PERSEVERANCE 2003 ANNUAL REPORT life and gold with output, mining operations sustainable profitability Underground CORPORATE DIRECTORY 2003 ANNUAL REPORT
DIRECTORS John Charles Quinn – Executive Chairman Christopher Linden Roberts - Exploration & Development Rodney John Robinson Robin John George
SECRETARY Martin William Bouwmeester
EXECUTIVE GENERAL MANAGER AUDITORS Graeme John Sloan Ernst & Young 120 Collins Street Melbourne Vic 3000 REGISTERED & CORPORATE OFFICE McCormicks Road Fosterville Vic 3557 BANKERS Telephone: (03) 5439 7244 National Australia Bank Facsimile: (03) 5439 7281 Cnr Queen & Mitchell Streets Email: [email protected] Bendigo Vic 3550 Web Site: www.perseverance.com.au SOLICITORS FOSTERVILLE MINE Clayton Utz McCormicks Road 333 Collins Street Fosterville Vic 3557 Melbourne Vic 3000 Telephone: (03) 5439 7244 Facsimile: (03) 5439 7281 SHARE REGISTRAR Email: [email protected] Computershare Registry Services Central Plaza One 345 Queen Street Brisbane Qld 4000
SECURITIES QUOTED Australian Stock Exchange Limited Home Exchange - Melbourne ASX Code - PSV Underground mining CONTENTS PERSEVERANCE 2003ANNUAL REPORT Printed on100%Recycled Paper 13010650049 A.B.N. Perseverance CorporationLimitedand itsControlledEntities Shareholder Information Directors’ Declaration Notes totheFinancial Statements ofCashFlows Statement ofFinancialStatement Performance ofFinancialStatement Position Report Independent Audit GovernanceStatement Corporate Directors’ Report Corporate Schedule of Tenements Sustainability andMineralResourcesStatement Ore Reserves Fosterville GoldProject Chairman’s Statement Year aGlance at operations
PERSEVERANCE 2003 ANNUAL REPORT with sustainable gold
output, profitability 47 46 26 25 24 23 21 20 16 13 12 11 8 4 3 2
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YEAR AT A GLANCE
PROJECT FOSTERVILLE GOLD PROJECT DEVELOPMENT IN VICTORIA
PRINCIPAL EXPLORATION ACTIVITIES RESOURCE DRILLING OF THE CENTRAL AREA OF THE FOSTERVILLE MINING LEASE AND FEASIBILITY STUDIES
RESOURCES 1.84 MOZ CENTRAL AREA RESOURCE AT 4.5 G/T AU
MINING RESERVES 0.91 MOZ CENTRAL AREA RESERVE AT 4.7 G/T AU
BANKABLE FEASIBILITY STUDY OUTCOMES INTEGRATED OPEN CUT UNDERGROUND MINE 110,000 OZ PA AVERAGE PRODUCTION 7.5 YEAR INITIAL RESERVE MINE LIFE WITH ADDITIONAL RESOURCES $321/OZ PRODUCTION CASH COSTS STARTUP CAPEX $75M
PROJECT DEVELOPMENTS GOLD FIELDS LIMITED BIOX® PROCESS SELECTED MINING AND TREATMENT STUDIES COMPLETED NEW MINERALISED SHOOTS IDENTIFIED WIDESPREAD SULPHIDE MINERALISED SYSTEM CONFIRMED
FUNDS RAISED $2.2M AUGUST 2002 ON EXERCISE OF OPTIONS $3.7M OCTOBER 2002 BY PLACEMENT
ENVIRONMENT & REHABILITATION COMPREHENSIVE SITE MONITORING WITHOUT ISSUES 40 HECTARES OF LANDFORMING AND PLANTING WITH OVER 16,000 NATIVE PLANTS
OH&S UPGRADED SAFETY PROGRAMME WEEKLY SHARE PRICE 01/07/02 - 30/06/03
SHARE PRICE
DATE
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PERSEVERANCE 2003 ANNUAL REPORT CHAIRMAN’S STATEMENT
Fellow Shareholders, Gold production is expected to average structures within the principal mining As foreshadowed in my Statement last in excess of 110,000 ozs per annum at lease. The remaining 85% of these fault year, your Board raised $3.74M by The year just completed has been one of a weighted average cash cost of $321 structures are geologically similar to the means of a placement of 27.7M ordinary exciting times and significant achievement per ounce over the initial mine life. area tested to date and have for the Company and its shareholders. fully paid shares at 13.5 cents per share We remain very confident that we can comparable gold endowments in the in October 2002. These funds, most of In the first half of the year we completed materially extend resources and mine oxide horizon. It is instructive that which had been expended by the date of an important in-fill drilling programme, life when financial resources permit with recent interrogation of the drilling data this report, were essential to enable the which resulted in a revised high grade obvious benefits to the total cost of gold base generated during the oxide mining Company to maintain the momentum of sulphide resource estimate of 6.05 production per ounce. phase has disclosed tangible evidence the Fosterville Sulphide Project. Funding million tonnes grading 5.9 grams of of high grade sulphide intersections The Board has determined that the remains a priority issue for the Board, gold per tonne containing 1.15 million which have never been followed up Bankable Feasibility Study indicates which is determined to put Perseverance ounces. This resource was published with systematic exploration. We are also that a viable mining operation can be on a sustainable financial footing. in January this year. The in-fill drilling mindful that the Exploration Licence, established at Fosterville and is currently program added 31% to our gold inventory which surrounds the mining lease, has We were fortunate to secure the services engaged in discussions on appropriate without any compromise in grade. similar structures carrying gold in both of Mr Graeme Sloan in December 2002. funding arrangements with prospective the oxide and sulphide horizons. Graeme, a mining engineer with 30 Concurrent with the infill drilling, financiers. years experience, was recruited from we accelerated and extended the It is my personal conviction that Whilst the Company’s financial resources AurionGold where he was General metallurgical testing program with Perseverance has only just scratched did not permit the maintenance of a Manager of the Henty Gold Mine in emphasis on comparing alternative the surface at Fosterville and that an significant exploration program in the Tasmania. He assumed responsibility oxidation processes, which are the adequately funded and persistent second half of the fiscal year, the work for the Company’s feasibility activities cornerstone of refractory ore treatment. exploration program will greatly reward that was possible continues to point to and will lead the proposed Fosterville After detailed analysis, the Company shareholders. decided upon the well proven Gold the potential for Fosterville to become development and mining operations. Fields Limited BIOX® technology. a world class goldfield. The Company has also made notable He has been ably supported by the progress on a number of other fronts in A licence agreement was negotiated We were successful in extending the small but dedicated staff, who continue the last year. The oxide heaps continued entitling Perseverance to use this Phoenix orebody some 400 metres down to deliver quality outcomes with limited to produce small amounts of gold during technology and securing Gold Fields’ plunge from the limits of the January financial resources. the year. The Company discontinued technical support. Resource model. The Phoenix remains cyanide addition in September 2002, but Your Board’s attention is now firmly A Preliminary Feasibility Study of a open down plunge and in time, further continued to irrigate the heaps to flush focussed on securing a financial mine development concept was also drilling will be required to follow this residual reagents and salts from the package which balances the immediate completed in January. This study gave prolific ore zone. Limited initial drilling system. Records suggest that a requirement of financing the proposed sufficient encouragement for your Board has pointed to a new shoot, dubbed the significant amount of gold at low grades Fosterville mine development and our to commit to a full scale Bankable Condor, south of the Daley’s Hill oxide is retained in these heaps and determination to maintain the Feasibility Study, which was completed pit. This area also cries out for more consideration continues to be given as momentum of drill testing this very at the end of August. drilling. to means by which some of this metal important mineral field. Central to our The Bankable Feasibility Study was Within the Central Area, there is might be economically recovered. deliberations is maximising the value predicated on an initial mineable reserve evidence that the Ellesmere ore body of your investment in this Company. Rehabilitation of areas disturbed during of 6.1 million tonnes of ore at a grade of extends for at least 350 metres beyond We anticipate that we will be in a oxide mining operations continued. 4.7 g/t Au containing 910,000 ounces the present resource shell. The Harrier position to elaborate on progress of this Notwithstanding the severe drought of gold. This mineable reserve together Shoot, which is located very close to the essential next stage of your Company’s conditions, we were pleased with the with inferred resources yet to be drilled proposed underground mine portal, is survival and growth rates of the more progress by the time of the Annual to reserve standard, indicates a mine life a priority target and we are optimistic than 16,000 seedlings planted in 2002. General Meeting. approaching ten years. about the Kestrel structure, which lies below the Phoenix shoot and plan to Contracts have now been entered into Sincerely, The Study proposes an integrated open drill this shoot when funds permit. for the disposal of non-core assets and pit and underground mine and treatment we are hopeful that most of these plant capable of extracting and It should be remembered that the contracts will proceed to settlement processing 800,000 tonnes of ore per Company’s drilling program over the last during the last quarter of this year. annum. Start-up capital is estimated at two years has been focused on just 15% $75 million. of the known mineralised fault John C Quinn
