RNS Number:6189I
Ballarat Goldfields N.L.
07 September 2006
Ballarat Goldfields nl Annual Report 2006
To view the full colour formatted report please refer to our website:
www.ballarat-goldfields.com.au
Annual Report
Corporate Directory
Directors
Alister Maitland - Chairman
Richard Laufmann - Managing Director
Wojciech Ozga - Director of Operations
Mike Etheridge
Company Secretary and Financial Controller
Amber Rivamonte
Registered Office
10 Woolshed Gully Drive Mt Clear Victoria 3350 Australia
Telephone: (03) 5327 1111 Facsimile: (03) 5331 7927
www.ballarat-goldfields.com.au
Share Registry
Computershare Investor Services Pty Ltd
GPO Box 2975 Melbourne Victoria 3001 Australia
Investor Enquiries Telephone: 1300 850 505
Telephone: (03) 9415 5000 Facsimile: (03) 9473 2500
www.computershare.com
Auditor
PricewaterhouseCoopers Chartered Accountants
GPO Box 1331L Melbourne Victoria 3001 Australia
Bankers
Australia and New Zealand Banking Group Limited
927 Sturt Street Ballarat Victoria 3350 Australia
Lawyers
Baker & McKenzie Solicitors
Rialto Level 39 525 Collins Street
Melbourne Victoria 3000 Australia
Nomad
RFC Corporate Finance Ltd
Level 14 19 - 31 Pitt Street
Sydney New South Wales 2000 Australia
UK Broker
Numis Securities Ltd
Cheapside House 138 Cheapside
London EC2V 6LH United Kingdom
UK Share Registry
Computershare Investor Services PLC
PO Box 82 The Pavilions Bridgwater Road
Bristol BS99 7NH United Kingdom
Stock Exchange Listing
Ballarat Goldfields NL is listed on the Australian Stock Exchange and
the Alternative Investment Market (AIM) of the London Stock Exchange
Stock Exchange Codes
ASX and AIM Code for Shares: BGF
Table of Contents Page
Corporate Directory Inside Cover
Chairman's Review 2
Managing Director's Review 4-5
Directors' Report 6-28
Auditors' Independence Declaration 29
Corporate Governance Statement 30-32
Financial Report 33-58
Directors' Declaration 59
Independent Audit Report to the Members 60
Shareholder Information 61
Tenement Information 62-63
A.C.N. 006 245 441
Our Vision
To become a major Australian gold producer.
Our Mission
By progressively expanding our geological knowledge we will lay
the foundation for growth, thereby pursuing the phased,
sustainable development, of the Ballarat goldfield.
Our Profile
Ballarat Goldfields NL is an Australian gold exploration and
development company, with a strong portfolio primarily focused on the
highly prospective Ballarat gold province in Victoria.
Ballarat Goldfields NL was formed in 1984 holding the operating
licence for the Ballarat East Field. The Company further consolidated
the field with the acquisition of Ballarat West and Berringa in 1998 and
Ballarat South in 2004.
The Company now holds all of the licenses within the prolific Ballarat
goldfield and is the first operator, since discovery in the 1850's,
to consolidate the field.
Ballarat Goldfields NL is applying modern exploration techniques and
innovative technology in a focused effort to assess the potential for
undiscovered gold mineralisation in this region. A comprehensive
geological model, developed by the Company, identified the massive
under-explored prospectivity of the region and forms the basis for
ongoing exploration and development.
The Company's skilled management team has a successful track
record in mining and development. This team will lead Ballarat
Goldfields NL towards its goal of becoming one of Australia's
foremost gold producers.
> Chairman's Review
I am pleased to report that Ballarat Goldfields NL
(BGF) has delivered on the objectives outlined in
the 2005 Annual Report. In doing so we achieved
a number of important milestones which
substantially improves our confidence to deliver
the Company vision.
We have made a considerable investment in our exploration program,
through which we have greatly increased our knowledge and
understanding of the mineralisation in the area. This includes a
significant increase in our previously reported Resource estimate.
We have continued development of the underground mine and
completed construction of most major surface infrastructure. As a
result, we are now in a prime position to quickly transition our profile
from explorer to producer.
We believe our primary focus is to evolve and refine our geological
model and this remains the key to generating long term value. This
year, the significant and crucial information derived from this process,
has enabled us to prioritise and better target our exploration and
development activities.
As a result, we have modified our mine plan in order to focus on the
emerging evidence supporting higher grade mineralisation at depth.
The new plan aims to increase the Company's target output from the
Ballarat East underground mine by 25 per cent. The planned output will
now reach 250,000 ounces per annum.
Our exploration success confirms the significant potential of the Ballarat
project.The new development schedule should provide the basis for a
long term substantial gold producing region.
In recent months, the Board farewelled Colin Smith who, as Chairman,
made an exceptional contribution to the development of the Company.
He demonstrated unwavering enthusiasm to explore new opportunities
for the Company to meet its objectives. On behalf of the Board and
employees, I extend our sincere thanks and appreciation to Colin for
his devoted contribution to BGF. We wish him well in retirement.
As a result of Colin's departure, coupled with the planned transition from
exploration to operation in the next few years, we recognised the need
for a change at an executive level. In light of this, Wojciech Ozga, was
appointed to the Board as Director of Operations. Wojciech has
extensive global mining experience including General Manager Central
Norseman Gold Corporation and in senior management roles with other
leading Australian and international resource companies.
The Board also acknowledges the dedication and commitment of our
Managing Director, Richard Laufmann, the management team and all
the staff and contractors who are focused on making BGF an
outstanding venture.
The past year has been one of consolidation and focus.
While our fundamental focus remains the same, the objective for this
year will be to achieve significant operational milestones that add to
shareholder value.
We are poised for the transition to become a first class
Australian gold producer.
On behalf of the Board I would also like to acknowledge the support
our Company has received throughout the year from the Ballarat
community, our suppliers, contractors and employees.
By demonstrating their support, they have expressed their confidence
in the potential business value of BGF to Australia and the region.
Alister Maitland
Chairman
> Managing Director's Review
There were two key objectives for the 2006 financial year to add shareholder
value. These were to systematically and methodically develop our geological
understanding of the area and the early construction of a process plant for
Ballarat Goldfields NL (BGF).
In achieving these objectives, we have enabled the Company to gain
specific information on suitable mining methods, the nugget effect and
process recoveries. This critical information has led to a refinement of
our project development plan and production schedule, delivering a
new mine plan aimed at achieving a production rate of 250,000
ounces per annum in 2009.
Other achievements during 2006:
> The Ballarat East Resource was increased 27 per cent by BGF's
exploration drilling program and an improved understanding of the
high grade gold mineralisation.
> The process plant (stage one) was completed.
> Test work commenced for the Ballarat South project. A pilot plant is
now treating an accumulated surface stockpile. If successful, this
project has the capacity to increase the Company's production profile.
Financial
BGF recorded a net loss of $39 million for the year. This included
expenditure totalling $35 million on exploration of the Ballarat licence
areas and mine development of the Ballarat East project. In addition,
investment in construction of the processing plant and other site
infrastructure was $27 million.
At 30 June 2006, BGF is in a solid position with cash on hand of $26
million and no debt or hedging.
Operational
This year we increased the total Mineral Resource to 1.4 million ounces
of gold. Importantly, this includes an Indicated Mineral Resource of
approximately 0.24 million ounces at over 13 grams per tonne.
Most major surface capital works were also completed, including the
construction and commissioning of our process plant, the tailings
storage facility and the primary ventilation shaft.
Underground, we accessed our first stope, which continues to provide
important information on the geology and was processed through the
plant. The underground development rate was slower than planned,
leading to lower rates of mining. This was impacted by the presence of
voids from old workings encountered in the first stoping block.
To date, 18,000 tonnes of ore has been treated, producing 600 tonnes
of sulphide concentrate which has been stockpiled. We are in the
process of finalising the construction decision for an Inline Leach
Reactor, to recover gold from the concentrate stockpiles.
BGF's exploration projects are situated in four major proven
mineralised systems, each with a history of repeated discoveries.
We are accelerating exploration and evaluation of these projects in the
current favourable metals market.
Work is continuing on the Berringa, Ballarat West and Ballarat South
project areas. In particular, Ballarat South test work has been
accelerated, with the installation of a pilot plant to assess the viability
of pre-washing and screening as a means of ore sorting.
Health and Safety
A 45 per cent reduction in lost time injuries per million hours worked
was recorded for the year.
However, as we are committed to achieving a Zero Harm workplace, our
safety performance fell short of our objective. The lost time injuries per
million hours worked was 8.4, compared to 15.3 for the previous
corresponding period. This represents three lost time injuries for the year.
We are continuing to evolve our safety culture and as our work force
continues to grow, we are implementing systems focused on those risk
areas we have identified as priorities.
Environment and Community
BGF recognises the potential impact the mining industry can have on
the environment and on communities near its operations. To proactively
mitigate any potential impacts, BGF applies the operating principles of
the Australian Minerals Industry Framework for Sustainable
Development.
In line with BGF's vision to become a leading gold producer in
Australia, the adoption of these policies represents a positive step
forward. The 2007 financial year will see this framework being applied
as the Company transitions into production.
What is Sustainable Development?
The Brundtland Commission's definition of sustainable
development is "development that meets the needs of the
present without compromising the ability of future
generations to meet their own needs"
(Our Common Future, Brundtland 1987).
In the mining and metals sector, this means that investments in
minerals projects should be financially profitable, technically
appropriate, environmentally sound and socially responsible.
Market Conditions
No consensus exists on the outlook for the gold price, however most
observers are comfortable with the view that the current price levels
can be maintained, particularly in an inflationary environment of
sustained higher oil and commodity prices.
The upward trend in the gold price is being somewhat offset by
inflation driven cost pressures, which are expected to continue. A rise
in operating costs will derive substantially from competition for labour
and the rising cost of most consumables.
Outlook
During the 2006 financial year we delivered the vital development and
initial mining trials, necessary to validate the technical and economic
parameters of our project. Following a strategic review of the
development plan, we have now unveiled a new mine plan for Ballarat
East. The new plan delivers a 25 per cent increase in annual gold
production, achievable through the accelerated development of the
deeper higher grade mineralisation of the Ballarat East mine.
The next 12 months will see a continuation of the evolution of our
Company, building on its capability to deliver production.
Our key objectives for the coming year will focus on mine and
project developments.
Mine development will include the continuation of resource drilling at
Ballarat East; a focus on the decline development priorities and
advance rates; the construction of a southern shaft; and building our
organisational capability.
We plan to continue progressing exploration of Ballarat East
and Berringa along with the completion of a development plan for
Ballarat South.
In order to meet our objectives, we are continuing to invest heavily in
our people, processes and systems, while strengthening our
community involvement.
It is anticipated that the projects scheduled for 2007 will provide
significant benefits to the Company. In addition to these projects, BGF
will actively pursue corporate opportunities to grow the Company.
The past year confirms our vision to be a leading Australian gold
producer. This is supported by our highly prospective field and
increased production opportunities. As an independent, unhedged
Australian junior, I look forward to delivering a return to shareholders
based on our solid management strategies.
Richard Laufmann
Managing Director
>Directors' Report
Your Directors present their report on the consolidated entity (referred to
hereafter as the Group) consisting of Ballarat Goldfields NL (BGF) and the
entities it controlled at the end of, or during, the year ended 30 June 2006.
> Review of Operations
Financial
BGF recorded a net loss of $39 million and held cash and deposits totalling $26
million at 30 June 2006. The funds were invested in mine development of
the Ballarat East project, including construction of the process plant and
exploration of the Ballarat licence areas. Revenue was restricted to interest
bearing bank deposits, as the Company recorded no gold sales during the year.
During the year our cash flow financing activities included:
> Cash of $12 million was drawn from our loan facility with Investec Bank.
> Funds of $33.7 million were received following the exercise of listed options
(BGFO). The options had an exercise price of 15 cents.
> In November 2005, an institutional placement of 150 million shares at 30 cents
raised $45 million before issue costs.
> In February 2006, following a General Meeting of shareholders, the balance of
debt was repaid to Investec Bank through the issue of 20 million
ordinary fully paid shares at 25 cents.
Funds were primarily directed to the following:
> The continued development of the Ballarat East underground project.
> The construction of the process facility, including both surface
infrastructure and tailings storage facility.
> The exploration and feasibility work for the Ballarat South, Ballarat West and
Berringa projects.
One of the most important achievements this year was the completion of the
process plant, enabling the first material mined from the project to be
processed. The development plan was revised in accordance with information
obtained during these activities. The key outcome of the plan revision is to
increase the production target to reach a rate of 250,000 ounces per annum in
2009.
Exploration
During the year we increased the total Mineral Resources of gold at Ballarat
East by 27 per cent, or 0.3 million ounces to 1.4 million ounces. This estimate
included an Indicated Mineral Resource of 0.24 million ounces and a 1.2 million
ounce Inferred Mineral Resource.
The success of our drill program has significantly improved our understanding of
the geology and demonstrates our ability to convert Exploration Potential to
Resource.
The following highlights our exploration progress:
> The increased Resource, includes 240,000 ounces in the higher confidence
"Indicated Mineral Resource" category.
> The discovery of the Blue Whale fault, the largest fault ever identified in
the field and interpreted as having a significant impact on the gold
mineralisation at Ballarat East.
> Distinctly higher gold grades evident in drilling at depth.
> A more detailed understanding of the nature and relevance of the quartz
veining at Ballarat East, potentially enabling us to identify those that carry
high grade gold mineralisation.
> Seismic research, aimed at testing the ability of seismic reflection to "see
through" the basalt cover, at Ballarat West.
The discovery of high grades near the Blue Whale fault is extremely significant.
Along a small section of its available strike length we have already drill
defined 0.3 million tonnes @ 20.6 grams per tonne for 0.2 million ounces.
Resource Statement
The estimated Mineral Resource identified to the end of June 2006 is:
3.9Mt @ 11.3g/t for 1.4Mozs.
This Resource includes an Indicated Mineral Resource of:
0.6Mt @ 13.4g/t for 0.24Mozs.
The Resource estimate assumes a very coarse gold content of 25 per cent.
Possible ranges identified for the total Mineral Resource, depending on the very
coarse gold content are:
3.9Mt @ 8.5g/t for 1.1Mozs (0% very coarse gold)
3.9Mt @ 17.0g/t for 2.1Mozs (50% very coarse gold)
The Mineral Resource has been reported in accordance with the 2004 JORC Code and
independently audited by AMC consultants in July 2006. As Resources are
progressively converted to the Indicated category, in line with our accounting
policy for exploration, BGF will begin to capitalise development expenditure.
The expanded Ballarat portfolio is divided into the following project areas:
Ballarat East, Ballarat South and Ballarat West, with Berringa some thirty
kilometres South West of Ballarat.
These project areas combine the most historically productive and, in our view,
geologically prospective leases in the greater Ballarat field. Whilst the
endowment of the field is undeniable, generation of the geological model enabled
us to develop a comprehensive target inventory.
Combining known and extrapolated data, the larger target inventory was
discounted for risk and uncertainty to estimate the Exploration Potential. In
addition to the 1.4 million ounce Resource, BGF published its portfolio of
Exploration Potential, totalling approximately 9 million ounces. These
estimates will be updated over the next 12 months to incorporate previously
unknown features, such as the Blue Whale fault.
