Annual Report 2013 Annual Report 2013
Total Page:16
File Type:pdf, Size:1020Kb
Lake Resources N.L. ANNUAL REPORT 2013 ANNUAL REPORT 2013 Corporate Strategy Company Directory Lake Resources' mission has always been to develop a profitable Lake Resources N.L. minerals discovery business, concentrating on the effective use of A.B.N. 49 079 471 980 the geosciences and leveraging these skills to make strategic investments. To this end, our focus is on: Directors Ross Johnston ! Exploration in the most prospective areas for world-class Chairman deposits that will attract major mining companies as joint Peter J Gilchrist venture partners at an appropriate stage. Managing Director James G Clavarino ! Use of the most cost-effective practices and technologies Exploration Director including multispectral satellite images, reprocessing and reinterpretation of existing databases and application of Registered Office appropriate deposit models. 3-7 Maud Street Newstead QLD 4006 ! Formation of alliances with major mining companies for GPO Box 1239 exploration and development of the Company's discoveries. Brisbane 4001 Australia ! Development of a revenue stream comprising net smelter Contacts royalties and net profits interests when mining companies Telephone: +61 7 3257 1111 develop deposits discovered by us. +61 7 3252 0255 Facsimile: +61 7 3257 2122 ! Seed capital investments in other emerging resources sector Email: [email protected] companies. Website: www.lakeresources.com.au The board considers that the corporate culture required for successful Auditors mineral exploration is significantly different from the culture of the Hayes Knight Audit (Qld) Pty Ltd downstream businesses of mining and smelting. Level 19, 127 Creek Street Brisbane 4000, Australia Accordingly, Lake Resources does not place a high priority on becoming a miner, preferring instead, to retain royalty and net profits Bankers interests in its discoveries and to remain focussed on its core Australia and New Zealand Banking Group Limited business of mineral exploration. 102 Brisbane Street Ipswich 4305, Australia Share Registry Link Market Services Limited Level 15, 324 Queen Street Brisbane 4000, Australia ASX Code LKE Lake Resources N.L. Chairman’s Report Dear Shareholder During the year under review, the company's The Exploration Licences were due for renewal In their First Quarter Report 2013, Barrick Gold activities focussed on data compilation and in September 2015. The Company has lodged stated that “In February 2013, the ICC tribunal evaluation for the Chagai project in Balochistan, appeals against the cancellations and is issued a ruling denying Tethyan Copper Pakistan, following a percussion drilling awaiting notice of a date for hearing of the Company's request for provisional measures.” program that was completed in the second appeals. Other avenues for restoration of the In their Second Quarter Report 2013, Barrick quarter of 2012. This project is situated in the Exploration Licences are being investigated by noted that “Pakistan received an extension to Tethyan magmatic arc, which extends from the Company's Country Manager in Pakistan. In file its opposition brief in the ICSID matter until Turkey, through Iran into Pakistan and hosts a view of the uncertainty of the legal processes in September 2013. The ICSID tribunal is number of copper gold deposits including the Pakistan, the directors believe that it is prudent considering scheduling a merits hearing for Saindak copper-gold mine and the giant Reko to write down the value of the Company's mid-2014. The ICC tribunal has scheduled Diq copper-gold deposit of Tethyan Copper investment in Pakistan to zero in the accounts hearing dates for June 2014, and is considering Company limited (TCC) (see below). Lake dated 30th June 2013. the scope of these hearings.” Resources has been exploring the region since 1998. Approximately 70 km west of Lake's On the world scene, volatility of world Koh-i-Sultan project is the giant Reko Diq economies and commodity demand and prices At Koh-i-Sultan, exploration targets are world- copper-gold deposit (see Figure 1). Barrick continue to dominate the outlook. The class copper and gold deposits associated with and Antofagasta each hold a 50% interest in Company is currently focussed on the status of an extensive system of intensely altered breccia Tethyan Copper Company Limited its exploration licences in Pakistan – any future and volcanics on the margin of an extinct (TCC/Tethyan), whose principal asset is a 75% developments of the Company will depend on volcanic caldera. Lake Resources has interest in the Reko Diq project, with the the outcome of the Company's interest in these undertaken drilling programs in 2005, 2007-8 Government of Balochistan holding 25% . licences. The Company will also