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FOSTERVILLE GOLD PROJECT
FUTURE ACTIVITIES • Review of earlier drilling during the target zones. Up to three diamond rigs oxide mining phase outside the were used, operating double shifts to The Fosterville Gold Project provides Central Area, showed multiple shallow complete the work within the period. the basis for the Company’s future sulphide intersections which have yet This drilling comprised infill resource development, with the successful to be systematically explored. completion of the Bankable Feasibility drilling, metallurgical drilling and step Study (BFS). The Company’s current • Initial drilling south of Daley’s Hill, out testing of plunge extensions of strategy involves the following activities: over two kilometres to the south of mineralisation in the Central Area. the Central Area, gave an encouraging The composite long section of the • Optimise the development financing sulphide intersection of 2.0 g/t Au resource model of the Central Area at structure over 23.4 metres, including 2.3 various cutoffs (Figure 1) shows the • Erect and commission the processing metres at 4.86 g/t Au and 2.9 metres extent of the four shoots modelled for Box Iron Bark Rehabilitation 1999 plant at 4.82 g/t Au. the resource. The new resources occur mainly on the Phoenix structure where • Develop the open pit and further drilling has demonstrated a high underground mines Resource Delineation degree of continuity and grade A total of 36,467 metres was drilled • Assess the broader Fosterville consistency (see Figure 2). exploration potential during the year consisting of 16,269 metres of RC pre-collar drilling and The project resources at September 1, • Progressively upscale production and 20,228 metres of diamond core drilling 2003, are detailed in the Ore Reserves mine life in 104 holes. Drilling was carried out and Mineral Resources Statement and using reverse circulation precollars, can be summarised for the Central Area EXPLORATION followed by diamond coring through all as follows - see table below. Following on from the exploration successes of the previous year in the drill testing of deeper mineralisation in the Central Area of the Fosterville lease, Box Iron Bark Rehabilitation 2000 a programme of infill drilling was carried out. This work was aimed at increasing the definition of the mineralisation and raising the resources to the indicated category of resource definition, allowing them to be considered for reserves during mine evaluation and planning. As a result, the resources in the Central Area were Figure 1 Long section view of the Central 2.5km Area of high grade resource and Exploration Targets estimated - see table below. • The Central Area resources based on a 2 g/t Au cut-off grade were raised to 12,820,000 tonnes grading 4.5 g/t Au containing 1,840,000 oz of gold. Box Iron Bark Rehabilitation 2003 In addition a number of other exploration highlights occurred: • The high geological and grade consistency of the Phoenix shoot was demonstrated on a 400 metre, down Figure 2 Grade x width contouring of Central Area ore shoots plunge stepout section, returning up to 5.5 g/t Au over 7m. Summary of Central Area Mineral Resources - September 1 2003
• Large diameter metallurgical core CLASSIFICATION TONNES GRADE G/T AU CONTAINED OZS GOLD drilling into the Phoenix confirmed the resource model and provided some High Grade Resources at 2 g/t Au cut off – Central Area substantially higher grades and Measured 3,480,000 4.0 450,000 thicknesses than those predicted by the resource model. Indicated 6,625,000 4.8 1,030,000 Inferred 2,715,000 4.1 360,000 Total 12,820,000 4.5 1,840,000
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The principal resource estimation for Based upon detailed knowledge of the An initial two drill holes, in a programme the Central Area was carried out by the Phoenix structure from the extensive to commence assessment of the Company, with external input by earlier work, it is expected that broader sulphide potential of the mining independent consultants in structural mineralisation consistent with resources lease, were drilled on Section 4750N. geology, stratigraphy and geostatistics. up plunge will be located by closer These holes were at the south end The resources were audited by spaced drilling within the inferred of the mining lease and intersected independent consultants prior to resources over this new 400m by 200m a shallowly plunging shoot of inclusion as the basis for the Bankable extension of the Phoenix structure. The mineralisation. Hole DALD002 Feasibility Study. This audit confirmed structure remains open down plunge intersected a broad zone of the Company’s methods and estimates. to the south of section 7000N. mineralisation in a sandstone host. The intersection assayed 2.0 g/t Au The Central Area resource model was Large diameter metallurgical holes Robbins Hill Waste Dump Rehabilitation 1999 over 23.4 metres from 129 metres estimated from 977 drill holes. The were drilled across and down dip of the down hole. This intersection included geological consistency and predictability mineralisation, to maximise collection 2.3 metres at 4.86 g/t Au and 2.9 of the Central Area provides a strong of samples and confirm interpretations. metres at 4.82 g/t Au in sheared level of confidence in the resource Intersections at substantially higher stockworked structures. The second model. The bulk of the Central Area grades and thicknesses than those hole, DALD003 intersected resources are classified as measured predicted from the resource model mineralisation of weaker tenor, in a and indicated. The upper 150 metres resulted, notably 25.0m @ 19.52 g/t Au similar setting some 45 metres down of the model is very closely defined on from 233m in Phoenix hole SPD176 dip. This new shoot has been named 25 by 15 metre spaced RC drilling and and 35.0m @ 14.18 g/t Au from 39m ‘Condor’. These intersections establish is classified as measured resource, in Falcon hole SPD185 drilled from the a shallow plunge dimension of this while deeper sections of indicated bottom of the existing oxide open cut. shoot of 150 metres, from the base of resources are drilled on 50 by 50 metre Analysis of the metallurgical drill holes the pit. The shoot remains open down spacing. compared to the resource model plunge. Results from this limited first The resource estimate was calculated generated some expected variability, stage drilling are considered by ordinary Kriging and checked by two however the overall indicated uplift encouraging and will be followed up alternative means, inverse distance in gold content was significant. at a later date. squared and polygonal methodologies. The Company plans to undertake infill All of the ore zones in the Central Area Close correlation was achieved by all drilling prior to the commencement of remain open to further testing and it methods. mining, which will quantify any potential is expected that work on these will upgrade. These resources were estimated at a commence as a priority, for their 2.0g/t Au cut-off based on underground potential to rapidly add to mineable mining costs. Additional resources Assessment of Mining Lease resources close to the project centre may be available for lower cost open Sulphide Potential Figure 3 Previous Shallow Sulphide Intersections of operations. cut mining. In light of the success of exploration A program of compilation and in the Central Area and utilising new Drilling to test the down plunge interpretation is currently being geological information from this area, extensions of the Phoenix shoot on undertaken on several other areas careful geological compilation and data section 7000N demonstrated the within the mining lease. The Robbins review within the Mining Lease away continuity of this structure, adding Hill/O’Dwyers project area produced from the Central Area was commenced. 400m, to give a total length of over over 130,000 ounces of gold from This work confirmed the similarity of 2,000 metres. The geology at this the recent oxide mining, providing the geological setting throughout deepest extent of the Phoenix, 950m a significant indication of gold the lease and the potential of the below surface, was consistent with the mineralisation in an area well outside widespread sulphides encountered higher levels. The first hole SPD 150 the Central Area explored for the throughout the lease beneath oxide intersected 7.0 metres at 5.5 g/t Au. current project. Work is underway open pits (see Figure 3). Compilation While intersections in two other holes to determine priority targets, which of earlier shallow sulphide intersections, on the section below SPD 150 had are anticipated to be drill tested in made during exploration for near narrower high grade sections of 6.94 subsequent years. g/t Au over 1.8m and 5.31 g/t Au over surface oxide mineralisation pre 2001, 1.2m, the three holes indicated assisted in providing a number of mineralisation over a total subvertical targets for later testing. dip extent of 200m.
