TIDMDME
AIM RELEASE
31 August 2011
DISCOVERY METALS LIMITED
DIRECTORS' AND FINANCIAL REPORT FOR THE YEAR ENDED
30 JUNE 2011
A complete copy of the Financial Report for the year ended 30 June 2011 is
available on the Company's website at http://www.discoverymetals.com.au/Reports
& Announcements/ASX Announcements.
Your directors present their report on the consolidated entity (referred to
hereafter as the Consolidated Group) consisting of Discovery Metals Limited (the
Company) and the entities it controlled at the end of or during the year ended
30 June 2011.
Directors
The directors of the Company at any time during the financial year were, and
until the date of this report are:
Non-Executive Chairman Managing Director Non-Executive Directors
Gordon Galt Stuart Bradley Sampson Morrice Cordiner
Ribson Gabonowe
Jeremy Read
John Shaw
All Directors held their position as a Director throughout the entire financial
year and up to the date of this report.
The qualifications, experience, other directorships and special responsibilities
of the directors in office at the date of this report are:
Gordon GaltIndependent Non-Executive Chairman
Qualifications: B.Eng (Hons), B Comm, Grad Dip Applied Finance,
MAusIMM, MAICD
Experience and expertise: Gordon is a mining engineer with post-graduate
qualifications in finance. He has worked in
senior management, technical and operational
roles including as managing director of
companies engaged in the development and
operation of large resource projects. He is
experienced across a wide range of commodities,
including, coal, gold, copper/lead/zinc and
magnesium. Gordon has also spent a period of
time in banking and is currently engaged in
funds management and corporate advisory work.
Throughout his career Gordon has demonstrated a
track record of creating shareholder value
through analysis of a Company's strategic
position, followed by implementation of
appropriate corporate strategies, fund raising
and motivating teams of senior resource
professionals.
Other current directorships: Non-executive Director of Aquila Resources Ltd
(since August 2007)
Non-executive Director of Nucoal Resources Ltd
(since February 2010)
Non-executive Director of US Masters Holdings
Ltd (since July 2010)
Non-executive Director of Delta SB Ltd (since
December 2010)
Former directorships in last Non-executive Director of Navigator Resources
three years: Ltd (from August 2008 to December 2010)
Committees: Member of the Audit and Financial Risk Committee
Member of the Remuneration and Nomination
Committee
Stuart Bradley Sampson Managing Director
Qualifications: B.E. (Hons)(Mining) Qld, MBA
Deakin, AMP Oxf, MAusIMM,
GAICD
Experience and expertise: Brad has over 20 years
international experience as a
mining engineer. He has
worked extensively in both
open cut and underground mine
operations and developments in
Australia, Southern Africa and
the Pacific. He previously
held an executive role in
Thiess Ltd and has been in
general management roles with
Gold Fields Limited at St Ives
gold mine in Western Australia
and at the Kloof operation in
South Africa. He also held
the position of General
Manager-PNG for Emperor Mines
Limited. Brad has also worked
with Anglo American, Ross
Mining NL and Comalco. Brad
is a director of all Discovery
Metals subsidiaries registered
in Botswana and Mauritius.
Morrice Cordiner Non-Executive Director
Qualifications: LLB, ASIA
Experience and expertise: Morrice is a corporate lawyer
and has in excess of 15 years'
experience in the finance and
resources industries. Morrice
was a founding director of
Discovery Metals and was
instrumental in identifying
the original projects and
strategic alliance with
Falconbridge Inc that formed
the original assets of the
Company in 2003. Over the
last 7 years, Morrice has been
involved in the successful
development and financing of a
number of junior listed
resource companies with
projects in gold, nickel,
copper and zinc. He has been
actively involved in raising
funds for these ventures on
the Australian Stock Exchange,
the London AIM market and the
Toronto Stock Exchange.
Other current directorships:
Former directorships in last Non-executive Director of
three years: Andean Resources Limited
(December 2003 to November
2009)
Non-executive Director of
Meridian Minerals Limited
(July 2008 to November 2009)
Committees: Chairman of the Audit and
Financial Risk Committee
Ribson Gabonowe Non-Executive Director
Qualifications: BSc (Mining Engineering), MSc
(Mineral Economics), MBA
Experience and expertise: Ribson is a Mining Engineer
with over 25 years of
experience in the mining
industry. For twelve years to
December 2006, Ribson was the
Director of Mines of Botswana,
responsible for administering
the legal and fiscal framework
governing mineral
exploitation. In this role,
Ribson was involved in
negotiations of mineral
agreements for copper, nickel,
diamonds, coal and soda ash.
Other current directorships: Executive Director of Boteti
Mining (Pty) Ltd (since
December 2010)
Non-Director of Gabor
Consulting (Pty) Ltd (since
August 2007)
Non-Executive Director of all
Discovery Metals subsidiaries
registered in Botswana.
Former directorships in last Non-Executive Director of
three years: Atlas Minerals (Pty) Ltd
(April 2009 to February 2011)
Non-executive Director of
Kukama Mining and Explorations
(Pty) Ltd ( November 2007 to
February 2011)
Non-Executive Director of Coal
Wealth Botswana Pty Ltd
(November 2010 to April2011)
Committees:
Jeremy Read Non-Executive Director
Qualifications: BSc (Hons), MAusIMM
Experience and expertise: Jeremy Read has 23 years domestic and
international minerals exploration experience
and was previously the Manager of BHP's
Australian Exploration Team. He has extensive
exploration experience for nickel and copper
sulphides and played a critical role in the
discovery of Kabanga North Nickel Deposit, in
Tanzania. Jeremy was the founding managing
director of Discovery Metals from its
incorporation in May 2003, until his
appointment as a non-executive director on 1
February 2008. Mr. Read secured the Boseto
copper project for the Company and was
responsible for all Discovery Metals' fund
raising activities and for listing Discovery
Metals on the Australian Securities Exchange,
Botswana Stock Exchange and the Alternative
Investment Market in London. He is also the
founding managing director of Meridian
Minerals Limited.
Other current directorships: Managing Director of Meridian Mineral Limited
(since September 2008)
Former directorships in last Managing Director of Discovery Metals Limited
three years: (July 2003 to January 2008)
Committees: Member of the Remuneration and Nomination
Committee.
John Shaw Non-Executive Director
Qualifications: BSc (Geological Engineering), FAusIMM, MCIM,
FAICD, SME
Experience and expertise: John has over 40 years' experience in
exploration, development and operations of
open cut and underground mines in Asia,
Australia, Africa and Canada. John previously
was Vice President of the Australian
Operations of Placer Dome Asia Pacific Limited
and managing director of Kidston Gold Mines.
