RNS Number : 0992G
Zeehan Zinc Limited
17 October 2008
ZEEHAN ZINC LIMITED
('Zeehan Zinc' or the 'Company')
Final Results for the year ended 30 June 2008
London: 17 October 2008 - Zeehan Zinc Limited, the exploration and development company with assets in Western Tasmania, Australia,
announces its audited final results for the year ended 30 June 2008 ("Final Results").
The audit report in respect of the Final Results, which will be included in its entirety in the Report & Accounts that will be posted to
shareholders shortly, is qualified on the basis that the auditors were not provided with information to support the directors' decision to
impair mine properties and plant & equipment by A$11,706,998 as at 30 June 2008. The auditors were unable to satisfy themselves as to the
recoverable amount calculated by the directors for mine properties and plant & equipment as at 30 June 2008.
The auditors also drew attention to Note 1 in the financial report (reproduced below) which indicates that the Company incurred a net
loss of A$22,267,043 during the year ended 30 June 2008 and during the same period the Company's net cash used in operating activities was
A$11,507,620 as set forth in Note 22 and, as at that date, the parent entity's total liabilities exceeded its total assets by A$4,360,929.
These conditions, along with other matters as set forth in Note 1, indicate the existence of material uncertainty which may cast significant
doubt about the Company's ability to continue as a going concern.
The Directors intend to send the Annual Report & Accounts to shareholders shortly, along with the AGM Notice which will include the
Directors' plans to raise additional funding to meet the Company's longer term liabilities.
For further information please visit www.zeehanzinc.com or enquire to:
Zeehan Zinc plc c/o Bankside
Tad Ballantyne Tel: +44 (0)20 7367 8888
Libertas Capital Tel: +44 (0)20 7569 9650
Jakob Kinde, Anthony Rowland
Bankside Consultants Tel: +44 (0)20 7367 8888
Simon Rothschild, Oliver Winters
Review of Operations
Mining Properties
Comstock
The Company brought its mine at Comstock into initial production during the year after an intensive construction period. Mining
operations were carried out between February and June 2008 by mining contractor Hoare Brothers at Main Lode (South Pit) and Allison's Lode.
Around 1,500 tonnes of high grade ore has been extracted and processed during the year. Around 620 cubic metres of massive zinc-lead
sulphide dominated materials and 4,270 cubic metres of mixed massive and disseminated zinc-lead sulphide and waste materials have been
extracted and currently stockpiled at site.
The Company entered into a contract for the sale of a trial amount of 500 tonnes of ore to Zinifex Australia Limited (Zinifex), now Oz
Minerals, in June 2008. Shipment was completed in early July 2008. The contract represents the commencement of a commercial relationship
with Zinifex and the Company intends to work closely with Zinifex and other interested parties for the sale of its product after the
completion of its exploration plan and subsequent extraction.
In line with the board's focus on resource definition and exploration, all mining and processing ceased in or around June 2008. The
board considers it uncommercial to continue with mining and processing until a tailored plan can be implemented at the conclusion of
resource definition and exploration work.
The processing plant has gone through extensive and costly commissioning, testing and adaption since October 2007 to produce product(s)
consistent with potential customers' expectations / specifications. Other adaptations have been made due to unforseen changes in the nature
of the ore being received at the plant. For these reasons the plant has been in a constant state of commission/adaptation/recommission since
October 2007. As a result, commissioning/operating costs have been high and the reliability below expectation. Ores crushed to date have
been for batch testing and sampling only and not truly representative of steady state production to a set product specification.
Since February 2008 the plant has crushed 1,500 tonnes of ore, half of which was to generate concentrate products, the remainder has
been crushed to generate samples for run of mine (RoM) assay analysis, blended float tests with other companies ores' and; saleable
test-products (500 tonnes to Zinifex).
Given the cost incurred on the processing plant to date, and the decision to focus on resource definition and mining, there is currently
minimal commercial benefit in operating the processing plant. The board will consider the benefits and costs in maintaining the processing
plant and may decide to dispose of this asset and apply sale proceeds to its capital works including the comprehensive resource definition
and exploration program.
The Government approved an increase in production limit for Comstock from 200ktpa to 400ktpa in March 2008. The board will seek to defer
use of this licence until the Company is in a position to recommence production.
The Company's intention to undertake a preliminary feasibility study and related design of a flotation plant, with a designed capacity
of 1 million tonnes per annum, has been suspended for the present until further analysis of ore processing requirements is undertaken. The
Company is unlikely to require use of a flotation plant over the next 6 - 12 months. The Company is seeking to sell incomplete and second
hand parts of a flotation plant which it owns and apply sale proceeds to its resource definition work and exploration program. The board
considers it more commercial to generate funds immediately to service its operational needs, and either purchase or use a flotation plant
under an EPCM arrangement that is fit for purpose and does not require uncertain fine tuning and construction when the Company is ready to
mine and process its product.
Development Properties
Oceana
A mine development proposal and environmental management plan (DPEMP) is being prepared for Government approval. It is unlikely the
Company will seek to mine Oceana until the completion of its feasibility study based on the high level resource estimation, which is
expected from completion of the exploration plan on Oceana. The current drilling program aims to further delineate Oceana resource and
provide useful data for re-estimating the mineral resource. Metallurgical and geotechnical analysis will assist in future mining and ore
processing design.
Mariposa
An application for a retention licence of 2 square kilometres at Mariposa (RL 1/2008) was approved in February 2008. This will allow the
Company to maintain control over the site until the completion of its current operational plan, likely to be around 12 months. The Company
will then develop and implement a mining and processing plan to the extent it is commercial and reasonable to do so.
Exploration
Exploration activities for the year included continuation of the Old Workings Survey aimed to locate previous mining activities on
current licences EL18/2003, EL20/2002 and EL30/2002. However, the exploration work on these areas will focus on conducting airborne
geophysical, ground geophysical and geochemical surveys.
A comprehensive resource definition and exploration program was adopted by the board and commenced in or around July 2008. The
commencement of this plan is consistent with the board's newly developed focus on substantiating and clarifying its resource position in
order to subsequently develop and implement a tailored mining and processing plan. The exploration plan and estimated budget have been
discussed with Mineral Resources Tasmania as part of the Company's commitment to the Government in applying for extensions of the
exploration licences.
Change in Board Focus
The board announced on 28 July 2008 that it had modified its focus. In addition to the resource enhancement and exploration plans
outlined above, the board will steer the Company towards diversification of resources and expansion, both within Australia and
internationally. The board has approved initial groundwork needed to begin exploration for nickel, and additional resource enhancement work
at its Oceana and Comstock properties, and on its exploration licenses. The board is considering strategic acquisitions with a view to
growth and expansion and has commenced discussions with interested parties in Australia and internationally in relation to mutually
beneficial corporate transactions.