A summary of the Resources and Exploration Potential are provided in the table
below:
Category Project Tonnes Grade June 06 June06 Dec 04
(M) oz(M) Range oz(M) oz(M)
Total Resource
Ballarat East 3.9 11.3g/t 1.4 1.1 - 2.1 1.1
Indicated Resource
Ballarat East 0.6 13.4g/t 0.24 0.2 - 0.4 -
Inferred Resource
Ballarat East 3.3 10.9g/t 1.2 0.8 - 1.7 1.1
Category Project Tonnes Grade June 06 90% Confidence Dec 04
(M) (oz)M Range oz (M) oz(M)
Exploration Potential
Ballarat East 4.5 1.9 - 7.4 4.5
Ballarat West 1.1 0.15 - 2.3 1.1
Ballarat South 2.7 0.7 - 4.7 2.7
Berringa 0.9 0.5 - 1.3 0.9
Total Exploration Potential 9.2 3.25 - 15.7 9.2
Ballarat West
The depth of basalt cover and limited drilling access means that effective
exploration of this project will benefit from extremely accurate targeting.
Following early modelling of the Ballarat West field, new developments in
seismic reflection technology has meant the possibility exists for us to adopt
techniques developed to penetrate the cover and locate key features that can
help focus this targeting.
A research project, in partnership with ANSIR (a national research facility for
earth sounding), completed a seismic survey over 11.5 kilometres at Ballarat
West. The data from this program is currently being interpreted.
Berringa
Drilling commenced during the June quarter. To date, 1,735 metres of diamond
drilling has been completed in 3 holes, targeting the anticline structure.
Whilst quartz veining and visible gold is evident in logging, no assay data has
yet been received.
Ballarat South
The Ballarat South project presents a significant opportunity, with both surface
and underground potential. Acquired in December 2004, it was originally owned by
CRA Exploration Pty Ltd, who modelled the area and conducted a very broad
surface drilling program to a depth of 50 metres.
During the late nineties a small operation processed approximately 450,000
tonnes of surface material. Our records indicate that production reconciled to
an average of over 0.8 grams per tonne.
BGF stockpiled approximately 10,000 tonnes of surface material during the
construction of the tailings storage facility. This is now being treated through
a pilot scrubbing and screening plant installed adjacent to the gravity recovery
plant.
This test plant will enable us to assess the viability of significantly
upgrading low grade shallow material by screening and washing, before processing
a much reduced volume through BGF's process plant. Initial results have been
very encouraging.
> Ballarat East Underground Development
Decline Development
Underground mine development remains focused on the Sulieman decline to the
north and the Woah Hawp decline to the south.
The rate of development has continued to improve throughout the year. A total of
2.3 kilometres of decline development was achieved from principally two main
development headings. We believe the rate of development will continue to
improve as recent modifications to the development cycle begin to take effect.
Trial Mining
Mining during the year was restricted to the 189 Woah Hawp ore block. This block
is located in the upper level of the mine in a gap between the historical
workings.
The 189 Woah Hawp trial mining block has been successfully excavated using two
mining methods, cut and fill and long hole open stoping. The information
gathered from these trials is being utilised to define the mine planning
parameters for future stoping.
Two more stopes are being opened for mining trials, the 218 Woah Hawp and 176
Sulieman ore blocks. The 218 Woah Hawp has been accessed by a crosscut to allow
geological mapping to be undertaken.
The ore drive placement for both stopes has been determined from close spaced
diamond drilling which has also been used to determine the extent of old
workings in the area. Mining will begin when dewatering has been completed.
Review of Underground Development Plan
All indications to date confirm the robustness of BGF's geological model. The
model, when revised in conjunction with the discovery of the Blue Whale fault,
offers technical support for the increase in grade with depth.
This emerging picture, supported by drilling, gives us enough information to
prioritise our drilling and development program.
In the upper levels, the possibility of further interference from unmapped
historical workings led to the view that they would not provide sufficiently
reliable early production sources.
Consequently, a revised development plan and ramp-up schedule has been
developed. This plan now focuses on access to the more clearly defined, deeper,
high grade ore bodies well below the historical workings.
The new plan is designed to reduce risk by targeting higher confidence Resource
areas in the first five years. In addition, decline development in the upper
levels, originally positioned for priority access to potential ore sources, have
been re-designed to access the deeper high grade deposits as early as possible.
The new design has additional haulage capacity by relocating a ventilation
intake shaft to within the vicinity of the decline portal. The new schedule uses
this southern shaft to speed development of the lower levels, giving access to
the Blue Whale fault. This design change provides additional haulage capacity to
the mine during ramp up and ongoing production.
Mine Infrastructure
The mine infrastructure was completed in record time. The process plant (stage
one) began in July 2005 and was completed on 22 December 2005. The plant site
excavation and construction coincided with the excavation and construction of
the tailings storage facility.
The construction period ran smoothly with no industrial or other disruptions.
The plant design is unique and is based around Gekko Systems Pty Ltd gravity
technology. It has the potential for expansion. Final concentrate treatment is
planned to utilise an Inline Leach Reactor, pending current test work to
finalise the design parameters.
Initial processing through the plant has been encouraging. To date, tail grades
have been lower than anticipated. A total of 18,000 ore tonnes were treated for
the financial year, with approximately 600 tonnes of gravity concentrate
remaining stockpiled on site.
Health and Safety
Our safety performance results were an improvement on the previous
year, but fell short of our objective to be a Zero Harm workplace.
The turnaround saw the lost time injury frequency rate fall from 15.3 in
2005 to 8.4 in 2006.
We are continuing to evolve our safety culture and implement systems
focused on risk management.
We support industry initiatives in this area and believe the goal of Zero
Harm is achievable.
BGF is committed to the following principles:
> No business activity will come before safety and health.
> All incidents and injuries are preventable on and off the job.
> Everyone has a personal responsibility for the safety and health of
themselves and others.
> Individuals must identify, assess and manage hazards.
> Individuals can be trained and equipped to ensure an incident
free workplace.
The health, safety and wellbeing of all BGF's employees, contractors
and suppliers remain a key priority.
Market Conditions
During the past 12 months the price of gold has gained momentum,
steadily rising to peak at US$720 per ounce in May 2006, a 25 year
high. Since that time, the price retracted to just below US$600 before
consolidating above US$600 per ounce in June 2006. In Australian
dollar terms, the price peaked at over A$900 per ounce, which was an
all-time high.
While the supply/demand fundamentals have been supportive,
following the controlled sales by a number of Central Banks under the
updated Washington Accord, a number of other factors have been
influencing the gold market as it joined the wider commodity boom
during 2006. The shift by gold companies to reduce gold hedging is of
particular significance. The traditional drivers of inflation and the US
dollar strength have also contributed to the rise but the advent of
Exchange Traded Funds (ETF), in allowing the broader investment
market to hold direct gold related investment instruments has been a
strong driver. Rising oil prices and continuing political instability in the
Middle East have continued to provide support.
In the medium to longer term, it is expected that the fundamental
drivers will continue to be supportive and BGF expects the gold price
to remain firm.
Environment and Community
Throughout the past year, strong foundations for sound environmental
and social performance have been built upon, including our
commitment to the Minerals Council of Australia's (MCA) sustainable
development framework "Enduring Value".
Primary operations are situated in the heart of Ballarat, one of Victoria's
earliest regional gold mining centres. With a focus on growing an
economically sound and sustainable business, BGF's planning ensures
that community values are not compromised and BGF aims to minimise
environmental impacts as a result of operations
Maintaining a high standard of environmental and social performance
throughout two major construction projects was exceptional and a credit
to all employees and contractors involved. The construction of stage one
of the processing plant and stage one of the tailings storage facility
(TSF) involved over 302 employees and contractors, each maintaining a
high level of communication and commitment throughout the project.
This ensured a safe, compliant and efficient work environment
Contributing to the local economy
Both the processing plant and TSF were constructed using predominantly
Ballarat contractors and suppliers. This strategy ensured a maximum
return to the Ballarat community through labour and the purchase of
goods and services.
Community consultation
A critical component of BGF operating in a socially responsible manner
is establishing strong links with the community and establishing a
process for engagement.
A strategic plan for corporate and community engagement forms the
basis for increased liaison with the Ballarat and district community.
We have initiated a number of forums to improve public access to
information on our activities, including information sessions, print
media and an open day attended by over 800 people. Relationships are
also being built with the Ballarat business community through a range
of conduits, including regular briefings with local decision makers and
membership on committees such as the Committee for Ballarat.
Environmental Performance
Excellence in environmental performance is a critical outcome for
our operations.
Environmental monitoring to demonstrate regulatory compliance
and community health and wellbeing continues to evolve. Data is
presented to and reviewed by the Environmental Review Committee on
a regular basis. The Committee comprises both regulatory and
community members.
An extensive revegetation program encompassing social,
environmental and future land use requirements commenced at
Ballarat East.
Several management plans were developed during the course of the
year in line with BGF's Environmental Management System to ensure
strategic development and compliance across the site.
BGF is currently gathering reliable environmental and social data which
will assist us to set realistic targets, based on best practice and
community and regulatory expectation.
Ensuring social and environmental sustainability within BGF's
geographic location remains challenging, however, the BGF team is
committed to embracing the principles of Enduring Value to ensure the
strategic growth of BGF.
The Group is subject to environmental regulation, primarily from the
Department of Primary Industries (DPI) under the Victorian Mineral
Resources Development Act (1990). The Group is also subject to
Environmental Protection Agency (EPA) regulations through its Waste
Water Discharge licence. During the financial year ended 30 June
2006, there were no material departures from the requirements of
either of these regulatory bodies.
Environmental systems for reporting and recording non-compliance
data have been developed in 2006 to reflect the level of growth and
activity at BGF and reporting and recording will continue to evolve in
line with our Company.
Directors
The following persons were Directors of Ballarat Goldfields NL (BGF)
during the whole of the financial year and up to the date of this report:
Alister Maitland
Colin Smith
Mike Etheridge
Richard Laufmann
Wojciech Ozga
Alister Maitland was appointed a Director on 22 July 2005 and
continues in office at the date of this report.
Colin Smith was a Director from the beginning of the financial year
until his resignation on 31 July 2006.
Wojciech Ozga was appointed a Director on 16 June 2006 and
continues in office at the date of this report.
Information on Directors
>Alister Maitland (Age 65) - B Com, FAICD, FAIM, SF Fin.
>Chairman - Non Executive
Experience and expertise
Extensive experience in financial management, executive stewardship
and corporate governance. Former Executive Director of the ANZ
Banking Group Ltd and served in New Zealand, the United Kingdom
and Australia. Amongst other positions, he was Chief Economist,
Managing Director of New Zealand and Executive Director International.
Adjunct Professor and Council member of Global Sustainability at RMIT.
Other current directorships
Chairman of Folkestone Ltd, the Eastern Health Network and Sterling
Biofuels International Ltd.
Former directorships in last 3 years
Chairman of ComLand Limited and Healthcorp Group Pty Ltd and
Director of Pengurusan Danaharta Nasional Berhad in Malaysia.
Special responsibilities
Chairman of the Board
Member of Remuneration Committee
Member of Audit Committee
Interests in shares and options
None
>Richard Laufmann (Age 43) - B. Eng. (Mining), MAICD, MAusIMM
>Managing Director and CEO - Executive
Experience and expertise
Managing Director of BGF for 4 years. Extensive experience in the
resources sector both in Australia and overseas. Former WMC
Executive, with operational background in both surface and
underground operations. Chairman of Minerals Council of Australia -
Victorian Division.
Other current directorships
Non Executive Director of Indophil Resources, an ASX listed company
operating in the Philippines.
Former directorships in last 3 years
SRK Consulting (Australasia) Pty Ltd until May 2004.
Special responsibilities
Non Executive Director
Member of Remuneration Committee
Member of Audit Committee
Interests in shares and options
300,000 ordinary shares in Ballarat Goldfields NL
1,000,000 options over ordinary shares in Ballarat Goldfields NL
Former directorships in last 3 years
None
Special responsibilities
Managing Director
Interests in shares and options
4,977,164 ordinary shares in Ballarat Goldfields NL
7,000,000 options over ordinary shares in Ballarat Goldfields NL
>Wojciech Ozga (Age 57) - B. Eng. (Mining)
>Director of Operations - Executive
Experience and expertise
Most recently responsible for the development and construction of
Zurdal mine in Kazakhstan, Wojciech has extensive experience in
operations and project management. With WMC for 14 years in various
management positions including General Manager Central Norseman
Gold Corporation, Manager Olympic Dam Mine expansion and Group
Manager of Mining Projects with WMC. Joined BGF on 1 September
2005 as General Manager of Operations.
Other current directorships
None
Former directorships in last 3 years
None
Special responsibilities
Director of Operations
Interests in shares and options
720,000 ordinary shares in Ballarat Goldfields NL
1,500,000 options over ordinary shares in Ballarat Goldfields NL
>Mike Etheridge (Age 60) - PhD, FTSE, FAIG, FAICD
>Director - Non Executive
Experience and expertise
Geologist with over 30 years' experience in exploration, mining,
consulting and research. He has specialised in the structural controls
on the localisation of mineral deposits, and has been involved with
Victorian gold deposits since the mid-1970's. Until 2004 he was
Chairman of SRK Consulting (Australasia), having co-founded its
predecessor Etheridge Henley Williams in 1990.
He is an Adjunct Professor at Macquarie University, where he has been
leading an industry collaborative research project into improving the
management of risk and value in mineral exploration.
Other current directorships
Chairman of TSX-V listed Geoinformatics Exploration Inc, a Director of
Consolidated Minerals Ltd and the AIM listed Ariana Resources Ltd and
the unlisted geothermal energy company, Scopenergy Ltd.
Special responsibilities
Non Executive Director
Member of Remuneration Committee
Member of Audit Committee
Interests in shares and options
300,000 ordinary shares in Ballarat Goldfields NL
1,000,000 options over ordinary shares in Ballarat Goldfields NL
Company Secretary
The Company Secretary is Amber Rivamonte, B.Bus (Acc), CPA.
Amber was appointed to the position of Company Secretary in 2003.
Amber has over 11 years experience in the financial management of
public listed exploration companies.
Meetings of Directors
The number of meetings of the Company's Board of Directors and of
each Board committee held during the year ended 30 June 2006, and
the numbers of meetings attended by each Director were:
Full meetings Audit Remuneration
of Directors Committee Committee
Number of
meetings held 11 2 2
Number of
meetings
attended by:
Alister Maitland 11 2 2
Colin Smith 11 2 2
Richard Laufmann 11 (a) (a)
Mike Etheridge 11 (a) 2
Wojciech Ozga (b) (a) (a)
(a) Not a member of the relevant committee
(b) Appointed to the Board on 16 June 2006 of which there no
meetings held during the time the Director held office.
Retirement, Election and Continuation in Office of Directors
Wojciech Ozga was appointed to the Board on 16 June 2006. Wojciech
Ozga offers himself for election at the next Annual General Meeting.
Alister Maitland was appointed to the Board on 22 July 2005 and was
officially elected at the 2005 AGM. Colin Smith resigned from the Board
on 31 July 2006.
Principal Activities
During the year the principal continuing activities of the Group
consisted of:
(a) surface and underground gold exploration
(b) underground decline development
(c) construction of the processing plant and tailings storage facility.