Other current directorships: Non-Executive Director of IAMGOLD Corporation
(since March 2006)
Non-Executive Director of Quadra Australia Pty
Ltd (since May 2006)
Former directorships in last Non-Executive Director of Albidon Limited
three years: (February 2008 to April 2009)
Non-Executive Director of Tri Origin Minerals
(October 2003 to February 2008)
Non-Executive Director of Lodestone
Exploration Limited (May 2002 to November
2007)
Non-Executive Director of Gallery Gold Limited
(November 2003 to March 2006)
Committees: Chairman of the Remuneration and Nomination
Committee
Member of the Audit and Financial Risk
Committee
As at the date of this report, the interests of the directors in the shares and
options of the Company were:
Number of Nature of Number of Number of
Director ordinary shares interest options over unvested share
held ordinary shares rights held in
trust
Gordon Galt 1,052,990 Direct - 1,500,000
Stuart Bradley - Direct 2,000,000 1,500,000
Sampson
Morrice - Direct 1,000,000 750,000
Cordiner
Ribson Gabonowe 486,250 Direct 513,750 750,000
Jeremy Read - Direct 1,000,000 750,000
John Shaw 500,000 Direct - 750,000
Company Secretary
Roslynn Shand Company Secretary
Qualifications: BA, LLB, FCIS
Experience and expertise: Roslynn has a combined degree in Arts/Law from the
University of Queensland, is a fellow of the Chartered
Secretaries Australia and has considerable experience
in the company secretarial area. She has been a
company secretary for 20 years for entities in the
financial, agricultural and mining sectors.
Directors' Meetings
The number of board and committee meetings attended by each of the directors who
held office during the financial year is as follows:
Board Board Committee Meetings
Meetings
Director Audit & Financial Remuneration &
Risk Nomination
Number Attend Number Attend Number Attend
Gordon Galt 20 17 2 2 1 1
Stuart Bradley 20 20
Sampson
Morrice Cordiner 20 19 2 2
Ribson Gabonowe 20 17
Jeremy Read 20 16 1 1
John Shaw 20 20 2 2 1 1
Number: - Number of meetings held during the time the director held office or
was a member of the relevant committee during the year.
Attend: - Number of meetings attended.
Committee membership
As at the date of this report, the Board had an Audit and Financial Risk
Committee and a Remuneration and Nomination Committee. Members acting on the
committees of the Board as at the date of this report are:
Audit & Financial Risk Remuneration & Nomination
Chairman Morrice Cordiner John Shaw
Members Gordon Galt Gordon Galt
John Shaw Jeremy Read
Principal Activities and review of operations
The principal activity of the Company during the year was continued mineral
exploration and in particular the commencement of development of its Boseto
copper project in Botswana.
Project review, strategies and future prospects
Boseto Copper Project
The Company's principal focus was the exploration and development of its 100%
owned Boseto copper project in Botswana.
JORC compliant Proved and Probable Ore Reserves of 22.5 Mt at 1.5% copper and
18.7 g/t silver above a cut-off grade of 0.6% copper was published in August
2010.
The Company announced the results for the completed studies on the technical and
economic feasibility of the Boseto copper project. The Bankable Feasibility
Study (BFS) examines the open pit mining of a portion of proved and probable
ore reserves only for an initial 5 year period, with power provided by diesel
generation. The Boseto Development Plan (BDP) examines the continuation of
mining beyond the BFS period, with mining of reserves plus inferred mineral
resources via open pit methods and inclusion of the Zeta underground mine. The
BDP covers an initial evaluated 15 year period with establishment of a coal
fired power station to provide power.
The feasibility study outcomes were:
* BFS Net Present Value (5 years): US$ 251 million at a C1 cash cost of
US$1.28/lb*2;
* BDP Net Present Value (15 years): US$ 375 million at a C1 cash cost of
US$1.23/lb*2;
* Payback for both these scenarios is less than 2 years after production
commences; and
* Demonstrated economic potential for operations to continue beyond 15 years.
*2 Costs are per pound of copper during debt repayment period July 2012 to
December 2014.
On 2 September 2010, the Company's EPC contractor for the construction of the
Boseto copper project (Sedgman) was given a "Notice to Proceed" with the
detailed design and construction of the Boseto processing plant and is on track
to deliver the project for commissioning in the first half of 2012.
On 1 November 2010, the Company announced that the surface rights for the Boseto
copper project have been granted.
On 2 December 2010, the Company received the environment approval from the
Botswana government to expand the capacity from 2 million tonnes per annum
(2Mtpa) to 3 million tonnes per annum (3Mtpa).
On 22 December 2010, the Botswana government awarded the Boseto Mining Licence
required to allow construction and operation of the mine and copper-silver
concentrator. The Botswana government did not exercise its 'once only' option
to purchase a share of the Boseto copper project and the Company retains 100%
ownership of the Boseto project.
Since December 2010, the Company and Sedgman have been proceeding with the
construction of the Boseto copper project in accordance with the planned
completion in the first half of 2012. Progress is reported in the quarterly
reports and a photographic record of the progress is on the Company's web site.
Dikoloti Nickel Project
The Company completed the expenditure of the JOGMEC funded exploration programme
for the Dikoloti during the year and is in the process of seeking Botswana
government ministerial approval to extend a portion of these prospecting
licences for further expenditure by JOGMEC over the next 2 years.
The Company's interest in the project has been diluted to 40% and in view of the
uncertainty of the renewal of the prospecting licences and the economics of
development the current resource, the Company has impaired the asset with a
resultant charge of US$1.812 million to the Statement of Comprehensive Income.
Kalahari Manganese Field
On 4 January 2011, the Company announced that it had been granted 16 new
Prospecting Licences (PLs) in southern Botswana. These PLs, which cover "all
metals", are valid for an initial period of three years, beginning on 1 January
2011 and are renewable twice for two additional terms of two years each, with a
standard renewal requirement to relinquish 50% of the tenure area at each
renewal.
The PLs cover areas underlain by rocks of the Transvaal Supergroup in an
extension of the Griqualand West Basin in South Africa, known in Botswana as the
Kanye Basin. The Griqualand West Basin is host to a number of large manganese
mines, which collectively comprise the Kalahari Manganese Field, located
immediately west of Hotazel in the Northern Cape Province of South Africa. More
than 50% of the world's manganese resources are contained in this world-class
mineral district in South Africa.