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Prefeasibility Study Early ore access is provided from Metallurgy existing open pits and mining from Based upon a resource upgrade for the The processing plant uses conventional these pits allows the steady ramp up Central Area, announced in December processing techniques and equipment. of underground mining to follow. 2002, a Prefeasibility Study completed Ore will be crushed in a single stage in January 2003 indicated that the Underground mining commences at jaw crusher followed by grinding in a Fosterville Gold Project resources could relatively shallow depths below the semi-autogenous mill (see Figure 4). be profitably mined and treated, leading open pits. An underground portal site The ground product will then be to a decision for a detailed BFS to be was chosen in an existing oxide open processed by froth flotation to produce undertaken. pit at the south end of the Central Area. a concentrate. Concentration rejects This decision followed consideration of 90% of the ore while recovering Robbins Hill Waste Dump Rehabilitation 2003 Bankable Feasibility Study alternative sites, with a view to 96-99% of the gold. The concentrate The BFS carried out during the latter simplifying decline layout, providing will be oxidised to liberate the gold half of the year was released on easier access to the Ellesmere and from the sulphide matrix and will then September 1, 2003. Harrier Shoots and minimising surface be processed through a CIL circuit to haulage and double handling. Initial recover the gold. Overall gold recovery The main features of this study are: surface and underground mine design from the plant is expected to be over • An integrated open pit and low cost and production schedules have been 90% . underground mining operation at completed with allowances for all Extensive metallurgical testwork for 800,000 tpa. surface mining and the initial 2 year both bulk representativity and specific • +110,000 ozs Au pa output over an underground development to be mineralisation variability has given initial 7.5 year mine life based solely undertaken by mining contractors. consistently good results with no on mineable reserves. Resources Mine design underground takes full significant variations with depth or ore beyond the mineable reserve limits advantage of the generally good ground shoot. The gold predominantly occurs are expected to expand mine life to conditions, by utilising low cost, high in arsenopyrite and the concentrates 10 years. productivity mechanised mining Long oxidise readily and rapidly. • Contract signed with Gold Fields Hole Open Stoping (LHOS) and Avoca In the course of evaluation of alternative Limited for use of BIOX® processing Stoping will be the principal mining oxidation processes and to assist in the technology after extensive methods. Results of the geotechnical consideration of construction and comparisons of alternative processes. analysis indicate that for LHOS, spans operating factors, visits were made • Cash costs of operation of $321/oz. of up to 55m high by 25m long and by senior company staff to BIOX® 20m wide can be used and for Avoca operations at Ashanti in Ghana and • Capital costs of $75M including Stopes, spans of up to 30m high by Wiluna in Western Australia and also to Figure 4 Process Plant Flowsheet processing plant, infrastructure, 50m long are achievable with widths the Porgera Pressure Leach operation open pit prestrip and early of 8-12m. in Papua New Guinea. underground mine development. The decline has been designed with an Mining Engineering opening dimension of 5m by 5.5m, to allow use of large 50t trucks, to reduce Mining engineering studies were haulage costs and maximise undertaken by consultants BFP efficiencies. Consultants Pty Limited, focusing initially on optimising open pits and Based on the economics and designs determining the cross over economics established, the total mineable reserves between open pit and underground estimated within the resources is shown mining. in the table below. Reserves - Central Area
CLASSIFICATION TONNES GRADE G/T AU CONTAINED GOLD OZS Proved and Probable Open Cut 1,748,000 3.9 219,000 Underground 4,348,000 4.9 691,000 Total 6,096,000 4.7 910,000
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After extensive analysis, the Company Costs for the project are strongly selected the Gold Fields Limited influenced by the existing local and patented BIOX® technology for the regional infrastructure in Victoria and oxidation section of the flow sheet. the presence of a skilled local BIOX® is a proven technology which workforce and suppliers. has been in commercial application for The State Government confirmed that 16 years. The Company conducted no additional Environmental Effects extensive testwork on its mineralisation, Statements (EES) would be required for which appears to be particularly well the proposed Fosterville Gold Project suited to oxidation via the BIOX® development. process. Discussions with State and Local The Company entered into a Licence Government and the Bendigo water Agreement with the relevant Gold Fields authority on access to treated effluent subsidiary for the use of this technology. and infrastructure issues were This Agreement requires Gold Fields to advanced. supply a process design package for the BIOX® circuit based on the results Discussions continued with prospective of test work on Fosterville ore, to audit financiers to the development. the detailed engineering of the BIOX® circuit, to supervise construction and to undertake commissioning of the circuit and training of Perseverance staff. Gold Fields also provide a guarantee of the BIOX® section performance. Pursuant to the Licence Agreement, Gold Fields provided the process design package to the Company’s engineering contractor, Lycopodium, who incorporated this section into the overall plant design. Plant layout and engineering design were completed utilising the Gold Fields package and metallurgical testwork results and vendor quotations on plant components. (See Figure 5)
Other Studies URS consultants carried out studies including noise, water, over burden heaps and residue facilities. No significant issues emerged. Cullen Mining Services as Project Managers developed detailed capital and operating cost estimates from vendor quotations for the BFS. Figure 5 Operating costs have been estimated at $321 per ounce.
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ORE RESERVES AND MINERAL RESOURCES STATEMENT
Mineral Resources at September 1, 2003 - Resources include Reserves
MEASURED INDICATED INFERRED TOTAL TONNES GRADE TONNES GRADE TONNES GRADE TONNES GRADE GOLD Au g/t Au g/t Au g/t Au g/t Ounces FOSTERVILLE
OXIDE (0.5 g/t Au cutoff) 2,800,000 1.1 2,350,000 1.1 500,000 1.0 5,650,000 1.1 196,000
SULPHIDE Central Area (2.0 g/t Au cutoff) 3,500,000 4.0 6,600,000 4.8 2,700,000 4.1 12,800,000 4.5 1,841,000 Fosterville Other (1.0 g/t Au cutoff) 1,050,000 1.8 1,450,000 1.6 2,100,000 1.6 4,550,000 1.7 243,000 TOTAL SULPHIDE 4,500,000 3.5 8,100,000 4.3 4,800,000 3.0 17,400,000 3.7 2,084,000
Mineral Reserves at September 1, 2003 – Reserves are included in Resources Reserves - Central Area
CLASSIFICATION TONNES GRADE G/T AU CONTAINED GOLD OZS Proved
Open Cut 1,750,000 3.9 219,400 Underground 265,000 4.6 39,500 Subtotal 2,015,000 4.0 258,900
Probable
Underground 4,085,000 5.0 651,100 Subtotal 4,085,000 5.0 651,100
Total 6,100,000 4.7 910,000
The reserves were established by the BFS which was completed post the year end and announced in early September, 2003. Resources and reserves may not sum to equal totals due to rounding.
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STATEMENT OF RESOURCE AND RESERVE ESTIMATION INFORMATION
Notes Accompanying The Ore Reserves and Mineral Resources Statement
Location Bulk Density Resources Grade Interpolation Section Oxide Sulphide Method Spacing (m) Fosterville Fault Central Ordinary Kriged 20, 50 & 100 2.4 2.56, 2.64, 2.73 (varies by RL)
Fosterville Other Ordinary Kriged 20, 25 & 50 2.4 2.8
The resources reported for Fosterville have been estimated using block models in which grades have been interpolated using the techniques stated in the table. The major difference between the resources reported in this report and the resources reported in the previous Annual Report of the Company is in the Fosterville Fault Central Area where infill drilling has resulted in an upgrade of most of the Phoenix and Ellesmere Shoots from the inferred to the indicated resource category and increased the resource tonnages and grades within both shoots. In addition the 8,800 ounce resource at Toolleen and the 104,200 oz resource at Walhalla have been removed from the resource inventory as a result of the completion of the sales of these properties. The Cornella resource has also been removed as being too small for the Company to develop. At Fosterville, oxide mineralisation generally extends from surface to 40m depth. Below this level all the mineralisation is refractory primary sulphide mineralisation.
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THE FOSTERVILLE FAULT The block model has dimensions of 2m OTHER FOSTERVILLE The information in this report that relates to (CENTRAL AREA GEOLOGICAL (E-W) by 10m (vertical) by 20m (N-S). MODELS mining extraction and cost parameters is MODEL) Ordinary Kriging was used for The Fosterville Fault (other) models based on information produced by Gary The base data set comprises 977 interpolation. For blocks to be were developed using the same Robert Davison, a member of the Australasian drillholes of which 729 (75%) are RC, interpolated there needed to be methods as outlined above for the Institute of Mining and Metallurgy. This 26 (2%) PQ diamond core, 4 (0.5%) HQ 5 composites within the same Fosterville Fault (Central) model with information was compiled by Gary Davison, diamond core, 44 (4.5%) NQ diamond mineralisation envelope within the the following exceptions. of BFP Consultants Pty Limited, who has core and 182 (18%) NQ2 diamond core. search ellipse below the base of greater than five years experience in the Drilling was mostly restricted to within The effect of combining the RC and oxidation. A maximum of 24 composites estimation, assessment and evaluation of 80m of the surface, with the deepest diamond drill data was investigated was used to interpolate, including a ore reserves in respect to mining extraction holes reaching 140m below surface. statistically and the two types of drilling maximum of six within any quadrant of techniques and mining cost estimation. The drill data used is almost entirely data found to be statistically the search ellipse. Search ellipses with Gary Robert Davison has experience that is (>98%) from reverse circulation drilling compatible. The location of all drillholes long axes of 60m were used in the relevant to the style of mineralisation and sampled at two metre intervals. is determined to 0.01m and downhole measured and indicated resource type of deposit under consideration and to surveys are conducted at approximately categories. In the inferred resource The drilling was carried out on 20m the activity which he is undertaking to qualify 30m intervals using an Eastman category search ellipses with long axes and 25m sections with generally 20m as a Competent Person as defined in the camera. There are no magnetic units of 120m to 400m were used. vertical spacing. The mineralisation 1999 edition of the “Australasian Code for domains were interpreted at 0.1 g/t Au Reporting of Mineral Resources and Ore known at Fosterville. The blocks were categorised as to 0.2 g/t Au, reflecting the lower cutoff Reserves”. Gary Robert Davison consents to The deeper diamond drilling was measured, indicated or inferred on the grades expected for open cut mining, the inclusion in this report of these matters initially on 100m spaced sections with basis of drill spacing and a subjective the lower grades encountered in the based on the information in the form and a vertical