Fund Raising
During the reporting period, the Company announced it completed a secondary placement of 13,175,000 shares on the Alternative Investment
Market to raise an amount of approximately GBP�1.98 million (GBP�1.94 million net of expenses, A$4.6 million), to select institutional
clients of Libertas Capital Securities Limited. Dealings in these shares commenced on 14th August 2007.
On 12 December 2007, the Company announced it had entered into an agreement with Creat Group Company Limited ("Creat Group") through
subsidiaries of Creat Group, to raise GBP�4.275 million by way of a convertible loan. The convertible loan is in the form of two convertible
loan notes which have a term of five years and carry a coupon of 6% per annum. Interest will be compounded if the Company opts not to meet
the interest payments on the relevant dates, such interest to be payable at maturity. The convertible loan is convertible into ordinary
shares of the Company at a conversion price of 15p.
Funds from the first convertible loan note were received in full 21 February 2008. Funds from the second convertible loan note were
received in part (GBP�1.0375 million) 21 May 2008, and (GBP�0.0380 million) 2 September 2008, At the date of this report, the balance due
under the agreement is GBP�0.720 million. The board agreed to an extension for the balance of the final payment which Creat Group has
undertaken to pay before the end of October 2008.
In order to meet the new board objectives reported above the board will review its capital structure. This review will be concluded on
terms and conditions which take into account the needs of all stakeholders, and particularly investors' long term investments in the
resource enhancement and subsequent operations of the Company.
Events Subsequent to Balance Date
The Company entered into a contract for the sale of a trial amount of 500 tonnes of ore to Zinifex Australia Limited (Zinifex). The
contract represents the commencement of a commercial relationship with Zinifex (now Oz Minerals).
The Company engaged an agent (Minasco Australia Pty Ltd) to effect the sale of flotation plant equipment. This decision was made on the
basis that the equipment was not fit for purpose and an uncertain amount of work would be required to effectively operate the equipment. The
Company intends to apply the proceeds of the sale to its working capital requirements including progress of the Exploration Plan. The
Company estimates it will receive around $2,900,000 from the sale.
Outstanding funds from the second convertible loan note agreement with Creat Group were received in part (GBP�0.0380 million) 2
September 2008, The board agreed to an extension for the balance of funds of GBP�0.720 million, which Creat Group has undertaken to pay
before the end of October 2008.
Mr Frank Lewis resigned from the board on 24 September 2008. The board thanked Mr Lewis for his efforts and commitment to the Company.
INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2008
Note Economic Entity Parent Entity
2008 2007 2008 2007
$ $ $ $
Revenue 2 843,593 339,050 531,992 258,320
Exploration and Evaluation 3 (103,648) (3,003,039) (41,649) (28,580)
Costs Expensed
Depreciation Expense 3 (302,975) (37,411) (15,347) (10,161)
Other Expenses 3 (22,519,695) (5,229,508) (19,619,582) (18,658,659)
Finance Costs 3 (184,318) (51,672) (148,213) (40,544)
Loss before Income Tax (22,267,043) (7,982,580) (19,292,799) (18,479,624)
Income Tax Expense 6 - - - -
Net Loss Attributable to (22,267,043) (7,982,580) (19,292,799) (18,479,624)
Members of Parent Entity
Earnings per share for the loss attributable
to the ordinary equity holders of the company
Cents Cents
Basic loss per share (15.48) (9.29)
Diluted loss per share (15.48) (9.29)
BALANCE SHEET
AS AT 30 JUNE 2008
Note Economic Entity Parent Entity
2008 2007 2008 2007
$ $ $ $
Assets
Current Assets
Cash and Cash Equivalents 7 1,278,897 9,260,758 1,153,822 9,087,082
Receivables 8 116,569 271,982 289,636 339,971
Assets Held for Sale 11 2,985,224 - - -
Inventories 96,281 - - -
Other Current Assets 9 336,338 970,027 49,471 199,387
Total Current Assets 4,813,309 10,502,767 1,492,929 9,626,440
Non-Current Assets
Receivables 8 - - - -
Property, Plant and Equipment 11 4,806,307 12,077,196 210,037 227,045
Intangible Assets 10 3,721 3,721 1,033 1,033
Other Financial Assets 25 - - - -
Total Non-Current Assets 4,810,028 12,080,917 211,070 228,078
Total Assets 9,623,337 22,583,684 1,703,999 9,854,518
Liabilities
Current Liabilities
Trade and Other Payables 12 1,210,331 3,237,273 409,206 386,519
Financial Liabilities 13 96,360 59,409 - -
Provisions 16 60,004 77,088 - -
Total Current Liabilities 1,366,695 3,373,770 409,206 386,519
Non-Current Liabilities
Financial Liabilities 13 5,958,233 157,111 5,607,722 -
Other Liabilities 14 953 20,140 - 19,965
Deferred Tax Liabilities 15 48,000 48,000 48,000 48,000
Total Non-Current Liabilities 6,007,186 225,251 5,655,722 67,965
Total Liabilities 7,373,881 3,599,021 6,064,928 454,484
Net Assets 2,249,456 18,984,663 (4,360,929) 9,400,034
Equity
Issued Capital 17 46,481,426 41,024,975 46,481,426 41,024,975
Reserves 18 279,309 203,924 279,309 203,924
Accumulated Losses (44,511,279) (22,244,236) (51,121,664) (31,828,865)
Total Equity 2,249,456 18,984,663 (4,360,929) 9,400,034
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2008
Note Economic Entity Parent Entity
2008 2007 2008 2007
Cash Flows from Operating Activities $ $ $ $
Receipts from Customers 1,209,019 174,440 320,585 95,678
Interest Received 521,797 164,610 352,372 162,641
Payments to Suppliers and (13,181,515) (12,631,606) (2,080,055) (7,974,713)
Employees
Interest Paid (36,105) (51,672) - (40,544)
Net Cash used in Operating 22(i) (11,486,804) (12,344,228) (1,407,098) (7,756,938)
Activities
Cash Flows from Investing
Activities
Sale/(Purchase) of Property, (7,276,241) (9,773,282) 1,661 12,204
Plant & Equipment
Payment for Controlled - (200) - (200)
Entities
Net Cash used in Investment (7,276,241) (9,773,482) 1,661 12,004
Activities
Cash Flows from Financing Activities
Net Movement from Borrowings 6,053,879 3,292,026 (11,255,128) (11,253,453)
Proceeds from Issue of Shares 4,727,305 28,087,649 4,727,305 28,087,648
Net Cash Provided by Financing 10,781,184 31,379,675 (6,527,823) 16,834,195
Activities
Net Increase/(Decrease) in (7,981,861) 9,261,966 (7,933,260) 9,089,261
Cash Held
Cash at Beginning of the Year 9,260,758 (1,208) 9,087,082 (2,179)
Cash at the End of the Year 7 1,278,897 9,260,758 1,153,822 9,087,082
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2008
Note Issued Retained Other Total
Capital Earning Reserves
$ $ $ $
Economic Entity
Total Equity at 1 July 2006 11,266,424 (14,261,656) 112,000 (2,883,232)
Net Loss for the Period - (7,982,580) - (7,982,580)
Share Option Reserve - - 91,924 91,924
Less: Capital Raising Costs (5,140,648) - - (5,140,648)
Issue of Share Capital 34,899,199 - - 34,899,199
Total Equity at 30 June 2007 41,024,975 (22,244,236) 203,924 18,984,663
Total Equity at 1 July 2007 41,024,975 (22,244,236) 203,924 18,984,663
Net Loss for the Period - (22,267,043) - (22,267,043)
Share Option Reserve - - 75,385 75,385
Less: Capital Raising Costs (102,127) - - (102,127)
Issue of Share Capital 4,727,305 - - 4,727,305
Issue of Convertible Notes 831,273 - - 831,273