Significant Changes in the State of Affairs
In the opinion of the Directors, other than matters reported in the
Directors' Report and in the Chairman's Review and Managing
Director's Review, there were no significant changes in the state of
affairs of the Group during the year ended 30 June 2006.
Likely Developments and Expected Results of Operations
The operations of the Group are anticipated to be the continuation of
surface and underground exploration and underground operations.
Dividends - Ballarat Goldfields NL
Directors do not recommend that a dividend be paid. Since the end of
the previous financial year, no dividend has been declared or paid.
Loss Per Share
2006 2005
Cents Cents
Basic loss per share (3.70) (2.98)
Diluted loss per share (3.70) (2.98)
Matters Subsequent to the End of the Financial Year
Since 30 June 2006, BGF has released to the market details of a new
mine development plan. The new plan, outlined in the Director's Report,
represents a significant change for the Company.
Additional financing is being arranged to fund this accelerated
development plan to set the Company direction for the next financial year.
Colin Smith resigned as Chairman on 31 July 2006. Alister Maitland
was appointed as Chairman effective 1 August 2006.
Except for the matters described above, no other matter or
circumstance has arisen since 30 June 2006 that has significantly
affected, or may significantly affect:
(a) the Group's operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the Group's state of affairs in future financial years.
Remuneration Report
The remuneration report is set out under the following main headings:
A. Principles used to determine the nature and amount
of remuneration
B. Details of remuneration
C. Service agreements
D. Share based compensation
E. Additional Information
The information provided under headings A-D includes remuneration
disclosures that are required under Accounting Standard AASB 124
Related Party Disclosures. These disclosures have been transferred
from the financial report and have been audited. The disclosures in
Section E are additional disclosures required by the Corporations Act
2001 and the Corporations Regulations 2001 which have not been audited.
A. Principles used to determine the nature and amount of remuneration (audited)
The Remuneration Committee makes recommendations to the full
Board on remuneration packages and other terms of employment for
the Chairman, Non Executive Directors, the Managing Director and the
Director of Operations.
The Committee also reviews and ratifies the Managing Director's
recommendations on the remuneration of key management and talent.
The Company's remuneration policy strives to ensure remuneration
packages properly reflect each person's duties and responsibilities and
that remuneration is competitive in attracting, retaining and motivating
people of the highest calibre.
Executive and staff remuneration is reviewed annually, effective
January 1 each year.
Individual reviews are based on the following criteria:
> Individual performance (measured against key performance and
behavioural indicators)
> Company performance against stated objectives
> Market parity
>CPI movements
Non Executive Directors
Remuneration of Non Executive Directors, including the issuance of
options, is determined by the Board within the maximum approved by
shareholders from time to time. The current maximum amount of
Directors' fees payable is fixed at $400,000 in total, for each twelve
month period commencing 1 July each year, until varied by ordinary
resolution of shareholders.
Directors' Fees
Remuneration for Non Executive Directors is $50,000 per annum and
for the Non Executive Chairman $125,000 per annum, effective from 1
July 2006. Superannuation contributions are also paid by the Company,
at a rate of 9 per cent of base fees.
Non Executive Directors do not participate in any cash bonus or share
plans that may be developed for Executives. From 1 July 2006,
additional fees of $8,000 per annum are payable to Non Executive
Directors for participation on Board Committees.
There are no retirement benefits for Non Executive Directors.
Managing Director and Director of Operations Remuneration
The remuneration package consists of two components, a base salary
and short term incentive scheme.
The Managing Director's base salary is $325,000 inclusive of
superannuation. In addition to the base salary, the Managing Director
can potentially earn up to 40 per cent of his base salary on fulfiling
certain goals and hurdles, formulated by the Chairman in conjunction
with the Board and the Managing Director annually.
BGF has a commitment for the salary of the Managing Director, who
has been engaged until 31 December 2008, at a minimum of
$325,000 per annum. The contract has a termination clause where the
Managing Director is entitled to the salary payable for the balance of
the term of his contract. A review is currently underway to put in place
a new contract for the Managing Director.
The Director of Operations' base salary is $275,000 inclusive of
superannuation. BGF has a commitment for the salary of the Director of
Operations, who has been engaged until 1 September 2007, at a
minimum of $275,000 per annum. The contract has a termination
clause with the balance of salary payable for the term of his contract.
Negotiations are currently underway to put in place a new contract.
Executive Pay
Executive remuneration, including the issuance of options, and other
terms of employment, are reviewed annually by the Remuneration
Committee having regard to performance against goals set for the
forthcoming year, relevant comparative information and independent
expert advice where applicable. As well as base salary, remuneration
includes superannuation and termination entitlements, performancerelated
bonuses and fringe benefits. Performance-related bonuses are
awarded at the discretion of the Managing Director. Remuneration and
other terms of employment for company Executives are formalised in
employment agreements.
Executive salaries are to be reviewed with effect from 1 January in
each year and may not be reduced.
B. Details of remuneration (audited)
Amounts of remuneration
Details of the remuneration of the Directors and the Key Management
Personnel (as defined in AASB 124 Related Party Disclosures) of
Ballarat Goldfields NL (BGF) and the BGF Group are set out in
following tables.
The Key Management Personnel of BGF and the Group include the
Directors as per pages 16-17 above and the following Executive
Officers. The Key Management Personnel of the Group are Directors
and those Executives that report directly to the Managing Director.
The following persons, together with the Directors, were the Group
Executives with the greatest authority and responsibility for planning,
directing, and controlling activities of both the consolidated entity and the
parent entity (OKey Management PersonnelO) during the financial year:
Amber Rivamonte - Company Secretary
Joel Forwood - Manager of Corporate and Markets
Steven Olsen - Chief Geologist
The 5 Group Executives who received the highest remuneration for the
year ended 30 June 2006 were:
Amber Rivamonte - Company Secretary
Joel Forwood - Manager of Corporate and Markets
Steven Olsen - Chief Geologist
Chris Finch - Mine Manager
Dick Livingstone - Loss Control Manager
All of the above persons were employees of BGF during the year ended
30 June 2006.
Key Management Personnel of Ballarat Goldfields NL and of the BGF Group
2006 Post Share
employment based
Short-term benefits benefits payment
Name Cash Non Cash Super-annuation Options TOTAL
salary monetary bonus
& fees benefits
$ $ $ $ $ $
Non Executive Directors
Colin Smith(1) 124,750 - - 10,485 - 135,235
Mike Etheridge 43,500 - - 6,615 - 50,115
Alister Maitland(2) 43,500 - - 3,915 - 47,415
Executive Directors
Richard Laufmann 283,315 - 151,380 32,414 - 467,109
Wojciech Ozga (3) 199,570 - 5,000 12,646 108,462 325,678
Other Key Management Personnel
Amber Rivamonte 121,831 - 10,000 11,865 - 143,696
Joel Forwood 184,255 - 5,000 17,033 - 206,288
Steven Olsen 148,906 19,055 10,000 14,302 - 192,263
Other Executives
Chris Finch 148,906 20,000 - 13,401 - 182,307
Dick Livingstone 117,098 20,000 5,000 10,989 - 153,087
1 Colin Smith resigned as Chairman and Director on 31 July 2006.
2 Alister Maitland was appointed a Director on 22 July 2005 and was appointed
Chairman on 1 August 2006.
3 Wojciech Ozga was appointed an Executive Director on 16 June 2006. Before this
appointment he was the Company's General Manager and joined BGF on 1 September
2006. Amounts shown above include all of Wojciech Ozga's remuneration during the
reporting period as General Manager. Amounts received and paid in his position
as a Director amounted to nil as his appointment was effective 16 June 2006.
> Directors' Report
Ballarat Goldfield NL 22
2005 Post Share
employment based
Short-term benefits benefits payment
Name Cash Non Cash Super- Options TOTAL
salary monetary bonus annuation
benefits
Non Executive Directors
Colin Smith 100,000 - - 9,000 - 109,000
Mike Etheridge(1) 35,000 - - 3,150 63,033 101,183
Nicholas Mather 2 6,727 - - 606 - 7,333
Executive Directors
Richard Laufmann 225,117 - 80,734 27,527 - 333,378
Other Key Management Personnel
Amber Rivamonte 103,337 - - 9,300 - 112,637
Joel Forwood 3 124,030 - - 11,163 71,200 206,393
Steven Olsen 127,734 20,000 - 11,496 - 159,230
Other Executives
Chris Finch 4 76,601 14,740 - 6,894 35,600 133,835
Dick Livingstone 107,939 20,000 - 9,715 - 137,654
1 Mike Etheridge was appointed a Director on 18 August 2004. 3 Joel Forwood
commenced employment on 4 October 2004.
2 Nicholas Mather resigned as a Director on 27 August 2004. 4 Chris Finch
commenced employment on 1 December 2004.
C. Service agreements (audited)
Remuneration and other terms of employment for the Managing
Director, Director of Operations, Other Key Management Personnel and
Other Executives are formalised in service agreements. The contractual
arrangements contain certain provisions typically found in contracts of
this nature. Other major provisions of the agreements for Other Key
Management Personnel and Other Executives relating to remuneration
are set out below.
Amber Rivamonte - Company Secretary
* Term of agreement - no specified term with current contract
provisions commencing 1 January 2004.
* Base salary, inclusive of superannuation, of $135,000 to be
reviewed annually by the Remuneration Committee.
* On termination of the contract, entitlement of salary as per the
severance pay standard.
Joel Forwood - Manager Corporate and Markets
* Term of agreement - no specified term with current contract
provisions commencing 1 October 2004.
* Base salary, inclusive of superannuation, of $190,000 to be
reviewed annually by the Remuneration Committee.
* On termination of the contract, entitlement of salary as per the
severance pay standard.
Steve Olsen - Chief Geologist
* Term of agreement - no specified term with current contract
provisions commencing 1 January 2004.
* Base salary, inclusive of superannuation, of $165,000 to be
reviewed annually by the Remuneration Committee.
* On termination of the contract, entitlement of salary as per the
severance pay standard.
Chris Finch - Mine Manager
* Term of agreement - no specified term with current contract
provisions commencing 4 December 2004.
* Base salary, inclusive of superannuation, of $165,000 to be
reviewed annually by the Remuneration Committee.
* On termination of the contract, entitlement of salary as per the
severance pay standard.
Dick Livingstone - Loss Control Manager
* Term of agreement - no specified term with current contract
provisions commencing 1 January 2004.
* Base salary, inclusive of superannuation, of $126,789 to be
reviewed annually by the Remuneration Committee.
* On termination of the contract, entitlement of salary as per the
severance pay standard.
D. Share based compensation (audited)
> Options provided as remuneration
There were 1.5 million options over unissued ordinary shares of BGF granted to
the Directors and nil share options granted to Other Key Management
Personnel of the Company and the Group as part of their remuneration during the
period ending 30 June 2006.
The terms and conditions of options affecting remuneration in this or future
reporting periods are as follows:
Name Grant Date Number of Exercise Expiry Grant Remuneration
options Price Date date consisting of
granted valuation options(2)
during yr
Wojciech
Ozga 2/9/2005 1,500,000 0.25(1)30/9/08 $150,000 41%
1 Of the options issued, one third are exercisable at any time, one third are
exercisable after 30 September 2006 and one third are exercisable after 30
September 2007.
2 The percentage of the value of remuneration consisting of options, based on
the value at grant date.
The amounts disclosed for emoluments relating to options above is the
assessed fair value at grant date of options granted to Directors and
Other Key Management Personnel. Fair values at grant date are
independently determined using a Black-Scholes option pricing model
that takes into account the exercise price, the term of the option, the
vesting and performance criteria, the impact of dilution, the nontradeable
nature of the option, the share price at grant date and the
expected volatility of the underlying share, the expected dividend yield
and the risk-free interest rate for the term of the option.
Options are approved for issue by the Board. The option issue price is
determined by the ASX average closing traded price for the 5 days
prior to grant date. Options are granted at nil consideration and carry
no voting rights or entitlements to dividends. If an employee ceases to
be employed by the Group they have 60 days to exercise all options
that have vested. Any options that are not exercised during this period
will lapse.
Details of options over ordinary shares in the Company provided as
remuneration to each Director of BGF and each of the Other Key
Management Personnel of the Group are set out below. When
exercisable, each option is convertible into one ordinary share of
Ballarat Goldfields NL.
> Shares provided on exercise of remuneration options
Details of ordinary shares in the Company provided as a result of the exercise
of remuneration options to each Director of BGF and other Key Management
Personnel of the Group are set out below.
Number of options granted during the year Number of options vested during the
year
Name Number of options granted Number of options vested
during the year during the year
2006 2005 2006 2005
Directors of BGF
Richard Laufmann - - 2,333,334 2,333,333
Wojciech Ozga 1,500,000 - 500,000 -
Other Key Management Personnel of the Group
Amber Rivamonte - - 333,334 333,333
Joel Forwood - 1,000,000 333,333 333,333
Steven Olsen - - 500,000 500,000
Other Executives
Chris Finch - 500,000 166,666 166,666
Dick Livingstone - - 166,667 166,666
Shares provided on exercise of remuneration options
Details of ordinary shares in the Company provided as a result of the exercise
of remuneration options to each Director of BGF and other Key Management
Personnel of the Group are set out below.
Name Amount paid Number of ordinary shares
per ordinary issued on exercise of options
share during the year
cents 2006 2005
Directors of BGF
Richard Laufmann - - -
Wojciech Ozga - - -
Other Key Management Personnel of the Group
Amber Rivamonte - - -
Joel Forwood - - -
Steven Olsen - - -
Other Executives
Chris Finch - - -
Dick
Livingstone * 4.72 166,667 166,666
* The share price at exercise date was 45 cents equating to a value of $75,000
being 49 per cent of his total salary for the period ended 30 June 2006. These
shares were unsold at reporting date.
E. Additional information (unaudited)
Principles used to determine the nature and amount of remuneration:
relationship between remuneration and company performance
Over the past five years share price appreciation has been 1,100 per
cent. During the same period, Executive remuneration (as measured by
the Managing Director's base salary) percentage increase was 14.5 per
cent. In addition to the base salary, the Managing Director was paid
short term incentives as per section A of the Remuneration Report.
Details of remuneration: cash bonuses and options
For each cash bonus and options granted to Directors and Other Key
Management Personnel, the percentage of the available bonus or grant
that was paid, or that vested, in the financial year, and the percentage
that was forfeited because the person did not meet the service and
performance criteria is set out below. No part of the bonuses or grants
of options are payable in future years. All cash bonuses were granted
effective 1 January 2006.
Cash bonus Options
Name Paid Forfeited Year Vested Forfeited FY in Minimum Maximum
% granted % % which total total
options value of value of
may vest grant grant
yet to yet to
vest vest
$ $
Richard
Laufmann 100 - 2003 33 - - - -
Wojciech
Ozga 100 - 2005 33 - 2007 - 35,538
2008 6,000
Amber
Rivamonte 100 - 2003 33 - - - -
Steven
Olsen 100 - 2003 33 - - - -
Joel
Forwood 100 - 2004 33 - 2007 - 3,236
Chris Finch - - 2004 33 - 2007 - 1,618
Dick
Livingstone 100 - 2003 33 - - - -
The maximum value of options yet to vest has been determined by the
portion of the grant date fair value that has not been expensed at
reporting date. That is, the amount that will be expensed in future years.
