Pacif ic Nuigini L imited and its Control led Ent it ies 1WWW.NIUGINI.COM.AU
ANNUAL REPORT 2012ABN: 30 003 207 467
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Pacif ic Nuigini L imited and its Control led Ent it ies Pacif ic Nuigini L imited and its Control led Ent it ies 1
CHAIRMAN’S LETTER TO SHAREHOLDERS 2
MANAGING DIRECTORS REPORT 3
REVIEW OF OPERATIONS 4 DIRECTORS’ REPORT 14
AUDITOR’S INDEPENDENCE DECLARATION 23
FINANCIAL STATEMENTS
ConsolidatedStatementofcomprehensiveincome 24 ConsolidatedStatementoffinancialposition 25 ConsolidatedStatementofchangesinequity 26 ConsolidatedStatementofcashflows 27 NotestoandformingpartoftheFinancialStatements 28
DIRECTORS’ DECLARATION 53
INDEPENDENT AUDIT REPORT TO THE MEMBERS 54
CORPORATE GOVERNANCE STATEMENT 56
SHAREHOLDER INFORMATION 60
MINERAL TENEMENTS 62
CORPORATE DIRECTORY
DirectorsMrPeterCOOK(Non-ExecutiveChairman)MrPaulCMRLEC(ManagingDirector)MrSamAKOITAI(NonExecutiveDirector)MrDavidOSIKORE(ExecutiveDirector)
Company Secretary and CFOMrDennisLOVELL
Registered OfficeSuite14,46DouglasStreetMiltonQLD4064Telephone:+61(0)733673996Facsimile:+61(0)733682998
Principal Place of BusinessSuite14,46DouglasStreetMiltonQLD4064Telephone:+61(0)733673996Facsimile:+61(0)733682998
BankersWestpacBankingCorporation109StGeorgesTerracePerthWA6000
Country of IncorporationAustralia
AuditorsBDOAuditPtyLtdLevel18,300QueenStreetBrisbaneQLD4000Telephone:+61(0)732375999Facsimile:+61(0)732219227
Share RegistryComputershareInvestorServicesPtyLtd117VictoriaStreetWestEndQLD4101GPOBox2975MelbourneVic3001Telephone:(withinAustralia)1300850505Telephone:(outsideAustralia)+61(0)394154000Facsimile:+61(0)394732500
Home ExchangeAustralianSecuritiesExchangeLimitedLevel5RiversideCentre123EagleStreetBrisbaneQLD4000
Websitewww.niugini.com.au
ASX Code: PNR
TABLE OF CONTENTSF
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DearShareholders,
ItismypleasuretopresentyoutheannualreportforPacificNiuginiLimitedforthe2012year.IthasbeenoneofmixedfortunesfortheCompany.
Wehavewitnessedsuccessinourregionalexplorationprograms,particularlyatGarainawherewehavedefinedasignificantgoldandcopperanomaly.
OurgoldingravelsprojectsatBulolohaveshownmixedsuccessfromourbulksamplingprograms.Wehavehadtosortoutcompeting landusemattersand resolved theseby formingaJVandacquiringanewprojectat thesametime. SamplingatWiduboshhasreturnedgradeslowerthanexpectedwithafarmoreerraticgolddistribution.Despitethisgradesarewellinexcessofouranticipatedoperatingcostsandweareforgingaheadwithstatutoryprocessestoenablemining.
AtBulolowehaveonlytestedasmallportionofthegravelsinthepreviouslyun-dredgedflatsinthesouthwestoftheproject.Hereun-expectedbarrenoverburdenandlowgradeswereencountered.Whilstthismostobviousoffirstchoiceminingareasappearsnottomakethegrade,thereremainssignificantmorepotentialinpreviouslyun-dredgeddeepergravels.Wehaveproceededwithourplantconstructionatthereadyandremaindeterminedtomakeacommercialgofromthisproject.
Elsewhereourgrass-rootsteamshavebeenwalkingupcreeksandclamberingovermountainsassessingtheprospectivityofourothertitles,withsomeearlystagesuccess.
Wehavecontinuedtooperateinafrugalmannerwithlowoverheadsandlowcostvalueformoneyexploration.
Weretainahealthycashbalanceandremaindebtfree.Unfortunately,oursharepricehasfalleninlinewiththewidermarketdeclineinrecenttimes.
I thankour shareholders for their continuedsupportandpatience.As farasgeologygoes,PNG iselephantcountryandourMelanesianteamhasasecondtononechanceofmakingthatnextbigdiscovery.
PeterCookChairman
CHAIRMAN’S LETTER TO SHAREHOLDERSF
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Thepastyearhasgenerallybeensuccessfulforthecompanyontheprojectdevelopmentfront.However,therehavealsobeennumerouschallengestofaceinordertoachieveourgoals.
CommencementofworkatBulolotookfarlongerthatwecouldhaveanticipatedduetoaccessissuespreventingthecommencementofbulksamplingformostofthefirsthalfoftheyear.Throughnegotiationandpersistence,thecompanyfinalisedajointventureagreementwithPNGForestProducts,openingaccesstoprospectiveareasofEL1616,andgaining50%ownershipoftheirgoldinterestsinML457-Widubosh.
InitialbulksamplingprogramshavebeencompletedatBuloloandWidubosh.InitialresultsindicatemoreconsistentandhighergradesattheWiduboshproject,andassuchthatisnowthefocusofinitialprojectdevelopmentactivities.
Theproductionplantpurchasedin2010hasundergoneasignificantmake-over,andmajorcomponentmanufactureandupgradehas been completed. The plant can be finalised on short notice once all development issues have been addressed. On siteconstructiontimeisexpectedtobeintheorderofamonth.
EnvironmentalapprovalsforWiduboshhavebeenlodged,andaminingcompensationagreementwithlandownershasalreadybeenputinplacebyPNGForestProducts.TheJointVentureistargetingproductioninthefirsthalfof2013.
Exploration,inourgreenfieldtenementshasalsocontinuedtobesuccessful.TheKusiProspectinEL1614-Garainahascontinuedtoreturnexcitinggeochemicalandgeophysicalsurveyresults,andthepotential fordelineationofaneconomicorebody inthetenementishigh.Soilsampling,costeansampling,ground-mag,heli-magandradiometricsurveyshaveallbeenundertakeninvaryingdegreesduring theyear. Threediamondholesweredrilled tounderstandthesub-surfacegeologyandeachreturnedencouraginggoldresults.
ExplorationatthenearbySimtarget(alsoinEL1614–Garaina)hasnowcommenced,withpositiveinitialresults,andreconnaissanceworksattheKasumatargetisplanned.Theaimistodelineateseveraldrilltargetsatthesiteaheadofremobilisingcontractorsanddrillingcrewslaterintheyear.
OurGusaptenement(EL1615)intheMadangProvinceprovidesoursecondgreenfieldsexplorationfocus.Severaloutcroppingcopper-goldprospectshavebeenidentifiedduringthepasttwoyears,andextensivemagneticandradiometricsurveyshavebeencompletedtoassistwiththeexplorationeffort.OurcurrentfocusintheareaistheMunambeProspect,whichisataveryearlystage,butshowingpositivesignsforasignificantdiscovery.
Theboardandmanagementareacutelyawareoftheverydifficultcapitalmarkets,particularlywithrespecttoearlystageexplorationventures.Wehaveworked tostrikeabalancebetweenprogressionofourprojects,andconservationofcash reserves.Whileprogressingtheneartermgravelprojectsasquicklyaspossible,wehavefocussedexplorationeffortsinotherareasondefiningthebestpossibledrilltargetsusinglowcostfieldreconnaissancetechniquesforthefirsthalfof2012.Thishasenabledustoremaininasoundfinancialpositionwithacashbalanceof$10.7millionandnodebtattheendofthereportingperiod.
PaulCmrlecManagingDirector
MANAGING DIRECTORS REPORTF
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CORPORATE
Share IssuesDuringthepastfinancialyearthefollowingshareissueswerecompletedtoraiseacashtotalof$3,347,600:
(i) Theexerciseof9,085,001,$0.30,30Sept2011optionstoraise$2,725,500.(ii) Theexerciseof1,500,000,$0.20,26Nov2012optionstoraise$300,000.(iii) Theexerciseof1,500,000,$0.20,30Jun2014optionstoraise$300,000.(iv) Theexerciseof130,000,$0.17,23Feb2013employeeoptionstoraise$22,100.
US$ deposit conversion
InSeptember2011theUS$cashdepositcarriedintheaccountsat30June2011atAU$11,064,637wasconvertedintoAustralianDollarstorealiseanamountofAU$11,917,690resultinginarealisedforeignexchangegainofAU$853,053.
OPERATIONS
Papua New Guinea (PNG)Pacific Niugini Minerals (PNG) Ltd
TheCompany’swhollyownedPNGsubsidiaryPacificNiuginiMinerals(PNG)Ltd(“PNM”)holds9explorationtitlescovering3,750squarekilometresinPapuaNewGuinea.
PNM’s projects and exploration tenementsarelocatedinthreeprovincesofPapuaNewGuinea,coveringsixseparateprojectareas.Exploration titles EL1589 (Zenag), EL1614(Garaina), EL2013 (Garawaria), EL1616(Bulolo) and EL 1828 (Pindu) are located inMorobe Province. Exploration title EL1613(Hagen) is located in Western HighlandsProvince, and EL1615 (Gusap), EL 1869(Mutzing)andEL1827(Dumpu)arelocatedintheMadangProvince.
Tenements EL1827, EL1828, EL 1869,and EL 2013 were newly acquired by thecompanyinMarch2012,andservetofurtherstrengthenourhighlyprospectiveportfolioofexplorationassetsinPapuaNewGuinea.
During the 2011/2012 year, the Companyhasactivelyexplored intheBulolo,Garaina,Gusap, and Hagen project areas with
encouragingresultsincludingthedefinitionofabroadzoneofhighlyanomalousgold-silvermineralisationattheKusiProspect,anddiscoveryofnumerousnewoccurrencesofcopperandgoldmineralisationinseveralprospectsattheGusapProject.
ThemajorfocusandareaofadvancementfortheyearwasintheBuloloGravelProject.AfterexhaustivenegotiationswithlandholderPNGForestProducts(PNGFP),PacificNiuginisuccessfullynegotiatedajointventurewhichnotonlyfacilitatedaccesstotheprospectiveareasofEL1616,butalsoprovideda50%interestinML457(Widubosh),atenementheldbyPNGFPapproximately10kmnorthofEL1616.
PNMcontinuestoprogressactivitiesinPNGwithaclearfocusonthecommencementofproductionfromtheBuloloProjectanddiscoveryofcopperandgolddepositsintheGarainaandGusapProjects.Newlygrantedtenementswillbethesubjectsofinitialreconnaissanceexplorationintheensuingmonths,withprioritiestobesetfollowingtheinitialprogramsofwork.
Thecompanyhasalsobeenactiveintheevaluationofnewprojectsandwillcontinuetoproactivelypursueacquisitionopportunitiesforproducing(ornearproduction)assets,whichcancomplimentthefocusoftransitiontoproducerstatus.
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Bulolo Gold Project – Morobe Province
FamousasthebirthplaceofPlacerDome(nowBarrick),oneoftheworld’sforemostgoldminersandthemostsuccessfulinPNG,therecordedproductionfromgraveldredgingisdocumentedfromhistoricrecordsatapproximately200MillionCubicmetresatarecoveredgradeof0.32g/m3gold,fortheproductionofover2.15millionounces.
EL1616 covers the vast bulk of historic gold productionfromwithintheMorobeProvince.ThisgoldproductionhascomefromgolddredgingoftheBuloloGravelFlatsbetween1934 and 1965, although significantly interrupted duringWorldWarII.EL1616containsthebestofthehistoricallyproductiveBulologravelflats.
Pacific Niugini attempted to access the gravel zones ofEL1616since the inceptionof thecompany in2009,butwasrepeatedlyfrustratedinitsattemptsduetoobjectionsand legal action taken by the current land holder, PNGForestProducts(PNGFP),whoutilisesomeoftheareaforgrazingcattle.