need to raise and 2012. Geologically significant gold and According to Antofagasta “The mineral further working capital to continue with any trace elements have been intersected in a resource at Reko Diq is estimated at 5.9 billion planned activities. number of holes - these results support the tonnes with an average copper grade of 0.41% accumulating evidence of potential for and average gold grade of 0.22g/tonne at a I wish to thank my fellow directors, economic porphyry copper-gold deposits. cut-off grade of 0.2% copper equivalent…” management and contractors for their (Antofagasta website, contribution to the operation of the company. The Dasht-i-Gauran area is situated to the antofagasta.co.uk/interior/operations/f_explor Thanks also to you, our shareholders, for your west of copper mineralisation reported by TCC a.html) ongoing support. We look forward to your from drilling at its Sor Baroot Prospect at the continuing association with Lake Resources. Reko Diq Project, and covers a number of Following the submission of a feasibility study possible alteration zones identified from to Government of Balochistan in August 2010, interpretation of satellite images. for development of the project, Tethyan Ross Johnston submitted an application for a mining lease in Chairman The Amalaf area adjoins the northern boundary accordance with the Balochistan Mineral Rules of the Saindak copper-gold mine. Our in February 2011. exploration target is large tonnage - low grade copper amenable to low-cost open-pit mining In the financial report for the six months ended and trucking to the adjacent Saindak mine. A 30 June 2012, Antofagasta stated that “On 15 percussion drilling program scheduled for the November 2011, Tethyan was notified by the second quarter of 2012 was postponed as a Government of Balochistan that the Government result of a new Government of Pakistan policy had rejected the application. Tethyan is pursuing requiring security clearances for expatriate two international arbitrations in order to protect personnel engaged in exploration activities in its legal rights: one against the Government of the region. Application for these clearances is Balochistan with the International Centre for in progress. Settlement of Investment Disputes (“ICSID”) asserting breaches of the Bilateral Investment Subsequent to 30th June 2013, the Directorate Treaty between Australia (where Tethyan is General of Mines and Minerals, Government of incorporated) and Pakistan, and the other Balochistan, advised that it has cancelled the against the Government of Balochistan with the 1 Company's three Exploration Licences in International Chamber of Commerce (:ICC”), Balochistan due to lack of exploration activity. asserting breaches of the CHEJVA ( Chagai Hills Joint Venture Agreement). Constitution of the ICC and ICSID arbitration panels is in progress”. ANNUAL REPORT 2013 Exploration Projects Mineral exploration is an inherently risky undertaking. Typically, for every one thousand mineral occurrences investigated, only one hundred warrant drilling and of these, only one ultimately proves to be economically mineable. PAKISTAN Factors that influence investment decisions for scarce exploration funds include geological prospectivity, availability of geological, geophysical and exploration data, access to land, sovereign risk, government policies, AUSTRALIA infrastructure and competitive advantages. ARGENTINA From its inception in 1997, Lake concentrated its early efforts in Pakistan and Sweden. In 2004, the Company wound down exploration in Sweden and shifted its focus to a promising new exploration play in Argentina, whilst continuing exploration in Pakistan. Following encouraging results from the company's first drilling program in Pakistan in late 2005, work in Argentina was placed on hold to concentrate on the company's more advanced copper and gold targets in Pakistan. Pakistan With a population of about 193 million (July 2013 estimate), the Islamic Republic of Pakistan is bordered by Iran, Afghanistan, China and India, and has a land area of 771 000 square kilometres, about one tenth of the area Following a major earthquake in Pakistan in of Australia. October 2005, Australia contributed more than The Republic is made up of four provinces - $80 million in emergency assistance. In 2010 Sindh (capital, Karachi), Punjab (Lahore), Australia's program grew in response to the Khyber Pakhtunkhwa (formerly North-West devastating floods which swept through Frontier (Peshawar)) and Baluchistan (Quetta) Pakistan in July of that year, providing $75 and seven areas ('agencies') on the border with million in humanitarian and early recovery Afghanistan known as the federally- assistance. Australia's total official administered tribal areas (FATA). Pakistan also development assistance