Waste Connections
Annual Report 2013

Plain-text annual report

White Cliff Minerals Limited ABN 22 126 299 125 Annual report for the year ended 30 June 2013 White Cliff Minerals Limited ABN 22 126 299 125 Contents Corporate information Operations report Directors’ report Auditor’s independence declaration Corporate governance report Statement of comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Directors’ declaration Independent auditor’s report to the members 3 4 19 27 28 33 34 35 36 37 62 63 ASX additional information 65 2 White Cliff Minerals Limited ABN 22 126 299 125 Corporate Information Michael Langoulant Todd Hibberd Rodd Boland Michael Langoulant Brooke White Directors Company secretaries Registered office and principal place of business Suite 2, 47 Havelock Street West Perth, Western Australia 6005 Share registry Auditors Solicitors ASX code Telephone: Facsimile: Website: (08) 9321 2233 (08) 9324 2977 www.wcminerals.com.au Computershare Investor Services Pty Ltd Reserve Bank Building Level 2, 45 St George’s Terrace Perth, Western Australia 6000 (08) 9323 2000 Telephone: HLB Mann Judd Chartered Accountants Level 4, 130 Stirling Street Perth, Western Australia 6000 Jackson McDonald Lawyers Level 25, 140 St Georges Terrace Perth, WA 6000 White Cliff Minerals Limited is listed on the Australian Securities Exchange (Shares: WCN, Options: WCNO) 3 White Cliff Minerals Limited ABN 22 126 299 125 Review of Operations Highlights  Two Capital Raisings and a Share Purchase Plan raise $2.97 Million dollars  Company awarded $150,000 in government co-funding drilling via the Exploration Incentive Scheme  Exploration including drilling, electromagnetics and soil geochemistry at the Lake Johnston project identified new nickel and base metal targets including: o 2m at 71g/t silver and 1 m at 144 g/t Silver from diamond drilling and; o 32m at 0.82% nickel and 0.02% copper from RC drilling o Soil geochemistry surveys confirms nickel-copper and platinum anomalies at the Mt Glasse and Lake Percy prospects o Electromagnetic surveys identify conductors at the Lake Percy, Mt Gordon and Mt Glasse prospects  Channel sampling at the Chanach project identifies new copper zones including: o 8 metres at 1.72% copper within 33 metres at 0.85% copper o 4 metres at 1.67% copper o 4 metres at 1.1% copper o Best trench results of 1m at 4.12% copper Corporate During the year the Company conducted two private placements and a shareholder purchase plan to raise capital to continue exploration on the Chanach copper-gold project in Kyrgyzstan and the Lake Johnston Nickel project in Western Australia. The terms of both offers included one free option for every two shares placed. Both offers were fully subscribed and the Company successfully raised $750,000 and $1.62 Million via private placements and $600,000 via a Shareholder purchase plan. The total capital raised during the year was $2.97 Million dollars. Exploration Summary White Cliff Minerals Limited controls extensive tenement packages in Western Australia’s Yilgarn Craton and the Pilbara region as well as a major gold-copper project in Central Asia. In Western Australia the Company is exploring several projects with the primary focus on the Lake Johnston nickel project (Map 1). Exploration completed at the Lake Johnston project near Norseman WA consisted of:  Six diamond holes for 1,293 metres testing six electromagnetic (EM) targets prospective for nickel sulphide mineralisation at the Lake Percy prospect;  Nine reverse circulation holes for 1,409 metres testing a further eight EM targets at the Lake Percy and Mt Gordon prospects;  Two EM surveys covering 110 line kilometres that identified twelve (EM) conductors consistent with massive sulphide mineralisation; and  Extensive geochemical soil sampling covering the southern section of the Lake Percy and Mt Glasse prospects. 4 White Cliff Minerals Limited ABN 22 126 299 125 Exploration Results: The soil geochemical surveys identified several coincident nickel-copper-platinum-palladium anomalies worthy of further exploration and the two electromagnetic surveys identified several category one anomalies that coincided with soil anomalies. Subsequent drilling tested several of these targets. Diamond and reverse circulation drilling at the Lake Percy and Mt Gordon prospects focussed on testing several EM conductors located on or adjacent to the basal contact of komatiitic ultramafic volcanics. The massive sulphide zones identified in drill holes LPDD001-005, LPRC001-006 (Lake Percy prospect) and MGRC001-003 (Mt Gordon prospect) contained trace nickel and copper consistent with sulphides formed within sea floor marine sediments, however two holes at the Lake Percy prospect intersected mineralisation. LPRC007 drilled into the central ultramafic unit intersected 32 metres at 0.83% nickel, 226 ppm copper and 176 ppm cobalt from 24 metres mainly within the weathered ultramafic regolith profile. The remainder of the ultramafic unit contained high background levels of nickel averaging 0.25% nickel and 1-5 ppm copper over 28 metres. LPDD004 also drilled into the central ultramafic unit identified strong silver mineralisation with intersections of 2 metres at 71 g/t and 1 metre at 144 g/t. The mineralisation is associated with anomalous tungsten, copper and gold. Significant silver anomalism was also identified in the same drill hole with 3 metres at 14.5g/t from surface. The intersections to date indicate that the central ultramafic unit at Lake Percy remains highly prospective for nickel sulphide accumulations. There is also the possibility that gold and copper mineralisation occurs in association with intrusive felsic units. Further work on both targets is planned. The Company has been granted $150,000 in government co-funding for drilling the Mt Gordon targets in addition to government co-funded grants received during the year totalling $106,221. Central Asia During the year the Joint Venture partners received the results from the 2012 rock sampling and drilling program. Sampling has identified several new zones of copper mineralisation and drilling has confirmed the orientation and tenor of the mineralised system. The copper trenching results are encouraging with assay values up to 4.12% copper. The best overall results were obtained from the top of the skarn contact with 8 metres at 1.72% copper within 33 metres averaging 0.85% copper and 24m at 0.48% copper. The mineralisation occurs as supergene copper oxides and secondary copper sulphides. There is significant potential for this zone to extend along strike to the north and south. The drilling extended the main existing mineralised zone 100 metres to the East with CHDD12-02 intersecting 26 metres at 0.3% copper within an alteration halo of 88 metres at 0.17% copper. A second hole (CHDD12-04) drilled on the same section, 100 metres to the north and 50 metres higher in elevation intersected 5 metres at 0.4% copper within 25 metres at 0.17% copper in the upper parts of the mineralised system. A review of the mineralised system has also identified that there may be significant economic potential for copper production from the surface copper oxide zones via a low cost heap leach processing operation. Further work on this possibility is being undertaken. 5 White Cliff Minerals Limited ABN 22 126 299 125 Map 1 White Cliff Minerals Limited exploration projects 6 White Cliff Minerals Limited ABN 22 126 299 125 Map 2 Chanach project location with regional geology with major gold deposits illustrated. Corporate During the year the Company announced two private placements and a shareholder purchase plan to raise capital to continue exploration on the Chanach copper-gold project in Kyrgyzstan and the Lake Johnston Nickel project in Western Australia. The terms of the offers included one free option for every two shares placed. Both offers were fully subscribed and the Company successfully raised $750,000 and $1.62M via a private placements and $600,000 via a shareholder purchase plan. The Company remains in a relatively strong financial position as at 30 June with cash assets of $1.19 million. 7 White Cliff Minerals Limited ABN 22 126 299 125 Lake Johnston Project (100%) During the financial year to 30 June 2013 the Company completed two phases of exploration including soil sampling, geophysics, reverse circulation and diamond drilling. Phase one consisted of 6 diamond drill holes for a total of 1,293 metres to test several geophysical conductors located on or adjacent to the interpreted basal contact of ultramafic units. Five drill holes intersected barren iron sulphides explaining the conductors. The ultramafic rocks intersected contained up to 0.3% background nickel indicating that the rocks are fertile for nickel sulphide accumulations. The sixth hole LPDD004 (Figures 3 and 4) drilled into the western ultramafic unit intersected two zones rich in silver at 34 and 76 metres respectively. The upper zone contained 2 metres at 71 g/t silver with trace gold, copper and tungsten and the lower zone contained 1 metre at 144 g/t silver, 0.1% copper, 0.04 g/t gold and trace tungsten. Silver and gold mineralisation was also identified at surface with 3 metres at 14.5 g/t silver and 34 ppb gold. A soil geochemistry survey was carried out post drilling to establish the extent and intensity of the surface silver and gold anomaly to allow future drilling to be effectively targeted. The survey identified coincident nickel and copper soil anomalies however no silver anomalies were identified that could assist with drill targeting. During October and November 2012 the Company also completed an extensive geophysical survey to evaluate areas of the Lake Percy tenement not previously tested with geophysics. The survey identified an additional four new conductors (Figures 1 and 2); two to the northwest of the phase one drilling program within the eastern ultramafic sequence and four in the southern corner of the tenement within the central ultramafic sequence. Each conductive target sits on or adjacent to an ultramafic contact that is considered to have the potential to host nickel sulphide mineralisation. The second phase of drilling consisted of nine reverse circulation holes for a total of 1,409 metres. The massive sulphide zones identified in drill holes LPRC001-005 (Lake Percy prospect) and MGRC001-003 (Mt Gordon prospect) contained trace nickel and copper consistent with sulphides formed within sea floor marine sediments. In contrast, at the Lake Percy prospect LPRC007 drilled into the central ultramafic unit intersected 32 metres at 0.83% nickel, 226 ppm copper and 176 ppm cobalt from 24 metres mainly within the weathered ultramafic regolith profile. The remainder of the ultramafic unit contained high background levels of nickel averaging 0.25% nickel and 1-5 ppm copper over 28 metres (Figures 3 and 4). The high nickel results are associated with exceptionally high copper values (averaging 266ppm) compared to background values of 1-5ppm copper, and very low chrome values (242ppm) compared to background values (500ppm). LPRC007 was drilled to test under a mineralised historical RAB hole that intersected 21m at 1.34% nickel, 356ppm copper, 560ppm cobalt and low chrome 0.14%. The low chrome, high copper and generally high base metals values in both holes are suggestive of a sulphide source overprinted by moderate enrichment via weathering. On the same cross section a historical hole ANC178C drilling by Anaconda Nickel intersected 6 metres at 1.7% nickel, 93 ppm copper, 267 ppm cobalt and 0.51% chrome on a faulted contact with an intrusive felsic pegmatite. Table 1 Mineralised nickel intervals on cross section WUM11 Hole ID Interval Nickel % Type From To LPRC007 ANR0559 ANC0172B RC RC RAB 24 16 100 56 37 106 32 21 6 0.83 1.34 1.7 Copper (ppm) 226 356 93 Cobalt (ppm) Chrome % 176 560 267 0.02 0.14 0.51 Additional analysis of the surface soil geochemistry samples collected in 2012 has identified very strong nickel/chrome and copper/zinc ratios along the western contact of the central ultramafic unit both north and south of LPRC007. The combined Ni/Cr and Cu/Zn (Kambalda) ratio is commonly indicative of nickel sulphide mineralisation occurring nearby (Figure 5). 