In October 2011, Pacific Niugini and PNGFP reachedagreement to merge their respective gold interests, andprogress the project under a joint venture arrangement.PNGFPiscurrentlythekeyeconomicandoperationalentityinBulolowithsubstantialagriculture,timberprocessing,andretailoperationsintheareawithapproximately1200peopleemployed.PNGFPalsobringsubstantialaccesstoservicesto the mining projects through supply of hydro-electricityfromthenearbyBaiunePowerStation(ownedbyPNGFP),expertiseandabilityinconstructionandoperationofminecamps and facilities, and extensive industrial workshopfacilitiesandpersonnelinoperationatBulolo.
Under the terms of the Joint venture, PNGFP haveparticipatinginterestsof30%overareassouthoftheBulolotownarea(primarilycoveredbypastorallicensesownedbyPNGFP),anda25%participatinginterestinotherareasofEL1616.
PacificNiuginihasa50%interestinML457(Widubosh),whichhasbeenheldbyPNGFPforanumberofyears.
PacificNiuginiistheoperatoroftheprojectsandcompletedasubstantialamountofworkinbothprojectareasduringthelasthalfoftheyear.
DespiteattemptstoexpeditethefinalisationoftheJointVentureagreements,finaliseddocumentationwasnotcompleteduntilApril2012,demonstratingthefrustrationwhichcanbemetinadministrativeprocessesinPNG.Whileagreementstooklongerthanexpectedtofinalise,PNGFPbecameausefulandcooperativepartner,andsubstantialtestingworkscommencedatWiduboshinJanuary2012,withbothpartiescontributingtotheirshareofcostssincethattime.
ML457– Widubosh (50%)
Widoboshliesapproximately10kmnorthofEL1616,coveringsome177hectares.Whilehistoricalrecordsarepoor,therehavebeenseveralpastperiodsofminingatWidobosh,withevidenceofsignificantpreviousgoldproduction.Areasclosetothetenementcontinuetobeworkedbysmall-scaleminers.
Themajorityofthegravelsexistinraisedterraces,andassuchtheareawasnotdredgedduringtheextensiveminingcampaignsintheareabetween1934and1965.Intermittentsmallscaleminingusingbothhydraulicingandmechanicalmininghasbeenundertakenintheareasincethe1950’s.Areasaroundthetenementcontinuetobeworkedbysmall-scaleminers.
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Pacific Niugini completed a majortesting program during the firstquarterof2012,withapproximately1,600tonnesofmaterialexcavatedfrom26testpits.Approximately13tonnesofconcentratematerialwasgeneratedanddispatchedtoBurnieResearch Laboratory for analysisandmetallurgicaltesting.
Laboratory testwork confirmedthe presence of gold throughoutthe gravel profile, with sizing from+1mmto-100μm.Recoveryofgoldusinggravity jigswasshowntobeexcellent,withnegligiblegoldvaluesreportedintailingssamples.
OverallthecombinedgoldresultsforML457indicatehighlyvariablegrades,asisexpectedinalluvialdeposits.Assaydataandsubsequentgradeestimatepercubicmetreofgravelsvaryfrom0.037g/m3to1.05g/m3,withpitsfromsubstantialareasoftheleaseindicatinggradesof0.1g/m3orbetter,andanoverallarithmenticaveragegradeof0.133g/m3.
Inadditiontobulksampling,atotalof5churn-drillholeswerecompletedwiththeaimofidentifyingcontinuityofgoldthroughouttheprofile,andtoestablishthedepthofbasement.Allholesconfirmedthecontinuityofgoldthroughtheprofile.
Hole ID Northing Easting RL (M) Drilled Depth(Meters)
Drilled to Basement (Y/N)
WD001 457112 9215474 613 25.5 Y
WD002 456697 92155665 613 30.1 N
WD003 456622 9215565 635 29.2 N
WD004 456999 9215124 626 22.6 Y
WD005 457194 9215198 609 12.5 Y
Visualinspectionofdrillsamplesfollowingaconcentrationprocessusingsluicingandpanningshowedgoldinvaryingamountsthroughoutthegravelprofiles.Thedrillresultsarenotconsideredtobeacceptableforaccurategradedeterminationandhavenotbeenassayed.PacificNiuginiwillcorrelatedrillingdatawithresultsfromtestpittingtoassistintheselectionofpriorityminingareasforthecommencementofproduction.
DuetodifficultiesindealingwithalluvialdepositsundertheJORCcode,PacificNiuginihasnotattemptedtogenerateresourceorreserveestimates,anddoesnotintendtodoso.Resultsreceivedfromtestinggivethecompanyadequateconfidencetoadvancetheprojectfurther,andactivitiesintheensuingyearareexpectedtoinclude:
• Completionofallrequiredregulatoryapprovalsfortheproject.EnvironmentalapprovaldocumentationandfeeshavealreadybeenlodgedwiththeDepartmentofEnvironmentandConservation.ApprovalsprocessesinPNGcanbeslow,andPacificNiuginiregardtheapprovalprocessasthemajortimeunknownpriortodevelopmentoftheproject.
• Undertakinga short infill test-pittingprogram.Themajor focusof the testpittingwill be tocomplete severalpits toatleast15mdepthtoconfirmthecontinuityofgoldgradesinthegravelprofile.TheJVpartnersareassessingtheprogramrequirementsatthetimeofthisreport.
• Finalisationofoperationalplansand infrastructurerequirements.PacificNiuginihasconsideredanumberofoptions foroperationoftheproject,withbulkhandlingofmaterialsusingconveyorscurrentlythepreferredoption,indicatingthelowestoperatingcost.
• Transitiontoproduction.Subjecttoresultsfromworkinthepointsabovebeingpositive,PacificNiuginiintendstofinalisethere-configurationofthealreadyowned750m3/hrproductionplantandmobilisetoWiduboshtocommenceproduction.Adecision tocommenceproduction requiresavote in theaffirmative frombothJVpartners,andbothpartnersare tocontributetocostsinaccordancewiththeirequityshareoftheproject.
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EL1616 – Bulolo (75% north of the Bulolo town ship and 70% south of the Bulolo township)
ThefirsttestingofEL1616commencedinSeptember2011,priortoagreementwithPNGFP.Thetestingundertakeninthelastquarterof2011wasrestrictedtopreviouslyminedareasoutsideofthePNGFPcontrolledpastoralleases,andservedtoconfirmthepresenceofgoldthroughoutthegravelprofile,aswellasconfirmingthattheBulolorivercontinuestorechargethesystemwithnewalluvialgold.Importantly,theperiodallowedforcommissioningofthe10t/hrtestplantmanufacturedbyPacificNiugini,andfortrainingoflocaltestingandsamplingcrews.Drillingwasundertakeninthesameperiodtodepthsexceeding50metres,confirmingthecontinuityofgoldoccurrencethroughoutthegravelprofile.Seismicsurveys inthepreviousyear indicatedgraveldepthsofgreaterthan100m,howeverdrillingcouldnotadvancebeyond55mduetodrillrigconstraints.
Systematictestingofbothpreviouslydredgedgravels,andvirginsourcescommencedinMarch2012,immediatelyaftercompletionoftheinitialWiduboshprogram.Atotalof40testpitswerecompletedovertheSouthWestportionofthegravelswitheachtestpitprovidinga30m3bulksample.
Anunexpectedlayerofbarrentransportedcoverwasfoundtoexistoverthepreviouslyundredgedgravels,whilegoldwasseentooccurfromsurfaceinthepreviouslydredgedareas.
Thebulksamplingresultsarefromthesouthwesternsectionofthegravels.Atyear-end,assayresultsfromthemajorityofthetestpitsremainedoutstanding,howeverthetestingprogramwascompletedin theSouthWesternportionof theareaof the testprogram.Thesamplingofhistoricallydredgedareasshowsthatsignificantgoldstillexistedintheirtailings(upto0.06g/m3).
Historicaldredgingonlywenttoapproximately30mdepthanddatacollected from drilling and seismic surveys suggests that a large
volumeofgravelexistsbelowthepreviouslydredgedareas,andmayprovideanopportunityiftheremovalofdredgetailingscanbeeffectedeconomically.Whilstdisappointedinthesamplingresultsfromthisarea–whichpresentedanearsurfaceimmediatetarget, thebulkof thegravels remain inplaceandtobe further tested.Basedonthe initial results fromBulolo,PacificNiuginiintendstoproceedwithadvancingtheWiduboshprojectasapriority,andwillrevisitprocessingofpreviouslydredgedgravelsandaccessingvirginareasbelowonceWiduboshisinproduction.
Production Plant
PacificNiuginimadetheopportunisticpurchaseofaproductionscalegravityprocessingplantwhenitbecameavailablelatein2010.Theplantwasofascalesuitedto initialproductionoperationsattheBuloloproject,butwaspoorly laidoutandlackedseveralitemsofcriticalinfrastructure.
PacificNiuginihasproceededwiththedetaileddesignandconstructionofadditionalitems,andreconfigurationoftheplantlayoutduringthepastyear.WorkshavebeenundertakennearBrisbaneinAustralia,andtheplantisnowdesignedinsuchawaythatmodulescanbetransported instandardshippingcontainers,withonsiteconstructionrequirements likely tobe less thanonemonthoncelandedincountry.
Theinitialplantonlyutilisesapproximatelyhalfoftheprocessingequipmentpurchasedin2010,andhasbeenconfiguredtotreatgravelatthecapacityof750m3/hour.Theproductionrateisexpectedtotranslatetoanannualcapacityof4milliontonnesofgravelperannum,withthefinalgoldproductionprofiledirectlydependentongoldgrade.Atthetimethatthefirstproductionmodulehasbeenshowntooperatesuccessfully,itisPacificNiugini’sintentiontoproduceasecondmodulefromtheremainingalreadyownedplant.
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Garaina Project - EL1614 and EL2013 – Morobe Province (100%)
TheGarainatenement (EL1614) is located110kmsoutheastofLaeand80kmsoutheastofWauTownintheMorobeProvince.
The tenementareacovers thesuturezonebetween theOwenStanley Metamorphic thrust to the west and the PapuanUltramafictotheeast.TheOwenStanleymetamorphiccomplexunderliesmostof theEL.Alluvialgoldcontinues tobeworkedbylocalvillagerswithcrudeequipmentatGerepo,Kamusi,Bapiand Garaina. Until the Kusi gold-silver discovery in 2011 byPacificNiugini,nopotentialsourceofthealluvialgoldhadbeendiscoveredinthepast.
Nickel, gold and copper occurrences have been previouslyreportedfromtheregion.PacificNiuginiconsidersthetenementhaspotentialfordiscoveryofeconomicgold,copperandnickellateritedeposits.
Kusi Prospect
PacificNiuginidiscoveredsignificantoutcroppingsurfacemineralisationattheKusiProspectinJanuary2011,andhascontinuedtoadvanceitsunderstandingofthesourceof,andcontrolstomineralisationsincethattime.Importantly,theKusidepositiswelllocatedintermsoffutureintensiveexploration,andmininglogistics.AroadalreadyexistsbetweenWauTownandKasangari,whichareonly3kilometresfromKusi.Whiletheroadisnotcurrentlyinservice,workstobringtheroadbacktoatrafficableconditionarerelativelyminor,andcanbeundertakenpriortocommencementofanymajordrillingprogramsplannedinthefuture.Further,largeareasofflatlandexistintheGarainaValley,approximately12kilometreseastofKusi.Thereiscurrentlyanoperatingairstripintheareabeingusedfortransportofpersonnel,andconsumableswherepossible.Thislargeexpanseofflatlandwillprovidetheidealplatformformineinfrastructureintheeventthatthedepositisdeveloped.
Workcompletedduringtheyearincludedextensivegridbasedgeo-chemicalsampling,manualcosteansampling,closespacedheli-magneticandradiometricsurveys,andreconnaissancedrilling.