Loans to Directors and Executives
There were no loans or related party transactions with Directors or
Other Key Management Personnel, including related entities during the
financial year.
Share Options Granted to Directors and the Most Highly Remunerated Officers
Details of options granted to the Directors and the 5 most highly
remunerated officers of the Group can be found in section D of the
remuneration report. No options over unissued ordinary shares have
been issued since the end of the financial year.
Shares Under Option
There are 17,250,000 unissued ordinary shares of BGF under option at
the date of this report.
Date options Expiry Date Issue price of Number under
granted shares option
1 July 2003 30 September 2006 1 4.72c 2,500,000
31 October 2003 30 September 2007 2 2 7,000,000
11 November 2004 30 September 2007 2 2 1,000,000
1 December 2004 30 September 2007 3 17.25c 1,500,000
2 December 2004 02 December 2007 15.00c 3,750,000
2 September 2005 30 September 2008 4 25.00c 1,500,000
1 Of the options issued, one third are exercisable at any time, one third are
exercisable after 30 September 2004 and one third are exercisable after 30
September 2005.
2 Of the options issued, one third are exercisable at any time at an exercise
price of 12 cents, one third are exercisable after 30 September 2004 at an
exercise price of 13 cents and one third are exercisable from 30 September 2005
at an exercise price of 15 cents.
3 Of the options issued, one third are exercisable at anytime, one third of the
options exercisable after 30 September 2005, and one third of the options
exercisable after 30 September 2006.
4 Of the options issued, one third are exercisable at anytime, one third of the
options exercisable after 30 September 2006, and one third of the options
exercisable after 30 September 2007.
Shares Issued on the Exercise of Options
The following ordinary shares of BGF were issued during the year
ended 30 June 2006 on the exercise of options. No amounts are
unpaid on any of the shares.
Date options Issue price of Number under
granted shares (cents) option
1 July 2003 4.72 166,667
9 August 2004 15.0 218,466,302
1 December 2004 17.25 333,333
2 December 2004 15.0 1,250,000
Insurance of Officers
During the financial year, BGF paid a premium of $48,400 to insure the
Directors and Secretary of the Company and related bodies corporate.
The liabilities insured include costs and expenses that may be incurred
in defending civil or criminal proceedings that may be brought against
the officers in their capacity as officers of the Company and related
bodies corporate. The Company's Directors' and Officers' Insurance
policy expires on 31 January 2007.
Proceedings on Behalf of the Company
No person has applied to the Court under section 237 of the
Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Company is
a party, for the purpose of taking responsibility on behalf of the
Company for all or part of those proceedings
No proceedings have been brought or intervened in or on behalf of the
Company with leave of the Court under section 237 of the Corporations
Act 2001.
Non-audit Services
The Company may decide to employ the auditor on assignments
additional to their statutory audit duties where the auditor's expertise
and experience with the Company and/or the consolidated entity
are important.
Details of the amounts paid or payable to the auditor for audit and nonaudit
services provided during the year are set out in note 23 to the
financial statements.
Auditors' Independence Declaration
A copy of the auditors' independence declaration as required under
section 307C of the Corporations Act 2001 is set out on the following page.
Auditor
PricewaterhouseCoopers continues in office in accordance with section
327 of the Corporations Act 2001.
This report is made in accordance with a resolution of the Directors.
Richard Laufmann Ballarat
Managing Director 7 September 2006
Auditors' Independence Declaration
As lead auditor for the audit of Ballarat Goldfields NL for the year ended 30
June 2006, I declare that to the best of my knowledge and belief,
there have been:
(a) no contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation
to the audit.
This declaration is in respect of Ballarat Goldfields NL and the entities it
controlled during the period.
Chris Dodd Melbourne
Partner 7 September 2006
PricewaterhouseCoopers
Liability is limited by a scheme approved under Professional Standards
Legislation
PricewaterhouseCoopers
abn 52 780 433 757
Freshwater Place
2 Southbank Boulevard
Southbank vic 3006
GPO Box 1331L
Melbourne vic 3001
Website www.pwc.com/au
Telephone +61 3 8603 1000
Facsimile +61 3 8603 1999
Ballarat Goldfields NL (BGF) has adopted a
detailed corporate governance statement which
when read in conjunction with its constitution,
provides the basis on which BGF can conduct
corporate governance practices of a high
standard. Each Director has agreed to observe
the guidelines contained in the detailed corporate
governance statement, which utilises the
framework set out by the ASX Corporate
Governance Council as a basis for its preparation.
This is a brief summary of that statement and
should be read in conjunction with the information
contained in the Directors' Report.
There is no obligation for all of the ASX Corporate
Governance Council Standards to be adopted, as
they apply on an "if not, explain why not" basis.
There is one particular difference from the ASX
Corporate Council Governance Standards which
has not been adopted by BGF, namely the nonestablishment
of a nomination committee for new
Directors to the Board. BGF is a small company
with a small number of Directors and a small
management team. It is not considered
appropriate for a company of BGF's nature to
establish a nomination committee in these
circumstances. The matters typically considered
by a nomination committee in a large company
context are generally considered by the Board as
a whole. Except for this difference, BGF follows
the substance of the ASX Corporate Governance
Council Standards.
Role and Responsibilities of Board and Management
The role of the Board is to effectively lead the Company by working
with executive management, determining key business strategies and
direction with the primary objective of enhancing long term
shareholder value. Oversight of the management and the overall
corporate governance of the Company including strategic direction,
establishing goals for management and the monitoring of the
achievements against these goals.
The Managing Director has been delegated overall authority and
responsibility for the management of the BGF and is required to report
to the Board with all information necessary to enable it to discharge
its responsibilities.
Board Charter
In addition to the roles and responsibilities referred to above and those
matters determined by law, the Board reserves to itself various powers
and authorities. This includes, for example, appointing and removing
the Managing Director and Company Secretary, reviewing governance
systems, as well as a range of other responsibilities.
Board Composition and Independence
The composition of the Board is established utilising various guidelines.
At least half of the Board should be Non Executives and should be
independent Directors. The Board will determine if a Director is
independent in a manner consistence with the ASX Corporate
Governance Principles and will regularly assess the independence of
those Directors. The Chairman of the Board must be an independent
Director. The role of the Chairman and Managing Director will not be
exercised by the same individual. All of these requirements are
complied with as at the date of publication of the Company's 2006
Annual Report, and all of the Company's Non Executive Directors are
independent Directors.
Remuneration Committee Charter
BGF has adopted a Remuneration Committee Charter which lays out
the remuneration and performance evaluation responsibilities
delegated to the Remuneration Committee by the Board and outlines
its structure, duties (including implementing the ASX Corporate
Governance Council recommendations as to remuneration policies)
and membership requirements.
The Remuneration Committee comprises of at least two Non Executive
Directors as proposed by the Chairman of the Board and approved by
the Board. The Remuneration Committee has an advisory role to the
Board and has a range of responsibilities relating to the remuneration
levels for key Executives and Directors including the Managing Director.
Audit Committee Charter
BGF has adopted an Audit Committee Charter which lays out the
framework for the oversight of the external audit and internal audit
arrangements and outlines its structures, duties and membership
requirements. In accordance with ASX Corporate Council Governance
Standards requirements, the Audit Committee comprises of at least two
Non Executive Directors who are financially literate, at least one
member has financial expertise and some members have an
understanding of the industry in which BGF operates. It is chaired by a
Non Executive Director who is not the Chairman. The Audit Committee
has an advisory role to the Board and has a range of responsibilities
relating to reliable management and financial reporting and
maintenance of an effective and efficient audit
Code of Conduct for Directors
The Directors are required to achieve high standards in the discharge
of their responsibilities and duties. A Director must take responsible
steps to avoid conflicts between material personal interests and the
interests of BGF. Directors must not participate in activities that will
discredit the Board or BGF.
Code of Conduct for Trading Securities
BGF has adopted a code of conduct for trading securities. No Directors
or key Executives may trade securities whilst they are in the
possession of price sensitive information or during one-off trading
embargo periods. Subject to this, Directors or key Executives are
permitted to trade securities with the exception of eight weeks prior to
the issue of annual reports, four weeks prior to the issue of quarterly
reports and other expected formal announcements when no such
trading should occur. Each Director or key Executive must disclose to
the Managing Director or Company Secretary in advance any intention
to trade securities and they must confirm at that time they are not in
position of price sensitive information.
Policy on Financial Reporting
At the time of presenting financial reports to the Board, the Managing
Director and the Chief Financial Officer are required to advise the Board
in writing that such reports represent a true and fair view of BGF's
financial position and performance, and that the reports have been
prepared to conform with relevant accounting standards together with
the compliance and control systems adopted by the Board.
The Managing Director and Chief Financial Officer are required to
advise the Board at that time in writing of any material matters which
have arisen to their knowledge regarding BGF's risk profile and internal
compliance systems.
Continuous Disclosure Policy
The Board has adopted a formal policy in relation to continuous
disclosure which has been made known to all key Executives. The
Board has implemented a standing procedure so that continuous
disclosure is a specific item considered at each Board Meeting. It is
BGF's policy that all price sensitive information should be disclosed to
ASX on a timely basis subject to the permitted exceptions to such
disclosure. Information disclosed to the ASX is posted on BGF's website
after it is disclosed to the ASX. BGF's policy on continuous disclosure is
extensive and covers the nature of price sensitive information,
preventing selective disclosure, developing disclosure procedures, etc.
Responsibility Statement
BGF's overriding responsibility is to the shareholders. It recognises that
others are affected by, or can influence, BGF's activities or have power
to influence BGF's activities and that it has a responsibility to actively
consider and interact with those parties in order to ensure that
shareholder wealth is maximised. The Company encourages effective
communications with shareholders and others within the community
through ASX announcements, the Company's website, shareholder
communications and the Company's Annual Report.
> Annual Financial Report
30 June 2006
The financial report covers both Ballarat Goldfields NL
as an individual entity and the consolidated entity
consisting of Ballarat Goldfields NL and its controlled
entities. The financial report is presented in the
Australian currency.
Ballarat Goldfields NL is a public company listed on the Australian
Stock Exchange incorporated and domiciled in Australia and the
Alternative Investment Market (AIM) of the London Stock Exchange.
Its registered office and principal place of business is:
Ballarat Goldfields NL
10 Woolshed Gully Drive
Mt Clear Victoria 3350 Australia
A.C.N. 006 245 441
A description of the nature of the consolidated entity's operations and
its principal activities is included in the review of operations and
activities and in the Directors' report, both of which are not part of this
financial report.
The financial report was authorised for issue by the Directors on
7 September 2006. The company has the power to amend and reissue
the financial report.
Through the use of the internet, we have ensured that our corporate
reporting is timely, complete, and available globally at minimum cost to
the Company. Information is available at on our website:
www.ballarat-goldfields.com.au
For information in relation to our reporting please call:
+61 (3) 5327 1111
or email info@ballarat-goldfields.com.au
Contents Page
Financial Report
Income Statements 34
Balance Sheets 35
Statements of Changes in Equity 36
Cash Flow Statements 37
Notes to the Financial Statements 38-58
Directors' Declaration 59
Independent Audit Report to the Members 60
> Financial Report Income Statements
2005 > 2006 For the year ended 30 June 2006
Consolidated Parent Entity
Notes 2006 2005 2006 2005
$ $ $ $
Revenue from continuing
operations 4 1,680,450 915,313 1,680,450 915,313
Other income 4 14,191 - 14,191 -
Other expenses
Marketing (468,804) (199,585) (468,804) (199,585)
Administration (4,774,445) (3,277,340) (4,772,925) (3,657,340)
Finance costs expense (506,686) (595,000) (506,686) (595,000)
Exploration (34,880,908) (17,876,464) (34,650,805) (17,418,130)
Loss before income tax expense (38,936,202) (21,033,076) (38,704,579) (20,954,742)
Income tax expense 6 - - - -
Net loss attributable to members
of Ballarat Goldfields NL (38,936,202) (21,033,076) (38,704,579) (20,954,742)
Cents Cents
Basic loss per share 26 (3.70) (2.98)
Diluted loss per share 26 (3.70) (2.98)
The above income statements should be read in conjunction with the accompanying
notes.
35 Annual Report 2006
> Financial Report Balance Sheets
2005 > 2006 As at 30 June 2006
Consolidated Parent Entity
Notes 2006 2005 2006 2005
$ $ $ $
Current Assets
Cash and cash equivalents 25,966,713 8,937,340 25,966,713 8,937,340
Receivables 7 1,241,024 520,225 1,241,024 520,225
Inventory 8 167,111 - 167,111 -
Other 9 115,868 - 115,868 -
Total Current Assets 27,490,716 9,457,565 27,490,716 9,457,565
Non Current Assets
Receivables 10 - - 841,130 550,511
Investments 11 - - 70,005 70,005
Property, plant and
equipment 12 31,228,345 4,911,052 30,979,432 4,660,779
Exploration 13 1,086,063 874,145 931,063 779,500
Intangible assets 14 171,636 - 171,636 -
Total Non Current Assets 32,486,044 5,785,197 32,993,266 6,060,795
Total Assets 59,976,760 15,242,762 60,483,982 15,518,360
Current Liabilities
Accounts payable 15 9,537,544 6,783,589 9,537,544 6,783,589
Borrowings 16 234,530 50,868 234,530 50,868
Provisions 17 370,662 215,445 370,662 215,445
Other 18 5,292 45,182 5,292 45,182
Total Current Liabilities 10,148,028 7,095,084 10,148,028 7,095,084
Non Current Liabilities
Borrowings 19 985,041 139,780 985,041 139,780
Provisions 20 572,864 379,500 572,864 379,500
Total Non Current
Liabilities 1,557,905 519,280 1,557,905 519,280
Total Liabilities 11,705,933 7,614,364 11,705,933 7,614,364
Net Assets 48,270,827 7,628,398 8,778,049 7,903,996
Equity
Contributed equity 21 188,261,861 108,750,280 188,261,861 108,750,280
Reserves 22 (a) 1,236,273 1,169,224 1,236,273 1,169,224
Accumulated losses 22 (b) (141,227,307) (102,291,106)(140,720,085)(102,015,508)
Total Equity 48,270,827 7,628,398 48,778,049 7,903,996
The above balance sheets should be read in conjunction with the accompanying
notes.
> Financial Report Statements of Changes in Equity
2005 > 2006 For the year ended 30 June 2006
Consolidated Parent Entity
Notes 2006 2005 2006 2005
$ $ $ $
Total equity at the beginning
of the financial year 7,628,398 1,580,529 7,903,996 1,777,793
Loss for the year (38,936,202) (21,033,076) (38,704,579) (20,954,742)
Total recognised income
and expense for the year (38,936,202) (21,033,076) (38,704,579) (20,954,742)
Transactions with equity holders in their
capacity as equity holders:
Employee share options 32 182,417 648,240 182,417 648,240
Contributions of equity,
net of transaction costs 21 79,396,215 26,432,705 79,396,215 26,432,705
Total equity at the end of
the financial year 48,270,827 7,628,398 48,778,049 7,903,996
The above statements of changes in equity should be read in conjunction with the
accompanying notes.
