GONDWANA RESOURCES LIMITED
7777777
Gondwana R E S O U R C E S L I M I T E D
A C N 0 0 8 9 1 5 3 1 1
Annual Report Year ended 31 December 2013 F
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Annual Report
Year Ended 31 December 2013
CONTENTS
Page
Corporate Directory 2
Chairmans Report 3
Review of Operations 4
Directors Report 17
Corporate Governance Statement 24
Lead Auditors Independence Declaration 27
Statement of Comprehensive Income 28
Statement of Financial Position 29
Statement of Changes in Equity 30
Cash Flow Statement 31
Notes to the Financial Statements 32
Directors Declaration 51
Independent Audit Report 52
Shareholder Information 54
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CORPORATE DIRECTORY
DIRECTORS
Warren Talbot Beckwith (Chairman) Paul Millington Goodsall Steven Leigh Pynt Jolyon James Sinclair
COMPANY SECRETARY
Paul Millington Goodsall BA (Acc), CA
REGISTERED OFFICE
230 Rokeby Road Subiaco, Western Australia 6008
PRINCIPAL OFFICE
8 Kearns Crescent Ardross, Western Australia 6153 Phone: +61 8 9364 7414 Fax: +61 8 9346 9101
POSTAL ADDRESS
PO Box 1819 Applecross, Western Australia 6953
MINING PROJECT MANAGER
Greg Robinson
AUDITORS
KPMG 235 St Georges Terrace Perth, Western Australia 6000
SHARE REGISTRY
Computershare Investor Services Pty Limited Level 2, Reserve Bank Building 45 St Georges Terrace Perth, Western Australia 6000 Telephone: +61 8 9323 2000 Facsimile: +61 8 9323 2033
STOCK EXCHANGE LISTING
Australian Securities Exchange Limited (ASX) ASX Code: GDA
ABN
72 008 915 311
WEBSITE
www.gondwanaresources.com
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CHAIRMANS REPORT
Dear Shareholder
I am pleased to present the Companys 2013 Annual Report, including financial statements and a detailed review of operations for the year ended 31 December 2013.
The year under review
2013 was a year of consolidation and re-definition of the Companys direction.
During the year, the Corunna Downs and adjacent Pilbara tenements were sold to Atlas Iron Limited (Atlas: AGO), and the Company has retained a royalty on the production of iron ore and other minerals.
Proceeds from this sale, together with the previous years sale of the Trigg Hill rare earths prospect in the Pilbara, not only significantly reduced the Companys exploration expenditure commitments, but also largely funded the Companys exploration programmes as well as mining studies at the Parker Range Gold Project, without the need to call on shareholders for additional capital. Refer to the Review of Operations on page 4 and Directors Report on page 17 for further details.
Towards the end of the year, the Company also announced
the farm-out of its Gobbos copper and molybdenum prospect in the Pilbara. The Company retains an interest in this tenement and a royalty on production of minerals; and
the temporary suspension of mining studies on the Parker Range Gold Project (Gold Project) as a consequence of the recent fall in the gold price; this decision will be reconsidered if and when there is a significant gold price recovery.
Outlook for the coming year
The Company is aiming to farm out or dispose of its non-core Parker Range tenements in the near future to conserve funds in a difficult market environment. This will permit the more active investigation of new, potential company-maker projects, as well as focus exploration on smaller number of core mineral prospects in gold, uranium and rare earths. A joint venture on our Gold Project may also be considered.
In line with its new strategy, during the year the Company entered into a Convertible Loan Agreement with Amazon Resources Limited (ARL), a potash explorer with projects in Brazil and Western Australia. This investment was made with a view to acquiring a significant stake in this world-class exploration opportunity. To date, ARL has been unsuccessful, again in a very tough market for explorers, in raising sufficient capital to achieve its dual aims of drilling its potash prospects and ASX listing.