Atotalof54manualtrenches(KSTC001–KSTC054)havebeenexcavatedacrosstheprospectsincediscovery.Samplingwasconductedmostlyat1mintervals,butalsowithconsiderationofgeology.Bestresults,whichhavebeenpreviouslyreportedbythecompanyinclude:
• [email protected]/tAu,39.17g/tAg• [email protected]/tAu,4.34g/tAg• [email protected]/tAu,2.54g/tAg• [email protected]/tAu,8.92g/tAg• [email protected]/tAu,4.8g/tAg• [email protected]/tAu,4.77g/tAg,0.37%Cu• [email protected]/tAu,&0.30%Cu• [email protected]/tAu,&0.42%Cu
Threeangleddiamonddrill holes totalling853.20metersweredrilled to test thesubsurfacestratigraphyand thecontinuityofoutcroppinggold,copperandbasemetalmineralisationinthesecondhalfof2011.HolesKSDD001andKSDDH002weredrilledtotestdepthextensionofbestgoldinterceptsintrenchKST026whichreported53.0m@1.97g/tAu.HoleKSDDH003wasdrilledatsouthernparttheprospectwhichhadhighmagneticresponseingroundbasedsurveys,andhascoincidentalhighgradegold,copperandbasemetalsintrenchKSTC045,[email protected]/tAu,0.37%Cuand0.93%Zn.
Workcompletedsincethedrillingcampaign,whichhasincludedheli-magneticandradiometricsurveys,extensivemapping,andfurthergridbasedsoilsampling,suggeststhatholeswerecompletedonasub-optimalpositionandorientation,andadditionaldrillingprogramsarebeingprepared.
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Drill holeDrill Collar Coordinates (m) Sample
NumberFrom (m)
To(m) Significant Intercepts (cut-off grade 0.5 g/t Au)North East
KSDD001 9134794 494157 5412-54195412–54145461-5490548254725505
12.215.266.087.077.0110.0
23.018.396.088.078.0111.0
Ø[email protected]/tAu&8.84g/[email protected]/tAu&18.15g/tAgØ[email protected]/tAu&0.51g/tAgincl.Ø[email protected]/tAu&0.4g/tAgØ[email protected]/tAu,2g/tAg&0.12%CuØ[email protected]/tAu&0.1g/tAg
KSDD002 9134794 494157 5669–56925670–56725715-5719
11.613.161.7
4016.867.7
Ø[email protected]/tAu&3.51g/[email protected]/tAu&14.53g/tAgØ[email protected]/tAu
KSDD003 9134422 494009 5877-58815880
5145
5.18.0
73.0
10.19.0
74.0
Ø[email protected]/tAu,0.45%Cu&0.96%Zn,[email protected]/tAu,0.91%Cu&0.31%Zn
[email protected]/tAu.
Resultsfromthecompletedholesaresummarisedinthetableabove:
Magnetic and radiometric signatures obtained through helicopterbasedsurveysprovideexcellentcorrelationwithfieldobservationsto date, and add great confidence to the overall prospectivity oftheproject,bothattheKusiProspect,andinotherareasofsimilarmagnetic anomalism including Sim and Kasuma. The magneticresponseshowsbothhighmagneticandlow(magneticdestruction)susceptibility with enriched potassium, thorium and uranium.PotassiumisespeciallyelevatedtowardsthesouthofKusi,whichcorrespondswithpotassicalterationencounteredindrillholesandcreekoutcropmapping.
OfmajorgeophysicalinterestisthefactthattheKusimagnetichighhasa largenonmagnetic core.Consultantgeophysicist,ExploreGeoPtyLtd reported that thenon-magnetic coremay represent
destructionofmagnetics,ratherthanbeinganon-magneticbody.Ifshowntobethecase,excellentpotentialfordiscoveryofalarge,highqualitydepositexists.
PacificNiuginiiscompletingafullgeochemicalsamplingprogramattheKusiProspect,aheadofintendedadditionalgeophysicalsurveysanddrillingprograms.
Sim Prospect
Simisagold,silver,lead,zinctargetsupportedbyacoincidentmagneticanomaly,andlocatedseveralkilometresnorthofKusi.
PacificNiuginiconductedafirstpassregionalsurfacesamplingcampaigninlate2010,whentworocksamplesreturnedelevatedgold(13.9g/tAuand9.29g/tAu)withelevatedbasemetals.Simisunderlainpredominantlybymetamorphicbasementrocksofcarbonaceousphyllite,metapsammite,schistandminorlimestone.Therockunitshavebeenextensivelydeformedandvariablyintrudedbyintrusivesofgranodioriticandporphyriticorigin.
Aridgeandspursurfacesamplingprogramoverthemagneticanomalyandsurroundingareaswascompletedsubsequenttotheendofthereportingperiod.Resultsfromthesamplingprogramarepending,howeverinitialsamplesarehighlyencouragingwithmultiplesamplesdisplayingmineralisedintrusiveandbasementrockfabricswithvariedalterationprofiles.
Kasuma Prospect
KasumaisamagnetictargetlocatedtothewestofKusi.Theprospectwassubjectoftheheli-magneticandradiometricsurveycompletedin2011,anddisplayssignaturessimilartotheSimprospect.
The Kasuma site is yet to be accessed for initial geological investigation and surface sampling, however the Pacific Niuginiexplorationteamarepreparingforaninitialprogram.Initialworkwillincludecreekmappingandridgeandspursamplingprogramswithcommencementofworkplannedforthelastquarterof2012.
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EL2013
EL2013adjoinsEL1614 (Garaina) tosouthwest.TheEL2013 tenementarea liesstrategicallyon thesamenortheast trendinginterpretedtransferstructureswhichhosttheKusi,SimandKasumatargetsandisconsideredhighlyprospectiveforepithermalandporphyrystylegoldand/orcopperdeposits.PacificNiuginiconsidersthattenementhassimilargeologyandprospectivityasforEL1614.
The exploration tenement was granted in March 2012, and no fieldwork has been undertaken to date. Depending on initialobservations,theplannedKasumareconnaissanceexplorationprogrammaybeextendedintoEL2013asthemagneticanomalyattheprospectstraddlestheboundaryofthetwotenements.
Gusap Project – EL1615, EL1869, and EL 1827 – Madang Province (100%)
TheGusapProjectislocatedintheMadangProvincecovering2250squarekilometresofprospectivegroundovertheFinisterreRanges. The tenement is underlain by athrusted sequence of indurated argillites,volcanic and limestone later intruded byintrusive of dioritic, granodiorite, microdiorite,gabbro,doleriteandtonalitedifferentiates.Thesequence is overlain unconformably to thenorthbyPliocenelimestone.Anumberofmajorregional, deeply sheeted structures, trendingnorthwest, and dipping east; dominate thestructuralframeworkoftheFinisterreRanges.
The tenementarea is considered tobehighlyprospectiveforthediscoveryoflargeporphyrycopper gold, epithermal gold, and skarndeposits. Pacific Niugini completed extensiveexplorationworkwithinEL1615duringtheyear,whilebothEL1869,andEL1827weregrantedinMarch2012.
A major wide spaced heli-magnetic andradiometric survey, covering approximately
45%oftheGusapProjectareawasundertakeninthelastquarterof2012,followingsubstantialdelayscausedbyavailabilityofthesurveyhelicopterandcrew.Theheli-surveyidentifiedanumberofstructuralfeatureswithinthetenement,andalsohighlightedmagneticanomalyprospectsforfurtherfollow-up.TheresultsorthesurveyledtoaclosespacedinfillprogramovertheMunambeProspectinEL1869andEL1615,whereextensivegroundmappingandsamplingiscurrentlyunderway.
ThefocusoffieldworkduringtheyearwastheYanganondeposit,wherecreekoutcroprocksamplesinMarch2011returnedupto4.80%copper,1.99g/tgold,0.87%Zinc,13.9g/tsilver,104g/tmolybdenum,16g/tantimonyand165g/ttin.UpongrantingofEL1869,PacificNiuginifocussedsignificantattentionontheMunambeProspect,whichisconsideredtobehighlyprospectiveforthediscoveryofacopper-goldporphyrysystem.
TheongoingexplorationactivitiesatYanganonandMunambeprospects,combinedwith thepreviousdiscoveryofhighgradecopper inoutcropatTuringopoandGabanacontinuetosupport the interpretedoccurrenceofasubstantialmineralisingbodywithinthetenementarea.Explorationforaworld-classporphyrycopper–goldsystemwithintheGusapProjectcontinuestobeaviewedashighlyprospectivebyPacificNiugini,andtheprojectwillcontinuetoprovideanexplorationfocus,alongwiththeGarainaProject.
Yanganon Copper Gold Prospect
CopperandgoldmineralisationatsurfaceishostedwithinshallowdippingandreactivatedthrustfaultsoftheFinnisterrestructuralcomplex.Therearenumeroushydrothermallyalteredintrusives(gabbro,diorite,clinopyroxinite,dolerite,microdioriteanddunnite)embeddedwithinthesestructures.Theintrusivesmayberesponsiblefor introductionofcopperandbasemetalmineralisation.ReplacementstylecopperskarnmineralisationisevidentandoutcropsatYanganonSouthEast,andYanganonCentralprospects.
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Thecombinedprospectareasspanapproximately12kilometresalongstrike.Besttrenchassayresultsduringtheyearincluded:
YWTC01 [email protected]%Cu
YWTC02 [email protected]%Cu
YWTC04 [email protected]%Cu
YWTC05 [email protected]%Cu
YWTC06A [email protected]%Cu
YWTC08 [email protected]%Cu
YWTC36 [email protected]%Cu
AnumberoftrenchandsoilsamplesremainoutstandingfortheYanganonProspects,andtheforwardworkprogramintheareawillbeformulatedonceallinformationisreceivedandcollated.
Munambe Copper and Gold Prospect
TheMunambeprospectdiscoveryin2010identifiedsamplescontainingupto9%Cu,0.34g/tAu,and38g/tAg,fromintenselysericite-clay-pyritealteredandquartz+carbonate+pyrite+chalcopyritemineralisedintrusiveclastshostedwithinanapparentlywidespreadargillicalterationzone.
TheCompanyundertookandcompletedadetailedhelicoptermagneticandradiometricsurveyovertheprospectarea,infillingthewidespacedsurveyundertakeninthelastquarterof2011.
Thefieldworkprogram forMunambe isongoing,with theobjectiveofexpandingon theoriginaloutcroppingcopperandgoldmineralisationdiscoveredin2010andbringingMunambetoahighconfidencedrilltargetassoonaspossible.
Todatemineralisationhasbeenmapped ina largestructure100mwideandapproximately1000m in length.Mineralisation isexpressedasintenselyhydrothermallyaltered(sericite–pyrite–clay)intrusivespresentasclastsandinfaultbrecciamatrix.ThemajorfaulthasbeennamedtheMunambefaultZone(MFZ).ThereareanumberofparallelstructurestoMFZtrending340degrees,anddippingsteeplytonortheast.Theseparallelstructuresaremineralisedandarelocatedbetween80and400mfromthemainMunambeFault.
Work programs at Munambe are at a very early stage, however initial sampling has confirmed the prospectivity of the area,confirmingthepresenceofcopper,gold,andbasemetals.Initialsamplingreturnedthefollowingassays.Selective Rock chip sampling
• SN20791:3.8%Cu,0.11%Pb&8.23%Zn(Float)• SN20789:0.81%Cu&0.85%Zn(Float)• SN20790:0.81%Cu&25ppmMo(Outcrop)• SN20785:0.18%Cu(Outcrop)• SN20779:0.17g/tAu,0.11%Zn(Outcrop)
Trench sampling
TrenchMNTC01 [email protected]/tAu, [email protected]%Cu,26ppmMo
TrenchMNTC02 [email protected]%Cu
PacificNiuginihasrecentlyachievedaccessintoanarea,whichdisplaysadomeshapedfeature,withacorrespondingzoneofhighmagneticsusceptibility.Initialfieldworkintheareahasidentifiedzonesofsulphidemineralisationinoutcrop,andvariablyalteredintrusiverocks.Thiszoneisthecurrentfocusofexplorationintheareawithalargenumberofsamplesrecentlysubmittedforassay.
TheGusapProjectremainsahighprioritytargetforPacificNiugini,andtheexplorationteamwillcontinuetopursuereconnaissanceprogramsintothevariousprospectareaswithaviewtodelineatingandundertakinghighconfidencedrillingprograms.
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EL1828, Pindu - Morobe Province (100%)
EL1828(547.8Km2)islocatedimmediatelynorthofLae,intheMorobeProvinceofPapuaNewGuinea.Thetenementcovers548squarekilometresoftheFinisterre–SarawagaRanges.ThisisaGreenfieldstenementwithverylimitedmoderndayexplorationworkovertheareasofthetenement.
