Annual Report 30 June 2008
www.apexminerals.com.au For personal use only use personal For
Apex Minerals NL ABN 22 098 612 974
ApexCover08.indd 1 13/10/08 3:14:50 PM Corporate Directory
Directors Registered Office Mark Ashley Managing Director Level 1, 10 Ord Street West Perth WA 6005 Mark Bennett Exploration Director PO Box 682, West Perth WA 6872 Glenn Jardine Operations Director Share Registry Stephen Lowe Non Executive Director Advanced Share Registry Services Pty Ltd Todd Bennett Non Executive Director 110 Stirling Highway, Nedlands WA 6009 PO Box 1156, Nedlands WA 6909 Kim Robinson Non Executive Chairman Telephone: (08) 9389 8033 Facsimile: (08) 9389 7871 Company Secretary Auditors Graham Douglas Anderson Stantons International Level 1, 1 Havelock Street, West Perth WA 6005 Principal Office Telephone: (08) 9481 3188 Facsimile: (08) 9321 1204 Level 1, 10 Ord Street West Perth WA 6005 Solicitors PO Box 682, West Perth WA 6872 Telephone: (08) 6311 5555 Salter Power Facsimile: (08) 6311 5556 Level 2, 6 Kings Park Road, West Perth WA 6005 Email: [email protected] Telephone: (08) 9216 0900 Facsimile: (08) 9216 0901
ASX Code: AXM ACN: 098 612 974
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ApexCover08.indd 2 13/10/08 3:14:50 PM A Year of Highlights
Positive Completion of Wiluna Implementation study in June forecasts cash costs of A$560/oz;
A$62m equity raising completed in June;
A$60.5m raised in September via issuance of Bonds, Warrants and Gold Upside Participation Notes;
Major resource upgrades announced in February, June and September;
Maiden reserve announced in June;
Refurbishment of plant well advanced;
Mining at Wiluna commenced in October;
First gold pour expected in November;
Second Lawlers Nickel JV with Barrick announced in June.
Table of Contents
Managing Director’s Address 2 Apex Project Location Map 5 Overview 7 Operations Project Development 14 Exploration and Resources 18 Resource Table 30 Reserves Table 32 Directors’ Report 34 Independent Auditor’s Report 44 Independence Declaration 46 Director’s Declaration 47 Income Statements 48 Balance Sheets 49 Statement of Changes in Equity 50 Cash Flow Statements 51 Notes to Financial Statements 52
For personal use only use personal For Corporate Governance Statement 86 Additional Information 91
Annual Report 08 1 MD & CEO Address
Dear Fellow Shareholder,
It is with pleasure I present to you the Annual Report Significant progress on the development of the for 2008. Apex has had an exciting year, and we Wiluna project was made throughout the year, with now stand on the cusp of beginning significant a number of development plans coming to fruition. and profitable gold production at Wiluna. First gold We successfully finalised the consolidation all the production is scheduled to commence in November required assets to commence our integrated mine 2008. Production for the 2009 calendar year is strategy, with the purchase of Wiluna, Wilsons and expected to be around 130,000 ounces increasing Youanmi. Detailed metallurgical test work and to 200,000 ounces per annum in subsequent years. engineering studies were undertaken for the project implementation study, culminating in the decision The results of the Project Implementation Study to commit to development in June 2008. announced in June and the imminent return to production have validated the integrated At this time the refurbishment of the Wiluna plant mine strategy adopted by Apex when it began is nearing completion, with over 150 workers on consolidating the Wiluna, Wilsons and Youanmi site and production on schedule to recommence projects in early 2007. As Apex moves into production, in November 2008. it will emerge as one of Australia’s largest domestically listed gold producers at competitive cash costs Overall cash costs are estimated to be $560 per ounce, delivering substantial cash margins. We have which will deliver a healthy cash margin based on significant growth opportunities ahead and are the current gold price. Apex’s medium term goal is now fully funded. to reach 500,000 oz per annum of profitable gold production and multiple growth options are open We have had substantial exploration success since to Apex to achieve this goal. acquiring these deposits, particularly at Wiluna, where gold resources now stand at over 1.5 million All necessary capital to develop the Wiluna Project has ounces. When we acquired Wiluna mid 2007, we set been raised. It is of great credit to Apex’s management our selves a target to increase the Reserve base from team and the strength of the project that the funds, approximately 6 to 9 months at that time to 3-5 years amounting to over $120 million were raised during the by the time we get back into production. year at a time of extreme global financial conditions which is adversely affecting all businesses in raising On 29 September we announced a 70% increase development finance. A $62 million placement was in the Indicated Resource base in the Calais area of achieved in March and a $60.5m Senior Secured the Wiluna mine to around 600,000 ounces. We are Note with detaching warrants and a rather unique currently re-calculating the Reserves there, but the Gold Upside Participation Note announced on new underground resource together with the new 29 September. open pit resource at Wiluna will, I’m confident, result in our getting close to the 5 year target. The funds from this raising now results in your company being fully funded and will enable The exploration success that we have experienced at the highly successful exploration program to be Wiluna in recent months has resulted in the process maintained at around $20 million per annum. plant being able to be fed completely with the lower cost Wiluna ore and the requirement to truck World economic conditions remain clouded, with supplementary feed from our nearby Wilsons deposit many markets continuing to suffer extreme volatility.
For personal use only use personal For has been deferred such that commencement of the For centuries, gold has acted as the traditional store of development of this deposit has been put back at wealth and safe haven for investors in troubled times. least until the March 09 quarter. In these uncertain times, the outlook for gold remains extremely positive and this is an opportune time to be entering gold production.
Apex Minerals NL 2 5 AUD Gold Price Year 1100
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900 I would like to thank the management team and staff at Apex for their hard work during 2008 and very 800 much look forward to the culmination of all their efforts in our first gold pour in late 2008. I would also 700 like to thank you, our shareholders for your loyalty and support over the past 12 months. 600
Kind Regards, 500 Oct Oct Oct Oct Oct Oct 03 04 05 06 07 08
5 USD Gold Price Year 800 Mark Ashley 700 Managing Director and Chief Executive Officer
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For personal use only use personal For All the photographs that appear in this Report reflect the current refurbishment occuring at the Wiluna plant, new mining fleet vehicles purchased and continued drilling. The focus is to present this by showing all the people actively engaged in the process.
Annual Report 08 3 For personal use only use personal For
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Apex Project Locations Eastern Goldfields For personal use only use personal For
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Apex Minerals NL 6 Overview
THE REGIONAL GOLD STRATEGY IMPLEMENTATION STUDY
Apex has assembled a portfolio of gold assets capable of The Implementation Study into the refurbishment of the elevating the company to producer status by early 2009. Wiluna gold treatment plant and the development of the The projects are located in the Eastern Goldfields of Wiluna, Wilsons and Youanmi high grade underground gold Western Australia as shown on page 5. mines was completed in June 2008. The study used reserves estimated in June 2008 based upon resource estimates Apex’s regional gold development strategy is to consolidate completed in May 2008. the ownership of various high grade, but currently undeveloped, refractory gold deposits. Following the The study showed that a minimum 3 year production completion of the Implementation Study in June, Apex is life could be supported at each of the mines feeding the set sequentially develop Wiluna, Wilsons and Youanmi lifting Wiluna plant. Formal Board approval to proceed with the group production to 200,000 ounces per annum. development of the project was given in June 2008, just 12 months after Apex took control of the Wiluna mine. The Aphrodite project also has the potential to be an additional processing hub producing either a high grade Following the resource expansion at Wiluna announced in gold concentrate for trucking to Wiluna for treatment September 2008 additional studies will now be undertaken through the BIOX® bacterial oxidation plant or, gold metal with a view to expanding the reserve and production base
on site further increasing annual group gold production. at Wiluna. For personal use only use personal For
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Wiluna Project Location of New Resources For personal use only use personal For
Apex Minerals NL 8 Overview continued
WILUNA
The Wiluna Gold Mine is located 1,000 kilometres northeast Geology and Title of Perth in the Eastern Goldfields of Western Australia. Apex took possession of the Wiluna operations with effect The Wiluna project comprises granted Mining Leases from 1 August 2007. The assets acquired as part the Wiluna and is situated at the northern end of the Norseman- transaction include all equipment necessary to operate a Wiluna greenstone belt – the most highly gold endowed modern gold mining and processing facility, namely: greenstone belt in Australia, which contains major gold mines such as those at Norseman, St.Ives, the Golden Mile, • 1Mtpa gold processing facility (including BIOX® bacterial Leonora and Thunderbox. oxidation plant); • Fully equipped administration facilities; At Wiluna, gold mineralisation is found where a series of • 12MW gas power station; northerly striking faults intersects a northwest striking • 300 person accommodation village; and southwest dipping sequence of basalts and dolerites. • Borefields and associated pumping system; This series of faults includes the East Lode, West Lode • Workshops and stores; and Moonlight Lode, which together have produced • Fully developed and serviced underground mine; approximately four million ounces of gold since their discovery (page 8). • Established roads.
Each of these lodes contains several orebodies, which Description have been previously mined by open pit or underground Wiluna has produced approximately four million ounces of methods to a depth of up to 900 metres (page 19). gold to date. Early mining for gold at Wiluna commenced in the late 19th century through a series of shallow underground and open pit workings, and two million ounces of gold were produced from underground workings at East Lode and West Lode during the 1930’s to 1950.
Modern gold mining operations at Wiluna commenced in the 1980s with the treatment of tailings from historic workings and non-refractory open pit reserves through what is now conventional CIP/CIL technology.
Gold at Wiluna is predominantly contained within sulphide minerals, particularly arsenopyrite, and is not amenable to extraction via normal cyanide leaching. It is however readily amenable to extraction using bacterial oxidation and has been successfully extracted in the company’s BIOX plant over the past 15 years. The common term used for this style of gold mineralisation is “refractory”.
Wiluna also hosts gold mineralisation associated with quartz reefs which is “free milling”, that is, amenable to conventional
cyanide leaching. For personal use only use personal For
Annual Report 08 9 Overview continued
WILSONS (Gidgee)
Description Geology and Title
The Gidgee gold mine is located 640 kilometres northeast The Gidgee project covers an area of approximately of Perth and approximately 130kilometres by road from 2,500 square kilometres of the Gum Creek greenstone Wiluna. Early mining for gold commenced in the 1930s belt. The central core of the area is held as granted Mining through a series of shallow underground and open pit Leases, which cover a 70 kilometre long structural corridor workings. Modern gold mining operations at Gidgee containing numerous occurrences of gold mineralisation commenced in the late 1980s. (page 11).
The assets acquired by Apex at Gidgee include: Approximately twenty open pits have previously mined near surface gold mineralisation and underground mining was • 600,000tpa conventional gold processing facility; undertaken beneath the Swan Bitter and Kingfisher pits. • Underground pumping and electrical equipment; Most of the gold is free milling, with the exception of the • 100 person accommodation village; Wilsons deposit, which is refractory. • Airstrip; • Administration offices; • 1MW diesel power station; • Ready access to bore and pit water; • Workshop and Stores buildings; and
• Established roads. For personal use only use personal For
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Gidgee Project Proposed Infrastructure Location Wilsons Mine For personal use only use personal For
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Apex Minerals NL 12 Overview continued
YOUANMI APHRODITE
Description Description
The Youanmi gold mine is located 480 kilometres northeast The Aphrodite gold deposit is located 65 kilometres of Perth and approximately 330 kilometres by road from north of Kalgoorlie on a tenement package which covers Wiluna. Early mining for gold commenced in the 1930s 51 square kilometres of the Bardoc Tectonic Zone – a highly through a series of shallow underground and open prospective regional gold bearing shear zone. pit workings. The project contains two known refractory gold deposits, Modern gold mining operations at Youanmi recommenced the Alpha lode and the Phi lode, which are located within in the 1980s. Like Wiluna, the gold mineralisation at Youanmi 200 metres of each other and could potentially be accessible is predominantly contained within the matrix of sulphide from a shared underground development in the event of particles, particularly arsenopyrite, at a microscopic level. a decision to mine.
Similarly to Wiluna, gold extraction of refractory ore at Geology and Title Youanmi was achieved by using bacteria following sulphide flotation. The bacterial oxidation process at Youanmi used The Aphrodite project covers 50 square kilometres of BacTech® patented bacteria, which is proprietary technology prospective geology in the Bardoc Tectonic Zone – a part owned by BacTech®, but essentially similar in nature toBIOX® of the Boulder-Lefroy Fault which also hosts the nearby technology. Paddington Gold Mine and the Golden Mile, some 65 kilometres to the south. Gold mineralisation occurs in The assets acquired by Apex at Gidgee include: two main zones, the Alpha and Phi lodes. • 600,000tpa conventional gold processing facility The Alpha lode is a porphyry-hosted shear zone, and the Phi (including BacTech®); lode is a sediment-hosted shear zone. • 40 person accommodation village; • Airstrip; • Administration offices; • 1MW diesel power station; • Ready access to bore and pit water; • Ready access to bore and pit water; • Workshop and Stores buildings; and • Established roads.
Geology and Title
The Youanmi project covers 40 strike kilometres of the gold mineralised Youanmi shear zone, with known resources and infrastructure being situated on granted Mining Leases. The Youanmi deposit is a high grade narrow vein style deposit, with gold intimately associated with sulphide minerals.
The main Youanmi deposit plunges steeply to the south and remains open at depth (page 26). Several parallel plunging shoots have been mined historically, with limited
exploration beneath them. For personal use only use personal For
Annual Report 08 13 Operations Project Development
WILUNA • Repair of plant tankage; • Expansion of the gold room; and Apex took control of the Wiluna mine in August 2007. • Refurbishment and expansion of the mine workshops Prior to the approval of the project by the Board in June and pumping, water supply, power and communication 2008 the surface plant and infrastructure was on care and systems. maintenance. The underground mine was kept fully serviced to allow diamond drilling activities to be undertaken. The Re-commissioning of the plant will be staged as the company used the period ahead of Board approval to refurbishment of each circuit of the plant is completed. undertake detailed inspections and engineering reviews of The first circuit to be re-commissioned will be the crushing the existing plant and infrastructure at Wiluna in order to circuit and this is expected to take place in the second week develop a detailed refurbishment plan. of October.
In addition, long lead time equipment items were ordered Bacteria including the underground mobile equipment fleets for Wiluna and Wilsons, to eliminate any potential delays to the As previously advised bacteria from the Wiluna plant were re-commencement of production. retained at the cessation of operations in July 2007 and kept active at laboratories in Perth by being fed Wiluna Processing concentrate retained from previous operations.
Plant and Infrastructure Refurbishment In mid 2008, the bacteria started being propagated in the laboratories in Perth and transported to the Wiluna site Infrastructure and plant refurbishment at Wiluna budgeted in 1 tonne batches. The bacteria is now being transferred at $31M has included: into BIOX reactors on site and is being propagated using • Repair of the village wet and dry messes and concentrate retained from previous operations and from accommodation units and facilities; a separate milling campaign conducted in April this year. • Updating the engine management and control systems of the 13MW gas power station and undertaking repairs The company proposes to have 3 primary reactors full of live to the generators; bacteria ready to receive ore by the start of November. • Repair of the generators in the 8MW back-up diesel The bacteria propagation is being conducted on site by power station; Apex employees all of whom have previously worked • Installation of new motor control centres (MCC’s) around with the bacteria in the Wiluna plant. Work is proceeding the plant and improvement and replacement where on a 24 hour basis and using equipment that is not necessary of high voltage (HV) and low voltage (LV) susceptible to interruption by power outages as a result distribution and control systems around the plant, village of refurbishment of the electrical system. and other surface installations; • Semi automation and upgrading of the site water supply Mining system; • Removal, repair and re-installation of all crushers and Mining will commence at Wiluna at the East Pit open cut and screens within the crushing circuit; Wiluna underground mine. • Inspection and replacement as necessary of all mill bearings and re-alignment of mill drives and gearboxes; East Pit Open Cut • Repair and re-adjustment of the flotation cells and the Mining of the East Pit open cut was temporarily suspended installation of a second flash flotation unit; following the announcement of the acquisition of the • Repair and replacement of rubber lining as well as Wiluna mine by Apex in April 2007. The pit was left with all internal and external cleaning of cooling coils in the BIOX waste pre-stripping having been completed and the next tanks; bench drilled out awaiting charging with explosives. For personal use only use personal For • Removal, repair and re-installation of all pumps (over 400) within the plant; • Repair and upgrade of the plant monitoring and control system;
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Annual Report 08 15 Operations Project Development continued
The contract for the mining of the East Pit open cut was The fleet comprises: awarded to Mining and Civil Australia Pty Ltd in September • Jumbos – 2 x M2D and 1 x H104; 2008. MACA commenced mobilisation to site in the week • Production Drills – 2 x Simba M7 and 1 x Simba 1257; of 15 September and has now completed its mobilisation. Blasting of the next bench in East Pit is expected to occur • LHD’s – 3 x ST1520 and 2 x 1030; in the second week of October. Accordingly the company • Trucks – 4 x MT6020; expects that this will result in approximately 50,000 tonnes • Service Vehicles – 2 x Volvo IT. of broken ore stocks being available when the plant recomissions in November. Personnel
Wiluna Underground Mine All operating activities at the mine with the exception of the East Pit open cut will be undertaken under an owner Underground mining will take place initially in the operator regime. immediate vicinity of existing decline development in the Calais area. Activity will focus on the extraction of Calais Accordingly, the company has embarked upon an extensive reserves above the 600mRL and decline access to new zones direct recruitment programme. Employees are initially at Henry V and Henry V North. being sought for the Wiluna operation and to date over 1200 applications have been received for approximately Underground Mobile Equipment Fleet 150 positions.
The underground mobile equipment fleet required for The senior management team at Wiluna is in place. Wiluna has been delivered to site. The fleet has been acquired from Atlas Copco and is being financed under
a finance lease arrangement also through Atlas Copco. For personal use only use personal For
Apex Minerals NL 16 Operations Project Development continued
WILSONS (Gidgee) YOUANMI
The Implementation Study showed the commencement of The Implementation Study showed production from the decline development at Wilsons occurring in October 2008 Youanmi mine being scheduled for mid 2009. However, the with full production being reached 6 months later in April recent success of infill and extensional drilling programmes 2009. However, the recent success of infill and extensional at Wiluna has allowed the timing of production from drilling programmes at Wiluna has allowed the timing of Youanmi to be deferred to mid 2010. development and production from Wilsons to be deferred by up to 5 months. Ore produced from Youanmi will be trucked to the Wiluna plant for treatment. Production is planned to be sourced Ore produced from Wilsons will be trucked to the Wiluna from extensions to the deposit immediately below plant for treatment. Production is planned to be sourced existing workings. from extensions to the Wilsons 1, 2 and 3 deposits immediately below existing open pit workings. Minimal Production at Youanmi will commence following: dewatering is required of the existing pits. • Dewatering of the Main Pit and existing underground workings; Production at Wilsons will commence following: • Refurbishment of the existing decline and services; and • Establishment of surface mine infrastructure at Wilsons • Detailed infill drilling and extensional drilling of the including offices, workshops and power station; resource from underground. • Decline development off the Wilsons 3 pit to the first ore horizons and establishment of underground Works conducted at Youanmi this year has comprised: services including power, ventilation, pumping and • Minor refurbishment of the existing village and communication systems; and associated infrastructure; • Upgrade of the existing Wilsons to Wiluna road. • Refurbishment of existing surface evaporation ponds; Works conducted for the development of Wilsons this • nstallation of dewatering pumps and pipelines in the year comprised refurbishment of the existing village and Main Pit; and associated infrastructure at Gidgee. Studies will continue • Dewatering of the Main Pit. into opportunities for improving upon the existing robust base case at Wilsons between now and the re-scheduled Prior to the commencement of dewatering in January 2008 commencement of decline development in March 2009. the Main Pit contained 1.8 million cubic metres of water. By mid year approximately 1.0 million cubic metres had been dewatered and dewatering of the Main Pit is on schedule for completion in December 2008.
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Annual Report 08 17 Exploration and Resources
WILUNA
Resources and Reserves Drilling has also commenced at the Crispin, East Lode North and Calvert zones, and an initial resource of over 200,000 Since purchasing the Wiluna Mine in mid 2007 Apex has ounces has been defined at East Lode North. increased gold resources by 120%, from 700,000 ounces to over 1.5 million ounces of gold. This comprises Measured Grade control drilling in the East Lode open pit has Resources of 550,000t @ 3.4g/t for 60,000 ounces in open discovered a significant additional zone of mineralisation, pits, Indicated Resources of 3.5 million tonnes @ 6.5g/t for leading to a 70% increase in resources and a 94% conversion 741,000 ounces and Inferred Resources of 3.9 million tonnes of Indicated Resources to the Measured category within @ 5.9g/t for 738,000 ounces of gold. A detailed breakdown the pit. of these resources is shown on pages 30 & 31. Drilling will continue with the aim of extending the limits Exploration and Resource Development of known mineralised zones, infilling these to Indicated As detailed in the Company’s ASX announcements during Resource status and testing additional nearby targets. the year, Apex has had considerable success in its program Several zones of mineralisation will be drilled to resource of resource definition drilling aimed at establishing sufficient status as new underground drilling positions become mineral resources to underpin an initial ore reserve capable available during the development of access to existing of sustaining production for a minimum of four years, resources. These include the Brothers Reef and the newly sourced from within or close to existing underground discovered fault offset extension of the Golden Age development. The program of extensional drilling has Reef. Drilling will also continue to delineate additional significantly increased resources in the vicinity of the mineralisation beneath the East Lode open pit adjacent to Calais zone, where the discovery of the Baldric zone has the historic East Lode workings. Historic production in this supplemented the Calais, Burgundy, Henry5 and Henry5 area exceeded 2 million ounces and there is considerable North zones. Infill drilling has been very successful in all scope to identify additional resources close to, and in the zones and has enabled most of the resource to be classified immediate hanging wall of the old workings (page 19).