spacing of 50m, the bulk of estimate of geological continuity. this drilling has been infilled to 50m near surface oxide mineralisation and context in which it appears. The model was tested against a model by 50m for indicated resources. The edge dilution due to the two metre Competent Person signoff on the reserves interpolated using inverse distance shallower RC drilling is on 25m by 15m sample length of the reverse circulation derived from tonnages and grades estimated square weighting and a polygonal centres providing measured resources. drilling. No topcut has been applied to by BFP under the economic and metallurgical estimate. The inverse distance model these models. The block dimensions parameters supplied is undertaken by The RC holes were predominantly agreed closely with the Kriged model. are 4m (E-W) by 5m (vertical) by 10m Christopher Linden Roberts. Christopher sampled at two metre intervals and the The polygonal estimate resulted in (N-S). The search ellipses used all had Linden Roberts has significant experience diamond holes sampled as half split fewer tonnes at higher grades for a long axes of 55 metres. that is relevant to the style of mineralisation core to one metre or geological very similar amount of contained gold and type of deposit under consideration and intervals. The assays are subject to an (ounces). Polygonal estimates are Note: The information in this report that to the activity which he is undertaking to auditing programme involving repeat known to overstate the grade and relates to mineral resources is based on qualify as a Competent Person as defined in sampling, inter-laboratory comparison understate the tonnage when compared information produced by Kerrin Allwood, the 1999 edition of the “Australasian Code and the use of standards. to Kriged block models. a member of the Australasian Institute of Mining and Metallurgy. This information was for Reporting of Mineral Resources and Ore The vast majority of holes intersect The resource estimate was completed compiled by Christopher Linden Roberts, of Reserves”. Christopher Linden Roberts mineralisation at angles exceeding in house in close consultation with Autarky Management Services Pty Limited, consents to the inclusion in this report of 45˚, most being at about 60˚. external geostatistical, sampling, a Corporate Member of the Australasian these matters based on the information in Two metre composites constrained database validation and structural Institute of Mining and Metallurgy and the form and context in which it appears. geology consultants. As part of the by domain wireframes were calculated member of the Australian Institute of Other parties contributing costs or metallurgical mining studies currently underway, the for all of the drillholes and used for Geoscientists who has a minimum of parameters to the reserve estimation were resource model has been audited by block model interpolation. Top cuts five years experience in the estimation, Cullen Mining Services Pty Ltd, Lycopodium independent consultants. ranging from 40 g/t Au to 25 g/t Au assessment and evaluation of mineral Pty Ltd, Gold Fields Limited, Metallurgy have been applied to all composites, The process of resource to reserve resources and ore reserves. International and URS Australia Pty Ltd. affecting 0.21% of the composites. conversion involved the application of Four 3-dimensional mineralisation various dilution factors as shown in the domains were created based on table below:- detailed geological interpretation at Cut Off Dilution Dilutant Grade g/t generally between 0.5 g/t Au and Open Cut 1.0 g/t 10% 0.15 1.0 g/t Au grades, with a minimum true Dilutant grades were the average grade of material between the 1 g/t cut-off and 0 g/t. This was calculated for each elevation in width of 2 metres. The mineralisation domains generally range from 4 to 8 the pit and each part of the underground workings. metres wide, but may be up to 25 Underground 3.75 g/t 7 - 15% 0.75 metres wide. Dilution was calculated from a 1m skin applied to the hanging wall and foot wall of the relevant stope block model.
PAGE 10 PERSEVERANCE 2003 ANNUAL REPORT life and gold with with output, output, mining operations sustainable sustainable profitability profitability Underground Underground
SUSTAINABILITY PERSONNEL & OCCUPATIONAL ENVIRONMENT & REHABILITATION HEALTH & SAFETY An increased focus on employee safety Environmental Monitoring has been made through improved The extensive programme of systems, training, employee tracking environmental monitoring of surface on site, safety assessments and work water, ground water and air at the procedures. The site is aiming for Fosterville site was continued with no a high level of health and safety abnormal results being recorded during awareness with further procedures the period. Results were reported to under development. government regulatory authorities and There was one lost-time accident the local community through the during the year. This accident resulted Environmental Review Committee. in a LTIFR of 14 for 2002/03. This is an improvement on the previous year’s Rehabilitation LTIFR of 36 and is also the third Following a substantial earthworks consecutive year of improving safety programme late in the last period, over statistics on the site. 16,000 seedlings were planted bringing totals for the site since the mid 1990’s to over 120,000. A total of some 40 COMMUNITY RELATIONS hectares was planted during the year. Three new Community Representatives Growth rates have been impressive, were appointed to the Fosterville despite drought conditions. Environmental Review Committee A review of the effectiveness of by the Bendigo City Council from rehabilitation over the life of the project applications received following a call indicated good plant survival, growth for nominations. The Committee, which and species diversity. meets every four months, includes representatives of all regulatory authorities and considers the results of site environmental monitoring and current and proposed activities. No substantive issues arose during the year and there were no complaints about the Company’s operations. A newsletter providing information to the community on the site activities and progress with the sulphide project has been continued broadly in conjunction Proposed Site Plan of Fosterville Gold Project with the release of ASX Quarterly Reports. Visits to most of the nearby residents in the area surrounding the site have also been conducted to assist in communications. An information day was held on site in 2002 to discuss the drilling results and implications for development. Close consultation with local residents will be maintained as plans for the development are finalised and works commence.
PERSEVERANCE 2003 ANNUAL REPORT PAGE 11 life and gold with with output, output, mining operations sustainable sustainable profitability profitability Underground Underground
SCHEDULE OF TENEMENTS AS AT 30 JUNE 2003
Regional Exploration Nagambie Mining Lease 1983 (Nagambie) Regional exploration was limited mainly Mining Licence 4244 (Nagambie) to generative work based on the recent Fosterville Exploration Licence 3539 (Goornong) advances in the geology of the Fosterville Mining Lease. Work was Exploration Licence 4506 (Fosterville North West) also carried out on the Walhalla Exploration Licence by a third party Exploration Licence Application 4572 (Bendigo East) under the terms of an agreement for Mining Licence Application 5177 (Fosterville West) the sale of that property. The Company retains its Exploration Mining Lease 1868 (Fosterville) Licence and Licence Application Mining Licence 4456 (Fosterville) coverage around the Fosterville Mining Lease, extending over 50 kilometres Mining Licence 4877 (Sharkey’s) north south and covering over 985 Bailieston Mining Licence 4784 (Bailieston) square kilometres (see Figure 6). The major sulphide deep drilling Heathcote Exploration Licence 3237 (Cornella East) programme at Fosterville has clear implications for the surrounding areas Exploration Licence 3484 (Greenstones) for deeper underground mineable Mining Licence 4149 (Cornella East) sulphide gold mineralisation.
Walhalla Exploration Licence 3311 (Walhalla)
Note: The above leases are 100% owned by the Company with the exceptions of EL 3237 & ML 4149, which are 49% owned by the Company. A royalty applies to mining of parts of EL 3539. Limited rights are held by another party, relating to platinum group and nickel minerals in exploration licences 3311 and 3484. Sale of EL 3311 was completed on August 29 under the terms of an agreement. An option for sale of ML 1983 and MIN 4244 at Nagambie matures in September 2003.
Figure 6 Figure 6
PAGE 12 PERSEVERANCE 2003 ANNUAL REPORT life and gold with with output, output, mining operations sustainable sustainable profitability profitability Underground Underground
CORPORATE
Finance Asset Sales Fosterville Operations The Company made a loss of $6.58 Sale of the Walhalla licence, EL 3311, Gold production for the year from the million before tax for the full-year which was non-core to the Company, final stages of rundown of the oxide ended 30 June 2003, compared with a was completed on August 29, 2003 for leach heaps was 1,226 ounces at a loss of $3.72 million before tax for the a total value of $535,000. treatment cost of A$460 per ounce. corresponding period last year. The Toolleen Gold Project was sold to The leach heaps were flushed during The following are the major a group which mined the small high the year prior to decommissioning. components of the result, with an grade resource during the year, paying However, the heaps are now under explanation: - the Company a royalty in addition to consideration for treatment for further other realisations. • An amount of $3,249,000 recovery of gold, reuse for oxide represents expenditure incurred Whilst to date the Company has been mineralisation which may be produced on the deeper sulphide exploration unsuccessful in securing the sale of as a product of the planned sulphide programme during the year. the second hand flotation and bacterial mining and alternative uses related to In addition to this, the Company oxidation plants, previously purchased the sulphide ore processing. expended $157,000 on regional for the Fosterville Open Pit Sulphides exploration. The Company continues Project, the Youanmi bacterial oxidation the philosophy of ongoing exploration plant in Western Australia was optioned costs being expensed as the cost is to be sold, with the terms of the option incurred. being extended to mature at the end of September 2003. • The Company expended $1,956,000 on feasibility studies relating to the Expressions of interest have been development and mining of the received for the second-hand flotation sulphide resource at the Company’s plant previously purchased for sulphide Fosterville property. processing, but now seen as unsuitable. • The Company continued the asset The Nagambie site has also been realisation programme that optioned to be sold, with the terms of commenced in February 2002. the option being extended during the Revenue from asset sales including year to mature at the end of September finalising disposal of properties 2003. acquired as part of the Daley’s Hill litigation settlement totalled Placement $375,000. On 21 October 2002, the Company The Company sold 1,328 ounces during issued 27,700,000 fully paid ordinary the year at an average price of A$570 shares at 13.5 cents per share raising per ounce. Cash and gold on hand at $3,739,500 to fund further exploration the end of the year was $3,273,000. work on its Fosterville Gold Project, the This amount includes cash completion of feasibility studies into the collateralisation of the Company’s development of a mining operation at Rehabilitation Bonds totalling $970,000. the Fosterville Gold Project, and for An amount of $527,000 previously working capital. collateralised was released during the year following conversion to a conventional bank guarantee.