Basement rocks consist mostly of Miocene Finisterrevolcanics and sediments. The basement rock packageswere later intrudedbyultrabasic rockswithperidotiteandserpentinised peridotite composition. It is believed thatthese intrusive may have introduced copper, silver, goldand nickel mineralisation. Elevated copper values werepreviouslyreportedatLengbati,LalangandatlowerMongiRiverbytheBureauofMineralResources(BMR)ofAustraliaandbythePapuaNewGuineaGeologicalSurvey.
Besthistoricalgradesreportedfromthetenementareawere23.7%copper,37g/t silver,chromite1800g/tchromite,
and369g/tnickel.ThetenementwasgrantedtoPacificNiuginiinMarch2012,andtodatenofieldworkhasbeenundertakenbyPacificNiugini.Theareaisconsideredtobehighlyprospectiveforporphyrycopper-goldtargets,andPacificNiuginiintendstoundertakeinitialreconnaissanceexplorationprogramswithinthetenementareaintheensuingyear.
EL 1613 – Mt Hagen (100%) – Western Highlands Province
TheMtHagenEL1613islocatednearPapuaNewGuinea’sthirdlargestcity,MtHagenCity,intheWesternHighlandsProvince.
Anexcellent roadnetworkexistswith infrastructuresandothers services easily accessible from Mt Hagen. TheEL covers prospective areas of the northwest-southeaststriking mineralised Bismarck Fault Zone corridor whichhosts numerous copper gold and other base-metaloccurrences including the copper molybdenum Yanderadeposit([email protected]%copper)thatisbeingprogressedtoPrefeasibilityStatus.
The tenement has two identified copper-gold prospects,KotnaandPaglum,withnumerousotherprospectiveareasavailableforreconnaissanceexploration.
Kotna Prospect
Volcanicunitsconsistingof tuff,volcanicbreccias,volcanolithicsedimentsandcalcareoussedimentsunderlieKotna.Both thevolcanicandsedimentaryunitsarelaterintrudedbymultiplephasedporphyriticdiorites.CopperandgoldoccurrencesareknowntobespatiallyrelatedtothedioriteintrusionsintheBismarckFaultZone.FieldmappingatKotnadiscoveredextensivehydrothermalalterationandcopper–gold–molybdenummineralisation.
Twocoreholes(KNDD001&2)werecompletedinthepreviousyear.Theobjectiveofthedrillingwastotestsubsurfacecontinuityofcopperandbasemetalmineralisationincosteans,whichisseentobehostedinsediments,volcanicunitsandindaciticporphyriticintrusives. Drilling intersected weak porphyry style mineralisation showing moderate to locally intense pervasive hydrothermalalteration,hostedbyvariablyalteredvolcanictuff.Drillingconfirmedsurfacegeologicalobservationsofporphyrystylemineralisation.Whilethetargetporphyrymineralisationwasnotintersectedbytheseholes,importantmineralisationandalterationpatternswerelogged.
Strong epidote and increasing sulphide mineralisation were intersected in the deeper parts of KNDD002. Intense propyliticalterationwithminorzonesofadvancedargilicalterationwasseeninthemajorityofholeKNDD001.Widely,spacednarrowveinletswithquartz+pyrite+chalcopyrite+/-basemetalwereintersectedinbothholes.PNRbelievesthattheresultsdemonstratethattheporphyrysourceisreasonablyclose,eitherbelowortothesideoftheinitialtargetarea.
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Following the drilling campaign, Pacific Niugini undertook an intensive ridge and spur sampling program, and ground basedmagneticsurveys.Theridgeandspurgeochemicalprogramidentifiedabroadzoneofanomalous,andcoincidentcopper,gold,molybdenum,leadandzinctothewestoftheoriginaldrillinglocation.Thegroundmagneticsurveyconfirmedtheexistenceofamagneticanomaly (bothhighand low(destructive)zonesrecorded)coincidentwiththegeochemicalanomaly.PacificNiuginicontinuestoviewtheKotnaProspectasbeingprospectiveforthediscoveryofablindcopper-goldporphyrydeposit,andwillconsiderfurtherworkprogramsasexplorationatGarainaandGusapareprogressed.
Paglum Prospect
ThePaglumprospect isunderlainmostlyby rocksof volcanicandsedimentaryorigin,whichhavebeen intrudedbyMiocenegranodioriteandbyPliocenediorites.Anumberofstructuresareevidenttrendingnorthwesttosoutheast,appeartensional toBismarckFaultZoneamajortectonicstructurewithinthearea.Gold,copperandbasemetalmineralisationarecloselyassociatedwithnortheast–southweststructures.
Mineralisationoccursaswidelyspacedquartz–sulphideveinsandatthecontactbetween intrusiveandcountryrock.Previousgeochemical sampling programs have outlined coincident zones of copper, gold and molybdenum mineralization within theprospect.
NoadditionalfieldworkwascarriedoutatPaglumduringtheyearduetocompetingexplorationpriorities.Paglumcontinuestobeprospectiveforthediscoveryofcopper-goldporphyrydeposits,andthecompanywillconsiderfurtherworkprogramsdependentonexplorationresultsattheGarainaandGusapprojects.
EL 1589 – Zenag
The Zenag Prospect (EL1589) is located 65kilometressouthwestofLaeCityand12kilometressoutheast of Wafi/Golpu epithermal gold andporphyrycopper-golddeposit.ThekeytargetistheBiamenamagneticanomalyconsideredtorepresentan intrusive magnetic body, which straddles thewesterntenementboundary.
Zenag Tenement
Works completed in EL1589 by PNM and othershave revealed widespread elevated gold in creeksand trenching shedding from this area. Historicalmappingandsamplingbytheneighbourtothewesthasreportedbestsurfacetrenchingresultsof15m@24g/tAuand1.44%Cufromwhatisconsideredtobelong to thesame intrusivesystemstraddling theboundaryofthetenement.
GiventhelargeamountofprospectsunderconsiderationbyPacificNiugini,workonthetenementhasbeenlimited.PacificNiuginiwillcontinuewithlimitedsamplingprogramsovertheprospectinthecomingyear,withtheGarainaandGusapprojectsexpectedtocontinueastheprioritytargetsforthecompany.
REVIEW OF OPERATIONS
TheinformationinthisreportthatrelatestotheExplorationResultsforPacificNiuginiMineralsLtdisbaseduponinformationcompiledbyMrDavidMOsikore(BScGeology)),M.AusIMM..MrOsikoreisafulltimeemployeeofPacificNiuginiLimitedMineandhassufficientexperiencewhichisrelevanttothestyleofmineralisationandtypeofdepositunderconsiderationandtotheactivitythatheisundertakingtodulyqualifyasaCompetentPersonasdefinedinthe2004EditionofAustralasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves.MrOsikoreconsentstotheinclusioninthereportofthemattersbasedupontheirinformationintheformandcontexttowhichitappears.PacificNiuginihasnotcalculatedresourcesfortheBuloloProjectincompliancewiththeJORCcode,anddoesnotintendtoduetodifficultiesindealingwithalluvialdeposits.Anyproductiondecisionwillbemadeonthebasisofbulksamplingresults,andinconsiderationofhistoricalproductionfromthearea
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Yourdirectorspresenttheirreportonthecompanyanditscontrolledentityforthefinancialyearended30June2012.
DIRECTORS
Thenamesofthedirectorsinofficeandatanytimeduringorsincetheendoftheyearareasfollows.Directorshavebeeninofficesincethestartofthefinancialyeartothedateofthisreportunlessotherwisestated.
NAMES, QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES
Mr Peter CookBScAppliedGeol,MSc(MinEcon),MAusIMM
MrCook is aGeologist andMineral Economist and is the currentNon-ExecutiveChairmanand formerManagingDirector ofMetalsXLtd.InthepastdecadehehasbeentheManagingDirectorofHill50Ltd,HarmonyGoldAustraliaPtyLtd,AbelleLtdandBluestoneTinLtd.
Heiscurrentlyanon-executivedirectorofWestgoldResourcesLtd,AzianaLtdandMetalsXLtd.
MrCookisthenon-executiveChairmanofPacificNiuginiLimited.
Mr David OsikoreBSc,MAusIMM
MrOsikoreBScisaGeologistandhasextensiveexplorationexperienceworkingforgroupssuchasBougainvilleCopperLimited,PlacerDome,Ingold(asubsidiaryofINCO)andRenisonGoldfields.InrecenttimeshehasbeenaSeniorGeologistwithAuroraGoldLimited,theExplorationManagerforAbelleLtdresponsiblefortheirWafiandHiddenValleyProjectsandhewasappointedthePNGExplorationManagerforHarmonyGoldaftertheirtake-overofAbelleLtd.DavidhasconsiderableexperienceindealingwithalllevelsofPNGbusiness,government,landownercommunitiesandgovernmentagencies.
MrOsikorehasnotheldanyotherpubliccompanydirectorshipsinthepastthreeyears.
MrOsikoreistheManagingDirectorofthewhollyownedPNGsubsidiary,PacificNiuginiMinerals(PNG)LimitedandisanexecutivedirectorofPacificNiuginiLimited.
Mr Paul Cmrlec BEng(Mining),Honours
MrCmrlecholdsaBachelorofMiningEngineeringdegreefromtheUniversityofSouthAustralia.Hehasextensiveexperienceinfeasibilitystudiesandprojectdevelopmentandhasheldanumberofoperationalandplanningroles,includingthepositionofUndergroundManageratseveralWesternAustraliangoldmines.HewaspreviouslytheGroupUndergroundMiningEngineerforHarmonyGoldAustralia,andtheGroupMiningEngineerforMetalsXLimited.
Inadditiontooperationalminingroles,MrCmrlec’srecentexperienceincludesthegeneralmanagementofmajorfeasibilitystudiesfortheWafiCopper-GolddepositinPapuaNewGuinea,andtheWingellinaNickel-CobaltdepositintheCentralMusgravesregionofWesternAustralia.
MrCmrlecistheManagingDirectorofPacificNiuginiLimited.
Hewasalsoanon-executivedirectorofWestgoldResourcesLimiteduntilhisresignationon1June2011.
Mr Sam Akoitai
MrAkoitaiwasamemberofthenationalparliamentofPNGfrom1997untilmid2007,servingfirstlyasMinisterforBougainvilleAffairsfrom1997until2000andsubsequentlyasMinisterforMiningfrom2002until2007.MrAkoitaiwasresponsibleforestablishmentofPNG’sMineralResourcesAuthority,thestatutoryauthoritywhichnowregulatestheminingindustryinthatcountry,andhasheldnumerousroleswithinthePNGresourcesindustry.
MrAkoitai isalsoanon-executivedirectorofMarengoMining (PNG)LimitedthePNGoperatingsubsidiaryofMarengoMiningLimited(ASX&POMSoXCode:MGO).MrAkoitaiisanon-executivedirectorofPacificNiuginiLimited.
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COMPANY SECRETARY AND CFO
Mr Dennis Lovell CA
MrLovellisaCharteredAccountantwithmorethan40yearsexperienceincorporatefinancialmanagementinarangeofindustriesincluding mineral exploration, mining, manufacturing and wholesale and retail operations in Australia and overseas. He hasconsultedtoanumberofASXlistingandcapitalraisingprojectsandhasactedascompanysecretaryandfinancialdirectortoanumberofpubliclistedcompanies.
PRINCIPAL ACTIVITIES
Theprincipalactivitiesoftheconsolidatedentityduringthefinancialyearconsistedof:• ExplorationformineralsinPapuaNewGuinea.
OPERATING RESULTS
Theconsolidatedlossforthefinancialyearafterprovidingforincometaxamountedto$2,326,986(2011:profitof$1,742,194).
DIVIDENDS PAID OR RECOMMENDED
Thedirectorsrecommendthatnodividendbepaidfortheyearended30June2012,norhaveanyamountsbeenpaidordeclaredbywayofdividendsincetheendofthepreviousfinancialyear.
REVIEW OF OPERATIONS
Afullreviewoftheoperationsoftheconsolidatedentityduringtheyearended30June2012isincludedinthisreport.
FINANCIAL POSITION
Theconsolidatedentityhadcashresourcesof$10.7millionat30June2012andhasnoborrowings.Thenetassetsoftheeconomicentityhaveincreasedby$1.3millionduringthefinancialyear(from$24.1millionat30June2011to$25.4millionat30June2012)mainlyfromsharecapitalissues.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
IntheopinionoftheDirectors,therewerenosignificantchangesinthestateofaffairsoftheconsolidatedentitythatoccurredduringthefinancialyearotherthanasdisclosedinthisreportortheconsolidatedfinancialstatements.