as Indicated (pages 20 & 21). For personal use only use personal For
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Wiluna Project Long projection of the East Lode open pit and North Resources For personal use only use personal For
Annual Report 08 19 Wiluna Project Long projection of the East Lode 50 Lens in the Calais area,
showing new resources For personal use only use personal For
Apex Minerals NL 20 Wiluna Project Long projection of the East Lode 100 Lens in the Calais area,
showing new resources For personal use only use personal For
Annual Report 08 21 Exploration and Resources continued
WILSONS (Gidgee)
Resources and Reserves Exploration and Resource Development
Since purchasing the Gidgee Gold project in early 2007 Apex The Wilsons ore reserve is based only on drilling within has increased gold resources by 33% from 490,000 ounces to the uppermost 250m of the deposit (page 24). The deposit 652,000 ounces. This is based on a doubling of the Wilsons continues at depth and drilling is proceeding with the dual resource from 164,000 ounces to 325,000 ounces of gold. aim of identifying extensions and infilling successive 100m panels to a spacing sufficient to classify additional zones The new Wilsons resource comprises an Indicated Resource of the resource as Indicated as a prerequisite to estimating of 921,000t @ 7.2g/t for 215,000oz and an Inferred Resource additional ore reserves and extending mine life. of 535,000t @ 6.4g/t for 110,000 ounces of gold. A detailed breakdown of these resources is shown on pages 30 & 31. In addition to this, drilling has commenced scoping the Premium and Cascade prospects, which comprise free The Indicated Resource at Wilsons underpins a Probable Ore milling quartz veins (page 25). These zones are small but Reserve of 826,000 tonnes @ 6.4g/t for a contained 170,000 high grade and ideal for trucking to the Wiluna plant. ounces of gold, which supports an initial three year mine life. A regional exploration program has commenced to create a pipeline of prospects to continue defining additional resources which could supplement ongoing production
from Wilsons. For personal use only use personal For
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Annual Report 08 23
Gidgee Project Wilsons Deposit Long Projection For personal use only use personal For
Apex Minerals NL 24
Gidgee Project Premium Long Projection For personal use only use personal For
Annual Report 08 25
Youanmi Project 2400 N Cross Section For personal use only use personal For
Apex Minerals NL 26 Exploration and Resources continued
YOUANMI APHRODITE
Resources and Reserves Resources and Reserves
The Youanmi Gold Mine was purchased with a total The Aphrodite deposit was purchased with an Inferred resource inventory of 951,000 ounces of gold, estimated Resource of 1.44 million tonnes @ 6.2 g/t for 287,000 ounces in compliance with JORC and NI 43-101 requirements. This of gold, estimated in compliance with the JORC code. This includes an Indicated and Inferred resource of 2.4 million resource is based solely on the Alpha lode. In addition to tonnes @ 8.5 g/t for 658,000 ounces of gold in the Youanmi this, a substantial amount of gold mineralisation exists Deeps gold deposit, estimated using a 4g/t lower cutoff. within the Phi lode which is, as yet, unclassified. Resources are shown on pages 30 & 31. Once infill drilling has been completed, the company intends to re-estimate the underground resource using Exploration and Resource Development a higher cutoff grade, in order to define a higher grade resource capable of sustaining the targeted production head An initial phase of resource definition drilling has been grade of 11g/t, However, this will also reduce the tonnes and completed on the Phi lode and an initial resource estimate is contained metal. A detailed breakdown of current resources scheduled for completion late in 2008. This program has also is shown on pages 30 & 31. provided a comprehensive set of samples for metallurgical testwork. Further drilling is planned during 2009. Exploration and Resource Development OTHER EXPLORATION An initial surface diamond drilling program, undertaken to provide confidence in the down dip continuity Apollo Hill of mineralisation, succeeded in defining high grade mineralisation up to 180 metres down dip of previous Apex withdrew from the Apollo Hill Joint Venture during drilling and 100 metres beneath the base of the current the year and has no ongoing rights or obligations. resource. Detailed resource definition drilling will be undertaken from underground positions once the decline has been dewatered and refurbished. Detailed evaluation of other prospects in the Youanmi tenement package will
commence in calendar 2009. For personal use only use personal For
Annual Report 08 27
Lawlers Nickel Project Electromagnetic Surveys and targets on Magnetics For personal use only use personal For
Apex Minerals NL 28 Exploration and Resources continued
OTHER EXPLORATION continued Business Development
Lawlers Nickel Joint Venture While Apex Minerals is now fully committed to the execution of its regional gold strategy and exploration of its other Apex has entered into a second agreement with Barrick Gold projects it intends to continue to use its unique in-house to earn an initial 56% interest in the nickel rights on Barrick’s expertise to evaluate other assets complimentary to its tenements adjacent to ist first JV, extending its coverage strategy both regionally and abroad. to a 234 square kilometres of nickel prospective terrain in the Lawlers district of the North Eastern Goldfields of Health and Safety Western Australia. The Company has existing health and safety systems in The terms of the JV are identical to the first JV, as detailed place for its exploration activities. That system will be in the company’s ASX announcement 11 December expanded to cover operations activities ahead of production 2006. The Barrick tenements are part of Barrick’s Lawlers re-commencing in November at Wiluna. To date, no lost Gold Operations, and the two JV’s contain over 80 strike time injuries have been sustained during the care and kilometres of relatively unexplored nickel sulphide maintenance, underground and surface diamond drilling prospective ultramafic rocks in the heart of the world class and plant refurbishment activities. North Eastern Goldfields nickel province. The JV area is surrounded by Xstrata’s Cosmos, Prospero and Sinclair nickel Environment and Community Relations mines, BHP Billiton’s Perseverance and Rockys Reward nickel mines, and Norilsk’s Waterloo nickel mine. The Company has obtained all necessary environmental approvals for the commencement of development and Importantly, no effective nickel sulphide exploration has production at its operations. Comprehensive environmental been undertaken on these tenements since Selection management, monitoring, rehabilitation and reporting Trust explored the area thirty years ago. Since then, nickel processes have been implemented by a dedicated team sulphide exploration has been very limited, with most of environmental professionals over the past 12 months. exploration focussing on nickel laterite and gold. Good relations with stakeholders including local councils, During the year Apex has extended its electromagnetic indigenous groups, community groups and land owners (EM) geophysical survey, which has identified several EM are being maintained through a variety of initiatives. targets. Future work will comprise further EM surveying These initiatives include sponsorship of: and ongoing drill testing of targets (page 28). • Clontarf Girls Academy; • Two doctors at the Wiluna Community Medical Centre; Jillawarra • Annual Wiluna Rodeo. The Jillawarra Joint Venture (“JJV”) covers an area of approximately 1,500 square kilometres adjoining and to the Investments west of Abra Mining’s namesake lead-zinc deposit, which Empire Resources is estimated to contain 50mt @ 5.5% lead. The project is managed by Abra Mining. During the year Apex acquired 5 million shares at 17 cents per share in Empire Resources positioning Apex as a During the year, Abra earned a 70% interest in this project, 6.95% stakeholder in Empire with the right to nominate and as per the terms of the farm in agreement, Apex elected a representative to join the Empire Board of Directors. to take a 10% free carried interest to the completion of a Empire is currently exploring for volcanogenic bankable feasibility study. massive sulphide (VMS) style copper-gold occurrences within its Yuinmery tenements just 6.5km from Apex Abra Mining have completed induced polarisation (IP) Minerals Youanmi Plant. Both companies have signed geophysical surveys, geochemical sampling and several For personal use only use personal For a Memorandum of Understanding (MoU) to enter into drilling programs at the Copper Chert and other prospects commercial negotiations relating to the Yuinmery Project. during the year. Exploration for Abra-style lead-zinc-copper- Under the MoU, Empire and Apex will investigate the gold deposits is ongoing. possibility of future development and production for Yuinmery, including the use of the Youanmi plant and its flotation circuit to treat Yuinmery ore.
Annual Report 08 29 Resource Table as at 7 October 2008 Note Oz TOTAL Tonnes g/t Gold, Oz INFERRED Tonnes g/t Gold, Oz INDICATED Tonnes g/t Gold, 5,380,000 7.1 1,231,000 7,830,000 6.7 1,698,000 13,230,000 6.9 2,938,000 Oz MEASURED 0 0.0 0 2,380,000 6.8 520,000 1,410,000 6.2 280,000 3,790,000 6.6 800,000 1 0 0.0 0 440,000 5.9 80,000 670,000 5.7 120,000 1,110,000 5.8 210,000 1 0 0.0 0 630,000 6.2 120,000 780,000 5.7 140,000 1,400,000 5.9 270,000 2 0 0.0 0 0 0.0 0 120,000 7.6 30,000 120,000 7.6 30,000 2 0 0.0 0 0 0.0 0 710,000 6.3 140,000 710,000 6.3 140,000 2 0 0.0 0 0 0.0 0 40,000 3.0 4,000 40,000 3.0 4,000 4 0 0.0 0 50,000 5.7 9,000 140,000 2.5 11,000 190,000 3.3 21,000 4 0 0.0 0 50,000 3.6 6,000 10,000 4.7 1,000 60,000 3.8 7,000 4 0 0.0 0 920,000 7.3 215,000 540,000 6.4 110,000 1,460,000 6.9 325,000 6 0 0.0 0 1,050,000 3.1 103,000 0 0.0 0 1,050,000 3.1 103,000 8 0 0.0 0 810,000 8.1 210,000 1,610,000 8.7 449,000 2,410,000 8.5 659,000 9 0 0.0 0 3,440,000 6.6 730,000 3,680,000 6.1 720,000 7,120,000 6.3 1,440,000 0 0.0 0 0 0.0 0 1,440,000 6.2 287,000 1,440,000 6.2 287,000 11 0 0.0 0 1,050,000 3.1 103,000 0 0.0 0 1,050,000 3.1 103,000 0 0.0 0 810,000 8.1 210,000 1,610,000 8.7 449,000 2,410,000 8.5 659,000 0 0.0 0 0 0.0 0 1,440,000 6.2 287,000 1,440,000 6.2 287,000 0 0.0 0 0 0.0 0 1,440,000 6.2 287,000 1,440,000 6.2 287,000 30,000 10.4 9,000 210,000 12.0 80,000 560,000 7.4 134,000 800,000 8.7 223,000 7 20,000 5.5 3,000 4,620,000 1.5 219,000 1,180,000 1.9 72,000 5,820,000 1.6 294,000 10 30,000 10.4 9,000 30,000 10.4 9,000 1,130,000 8.1 294,000 1,100,000 6.9 245,000 2,250,000 7.6 548,000 30,000 10.4 9,000 2,180,000 5.7 398,000 1,100,000 6.9 245,000 3,300,000 6.1 652,000 20,000 5.5 3,000 4,620,000 1.5 219,000 1,180,000 1.9 72,000 5,820,000 1.6 294,000 20,000 5.5 3,000 5,430,000 2.5 429,000 2,790,000 5.8 521,000 8,230,000 3.6 953,000 570,000 3.4 63,000 5,770,000 1.8 337,000 1,400,000 2.1 93,000 7,740,000 2.0 493,000 370,000 4.1 50,000 0 0.0 0 30,000 4.2 4,000 400,000 4.1 53,000 3 180,000 1.8 10,000 0 0.0 0 0 0.0 0 180,000 1.8 10,000 5 600,000 3.8 72,000 11,200,000 4.4 1,570,000 9,200,000 6.0 1,790,000 21,000,000 5.1 3,430,000 550,000 3.4 60,000 100,000 4.7 15,000 220,000 2.9 21,000 870,000 3.4 96,000 550,000 3.4 60,000 3,540,000 6.5 741,000 3,900,000 5.9 738,000 8,000,000 6.0 1,539,000
Tonnes g/t Gold, For personal use only use personal For Calais underground Calais East Lode NorthEast Lode East & West Lode other Lode West East & Happy Jack Happy Lone Hand-Adelaide-MoonlightLone East Pit North Pit Lone Hand-Adelaide-MoonlightLone Magazine Stockpiles Wilsons Other Other Youanmi underground Youanmi Various open pits Various Alpha Lode ockpiles it & St WILUNA Underground Open P TOTAL Total Wiluna underground Wiluna Total Open pit & stockpiles Total Wiluna open pit & stockpiles Wiluna Total TOTAL WILUNA TOTAL GIDGEE Underground Total Gidgee underground Total Open pit & stockpiles Total Gidgee open pit & stockpiles Total TOTAL GIDGEE TOTAL YOUANMI Underground Total Youanmi underground Youanmi Total Open pit & stockpiles Total Youanmi open pit & stockpiles Youanmi Total TOTAL YOUANMI TOTAL APHRODITE Underground Total Aphrodite underground Aphrodite Total TOTAL APHRODITE TOTAL GLOBAL Underground
Apex Minerals NL 30 Competent Person’s statement for exploration results and Mineral Resources Estimates
Note Reverse circulation (RC) drill samples are obtained by collecting 1. Resource estimated September 2008 by Andy Thompson meter samples via a three stage riffle or cone splitter, and at a 3.5g/t Au lower cut off. diamond drill hole results are obtained from half NQ core or quarter HQ core sampled to geological boundaries where 2. Resource estimated June 2007 by Paul Tan appropriate. at a 4.5g/t Au lower cut off. 3. Resource estimated September 2008 by Andy Thompson Assay results are obtained from Intertek (formerly known as at a 1.0g/t Au lower cut off. Genalysis) and ALS Chemex Laboratories in Perth. Samples are prepared using single stage pulverization of the entire sample. 4. Resource estimated June 2007 by Paul Tan Gold assays are obtained using a 30g or 50g lead collection fire at a 0.75g/t Au lower cut off. assay digest and atomic absorption spectrometry (AAS) analysis 5. Resource estimated June 2007 by Paul Tan techniques. Multi-element analyses (arsenic, sulphur, iron, lead, at a 1.5g/t Au lower cut off. zinc, bismuth, antimony and tellurium) are obtained using a 6. Resource estimated May 2008 by Andy Thompson four acid total digest and inductively coupled plasma optical at a 4.5g/t Au lower cut off. emission spectrometry (ICP OES) analysis techniques. Full 7. Resource estimated June 2006 by Spero Carras analytical quality assurance – quality control(QAQC) is achieved at a 1.3g/t Au lower cut off. using a suite of certified standards, laboratory standards, field duplicates, laboratory duplicates, repeats, blanks and grind 8. Resource estimated June 2006 by Spero Carras size analysis. Assays quoted in announcements may be of a at a 3.0g/t Au lower cut off. preliminary nature. Assays used in resource estimates have 9. Resource estimated July 2006 by Steve Hyland undergone full QAQC. at a 4.0g/t Au lower cut off. The spatial location of samples from surface holes is derived 10. Resource estimated July 2006 by Steve Hyland using a combination of surveyed grid co-ordinates and 3D at a 1.0g/t Au lower cut off. differential GPS collar survey pickups, and Reflex single shot 11. Resource estimated December 2005 by Richard Allan and gyroscopic downhole surveys. The spatial location of at a 2.5g/t Au lower cut off. samples from underground holes is derived using surveyed rig setups and Reflex multi-shot downhole surveys. True widths are calculated using the mean dip and strike of the mineralization The information in this report that relates to Exploration Results from 3D wireframe models and downhole surveys. is based on information compiled by Mr. Andrew Thompson who is an employee of the company. The information in this Quoted drill intersections are based on situation specific criteria, report that relates to Mineral Resources at the Calais, East which include using a lower cutoff of 1g/t or 2g/t gold and Lode North and East Pit zones at Wiiluna, and the Wilsons acceptable levels of internal dilution. deposit at Gidgee is based on information compiled by Mr. Mineral Resources have been estimated using standard Andrew Thompson who is an employee of the company. accepted industry practices. All Resources have been estimated The information in this report that relates to other Mineral via Block Ordinary Kriging using 1m composite samples. Top Resources at Wiluna is based on information compiled by Mr. cuts have been applied to the composites and are considered Paul Tan who is a former employee of Agincourt and Oxiana at appropriate for the nature and style of mineralization in all Wiluna. The information in this report that relates to Mineral cases. Directional grade variography was modeled for all Resources other than the Wilsons deposit at Gidgee is based on zones based on 1m composites. Geological and mineralization information compiled by Mr. Spero Carras who is a consultant. modeling has been achieved by 3D modeling of footwall and The information in this report that relates to Mineral Resources hangingwall structures (a lower 2g/t Au cutoff was applied at the Youanmi project is based on information compiled by Mr. in the case of Wilsons Deposit). Block models have been Steve Hyland who is a consultant. The information in this report developed for both deposits incorporating a suitable parent and that relates to Mineral Resources at the Aphrodite deposit is sub block dimension to allow adequate volume resolution of based on information compiled by Mr. Richard Allan who is an modeled geology and mineralization. Grade interpolation (via employee of Barrick Gold. Mr. Thompson, Mr. Tan, Mr. Carras, Mr. Block Ordinary Kriging) was then undertaken using a multiple Hyland and Mr. Allan are Members of the Australasian Institute estimation pass strategy. of Mining and Metallurgy and have sufficient experience of relevance to the styles of mineralisation and the types of Where quoted, Mineral Resource and Ore Reserve tonnes and deposits under consideration, and to the activities undertaken, ounces are rounded to appropriate levels of precision, causing
to qualify as Competent Persons as defined in the 2004 Edition minor computational errors. For personal use only use personal For of the Joint Ore Reserves Committee (JORC) Australasian Code Mineral Resources are classified on the basis of drillhole spacing, for Reporting of Exploration Results, Mineral Resources and Ore geological continuity and predictability, geostatistical analysis Reserves. Mr. Thompson, Mr. Tan, Mr. Carras, Mr. Hyland and Mr. of grade variability, sampling, analytical, spatial and density Allan consent to the inclusion in this report of the matters based QAQC criteria and demonstrated amenability of mineralization on information in the form and context in which it appears. style to proposed processing methods.
Annual Report 08 31 Reserves Table as at 23 June 2008
Proved Probable Total
000’s Grade 000’s 000’s Grade 000’s 000’s Grade 000’s Ore Reserves tonnes g/t Au oz Au tonnes g/t Au oz Au tonnes g/t Au oz Au
Wiluna u/g – Calais area 955 6.4 197 955 6.4 197
Wiluna East Lode pit 264 3.3 30 264 3.3 30
Wiluna total 1,219 5.8 227 1,219 5.8 227
Wilsons u/g 826 6.4 170 826 6.4 170
Total 2,045 6.0 397 2,045 6.0 397
Competent Person’s statement for Ore Reserves Estimates
Ore Reserves have been estimated in accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2004 Edition). The information in this report which relates to the Wiluna and Wilsons Underground Ore Reserves is based on and accurately reflects the information compiled by Mr Blair Duncan a consultant to Apex Minerals NL and Principal of Arbitrage Consulting Australia Pty Ltd. The information in this report which relates to the Wiluna Open Pit Ore Reserve is based on and accurately reflects the information compiled by Mr Linton Putland a consultant to Apex Minerals NL and Principal of Linton Putland and Associates Pty Ltd. Mr. Duncan and Mr. Putland are members of The Australasian Institute of Mining and Metallurgy (“AusIMM”) and have sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a ‘Competent Person’ as defined in the 2004 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code fro reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Duncan and Mr. Putland
consent to the inclusion in this report of the matters based on information in the form and context in which it appears. For personal use only use personal For
Apex Minerals NL 32 For personal use only use personal For
Annual Report 08 33 Directors’ Report
The Directors present their report on the Company and its Mark Bennett – Exploration Director consolidated entity (referred to hereafter as the Group) BSc PhD MAusIMM FGS for the year ended 30 June 2008. Dr Bennett is a geologist with over 21 years experience, predominantly in gold, nickel and base metal exploration Directors and mining. He holds a BSc in Mining Geology from the The names and details of the Company’s directors in office University of Leicester, and a PhD from the University of during the financial year and until the date of this report Leeds, is a member of the Australasian Institute of Mining are as follows. Directors were in office for this entire period and Metallurgy and an elected Fellow of the Geological unless otherwise stated. Society of London.
Mark Ashley – Managing Director Mark has worked in Europe, West Africa, and Australia, and FCMA has spent much of his career working for WMC Resources He is a Fellow of the Chartered Institute of Management and LionOre in Australia. Previous positions held include Accountants and has over 20 years experience in the Exploration Manager and Chief Geologist, including periods resources industry. at WMC’s Kambalda Nickel Operations, Gold Fields’ St.Ives Gold Mines, Forrestania Gold’s Bounty Gold Mine, and In 1992, Mr Mark Ashley joined Forrestania Gold – which was WMC’s Melbourne head office. subsequently acquired by LionOre in 1994 and was with the company through its emergence as a growing international In 2002, Mark received the Association of Mining and nickel producer up until 31 March 2006. Mark who was Exploration Companies (AMEC) Prospector of the Year a main board Director and CEO of its Australian operations, award in recognition of his contribution to the discovery left LionOre at that time to run Apex Minerals. of the Thunderbox gold and the Waterloo nickel deposits. Within the prior three years, Mark is a Non-executive Within the prior three years, Mr Bennett has not been Director of Kagara Zinc and Metallica Minerals Limited, a director for any other public listed company. both ASX listed companies. He was also a Non-Executive Stephen Lowe – Non Executive Director director for ASX listed company Tianshan Goldfields Limited BBus (ECU) GradDipAdvTax (UNSW) MTax (UNSW) FTIA MAICD appointed on 11 April 2006 and resigned on 7 September Mr Stephen Lowe is a taxation specialist with over 15 years 2007. Mark is a Member of Council at the Curtin University experience consulting to a wide range of corporate and of Technology and is a member of the university’s Finance private clients on a broad range of taxation issues including Committee. He has also served as Chairman of the Major mining and international matters, GST and CGT. He is a Gifts Committee for the Royal Flying Doctor Service and director of ASX listed Croesus Mining NL. He is also a director as a Director of the Australian Gold Council. of the Perth based specialist taxation firm MKT – Taxation Glenn Jardine – Operations Director Advisors and has been a director of several other public BEng FAusIMM unlisted companies. His qualifications include a Bachelor of Mr Glenn Jardine has over 20 years experience in the mining Business, Post-Graduate Diploma in Advanced Taxation and industry and was most recently succeeded Mark Ashley a Master of Taxation from the University of New South Wales. as Managing Director of LionOre Mining International’s Steve is a Fellow of the Taxation Institute of Australia and a Australian operations, where he also held roles including Member of the Australian Institute of Company Directors. Chief Operating Officer and prior to that, General Manager, Within the prior three years Mr Lowe has not been a director New Business and Project Manager. During his time with of any other publicly listed company. LionOre Australia, Mr Jardine oversaw the successful development of the Emily Ann, Maggie Hays and Waterloo Kim Robinson – Non Executive Chairman nickel mines, leading teams whose work was subsequently BSc (Geology) recognised by the achievement of two separate major Mr Kim Robinson is a founding Director of Kagara Zinc environmental awards. Limited and its current Executive Chairman. Mr Robinson graduated from the University of Western Australia in 1973 Glenn graduated with a BE Mining from the University of with a degree in Geology and has 29 years experience in For personal use only use personal For Queensland in 1984 and is a member of the Institute of the minerals exploration and mining industries, including Company Directors and a Fellow of the Aus IMM. 10 years as Executive Chairman of Forrestania Gold NL. Within the prior three years, Mr Jardine has not been Mr Robinson is also the Non-Executive Chairman of a director for any other public listed company. Metex Resources Ltd.