8 White Cliff Minerals Limited ABN 22 126 299 125 Given these results, the Company strongly believes that further exploration is warranted. However, given the current economic conditions the Company believes it is prudent to refine targets with additional low cost soil geochemistry surveys prior to further drilling. Mt Glasse The recently completed soil geochemistry at Mt Glasse displayed strong nickel, copper and platinum/palladium enrichment, potentially indicative of nickel sulphide mineralisation at depth. Follow up geophysical surveys confirmed several prospective geophysical conductors at depths of 100 to 200 metres consistent with sulphide mineralisation. The conductors also occur down dip from coincident nickel and copper anomalies in shallow RAB drill holes (Figure 6). Depending on the geological interpretation applied, the conductors occur either on an internal basal contact within the ultramafic sequence or on the upper contact of the central ultramafic unit and overlying felsic and mafic volcanics. While nickel sulphide deposits do occur in these positions the conductors are not located in the optimal basal contact position. Further detailed analysis of the geochemistry, particularly the nickel/chrome and copper zinc ratios (Kambalda ratio) indicates that the high nickel and copper values may be the result of weathering processes and are not necessarily indicative of sulphide mineralisation at depth. While the conductors still represent prospective drill targets, the Company is cogniscent of the difficult market conditions and has decided to focus the next round of exploration efforts on the Lake Percy nickel and base metal targets in preference to progressing drilling on the Mt Glasse targets. Ongoing Exploration The Company will continue to refine drilling targets with additional low cost soil geochemistry surveys at Lake Percy, Mt Gordon and Mt Glasse. 9 White Cliff Minerals Limited ABN 22 126 299 125 Figure 1 Regional geology map showing tenement holdings, mine locations and the location of the Mt Gordon and Lake Percy prospects. 10 White Cliff Minerals Limited ABN 22 126 299 125 Figure 2 Completed diamond and reverse circulation drill holes at Lake Percy. Section WUM 11 Figure 3 Geological plan of cross section WUM11 showing mineralised zone at Lake Percy. 11 White Cliff Minerals Limited ABN 22 126 299 125 21m at: 1.34% Ni 356 ppm Cu 560 ppm Co 0.14% Cr 32m at: 0.83% Ni 226 ppm Cu 169 ppm Co 0.02% Cr 6m at: 1.7% Ni 93 ppm Cu 267 ppm Co 0.51% Cr Figure 4 LPRC007 Cross section showing mineralised nickel intersections. Figure 5 Nickel/Chrome*Copper/Zinc (Kambalda) ratios >1 (pink dots) highlight the prospectivity of the western contact of the western ultramafic unit north of LPRC007. 12 White Cliff Minerals Limited ABN 22 126 299 125 Surface nickel-copper- platinum-palladium anomaly 500ppm copper contour 8m at 1.1% Ni, 500 ppm Cu MLTEM Conductor Figure 6 Geological interpretation of Mt Glasse cross section 8 showing EM conductor, drill hole copper anomaly and surface Ni-Cu-Pt-Pd anomalies. The Chanach Copper – Gold Project, Central Asia (57%) The Chanach gold-copper project is situated in the northwest region of the Kyrgyz Republic and covers 83 km2. White Cliff Minerals Limited and its joint venture partner, T2 Gold Pty Limited, own 90% of the Chanach gold-copper project on a 64:36 basis. During the financial year the Joint Venture partners received the results from the 2012 rock sampling and drilling program. Sampling has identified several new zones of copper mineralisation and drilling has confirmed the orientation and tenor of the mineralised system. A review of the mineralised system has also identified that there may be significant economic potential for copper production from the surface copper oxide zones via a low cost heap leach processing operation. Further work on this possibility is being undertaken. Copper Mineralisation Sampling along trenches and bulldozer cuttings across the skarn contact has identified new zones of copper mineralisation (Figure 7 and 8). The copper trenching results are encouraging with assay values up to 4.12% copper. The best overall results were obtained from the top of the skarn contact with 8 metres at 1.72% copper within 33 metres averaging 0.85% copper and 24m at 0.48% copper. The mineralisation occurs as supergene copper oxides and secondary copper sulphides. There is significant potential for this zone to extend along strike to the north and south. The above results are 100m above and offset from an intersection of 33m averaging 0.66% copper that also occurs along the thermally metamorphosed skarn contact (Figure 8). 13 White Cliff Minerals Limited ABN 22 126 299 125 Central Ridge Porphyry Ridge Figure 8 South Porphyry Ridge Figure 7 Rock chip and trench sampling locations showing copper mineralisation Skarn Contact 33m at 0.66% Cu Porphyry Ridge 24m at 0.48% Cu 4m at 1.1% Cu 1m at 4.12% Cu within 4m at 1.67% Cu 8 m at 1.72% Cu within 33m at 0.85% Cu Figure 8 Rock chip and trench sample locations showing copper mineralisation on Skarn Contact 14 White Cliff Minerals Limited ABN 22 126 299 125 Drilling Results The 2012 drilling program consisted of 5 holes for a total of 623 metres, designed to extend the existing mineralised zone to the East as well as test the skarn contact and a magnetic high adjacent to the skarn contact (Figure 9). The drilling extended the main existing mineralised zone 100 metres to the east with CHDD12-02 intersecting 26 metres at 0.3% copper within an alteration halo of 88 metres at 0.17% copper. A second hole (CHDD12-04) drilled on the same section, 100 metres to the north and 50 metres higher in elevation intersected 5 metres at 0.4% copper within 25 metres at 0.17% copper in the upper parts of the mineralised system. Based on drilling results to date the mineralisation is interpreted to form a moderate grade (0.3 to 0.5% copper) supergene blanket of mineralisation above a series of deeper, steeply dipping, higher grade (0.5 to 2.3% copper) shear zones. There appear to be three mineralised zones approximately 500 metres long, up to 100 metres wide at surface and narrowing to 3-10 metres wide at depth. Mineralisation is open to the north, south at depth and along strike to the east. Drilling also identified 12 metres at 0.36% copper across the thermally metamorphosed contact between the granodiorite and the overlying limestone. Drilling at the magnetic high did not identify any mineralisation. 12 m at 0.36% Cu 5 m at 0.40% Cu within 25m at 0.17% Cu 26 m at 0.29% Cu within 88m at 0.2% Cu Figure 9 Interpreted mineralised zones (red hatched areas) based on drilling and rock sampling results. Project Review During a review of the mineralised system it was identified that there may be significant economic potential for copper production from the surface copper oxide zones via a low cost heap leach processing operation. The bulk of the trenching and drilling to date have outlined a large area containing extensive copper oxide mineralisation that is amenable to heap leaching. A first pass economic assessment suggests that project economics would be very robust subject to further metallurgical and engineering studies. Further exploration will now focus on expanding the size of the copper oxide zones and carrying out initial metallurgical and 15 White Cliff Minerals Limited ABN 22 126 299 125 engineering studies to confirm project economics. To this end, the Joint Venture partners have planned an exploration program for the 2013 field season focussing on copper oxide mineralisation and are seeking a funding partner to advance the project. Mount Remarkable Project (100%) The project is located approximately 170 km N-NE of Kalgoorlie in the Northern Goldfields and includes the historic gold mining centres of Mt Remarkable and Yerilla. The project covers approximately 604 square kilometres of Archean greenstone and granitoid sequences prospective for shear and vein hosted gold deposits, ultramafic hosted nickel sulphide deposits and volcanic hosted base metal deposits. During the year the Company reviewed the project focussing on the nickel sulphide, base metals and gold potential. The Company is planning a series of soil sampling campaigns covering extensions to the Apollo Shear (gold), the Mt Remarkable Fault (nickel) and the Jungle Pool fault aimed at defining base metal, nickel and gold targets. Jungle Pool VMS Target Figure 10 The Mt Remarkable and Jungle Pool project areas with local nickel, gold and VMS targets 16 White Cliff Minerals Limited ABN 22 126 299 125 Ghan Well Project (100%) The Ghan Well Nickel Prospect is located some 40 km southwest of Laverton on the Western Edge of Lake Carey and adjacent to Minara Resources Murrin Murrin East open Pit. The Prospect is dominated by a Northward trending strong magnetic high that extends over 10 kilometres. The magnetic high is closely correlated with outcropping komatiitic ultramafics that contain extensive nickel and cobalt mineralisation in the lateritic and saprolitic profiles. This region hosts the Murrin Murrin and Mt Windarra nickel mines, along with the Sunrise Dam, Granny Smith and Bright Star gold mines. During the year the Company reviewed the nickel and gold prospectivity of the project. Previous drilling intersected widespread nickel mineralisation with one metre sample grades up to 1.57% nickel and 0.30% cobalt within the siliceous laterite ultramafic cap and underlying highly weathered saprolitic ultramafic. The drilling also identified anomalous copper values in some holes highlighting the prospectivity of the ultramafic rocks for nickel sulphide mineralisation at depth. The identification of komatiitic and cumulate textures and presence of nickel mineralisation demonstrate that the ultramafic unit is prospective for nickel sulphides. The Ghan Well ultramafic unit extends over six kilometres along strike and only 400 metres of this ultramafic unit has been tested to date. The most prospective and largest zones are south of the existing drilling along the edge of Lake Carey (Figure 11). The Company is investigating several geochemical sampling methods to test the regolith profile beneath shallow lake sediments to further define gold and nickel targets prior to planning drilling. 17 White Cliff Minerals Limited ABN 22 126 299 125 2011 Air Core Drilling Figure 11 Ghan Well Location plan showing tenement outline (green), drilling location (yellow) and Lake Carey outline (Blue) over RTP magnetic image. Other Projects In the year there was no significant exploration undertaken on the Company’s remaining exploration projects. The Information in this report that relates to exploration results, mineral resources or ore reserves is based on information compiled by Mr Todd Hibberd, who is a member of the Australian Institute of Mining and Metallurgy. Mr Hibberd is a full time employee of the company. Mr Hibberd has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the `Australian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (the JORC Code)`. Mr Hibberd consents to the inclusion of this information in the form and context in which it appears in this report. 18 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Your directors present their annual financial report on the consolidated entity (referred to hereafter as the “Group”) consisting of White Cliff Minerals Limited (the “Company” or “parent entity”) and the entities it controlled during the financial year ended 30 June 2013. In order to comply with the provisions of the Corporations Act, the directors report as follows: Directors The following persons were directors of the Company during the whole of the financial year and up to the date of this report: M Langoulant - Executive Chairman T Hibberd - Managing Director R Boland - Non-Executive Director Principal activities The principal activity of the Group during the financial year was mineral exploration. Dividends No dividend has 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. Review of operations Information on the operations of the Group is set out in the review of Operations Report on pages 4 to 18 of this Annual Report. Significant changes in the state of affairs There have been no significant changes in the state of affairs of the Group to the date of this report. Matters subsequent to the end of the financial year There has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods. Likely developments and expected results Additional comments on expected results of certain operations of the Group are included in the review of operations and activities. Environmental legislation The Group is subject to significant environmental legal regulations in respect to its exploration and evaluation activities. There have been no known breaches of these regulations and principles. Indemnification and insurance of directors and officers During the financial year the Company has not paid premiums in respect of insuring directors and officers of the Company against liabilities incurred as directors or officers. The Company has no insurance policy in place that indemnifies the Company’s auditors. 