AFTER BALANCE DATE EVENTS
Thereisnoothermatterorcircumstancethathasarisensincetheendofthefinancialyeartothedateofthisreport,whichhassignificantlyaffected,ormaysignificantlyaffecttheoperationsoftheconsolidatedentity,theresultsofthoseoperationsorthestateofaffairsoftheconsolidatedentityinsubsequentfinancialyears.
FUTURE DEVELOPMENTS AND EXPECTED RESULTS
Businessstrategiesandprospectsforfuturefinancialyearshavebeenincludedinthereviewofoperations.
ENVIRONMENTAL ISSUES
Theconsolidatedentity’soperationsaresubject tosignificantenvironmental regulationsunder the lawsofPapuaNewGuinea.TheseissuesaredealtwithbytheManagingDirectorofPacificNiuginiMinerals(PNG)Ltd,theoperatingentityinPNG,andtheconsolidatedentityisnotawareofanymatterthatrequiresdisclosurewithrespecttoanysignificantenvironmentalregulationinrespectofitsactivities.
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REMUNERATION REPORT (AUDITED)
ThisreportdetailsthenatureandamountofremunerationforeachdirectorandotherkeymanagementpersonnelofPacificNiuginiLimited.
(A) Principles used to determine the nature and amount of remuneration
Remuneration PolicyTheremunerationpolicyoftheCompanyhasbeendesignedtoaligndirectorandotherkeymanagementpersonnelobjectiveswithshareholderandbusinessobjectivesbyprovidingafixedremunerationcomponentandofferingspecificlong-termincentivesviatheissueofoptionsandperformancerights.TheBoardoftheCompanybelievestheremunerationpolicytobeappropriateandeffectiveinitsabilitytoattractandretainthebestexecutivesanddirectorstorunandmanagetheeconomicentity,aswellascreategoalcongruencebetweendirectors,executivesandshareholders.
During the year ended30June2012, theeconomicentitydidnothavea separately establishednominationor remunerationcommittee.Consideringthesizeoftheeconomicentity,thenumberofdirectorsandtheeconomicentity’sstageofitsdevelopment,theBoardareoftheviewthatthesefunctionscanbeefficientlyperformedwithfullBoardparticipation.
Theremunerationpolicy,settingthetermsandconditionsfortheexecutivedirectorsandotherseniorexecutives,wasdevelopedandapprovedbytheboard.TheBoardbelievesthatithasimplementedsuitablepracticesandproceduresthatareappropriateforanorganisationofthissizeandmaturity.
Remuneration StructureInaccordancewithbestpracticecorporategovernance, thestructureofnon-executiveDirectorandexecutiveremuneration isseparateanddistinct.
Non-Executive Director Remuneration ObjectiveTheBoardseekstosetaggregateremunerationatalevelwhichprovidestheCompanywiththeabilitytoattractandretainDirectorsofthehighestcalibre,whilstincurringacostwhichisacceptabletoshareholders.
StructureTheboardpolicyistoremuneratenon-executivedirectorsatmarketratesforcomparablecompaniesfortime,commitmentandresponsibilities.Theboarddeterminespaymentstothenon-executivedirectorsandreviewstheirremunerationannually,basedonmarketpractice,dutiesandaccountability.Independentexternaladviceissoughtwhenrequired.Noadvicewasobtainedduringthereportingperiod.Themaximumaggregateamountoffeesthatcanbepaidtonon-executivedirectorsissubjecttoapprovalbyshareholdersattheAnnualGeneralMeetingandcurrentlystandsat$250,000pa.Feesfornon-executivedirectorsarenotlinkedtotheperformanceoftheeconomicentity.TheDirectorsarenotrequiredtoholdanysharesintheCompanyundertheConstitutionoftheCompany,howevertoaligndirectors’interestswithshareholderinterests,thedirectorsareencouragedtoholdsharesintheCompany.
Managing Director and Executive Remuneration StructureBasedonthecurrentstageintheCompany’sdevelopment,itssize,structureandstrategies,theBoardconsidersthatthekeyperformanceindicatorinassessingtheperformanceofExecutivesandtheircontributiontowardsincreasingshareholdervalueissharepriceperformanceoverthereviewperiod.Atpresent,remunerationisnotimpactedsolelybytheCompany’ssharepriceperformancebutalsootherfactorssuchasexplorationprogressandresults.
IndividualandCompanyoperatingtargetsassociatedwithtraditionalfinancialandnon-financialmeasuresaredifficulttosetgiventhesmallnumberofexecutivesandtheneedtobeflexibleandmulti-tasked,astheCompanyrespondstoacontinuallychangingbusinessenvironment.Consequently,aformalprocessofdefiningKeyPerformanceIndicators(KPI’s)andsettingtargetsagainsttheKPI’shasnotbeenadoptedatthepresenttime.
Remunerationconsistsofthefollowingkeyelements:Fixedremuneration;andVariableremunerationLongtermincentives(LTI).
TheproportionoffixedremunerationandvariableremunerationisestablishedforeachexecutivebytheBoard.
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Fixed RemunerationTheleveloffixedremunerationissetsoastoprovideabaselevelofremunerationwhichisbothappropriatetothepositionandiscompetitiveinthemarket.FixedremunerationisreviewedannuallybytheBoardhavingregardtotheCompanyandindividualperformance,relevantcomparableremunerationintheminingexplorationindustryandexternaladvice.Noexternaladvicewasobtainedduringthereportingperiod.Executivesreceivetheirfixedremunerationincash.
ExecutivedirectorscanbeemployedbytheCompanyonaconsultancybasis,onboardapproval,withremunerationandtermsstipulatedinindividualconsultancyagreements.
Variable Remuneration – Long Term Incentive (LTI)TheobjectiveoftheLTIplanistorewardExecutivesinamannerwhichalignstheelementofremunerationwiththecreationofshareholderwealth.AssuchLTI’saremadetoExecutiveswhoareabletoinfluencethegenerationofshareholderwealthandthushaveanimpactontheCompany’sperformance.
ThelevelofLTIgrantedis,inturn,dependentontheseniorityoftheExecutiveandtheresponsibilitiestheExecutiveassumesintheCompanyandisgrantedatthediscretionoftheBoard.
LTIgrantstoExecutivesaredeliveredintheformofshareoptionsandperformancerights.TheseoptionsandrightsareissuedontermsdeterminedbytheBoardatthetimeofissue.TheyareissuedtoaligntheExecutivesinterestswiththatoftheshareholders.TheCompanydoeshaveaformalemployeeLongTermIncentivePlan.Duringthecurrentandpreviousfinancialyearsthegrouphasgeneratedlossesfromitsexplorationandevaluationactivities.Giventhenatureof thegroup’sactivitiesandtheconsequentialoperatingresults,nodividendshavebeenpaid.Therehavebeennoreturnsofcapitalinthecurrentorpreviousfinancialperiods.Thedetailsofmarketsharepricemovementsareasfollows:
Share Price
Yearend30June2012 $0.235
Yearend30June2011 $0.38
Yearend30June2010 $0.18
Yearend30June2009 $0.08
Yearend30June2008 $0.15
(B) Remuneration of Directors and other Key Management Personnel
Detailsoftheremunerationofdirectorsandthekeymanagementpersonnel(asdefinedinAASB124RelatedPartyDisclosures)aresetoutinthefollowingtables.
ThekeymanagementpersonneloftheCompanyandtheGroupincludethedirectorsandthefollowingexecutiveofficerswhohaveordidhaveauthorityandresponsibilityforplanning,directingandcontrollingtheactivitiesoftheentity:
• DennisLovell-CompanySecretaryandChiefFinancialOfficer
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Remuneration of Directors and other Key Management Personnel (cont)
Short TermPost
EmploymentShare-Based
Payments
2012
Cash Salary & Fees
Cash Bonus
Non-Cash
Benefits
Consultancy Agreement
Superannuation Contribution
Options/Performance
Rights
Total % Performance
Related
Directors $ $ $ $ $ $ $
PeterCook 60,000 - - 8,800 5,400 - 74,200 -
DavidOsikore 190,476 - - - 16,000 - 206,476 -
PaulCmrlec - - - 319,400 - 171,334* 490,734 35%
SamAkoitai 44,676 - - - - - 44,676 -
Total 295,152 - - 328,200 21,400 171,334 816,086 -
Other Key Management Personnel
DennisLovell - - - 132,223 - - 132,223 -
Total - - - 132,223 - - 132,223 -*Thisamountrepresentstheportionofthevaluationoftheperformancerightsexpensedduringthe2012financialyear.NorightswereissuedtoPCmrlecduringthecurrentfinancialyear,nocashbenefitwasreceivedandtherightshavenotvested.
Short TermPost
EmploymentShare-Based
Payments
2011
Cash Salary & Fees
Cash Bonus
Non-Cash
Benefits
Consultancy Agreement
Superannuation Contribution
Options/Performance
Rights
Total % Performance
Related
Directors $ $ $ $ $ $ $
PeterCook 60,000 - - 30,800 - - 90,800 -
DavidOsikore 166,667 - - - 14,000 - 180,667 -
AndrewWaller-resigned1/4/11 30,000 - - - - - 30,000 -
PaulCmrlec 30,000 - - 65,420 - 306,234 401,654 76%
SamAkoitai–appointed23/5/11 4,200 - - - - - 4,200 -
Total 290,867 - - 96,220 14,000 306,234 707,321 -
Other Key Management Personnel
DennisLovell - - - 126,062 - - 126,062 -
Total - - - 126,062 - - 126,062 -
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(C) Compensation options/rights – Granted and vested during the year
During the 2012 financial year there were no options or performance rights granted as equity compensation benefits to keymanagementpersonnel.
2011 financial year:Duringthe2010/11financialyearunlistedoptionsandperformancerights(Rights)weregrantedasequitycompensationbenefitsasdisclosedbelow.Theoptionsandrightswereissuedfreeofcharge.Detailsofthetermsoftheoptionsandrightsaregivenin(E)below.Theoptionsandperformancerightsvestasindicatedbelowandwereissuedtoencouragekeymanagementpersonneltogeneratefutureshareholderwealth.TheoptionsandperformancerightsissuedtoPCmrlecwereissuedintermsoftheemployeeLongTermIncentivePlanandwereapprovedbyshareholdersatameetingheldon23June2011.
Terms and Conditions of Each Grant
2011 Granted Number
Grant Date Value per Option/right at Grant Date
$
Exercise Price
$
Vesting Date Expiry Date
Directors
PCmrlec-Options 2,000,000 23.06.2011 0.152 0.38 23.06.2011 23.06.2014
PCmrlec-Rights 500,000 23.06.2011 0.34 Nil (a) 23.06.2014
PCmrlec-Rights 500,000 23.06.2011 0.34 Nil (a) 23.06.2014
PCmrlec-Rights 500,000 23.06.2011 0.34 Nil (a) 23.06.2014
PCmrlec-Rights 500,000 23.06.2011 0.34 Nil (a) 23.06.2014
TOTAL 4,000,000
(a)Detailsofvestingconditionsaregivenin(E)below-norightsvestedorwereforfeitedduringthefinancialyear.
(D) Values of Options and Performance Rights Granted as Part of Remuneration
During the 2012 financial year there were no options or performance rights granted as equity compensation benefits to keymanagementpersonnel.
2011
Value of options/rights granted during the year
Value of options/rights exercised during the year
Value of options/rights lapsed during
the year
Directors
PCmrlec-optionsandrightstotal 814,000 - -Therewerenoalterationstotermsandconditionsofoptionsorrightsgrantedasremunerationsincetheirgrantdate.