PERSEVERANCE 2003 ANNUAL REPORT PAGE 13 life and gold with with output, output, mining operations sustainable sustainable profitability profitability Underground Underground
PAGE 14 PERSEVERANCE 2003 ANNUAL REPORT PERSEVERANCE CORPORATION LIMITED ABN 13 010 650 049
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2003
PERSEVERANCE 2003 ANNUAL REPORT PAGE 15 DIRECTORS’ REPORT
The Board of Directors present their report together with the financial statements of Perseverance Corporation Limited (“the Company”) and the consolidated financial statements of the consolidated entity being the Company and its controlled entities for the year ended 30 June 2003.
DIRECTORS The names and details of the directors in office at the date of this report are: -
JOHN CHARLES QUINN (EXECUTIVE CHAIRMAN) Mr Quinn is an accountant and has had a career of over 30 years in the industry, including Managing Director of Newmont Australia Limited and Newcrest Mining Limited. During Mr Quinn’s tenure as Managing Director at Newcrest, he formulated and implemented the strategies that led to the discovery and development of the Cadia, Ridgeway, Gosowong and the Telfer “I” Series orebodies. Mr Quinn was also Chairman of the Newmont Indonesian subsidiaries that discovered the Mesel and Batu Hijau orebodies. He is a Fellow of the Australasian Institute of Chartered Accountants.
CHRISTOPHER LINDEN ROBERTS (EXPLORATION & DEVELOPMENT DIRECTOR) Mr Roberts is a geologist with 31 years experience in exploration throughout Australia, initially with BHP but subsequently in senior positions with a number of other companies. Mr Roberts is also a Corporate Member of the Australasian Institute of Mining and Metallurgy and a member of the Australasian Institute of Geoscientists.
ROBIN JOHN GEORGE (NON-EXECUTIVE DIRECTOR) Dr George is a geologist and has had a career of over 30 years in the industry. Dr George was Executive Director - Exploration and Mining at Acacia Resources Limited prior to that Company’s acquisition by Anglo Gold Limited from which he retired in 2001. Dr George is a non-executive Director of MPI Mines Limited, and is a Fellow of the Australasian Institute of Mining and Metallurgy.
RODNEY JOHN ROBINSON (NON-EXECUTIVE DIRECTOR) Mr Robinson is a metallurgist and has had a career of over 30 years in the industry. Mr Robinson was formerly the Managing Director of Ashton Mining Limited and worked for companies such as Newmont, Aberfoyle and WMC. Mr Robinson is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Robinson is also Chairman of Boom Logistics Limited, a non- executive director of Poseidon Scientific Instruments Limited, and is a Member of the Board of Management of the Prince Henry’s Institute of Medical Research.
RESULTS FOR THE YEAR The consolidated loss of the economic entity for the financial year after income tax was $6,576,543 [2002 loss: $3,723,466].
PRINCIPAL ACTIVITIES The principal activities of the consolidated entity during the course of the financial year were gold mining and exploration. There was no change in the nature of the consolidated entity’s activities during the year.
DIVIDENDS The directors do not recommend the payment of a dividend for this financial year. No dividend has been declared or paid by the Company since the end of the previous financial year.
STATE OF AFFAIRS In the opinion of the Directors, there were no significant changes in the state of the consolidated entity that occurred during the financial year under review not otherwise disclosed in this report or the consolidated financial statements.
PAGE 16 PERSEVERANCE 2003 ANNUAL REPORT REVIEW OF OPERATIONS AND FUTURE DEVELOPMENTS During the year the consolidated entity produced 1,226 ounces of gold from its Fosterville operations. On 8 February 2002, the parent entity issued 44,000,000 fully paid ordinary shares at 5 cents per share with an attaching option (nil issue price). The options were exercisable to take up ordinary shares in the Company at 5 cents per share at any time on or before 19 August 2002. On 23 August 2002 the Company issued 44,000,000 fully paid ordinary shares by virtue of the exercise of options prior to their expiry date, raising $2,200,000 before expenses. On 21 October 2002, the parent entity issued 27,700,000 fully paid ordinary shares at 13.5 cents per share raising $3,739,500 before expenses by way of a placement to fund further exploration work on its Fosterville Sulphides Project, the completion of feasibility studies into the development of a mining operation at the Fosterville Gold Project, and for working capital. Refer to Note 11 for total movements in contributed equity during the year. Other than as referred to in this report, further information on the likely developments in the operations of the consolidated entity and the expected results of those operations would, in the opinion of the Directors, be speculative and would be likely to result in unreasonable prejudice to one or more entities in the consolidated entity.
EVENTS SUBSEQUENT TO BALANCE DATE There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in subsequent financial years, except for those matters referred to below: On 1 September 2003, the Company announced the successful completion of the Fosterville Sulphide Bankable Feasibility Study. Following consideration of the Bankable Feasibility Study, the Board of Directors determined to progress discussions with prospective financiers, secure a financial package consistent with the immediate needs of the development described in the Bankable Feasibility Study and the Company’s longer term strategic objectives and to release the project for development as soon as practicable. The financial package will be structured to fund the development, to provide working capital to enable the concurrent assessment of the large resource potential at Fosterville and to ensure that free cash flow from operations is adequate to maintain this work. On 29 August 2003, the Company announced that it had realised $535,000 from the divestment of Victorian Exploration Licence 3311 to Goldstar Resources NL. This Exploration Licence which is located in South Eastern Victoria is not associated with the Company’s Fosterville property and was therefore considered non-core.
OPTIONS The Company issued 4,500,000 options during the year under the Perseverance Employee Option Plan approved by shareholders at the Company’s Annual General Meeting held on 18 October 2002.
DIRECTORS’ MEETINGS During the year the Company held 11 meetings of directors. The attendance of the directors at meetings of the Board were as follows. Directors Meetings Director Attended Maximum Possible Attended
J. C. Quinn 11 11 C. L. Roberts 10 11 R. J. George 11 11 R. J. Robinson 11 11
The Company has separate committees for audit and remuneration. Mr R J George is the Chairman of the Audit Committee. Mr J.C. Quinn is also a member of the Audit Committee. During the year the Company held four Audit Committee meetings. These meetings were attended by Mr R.J. George and Mr J.C. Quinn. Mr R.J. Robinson is the Chairman of the Remuneration Committee. Mr J.C. Quinn is also a member of the Remuneration Committee. During the year the Company held two Remuneration Committee meetings.
PERSEVERANCE 2003 ANNUAL REPORT PAGE 17 DIRECTORS’ AND EXECUTIVES’ REMUNERATION
Base Salary ($) Fee ($) Superannuation Options vesting during Vehicle ($) Total ($) ($) the current period:
Number Amortised Granted Cost (d) ($)
Directors J. C. Quinn (a) 144,427 - 13,398 - 23,160 - 180,985 C. L. Roberts (a) - 167,738 - 1,000,000(c) 6,793 - 174,531 R. J. George - 25,000 2,250 - - - 27,250 R. J. Robinson - 25,000 2,250 - - - 27,250 Executives G. J. Sloan (b) 126,547 - 11,389 2,000,000(c) 4,288 13,000 155,224
(a) Mr J. C. Quinn and Mr C. L. Roberts are Executive Directors of the Company. (b) Mr G. J. Sloan is the Executive General Manager of the Company. Mr G. J. Sloan is the only employee that participates in the executive management of the consolidated entity. (c) These options were granted under the terms of the Perseverance Corporation Limited Employee Option Plan. For further details, refer to Note 23 to the financial statements. (d) The company has adopted the fair value measurement provisions of ED 108 “Share-based Payment” prospectively for all options granted to directors and relevant executives, which have not vested as at 1 July 2002. The fair value of such grants is being amortised and disclosed as part of director and executive remuneration on a straight-line basis over the vesting period. No adjustments have been or will be made to reverse amounts previously disclosed in relation to options that never vest (i.e., forfeitures). Prior to 1 July 2002, the company disclosed the fair value of option grants using the Black-Scholes option- pricing model but did not allocate those values over the vesting period. The Black-Scholes option pricing model takes account of factors including the option exercise price, the current level and volatility of the underlying share price, the risk-free interest rate, current market price of the underlying share and the expected life of the option. For further details, refer to Note 23 to the financial statements. The role of the Board is to review remuneration packages and policies applicable to the directors themselves. The remuneration of senior management is determined by the Remuneration Committee.
REMUNERATION POLICY The Company has an established Remuneration Committee. The current composition of the committee is Mr John Quinn and Mr John Robinson. This committee has been charged with responsibility by the Board.
CORPORATE GOVERNANCE STATEMENT In recognising the need for the highest standard of corporate behaviour and accountability, the Directors of Perseverance Corporation Limited support and have adhered to the principle of corporate governance. The Company’s corporate governance statement is on page 20.
