Sheffield Resources Limited
ANNUAL REPORT 2011
ACN 125 811 083
CORPORATE INFORMATION
ACN 125 811 083
Directors
Mr Will Burbury, Chairman
Mr Bruce McQuitty, Managing Director
Mr David Archer, Technical Director
Company secretary
Mr Will Burbury
Registered office
14 Prowse Street
West Perth WA 6005
Principal place of business
14 Prowse Street
West Perth WA 6005
Share register
Link Market Services
178 St Georges Terrace
Perth WA 6000
Solicitors
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Bankers
Australia and New Zealand Banking Corporation
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Securities Exchange Listing
Australian Securities Exchange (ASX: SFX)
A dynamic mineral exploration company
with a bulk mineral focus
Heavy Mineral Sands
• SFX is exploring for zircon and titanium feedstock (rutile, leucoxene,
ilmenite)
• Zircon uses: manufacture of ceramics and refractory linings
• Titanium uses: pigment production for paint, coatings, plastics, tita-
nium metal
• Urbanisation in emerging countries such as China has produced an
acute shortage of supply and increased demand for zircon and titanium
minerals
“China may have a lock on exotic rare earths that go into
mobile phones and stealth fighters, but the real money is also
being made in the more mundane world of Australian mineral
sands that go into bathroom tiles and pacemakers.”
REUTERS
Talc
• Talc is a simple dig and deliver commodity
• SFX is exploring for premium grade talc to gain market penetration
• Talc has many uses: however its main use is in the manufacture of
paper, ceramics, plastics for automotive industry
“Chinese output of high quality powder and lump is considered
insufficient to meet the needs of either Chinese domestic
market or export.”
INDUSTRIAL MINERALS, 2008
Iron ore
• SFX is exploring for iron ore in the Pilbara
• Strategy is to target hematite mineralisation adjacent to infrastructure
and to build up consolidated tenement holdings
• Dig and deliver product with main use being for steel production
‘‘The (iron ore) demand outlook continues to be strong with
supply lagging elsewhere in the industry and we are seeing
new supplies proving slower to materialise than predicted’’
RIO TINTO, 2011
CONTENTS
Chairman’s Letter
Review of Operations
Directors Report
Auditor’s Independence Declaration
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
3
4
14
20
21
22
23
Statement of Cash Flows
Notes to the Financial Statements
Directors Declaration
Independence Auditor’s Report
Corporate Governance Statement
ASX Additional Information
24
25
45
46
48
51
Drilling at Moora Talc Belt
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CHAIRMANS LETTER
Dear Shareholders,
I am pleased to present this review of operations of the Company for the year ended 30 June 2011.
The Company has had a very busy and productive financial year achieving excellent progress on the exploration and
development of our projects. This has been underpinned by the completion of a heavily oversubscribed IPO and ASX
listing in December 2010 and the recruitment of a high calibre exploration team. The Company has assembled a large
area of granted exploration tenure in Western Australian targeting a number of strategic commodities. Most of these
tenements form large consolidated projects which are close to accessible infrastructure.
The more significant of these exploration projects include:
Heavy Mineral Sands (HMS) projects in the Mid-West and Kimberley regions;
The Three Pools and Panorama Iron Ore projects, located in the Pilbara.
The Moora Talc Belt project; and
I am delighted to confirm that exploration results to date have been extremely encouraging on each of these projects.
Highlights to date include:
Yandanooka HMS project - the announcement of our first JORC resource;
West Mine North, Ellengail, McCalls projects – positive drilling results with resource estimation being
undertaken in Q3 of 2011;
Dampier HMS Project – the grant of a new licence with high grade zircon potential, exploration to commence in
2012;
Moora Talc Belt project – high grade talc results from initial diamond core drilling; and
Pilbara Iron Ore projects – high grade iron ore mineralisation has been identified from rock chip sampling and
mapping. Drilling has commenced at the highly prospective Three Pools project.
There has been a remarkable improvement in markets for HMS commodities during the last 12 months and it is our
intention to rapidly progress the development of our HMS projects to take advantage of this. Given the exploration
success we have achieved in a relatively short time, your Board believes there is scope to unlock value on our HMS
projects in the year ahead. We plan to undertake pre-feasibility studies on the more advanced projects in the mid-west
region and to commence exploration on the large and highly prospective Dampier project.
The Company’s talc and iron ore projects will also proceed to resource drilling during the year ahead subject to further
success of the initial exploration drilling.
I would like to thank management, staff and all stakeholders for their substantial contribution and support in growing our
Company to this very exciting point, and look forward to building on our early success in the forthcoming year.
Yours sincerely
Will Burbury
Chairman
17 October 2011
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REVIEW OF OPERATIONS
Introduction
Sheffield has had a very busy and productive year which was largely underpinned by:
1. The completion of a heavily oversubscribed initial public offering and subsequent ASX listing. The IPO raised
$7 million, ensuring a strong financial position and adequate funding for an aggressive exploration programme.
Cash reserves at the end of the period were $4,128,361; and
2. The recruitment of a high calibre exploration team consisting of 4 experienced geologists and a complimentary
field operations team. This has allowed the Company to plan and then complete an aggressive drilling
campaign during April-June 2011, comprising:
10,183 metres of aircore drilling (Mineral Sands Projects); and
1,238 metres of diamond drilling (Moora Talc Belt Project).
Sheffield has 28 granted tenements totalling 1,552km2 and over 5,000km2 of exploration tenure under application, all
within the state of Western Australia. Most of the tenements are clustered to form larger consolidated projects which are
located close to accessible infrastructure.
The Company is targeting commodities that are geared towards the steel industry feed cycle (iron ore and tungsten) and
the emerging fillers-ceramics-pigments cycle (talc, zircon, titanium). Over the past 18 months, there has been a
considerable improvement in the prices of the Company’s targeted commodities.
The Company’s near term strategy is to aggressively drill these projects to resource status from where they can be
developed into viable commercial operations.
The results from this drilling, together with data collated from extensive historical exploration databases, will enable
resource estimates to be completed on 4 of the Company’s mineral sands projects during the second half of 2011.
Recently, the Company announced its first resource at the Yandanooka project.
Drilling at Yandanooka
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Figure 1: Location of Sheffield’s projects in Western Australia
Figure 2: Location of Sheffield’s projects in the Mid-West Region
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Heavy Mineral Sands “HMS” projects
Sheffield controls over 5,000km2 of tenure in the established North Perth Basin and the emerging Carnarvon, Eucla and
Canning Basin provinces (Figures 1 & 2). Most of this tenure has been acquired as a result of applications lodged by the
Company over vacant prospective ground, however the Company also completed the following strategic acquisitions:
1. On 17 January 2011, Sheffield purchased the McCalls HMS project from a prospecting syndicate for a
consideration of $30,000 in cash and 500,000 Sheffield shares. McCalls is a large ex-BHP exploration project
located 110km north of Perth and is well located with respect to existing infrastructure. Sheffield has ascribed
an Exploration Target* of 1.5-2.5 Billion tonnes of between 1.1-1.3% HM to the greater McCalls project.
2. On 11 March 2011 Sheffield completed the purchase of 4 tenements, including 3 granted mining leases, from
Iluka Resources Ltd (ASX:ILU). These tenements contain significant concentrations of heavy minerals outlined
by extensive prior drilling. Sheffield acquired 100% interest in the tenements for a consideration of $150,000
and a 1.5% gross sales royalty. The acquisition provides Sheffield with advanced exploration projects on
granted mining tenure near existing infrastructure, offering opportunity for near-term development.
Since making these acquisitions there has been considerable improvement in markets for HMS commodities.
Sheffield now has over 2,500km2 of tenure in the North Perth Basin mineral sands province, incorporating several
advanced exploration projects (Figure 3). These projects are strategically located close to existing mineral sands
operations and to a network of highways and railway lines connecting to Geraldton and Fremantle/Kwinana ports.
Sheffield’s programme of 10,183m of aircore drilling targeted the Yandanooka, Irwin, Drummond Crossing, West Mine
North and McCalls projects. At the time of writing, final assay results have been received for Yandanooka, West Mine
North and Irwin.
Figure 3: Location of Sheffield’s mineral sands projects near Eneabba
*Sheffield Resources has not yet reported Mineral Resources at McCalls and any discussion in relation to targets and Mineral
Resources is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if
further exploration will result in the determination of a Mineral Resource.
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Yandanooka HMS project
Yandanooka is one of few remaining outcropping HMS deposits in the mid-west. It is situated on freehold land just 2.5km
from existing road and rail infrastructure connecting to Geraldton port, approximately 140km to the northwest.
Sheffield completed a 130 hole drilling programme at Yandanooka, designed to infill and confirm the drill results of
previous explorers. The drill results from this programme improved on the results of historical drilling, outlining a zone of
heavy mineral bearing sand approximately 4km long by 1km to 1.6km wide and between 3m and 20m thick. Within this is
a coherent higher grade zone (>3% HM) which is approximately 3.4km long, 500m to 800m wide and 3m to 10m thick
(Figures 4 & 5).
Subsequent to the reporting period, Sheffield announced a maiden resource for the Yandanooka deposit of 1.84 million
tonnes of contained HM (71.75Mt @ 2.6% HM in Indicated and Inferred categories), including an Indicated Resource
for the high grade core of 1.41Mt of contained HM (37.5Mt at 3.8% HM). The deposit has a high value mineral
assemblage comprising 11.5% zircon, 6.9% rutile, 10.2% leucoxene and 61.9% ilmenite.
Bulk sample metallurgical testwork is scheduled to be completed during the second half of 2011.
Significantly, Sheffield has secured an additional 60km of strike of the prospective Yandanooka palaeoshoreline trend
with the granting of exploration licences E70/3761 and E70/3762 containing known HMS occurrences at Durack and
Arrino. The mineralisation at these prospects, like Yandanooka, occurs at surface.
West Mine North HMS project
West Mine North comprises 3 granted mining leases and is located 6km to the west of Eneabba, immediately along
strike to the north of Iluka’s Eneabba West mine. The project comprises a 3km strike continuation of the high grade
strand mineralisation that was dredge mined at Eneabba West in the 1990’s.
