For personal use only - ASX · Company Secretary Simon Penney Registered Office Suite 2, Level 5 71 Macquarie Street ... 680 George Street Sydney NSW 2000 Solicitors Finlaysons 81

ABN 68 108 737 711

Half Year Financial Report

31 December 2013

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ORD RIVER RESOURCES LIMITED TABLE OF CONTENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2013

Corporate Directory 1

Directors’ Report 2

Auditor’s Independence Declaration 7

Condensed Statement of Comprehensive Income 8

Condensed Statement of Financial Position 9

Condensed Statement of Changes in Equity 10

Condensed Statement of Cash Flows 11

Notes to the Financial Statements 12

Directors’ Declaration 21

Independent Auditor’s Review Report 22

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ORD RIVER RESOURCES LIMITED CORPORATE DIRECTORY FOR THE HALF YEAR ENDED 31 DECEMBER 2013

1

Directors Graham McGeagh (Non-Executive Chairman) Bruce McInnes (Deputy Chairman, Executive Director Finance) Frank Zhu (Managing Director) Michael P Lee (Non-Executive Director) A.Anthony McLellan (Non-Executive Director)

Company Secretary Simon Penney

Registered Office Suite 2, Level 5 71 Macquarie Street Sydney NSW 2000

Principal place of business Suite 2, Level 5 71 Macquarie Street Sydney NSW 2000

Share Register Boardroom Limited Level 7 207 Kent Street Sydney NSW 2000 Telephone: +61 2 9290 9600 Facsimilie: +61 2 9279 0664

Auditor Ernst & Young Ernst & Young Centre 680 George Street Sydney NSW 2000

Solicitors Finlaysons 81 Flinders Street Adelaide SA 5000

Stock exchange listing Australian Securities Exchange ASX Code: ORD

Website www.ord.com.au

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http://www.ord.com.au/

ORD RIVER RESOURCES LIMITED DIRECTORS’ REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2013

2

Your directors present their report on the consolidated entity consisting of Ord River Resources

Limited and the entities it controlled at the end of, or during, the half-year ended 31 December 2013.

Directors

The names of the Company’s Directors in office during the Period and until the date of this report are

set out below. Directors were in office for this entire period unless otherwise stated.

Graham McGeagh Bruce McInnes Franck Zhu Michael P Lee A. Anthony McLellan (Appointed 6 November 2013) David Tang (Resigned 23 October 2013)

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $810,000 (31 December

2012: $704,000).

Revenue decreased during the half-year, primarily from a reduction in interest income due to lower

interest rates and a lower cash balance. Corporate expenditure was comparable with the prior half-year

period. The Company recognised an impairment expense of $60,000 (31 December 2012: $0) which

contributed to the increased loss.

Plutonic Dome Gold Project

During the half year the Company entered into a significant Farm-In/Joint Venture (“FIJVA”) with Dampier

Gold Limited (ASX:DAU) (“Dampier”) to earn a 75% interest in the Plutonic Dome Gold Project (“Project”)

through $6million expenditure over a two year period. The Project consists of in excess of 400km2 of

granted tenure. An 85km network of high quality haul roads provide access within the project area and

the nearby Northern Star Resources Limited (ASX:NST) Plutonic processing facility. The Project has an

extensive history of past production with a total of 580,000oz gold having been produced from 40 mostly

shallow open pits within the project area.

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Figure 1: Marwest Open Pit

Transaction Terms

ORD and Dampier have entered into the FIJVA under which Ord will sole fund a maximum of $6 million in

project expenditure over two years in return for up to 75% interest in the Plutonic Dome tenements.

ORD is required to sole fund at least $2 million in project expenditure within the first nine months of the

Joint Venture to earn 30% interest (refer to Table 1). After fulfilling the $2m commitment, ORD can

choose to continue or stop sole funding.