> Financial Report Cash Flow Statements
2005 > 2006 For the year ended 30 June 2006
Consolidated Parent Entity
Notes 2006 2005 2006 2005
$ $ $ $
Cash flows from operating activities
Exploration expenditure (33,056,498) (15,440,474) (32,765,879) (15,154,213)
Payments to suppliers and employees (2,925,699) (2,109,409) (2,925,699) (2,109,409)
(35,982,197) (17,549,883) (35,691,578) (17,263,622)
Interest received 1,595,998 915,313 1,595,998 915,313
Interest paid (1,034,512) - (1,034,512) -
Net cash outflow from operating
activities 28 (35,420,711) (16,634,570) (35,130,092) (16,348,309)
Cash flows from investing activities
Payments for property, plant
and equipment (26,983,404) (2,003,849) (26,983,404) (2,003,849)
Payments for acquisition of
tenements - (200,000) - (400,000)
Loans to controlled entities - - (290,619) (286,261)
Repayment of loans to controlled entities - - - 200,000
Proceeds from sale of property, plant
and equipment 37,273 - 37,273 -
Net cash outflow from investing
activities (26,946,131) (2,203,849) (27,236,750) (2,490,110)
Cash flows from financing activities
Proceeds from the issues of share
and other equity securities 84,030,465 28,184,755 84,030,465 28,184,755
Costs associated with issue of shares
and other equity securities (4,634,250) (1,752,051) (4,634,250) (1,752,051)
Proceeds from borrowings 12,000,000 - 12,000,000 -
Repayment of borrowings (12,000,000) - (12,000,000) -
Net cash inflow from financing
activities 79,396,215 26,432,704 79,396,215 26,432,704
Net increase (decrease) in cash held 17,029,373 7,594,285 17,029,373 7,594,285
Cash at the beginning of the financial
year 8,937,340 1,343,055 8,937,340 1,343,055
Cash at the end of the financial
year 25,966,713 8,937,340 25,966,713 8,937,340
The above cash flow statements should be read in conjunction with the
accompanying notes.
NOTE 1 > SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial
report are set out below. These policies have been consistently applied to
all the years presented, unless otherwise stated. The financial report includes
separate financial statements for Ballarat Goldfields NL as an individual
entity and the consolidated entity consisting of Ballarat Goldfields NL and its
subsidiaries.
(a) Basis of preparation
This general purpose financial report has been prepared in accordance with
Australian equivalents to International Financial Reporting Standards
(AIFRSs), other authoritative pronouncements of the Australian Accounting
Standards Board, Urgent Issues Group Interpretations and the
Corporations Act 2001.
> Compliance with IFRSs
Australian Accounting Standards include AIFRSs. Compliance with AIFRSs ensures
that the consolidated financial statements and notes of Ballarat
Goldfields NL comply with International Financial Reporting Standards (IFRSs).
The parent entity financial statements and notes also comply with
IFRSs except that it has elected to apply the relief provided to parent entities
in respect of certain disclosure requirements contained in AASB 132
Financial Instruments: Presentations and Disclosure.
> Application of AASB 1 First-time Adoption of Australian Equivalents to
International Financial Reporting Standards
These financial statements are the first Ballarat Goldfields NL financial
statements to be prepared in accordance with AIFRSs. AASB 1 First time
Adoption of Australian Equivalents to International Financial Reporting
Standards has been applied in preparing these financial statements.
Financial statements of Ballarat Goldfields NL until 30 June 2005 have been
prepared in accordance with previous Australian Generally Accepted
Accounting Principles (AGAAP). AGAAP differs in certain respects from AIFRS.
When preparing the Ballarat Goldfields NL financial statements,
management has amended certain accounting, valuation and consolidation methods
applied in the AGAAP financial statements to comply with AIFRS.
Reconciliations and descriptions of the effect of transition from previous AGAAP
to AIFRSs on the Group's equity and its net income are given in Note 34.
> Early adoption of standards
The Group has elected to apply AASB119 Employee Benefits (issued in December
2004) to the annual reporting period beginning 1 July 2005.
This includes applying AASB 119 to the comparatives in accordance with AASB 108
Accounting Policies, Changes in Accounting Estimates and
Errors. There was no impact from the application of AASB 119.
> Historical cost convention
These financial statements have been prepared under the historical cost
convention.
> Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the
use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's
accounting policies. The area involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are
significant to the financial statements, are disclosed in note 3.
(b) Segment reporting
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are
different to those of other business segments. A geographical segment is engaged
in providing products within a particular economic
environment and is subject to risks and returns that are different from those of
segments operating in other economic environments.
(c) Impairment of assets
Assets that have an indefinite useful life are not subject to amortisation and
tested annually for impairment. Depreciable assets that are subject
to amortisation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying value may not be
recoverable. An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash
flows (cash generating units). Prior to the establishment of a cash
generating unit assets are assessed for impairment against the total project
value.
(d) Restoration, rehabilitation and environmental expenditure
Environmental obligations associated with the retirement or disposal of long
lived assets will be recognised when the disturbance occurs and is
based on the extent of damage incurred. The provision is measured as the present
value of the future expenditure and a corresponding
rehabilitation asset is also recognised. On an ongoing basis, the rehabilitation
liability will be re-measured in line with the changes in the time
value of money (recognised as an expense in the statement of financial
performance and an increase in the provision), and additional
disturbances will be recognised as additions to a corresponding asset and
rehabilitation liability. The rehabilitation asset will be accounted for in
accordance with the accounting policy applicable to the asset to which it
relates (i.e. Exploration and Evaluation).
(e) Equity-based compensation benefits
Equity-based compensation will be recognised as an expense in respect of the
services received.
> Share options granted before 7 November 2002 and/or vested before 1 January
2005
No expense is recognised in respect of these options. The shares are recognised
when the options are exercised and the proceeds received
allocated to share capital.
> Share options granted after 7 November 2002 and vested after 1 January 2005
The fair value of options granted is recognised as an employee benefit expense
with a corresponding increase in equity. The fair value is
measured at grant date and recognised over the period during which the employees
become unconditionally entitled to the options.
The fair value at grant date is independently determined using a Black-Scholes
option pricing model that takes into account the exercise price, the
term of the options, the vesting and performance criteria, the impact of
dilution, the non-tradeable nature of the option, the share price at grant
date and expected price volatility of the underlying share, the expected
dividend yield and the risk-free interest rate for the term of the option.
Non-market vesting conditions are included in assumptions about the number of
options that are expected to become exercisable. At each
balance sheet date, the entity revises its estimate of the number of options
that are expected to become exercisable. The employee benefit
expense recognised each period takes into account the most recent estimate.
There are no market conditions attached to the options.
On the exercise of options, the balance of the share based payments reserve
relating to those options is transferred to share capital and the
proceeds received, net of any directly attributable transactions costs are
credited to share capital.
(f) Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of
all entities controlled by Ballarat Goldfields NL as at 30 June 2006 and the
results of all controlled entities for the year then ended. Ballarat Goldfields
NL and its controlled entities together are referred to in this financial report
as the Group or the consolidated entity. The effects of all transactions between
entities in the consolidated entity are eliminated in full.
Subsidiaries are all those entities (including special purpose entities) over
which the Group has the power to govern the financial and operating
policies, generally accompanying a shareholding of more than one-half of the
voting rights. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when assessing whether
the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that
control ceases.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group (refer to note 1 (h)).
Intercompany transactions, balances and unrealised gains on transactions between
Group companies are eliminated. Unrealised losses are also eliminated unless the
transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
The Company has elected to utilise the exemption available under AASB 1 First
Time Adoption of AIFRS AASB 3 Business Combinations to grandfather pre-AIFRS
business combinations.
Investments in subsidiaries are accounted for at cost in the individual
financial statements of Ballarat Goldfields NL.
(g) Exploration and evaluation expenditure
For each area of interest, expenditure incurred in the exploration for and
evaluation of mineral resources shall be expensed as incurred unless the
following conditions are met:
* the Company has a right to tenure;
* the Company is able to make a reasonable assessment of the existence of
economically recoverable Reserves or Indicated Resources; and
* active and significant operations in the area of interest are continuing.
Expenditure on the acquisition of mining tenements and other such rights are
capitalised when incurred and carried as assets while they remain current.
Each area of interest is reviewed for impairment at each reporting date and
accumulated costs are written off to the income statement to the
extent that they will not be recoverable in the future or are impaired. If it is
established subsequently that economically recoverable Reserves or
Indicated Resources exist in a particular area of interest, resulting in the
decision to develop a commercial mining operation, then in that year the
accumulated expenditure attributable to that area, to the extent that it does
not exceed the recoverable amount of the area concerned, will be
transferred to mine development. As such it will be subsequently amortised
against production from that area.
(h) Acquisitions of assets
The purchase method of accounting is used for all acquisitions of assets
regardless of whether equity instruments or other assets are acquired.
Cost is measured as the fair value of the assets given up, shares issued or
liabilities undertaken at the date of acquisition plus incidental costs
directly attributable to the acquisition.
(i) Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the
acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Group and the
cost of the item can be measure reliably. All other repairs and
maintenance are charged to the income statement during the financial period in
which they are incurred.
Depreciation is applied in respect of all fixed assets excluding freehold land
and is calculated using the straight line method. Capitalised
exploration expenditure is not amortised until production commences. Leased
assets are depreciated over the period of the lease or estimated
useful life, whichever is shorter, using the straight line method. The expected
useful lives are as follows:
Buildings 40 years
Plant and equipment 5 - 20 years
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date.
An asset's carrying amount is written down immediately to its recoverable amount
if the asset's carrying amount is greater than its estimated
recoverable amount. (note 1(c))
Gains and losses on disposals are determined by comparing proceeds with carrying
amounts. These are included in the income statement.
(j) Inventories
Raw materials and stores, work in progress and finished goods are valued at the
lower of cost and net realisable value. Costs comprise direct
materials, direct labour and an appropriate proportion of variable and fixed
overhead expenditure which are assigned to inventory on hand by the
method most appropriate to each particular class of inventory. The majority of
costs are assigned to individual items of stock on the basis of
weighted average costs.
During the exploration and development phase, where the cost of extracting the
ore exceeds the likely recoverable amount, work in progress
inventory is written down to a nil value.
(k) Hire purchase and finance of non current assets
Where non current assets are acquired by means of hire purchase agreements or
chattel mortgage the cost price of that equipment is
established as an asset and amortised on a straight line basis over its useful
life. A corresponding liability is also established and each hire
purchase repayment is allocated between such liability and interest expense.
(l) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of
changes in value, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities on the balance sheet.
(m) Employee benefits
> Wages, salaries and annual leave
Liabilities for wages and salaries and annual leave are recognised in respect of
employees' services up to the reporting date and are measured
at the amounts expected to be paid when the liabilities are settled. No
provision is made for sick leave.
> Long Service Leave
A liability for long service leave is measured as the present value of expected
future payments to be made in respect of services provided by
employees up to the reporting date. Consideration is given to expected future
wage and salary levels, experience of employee departures and
periods of service and appropriate discounting of future payments.
(n) Earnings per share
> Basic earnings per share
Basic earnings per share is determined by dividing net loss after income tax
attributable to members by the weighted average number of
ordinary shares outstanding during the financial year.
> Diluted Earnings per Share
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share by taking into account the after tax effect of
interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have
been issued for no consideration in relation to dilutive potential ordinary
shares.
(o) Trade and other creditors
These amounts represent liabilities for goods and services provided to the
consolidated entity prior to the end of the financial year and which are
unpaid. The amounts are unsecured.
(p) Receivables
Receivables are recognised as amounts outstanding on various contracts as at
balance date. Settlement of such amounts occurs within the terms
of the contracts and in the case of trade debtors occurs within 30 days of
recognition.
Collectibility of receivables is reviewed on an ongoing basis. Debts which are
known to be uncollectible are written off. A provision for doubtful
receivables is established when there is objective evidence that the Group will
not be able to collect all amounts due according to the original
terms of receivables. The amount of the provision is recognised in the income
statement.
(q) Interest income recognition
Interest revenue is recognised on an effective interest basis.
(r) Finance costs
Finance costs are recognised as expenses in the period in which they are
incurred. Finance costs include interest on bank overdrafts and short
term and long term borrowings, finance lease charges and certain exchange rate
differences arising from foreign currency borrowings.
(s) Interest bearing liabilities and borrowings
Convertible instruments that are convertible to ordinary shares at the
discretion of the lender are classified as interest bearing liabilities.
Borrowings are classified as current liabilities unless the group has an
unconditional right to defer settlement of the liability for at least 12
months after the balance sheet date.
(t) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction from the proceeds.
(u) Intangible assets
Licences have a finite useful life and are carried at cost less accumulated
amortisation and impairment losses. Amortisation is calculated using
the straight line method to allocate the cost of the licences over their
estimated useful life.
(v) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated
GST, unless the GST incurred is not recoverable from the taxation
authority. In this case it is recognised as part of the cost of the acquisition
of the asset or part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or
payable. The net amount of GST recoverable from, or payable to, the taxation
authority is included with receivables or payables in the balance sheet.
Cash flows are presented on a net basis. The GST components of cash flows
arising from investing or financing activities which are recoverable
from, or payable to the taxation authority, are presented as operating cash
flow.
(w) New accounting standards and UIG interpretations
Certain new accounting standards and UIG interpretations have been published
that are not mandatory for 30 June 2006 reporting periods. The
Group's assessment of the impact of these new standards and interpretations is
set out below.
> UIG 5 Rights to Interests arising from Decommissioning, Restoration and
Environmental Rehabilitation Funds
The Group does not have interests in decommissioning, restoration and
environmental rehabilitation funds. This interpretation will not affect the
Group's financial statements.
(x) Income tax
Tax effect accounting has been adopted, whereby tax expense is calculated on pre
tax accounting profits adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of
assets and liabilities and their carrying amounts in the financial statements,
and to unused tax losses. The income tax benefit relating to tax losses is not
carried forward as an asset unless realisation of the benefit is probable.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities and when the
deferred tax balances relate to the same taxation authority.
NOTE 2 > RISK MANAGEMENT
(a) Credit Risk
The Group has no concentration of credit risk. The credit risk on financial
assets of the consolidated entity which have been recognised on the
balance sheet is generally the carrying amount, net of any provision for
doubtful debts.
(b) Interest Rate Risk
The Group's exposure to interest rate risk only applies to hire purchase
liabilities of $1,218,761 (2005: $190,648) and term deposits of
$21,658,014 (2005: $ nil). The effective interest rate on the hire purchase
liabilities are at fixed rates between 8% to 9% (2005: 8.25%) over the
life of the hire purchase agreements and term deposits is a fixed rate of 5.75%
maturing monthly (2005: 0%). All other financial instruments of
the consolidated entity are non-interest bearing.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash. As the
Group is an emerging producer and at balance date not
producing self sustaining cash flows from gold sales, the Group maintains the
capacity to raise additional funds through the equity markets or
debt financing.
NOTE 3 > CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that may
have a financial impact on the entity and that are believed to be reasonable
under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal actual results. There are
no estimates, assumptions or critical judgements that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year.
The Group continues to apply its accounting policy (refer note 1(g)) of only
capitalising exploration and subsequent capital development expenditure when it
relates to an Indicated Resource or Reserve. As described in the Directors'
Report, the continued success of our exploration drilling program will allow the
Group to commence capitalisation of expenditure as we transfer ounces from
Exploration Potential to Resource.