Total Equity at 30 June 2008 46,481,426 (44,511,279) 279,309 2,249,456
Parent Entity
Total Equity at 1 July 2006 11,266,424 (13,349,241) 112,000 (1,970,817)
Net Loss for the Period - (18,479,624) - (18,479,624)
Share Option Reserve - - 91,924 91,924
Less: Capital Raising Costs (5,140,648) - - (5,140,648)
Issue of Share Capital 34,899,199 - - 34,899,199
Total Equity at 30 June 2007 41,024,975 (31,828,865) 203,924 9,400,034
Total Equity at 1 July 2007 41,024,975 (31,828,865) 203,924 9,400,034
Net Loss for the Period - (19,292,799) - (19,292,799)
Share Option Reserve - - 75,385 75,385
Less: Capital Raising Costs (102,127) - - (102,127)
Issue of Share Capital 4,727,305 - - 4,727,305
Issue of Convertible Notes 831,273 - - 831,273
Total Equity at 30 June 2008 46,481,426 (51,121,664) 279,309 (4,360,929)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2008
NOTE 1: STATEMENT 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
Zeehan Zinc Limited as an individual entity (the *Company* or *Parent Entity*) and the consolidated entity consisting of Zeehan Zinc Limited
and its subsidiaries (the *Group* or *Economic Entity*).
a) Basis of Preparation
Statement of Compliance
This general purpose financial report has been prepared in accordance with Australian Accounting Standards (AASBs), including Australian
Interpretations, adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. Both the consolidated financial
report of the Economic Entity and the financial report of the Company comply with International Financial Reporting Standards (*IFRSs*) and
the interpretations adopted by the International Accounting Standards Board.
The financial statements were approved by the board of directors on 24 September 2008.
Basis of Measurement
These financial statements have been prepared on an accrual basis and under the historical cost convention, as modified by the revaluation
of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value either through
profit or loss or equity and certain classes of property, plant and equipment.
Going Concern
The Company is in a development stage and in the course of its activities has sustained operating losses. It expects such losses to continue
for at least the next 12 months. Attempts to extract, process and sell resources (to generate operating revenues) will be delayed until the
completion of comprehensive exploration and high confidence level resource estimation, and completion of a feasibility study. The Company
will finance its operations primarily through cash and cash equivalents on hand, future financing from the issuance of debt or equity
instruments and through the generation of revenues once commercial operations get underway. However, the Company has yet to generate any
significant revenues and has no assurance of future revenues.
The financial report has been prepared on a going concern basis. However uncertainties exist in terms of the ability to generate cash flows
in the future which cast doubt upon the Company's ability to continue as a going concern.
The directors have reviewed their short-term requirements and are considering various funding options to ensure that the Company is able to
meet its financial obligations on a going concern basis.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets nor to the
amounts and classification of liabilities that might be necessary should the entity not continue as a going concern.
Functional and Presentation Currency
These financial statements are presented in Australian dollars, which is the Group*s functional currency.
Principles of Consolidation
Subsidiaries
A subsidiary is any entity Zeehan Zinc Limited has the power to control the financial and operating policies of, so as to obtain the benefit
from its activities. All controlled entities have a June financial year end.
Transactions Eliminated on Consolidation
All intercompany balances and transactions between entities in the Economic Entity, including any unrealised profits or losses, have been
eliminated on consolidation. Where controlled entities have entered or left the Economic Entity during the year, their operating results
have been included/excluded from the date control was obtained or until control ceased.
b) Exploration and Evaluation Expenditure
Exploration and evaluation costs are expensed as they are incurred.
Exploration operations in areas of interest are continuing. The Economic Entity holds current rights of tenure over any undiscovered
resources in the areas of interest. Significant amounts have been expensed to progress this work.
c) Mine Development Expenditure
Mine Development expenditure incurred by or on behalf of the Economic Entity is accumulated separately for each area of interest in which
economically recoverable reserves have been identified to the satisfaction of the directors. Such expenditure comprises net direct costs and
an appropriate portion of related overhead expenditure having a specific nexus with the development property.
Mine Development expenditure is capitalised only if development costs can be measured reliably, the mining and production process is
technically and commercially feasible, future economic benefits probable and the Economic Entity has sufficient resources to complete
development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour and overhead costs that
are directly attributable to preparing the asset for its intended use. Other development expenditure is recognised in the Income Statement
when incurred.
No amortisation is provided in respect of mine development properties until they are reclassified as *Mine Properties* following a decision
to commence mining.
d) Mine Properties
Mine properties represent the accumulation of all development expenditure incurred by or on behalf of the Economic Entity in relation to
areas of interest in which mining of a mineral resource has commenced.
When further development expenditure is incurred in respect of a mine property after the commencement of production, such expenditure is
carried forward as part of the mine property only when it is probable that the associated future economic benefits will flow to the Economic
Entity, otherwise such expenditure is classified as part of the cost of production.
Amortisation is provided on either a unit-of-production basis so as to write off the cost in proportion to the depletion of the proven and
probable mineral reserves. (Also refer Note 11c).
e) Impairment of Assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any
indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the
asset*s fair value less costs to sell and value in use, is compared to the asset*s carrying value. Any excess of the asset*s carrying value
over its recoverable amount is expensed to the Income Statement. For the purpose of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash generating units).
f) Rehabilitation and Mine Closure Costs
The Economic Entity has certain obligations to restore and rehabilitate mine properties. A non-transferable bond is held by Mineral
Resources Tasmania and is included under Mine Properties.
g) Financial Instruments
Recognition
Financial instruments are initially measured at the cost on trade date, which includes transaction costs, when the related contractual
rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.