Kalahari Copperbelt Exploration
On 20 September 2010, the Company announced further exploration success in the
Kalahari Copperbelt. Two new exploration targets have been defined by surface
geochemistry:
* Ophion: a 12 kilometre long anomaly
* Ourea: a 4 square kilometre anomaly
Initial follow-up drilling of the Zeta Deposit, at the Boseto copper project,
has returned high grade (>2.0% Cu) intercepts over significant widths, along
more than one kilometre of strike length. Many of the intercepts have elevated
copper and silver grades compared to the grades currently assumed in the Boseto
Development Plan (1.4% Cu and 23.1 g/t Ag). These results confirm the
continuity of grade and thickness of mineralisation for current Inferred Mineral
Resources. This high grade zone, which is being targeted for future underground
mining, remains open at depth. The drilling, which forms part of the Zeta
Underground Definitive Feasibility Study, was completed by June 2011.
On 10 November 2010, the Company announced the assay results for three holes
(total of 208 metres drilled) comprising the initial drill test of the Ophion
exploration target. Ophion is located approximately 40 kilometres southwest of
the Zeta Deposit, which is part of the Company's 100% owned Boseto copper
project.
On 28 April 2011, the Company reported the final results from the 54 hole infill
drilling programme of the Zeta deposit. Zeta is a part of the 100% owned Boseto
copper project, which is currently being constructed and is scheduled to
commence production in early 2012.
On 2 June 2011, the Company reported the first results from an 11 hole deep
drilling programme of the Plutus deposit (Plutus). The results reported are for
the first 3 holes of a deep drilling programme which was designed as an initial
test to investigate the potential for underground mining at Plutus.
Corporate
On 28 September 2010, the Company announced the seven Ngamiland prospecting
licences original granted in 2005 have been renewed until 30 September 2012.
On 4 November 2010, the Company announced that it has successfully completed the
institutional placement component of the equity raising. The placement was
conducted by way of an institutional book build with a fixed price of A$1.12 per
DML share which raised approximately A$51 million. The strong degree of support
shown by a wide range of new and high quality international institutional
investors through participation in the Placement demonstrated the high level of
interest in the Boseto project. The Company announced that it has successfully
completed its 1 for 4 non-renounceable Rights Issue which raised proceeds of
approximately A$91 million (before expenses) at an issue price of A$1.05
(BWP6.825) per share. All additional entitlements from retail shareholders were
accepted.
On 10 February 2011, the Company announced that it has mandated a syndicate of
leading banks to provide debt finance required to construct the Boseto copper
project for US$180 million. The debt syndicate comprises Standard Chartered
Bank, Standard Bank, Credit Suisse and Caterpillar Financial SARL as lead
arrangers. The facility also provides project overrun and hedging facilities.
Funding will be applied to the Boseto processing plant for US$105 million and
the Boseto mine mobile fleet for US$75 million. In addition to project and
equipment finance, the banking syndicate provides a US$25 million overrun and
working capital facility plus hedging lines for both copper and silver
production. The incorporation of all debt facilities into one facility
simplifies the documentation and security arrangements significantly. The
facility will be secured over the Boseto copper project assets and 100% of the
shares the Company owns in the project entity.
On 24 June 2011, the Company received confirmation that the banking syndicate
credit committees have approved the Boseto debt facility. This follows an
extensive due diligence process by the banks. The remaining conditions
subsequent are expected to be completed by October 2011.
Financial
The Company recorded a loss of US$14.5 million for the year ended 30 June 2011
(2010: US$4.1 million loss).
The net asset position of the Consolidated Group at 30 June 2011 was US$204.4
million (30 June 2010: US$63.2 million).
The Consolidated Group has impaired US$1.8 million (30 June 2010: $nil) on
exploration during the year.
Significant changes in state of affairs
The Company's issued capital has increased to US$213 million from
US$75.5 million, an increase of US$137.5 million. The movement was largely the
result of the issue of ordinary shares, including A$51 million raised via an
equity placement to institutional and sophisticated investors and A$91 million
(before expenses) raised via non-renounceable entitlements offer to existing
shareholders. The Company also received US$1.5 million from the exercise of
options by executives/directors during the year. Refer note 18 for further
information on movements in equity.
In the opinion of the directors there were no other significant changes in the
state of affairs of the Company that occurred during the financial year under
review, other than those described in this financial report under "Principal
Activities and Review of Operations".
Dividends
The directors have not recommended the declaration of a dividend. No dividends
were paid or declared by the Company during the current or previous financial
year.
Number of employees
There are 82 (2010: 34) full-time employees employed by the Consolidated Group
in Australia and Botswana. All other roles are currently undertaken under
contract arrangements, or by part-time employees.
Significant events after the balance date
No other matters or circumstances have arisen since the end of the financial
year which significantly affected or may significantly affect the operations of
the Consolidated Group, the results of those operations or the state of affairs
of the Consolidated Group in future financial years other than those noted in
Note 26 in the Notes to the Financial Statements.
Future developments
Other than as referred to in this report, further information as to likely
developments in the operations of the Consolidated Group and the expected
results of those operations would, in the opinion of the directors, be
speculative.
Environmental regulation
The Company's exploration activities are subject to significant environmental
regulations under Botswana legislation.
The Company is committed to achieving a high standard of environmental
performance. The Board is responsible for the regular monitoring of
environmental exposures and compliance with environmental regulations.
The Board believes that the Company has adequate systems in place for the
management of its environmental requirements and is not aware of any breach of
those environmental requirements as they apply to the Company.
The Company aims to minimise the impact on the environment which results from
our operations. The Company believes that all employees, contractors,
consultants and persons associated with the Company have to be involved in
achieving environmental objectives and targets.
Each mining operation is subject to particular environmental regulations
specific to the activities undertaken at that site as part of the licence or
approval for that operation. There are also a broad range of industry and
specific environmental laws which apply to all mining operations and other
operations of the Consolidated Group. The environmental laws and regulations
generally address the potential impact of the Consolidated Group's activities on
water and air quality, noise, surface disturbance, and the impact upon flora and
fauna.
An important part of the Company's environmental performance is to identify and
track all incidents resulting from its operations so that appropriate action can
be taken to prevent reoccurrence. As part of the Company's commitment to open
and transparent reporting, all incidents are reported to the relevant Government
authorities and within publicly released reports.
The directors are not aware of any environmental matters which would have a
materially adverse impact on the overall business of the Consolidated Group.