Apex Minerals NL 34 Directors’ Report continued
Todd Bennett – Non Executive Director • The Youanmi Gold Project, located 480 kilometres (appointed 18 July 2008) northeast of Perth and covering 40 kilometres of strike of Mr Todd Bennett is the Managing Director of AMB Holdings, the Youanmi shear zone, with a total JORC and NI 43-101 a private investment company associated with the Bennett compliant resource inventory of 951,000 ounces of gold, family. Mr Bennett oversees the management of a broad including the Youanmi Deeps refractory gold deposit portfolio of assets, which includes a significant share in the (Indicated and Inferred resource of 2.4 million tonnes Rhodes Ridge Iron Ore project in the Pilbara, and AMB’s @ 8.5 g/t for 658,000 ounces of gold) plus a 600,000 tpa strategic relationships with the Rio Tinto Group. Mr Bennett gold treatment plant, a 270,000tpa sulphide flotation holds an MBA from The University of Western Australia plant and a Bactech bacterial oxidation treatment plant (UWA) and is also an Executive Director of unlisted Finance capable of treating the gold concentrate (currently not in and Energy Exchange (FEX) a premium provider of energy operation) from TSXV-listed Goldcrest Resources Ltd; and and financial derivatives with a focus on Asia. • The Aphrodite Gold Project, located 65 kilometres north of Kalgoorlie and covering 51 square kilometres Company Secretary of the Bardoc Tectonic Zone, comprising a refractory Graham Anderson gold deposit with a JORC compliant Inferred Resource BBus CA of 1.44 million tonnes @ 6.2 g/t for 287,000 ounces of Mr Graham Anderson is a graduate of Curtin University and gold as well as a significant inventory of unclassified gold has over 20 years’ commercial experience as a Chartered mineralisation, from Barrick (PD) Australia Limited; and Accountant. He operates his own specialist accounting • The Wiluna Gold Project is situated 1,000 kilometres and management consultancy practise, providing a range northeast of Perth and comprises granted mining leases of corporate advisory services to both public and private covering approximately 50 square kilometres, as well companies. From 1990 to 1997 he was an audit partner as miscellaneous licences. The operation has access to at Duesburys and from 1997 to 1999 he was an audit the Goldfields Gas Pipeline and includes gold resources partner at Horwath Perth. He is currently Director and totalling over 700,000 ounces (see Table 1), a ~1Mtpa Company Secretary of APA Financial Services Limited, Echo processing facility and a BIOX® bacterial oxidation plant, Resources Limited, Pegasus Metals Limited, Dynasty Metals along with other established infrastructure. Limited and Company Secretary of Catalpa Resources Ltd, Iron Road Limited, Westonia Mines Limited and Mamba Further details in relation to the projects above are Minerals Limited. contained in announcements lodged with the ASX. The Project Implementation Study was completed in June Principal Activities 2008 at which point project development commenced at The principal activity of the Group during the financial year the Wiluna Gold Project. The site has been kept under active was exploration for mineral resources. care and maintenance immediately following its acquisition. Mining is scheduled to begin at Wiluna (underground) and East Pit (open pit) in October 2008 with ore being Results immediately accessible from these two sources. At the same The consolidated loss for the year after income tax was time, decline development is scheduled to begin towards $60,406,355 (2007 $5,906,489). new zones at Wiluna and at Wilsons (Gidgee), where first ore is expected to be mined in February 2009. Commercial Operating Review production is scheduled to begin in the first quarter of During the year ended 30 June 2008, the Company 2009 following a ramp-up phase. completed the following acquisitions: Significant Changes in the State of Affairs • The Gidgee Gold Project, located 640 kilometres During the financial year the Company raised northeast of Perth and covering 90 kilometres of strike of $117,569,879 less capital raising costs of $6,683,602 the Gum Creek greenstone belt, comprising a total JORC on the issue of 147,755,445 shares.
compliant resource inventory of 490,000 ounces gold, For personal use only use personal For including the Wilsons refractory gold deposit (Current Other than the above there were no significant Resource: 734,000t @ 6.9g/t for 164,000oz), a 600,000 changes in the state of affairs of the Company during tpa gold treatment plant (currently not in operation), the financial year, not otherwise disclosed in the a 150 man camp, additional high-grade non-refractory attached financial report. resources close to the existing developments, and significant exploration upside;
Annual Report 08 35 Directors’ Report continued
Likely Developments (d) Non-executive Director of the Company, Stephen Lowe, The Group will continue to develop, explore and assess its 300,000 unlisted options in the Company; and mineral projects and will also consider new projects that (e) Non-executive Director of the Company, Kim Robinson, could provide growth for shareholders. 300,000 unlisted options in the Company, pursuant to Further information on the likely developments and a resolution of shareholders at general meeting. Each expected results of operations of the Group have not been option is exercisable at $0.65 and expires on 1 June 2012. included in this report because the directors believe it would On 31 July 2007, the Company issued 2,050,000 options be likely to result in unreasonable prejudice to the Group. exercisable at $1.00 expiring 30 July 2012 pursuant to the Company’s Employee Share Option Plan. Dividends No dividends have been paid during the year and the On 16 October 2007, the Company issued 350,000 options Directors have not recommended that any dividend be paid. exercisable at $1.30 expiring 15 October 2012 pursuant to the Company’s Employee Share Option Plan. Events Subsequent to Reporting Date On 31 October 2007, the Company issued 200,000 options On 7 July 2008, an announcement was made on the ASX exercisable at $1.30 expiring 30 October 2012 pursuant that the Company was to be a substantial holder in Empire to the Company’s Employee Share Option Plan. Resources Ltd. A total of 5,000,000 shares was purchased at 17 cents each and also entered into a signed Memorandum On 12 November 2007, the Company issued 350,000 options of Understanding thus giving the right to the Company exercisable at $1.30 expiring 11 November 2012 pursuant to nominate a representative to join the Empire Board to the Company’s Employee Share Option Plan. of Directors. On 11 January 2008, 75,000 unlisted options that were On 18 July 2008, it was released to the ASX that the issued pursuant to the Company’s Employee Share Option Company had appointed Todd Bennett to the Board Plan lapsed due to the relevant employees ceasing as a Non-Executive Director, further strengthening the employment with the Company. Company’s access to international resource industry On 11 January 2008, the Company issued 50,000 options investors and project developers. Mr Bennett is the exercisable at $1.60 expiring 10 January 2013 pursuant to Managing Director of AMB Holdings, a private investment the Company’s Employee Share Option Plan. company associated with the Bennett family. Mr Bennett On 28 April 2008, the Company issued to: oversees the management of a broad portfolio of assets, which includes a significant share in the Rhodes Ridge (a) an entity associated with Director of the Company, Mark Iron Ore project in the Pilbara, and the AMB’s strategic Bennett, 350,000 unlisted options in the Company; and relationships with the Rio Tinto Group. (b) a Director of the Company, Glenn Jardine, 350,000 On 3 August 2008, two partly paid shareholders had fully unlisted options in the Company, paid the remainder of their shares totalling $120,940 pursuant to a resolution of shareholders at general meeting. (605,000 shares at $0.1999). The total number of partly Each option is exercisable at $1.30 and expires on 27 April paid shares remaining is 19,125,000. 2013. On 29 September 2008, the Group raised $58,500,000 On 12 May 2008, the Company issued 1,911,000 options gross of costs through the issue of Notes, Gold Upside exercisable at $1.30 expiring on 11 May 2013 pursuant Participation (“GUP”) Notes and Unsecured Warrants to the Company’s Employee Share Option Plan. to investors. The Notes have a coupon of 11.25% and a 3 year term. On 20 June 2008, the Company issued 600,000 options The GUP Notes are based on a floor price as at the date exercisable at $1.30 expiring on 19 June 2013 pursuant of and are for 500,000 units. The Warrants are exercisable to the Company’s Employee Share Option Plan. at 33.5 cents and expire after 5 years. More details are On 30 June 2008, the Company cancelled 50,000 unlisted contained in the Offering Circular lodged with the ASX. options in the Company. The options had been exercisable at $1.30 expiring 19 June 2013.
Options Issued For personal use only use personal For On 18 July 2007, the Company issued to: On 18 July 2008, the Company issued 1,000,000 options (a) an entity associated with Director of the Company, Mark exercisable at $0.70 expiring on 18 July 2013. Ashley, 500,000 unlisted options in the Company, and Since 30 June 2008, the Directors are not aware of any (b) an entity associated with Director of the Company, Mark other matter or circumstance that has significantly or may Bennett, 500,000 unlisted options in the Company; and significantly affect the operations of the Company or the results of those operations, or the state of affairs of the (c) Director of the Company, Glenn Jardine, 1,000,000 Company in subsequent financial years. unlisted options in the Company; and
Apex Minerals NL 36 Directors’ Report continued
Directors’ Interests Remuneration Report (Audited) The relevant interest of each director in the shares, This Remuneration Report outlines the director and debentures, interests in registered schemes and rights or executive remuneration arrangements of the Company options over such instruments issued by the companies and the Group in accordance with the requirements of within the Group and other related bodies corporate, the Corporations Act 2001 and its Regulations. as notified by the directors to the Australian Securities Details of key management personnel (including the five Exchange in accordance with S205G(1) of the Corporations highest executives of the Company and the Group): Act 2001, at the date of this report is as follows: • Mark Ashley – Managing Director Apex Minerals NL • Mark Bennett – Exploration Director Fully Paid Shares Options • Glenn Jardine – Operations Director M Ashley Direct – – • Grant Brock – Chief Operating Officer Indirect 16,800,000 2,500,000 • Anna Neuling – Chief Financial Controller M Bennett Direct – – • William Dix – Exploration Manager Indirect 1,472,471 2,850,000 G Jardine Direct 2,315,000 2,850,000 Directors’ and Executives Emoluments Remuneration and other terms of employment of Indirect – – executives, including executive directors, are reviewed K Robinson Direct 5,800,000 1,300,000 periodically by the Board having regard to performance, Indirect – – relevant comparative information and, where necessary, S Lowe Direct 186,201 800,000 independent expert advice. Remuneration packages which can include bonuses are set at levels that are Indirect – – intended to attract and retain executives capable of T Bennett Direct 255,000 – managing the Company’s operations. Indirect – – Bonuses are paid at the discretion of the Board and Meetings of Directors currently are not directly linked to any key performance The following table sets out the number of meetings of indicators. the Company’s Directors held during the year ended The terms of engagement and remuneration of executive 30 June 2008. directors is reviewed periodically by the Board, with There were a total of 6 Director’s Meetings held during recommendations being made by the non-executive the year. director. Where the remuneration of a particular executive director is to be considered, the director concerned does Number Eligible Number not participate in the discussion or decision-making. to Attend Attended The policy of the Company is to pay remuneration of Director directors and senior executives in cash and in amounts M Ashley 6 6 in line with employment market conditions relevant in M Bennett 6 6 the mining industry. Minor amounts of employee fringe G Jardine 6 6 benefits in the form of employee meals and entertainment K Robinson 6 6 are provided as a part of the executives’ way of conducting business. S Lowe 6 6 The Company’s performance, and hence that of its directors and executives, is measured in terms of: (i) Company share price growth;
(ii) Cash raised; For personal use only use personal For (iii) Exploration carried out; and (iv) Farm-in expenditure attracted.
Annual Report 08 37 Directors’ Report continued
Remuneration Report (Audited) continued Directors’ and Executives Emoluments continued The emoluments of each Director and Key Executive were as follows:
Share based Short term employee benefits Post employment benefits payments Salary and Non- Percentage of Directors’ Other Monetary Super- Retirement remuneration Performance Fees $ Bonuses $ Services $ Benefits $ annuation $ Benefit $ Options $ Total $ by options % related % Director M Ashley 2008 300,000 100,000 – 31,720 36,000 – 400,357 868,077 46% 12% 2007 298,495 – – – 24,750 – 249,032 572,277 44% 0% M Bennett 2008 304,167 100,000 – 34,525 36,375 – 415,178 890,245 47% 11% 2007 257,336 – – – 21,591 – 249,032 527,959 47% 0% G Jardine 2008 304,167 100,000 – – 36,375 – 517,059 957,601 54% 10% 2007 29,375 – – – 2,250 – – 31,625 0% 0% K Robinson 2008 45,628 – – – 6,665 – 225,019 277,312 81% 0% 2007 28,424 – – – – – 118,891 147,315 81% 0% S Lowe 2008 36,002 – – – 1,620 – 171,032 208,654 82% 0% 2007 33,511 – 9,293 – – – 59,445 102,249 58% 0% S Stone 2008 – – – – – – – – 0% 0% 2007 8,308 – – – – – 116,383 124,691 93% 0% Total 2008 989,964 300,000 – 66,245 117,035 – 1,728,645 3,201,889 2007 655,449 – 9,293 – 48,591 – 792,783 1,506,116 Key Executives G Anderson 2008 – – 66,000 – – – 32,823 98,823 33% 0% 2007 – – 66,000 – – – 2,798 68,798 4% 0% G Brock 2008 137,820 – – – 2,250 – 3,086 143,156 2% 0% 2007 – – – – – – – – 0% 0% A Neuling 2008 146,154 20,000 – 6,725 14,602 – 66,855 254,336 26% 8% 2007 – – – – – – – – 0% 0%
W Dix For personal use only use personal For 2008 157,500 30,000 – 25,326 16,875 – 173,576 403,277 43% 7% 2007 ––– – – – – 0% 0% Total 2008 441,474 50,000 66,000 32,051 33,727 – 276,340 899,592 2007 – – 66,000 – – – 2,798 68,798
Apex Minerals NL 38 Directors’ Report continued
Remuneration Report (Audited) continued becomes incapacitated by illness or accident for an accumulated period of three months or the Company Directors’ and Executives Emoluments continued is advised by an independent medical officer that the Employment Benefits Executive’s health has deteriorated to a degree that it is The details of the executive employment contracts are advisable for the Executive to leave the Company. On as follows: termination on notice by the Company, the Company is obliged to pay the Executive a six month service fee. The Managing Director, Mark Ashley, current employment contract is a 3 year contract that commenced on 18 April • The Company may terminate the contract at any time 2006 and terminates on 17 April 2009, unless earlier without notice if serious misconduct has occurred. terminated in accordance with this agreement. Upon the On termination with cause, the Executive is not expiration of the term of this agreement, the Executive’s entitled to any payment. appointment will continue on the same terms as this The Operations Director, Glenn Jardine, current employment agreement unless the agreement is terminated in accordance contract is a contract that commenced on 31 May 2007. with its terms. Under the terms of the present contract: Upon the expiration of the term of this agreement, the • Mr Ashley will be paid a minimum remuneration package Executive’s appointment will continue on the same terms of $300,000p.a. base salary plus superannuation. The as this agreement unless the agreement is terminated Company will also provide a motor vehicle to the value of in accordance with its terms. Under the terms of the $65,000 and will be responsible for costs associated with present contract: the maintenance, licensing, running of and repairs to the • Mr Jardine will be paid a minimum remuneration vehicle together with any fringe benefits tax payable in package of $350,000p.a. base salary plus superannuation. relation to the vehicle. • The Company may terminate this agreement by not • The Company may terminate this agreement by not less than three months’ notice in writing if the Executive less than three months’ notice in writing if the Executive becomes incapacitated by illness or accident for an becomes incapacitated by illness or accident for an accumulated period of three months or the Company accumulated period of three months or the Company is advised by an independent medical officer that the is advised by an independent medical officer that the Executive’s health has deteriorated to a degree that it Executive’s health has deteriorated to a degree that it is is advisable for the Executive to leave the Company. advisable for the Executive to leave the Company. On On termination on notice by the Company, the Company termination on notice by the Company, the Company is obliged to pay the Executive a six month service fee. is obliged to pay the Executive a six month service fee. • The Company may terminate the contract at any time • The Company may terminate the contract at any time without notice if serious misconduct has occurred. without notice if serious misconduct has occurred. On termination with cause, the Executive is not On termination with cause, the Executive is not entitled to any payment. entitled to any payment. The Chief Operating Officer, Grant Brock, commenced The Exploration Director, Mark Bennett, current employment with the Company on a Contractor Agreement between contract is a 3 year contract that commenced on 9 May 2006 29 January 2008 and 31 May 2008. Mr Brock’s current and terminates on 8 May 2009, unless earlier terminated employment contract is a contract that commenced in accordance with this agreement. Upon the expiration of on 1 June 2008. Upon the expiration of the term of this the term of this agreement, the Executive’s appointment agreement, the Executive’s appointment will continue on will continue on the same terms as this agreement unless the same terms as this agreement unless the agreement is the agreement is terminated in accordance with its terms. terminated in accordance with its terms. Under the terms Under the terms of the present contract: of the present contract: • Mr Bennett will be paid a minimum remuneration • Mr Brock will be paid a minimum remuneration package of $350,000p.a. base salary plus superannuation. package of $300,000p.a. base salary plus superannuation.
For personal use only use personal For The Company will also provide a motor vehicle to Mr Brock is entitled to claim reimbursement of costs the value of $65,000 and will be responsible for costs associated with running his own vehicle including: associated with the maintenance, licensing, running fuel, insurance, registration, servicing, parking and of and repairs to the vehicle together with any fringe other incidentals. benefits tax payable in relation to the vehicle. • either party may terminate this agreement by not less • The Company may terminate this agreement by not than one months’ notice in writing. less than three months’ notice in writing if the Executive
Annual Report 08 39 Directors’ Report continued
Remuneration Report (Audited) continued Share based payments The Group has an ownership-based compensation scheme Directors’ and Executives Emoluments continued for executives and employees of the Group. Each employee Employment Benefits continued share option converts into one ordinary share of Apex • The Company may terminate the contract at any time Minerals NL on exercise. No amounts are paid or payable without notice if serious misconduct has occurred. by the recipient on receipt of the option. The options carry On termination with cause, the Executive is not neither rights to dividends or voting rights. Options may be entitled to any payment. exercised at any time from the date of vesting to the date The Chief Financial Officer, Anna Neuling, current of their expiry. employment contract is a contract that commenced The following table summarises the value of options on 30 July 2007. Upon the expiration of the term of this granted, exercised or lapsed during the annual reporting agreement, the Executive’s appointment will continue on period to the identified directors and executives: the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms Value of options Value of options Value of options of the present contract: 2008 granted at the exercised at the lapsed at the grant date $ exercise date $ date of lapse $ • Ms Neuling will be paid a minimum remuneration Directors package of $165,000p.a. base salary plus superannuation. Due to her existing lease agreement she is permitted Mark Ashley 382,300 – – to salary sacrifice a vehicle until the termination of the Mark Bennett 553,800 – – lease in May 2009. Glenn Jardine 936,100 – – • either party may terminate this agreement by not less Kim Robinson 229,380 – – than one months’ notice in writing. Stephen Lowe 229,380 – – • The Company may terminate the contract at any time Key Executives without notice if serious misconduct has occurred. Graham Anderson – – – On termination with cause, the Executive is not Grant Brock 225,000 – – entitled to any payment. Anna Neuling 161,400 – – The Exploration Manager, William Dix, current employment William Dix 383,782 – – contract is a contract that commenced on 7 May 2006. 3,101,142 – – Upon expiration of the term of this agreement, the Executive’s appointment that will continue on the same terms as this agreement unless the agreement is terminated in accordance Value of options Value of options Value of options with its terms. Under the terms of the present contract: 2007 granted at the exercised at the lapsed at the grant date $ exercise date $ date of lapse $ • Mr Dix will be paid a minimum remuneration package Directors of $165,000p.a. base salary plus superannuation. The Stephen Stone 116,383 116,383 – Company will also provide a motor vehicle to the value Mark Ashley 465,532 – – of $65,000 and will be responsible for costs associated with the maintenance, licensing, running of and repairs Mark Bennett 465,532 – – to the vehicle together with any fringe benefits tax Glenn Jardine – – – payable in relation to the vehicle. Kim Robinson 232,766 – – • The Company may terminate this agreement by not Stephen Lowe 116,383 – – less than three months’ notice in writing if the Executive Key Executives becomes incapacitated by illness or accident for an Graham Anderson 68,260 – – accumulated period of three months or the Company Grant Brock – – – is advised by an independent medical officer that the Anna Neuling – – – For personal use only use personal For Executive’s health has deteriorated to a degree that it is advisable for the Executive to leave the Company. On William Dix – – – termination on notice by the Company, the Company 1,464,856 116,383 – is obliged to pay the Executive a six month service fee. 1,500,000 options were issued to Glenn Jardine as a • The Company may terminate the contract at any time consultant but prior to him being an employee or without notice if serious misconduct has occurred. director of the Company. On termination with cause, the Executive is not entitled to any payment.
Apex Minerals NL 40 Directors’ Report continued
Remuneration Report (Audited) continued Directors’ and Executives Emoluments continued Share based payments continued The terms of conditions of each grant of options affecting remuneration in the previous, this or future reporting periods are as follows:
Exercise Fair value at Series No. Number Issue Date Grant Date Expiry date Vested No. 2008 Price Grant Date Directors options Mark Ashley 12 500,000 18/07/2007 18/07/2007 1/06/2012 0.65 0.76 – Mark Bennett 12 500,000 18/07/2007 18/07/2007 1/06/2012 0.65 0.76 – Glenn Jardine 12 1,000,000 18/07/2007 18/07/2007 1/06/2012 0.65 0.76 – Kim Robinson 12 300,000 18/07/2007 18/07/2007 1/06/2012 0.65 0.76 – Stephen Lowe 12 300,000 18/07/2007 18/07/2007 1/06/2012 0.65 0.76 – Mark Bennett 18 350,000 28/04/2008 28/04/2008 27/04/2013 1.30 0.49 – Glenn Jardine 18 350,000 28/04/2008 28/04/2008 27/04/2013 1.30 0.49 – Key executive options Anna Neuling 13 200,000 31/07/2007 31/07/2007 30/07/2012 1.00 0.72 – Anna Neuling 19 40,000 12/05/2008 12/05/2008 11/05/2013 1.30 0.45 – William Dix 19 40,000 12/05/2008 12/05/2008 11/05/2013 1.30 0.45 – Grant Brock 20 500,000 20/06/2008 20/06/2008 19/06/2013 1.30 0.30 – 2007 Directors options Mark Ashley 1 2,000,000 20/07/2006 22/06/2006 20/07/2011 0.14 0.23 – Mark Bennett 1 2,000,000 20/07/2006 22/06/2006 20/07/2011 0.14 0.23 – Kim Robinson 1 1,000,000 20/07/2006 22/06/2006 20/07/2011 0.14 0.23 – Stephen Lowe 1 500,000 20/07/2006 22/06/2006 20/07/2011 0.14 0.23 – Key executive options Graham Anderson 11 200,000 1/06/2007 1/06/2007 1/06/2012 0.65 0.34 – William Dix 11 400,000 1/06/2007 1/06/2007 1/06/2012 0.65 0.34 – William Dix 3 1,000,000 20/07/2006 7/05/2006 20/07/2011 0.14 0.23 –
All of the options above vest two years after the date of issue. The expense is spread over the two year vesting period with $1,479,000 to be expensed in the year ended 30 June 2009 and $273,000 the year ended 30 June 2010.
Options were priced using a Black Scholes option pricing model using the inputs below.
Series 1 Series 3 Series 11 Series 12 Series 13 Series 18 Series 19 Series 20 Grant Date 0.30 0.30 0.56 1.06 1.10 0.88 0.83 0.62 Share Price ($) Exercise Price ($) 0.14 0.14 0.65 0.65 1.00 1.30 1.30 1.30
Expected volatility 70% 70% 70% 70% 70% 70% 70% 70% For personal use only use personal For Option life 20/07/2011 20/07/2011 1/06/2012 1/06/2012 30/07/2012 27/04/2013 11/05/2013 19/06/2013 Dividend yield 0% 0% 0% 0% 0% 0% 0% 0% Interest rate 6.50% 6.50% 6.50% 6.28% 6.27% 7.25% 7.25% 7.25%
Annual Report 08 41 Directors’ Report continued
Remuneration Report (Audited) continued Options outstanding There are 24,136,000 options outstanding as at the date Directors’ Benefits of this report. Since the date of the last Directors’ Report, no director of the Company has received, or become entitled to Number of issue Exercise Price $ Expiry Date receive (other than a remuneration benefit included in 1,500,000 0.20 3 July 2011 Note 28 to the financial statements), a benefit because 7,200,000 0.14 20 July 2011 of a contract that: 250,000 0.30 17 August 2011 (a) The director; or 250,000 0.35 14 September 2011 (b) A firm of which the director is a member; or 300,000 0.20 31 May 2009 (c) an entity in which the director has a substantial financial 500,000 0.35 1 November 2011 interest, has made (during the year ended 30 June 2008, 1,000,000 0.35 1 November 2011 or at any other time) with 275,000 0.45 30 November 2011 (i) The Company; or 300,000 0.45 30 November 2011 (ii) an entity that the Company controlled, or a 2,875,000 0.65 1 June 2012 body corporate that was related to the Company, 2,600,000 0.65 1 June 2012 when the contract was made or when the director 1,975,000 1.00 30 July 2012 received, or became entitled to receive, the benefit (if any). 350,000 1.30 15 October 2012 200,000 1.30 30 October 2012 Share Options 350,000 1.30 11 November 2012 Options granted to Directors and officers of the Company 50,000 1.60 10 January 2013 During and subsequent to year ended 30 June 2008 the 700,000 1.30 27 April 2013 following options have been issued to directors and executives as part of their remuneration: 1,911,000 1.30 11 May 2013 550,000 1.30 19 June 2013 Number of Number of Options Options 1,000,000 0.70 18 July 2013 issued pre issued post 24,136,000 30 June 2008 30 June 2008 Total
Director Option holders do not have any right, by virtue of the Mark Ashley 2,500,000 – 2,500,000 option, to participate in any share issue of the Company Mark Bennett 2,850,000 – 2,850,000 or any other related body corporate or in the interest issue of any other registered scheme. Glenn Jardine 2,850,000 – 2,850,000 Kim Robinson 1,300,000 – 1,300,000 Environmental Regulation Stephen John Lowe 800,000 – 800,000 The Group’s operations are subject to significant Graham Anderson 200,000 – 200,000 environmental regulations under both Commonwealth Grant Brock 500,000 – 500,000 and State legislation in relation to its mineral exploration activities. At the date of this report the Group is not aware Anna Neuling 240,000 – 240,000 of any breach of those environmental requirements. Will Dix 1,440,000 – 1,440,000
Directors’ Insurance Shares issued on exercise of options During the year, the Company has paid a premium in During the year no shares have been issued from the respect of a contract insuring the directors of the Company exercise of options. For personal use only use personal For (as named above) against liabilities incurred as such a director to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.
Apex Minerals NL 42 Directors’ Report continued
Corporate Governance In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of the Company support and have adhered to the highest principles of corporate governance. The Company’s corporate governance statement is contained in the Corporate Governance section on pages 84 to 90.
Auditor’s Independence A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 46.
Non-Audit Services During the year Stantons International, the Group’s auditor, did not perform any other services in addition to their statutory duties.
This report is made in accordance with a resolution of the Directors.
Dated at Sydney this 29th day of September 2008.
Mark Ashley
Managing Director For personal use only use personal For
Annual Report 08 43 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF APEX MINERALS NL
Report on the Financial Report and the AASB 124 remuneration disclosures contained in the Directors’ Report
We have audited the accompanying financial report of Apex Minerals NL, which comprises the balance sheet as at 30 June 2008, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies and other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.
We have also audited the remuneration disclosures contained in the Directors’ Report under the heading “remuneration report” on pages 37 to 42.
Directors’ responsibility for the Financial Report and the AASB 124 remuneration disclosures contained in the Directors’ Report
The directors of the Company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In note 1, the directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report of the Company and the Group, comprising the financial statements and notes, complies with International Financial Reporting Standards.
The directors of the Company are also responsible for the remuneration disclosures contained in the Directors’ Report.
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. These Auditing 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. Our responsibility is also to express an opinion on the remuneration
disclosures contained in the Directors’ Report based on our audit. For personal use only use personal For
16
Apex Minerals NL 44 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report and the remuneration disclosures contained in the Directors’ Report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report and the remuneration disclosures contained in the Directors’ Report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report and the remuneration disclosures contained in the Directors’ Report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report and the remuneration disclosures contained in the Directors’ 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.