Joint Venture Interest and Required ORD Expenditure

30% Joint Venture interest $2 million project expenditure to be incurred within 9 months after the FIJVA Farm In commencement date

Further 15% Joint Venture interest

Next $1 million project expenditure to be incurred within 14 months after the FIJVA Farm In commencement date





Table 1: Joint Venture interest and Required ORD Expenditure

The FIJVA Farm In commencement date was 2 January 2014 and Ord is now the Manager for the sole

funding period and thereafter, whichever party has the highest Joint Venture interest will be the

Manager. Each party will have a first right of refusal over the interest of the other party under the FIJVA.

Plutonic Dome Gold Project Exploration Completed

An extensive review of the Project database was conducted to assist with ranking of high priority targets

for development and further exploration within the project area. A total of 1,506,608m of drilling data

was assessed to assist with the targeting review. Significant mineralisation was identified in previous

drilling outside of defined resource areas.

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Figure 2: Marwest Prospect Location Plan-TMI Magnetics

The review of the previous drilling resulted in the estimation of a maiden resource at Marwest of

267,500t at 2.5g/t Au for 21,100oz (0.5g/t Au cut off). This included a high grade resource of 664,400t at

5.4g/t for 11,200oz (3g/t Au cut off) (ASX: ORD announcement 9/12/13).

Figure 3: Marwest Open Pit and Mineralisation Wireframe- Long Section Looking NW

Since 31 December 2013 a review of the K2 resource model has been undertaken, resulting in the

remodelling of the deposit at a higher cut-off grade to better reflect the likely underground mining

method (ASX:ORD announcement 11/02/2014). This review resulted in a revised resource at K2 of:

Au g/t

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325kT @ 7.7g/t Au for 81,000 oz Au.

Given this significant high grade resource, a Geotechnical study of the deposit is currently underway

(ASX:ORD announcement 10/03/2013).

Global Resource:

The total global resource base for the Plutonic Dome Project has increased to:

7.7 million tonnes @ 3.13 g/t Au for 778,000 oz

Table 2: Plutonic Dome Gold Project Mineral Resources as at February 2014 (ASX:ORD announcement 11/02/2013) OP = open pit, UG = underground, COG = Cut off grade. Underground resources reported above a 3.0g/t Au

cut-off.

* Resources reported in accordance with JORC 2012 Edition of Guidelines above a 3.0g/t Au cut-off grade.

** Resources reported in accordance with JORC 2012 Edition of Guidelines above a 0.5g/t Au cut- off grade.

*** Resources reported in accordance with JORC 2004 Guidelines. OP= open pit resources, reported within

optimised conceptual pit shells at $1,700/oz gold price above a 0.5g/t Au cut off. UG= underground

resources, reported above a 3.0 g/t Au cut-off grade.

Due to rounding, tonnages and grades may not equate to exact contained ounces

Competent persons’ statements

The information in this report that relates to Mineral Resources for Trident, K1, PPP and Cinnamon is

based on information compiled and reviewed by Mr Graham de la Mare who is a Member of the

Australian Institute of Geoscientists and full-time employee of RungePincockMinarco Limited. Mr Graham

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de la Mare has sufficient experience relevant to the style of mineralisation and type of deposit under

consideration, and to the activity which he has undertaken, to qualify as a Competent Person as defined

in the 2004 JORC Code. Mr de la Mare consents to the inclusion in this report of the matters based on

this information in the form and context in which it appears.

The information in this report that relates to Mineral Resources for Marwest, K2, K2SE, K3 and Plutonic

Dome Project Exploration Results is based on information compiled and fairly represented by Mr

Jonathan King, consultant geologist, who is a Member of the Australian Institute of Geoscientists and

employed by Geonomics Pty Ltd. Mr King has sufficient experience relevant to the style of mineralisation

and type of deposit under consideration, and to the activity which he has undertaken, to qualify as a

Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC)

Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr King

consents to the inclusion in this report of the matters based on this information in the form and context

in which it appears.

Suplejack

Hydrology and ecology studies were completed across the Suplejack project. The hydrology study

identified four potential ground water targets within the project area. The targets were interpreted to be

primarily fractured bedrock aquifers.

Copper Flats

Subsequent to period end Xstrata Copper (through their subsidiary Mount Isa Mines) notified the

Company of their intention to withdraw from the Copper Flats Project – Binding Term Sheet Agreement

(“Agreement”), which required expenditure of a minimum of $300,000 per annum over two years to

review and develop the project. The Agreement ended on 27 February 2014. The Company is

negotiating with another party to farm in the property.