Sheffield completed a programme of 90 drill holes which were designed to infill and confirm Iluka’s previous drilling
results and to provide material for mineralogical and metallurgical testwork.
The drill results from this programme confirm a zone of high grade mineralisation (>2.5% HM) approximately 3.5km long
by 250m wide and up to 22m thick. The high-grade mineralisation is variably overlain and enveloped by a halo of lower
grade (1-2% HM) mineralisation.
Mineral assemblage test work, bulk sample metallurgical testwork and resource estimation will be undertaken during the
second half of 2011.
Ellengail HMS project
Ellengail lies a further 3km along strike to the north of West Mine North and consists of a 3km strike of strand
mineralisation which, in the northern half of the deposit is overlain by near-surface lower grade dunal mineralisation. The
project is held under a retention licence (R70/35).
Since acquiring the project, Sheffield has collated and interpreted all prior exploration data, and is undertaking mineral
assemblage testwork and a resource estimate.
Irwin HMS project
The Irwin project comprises granted exploration licences E70/3812 and E70/3830, plus several adjoining exploration
licence applications, and is located 80km southeast of Geraldton. The project tenements lie to the east, west and north of
Tiwest JV’s large Dongara heavy mineral sands deposit.
Sheffield completed a 31 hole drilling programme to test the northward continuity of a broad zone of low grade dunal
mineralisation outlined by scout drilling undertaken by North Mining Ltd in 1994.
The drill results from this programme confirms the presence of a large 1.5–2.5km wide zone of low grade (1-2% HM),
dunal-style mineralisation, and increase the strike length of the zone to 5km. The mineralisation averages 10m in
thickness but is locally up to 18m thick at 1% HM cut-off and is variably overlain and enveloped by a halo of lower grade
(0.5-1% HM) mineralisation.
An important feature of the dunal mineralisation is the low slimes content (weighted average 6.4%) and low oversize
(3.0%), which favour low cost processing techniques.
The Company will undertake mineral assemblage testwork prior to planning further drilling.
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Figure 4: Plan view of the Yandanooka Deposit showing resouce domains
Figure 5: Typical cross-sections, looking north, through the Yandanooka deposit
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McCalls HMS project
The McCalls project is located 110km north of Perth. The project comprises granted exploration licence E70/3967 and
exploration licence applications E70/3929 and E70/3931, forming a contiguous tenement package, 471km2 in total area.
Previous exploration by BHP in the early 1990s outlined large heavy mineral sand deposit covering an area of 30km2,
and extending from near-surface to depths of typically 30-45m, locally up to 54m. Drill intersections commonly comprise
broad intervals of between 1.0% and 1.5% HM.
Sheffield completed a programme of 30 aircore drill holes to confirm the BHP results, assess local grade variability and
to provide material for mineral assemblage testwork. The results of this work are still pending at the time of writing.
The Company plans undertake a resource estimate on McCalls during Q4 2011.
Other North Perth Basin HMS projects
Thirty aircore holes were drilled at a dunal HMS target at Drummond Crossing (E70/3814). The samples are yet to be
submitted for analysis.
The Stockyard project tenement E70/3898, located 20km southwest of Eneabba, was granted during May 2011. Several
promising exploration targets have been identified based on analysis of data from prior exploration work and will prioritise
these targets for drilling during 2011-2012.
Following a strategic review of the Company’s project portfolio, the Cowella Peak tenements E70/3801-3803 were
surrendered due to a comparative lack of prospectivity relative to other projects.
Woodleigh HMS project
The Woodleigh project covers conceptual HMS targets in the Carnarvon Basin. Following a field visit and geological
review, one project tenement E09/1740 was surrendered. The Company plans to undertake an analysis of open file
aeromagnetic data on the remaining tenement E09/1739.
Other HMS projects
Sheffield has tenement applications totalling 700km2 located on the Dampier Peninsula, 65km west of Derby in Western
Australia’s Kimberley region. The Dampier project covers two significant fine-grained HMS deposits discovered between
2004 and 2009 by Rio Tinto Exploration. The company also has an exploration licence application in the Eucla Basin.
Moora Talc Belt project
Sheffield holds more than 1,152km2 of tenure over the 175km-long Moora Talc Belt (Figure 6). For the past 50 years the
Moora Talc Belt has been exclusively controlled by large mining companies such as Rio Tinto, Western Mining
Corporation and Unimin.
The Moora Talc Belt includes the large Three Springs mine which is owned by Rio Tinto Limited subsidiary Luzenac
Australia Pty Ltd (recently acquired by French conglomerate Imerys). Three Springs has been operating since 1948 and
is renowned for producing premium grade microcrystalline talc and is a relatively simple “dig-and-deliver” operation.
The Moora Talc Belt project contains over twenty known talc occurrences and numerous grassroots targets. Subject to
exploration success, Sheffield’s strategy is to prove up large deposits, or clusters of deposits, containing high quality talc
capable of supporting long-life “direct shipping” mining operations.
Sheffield’s geologists undertook an extensive review of historical talc exploration data and the Company then completed
a diamond drilling programme of 9 holes for 1,238m at the Nivens, Haigs, Buckingham, Prowaka South, Tilleys and
Fowlers prospects. The objective of the programme was to test for the presence of high quality marketable talc.
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Significant talc intersections were obtained in four of the six targets tested, including:
72.3m of talc from 0.9m depth in drill hole MODD006, and
83.7m of talc from 0.8m depth in drill hole MODD008 at Fowlers prospect, and
26.5m of talc from 45m depth in drill hole MODD009 at Tilleys Prospect.
(Refer to ASX release of 27 June 2011 for full details).
The talc intersections in drill holes MODD006 and MODD008 at Fowlers are amongst the longest recorded at that
prospect.
Sampling and processing of the drill core has subsequently been completed. Samples have been submitted for XRF
analysis and brightness measurements to determine the suitability of the talc for various end use applications.
Sheffield is one of very few listed public companies in the world offering significant exposure to talc.
Figure 6: Location of Sheffield’s Moora Talc Belt Projects
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Pilbara Iron project
Sheffield is targeting direct shipping hematite iron ore in the world class Pilbara iron province.
The Pilbara iron project comprises 5 granted exploration licences, four of which, E47/2280 “Three Pools”, E47/2291
“Eagle Pool”, E45/3640 “Discard” and E45/3662 “Panorama” are located in the eastern Pilbara (Figure 7). The company
also has 16 tenement applications, of which three are second-in-time and five are subject to ballot with multiple
competing parties. Sheffield’s strategy is to build up consolidated tenement holdings adjacent to infrastructure over time.
Sampling and mapping programmes were undertaken on the Company’s east Pilbara iron ore projects, work which
outlined a substantial DSO exploration target at Three Pools and smaller mineralised zones at Panorama and Eagle
Pool. The results of this work are detailed in ASX releases of 11 May and 27 July 2011.
Figure 7: Location of Sheffield’s Iron Projects in the Eastern Pilbara
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Sheffield announced an Exploration Target of 20-60Mt at 58 to 64% Fe at Three Pools based on the results of detailed
mapping and sampling conducted during the month of June. This target is derived from the total mapped area of
enrichment at five prospects (approximately 789,470m2), a mineralisation thickness of between 10m and 30m and typical
bulk densities for high grade bedded iron deposits.
Sheffield has not yet reported Mineral Resources at the Three Pools project and any discussion in relation to targets and
Mineral Resources is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is
uncertain if further exploration will result in the determination of a Mineral Resource.
In total 70 rock chip samples have been collected from iron enrichment at Three Pools. These samples returned an
average grade of 61.89% Fe (with values up to 66.6% Fe) and 0.097% P. Results of sample traverses taken across
strike include:
372.2m at 60.48% Fe and 337.4m at 62.46% Fe from Top Forge prospect,
230.9m at 60.22% Fe from Paradise prospect, and
135.8m at 61.26% Fe from Crucible prospect.
(Refer to ASX release of 27 July for further details).
The Company will undertake Aboriginal Heritage surveys at Three Pools during Q3 2011 ahead of an initial RC drilling
programme scheduled for Q4 2011.
At Eagle Pool, located 4km west of Three Pools, mapping and sampling resulted in the identification of channel iron
deposit (CID) and minor bedded iron enrichment.
Mapping and sampling at the Panorama project, located near Atlas Iron’s Abydos mining centre, outlined a zone of iron
mineralisation with a strike length of approximately 500m to 600m with a thickness of between 20 and 40m. Seven rock
chip samples from this zone averaged 59.8% Fe, although phosphorous levels were elevated (av. 0.228% P).
Other Projects
The Company has one granted tenement E80/4394 covering tungsten occurrences at Berthas Butt, located 40km to the
east of Halls Creek. Initial mapping and sampling work is planned for Q3 2011.
The Company is also progressing applications for three exploration licences E53/1614-16 for Rare Earth Elements (REE)
at Desert Bore, east of Wiluna and a single exploration licence for lateritic iron and bauxite at Cape Londonderry in the
far north Kimberley.
Sheffield’s Exploration Team in action
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COMPETENT PERSONS’ STATEMENTS
The information in this announcement that relates to exploration results is based on information compiled by Mr Bruce
McQuitty and Mr David Archer. Both Mr McQuitty and Mr Archer are full time employees of the Company. Mr McQuitty
and Mr Archer are Members of the Australasian Institute of Geoscientists and each has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and the activity to which they are
undertaking to qualify as Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”)’. Each of Mr McQuitty and Mr Archer consent
to the inclusion in the report of the matters based on their information in the form and context in which it appears.
YANDANOOKA RESOURCE ESTIMATE
The information in this announcement that relates to resource estimation is based on information compiled under the
guidance of John Vann. Mr Vann is a Principal of Quantitative Group and acts as a consultant to the Company. Mr
Vann is a Fellow of the Australasian Institute of Mining and Metallurgy and a Fellow of the Australasian Institute of
Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration and the activity to which they are undertaking to qualify as Competent Person as defined in the 2004
Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC
Code”)’. Mr Vann consents to the inclusion in the report of the matters based on their information in the form and context
in which it appears.