19 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Information on directors Michael Langoulant; B Com, CA Executive Chairman and Company Secretary Experience and expertise Founding director with over 20 years’ experience in public company corporate administration and fundraising. After 10 years with large international accounting firms he has acted as finance director, CFO, company secretary and non-executive director with a number of publicly listed companies. Other current directorships Nyota Minerals Limited and Luiri Gold Ltd Former directorships in the last 3 years None Special responsibilities Chairman and co-Company Secretary Interests in shares and options at the date of this report 5,621,822 ordinary shares; 4,681,820 30 September 2014 options; 1,000,000 30 June 2014 options Todd Jeffrey Hibberd; BSc, MSc, Dip Bus, MAusIMM, MAICD Managing Director Experience and expertise Appointed in December 2008 Mr Hibberd is a geologist with an extensive background in exploration, mining and mineral economics with over 20 years in exploration, resource estimation, feasibility studies, mine development and production management. Recent experience includes two years as Managing Director of ASX listed Stonehenge Metals Limited and 10 years working for Newmont Mining Corporation in various senior exploration and production roles. Other current directorships None Former directorships in the last 3 years None Special responsibilities Managing director Interests in shares and options at the date of this report 6,047,964 ordinary shares; 5,000,000 30 September 2014 options; 1,500,000 30 June 2014 options Rodd Boland; B Com, MBA Non-Executive Director Experience and expertise Mr. Boland has over 20 years of corporate and financial industry experience in investment banking, executive management and the capital markets including advising and raising equity for corporations in the form of venture capital, private equity, pre-initial public offerings and initial public offerings. Other current directorships None Former directorships in the last 3 years None. Special responsibilities Investor relations Interests in shares and options at the date of this report 510,000 ordinary shares; 1,250,000 30 September 2014 options; 750,000 30 June 2014 options Co-Company Secretary Brooke White, 32, has been co-company secretary of White Cliff since February 2010. Ms White holds business administration and financial services qualifications with over 11 years in corporate secretarial roles. She has been either company secretary or assistant company secretary for numerous ASX and AIM listed mining and exploration companies. 20 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Meetings of directors During the financial year there were 6 formal directors’ meetings. All other matters that required formal Board resolutions were dealt with via written circular resolutions. In addition, the directors met on an informal basis at regular intervals during the financial year to discuss the Group’s affairs. The number of meetings of the Company’s board of directors attended by each director were: M Langoulant T Hibberd R Boland Shares under option Directors’ meetings held whilst in office Directors’ meetings attended 6 6 6 6 6 6 Outstanding share options at the date of this report are as follows: Grant Date Date of expiry Exercise price Number of options April 2011 September 2012 – March 2013 30 June 2014 30 September 2014 $0.25 $0.06 5,750,000 116,227,300 No option holder has any right under the options to participate in any other share issue of the Company or any other controlled entity. Shares issued on the exercise of options There have been no shares issued upon the exercise of options. 21 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Remuneration Report This report outlines the remuneration arrangements in place for the key management personnel of White Cliff Minerals Limited (the “Company”) for the financial year ended 30 June 2013. 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 and the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company, and includes all executives in the Parent and the Group receiving the highest remuneration. Key Management Personnel (i) Directors Michael Langoulant (Chairman) Todd Hibberd (Managing Director) Rod Boland (Non-executive Director) (ii) Executive There were no other executives of the Company as at 30 June 2013. Details of directors’ and executives’ remuneration are set out under the following main headings: A B C D Principles used to determine the nature and amount of remuneration Details of remuneration Employment contracts/Consultancy agreements Share-based compensation Principles used to determine the nature and amount of remuneration A The objective of the Company’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aims to align executive reward with the creation of value for shareholders. The key criteria for good remuneration governance practices adopted by the Board are:      competitiveness and reasonableness acceptability to shareholders performance incentives transparency capital management The framework provides a mix of fixed salary, consultancy agreement based remuneration and share based incentives. The broad remuneration policy for determining the nature and amount of emoluments of Board members and senior executives of the Company is governed by the full board. Although there is no separate remuneration committee the Board’s aim is to ensure the remuneration packages properly reflect directors’ and executives’ duties and responsibilities. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention and motivation of a high quality Board and executive team. The current remuneration policy adopted is that no element of any director or executive package is directly related to the Company’s financial performance. Indeed there are no elements of any director or executive remuneration that are dependent upon the satisfaction of any specific condition however the overall remuneration policy framework is structured to advance and create shareholder wealth. Non-executive directors Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-executive directors’ fees and payments are reviewed annually by the Board and are intended to be in line with the market. 22 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Directors’ fees Some of the directors perform at least some executive or consultancy services. As the Board considers it important to distinguish between the executive and non-executive roles each of the directors receive a separate fixed fee for their services as a director. As from 1 July 2012 the annual director fee has been reduced by 50% from $30,000 per annum per director to $15,000 per annum per director. Retirement allowances for directors Apart from superannuation payments paid on salaries there are no retirement allowances for directors. Executive pay The executive pay and reward framework has the following components:   base pay and benefits such as superannuation long-term incentives through participation in employee equity issues Base pay All executives are either full time employees or consultants who are paid on an agreed basis that has been formalised in a consultancy agreement. Benefits Apart from superannuation paid on executive salaries there are no additional benefits paid to executives. Short-term incentives There are no current short term incentive remuneration arrangements. Employee/Consultant options To ensure that the Company has appropriate mechanisms in place to continue to attract and retain the services of suitable directors and employees, the Company has issued options to key personnel. During the year ended 30 June 2013, the Company issued 8,000,000 Options exercisable at $0.06 on or before 30 September 2014 to directors. No options were issued during the year ended 30 June 2012. B Details of remuneration Amounts of remuneration Details of the remuneration of the directors and other key management personnel (as defined in AASB 124 Related Party Disclosures) of the Company and the Group for the year ended 30 June 2013 are set out in the following tables. There are no elements of remuneration that are directly related to performance. The key management personnel of the Group are the directors of the Company and those executives that have authority and responsibility for planning, directing and controlling the activities of the Group. 23 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Remuneration of directors Year ended 30 June 2013 Name Director M Langoulant3 T Hibberd R Boland Primary benefits Salary and/or consulting fees $ Post- employment benefits Super- annuation Directors’ Fees1 Share-based payment Option Issues2 Total $ $ $ $ 150,000 229,360 30,000 409,360 30,000 30,000 30,000 90,0001 - 20,640 - 20,640 51,565 59,498 15,866 126,9292 231,565 339,498 75,866 646,929 Other key management personnel Nil Year ended 30 June 2012 Director M Langoulant3 T Hibberd R Boland Other key management personnel Nil 150,000 229,360 30,000 409,360 15,000 15,000 15,000 45,0001 - 20,640 - 20,640 28,586 42,879 21,440 92,905 193,586 307,879 66,440 567,905 1 The 2012 financial statements omitted the Director fees for the period January to June 2012 which were only to be paid upon the Company receiving additional equity funding. These fees (although relating to the 2012 year) were paid in September 2012 and are presented above as part of the 2013 year remuneration. Since 1 July 2012 director fees have been set at $15,000 per annum. 2 Employee options exercisable in September 2014 issued to Directors in November 2012 were issued with continuity of employment vesting conditions. In March 2013 however shareholders voted to vary the conditions of all September 2014 options on issue (including those issued to Directors) such that these options could become listed on ASX. As a result the vesting conditions were removed and the share based expense relating to the issue of options to Directors has been accounted for in full during the 2013 year instead of being amortised over three financial years as was originally intended. 3 Includes fees for accounting and corporate administration services to a company of which he is a Director and shareholder. The assessed fair value at grant date of options granted to individuals is included in key management personnel remuneration above and expensed in the statement of comprehensive income over the vesting period of the options. Employee options exercisable in September 2014 issued to key management personnel in November 2012 were issued with continuity of employment vesting conditions. In March 2013 however shareholders voted to vary the conditions of all September 2014 options on issue (including those issued to Directors) such that these options could become listed on ASX. As a result the vesting conditions applicable to these options were removed and the share based expense relating to the issue of options to key management personnel has been accounted for in full during the 2013 year instead of being amortised over three financial years as was originally intended. 24 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Fair values at grant date are independently determined using a Black and Scholes option pricing model that takes into account various assumption as detailed in Note 14. The table below compares the share based payment expense components for the year ended 30 June 2013 to the theoretical cash value of directors’ options held as at 30 June 2013. Details of individual directors’ option holdings are provided in Note 17. Name Director M Langoulant T Hibberd R Boland 2013 Share-based payments expense for remuneration disclosure and accounting purposes $ Value of directors’ listed options that have vested but are unexercised as of 30 June 2013 $* 51,565 59,498 15,866 3,250 3,750 1,000 * This amount is based upon the market value of the Company’s listed options on the last trading day on which the Company’s options traded on the ASX on or before 30 June 2013, which was $0.001. C Employment contracts/Consultancy agreements On appointment to the Board, all Non-Executive Directors enter into a service agreement with the Company in the form of a letter of appointment. Formal services contracts have been made with the Executive Chairman and the Managing Director. Given the Company’s current cash resources and state of equity capital markets the Board agreed that all gross wages/consulting fee arrangements with directors have been reduced by a factor of 40% commencing from 1 July 2013. In addition it was previously agreed to cut annual director fees by 50% effective from 1 July 2012.These arrangements will not be reviewed unless the Company is able to raise fresh equity funding. Share-based compensation D Options Options are granted to employees and consultants as determined by the board. The terms and conditions of each grant of options affecting remuneration in this or future reporting periods are as follows: Grant date Expiry date Exercise price Value per option at grant date Date exercisable 1 April 2011 30 June 2014 $0.25 $0.054 3 tranches, subject to vesting conditions, one third on 1 April 2012, one third on 1 April 2013 and one third 1 April 2014 2 November 2012 30 September 2014 $0.06 $0.016 30 September 2014 25 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report There have been no options granted to employees or consultants that have been exercised or have lapsed during the reporting period. Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share. Further information on the options is set out in notes 14 and 17 to the financial statements. Details of Share-based compensation options issue to directors and key management personnel during the current financial year are set out below. Name M Langoulant T Hibberd R Boland End of remuneration report. Option series Number granted Number vested % of compensation for year consisting of options 2/11/2012 3,250,000 3,250,000 2/11/2012 3,750,000 3,750,000 2/11/2012 1,000,000 1,000,000 22 18 21 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 27 and forms part of this directors’ report for the year ended 30 June 2013. Non-audit services The Company may decide to employ the auditors on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the consolidated entity are important. The Company has considered the position and is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The auditors have not provided any material non-audit services during the reporting year and therefore the auditors’ independence was not compromised. Proceedings on behalf of 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. This report is made in accordance with a resolution of the directors. M Langoulant Chairman Perth, Western Australia 6 September 2013 26 AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the consolidated financial report of White Cliff Minerals Limited for the year ended 30 June 2013, 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 White Cliff Minerals Limited and the entities it controlled during the year. Perth, Western Australia 6 September 2013 N G Neill Partner, HLB Mann Judd HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers. White Cliff Minerals Limited ABN 22 126 299 125 Corporate governance statement Introduction White Cliff Minerals Limited (the “Company”) considers the adoption of appropriate systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised in this report. Commensurate with the spirit of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations 2nd edition (Recommendations) the Company has followed each Recommendation where the Board has considered the recommendation to be an appropriate benchmark for corporate governance practices, taking into account factors such as the size of the Company and the Board, resources available and activities of the Company. Where, after due consideration, the Company's corporate governance practices depart from the Recommendations, the Board has offered full disclosure of the nature of, and reason for, the adoption of its own practice. Further information about the Company's corporate governance practices, polices and Charters are set out on the Company's website at www.wcminerals.com.au. In accordance with the Recommendations, information published on the Company's website includes charters (for the Board and its sub-committees), codes of conduct and other policies and procedures relating to the Board and its responsibilities. Disclosure – Principles & recommendations The Company reports below on how it has followed (or otherwise departed from) each of the Recommendations during the 2012/2013 financial year ("Reporting Period"). Board Roles and responsibilities of the Board and Senior Executives (Recommendations: 1.1, 1.3) The Company has established the functions reserved to the Board, and those delegated to senior executives and has set out these functions in its Board Charter. The Board is collectively responsible for promoting the success of the Company through its key functions of overseeing the management of the Company, providing overall corporate governance of the Company, monitoring the financial performance of the Company, engaging appropriate management commensurate with the Company's structure and objectives, involvement in the development of corporate strategy and performance objectives, and reviewing, ratifying and monitoring systems of risk management and internal control, codes of conduct and legal compliance. Senior executives are responsible for supporting the Managing Director and assisting the Managing Director in implementing the running of the general operations and financial business of the Company in accordance with the delegated authority of the Board. Senior executives are responsible for reporting all matters which fall within the Company's materiality thresholds at first instance to the Managing Director or, if the matter concerns the Managing Director, directly to the Chair or the lead independent director, as appropriate. Skills, experience, expertise and period of office of each Director (Recommendation: 2.6) A profile of each Director setting out their skills, experience, expertise and period of office is set out in the Directors' Report. The mix of skills and diversity for which the Board is looking to achieve in membership of the Board are: ability to provide guidance on the development of the Company’s assets; independence; understanding of exploration; capital markets; geological; accounting and finance; and mining experience. Director independence (Recommendations: 2.1, 2.2, 2.3, 2.6) For the Reporting Period the Board did not have a majority of directors who were independent. 28 White Cliff Minerals Limited ABN 22 126 299 125 The Company has not complied with this Recommendation. The Board has two non-independent directors and one independent director. Given the size and scope of the Company's operations, the Board considers that it has the relevant experience in the exploration and mining industry and is appropriately structured to discharge its duties in a manner that is in the best interests of the Company and its Shareholders from both a long-term strategic and operational perspective. The Board considers the independence of directors having regard to its Policy on Assessing the Independence of Directors, which provides that when determining the independent status of a director the Board should consider whether the director:      is a substantial shareholder of the Company or an officer, of, or otherwise associated directly with, a substantial shareholder of the Company; is employed, or has previously been employed in an executive capacity by a Group company and there has not been a period of at least 3 years between ceasing such employment and serving on the Board; has within the last 3 years been a principal of a material professional adviser or a material consultant to the Group; has a material contractual relationship with the Company or other group member other than as a director; is a material supplier or customer of the Group, or an officer of or otherwise associated directly or indirectly with a material supplier or customer.   The Board has agreed on the following guidelines for assessing the materiality of matters:  Statement of Financial Position items are material if they have a value of more than 5% of pro-forma net asset. Statement of Comprehensive Income items are material if they will have an impact on the current year operating result of 5% or more. Items are also material if they impact on the reputation of the Company, involve a breach of legislation, are outside the ordinary course of business, could affect the Company’s rights to its assets, if accumulated would trigger the quantitative tests, involve a contingent liability that would have a probable effect of 5% or more on asset, liability, income or expense items, or will have an effect on operations which is likely to result in an increase or decrease in net income or dividend distribution of more than 5%. The independent director of the Company is Mr Rod Boland, who is not the Chair. Whilst the Company recognises the benefit of having an independent director as Chair, the Board was of the view that Michael Langoulant continues to be the most appropriate person for the position of Chair. The Chief Executive Officer is Todd Hibberd who is not also Chair of the Board. Independent professional advice (Recommendation: 2.6) To assist directors with independent judgement, it is the Board's policy that if a director considers it necessary to obtain independent professional advice to properly discharge the responsibility of their office as a director then, provided the director first obtains approval from the Chair for incurring such expense, the Company will pay the reasonable expenses associated with obtaining such advice. Selection and (Re)Appointment of Directors (Recommendation: 2.6) In determining candidates for the Board, the Nomination Committee (or equivalent) follows a prescribed process whereby it evaluates the mix of skills, experience and expertise of the existing Board. In particular, the Nomination Committee (or equivalent) is to identify the particular skills that will best increase the Board's effectiveness. Consideration is also given to the balance of independent directors. Potential candidates are identified and, if relevant, the Nomination Committee (or equivalent) recommends an appropriate candidate for appointment to the Board. Any appointment made by the Board is subject to ratification by shareholders at the next general meeting. 29 White Cliff Minerals Limited ABN 22 126 299 125 Each director other than the Managing Director, must not hold office (without re-election) past the third annual general meeting of the Company following the director's appointment or three years following that director's last election or appointment (whichever is the longer). However, a director appointed to fill a casual vacancy or as an addition to the Board must not hold office (without re-election) past the next annual general meeting of the Company. At each annual general meeting a minimum of one director or one third of the total number of directors must resign. A director who retires at an annual general meeting is eligible for re-election at that meeting. Re-appointment of directors is not automatic. Board committees Nomination Committee (Recommendations: 2.4, 2.6) The Board has not established a separate Nomination Committee. The Board believes that there would be no efficiencies gained by establishing a separate Nomination Committee. Accordingly, the Board performs the role of the Nomination Committee. Items that are usually required to be discussed by a Nomination Committee are marked as separate agenda items at Board meetings when required. When the Board convenes as the Nomination Committee it carries out those functions which are delegated to it in the Company’s Nomination Committee Charter. The Board deals with any conflicts of interest that may occur when convening in the capacity of the Nomination Committee by ensuring that the director with conflicting interests is not party to the relevant discussions. The full Board officially convened as a Nomination Committee once during the Reporting Period, In addition informal nomination-related discussions occurred from time to time during the year as required. Audit Committee (Recommendations: 4.1, 4.2, 4.3, 4.4) The Board has not established an Audit Committee. The role of the audit committee is undertaken by the full Board, which comprises two executive directors and one independent non-executive director. The Board considers that given its current size no efficiencies or other benefits would be gained by establishing a separate audit committee. The Board has stated its audit and compliance responsibilities in the Board Charter. Remuneration Committee (Recommendations: 8.1, 8.2, 8.3, 8.4) The Board has not established a Remuneration Committee. The Board considers that no efficiencies or other benefits would be gained by establishing a separate Remuneration Committee. The Company’s constitution provides that the remuneration of Non-Executive Directors will not be more than the aggregate fixed sum determined by general meeting. Time is set aside at one Board meeting each year specifically to address the matters usually considered by a Remuneration Committee. Remuneration matters, usually considered by a Remuneration Committee, were considered at during a number of Board meetings during the year. Details of remuneration, including the Company’s policy on remuneration, are contained in the “Remuneration Report” which forms of part of the Directors’ Report. The Company’s policy is to remunerate non-executive directors at market rates (for comparable companies) time, commitment and responsibilities. Fees for non-executive directors are not linked to the performance of the Company. Given the Company’s stage of development and the financial restriction placed on it, the Company may consider it appropriate to issue unlisted options to non-executive directors, subject to obtaining the relevant approvals. The grant of options is designed to attract and retain suitability qualified non-executive directors. for There are no termination or retirement benefits for non-executive directors (other than for superannuation). 