(a) Thevalueofoptionsandperformancerightsgrantedinthe2011yearwasdeterminedbyanindependentvaluerusingtheBlack-Scholespricingmodelthattakesintoaccountthesharepriceatgrantdate,exerciseprice,expectedvolatility,option/rightslife,expecteddividends,therisk-freerate,andthefactthattheoptions/rightsarenottradeable.Thetotalvalueoftheoptions/rightsgrantedisincludedinthetableabove.Thisdiffersfromtheexpenserecognisedasthecalculationoftheexpensealsotakesintoaccounttheprobabilityofsatisfyingthevestingcriteria.Theexpenseisrecognisedoverthevestingperiod.Ifallperformanceconditionsaremetanamountof$336,432willbeexpensedinfuturereportingperiods
(b) Noremunerationoptionsorrightslapsedduringtheyearended30June2012.Duringtheyear1,500,000shareswereissuedtoDOsikoreontheexerciseofremunerationoptionswithanexercisepriceof20c.$300,000wasreceived.Thevalueoftheoptionsatgrantdateandexercisedatewas8.1cand24crespectively.
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(E) Employment Contracts of Directors and Senior Executives
Mr Paul Cmrlec, Managing Director and CEO
MrCmrlecwasappointedasManagingDirectoron4thApril2011.
Witheffectfrom1April2011athreeyearcontractwasenteredintobetweenBerrimilServicesPtyLtd(acompanyassociatedwithMrCmrlec)andPacificNiuginiLtd(PNR).
UnderthecontractBerrimilprovidestheservicesofMrCmrlecasManagingDirectorofPNRforadailyconsultingfeecappedtoamaximumdailyamountof$1,600perday.Thefeeisallinclusive,withnoadditionalon-coststobechargedbyBerrimil.
MrCmrlec’sremunerationpackageincludesthefollowingincentives:-(a)TwomillionoptionstoacquirefullypaidordinarysharesinPNRatanexercisepriceof$0.38expiring23June2014.(b)TwomillionperformancerightstobeallottedfullypaidordinarysharesinPNRwiththefollowingtermsandperformancehurdles:
• 500,000shareswhenPNRrecordsitsfirstcommerciallyviablegoldproduction.• 500,000shareswhenPNRsurpasses50,000ozofgoldproductionorequivalentproductioninthecaseofanothermetal
orcommodityinvalue.• 500,000shareswhenPNRsurpasses100,000ozofgoldproductionorequivalentproductioninthecaseofanothermetal
orcommodityinvalue.• 500,000sharesifandwhenthemarketcapitalisationofPNRsurpassesAU$200millionforaminimumcontinuousperiod
of20tradingdays.TheoptionsandperformancerightswereissuedunderthetermsofthePacificNiuginiLtd’sLongTermIncentivePlanandwereapprovedbyshareholdersatameetingheldon23June2011.Theperformancerightswereissuedon23June2011andexpirethreeyearsfromthedateofissue.Toexercisetheperformancerights,itisarequirementthatMrCmrlecremainsaconsultantofthecompanyuntilthevestingconditionsaremet.
Mr David Osikore, Managing Director PNG and Executive Director
MrDOsikorehasafouryearservicecontractwithPacificNiuginiMinerals(PNG)Ltdwhichcommenced1July2009.ThecurrentremunerationistheequivalentofAU$175,000perannumwhichequatedtoPNGKina400,000atthedateofthelastreviewandispaidinPNG,plussuperannuation.Terminationis3monthsnoticeundernormalcircumstancesand12monthsinthecaseofterminationwithoutnoticeorfundamentalchange.
Mr Peter Cook, Non-Executive Chairman
MrCookhasnoformalagreementbetweenhimselfandtheCompany.Heispaidanon-executivedirectors’feeof$60,000perannumplussuperannuationandaconsultingfeeforanyadditionaltimespentonCompanybusinessoverandabovethenormalhourscoveredbythefixeddirectors’fee.
Mr Sam Akoitai, Non-Executive Director
MrAkoitaihasnoformalagreementbetweenhimselfandtheCompany.Heispaidanon-executivedirectors’feeof$40,000perannumandaconsultingfeeforanyadditionaltimespentonCompanybusinessoverandabovethenormalhourscoveredbythefixeddirectors’fee.
Mr Dennis Lovell, CFO and Company Secretary
MrLovellhasnoformalagreementbetweenhimselfandtheCompany.HisremunerationisbywayoffeespaidtoLovell&CoPtyLtd(acompanyassociatedwithDLovell)forservicesprovidedtotheCompanyinvoicedonanhourlybasis.
THIS IS THE END OF THE AUDITED REMUNERATION REPORT
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Directors’ Interests in Shares and Options of the Company
2012 Ordinary Options Over Ordinary Shares Performance Rights
Shares $0.20 $0.17 $0.20 $0.38
30/06/14 23/02/13 26/11/12 23/06/14 23/06/14
PeterCook 15,065,656 5,000,000 - - - -
DavidOsikore 6,000,000 1,500,000 - - - -
SamAkoitai - - - - - -
PaulCmrlec 408,500 200,000 1,000,000 - 2,000,000 2,000,000
MEETINGS OF DIRECTORS
Duringthefinancialyeardetailsofmeetingsofdirectorsheldandattendancesbyeachdirector(whileadirectoroftheCompany)duringtheyearwereasfollows:
Board Meetings
Director Attended Held
PCook 3 3
DOsikore 3 3
PCmrlec 3 3
SAkoitai 2 3
INDEMNIFYING OFFICERS OR AUDITOR
DuringthefinancialyeartheCompanyhaspaidpremiumstoinsuretheDirectorsandofficersagainstcertainliabilitiesarisingoutoftheirconductwhileactingasanofficeroftheCompany.Thecompanyhaspaidpremiumstoinsureeachofthedirectorsandofficersagainstliabilitiesforcostsandexpensesincurredbythemindefendinganylegalproceedingsarisingoutoftheirconductwhileactinginthecapacityofdirectororofficerofthecompany,otherthanconductinvolvingawilfulbreachofdutyinrelationtothecompany.Underthetermsandconditionsoftheinsurancecontractthepremiumpaidcannotbedisclosed.
OPTIONSAtthedateofthisreport,theunissuedordinarysharesoftheCompanyunderoptionorperformancerightsareasfollows:
Date of options/rights granted
Expiry Date Exercise Price Number of unlisted Options
Number of unlisted Performance Rights
01/09/2009 30/06/2014 $0.20 16,450,100
23/02/2010 23/02/2013 $0.17 150,000
09/03/2010 23/02/2013 $0.17 1,000,000
06/09/2010 31/03/2013 $0.28 2,000,000
21/12/2010 21/12/2013 $0.47 1,000,000
23/06/2011 23/06/2014 $0.38 2,000,000
23/06/2011 23/06/2014 Nil 2,000,000
30/11/2011 30/11/2012 Nil 300,000
30/11/2011 30/11/2013 Nil 200,000
30/11/2011 30/11/2014 $0.48 800,000
23,400,100 2,500,000
Therearenoparticipatingrightsorentitlementsinherentintheoptionsandholderswillnotbeentitledtoparticipateinnewissuesofcapitalorbonusissuesofferedormadetoshareholdersduringthecurrencyoftheoptions.However,theCompanywillsendanoticetoeachoptionholderatleast20businessdaysbeforetherecorddate,andthiswillgiveoptionholderstheopportunitytoexercisetheiroptionspriortothedatefordeterminingentitlementstoparticipateinanysuchissue.
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OPTIONS (cont)Thefollowingordinarysharesofthecompanywereissuedduringorsincetheendofthefinancialyearasaresultoftheexerciseofoptionsgranted:
Date of options granted Options expiry date Issue price of shares No. of shares issued
1/09/2009 30/09/2011 $0.30 9,085,001
1/09/2009 30/06/2014 $0.20 1,500,000
26/11/2009 26/11/2012 $0.20 1,500,000
23/02/2010 23/02/2013 $0.17 130,000
12,215,001Noamountswereunpaid.
PROCEEDINGS ON BEHALF OF COMPANY
Nopersonhasappliedforleaveofcourttobringproceedingsonbehalfofthecompanyorinterveneinanyproceedingstowhichthecompanyispartyforthepurposeoftakingresponsibilityonbehalfofthecompanyforalloranypartoftheseproceedings.
TheCompanywasnotapartytoanysuchproceedingsduringtheyear.
CORPORATE GOVERNANCE
Inrecognisingtheneedforthehigheststandardsofcorporatebehaviourandaccountability,thedirectorsoftheCompanysupportandhaveadheredtotheprinciplesofCorporateGovernance.TheCompany’scorporategovernancestatementiscontainedintheCorporateGovernancesectionoftheReport.
NON-AUDIT SERVICES
Theboardofdirectorsissatisfiedthattheprovisionofnon-auditservicesduringtheyeariscompatiblewiththegeneralstandardofindependenceforauditorsimposedbytheCorporationsAct2001.Thedirectorsaresatisfiedthattheservicesdisclosedbelowdidnotcompromisetheexternalauditor’sindependenceforthefollowingreasons:
• allnon-auditservicesarereviewedandapprovedbytheboardpriortocommencementtoensuretheydonotadverselyaffecttheintegrityandobjectivityoftheauditor;and
• thenatureoftheservicesprovideddonotcompromisethegeneralprinciplesrelatingtoauditorindependenceassetoutintheAPES110CodeofEthicsforProfessionalAccountants.
Thefollowingfeesfornon-auditserviceswerepaid/payabletorelatedentitiesoftheexternalauditorsBDOAuditPtyLtdandSintonSpenceCharteredAccountants(PNG)duringtheyearended30June2012:
BDOAuditPtyLtd $10,750 SintonSpenceCharteredAccountantsPNG $6,885
Theauditor’sindependencedeclarationfortheyearended30June2012isonthefollowingpageandthedeclarationformspartofthisdirectors’report.
SignedinaccordancewitharesolutionoftheBoardofDirectors.
Paul CmrlecManaging DirectorDated24September2012
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DECLARATION OF INDEPENDENCE BY A J WHYTE TO THE DIRECTORS OF PACIFIC NIUGINI LIMITED
AsleadauditorofPacificNiuginiLimitedfortheyearended30June2012,Ideclarethat,tothebestofmyknowledgeandbelief,therehavebeennocontraventionsof:
• theauditorindependencerequirementsoftheCorporationsAct2001inrelationtotheaudit;and• anyapplicablecodeofprofessionalconductinrelationtotheaudit.
ThisdeclarationisinrespectofPacificNiuginiLimitedandtheentitiesitcontrolledduringtheperiod.
AJWhyteDirector
BDOAuditPtyLtd
Brisbane:24September2012
Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au
Level 18, 300 Queen St Brisbane QLD 4000, GPO Box 457 Brisbane QLD 4001 Australia
BDO Audit (QLD) Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (QLD) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
57
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001. We confirm that the independence declaration required by the Corporations
Act 2001, which has been given to the directors of Pacific Niugini Limited, would be in the same
terms if given to the directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of Pacific Niugini Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June
2011 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b) the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 1 to of the directors’ report for
the year ended 30 June 2011. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Pacific Niugini Limited for the year ended 30 June 2011
complies with section 300A of the Corporations Act 2001.
BDO Audit (QLD) Pty Ltd
A J Whyte
Director
Brisbane: 26 September 2011
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AUDITOR’S INDEPENDENCE DECLARATION
BDOAuditPtyLtdABN33134022870isamemberofanationalassociationofindependententitieswhichareallmembersofBDO(Australia)LtdABN77050110275,anAustraliancompanylimitedbyguarantee.BDOAuditPtyLtdandBDO(Australia)LtdaremembersofBDOInternationalLtd,aUKcompanylimitedbyguarantee,andformpartoftheinternationalBDOnetworkofindependentmemberfirms.LiabilitylimitedbyaschemeapprovedunderProfessional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012
Note Group
2012
$
2011
$
Continuing Operations
Revenue 4(a) 778,703 373,296
Otherincome 4(b) 853,053 988,061
Depreciation (230,377) (85,253)
DirectorandEmployeebenefitsexpense (993,620) (1,047,639)
Otherexpenses 5 (2,734,745) (6,910,069)
Profit (Loss) from continuing operations before income tax (2,326,986) (6,681,604)
Incometaxexpense 6 - -Profit/(Loss) from continuing operations for the year after income tax (2,326,986) (6,681,604)
Profit/(Loss) from discontinued operations before income tax 23 - 9,310,368
Income tax expense 6(a) - (886,569)
Profit/(Loss) from discontinued operations after income tax - 8,423,798
Profit/(Loss) for the year (2,326,986) 1,742,194
Other comprehensive income
Exchangedifferencesonthetranslationofforeignoperations 81,466 (18,924)
Other comprehensive income for the year net of tax 81,466 (18,924)
Total comprehensive income for the year (2,245,520) 1,723,270
Earnings per Share from continuing operations
Basicprofit/(loss)pershare(centspershare) 9 (0.94) (2.90)
Dilutedprofit/(loss)pershare(centspershare) 9 (0.94) (2.90)
Earnings per share from Discontinued Operations
Basicprofit/(loss)pershare(centspershare) 9 - 3.66
Dilutedprofit/(loss)pershare(centspershare) 9 - 3.66
Earnings per Share for profit/(loss) for the year
Basicprofit/(loss)pershare(centspershare) 9 (0.94) 0.76
Dilutedprofit/(loss)pershare(centspershare) 9 (0.94) 0.76
Theaccompanyingnotesformpartofthesefinancialstatements.