DIRECTORS’ SHAREHOLDINGS At the date of this report, the interests of the directors in the shares of the Company are:
DIRECTOR SHARES UNLISTED OPTIONS DIRECT INDIRECT DIRECT INDIRECT J. C. Quinn 1,488,400 919,164 5,000,000(a) - C. L. Roberts 253,800 169,983 1,000,000 - R. J. George - - - - R. J. Robinson - - - -
(a) As noted above in Directors’ and Executives Remuneration, these options are unlisted options that were granted to Mr Quinn as an inducement for Mr Quinn to join the board and are exercisable in equal tranches from the first and second anniversary dates of his appointment (8 February 2001). When exercisable, of the 5,000,000 options issued, 2,818,332 options can be exercised to take up ordinary shares in the company at 9 cents per share at any time on or before 8 February 2011, and 2,181,668 options can be exercised to take up ordinary shares in the company at 9 cents per share at any time on or before 10 March 2011.
PAGE 18 PERSEVERANCE 2003 ANNUAL REPORT DIRECTORS’ INTERESTS AND BENEFITS Since the end of the previous financial year no director of the Company has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by directors shown in the consolidated financial report), by reason of a contract made by the Company, its controlled entities or a related body corporate with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except for:- (a) payment for geological services in the ordinary course of business to a company in which a director is a director and shareholder. (b) payment for provision of accommodation facilities in the Fosterville area to a company in which a director is also a director and shareholder.
ENVIRONMENTAL REGULATION The operations of the Consolidated Entity in Australia are subject to environmental regulation under the laws of the Commonwealth and the States in which those operations are conducted. Each mining operation is subject to particular environmental regulation specific to the activities undertaken at that site as part of the licence or approval for that operation. There are also broad industry environmental laws that apply to all mining operations and other operations of the Consolidated Entity. The environmental laws and regulations generally address the potential impact of the Consolidated Entity’s activities in the areas of water and air quality, noise, surface disturbance and the impact upon flora and fauna. The Executive Chairman reports to the Board on all environmental and health and safety incidents. The Directors are not aware of any environmental matter that would have a materially adverse impact on the overall business of the Consolidated Entity.
TAX CONSOLIDATION As at the date of this report, the Company has not formally notified the Australian Tax Office of its adoption of the tax consolidation regime. It is anticipated that effective from 1 July 2002, for the purposes of income taxation, the Company and its 100% owned subsidiaries will form a tax consolidated group. Members of the group will enter into a tax sharing arrangement in order to allocate income tax expense to the wholly-owned subsidiaries on a pro-rata basis. In addition, there will be provision for allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. At the balance date, the possibility of such default is remote. The head entity of the tax consolidated group is anticipated to be Perseverance Corporation Limited.
GOING CONCERN The financial report has been prepared on a going concern basis. The economic entity’s cash position, and the extent to which revenue can be generated at 30 June 2003, result in uncertainty relating to going concern. The ability of the economic entity to continue as a going concern, and as such realise its assets and extinguish its liabilities in the normal course of business, is dependent on the entity obtaining further funds to continue exploration and appraisal activities, implement the Consolidated Entity’s proposed mine development plan and to fund ongoing working capital requirements. The financial report does not include adjustments relevant should the entity not continue as a going concern.
INDEMNIFICATION OF DIRECTORS AND OFFICERS During the year the Company paid an insurance premium in respect of a contract insuring each of the directors named earlier in this report and each full-time executive officer, director and secretary of group entities, against all liabilities and expenses arising as a result of work performed in their respective capacities, to the extent permitted by the law. This report has been made in accordance with a resolution of directors Signed this 11th day of September 2003.
J. C. Quinn C. L. Roberts Director Director
PERSEVERANCE 2003 ANNUAL REPORT PAGE 19 CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Perseverance Corporation Limited is responsible for the corporate governance of the consolidated entity. The Board guides and monitors the business of Perseverance Corporation Limited on behalf of the shareholders by whom they are elected and to whom they are accountable.
BOARD OF DIRECTORS The Company has four directors, two of which are executive directors as detailed in the Directors’ Report. The Board of directors comprises directors with an appropriate range of qualifications and expertise meeting regularly on the business of the Company. The directors feel that appropriate measures are in place, which enable effective control and direction of the Company to identify areas of significant business risk and ensure arrangements are in place to adequately manage those risks.
AUDIT COMMITTEE AND REMUNERATION COMMITTEE The Company has an established Audit Committee and a Remuneration Committee. The current composition of the Audit Committee is Mr John Quinn and Mr Robin George. The current composition of the Remuneration Committee is Mr John Quinn and Mr John Robinson. Both of these Committees have been charged with responsibilities by the Board.
INDEPENDENT PROFESSIONAL ADVICE At any time, any director can obtain independent professional advice at the Company’s expense. No director has sought independent professional advice during the financial year. The Board of Directors aims to ensure that the shareholders on behalf of whom they act are informed of all information necessary to assess the performance of the directors. Information is communicated to the shareholders through: - • the annual report which is distributed to all shareholders, • the quarterly report, • the annual general meeting and other meetings so called to obtain approval for board action as appropriate, and • the Company Website - www.perseverance.com.au.
ASX CORPORATE GOVERNANCE GUIDELINES In March 2003 the ASX Corporate Governance Council released the “Principals of Good Corporate Governance and Best Practice Recommendations”. The change in reporting requirements arising from these recommendations apply to Perseverance Corporation Limited from the year commencing 1 July 2003. The Board of Directors is giving full consideration to the guidelines and will take the necessary steps to ensure compliance where appropriate.
PAGE 20 PERSEVERANCE 2003 ANNUAL REPORT INDEPENDENT AUDIT REPORT TO THE MEMBERS OF PERSEVERANCE CORPORATION LIMITED
SCOPE The Financial Report and Directors’ responsibility The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors’ declaration for Perseverance Corporation Limited (“the company”) and the consolidated entity, for the year ended 30 June 2003. The consolidated entity comprises both the company and the entities it controlled during that year. The directors of the company are responsible for preparing a financial report that gives a true and fair view of the financial position and performance of the company and the consolidated entity, and that complies with Accounting Standards in Australia, in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.
Audit approach We conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards in Australia, and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company’s and the consolidated entity’s financial position, and of their performance as represented by the results of their operations and cash flows. We formed our audit opinion on the basis of these procedures, which included: • examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and • assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors. While we considered the effectiveness of management’s internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls. We performed procedures to assess whether the substance of business transactions was accurately reflected in the financial report. These and our other procedures did not include consideration or judgement of the appropriateness or reasonableness of the business plans or strategies adopted by the directors and management of the company.
INDEPENDENCE We are independent of the company, and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001. In addition to our audit of the financial report, we were engaged to undertake the services disclosed in the notes to the financial statements. The provision of these services has not impaired our independence.
PERSEVERANCE 2003 ANNUAL REPORT PAGE 21 AUDIT OPINION In our opinion, the financial report of Perseverance Corporation Limited is in accordance with: (a) the Corporations Act 2001, including: (i) giving a true and fair view of the financial position of Perseverance Corporation Limited and the consolidated entity at 30 June 2003 and of their performance for the year ended on that date; and (ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and (b) other mandatory financial reporting requirements in Australia.
INHERENT UNCERTAINTY REGARDING GOING CONCERN Without qualification to the opinion above, attention is drawn to the following matter. As a result of the matters described in Note 27 on Going Concern, there is significant uncertainty whether Perseverance Corporation Limited and the consolidated entity will be able to continue as a going concern without obtaining further funds to continue its ongoing working capital requirements, further exploration and appraisal activities, and implement the Economic Entity’s proposed mine development plan, in order for the Economic Entity to realise assets and extinguish liabilities in the normal course of business at the amounts stated in the financial report. The financial report does not include adjustments relevant should the entity not continue as a going concern.
Ernst & Young
Tim Wallace Partner Melbourne 11 September 2003
PAGE 22 PERSEVERANCE 2003 ANNUAL REPORT STATEMENT OF FINANCIAL POSITION YEAR ENDED 30 JUNE 2003
PERSEVERANCE 2003 ANNUAL REPORT PAGE 23 STATEMENT OF FINANCIAL PERFORMANCE YEAR ENDED 30 JUNE 2003
PAGE 24 PERSEVERANCE 2003 ANNUAL REPORT STATEMENT OF CASH FLOWS YEAR ENDED 30 JUNE 2003
PERSEVERANCE 2003 ANNUAL REPORT PAGE 25 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial report has been prepared as a general purpose financial report which complies with the requirements of the Corporations Act 2001, Australian Accounting Standards and Urgent Issues Group Consensus Views. The financial statements have also been prepared in accordance with the historical cost convention using the accounting policies described below and do not take account of changes in either the general purchasing power of the dollar or in the prices of specific assets except as otherwise disclosed. The accounting policies used are consistent with those adopted in the previous year, except as disclosed.
CHANGE IN ACCOUNTING POLICY The accounting policies adopted are consistent with those of the previous year except for the accounting policy with respect to earnings per share, employee benefits, and provisions noted below.