The information in this announcement that relates to reporting of resource and exploration results is based on information
compiled under the guidance of Mark Teakle. Mr Teakle is a consultant to the Company. Mr Teakle is a Member of the
Australasian Institute of Geoscientists and the Australasian Institute of Mining and Metallurgy and has sufficient
experience which is relevant to the style of mineralisation and type of deposit under consideration and the activity to
which they are undertaking to qualify as Competent Person as defined in the 2004 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”)’. Mr Teakle consents to the
inclusion in the report of the matters based on their information in the form and context in which it appears.
FORWARD LOOKING AND EXPLORATION TARGET STATEMENTS
Some statements in this report regarding estimates or future events are forward-looking statements. They involve risk
and uncertainties that could cause actual results to differ from estimated results. Forward-looking statements include, but
are not limited to, statements concerning the Company’s exploration programme, outlook, target sizes and mineralised
material estimates. They include statements preceded by words such as “seek”, “expected”, “target”, “scheduled”,
“intends”, “potential”, “prospective” and similar expressions.
The terms “Target” and “Exploration Target”, where used in this report, should not be misunderstood or misconstrued as
an estimate of Mineral Resources and Reserves as defined by the JORC Code (2004), and therefore the terms have not
been used in this context. Exploration Targets are conceptual in nature and it is uncertain if further exploration or
feasibility study will result in the determination of a Mineral Resource or Reserve.
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DIRECTORS’ REPORT
Your directors submit the annual financial report of the company for the financial year ended 30 June 2011. In order to
comply with the provisions of the Corporations Act, the directors report as follows:
Directors
The names of directors who held office during or since the end of the year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Mr Will Burbury BComm, LLB (Chairman and Company Secretary) Appointed on 6 June 2007
Will Burbury practised as a corporate lawyer with a leading Australian law firm prior to entering the mining and exploration
industry in 2003. During this time, he has been actively involved in the identification and financing of many resources
projects in Australia and on the African continent and has held the senior management positions and served on boards of
several private and publicly listed companies.
Mr Burbury was previously chairman of ASX listed Warwick Resources Limited prior to its merger with Atlas Iron Limited in
2009. He was also previously a director of ASX listed Lonrho Mining Limited and an executive of ASX listed NKWE Platinum
Limited.
Mr Bruce McQuitty BSc, MEconGeol (Managing Director) Appointed on 14 December 2009
Bruce McQuitty has 28 years’ experience in the mining and civil industries. During this time he has held various senior
positions in large mining houses and has been involved in exploration through to the development of mines. Mr McQuitty
has significant technical expertise in exploration, project generation, feasibility, underground mining and engineering
geology and has managed exploration teams in Australia and overseas. Mr McQuitty holds a Masters of Economic Geology
and a Bachelor of Science.
Mr McQuitty was previously Managing Director of ASX listed Warwick Resources prior to its merger with Atlas Iron Limited
in 2009. Prior to that he held senior positions with ASX/AIM listed Consolidated Minerals Limited and Gympie Gold Limited.
Mr David Archer BSc (Hons) (Technical Director) Appointed on 14 December 2009
David Archer is a geologist with 22 years’ experience in exploration and mining in Australia. He has held senior positions with
major Australian mining companies, including Renison Goldfields Consolidated Ltd, and has spent the last ten years as a
Director of Archer Geological Consulting specialising in project generation, geological mapping and project evaluation. Mr
Archer was a consultant to ASX listed Atlas Iron Limited and Warwick Resources Limited and was responsible for significant
iron ore discoveries for both companies in the Pilbara. He was also involved in the discovery of the Magellan lead mine and
the Raleigh and Paradigm gold mines.
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DIRECTORS’ REPORT (continued)
Interests in the shares and options of the company and related bodies corporate
The following relevant interests in shares and options of the company or a related body corporate were held by the
directors as at the date of this report.
Directors
Will Burbury
Bruce McQuitty
David Archer
Number of options
over ordinary shares
Number of fully paid
ordinary shares
2,500,000
5,000,001
2,500,000
5,000,000
2,500,000
5,000,000
Details of ordinary shares issued by the company during or since the end of the financial year as a result of the exercise
of an option are:
Number of shares
Amount paid per share
1,258,333
$0.20
Shares Under Option
At the date of this report unissued ordinary shares of the Company under option are:
Expiry Date
Exercise price (cents)
Number of options
30 June 2013
30 June 2013
30 June 2013
30 November 2013
13 December 2015
20 March 2016
30 June 2016
6 September
20
20
20
30
30
44
44
44
19,654,167
225,000
7,312,500
3,000,000
1,550,000
550,000
525,000
250,000
33,066,667
Dividends
No dividends have been paid or declared since the start of the financial year and the Directors do not recommend the
payment of a dividend in respect of the financial year.
Principal Activities
The principal activities of the company during the year were exploration for and acquisition of bulk commodity projects
targeting commodities that are geared towards the steel industry feed cycle (iron ore and tungsten) and the emerging
filers-ceramics-pigments cycle (talc, zircon, titanium).
The operations of the Company during the financial year reviewed are on pages 4 to 12 of this Annual Report.
There have been no other significant changes in the nature of these activities during the year.
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DIRECTORS’ REPORT (continued)
Significant changes in the state of affairs
There have been no significant changes in the state of affairs of the company to the date of this report.
Significant events after balance date
There have been no significant events after balance date.
Likely developments and expected results
Disclosure of information regarding likely developments in the operations of the company in future financial years and the
expected results of those operations is likely to result in unreasonable prejudice to the company. Therefore, this
information has not been presented in this report.
Environmental legislation
The Company’s operations are subject to environmental regulation in respect to its mineral tenements relating to
exploration activities on those tenements. No breaches of any environmental restrictions were recorded during the
financial year. The company has not yet fully reviewed the reporting requirements under the Energy Efficient
Opportunities Act 2006 or the National Greenhouse and Energy Reporting Act 2007, but believes it has adequate
systems in place to ensure compliance with these Acts having regard to the scale and nature of current operations.
Indemnification and insurance of Directors and Officers
The Company has agreed to indemnify all the Directors of the Company for any liabilities to another person (other than
the Company or related body corporate) that may arise from their position as Directors of the Company, except where
the liability arises out of conduct involving a lack of good faith.
During the financial year the Company paid a premium in respect of a contract insuring the Directors and Officers of the
Company against any liability incurred in the course of their duties to the extent permitted by the Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Remuneration report
This report outlines the remuneration arrangements in place for the key management personnel of the Company for the
financial year ended 30 June 2011. The information provided in this remuneration report has been audited as required by
Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who are defined
as those persons having authority and responsibility for planning, directing and controlling the major activities of the
Company directly or indirectly.
Key Management Personnel
(i) Directors
Will Burbury: Executive Chairman
Bruce McQuitty: Managing Director
David Archer: Technical Director
Remuneration philosophy
The performance of the company depends upon the quality of its Directors and Executives. The philosophy of the
company in determining remuneration levels is to:
set competitive remuneration packages to attract and retain high calibre employees;
link executive rewards to shareholder value creation; and
establish appropriate, demanding performance hurdles for variable Executive remuneration
-
-
-
-
Remuneration structure
In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive
remuneration is separate and distinct.
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DIRECTORS’ REPORT (continued)
Remuneration report (continued)
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the company with the ability to attract and retain
Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from
time to time by a general meeting. The determination of this will be addressed at the upcoming Annual General Meeting.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst Directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid
to Non-Executive Directors of comparable companies when undertaking the annual review process. Each Director
receives a fee for being a Director of the company.
The Company has not appointed any Non-executive Directors.
Senior manager and executive director remuneration
Remuneration consists of fixed remuneration and variable remuneration (comprising short-term and long-term incentive
schemes).
Fixed Remuneration
Fixed remuneration is reviewed annually by the Remuneration Committee. The process consists of a review of relevant
comparative remuneration in the market and internally and, where appropriate, external advice on policies and practices.
The Committee has access to external, independent advice where necessary.
Senior managers are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including
cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment
chosen will be optimal for the recipient without creating undue cost for the Company.
The fixed remuneration component of the 3 most highly remunerated company executives is detailed in Table 1.
Variable Remuneration
The objective of the short term incentive program is to link the achievement of the Company’s operational targets with
the remuneration received by the Executives charged with meeting those targets. The total potential short term incentive
available is set at a level so as to provide sufficient incentive to the senior manager to achieve the operational targets
and such that the cost to the Company is reasonable in the circumstances.
The aggregate of annual payments available for Executives across the Company is subject to the approval of the
Remuneration Committee. Payments made are delivered as a cash bonus in the following reporting period.
The Company also makes long term incentive payments to reward senior executives in a manner that aligns this element
of remuneration with the creation of shareholder wealth.
Employment Contracts
Executive Services Agreement – Bruce McQuitty
The Company entered into a services agreement with Bruce McQuitty (McQuitty Services Agreement) effective 1 July
2010. Under the McQuitty Services Agreement, Mr McQuitty is employed by the Company to provide services to the
Company in the capacity of Managing Director.
Mr McQuitty is paid an annual remuneration of $200,000 plus statutory superannuation. Mr McQuitty will also be
reimbursed for reasonable expenses incurred in carrying out his duties.
The McQuitty Services Agreement will continue until terminated in accordance with its terms. The McQuitty Services
Agreement contains standard termination provisions under which either party must give three months’ notice of
termination (or shorter period in the event of a material breach) or alternatively, payment in lieu of service. In addition, Mr
McQuitty is entitled to all unpaid remuneration and entitlements up to the date of termination.
17 | P a g e
DIRECTORS’ REPORT (continued)
Remuneration report (continued)
Executive Services Agreement – Will Burbury
The Company entered into a services agreement with Will Burbury (Burbury Services Agreement) effective 1 July 2010.
Under the Burbury Services Agreement, Mr Burbury is employed by the Company to provide services to the Company in
the capacity of Executive Chairman and Company Secretary
Mr Burbury is paid an annual remuneration of $100,000 plus statutory superannuation. Mr Burbury will also be
reimbursed for reasonable expenses incurred in carrying out his duties.