Prospecting Licence schedule
The Consolidated Group has an interest in the following Prospecting Licences,
all held in Botswana:
+---------------+-------------------+----------+-----------------+-------------+
| Project |Prospecting Licence|Area (Km2)| Initial Grant | Expiry |
| | | | date | |
+---------------+-------------------+----------+-----------------+-------------+
|DIKOLOTI NICKEL| P019/2004 | 284.0 | 1-Jul-04 |30-Jun-11 *1 |
+---------------+-------------------+----------+-----------------+-------------+
|DIKOLOTI NICKEL| P020/2004 | 89.6 | 1-Jul-04 |30-Jun-11 *1 |
+---------------+-------------------+----------+-----------------+-------------+
|DIKOLOTI NICKEL| P021/2004 | 40.7 | 1-Jul-04 |30-Jun-11 *1 |
+---------------+-------------------+----------+-----------------+-------------+
|DIKOLOTI NICKEL| P022/2004 | 197.4 | 1-Jul-04 |30-Jun-11 *1 |
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | P98/2005 | 520.0 | 1-Oct-05 | 30-Sep-12 |
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | P99/2005 | 890.0 | 1-Oct-05 | 30-Sep-12 |
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | P100/2005 | 736.0 | 1-Oct-05 | 30-Sep-12 |
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | P101/2005 | 380.0 | 1-Oct-05 | 30-Sep-12 |
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | P102/2005 | 474.0 | 1-Oct-05 | 30-Sep-12 |
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | P103/2005 | 223.0 | 1-Oct-05 | 30-Sep-12 |
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | P104/2005 | 726.0 | 1-Oct-05 | 30-Sep-12 |
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | 186/2008 | 804.0 | 1-July-08 |30-June-13 *2|
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | 187/2008 | 894.0 | 1-July-08 |30-June-13 *2|
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | 188/2008 | 634.0 | 1-July-08 |30-June-13 *2|
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | 189/2008 | 271.0 | 1-July-08 |30-June-13 *2|
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | 190/2008 | 760.0 | 1-July-08 |30-June-13 *2|
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | 191/2008 | 927.0 | 1-July-08 |30-June-13 *2|
+---------------+-------------------+----------+-----------------+-------------+
| BOSETO COPPER | 192/2008 | 638.0 | 1-July-08 |30-June-13 *2|
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL001/2011 | 483.7 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL002/2011 | 720.8 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL003/2011 | 974.8 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL004/2011 | 950.4 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL005/2011 | 914.8 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL006/2011 | 962.4 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL007/2011 | 933.5 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL008/2011 | 866.2 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL009/2011 | 982.7 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL010/2011 | 958.0 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL011/2011 | 856.3 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL012/2011 | 983.1 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL013/2011 | 883.6 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL014/2011 | 1000.0 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL015/2011 | 991.3 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
| MANGANESE | PL016/2011 | 963.6 | 1-Jan-11 | 31-Dec-13 |
+---------------+-------------------+----------+-----------------+-------------+
Note *1: The 4 Dikoloti prospecting licences P19 toP22/2004 are subject to
Botswana Minister of Mines discretion as a retention licence and an application
has been made to the Department of Mines.
The Ghanzi prospecting licences PL186 to 192/2008 were renewed in August
2011.
Remuneration report
This audited remuneration report for the year ended 30 June 2011 outlines the
remuneration arrangements of the Company in accordance with Section 300A of the
Corporations Act 2001 and its regulations. This information has been audited as
required by section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for the Company's
key management personnel (KMP) during the financial year ended 30 June 2011.
Key management personnel are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of
the Company, directly or indirectly, including any director (whether executive
or otherwise) of the Company and other designated senior executives, and
includes the five highest remunerated executives of the Company.
Individual key management personnel disclosures
Details of KMP including the top five remunerated executives of the Company are
set out below.
Executive director and senior executives:
Name Position Period as KMP
Stuart Bradley Sampson Managing Director All financial year
Paul Fulton Chief Financial Officer All financial year
Ross Gibbins Business Development Executive All financial year
Phil Nolan General Manager - Boseto Commenced January 2011
Operations
Jan Anderson General Manager - Technical Commenced March 2011
Non-Executive directors:
Name Position Period as KMP
Gordon Galt Chairman (non-executive) All financial year
Morrice Cordiner Director (non-executive) All financial year
Ribson Gabonowe Director (non-executive) All financial year
Jeremy Read Director (non-executive) All financial year
John Shaw Director (non-executive) All financial year
There were no changes to KMP after the reporting date and before the date the
financial report was authorised for issue.
Remuneration policy
Remuneration strategy
The Company is committed to the close alignment of remuneration particularly
that of executives, to shareholder returns. To this end, the Company's
remuneration strategy is designed to attract, motivate and retain employees and
non-executive directors (NEDs) by identifying and rewarding high performers and
recognising the contribution of each employee to the continued growth and
success of the Company. No hedging of the economic risk is allowed under the
Company's incentive plans.
Key objectives of the Company's remuneration framework are to ensure that
remuneration practices:
* Are aligned to the Company's business strategy;
* Offer competitive remuneration benchmarked against the external market;
* Provide strong linkage between individual and Company performance and
rewards; and
* Achieve the broader outcome of creation of value for shareholders by
aligning the interests of executives, including employees, with
shareholders.
The first short-term incentive plan for the Company is being formulated to apply
for the year ended 30 June 2012 and thereafter. The initial year of plan will
focus on commissioning and achievement of design production at the Boseto copper
project.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee comprises three independent NEDs and
is responsible for making recommendations to the Board on the remuneration
arrangements for NEDs and executives.
The Remuneration and Nomination Committee assesses the appropriateness of the
nature and amount of remuneration of NEDs and executives on a periodic basis by
reference to relevant employment market conditions, with the overall objective
of ensuring maximum stakeholder benefit from the retention of a high performing
director and executive team. In determining the level and composition of
executive remuneration, the Remuneration and Nomination Committee also engages
external consultants to provide independent advice.
The Remuneration and Nomination Committee is responsible for:
* reviewing remuneration arrangements for key management personnel;
* assessing the appropriateness of the nature and amount of remuneration of
directors and key executives on a periodic basis by reference to the
Company's performance, executive performance and comparable information from
industry sectors; and
* making recommendations to the Board.
Remuneration approval process
The Board approves the remuneration arrangements of the Managing Director and
other key management personnel and all awards made under the long-term incentive
(LTI) plans and short-term incentive (STI) plans, following recommendations from
the Remuneration and Nomination Committee. The Board also sets the aggregate
remuneration of NEDs.
Non-executive director remuneration arrangements
As the focus of the Board is on the long-term direction and well-being of the
Company, there is no direct link between non-executive directors' remuneration
and the Company's short-term results other than participation in the Directors
and Employees Share Plan. Non-executive directors do not receive any
performance related remuneration. Remuneration is limited to the payment of
Board fees which serves to help maintain independence and impartiality.
The Board seeks to set aggregate remuneration at a level that provides the
Company with the ability to attract and retain directors of the highest calibre,
whilst incurring a cost that is acceptable to shareholders. However, to align
directors' interests with shareholder interests, the directors are encouraged to
hold shares in the Company and are able to participate in the Directors and
Employees Share Plan.