30 White Cliff Minerals Limited ABN 22 126 299 125 Performance evaluation Senior executives (Recommendations: 1.2, 1.3) The Managing Director is responsible for evaluating the performance of senior executives. The performance evaluation of senior executives is undertaken by meetings held with each senior executive and the Managing Director on an informal basis at least once a year. During the Reporting Period an evaluation of senior executives took place in accordance with the process disclosed above. Board, its committees and individual directors (Recommendations: 2.5, 2.6) The Chair is responsible for evaluating the performance of the Board and, when deemed appropriate, Board committees and individual directors. Evaluations of the Board and its committees are undertaken by way of round-table discussions and individual directors by one on one interview. During the Reporting Period an evaluation of the Board and individual directors took place in accordance with the process disclosed above. Ethical and responsible decision making Code of Conduct (Recommendations: 3.1, 3.5) The Company has established a Code of Conduct as to the practices necessary to maintain confidence in the Company's integrity, the practices necessary to take into account its legal obligations and the reasonable expectations of its stakeholders and the responsibility and accountability of individuals for reporting and investigating reports of unethical practices. Diversity (Recommendations: 3.2, 3.3, 3.4, 3.5) The Company has established a Diversity Policy, which includes requirements for the Board to establish measurable objectives for achieving gender diversity and for the Board to assess annually both the objectives and progress towards achieving them. Given the small size of the Company, the Board has not set measurable objectives for achieving gender diversity. However, the Company's Board does take into account the gender, age, ethnicity and cultural background of potential Board members, executives and employees. At the date of this report the Company had only 2 male employees and no female Board members but contract a female co-company secretary. A summary of the Company’s Diversity Policy is disclosed on the Company’s website. Continuous Disclosure (Recommendations: 5.1, 5.2) The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and accountability at a senior executive level for that compliance. Shareholder Communication (Recommendations: 6.1, 6.2) The Company has designed a communications policy for promoting effective communication with shareholders and encouraging shareholder participation at general meetings. 31 White Cliff Minerals Limited ABN 22 126 299 125 Risk Management Recommendations: 7.1, 7.2, 7.3, 7.4) The Board has adopted a Risk Management Policy, which sets out the Company's risk profile. Under the policy, the Board is responsible for approving the Company's policies on risk oversight and management and satisfying itself that management has developed and implemented a sound system of risk management and internal control. Under the policy, the Board delegates day-to-day management of risk to the Managing Director, who is responsible for identifying, assessing, monitoring and managing risks. The Managing Director is also responsible for updating the Company's material business risks to reflect any material changes, with the approval of the Board. In fulfilling the duties of risk management, the Managing Director has unrestricted access to Company employees, contractors and records and may obtain independent expert advice on any matter they believe appropriate, with the prior approval of the Board. In addition, the following risk management measures have been adopted by the Board to manage the Company's material business risks:   the Board has established authority limits for management, which, if proposed to be exceeded, requires prior Board approval; and the Board has adopted a compliance procedure for the purpose of ensuring compliance with the Company's continuous disclosure obligations. During the Reporting Period, the Company formalised its approach to risk management by documenting all material business risks in a risk register and allocation of ownership for material business risks to the Managing Director and management of individual material business risks to senior management and individuals within the organisation. The risk register is regularly reviewed by the Board and management. All risks identified in the risk register will be reviewed and assessed by management and the Board at least annually. Risk is a standing discussion item at scheduled Board meetings. The key categories of risk of the Company, as reported on by management, include: cash management and the ability to raise fresh equity capital; financial reporting;    ASX reporting compliance;  project ownership retention;  executive travel safety;  maintaining joint venture partnerships;  employee health and safety;  retention of key employees;  environmental compliance; foreign exchange risk; and  sovereign risk.  The Board has required management to design, implement and maintain risk management and internal control systems to manage the Company's material business risks. The Board also requires management to report to it confirming that those risks are being managed effectively. The Board has received a report from management as to the effectiveness of the Company's management of its material business risks for the Reporting Period. The Managing Director and the CFO equivalent have provided a declaration to the Board in accordance with section 295A of the Corporations Act and have assured the Board that such declaration is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks. 32 White Cliff Minerals Limited ABN 22 126 299 125 Statement of Comprehensive Income For the year ended 30 June 2013 Other income Depreciation Exploration expenditure incurred Impairment of other financial assets Project acquisition costs written off Share based payment expense Other expenses Loss before income tax expense Note 2 10 Consolidated 2013 $ 2012 $ 260,705 410,841 2,670 1,345,261 101,609 439,568 158,660 1,068,200 4,222 926,691 - 554,889 164,370 841,062 3,115,968 2,491,234 (2,855,263) (2,080,393) Income tax expense 3 - - Loss after income tax expense Net loss for the year that may be subsequently Other comprehensive loss/(income) Items reclassified to profit and loss: Fair value adjustment on investments in other companies Items that will not be subsequently reclassified to profit and loss: Reclassification of fair value adjustments on investments in other companies to profit and loss Other comprehensive loss/(income), net of tax (2,855,263) (2,080,393) (2,855,263) (2,080,393) - (58,940) 53,849 53,849 - (58,940) Total comprehensive loss for the year (2,801,414) (2,139,333) Basic loss per share (cents per share) 4 2.3 3.1 The above statement of comprehensive income should be read in conjunction with the accompanying notes. 33 White Cliff Minerals Limited ABN 22 126 299 125 Statement of Financial Position As at 30 June 2013 Note 6 7 8 9 10 Consolidated 2013 $ 2012 $ 1,190,649 39,109 635,309 547,093 1,229,758 1,182,402 - - 814,612 47,760 2,670 570,644 814,612 621,074 2,044,370 1,803,476 11 182,827 120,063 182,827 120,063 182,827 120,063 1,861,543 1,683,413 12 13 14,464,160 874,899 (13,477,516) 11,801,936 503,730 (10,622,253) 1,861,543 1,683,413 Current Assets Cash and cash equivalents Trade and other receivables Total Current Assets Non-Current Assets Other financial assets Plant and equipment Exploration project acquisition costs Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Total Current Liabilities Total Liabilities Net Assets Equity Issued capital Reserves Accumulated losses Total Equity The above statement of financial position should be read in conjunction with the accompanying notes. 34 White Cliff Minerals Limited ABN 22 126 299 125 Statement of Changes in Equity For the year ended 30 June 2013 Consolidated Balance 1 July 2011 Loss for the period Other comprehensive income/(loss) Total comprehensive loss for the year Shares issued during the period Share based compensation Issued capital $ Accumulated losses $ Reserves Total equity $ $ 11,789,952 (8,541,860) 398,300 3,646,392 - - - 11,984 - 11,984 (2,080,393) - (2,080,393) - (58,940) (58,940) (2,080,393) (58,940) (2,139,333) - - - - 11,984 164,370 164,370 164,370 176,354 Balance at 30 June 2012 11,801,936 (10,622,253) 503,730 1,683,413 Balance at 1 July 2012 11,801,936 (10,622,253) 503,730 1,683,413 Loss for the period Other comprehensive income Total comprehensive loss for the year Shares issued during the period Capital raising costs (note 12(b)) Share based compensation - - - (2,855,263) - (2,855,263) - 53,849 53,849 (2,855,263) 53,849 (2,801,414) 2,972,001 (309,777) - 2,662,224 - - - - - 2,972,001 - 317,320 (309,777) 317,320 317,320 2,979,544 Balance at 30 June 2013 14,464,160 (13,477,516) 874,899 1,861,543 The above statement of changes in equity should be read in conjunction with the accompanying notes. 35 White Cliff Minerals Limited ABN 22 126 299 125 Statement of Cash Flows For the year ended 30 June 2013 Cash flows from operating activities Government drilling grants Payments to suppliers and employees Interest received Note Consolidated Inflows/ (Outflows) 2013 $ Inflows/ (Outflows) 2012 $ 106,221 (1,003,794) 28,484 - (951,413) 75,230 Net cash outflow from operating activities 19(a) (869,088) (876,183) Cash flows from investing activities Purchase of plant and equipment Loans (to)/from others Payments for exploration and evaluation Proceeds from sale of tenements Net cash outflow from investing activities Cash flows from financing activities Proceeds from the issue of shares/options Capital raising costs Net cash inflow from financing activities Net increase/(decrease) in cash held Cash at the beginning of the year Effect of exchange rate fluctuations on cash held - 110,606 (1,633,062) 126,000 (547) (359,807) (1,420,727) 352,177 (1,396,456) (1,428,904) 2,972,001 (151,117) 2,820,884 - - - 555,340 (2,305,087) 635,309 2,940,286 - 110 Cash at the end of the year 6 1,190,649 635,309 The above statement of cash flows should be read in conjunction with the accompanying notes. 36 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 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. The Company is a listed public company registered and domiciled in Australia. The financial report is presented in Australian dollars. Going Concern The Company and its controlled entities as at 30 June (the “Group”) do not generate sufficient cash flows from their operating activities to finance these activities. Thus the continuing viability of the Group and its ability to continue as a going concern and meet its debts and commitments as they fall due are dependent upon the Group being successful in completing a capital raising and/or asset sale/joint venture agreement in the next 12 months. The directors have mitigated this risk by reducing the Group’s corporate overheads and postponing expenditure on the Group’s projects where possible. As a result of these matters, there is uncertainty that may cast significant doubt on whether the Group will continue as a going concern and, therefore, whether it will realise its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial report. However, the directors believe that the Group will be successful in the above matters and, accordingly, have prepared the financial report on a going concern basis. (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 2013, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Group’s operations and effective for the current annual reporting period. It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group and, therefore, no change is necessary to Group accounting policies. The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2013. 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 the Group and, therefore, no change necessary to Group accounting policies. Statement of compliance The financial report was authorised by the Board of directors for issue on 6 September 2013. 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). Basis of consolidation The consolidated financial statements comprise the financial statements of White Cliff Minerals Limited (“Company” or “parent entity”) and its controlled entities as at 30 June 2013 (the “Group”). The financial statements of the controlled entities are prepared for the same reporting period as the parent entity, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Controlled entities are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Control exists where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. 37 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 1: Statement of significant accounting policies (continued) (e) Significant accounting judgements estimates and assumptions 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. Exploration and evaluation costs carried forward The Group’s main activity is exploration and evaluation for minerals. The nature of exploration activities are such that it requires interpretation of complex and difficult geological models in order to make an assessment of the size, shape, depth and quality of resources and their anticipated recoveries. The economic, geological and technical factors used to estimate mining viability may change from period to period. In addition, exploration activities by their nature are inherently uncertain. Changes in all these factors can impact exploration asset carrying values. Share-based payment transactions: The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using a Black and Scholes model using the assumptions contained in Note 14. Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group 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. (ii) Government assistance - drilling grants Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. 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. Temporary bank overdrafts are included in cash at bank and in hand. Permanent 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. Income tax The income tax expense or benefit for the year is the tax payable on the current year’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 in the countries where the company’s subsidiaries and associates operate and generate taxable income. 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 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. 38 (f) (g) (h) White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 1: Statement of significant accounting policies (continued) (h) Income tax (cont) 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 controlled entities, 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 controlled entities, 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. 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 financial 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. 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. Tax consolidation legislation The Company and its 100% owned Australian resident subsidiaries have implemented the tax consolidation legislation. Current and deferred tax amounts are accounted for in each individual entity as if each entity continued to act as a taxpayer on its own. The Company recognises both its own current and deferred tax amounts and those current tax liabilities, current tax assets and deferred tax assets arising from unused tax credits and unused tax losses which it has assumed from its controlled entities within the tax consolidated group. (i) 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 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 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. 39 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 1: Statement of significant accounting policies (continued) (j) Plant and equipment Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows: (k) Office equipment – 13% Plant and equipment – 20% - 40% The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end. Impairment of assets The Group 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 Group 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 or groups of 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 re- valued 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. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior financial periods. Such reversal is recognised in profit or loss 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. (l) Trade and other payables Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months. 40 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 1: Statement of significant accounting policies (continued) (m) (o) Provisions Where applicable, provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not made for future operating losses. When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement. Provisions are measured at the net present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting year. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost. Share-based payment transactions Equity settled transactions: The Group provides benefits to employees and consultants of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity- settled transactions). The cost of these equity-settled transactions with employees and consultants is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black and Scholes model, further details of which are given in Note 14. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which any performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects the extent to which the vesting period has expired, and the Group’s best estimate of the number of equity instruments that will ultimately vest. The statement of comprehensive income charge or credit for a year represents the movement in cumulative expense recognised as at the beginning and end of that year. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition. If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification. If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see Note 4). (p) 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. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a new business are not included in the costs of acquisition as part of purchase consideration. 41 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 1: Statement of significant accounting policies (continued) (q) (r) Earnings per share Basic earnings per share is calculated as net profit or loss attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares. Diluted earnings per share is calculated as net profit or loss attributable to members of the parent, adjusted for:    costs of servicing equity (other than dividends) and preference share dividends; the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares, divided by the weighted average number of ordinary shares and dilutive potential ordinary shares. Exploration and evaluation expenditure Exploration costs are expensed as incurred. Acquisition costs are accumulated in respect of each separate area of interest. Acquisition costs are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through the sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial year and accumulated acquisition costs written off to the extent that they will not be recovered in the future. Amortisation is not charged on acquisition costs carried forward in respect of areas of interest in the development phase until production commences. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development. (s) 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 White Cliff Minerals Limited. 42 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 1: Statement of significant accounting policies (continued) (t) Financial assets (cont) (i) Financial assets at fair value through profit or loss Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss. (ii) Held-to-maturity investments Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process. If the Group were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available-for-sale. (iii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process. (iv) Available-for-sale investments Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss. The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance date. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions, reference to the current market value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. 43 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 1: Statement of significant accounting policies (continued) (u) Impairment of financial assets The Group assesses at each balance date whether a financial asset or group of financial assets is impaired. (i) Financial assets carried at amortised cost If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account. The amount of the loss is recognised in profit or loss. The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date. (ii) Financial assets carried at cost If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for a similar financial asset. (iii) Available-for-sale investments If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to the statement of comprehensive income. Reversals of impairment losses for equity instruments classified as available-for-sale are not recognised in profit. Reversals of impairment losses for debt instruments are reversed through profit or loss if the increase in an instrument's fair value can be objectively related to an event occurring after the impairment loss was recognised in profit or loss. (v) Parent entity financial statements The financial information for the parent entity, White Cliff Minerals, disclosed in Note 20, has been prepared on the same basis as the consolidated financial statements. (w) Comparative figures When required by Accounting Standards, comparative figures have been adjusted to conform in presentation with the current year. 44 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 2: Revenue and expenses (a) Revenue from continuing operations Other revenue Interest received Profit on sale of tenements Government drilling grants (b) Expenses Loss from ordinary activities before income tax expense includes the following specific expenses: Auditor’s remuneration Employee costs* * Includes all direct exploration employee costs Consolidated 2013 $ 2012 $ 28,484 126,000 106,221 75,230 335,611 - 29,550 490,870 36,200 315,875 45 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 3: Income tax (a) Income tax benefit The prima facie income tax expense on pre-tax accounting result from operations reconciles to the income tax benefit in the financial statements as follows Accounting loss before tax from continuing operations Tax expense/(benefit) calculated at 30% Non-deductible expenses Unused tax losses and tax offset not recognised as deferred tax assets Other deferred tax assets and tax liabilities not recognised Adjustments in respect of current income tax of previous years Deferred tax assets and tax liabilities not recognised in relation to foreign expenses Income tax expense/(benefit) reported in the statement of comprehensive income (b) Unrecognised deferred tax balances The following deferred tax assets have not been brought to account Deferred tax assets comprise: Accruals Fair value of investments Share issue costs Losses available for offset against future income – revenue Losses available for offset against future income – capital Deferred tax liabilities comprise: Exploration expenses capitalised Net unrecognised deferred tax assets (c) Income tax benefit not recognised directly in equity during the year Share issue costs Investments – fair value adjustment Consolidated 2013 $ 2012 $ (2,855,263) (2,080,393) (856,579) (624,118) 36,566 44,988 - 127,197 508,762 102,588 597 89,176 310,654 260,169 - - 10,613 30,483 53,495 3,195,884 38,159 3,328,634 7,733 16,155 30,676 2,730,967 127,197 2,912,728 (94,384) (123,763) 3,234,250 2,788,965 45,335 - 45,335 - 17,682 17,682 46 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 4: Loss per share Total basic loss per share (cents) The loss and weighted average number of ordinary shares used in the calculation of basic loss per share is as follows: Consolidated 2013 $ 2012 $ (2.3) (3.1) Net loss for the period The weighted average number of ordinary shares (2,855,263) (2,080,393) 122,080,092 67,287,873 The diluted loss per share is not reflected as the result is anti-dilutive. Note 5: Segment information For management purposes, the Board of Directors of the Company has been defined as the Chief Operating Decision Maker. Segment information is presented in respect of the Group’s business segments based on the Group’s management and internal reporting structure. During the year the group operated predominantly in one business segment that consisted of mineral exploration. Geographically, the group explores in both Australia and the Kyrgyz Republic. Segment results are classified in accordance with their use within geographic segments. Segment results and assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The following table presents the financial information regarding these segments provided to the Board of Directors for the year ended 30 June 2013. 2013 Revenue Government drilling grants Sale of tenements Interest income Segment revenue Segment net operating loss after tax Segment assets Other segment information Segment liabilities Depreciation and amortisation of segment assets Acquisition of plant and equipment Australia $ 106,221 126,000 28,484 260,705 Kyrgyz $ - - - Total $ 106,221 126,000 28,484 260,705 (2,109,115) (746,148) (2,855,263) 1,544,370 500,000 2,044,370 168,827 14,000 182,827 2,670 - - - 2,670 - 47 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 5: Segment information (cont) 2012 Revenue Sale of tenements Interest income Segment revenue Segment net operating loss after tax Segment assets Other segment information Segment liabilities Depreciation and amortisation of segment assets Acquisition of plant and equipment Note 6: Cash and cash equivalents Cash at bank and on hand Short term deposits Australia $ 335,611 75,230 410,841 Kyrgyz $ - - - Total $ 335,611 75,230 410,841 (1,285,856) (794,537) (2,080,393) 1,645,376 158,100 1,803,476 105,549 14,514 120,063 4,222 547 - - 4,222 547 Consolidated 2013 $ 2012 $ 42,891 1,147,758 16,509 618,800 1,190,649 635,309 (a) Reconciliation to Statement of Cash Flows The above figures agree to cash at the end of the financial year as shown in the Statement of Cash Flows. (b) Cash at bank and on hand These are non-interest bearing accounts. (c) Deposits at call The deposits are bearing floating interest rates between 2.6% and 4%. These deposits have a maturity of no more than 90 days. (d) Cash balances not available for use As at 30 June 2013, an amount of $Nil (2012: $62,939) was held as security bonds. 