Rounding of amounts

The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and

Investments Commission, relating to the ‘rounding-off’ of amounts in the directors’ report and

financial report. Amounts in the directors’ report and financial report have been rounded off to the

nearest thousand dollars in accordance with that Class Order.

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations

Act 2001 is set out on the following page.

This report is made in accordance with a resolution of directors.

Frank Zhu, Managing Director Sydney, 14 March 2014

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ORD RIVER RESOURCES LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2013

8

31-Dec-13 31-Dec-12

Note $ '000 $ '000

Revenue from continuing operations 3 37 91

Share of losses of associates accounted for using the equity method (119) (130)

Expenses

Depreciation and amortisation expense 4 (7) (7)

Impairment of exploration and evaluation assets 4 (60) -

Other expenses 4 (661) (658)

Loss before tax from continuing operations (810) (704)

Income tax expense - -

Loss for the half-year from continuing operations (810) (704)

Other comprehensive income for the half-year, net of tax - -

Total comprehensive loss for the half-year attributable to

the ordinary equity holders of Ord River Resources Ltd (810) (704)

Cents Cents

Loss per share attributable to the ordinary equity holders of the company:

Basic loss per share (0.13)

(0.11)(1)

Diluted loss per share (0.13)

(0.11) (1)

(1) Restated to reflect the impact of the bonus element component of the rights issue completed in January 2014. Refer to

note 1(c) for further details.

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

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ORD RIVER RESOURCES LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE HALF YEAR ENDED 31 DECEMBER 2013

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31-Dec-13

30-Jun-13

Note $ '000 $ '000

ASSETS

Current assets Cash and cash equivalents 1,496

1,094

Trade and other receivables 15

45

Other 74

76

Total current assets 1,585

1,215

Non-current assets Investment accounted for using the equity method 5 3,771

3,888

Property, plant and equipment 80

87

Exploration evaluation expenditure 6 6,802

6,539

Other 157

157

Total non-current assets 10,810

10,671

Total assets 12,395

11,886

LIABILITIES

Current liabilities Trade and other payables 737 527

Borrowings 7 200 -

Employee benefits 103 98

Total current liabilities 1,040 625

Non-current liabilities Provisions 2

2

Total non-current liabilities 2 2

Total liabilities 1,042

627

Net assets 11,353

11,259

EQUITY Issued capital 8 40,582

39,678

Reserves 13,226

13,226

Accumulated losses (42,455) (41,645)

TOTAL EQUITY 11,353

11,259

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

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ORD RIVER RESOURCES LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2013

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Issued Capital Reserves

Accumulated Losses

Total Equity

$ '000 $ '000 $ '000 $ '000

Balance at 1 July 2012

39,495

13,226

(35,634)

17,087

Loss after income tax expense for the half-year

-

-

(704)

(704)

Other comprehensive income for the half-year, net of tax

-

-

-

-

Total comprehensive loss for the half-year

-

-

(704)

(704)

Transactions with owners in their capacity as owners:

Contributions of equity, net of transaction costs

150

-

-

150

Other reserves

-

34

-

34

Balance at 31 December 2012

39,645

13,260

(36,338)

16,567

Balance at 1 July 2013

39,678

13,226

(41,645)

11,259

Loss after income tax expense for the half-year

-

-

(810)

(810)

Other comprehensive income for the half-year, net of tax

-

-

-

-

Total comprehensive loss for the half-year

-

-

(810)

(810)

Transactions with owners in their capacity as owners:

Contributions of equity, net of transaction costs

904

-

-

904

Balance at 31 December 2013

40,582

13,226

(42,455)

11,353

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

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ORD RIVER RESOURCES LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2013

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31-Dec-13 31-Dec-12

Note $ '000 $ '000

Cash flows used in operating activities

Payment to suppliers and employees (320)

(739)

Interest received 17

61

Rent received 25

28

Net cash flows used in operating activities (278) (650)

Cash flows used in investing activities

Payments for property, plant and equipment - (3)