The amount of aggregate remuneration sought to be approved by shareholders and
the fee structure is reviewed annually against fees paid to NEDs of comparable
companies. The Board considers advice from external consultants when
undertaking the annual review process.
The Company's constitution and the ASX listing rules specify that the NED fee
pool shall be determined from time to time by a general meeting. Non-executive
directors' fees are presently limited to a total aggregate fee pool of A$450,000
per annum, excluding the fair value of any options/share rights granted.
Structure
The remuneration of NEDs consists of directors' fees. NEDs do not receive
retirement benefits, unless approved by shareholders in general meeting. NEDs
may also participate in equity-based incentive programs as approved by the
shareholders. Refer to section 4 of this remuneration report for details of
options issued to NEDs during the financial year.
The remuneration of NEDs for the year ended 30 June 2011 and 30 June 2010 are as
follows:
30 June 2011 30 June 2011 Restated 30 June
2010
Non-executive Fixed Fees including Inclusive of Share Inclusive of Share
director Superannuation Rights & Options Rights& Options
US$'000 US$'000
Gordon Galt 86 727 201
Morrice Cordiner 44 364 260
Ribson Gabonowe 45 365 101
Jeremy Read 44 363 100
John Shaw 43 363 100
Total 262 2,182 762
Directors are also entitled to be reimbursed for all business related expenses,
including travel on Company business, as may be incurred in the discharge of
their duties. There are no plans for retirement benefits for non-executive
directors and no retirement benefits are payable by the Company to any non-
executive director.
Executive remuneration arrangements
Remuneration levels and mix
The Company aims to reward executives with a level and mix of remuneration
commensurate with their position and responsibilities with the Company and
aligned with market practice.
Structure
In the 2011 financial year, the executive remuneration framework consisted of a
fixed component; and an equity-based component.
Fixed remuneration
Fixed remuneration includes base pay including superannuation contributions.
Executive contracts of employment do not include any guaranteed base pay
increases and are reviewed annually by the Board and the Remuneration and
Nominations Committee. The process consists of a review of the Company,
individual performance, relevant comparative remuneration internally and
externally and, where appropriate, external advice independent of management.
In reviewing comparative remuneration data sourced from independent industry
surveys, the Board or relevant committee's policy is to position total fixed
remuneration close to the median of its defined market to ensure a competitive
offering. The Company undertakes an annual remuneration review to determine the
total remuneration positioning against the market.
The Company's policy for determining the nature and amount of remuneration for
key management personnel of the Consolidated Group is as follows:
* All key management personnel receive a base salary (which is based on
factors such as demonstrated skills and experience), superannuation, fringe
benefits and a share plan package. Short term performance incentives will
be added for future years to coincide with commissioning and commencement of
commercial production at Boseto.
* Review key management personnel packages annually by reference to the
Consolidated Group's performance, executive performance and comparable
information from industry sectors.
* The base salary is determined using a number of factors, including skills
displayed, particular experience of the individual concerned and overall
performance of the Company. The contracts for service between the Company
and key management personnel are on a continuing basis, the terms of which
are not expected to change in the immediate future. Upon retirement, key
management personnel are paid employee benefit entitlements accrued to the
date of retirement. Executives are paid a percentage of between three and
twelve months of their salary in the event of termination, with all granted
options vesting immediately in the event of a takeover bid for the Company.
Any options not exercised within 60 days of the date of termination lapse.
* For executives, the Consolidated Group will seek to emphasise payment for
results through the incorporation of cash incentive payments based on the
achievement of revenue targets and return on equity ratios. This will be
implemented once the Company commences production in future years.
The performance of executives is measured against criteria agreed with the
Managing Director and ratified annually by the Remuneration Committee. The
criteria are based predominantly on the work required to grow the Company and to
bring the Boseto copper project into production and therefore add to
shareholders' value. As the Company has been in the exploration and feasibility
phase, currently no short term bonus payment plan is applicable to executives.
Any future bonuses and incentives will be linked to predetermined performance
criteria. The Remuneration Committee may, however, recommend that the Board
exercise its discretion in relation to approving incentives, bonuses and options
and make changes. Any such changes must be justified by reference to measurable
performance criteria. The policy is designed to attract the highest calibre of
executives and reward them for performance that results in long-term growth in
shareholder wealth.
Executives are entitled to participate in the Company's Director and Employee
Share Plan (which replaced the previous share option plan), which is the long
term incentive portion of their remuneration. The Directors and Employees Share
Plan (Share Plan) was approved by shareholders in February 2010 and links
director and executive incentives to the shareholder objectives in four
tranches.
For directors and executive management (Eligible Employees), the shares are
subject to the following vesting conditions, and are only be able to be released
from the Share Plan after these conditions have been satisfied:
a. The shares vest in four tranches and each tranche will be subject to
the performance hurdles in (b) below. Any further tranches will be
advised by the Company's Plan Committee.
b. Each tranche of shares will not be able to be released from the
Share Plan unless and until the following performance hurdles have
been achieved:
c. tranche one = The processing plant for the Boseto copper project has
been built and commissioned and the plant has achieved an output of
10,000 tonnes of copper;
d. tranche two = The share price (as traded on ASX) has exceeded A$1.00
per share for more than 10 trading days (which need not be
consecutive);
e. tranche three = The share price (as traded on ASX) has exceeded
A$1.50 per share for more than 10 trading days (which need not be
consecutive);
f. tranche four = The share price (as traded on ASX) has exceeded
A$2.00 per share for more than 10 trading days (which need not be
consecutive); and
g. tranche five = includes measures for Shareholder Return and a "good
service" component. It is intended to present the proposed ongoing
Long Term Incentive Plan for executive management to shareholder for
approval at the November 2011 Annual General Meeting. This tranche
only applies to 3 executives including 1 key management personnel
(Phil Nolan).
Australian key management personnel receive a superannuation guarantee
contribution required by the Australian government, which is currently 9%, and
do not receive any other retirement benefits. Botswana key management personnel
receive a similar superannuation contribution payment. Individuals may choose
to sacrifice part of their salary to increase payments towards superannuation.
All remuneration paid to key management personnel is valued at the cost to the
Company and expensed when paid, or in the case of share options, in the year of
the grant. Options are valued using the Black-Scholes methodology. Grants of
shares are valued using Monte-Carlo and other option pricing methodology and are
expensed over the period from grant to the expected vesting date.
Performance-based remuneration
For the reporting year the Company currently has no performance based
remuneration component built into director and executive remuneration packages
other than the Directors and Employees Share Plan.
Company performance, shareholder wealth and director and executive remuneration
The remuneration policy has been tailored to increase goal congruence between
shareholders, directors and executives.