48 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 7: Trade and other receivables Goods and services tax receivable Joint venture partner contributions Other receivables Note 8: Other financial assets Shares held in companies listed on a prescribed stock exchange – at cost Fair value adjustment Note 9: Plant and equipment Year ended 30 June 2012 Opening balance Additions Depreciation charge Closing net book value At 30 June 2012 Cost or fair value Accumulated depreciation Net carrying amount Consolidated 2013 $ 2012 $ 39,109 - - - 506,342 40,751 39,109 547,093 101,609 (101,609) 101,609 (53,849) - 47,760 Plant and equipment $ 6,345 547 (4,222) 2,670 26,002 (23,332) 2,670 49 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 9: Plant and equipment (cont) Year ended 30 June 2013 Opening balance Additions Depreciation charge Closing net book value At 30 June 2013 Cost or fair value Accumulated depreciation Net carrying amount The depreciation rates were as follows for both 2012 and 2013: Plant and equipment 20-40% Note 10: Exploration project acquisition costs Opening balance Project acquisition costs Projects sold Project acquisition costs written off Acquisition costs in respect of areas of interest in the exploration phase Plant and equipment $ 2,670 - (2,670) - 26,002 (26,002) - Consolidated 2013 $ 2012 $ 570,644 683,536 - (439,568) 1,102,123 29,975 (6,565) (554,889) 814,612 570,644 The recoupment of exploration project acquisition costs carried forward is dependent upon the recoupment of costs through successful development and commercial exploitation, or alternatively by sale of the respective areas. As a result of exploration activities during the year, the directors re-assessed the carrying value of the acquisition costs relating to certain project areas and, as a result, have written off those acquisition costs that are not expected to be re-couped in the future, notwithstanding that title to these areas remains valid and further exploration is planned. Note 11: Trade and other payables Trade payables and accruals* Provisions * Trade payables are non-interest bearing and are normally paid on 30 day terms. 145,774 37,053 120,063 - 182,827 120,063 50 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 12: Issued capital (a) Ordinary shares issued 186,107,947 (2012: 67,380,647) ordinary shares Number of shares 2012 2013 14,464,160 11,801,936 Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings. In the event of winding up of the parent entity, ordinary shareholders rank after all creditors and are fully entitled to any proceeds on liquidation. (b) Movements in ordinary share capital: Date Opening balance Details Number of shares 67,227,003 Issue Price $ $ 11,789,952 6 February 2012 Consulting fee 153,644 0.078 11,984 30 June 2012 7 September 2012 1 October 2012 11 October 2012 13 February 2013 21 March 2013 Capital raising costs 30 June 2013 (c) Share options Placement Share Purchase Plan Placement Placement Placement 67,380,647 6,660,000 20,000,000 18,340,000 8,400,000 65,327,300 - 0.03 0.03 0.03 0.022 0.022 11,801,936 199,800 600,000 550,200 184,800 1,437,201 (309,777) 186,107,947 14,464,160 Listed options exercisable at $0.06 on or before 30 September 2014 Employee Options exercisable at $0.25 on or before 30 June 2014 (d) Movements in share options Listed Options to acquire ordinary fully paid shares at $0.06 on or before 30 September 2014: Beginning of the financial year Issued during year Balance at end of financial year Number of options 2013 2012 116,227,300 5,750,000 121,977,300 - 5,750,000 5,750,000 - 116,227,300 116,227,300 - - - 51 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 13: Reserves Investment revaluation reserve (a) Option issue reserve (b) Share compensation reserve (c) Consolidated 2013 $ - 125,391 749,508 2012 $ (53,849) 125,391 432,188 874,899 503,730 (a) (b) (c) Investment revaluation reserve The investment revaluation reserve represents revaluation movements in the value of other financial assets. The balance as at 30 June 2012 has been reclassified to profit and loss in this period. Option issue reserve The option issue reserve represents amounts paid upon subscribing for options issued by the Company. Share compensation reserve The share compensation reserve is used to record the value of equity benefits provided to consultants and directors as part of their remuneration. Refer Note 14. 52 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 14: Share based payments Share based payments consists of listed and unlisted options issued to directors and consultants. The expense is recognised in the Statement of Comprehensive Income and Statement of Changes in Equity over the vesting periods of the options. The following share-based payment arrangements were in place during the current and prior years: Number Grant date Expiry Date Exercise price $ 5,750,000 1/4/2011 30/6/2014 10,000,000 2/11/2012 30/9/2014 0.25 0.06 Fair value at grant date* $310,500 $158,660 Fair value of options granted * The fair value of the equity-settled share options granted under the Employee Share Option Plan 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. The actual value of these options may be materially different to this accounting estimation. The following table lists the inputs to the Black and Scholes model used: Dividend yield % Expected volatility % Risk-free interest rate % Life of option Exercise price Grant date share price Discount for lack of marketability April 2011 November 2012 - 100% - 90% 4.95% 2.55% 39 months 23 months $0.25 $0.06 $0.145 $0.053 33% 33% 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. The fair value of unlisted options was discounted to account for the existence of continuity of employment vesting conditions, non-transferability and the un-listed aspect of the employee options. No other features of options granted were incorporated into the measurement of fair value. 53 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 15: Financial instruments (a) Capital risk management Prudent capital risk management implies maintaining sufficient cash and marketable securities to ensure continuity of tenure to exploration assets and to be able to conduct the Group’s business in an orderly and professional manner. The Board monitors its future capital requirements on a regular basis and will when appropriate consider the need for raising additional equity capital or to farm-out exploration projects as a means of preserving capital. The Board currently has a policy of not entering into any debt arrangements. (b) Categories of financial instruments The Group’s principal financial instruments comprise of cash and short-term deposits. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other financial assets and liabilities such as receivables and trade payables, which arise directly from its operations. It is, and has been throughout the year, the Group’s policy that no trading in financial instruments shall be undertaken during the year. (c) Financial risk management objectives The Group is exposed to market risk (including interest rate risk and equity price risk), credit risk and liquidity risk. The main risks arising from the Group’s financial instruments are interest rate risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. (d) Market risk Equity price risk sensitivity analysis There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk from the previous period. (i) Interest rate risk management All cash balances attract a floating rate of interest. Excess funds that are not required in the short term are placed on deposit for a period of no more than 3 months. The Group’s exposure to interest rate risk and the effective interest rate by maturity periods is set out below. Interest rate sensitivity analysis As the Group has no interest bearing borrowings its exposure to interest rate movements is limited to the amount of interest income it can potentially earn on surplus cash deposits. At 30 June 2013, if interest rates had changed by +/- 50 basis points and all other variables were held constant, the Group’s after tax loss would have been $4,130 (2012: $3,177) lower/higher as a result of higher/lower interest income on cash and cash equivalents. (ii) Equity price risk management The Group is exposed to equity price risks arising from available-for-sale financial assets. Given the current state of equity markets the Company has fully impaired its available-for-sale financial assets. 54 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 15: Financial instruments (cont) (e) Credit risk management Credit risk relates to the risk that counterparties will default on their contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with credit worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from any defaults. (f) Liquidity risk management Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to ensure continuity of tenure to exploration assets and to be able to conduct the Group’s business in an orderly and professional manner. Cash deposits are only held with major financial institutions. 2013 Financial assets Cash and cash equivalents – non - interest bearing Cash and cash equivalents – interest bearing Trade and other receivables Other financial assets Financial liabilities Trade and other payables Provisions 2012 Financial assets Cash and cash equivalents – non-interest bearing Cash and cash equivalents –interest bearing Trade and other receivables Other financial assets Financial liabilities Trade and other payables Weighted Average Interest Rate Less than 1 month 1-3 months 3 months – 1 year 5 + years n/a 41,751 - 348,021 39,109 - 428,881 800,877 - - 800,877 - - - - - 3.45% n/a n/a n/a n/a - - - 145,774 - - 37,053 145,774 37,053 n/a 14,689 3.8% n/a n/a 620,620 10,751 - 646,060 - - - - - - - 536,342 47,760 584,102 n/a - 120,063 - 646,060 (120,063) 584,102 - - - - - - - - - - - - - - 55 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 15: Financial instruments (cont) (g) Fair value of financial instruments The following table presents the group’s assets and liabilities measured and recognised at fair value at 30 June 2013 utilising the following fair value measurement hierarchy:  quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)  inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly ( derived from prices) (level 2), and inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).  Consolidated – 2013 Assets Available-for-sale financial assets Consolidated – 2012 Assets Available-for-sale financial assets Level 1 Level 2 Level 3 Total - - 47,760 47,760 - - - - - - - - - - 47,760 47,760 The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the end of the reporting period. The Company’s investments have been fully impaired during this reporting period. Note 16: Commitments and contingencies Exploration expenditure commitments In order to maintain rights of tenure to its Australian located mineral tenements, the Company is required to outlay certain amounts in respect of rent and minimum expenditure requirements set by the Western Australian State Government Mines Department. The Group’s commitments to meet this minimum level of expenditure are approximately $580,000 (2012: $601,000) annually. Exemption from incurring this annual level of expenditure may be granted where access to the tenement area is restricted for reasons beyond the Company’s control such as where native title issues restrict the Company’s ability to explore in the project area. The Company is not aware of any such restrictions to exploration in the coming year and it does not anticipate seeking any exemption to reduce this annual expenditure requirement. In order to maintain rights of tenure to its Kyrgyz Republic located mineral tenement, the Company is required to complete an annual works program as agreed with the Kyrgyz government. If this program is not completed in the calendar year then continued tenure to the project could be in jeopardy. It is possible that the Company and its joint venture partners may not be able to complete the 2013 works program and hence there is a risk that the Company and its joint venture partners may not be able to maintain continued tenure of the Kyrgyz project. Other contingencies The Company is a co-guarantor to an office lease under which its remaining exposure through to the end of the lease in October 2015 is approximately $98,500. 