Auditor’s opinion on the financial report
In our opinion:
(a) the financial report of Apex Minerals NL is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2008 and of their performance for the year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.
(b) the financial report of the Company and the Group also complies with International Financial Reporting Standards as disclosed in note 1.
Auditor’s opinion on the AASB 124 remuneration disclosures contained in the directors’ report
In our opinion the remuneration disclosures that are contained in pages 37 to 42 of the Directors’ Report comply with section 300 A of the Corporations Act 2001.
STANTONS INTERNATIONAL
(An Authorised Audit Company) For personal use only use personal For
K G Lingard Director
West Perth, Western Australia 29 September 2008
Annual Report 08 45
17 29 September 2008
Board of Directors Apex Minerals NL Ground Floor 31 Ventnor Avenue WEST PERTH WA 6005
Dear Directors
RE: APEX MINERALS NL
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Apex Minerals NL.
As the Audit Director for the audit of the financial statements of Apex Minerals NL for the year ended 30 June 2008, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely STANTONS INTERNATIONAL (Authorised Audit Company)
KG Lingard
Director For personal use only use personal For
18
Apex Minerals NL 46 Directors’ Declaration
The directors declare that:
1. The financial statements and notes set out on pages 48 to 83, are in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the financial position of the Company and the Group as at 30 June 2008 and of their performance, as represented by the results of their operations and cashflows, for the year ended on that date; and
(b) complying with Accounting Standards and the Corporations Regulations 2001; and
2. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
3. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief executive officer and chief financial officer for the year ended 30 June 2008.
This statement is made in accordance with a resolution of the Directors.
Dated at Sydney this 29th day of September 2008.
Mark Ashley
Managing Director For personal use only use personal For
Annual Report 08 47 Income Statements for the year ended 30 June 2008
Consolidated Parent Entity 2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
Revenues from ordinary activities 3 2,025 202 1,834 183 Recovery from subsidiary – 22 – – Other income 3 837 736 836 – Marketing expenses (96) (56) (96) (57) Occupancy expenses (199) (128) (193) (128) Share based payments (3,456) (1,276) (2,942) (1,276) Administrative expenses (4,749) (1,862) (4,610) (1,862) Exploration expenditure written off (54,134) (3,251) (185) (1,420) Provisions for writedowns – (293) (58,833) (3,475) Finance costs 4 (634) – – – (Loss) from ordinary activities before related income tax expense 5 (60,406) (5,906) (64,189) (8,035)
Income tax attributable to operating loss 6 – – 279 – Loss after income tax (60,406) (5,906) (63,910) (8,035)
Basic loss per share (cents) 18 (19.01) (3.69) For personal use only use personal For
The accompanying notes form part of these financial statements.
Apex Minerals NL 48 Balance Sheets as at 30 June 2008
Consolidated Parent Entity 2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
Current Assets Cash and cash equivalents 25(a) 38,909 13,264 38,008 13,244 Trade and other receivables 7 2,274 68 305 66 Inventory 8 1,972 – – – Other financial assets 9 512 – – – Total Current Assets 43,667 13,332 38,313 13,310 Non Current Assets Other receivables 7 – – 51,778 – Property, plant and equipment 10 48,450 357 350 357 Deferred tax assets – – 279 – Other financial assets 9 1,526 2,777 1,189 1,220 Exploration acquisition costs 11 19,195 – – – Project development 12 27,737 – – – Total Non Current Assets 96,908 3,134 53,596 1,577 Total Assets 140,575 16,466 91,909 14,887
Current Liabilities Trade and other payables 13 12,305 2,407 1,867 2,407 Provisions 15 471 117 276 117 Loan Payable 33 – – 414 429 Borrowings 14 17 – – – Deferred consideration 24 3,000 – – – Total Current Liabilities 15,793 2,524 2,557 2,953 Non-Current Liabilities Borrowings 14 69 – – – Provisions 15 29,722 – – – Other payables 16 21 – – – Total Non-Current Liabilities 29,812 – – – Total Liabilities 45,605 2,524 2,557 2,953 Net Assets 94,970 13,942 89,352 11,934
Equity Issued capital 17 162,967 24,081 162,967 24,081 Share based payments reserve 21 4,732 1,276 4,732 1,276 Available for sale investments revaluation reserve 21 (208) 700 (193) 821 Accumulated losses 19 (72,521) (12,115) (78,154) (14,244)
For personal use only use personal For Total Equity 94,970 13,942 89,352 11,934
The accompanying notes form part of these financial statements.
Annual Report 08 49 Statement of Changes in Equity for the year ended 30 June 2008
Available for sale share Based investments Issued Accumulated Payments revaluation Total Capital Losses reserve reserve equity $’000 $’000 $’000 $’000 $’000
Consolidated Balance 1 July 2006 12,769 (6,209) – – 6,560 Issue of share capital 11,960 – – – 11,960 Capital raising costs (718) – – – (718) Issue of share based payments – – 1,276 – 1,276 Exercise of options 70 – – – 70 Net unrealised gain for the year – – – – – Revaluation to fair value – – – 700 700 Loss for the year – (5,906) – – (5,906) Balance 30 June 2007 24,081 (12,115) 1,276 700 13,942
Issue of share capital 145,570 – – – 145,570 Capital raising costs (6,684) – – – (6,684) Issue of share based payments – – 3,456 – 3,456 Exercise of options – – – – – Net unrealised gain for the year – – – – – Revaluation to fair value – – – (618) (618) Transfer to income statement on sale of investment – – – (290) (290) Loss for the year – (60,406) – – (60,406) Balance 30 June 2008 162,967 (72,521) 4,732 (208) 94,970
Parent Balance 1 July 2006 12,769 (6,209) – – 6,560 Issue of share capital 11,960 – – – 11,960 Capital raising costs (718) – – – (718) Issue of share based payments – – 1,276 – 1,276 Exercise of options 70 – – – 70 Revaluation to fair value – – – 821 821 Loss for the year – (8,035) – – (8,035) Balance 30 June 2007 24,081 (14,244) 1,276 821 11,934
Issue of share capital 145,570 – – – 145,570 Capital raising costs (6,684) – – – (6,684) Issue of share based payments – – 3,456 – 3,456 Exercise of options – – – – – Revaluation to fair value – – – (724) (724) Transfer to income statement on sale of investment – – – (290) (290)
Loss for the year – (63,910) – – (63,910) For personal use only use personal For Balance 30 June 2008 162,967 (78,154) 4,732 (193) 89,352
The accompanying notes form part of these financial statements.
Apex Minerals NL 50 Cash Flow Statement for the year ended 30 June 2008
Consolidated Parent Entity 2008 2007 2008 2007 Note $’000 $’000 $’000 $’000
Cash flows from operating activities Receipts from customers 512 – – – Payments to suppliers and employees (53,089) (4,188) (4,477) (1,262) Interest received 1,751 183 1,597 183 Interest paid (494) – (3) – Other income – 42 – – Net cash flows (used in) operating activities (51,320) (3,963) (2,883) (1,079)
Cash flows from investing activities Proceeds on available for sale financial assets 398 2,223 398 – Payments for available for sale financial assets (53) (2,816) (53) (23) Proceeds from sale of fixed assets 4 – – – Payments for property, plant and equipment (1,293) (378) (262) (378) Payments for development of mining properties (1,238) – – – Payments for acqusitions of gold projects (26,249) – – – Payments for costs of acquisition of gold projects (3,899) – – – Amounts advanced to subsidiaries – – (82,574) (3,475) Payments relating to project costs – (350) – (350) Net cash flows (used in) investing activities (32,330) (1,321) (82,491) (4,226)
Cash flows from financing activities Payments for costs of raising capital (7,401) (176) (7,401) (176) Payment for cash backed guarantees (215) – (31) – Proceeds from share issue 117,570 12,033 117,570 12,034 Repayment of lease liability (659) – – – Repayment of loan – (550) – (550) Net cash flows from financing activities 109,295 11,307 110,138 11,308
Net increase in cash and cash equivalents held 25,645 6,023 24,764 6,003 Cash and cash equivalents at beginning of the year 13,264 7,241 13,244 7,241 Cash and cash equivalents at end of the year 25(a) 38,909 13,264 38,008 13,244
RECONCILIATION OF OPERATING LOSS AFTER INCOME TAX TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Operating (loss) after tax (60,406) (5,906) (63,910) (8,035) Depreciation 366 106 270 106 Employee entitlements 354 106 160 106 Share based payments 3,456 1,276 2,942 1,276 Provision for non recovery of loan – 292 58,833 3,475 Profit on sale of investments (837) (736) (836) –
For personal use only use personal For Tax expense – – (279) – Changes in assets and liabilities (Increase)/Decrease in receivables (2,205) (26) 66 (24) (Increase)/Decrease in other assets and liabilities (1,946) – – – Increase/(Decrease) in payables 9,898 925 (129) 2,017 (51,320) (3,963) (2,883) (1,079)
The accompanying notes form part of these financial statements.
Annual Report 08 51 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 1. CORPORATE INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Apex Minerals NL (the parent) is a company incorporated Adoption of new and revised Accounting Standards in Australia where shares are traded on the Australian In the current year, the Group has adopted all of the new and Securities Exchange. revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to The financial statements were authorised for issue by the its operations and effective for the current annual reporting directors on 29 September 2008. period. Details of the impact of the adoptions of these new The significant policies which have been adopted in the accounting standards are set out in the individual accounting preparation of this financial report are: policy notes set out below. The Group has also adopted the following Standards as listed below which only impacted on Statement of compliance the Group’s financial statements with respect to disclosure. The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act • AASB 101 ‘Presentation of Financial Statements’ 2001, Accounting Standards and Interpretations, and complies (revised October 2006) with other requirements of the law. • AASB 7 ‘Financial Instruments: Disclosures’ The financial report includes the separate financial statements • Accounting Standards of Interpretation issued but not yet of the Company and the consolidated financial statements effective as disclosed in note 1(w). of the Group. Going Concern Accounting Standards include Australian equivalents The financial report has been prepared on a going concern to International Financial Reporting Standards (‘A-IFRS’). basis, which contemplates the continuity of normal business Compliance with A-IFRS ensures that the financial statements activity and the realisation of assets and the settlement of and notes of the Company and the Group comply with liabilities in the normal course of business. International Financial Reporting Standards (‘IFRS’). The Group incurred a net loss of $60,406,000 for the year ended Basis of preparation 30 June 2008 and had a net cash outflow from operations of The financial report has been prepared in accordance with the $51,320,000 for the year. The Group has a net current asset hitorical cost convention except for the revaluation of certain position of $27,874,000 and a net asset position of $94,970,000. non-current assets and financial instruments. All amounts are The Group have raised $58,500,000 gross of costs through presented in Australian dollars, unless otherwise noted. the issue of Notes, GUP Notes and Warrants. These funds will supply the Group with working capital through the start The Company is a company of the kind referred to in ASIC Class of production and enable exploration to continue based Order 98/100, dated 10 July 1998, and in accordance with that on the cashflows forecast used by the Board for the project Class Order amounts in the directors’ report and the financial assessment. Further details on the structure of the financing report are rounded off to the nearest thousand dollars, is in Note 34. unless otherwise indicated. Should the Company and the Group be unable to continue Critical accounting, judgement and estimates as going concerns, they may be required to realise their assets In the application of the Group’s accounting policies, and extinguish their liabilities other than in the normal course management is required to make judgements, estimates and of business and at amounts different from those stated in the assumptions about carrying values of assets and liabilities that financial reports. The financial report does not include any are not readily apparent from other sources. The estimates and adjustments relating to the recoverability and classification of associated assumptions are based on historical experience and recorded asset amounts or to the amounts and classification of various other factors that are believed to be reasonable under liabilities that may be necessary should the Company and the the circumstance, the results of which form the basis of making Group be unable to continue as going concerns. the judgements. Actual results may differ from these estimates. The following significant accounting policies have been adopted The estimates and underlying assumptions are reviewed in the preparation and presentation of the financial report: on an ongoing basis. Revisions to accounting estimates are For personal use only use personal For recognised in the period in which the estimate is revised if the (a) Basis of consolidation revision only affects that period, or in the period of the revision The consolidated financial statements incorporate the and future periods if the revision affects current and future financial statements of Company and entities controlled periods. Refer to Note 2 for a discussion of critical judgements by the Company (its subsidiaries) (referred to as ‘the Group’ in applying the entity’s accounting policies, and key sources in these financial statements). Control is achieved where of estimation certainty. the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
Apex Minerals NL 52 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 1. CORPORATE INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued (a) Basis of consolidation continued There is currently a Employee Share Option Plan (ESOP), The results of subsidiaries acquired or disposed of which provides benefits to employees. The cost of these during the year are included in the consolidated income equity-settled transactions with employees is measured statement from the effective date of acquisition or up to by reference to the fair value of the equity instruments the effective date of disposal, as appropriate. at the date which they are granted. Where necessary, adjustments are made to the financial In valuing equity-settled transactions, no account is taken statements of subsidiaries to bring their accounting of any performance conditions, other than conditions policies in line with those used by other members of the linked to the price of the shares of Apex Minerals NL Group. All intra-group transactions, balances, income and (market conditions) if applicable. expenses are eliminated in full on consolidation. In the The cost of equity-settled transactions is recognised, separate financial statements of the Company, intra-group together with a corresponding increase in equity, over transactions (‘common control transactions’) are generally the period in which the performance and/or service accounted for by reference to the existing (consolidated) conditions are fulfilled, ending on the date on which book value of the items. Where the transaction value the relevant employees come fully entitled to the award of common control transactions differ from their (the vesting period). consolidated book value, the difference is recognised as a contribution by or distribution to equity participants by The cumulative expense recognised for equity-settled the transacting entities. transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period (b) Revenue recognition has expired and (ii) the Group’s best estimate of the Revenues are recognised at fair value of the consideration number of equity instruments that will ultimately vest. received net of the amount of goods and services tax (GST). No adjustment is made for the likelihood of market Exchanges of goods or services of the same nature without performance conditions being met as the effect of any cash consideration are not recognised as revenues. these conditions is included in the determination of fair value at grant date. The income statement charge Interest income or credit for a period represents the movement in Interest income is recognised as it accrues, taking into cumulative expense recognised as at the beginning account the effective yield on the financial asset. and end of that period. Sale of goods No expense is recognised for awards that do not Revenue from the sale of mineral production is recognised ultimately vest, except for awards where vesting when the Group has passed risks and rewards of the is only conditional upon market condition. mineral production to the buyer and a price has been set. If the terms of an equity-settled award are modified, Sale of non-current assets as a minimum an expense is recognised as if the terms The gross proceeds of non-current asset sales are included had not been modified. In addition, an expense is as revenue at the date control of the asset passes to the recognised for any modification that increases the total buyer, usually when an unconditional contract of sale is fair value of the share-based payment arrangement, or signed. The gain or loss on disposal is calculated as the is otherwise beneficial to the employee, as measured difference between the carrying amount of the asset at at the date of modification. the time of disposal and the net proceeds on disposal. If an equity-settled award is cancelled, it is treated (c) Joint Venture Operations as if it had been vested on the date of cancellation, The Company’s interest in joint ventures is brought to and any expense not yet recognised for the award is account by including its proportionate share of the joint recognised immediately. However, if a new award is venture’s assets, liabilities and expenses and share of its substituted for the cancelled award and designated as output on a line-by-line basis. a replacement award on the date that it is granted, the For personal use only use personal For cancelled and new award are treated as if they were a (d) Share based payments modification of the original award, as described in the (i) Equity settled transaction: previous paragraph. The Group provides benefits to employees (including The dilutive effect, if any, of outstanding options is senior executives) of the Group in the form of share- reflected as additional share dilution in the computation based payments, whereby employees render services of earning per share. in exchange for shares or rights over shares (equity- settled transactions).
Annual Report 08 53 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 1. CORPORATE INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued (e) Goods and Services Tax temporary differences will reverse in the foreseeable Revenues, expenses and assets are recognised net of the future and taxable profit will be available against which amount of goods and services tax (GST), except where the temporary differences can be utilised. the amount of GST incurred is not recoverable from the The carrying amount of deferred income tax assets is Australian Tax Office (ATO). In these circumstances the reviewed at each balance sheet date and reduced to the GST is recognised as part of the cost of acquisition of the extent that it is no longer probable that sufficient taxable asset or as part of an item of the expense. Receivables and profit will be available to allow all or part of the deferred payables are stated with the amount of GST included. The income tax asset to be utilised. net amount of GST recoverable from, or payable to, the Deferred income tax assets and liabilities are measured ATO is included as a current asset or liability in the Balance at the tax rates that are expected to apply to the year Sheet. Cash flows are included in the Statement of Cash when the asset is realised or the liability is settled, based Flows on a gross basis. The GST components of cash flows on tax rates (and tax laws) that have been enacted or arising from investing and financing activities which are substantively enacted at the balance sheet date. recoverable from, or payable to, the ATO are classified as operating cash flows. Income taxes relating to items recognised directly in equity are recognised in equity and not in the (f) Income Tax income statement.
Deferred Income Tax Tax Consolidation Deferred income tax is provided on all temporary The Company and all its wholly owned Australian differences at the balance sheet date between the tax resident entities are part of a tax-consolidated group bases of assets and liabilities and their carrying amounts under Australian taxation law. Apex Minerals NL is for financial reporting purposes. the head in the tax-consolidated group. Tax expense/ Deferred income tax liabilities are recognised for all income, deferred tax liabilities and deferred tax assets taxable temporary differences: arising from temporary difference of the members of the • except where the deferred income tax liability arises tax-consolidated group are recognised in the separate from the initial recognition of an asset or liability in a financial statements of the of each entity and the tax transaction that is not a business combination and, values applying under tax consolidation. Current tax at the time of the transaction, affects neither the liabilities and assets and deferred tax assets arising from accounting profit nor taxable profit or loss; and unused tax losses and relevant tax credits of the members of the tax-consolidated group are recognised by the • in respect of taxable temporary differences associated Company (as head entity in the tax-consolidated group). with investments in subsidiaries, associates and interests in joint ventures, except where the timing Due to the existence of a tax funding arrangement of the reversal of the temporary differences can be between the entities in the tax-consolidated group, controlled and it is probable that the temporary amounts are recognised as payable or receivable by the differences will not reverse in the foreseeable future. company and each member of the group in relation to the tax contribution amounts paid or payable between Deferred income tax assets are recognised for all deductible the parent entity and the other members of the tax- temporary differences, carry-forward of unused tax assets consolidated group in accordance with the arrangement. and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible (g) Cash and cash equivalents temporary differences, and the carry-forward of unused tax Cash and cash equivalents in the balance sheet comprise assets and unused tax losses can be utilised: cash at bank and in hand and short-term deposits with an original maturity of three months or less. For the purposes • except where the deferred income tax asset relating of the Cash Flow Statement, cash and cash equivalents to the deductible temporary difference arises from the consist of cash and cash equivalents as defined above, initial recognition of an asset or liability in a transaction net of outstanding bank overdrafts. For personal use only use personal For that is not a business combination and, at the time of the transaction, affects neither the accounting profit (h) Trade and other receivables nor taxable profit or loss; and Trade receivables, which generally have 30 day terms, are • in respect of deductible temporary differences recognised and carried at original invoice amount less associated with investments in subsidiaries, associates an allowance for any uncollectible amounts. An estimate and interests in joint ventures, deferred tax assets are for doubtful debts is made when collection of the full only recognised to the extent that it is probable that the amount is no longer probable. Bad debts are written off when identified.
Apex Minerals NL 54 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 1. CORPORATE INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued (i) Exploration and Evaluation Expenditure An item of property, plant and equipment is derecognised Exploration and evaluation costs are written off in the upon disposal or when no future economic benefits are year they are incurred, apart from acquisition costs which expected to arise from the continued use of the asset. are carried forward where right of tenure of the area of Any gain or loss arising on derecognition of the asset interest is current and the expenditure is expected to be (calculated as the difference between the net disposal recouped through sale or successful development and proceeds and the carrying amount of the item) is included in exploration of the area of interest. When the technical the income statement in the period the item is derecognised. feasibility and commercial viability of extracting a mineral resource have been demonstrated then any capitalised (l) Recoverable amount of assets exploration and evaluation expenditure is reclassified as At each reporting date, the Company assesses whether capitalised mine development. Prior to reclassification, there is any indication that an asset may be impaired. capitalised exploration and evaluation expenditure is assessed for impairment. Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount.Where (j) Mining Development and Expenditure the carrying amount of an asset exceeds its recoverable Mine development expenditure is recognised at cost less amount the asset is considered impaired and is written accumulated amortisation and any impairment losses. down to its recoverable amount. Where commercial production in an area of interest has Recoverable amount is the greater of fair value less costs commenced, the associated costs are amortised over to sell and value in use. It is determined for an individual the estimated economic life of the mine on a units of asset, unless the asset’s value in use cannot be estimated production basis. to be close to its fair value less costs to sell and it does Changes in factors such as estimates of proved and not generate cash inflows that are largely independent probable reserves that affect unit of production of those from other assets or groups of assets, in which calculations are dealt with on a prospective basis. case, the recoverable amount is determined for the cash‑generating unit to which the asset belongs. (k) Property, Plant and Equipment Plant and equipment is stated at cost less accumulated In assessing value in use, the estimated future cash flows depreciation and any impairment in value. Leasehold are discounted to their present value using a pre tax improvements are depreciated over the shorter of either discount rate that reflects current market assessments of the unexpired period of the lease or the estimated useful the time value of money and the risks specific to the asset. lives of the improvements. (m) Investments Plant and equipment is depreciated on the diminishing All investments are initially recognised at cost, being value method at the rate of 22.5% and computer the fair value of the consideration given and including equipment at 40% on the diminishing value method. acquisition charges associated with the investment. Impairment – The carrying values of plant and equipment After initial recognition, investments, which are classified are reviewed for impairment when events or changes as held for trading and available-for-sale, are measured in circumstances indicate the carrying value may not be at fair value. Gains or losses on investments held for recoverable. For an asset that does not generate largely trading are recognised in the income statement. independent cash inflows, the recoverable amount is Gains or losses on available-for-sale investments are determined for the cash-generating unit to which the recognised as a separate component of equity until the asset belongs. If any such indication exists and where the investment is sold, collected or otherwise disposed of, carrying values exceed the estimated recoverable amount, or until the investment is determined to be impaired, the assets or cash-generating units are written down at which time the cumulative gain or loss previously to their recoverable amount. The recoverable amount reported in equity is included in the income statement. of plant and equipment is the greater of fair value less For personal use only use personal For costs to sell and value in use. In assessing value in use, Non-derivative financial assets with fixed or determinable the estimated future cash flows are discounted to their payments and fixed maturity are classified as held-to- present value using a pre-tax discount rate that reflects maturity when the Group has the positive intention current market assessments of the time value of money and ability to hold to maturity. Investments intended and the risks specific to the asset. to be held for an undefined period are not included in this classification.