Financial assets at fair value through profit and loss
A financial asset is classified in this category if acquired principally for the purpose of selling in the short term, or if so designed by
management and within the requirement of AASB139: Recognition and Measurement of Financial Instruments. Derivatives are also categorised as
held for trading unless they are designated as hedges. Realised and unrealised gains and losses arising from changes in the fair value of
these assets are included in the income statement in the period in which they arise.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and
are stated at amortised cost using the effective interest rate method.
Available-for-sale Financial Assets
Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets
are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.
Financial Liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.
Derivative Instruments
Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are taken to the income statement
unless they are designated as hedges.
Fair Value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair
value for all unlisted securities, including recent arm*s length transactions, reference to similar instruments and option pricing models.
h) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current
financial year.
Economic Entity Parent Entity
2008 2007 2008 2007
$ $ $ $
Note 2: Revenue
Revenues from Operating Activities
Sale of Goods 8,038 - 8,038 -
Revenues from Non-Operating Activities
Interest Income 521,797 164,610 352,372 162,641
Other Revenue 313,758 174,440 171,582 95,679
Total Revenue 843,593 339,050 531,992 258,320
Note 3: Expenses
Loss from ordinary activities has been determined after:
Finance Costs:
Interest Expense - 130,524 44,965 127,397 40,544
Other Persons
Finance Charges on 32,978 6,707 - -
Finance Leases
Amortisation of 20,816 - 20,816 -
Deferred Finance
Costs
184,318 51,672 148,213 40,544
Rental Expense relating to Operating 368,284 108,845 126,786 9,545
Leases
Depreciation of Non Current Assets:
Property, Plant & 302,975 37,411 15,347 10,161
Equipment
Bad and Doubtful Debts 55,791 163,127 55,791 163,127
Impairment Expense Mine Properties, Plant 11,706,998
- - -
Impairment Loss on Loans to Subsidiaries - - 17,525,945 15,111,390
Exploration and Evaluation costs expensed 103,648 3,003,039 41,649 28,580
Note 4: Auditors' Remuneration
Remuneration of the Auditor of Parent Entity for:
Auditing or 84,800 44,400 84,800 44,400
Reviewing the
Financial Report
Other Services - - 6,800 - 6,800
Internal control
review
No other benefits were received by Auditor.
Note 5: Prior Year Transaction
During the period February 2006 to June 2006, the then directors approved the conversion of debt to equity, in respect of amounts shown as
liabilities of the Group, totalling $1,377,847. The transactions undertaken resulted in an over issue of 2,745,464 shares in the Company,
for which agreed value was not
received. The error in the calculation was not identified until after the issue of the final audited June 2006 accounts, and subsequently a
receivable amounting to $368,408 was raised in the Company's accounts but relevant to shares issued prior to end of year June 2006. The
amount due of $368,408, was received in
cash in February 2007 in full settlement of the receivable amount, within seven (7) days of the relevant shareholders being advised of the
calculation error.
Economic Entity
Parent Entity
2008
2007 2008
2007
$
$ $
$
Note 6: Income Tax Expense
(i) Current Income Tax
Income Tax Expense -
- -
-
Reported in the
Income Statement
(ii) Numerical
Reconciliation of
Income Tax Expense
to Prima Facie
Income Tax Payable
Accounting Loss (22,267,043)
(7,982,580) (19,292,799)
(18,479,624)
before Income Tax
Prima facie Income (6,680,113)
(2,394,774) (5,787,840)
(5,543,887)
Tax Benefit on Loss
from Ordinary
Activities before
Income Tax at 30%
Permanent -
- -
-
Differences Group
Company Receivable
provided for
Future Income Tax 6,680,113
2,394,774 5,787,840
5,543,887
Benefit Relating to
Tax Losses not
brought to Account
Income Tax -
- -
-
Benefit/(Liability)
Attributable to
Operating Loss
The directors estimate that the potential future 11,110,414
4,430,301 13,732,245
7,944,405
income tax benefit at year end in respect of tax
losses not brought to account is:
The Parent Company and its subsidiaries are consolidated for tax purposes.
The benefit of tax losses will only be obtained if:
(a) The Company and its subsidiaries derive future assessable income of a nature and of an amount sufficient to
enable the benefit from the deductions for the losses to be realised;
(b) The Company and its subsidiaries continue to comply with the conditions for deductibility imposed by the
law; and
(c) no changes in tax legislation adversely affect the Company and its subsidiaries in realising the benefit
from the deduction for the losses.
Economic Entity Parent Entity
2008 2007 2008 2007
$ $ $ $
Note 7: Cash and Cash
Equivalents
Cash at Bank and in Hand 1,178,897 4,888,098 1,153,822 4,814,422
Short-Term Bank Deposits 100,000 4,372,660 - 4,272,660
1,278,897 9,260,758 1,153,822 9,087,082
Reconciliation of Cash
Cash at the end of the
financial year as shown in the
Statement of Cash Flows is
reconciled to items in the
Balance Sheet as follows:
Cash and Cash Equivalents 1,278,897 9,260,758 1,153,822 9,087,082
Note 8: Receivables
Current
Debtors and Advances 34,841 163,584 207,908 231,573
Advances to Related Parties 320,417 271,526 320,417 271,526
Provision for Doubtful Debts (238,689) (163,128) (238,689) (163,128)
116,569 271,982 289,636 339,971
Non-Current
Loans to Controlled Entities - - 40,304,964 22,779,018
(Note 23iv)
Provision for Doubtful Debts - - (40,304,964) (22,779,018)
- - - -
Note 9: Other Current Assets
Deposits and Advances 251,900 287,778 26,706 133,807
GST Recoverable 84,438 682,249 22,765 65,580
336,338 970,027 49,471 199,387
Note 10: Intangibles
Preliminary Expenses 2,013 2,013 1,033 1,033
Goodwill on Consolidation 1,708 1,708 - -
3,721 3,721 1,033 1,033
Economic Entity
Parent Entity
2008 2007 2008
2007
$ $ $
$
Note 11: Property, Plant and
Equipment
Land and Buildings
Freehold Land at Independent 200,000 200,000 200,000
200,000
Valuation 2006 (a)
Less: Provision for (7,587) (3,794)
(7,587) (3,794)
Depreciation
Total Land and Buildings 192,413 196,206 192,413
196,206
Leasehold Improvements
Leasehold Improvements at Cost 166,202 128,383 939
-
Less: Provision for (22,150) (6,614)
(69) -
Depreciation
Total Leasehold Improvements 144,052 121,769 870
-
Plant and Equipment
Plant and Equipment at Cost 4,340,068 352,425 29,566
42,566
Less: Provision for (2,992,396) (35,267)
(12,812) (11,727)
Depreciation
Total Plant and Equipment 1,347,672 317,158 16,754
30,839
Leased Assets
Leased Assets 565,341 212,480 -
-
Less: Provision for (89,338) (14,466) -
-
Depreciation
Total Leased Assets 476,003 198,014 -
-
Plant Under Construction
Processing Plant and Flotation - 4,530,494 -
-
Plant (b)
Less: Provision for - - -
-
Depreciation
Total Plant Under Construction - 4,530,494 -
-
Mine Development
Mine Development at Cost (c) 146,167 6,713,555 -
-
Less: Provision for - - -
-
Depreciation
Total Mine Development 146,167 6,713,555 -
-
Mine Properties
Mine Properties at Cost (c) 11,423,376 - -
-
Less: Provision for (8,923,376) - -
-
Depreciation
Total Mine Properties 2,500,000 - -
-
Total Property, Plant and 4,806,307 12,077,196 210,037
227,045
Equipment
(a) The Group's land and buildings were revalued at 24th October 2005 by independent valuers. Valuations were made on the basis of open
market value. The revaluation
surplus net of applicable deferred income taxes was credited to an asset revaluation reserve in shareholders' equity.
