ABN 30 068 263 098 Heron Resources NL 21 Close Way, West Kalgoorlie PO Box 1280, Kalgoorlie, Western Australia 6430 Telephone: (08) 9091 9253 Facsimile: (08) 9091 9256 Email: [email protected] www.heronresources.com.au Heron, with the Rotary Club of Hannans and Rotary International supports the special education needs of East Kalgoorlie Primary School. One project involved minesite and bush excursions, with the children’s impressions captured in their art. Salena Abdullah’s painting was chosen to feature on the cover of this report. The title of Salena’s painting is “Binduli”. Reynolds Graphics, Kalgoorlie 11839 “My painting is of the manmade and natural environment. In the background is the revegetated land. In front is a road that leads to the mine. The colour represents the earth”. The accompanying photographic image of the Heron Goongarrie Project on the front cover can also be described by Salena’s words. Heron Resources NL Heron Resources NL Corporate Directory In the Community COMPANY SECRETARY The Artists: Ross James Arancini BBus, ACA - Company Secretary 110 Hensman Street, South Perth, Western Australia, 6151 Telephone: (08) 9367 1213 Facsimile: (08) 9367 7853 East Kalgoorlie Primary School Email: [email protected] Grades 3 to 7 REGISTERED AND PRINCIPAL OFFICE 21 Close Way, PO Box 1280, Kalgoorlie, Western Australia, 6430 Back Row, from left: Front Row, from left: Telephone: (08) 9091 9253 Facsimile: (08) 9091 9256 Derrick Sceghi, Kenneth Jackson, Natalia Tucker, Tony Champion, Email: [email protected] Wyvern Jackson, Kevin Banks, Shane Stokes, Leith Stevens, Website: http://www.heronresources.com.au Teacher: Amber Lewington, Salena Abdullah, Marika Smith, Merita Stevens, Naomi Ellis, Kim-Thi Nguyen, Joelene Tucker AUDITORS Krystal Foley, Andrea Munmurrie Absent: Butler Settineri Chartered Accountants Charis Abdullah, Cheynne Graham, 35-37 Havelock Street, West Perth, Western Australia, 6005 Andrew Abdullah SOLICITORS TO THE COMPANY McKenzie Lalor 74 Egan Street, Kalgoorlie, Western Australia, 6430 Pullinger Readhead Stewart 46-50 Kings Park Road, West Perth, Western Australia, 6005 BANKERS Project Geologist (and star Challenge Bank, 230-236 Hannan Street, Kalgoorlie, Western Australia, 6430 winger for Boulder Rugby Union Football Club) CORPORATE ADVISOR Simon Gobbett and Carmichael First Capital Pty Ltd Administration Manager Level 11, 77 St Georges Terrace Sue Geary. Perth, Western Australia, 6000 Please telephone Sue on (08) 9091 9253 SHARE REGISTRY Doreen, Paula, Eva and Coral from NTP at if you wish to discuss any Security Transfer Registrars Pty Ltd aspect of Heron’s operations. Level 1, 168 Adelaide Terrace, Perth, Western Australia, 6000 the new childrens health clinic Telephone: (08) 9221 4200 Facsimile: (08) 9221 1581 which Heron has helped to purchase. Email: [email protected] STOCK EXCHANGE Australian Stock Exchange Limited 2 The Esplanade, Perth, Western Australia, 6000 The Heron Team at the Balzano Barrow Race. ASX CODE HRR SEAT ABBREVIATION Heron HOME BRANCH Perth Laverton Centenary INDUSTRY CLASSIFICATION Cricket Tournament OTHER METALS - 022 BASE METALS Heron Hospitality Tent Heron Resources NL Ian Buchhorn, Pam Buchhorn Exploration and RESEARCH SERVICE INDEX NUMBER and Shyama Peebles, the Administration Office Mining H50 Centenary Events 21 Close Way, West Kalgoorlie Co-ordinator. ISIN AU000 000 HRR6 Heron sponsored an Art Prize and Exhibition for the students of East Kalgoorlie Primary School. Salena’s work was selected to feature on the front cover. All photographic page art was taken at Heron’s Goongarrie Nickel Project by Justin Madden, Reynolds Graphics Kalgoorlie. Other works featured throughout this report are testimony to the creative skills of the students of East Kalgoorlie Primary School. All inset artistic contributions are from the students of East Kalgoorlie Primary School; See inside back cover. Heron would like to thank the team at Reynolds Graphics for their expertise and professionalism in the design and production of this report. Heron Resources NL Directors Rodney Michael Evans FCA, FCIS, FCIM, AIArbA Chairman (Non Executive) 21 Close Way, Kalgoorlie, Western Australia, 6430 Ian James Buchhorn BSc (Hons), Dipl Geosci, MAusIMM Managing Director (Executive) 21 Close Way, Kalgoorlie, Western Australia, 6430 Robert George Colville Photo: Robert Colville, Rodney Evans, Ian Buchhorn AssocRMIT, MAusIMM Director (Non Executive) Level 1, 1 Sleat Road, Applecross, Western Australia, 6153 Peter James Lee BBus, CA, FCIS, MAICD Director (Non Executive) 210 Kings Way, South Melbourne, Victoria, 3205 Annual Report 2000 Contents 1.0 Chairman’s Review...............................................................................................3 2.0 Operations Review ...............................................................................................4 3.0 Corporate Profile ................................................................................................38 4.0 Directors’ Report ................................................................................................40 5.0 Financial Statements........................................................................................45 Profit and Loss Account.................................................................................45 Balance Sheet ......................................................................................................46 Statement of Cash Flow.................................................................................47 Notes to and Forming Part of the Accounts......................................48 Directors’ Declaration......................................................................................60 6.0 Independent Audit Report.............................................................................61 7.0 Shareholder Information ................................................................................62 8.0 Interest in Mining Tenements......................................................................65 Glossary of Terms ..............................................................................................79 Heron Resources NL Annual Report 2000 page 1 Heron Resources NL Annual Report 2000 Figure 1 - TENEMENT HOLDINGS Victory North Sandstone Mount Varden Victory JV Laverton Merolia Murrin Murrin 6,800,000mN Leonora Aubils Mineral Patch Hill Lawrence Kookynie Find Ghost Rocks JV Snake Edjudina Hill Menzies JV Southern Laverton Goongarrie Tectonic Zone Gindalbie Terrane Kalpini Mulgabbie Frances Lesley Blister Cawse Dam Bungalbin Mungari NW Dunnsvilles Bulong 6,600,000mN Kurnalpi JV KALGOORLIE Binduli JV Bullabulling Coolgardie Mt Martin Transline JV Kambalda Southern Cross Karonie South JV Widgiemooltha JV Balladonia West Pioneer Maggie Hays Hill Norseman 50km 6,400,000mN Balladonia Salmon Gums 200,000mE 400,000mE Photo Strip: Drilling Contractor Deep Mining Pty Ltd has continued its professional work throughout 2000. The excellent Diamond Drill validation results are an endorsement of Deep Mining’s attention to detail and quality assurance. page 2 Heron Resources NL Annual Report 2000 Heron Resources NL Chairmans Review 1.0 Chairman’s Review It is with pleasure that I present the fifth Annual Report of Heron Resources NL (“Heron”). Exploration and development success during 2000 at the Goongarrie Nickel Project has resulted in the Company identifying a deposit acknowledged to be one of the premium ore occurrences in terms of grade, thickness and metallurgy that has been recorded within the fledgling Australian Nickel Laterite industry. Goongarrie is part of the Cawse Stage II Heron - Centaur Strategic Alliance. A year ago, Goongarrie was an inferred deposit drilled on an 800x80m pattern. In just 12 months, Heron has advanced its technical work such that: • Resource Definition Reverse Circulation drilling continued almost non-stop, with 36,920m in 782 holes completed. Strict rehabilitation procedures are in place, to ensure that environmental disturbance is minimised during the intense drill activity. • Confirmation Diamond Drilling was completed, consisting of 406m in 8 holes, which validated the RC drilling data and confirmed an excellent quality ore body. • Detailed metallurgical evaluation commenced at the Lakefield Oretest metallurgical laboratory, Perth, with 16 Goongarrie bulk samples currently under test. Results to date have been excellent. • Archaeological, ethnographic, flora, fauna, photogrammetry and baseline environmental surveys were completed, and tenement and hydrological surveys were commenced. As at 30 June 2000, the total Indicated and Inferred Mineral Resource above a 0.75% Ni cut-off for Goongarrie-Ghost Rocks- Kalpini and satellite nickel projects was 182.1 million tonne at 1.07% Ni and 0.08% Co. The Indicated and Inferred Mineral Resource above a 0.50% Ni cut-off for the Goongarrie-Ghost Rocks-Kalpini and satellite nickel projects was 405 million tonne at 0.8% Ni and 0.06% Co. The fully diluted Mineral Resource was 474 million tonne at 0.7% Ni and 0.05% Co, with contained metal of 3.4 million tonne nickel and 0.3 million tonne cobalt. The Goongarrie ore body will be a major factor in the continuing expansion of the Australian Nickel Laterite industry. This factor has been widely recognised. On 8 February 2000, Centaur Nickel Investments Pty Limited, a wholly-owned subsidiary of Centaur Mining & Exploration Limited, launched a Part C takeover bid to acquire the issued capital of Heron at 30 cents per