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CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 30 JUNE 2012
Note Group
2012 $
2011 $
ASSETS
CURRENT ASSETS
Cashandcashequivalents 10 10,717,727 17,185,823
Tradeandotherreceivables 11 520,908 1,038,869
Financialassetsatfairvaluethroughprofitorloss 12 110,091 458,369
TOTAL CURRENT ASSETS 11,348,726 18,683,061
NON-CURRENT ASSETS
Property,plantandequipment 14 3,870,896 1,159,510
Explorationandevaluationassets 15 12,357,921 6,098,966
TOTAL NON-CURRENT ASSETS 16,228,817 7,258,476
TOTAL ASSETS 27,577,543 25,941,537
CURRENT LIABILITIES
Tradeandotherpayables 16 802,243 585,880
Provisions 17 89,412 51,095
TOTAL CURRENT LIABILITIES 891,655 636,975
NON-CURRENT LIABILITIES
Deferredtaxliability 18 1,240,810 1,240,810
TOTAL NON-CURRENT LIABILITIES 1,240,810 1,240,810
TOTAL LIABILITIES 2,132,465 1,877,785
NET ASSETS 25,445,078 24,063,752
EQUITY
Issuedcapital 19 132,430,888 129,083,287
Reserves 20 3,474,395 3,113,684
Accumulatedlosses (110,460,205) (108,133,219)
TOTAL EQUITY 25,445,078 24,063,752
Theaccompanyingnotesformpartofthesefinancialstatements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 JUNE 2012
Issued Capital
Accumulated Losses
Option Reserve
Foreign Currency
Translation Reserve
Share Based Payment Reserve
Total
$ $ $ $ $ $
Balance at 1 July 2010 121,979,494 (109,875,413) 1,562,495 27,990 782,897 14,477,463
Profit(Loss)fortheyear - 1,742,194 - - - 1,742,194
Exchangedifferencesontranslationofforeignoperations -
- - (18,924) - (18,924)
Total comprehensive income for the year - 1,742,194 - (18,924) - 1,723,270
Transactions with owners in their capacity as owners:
Sharesissuedduringtheyear 7,616,423 - - - - 7,616,423
Optionsissuedasconsiderationforcapitalraising (241,130) - 241,130 - -
-
Othershareissuecosts (271,500) - - - - (271,500)
Sharebasedpayments - - - - 518,096 518,096
Balance at 30 June 2011 129,083,287 (108,133,219) 1,803,625 9,066 1,300,993 24,063,752
Balance at 1 July 2011 129,083,287 (108,133,219) 1,803,625 9,066 1,300,993 24,063,752
Profit(Loss)fortheyear - (2,326,986) - - - (2,326,986)
Exchangedifferencesontranslationofforeignoperations - - - 81,466 - 81,466
Total comprehensive income for the year
- (2,326,986) - 81,466 - (2,245,520)
Transactions with owners in their capacity as owners:
Sharesissuedduringtheyear 3,347,601 - - - - 3,347,601
Sharebasedpayments - - - - 279,245 279,245
Balance at 30 June 2012 132,430,888 (110,460,205) 1,803,625 90,532 1,580,238 25,445,078
Theaccompanyingnotesformpartofthesefinancialstatements
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CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 2012
Note Group
2012 $
2011 $
CASH FLOWS FROM OPERATING ACTIVITIES
Receiptsinthecourseofoperations 110,455 48,867
Paymentstosuppliersandemployees (2,151,620) (1,476,890)
Interestreceived 590,500 294,533
Incometaxpaid - (886,569)
Netcashprovidedby/(usedin)operatingactivities 24 (1,450,665) (2,020,059)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchaseofproperty,plantandequipment (2,724,401) (938,887)
Paymentsforexplorationandevaluationassets (6,493,682) (3,018,316)
Proceedsfromsaleofheldforsaleassets 23 - 13,243,674
Baddebtrecovery - 400,000
Bonmercioptionfees - 335,785
Loanstootherparties - 177,000
Netcash(usedin)/providedbyinvestingactivities (9,218,083) 10,199,256
CASH FLOWS FROM FINANCING ACTIVITIES
Proceedsfromissueofshares 19 3,347,599 7,616,423
Costofshareissue - (271,500)
Netcashprovidedbyfinancingactivities 3,347,599 7,344,923
Net(decrease)/increaseincashandcashequivalentsheld (7,321,149) 15,524,120
Effectofexchangeratechangesoncashandcashequivalents 853,053 (1,261,987)
Cashandcashequivalentsatbeginningoffinancialyear 17,185,823 2,923,690
Cashandcashequivalentsatendoffinancialyear 10 10,717,727 17,185,823
Theaccompanyingnotesformpartofthesefinancialstatements.
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Note 1: Reporting Entity
PacificNiuginiLimited(the“Company”)isacompanydomiciledinAustralia.TheconsolidatedfinancialstatementsoftheCompanyasatandfortheyearended30June2012comprisetheCompanyanditssubsidiaries(togetherreferredtoas“theGroup”).SeparatefinancialstatementsforPacificNiuginiLimitedasanindividualentityarenolongerpresentedasaresultofachangeintheCorporationsAct2001.FinancialinformationforPacificNiuginiLtdasanindividualentityisincludedinnote27.
Note 2: Basis of Preparation(a) Statement of compliance
The financial statements are general purpose financial statements which have been prepared in accordance with AustralianAccounting Standards (AASB’s) (including Australian Interpretations) adopted by the Australian Accounting Standards Board(AASB)andtheCorporationsAct2001.AustralianAccountingStandardsincludeAustralianequivalentstoInternationalFinancialReportingStandards(AIFRS).CompliancewithAIFRSensuresthefinancialreportalsocomplieswithIFRSsandinterpretationsadoptedbytheInternationalAccountingStandardsBoard.Thegroupisafor-profitentityforfinancialreportingpurposesunderAustralianAccountingStandards.
ThefinancialstatementswereapprovedbytheBoardofDirectorson24September2012.
(b) Basis of measurement
Theconsolidatedfinancialstatementshavebeenpreparedonthehistoricalcostbasisexceptforheld-for-tradingfinancialassetsatfairvaluethroughprofitorlosswhicharemeasuredatfairvalue.
(c) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars which is the Company’s functional currency. ThefunctionalcurrencyoftheGroup’sPapuaNewGuineasubsidiaryisthePNGKina.
(d) Use of estimates and judgements
Thepreparationoffinancialstatementsrequiresmanagement tomake judgements,estimatesandassumptionsthataffect theapplicationofaccountingpoliciesandthereportedamountsofassets,liabilities,incomeandexpenses.Actualresultsmaydifferfromtheseestimates.Estimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoaccountingestimatesarerecognisedintheperiodinwhichtheestimateisrevisedandinanyfutureperiodsaffected.
Inparticular,informationaboutsignificantareasofestimationuncertaintyandcriticaljudgementsinapplyingaccountingpoliciesthathavethemostsignificanteffectontheamountsrecognisedinthefinancialstatementsaredescribedinthefollowingnotes:
Note15–recoverableamountofexplorationassetsNote25–sharebasedpayments
Note 3: Significant Accounting Policies
Thefinancial reportcomprisesfinancialstatements for theconsolidatedentityconsistingof theCompanyand itssubsidiaries.Theaccountingpoliciessetoutbelowhavebeenappliedconsistentlytoalltheyearspresentedintheseconsolidatedfinancialstatements,unlessotherwisestatedandhavebeenappliedconsistentlyacrosstheGroup,exceptassetoutbelow:
(a) Principles of Consolidation
(i) Subsidiaries
TheconsolidatedfinancialstatementsincorporatetheassetsandliabilitiesofallsubsidiariesoftheCompanyasat30June2012andtheresultsofallsubsidiariesfortheyearthenended.TheCompanyanditssubsidiariestogetherarereferredtointhisfinancialreportasthegrouportheconsolidatedentity.
Subsidiariesareentitiescontrolledby theCompany.Controlexistswhen theCompanyhas thepower,directlyor indirectly, togovernthefinancialandoperatingpoliciesofanentitysoastoobtainbenefitsfromitsactivities.Inassessingcontrol,potentialvoting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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includedintheconsolidatedfinancialstatementsfromthedatethatcontrolcommencesuntilthedatethatcontrolceases.Theyarede-consolidatedfromthedatethatcontrolceases.
(ii) Transactions eliminated on consolidation
Intra-groupbalances,andanyunrealisedincomeandexpensesarisingfromintra-grouptransactions,areeliminatedinpreparingtheconsolidatedfinancialstatements.Accountingpoliciesofsubsidiariesareconsistentwiththeparent.
(iii) Investment in Associate
AssociatesarethoseentitiesinwhichtheGrouphassignificantinfluence,butnotcontrol,overthefinancialandoperatingpolicies.Associatesareaccountedforusingtheequitymethod(equityaccountinginvestees).TheconsolidatedfinancialstatementsincludetheGroup’sshareoftheresultsofequityaccountedinvestees,afteradjustmentstoaligntheaccountingpolicieswiththoseoftheGroup,fromthedatethatsignificantinfluencecommencesuntilthedatethatsignificantinfluenceceases.WhentheGroup’sshareoflossesexceedsitsinterestinanequityaccountedinvestee,thecarryingamountofthatinvestment(includinganylongterminvestments)isreducedtonilandtherecognitionoffurtherlossesisdiscontinuedexcepttotheextentthattheGrouphasanobligationorhasmadepaymentsonbehalfoftheinvestee.
(b) Business combinationsTheacquisitionmethodofaccountingisusedtoaccountforallbusinesscombinations.Considerationismeasuredatthefairvalueoftheassetstransferred,liabilitiesincurredandequityinterestsissuedbythegrouponacquisitiondate.Considerationalsoincludestheacquisitiondatefairvaluesofanycontingentconsiderationarrangements,anypre-existingequityinterestsintheacquireeandshare-basedpaymentawardsoftheacquireethatarerequiredtobereplacedinabusinesscombination.Theacquisitiondateisthedateonwhichthegroupobtainscontroloftheacquiree.Whereequityinstrumentsareissuedaspartoftheconsideration,thevalueoftheequityinstrumentsistheirpublishedmarketpriceattheacquisitiondateunless,inrarecircumstancesitcanbedemonstratedthatthepublishedpriceatacquisitiondateisnotfairvalueandthatotherevidenceandvaluationmethodsprovideamorereliablemeasureoffairvalue.
Identifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumedinbusinesscombinationsare,withlimitedexceptions,initiallymeasuredattheirfairvaluesatacquisitiondate.Goodwillrepresentstheexcessoftheconsiderationtransferredandtheamountofthenon-controllinginterestintheacquireeoverfairvalueoftheidentifiablenetassetsacquired.Iftheconsiderationandnon-controllinginterestoftheacquireeislessthanthefairvalueofthenetidentifiableassetsacquired,thedifferenceisrecognisedinprofitorlossasabargainpurchaseprice,butonlyafterareassessmentoftheidentificationandmeasurementofthenetassetsacquired.
Foreachbusinesscombination,thegroupmeasuresnon-controllinginterestsateitherfairvalueoratthenon-controllinginterest’sproportionateshareoftheacquiree’sidentifiablenetassets.
Acquisition-relatedcostsareexpensedwhenincurred.