The Directors are optimistic that the gold price will recover in due course and permit the Company to resume feasibility studies at Parker Range and pursue the opportunities to improve or provide upside for the project discussed in the Review of Operations. We also look forward to an eventual pick-up in commodity and capital markets so that the Company will be in a position to apply additional resources to its WA exploration programmes, and potentially support the resumption of exploration at ARLs potash projects.
Capital raising
The Company will shortly issue a prospectus for an offer to raise up to approximately $1.264 million before costs, which is intended to assist in funding, principally, the ongoing exploration at our Parker Range, Gascoyne and Pilbara projects described in the Review of Operations on Page 4.
On behalf of the board of directors, I extend our thanks to the Companys staff, consultants and the Companys shareholders who have supported us during the year.
Yours sincerely
Warren Beckwith Chairman 31 March 2014
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REVIEW OF OPERATIONS
PARKER RANGE PROJECT
Figure 1: Parker Range Tenement Groups
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Introduction
Gondwana Resources Limited has been operating south of Marvel Loch in Western Australia for the past 11 years. Gondwana acquired its original tenements in the area pursuant to an agreement with Sons of Gwalia Limited in 2003 (the Parker Range Project). Gondwana is 100% owner of most of its Parker Range Project tenements, with a number owned in joint venture or subject to nickel rights held by others (see attached Tenement Schedule).
The Parker Range Project is located in the Southern Cross Greenstone Belt, immediately south of Marvel Loch Gold Operations and 80km north of Western Areas Forrestania Nickel Operations. The project area comprises exploration tenure of approximately 500 km prospective for gold and nickel and contains numerous historic gold mines.
The Southern Cross area is a well-recognised regional mining centre offering excellent established infrastructure and a long gold mining tradition. Historic production since 1906 when gold was first discovered in the region exceeds 12Mozs of gold and 1,100,000t of nickel.
Gondwanas recent gold exploration focus at Parker Range has been to transform three historic gold deposits, Buffalo, Spring Hill (70% Gondwana) and Centenary (100% Gondwana), into JORC compliant gold resources and to explore nearby historic gold prospects with the aim of increasing total resources.
In mid-2010, Gondwana discovered 40,300oz of gold at the Centenary gold
project, 5km north of Buffalo. The Parker Range Gold Project, comprising the Buffalo, Spring Hill and Centenary deposits is now estimated to contain a total 91,450 oz Au Mineral Resource (see table below).
The Marvel Loch gold treatment plant (currently on care and maintenance) has been acquired by Hanking Gold Mining Pty Ltd and preliminary discussions with Hanking have confirmed that the mill could potentially be available for the treatment of ore produced from the Gold Project.
Gold Mining Studies
The Company has been conducting mining studies (PFS) for the Parker Range Gold Project with a view, subject to Department of Mines and Petroleum (DMP) approvals and a satisfactory gold price, commencing production on a toll treatment basis. The Parker Range Gold Project is a relatively small gold deposit but has the potential to be exploited for a low capital cost through the use of mining contractors and toll treatment at the nearby Marvel Loch gold treatment plant.
Following the completion of Whittle pit shell optimization studies for the Centenary, Buffalo and Spring Hill gold deposits, with positive results for all three pits, Minecomp Pty Ltd have generated pit designs, life-of-mine schedules, cash flow projections and JORC Ore Reserve estimates.
Recent work carried out as part of the mining studies includes:
A miscellaneous licence L77/264 was applied for to cover the proposed road re-alignment and this was granted on 7 January 2014.
Minecomp prepared additional cross sections through the Centenary and Buffalo mine and waste dumps at the request of DMP to assist their assessment of compliance with the guideline Safety Bund Walls around Abandoned Open Pit Mines.
Mining, haulage and operating cost quotes have been updated from independent contractors. Forecast costs have increased marginally since the Whittle optimisations were completed and cash operating cost estimates were published in April 2012. The increases are shown in the table below:
Figure 2: Location of the Parker Range Project
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Table 1: Operating cost estimates
Pit Previous estimates
A$/oz produced
Updated quotes
A$/oz produced
Centenary 1,093
Buffalo 1,018
Centenary/Buffalo combined - 1,160
Spring Hill 1,194
