral Resources and
Ore Reserves. The JORC Code provides a mandatory system for the classification of minerals Exploration Results, Mineral Resources and
Ore Reserves according to the levels of confidence in geological knowledge and technical and economic considerations in Public Reports.
NI 43-101 means National Instrument 43-101 and is a national instrument for the Standards of Disclosure for Mineral Projects within
Canada. The Instrument is a codified set of rules and guidelines for reporting and displaying information related to mineral properties
owned by, or explored by, companies which report these results on stock exchanges within Canada. This includes foreign-owned mining
entities who trade on stock exchanges overseen by the Canadian Securities Administrators, even if they only trade on Over The Counter
(OTC) derivatives or other instrumented securities.
Page 76 - Heron Resources Limited - Annual Report 2014
Woodlawn - a story of discovery
circumstances
1970 Mapped gossan & discovery hole
1970 Early drilling down plunge F Lens
1970 F Lens discovery hole
1978 to 1998 Modelling of massive sulphide lenses
E Lens
H Lens
Open Pit
(Waste disposal site)
A Lens
W
L
T
D
0
1
5
Kate Lens
J Lens
4.0m @ 3.1% Cu, 8g/t Ag
J Lens
350m
620m
deepest
workings
New
D Lens
B Lens
B Lens
4.0m @ 3.3% Cu, 13g/t Ag
13.7m@ 4.3% Cu, 13.4g/t Ag
C Lens
Proposed
2H 2014 Drilling
Pierce point
Kate Lens
32m @ 4.6% Zn, 1.8% Cu, 1.2% Pb, 0.6g/t Au, 22g/t Ag
incl 9m @ 16.1% Zn, 2% Cu, 4% Pb, 0.8g/t Au, 52g/t Ag
I Lens
9.45m @ 6.2% Zn, 1.7% Cu, 1.2% Pb, 0.8g/t Au, 14.6g/t Ag
14.5m @ 11.7% Zn, 3.7% Cu, 3.7% Pb, 1.9g/t Au, 121g/t Ag
9.0m @ 8.6% Zn, 2.9% Cu, 4.6% Pb, 2.1g/t Au, 167g/t Ag
NEW I2 Lens
7.3m @ 6.0% Zn, 1.7% Cu, 1.8% Pb, 2.9g/t Au, 54g/t Ag
8.9m @ 6.3% Zn, 2.7% Cu, 3.0% Pb, 1.2g/t Au, 71g/t Ag
D Lens
11.1m @ 8.3% Zn, 0.9% Cu, 3.6% Pb, 0.4g/t Au, 61.2g/t Ag
13m @ 5.5% Zn, 0.2% Cu, 2.2% Pb, 0.2g/t Au, 23.7g/t Ag
8.0m @ 10.7% Zn, 1.2% Cu, 3.9% Pb, 0.6g/t Au, 57g/t Ag
400m
Prospective
Untested
NW corridor
Woodlawn Mine
Historical production
13.8Mt @ 9.1% Zn, 3.6% Pb,
1.6% Cu, 74g/t Ag, 0.5g/t Au
Area A
:::::::::::::::::::::::::::::::::::::::::::::::::
Cowley Hills
Murphy’s
SML20
SML20
:::::::::::::::::::::::::::::::::::::::::::::::::
Willows
2km
2014 Woodlawn back to life as a vibrant exploration project now headed towards feasibility with Heron.
Heron Resources Limited - Annual Report 2014 - Page 77
ASX:HRR (cid:129) TSX:HER
www.heronresources.com.au