56 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 17: Key management personnel disclosures (a) Directors At the date of this report the directors of the Company are: M Langoulant – Executive Chairman T Hibberd – Managing director R Boland – Non executive director There were no changes of the key management personnel after the reporting date and the date the financial report was authorised for issue. (b) Key management personnel During the reporting periods the Company had no other key management personnel. (c) Key management personnel compensation Short-Term Post-employment Share-based payments Consolidated 2013 $ 499,360 20,640 126,929 2012 $ 454,360 20,640 92,905 646,929 567,905 Detailed remuneration disclosures of directors and key management personnel are in pages 22 to 26 of this report. (d) Option holdings of key management personnel Details of options provided as remuneration, together with the terms and conditions of the shares and options can be found in section D of the remuneration report. The following options were granted to directors subject to continuity of employment vesting conditions. 2013 Name Director Balance at the beginning of the financial period Granted during the financial period Expired during the financial period Balance at the end of the financial period Vested and exercisable at the end of the financial period M Langoulant 1,000,000 3,250,000 T Hibberd R Boland 1,500,000 3,750,000 750,000 1,000,000 Other key management personnel Nil - - - - - - 4,250,000 3,916,666 5,250,000 4,750,000 1,750,000 1,500,000 - - 57 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 17: Key management personnel disclosures (cont) (e) Equity holdings of key management personnel The number of shares and options in the Company held during the financial period by each director of the Company and key management personnel of the Group, including their personally related parties, are set out below 2013 Director Ordinary shares M Langoulant T Hibberd R Boland Options M Langoulant T Hibberd R Boland 2012 Director Ordinary shares M Langoulant T Hibberd R Boland Options M Langoulant T Hibberd R Boland Balance at start of year Net movement during the year Balance at the end of the financial year 3,400,002 3,705,714 10,000 2,221,820 2,342,250 500,000 1,000,000 4,681,820 1,500,000 5,000,000 750,000 1,250,000 3,400,002 3,128,344 10,000 1,000,000 1,500,000 750,000 - 577,370 - - - - 5,621,822 6,047,964 510,000 5,681,820 6,500,000 2,000,000 3,400,002 3,705,714 10,000 1,000,000 1,500,000 750,000 58 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 18: Related party disclosure The ultimate parent entity in the wholly-owned group and the ultimate Australian parent entity is White Cliff Minerals Limited. The consolidated financial statements include the financial statements of White Cliff Minerals Limited and the controlled entities listed in the following table: Name of entity Country of incorporation Class of shares Equity holding Northern Drilling Pty Ltd Danforth Resources Pty Ltd PB Partners Pty Ltd Petrus Resources Pty Ltd Venture Exploration Pty Ltd Australia Australia Australia Australia Australia Ordinary Ordinary Ordinary Ordinary Ordinary 2013 % 100 100 100 100 100 2012 % 100 100 100 0 100 There were no transactions between White Cliff Minerals Limited and its controlled entities during the financial year (2012: nil). Note 19: Reconciliation of loss after income tax to net cash outflow from operating activities a) Reconciliation of loss from ordinary activities after income tax to net cash outflow from operating activities Net loss for the year (2,855,263) (2,080,393) Consolidated 2013 $ 2012 $ Depreciation Consulting fees paid by share issue Share based payment expense Impairment of financial assets Profit on sale of tenements classified as investing activity Mining tenement expenditure written off Foreign exchange loss (Increase) / decrease in trade and other receivables Increase / (decrease) in trade and other payables Increase / (decrease) in provisions 2,670 - 158,660 101,609 (126,000) 1,784,831 - 1,642 4,222 11,984 164,370 - (335,612) 1,481,580 (110) 49,434 25,710 (171,658) 37,053 - Net cash outflow from operating activities (869,088) (876,183) b) Non-cash financing and investing activities Consulting fees paid by issue of shares (note 12(b)) - 11,984 59 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 20: Parent Entity Disclosures Financial position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Total liabilities Equity Issued capital Retained earnings Reserves Asset revaluation reserve Option issue reserve Share-based payments Total equity Financial performance Loss for the year Other comprehensive income Total comprehensive loss Note 21: Events after the balance date 30 June 2013 $ 30 June 2012 $ 1,229,758 814,612 1,182,402 621,074 2,044,370 1,803,476 182,827 120,063 182,827 120,063 14,464,160 (13,477,516) 11,801,936 (10,622,253) - 125,391 749,508 (53,849) 125,391 432,188 1,861,543 1,683,413 (2,855,263) 53,849 (2,080,393) (58,940) (2,801,414) (2,139,333) There has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods. 60 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2013 Note 22: Auditor’s remuneration The auditors of the Group are HLB Mann Judd. Assurance services HLB Mann Judd: Audit and review of financial statements Total remuneration for audit services Other services HLB Mann Judd - taxation services Total auditor’s remuneration Consolidated 2013 $ 2012 $ 22,800 22,800 24,500 24,500 6,750 11,700 29,550 36,200 Note 23: Interest in jointly controlled operation The Group has a 57% interest in the Chanach joint venture, which is involved in exploration of copper and gold resources in Kyrgyz Republic. The share of the assets, liabilities, revenue and expenses of the jointly controlled operation, which are included in the consolidated financial statements, are as follows: Non-Current Assets Exploration project acquisition costs Total assets Liabilities Trade creditors Total liabilities Revenue Exploration costs written off Net loss Consolidated 2013 $ 2012 $ 500,000 158,101 500,000 158,101 14,000 14,000 14,515 14,515 756,148 794,537 (756,148) (794,537) The Group has no capital commitments or guarantees in relation to the jointly controlled operation. The Company increased in interest in this project from 45% to 57% during the financial year. Further it has impaired in exploration property acquisition costs by $314,568 during this financial year (2012 – Nil). 61 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ declaration 1. In the opinion of the directors of White Cliff Minerals Limited (the “Company”): a. the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including: i. giving a true and fair view of the group’s financial position as at 30 June 2013 and of its performance for the financial year then ended; and ii. complying with Accounting Standards, Corporations Regulations 2001, professional reporting b. c. requirements and other mandatory requirements. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 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 year ended 30 June 2013. This declaration is signed in accordance with a resolution of the Board of Directors. MJ Langoulant Chairman Perth, Western Australia 6 September 2013 62 INDEPENDENT AUDITOR’S REPORT To the members of White Cliff Minerals Limited Report on the Financial Report We have audited the accompanying financial report of White Cliff Minerals Limited (“the company”), which comprises the consolidated statement of financial position as at 30 June 2013, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated 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 the consolidated entity. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ responsibility for the financial report The directors of the company are responsible for the preparation 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 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 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. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers. Auditor’s opinion In our opinion: (a) the financial report of White Cliff Minerals Limited is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(c). Emphasis of Matter Without modifying our opinion, we draw attention to Note 1(a) to the financial report which indicates that the continuing viability of the Group and its ability to continue as a going concern and meet its debts and commitments as they fall due are dependent upon the Group being successful in completing a capital raising and/or asset sale/joint venture agreement in the next 12 months. The directors have mitigated this risk by reducing the Group’s corporate overheads and postponing expenditure on the Group’s projects where possible. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern and therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business. Report on the Remuneration Report We have audited the remuneration report included in the directors’ report for the year ended 30 June 2013. 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 White Cliff Minerals Limited for the year ended 30 June 2013 complies with section 300A of the Corporations Act 2001. HLB Mann Judd Chartered Accountants Perth, Western Australia 6 September 2013 N G Neill Partner 270 White Cliff Minerals Limited ABN 22 126 299 125 Additional information The shareholder information set out below was applicable as at 21 August 2013. A. Distribution of equity securities Analysis of numbers of equity security holders by size of holding: 1,000 1  5,000 1,001  5,001  10,000 10,001  100,000 100,001 and over There were 353 holders of less than a marketable parcel of ordinary shares. B. Equity security holders Twenty largest quoted equity security holders – ordinary shares Name Woodlands Asset Management Pty Ltd Minsk Pty Ltd Lanza Holdings Pty Ltd Jamber Investments Pty Ltd (Amber Schwartz Family A/C) Terra Aqua Pty Ltd (Terra Rosso A/C) Mr Adrian Alexander Venuti (Adrian Venuti Family A/C) Perth Select Seafoods Pty Ltd Mrs Jill Hampshire Ms Noleen V Rowe Technica Pty Ltd Florin Mining Investment Company Limited (Trading A/C) Mr Alan David Dimmock Gandria Capital Pty Ltd (The Tedblahnki Family A/C) Mr Alan Bender Gianfam Investments Pty Ltd (Mark Giannarelli Family A/C) Mr Guy Lance Jones (BOQ Loan A/C) Octifil Pty Ltd Danforth International Pty Ltd Stone Poneys Nominees Pty Ltd (Chapman Super Fund A/C) Abminga Nominees Pty Ltd Class of equity security Ordinary shares 17 29 86 386 270 788 Ordinary shares held % of issued shares 6,818,185 4,542,566 3,800,002 3,750,000 3,666,708 3,594,200 3,450,000 3,300,001 3,300,000 2,950,000 2,800,000 2,580,000 2,545,455 2,500,000 2,300,000 2,272,730 2,272,727 2,002,834 1,970,000 3.66 2.44 2.04 2.01 1.97 1.93 1.85 1.77 1.77 1.59 1.50 1.39 1.37 1.34 1.24 1.22 1.22 1.08 1.06 1,950,000 62,365,408 1.05 33.51 65 White Cliff Minerals Limited ABN 22 126 299 125 Additional information Twenty largest quoted equity security holders – 30 September 2014 options Name Zenix Nominees Pty Ltd Woodlands Asset Management Pty Ltd Lawrence Crowe Consulting Pty Ltd (L C C Super Fund A/C) Southern Terrain Pty Ltd (Southern Terrain A/C) Mr Todd Hibberd Mr Michael Langoulant Gandria Capital Pty Ltd (The Tedblahnki Family A/C) Technica Pty Ltd Florin Mining Investment Company Limited (Trading A/C) Scintilla Strategic Investments Limited Mr Guy Lance Jones (BOQ Loan A/C) Octifil Pty Ltd Perth Select Seafoods Pty Ltd Miss Allison Armstrong Invictus Capital Pty Ltd (Mail Family A/C) Mr Mark Nasarczyk & Mr Atilla Belik Mr Giovanni Spagnolo (Marcus Deluca A/C) O’Connor Funds Pty Ltd (The O’Connor Super Fund A/C) Corporate Property Services Pty Ltd (K W Share A/C) Carpenders Park Pty Ltd (Staff Super Fund A/C) C. Substantial shareholders There are no substantial shareholders in the Company. D. Voting rights Options held % of issued options 10,000,000 6,818,185 3,980,813 3,922,730 3,750,000 3,250,000 3,045,455 2,500,000 2,425,000 2,400,000 2,272,730 2,272,727 2,075,000 2,000,000 2,000,000 2,000,000 2,000,000 1,921,682 1,822,728 1,500,000 8.60 5.87 3.43 3.38 3.23 2.80 2.62 2.15 2.09 2.06 1.96 1.96 1.79 1.72 1.72 1.72 1.72 1.65 1.57 1.29 61,957,050 53.31 The voting rights attaching to each class of equity securities are set out below: Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. 66 White Cliff Minerals Limited ABN 22 126 299 125 Additional information E. Tenement schedule Project Area Tenement details % Held Laverton Mt Remarkable EL38/2456-7; EL38/2484; EL38/2528; EL38/605; EL38/2702; 100-85 EL31/0865; EL31/0874; EL31/0918; EL31/0923; EL31/1015 PL31/1996-7 100 100 100 100 100 56 Ghan Well E39/1479; EL39/1585-6; Ironstone Range EL38/2552; EL38/2583 Lake Johnson EL63/1222, EL63/1264; EL63/1378; PL63/1723-29;PL63/1731 PL63/1740-42 Oakover ELA45/3250-2 Chanach, Kyrgyz Republic EL 590 A  67 

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