The Burbury Services Agreement contains standard termination provisions under which either party must give three
months’ notice of termination (or shorter period in the event of a material breach), or alternatively, payment in lieu of
service. In addition, Mr Burbury is entitled to all unpaid remuneration and entitlements up to the date of termination.
Executive Services Agreement – David Archer
The company entered into a services agreement with David Archer (Archer Services Agreement) effective 1 July 2010.
Under the Archer Services Agreement, Mr Archer is employed by the Company to provide services to the Company in
the capacity of Technical Director.
Mr Archer is paid an annual remuneration of $180,000 plus statutory superannuation. Mr Archer will also be reimbursed
for reasonable expenses incurred in carrying out his duties.
The Archer Services Agreement will continue until terminated in accordance with its terms. The Archer Services
Agreement contains standard termination provisions under which either party must give three months’ notice of
termination (or shorter period in the event of a material breach), or alternatively, payment in lieu of services. In addition,
Mr Archer is entitled to all unpaid remuneration and entitlements up to the date of termination.
Remuneration of Directors and named Executives
Table 1: Directors’ remuneration for the years ended 30 June 2011 and 30 June 2010
Short-term
Employee benefit
Post-employment
benefit
Salary & Fees
$
Superannuation
$
Will Burbury
Bruce McQuitty
David Archer
2011
2010
2011
2010
2011
2010
100,000
-
200,000
-
180,000
-
9,000
-
18,000
-
16,200
-
Total
$
109,000
-
218,000
-
196,200
-
Performance
Related
%
-
-
-
-
-
There were no share based or performance based remuneration in either the current or prior period.
Details of employee share option plans
2,100,000 unlisted options were issued during the year to three employees in accordance with the Employee Share
Option Plan of the Company.
Of these 2,100,000 unlisted options, 1,550,000 unlisted options were issued on 14 December 2011, have an exercise
price of $0.30 an expiry date of 13 December 2015 and a fair value at grant date of $217,930.
DIRECTORS’ REPORT (continued)
18 | P a g e
The remaining 550,000 unlisted options were issued on 22 March 2011, have an exercise price of $0.44 and an expiry
date of 20 March 2016 and a fair value at grant date of $34,980.
These options are not subject to any vesting conditions.
Directors’ Meetings
The number of meetings of directors (including meetings of committees of directors) held during the year and the
number of meetings attended by each director were as follows:
Number of meetings held:
Number of meetings attended:
Will Burbury
Bruce McQuitty
David Archer
Directors’
Meetings
4
4
4
4
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237
of the Corporations Act 2001.
Auditor Independence and Non-Audit Services
Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the
Company with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration
is set out on page 17 and forms part of this Directors’ report for the year ended 30 June 2011.
Non-Audit Services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are
outlined in Note 19 to the financial statements. The Directors are satisfied that the provision of non-audit services is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit
services have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none of
the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board.
Signed in accordance with a resolution of the Directors.
Bruce McQuitty
Director
Perth, 27 September 2011
19 | P a g e
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Sheffield Resources Limited for the year ended 30 June
2011, I declare that to the best of my knowledge and belief, there have been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Sheffield Resources Limited.
Perth, Western Australia
27 September 2011
N G NEILL
Partner, HLB Mann Judd
20 | P a g e
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2011
Other income
Employee benefits expense
Depreciation and amortisation expense
Other expenses
Share based payments
Write off exploration costs
Loss before income tax expense
Income tax expense
Loss for the year
Other comprehensive Income
Notes
2011
$
2010
$
2
175,344
1,091
(226,138)
(25,684)
(285,358)
(287,410)
(130,783)
-
-
(397,166)
-
-
2
3
(780,029)
(396,075)
-
-
(780,029)
(396,075)
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
-
-
(780,029)
(396,075)
Basic loss per share (cents per share)
5
(1.88)
(1.37)
The accompanying notes form part of these financial statements
21 | P a g e
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2011
Notes
2011
$
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Plant and equipment
Deferred exploration expenditure
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
The accompanying notes form part of these financial statements
6
7
8
9
10
11
12
13
13
2010
$
60,937
8,088
69,025
-
-
-
69,025
-
-
-
-
4,128,361
209,432
4,337,793
224,208
2,196,453
2,420,661
6,758,454
268,523
32,709
301,232
301,232
6,457,222
69,025
7,345,916
465,100
287,410
-
(1,176,104)
(396,075)
6,457,222
69,025
22 | P a g e
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2011
Issued Capital
Accumulated
Losses
Reserves
$
$
$
Balance as at 1 July 2009
Loss for the year
Total comprehensive loss for the year
Shares issued during the year
Share issue costs
Balance at 30 June 2010
Balance as at 1 July 2010
Loss for the year
Total comprehensive loss for the year
Shares issued during the year
Share issue costs
Recognition of share-based payments
-
-
-
475,000
(9,900)
465,100
465,100
-
-
7,391,666
(510,850)
-
-
(396,075)
(396,075)
-
-
(396,075)
(396,075)
(780,029)
(780,029)
-
-
-
Total
$
-
(396,075)
(396,075)
475,000
(9,900)
69,025
69,025
(780,029)
(780,029)
7,391,666
(510,850)
-
-
-
-
-
-
-
-
-
-
287,410
287,410
Balance at 30 June 2011
7,345,916
(1,176,104)
287,410
6,457,222
The accompanying notes form part of these financial statements
23 | P a g e
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2011
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Notes
2011
$
2010
$
Inflows/(Outflows)
(190,372)
(110,894)
151,135
1,091
Net cash (used in) operating activities
6
(39,237)
(109,803)
Cash flows from investing activities
Payments for exploration and evaluation expenditure
Purchase of non-current assets
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
(2,474,263)
(294,360)
(249,892)
-
(2,724,155)
(294,360)
7,341,666
475,000
(510,850)
(9,900)
6,830,816
465,100
4,067,424
60,937
60,937
-
Cash and cash equivalents at end of period
6
4,128,361
60,937
The accompanying notes form part of these financial statements
24 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other
requirements of the law.
The accounting policies detailed below have been consistently applied to all of the years presented unless
otherwise stated.
The financial report has also been prepared on a historical cost basis. Cost is based on the fair values of the
consideration given in exchange for assets.
The company is a listed public company, incorporated in Australia and operating in Australia. The entity’s
principal activity is exploration for bulk minerals.
(b)
(c)
(d)
Adoption of new and revised standards
Changes in accounting policies on initial application of Accounting Standards
In the year ended 30 June 2011, the Company has reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to its operations and effective for the current annual
reporting period. It has been determined by the Company that there is no impact, material or otherwise, of the
new and revised Standards and Interpretations on its business and, therefore, no change is necessary to
Company accounting policies.
The Company has also reviewed all new Standards and Interpretations that have been issued but are not yet
effective for the year ended 30 June 2011. As a result of this review the Directors have determined that there is
no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and,
therefore, no change necessary to Company accounting policies.
Statement of compliance
The financial report was authorised for issue on 27 September 2011.
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial Reporting Standards
(IFRS).
Critical accounting estimates and judgements
The application of accounting policies requires the use of judgements, 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 other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the
period in which the estimate is revised if it affects only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
Share-based payment transactions:
The Company 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 an external valuer
using a Black and Scholes model, using the assumptions detailed in Note 14.
The Company measures the cost of cash-settled share-based payments at fair value at the grant date using the
Black and Scholes formula taking into account the terms and conditions upon which the instruments were
granted, as discussed in Note 14
25 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e)
Going concern
The directors are of the opinion that the company is a going concern.
(f)
(g)
(h)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Board of Directors of Sheffield
Resources Limited.
Revenue recognition
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of returns, trade allowances, rebates and amounts collected on behalf of third parties. Revenue is
recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue
can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised.
(i) Interest income - Interest revenue is recognised on a time proportionate basis that takes into account the
effective yield on the financial asset.
Income tax
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in
a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is
probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be
utilised, except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
26 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i)
Income tax (continued)
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income
tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
(j)
(k)
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the balance sheet.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
Impairment of assets
The Company assesses at each balance date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Company makes an
estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less
costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets and the asset's value in use cannot be
estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-
generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its
recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its
recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent
with the function of the impaired asset unless the asset is carried at revalued amount (in which case the
impairment loss is treated as a revaluation decrease).
An assessment is also made at each balance date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a
change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount unless the
asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a
reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less
any residual value, on a systematic basis over its remaining useful life.
27 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l)
Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents
as defined above, net of outstanding bank overdrafts.
(m)
(n)
(o)
Trade and other receivables
Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised
cost using the effective interest rate method, less any allowance for impairment. Trade receivables are generally
due for settlement within periods ranging from 15 days to 30 days.
Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are
written off by reducing the carrying amount directly. An allowance account is used when there is objective
evidence that the Company will not be able to collect all amounts due according to the original contractual terms.
Factors considered by the Company in making this determination include known significant financial difficulties of
the debtor, review of financial information and significant delinquency in making contractual payments to the
Company. The impairment allowance is set equal to the difference between the carrying amount of the receivable
and the present value of estimated future cash flows, discounted at the original effective interest rate. Where
receivables are short-term discounting is not applied in determining the allowance.
The amount of the impairment loss is recognised in the statement of comprehensive income within other
expenses. When a trade receivable for which an impairment allowance had been recognised becomes
uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of
amounts previously written off are credited against other expenses in the statement of comprehensive income.
Payables
Trade and other payables represent liabilities for goods and services provided to the Company prior to the year
end and which are unpaid. These amounts are unsecured and have 30-60 day payment terms. They are
recognised initially at fair value and subsequently at amortised cost.
Employee Benefits
Wages and Salaries, Annual Leave and Sick Leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of statement of financial position date are recognised in respect of
employees’ services rendered up statement of financial position date and measured at amounts expected to be
paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when leave is
taken and measured at the actual rates paid or payable. Liabilities for wages and salaries are included as part of
Other Payables and liabilities for annual and sick leave are included as part of Employee Benefits Provisions.
Long Service Leave
Liabilities for long service leave are recognised as part of 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 to the
statement of financial position date using the projected future projected unit credit method. Consideration is given
to expected future salaries and wages levels, experience of employee departures and periods of service.