Payments for exploration and evaluation (424) (952)

Net cash flows used in investing activities (424) (955)

Cash flows from financing activities

Proceeds from issue of shares - 200

Proceeds from unissued ordinary shares 8 1,027 -

Share issue transaction costs (123) (16)

Proceeds from borrowings 7 200 -

Net cash flows provided by financing activities 1,104 184

Net increase / (decrease) in cash and cash equivalents 402 (1,421)

Cash and cash equivalents at the beginning of the half-year

1,094

3,262

Cash and cash equivalents at the end of the period 1,496 1,841

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

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ORD RIVER RESOURCES LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2013

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1. BASIS OF PREPARATION

This general purpose condensed consolidated interim financial report for the half-year reporting

period ended 31 December 2013 has been prepared in accordance with Accounting Standard AASB

134 Interim Financial Reporting and the Corporations Act 2001. Compliance with AASB 134 ensures

compliance with International Financial Standard IAS 34 Interim Financial Reporting.

This condensed consolidated interim financial report does not include all notes of the type normally

included in an annual financial report. Accordingly, this report is to be read in conjunction with the

annual report for the year ended 30 June 2013 and any public announcements made by the

Company during the interim reporting period in accordance with the continuous disclosure

requirements of the Corporations Act 2001.

(a) Going Concern

This condensed consolidated interim financial report has been prepared on a going concern basis, which

contemplates the continuity of normal business activity and the realisation of assets and the settlement

of liabilities in the normal course of business.

The consolidated entity has incurred a net loss after tax for the half-year ended 31 December 2013 of

$810,000 (2012: $704,000) and experienced net cash outflows from operating activities of $278,000

(2012: $650,000).

The ability of the Company to continue as a going concern is dependent on the Company being able to

raise additional funds as required to fund ongoing exploration commitments and for working capital. The

Directors believe that they will be able to raise additional capital as required and subsequent to period

end have finalised a $900,000 unsecured loan facility, placed $1.495 million of the renounceable rights

offer shortfall and entered into a conditional placement term sheet to raise a further $3m. The Directors

believe that the Company will continue as a going concern. As a result the financial report has been

prepared on a going concern basis. However should the Company be unsuccessful in undertaking

additional raisings the Company may not be able to continue as a going concern. No adjustments have

been made relating to the recoverability of assets and classification of liabilities that might be necessary

should the Company not continue as a going concern.

(b) New / revised accounting standards and interpretations adopted

The accounting policies adopted in the preparation of the interim condensed consolidated financial

statements are consistent with those followed in the preparation of the Group’s annual consolidated

financial statements for the year ended 30 June 2013, except for the adoption of new standards and

interpretation noted below:

AASB10 Consolidated Financial Statements AASB 10 establishes a new control model that applies to all entities. It replaces parts of AASB 127 Consolidated and Separate Financial Statements dealing with the accounting for consolidated financial statements and UIG-112 Consolidation – Special Purpose Entities. The new control model broadens the situations where an entity is considered to be controlled by another entity and includes new guidance for applying the model to specific situations, including when acting as a

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manager may give control, the impact of potential voting rights and when holding less than a majority voting rights may give control. AASB12 Disclosure of interests in other entities AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. New disclosures have been introduced about the judgements made by management to determine whether control exists, and to require summarised information about joint arrangements, associates, structure entities and subsidiaries with non-controlling interests. AASB13 Fair value measurement AASB13 establishes a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted. Application of this definition may result in different fair values being determined for the relevant assets. AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information about the assumptions made and the qualitative impact of those assumptions on the fair value determined. Consequential amendments were also made to other standards via AASB 2011-8.

AASB 119 Employee benefits The main change introduced by this standard is to revise the accounting for defined benefit plans. The amendment removes the options for accounting for the liability, and requires that the liabilities arising from such plans is recognised in full with actuarial gains and losses being recognised in other comprehensive income. It also revised the method of calculating the return on plan assets. The revised standard changes the definition of short-term employee benefits. This distinction between short-term and other long-term employee benefits is now based on whether the benefits are expected to be settled wholly within 12 months after the reporting date. Consequential amendments were also made to other standards via AASB 2011-10. Adoption of these amendments had no material impact on financial position or performance of the

group.