Consolidated Parent Entity
2006 2005 2006 2005
$ $ $ $
NOTE 4 > REVENUE AND OTHER INCOME
Interest received 1,680,450 915,313 1,680,450 915,313
Net gain on disposal of property, plant
and equipment 1 4,191 - 14,191 -
1,694,641 915,313 1,694,641 915,313
NOTE 5 > EXPENSES
Loss before income tax includes the following specific expenses:
Depreciation & amortisation
Land and buildings 6,814 3,956 5,454 2,589
Plant and equipment 142,712 31,931 142,712 31,931
Leased assets 85,794 44,747 85,794 44,747
Intangible assets 2,909 - 2,909 -
Total depreciation & amortisation expense 238,229 80,634 236,869 79,267
Finance costs expense 506,686 595,000 506,686 595,000
Employee benefits 4,090,497 2,582,130 3,962,133 2,564,985
Write down of loans to controlled entities - - - 264,943
Write down of exploration expenditure - 435,650 - -
Write down of investment in controlled
entities - - - 380,000
NOTE 6 > INCOME TAX
Loss from continuing operations
before income tax expense (38,936,202) (21,033,076) (38,704,579) (20,954,742)
Tax at the Australian tax rate of 30%
(2005 - 30%) (11,680,861) (6,309,923) (11,611,374) (6,286,423)
Tax effect of amounts which are not deductible
(taxable) in calculating taxable income:
Amortisation of intangibles 873 - 873 -
Share based payments 54,725 - 54,725 -
Debt forgiveness - - - 264,943
(11,625,263) (6,309,923) (11,555,776) (6,021,480)
Unrecognised deferred tax assets 11,625,263 6,309,923 11,555,776 6,021,480
Income tax expense - - - -
Deferred tax liabilities that have arisen in the course of normal operations
have been offset against unutilised deferred tax assets and as such
have not been shown separately.
At 30 June 2006, the Group had accumulated revenue tax losses of approximately
$78 million (2005: $39 million) resulting from its operations.
The parent entity has accumulated revenue tax losses of approximately $74
million (2005: $35 million) resulting from its operations.
In addition, the Group has capital tax losses of approximately $30 million
(2005: $30 million).
Deferred tax assets of approximately $23 million (2005: $12 million), based on a
corporate tax rate of 30%, attributed to revenue tax losses, has not been
brought to account but may be realised if:
(i) the economic entity derives future profits of a nature and amount sufficient
to enable the benefit of losses to be realised;
(ii) the economic entity continues to comply with the conditions of
deductibility imposed by tax legislation; and
(iii) legislation does not change in a manner which would adversely affect the
realisation of the benefit of losses by the economic entity.
Tax Consolidations
The economic entity has made no decision on whether to implement the tax
consolidations legislation.
Consolidated Parent Entity
2006 2005 2006 2005
$ $ $ $
NOTE 7 > CURRENT ASSETS - RECEIVABLES
Other debtors 1,241,024 520,225 1,241,024 520,225
1,241,024 520,225 1,241,024 520,225
Other debtors is primarily the GST recoverable from the taxation authority
(refer note 1(v)).
NOTE 8 > CURRENT ASSETS - INVENTORY
Finished goods - at net realisable
value 167,111 - 167,111 -
167,111 - 167,111 -
Inventories recognised as expense during the year ended 30 June 2006 amounted to
nil (2005: nil).
Inventory on hand at 30 June 2006 was produced as part of the plant
commissioning.
NOTE 9 > CURRENT ASSETS - OTHER
Prepayments 115,868 - 115,868 -
115,868 - 115,868 -
NOTE 10 > NON CURRENT ASSETS - RECEIVABLES
Unsecured loans - controlled entities - - 841,130 550,511
- - 841,130 550,511
Unsecured loans to controlled entities are non interest bearing.
NOTE 11 > NON CURRENT ASSETS - INVESTMENTS
Ballarat Goldfields NL shares in controlled entities which are unquoted and
comprise:
Share Class Equity Holding Cost
Ordinary 2006 2005 2006 2005
% % $ $
Controlled Entities:
New Resources Pty Ltd 100 100 3 3
Berringa Resources Pty Ltd 100 100 2 2
Ballarat West Goldfields Pty Ltd 100 100 450,000 450,000
Corpique 21 Pty Ltd 100 100 27,242,759 27,242,759
Investment at cost 27,692,764 27,692,764
Provision for dimunition (27,622,759) (27,622,759)
70,005 70,005
All controlled entities are incorporated in Australia.
Ballarat West Goldfields Pty Ltd, Corpique 21 Pty Ltd, Berringa Resources Pty
Ltd and New Resources Pty Ltd are small proprietary companies and are not
required to prepare financial statements. Consequently no individual audit
reports have been issued for them.
The ultimate parent entity in the wholly owned group is Ballarat Goldfields NL.
NOTE 12 > NON CURRENT ASSETS - PROPERTY, PLANT & EQUIPMENT
Assets under Land and Plant and Leased plant Total
Consolidated construction buildings equipment and equipment
$ $ $ $ $
At 1 July 2004
Cost - 259,501 83,826 131,135 474,462
Accumulated depreciation - (7,861) (55,715) (18,028) (81,604)
Net book amount - 251,640 28,111 113,107 392,858
Year ended 30 June 2005
Opening net book amount - 251,640 28,111 113,107 392,858
Additions 3,745,986 576,274 179,479 97,089 4,598,828
Depreciation - (3,956) (31,931) (44,747) (80,634)
Closing net book amount 3,745,986 823,958 175,659 165,449 4,911,052
As at 30 June 2005
Cost 3,745,986 835,775 263,305 228,224 5,073,290
Accumulated depreciation - (11,817) (87,646) (62,775) (162,238)
Net book amount 3,745,986 823,958 175,659 165,449 4,911,052
Year ended 30 June 2006
Opening net book amount 3,745,986 823,958 175,659 165,449 4,911,052
Additions 23,485,861 378,255 1,652,656 1,058,923 26,575,695
Disposals - - - (23,082) (23,082)
Depreciation - (6,814) (142,712) (85,794) (235,320)
Closing net book amount 27,231,847 1,195,399 1,685,603 1,115,496 31,228,345
As at 30 June 2006
Cost 27,231,847 1,214,029 1,915,962 1,238,112 31,599,950
Accumulated depreciation - (18,630) (230,359) (122,616) (371,605)
Net book amount 27,231,847 1,195,399 1,685,603 1,115,496 31,228,345
Assets under Land and Plant and Leased plant Total
Parent construction buildings equipment and equipment
$ $ $ $ $
At 1 July 2004
Cost - - 83,826 131,135 214,961
Accumulated depreciation - - (55,715) (18,028) (73,743)
Net book amount - - 28,111 113,107 141,218
Year ended 30 June 2005
Opening net book amount - - 28,111 113,107 141,218
Additions 3,745,986 576,274 179,479 97,089 4,598,828
Depreciation - (2,589) (31,931) (44,747) (79,267)
Closing net book amount 3,745,986 573,685 175,659 165,449 4,660,779
As at 30 June 2005
Cost 3,745,986 576,274 263,305 228,224 4,813,789
Accumulated depreciation - (2,589) (87,646) (62,775) (153,010)
Net book amount 3,745,986 573,685 175,659 165,449 4,660,779
Year ended 30 June 2006
Opening net book amount 3,745,986 573,685 175,659 165,449 4,660,779
Additions 23,485,861 378,255 1,652,656 1,058,923 26,575,695
Disposals - - - (23,082) (23,082)
Depreciation - (5,454) (142,712) (85,794) (233,960)
Closing net book amount 27,231,847 946,486 1,685,603 1,115,496 30,979,432
As at 30 June 2006
Cost 27,231,847 954,529 1,915,962 1,238,112 31,340,450
Accumulated depreciation - (8,043) (230,359) (122,616) (361,018)
Net book amount 27,231,847 946,486 1,685,603 1,115,496 30,979,432
Consolidated Parent Entity
2006 2005 2006 2005
$ $ $ $
NOTE 13 > NON CURRENT ASSETS - EXPLORATION
Opening balance at 1 July 874,145 904,794 779,500 174,499
Write-down of exploration - (435,650) - -
Additions 211,918 605,001 151,563 605,001
Disposals - (200,000) - -
Closing balance at 30 June 1,086,063 874,145 931,063 779,500
These amounts reflect, to the best of the Company's knowledge, a cost of
acquisition of the exploration and evaluation properties.
NOTE 14 > NON CURRENT ASSETS - INTANGIBLE ASSETS
Opening balance at 1 July - - - -
Acquisition of forestry licence 174,545 - 174,545 -
Accumulated amortisation (2,909) - (2,909) -
Closing net book amount at 30 June 171,636 - 171,636 -
The forestry licence borders the Ballarat East mine site and provides an
environmental buffer to the Ballarat community. The area is currently
planted with pine trees that are available for commercial harvesting as per the
terms of the licence. The licence is being amortised over its useful
life of 15 years.
NOTE 15 > CURRENT LIABILITIES - ACCOUNTS PAYABLE
Trade payables 9,281,284 6,673,586 9,281,284 6,673,586
Other payables 256,260 110,003 256,260 110,003
9,537,544 6,783,589 9,537,544 6,783,589
NOTE 16 > CURRENT LIABILITIES - BORROWINGS
Secured
Hire purchase liability (Note 25(b)) 234,530 50,868 234,530 50,868
234,530 50,868 234,530 50,868
The effective interest rate on the hire purchase liabilities are at fixed rates
between 8% to 9% (2005: 8.25%) over the life of the hire purchase
agreements. The carrying amounts and fair values of hire purchase liabilities
are the same.
Credit standby arrangements:
Total finance facilities - 17,000,000 - 17,000,000
Used at balance date - - - -
Unused at balance date - 17,000,000 - 17,000,000
A finance facility agreement was entered into on 10 June 2005. $12 million was
drawn down from the facility during the current period and the
facility was closed out on 24 April 2006.
NOTE 17 > CURRENT LIABILITIES - PROVISIONS
Employee benefits - annual leave 305,583 158,644 305,583 158,644
Employee benefits - long service leave 65,079 56,801 65,079 56,801
370,662 215,445 370,662 215,445
Consolidated Parent Entity
2006 2005 2006 2005
$ $ $ $
NOTE 18 > CURRENT LIABILITIES - OTHER
Unclaimed monies 5,292 45,182 5,292 45,182
5,292 45,182 5,292 45,182
NOTE 19 > NON CURRENT LIABILITIES - BORROWINGS
Hire purchase liability (Note 25(b)) 985,041 139,780 985,041 139,780
985,041 139,780 985,041 139,780
The effective interest rate on the hire purchase liabilities are at fixed rates
between 8% to 9% (2005: 8.25%) over the life of the hire purchase
agreements. The carrying amounts and fair values of hire purchase liabilities
are the same.
NOTE 20 > NON CURRENT LIABILITIES - PROVISIONS
Rehabilitation 568,238 379,500 568,238 379,500
Employee benefits - long service leave 4,626 - 4,626 -
572,864 379,500 572,864 379,500
A provision of $568,238 exists at 30 June 2006 in repect of the Group's
obligation to rehabilitate any of the Group's exploration sites upon
closure of the sites in accordance with State environmental regulatory
requirements, using technology and materials that are currently available.
The provision for rehabilitation has been calculated using a mine life of 20
years and a discount rate of 7%.
Movements in the rehabilitation provision during the financial year are set out
below:
Consolidated Parent Entity
2006 2006
$ $
Carrying amount at start of year 379,500 379,500
Amounts capitalised 151,564 151,564
Discounting 37,174 37,174
Closing amount at end of year 568,238 568,238
NOTE 21 > EQUITY - CONTRIBUTED EQUITY
Parent Entity Parent Entity
2006 2005 2006 2005
Shares Shares $ $
Share capital
Ordinary shares
Fully paid 1,188,153,935 793,907,022 188,206,761 108,695,180
Fully paid - forfeited - - 55,100 55,100
1,188,153,935 793,907,022 188,261,861 108,750,280
Ballarat Goldfields N.L. 48
NOTE 21 > EQUITY - CONTRIBUTED EQUITY (CONTINUED)
Movements in ordinary share capital: Number of Shares Issue Price $ $
Opening balance at 1 July 2004 488,944,440 82,317,576
Issue of Ordinary shares: 7/7/04 73,300,000 0.095 6,963,500
Issue of Ordinary shares: 9/8/04 224,897,776 0.090 20,240,800
Less Issue Costs: - - (1,752,051)
Exercise of Options: 6/9/04 166,666 0.047 7,867
Exercise of Options: 6/9/04 66,965 0.150 10,045
Exercise of Options: 12/10/04 27,235 0.150 4,085
Exercise of Options: 10/11/04 4,704 0.150 706
Exercise of Options: 1/2/05 166,666 0.047 7,867
Exercise of Options: 1/2/05 73,849 0.150 11,077
Exercise of Options: 12/4/05 356,659 0.150 53,499
Exercise of Options: 30/6/05 5,902,062 0.150 885,310
Balance at 30 June 2005 793,907,022 108,750,280
Movements in ordinary share capital: Number of Shares Issue Price $ $
Opening balance at 1 July 2005 793,907,022 108,750,280
Exercise of Options: 15/7/05 4,201,688 0.150 630,253
Exercise of Options: 10/8/05 11,068,035 0.150 1,660,205
Exercise of Options: 1/9/05 2,047,450 0.150 307,118
Exercise of Options: 20/9/05 39,532,694 0.150 5,929,904
Exercise of Options: 23/9/05 32,890,392 0.150 4,933,559
Exercise of Options: 10/10/05 128,726,043 0.150 19,308,906
Issue of Ordinary shares: 28/11/05 150,000,000 0.300 45,000,000
Less Issue Costs: - - (4,520,007)
Exercise of Employee Options:
Funds received 20/1/06 333,333 0.173 57,500
Transfer from share based payments reserve 20/1/06 - - 29,666
Issue of Ordinary shares: 21/2/06 1,855,999 0.250 464,000
Exercise of Options:
Funds received 24/3/06 1,250,000 0.150 187,500
Transfer from share based payments reserve 24/3/06 - - 75,000
Exercise of Employee Options:
Funds received 24/3/06 166,667 0.047 7,867
Transfer from share based payments reserve 24/3/06 - - 10,700
Issue of Ordinary shares: 26/4/06 22,174,612 0.250 5,543,653
Less Issue Costs: - - (114,242)
Balance at 30 June 2006 1,188,153,935 188,261,861
Ordinary Shares
Ordinary shares entitle the holder to participate in dividends and the proceeds
on winding up of the Company in proportion to the number of and
amounts paid on the shares held. On a show of hands every holder of ordinary
shares present at a meeting in person or by proxy, is entitled to
one vote, and upon a poll each share is entitled to one vote.
Options
Details of options issued, exercised and lapsed during the financial year and
options outstanding at the end of the financial year, is set out in Note 32.
> Financial Report Notes to the Financial Statements
2005 > 2006 30 June 2006
Consolidated Parent Entity
2006 2005 2006 2005
$ $ $ $
NOTE 22 > RESERVES AND
RETAINED LOSSES
(a) Reserves
Share based payments reserve 1,236,273 1,169,224 1,236,273 1,169,224
1,236,273 1,169,224 1,236,273 1,169,224
Movements:
Balance 1 July 1,169,224 520,983 1,169,224 520,983
Option expense 182,417 648,241 182,417 648,241
Transfer to share capital
(options exercised) (115,368) - (115,368) -
Balance 30 June 1,236,273 1,169,224 1,236,273 1,169,224
The share based payments reserve is used to recognise the fair value of options
issued but not exercised.