Annual Report 08 55 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 1. CORPORATE INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued (n) Operating leases the amount of the provision can be measured reliably. Lease payments for operating leases, where substantially The estimated future obligations include the costs of all the risks and benefits remain with the lessor, are removing facilities, abandoning sites and restoring the charged as expenses in the periods in which they affected areas. are incurred. Lease incentives under operating leases The provision for future restoration costs is the best are recognised as a liability. Lease payments received estimate of the present value of the expenditure required reduce the liability. to settle the restoration obligation at the reporting date. (o) Finance leases The initial estimate of the restoration and rehabilitation Assets held under finance leases are initially recognised provision relating to exploration, development and mining at their value or, if lower, at amounts equal to the present facilities is capitalised into the cost of the related asset and value of the minimum lease payments, each determined amortised on the same basis as the related asset. at the inception of the lease. The corresponding liability Changes in the estimate of the provision for restoration to the lessor is included in the balance sheet as a finance and rehabilitation are treated in the same manner, lease obligation. except the unwinding of the effect of discounting on Lease payments are apportioned between finance the provision is recognised as a finance cost rather than charges and reduction of the lease obligation so as to being capitalised into the costs of the related asset. achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged (t) Transactions Costs Arising on the Issue of directly against income, unless they are directly Equity Instruments attributable to qualifying assets, in which they are Transaction costs arising on the issue of equity capitalised in accordance with the Group’s general policy instruments are recognised directly in equity as a on borrowing costs. reduction of the proceeds of the equity instruments to which the costs relate. (p) Investments Investments in controlled entities are carried in the (u) Earnings per Share Company’s financial statements at the lower of cost (i) Basic Earnings per Share and recoverable amount. Basic earnings per share is determined by dividing the operating loss after income tax by the weighted average (q) Accounts Payable number of ordinary shares outstanding during the Liabilities are recognised for amounts to be paid in the financial year. future for goods or services received, whether or not billed to the Company. Trade accounts payable are (ii) Diluted Earnings per Share normally settled within 60 days. Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking (r) Employee benefits into account amounts unpaid on ordinary shares and Liabilities for wages and salaries, including non-monetary any reduction in earnings per share that will probably benefits, annual leave and accumulating sick leave arise from the exercise of partly paid shares or options expected to be settled within 12 months of the reporting outstanding during the financial year. date are recognised in other payables in respect of the employee’s services up to the reporting date. They are (v) Inventories measured at the amounts expected to be paid when Inventories are stated at the lower of cost and net the liabilities are settled. realisable value on a weighted average basis. Liabilities for non-accumulating sick leave are recognised (w) Standards and Interpretations issued not yet effective when the leave is taken and are measured at the rates At the date of authorisation of the financial report, the For personal use only use personal For paid or payable. Standards and Interpretations listed below were in issue but not yet effective. (s) Provision for restoration and rehabilitation A provision for restoration and rehabilitation is Initial application of the following Standard will not affect recognised when there is a present obligation as a result any of the amounts recognised in the financial report, but of exploration, development and production activities will change the disclosures presently made in relation to undertaken, it is probable that an outflow of economic the Group and the Company’s financial report: benefits will be required to settle the obligation, and
Apex Minerals NL 56 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 1. CORPORATE INFORMATION AND SUMMARY NOTE 2. CRITICAL ACCOUNTING JUDGEMENTS AND OF SIGNIFICANT ACCOUNTING POLICIES continued KEY SOURCES OF ESTIMATION UNCERTAINTY (w) Standards and Interpretations issued not yet effective (a) Critical judgements in applying the entity’s continued accounting policies • AASB 101 ‘Presentation of Financial Statements’ The following are the critical judgements (apart from (revised September 2007) those involving estimations, which are dealt with below), that management has made in the process of applying – Effective for annual reporting periods beginning the Group’s accounting policies and that have the most on or after 1 January 2009 significant effect on the amounts recognised in the • AASB 8 Operating Segments and AASB 2007-3 financial statements: Amendments to Australian Accounting Standards arising from AASB 8 Determination of mineral reserves and resources The determination of reserves impacts the accounting – AASB 8 and AASB 2007-3 are effective for annual for asset carrying values, depreciation and amortisation reporting periods commencing on or after 1 January rates, deferred stripping costs and provisions for 2009. AASB 8 will result in a significant change in the decommissioning and restoration. The Group uses the approach to segment reporting, as it requires adoption Australian Code for Reporting of Exploration Results, Mineral of a ‘management approach’ to reporting on financial Resources and Ore Reserves 2004 (the ‘JORC code’) as a performance. The information being reported will be minimum standard. The information on mineral resources based on what the key decision makers use internally and ore reserves were prepared by or under the supervision for evaluating segment performance and deciding of Competent Persons as defined in the JORC code. The how to allocate resources to operating segments. The amounts presented are based on the mineral resources and Group has not yet decided when to adopt AASB 8. ore reserves determined under the JORC code. Application of AASB 8 may result in different segments, There are numerous uncertainties inherent in estimating segment results and different types of information mineral resources and ore reserves and assumptions being reported in the segment note of the financial that are valid at the time of estimation may change report. However, at this stage, it is not expected significantly when new information becomes available. to affect any of the amounts recognised in the financial statements. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the • Revised AASB 123 Borrowing Costs and economic status of reserves and may, ultimately, result in AASB 2007-6 Amendments to Australian Accounting the reserves being restated. Standards arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 (b) Key sources of estimation uncertainty and Interpretations 1 & 12] The following are the key assumptions concerning the – The revised AASB 123 is applicable to annual reporting future, and other key sources of estimation uncertainty periods commencing on or after 1 January 2009. It has at the balance sheet date, that have a significant risk of removed the option to expense all borrowing costs and causing a material adjustment to the carrying amounts – when adopted – will require the capitalisation of all within the next financial year: borrowing costs directly attributable to the acquisition, (i) Useful lives of property, plant and equipment construction or production of a qualifying asset. There As described in note 2, the Group review the estimated will be no impact on the financial report of the Group, useful lives of property, plant and equipment at the end as the Group does not have any borrowings (or already of each annual reporting period. There have been no capitalises borrowing costs relating to qualifying assets). adjustments to the estimated useful lives that impact The potential effect of the initial application of the expected on the balance sheet values. issue of an Australian equivalent accounting standard to the (ii) Impairment of capitalised mine development following Standard has not yet been determined:
For personal use only use personal For expenditure • IFRS 3 ‘Business Combinations’ and IAS 27 The future recoverability of capitalised development ‘Separate and Consolidated Financial Statements’ expenditure is dependent on a number of factors, including the level of proved, probable and inferred – Effective for annual reporting periods beginning mineral resources, future technological changes that on or after 1 July 2009 could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.
Annual Report 08 57 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY continued (b) Key sources of estimation uncertainty continued (iv) Provision for decommissioning and restoration costs (ii) Impairment of capitalised mine development Decommissioning and restoration costs are a normal expenditure continued consequence of mining, and the majority of this To the extent that capitalised mine development expenditure is incurred at the end of the mine’s life. expenditure is determined not to be recoverable in In determining an appropriate level of provision the future, profits and net assets will be reduced in consideration is given to the expected future costs to be the period in which this determination is made. incurred, the timing of these expected future costs (largely dependent on the life of the mine), and the estimated (iii) Impairment of property, plant and equipment future level of inflation. Property, plant and equipment is reviewed for impairment The ultimate cost of decommissioning and restoration is if there is any indication that the carrying amount may uncertain and costs can vary in response to many factors not be recoverable. Where a review for impairment including changes to the relevant legal requirements, the is conducted, the recoverable amount is assessed by emergence of new restoration techniques or experience reference to the higher of ‘value in use’ (being the net at other mine sites. The expected timing of expenditure present value of expected future cash flows of the relevant can also change, for example in response to changes cash generating unit) and ‘fair value less costs to sell’. in reserves or to production rates. In determining value in use, future cash flows are Changes to any of the estimates could result in significant based on: changes to the level of provision required, which would • estimates of the quantities of ore reserves and in turn impact future financial results. mineral resources for which there is a high degree of confidence of economic extraction; (v) Recoverability of potential deferred income tax assets The Group does not recognise deferred income tax assets • future production levels; in respect of tax losses to the extent that it is not probable • future commodity prices; and that the future utilisation of these losses is considered probable. Assessing the future utilisation of these losses • future cash costs of production and capital requires the Group to make significant estimates related to expenditure. expectations of future taxable income. Estimates of future Variations to the expected future cash flows, and the taxable income are based on forecast cash flows from timing thereof, could result in significant changes to any operations and the application of existing tax laws. To the impairment losses recognised, if any, which could in turn extent that future cash flows and taxable income differ impact future financial results. significantly from estimates, this could result in significant changes to the deferred income tax assets recognised,
which would in turn impact future financial results. For personal use only use personal For
Apex Minerals NL 58 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000
NOTE 3. REVENUE Revenue from outside the Operating Activities Interest revenue 2,025 183 1,834 183 Fair value of financial asset received from joint venture farminee as part of joint venture agreement – 19 – – 2,025 202 1,834 183
Recovery from subsidiary – 22 – – Other income Other income (i) 785 – 785 – Reversal of gain/(loss) from equity on disposal of investments classified as available-for-sale 290 – 290 – (Loss)/Profit from sale of investments classified as available for sale (239) – (239) – (Loss)/Profit from sale of fixed assets 1 – – – (Loss)/Profit from sale of investments classified as held for trading – 736 – – 837 736 836 – Total Revenue 2,862 960 2,670 183
(i) This relates to shares and options acquired in Maximus as consideration for the disposal of an interest in the Narndee JV to Maximus Resources NL as per ASX announcement dated 23 May 2007.
NOTE 4. FINANCE COSTS Interest on guarantees 473 – – – Interest on obligations under finance leases 2 – – – Total Interest expense 475 – – – Unwinding of discounts on provisions (note 15) 159 – – – Total Finance costs 634 – – –
NOTE 5. OPERATING LOSS Operating loss from ordinary activities before income tax has been arrived at after charging the following items: Depreciation of non-current assets 235 106 139 106 Impairment of non-current assets 131 – 131 – Exploration expenditure written off 54,134 3,251 185 1,420
Provision for non-recovery of loans to controlled entities – – 58,833 3,475 For personal use only use personal For
Annual Report 08 59 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000
NOTE 6. INCOME TAX Income tax recognised in profit or loss Current tax Current year – – – – Under/(Over) Provision for Prior Year – – – – Deferred tax Origination and reversal of temporary differences 239 – (147) – Benefit on tax losses recognised – – – – Under/(Over) Provision for Prior Year of Temporary Differences (239) – (132) – Total income tax expense/(benefit) per income statement – – (279) –
Numerical reconciliation between tax expense and pre-tax net loss Net profit/(loss) before tax (60,406) (5,906) (64,189) (8,035) Income tax expense/(benefit) on above at 30% (18,122) (1,772) (19,257) (2,411) Increase in income tax due to: Non-deductible expenses 1,170 387 1,011 389 Sundry items – – – – Under/(Over) Provision for Prior Year of Temporary Differences – – – – Loan impairment in subsidiaries – – 17,650 1,042 Tax effect of exploration on acquisition of subsidiary 1,491 – – – Tax effect of temporary differences not recognised 1,602 – – – Tax effect of current year capital loss not recognised 56 – 56 – Tax effect of previously recognised losses derecognised 320 – 320 – Tax effect of current year tax losses derecognised 14,628 1,524 822 1,014 Other – – – 29 Decrease in income tax expense due to: Under/(Over) Provision for Prior Year of Temporary Differences (239) – (132) – Tax effect of revaluations and transfers of investments from equity (262) – (293) – Tax effect of ARO temporary differences in acquired subsidiaries (189) – – – Deductible equity raising costs (456) (63) (456) (63) Other – (76) – – Income tax expense attributable to entity – – (279) – Deferred tax recognised directly in equity Relating to equity raising costs – – – – Relating to available for sale investments – – – – Deferred tax expense/(benefit) attributable to entity
recognised in equity – – – – For personal use only use personal For
Apex Minerals NL 60 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000
NOTE 6. INCOME TAX continued Recognised deferred tax assets & liabilities Deferred tax assets & liabilities are attributable to the following: Assets Property, Plant and Equipment 39 – 40 – Mine Development 451 – – – Expensed Blackhole costs 13 – 13 – Provision for rehabilitation 8,917 – – – Provisions and Accruals 851 – 327 – Revenue Losses – 320 – 252 Capital Losses – – – – Deferred Tax Assets 10,271 320 380 252 Liabilities Accrued Income (74) – (73) – Investments (24) (210) (28) (247) Exploration (1,491) – – – Mine Development – (105) – – ARO Assets (8,681) – – – Provisions and Accruals – (5) – (5) Prepayments (1) – – – Deferred Tax Liabilities (10,271) (320) (101) (252) Net Deferred Tax Assets/(Liabilities) – – 279 –
Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following: Entity Deductible temporary differences 3,360 277 1,758 1,726 Tax revenue losses 17,233 2,688 17,233 2,248 Tax capital losses 56 – 56 –
20,649 2,965 19,047 3,974 For personal use only use personal For
Annual Report 08 61 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 6. INCOME TAX continued Consolidated Balance at recognised recognised Balance at 1/07/2006 Under/Over in income in equity other 30/06/07
Deferred Tax Assets & Liabilities Property, Plant and Equipment – – – – – – Accrued Income – – – – – – Investments – – (210) – – (210) Exploration – – – – – – Mine Development – – (105) – – (105) Equity Raising Costs – – – – – – Expensed Blackhole costs – – – – – – ARO Assets – – – – – – Provision for rehabilitation – – – – – – Provisions and Accruals (5) – – – – (5) Prepayments – – – – – – Other – – – – – – Revenue Losses 5 – 315 – – 320 Capital Losses – – – – – – Net Deferred Tax Assets/(Liabilities) – – – – – –
Balance at recognised recognised Balance at 1/07/2007 Under/Over in income in equity other 30/06/08
Deferred Tax Assets & Liabilities Property, Plant and Equipment – – 39 – – 39 Accrued Income – (2) (72) – – (74) Investments (210) (4) 190 – – (24) Exploration – – (8,762) – 7,272 (1,490) Mine Development (105) 176 7,652 – (7,272) 451 Equity Raising Costs – – – – – – Expensed Blackhole costs – 20 (7) – – 13 ARO Assets – – (524) – (8,156) (8,680) Provision for rehabilitation – – 760 – 8,156 8,916 Provisions and Accruals (5) 49 806 – – 850 Prepayments – – (1) – – (1) Other – – – – – – Revenue Losses 320 – (320) – – – Capital Losses – – – – – –
Net Deferred Tax Assets/(Liabilities) – 239 (239) – – – For personal use only use personal For
Apex Minerals NL 62 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 6. INCOME TAX continued Movement in temporary differences during the year Parent Balance at recognised recognised Balance at 1/07/2006 Under/Over in income in equity other 30/06/07
Deferred Tax Assets & Liabilities Property, Plant and Equipment – – – – – – Accrued Income – – – – – – Investments – – (247) – – (247) Exploration – – – – – – Mine Development – – – – – – Equity Raising Costs – – – – – – Expensed Blackhole costs – – – – – – ARO Assets – – – – – – Provision for rehabilitation – – – – – – Provisions and Accruals (5) – – – – (5) Prepayments – – – – – – Other – – – – – – Revenue Losses 5 – 247 – – 252 Capital Losses – – – – – – Net Deferred Tax Assets/(Liabilities) – – – – – –
Balance at recognised recognised Balance at 1/07/2007 Under/Over in income in equity other 30/06/08
Deferred Tax Assets & Liabilities Property, Plant and Equipment – – 39 – – 39 Accrued Income – (1) (71) – – (72) Investments (247) (4) 222 – – (29) Exploration – – – – – – Mine Development – – – – – – Equity Raising Costs – – – – – – Expensed Blackhole costs – 20 (7) – – 13 ARO Assets – – – – – – Provision for rehabilitation – – – – – – Provisions and Accruals (5) 49 284 – – 328 Prepayments – – – – – – Other – – – – – – Revenue Losses 252 68 (320) – – – Capital Losses – – – – – – Net Deferred Tax Assets/(Liabilities) – 132 147 – – 279
Tax consolidation The Company and its wholly-owned Australian entities have formed a tax-consolidated group with effect from 1 June 2006 and therefore are taxed as a single entity from that date. The head entity of the group is Apex Minerals NL. The members of the tax-consolidated group are as per the note 31.
For personal use only use personal For Nature of tax funding arrangements and tax sharing agreements Entities within the tax-consolidated group have entered into a tax funding arrangement and tax sharing agreement with the head entity. Under terms of the tax funding arrangements, Apex Minerals NL and each of the entities in the tax consolidated group has agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax asset of the entity. Such amounts are reflected in amounts receivable from or payable to other entities in the tax consolidated group. The tax sharing agreement entered into between members of the tax consolidated group provides for the determination of the allocation of income tax liabilities between entities should the head entity default on its tax payment obligations or if an entity should leave the tax consolidated group. The effect of the tax sharing agreement is that each member’s liability for tax payable by the tax consolidated group is limited to the amount payable to the head entity under the tax funding arrangement. Annual Report 08 63 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000
NOTE 7. TRADE AND OTHER RECEIVABLES Current Trade receivables (i) 226 3 – 3 Accrued interest 247 6 243 6 GST receivable 976 34 39 31 Prepayments 363 25 21 26 Other (ii) 462 – 2 – 2,274 68 305 66 Non Current Loans to controlled entities – – 114,832 4,221 Provision for non-recovery – – (63,054) (4,221) – – 51,778 –
(i) The Company policy for accounts receivable is a 30 day trading term. $31,000 is current, $83,000 is outstanding greater than 30 days, $17,000 is outstanding greater than 90 days, $47,000 is outstanding greater than 120 days and $48,000 is outstanding greater than 180 days. The Company does not believe that the provision for doubtful debts is required on the basis that all these debts will be recovered as per prior collection history from these debtors. (ii) Other receivables relate to cash advances to staff and diesel fuel rebate.
NOTE 8. INVENTORY At cost 1,972 – – – 1,972 – – –
NOTE 9. OTHER FINANCIAL ASSETs Current Bank guarantees (i) 512 – – – 512 – – – Non Current Controlled entities – unlisted – – 1,241 727 Less provision for diminution in value – – (727) (727) Investment in other entity – available for sale 859 1,276 494 1,070 Deposits in relation to post balance sheet acquisitions – 1,000 – – Bank guarantees (i) 667 150 181 150 Project costs in relation to post balance sheet date acquisitions – 351 – – 1,526 2,777 1,189 1,220
(i) Relates to office lease bond (2008 $93,296), credit card bond (2008 $87,700), gas contract bond (2008 $470,706), lease contract For personal use only use personal For bond (2008 $512,127) and account bond (2008 $15,000).
Apex Minerals NL 64 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000
NOTE 10. PROPERTY, PLANT AND EQUIPMENT Plant and equipment at cost 49,057 500 764 500 Accumulated depreciation and impairment (607) (143) (414) (143) 48,450 357 350 357
Consolidated Parent Entity Leasehold Plant and Leasehold Plant and Improvements equipment improvements equipment at cost at cost at cost at cost $’000 $’000 $’000 $’000
Movement during the year Gross carrying amount Balance at 1 July 2006 – 111 – 111 Additions 181 208 181 208 Disposals – – – – Balance at 1 July 2007 181 319 181 319 Additions (i) 10 1,411 10 254 Additions to Rehabilitation asset – 27,975 – – Disposals – (3) – – Acquisitions through gold projects – 19,164 – – Balance at 30 June 2008 191 48,866 191 573
Accumulated depreciation/amortisation Balance at 1 July 2006 – (37) – (37) Depreciation expense (29) (77) (29) (77) Balance at 1 July 2007 (29) (114) (29) (114) Depreciation expense (30) (205) (30) (109) Acquisitions through gold projects – (97) – – Impairment due to cessation of lease (132) – (132) – Balance at 30 June 2008 (191) (416) (191) (223)
Net book value As at 30 June 2007 152 205 152 205 As at 30 June 2008 – 48,450 – 350
(i) For additions by the Group during the period, an amount of $126,000 was in relation to assets under finance lease. For personal use only use personal For
Annual Report 08 65 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000
NOTE 11. EXPLORATION ACQUISITION COSTS Exploration at cost 19,195 – – – 19,195 – – – Movement during the year Balance at beginning of year – – – – Expenditure incurred during the year 54,134 3,252 (185) 1,420 Exploration expenditure relating to acquisitions 43,434 – – – Exploration expenditure written off (54,134) (3,252) 185 (1,420) Transferred to Development (i) (24,239) – – – Balance at end of year 19,195 – – –
(i) It was decided by the Board of Directors that projects Wiluna and Gidgee (Wilsons) would commence development from 23 June 2008. Exploration capitalised was then reclassified into project development also detailed in note 12.
NOTE 12. PROJECT DEVELOPMENT Project development at cost 27,737 – – – 27,737 – – – Movement during the year Balance at beginning of year – – – – Expenditure incurred during the year 3,498 – – – Transferred from exploration acquisition costs 24,239 – – – Balance at end of year 27,737 – – –
NOTE 13. TRADE AND OTHER PAYABLES Trade payables 4,509 187 1,054 187 Accrued expenses 7,700 2,220 814 2,220 Other (i) 96 – – – 12,305 2,407 1,867 2,407
(i) Relates to the non interest bearing repayment loans of $12,000 for fuel bowsers and $84,300 for generators.
NOTE 14. BORROWINGS Secured – at amortised cost Current Finance lease liabilities (i) 17 – – –
For personal use only use personal For Non current Finance lease liabilities (i) 69 – – – 86 – – –
(i) Secured over the assets leased. The borrowings are fixed interest rate debt with repayments of less than 5 years. The current weighted average effective interest rate on the finance lease liabilities is 9.8 % pa.
Apex Minerals NL 66 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000
NOTE 15. PROVISIONS Current Employee benefits (i) 471 117 276 117 Non Current Restoration and Rehabilitation (ii) 29,722 – – – 30,194 117 276 117
(i) Number of employees 62 13 23 13 (ii) Restoration and Rehabilitation Balance at beginning of year – – – – Provision at acquisition 1,589 – – – Additional provision recognised 27,974 – – – Unwinding of discount and effect of changes in discount rate (note 4) 159 – – – Balance at end of year 29,722 – – –
(i) The current provision for employee benefits relates to annual leave. (ii) The provision for the restoration and rehabilitation of the mine sites operated by the Group represents the present value of the best estimate of the future sacrifice of economic benefits that will be required.
NOTE 16. OTHER PAYABLES Non Current Other (i) 21 – – – 21 – – –
(i) Relates to non interest bearing repayment loan for fuel bowsers.
NOTE 17. CONTRIBUTED EQUITY Issued Capital Fully paid ordinary shares 162,967 24,081 162,967 24,081 19,730,000 shares partly paid to 0.001 cents each – – – – 162,967 24,081 162,967 24,081
Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore the company does not have a limited amount of authorised capital and issued shares do not have a par value. Partly Paid Shares – Terms and Conditions (1) No calls may be made by the Company for the partly paid shares currently on issue to be fully paid up, for 5 years from the date of the general meeting held on 22 June 2006.
For personal use only use personal For (2) After the first anniversary of the date of this General Meeting, the holder of partly paid shares may request that a call be made by the Company to pay up the uncalled capital on no more than one half of the partly paid shares held by that shareholder. (3) After the second anniversary of the date of this General Meeting, the holder of partly paid shares may request that call be made by the Company to pay up the uncalled capital on all of the remaining partly paid shares held by that shareholder or from time to time a proportion thereof.
Annual Report 08 67 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
Number of Shares 2008 2007 2008 2007 $’000 $’000
NOTE 17. CONTRIBUTED EQUITY continued Movements in issued and paid up ordinary capital of the Company during the past year were as follows: Balance at the beginning of the year: 182,119,755 158,619,755 24,081 12,769 Issues Placement at 52 cents per share 39,000,000 23,000,000 20,280 11,960 Acquisition of Youanmi at $0.35 per share 14,285,714 – 5,000 – Payment of outstanding balance on partly paid shares of $0.19999 per share 618,750 – 124 – Acquisition of Aphrodite at $0.98 per share 2,051,272 – 2,000 – Placement at $1 per share 30,000,000 – 30,000 – Acquisition of Gidgee at $0.32 per share 34,000,000 – 11,000 – Placement at $1 per share 5,000,000 – 5,000 – Placement at $1.10 per share 1 – – – Wiluna Acquisition at $1.05 per share 9,536,526 – 10,000 – Placement at $0.85 per share 47,491,802 – 40,368 – Placement at $0.85 per share 25,644,892 – 21,798 – Cost of issues – – (6,684) (718) Options exercised – 500,000 – 70 Balance at year end 389,748,712 182,119,755 162,967 24,081
Consolidated Cents per share 2008 2007
NOTE 18. EARNINGS/(LOSS) PER SHARE (a) Basic loss per share (19.01) (3.69)
$’000 $’000 (b) Net loss used in calculating – Basic loss per share (60,406) (5,906)
Number of shares Weighted average number of ordinary shares outstanding during the year used in the calculation of basic earnings per share 317,737,672 160,000,577
Diluted earnings per share has not been disclosed as it does not result in an inferior position. For personal use only use personal For
Apex Minerals NL 68 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000
NOTE 19. ACCUMULATED LOSSES Accumulated losses Accumulated losses at beginning of year (12,115) (6,209) (14,244) (6,209) Net loss attributable to Apex Minerals NL (60,406) (5,906) (63,910) (8,035) Accumulated losses at end of year (72,521) (12,115) (78,154) (14,244)
NOTE 20. COMMITMENTS FOR EXPENDITURE (a) Exploration Commitments The Company must meet the following tenement expenditure commitments to maintain them in good standing until they are joint ventured, sold, reduced, relinquished, exemptions from expenditure are applied for or are otherwise disposed of. These commitments, net of farm outs, are not provided for in the financial statements and are: Not later than one year 5,358 1,433 285 163 After one year but less than two years 5,358 1,433 – 163 After two years but less than five years 17,040 4,300 – 489 After five years 4,850 1,433 – 163 32,606 8,599 285 978 (b) Lease Commitments See operating and finance lease information at Note 23. (c) Capital Expenditure commitments Plant and Equipment Not longer than 1 year 10,310 – – – 10,310 – – –
NOTE 21. RESERVES Share-based payments reserve Balance at beginning of year 1,276 – 1,276 – Options issued to consultants – 135 – 135 Options issued to employees 3,456 1,141 2,942 1,141 Options issued to subsidiaries’ employees – – 514 – Balance at year end 4,732 1,276 4,732 1,276
The share based payments reserve is used to recognise the fair value of share based payments issued to employees and consultants. Available-for-sale investments revaluation reserve Balance at beginning of year 700 – 821 – Revaluation (618) 700 (724) 821 Transfer to income statement on part sale of investment (290) – (290) –
Balance at year end (208) 700 (193) 821 For personal use only use personal For
The investments revaluation reserve arises on the revaluation of available-for-sale financial assets. Where a revalued financial asset is sold that portion of the reserve which relates to that financial asset, and is effectively realised, is recognised in profit or loss. Where a revalued financial asset is impaired that portion of the reserve which relates to that financial asset is recognised in a profit or loss.