(c) Earnings per share

In January 2014 the Company completed a renounceable rights issue at an issue price of $0.005 for one

new share and one free attaching option, which represented a discount to the market price. In

accordance with AASB133 Earnings per Share, the comparative earnings per share calculations for the

half-year ended 31 December 2012 have been restated for the bonus element of the renounceable rights

issue.

2. OPERATING SEGMENTS

Identification of reportable operating segments The consolidated entity has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources.

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As of the date of this report the consolidated entity operates entirely in the industry of exploration of minerals in Australia and Laos. The operating segments are identified based on the location of the exploration tenements. Reportable segments disclosed are based on aggregating operating segments where the segments are

considered to have similar economic characteristics and are also similar with respect to the type of

product and service. The consolidated entity has determined that the reportable operating segments are

based on geographical locations as this is the source of the consolidated entity’s major assets which are

in Australia and Laos.

Corporate office activities Corporate office activities are not allocated to operating segments and form part of the reconciliation to net profit/(loss) after tax.

Australia Laos

Intersegment

eliminations/un

allocated Total

Half-year ended 31 December 2013 $'000 $'000 $'000 $'000

Revenue

Interest and rental revenue - - 37 37

Total revenue - - 37 37

Depreciation (7) - - (7)

Impairment (60) - - (60)

Share of loss of joint venture entity - (119) - (119)

Corporate operating costs - - (661) (661)

Loss after income tax expense (67) (119) (624) (810)

Half-year ended 31 December 2012

Revenue

Interest and rental revenue - - 91 91

Total revenue - - 91 91

Depreciation (7) - - (7)

Share of loss of joint venture entity - (130) - (130)

Corporate operating costs - - (658) (658)

Loss after income tax expense (7) (130) (567) (704)

Total segment assets

31 December 2013 6,882 3,771 1,742 12,395

30 June 2013 6,626 3,888 1,372 11,886

Total segment laibilities

31 December 2013 195 140 707 1,042

30 June 2013 102 140 385 627

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3. REVENUE

31-Dec-13

31-Dec-12

$ '000 $ '000

Interest 12

61

Rent 25

30

Revenue 37

91

4. EXPENSES

31-Dec-13

31-Dec-12

$ '000 $ '000

The loss before income tax includes the following specific expenses:

Depreciation Plant and equipment 7

7

Impairment Exploration and evaluation 60

0

Other expenses Accounting and audit 19

74

Directors' fees and remuneration 110

23

Employee costs 241

218

Corporate costs 28

37

Operating leases 84

83

Consulting fees 39

110

Travel 62

42

Other expenses 78

71

661

658

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5. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

31-Dec-13

30-Jun-13

$ '000 $ '000

Interest in joint venture entity 3,771

3,888

The consolidated entity has a 49% interest in the joint venture entity Sino Australian Resources (Laos) Co.

Ltd (“SARCO”) which is incorporated in Laos PDR and is involved in the exploration of bauxite resources in

Bolaven Plateau in Laos.

The Company has been in talks with potential buyers of its 49% interest in SARCO. During February

2014 the Company entered into a term sheet with an international specialist bauxite company

granting them an exclusive due diligence period which will expire at midnight 28 March 2014. The

bauxite sector has attracted recent attention following Indonesia’s decision to activate a ban on its

bauxite exports at the beginning of 2014 and with the price of the commodity rising. There have

been several verbal indications of interest from other potential buyers.

Based on the above, management have determined that no impairment charge is necessary for the

half-year ended 31 December 2013.

The share of the joint venture loss after income tax for the half-year was $119,009.

6. DEFERRED EXPLORATION AND EVALUATION

31-Dec-13

30-Jun-13

$ '000 $ '000

Exploration and evaluation 6,802

6,539

Reconciliations Reconciliations of the written down values at the beginning and end of the current financial half-year are set out below:

Exploration &

evaluation

Total

$ '000 $ '000

Balance at 1 July 2013 6,539

6,539

Expenditure during the half-year 323

323

Impairments (60)

(60)

Balance at 31 December 2013 6,802

6,802

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At 31 December 2013 the Company has raised a $60,000 provision for impairment to reduce the carrying

value of the West Wyalong tenement to $0. This is because there is significant uncertainty that

management will continue exploring this tenement in the future and realise value from this tenement.