Expected future payments are discounted using national government bond rates at statement of financial position
date with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
28 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(p)
Exploration and evaluation expenditure
Exploration and evaluation expenditure encompasses expenditures incurred by the Company in connection with
the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of
extracting a mineral resource are demonstrable.
Exploration and evaluation expenditure incurred by the Company is accumulated for each area of interest and
recorded as an asset if:
(i)
(ii)
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
(1) the exploration and evaluation expenditures are expected to be recouped through successful
development and exploitation of the area of interest, or alternatively, by its sale; and
(2) exploration and evaluation activities in the area of interest have not at the reporting date reached a
stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of interest are
continuing.
For each area of interest, expenditure incurred in the acquisition of rights to explore is capitalised, classified as
tangible or intangible, and recognised as an exploration and evaluation asset. Exploration and evaluation assets
are measured at cost at recognition.
A provision for unsuccessful exploration and evaluation is created against each area of interest by means of a
charge to the statement of comprehensive income.
The recoverable amount of each area of interest is determined on a bi-annual basis and the provision recorded in
respect of that area adjusted so that the net carrying amount does not exceed the recoverable amount. For areas
of interest that are not considered to have any commercial value, or where exploration rights are no longer
current, the capitalised amounts are written off against the provision and any remaining amounts are charged to
profit and loss.
Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful
development and commercial exploitation, or alternatively, sale of the respective areas of interest.
(q)
(r)
Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
Goods and Services Tax
Revenues, expenses and assets are recognised net of GST except where GST incurred on a purchase of goods
and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the
cost of acquisition of the asset or as part of the expense item.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable
from, or payable to, the taxation authority is included as part of receivables or payables in the statement of
financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows
arising from investing and financial activities, which are recoverable from, or payable to, the taxation authority,
are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
29 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(s)
Leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as
lessee are classified as operating leases. Payments made under operating leases (net of any incentive received
from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
(t)
Provisions
Provisions for legal claims are recognised when the Group has a 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.
Provisions are measured at the present value of management best estimate of the expenditure required to settle
the present obligation at the reporting date. The discount rate used to determine the present value reflects
current market assessments of the time value of money and the risks specific to the liability. The increase in the
provision due to the passage of time is recognised as interest expense.
(u)
Share based payments
The Company provides benefits to employees (including directors) of the Company in the form of share-based
payment transactions, whereby employees render services in exchange for shares or options over shares
(“equity-settled transactions”).
The fair value of options is recognised as an expense with a corresponding increase in equity (share-based
payments reserve). The fair value is measured at grant date and recognised over the period during which the
holder becomes unconditionally entitled to the options. Fair value is determined by an independent valuer using a
Black-Scholes option pricing model. In determining fair value, no account is taken of any performance conditions
other than those related to the share price of the Company (“market conditions”).
The cumulative expense recognised between grant date and vesting date is adjusted to reflect the director’s best
estimate of the number of options that will ultimately vest because of internal conditions of the options, such as
the employees having to remain with the company until vesting date, or such that employees are required to
meet internal sales targets. No expense is recognised for options that do not ultimately vest because a market
condition was not met.
Where the terms of options are modified, the expense continues to be recognised from grant date to vesting date
as if the terms had never been changed. In addition, at the date of the modification, a further expense is
recognised for any increase in fair value of the transaction as a result of the change.
Where options are cancelled, they are treated as if vesting occurred on cancellation and any unrecognised
expenses are taken immediately to the statement of comprehensive income. However, if new options are
substituted for the cancelled options and designated as a replacement on grant date, the combined impact of the
cancellation and replacement options are treated as if they were a modification.
(v)
Plant and Equipment
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment
losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the group and the cost
of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset
is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
30 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(w)
Plant and Equipment (continued)
Depreciation is calculated on the straight line basis to write off the net cost of each item over its expected useful
life. Depreciation rate for computer equipment is 33%. The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting period.
As asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included
in the Statement of Comprehensive Income. When revalued assets are sold, it is group policy to transfer any
amounts included in other reserves in respect of those assets to accumulated losses.
(x)
Earnings per Share
(i) Basic Earnings per Share
Basic earnings per share is determined by dividing the operating loss after income tax by the weighted average
number of ordinary shares outstanding during the financial year.
(ii) Diluted Earnings per Share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking
into account amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise
from the exercise of partly paid shares or options outstanding during the financial year.
NOTE 2: REVENUE AND EXPENSES
(a) Revenue
Bank interest received
(b) Expenses
Accounting fees
Interest expense
Depreciation of non-current assets
Operating lease rental expense
Share based payments expense
Write off of exploration expenditure
2011
$
2010
$
175,344
1,091
32,448
2,639
25,684
60,990
287,410
130,783
1,324
-
-
-
-
294,360
31 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 3: INCOME TAX
The prima facie income tax expense on pre-tax accounting loss from operations
reconciles to the income tax expense in the financial statements as follows:
Accounting loss before income tax
Income tax expense calculated at 30%
Tax effect of amounts which are not deductible/(taxable) in calculating taxable
income:
Share-based payments
Accruals
Other expenses
Share issue costs
Unrecognised tax losses
Income tax expense reported in the statement of comprehensive income
(780,029)
(396,075)
(234,009)
(118,822)
86,223
7,799
1,230
(32,006)
170,763
-
-
-
-
-
118,822
-
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on
taxable profits under Australian tax law. There has been no change in this tax rate since the previous reporting period.
The Company has tax losses arising in Australia. The tax benefit of these losses of $289,585 (2010: $118,822) is
available indefinitely for offset against future taxable profits of the companies in which the losses arose.
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Deductible temporary differences
Tax losses
Consolidated
2011
$
18,000
289,585
307,585
2010
$
-
118,822
118,822
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets
have not been recognised in respect of these items because it is not probable that future taxable profit will be
available against which the Company can utilise the benefits thereof.
32 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 4: SEGMENT REPORTING
Description of segment
The Company operates in one geographical segment, being Western Australia and in one operating category, being
exploration in bulk minerals.
The chief operating decision maker has been identified as the Board of Directors. Information reported to the Board
members for the purpose of resource allocation and assessment of performance is focused on exploration for bulk
minerals within Western Australia. Consequently the Company reports within one segment.
NOTE 5: LOSS PER SHARE
Basic loss per share:
Continuing operations
Total basic loss per share
2011
2010
Cents per share
Cents per share
(1.88)
(1.88)
(1.37)
(1.37)
The loss and weighted average number of ordinary shares used in
the calculation of basic loss per share is as follows:
Loss (refer (i))
(780,029)
(396,075)
Losses from continuing operations (refer (i))
(780,029)
(396,075)
Weighted average number of ordinary shares for the purposes of
basic earnings per share
41,412,412
28,849,316
Number
Number
All potential ordinary shares, being options to acquire ordinary shares, are not considered dilutive in the calculation
of 2011 or 2010 loss per share as the exercise of the options would not increase the loss per share.
33 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term deposits
2011
$
2010
$
628,361
60,937
3,500,000
4,128,361
-
60,937
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and three months, depending on the immediate
cash requirements of the Company, and earn interest at the respective short-term deposit rates.
(i) Reconciliation of profit for the year to net cash flows from operating
activities
Loss for the year
Equity settled share based payment
Depreciation
Write off of exploration expenditure
Exploration expenditure incurred
Provision for employee benefits
(Increase)/decrease in assets:
Current receivables
Increase/(decrease) in liabilities:
Current payables
Net cash from operating activities
NOTE 7: TRADE AND OTHER RECEIVABLES
Trade receivables
Allowance for impairment
GST recoverable
Prepaid expenses
Accrued interest
(780,029)
(396,075)
287,410
25,684
130,783
-
32,709
-
-
-
294,360
-
(201,344)
(8,088)
465,550
(39,237)
-
(109,803)
2011
$
3,973
-
3,973
167,014
13,734
24,711
209,432
2010
$
-
-
-
7,586
-
502
8,088
34 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 7: TRADE AND OTHER RECEIVABLES (continued)
Aging of past due but not impaired
30 – 60 days
60 – 90 days
90 – 120 days
Total
3,973
-
-
3,973
-
-
-
-
In determining the recoverability of a trade receivable, the Company considers any changes in the credit quality of the
trade receivable from the date credit was initially granted up to the balance date. The concentration of credit risk is limited
due to the customer base being large and unrelated. Accordingly, the directors believe that there is no further credit
provision required in excess of the allowance for impairment.
NOTE 8: PLANT AND EQUIPMENT
Year ended 30 June 2011
At 1 July 2010, net of accumulated depreciation and
impairment
Additions
Depreciation charge for the year
At 30 June 2011, net of accumulated depreciation and
impairment
At 1 July 2010
Cost or fair value
Accumulated depreciation and impairment
Net carrying amount
At 30 June 2011
Cost or fair value
Accumulated depreciation and impairment
Net carrying amount
Motor Vehicles
Plant and equipment
Total
$
-
62,172
(3,705)
$
-
$
-
187,720
(21,979)
249,892
(25,684)
58,467
165,741
224,208
-
-
-
62,172
(3,705)
58,467
-
-
-
-
-
-
187,720
(21,979)
165,741
249,892
(25,684)
224,208
The useful life of the assets was estimated as follows for both 2010 and 2011:
Motor Vehicles
Plant and equipment
4 years
4 to 15 years
The carrying value of plant and equipment held under finance leases and hire purchase contracts at 30 June 2011 is Nil.
(2010:Nil).
35 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 9: DEFERRED EXPLORATION EXPENDITURE
Costs carried forward in respect of:
Exploration and evaluation phase – at cost
Balance at beginning of year
Expenditure incurred
Expenditure written off
Total exploration expenditure
2011
$
2010
$
-
2,327,236
(130,783)
2,196,453
-
-
-
-
The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is
dependent on the successful development and commercial exploitation or sale of the respective areas.
NOTE 10: TRADE AND OTHER PAYABLES (CURRENT)
Trade creditors
Accruals
(i) Trade payables are non-interest bearing and are normally settled on 30-day terms.