(b) Plant Under Construction reported as at 30 June 2007 comprised construction of a processing plant and equipment acquired with the
intention of constructing a flotation
plant. As at 30 June 2008, the processing plant equipment has been transferred to Plant and Equipment and the flotation plant equipment
transferred to Assets held for Sale.
(c) Mine Properties An $11.4m asset was recognised when mining at Comstock commenced during the year. This included the $2.5 million bond
that was paid to Mineral
Resources Tasmania for the Mining Licences in March 2007, which is expected to cover costs for decommissioning and rehabilitating the mine
site and disturbed areas.
Following cessation of mining operations and significant uncertainty as to when commercial mining will recommence, an impairment loss of
$8.8m has been recognised. The
directors have assessed that this now reflects the recoverable amount of the asset. The asset may have value in the future if further
resource definition and exploration
work supports the recommencement of commercial mining operations.
Movements in Carrying Amounts
Land & Buildings Leasehold Improve Plant & Equipment Leased Assets Plant Under Mine
Develop-ment Mine Properties Total
-ments Constr-uction
$ $ $ $ $ $
$ $
Economic Entity:
Balance at the Beginning of 196,206 121,769 317,158 198,014 4,530,494
6,713,555 - 12,077,196
Year
Additions/ (Disposals) - 37,819 344,255 352,861 2,133,385
4,855,988 - 7,724,308
Transfers / other movements - - 3,678,655 - (6,663,879)
(11,423,376) 11,423,376 (2,985,224)
(1)
Impairment Expense (2) - - (2,855,155) - -
- (8,851,843) (11,706,998)
Depreciation Expense (3,793) (15,536) (137,241) (74,872) -
- (71,533) (302,975)
Carrying Amount at End of Year 192,413 144,052 1,347,672 476,003 -
146,167 2,500,000 4,806,307
Parent Entity
Balance at the Beginning of 196,206 - 30,839 - -
- - 227,045
Year
Additions/ (Disposals) - 939 (2,600) - -
- - (1,661)
Transfer to Subsidiary Coy - - - - -
- - -
Depreciation Expense (3,793) (69) (11,485) - -
- - (15,347)
Carrying Amount at End of Year 192,413 870 16,754 - -
- - 210,037
(1) Transfers and other movements includes reclassification between categories.
(2) P&E impairment loss recoginsed comprised processing plant $2,694,391 and flotation plant equipment $160,764.
Economic Entity Parent Entity
2008 2007 2008 2007
$ $ $ $
Note 12: Trade and Other
Payables
Current
Trade Creditors 931,112 1,191,944 263,886 171,949
Sundry Accruals 279,219 2,045,329 145,320 214,570
1,210,331 3,237,273 409,206 386,519
Note 13: Financial Liabilities
Current
Finance Lease Liability 96,360 59,409 - -
96,360 59,409 - -
Non-Current
Convertible Notes 5,606,526 - 5,606,526 -
Other Loans: Unsecured - 19,965 1,196 19,965
Finance Lease Liability 351,707 137,146 - -
5,958,233 157,111 5,607,722 19,965
Convertible Notes
Proceeds from Issue of 6,629,303 - 6,629,303 -
Convertible Notes
Transaction Costs (338,836) - (338,836) -
Net Proceeds 6,290,467 - 6,290,467 -
Amount classified as Equity (831,273) - (831,273) -
Amortisation of Deferred 20,816 20,816
Finance Costs
Accreted Interest 126,516 - 126,516 -
Carrying Amount of Liability 5,606,526 - 5,606,526 -
at 30 June
The amount of the convertible notes classified as equity of $831,273 is net of attributable transaction costs of
$47,290.
The notes are convertible into ordinary shares of the Company at a conversion price of 15p.
Economic Entity Parent Entity
2008 2007 2008 2007
$ $ $ $
Note 14: Other Liabilities
Non-Current
Security Deposits Held 953 20,140 - -
Note 15: Deferred Tax
Liabilities
Non-Current
Deferred Tax Liabilities
Comprise:
Tax Allowances relating to 48,000 48,000 48,000 48,000
Property, Plant and Equipment
Revaluation Adjustments taken
Directly to Equity.
48,000 48,000 48,000 48,000
Reconciliations
i) Gross movements
The Overall Movement in the
Deferred Tax Account is as
follows:
Opening Balance 48,000 48,000 48,000 48,000
Charges to Equity - - - -
Closing Balance 48,000 48,000 48,000 48,000
Note 16: Provisions
Economic Entity Employee Entitlements
Rehabilitation of Comstock Mine
Total
Current
Non Current
$
$
$
Opening Balance at 1 July 2007 77,088
-
77,088
Additional Provisions Raised During the Year 194,503
-
194,503
Amounts Used/ Removed
(211,587) -
(211,587)
Balance at 30 June 2008 60,004
-
60,004
Opening Balance at 1 July 2006 30,317
500,000
530,317
Additional Provisions Raised During the Year 70,731
-
70,731
Amounts Used/ Removed
(23,960) (500,000)
(523,960)
Balance at 30 June 2007 77,088
-
77,088
Parent Entity
Opening Balance at 1st July -
-
-
2007
Amounts Used -
-
-
Amounts Transferred to -
-
-
Subsidiaries
Balance at 30 June 2008 -
-
-
Opening Balance at 1st July 21,181
-
21,181
2006
Amounts Used
(7,857) -
(7,857)
Amounts Transferred to
(13,324) -
(13,324)
Subsidiaries
Balance at 30 June 2007 -
-
-
Analysis of Total Provisions
Economic Entity
Parent Entity
2008 2007
2008 2007
Current 60,004 77,088
-
-
Non-current - -
-
-
60,004 77,088
-
-
Provision for Employee
Entitlements
A provision has been recognised for employee entitlements relating to annual leave for employees. The measurement and recognition criteria
for employee benefits have been included in Note 1.