The write down is considered necessary to reflect the tenements fair value given Ord River Resources’

other priorities at this time and that the tenement is approaching its 5 year maturity. Management

intend to renew this tenement.




review and develop the project. The Agreement ended on 27 February 2014. The Company has not

recognised an impairment against capitalised exploration expenditure for Copper Flats as it believes the

tenement still has value given interest received from third parties.

7. BORROWINGS

31-Dec-13

30-Jun-13

$ '000 $ '000

Unsecured loan 200

-

On 31 December 2013 the Company entered into three separate unsecured loan agreements with

private investors. The loan agreements provide Ord with the ability to borrow up to AUD $900,000 in

total for the purpose of financing the Plutonic Dome Project Farm In and Joint Venture with Dampier

Gold Limited. There is a 4% arrangement fee and the loans bear interest at 7% per annum, payable

monthly in arrears. The loans are repayable 12 months from the date of the loan agreements, although

Ord may repay the loan at any time without penalty.

At 31 December 2013, $200,000 had been received by the Company.

8. ISSUED CAPITAL

31-Dec-13

30-Jun-13 31-Dec-13

30-Jun-13

Shares Shares $ '000 $ '000

Ordinary shares - fully paid 573,696,231

573,696,231 40,5821

39,678

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds of winding up of the

company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary

shares have no par value and the company does not have a limited amount of authorised capital.

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On a show of hands every member present at a meeting in person or by proxy shall have one vote and

upon a poll each share shall have one vote.

1Rights Issue

The Company undertook a partially underwritten renounceable rights issue during the half-year. The

rights offer closed on 23 December 2013 and completed on 2 January 2014 once all underwriters’ funds

had been received. The majority of funds were received prior to 31 December 2013; however the

shares were not issued until completion on 2 January 2014. Given that the proceeds meet the definition

of equity at 31 December 2013, they have been recorded as issued capital at this date.

9. DIVIDENDS

There were no dividends paid, recommended or declared during the current or previous financial half-

year.

10. CONTINGENT LIABILITIES

This note provides details of the consolidated entity’s contingent liabilities, based on the probability that

payment is considered unlikely, along with details of contingent liabilities which our directors consider

should be disclosed.

Under the name Sino Australian Resources (Laos) Co., Ltd (SARCO), the project is a joint venture between

Ord River Resources (49%) and China Nonferrous Metal Industry’s Foreign Engineering and Construction

Co., Ltd (NFC) (51%). Until 30 September 2009, Ord River Resources solely funded all exploration

activities conducted by SARCO in Laos and since 1 October 2010 NFC has been funding ongoing

exploration activities.

In accordance with the Joint Venture agreement, at the time NFC’s contribution has reached the level of

Ord River Resource’s initial contribution, both Ord River Resources and NFC are obliged to contribute

their respective share of funding requirements for any further activity.

In 2012 an audit was performed by NFC in relation to Ord River Resources’ contribution to the

expenditures incurred by the SARCO JV from inception to 30 September 2009. At the conclusion of this

audit NFC challenged a total of $1.1 million in expenditure that is currently included as part of the total

Ord River Resources’ contribution recorded by the consolidated entity, although a formal claim has not

been made by NFC.

Ord River Resources has the contractual right to audit the NFC contributions. At this time, such an audit

has not been undertaken, although any findings from such an audit may constitute a future claim by Ord

River Resources on NFC.At 31 December 2013 the consolidated entity is working amicably with NFC to

resolve this disputed amount.

Additional contributions by NFC to the SARCO JV have since increased Ord’s contingent liability by

$203,000.