Managing Director and Executives
The employment conditions of the Managing Director, Stuart Bradley Sampson and
other key executives are formalised in contracts of employment. The Managing
Director and other executives are permanent employees of Consolidated Group
companies.
Brad Sampson is employed under an ongoing contract, which commenced on 1 June
2010, replacing his fixed term contract commencing on 1 February 2008. The
employment contract stipulates a six (6) month notice period for resignation.
The Company may terminate the employment contract without cause by providing
twelve (12) months written notice or making payment in lieu of notice, based on
the individual's annual salary. Other key management personnel have Company
period of 3 or 6 months and a minimum 3 month resignation notice period.
Termination payments are generally not payable on resignation or dismissal for
serious misconduct. In the instance of serious misconduct the Company can
terminate employment at any time. Any options not exercised within 60 days of
the date of termination will lapse. This lapsing of options after 60 days is a
standard employment contract condition for all executives with options
outstanding.
The Board, on advice from the Remuneration Committee, determines the proportion
of fixed and variable compensation for each executive.
Key Management Personnel Remuneration
2011 Short term benefits Post-employment Share based
benefits
Non-
Cash Salary Monetary Super- Shares or
Name & Fees Benefits annuation Other Options Total
US$ US$ US$ US$ US$ US$
Non - Executive Directors
Gordon Galt 86,250 - - - 640,506 726,756
(1)
Morrice 43,482 - - - 320,253 363,735
Cordiner (2)
Ribson 44,854 - - - 320,253 365,107
Gabonowe (3)
Jeremy Read 39,566 - 3,561 - 320,253 363,380
John Shaw - 43,127 - 320,253 363,380
=-------------------------------------------------------------------------------
Total for 214,152 - 46,688 - 1,921,518 2,182,358
NEDs
=-------------------------------------------------------------------------------
Executive Directors
Brad 473,543 11,839 24,729 - 640,506 1,150,617
Sampson
Other key management personnel
Paul Fulton 302,933 6,397 49,457 - 320,253 679,040
Ross Gibbins 253,468 6,397 22,812 - 160,127 442,804
Phil Nolan 138,255 4,436 16,486 - 668,717 827,894
(4)
Jan Andersen 76,468 1,912 12,570 - 472,765 563,715
(5)
=-------------------------------------------------------------------------------
Total for
executive 1,244,667 30,981 126,054 - 2,262,368 3,664,070
KMP
=-------------------------------------------------------------------------------
Grand total 1,458,819 30,981 172,742 - 4,183,886 5,846,428
=-------------------------------------------------------------------------------
Notes:
Differences in directors fees recorded in this report arise from timing of
payments and therefore different exchange rates applied to convert the
Australian Dollar denominated fees into the United States dollars reporting
currency.
Cash Bonuses are not payable until the year that Boseto production commences and
therefore 0% of directors and key management remuneration is related to
performance.
Long service leave is not accrued until 5 years service has been reached.
Share Based Payments are valued using the Black-Scholes and Monte-Carlo option
pricing methodologies.
1. Mr Galts's director's fees are paid to Veromas Pty Limited in accordance
with his contract.
2. Mr Cordiner's director's fees are paid to Mining Investors Australia Pty
Limited in accordance with his contract.
3. Mr Gabonowe's director's fees are paid to Gabor Consulting (Pty) Ltd in
accordance with his contract.
4. Mr Nolan commenced employment in January 2011.
5. Mr Andersen commenced employment in March 2011.
Key Management Personnel Remuneration
Restated 2010 Short term benefits Post-employment Share
benefits based
Non-
Cash Salary Monetary Super- Shares or
Name & Fees Benefits annuation Other Options Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Non - Executive Directors
Gordon Galt 77,904 - - - 123,498 201,402
(1)
Morrice 38,952 - - - 220,727 259,679
Cordiner (2)
Ribson 39,136 - - - 61,749 100,885
Gabonowe (3)
Jeremy Read 35,283 - 3,175 - 61,749 100,207
John Shaw - - 38,458 - 61,749 100,207
=-------------------------------------------------------------------------------
Total for 191,275 - 41,633 - 529,472 762,380
NEDs
=-------------------------------------------------------------------------------
Executive Directors
Brad Sampson 354,241 8,856 22,052 - 143,650 528,799
Other key management personnel
Paul Fulton 238,158 3,997 44,103 - 126,188 412,446
Ross Gibbins 206,183 3,997 18,557 - 51,387 280,123
Nick Franey 57,097 1,999 5,139 - 61,749 125,984
(4)
=-------------------------------------------------------------------------------
Total for 855,679 18,849 89,851 - 382,974 1,347,533
executive KMP
=-------------------------------------------------------------------------------
Grand total 1,046,954 18,849 131,484 - 912,446 2,109,733
=-------------------------------------------------------------------------------
Notes:
Cash Bonuses are not payable until production commences and therefore 0% of
directors and key management remuneration is related to performance.
Long service leave is not accrued until 5 years' service has been reached.
Share Based Payments are valued using the Black-Scholes and Monte-Carlo
methodologies.
1. Mr Galts's director's fees are paid to Veromas Pty Limited in accordance
with his contract.
2. Mr Cordiner's director's fees are paid to Mining Investors Australia Pty
Limited in accordance with his contract.
3. Mr Gabonowe's director's fees are paid to Gabor Consulting (Pty) Ltd in
accordance with his contract.
4. Mr Franey commenced employment on 6 April 2010.
Options issued as part of remuneration for the year ended 30 June 2011
There were no options issued to the directors and executives during the year
ended 30 June 2011.
Options issued as part of remuneration for the year ended 30 June 2010
Options were issued to directors and executives as part of their remuneration.
The options were not issued on performance criteria, but are issued to the
majority of directors and executives of the Consolidated Group to increase goal
congruence between executives, directors and shareholders.
Terms & Vested Granted Grant Value Exercise First Last
Conditions No. No. Date per Price Exercise Exercise
for Each Option A$ Date Date
Grant at
Grant
Date
A$
Non- Executive Directors
Morrice - 1,000,000 03/12/09 A$0.35 A$0.50 24/11/10 12/12/11
Cordiner
Directors and Employees Share Plan
As part of the Directors and Employees Share Plan, the following newly appointed
key management personnel were granted the share rights during the period ended
30 June, 2011
Tranche 1 Tranche 3 Tranche 4 Tranche 5
10,000t ASX share ASX share Shareholder and
Share Rights Copper price exceeds price exceeds Service components
produced A$1.50 A$2.00
Value per right at
grant
Phil Nolan A$1.26 A$1.24 A$1.19 A$1.048
Jan Andersen A$1.15 A$1.12 A$1.07 -
Other key management
personnel
Phil Nolan 250,000 250,000 250,000 250,000
Jan Andersen 250,000 250,000 250,000 -
During the year ended 30 June 2011, the share price (as traded on ASX) exceeded
A$1.00 per share for more than 10 trading days. Hence the vesting conditions
related to Tranche 2 have been satisfied and the Plan Trust Company released
3,250,000 shares to the directors and executives who participated in the plan.