Annual Report 08 69 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 22. CONTINGENT LIABILITIES There is a contingent consideration of $5,000,000 payable to Legend Mining Ltd within 30 days of 250,000 troy ozs of gold being produced and sold from the Gidgee tenements. As at the date of this report, it is not possible to accurately estimate the likelihood and timing of the production of the 250,000 ozs required to be produced before the contingent consideration is due. As at 30 June 2008, this consideration has not been accounted for as a liability. The directors are of the opinion that there are no other contingent liabilities as at 30 June 2008.
NOTE 23. LEASES Finance Leases Leasing arrangements Finance leases relate to plant and equipment purchased for the term of 5 years. The Group has options to purchase the equipment for a nominal amount at the conclusion of the lease agreements. The Group’s obligation under finance leases are secured by the lessor’s title to the leased assets. Minimum Future Present Value of Minimum Lease Payments Future Lease Payments Consolidated Parent Entity 2008 2007 2008 2007 2008 2007 2008 2007 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 No later than 1 year 25 – – – 17 – – – Later than 1 year and not later than 5 years 83 – – – 69 – – – Later than 5 years – – – – – – – – Minimum future lease payments 108 – – – 86 – – – Less future finance charges (22) – – – – – – – Present value of minimum lease payments 86 – – – 86 – – – Included in the financial statements as: (note 14) Current Borrowings 17 – – – Non-current borrowings 69 – – – 86 – – – Operating leases Leasing arrangements Operating leases relate to head office premises and various items of office equipment. The lease terms for the office premises is 1 June 2006 to 1 June 2012. The lease terms for the various items of office equipment vary between 2008 to 2011.
Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000 Not longer than 1 year 133 121 121 121 Longer than 1 year and not longer than 5 years 404 476 354 476 For personal use only use personal For Longer than 5 years – – – – 537 597 475 597
Apex Minerals NL 70 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 24. ACQUISITIONS (a) Wiluna Acquisition The Wiluna acquisition was completed on 11 October 2007. The consideration was 9,536,526 shares valued at $10,000,000, $16,500,000 of cash, $3,000,000 of deferred consideration which is to be paid at first pour of gold dore bullion and $1,805,000 of costs including stamp duty. The assets acquired were $2,045,000 of inventory, $15,451,000 of property, plant and equipment at Wiluna mine site and $13,809,000 of fair value of exploration potential. An additional $737,000 of plant and equipment and the related liability were reassigned from Oxiana as part of the acquisition. (b) Gidgee Acquisition The Gidgee acquisition completed on 10 August 2007. The consideration was 34,000,000 shares valued at $11,000,000 and $1,004,000 of costs including stamp duty. See Note 22 for further details on deferred consideration. The assets acquired were $314,000 of inventory, $1,261,000 of property, plant and equipment at Gidgee mine site and $10,429,000 of fair value of exploration potential. (c) Youanmi Acquisition The Youanmi acquisition completed on 31 July 2007. The consideration was 14,285,714 shares valued at $5,000,000, $5,000,000 cash and $2,530,000 of costs including stamp duty. Two subsidiaries were acquired with a consolidated net asset deficiency of $2,488,000, $11,752,000 of fair value of exploration potential and $1,620,000 of property, plant and equipment. (d) Aphrodite Acquisition The Aphrodite acquisition completed on 8 August 2007. The consideration was 2,051,272 shares valued at $2,000,000, $5,000,000 cash and $442,000 of costs including stamp duty. The assets acquired were $7,442,000 of fair value of exploration potential.
NOTE 25. NOTES TO THE CASH FLOW STATEMENT (a) Reconciliation to the cash flow statement For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows:
Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000 Cash and cash equivalents 38,909 13,264 38,008 13,244 Bank overdraft – – – – 38,909 13,264 38,008 13,244
(b) Non-cash financing activities and investing activities See the acquisitions note for detail on the non cash transactions relating to the acquisitions. (c) Financing facilities Unsecured guarantee facility(i) Amount used – – – –
For personal use only use personal For Amount unused 2,055 – 2,055 – (i) Government environmental bonds are guaranteed over assets owned by a third party. An agreement which ends in March 2009 with Mark Creasy enables the company to use third party assets to guarantee the bonds for an interest payment of 9.75% up to $2,057,000 and 10.25% from $2,057,000 to $8,057,000. There were no unsecured guarantee facilities entered into by the Group or Company in the year ended 30 June 2007.
Annual Report 08 71 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 26. FINANCIAL INSTRUMENTS (a) Capital Risk Management The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern whilst maximising the return to stakeholders through the optimisation of the debt and equity balance. Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000 Financial Instruments Debt (i) (3,981) – – – Cash and cash equivalents – – – – Net cash (3,981) 0 0 0
Equity 140,575 Net debt to equity ratio 0% (i) Debt is defined as long- and short-term borrowings. (b) Credit Risk Management The credit risk on financial assets of the Company which have been recognised on the balance sheet is generally the carrying amount, net of any provisions for doubtful debts. (c) Foreign Currency Risk Management The Group has minimal transactional currency exposures as the majority of the Group’s transactions are in Australian dollars. (d) Interest Rate Risk Management The Group and Company are not materially exposed to interest rate risk although entities in the Group borrow funds at fixed interest rates. At reporting date, there are immaterial finance leases on fixed interest rates and the unsecured guarantee as detailed in note 25 (c). The Group’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and financial liabilities is set out below. Floating Interest Rate Fixed Interest Rate Non-Interest Bearing Total Consolidated 2008 2007 2008 2007 2008 2007 2008 2007 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial Assets
Cash Assets 8,909 12,723 30,000 541 – – 38,909 13,264 Other financial assets – – 1,164 – 874 1,426 2,038 1,426 Receivables – – – – 1,911 43 1,911 43 8,909 12,723 31,164 541 2,785 1,469 42,858 14,733
Interest Rate 7.00% 4.00% 8.00% 5.00% Financial Liabilities Payables – – – – 12,209 2,407 12,209 2,407 Non Interest bearing – – – – 117 – 117 – Interest bearing liability – – 86 – – – 86 – Deferred Consideration – – – – 3,000 – 3,000 –
For personal use only use personal For – – 86 – 15,326 2,407 15,412 2,407
Interest Rate 9.80% Net Financial Assets/(Liabilities) 8,909 12,723 31,078 541 (12,541) (938) 27,446 12,326
Apex Minerals NL 72 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 26. FINANCIAL INSTRUMENTS continued (d) Interest Rate Risk Management continued Floating Interest Rate Fixed Interest Rate Non-Interest Bearing Total Parent 2008 2007 2008 2007 2008 2007 2008 2007 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial Assets Cash Assets 8,008 12,703 30,000 541 – – 38,008 13,244 Other financial assets – – 181 – 1,008 1,220 1,189 1,220 Receivables – – – – 52,062 40 52,062 40 8,008 12,703 30,181 541 53,070 1,260 91,259 14,504
Interest Rate 7.00% 4.00% 8.00% 5.00% Financial Liabilities Payables – – – – 2,281 2,836 2,281 2,836 Non Interest bearing – – – – – – – – Interest bearing liability – – – – – – – – – – – – 2,281 2,836 2,281 2,836
Interest Rate Net Financial Assets/(Liabilities) 8,008 12,703 30,181 541 50,789 (1,576) 88,978 11,668
(e) Liquidity Risk Management The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Weighted Average Less than 3 months Effective Interest Rate 1 month 1-3 months to 1 year 1 to 5 years 5+ years 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 Consolidated % % $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial Liabilities Non-interest bearing 11,726 2,293 466 113 3,113 1 20 – – – Finance lease liability 9.80% 1 – 2 – 13 – 70 – – – 11,727 2,293 469 113 3,126 1 90 – – – Financial Assets Non-interest bearing 2,223 1,469 463 – 95 – 5 – – – Variable interest rate instruments 7.00% 4.00% 8,909 12,723 – – – – – – – – Fixed interest rate instruments 8.00% 5.00% – – 30,088 – – 541 1,076 – – –
11,132 14,192 30,550 – 95 541 1,081 – – – For personal use only use personal For
Annual Report 08 73 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 26. FINANCIAL INSTRUMENTS continued (e) Liquidity Risk Management continued Weighted Average Less than 3 months Effective Interest Rate 1 month 1-3 months to 1 year 1 to 5 years 5+ years 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 Parent % % $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Financial Liabilities Non-interest bearing 2,243 2,722 7 113 31 1 – – – – 2,243 2,722 7 113 31 1 – – – – Financial Assets Non-interest bearing 52,828 1,260 242 – – – – – – – Variable interest rate instruments 7.00% 4.00% 8,008 12,703 – – – – – – – – Fixed interest rate instruments 8.00% 5.00% – – 30,088 – – 541 93 – – – 60,836 13,963 30,330 – – 541 93 – – –
(f) Net Fair Value of Financial Assets and Liabilities The net fair value of the financial assets and liabilities are the same as their carrying amount. (g) Commodity’s Price Risk The Group’s exposure to price risk is minimal at the stage of project development as at 30 June 2008.
Consolidated Parent Entity 2008 2007 2008 2007 $’000 $’000 $’000 $’000
NOTE 27. AUDITORS REMUNERATION Amounts received or due and receivable by the auditors of parent entity: – auditing or reviewing the financial report 61 39 61 39 – other services – – – – 61 39 61 39
NOTE 28. DIRECTOR AND EXECUTIVE DISCLOSURES (a) Details of Directors and Key Executive (i) Directors Mark Ashley Managing Director – Appointed 18 April 2006 Mark Bennett Exploration Director – Appointed 9 May 2006 Glenn Jardine Operations Director – Appointed 16 June 2007 Kim Robinson Chairman/Director (non-executive) – Appointed 26 September 2006 Stephen John Lowe Director (non-executive) (i) Key Executives
Graham Anderson Company Secretary For personal use only use personal For Grant Brock Chief Operating Officer Anna Neuling Chief Financial Officer William Dix Exploration Manager
Apex Minerals NL 74 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 28. DIRECTOR AND EXECUTIVE DISCLOSURES continued (b) Remuneration of Directors and Key Executive
Share based Short term employee benefits Post employment benefits payments Salary and Non- Percentage of Directors’ Other Monetary Super- Retirement remuneration Performance Fees $ Bonuses $ Services $ Benefits $ annuation $ Benefit $ Options $ Total $ by options % related % Director M Ashley 2008 300,000 100,000 – 31,720 36,000 – 400,357 868,077 46% 12% 2007 298,495 – – – 24,750 – 249,032 572,277 44% 0% M Bennett 2008 304,167 100,000 – 34,525 36,375 – 415,178 890,245 47% 11% 2007 257,336 – – – 21,591 – 249,032 527,959 47% 0% G Jardine 2008 304,167 100,000 – – 36,375 – 517,059 957,601 54% 10% 2007 29,375 – – – 2,250 – – 31,625 0% 0% K Robinson 2008 45,628 – – – 6,665 – 225,019 277,312 81% 0% 2007 28,424 – – – – – 118,891 147,315 81% 0% S Lowe 2008 36,002 – – – 1,620 – 171,032 208,654 82% 0% 2007 33,511 – 9,293 – – – 59,445 102,249 58% 0% S Stone 2008 – – – – – – – – 0% 0% 2007 8,308 – – – – – 116,383 124,691 93% 0% Total 2008 989,964 300,000 – 66,245 117,035 – 1,728,645 3,201,889 2007 655,449 – 9,293 – 48,591 – 792,783 1,506,116 Key Executives G Anderson 2008 – – 66,000 – – – 32,823 98,823 33% 0% 2007 – – 66,000 – – – 2,798 68,798 4% 0% G Brock 2008 137,820 – – – 2,250 – 3,086 143,156 2% 0% 2007 – – – – – – – – 0% 0% A Neuling 2008 146,154 20,000 – 6,725 14,602 – 66,855 254,336 26% 8% 2007 – – – – – – – – 0% 0% W Dix
2008 157,500 30,000 – 25,326 16,875 – 173,576 403,277 43% 7% For personal use only use personal For 2007 ––– – – – – 0% 0% Total 2008 441,474 50,000 66,000 32,051 33,727 – 276,340 899,592 2007 – – 66,000 – – – 2,798 68,798
Annual Report 08 75 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 28. DIRECTOR AND EXECUTIVE DISCLOSURES continued (b) Remuneration of Directors and Key Executive continued The Managing Director, Mark Ashley, current employment contract is a 3 year contract that commenced on 18 April 2006 and terminates on 17 April 2009, unless earlier terminated in accordance with this agreement. Upon the expiration of the term of this agreement, the Executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract: • Mr Ashley will be paid a minimum remuneration package of $300,000p.a. base salary plus superannuation. The Company will also provide a motor vehicle to the value of $65,000 and will be responsible for costs associated with the maintenance, licensing, running of and repairs to the vehicle together with any fringe benefits tax payable in relation to the vehicle. • The Company may terminate this agreement by not less than three months’ notice in writing if the Executive becomes incapacitated by illness or accident for an accumulated period of three months or the Company is advised by an independent medical officer that the Executive’s health has deteriorated to a degree that it is advisable for the Executive to leave the Company. On termination on notice by the Company, the Company is obliged to pay the Executive a six month service fee. • The Company may terminate the contract at any time without notice if serious misconduct has occurred. On termination with cause, the Executive is not entitled to any payment. The Exploration Director, Mark Bennett, current employment contract is a 3 year contract that commenced on 9 May 2006 and terminates on 8 May 2009, unless earlier terminated in accordance with this agreement. Upon the expiration of the term of this agreement, the Executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract: • Mr Bennett will be paid a minimum remuneration package of $350,000p.a. base salary plus superannuation. The Company will also provide a motor vehicle to the value of $65,000 and will be responsible for costs associated with the maintenance, licensing, running of and repairs to the vehicle together with any fringe benefits tax payable in relation to the vehicle. • The Company may terminate this agreement by not less than three months’ notice in writing if the Executive becomes incapacitated by illness or accident for an accumulated period of three months or the Company is advised by an independent medical officer that the Executive’s health has deteriorated to a degree that it is advisable for the Executive to leave the Company. On termination on notice by the Company, the Company is obliged to pay the Executive a six month service fee. • The Company may terminate the contract at any time without notice if serious misconduct has occurred. On termination with cause, the Executive is not entitled to any payment. The Operations Director, Glenn Jardine, current employment contract is a contract that commenced on 31 May 2007. Upon the expiration of the term of this agreement, the Executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract: • Mr Jardine will be paid a minimum remuneration package of $350,000p.a. base salary plus superannuation. • The Company may terminate this agreement by not less than three months’ notice in writing if the Executive becomes incapacitated by illness or accident for an accumulated period of three months or the Company is advised by an independent medical officer that the Executive’s health has deteriorated to a degree that it is advisable for the Executive to leave the Company. On termination on notice by the Company, the Company is obliged to pay the Executive a six month service fee. • The Company may terminate the contract at any time without notice if serious misconduct has occurred. On termination with cause, the Executive is not entitled to any payment. The Chief Operating Officer, Grant Brock, commenced with the Company on a Contractor Agreement between 29 January and 31 May 2008. Mr Brock’s current employment contract is a contract that commenced on 1 June 2008. Upon the expiration of the term of this agreement, the Executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in
For personal use only use personal For accordance with its terms. Under the terms of the present contract: • Mr Brock will be paid a minimum remuneration package of $300,000p.a. base salary plus superannuation. Mr Brock is entitled to claim reimbursement of costs associated with running his own vehicle including: fuel, insurance, registration, servicing, parking and other incidentals. • Either party may terminate this agreement by not less than one months’ notice in writing. • The Company may terminate the contract at any time without notice if serious misconduct has occurred. On termination with cause, the Executive is not entitled to any payment.
Apex Minerals NL 76 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 28. DIRECTOR AND EXECUTIVE DISCLOSURES continued (b) Remuneration of Directors and Key Executive continued The Chief Financial Officer, Anna Neuling, current employment contract is a contract that commenced on 30 July 2007. Upon the expiration of the term of this agreement, the Executive’s appointment will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract: • Ms Neuling will be paid a minimum remuneration package of $165,000p.a. base salary plus superannuation. Due to her existing lease agreement she is permitted to salary sacrifice a vehicle until the termination of the lease in May 2009. • Either party may terminate this agreement by not less than one months’ notice in writing. • The Company may terminate the contract at any time without notice if serious misconduct has occurred. On termination with cause, the Executive is not entitled to any payment. The Exploration Manager, William Dix, current employment contract is a contract that commenced on 7 May 2006. Upon expiration of the term of this agreement, the Executive’s appointment that will continue on the same terms as this agreement unless the agreement is terminated in accordance with its terms. Under the terms of the present contract: • Mr Dix will be paid a minimum remuneration package of $165,000p.a. base salary plus superannuation. The Company will also provide a motor vehicle to the value of $65,000 and will be responsible for costs associated with the maintenance, licensing, running of and repairs to the vehicle together with any fringe benefits tax payable in relation to the vehicle. • The Company may terminate this agreement by not less than three months’ notice in writing if the Executive becomes incapacitated by illness or accident for an accumulated period of three months or the Company is advised by an independent medical officer that the Executive’s health has deteriorated to a degree that it is advisable for the Executive to leave the Company. On termination on notice by the Company, the Company is obliged to pay the Executive a six month service fee. • The Company may terminate the contract at any time without notice if serious misconduct has occurred. On termination with cause, the Executive is not entitled to any payment.
(c) Remuneration options: Granted and vested during the year Directors and key executives were granted options during the year. The Group has an ownership-based compensation scheme for executives and employees of the Group. Each employee share option converts into one ordinary share of Apex Minerals NL on exercise. No amounts are paid or payable by the recipient on receipt of the option. The following table summarises the value of options granted, exercised or lapsed during the annual reporting period to the identified directors and executives:
Value of options granted Value of options exercised Value of options lapsed 2008 at the grant date $ at the exercise date $ at the date of lapse $ Directors Mark Ashley 382,300 – – Mark Bennett 553,800 – – Glenn Jardine 936,100 – – Kim Robinson 229,380 – – Stephen Lowe 229,380 – – Key Executives Graham Anderson – – –
For personal use only use personal For Grant Brock 225,000 – – Anna Neuling 161,400 – – William Dix 383,782 – – 3,101,142 – –
Annual Report 08 77 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 28. DIRECTOR AND EXECUTIVE DISCLOSURES continued (c) Remuneration options: Granted and vested during the year continued
Value of options granted Value of options exercised Value of options lapsed 2007 at the grant date $ at the exercise date $ at the date of lapse $ Directors Stephen Stone 116,383 116,383 – Mark Ashley 465,532 – – Mark Bennett 465,532 – – Glenn Jardine – – – Kim Robinson 232,766 – – Stephen Lowe 116,383 – – Key Executives Graham Anderson 68,260 – – Grant Brock – – – Anna Neuling – – – William Dix – – – 1,464,856 116,383 –
Series 1 Series 3 Series 11 Series 12 Series 13 Series 18 Series 19 Series 20 Grant Date Share Price ($) 0.30 0.30 0.56 1.06 1.10 0.88 0.83 0.62 Exercise Price ($) 0.14 0.14 0.65 0.65 1.00 1.30 1.30 1.30 Expected volatility 70% 70% 70% 70% 70% 70% 70% 70% Option life 20/07/2011 20/07/2011 1/06/2012 1/06/2012 30/07/2012 27/04/2013 11/05/2013 19/06/2013 Dividend yield 0% 0% 0% 0% 0% 0% 0% 0% Interest rate 6.50% 6.50% 6.50% 6.28% 6.27% 7.25% 7.25% 7.25% Grant Date 22/06/2006 7/05/2006 1/06/2007 18/07/2007 31/07/2007 28/04/2008 12/05/2008 20/06/2008 Number 5,500,000 1,000,000 600,000 2,600,000 200,000 700,000 80,000 500,000 Fair value at Grant Date 0.23 0.23 0.34 0.76 0.49 0.72 0.45 0.30 All of the options above vest two years after the date of issue. The expense is spread over the two year vesting period with $1,479,000 to be expensed in the year ended 30 June 2009. See note 29 for the assumptions used in the Black Scholes valuation. (d) Shareholdings of Directors and Key Executives
Fully Paid Ordinary Shares Held at 1 July 2007 Purchases Sales Held at 30 June 2008 (i) Directors Mark Ashley 16,250,000 550,000 – 16,800,000 Mark Bennett 1,450,000 22,471 – 1,472,471 Glenn Jardine 2,215,000 100,000 – 2,315,000 Kim Robinson 5,000,000 800,000 – 5,800,000 Stephen John Lowe 171,201 – – 171,201
(ii) Key Executives For personal use only use personal For Graham Anderson (i) 85,001 50,000 – 135,001 Grant Brock – 60,000 – 60,000 Anna Neuling – 5,000 – 5,000 William Dix 840,000 – – 840,000 (i) These shares were purchased in October 2005 and this disclosure was omitted from the figures in year ending for 30 June 2006 and 30 June 2007.
Apex Minerals NL 78 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 28. DIRECTOR AND EXECUTIVE DISCLOSURES continued (d) Shareholdings of Directors and Key Executives continued
Options Held at 1 July 2007 Granted Exercised Held at 30 June 2008 (i) Directors Mark Ashley 2,000,000 500,000 – 2,500,000 Mark Bennett 2,000,000 850,000 – 2,850,000 Glenn Jardine 1,500,000 1,350,000 – 2,850,000 Kim Robinson 1,000,000 300,000 – 1,300,000 Stephen John Lowe 500,000 300,000 – 800,000 (ii) Key Executives Graham Anderson 200,000 – – 200,000 Grant Brock – 500,000 – 500,000 Anna Neuling – 240,000 – 240,000 William Dix 1,400,000 40,000 – 1,440,000
Fully Paid Ordinary Shares Held at 1 July 2006 Purchases Sales Held at 30 June 2007 (i) Directors Mark Ashley 16,000,000 250,000 – 16,250,000 Mark Bennett 1,400,000 50,000 – 1,450,000 Glenn Jardine 215,000 2,000,000 – 2,215,000 Kim Robinson 4,800,000 200,000 – 5,000,000 Stephen John Lowe 171,201 – – 171,201 (ii) Key Executives Graham Anderson 85,001 – – 85,001
Options Held at 1 July 2006 Granted Exercised Held at 30 June 2007 (i) Directors Mark Ashley – 2,000,000 – 2,000,000 Mark Bennett – 2,000,000 – 2,000,000 Glenn Jardine – 1,500,000 – 1,500,000 Kim Robinson – 1,000,000 – 1,000,000 Stephen John Lowe – 500,000 – 500,000 (ii) Key Executives Graham Anderson – 200,000 – 200,000 William Dix – 1,400,000 – 1,400,000
(e) Other transactions of Directors and Director-Related entities During the year the Company paid taxation and business consulting fees of $34,000 excluding GST to MKT at normal professional rates an accounting firm of which S J Lowe is a non-executive director.
For personal use only use personal For Aggregate amounts of each of the above types of transactions with Directors and their Director-related entities are included in Directors’ remuneration disclosed above.