Provision for Rehabilitation of Comstock Mine
The $500,000 provision (based on a report by SEMF Consulting in May 2006) from the prior year was reversed due to the $2.5 million bond
that was paid to Mineral Resources Tasmania for the Mining Licences in March 2007. This is expected to cover costs for decommissioning and
rehabilitating the
mine site and disturbed areas and is expected to apply if the operation ceases at any time up to the end of the expected mine life.
Note 17: Contributed Equity
Economic Entity
Parent Entity
2008 2007 2008
2007
$ $ $
$
(i) Issued and Paid-up Capital
144,979,674 Ordinary Shares Fully Paid 46,481,426 41,024,975 46,481,426
41,024,975
(2007: 131,801,674)
Total Issued Capital 46,481,426 41,024,975 46,481,426
41,024,975
(ii) Terms and Conditions of Contributed Equity
Ordinary shares and "A" Class shares participate in dividends and the proceeds on winding up of the Parent Entity in proportion to the
number of shares held.
At shareholders meeting each Ordinary share and each "A" Class share is entitled to 1 vote when a poll is called, otherwise each
shareholder has 1 vote on a show of hands.
(iii) Movements in Ordinary Share Capital
2008 2008 2007
2007
Number of Ordinary $ Number of Ordinary
Shares $
Shares
Beginning of the Financial Year 131,801,674 41,024,975 43,449,307
11,265,425
Shares Issued During the Year :
Shares Issued for 13,175,000 4,727,305
21,200,000 5,354,040
Cash
Converted A Class
1,000 1,000
Shares
Conversion Brokers
2,065,507 913,350
Commission
Capital raised - AIM
46,153,846 22,365,000
Market Listing
Shares Issued to
4,280,000 928,400
Swap Debt
Conversion of Note
14,652,014 4,970,000
Receivable -
368,408
Capital raising (102,127) -
(5,140,648)
costs
Issue of Convertible 831,273 -
-
Notes (a)
End of the Financial Year 144,976,674 46,481,426
131,801,674 41,024,975
* Potential ordinary shares.
Economic Entity Parent Entity
2008 2007 2008 2007
$ $ $ $
At the Beginning of the Reporting Period 41,024,975 11,265,425 41,024,975 11,265,425
Shares Issued During the Year :
Shares Issued for Cash:
9,760,000 on 8th August 2006 - 2,494,040 - 2,494,040
2,440,000 on 15th August 2006 - 610,000 - 610,000
9,000,000 on 27th October 2006 - 2,250,000 - 2,250,000
Receivable on 30th June 2006 (Note 5) - 368,408 - 368,408
1,000 on 16th December 2006 - 1,000 - 1,000
(Converted A Class Shares)
46,153,846 on 6th March 2007 - AIM - 22,365,000 - 22,365,000
Listing
Captial raised: Value GBP 9,000,000
13,175,000 on 15th August 2007 4,727,305 - 4,727,305 -
Captial raised: Value GBP 1,976,250
Shares Issued for Services Provided:
373,200 on 20th September 2006 - 93,300 - 93,300
Brokers Commission - Equity based
1,692,307 on 6th March 2007 - 820,050 - 820,050
Brokers Commission - Equity based
Shares Issued to Swap Debt:
200,000 on 21st July 2006 - 2,800 - 2,800
400,000 on 21st July 2006 - 5,600 - 5,600
400,000 on 23rd October 2006 - 100,000 - 100,000
880,000 on 23rd October 2006 - 220,000 - 220,000
800,000 on 23rd October 2006 - 200,000 - 200,000
1,600,000 on 23rd October 2006 - 400,000 - 400,000
14,652,014 on 6th March 2007 - 4,970,000 - 4,970,000
Conversion of Wind City Note
Less: Capital Raising Costs Associated
with AIM Listing & Other Capital Raising
(102,127) (5,140,648) (102,127) (5,
140,
648)
Issue of Convertible Notes 831,273 - 831,273 -
144,976,674 Ordinary Shares
(2007: 131,801,674)
Fully Paid at the Reporting Date 46,481,426 41,024,975 46,481,426 41,024,975
(iv) Top 20 Shareholders
Shareholder No of shares Percentage Held %
CREDIT SUISSE CLIENT NOMINEES (UK) 19,913,846 13.736%
W B NOMINEES LIMITED 15,958,244 11.007%
THE BANK OF NEW YORK (NOMINEES) 15,874,687 10.950%
EUROPE WIND III BV 14,652,014 10.106%
HSBC GLOBAL CUSTODY NOMINEE (UK) 13,417,801 9.255%
HSBC CLIENT HOLDINGS NOMINEE (UK) 9,200,000 6.346%
EMPIRE HOLDINGS BV 6,100,000 4.208%
ROY NOMINEES LIMITED 5,648,332 3.896%
BATEGO LIMITED 5,000,000 3.449%
STATE STREET NOMINEES 3,750,000 2.587%
LIMITED
CHASE NOMINEES LIMITED 3,474,358 2.396%
R C GREIG NOMINEES 2,545,029 1.755%
LIMITED
MR GRAEME 1,774,500 1.224%
STUART-BRADSHAW
DEWBERRY ENTERPRISES 1,726,387 1.191%
LIMITED
MRS SUSANNE STUART-BRADSHAW 1,365,000 0.942%
NORTRUST NOMINEES 1,282,050 0.884%
LIMITED
J M FINN NOMINEES 1,232,520 0.850%
LIMITED
PERSHING NOMINEES 1,197,000 0.826%
LIMITED
PETLYNNE INVESTMENTS 1,072,700 0.740%
PTY LTD
BEAR STEARNS SECURITIES 900,000 0.621%
CORP
Economic Entity
Parent Entity
2008
2007
2008
2007
$
$
$
$
Note 18: Reserves
Asset Revaluation Reserve 112,000
112,000
112,000
112,000
Share-based Payments Reserve 167,309
91,924
167,309
91,924
279,309
203,924
279,309
203,924
Movements
(i) Asset Revaluation
Reserve
Balance at 1 July 112,000
112,000
112,000
112,000
Revaluation - gross -
-
-
-
Balance at 30 June 112,000
112,000
112,000
112,000
(ii) Share-based Payments
Reserve
Balance at 1 July 91,924
-
91,924
-
Option valuation 75,385
91,924
75,385
91,924
movements charged to
Income Statement
Balance at 30 June 167,309
91,924
167,309
91,924
Nature and Purpose of Reserve
(i) Asset Revaluation
Reserve
The Asset Revaluation Reserve records revaluations of non-current assets. Under certain circumstances dividends
can be declared from the Reserve.
(ii) Share-based Payments
Reserve
The share-based payments reserve is used to recognise the fair value of options issued but not exercised.