Shares Issued to Plan Trust Company to be held until vesting (2010)
Shares for directors and executives were issued to the Plan Trust Company and
will be released to the executives when vesting occurs, subject to performance
and other criteria. There is no earliest date for vesting and the shares are
issued and not subject to expiry. Following approval of the Directors and
Employees Share Plan by shareholders on 24 February 2010, the shares were issued
to the Plan Trust Company on 31 March 2010.
Tranche 1 Tranche 2 Tranche 3 Tranche 4
10,000t ASX share ASX share ASX share
Share Rights Copper price exceeds price exceeds price exceeds
produced A$1.00 A$1.50 A$2.00
Value per right at grant A$0.76 A$0.74 A$0.6990 A$0.6619
Non- Executive Directors
Gordon Galt 500,000 500,000 500,000 500,000
Morrice Cordiner 250,000 250,000 250,000 250,000
Ribson Gabonowe 250,000 250,000 250,000 250,000
Jeremy Read 250,000 250,000 250,000 250,000
John Shaw 250,000 250,000 250,000 250,000
Executive Directors
Brad Sampson 500,000 500,000 500,000 500,000
Other key management personnel
Paul Fulton 250,000 250,000 250,000 250,000
Ross Gibbins 125,000 125,000 125,000 125,000
Note: Tranche 2 vested during the reporting period.
Shares Issued on Exercise of Compensation Options
Options exercised during the year ended 30 June 2011 that were granted as
compensation in prior periods
No. of Ordinary Shares Amount Paid Amount Unpaid per
Issued per Share Share
Non- Executive
Directors
Ribson Gabonowe 486,250 A$0.50 -
Executive Directors
Brad Sampson 1,000,000 A$0.44 -
Options exercised during the year ended 30 June 2010 that were granted as
compensation in prior periods
No. of Ordinary Shares Amount Paid Amount Unpaid per
Issued per Share Share
Non- Executive
Directors
Gordon Galt 1,000,000 A$0.30 -
Gordon Galt 800,000 A$0.35 -
John Shaw 500,000 A$0.30 -
John Shaw 500,000 A$0.35 -
Options & share rights value as a portion of total remuneration
Total
Options & Share Remuneration Cost of
30 June 2011 Rights Granted as represented by Options &
part of Options & Share Share Rights Options
Remuneration Rights Exercised Lapsed
US$ % US$ US$
Non- Executive
Directors
Gordon Galt 640,506 88% - -
Morrice Cordiner 320,253 88% - -
Ribson Gabonowe 320,253 88% 247,088 -
Jeremy Read 320,253 88% - -
John Shaw 320,253 88% - -
Executive
Directors
Brad Sampson 640,506 56% 435,776 -
Other key management personnel
Paul Fulton 320,253 47% - -
Ross Gibbins 160,127 36% 239,136 -
Phil Nolan 668,717 81% - -
Jan Andersen 472,765 84% - -
Total
Options & Share Remuneration
Restated 30 June Rights Granted as represented by
2010 part of Options & Share Options Options
Remuneration Rights Exercised Lapsed
US$ % US$ US$
Non- Executive
Directors
Gordon Galt 123,498 61% 328,305 0
Morrice Cordiner 220,727 85% 0 0
Ribson Gabonowe 61,749 61% 0 0
Jeremy Read 61,749 61% 0 0
John Shaw 61,749 61% 132,310 0
Executive
Directors
Brad Sampson 143,650 27% 0 0
Other key management personnel
Paul Fulton 126,188 30% 0 0
Ross Gibbins 51,387 18% 0 0
Indemnification and insurance of directors and officers
Indemnification
The Company indemnifies each of its directors, officers and company secretary.
The Company indemnifies each director or officer to the maximum extent
permitted by the Corporations Act 2001 from liability to third parties, except
where the liability arises out of conduct involving lack of good faith, and in
defending legal and administrative proceedings and applications for such
proceedings.
The Company must use its best endeavours to insure a director or officer against
any liability, which does not arise out of a conduct constituting a wilful
breach of duty or a contravention of the Corporations Act 2001. The Company
must also use its best endeavour to insure a director or officer against
liability for costs and expenses incurred in defending proceedings whether civil
or criminal.
The Company has not entered into any agreement with its current auditors
indemnifying them against any claims by third parties arising from their report
on the financial report. The directors of the Company are not aware of any
proceedings or claim brought against the Company as at the date of this report.
Insurance premiums
The Consolidated Group has paid insurance premiums in respect of directors' and
officers' liability and legal expenses insurance contracts for current and
former directors, executive officers and secretaires. The directors have not
included details of the premium paid in respect of the directors' and officers'
liability and legal expenses' insurance contracts, as such disclosure is
prohibited under the terms of the contract.
Rounding
The amounts contained in this report and in the financial report have been
rounded to the nearest US$1,000 (where rounding is applicable and where noted
(US$'000)) under the option available to the Company under ASIC CO 98/0100.
Share Options
At 30 June 2011 there were 6,363,750 (2010: 10,315,525) unissued ordinary shares
of Discovery Metals for which options were outstanding as detailed at Note 25 to
the Financial Statements.
Proceedings on Behalf of Company
No person has applied to the Court for leave to bring proceedings on behalf of
the Company, or 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 any
part of those proceedings. The Company was not a party to any such proceedings
during the year.
Non-audit Services
On 23 November 2010, the Company announced the appointment of Ernst & Young as
the Company's auditor, following the resignation of RSM Bird Cameron Partners at
the 2010 Annual General Meeting.
Details on the fees and charges for provision of audit and non-audit services by
that firm are included in Note 37 of the Financial Statements. The Audit
Committee has developed a policy to ensure that the independence of the
Company's auditor is not impaired in providing non audit services to the Company
so that both the Company and the external auditor can comply with relevant
auditor independence rules which apply in the various jurisdictions in which the
Consolidated Group operates.
No officer of the Consolidated Group who held office during the financial year,
and no current officer, was formerly a partner or director of Ernst & Young.
The board of directors, in accordance with advice from the audit committee, is
satisfied that the provision of non-audit services during the year is compatible
with the general standard of independence for auditors imposed by the
Corporations Act 2001. The directors are satisfied that the services disclosed
below did not compromise the external auditor's independence for the following
reasons:
* all non-audit services were subject to the corporate governance procedures
adopted by the Company and have been reviewed by the Company to ensure they
do not impact the integrity and objectivity of the auditor; and
* non-audit services provided do not undermine the general principles relating
to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants, as they did not involve reviewing or auditing the
auditor's own work, acting in a management or decision making capacity for
the Company, acting as an advocate for the Company or jointly sharing risks
and rewards.