EMPLOYEE BENEFITS The consolidated entity has adopted the revised Accounting Standard AASB 1028 “Employee Benefits”, which has resulted in a change in the accounting policy for the measurement of employee benefit liabilities. Previously, the consolidated entity measured the provision for employee benefits based on remuneration rates at the date of recognition of the liability. In accordance with the requirements of the revised Standard, the provision for employee benefits is now measured based on the remuneration rates expected to be paid when the liability is settled. There has been no financial impact to the consolidated entity as a result of this change in accounting policy at 30 June 2003.
PROVISION FOR REHABILITATION The consolidated entity has adopted the new Accounting Standard AASB 1044 “Provisions, Contingent Liabilities and Contingent Assets” which has resulted in a change in the accounting for the provisioning for restoration and rehabilitation obligations. In accordance with the requirements of the revised Standard, the provision for rehabilitation is now discounted to present values, after an assessment of the timing of rehabilitation works has been made. There was no impact as a result of an assessment of the estimated anticipated cost in future dollars of the amount required for rehabilitation and the discounting of the future anticipated costs to present values. As such, there has been no financial impact to the consolidated entity as a result of this change in accounting policy at 30 June 2003.
PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the financial statements of Perseverance Corporation Limited and the results of all of its controlled entities as defined by AASB 1024 “Consolidated Accounts”, which are referred to collectively throughout these financial statements as the “Consolidated Entity”. The results of controlled entities are prepared for the same reporting period as the parent, using consistent accounting policies. All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.
INVENTORY (a) Work in progress Work in progress, including ore stock, is valued at the lower of average cost and net realisable value per heap. Cost represents the weighted average cost and includes direct costs and an appropriate portion of fixed and variable direct overhead expenditure including depreciation and amortisation. (b) Stores Stores represent consumable supplies and maintenance spares and are valued at cost.
PAGE 26 PERSEVERANCE 2003 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2003
MINERAL EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE Exploration, evaluation and development expenditure incurred by the Consolidated entity is accumulated for each separate area of interest. Accumulated exploration, evaluation and development expenditure on areas of interest are carried forward where costs are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale. Where exploration and/or evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing the costs may be carried forward or expensed. Expenditure on areas that have been abandoned, or considered to be of no value, is written off or expensed. For those areas in which extraction of ore has commenced, accumulated costs are amortised over the expected recoverable ounces of gold from the orebody and written off on a unit of gold production basis. The expected recoverable ounces of gold are based on estimates of reserves revised bi-annually.
PROPERTY, PLANT AND EQUIPMENT Land and buildings are carried at deemed cost. Leased plant and equipment is depreciated over the term of the lease or the estimated useful life of the asset if the asset is expected to be acquired at the end of the lease. Property, plant and equipment, excluding freehold land, are depreciated over their useful economic lives as follows:
LIFE METHOD Buildings on Mining Leases 5 years Straight line Motor Vehicles 4 years Straight line Office Equipment 5 years Straight line Owned Plant and Equipment - Mining Operations Life of Mine Units of Production Owned Plant and Equipment - Other 5 years Straight line
(a) Land held for resale Land held for resale is valued at the lower of cost and net realisable value.
RESTORATION AND REHABILITATION Costs of rehabilitation work, including reclamation, plant closure and monitoring are provided for and treated as production costs. The provision for rehabilitation is reassessed at balance date each year such that full provision is made by the end of the production life of each area for the anticipated costs of rehabilitation necessitated by disturbance arising from exploration, evaluation, development and mining. The provision is discounted to present values, after an assessment of the timing of rehabilitation works has been made. Changes in estimates of future costs are reflected in the provision on a prospective basis over the life of each area of interest.
FINANCIAL INSTRUMENTS Included in Equity • Ordinary share capital bears no special terms or conditions affecting income or capital entitlements of the shareholders. • Options, when converted to shares, form part of ordinary share capital noted above. Included in Assets • Receivables are initially recorded at the amount of contracted sales proceeds. • Investments, including equity interests in non-subsidiary, non-associated corporations, are included in investments at the lower of cost or recoverable amount. Included in Liabilities • Finance lease liabilities are reduced by the non-interest expense portion of lease payments made.
PERSEVERANCE 2003 ANNUAL REPORT PAGE 27 NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2003
REVENUE RECOGNITION Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: (a) Sales of gold Gold sales revenue is recognised as the bars are delivered from the mine site. Revenue from gold sold under a forward sales programme is recorded at the contracted price. Gains or losses on the undelivered portion of forward sales programmes are not taken into account. (b) Sales of assets There is an unconditional contract of sale signed. Any non-refundable proceeds received are immediately recognised as revenue in the period in which they are received.
EMPLOYEE BENEFITS Provision has been made in the financial statements for benefits accruing to employees in relation to annual leave, and long service leave. All on-costs, including payroll tax, workers’ compensation premiums and superannuation are included in the determination of provisions. Provision for annual leave and the current portion of long service leave are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. The non-current portion of the long service leave provision is measured at the present value of estimated future cash flows. The present value of future cash outflows reflect estimated increases in entitlement costs and discount rates based on government issued securities.
TAX (a) Income taxes Tax-effect accounting is applied using the liability method whereby income tax is regarded as an expense and is calculated in the accounting profit after allowing for permanent differences. To the extent timing differences occur between the time items are recognised in the financial statements and when items are taken into account in determining taxable income, the net related taxation benefit or liability, calculated at current rates, is disclosed as a future income tax benefit or a provision for deferred income tax. Future income tax benefits attributable to timing differences are not brought to account unless realisation of such benefit is assured beyond reasonable doubt. Future income tax benefits attributable to tax losses are only brought to account when the realisation of those losses is virtually certain.
(b) Goods and services tax (GST) Revenues, expenses and assets are recognised net of the amount of GST except: • Where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and • Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement of Financial Position. Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
CASH ASSETS For the purposes of these financial statements, cash includes deposits at call which are readily convertible to cash on hand and which are used in the cash management function on a day to day basis.
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FOREIGN CURRENCY TRANSACTIONS Foreign currency transactions are translated to Australian currency at the rate of exchange ruling at the date of the transaction. Amounts receivable and payable in foreign currency are translated at the rate of exchange ruling at balance date. Differences arising from such transactions where they are related to monetary items are taken to the Statement of Financial Performance.
NON-CURRENT ASSETS The carrying amounts of all non-current assets excluding exploration, evaluation and development expenditure are reviewed at least annually to determine whether they exceed their recoverable amount. The recoverable amounts of all non-current assets are determined using net cash flows, which have not been discounted to their present value. The potential capital gains tax is not taken into account in determining the re-valued assets. Land is carried at cost.
JOINT VENTURE OPERATIONS An interest in a joint venture is brought to account by including in the respective financial statement categories: • the consolidated entity’s share in each of the individual assets employed in the joint venture; • liabilities incurred by the consolidated entity in relation to the joint venture including the consolidated entity’s share of any liabilities for which the consolidated entity is jointly and/or severally liable; and • the consolidated entity’s share of expenses of the joint venture.
EARNINGS PER SHARE Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted EPS is calculated as net profit attributable to members, adjusted for: • costs of servicing equity (other than dividends); • the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and • other non-discretionary changes in revenues or expenses during the period which would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
LEASED ASSETS Assets acquired under finance leases are capitalised and amortised over the life of the relevant lease or, where ownership is likely to be obtained on expiration of the lease, over the expected useful life of the asset. Lease payments are allocated between interest expense and reduction in the lease liability. Operating lease assets are not capitalised and rental payments are charged against operating profit in the period in which they are incurred.
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(a) Contributed equity issued On 8 February 2002, the parent entity issued 44,000,000 fully paid ordinary shares at 5 cents per share with an attaching option (nil issue price). The options were exercisable to take up ordinary shares in the Company at 5 cents per share at any time on or before 19 August 2002. On 23 August 2002 the Company issued 44,000,000 fully paid ordinary shares by virtue of the exercise of options prior to their expiry date, raising $2,200,000 before expenses. On 21 October 2002, the parent entity issued 27,700,000 fully paid ordinary shares at 13.5 cents per share raising $3,739,500 before expenses by way of a placement to fund further exploration work on its Fosterville Sulphides Project, and to fund the completion of feasibility studies into the development of a mining operation at the Fosterville Gold Project, and for working capital.
(b) Options converted On 27 June 2000, the parent entity issued a prospectus for a non-renounceable options issue on the basis of 1 option for every 1 share held in the company at an issue price of 2.5 cents per option to raise up to A$1.37M before expenses. This resulted in the issue of 51,890,604 options. The options were exercisable to take up ordinary shares in the Company at 20 cents per share at any time on or before 31 July 2002. A total of 9,291 fully paid ordinary shares were issued by virtue of the exercise of options during the financial year ended June 2001. No shares in relation to these options were issued in the year ended 30 June 2002. The Company issued 34,109 fully paid ordinary shares by virtue of the exercise of options prior to their expiry date on 31 July 2002.
(c) Terms and conditions of contributed equity Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.