Note 19: Contingent Liabilities
Economic Entity
Parent Entity
2008
2007
2008
2007
$
$
$
$
Estimate of the maximum amounts of
contingent liabilities that may become payable
-
-
-
-
Discussions are in process against the company relating to a dispute with a recruitment agency who claims an entitlement of up to $200,000
for services provided. The information usually required by AASB 137 Provisions, Contingent Liabilities and Contingent Assets is not
disclosed on the grounds that it can be expected to prejudice seriously the outcome of the discussions to resolve the dispute. The directors
are of the opinion that the claim can be successfully resisted by the
company.
Note 20: Capital and Leasing Commitments
Economic Entity
Parent Entity
2008
2007
2008
2007
a) Finance Lease Commitments $
$
$
$
Payable - Minimum Lease Payments
- Not later than 12 months 134,283
57,879
-
-
- Later than 1 year Not Later than 5 386,319
173,602
-
-
Total Minimum Lease Payments 520,602
231,481
-
-
Less: Future Finance Charges (72,535)
(34,926)
-
-
Present Value of Minimum Lease Payments (refer Note 14) 448,067
196,555
-
-
b) Operating Lease Commitments
Payable - Rent and Car Parks at
199 Macquarie St Hobart
- Not later than 12 months 183,369
178,115
-
-
- Later than 1 year Not Later than 5 83,349
267,173
-
-
Total Minimum Lease Payments 266,718
445,288
-
-
c) Capital Expenditure commitments
Reclamation and Rehabilitation
Commitments at Comstock Mine -
-
-
-
Capital Commitments on Exploration
Leases held by ZZ Exploration Pty Ltd
EL20/2002 & EL30/2002 3,837,000
1,887,000
-
-
EL18/2003 132,500
122,500
-
-
Total Commitments over Term of Exploration Licences 3,969,500
2,009,500
-
-
Capital Commitments on Exploration
Leases held by ZZ Explorations Pty Ltd:
EL20/2002 1,880,500
1,110,917
-
-
EL30/2002 819,000
545,667
-
-
EL18/2003 24,667
16,333
-
-
Total Capital Expenditure Commitments as at period end 2,724,167
1,672,917
-
-
The minimum expenditure commitments of exploration licences under the Mineral Exploration Code of Practice are specified as follows:
a) First Year: $250 per km2 per annum
b) Second Year: $500 per km2 per annum
c) Third Year at $1,000 per km2 per annum
d) Fourth Year at $2,000 per km2 per annum
e) Last Year at $5,000 per km2 per annum
EL20/2002, EL30/2002 and EL18/2003 have been granted an extension of an additional year. All previous commitments to spend under these
licences were met or
exceeded.
Economic Entity
2008 2007
$ $
Total Capital Expenditure Incurred to Date
From Date of Renewal/Granting
EL20/2002 (2,437,149) (2,279,970)
EL30/2002 (1,109,524) (934,220)
EL18/2003 (311,020) (209,907)
(3,857,693) (3,424,097)
Net Capital Commitments at 30 (1,133,526) (1,751,180)
June after Expenditure
Incurred
(Negative amount indicates amounts expended in excess of license requirement.)
Note 21: Statement Of Operations by Segments
Industry Segments
The Economic Entity operates predominantly in one industry, being the mineral exploration development and extraction industry.
Geographical Segments
The Economic Entity's business segments are located in Australia.
Economic Entity Parent Entity
2008 2007 2008 2007
$ $ $ $
Note 22: Cash Flow Information
(i) Reconciliation of Cash Flows from
Operations with Loss from Ordinary
Activities after Income Tax
Loss from Ordinary
Activities after
Income Tax
(22,267,043) (7,982,580) (19,292,799) (18,479,624)
Adjustments for:
Depreciation 302,975 37,411 15,347 10,161
Doubtful Debts - - 17,525,945 15,274,517
Finance Costs 184,318 51,672 148,213 40,544
Impairment Losses 11,706,998 - - -
Reserves 75,385 91,924 75,385 91,924
Costs Associated (102,127) (5,140,648) (102,127) (5,140,648)
with Capital Raising
Changes in Assets and Liabilities:
Other Receivables 155,413 - (58,064) -
Other Assets 633,689 - 258,315 (32,577)
Payables (2,026,942) 255,845 22,687 539,274
Provisions (17,084) 453,229 - -
Inventories (96,281) - - -
Other Liabilities - (59,409) - (19,965)
Interest
Interest Paid (36,105) (51,672) - (40,544)
Net Cash Flows used (11,486,804) (12,344,228) (1,407,098) (7,756,938)
in Operations
(ii) Non Cash Financing
and Investment
Activities
Debt for Equity Swap - 5,898,400 - 5,898,400
Note 23: Related Party Transactions
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties
unless otherwise stated.
Economic Entity
Parent Entity
2008 2007
2008 2007
(i) Loans with Related Parties $ $
$ $
The following related parties have made loans to the
Economic Entity. These loans are in the form of
fixed rate 6% unsecured convertible notes.
Creat Group (HK) Ltd (through its nominees Marvel 5,606,526 -
5,606,526 -
Link Group Limited and Kingwealth Finance Limited)
5,606,526 -
5,606,526 -
(ii) Transactions with Director Related Parties:
David Tanner Holdings Pty Ltd, controlled by David - 18,844
- 444
Tanner, a past director, provided consultancy
services
Logok Pty Ltd, controlled by Malcolm Bendall, a past - 13,500
- 13,500
director provided rental services
Bass Gas & Oil Pty Ltd, controlled by Malcolm - 157,250
- 37,538
Bendall, a past director, provided consultancy
services
Great South Land Minerals Limited of which Clive - 786,370
- 191,465
Burrett is a director and Malcolm Bendall was a
director provided use of company staff and equipment
ECR Research Pty Ltd, controlled by Keith Laing, a - 181,826
- 181,826
past director, provided consultancy services
Michael Roberts, a past director, has provided 42,650 47,389
42,650 47,389
consultancy services
Malcolm Bendall, a past director has an outstanding 101,500 101,500
101,500 101,500
claim for consultancy services
Malcolm Bendall, a past director has an outstanding 320,187 264,627
320,187 264,627
advance for non-business related expenses
(iii) Parent Entity
Zeehan Zinc Ltd (ABN 43 089 093 943) is the ultimate parent entity within the economic entity.
(iv) Controlled Entities - Wholly Owned
Controlled entities made payments and received funds on behalf of Zeehan Zinc Ltd by way of inter-company loan accounts. The loans are
unsecured, bear no interest and are repayable on demand,
however, demand for repayment is not expected in the next twelve months. Aggregate amounts receivable from the wholly owned controlled
entities by the Company are set out in Note 8.
(v) Entities with Significant Influence over the Economic Entity
Directly through Creat Group Company Limited "Creat Group" or "Creat Group (HK) Ltd" with two senior executive directors on the Zeehan Zinc
Limited board and indirectly through its nominees
Marvel Link Group Limited and Kingwealth Finance Limited.