Annual Report 08 79 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 28. DIRECTOR AND EXECUTIVE DISCLOSURES continued (f) Remuneration Practices Remuneration and other terms of employment of executives, including executive directors, are reviewed periodically by the Board having regard to performance, relevant comparative information and, where necessary, independent expert advice. Remuneration packages are set at levels that are intended to attract and retain executives capable of managing the Company’s operations. The terms of engagement and remuneration of executive directors is reviewed periodically by the Board, with recommendations being made by the non-executive director. Where the remuneration of a particular executive director is to be considered, the director concerned does not participate in the discussion or decision-making. The policy of the Company is to pay remuneration of directors and senior executives in cash and in amounts in line with employment market conditions relevant in the mining industry. Minor amounts of employee fringe benefits in the form of employee meals and entertainment are provided as a part of the executives’ way of conducting business. The Company’s performance, and hence that of its directors and executives, is measured in terms of: (i) Company share price growth; (ii) Cash raised; (iii) Exploration carried out; and (iv) Farm-in expenditure attracted. Upon retirement no benefits will be paid to specified directors and executives.
NOTE 29. SHARE BASED PAYMENTS Each share option converts into one ordinary share of Apex Minerals NL on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends or voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. The following share-based payments arrangements were in existence during the current and comparative reporting periods:
Exercise Fair value at Options Series Number Grant Date Expiry date Price $ Grant Date $ (1) Issued 20 July 2006 6,000,000 22/06/2006 20/07/2011 0.14 0.23 (2) Issued 20 July 2006 350,000 24/04/2006 20/07/2011 0.14 0.24 (3) Issued 20 July 2006 1,000,000 7/05/2006 20/07/2011 0.14 0.23 (4) Issued 20 July 2006 350,000 29/05/2006 20/07/2011 0.14 0.22 (5) Issued 18 August 2006 250,000 18/08/2006 17/08/2011 0.30 0.10 (6) Issued 15 September 2006 250,000 4/09/2006 14/09/2011 0.35 0.26 (7) Issued 1 November 2006 1,500,000 13/10/2006 1/11/2011 0.35 0.23 (8) Issued 15 November 2006 75,000 20/11/2006 30/11/2011 0.45 0.14 (9) Issued 15 November 2006 100,000 1/09/2006 30/11/2011 0.45 0.14 (10) Issued 23 January 2007 20,000 23/01/2007 12/01/2012 0.45 0.18 (11) Issued 1 June 2007 2,875,000 1/06/2007 1/06/2012 0.65 0.34 (12) Issued 18 July 2007 2,600,000 18/07/2008 1/06/2012 0.65 0.76 (13) Issued 31 July 2007 2,050,000 31/07/2007 30/07/2012 1.00 0.72
(14) Issued 16 October 2007 350,000 16/10/2007 15/10/2012 1.30 0.85 For personal use only use personal For (15) Issued 31 October 2007 200,000 31/10/2007 30/10/2017 1.30 0.83 (16) Issued 12 November 2007 350,000 12/11/2007 11/11/2012 1.30 0.78 (17) Issued 11 January 2008 50,000 11/01/2008 10/01/2013 1.60 0.84 (18) Issued 28 April 2008 700,000 28/04/2008 27/04/2013 1.30 0.49 (19) Issued 12 May 2008 1,911,000 12/05/2008 11/05/2013 1.30 0.45 (20) Issued 20 June 2008 600,000 20/06/2008 19/06/2013 1.30 0.30
Apex Minerals NL 80 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 29. SHARE BASED PAYMENTS continued All of the options above vest two years after the date of issue with the exception of 500,000 options in series 7 which vested immediately. The options are expensed over the two year vesting period and there is $3,340,000 to be expensed in the year ended 30 June 2009 and $827,000 in the year ended 30 June 2010. The 500,000 options which vested immediately were issued to a consultant were valued at $24,725 as the value of the service provided. The weighted average fair value of the share options granted during the financial year is $0.41 (2007 $0.23). Options were priced using a Black Scholes option pricing model using the inputs below.
Series 1 Series 2 Series 3 Series 4 Series 5 Series 6 Series 7 Series 8 Series 9 Series 10 Grant Date Share price 0.30 0.31 0.30 0.29 0.27 0.40 0.36 0.36 0.35 0.32 Exercise Price 0.14 0.14 0.14 0.14 0.30 0.35 0.35 0.45 0.45 0.40 Expected volatility 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% Option life 20/07/2011 20/07/2011 20/07/2011 20/07/2011 17/08/2011 14/09/2011 1/11/2011 30/11/2011 30/11/2011 12/01/2012 Dividend yield 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Interest rate 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50%
Series 11 Series 12 Series 13 Series 14 Series 15 Series 16 Series 17 Series 18 Series 19 Series 20 Grant Date Share price 0.56 1.06 1.10 1.33 1.30 1.24 1.38 0.88 0.83 0.62 Exercise Price 0.65 0.65 1.00 1.30 1.3 1.30 1.60 1.30 1.30 1.30 Expected volatility 70% 70% 70% 70% 70% 70% 70% 70% 70% 70% Option life 1/06/2012 1/06/2012 30/07/2012 15/10/2012 30/10/2012 12/11/2012 11/01/2013 27/04/2013 11/05/2013 19/06/2013 Dividend yield 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Interest rate 6.50% 6.28% 6.27% 6.50% 6.50% 6.50% 6.75% 7.25% 7.25% 7.25%
The following reconciles the outstanding share options granted to employees and directors at the beginning and the end of the financial year: 2008 2007 Weighted Weighted Number average Number average of Options exercise price of Options exercise price Balance at the beginning of the financial year 12,270,000 0.29 – – Granted during the financial year 8,811,000 1.04 (12,770,000) 0.29 Exercised during the financial year (i) – – (500,000) 0.14 Cancelled during the financial year (ii) (145,000) 1.05 – – Expired during the financial year – – – – Balance at the end of the financial year 20,936,000 0.60 12,270,000 0.29
Exercisable at end of the financial year 500,000 0.35 500,000 0.35 (i) Exercised during the year No options were exercised in the year. (ii) Cancelled during the year Options cancelled in the year was 145,000 at a weighted average exercise price of $1.05.
For personal use only use personal For These options were cancelled due to employees leaving the Company before the vesting date.
Annual Report 08 81 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 30. INTEREST IN JOINT VENTURES The Company has entered into unincorporated joint ventures where the joint venturer may earn its interest in mining and exploration tenements held by the Company, as set out in the various agreements. The joint ventures agreements are listed as follows: Apex Minerals NL – Windimurra Resources Pty Ltd Farm-In and Joint Venture Agreement Apex Minerals NL – Bernfried Gunter Franz Wasse Farm-In and Joint Venture Agreement Apex Minerals NL – Tyson Resources Pty Ltd/ Wedgetail Resources Pty Ltd Sale and Joint Venture Agreement Apex Minerals NL – Mark Gareth Creasy Deed Apex Minerals NL – Mark Gareth Creasy 33.3% – Bruce Legendre (33.3%) – Voermans Geological Services Pty Ltd (33.3%) Farm-In and Joint Venture Agreement Apex Minerals NL – Maximus Resources Ltd Farm-In and Joint Venture Agreement Apex Minerals NL – Abra Mining Farm-In and Joint Venture Agreement Apex Gold Pty Ltd – Dalrymple Resources, Ajava Farm in and Joint Venture Agreement Apex Nickel Pty Ltd – Forsayth NL – Plutonic Operations, Lawlers Joint Venture Agreement (I) Apex Nickel Pty Ltd – Forsayth NL – Plutonic Operations, Lawlers Joint Venture Agreement (II) Apex Minerals NL – Abra Mining Farm-In and Joint Venture Agreement Goldcrest Mines Ltd – Snowpeak Nominees, Agreement for sale and Joint Venture for the Snowpeak Tenements W.A. Hampton Hill Mining – Apollo Mining – Apex Minerals, Letter Agreement Earn-in and Joint Venture Apollo Hill.
NOTE 31. INVESTMENT IN CONTROLLED ENTITIES Details of investments in the ordinary share capital of controlled entities is as follows: Cost of Parent Name of Entity Equity Holding entity’s Investment 2008 2007 2008 2007 % % $’000 $’000 Parent Entity Apex Minerals NL (Incorporated Australia) (i) – – – – Controlled Entities Apex Xinjiang NL (Incorporated Australia) (ii) 100 100 727 727 Apex Nickel Australia Pty Ltd (Incorporated Australia) (ii) 100 100 – – Apex Gold Pty Ltd (Incorporated Australia) (ii)(iii) 100 100 514 – Sonax Investment Pty Ltd (Incorporated Australia) (ii) 100 100 – – Apex Greenstone Mountain Pty Ltd (Incorporated Australia) (ii) 100 100 – – 1,241 727 Subsidiaries of Apex Xinjiang NL Apex Copper Mountain Pty Ltd (Incorporated Australia) (ii) 100 100 – – Subsidiaries of Apex Gold Pty Ltd Goldcrest Mines Pty Ltd 100 – 2,481 – Subsidiaries of Goldcrest Mines Pty Ltd Youanmi Mines Pty Ltd 100 – – – (i) Apex Minerals NL is the head entity within the tax consolidated group. (ii) These companies are members of the tax-consolidated group.
(iii) The change in the year is due to the options issued by Apex Minerals NL to Apex Gold Pty Ltd employees. For personal use only use personal For
NOTE 32. PLACE OF INCORPORATION The Company and all subsidiaries are domiciled and incorporated in Australia. The principal place of business for the Company and the Group is Western Australia.
Apex Minerals NL 82 Notes to and forming part of the Financial Statements for the year ended 30 June 2008
NOTE 33. RELATED PARTIES Apex Minerals NL provides working capital to its controlled entities. Transactions between Apex Mineral NL and other controlled entities in the wholly owned Group during the year ended 30 June 2008 consisted of: (i) Working capital advanced by Apex Minerals NL; (ii) Provision of management and other services by Apex Minerals NL; (iii) Expenses paid by Apex Minerals NL on behalf of its controlled entities, and (iv) Cash received by Apex Minerals NL on behalf of subsidiaries with no bank accounts. The above transactions were made interest free with no fixed terms for the repayment of principal on the working capital advanced. At balance date amounts receivable from controlled entities totalled $114,831,721 (2007 $4,220,655) and the amounts payable to controlled entities was $413,394 (2007 $429,089).
NOTE 34. SUBSEQUENT EVENTS On 7 July 2008, an announcement was made on the ASX that the Company was to be a substantial holder in Empire Resources Ltd. A total of 5,000,000 shares were purchased at 17 cents each and the Company also entered into a signed Memorandum of Understanding thus giving the right to the Company nominate a representative to join the Empire Board of Directors. On 18 July 2008, it was released to the ASX that the Company had appointed Todd Bennett to the Board as a Non-Executive Director. On 3 August 2008, two partly paid shareholders had fully paid the remainder of their shares totalling $120,940 (605,000 shares at $0.1999). The total number of partly paid shares remaining is 19,125,000. On 29 September 2008, the Group raised $58,500,000 gross of costs through the issue of Notes, GUP Notes and Unsecured Warrants to investors. The Notes have a coupon of 11.25% and a 3 year term. The GUP Notes are based on a floor price as at the date of issue and are for 500,000 units. The Warrants are exercisable at 33.5 cents and expire after 5 years.
More details of the issue are contained in the Offering Circular lodged with the ASX. For personal use only use personal For
Annual Report 08 83 Corporate Governance Statement
The Board of Directors is responsible for corporate governance The Board currently has 6 directors being Mark Ashley, of the Company and its controlled entities (‘Group’ and Mark Bennett, Glenn Jardine, Kim Robinson, Stephen Lowe, ‘Company’). The Board considers good corporate governance Todd Bennett. The Company has a Managing Director, Mark a matter of high importance and aims for best practice in the Ashley, who is a shareholder of the Company. Mr Ashley’s area of corporate governance. This section describes the main appointment as Managing Director is based on his strong corporate governance practices of the Company. understanding and experience in the mining industry. His role is strongly supported by the presence of the other 5 directors In reviewing the corporate governance structure of Apex, and their strength, abilities and knowledge of the Company the Board have reviewed and considered the ASX Corporate and mining industry. The Board believes that the benefits Governance Council’s recommendations. Comment is made of these attributes have a greater impact on the Company’s where key principles are not followed due to the size and performance at this stage in its development. nature of Apex. Under ASX guidelines none of the current Board is considered Board responsibilities to be independent directors. The Board is satisfied that The Board’s key responsibilities are: the structure of the Board is appropriate for the size of the Company and the nature of its operations and is a cost • oversight of the operation of the Group including effective structure for managing the Company. establishing, reviewing and changing corporate strategies; The Company facilitates and pays for directors and Board • ensuring that appropriate internal control, reporting, risk committee members to obtain professional independent management and compliance frameworks are in place; advice if they require it. • appointing, removing, reviewing and monitoring the performance of the Managing Director to whom the Board Code of Conduct have delegated the day to day management of the Group; The Company has a Code of Conduct as well as a number of internal policies and operating procedures aimed at providing • approval of the annual report (including the accounts), guidance to directors, senior management and employees on the budget and the business plan of the Group; the standards of personal and corporate behaviour required • regular (at present at least monthly) review of the Group’s of all Apex personnel. performance against the budget and the business plan; The Code of Conduct covers specific issues such as trading in • approving material contractual arrangements including Company securities by Directors, officers and employees and all major investments and strategic commitments; also provides guidance on how to deal with business issues in • making decisions concerning the Group’s capital structure, a manner that is consistent with the Company’s responsibilities the issue of any new securities and the dividend policy; to its shareholders.
• establishing and monitoring appropriate committees Audit and Corporate Governance Committee of the Board; The Board has an Audit and Corporate Governance Committee • reporting to shareholders; and which consists of the 6 directors on the Board. The Committee members are responsible for ensuring: • ensuring the Company’s compliance with all legal requirements including the ASX Listing Rules. • the system of internal control which management has established effectively safeguards the assets of the Structure of Board economic entity; The Company currently has 6 directors on the Board. A director • accounting records are properly maintained in accordance may be appointed by resolution passed at a general meeting with statutory requirements; or, in the case of casual vacancies, by the directors. • financial information provided to shareholders is accurate Potential additions to the Board are carefully considered by the and reliable; and Board prior to being nominated to shareholders or appointed • the external audit function is effective.
For personal use only use personal For as casual vacancies. The Company has a Remuneration Committee which consists The Committee is responsible for the appointment of the of the 6 directors on the Board. external auditor and ensures that the incumbent firm (and the responsible service team) has suitable qualifications and The skills, experience, expertise and period of office of each of experience to conduct an effective audit. the directors are set out in the Board and Management Section of the Annual Report. The external audit partner will be required to rotate every five balance dates in accordance with Clerp 9 requirements.
Apex Minerals NL 84 Corporate Governance Statement continued
The Committee meets to review the half-year and annual the security of its premises and the appropriate provisioning results of the Group, and to review the audit process, and of insurance policies. those representations made by management in support In addition, the Board regularly provides specific advice or of monitoring the Group’s commitment to integrity in recommendations to the Board regarding the existence and financial reporting. status of business risks that the Company faces. Disclosure Performance and remuneration The Company’s policy is that shareholders are informed of The Remuneration Committee monitors and reviews all major developments that impact on the Company. The the performance of the Managing Director as well as the Company treats its continuous disclosure obligations seriously performance of management. The Remuneration Committee and has a number of internal operating policies and principles receives regular updates of the performance of the Group as (including the Code of Conduct referred to above) that are a whole. The Remuneration Committee also has responsibility designed to promote responsible decision-making and for ensuring that the Company: timely and balanced disclosure. • has coherent remuneration policies and practices to attract The Board is ultimately responsible for ensuring compliance and retain executives and directors who will create value by senior management and employees of the Company for shareholders; with the Company policies and therefore requires that senior management and employees have an up to date • observes those remuneration policies and practices; and understanding of ASX listing requirements. • fairly and responsibly rewards executives having regard The Company also ensures that the directors and senior to the performance of the Group, the performance of the management obtain timely and appropriate external advice executives and the general pay environment. where necessary. The Remuneration Committee receives external assistance The Company currently places all relevant announcements and advice to assist it in determining appropriate levels of made to the market including all past annual reports together remuneration for the directors of the Company. with related information on its website: www.apexminerals.com Remuneration details of each of the directors and senior Additionally, the Company ensures that its external auditor management are set out in the Financial Report. is represented at the annual general meeting to answer shareholder questions about the conduct of the audit and ASX Core Principles of Corporate Governance the preparation of the auditor’s report. and ASX Guidelines Australian Stock Exchange Ltd (ASX) has published 10 core Business risk management principles of corporate governance which it believes underlie The Company endeavours at all times to minimise and good corporate governance together with guidelines to effectively manage risk. The Board reviews the control systems satisfy those core principles. Under ASX listing rules, listed and policies of the Company in relation to risk management on companies are required to provide a statement in their annual an ongoing basis and maintains a diagrammatic representation reports outlining the extent to which they have followed these of the key operating and control systems of the company. best practice guidelines. In the following table the ASX core principles and guidelines are listed in the left hand column, The Board reviews key matters of business risk management and the Company’s comment/response is listed in the right and ensures appropriate measures are in place to protect the hand column.
assets of the Company including the security of its software, For personal use only use personal For
Annual Report 08 85 Corporate Governance Statement continued
ASX Principle 1: Lay Solid Foundations Comment/Response by Company Recognise and publish the respective roles and responsibilities of the board and management ASX Recommendations The Board is comprised of a Non-Executive Chairman, Managing 1.1 Formalise and disclose the functions reserved to the Board Director, Exploration Director, Operations Director and two Non and those delegated to management Executive Directors. Management of the Company is carried out by the Managing Director with the support from the other directors. The full board meets on a regular basis for both management and board meetings. ASX Principle 2: Board Structure Comment/Response by Company Have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties ASX Recommendations None of the six directors are independent in accordance to 2.1 A majority of Board members should be independent the ASX definition. In view of the size of the Company and directors the nature of its activities the Board considers that the current Board is a cost effective and practical method of directing and managing the Company. 2.2 The chairperson should be an independent director As stated above the chairman is not considered independent under the ASX definition. The Company is satisfied the current Board structure is appropriate for the size of the Company and the nature of its activities. 2.3 The roles of chairperson and chief executive officer should Since April 2006, the roles of chairman and chief executive officer not be exercised by the same individual have been separated. 2.4 The Board should establish a nomination committee In view of the size of the Company and the nature of its activities, the nomination of new Directors and the setting, or review, of remuneration levels of Directors and senior executives are reviewed by the Board as a whole and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest). 2.5 The information indicated in Guide to reporting on Not applicable. Principle 2 should be provided. (See Guide Notes at end of table) ASX Principle 3: Ethical and responsible decision-making Comment/Response by Company Actively promote ethical and responsible decision-making ASX Recommendations Apex has a Code of Conduct as well as a number of internal 3.1 The Company should establish a code of conduct policies and operating procedures aimed at providing guidance to guide the directors, the chief executive officer (or to directors and employees on the standards of personal and equivalent), the chief financial officer (or equivalent) and corporate behaviour required of all Apex personnel. any other key executives as to the practices necessary to maintain confidence in the company’s integrity, and the responsibility and accountability of individuals for reporting or investigating reports of unethical practices
For personal use only use personal For 3.2 Disclose the policy concerning trading in company The Code of Conduct covers specific issues such as trading in securities by directors, officers and employees Company securities by Directors, officers and employees and also provides guidance on how to deal with business issues in a manner that is consistent with the Company’s responsibilities to its shareholders. 3.3 Provide the information indicated in Guide to Reporting on Not applicable – see above. Principles. (See Guide Notes at end of table)
Apex Minerals NL 86 Corporate Governance Statement continued
ASX Principle 4: Financial reporting integrity Comment/Response by Company Have a structure in place to independently verify and safeguard the integrity of the company’s financial reporting ASX Recommendations The Managing Director and Chief Financial Officer are required 4.1 Require the chief executive officer (or equivalent) and the to sign a declaration addressing the integrity of the financial chief financial officer (or equivalent) to state in writing to statements and maintenance of financial records in accordance the Board that the company’s financial reports present a with s286 of the Corporations Act. true and fair view, in all material respects, of the company’s financial condition and operational results and are in accordance with relevant accounting standards 4.2 The Board should establish an audit committee An Audit & Corporate Governance Committee was established in the 2007 year. Accordingly audit matters are reviewed by the Committee as a whole and approved by resolution of the Committee (with abstentions from relevant Directors where there is a conflict of interest). 4.3 Structure the audit committee so that it consists of: The Audit and Corporate Governance Committee consists of all – Only non-executive directors six members of the Board. In view of the size of the Company – A majority of independent directors and the nature of its activities, this is felt to be appropriate. – An independent chairperson who is not the chairperson of the Board – At least three members 4.4 Create a formal operating charter for the audit committee The Audit & Corporate Governance Committee Charter is available on the Company website. 4.5 Understand and provide the information indicated in the See above. Guide to reporting on Principle 4. (See Guide Notes at end of table) ASX Principle 5: Timely and balanced disclosure Comment/Response by Company Promote timely and balanced disclosure of all material matters concerning the company ASX Recommendations Due to its size and structure the Board is able to meet on 5.1 Establish written policies and procedures designed to a regular basis for both management and board meetings ensure compliance with ASX Listing Rule disclosure to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior requirements. The full Board is accountable for ASX compliance. management level for that compliance 5.2 Understand and provide the information indicated in the See above. Guide to Reporting on Principle 5. (See Guide Notes at end of table) ASX Principle 6: Shareholder rights Comment/Response by Company Respect the rights of shareholders and facilitate the effective exercise of those rights ASX Recommendations See the section on Communication to Market and Shareholders. 6.1 Design and disclose a communications strategy to promote
For personal use only use personal For effective communication with shareholders and encourage effective participation at general meetings 6.2 Request the external auditor to attend the annual general It is Company policy that the auditor attends the AGM and meeting and be available to answer shareholder questions part of the agenda is the tabling of the accounts and inviting about the audit and the preparation and content, of the shareholders to ask the directors or the auditor any questions auditor’s report about the report including the audit report.