Auditor's Independence Declaration
The lead auditor's independence declaration for the year ended 30 June 2011 has
been received and can be found on page 64 of this combined report.
Signed in accordance with a resolution of the board of directors.
Brad SampsonGordon Galt
Managing DirectorChairman
Brisbane
Dated this 31st day of August, 2011
STATEMENT OF FINANCIAL POSITION
As at 30 June 2011
Note 2011 Restated 2010 Restated 2009
US$'000 US$'000 US$'000
ASSETS
CURRENT ASSETS
Cash & cash equivalents 9 88,807 33,530 7,085
Trade & other receivables 10 3,876 376 197
Prepaid expenses and deposits 11 1,981 294 157
-------------------------------------
TOTAL CURRENT ASSETS 94,664 34,200 7,439
-------------------------------------
NON-CURRENT ASSETS
Property, Plant and equipment 12 94,591 1,111 415
Exploration, evaluation and 13 37,771 28,878 18,523
development expenditure
Intangible assets 14 568 46 -
-------------------------------------
TOTAL NON-CURRENT ASSETS 132,930 30,035 18,938
-------------------------------------
TOTAL ASSETS 227,594 64,235 26,377
-------------------------------------
CURRENT LIABILITIES
Trade & other payables 15 19,425 829 1,113
Current portion of Finance Lease 17 73 - -
Provisions 16 427 264 128
-------------------------------------
TOTAL CURRENT LIABILITIES 19,925 1,093 1,241
-------------------------------------
NON-CURRENT LIABILITIES
Non-current portion of Finance lease 17 159 - -
Deferred Tax Liability 6 336 - -
Provisions 16 2,812 - -
-------------------------------------
TOTAL NON-CURRENT LIABILITIES 3,307
-------------------------------------
TOTAL LIABILITIES 23,232 1,093 1,241
-------------------------------------
NET ASSETS 204,362 63,142 25,136
EQUITY
Issued capital 18 213,017 75,480 35,130
Reserves 20 22,483 4,254 2,486
Accumulated losses 21 (31,138) (16,592) (12,480)
-------------------------------------
TOTAL EQUITY 204,362 63,142 25,136
The above statement of financial position should be read in conjunction with the
accompanying notes.
STATEMENT OF COMPREHENSIVE INCOME
As at 30 June 2011
Note 2011 Restated 2010
US$'000 US$'000
Other revenue 5 3,327 673
Compliance expenses 5 (1,121) (578)
Depreciation and amortisation 12/14 (258) (81)
Exploration expenditure impaired 13 (1,812) -
Legal expenses (395) (268)
Rent 5 (228) (165)
Salaries and consultants 5 (4,443) (1,776)
Travel expenses 5 (1,221) (504)
Share based payments 7 (4,870) (911)
Gain/(Loss) on foreign currency 5 (2,375) -
Other expenses 5 (820) (502)
-----------------------
Profit/(loss) before income tax expense (14,216) (4,112)
Income tax (expense) / benefit 6 (330) -
-----------------------
Profit/(loss) after tax (14,546) (4,112)
Other comprehensive income, net of tax
Foreign currency translation movements 12,074 856
Total Comprehensive Income (2,472) (3,256)
Profit/(loss) attributable to members of the (14,546) (4,112)
Consolidated Group
-----------------------
Total Comprehensive Income attributable to members (2,472) (3,256)
of the Consolidated Group
-----------------------
Loss per share:
Basic & diluted ordinary loss per share
attributable to ordinary equity holders (cents per 8 (3.82) (1.80)
share)
The above statement of comprehensive income should be read in conjunction with
the accompanying notes.
STATEMENT OF CHANGES IN EQUITY
As at 30 June 2011
Issued Accumulated Option Foreign Total
Share (Losses) Reserve Currency US$'000
Capital US$'000 US$'000 Translation
US$'000 Reserve
US$'000
At 1 July 2010 35,130 (12,480) 2,227 259 25,136
(Restated)
Currency
Translation - - - 857 857
Differences
(Loss) for the - (4,112) - - (4,112)
year
Shares issued 40,993 - - - 40,993
during the year
Transaction
costs for (643) - - - (643)
shares issued
Cost of share - - 911 - 911
based payments
-----------------------------------------------------------------
Balance as at 75,480 (16,592) 3,138 1,116 63,142
30 June 2010
2011
Currency
Translation - - - 12,074 12,074
Differences
(Loss) for the - (14,546) - - (14,546)
year
Shares issued 142,429 - - - 142,429
during the year
Transaction
costs for (4,892) - - - (4,892)
shares issued
Cost of share - - 6,155 - 6,155
based payments
-----------------------------------------------------------------
Balance as at 213,017 (31,138) 9,293 13,190 204,362
30 June 2011
The above statement of changes in equity should be read in conjunction with the
accompanying notes.
STATEMENT OF CASH FLOWS
As at 30 June 2011
Note 2011 Restated 2010
US$'000 US$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers - -
GST receipts 521 181
Payments to suppliers and employees (11,336) (4,501)
Interest received 3,136 592
Dikoloti management fee 182 72
Refunds received 9 8
---------------------------
Net cash used in operating activities 27 (7,488) (3,647)
---------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration (10,704) (9,751)
Purchase of plant and equipment (73,535) (779)
Payment of Intangibles 14 (592) (47)
---------------------------
Net cash used in investing activities (84,831) (10,577)
---------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 142,429 40,902
Share issue costs (4,892) (552)
---------------------------
Net cash provided by financing activities 137,537 40,350
---------------------------
Net increase (decrease) in cash held 45,218 26,126
Cash at the beginning of the period 33,530 7,085
Effect of exchange rates 10,059 319
---------------------------
Cash at the end of the period 9 88,807 33,530
The above statement of cash flows should be read in conjunction with the
accompanying notes.
For further information contact:
Discovery Metals Limited
Brad Sampson
Managing Director
Tel: +617 3218 0200
Fairfax I.S. PLC
Ewan Leggat / Laura Littley
Tel: +44 (0)20 7598 5368
Tavistock
Jos Simson/Emily Fenton
Tel: +44 (0) 207 9203150
Mobile: +44 (0)7899 870 450
Further information on the Company is available on its website:
www.discoverymetals.com.au
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Source: Discovery Metals Limited via Thomson Reuters ONE
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Discov. Met (LSE:DME)
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De May 2024 a Jun 2024
Discov. Met (LSE:DME)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024