(b) Accumulated losses
Movements in accumulated losses were as follows:
Balance 1 July (102,291,106) (81,258,030) (102,015,508) (81,060,766)
Net loss for the year (38,936,202) (21,033,076) (38,704,579) (20,954,742)
Balance 30 June (141,227,307) (102,291,106) (140,720,085) (102,015,508)
NOTE 23 > REMUNERATION OF AUDITORS
Total amount receivable by the auditors
PricewaterhouseCoopers Australian Firm, for:
a) audit of the consolidated
statutory financial statements 30,500 22,350 30,500 22,350
b) review of statutory half yearly ASX
report 19,700 10,500 19,700 10,500
d) other audit related work - - - -
50,200 32,850 50,200 32,850
NOTE 24 > CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Ballarat Goldfields NL's bankers have guaranteed $1,082,000 (2005: $379,500) in
the event that the Company is called upon to rehabilitate any of
the entity's exploration sites. The guarantee is secured against cash deposits,
land and buildings.
As part of the Company's objective to refocus on gold, its technology subsidiary
Oztrak was sold in January 2003. The terms of the sale entitles
Ballarat Goldfields NL to 55% (less costs up to 15%) of the proceeds recovered
from the substantial claim against BSK GmbH Germany which is
yet to be settled.
As a result of the sale of Highlake Resources NL which held tenements at
Campbelltown, Maryborough and Dunolly during 2004, Ballarat
Goldfields NL is entitled to receive a 1% royalty of any gold recovered from
these tenements at no future cost to Ballarat Goldfields NL.
There are no other contingent liabilities or assets at the date of this report.
Consolidated Parent Entity
2006 2005 2006 2005
$ $ $ $
NOTE 25 > COMMITMENTS
(a) Lease commitments
The Company has no finance leases outstanding
at 30 June 2006 (2005: Nil).
(b) Commercial financial commitments
Commitments in relation to hire purchase
agreements are payable as follows:
Within one year 328,758 67,985 328,758 67,985
Later than one year but not later than
five years 1,128,672 153,529 1,128,672 153,529
Later than five years - - - -
Minimum lease payments 1,457,430 221,514 1,457,430 221,514
Future finance charges (237,859) (30,866) (237,859) (30,866)
Recognised as a liability 1,219,571 190,648 1,219,571 190,648
Representing hire purchase liabilities:
Current (Note 16) 234,530 50,868 234,530 50,868
Non current (Note 19) 985,041 139,780 985,041 139,780
1,219,571 190,648 1,219,571 190,648
The Group's commercial finance agreements include commercial hire purchase
agreements for motor vehicles and mobile equipment with a
carrying amount of $1,115,496 (2005: $165,449) under agreements expiring 3 to 5
years.
(c) Mineral tenement leases
In order to maintain current rights of tenure to mining tenements, Ballarat
Goldfields NL will be required to outlay the following amounts in respect
of tenement lease rentals and to meet the minimum expenditure requirements of
the Department of Primary Industries. These obligations are
expected to be fulfilled in the normal course of operations. Mining interests
may be relinquished or joint ventured to reduce this amount. The
Department of Primary Industries has the authority to defer, waive or amend the
minimum expenditure requirements.
Not later than one year 1,884,056 1,553,100 1,816,237 1,490,400
Later than one year but not later
than five years 7,536,224 6,212,400 7,264,947 5,961,600
9,420,280 7,765,500 9,081,184 7,452,000
(d) Remuneration commitments
Commitments for the payment of salaries and other
remuneration under long-term employment contracts in
existence at the reporting date but not recognised as
liabilities, payable:
Within one year 600,000 275,000 600,000 275,000
Later than one year and not later
than five years 534,212 137,500 534,212 137,500
Later than five years - - - -
1,134,212 412,500 1,134,212 412,500
Amounts disclosed as remuneration commitments include commitments arising from
the service contracts of Key Management Personnel referred to in section C of
the Remuneration Report that are not recognised as liabilities and are not
included in the Key Management Personnel compensation.
NOTE 26 > LOSS PER SHARE
2006 2005
Basic loss per share (cents per share) (3.70) (2.98)
Diluted loss per share (cents per share) (3.70) (2.98)
Weighted average number of ordinary shares on
issue used in the calculation of basic loss
per share. 1,051,274,143 706,432,379
Weighted average number of ordinary shares and
potential ordinary shares used in calculating diluted
earnings per share. 1,076,524,143 950,565,349
The earnings used in the calculation of basic loss per share is the net loss for
the year of $38,936,202 (2005: loss of $21,033,076). As at 30 June
2006, the Company had on issue 25,250,000 (2005: 244,132,970) options over
unissued capital exercisable and no partly paid shares (2005: nil).
The options have not been included in the determination of basic loss per share
and have been included in the determination of diluted loss per share.
NOTE 27 > FINANCIAL REPORTING BY SEGMENTS
The consolidated entity operates predominantly in the mineral exploration
industry. Details of the Group's mineral exploration activities are set out
in the Review of Operations. Each company within the consolidated entity
operates within the one geographic area, being Australia.
NOTE 28 > RECONCILIATION OF OPERATING LOSS AFTER INCOME TAX TO NET CASH OUTFLOW
FROM OPERATING ACTIVITIES
Consolidated Parent Entity
2006 2005 2006 2005
$ $ $ $
Operating Loss after income tax (38,936,202) (21,033,076) (38,704,579) (20,954,742)
Depreciation and amortisation 238,229 80,634 236,869 79,267
Non cash employee benefits expense 182,417 648,241 182,417 648,241
(Increase) decrease in receivables (836,667) (509,491) (836,666) (509,491)
Write down of property plant & equipment - - - -
Write down of loans to controlled entities - - - 264,943
Write down of investment in controlled entities - - - 380,000
Write down of exploration expenditure - 435,650 - -
(Gain) loss on sale of plant & equipment - - - -
(Increase) decrease in inventory (167,111) 458 (167,111) 458
Increase (decrease) in provisions 159,844 98,109 159,844 98,109
(Decrease) increase in operating trade
creditors 3,832,412 3,644,906 3,892,767 3,644,906
(Decrese) increase in other operating
liabilities 106,367 - 106,367 -
Net cash outflow from operating
activities (35,420,711) (16,634,569) (35,130,092) (16,348,309)
NOTE 29 > KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Directors
The following persons were Directors of Ballarat Goldfields NL during the
financial year:
* Alister Maitland - Non Executive Chairman and was appointed to the Board on
22 July 2005 and was appointed as Non Executive Chairman on 1 August 2006
* Richard Laufmann - Managing Director
* Wojciech Ozga - Director of Operations and was appointed to the Board on 16
June 2006
* Mike Etheridge - Non Executive Director
* Colin Smith - Resigned as Chairman and Non Executive Director on 31 July
2006
NOTE 29 > KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(b) Other Key Management Personnel
The following persons also have authority and responsibility for planning,
directing and controlling the activities of the Group, directly or indirectly,
during the financial year:
* Amber Rivamonte - Company Secretary/Financial Controller
* Joel Forwood - Manager Corporate and Markets
* Steven Olsen - Chief Geologist
All of the above persons were also Key Management Personnel during the year
ended 30 June 2005 and are all employees of Ballarat Goldfields NL.
(c) Key management personnel compensation
Consolidated Parent Entity
2006 2005 2006 2005
$ $ $ $
Short term employee benefits 1,350,062 822,679 1,350,062 822,679
Post employment benefits 109,275 72,242 109,275 72,242
Share based payments 108,462 134,233 108,462 134,233
1,567,799 1,029,154 1,567,799 1,029,154
The Company has taken advantage of the relief provided by the Corporations
Regulations CR2M.6.04 and has transferred the detailed remuneration disclosures
to the Directors' report. The relevant information can be found in sections A-C
of the remuneration report.
(d) Equity instrument disclosures relating to Key Management Personnel
i. Options provided as remuneration and shares issued on exercise of such
options
Details of options provided as remuneration and shares issued on the exercise of
such options, together with terms and conditions of the options, can be found in
section D of the remuneration report.
ii. Option holdings
The number of options over ordinary shares in the Company held during the
financial year by each Group Director of Ballarat Goldfields NL and Other Key
Management Personnel of the Group, including their related parties, are set out
below.
2006 Balance at Exercise of Granted Other Balance at Vested &
the start options during the changes the end of exercisable
of the year year as during the year at the end
remuneration the of the year
Name year
Directors
Colin 5,805,717 2,805,717 - - 3,000,000 3,000,000
Smith
Richard
Laufmann 8,000,000 1,000,000 - - 7,000,000 7,000,000
Mike 1,000,000 - - - 1,000,000 1,000,000
Etheridge
Alister - - - - - -
Maitland
Wojciech - - 1,500,000 - 1,500,000 500,000
Ozga
Other Key Management Personnel
Steven 1,548,000 48,000 - - 1,500,000 1,500,000
Olsen
Amber 1,000,000 - - - 1,000,000 1,000,000
Rivamonte
Joel 1,000,000 - - - 1,000,000 333,333
Forwood
Richard Laufmann, Colin Smith and Steven Olsen options were exercised during the
period as part of their entitlements for participating in the July 2004 Rights
Issue prospectus. There were 4,020,383 shares issued upon the exercise of
options for Directors or Key Management Personnel of the Group during the
financial year.
2005 Balance at Exercise Granted Other Balance at Vested &
the start of during the changes the end of exercisable
of the year options year as during the the year at the end
remuneration year of the year
Name
Directors
Colin
Smith 3,000,000 - - 2,805,717 5,805,717 4,805,717
Richard
Laufmann 7,000,000 - - 1,000,000 8,000,000 5,666,666
Mike
Etheridge - - 1,000,000 - 1,000,000 666,666
Other Key Management Personnel
Steven
Olsen 1,500,000 - - - 1,500,000 1,000,000
Amber
Rivamonte 1,000,000 - - - 1,000,000 666,666
Joel
Forwood - - 1,000,000 - 1,000,000 333,333
iii. Share holdings
The number of shares in the Company held during the financial year by each
Director and each of the Key Management Personnel of the Group, including
related entities, are set out below:
2006 Balance at Exercise of Other net Balance at
the start of options changes during the end of
Name the year the year the year
Directors
Colin Smith 9,820,008 2,805,717 - 12,625,725
Richard
Laufmann 4,777,164 1,000,000 (800,000) 4,977,164
Mike Etheridge 300,000 - - 300,000
Alister Maitland - - - -
Wojciech Ozga - - 720,000(1) 720,000
Other Key ManagementPpersonnel
Steven Olsen 168,000 48,000 - 216,000
Amber Rivamonte - - - -
Joel Forwood 50,000 - - 50,000
Richard Laufmann, Colin Smith and Steven Olsen options were exercised during the
period as part of their entitlements for participating in the July 2004 Rights
Issue prospectus.
*Wojciech Ozga held 720,000 fully paid ordinary shares prior to joining Ballarat
Goldfields NL on 1 September 2006.
2005 Balance at the Exercise Other net Balance at
start of the of options changes during the end of
Name year the year the year
Directors
Colin Smith 7,014,291 - 2,805,717 9,820,008
Richard Laufmann 3,777,164 - 1,000,000 4,777,164
Mike Etheridge - - 300,000 300,000
Other Key Management Personnel
Steven Olsen 120,000 - 48,000 168,000
Amber Rivamonte 118,100 - (118,100) -
Joel Forwood - - 50,000 50,000
(e) Other transactions with Key Management Personnel
There were no related party transactions or loans with Directors or Other Key
Management Personnel including related entities during the financial
year or in the prior 2005 financial year.
NOTE 30 > RELATED PARTIES TRANSACTIONS
(a) Controlled Entities
During the year Ballarat Goldfields NL, in the normal course of business,
entered into transactions with controlled entities in the Ballarat Goldfields
NL group (refer note 8 for details of controlled entities). The transactions and
balances fall into the following categories:
i. Aggregate amounts receivable from and payable to controlled entities,
including amounts advanced or received by the parent entity - refer
note 10. Parent entity amounts receivable from Berringa Resources Pty Ltd
$795,517 and New Resources Pty Ltd $45,613 as at 30 June 2006.
ii. External payments - Ballarat Goldfields NL also administers and settles
most of the payments external to the Group, including salaries paid on
behalf of the Group companies via a shared services arrangement. These
transactions are recovered from the respective entities on a cost
basis, and are settled through the intercompany accounts described above. During
the period ended 30 June 2006, Berringa Resources Pty Ltd
loaned amounts totalling $290,619 from the parent entity.
(b) Key management personnel
Disclosures relating to Key Management Personnel are set out in note 29.
NOTE 31 > EVENTS OCCURING AFTER BALANCE DATE
Since 30 June 2006, BGF has released to the market details of a new mine
development plan. The new plan, outlined in the Director's Report,
represents a significant change for the Company.
Additional financing is being arranged to fund this accelerated development plan
to set the Company direction for the next financial year.
The financial impacts of these transactions have not been reflected within the
financial statements.
NOTE 32 > SHARE BASED PAYMENTS
Expenses arising from share based payment transactions
The amounts disclosed for the remuneration options is the assessed fair value at
grant date of options granted. Fair values at grant date are
independently determined using a Black-Scholes option pricing model that takes
into account the exercise price, the term of the option, the
vesting and performance criteria, the impact of dilution, the non-tradeable
nature of the option, the share price at grant date and the expected
volatility of the underlying share, the expected dividend yield and the
risk-free interest rate for the term of the option. Additional details relating
to remuneration options are set out in the Remuneration Report.
The model inputs for options granted during the year ended 30 June 2006
included:
(a) Options are granted for no consideration, have a three year life, and one
third are exercisable at any time, one third are exercisable after
30 September 2006 and one third are exercisable after 30 September 2007.
(b) Exercise price: 25 cents.
(c) Grant date: 2 September 2005
(d) Expiry date: 30 September 2008
(e) Share price at grant date: 25.5 cents
(f) Expected price volatility of the Company's shares: 50%
(g) Risk free cost of capital: 4.83%
Total expenses arising from share based payment transactions recognised during
the period as part of employee benefit expense were as follows:
Consolidated Parent entity
2006 2005 2006 2005
$ $ $ $
Remuneration options 182,417 648,240 182,417 648,240
issued
NOTE 33 NON CASH INVESTING AND FINANCING ACTIVITIES
Consolidated Parent entity
2006 2005 2006 2005
$ $ $ $
Acquisition of plant
and equipment by means
of hire purchase
agreements 1,058,923 97,089 1,058,923 97,089
Conversion of
debt to equity 12,000,000 - 12,000,000 -
Options issued to employees for no cash consideration are shown in note 29.