NOTE 11: PROVISIONS (CURRENT)
Employee benefits – annual leave
NOTE 12: ISSUED CAPITAL
58,658,334 Ordinary shares issued and fully paid
2011
$
225,679
42,844
268,523
2011
$
32,709
2010
$
-
-
-
2010
$
-
2011
$
2010
$
7,345,916
465,100
Ordinary shares 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 held.
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.
Ordinary shares have no par value and the company does not have a limited amount of authorised capital.
36 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 12: ISSUED CAPITAL (continued)
Movement in ordinary shares on issue
Balance at beginning of financial year
Issue of 15,000,000 fully paid ordinary shares at $0.005
each
Issue of 2,000,000 fully paid ordinary shares at $0.05
each
Issue of 4,000,000 fully paid ordinary shares at $0.075
each
Issued on 18 January 2011 as part consideration for
acquisition of McCalls Heavy Minerals Sands Project
Issue of 900,000 fully paid ordinary shares at $0.10 each
Issue of 35,000,000 fully paid ordinary shares at $0.20
each
Issued for cash on exercise of share options
Share issue costs
2011
2010
No.
$
No.
21,000,001
465,100
1
$
-
-
-
-
-
-
-
15,000,000
75,000
2,000,000
100,000
4,000,000
300,000
500,000
900,000
50,000
90,000
35,000,000
7,000,000
1,258,333
251,667
-
(510,851)
-
-
-
-
-
-
-
-
-
(9,900)
Balance at end of financial year
58,658,334
7,345,916
21,000,0001
465,100
2011
2010
No.
$
No.
$
Movements in options over ordinary shares on issue
Balance at beginning of financial year
Issue of unlisted options exercisable at $0.20 each on or
before 30 June 2013
Issue of unlisted options exercisable at $0.30 each on or
before 30 November 2013
Issue of unlisted options exercisable at $0.30 each on or
before 30 December 2013
Issue of unlisted options exercisable at $0.44 each on or
before 20 March 2016
Exercise of unlisted options exercisable at $0.20 each on
or before 30 June 2013
Balance at end of financial year
10,500,000
17,950,000
3,000,000
1,550,000
550,000
(1,258,333)
32,291,667
-
-
-
-
-
-
-
-
10,500,000
-
-
-
-
10,500,000
-
-
-
-
-
-
-
Employee Share options
The company has an Employee Share Option Plan under which options to subscribe for the company's shares have been
granted to
certain employees (refer to note 14).
37 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 13: ACCUMULATED LOSSES AND RESERVES
Accumulated Losses
Balance at beginning of financial year
Loss for the year
Balance at end of financial year
Share-based payments reserves
Balance at beginning of financial year
Share based payments
Balance at end of financial year
2011
$
2010
$
(396,075)
(780,029)
(1,176,104)
-
(396,075)
(396,075)
-
287,410
287,410
-
-
-
(i) Nature and purpose of reserves
Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of options issued.
NOTE 14 : SHARE BASED PAYMENT PLANS
2,100,000 unlisted options were issued during the year to three employees in accordance with the Employee Share
Option Plan of the Company.
Of these 2,100,000 unlisted options, 1,550,000 unlisted options were issued on 14 December 2011, have an exercise
price of $0.30 and an expiry date of 13 December 2015 and the remaining 550,000 unlisted options were issued on 22
March 2011, have an exercise price of $0.44 and an expiry date of 20 March 2016.
All of the above options are not subject to any vesting conditions.
3,000,000 options were issued to brokers as a fee for their services in the capital raising of the Company’s IPO.
The following share-based payment arrangements were in place during the current and prior periods:
SERIES 1(1)
SERIES 2
SERIES 3
Number
Grant date
Expiry date
Exercise
price
Fair value at
grant date
3,000,000
30/11/2010
30/11/2013
1,550,000
14/12/2010
13/12/2015
550,000
22/03/2011
20/03/2016
0.30
0.30
0.44
34,500
217,930
34,980
(1) Unlisted options were issued to consultants as a fee of their services for the capital raising at the IPO.
38 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 14: SHARE BASED PAYMENT PLANS (continued)
The following table illustrates the number (No.) and weighted average exercise prices of and movements in share
options issued during the year:
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
2011
No.
-
5,100,000
-
5,100,000
5,100,000
2011
Weighted
average
exercise price
2010
No.
2010
Weighted
average
exercise
price
-
0.32
-
0.32
-
-
-
-
-
-
-
-
-
-
-
The outstanding balance as at 30 June 2011 is represented by:
5,100,000 options over ordinary shares with a weighted average exercise price of $0.32 each, exercisable upon meeting
the above conditions and until the relevant expiry dates.
The weighted average remaining contractual life for the share options outstanding as at 30 June 2011 is 3.28 years
(2010: Nil).
The weighted average share price at the date of exercise options exercised during the year ended 30 June 2011 was
$0.32 (2010: Nil)
The range of exercise prices for options outstanding at the end of the year is $0.30 - $0.44 (2010: Nil)
The fair value of the equity-settled share options granted under the option is estimated as at the date of grant using the
Black and Scholes model taking into account the terms and conditions upon which the options were granted.
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of option (years)
Exercise price (cents)
Grant date share price
SERIES 1*
SERIES 2 SERIES 3
-
-
-
-
-
-
-
100
4.75
4
30
20
-
50
4.75
5
44
29
*Unlisted options were issued to consultants at a value equating to the amount of services provided to the Company of
$34,500.
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may
occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may
also not necessarily be the actual outcome. No other features of options granted were incorporated into the
measurement of fair value.
The carrying amount of the liability relating to the cash-settled share-based payment at 30 June 2011 is $34,500 (2010:
Nil)
39 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
Capital risk management
NOTE 15: FINANCIAL INSTRUMENTS
(a)
The Company manages its capital to ensure that entities in the Company will be able to continue as a going concern
while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The Company’s overall strategy remains unchanged from 2010.
The capital structure of the Company consists of debt, cash and cash equivalents and equity attributable to equity
holders of the Company, comprising issued capital, reserves and retained earnings.
None of the Company’s entities are subject to externally imposed capital requirements.
Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as tax,
dividends and general administrative outgoings.
Gearing levels are reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital and
the risks associated with each class of capital.
(b) Categories of financial instruments
Financial assets
Receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
2011
$
2010
$
195,629
4,128,429
8,088
60,937
301,232
-
(c) Financial risk management objectives
The main risks arising from the Company’s financial instruments are interest risk, credit risk and liquidity risk. The
Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative
purposes.
(d) Interest rate risk management
The Company’s exposure to risks of changes in market interest rates relates primarily to the Company cash balances.
The Company constantly analyses its interest rate exposure. Within this analysis consideration is given to potential
renewals of existing positions, alternative financing positions and the mix of fixed and variable interest rates. As the
Company has no interest bearing borrowing its exposure to interest rate movements is limited to the amount of interest
income it can potentially earn on surplus cash deposits.
2011
6 – 12
months
$
1-5
Years
$
≤6 months
$
Total
$
≤6 months
$
2010
6 – 12
months
$
1-5
Years
$
Total
$
Financial assets
Variable interest rate instruments
Fixed Interest bearing
Non-interest bearing
Total Financial Assets
Financial liabilities
Non-interest bearing
Total Financial Liabilities
628,361
3,500,000
209,432
4,337,793
301,232
301,232
-
-
-
-
-
-
-
-
-
-
-
-
628,361
60,937
3,500,000
-
209,432
8,088
4,337,793
69,025
301,232
301,232
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,937
-
8,088
69,025
-
-
40 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 15: FINANCIAL INSTRUMENTS (continued)
Interest rate risk sensitivity analysis
Exposure arises predominantly from assets and liabilities bearing variable interest rates as the Company intends to hold
fixed rate assets and liabilities to maturity. Interest rate risk is considered unlikely to be material.
(e) Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient
collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Company only transacts with entities that are rated the equivalent of investment grade and above. This information
is supplied by independent rating agencies where available and, if not available, the Company uses publicly available
financial information and its own trading record to rate its major customers.
The Company’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value
of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty
limits that are reviewed and approved by the risk management committee annually.
The Company does not have any significant credit risk exposure to any single counterparty or any Company of
counterparties having similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited
because the counterparties are banks with high credit ratings assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowance for losses, represents
the Company’s maximum exposure to credit risk without taking account of the value of any collateral obtained.
(f) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate
liquidity risk management framework for the management of the Company’s short, medium and long-term funding and
liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking
facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding
the impact of netting agreements:
2011
Carrying
amount
Total
Contractual
cash flows
6 months or
less
6-12
months
1-2 years
2-5 years
More than
5 years
Trade and other payables
301,232
301,232
301,232
301,232
301,232
301,232
-
-
-
-
-
-
-
-
2010
Trade and other payables
Carrying
amount
Total
Contractual
cash flows
-
-
-
-
6 months or
less
6-12
months
1-2 years
2-5 years
More than
5 years
-
-
-
-
-
-
-
-
-
-
41 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 16: COMMITMENTS AND CONTINGENCIES
Operating lease commitments
The Company entered in to a 3 year lease agreement in relation to offices premises on 1 January 2011.
The commitments in relation to this, inclusive of floor space and parking bays are as follows:
Within one year
After one year but not more than three years
Exploration commitments
2011
$
93,480
186,960
280,440
The Company has certain obligations to perform minimum exploration work and to spend minimum amounts on
exploration tenements. The obligations may be varied from time to time subject to approval and are expected to be
fulfilled in the normal course of the operations of the Company. Due to the nature of the Company’s operations in
exploring and evaluating areas of interest, it is difficult to accurately forecast the nature and amount of future expenditure
beyond the next year. Expenditure may be reduced by seeking exemption from individual commitments, by relinquishing
of tenure or any new joint venture agreements. Expenditure may be increased when new tenements are granted.
Commitment contracted for at balance date but not recognised as liabilities are as follows:
Within one year
NOTE 17: RELATED PARTY DISCLOSURE
2011
$
1,149,800
There were no transactions entered into with related parties for the June 2011 financial year. Details of key management
personnel share and option holdings are set out in Note 20.