Annual Report 08 87 Corporate Governance Statement continued
ASX Principle 7: Risk Management Comment/Response by Company Establish a sound system of risk oversight and management and internal control ASX Recommendations The Audit and Corporate Governance Committee consists of 7.1 The Board or appropriate board committee should all six members of the Board and includes risk management in establish policies on risk oversight and management its’ charter. Accordingly risk oversight and management issues and policies are reviewed by the Committee and approved by resolution of the Committee (with abstentions from relevant Directors where there is a conflict of interest). 7.2 The chief executive officer (or equivalent) and the chief financial officer (or equivalent) should state to the Board in writing that: 7.2.1 the statement given in accordance with best practice The Managing Director and Chief Financial Officer are required recommendation 4.1 (the integrity of financial to sign a declaration addressing the integrity of the financial statements) is founded on a sound system of risk statements and maintenance of financial records in accordance management and internal compliance and control with s286 of the Corporations Act. which implements the polices adopted by the Board 7.2.2 the company’s risk management and internal As above compliance and control system is operating efficiently and effectively in all material respects 7.3 Information indicated in the Guide to Reporting on Not applicable for reasons stated above Principle 7 should be understood and provided. (See Guide Notes at end of table) ASX Principle 8: Enhanced Performance Comment/Response by Company Fairly review and actively encourage enhanced board and management effectiveness ASX Recommendations Due to the size and structure of the Board a formal evaluation 8.1 Disclose the process for performance evaluation of the process is not conducted. Board, its committees and individual directors, and key The company uses consultants for geological and company executives secretarial functions and pays market rates for experienced
professionals. For personal use only use personal For
Apex Minerals NL 88 Corporate Governance Statement continued
ASX Principle 9: Remunerate fairly Comment/Response by Company Ensure that the level and composition of remuneration is sufficient and reasonable and its relationship to corporate and individual performance is defined ASX Recommendations The company does not have a remuneration policy other than 9.1 Provide disclosure in relation to the company’s to ensure that Directors, staff and consultants are paid market remuneration policies to enable investors to understand rates in accordance with their qualifications, experience and (i) the costs and benefits of these policies and (ii) the link contribution to the company. Directors’ remuneration for both between remuneration paid to directors and key executives executive and non executive directors is compared to other and corporate performance. “junior explorers” as a guide to industry rates. There are no schemes of retirement benefits. 9.2 The Board should establish a remuneration committee A Remuneration Committee has been established in the year and consists of all 6 directors. Accordingly remuneration matters are reviewed by the Committee and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest). 9.3 The structure of non-executive directors’ remuneration Remuneration terms of all Executive directors are governed should be clearly distinguished from that of executives by formal contracts. Directors’ fees are paid separately to all Directors. The different types of remuneration including consulting fees and directors’ fees are all clearly outlined in the Annual Report. 9.4 Ensure equity-based executive remuneration is made All Directors, executives and staff equity-based remuneration has in accordance with thresholds set in plans approved been made only in accordance with shareholder resolution. by shareholders 9.5 Ensure information indicated in ASX Guide to Reporting See above on Principle 9 is understood and provided. (See Guide Notes at end of table) ASX Principle 10: Interest of Stakeholders Comment/Response by Company Recognise the legal and other obligations of all legitimate stakeholders ASX Recommendations In view of the size of the Company and the nature of its activities, 10.1 Establish and disclose a code of conduct to guide the Board has considered that an informal code of conduct is compliance with legal and other obligations to legitimate appropriate to guide executives, management and employees stakeholders in carrying out their duties and responsibilities. There is a formal
Board Code of Conduct in place for the Board. For personal use only use personal For
Annual Report 08 89 Corporate Governance Statement continued
ASX Guide to Reporting on Principles ASX rules requires that the following material should ASX guidelines also recommend that the following material be included in the corporate governance section of the should be made publicly available, ideally by posting it to annual report: the company’s website in a clearly marked corporate governance section: • Principles 1 to 10 inclusive – an explanation of any departure from best practice recommendations 1.1 to 10.1. • Principle 1 – a statement of matters reserved for the board or a summary of the board charter or a statement of • Principle 2 – the skills, experience and expertise relevant to delegated authority to management. the position of director held by each director in office at the date of the annual report. • Principle 2 – A description of the procedure for the selection and appointment of new directors to the board. • Principle 2 – The names of the directors considered by the board to constitute independent directors and the • Principle 2 – The charter of the nomination committee company’s materiality thresholds. or a summary of the role, rights, responsibilities and membership requirements for that committee. • Principle 2 – A statement as to whether there is a procedure agreed by the board for directors to take independent • Principle 2 – The nomination committee’s policy for the professional advice at the expense of the company. appointment of directors. • Principle 2 – The term of office held by each director in • Principle 3 – Any applicable code of conduct or a summary office at the date of the annual report. of its main provisions. This disclosure may be the same as that required under principle 10. • Principle 2 – The names of members of the nomination committee and their attendance at meetings of the • Principle 3 – The trading policy or a summary of its main committee. provisions. • Principle 4 – Details of the names and qualifications of • Principle 4 – The audit committee charter. those appointed to the audit committee, or, where an • Principle 4 – Information on procedures for the selection audit committee has not been formed, those who fulfil and appointment of the external auditor, and for the the functions of an audit committee. rotation of external audit engagement partners. • Principle 4 – The number of meetings of the audit • Principle 5 – A summary of the policies and procedures committee and the names of the attendees. designed to guide compliance with Listing Rule disclosure • Principle 8 – Whether a performance evaluation for the requirements. board and its members has taken place in the reporting • Principle 6 – A description of the arrangements period and how it was conducted. the company has to promote communication with • Principle 9 – Disclosure of the company’s remuneration shareholders. policies referred to in best practice recommendation 9.1 • Principle 7 – A description of the company’s risk and in Box 9.1. management policy and internal compliance and control • Principle 9 – The names of the members of the system. remuneration committee and their attendance at meetings • Principle 8 – A description of the process for performance of the committee. evaluation of the board, its committees and individual • Principle 9 – The existence and terms of any schemes for directors, and key executives. retirement benefits, other than statutory superannuation, • Principle 9 – The charter of the remuneration committee for non-executive directors. or a summary of the role, rights, responsibilities and membership requirements for that committee. • Principle 10 – Any applicable code of conduct or a summary
For personal use only use personal For of its main provisions.
Apex Minerals NL 90 Additional Information continued
DISTRIBUTION OF SHARES AS AT 23 SEPTEMBER 2008
Fully paid Partly paid Distribution of Holdings number of holders number of holders 1 – 1,000 1,264 – 1,001 – 5,000 1,135 – 5,001 – 10,000 471 – 10,001 – 100,000 795 – 100,001 and over 213 3
20 LARGEST SHAREHOLDERS (BY REGISTERED HOLDER) AS AT 23 SEPTEMBER 2008
Fully Paid Shares Rank Holder Shares % 1 HSBC Custody Nominees (Australia) Limited [GSI ECSA] 51,123,565 13.10% 2 National Nominees Limited 48,614,779 12.45% 3 HSBC Custody Nominees (Australia) Limited [A/C 2] 40,753,299 10.44% 4 Mr Mark Gareth Creasy 25,586,830 6.55% 5 Citicorp Nominees Pty Limited 25,359,873 6.50% 6 HSBC Custody Nominees (Australia) Limited 14,231,854 3.65% 7 J P Morgan Nominees Australia Limited 12,248,876 3.14% 8 Yandal Investments Pty Ltd 10,191,118 2.61% 9 ANZ Nominees Limited [Cash Income A/C] 9,642,202 2.47% 10 Oxiana Investments Pty Ltd 9,536,526 2.44% 11 Mark John Ashley & Maureen Sofia Ashley [The Mark Ashley Super Fund] 8,790,000 2.25% 12 Mr Kim Robinson 5,000,000 1.28% 13 Australian Gold Resources Pty Ltd 4,433,690 1.14% 14 Shelay Investments Pty Ltd 4,410,000 1.13% 15 Mr Roderick McKay & Mrs Kathleen McKay 4,020,000 1.03% 16 Lost Ark Nominees Pty Limited [RAS GFAM A/C] 3,745,200 0.96% 17 Mr Mark John Ashley & Mrs Maureen Sofia Ashley [Mark Ashley Super Fund A/C] 3,600,000 0.92% 18 Mr Stephen Stone & Ms Julia Pearl [The West One Super Fund A/C] 3,400,001 0.87% 19 Cogent Nominees Pty Limited [SMP Accounts] 3,266,053 0.84% 20 Merrill Lynch (Australia) Nominees Pty Ltd 2,493,284 0.64%
Partly Paid Shares Holder Shares % Mark Gareth Creasy 11,250,000 58.17% Stephen Stone 4,000,000 20.92%
For personal use only use personal For Stephen Stone [The Pearlstone Account] 4,000,000 20.92%
Annual Report 08 91 Additional Information continued
SUBSTANTIAL SHAREHOLDERS
Fully Paid Shares Holder Shares % Mr Mark G Creasy 40,655,162 11.17% Pelagic Capital Advisors 19,495,000 5.00%
Voting Rights Each shareholder is entitled to receive notice of and attend and vote at general meetings of the Company. At a general meeting, every shareholder present in person or by proxy, representative or attorney will have one vote on a show of hands and on a poll, one vote for each share held. Any shares which are not fully paid shall be entitled to a fraction of a vote equal to that proportion of a vote that the amount paid on the relevant share bears to the total issue price of the share.
DISTRIBUTION OF OPTIONS AS AT 23 SEPTEMBER 2008
Exercise Price – Expiry Date Distribution 20c 14c 30c 35c 20c 35c 45c 40c 65c of holdings 3/07/11 20/07/11 17/08/11 3/09/11 31/05/09 1/11/11 30/11/11 17/01/12 1/06/12 1 – 1,000 0 0 0 0 0 0 0 0 0 1,001 – 5,000 0 0 0 0 0 0 0 0 0 5,001 – 10,000 0 0 0 0 0 0 0 0 0 10,001 – 100,000 0 0 0 0 0 0 2 0 3 10,0001 – over 1 7 1 1 1 1 1 0 12 Total Holders 1 7 1 1 1 1 3 0 15 Total Units 1,500,000 7,200,000 250,000 250,000 300,000 1,500,000 575,000 – 5,475,000
Exercise Price – Expiry Date Distribution $1.00 $1.30 $1.30 $1.30 $1.60 $1.30 $1.30 $1.30 70c of holdings 30/07/12 15/10/12 30/10/12 11/11/12 10/01/13 27/04/13 11/05/13 19/06/13 17/07/13 1 – 1,000 0 0 0 0 0 0 0 0 0 1,001 – 5,000 0 0 0 0 0 0 0 0 0 5,001 – 10,000 0 0 0 0 0 0 0 0 0 10,001 – 100,000 26 3 0 6 1 0 59 1 0 10,0001 – over 2 1 1 0 0 2 0 1 1 Total Holders 28 4 1 6 1 2 59 2 1
Total Units 1,975,000 350,000 200,000 350,000 50,000 700,000 1,911,000 550,000 1,000,000 For personal use only use personal For
Apex Minerals NL 92 Additional Information continued
TENEMENT SCHEDULE as at 23 SEPTEMBER 2008 Tenement Holder or Applicant Status
Tenement Holder or Applicant Status Lawlers 2 (iii) continued M360277 Forsyth NL Granted Boundary Well M360278 Forsyth NL Granted E 360611 Apex Nickel Pty Ltd Granted P361184 Forsyth NL Granted Jillawara (iv) P361190 Forsyth NL Granted E 521413 Creasy – Legendre – Voermans Granted P361191 Forsyth NL Granted E 521970 Apex – Creasy – Legendre – Granted Voermans P361192 Forsyth NL Granted E 521971 Apex – Creasy – Legendre – Granted P361194 Forsyth NL Granted Voermans P361195 Forsyth NL Granted E 521972 Apex – Creasy – Legendre – Granted P361196 Forsyth NL Granted Voermans P361197 Forsyth NL Granted Lawlers (iii) P361208 Forsyth NL Granted M 360273 Forsayth NL Granted P361209 Forsyth NL Granted M 360274 Forsayth NL Granted P361210 Forsyth NL Granted M 360275 Forsayth NL Granted P361211 Forsyth NL Granted M 360276 Forsayth NL Granted P361212 Forsyth NL Granted M 360366 Forsayth NL Application P361213 Forsyth NL Granted M 360391 Forsayth NL Application P361219 Forsyth NL Granted M 360408 Forsayth NL Granted P361185 Forsyth NL Granted M 360443 Forsayth NL Granted P361186 Forsyth NL Granted M 360576 Plutonic Operations Ltd Granted P361187 Forsyth NL Granted M 360577 Plutonic Operations Ltd Granted P361188 Forsyth NL Granted M 360578 Plutonic Operations Ltd Granted P361189 Forsyth NL Granted M 360579 Plutonic Operations Ltd Granted P361193 Forsyth NL Granted M 360622 Forsayth NL Granted P361198 Forsyth NL Granted M 360623 Forsayth NL Granted P361199 Forsyth NL Granted M 360624 Forsayth NL Application P361207 Forsyth NL Granted P 361122 Forsayth NL Granted P361214 Forsyth NL Granted P 361123 Forsayth NL Granted P361215 Forsyth NL Granted P 361124 Forsayth NL Granted P361216 Forsyth NL Granted P 361125 Forsayth NL Granted P361217 Forsyth NL Granted P 361128 Forsayth NL Granted P361218 Forsyth NL Granted P 361232 Forsayth NL Granted P361220 Forsyth NL Granted P 361233 Forsayth NL Granted P361221 Forsyth NL Granted P 361234 Forsayth NL Granted P361138 Forsyth NL Granted P 361235 Forsayth NL Granted P361304 Forsyth NL Granted P 361236 Forsayth NL Granted P361305 Forsyth NL Granted For personal use only use personal For P 361237 Forsayth NL Granted P361306 Forsyth NL Granted P 361238 Forsayth NL Granted P361307 Forsyth NL Granted P 361251 Forsayth NL Granted P361308 Forsyth NL Granted Lawlers 2 (iii) E360156 Forsyth NL Granted M360171 Forsyth NL Granted E360489 Forsyth NL Granted M360172 Forsyth NL Granted M360174 Forsyth NL Granted
Annual Report 08 93 Additional Information continued
Tenement Holder or Applicant Status Tenement Holder or Applicant Status Lawlers 2 (iii) continued Youanmi continued M360314 Forsyth NL Granted P 571197 Goldcrest – Snowpeak Granted M360369 Forsyth NL Application P 571198 Goldcrest – Snowpeak Granted M360380 Forsyth NL Application P 571199 Goldcrest – Snowpeak Granted M360381 Forsyth NL Application P 571200 Goldcrest – Snowpeak Granted M360382 Forsyth NL Application E 570627 Goldcrest – Snowpeak Granted M360384 Forsyth NL Application E 570652 Goldcrest – Snowpeak Granted M360411 Forsyth NL Application Aphrodite (ii) M360442 Forsyth NL Application P 243130 Apex Gold Pty Ltd Granted M360495 Forsyth NL Application M 240662 Apex Gold – Dalrymple Granted M360496 Forsyth NL Application M 240779 Apex Gold Pty Ltd Granted M360635 Forsyth NL Application M 240681 Apex Gold Pty Ltd Application M360636 Forsyth NL Application M 240649 Apex Gold Pty Ltd Application P361545 Forsyth NL Application M 240720 Apex Gold Pty Ltd Granted Youanmi Gidgee E 570578 Goldcrest Mines Pty Ltd (i) Granted E 511144 Apex Gold Pty Ltd Granted E 570627 Goldcrest – Snowpeak Granted E 511145 Apex Gold Pty Ltd Granted E 570652 Goldcrest – Snowpeak Granted E 530957 Apex Gold Pty Ltd Granted E 570653 Goldcrest Mines Pty Ltd (i) Granted E 531215 Apex Gold Pty Ltd Granted E 570707 Goldcrest Mines Pty Ltd (i) Granted E 531216 Apex Gold Pty Ltd Granted M 570010 Youanmi Mines Pty Ltd (i) Granted E 531217 Apex Gold Pty Ltd Granted M 570051 Youanmi Mines Pty Ltd (i) Granted E 531270 Legend Mining Ltd (ii) Granted M 570075 Goldcrest Mines Pty Ltd (i) Granted E 531273 Legend Mining Ltd (ii) Granted M 570097 Goldcrest Mines Pty Ltd (i) Granted E 531396 Apex Gold Pty Ltd Application M 570109 Goldcrest Mines Pty Ltd (i) Granted E 531398 Apex Gold Pty Ltd Application M 570135 Goldcrest Mines Pty Ltd (i) Granted E 570520 Apex Gold Pty Ltd Granted M 570160A Goldcrest Mines Pty Ltd (i) Granted E 570571 Apex Gold Pty Ltd Granted M 570164 Goldcrest Mines Pty Ltd (i) Granted E 570588 Gidgee Resources Ltd (ii) Granted M 570165 Goldcrest Mines Pty Ltd (i) Granted E 570633 Legend Mining Ltd (ii) Granted M 570166 Goldcrest Mines Pty Ltd (i) Granted E 570636 Legend Mining Ltd (ii) Granted M 570167 Goldcrest Mines Pty Ltd (i) Granted E 570676 Legend Mining Ltd (ii) Granted M 570180 Goldcrest Mines Pty Ltd (i) Granted E 570678 Legend Mining Ltd (ii) Granted M 570196 Goldcrest Mines Pty Ltd (i) Granted E 570705 Legend Mining Ltd (ii) Granted M 570245 Goldcrest – Snowpeak Granted E 570755 Apex Gold Pty Ltd Application P 571043 Goldcrest Mines Pty Ltd (i) Granted L 530046 Apex Gold Pty Ltd Granted P 571043 Goldcrest Mines Pty Ltd (i) Granted L 530047 Apex Gold Pty Ltd Granted P 571190 Goldcrest – Snowpeak Granted L 530095 Apex Gold Pty Ltd Granted For personal use only use personal For P 571191 Goldcrest – Snowpeak Granted L 530096 Apex Gold Pty Ltd Granted P 571192 Goldcrest – Snowpeak Granted L 530116 Apex Gold Pty Ltd Granted P 571193 Goldcrest – Snowpeak Granted L 570011 Apex Gold Pty Ltd Granted P 571194 Goldcrest – Snowpeak Granted L 570012 Apex Gold Pty Ltd Granted P 571195 Goldcrest – Snowpeak Granted L 570020 Apex Gold Pty Ltd Granted P 571196 Goldcrest – Snowpeak Granted M 510104 Apex Gold Pty Ltd Granted
Apex Minerals NL 94 Additional Information continued
Tenement Holder or Applicant Status Tenement Holder or Applicant Status Gidgee continued Gidgee continued M 510105 Apex Gold Pty Ltd Granted P 531295 Legend Mining Ltd (ii) Granted M 510157 Apex Gold Pty Ltd Granted P 531296 Legend Mining Ltd (ii) Granted M 510185 Apex Gold Pty Ltd Granted P 531297 Legend Mining Ltd (ii) Granted M 510186 Apex Gold Pty Ltd Granted P 531302 Legend Mining Ltd (ii) Granted M 510290 Apex Gold Pty Ltd Granted P 570971 Legend Mining Ltd (ii) Granted M 510410 Apex Gold Pty Ltd Granted P 571024 Legend Mining Ltd (ii) Granted M 510458 Apex Gold Pty Ltd Granted P 571028 Legend Mining Ltd (ii) Granted M 530010 Apex Gold Pty Ltd Granted P 571050 Kiamora Pty Ltd (ii) Application M 530011 Apex Gold Pty Ltd Granted P 571051 Kiamora Pty Ltd (ii) Application M 530105 Apex Gold Pty Ltd Granted P 571052 Kiamora Pty Ltd (ii) Application M 530153 Apex Gold Pty Ltd Granted P 571053 Kiamora Pty Ltd (ii) Application M 530251 Apex Gold Pty Ltd Granted P 571054 Kiamora Pty Ltd (ii) Application M 530252 Apex Gold Pty Ltd Granted P 571055 Kiamora Pty Ltd (ii) Application M 530500 Apex Gold Pty Ltd Granted P 571059 Kiamora Pty Ltd (ii) Application M 530716 Apex Gold Pty Ltd Granted P 571060 Kiamora Pty Ltd (ii) Application M 530904 Apex Gold Pty Ltd Granted P 571061 Kiamora Pty Ltd (ii) Application M 530988 Apex Gold Pty Ltd Granted P 571062 Kiamora Pty Ltd (ii) Application M 570019 Apex Gold Pty Ltd Granted P 571063 Kiamora Pty Ltd (ii) Application M 570026 Apex Gold Pty Ltd Granted P 571080 Apex Gold Pty Ltd Granted M 570033 Apex Gold Pty Ltd Granted P 571081 Apex Gold Pty Ltd Granted M 570069 Apex Gold Pty Ltd Granted P 571082 Apex Gold Pty Ltd Granted M 570070 Apex Gold Pty Ltd Granted P 571083 Apex Gold Pty Ltd Granted M 570071 Apex Gold Pty Ltd Granted P 571084 Apex Gold Pty Ltd Granted M 570072 Apex Gold Pty Ltd Granted P 571087 Apex Gold Pty Ltd Granted M 570073 Apex Gold Pty Ltd Granted P 571088 Apex Gold Pty Ltd Granted M 570074 Apex Gold Pty Ltd Granted P 571093 Apex Gold Pty Ltd Granted M 570143 Apex Gold Pty Ltd Granted P 571094 Apex Gold Pty Ltd Granted M 570144 Apex Gold Pty Ltd Granted P 571105 Legend Mining Ltd (ii) Granted M 570145 Apex Gold Pty Ltd Granted P 571106 Legend Mining Ltd (ii) Granted M 570146 Apex Gold Pty Ltd Granted P 571123 Legend Mining Ltd (ii) Granted M 570210 Apex Gold Pty Ltd Granted P 571124 Legend Mining Ltd (ii) Granted M 570231 Apex Gold Pty Ltd Granted P 571125 Legend Mining Ltd (ii) Granted M 570236 Apex Gold Pty Ltd Granted P 571213 Legend Mining Ltd (ii) Granted M 570241 Apex Gold Pty Ltd Granted Wiluna M 570242 Apex Gold Pty Ltd Granted L 530020 Apex Gold Pty Ltd Granted M 570250 Apex Gold Pty Ltd Granted L 530021 Apex Gold Pty Ltd Granted For personal use only use personal For M 570251 Apex Gold Pty Ltd Granted L 530022 Apex Gold Pty Ltd Granted M 570291 Legend Mining Ltd (ii) Application L 530023 Apex Gold Pty Ltd Granted M 570292 Apex Gold Pty Ltd Granted L 530024 Apex Gold Pty Ltd Granted M 570349 Apex Gold Pty Ltd Granted L 530032 Apex Gold Pty Ltd Granted M 570375 Apex Gold Pty Ltd Granted L 530033 Apex Gold Pty Ltd Granted P 531269 Legend Mining Ltd (ii) Granted L 530034 Apex Gold Pty Ltd Granted P 531285 Apex Gold Pty Ltd Granted L 530035 Apex Gold Pty Ltd Granted
Annual Report 08 95 Additional Information continued
Tenement Holder or Applicant Status Tenement Holder or Applicant Status Wiluna continued Wiluna continued L 530036 Apex Gold Pty Ltd Granted M 530006 Apex Gold Pty Ltd Granted L 530037 Apex Gold Pty Ltd Granted M 530026 Apex Gold Pty Ltd Granted L 530038 Apex Gold Pty Ltd Granted M 530027 Apex Gold Pty Ltd Granted L 530039 Apex Gold Pty Ltd Granted M 530030 Apex – Jackson Granted L 530040 Apex Gold Pty Ltd Granted M 530032 Apex Gold Pty Ltd Granted L 530041 Apex Gold Pty Ltd Granted M 530040 Apex Gold Pty Ltd Granted L 530042 Apex Gold Pty Ltd Granted M 530043 Apex Gold Pty Ltd Granted L 530043 Apex Gold Pty Ltd Granted M 530044 Apex Gold Pty Ltd Granted L 530044 Apex Gold Pty Ltd Granted M 530050 Apex Gold Pty Ltd Granted L 530045 Apex Gold Pty Ltd Granted M 530064 Apex Gold Pty Ltd Granted L 530048 Apex Gold Pty Ltd Granted M 530069 Apex Gold Pty Ltd Granted L 530050 Apex Gold Pty Ltd Granted M 530071 Apex Gold Pty Ltd Granted L 530062 Apex Gold Pty Ltd Granted M 530095 Apex Gold Pty Ltd Granted L 530077 Apex Gold Pty Ltd Granted M 530096 Apex Gold Pty Ltd Granted L 530094 Apex Gold Pty Ltd Granted M 530173 Apex Gold Pty Ltd Granted L 530097 Apex Gold Pty Ltd Granted M 530200 Apex Gold Pty Ltd Granted L 530098 Apex Gold Pty Ltd Granted M 530205 Apex Gold Pty Ltd Granted L 530103 Apex Gold Pty Ltd Granted M 530468 Apex Gold Pty Ltd Granted L 530144 Apex Gold Pty Ltd Granted M 530797 Oxiana Wiluna Pty Ltd Granted
Key: Apex Apex Minerals NL and its subsidiaries Creasy – Legendre – Voermans Mark Gareth Creasy (33.3%) – Bruce Legendre (33.3%) – Voermans Geological Services Pty Ltd (33.3%). Apex has a 70% beneficial interest in the tenement. Apex – Creasy – Legendre – Voermans Apex Minerals (80%) – Mark Gareth Creasy (6.67%) – Bruce Legendre (6.67%) – Voermans Geological Services Pty Ltd (6.67%) Wiluna – Jackson Wiluna Operations Ltd (98%) – James Murry Jackson (2%). Wiluna Operations Ltd share is being transferred to Apex Gold Pty Ltd following completion. Goldcrest – Snowpeak Goldcrest Mines Pty Ltd (80%) – Snowpeak Nominees Pty Ltd (20%) Oxiana Wiluna Pty Ltd Tenement is owned by Oxiana but Apex has 100% of the gold rights (i) Subsidiary of Apex Minerals NL (ii) In the process of being transferred to Apex Gold Pty Ltd following completion of acquisition. (iii) Apex can earn up to 56% interest in the nickel rights on these tenements. (iv) Apex recently converted its interest to a 10% free carried interest to the completion of
a bankable feasibility study. For personal use only use personal For E Granted Exploration Licence or Exploration Licence Application P Granted Prospecting Licence or Prospecting Licence Application M Granted Mining Licence or Mining Licence Application L Granted Miscellaneous Licence
Apex Minerals NL 96 Annual Report 30 June 2008
www.apexminerals.com.au For personal use only use personal For
Apex Minerals NL ABN 22 098 612 974
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