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As at 30 June 2003, companies within the economic entity have estimated unconfirmed unrecouped income tax losses of approximately $23,671,000 (2002: $17,850,000) available to offset against future years’ taxable income. The benefit of these losses of $7,101,000 (2002: $5,355,000) has not been brought to account as realisation is not virtually certain. The benefit will only be obtained if: (a) the company derives future assessable income of a nature and of an amount sufficient to enable the benefits from the deductions for the losses to be realised; (b) the company continues to comply with the conditions for deductibility imposed by the law; and (c) no changes in tax legislation adversely affect the company in realising the benefit from the deductions for the losses.
(a) Tax consolidation As at the date of this report, the Company has not formally notified the Australian Tax Office of its adoption of the tax consolidation regime. It is anticipated that effective from 1 July 2002, for the purposes of income taxation, the Company and its 100% owned subsidiaries will form a tax consolidated group. Members of the group will enter into a tax sharing arrangement in order to allocate income tax expense to the wholly-owned subsidiaries on a pro-rata basis. In addition, there will be provision for allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. At the balance date, the possibility of such default is remote. The head entity of the tax consolidated group is anticipated to be Perseverance Corporation Limited.
15. PARTICULARS IN RELATION TO CONTROLLED ENTITIES The consolidated financial statements at 30 June 2003 include the following controlled entities. The financial years of all controlled entities are the same as that of the parent entity.
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(1) The Options were granted subject to the following vesting conditions: (i) The first 50% of the Options will vest upon the announcement by the Company to Australian Stock Exchange of a decision to commence the construction of facilities to mine and treat sulphide mineralization from the Fosterville mineral leases. (ii) The balance of the Options will vest upon the announcement by the Company to the Australian Stock Exchange of the completion of construction and commissioning of facilities to mine and treat sulphide mineralization from the Fosterville mineral leases. (2) The Options were granted subject to the following vesting conditions: (i) The first 50% of the Options will vest upon the earlier of an announcement by the Company to Australian Stock Exchange of a decision to commence the construction of facilities to mine and treat sulphide mineralization from the Fosterville mineral leases and 30 September 2004. (ii) The balance of the Options will vest upon the earlier of an announcement by the Company to the Australian Stock Exchange of the completion of construction and commissioning of facilities to mine and treat sulphide mineralization from the Fosterville mineral leases and 30 September 2005.
(1) The Options were granted subject to the following vesting conditions: (i) The first 50% of the Options will vest upon the announcement by the Company to Australian Stock Exchange of a decision to commence the construction of facilities to mine and treat sulphide mineralization from the Fosterville mineral leases. (ii) The balance of the Options will vest upon the announcement by the Company to the Australian Stock Exchange of the completion of construction and commissioning of facilities to mine and treat sulphide mineralization from the Fosterville mineral leases. (2) The Options were granted subject to the following vesting conditions: (i) The first 50% of the Options will vest upon the earlier of an announcement by the Company to Australian Stock Exchange of a decision to commence the construction of facilities to mine and treat sulphide mineralization from the Fosterville mineral leases and 30 September 2004. (ii) The balance of the Options will vest upon the earlier of an announcement by the Company to the Australian Stock Exchange of the completion of construction and commissioning of facilities to mine and treat sulphide mineralization from the Fosterville mineral leases and 30 September 2005.
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(c) Superannuation commitments The consolidated entity maintains a superannuation scheme covering substantially all of its employees. The consolidated entity has a legal obligation to contribute to the scheme that is administered by MLC Ltd. Both wage and salaried employees belong to the same scheme where the consolidated entity contributes 9% (2002: 8%) of gross salaries and the employees contribute between 0% and 8%. The above scheme is a cash accumulation scheme, and hence no actuarial assessments are required. (d) Retirement benefits No prescribed benefits were given to a prescribed superannuation fund in connection with the retirement of a person from a prescribed office of the group during the financial year. (2002:$Nil).
24. CONTINGENT LIABILITIES The Consolidated Entity has given to the Department of Natural Resources and Environment performance bonds totalling $1,497,000 (2002:$1,537,000). An amount of $527,000 is secured by a registered mortgage over land owned by the Company. The balance of $970,000 is secured by security deposits. This includes $8,000 in joint venture performance bonds. The consolidated entity has been notified by the Native Title Tribunal of a native title claim which covers MIN(A)5177 held by Perseverance Exploration Pty Ltd. The Company drafted an agreement in 1998 that is still being considered by the claimants. The Directors do not consider that there is any significant financial exposure to these matters and hence no provisions have been made.
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(d) Net fair value of financial assets and liabilities All financial assets and financial liabilities held at balance date are carried at net fair value. The net fair value of a financial asset or a financial liability is the amount at which the asset could be exchanged, or liability settled in a current transaction between willing parties after allowing for transaction costs. (e) Credit risk exposure The credit risk on financial assets of the consolidated entity is generally the carrying amount net of any provisions for doubtful debts. Credit exposure represents the extent of credit related losses that the consolidated entity may be subject to on amounts to be exchanged under the derivatives or to be received from financial assets. The notional amounts of derivatives are not a measure of this exposure. The consolidated entity, while exposed to credit related losses in the event of non-performance by counter parties to financial instruments, does not expect any counter parties to fail to meet their obligations given their high credit ratings.
26. SUBSEQUENT EVENTS On 1 September 2003, the Company announced the successful completion of the Fosterville Sulphide Bankable Feasibility Study. Following consideration of the Bankable Feasibility Study, the Board of Directors has determined to progress discussions with prospective financiers, secure a financial package consistent with the immediate needs of the development described in the Bankable Feasibility Study and the Company’s longer term strategic objectives and to release the project for development as soon as practicable. The financial package, the composition of which is yet to be finalised, will be structured to fund the development, to provide working capital to enable the concurrent assessment of the large resource potential at Fosterville and to ensure that free cash flow from operations is adequate to maintain this work. On 29 August 2003, the Company announced that it had realised $535,000 from the divestment of Victorian Exploration Licence 3311 to Goldstar Resources NL. This Exploration Licence which is located in South Eastern Victoria is not associated with the Company’s Fosterville property and was therefore considered non-core.
27. GOING CONCERN The financial report has been prepared on a going concern basis. The economic entity’s cash position, and the extent to which revenue can be generated at 30 June 2003, result in uncertainty relating to going concern. The ability of the economic entity to continue as a going concern, and as such realise its assets and extinguish its liabilities in the normal course of business, is dependent on the entity obtaining further funds to continue exploration and appraisal activities, implement the Consolidated Entity’s proposed mine development plan and to fund ongoing working capital requirements. The financial report does not include adjustments relevant should the entity not continue as a going concern.
PERSEVERANCE 2003 ANNUAL REPORT PAGE 45 DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Perseverance Corporation Limited, we state that: In the opinion of the directors: (a) the financial statements and notes of the company and of the consolidated entity are 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 2003 and of their performance for the year ended on that date; and (ii) complying with Accounting Standards and Corporations Regulations 2001; and (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable, subject to the matters referred to in Note 27.
On behalf of the Board
J C Quinn Director
C L Roberts Director
Melbourne 11 September 2003
PAGE 46 PERSEVERANCE 2003 ANNUAL REPORT SHAREHOLDER INFORMATION AS AT 17 SEPTEMBER 2003
ISSUED SHARES
ISSUED CAPITAL 252,428,651 Total holding of the twenty largest shareholders 175,507,824 % of total shares on issue 69.49%
DISTRIBUTION OF SHAREHOLDERS No. 1 - 1,000 Shares 171 1,001 - 5,000 Shares 401 5,001 - 10,000 Shares 317 10,001 - 50,000 Shares 499 50,001 - 100,000 Shares 126 100,001 and over 153 1,667 Shareholders holding less than a marketable parcel 226
SUBSTANTIAL SHAREHOLDERS The substantial shareholders of the company as defined by Part 6C.1 of the Corporations Act are:
NUMBER OF FULLY PAID % OF FULLY PAID ORDINARY ORDINARY SHARES TOTAL SHARE CAPITAL Palmaris Capital PLC 65,233,745 Commonwealth Custodial Services Limited 16,004,837 TOP 20 SHAREHOLDERS Palmaris Capital PLC 65,233,745 25.83% Commonwealth Custodial Services Limited 16,004,837 6.34% National Nominees Limited 10,621,252 4.21% Abbotsleigh Pty Ltd 10,000,000 3.96% JP Morgan Nominees Australia 9,502,523 3.76% Nefco Nominees Pty Ltd 8,350,000 3.31% Melbourne Square Pty Ltd 8,143,089 3.22% Citicorp Nominees Pty Limited 6,414,688 2.54% ANZ Nominees Limited 5,304,190 2.10% HSBC Custody Nominees (Australia) Limited 5,048,960 2.00% Queensland Investment Corporation 4,224,949 1.67% Stadjoy Pty Ltd 4,036,650 1.60% Mr Antony Cokayne Doulton 3,850,000 1.52% Citicorp Nominees Pty Limited
VOTING RIGHTS The Company’s issued shares are one class with each share being entitled to one vote.
PERSEVERANCE 2003 ANNUAL REPORT PAGE 47 NOTES
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