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11. COMMITMENTS

31-Dec-13

30-Jun-13

$ '000 $ '000

Lease commitments - operating Committed at the reporting date but not recognised as liabilities, payable: Within one year 172

168

One to five years 179

265

351

433

12. RELATED PARTY TRANSACTIONS

Parent entity Ord River Resources Limited is the parent entity. Transactions with related parties During the half-year accounting fees were paid to McInnes & Associates, a related party of Mr Bruce McInnes. The fees totalled $5,500 (including GST) paid or payable at 31 December 2013. Terms and conditions All transactions were made on normal commercial terms and conditions and at market rates.

13. FINANCIAL INSTRUMENTS

Net Fair Values

Fair value estimation

The fair values of financial assets and financial liabilities are the equivalent of the net carrying

amount as the financial assets and financial liabilities are short-term instruments. Fair values are

those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable,

willing parties in an arm’s length transaction.

The fair values have been determined based on the following methodologies:

(i) Cash and cash equivalents and trade and other payables are short-term instruments in

nature whose carrying value is equivalent to fair value. Trade and other payables exclude amounts

provided for relating to annual leave which is not considered a financial instrument.

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14. EVENTS AFTER THE REPORTING DATE

On 26 November 2013 the Company lodged a prospectus with ASIC for a renounceable rights issue

offering new shares at an issue price of $0.005 on the basis of 1.22 new shares for every 1 share held on

the record date, together with 1 free attaching listed option for each new share subscribed for to raise

up to $3.5 million. The renounceable rights issue completed on 2 January 2014 raising $1,160,555

before costs and a total of 232,110,991 fully paid ordinary shares and 232,110,991 attaching options,

each exercisable at $0.008 per share and expiring on 19 December 2014 were allotted and issued. The

company reserved the right to issue any shortfall shares at its discretion. The Company issued a further

8,330,724 fully paid ordinary shares and 8,330,724 listed options on 28 January 2014 and 290,700,000

fully paid ordinary shares and 290,700,000 listed options on 7 March 2014 as part of the rights issue

shortfall.

At the Company’s Annual General Meeting on 20 December 2013 the Company’s shareholders

approved the Ord River Resources Employee Loan Share Plan and the issue of shares to directors under

the terms of that plan. 140,000,000 ordinary shares were issued on 2 January 2014 under the terms of

the plan.

All conditions precedent to the Company’s FIJVA Farm In with Dampier Gold Ltd (see Review of

operations) were satisfied by 2 January 2014 and the Farm In commencement date is therefore 2

January 2014.

As announced on 25 February 2014, Ord has signed a Conditional Placement Term Sheet to raise $3

million by way of the issue of 237,045,507 fully paid ordinary shares in the Company. The agreement is

conditional on:

(a) An independently prepared feasibility study to mine K2, satisfactory to the investor;

(b) Ord securing projector debt financing of $3m (conditional upon the placement monies being

received); and

(c) Relevant regulatory approvals.

The investor has three months to conduct due diligence and be satisfied by the conditions precedent.

Either Ord or the investor can withdraw from the arrangement at any time prior to subscription.

During February 2014 Ord entered into a term sheet with an international specialist Bauxite company in

respect of the possible sale of its bauxite assets (see note 5). In so doing, Ord has granted an exclusive

Due Diligence period to the potential buyer which will expire midnight 28 March, 2014. During the

exclusivity period, Ord has agreed not to solicit alternative offers or to enter into negotiations and the

like with other potential buyers.




review and develop the project. The Agreement ended on 27 February 2014.

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ORD RIVER RESOURCES LIMITED DIRECTORS’ DECLARATION FOR THE HALF YEAR ENDED 31 DECEMBER 2013

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In the Directors’ opinion:

(a) The financial statements and notes of Ord River Resources Limited for the half-year ended 31

December 2013 are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the consolidated entity’s financial position as at 31 December

2013 and of its performance for the half-year ended on that date; and

(ii) complying with Accounting Standards and the Corporations Regulations 2001, and

(b) There are reasonable grounds to believe that Ord River Resources Limited will be able to pay

its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Directors.

Frank Zhu Managing Director 14 March 2014

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Documents

For personal use only - ASX · Company Secretary Simon Penney Registered Office Suite 2, Level 5 71 Macquarie Street ... 680 George Street Sydney NSW 2000 Solicitors Finlaysons 81