Ballarat Goldfields N.L. 56
> Financial Report Notes to the Financial Statements
2005 > 2006 30 June 2006
NOTE 34 > EXPLANATION OF TRANSITION TO AUSTRALIAN EQUIVALENTS TO IFRSs
1. Reconciliation of equity reported under previous Australian Generally
Accepted Accounting Principles (AGAAP) to equity under Australian equivalents
to IFRSs (AIFRS)
(a) At the date of transition to AIFRS: 1 July 2004
Consolidated Parent Entity
1 July 2004 1 July 2004
Effect of Effect of
Previous transition to Previous transition to
AGAAP AIFRS AIFRS AGAAP AIFRS AIFRS
Notes $ $ $ $ $ $
Current Assets
Cash and cash equivalents 1,343,055 1,343,055 1,343,055 1,343,055
Receivables 10,734 10,734 10,734 10,734
Inventory 458 458 458 458
Total Current Assets 1,354,247 - 1,354,247 1,354,247 - 1,354,247
Non Current Assets
Receivables - - 729,194 729,194
Investments - - 450,005 450,005
Property, plant and equipment 392,858 392,858 141,218 141,218
Exploration 4(b) 10,348,596 (9,443,802) 904,794 9,540,101 (9,365,602) 174,499
Total Non Current Assets 10,741,454 (9,443,802) 1,297,652 10,860,518 (9,365,602) 1,494,916
Total Assets 12,095,701 (9,443,802) 2,651,899 12,214,765 (9,365,602) 2,849,163
Current Liabilities
Accounts payable 614,962 614,962 614,962 614,962
Borrowings 29,192 29,192 29,192 29,192
Provisions 117,336 117,336 117,336 117,336
Other 45,182 45,182 45,182 45,182
Total Current Liabilities 806,672 - 806,672 806,672 - 806,672
Non Current Liabilities
Borrowings 90,198 90,198 90,198 90,198
Provisions 174,500 174,500 174,500 174,500
Total Non Current Liabilities 264,698 - 264,698 264,698 - 264,698
Total Liabilities 1,071,370 - 1,071,370 1,071,370 - 1,071,370
Net Assets 11,024,331 (9,443,802) 1,580,529 11,143,395 (9,365,602) 1,777,793
Equity
Contributed equity 82,317,576 82,317,576 82,317,576 82,317,576
Reserves 4 (a) - 520,983 520,983 - 520,983 520,983
Accumulated losses 4(a) (b) (71,293,245) (9,964,785) (81,258,030)(71,174,181) (9,886,585)(81,060,766)
Total Equity 11,024,331 (9,443,802) 1,580,529 11,143,395 (9,365,602) 1,777,793
57 Annual Report 2006
> Financial Report Notes to the Financial Statements
2005 > 2006 30 June 2006
NOTE 34 > EXPLANATION OF TRANSITION TO AUSTRALIAN EQUIVALENTS TO IFRSs
(CONTINUED)
(b) At the end of the last reporting period under previous AGAAP: 30 June 2005
Consolidated Parent Entity
30 June 2005 30 June 2005
Effect of Effect of
Previous transition to Previous transition to
AGAAP AIFRS AIFRS AGAAP AIFRS AIFRS
Notes $ $ $ $ $ $
Current Assets
Cash and cash equivalents 8,937,340 8,937,340 8,937,340 8,937,340
Receivables 520,225 520,225 520,225 520,225
Inventory - - - -
Total Current Assets 9,457,565 - 9,457,565 9,457,565 - 9,457,565
Non Current Assets
Receivables - - 550,511 550,511
Investments - - 70,005 70,005
Property, plant and equipment 4,911,052 4,911,052 4,660,779 4,660,779
Exploration 4(b) 10,317,947 (9,443,802) 874,145 10,145,102 (9,365,602) 779,500
Total Non Current Assets 15,228,999 (9,443,802) 5,785,197 15,426,397 (9,365,602)6,060,795
Total Assets 24,686,564 (9,443,802) 15,242,762 24,883,962 (9,365,602)15,518,360
Current Liabilities
Accounts payable 6,783,589 6,783,589 6,783,589 6,783,589
Borrowings 50,868 50,868 50,868 50,868
Provisions 215,445 215,445 215,445 215,445
Other 45,182 45,182 45,182 45,182
Total Current Liabilities 7,095,084 - 7,095,084 7,095,084 - 7,095,084
Non Current Liabilities
Borrowings 139,780 139,780 139,780 139,780
Provisions 379,500 379,500 379,500 379,500
Total Non Current Liabilities 519,280 - 519,280 519,280 - 519,280
Total Liabilities 7,614,364 - 7,614,364 7,614,364 - 7,614,364
Net Assets 17,072,200 (9,443,802) 7,628,398 17,269,598 (9,365,602) 7,903,996
Equity
Contributed equity 108,750,280 108,750,280 108,750,280 108,750,280
Reserves 4 (a) - 1,169,224 1,169,224 - 1,169,224 1,169,224
Accumulated losses 4(a) (b)(91,678,080) (10,613,026)(102,291,106) (91,480,682) (10,534,826)(102,015,508)
Total Equity 17,072,200 (9,443,802) 7,628,398 17,269,598 (9,365,602) 7,903,996
Ballarat Goldfields N.L. 58
> Financial Report Notes to the Financial Statements
2005 > 2006 30 June 2006
NOTE 34 > EXPLANATION OF TRANSITION TO AUSTRALIAN EQUIVALENTS TO IFRSs
(CONTINUED)
2. Reconciliation of loss for the year ended 30 June 2005
Consolidated Parent Entity
30 June 2005 30 June 2005
Effect of Effect of
Previous transition to Previous transition to
AGAAP AIFRS AIFRS AGAAP AIFRS AIFRS
Notes $ $ $ $ $ $
Revenue from
continuing operations 915,313 915,313 915,313 915,313
Other expenses
Marketing (199,585) (199,585) (199,585) (199,585)
Administration 4 (a)(2,629,099) (648,241) (3,277,340) (3,009,099) (648,241)(3,657,340)
Finance costs expense (595,000) (595,000) (595,000) (595,000)
Exploration (17,876,464) (648,241)(17,876,464) (17,418,130) (648,241)(17,418,130)
Loss before income
tax expense (20,384,835) (648,241)(21,033,076) (20,306,501) (648,241)(20,954,742)
Income tax expense - - - -
Net loss attributable
to members of
Ballarat Goldfields NL (20,384,835) (648,241)(21,033,076) (20,306,501) (648,241)(20,954,742)
3. Reconciliation of cash flow statement for the year ended 30 June 2005
The adoption of AIFRSs has not resulted in any material adjustments to the cash
flow statement.
4. Notes to the reconciliations
(a) Share based Payment
Under AASB 2 Share based Payment from 1 July 2004 the Group is required to
recognise an expense for those options that were issued to employees after 7
November 2002. The effect of this is:
i. At 1July 2004
For the Group there has been a decrease in retained earnings of $520,983 and a
corresponding increase in reserves.
ii. At 30 June 2005
For the Group there has been a decrease in retained earnings of $1,169,224 and a
corresponding increase in reserves.
iii. For the year ended 30 June 2005
For the Group there has been an increase in employee benefits expense of
$648,241.
(b) Exploration and evaluation expenditure
The transition to AIFRS resulted in a change to the Group's Exploration and
evaluation expenditure accounting policy (refer note 1(g)) so as to be in
accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, from
1 July 2004.
Given the parameters set in AASB 6, the Company now capitalises exploration and
evaluation expenditure only when they have Reserves or Indicated Resources,
other than the cost of acquiring mining tenements which are capitalised and
recognised at cost. Under the previous
AGAAP policy, exploration and evaluation expenditure was capitalised at an
earlier stage in some instances. As at transition date and at 30 June 2006 there
are no Reserves or Indicated Resources reported by the Company.
As a consequence of this change, previously capitalised exploration expenditure
totalling $9,443,802 relating primarily to the Ballarat East area was written
off, at 1 July 2004. This has resulted in a corresponding increase in
accumulated losses of $9,443,802.
59 Annual Report 2006
> Financial Report Directors' Declaration
2005 > 2006
In the Directors' opinion:
(a) the financial statements and notes set out on pages 34 to 58 are in
accordance with the Corporations Act 2001, including:
i. complying with Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements; and
ii. giving a true and fair view of the Company's and consolidated entity's
financial position as at 30 June 2006 and of their performance, as represented
by the results of their operations, changes in equity and their cash flows, for
the financial year ended on that date; 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; and
(c) the audited remuneration disclosures set out on pages 19 to 27 of the
Directors' report comply with Accounting Standards AASB 124 Related Party
Disclosures and the Corporations Regulations 2001; and
The Directors have been given the declarations by the Chief Executive Officer
and Chief Financial Officer required by 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
Richard Laufmann
Managing Director
Ballarat
7 September 2006
Ballarat Goldfields N.L. 60
Independent audit report to the members of Ballarat Goldfields NL
Audit opinion
In our opinion:
1. the financial report of Ballarat Goldfields NL:
* gives a true and fair view, as required by the Corporations Act 2001 in
Australia, of the financial position of Ballarat Goldfields NL and the Ballarat
Goldfields NL Group (defined below) as at 30 June 2006, and of their performance
for the year ended on that date, and
* is presented in accordance with the Corporations Act 2001, Accounting
Standards and other mandatory financial reporting requirements in Australia,
and the Corporations Regulations 2001; and
2. the remunerations disclosures that are contained on pages 19 to27 of the
directors'report comply with Accounting Standard AASB 124 Related Party
Disclosures (AASB 124) and the Corporations Regulations 2001.
This opinion must be read in conjunction with the rest of our audit report.
Scope
The financial report, remunerations disclosures and directors' responsibility
The financial report comprises the balance sheet, income statement, cash flow
statements, statement of changes in equity, accompanying notes to the
financial statements, and the directors' declaration for both Ballarat
Goldfields NL (the Company) and the Ballarat Goldfields NL Group (the
consolidated
entity), for the year ended 30 June 2006. The consolidated entity comprises both
the Company and the entities it controlled during that year.
The company has disclosed information about the remuneration of directors and
executives (remuneration disclosures) as required by AASB 124, under
the heading Oremuneration reportO on pages 19 to27 of the directors' report, as
permitted by the Corporations Regulations 2001.
The directors of the Company are responsible for the preparation and true and
fair presentation of the financial report 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. The directors are also responsible
for the remuneration disclosures contained in the directors' report.
Audit approach
We conducted an independent audit in order to express an opinion 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 and the
remuneration disclosures comply with AASB 124 and the Corporations Regulations
2001. 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.
For further explanation of an audit, visit our website: http://www.pwc.com/au/
financialstatementaudit
We performed procedures to assess whether in all material respects the financial
report presents fairly, in accordance with the Corporations Act 2001,
Accounting Standards 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, changes in equity
and cash flows. We also performed procedures to assess whether the remuneration
disclosures comply with AASB 124 and the Corporations Regulations 2001.
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 remuneration
disclosures, and
* assessing the appropriateness of the accounting policies and disclosures used
and the reasonableness of significant accounting estimates made
by the directors.
Our procedures include reading the other information in the Annual Report to
determine whether it contains any material inconsistencies with the
financial report.
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.
Our audit did not involve an analysis of the prudence of business decisions made
by directors or management.
Independence
In conducting our audit, we followed applicable independence requirements of
Australian professional ethical pronouncements and the Corporations Act 2001.
PricewaterhouseCoopers Chris Dodd Melbourne
Partner 7 September 2006
PricewaterhouseCoopers
abn 52 780 433 757
Freshwater Place
2 Southbank Boulevard
southbank vic 3006
gpo Box 1331L
melbourne vic 3001
dx 77
Website www.pwc.com/au
Telephone +61 3 8603 1000
Facsimile +61 3 8603 1999
> Financial Report Shareholder Information
The shareholder information set out below was applicable as at 31 August 2006.
(a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Range of holding Ordinary shares Percentage
1 - 1,000 359,999 0.03%
1,001 - 5,000 5,975,826 0.50%
5,001 - 10,000 11,248,445 0.94%
10,001 - 100,000 121,606,833 10.19%
100,001 - OVER 1,053,962,832 88.33%
Total 1,193,153,935 100.00%
There were 1,156 holders of less than a marketable parcel of ordinary shares.
There were no holders of partly paid ordinary shares and 10
holders of options issued under Ballarat Goldfields NL. Holders of fully paid
shares are entitled, on a poll, to one vote for each share.
(b) Equity security holders
The names of the twenty largest holders of quoted equity securities are listed
below:
Name Number Held %
1 National Nominees Limited 185,334,848 15.53
2 Westpac Custodian Nominees Limited 131,593,666 11.03
3 JP Morgan Nominees Australia Limited 106,369,082 8.91
4 ANZ Nominees Limited 60,912,804 5.11
5 HSBC Custody Nominees (Australia) Limited 57,342,784 4.81
6 Credit Suisse Securities (Europe) Ltd 50,000,000 4.19
7 HSBC Custody Nominees (Australia) Limited 40,910,597 3.43
8 International Commodity Finance Limited 32,438,266 2.72
9 Northcliffe Holdings Pty Ltd 24,600,000 2.06
10 Citicorp Nominees Pty Limited 24,463,912 2.05
11 RBC Securities Nominees Pty Ltd 20,354,612 1.71
12 CS Third Nominees Pty Ltd 17,944,616 1.50
13 Alchemy Securities Pty Ltd 15,000,000 1.26
14 Computershare Clearing Pty Ltd 13,733,947 1.15
15 Fortis Clearing Nominees Pty Ltd 10,827,941 0.91
(Settlement A/C)
16 Mr Colin Smith & Mrs Adrienne Smith (SF A/C) 9,990,000 0.84
17 Merrill Lynch (Australia) Nominees Pty Ltd 6,416,651 0.54
18 Mechanised Mining Services Pty Ltd 5,490,000 0.46
19 Mr John S Hewson & Mrs Rosemary A Hewson 5,400,000 0.45
20 RFC Growth Fund Limited 5,150,000 0.43
TOTAL 824,273,726 69.09
Substantial shareholders in the company include:
Ordinary Shares Percentage Number Held
Merrill Lynch & Co., Inc. 7.64% 91,159,681
JP Morgan Chase & Co. 7.21% 84,014,760
Capital Group Companies, Inc. 6.58% 76,740,000
Credit Suisse Holdings 6.10% 72,327,717
(Australia) Limited.
Tenement holdings as at 31 August 2006:
Tenement No Location Holder BGF Expiry Date
Interest
EL3018 Ballarat East Ballarat Goldfields NL 100% 4 October 2007
MIN5396 Ballarat East Ballarat Goldfields NL 100% 4 October 2008
MIN4847 Ballarat South Ballarat Goldfields NL 100% 1 November 2009
MIN4194 Berringa Berringa Resources P/L 100% 14 February 2012
MIN 5444 Yarrowee River Ballarat Goldfields 100% 4 April 2026
The information in this report that relates to Mineral Resources and Exploration
Potential is based on information compiled by Steven Olsen. Steven is a full
time employee of the Company, is a Member of the Australian Institute of Mining
and Metallurgy and is a Competent Person under the definition of the 2004 JORC
Code. The Exploration Potential described above is conceptual in nature, and
there is insufficient information to establish whether further exploration will
result in the determination of a Mineral Resource. Steven Olsen consents to the
publication of this information in the form and context in which it appears.
ballarat goldfields n.l.
10 Woolshed Gully Drive
Mt Clear Victoria 3350 Australia
PO Box 1228 Bakery Hill
Victoria 3354 Australia
+61 (0) 3 5327 1111
+61 (0) 3 5331 7927
info@ballarat-goldfields.com.au
www.ballarat-goldfields.com.au
ACN: 006 245 441
This information is provided by RNS
The company news service from the London Stock Exchange
END
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