NOTE 18: EVENTS AFTER THE REPORTING PERIOD
There are no other matters or circumstance has arisen since 30 June 2011, which has significantly affected, or may
significantly affect the operations of the Company, the result of those operations, or the state of affairs of the Company in
subsequent financial years.
NOTE 19: AUDITOR’S REMUNERATION
The auditor of Sheffield Resources Limited is HLB Mann Judd.
Amounts received or due and receivable by HLB
Mann Judd for:
An audit or review of the financial report of the
entity
Other services in relation to the entity
- Independent accountant’s report
2011
$
2010
$
7,500
8,000
-
-
42 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 20: DIRECTORS AND EXECUTIVES DISCLOSURES
Details of Key Management Personnel
(a)
(i)
Directors
Will Burbury
Bruce McQuitty
David Archer
Key management personnel remuneration has been included in the Remuneration Report section of the Directors’
Report.
Chairman (Non-Executive)/Company Secretary
Managing Director
Technical Director
(b)
Option holdings of Key Management Personnel
Balance at
beginning of
period
Granted as
remuneration
Options
exercised
Net
change
Other
Balance at
end of
period
Total
Vested and
exercisable
Unvested
30 June 2011
Directors
Will Burbury
Bruce McQuitty
David Archer
Total
30 June 2010
Directors
Will Burbury
Bruce McQuitty
David Archer
Total
2,500,000
2,500,000
2,500,000
7,500,000
-
-
-
-
-
-
-
-
-
-
-
-
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
7,500,000
7,500,000
7,500,000
-
-
-
-
Balance at
beginning of
period
Granted as
remuneration
Options
exercised
Net change
Other
Balance at
end of
period
Total
Vested and
exercisable
Unvested
-
-
-
-
-
-
-
-
-
-
-
-
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
7,500,000
7,500,000
7,500,000
7,500,000
-
-
-
-
(c)
Shareholdings of Key Management Personnel
Balance at
beginning of period
Granted as
remuneration
On exercise of
options
Net change Other
Balance at end of
period
30 June 2011
Directors
Will Burbury
Bruce McQuitty
David Archer
Total
5,000,001
5,000,000
5,000,000
15,000,001
-
-
-
-
-
-
-
-
-
-
-
-
5,000,001
5,000,000
5,000,000
15,000,001
43 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2011
NOTE 20: DIRECTORS AND EXECUTIVES DISCLOSURES (continued)
(c)
Shareholdings of Key Management Personnel (continued)
Balance at
beginning of period
Granted as
remuneration
On exercise of
options
Net change Other
Balance at end of
period
30 June 2010
Directors
Will Burbury
Bruce McQuitty
David Archer
Total
-
-
-
-
-
-
-
-
-
-
-
-
5,000,001
5,000,000
5,000,000
5,000,001
5,000,000
5,000,000
15,000,001
15,000,001
(d)
Other transactions and balances with Key Management Personnel
Key management personnel compensation
Details of key management personnel compensation are provided in the Remuneration Report of the Directors’ Report.
Loans to key management personnel
There were no loans to key management personnel during the period.
44 | P a g e
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of Sheffield Resources Limited (the ‘Company’):
a.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001
including:
i.
ii.
giving a true and fair view of the Company’s financial position as at 30 June 2011 and of its
performance for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001, professional
reporting requirements and other mandatory requirements.
b.
there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable.
c. the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2011.
This declaration is signed in accordance with a resolution of the Board of Directors.
Bruce McQuitty
Director
---------------------------------------------------------------------------
Dated this 27th
day of September
2011
45 | P a g e
INDEPENDENT AUDITOR’S REPORT
To the members of Sheffield Resources Limited
Report on the Financial Report
We have audited the accompanying financial report of Sheffield Resources Limited, which comprises the statement of
financial position as at 30 June 2011, the statement of comprehensive income, the statement of changes in equity and
the statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information, and the directors’ declaration for Sheffield Resources Limited.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that is free from material misstatement,
whether due to fraud or error.
In Note 1(c), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial
Statements, that the financial report of Sheffield Resources Limited complies with International Financial Reporting
Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the
financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the company’s preparation and fair presentation of the financial report in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
Our audit did not involve an analysis of the prudence of business decisions made by directors or management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Matters relating to the electronic presentation of the audited financial report
This auditor’s report relates to the financial report and remuneration report of Sheffield Resources Limited for the
financial year ended 30 June 2011 included on Sheffield Resources Limited’s website. The company’s directors are
responsible for the integrity of the Sheffield Resources Limited website. We have not been engaged to report on the
integrity of this website. The auditor’s report refers only to the financial report and remuneration report identified above. It
does not provide an opinion on any other information which may have been hyperlinked to/from the financial report. If
users of the financial report are concerned with the inherent risks arising from publication on a website, they are advised
to refer to the hard copy of the audited financial report and remuneration report to confirm the information contained in
this website version of the financial report.
46 | P a g e
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor’s Opinion
In our opinion:
(a) the financial report of Sheffield Resources Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s financial position as at 30 June 2011 and of its performance for the
year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(c).
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2011.The
directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s Opinion
In our opinion the Remuneration Report of Sheffield Resources Limited for the year ended 30 June 2011 complies with
section 300A of the Corporations Act 2001.
HLB MANN JUDD
Chartered Accountants
Perth, Western Australia
27 September 2011
N G NEILL
Partner
47 | P a g e
CORPORATE GOVERNANCE STATEMENT
Prior to listing on ASX, Sheffield established a set of corporate governance policies and procedures that were based on
the Australian Securities Exchange Corporate Governance Council’s Principles of Good Corporate Governance and Best
Practice Recommendations.
In accordance with the Recommendations, the Corporate Governance Statement must now contain certain specific
information and must disclose the extent to which the Company has followed the guidelines during the period. Where
Sheffield has not adopted or complied with the relevant recommendation, the reasons are set out below.
For further information on corporate governance policies adopted by the Company, refer to our website,
www.sheffieldresources.com.au
Structure of the Board of Directors
The Board established a formal Board Charter as per Recommendation 1.1. In broad terms, the Board is accountable to
the shareholders and must ensure that Sheffield is properly managed to protect and enhance shareholders’ wealth and
other interests. The Board Charter sets out the role and responsibilities of the Board of Sheffield within its governance
structure.
The skills, experience and expertise relevant to the position of Director held by each Director in office at the date of the
annual report is included in the Directors’ Report.
The Board reviews its composition on an annual basis to ensure that it has the necessary skills, experience and
expertise appropriate for the Company.
The performance of all Directors is reviewed by the Chairman on an ongoing basis and any Director whose performance
is considered unsatisfactory is asked to retire. Given the small size of the company and hands on management style
requires an increased level of interaction between Directors and Executives throughout the year. Board members meet
amongst themselves both formally and informally. The Board considers that the current approach that it has adopted
with regard to the review of its performance provides the best guidance and value to the Company.
Sheffield does not comply with Recommendation 2.1 which states that the majority of Directors should be independent
directors. There are no Directors that qualify as independent directors as required under Recommendation 2.2, nor are
there non-executive Directors.
There are procedures in place, as agreed by the Board, to enable Directors to seek independent professional advice.
Nomination Committee
The Board has formally adopted a Nomination Committee Charter but given the present size of the Company, has not
formed a separate Committee. Instead the function will be undertaken by the full Board in accordance with the policies
and procedures outlined in the Nomination Committee Charter. At such time when the Company is of sufficient size a
separate Nomination Committee will be formed.
Audit and Risk Management Committee
The Board has formally adopted an Audit and Risk Management Committee Charter but given the present size of the
Company, has not formed a separate Committee. Instead the function of the Committee will be undertaken by the full
Board in accordance with the policies and procedures outlined in the Audit and Risk Management Committee Charter. At
such time when the Company is of sufficient size a separate Audit and Risk Management Committee will be formed.
It is the Board’s responsibility to ensure that an effective internal control framework exists within the entity. This includes
both internal controls to deal with both the effectiveness and efficiency of significant business processes, the
safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial and non-financial-
information. It is the Board’s responsibility for the establishment and maintenance of a framework of internal control of
the Company.
48 | P a g e
CORPORATE GOVERNANCE STATEMENT (continued)
Remuneration
It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high quality Board by
remunerating Directors fairly and appropriately with reference to relevant employment market conditions. The Company
does not link the nature and amount of executive and directors’ emoluments to the Company’s financial and operational
performance.
For details of remuneration of Directors and Executives please refer to the Directors’ Report.
The Board is responsible for determining and reviewing compensation arrangements for executive Directors. The Board
has formally adopted a Remuneration Committee Charter however given the present size of the Company, has not
formed a separate Committee. Instead the function will be undertaken by the full Board in accordance with the policies
and procedures outlined in the Remuneration Committee Charter. At such time when the Company is of sufficient size a
separate Remuneration Committee will be formed.
There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive Directors.
Share Trading Policy
Sheffield has introduced a formal securities trading policy as required by Recommendation 3.2. This policy applies to
key management personnel and Directors and prohibits them from trading in any securities of the Company at any time
when they are in possession of unpublished, price-sensitive information in relation to those securities.
Before commencing to trade, all key management personnel must first obtain the approval of the Managing Director to
do so and a Director must first obtain approval of the Chairman. Only in exceptional circumstances will approval be
forthcoming inside closed periods (two weeks prior to and one day after) the release of the Company’s Annual Financial
Report, Consolidated Interim Financial Report or Quarterly Reports.
Ethical Standards
Sheffield has introduced a Code of Conduct as per Recommendation 3.1. This code outlines how Sheffield expects
Directors and its employees to behave and conduct its business on a range of issues. Sheffield is committed to the
highest levels of integrity and ethical standards in all business practices.
All employees and Directors are expected to act with the utmost integrity and objectivity, striving at all times to enhance
the reputation and performance of the Company.
Risk Management
Sheffield has a Risk Management Policy in accordance with Recommendation 7.1. Significant areas of concern and
potential risks are discussed at Board level to ensure potential risks to the business are identified and then managed.
When appropriate, experts are invited to address Board meetings on major risks facing the Company and to develop
strategies to mitigate those risks.