Note 24: Financial Risk Management
The Group's financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and payable, loans to
and from subsidiaries, bills and leases.
The main purpose of non-derivative financial instruments is to raise finance for Group operations.
The Group does not have any derivative instruments at 30 June 2008.
The main risks the Group is exposed to through its financial instruments are liquidity risk, credit risk and foreign currency risk.
Foreign Currency Risk
The Group manages exposures to fluctuations in foreign currencies as they arise. Current exposure is reviewed regularly.
Liquidity Risk
The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are
maintained.
Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial
assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the Balance Sheet and notes to the
financial statements.
Weighted Average Effective Interest Rate Floating Interest Rate
Fixed Interest Rate maturing within 1 Year Fixed Interest Rate maturing 1 to 5
Years
2008 2007 2008 2007
2008 2007 2008
2007
% % $ $
$ $ $
$
Financial Liabilities
Convertible Notes Unsecured - 6% -
- - - 5,606,526
-
Lease Liabilities 31% 31% -
- - - 448,067
196,555
Total Financial Liabilities
- - 6,054,593
196,555
Non-interest Bearing Total
2008 2007 2008
2007
Financial Assets
$ $ $
$
Cash and Cash Equivalents
14,450 78,111 1,178,897
9,260,758
Receivables
116,569 271,982 116,569
271,982
Total Financial Assets
131,019 350,093 1,295,466
9,532,740
Financial Liabilities
Short Term Borrowing Unsecured
- - -
-
Convertible Notes Unsecured
- - 5,606,526
-
Long Term Borrowing Unsecured
- 19,965 -
19,965
Security Deposits Held
953 20,140 953
20,140
Lease Liabilities
- - 448,067
196,555
Current Trade and Other Payables
1,210,331 3,237,273 1,210,331
3,237,273
Non Current Trade and Other Payables
- - -
-
Total Financial Liabilities
1,211,284 3,277,378 7,265,877
3,473,933
Economic Entity
Parent Entity
2008
2007
2008 2007
$
$
$ $
Note 25: Other Financial Assets
Non-Current
Unlisted Investments at cost
Shares in Controlled Entities -
-
4,024,246 4,024,246
Provision for diminution -
-
(4,024,246) (4,024,246)
Total available-for-sale financial assets -
-
- -
Note 26: Earnings Per Share
Basic and diluted earnings per share amounts are calculated by dividing loss attributable to the ordinary equity holders of the parent by
the weighted average number of ordinary shares outstanding during the financial year.
The following reflects the information used in the basic and diluted earnings per share computations:
Economic Entity
2008 2007
$ $
Basic earnings per share
Loss attributable to the ordinary equity holders of the Company (cents per share)
(0.1548) (0.0929)
Earnings used in calculating earnings per share
Loss attributable to the ordinary equity holders of the Company ($)
(22,267,043) (7,982,580)
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share
143,878,757 85,886,946
Diluted earnings per share
Loss attributable to the ordinary equity holders of the Company (cents per share)
(0. 1548) (0.0929)
Earnings used in calculating earnings per share
Loss attributable to the ordinary equity holders of the Company ($)
(22,267,043) (7,982,580)
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating diluted earnings per share
143,878,757 85,886,946
Instruments that could potentially dilute basic earnings per share in the future but were not included in the
calculation of diluted earnings per share because they were anti-dilutive for the periods presented.
Convertible notes - refer Note 13
Share options - refer Note 27
Note 27: Share Based Payment
The Company established a Share Option Plan in 2006 which enables directors and employees of the Company to be granted options to acquire
ordinary shares in the share capital of the Company. The Share Option Plan provides the directors with a means to attract, retain and reward
directors and employees. The key provisions of the Share Option Plan are as follows:
Options are granted under the Share Option Plan for no consideration, and are granted at the discretion of the board. The options cannot be
transferred and can be exercised at any time between the date the option is granted and the expiry date, subject to the imposition of any
specified vesting date which is at the discretion of the board. Each option is convertible into one ordinary share.
During the financial year there were 3,400,000 options granted under the Company's Share Option Plan. These options are exercisable in
tranches as follows:
Grant Date Number of Options
Expiry Date
Option grant to key management (1)
14-Jul-07 3,000,000
14-Jul-12
Option grant to senior employees
9-Oct-07 100,000
31-Dec-07
Option grant to director (2)
16-Mar-08 300,000
16-Mar-12
(1) Options to be vested in lots of 500,000 on the 1st, 2nd and 3rd anniversaries, strike
price on date of grant for first two years. Options forfeited on resignation during year.
(2) Options to be vested in lots of 100,000 on grant date, and 1st and 2nd anniversaries,
strike price on date of grant.
The number and weighted average exercise prices of share options is as follows:
Number of
Options weighted average exercise price
Number of Options weighted average exercise price
2008
2008
2007 2007
$
$
Options outstanding at 1 July
1,900,000 0.4994
- -
Granted
3,400,000 0.3337
1,900,000 0.4994
Forfeited
(3,000,000) 0.3423
- -
Exercised
- -
- -
Expired
(500,000) 0.4172
- -
Options outstanding at 30 June
1,800,000 0.1571
1,900,000 0.4994
Options exercisable at 30 June
1,100,000 0.3992
900,000 0.4629
The options outstanding at 30 June 2008 have an exercise price in the range $0.22 to $0.54 and
a weighted average contractual life of 3.85 years.
The estimated fair value of each share option granted during the period was calculated at $0.0151 (2007: $0.0798). This was calculated by
applying a binomial option pricing model using the following assumptions:
2008 2007
Expected share price volatility (%)
23.40 14.30
Risk-free interest rate (%)
7.00 5.50
Expected life of option (years)
3 3
Share price ($)
0.1631 0.4463
Weighted average exercise price ($)
0.4190 0.4906
Note 28: Accounting Standards Issued or Amended
A number of Australian Accounting Standards have been issued or amended since year end but are not
yet effective and have not been adopted in the preparation of the financial statements at
reporting date. The Economic Entity does not believe they have any material impact on the 2008
Financial Report or for the ensuing year.
Note 29: Controlled Entities
Country of Incorporation % owned
2008 2007
Parent Entity
Zeehan Zinc Limited Australia - -
Controlled Entities of Zeehan Zinc Limited:
Oceania Tasmania Pty Limited Australia 100 100
ZZ Exploration Pty Limited Australia 100 100
Zeehan Zinc Administration Pty Limited Australia 100 100
Zeehan Zinc Properties Pty Limited Australia 100 100
Note 30: Company Details
The registered office and principal place of business of the Company is:
Zeehan Zinc Limited
Level 1 199 Macquarie Street
Hobart 7000
Tasmania
Australia
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GUGCPUUPRGUM
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