Continuous Disclosure
The Company introduced a formal Continuous Disclosure Policy as required by Recommendation 5.1. This policy was
introduced to assist Sheffield to achieve best practice by:
Ensuring that shareholders and the financial markets are provided with full and timely information;
Complying with continuous disclosure obligations contained in the ASX listing rules and the Corporations Act in
Australia; and
Communicating effectively with its shareholders and making it easier for shareholders to communicate with the
Company.
49 | P a g e
CORPORATE GOVERNANCE STATEMENT (continued)
Shareholder Communication
The Company has introduced a Shareholder Communications Strategy Policy as required by Recommendation 6.1. This
policy was introduced to promote effective communication with shareholders and encourage effective participation at
general meetings, information is communicated to shareholders:
Through the release of information to the market via the ASX;
Through the distribution of the annual report and notices of annual general meeting;
Through shareholder meetings and investor relations presentations; and
By posting relevant information on the Company’s website: www.sheffieldresources.com.au
The external auditors are required to attend the annual general meeting and are available to answer any shareholder
questions about the conduct of the audit and preparation of the audit report.
Corporate Governance Compliance
During the financial year Sheffield has complied with each of the 8 Corporate Governance Principles and the
corresponding Best Practice Recommendations, other than in relation to the matters specified below.
Notification of Departure
Explanation of Departure
Recommendation
Reference
2.1, 2.2
2.4
4.2
No independent Directors
No separate nomination
committee
A separate Audit Committee
has not been formed
7.1, 7.2, 7.3
A separate Risk Committee
has not been formed
8.1, 8.2
A separate Remuneration
Committee has not been
formed
The Board considers that the Company is not of a
size or scale, nor are its affairs of such complexity to
justify the expense of the appointment of a majority
of independent non-executive Directors.
The Board believes that the individuals on the Board
can make and do make quality and independent
judgments in the best interests of the Company.
The Board considers that the Company is not of a
size or scale to justify the formation of a nomination
committee.
The Board as a whole undertakes the process of
reviewing the skill base and experience of existing
Directors to enable identification or attributes
required in new Directors.
The Board considers that the Company is not of a
size or scale, nor are its financial affairs of such
complexity to justify the formation of an audit
committee.
The Board as a whole undertakes the selection and
proper application of accounting policies, the
identification and management of risk and the review
of the operation of the internal control systems.
The Board considers that the Company is not of a
size or scale, nor are its affairs of such complexity to
justify formation of a risk committee.
The Board as a whole undertakes the process of
identifying the risks of the Company.
The Board considers that the Company is not of a
size or scale, nor are its financial affairs of such
complexity to justify the formation of a remuneration
committee.
The Board as a whole is responsible for the
remuneration arrangements for Directors and
executives of the Company.
50 | P a g e
ASX ADDITIONAL INFORMATION
The Company was admitted to the official list of ASX on 15 December 2010. Since Listing, the Company has used its
cash (and assets in a form readily convertible to cash) in a manner consistent with its business objectives. In accordance
with the ASX Listing Rules, the Company is required to disclose the following information which was prepared based on
share registry information processed up to 14 October 2011.
Ordinary Share Capital
At 14 October 2011, 58,658,334 fully paid ordinary shares are held by 625 individual shareholders.
Spread of Holdings
Total Holders
Ordinary Shares
1
1,001
5,001
10,001
100,001
- 1,000
- 5,000
- 10,000
- 100,000
- and over
Number of Holders/Shares
3
56
141
330
95
625
6
198,117
1,340,919
14,988,540
42,130,752
58,658,334
Unmarketable parcels at 14 October 2011 amount to 15785 shares held by 12 shareholders.
Substantial Shareholders
Ordinary Shareholders
WILL BURBURY - THE BURBURY FAMILY A/C
BRUCE MCQUITTY
ARCHER ENTERPRISES (WA) PTY LTD – DAVID ARCHER FAMILY
Fully Paid Ordinary Shares
Number
Percentage
5,000,000
5,000,000
3,500,000
8.52
8.52
5.97
Mr David Archer, Technical Director of Sheffield Resources Limited, holds or has control over a total of 5,000,000 shares
representing 8.52% of the issued fully paid shares in the Company.
Archer Enterprises (WA) Pty Ltd – David Archer Family A/C
David Lindsay Archer & Simone Elizabeth Archer – David Archer Super Fund
3,500,000 shares
1,500,000 shares
Voting rights
All ordinary shares carry one vote per share without restriction. Options for ordinary shares do not carry any voting rights.
Statement of Quotation and Restrictions
Listed on the ASX are 44,033,334 fully paid shares. 14,625,000 shares are not quoted on the ASX and are subject to
voluntary escrow until 15 December 2012.
All 33,066,667 options are not quoted on the ASX. Of these options 10,312,500 unlisted share options are subject to
voluntary escrow until 15 December 2012.
51 | P a g e
ASX ADDITIONAL INFORMATION (continued)
Twenty Largest Shareholders
Details of the 20 largest shareholders by registered shareholding are:
Ordinary Shareholders
MR WILL BURBURY - THE BURBURY FAMILY A/C
BRUCE MCQUITTY
Fully Paid Ordinary Shares
Number
Percentage %
5,000,000
8.52
5,000,000
8.52
ARCHER ENTERPRISES (WA) PTY LTD – DAVID ARCHER FAMILY A/C
3,500,000
5.97
DAVID LINDSAY ARCHER & SIMONE ELIZABETH ARCHER – DAVID ARCHER
SUPER FUND
PASSIO PTY LTD – G WESTON & ASSOC S/F A/C
MRS NADINE RUTH TOLCON
CAPPIG FINANCE PTY LTD
CAPPIG FINANCE PTY LTD
WESTORIA RESOURCE INVESTMENTS LTD
QUINLYNTON PTY LTD – PURSER SUPER FUND A/C
SATORI INTERNATIONAL PTY LTD – SARTORI S/F A/C
MENLO PTY LTD – MGM SUPER FUND A/C
YOVICH & CO LIMITED
YOVICH & CO LIMITED
DR ROSEMARY ALISON MCLAREN & MR DONALD MALCOLM BLACK – THE
MCLAREN-BLACK S/FUND A/C
MR PETER DOUGLAS STEVENS & MRS MELVA JEANETTE STEVENS – PD
STEVENS & CO P/L S/F A/C
1,500,000
2.56
1,200,000
2.05
1,050,000
1.79
1,000,000
1.70
1,000,000
1.70
797,896
1.36
750,000
1.28
712,500
1.21
650,000
600,000
1.11
1.02
580,000
0.99
570,000
0.97
500,000
0.85
COLLISS SUPERANNUATION PTY LTD – COLLISS SUPERANNUATION FUND
500,000
0.85
HNC PTY LTD – THE SAGGERS SUPER FUND A/C
MYCHI LE INVESTMENTS PTY LTD
MR ROBERT JOHN RYAN & MRS PATRICIA ANN RYAN
TOTAL
500,000
0.85
500,000
0.85
500,000
0.85
26,410,396
45.03
Options
Outstanding at 16 September 2011 were 33,066,667. options and the balance is represented by:
-
-
-
-
-
-
27,191,667 options over ordinary shares with an exercise price of $0.20 each, expiring on 30 June 2013.
3,000,000 options over ordinary shares with an exercise price of $0.30 each, expiring on 30 November 2013.
1,550,000 options over ordinary shares with exercise price of $0.30 each, expiring on 13 December 2015.
550,000 options over ordinary shares with exercise price of $0.44 each, expiring on 20 March 2016.
525,000 options over ordinary shares with exercise price $0.44 each, expiring on 30 June 2016.
250,000 options over ordinary shares with exercise price $0.44 each, expiring on 6 September 2014.
There are no single holders of options which comprise more than 20% of outstanding options.
52 | P a g e
ASX ADDITIONAL INFORMATION (continued)
Interests in Mining Tenements
Project
Talc
Talc
Talc
Tungsten
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Iron
Talc
Iron
Iron
Talc
Talc
Talc
Talc
Mineral Sands
Mineral Sands
Iron
Iron
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Tenement
Interest
Location
Status
E70/3779
E70/3778
E70/3884
E80/4394
E70/3930
E70/3813
E70/3814
E70/3812
E70/3967
E47/2276
E70/3777
E47/2280
E47/2291
E70/3776
E70/4003
E70/4004
E70/4189
E09/1739
E70/3763
E45/3640
E45/3662
E70/3761
E70/3762
E70/3898
E04/2083
R70/35
M70/872
M70/965
M70/1153
E69/2752
E70/3764
E70/3846
E70/3859
E70/3862
100%
100%
100%
100%
100%
100%
100%
100%
20%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Moora
Moora
Moora
Halls Creek
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Pilbara
Moora
Pilbara
Pilbara
Moora
Moora
Moora
Moora
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Carnarvon Basin
Granted
Perth Basin
Pilbara
Pilbara
Perth Basin
Perth Basin
Perth Basin
Derby
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Eucla Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Pending
Pending
Pending
Pending
Pending
53 | P a g e
Project
Tenement
Interest
Location
Iron
Iron
Talc
Iron
Iron
Iron
Iron
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Iron
Mineral Sands
Mineral Sands
Mineral Sands
Iron/bauxite
Rare Earths
Rare Earths
Rare Earths
Mineral Sands
Talc
Mineral Sands
Iron
Iron
Iron
P47/1542
P47/1543
E70/3883
E47/2343
E47/2344
E47/2345
E47/2346
E70/3901
E70/3929
E70/3931
E70/3947
E70/3970
E70/3971
E45/3822
E04/2081
E04/2082
E04/2084
E80/4582
E53/1614
E53/1615
E53/1616
E70/4117
E70/4167
E70/4190
E47/2592
E47/2593
E47/2594
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%
Pilbara
Pilbara
Moora
Pilbara
Pilbara
Pilbara
Pilbara
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Pilbara
Broome
Broome
Broome
Kimberley
Yilgarn
Yilgarn
Yilgarn
Perth Basin
Moora
Perth Basin
Pilbara
Pilbara
Pilbara
Status
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
Pending
54 | P a g e
www.sheffieldresources.com.au