Wherethegroupobtainscontrolofasubsidiarythatwaspreviouslyaccountedforasanequityaccountedinvestmentinassociateorjointlycontrolledentity,thegroupremeasuresitspreviouslyheldequityinterestintheacquireeatitsacquisitiondatefairvalueandtheresultinggainorlossisrecognisedinprofitorloss.Wherethegroupobtainscontrolofasubsidiarythatwaspreviouslyaccounted for as an available-for-sale investment, any balance on the available-for-sale reserve related to that investment isrecognisedinprofitorlossasifthegrouphaddisposeddirectlyofthepreviouslyheldinterest.
Wheresettlementofanypartofthecashconsiderationisdeferred,theamountspayableinfuturearediscountedtopresentvalueatthedateofexchangeusingtheentity’sincrementalborrowingrateasthediscountrate.
Contingentconsideration isclassifiedasequityor financial liabilities.Amountsclassifiedasfinancial liabilitiesaresubsequentlyremeasuredtofairvalueattheendofeachreportingperiod,withchangesinfairvaluerecognisedinprofitorloss.
Assetsandliabilitiesfrombusinesscombinationsinvolvingentitiesorbusinessesundercommoncontrolareaccountedforatthecarryingamountsrecognisedinthegroup’scontrollingshareholder’sconsolidatedfinancialstatements.
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(c) Financial Assets
Recognition
Thegrouprecognisesreceivablesonthedatethattheyareoriginated.Allotherfinancialassetsarerecognisedinitiallyonthetradedateatwhichthegroupbecomesapartytothecontractualprovisionsoftheinstrument.
Thegroupderecognisesafinancialassetwhenthecontractualcashflowsfromtheassetexpires,orittransferstherightstoreceivethecontractualcashflowssuchthatsubstantiallyalltherisksandrewardsofownershipofthefinancialassetaretransferred.
Thegrouphasthefollowingfinancialassets:
Financial assets at fair value through profit or loss
Financialassetsatfairvaluethroughprofitorlossarethosethatareintendedtobesoldinthenearterm.
Financialassetsatfairvaluethroughprofitorlossaremeasuredinitiallyatfairvalue.Theyaremeasuredsubsequentlyatfairvaluewithmovementsinfairvaluebeingrecognisedinprofitorloss.
Loans and receivables
Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquoted inanactivemarketandaresubsequentlymeasuredatamortisedcost.Gainsorlossesarerecognisedinprofitorlossthroughtheamortisationprocessandwhenthefinancialassetisderecognised.
(d) Foreign Currency Transactions and Balances
(i) Functional and presentation currencyItemsincludedinthefinancialstatementsofeachofthegroup’sentitiesaremeasuredusingthecurrencyoftheprimaryeconomicenvironment in which the entity operates (“the functional currency”). The consolidated financial statements are presented inAustraliandollars,whichisPacificNiuginiLtd’sfunctionalandpresentationcurrency.
(ii) Transactions and balancesTransactionsinforeigncurrencieshavebeenconvertedatratesofexchangerulingonthedateofthosetransactions.Atbalancedate,amountsreceivableandpayableinforeigncurrenciesaretranslatedatratesofexchangecurrentatthatdate.Realisedandunrealisedgainsandlossesarebroughttoaccountindeterminingtheprofitorlossforthefinancialyear.
(iii) Group companiesTheresultsandfinancialpositionofallthegroupentities(noneofwhichhasthecurrencyofahyperinflationaryeconomy)thathaveafunctionalcurrencydifferentfromthepresentationcurrencyaretranslatedintothepresentationcurrencyasfollows:• Assetsandliabilitiesforeachstatementoffinancialpositionpresentedaretranslatedattheclosingrateatthedateofthat
statementoffinancialposition
• Incomeandexpensesforeachstatementofcomprehensiveincomepresentedaretranslatedataverageexchangerates(unlessthisisnotareasonableapproximationofthecumulativeeffectoftheratesprevailingonthetransactiondates,inwhichcaseincomeandexpensesaretranslatedatthedatesofthetransactions),and
• Allresultingexchangedifferencesarerecognisedinothercomprehensiveincome.
Onconsolidation,exchangedifferencesarisingfromthetranslationofanynetinvestmentinforeignentities,andofborrowingsandotherfinancialinstrumentsdesignatedashedgesofsuchinvestments,arerecognisedinothercomprehensiveincome.Whenaforeignoperationissoldoranyborrowingsformingpartofthenetinvestmentarerepaid,aproportionateshareofsuchexchangedifferencesisreclassifiedtoprofitorloss,aspartofthegainorlossonsalewhereapplicable.
Goodwillandfairvalueadjustmentsarisingontheacquisitionofaforeignentityaretreatedasassetsandliabilitiesoftheforeignentitiesandtranslatedattheclosingrate.
(e) Revenue Recognition
Revenue from thesaleofgoodsanddisposalofotherassets is recognisedwhen theGrouphas transferred to thebuyer thesignificantrisksandrewardsofownership.Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable.
Interestincomeisrecognisedonatimeproportionbasisusingtheeffectiveinterestmethod.
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(f) Income Tax
Incometaxexpensecomprisescurrentanddeferredtax.Currenttaxfortheperiodistheexpectedtaxpayableonthecurrentperiod’staxableincomebasedonthenationalincometaxrateforeachjurisdiction.Deferredtaxisrecognisedusingtheliabilitymethod,providingfortemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesforfinancialreportingpurposesandtheamountsusedfortaxationpurposesandunusedtaxlosses.
Deferredtaxisrecognisedfortemporarydifferencesatthetaxratesexpectedtoapplywhentheassetsarerecoveredorliabilitiesaresettled,basedonthosetaxrates,whichareenactedorsubstantivelyenactedforeachjurisdiction.Therelevanttaxratesareappliedtothecumulativeamountsofdeductibleandtaxabletemporarydifferencestomeasuredeferredtax.Anexceptionismadeforcertaintemporarydifferencesarisingfromtheinitialrecognitionofanassetoraliability.Nodeferredtaxisrecognisedinrelationtothesetemporarydifferencesiftheyaroseinatransaction,otherthanabusinesscombination,thatatthetimeofthetransactiondidnotaffecteitheraccountingprofitortaxableprofitorloss.
Deferredtaxassetsarerecognisedfordeductibletemporarydifferencesandunusedtax lossesonly if it isprobablethatfuturetaxableamountswillbeavailabletoutilisethosetemporarydifferencesandlosses.
Deferredtaxassetsarereviewedateachreportingdateandarereducedtotheextentthatitisnolongerprobablethattherelatedtaxbenefitwillberealised.
Deferredtaxisnotrecognisedfortemporarydifferencesbetweenthecarryingamountandtaxbasesofinvestmentsincontrolledentitieswheretheparententityisabletocontrolthetimingofthereversalofthetemporarydifferencesanditisprobablethatthedifferenceswillnotreverseintheforeseeablefuture.
Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrenttaxassetsandliabilitiesandwhenthedeferredtaxbalancesrelatetothesametaxationauthority.Currenttaxassetsandliabilitiesareoffsetwheretheentityhasa legallyenforceablerighttooffsetandintendseithertosettleonanetbasis,ortorealisetheassetandsettlethe liabilitysimultaneously.
Currentanddeferredtaxbalancesattributabletoamountsrecognisedinothercomprehensiveincomeanddirectlyinequityarealsorecognisedinothercomprehensiveincomeanddirectlyinequityrespectively.
(g) Impairment of Assets
Assetsare reviewed for impairmentwhenevereventsorchanges incircumstances indicate that thecarryingamountmaynotberecoverable.Animpairmentlossisrecognisedfortheamountbywhichtheasset’scarryingamountexceedsitsrecoverableamount.Therecoverableamount is thehigherofanasset’s fairvalue lesscosts tosellandvalue inuse.For thepurposesofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashinflowswhicharelargelyindependentofthecashinflowsfromotherassetsorgroupsofassets(cash-generatingunits).Assets,otherthangoodwill,thatsufferedaimpairmentarereviewedforpossiblereversaloftheimpairmentateachreportingdate.
(h) Cash and Cash Equivalents
For statementof cash flowpurposes, cashandcashequivalents includescashonhand,deposits heldat callwith financialinstitutions,othershort-term,highlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue,andbankoverdrafts.
(i) Fair Value Estimation
Thefairvalueoffinancialassetsandfinancialliabilitiesmustbeestimatedforrecognitionandmeasurementorfordisclosurepurposes.Fairvalueshavebeendeterminedformeasurementand/ordisclosurepurposesbasedonthefollowingmethods.
Financial instruments traded in active marketsThefairvalueoffinancialinstrumentstradedinactivemarkets(suchaspubliclytradedderivatives,andtradingandavailable-for-salesecurities)isbasedonquotedmarketpricesatthestatementoffinancialpositiondate.ThequotedmarketpriceusedforfinancialassetsheldbytheGroupisthecurrentbidprice;theappropriatequotedmarketpriceforfinancialliabilitiesisthecurrentaskprice.
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Financial instruments not traded in active marketsThefairvalueoffinancialinstrumentsthatarenottradedinanactivemarketisdeterminedusingvaluationtechniques.TheGroupusesavarietyofmethodsandmakesassumptionsthatarebasedonmarketconditionsexistingateachbalancedate.Quotedmarketpricesordealerquotesforsimilarinstrumentsareusedforlong-termdebtinstrumentsheld.Othertechniques,suchasestimateddiscountedcashflows,areusedtodeterminefairvaluefortheremainingfinancialinstruments.
Share-based payment transactionsThefairvalueofemployeeshareoptionsismeasuredusinganoptionspricingmodel.Measurementinputsincludesharepriceonameasurementdate,exercisepriceoftheinstrument,expectedvolatility(basedonweightedaveragehistoricvolatilityadjustedforchangesexpectedduetopubliclyavailableinformation),weightedaverageexpectedlifeoftheinstruments(basedonhistoricalexperienceandgeneraloptionholderbehaviour),expecteddividends,andtherisk-freeinterestrate(basedongovernmentbonds).Serviceandnon-marketperformanceconditionsattachedtothetransactionsarenottakenintoaccountindeterminingfairvalue.
(j) Property, Plant and Equipment
Recognition and measurementEachclassofproperty,plantandequipmentisstatedathistoricalcostless,whereapplicable,anyaccumulateddepreciationandimpairmentlosses.Historicalcostincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheitems.
Thecostofself-constructedassetsincludesthecostofmaterialsanddirectlabour,anyothercostsdirectlyattributabletobringingassettoaworkingconditionforitsintendeduse,andthecostsofdismantlingandremovingtheitemsandrestoringthesiteonwhichtheyarelocated.Purchasedsoftwarethatisintegraltothefunctionalityoftherelatedequipmentiscapitalisedaspartoftheequipment.
Whenpartsofanitemofproperty,plantandequipmenthavedifferentusefullives,theyareaccountedforasseparateitems(majorcomponents)ofproperty,plantandequipment.
Subsequent costsSubsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.Allotherrepairsandmaintenancearechargedtothestatementofcomprehensiveincomeduringthefinancialperiodinwhichtheyareincurred.
DepreciationDepreciationiscalculatedusingthestraightlinemethodtoallocatetheassetscost,netoftheirresidualvalues,overtheirestimatedusefullives,asfollows:
Plantandequipment: 3-10yearsMotorvehicles: 5yearsLeaseholdimprovements: 3-5years
Theassets’residualvaluesandusefullivesarereviewed,andadjustedifappropriate,ateachstatementoffinancialpositiondate.
Gainsandlossesondisposalsaredeterminedbycomparingproceedswithcarryingamount.Theseareincludedinthestatementofcomprehensiveincome.
(k) Mineral Exploration and Evaluation Expenditure
Explorationandevaluationexpenditure incurred isaccumulated inrespectofeach identifiableareaof interest.Thesecostsareonlycarriedforwardtotheextentthattheyareexpectedtoberecoupedthroughthesuccessfuldevelopmentorsaleofthearea,orwhereactivitiesintheareahavenotyetreachedastagethatpermitsreasonableassessmentoftheexistenceorotherwiseofeconomicallyrecoverablereserves.
Accumulatedcostsinrelationtoanabandonedareaarewrittenoffinfullagainstprofitintheyearinwhichthedecisiontoabandontheareaismade.
(l) Issued Capital
Ordinarysharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissueofnewsharesoroptionsareshowninequityasadeduction,netoftax,fromtheproceeds.
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(m) Earnings Per Share
(i) Basic earnings per share
Basicearningspershareiscalculatedbydividingtheprofitorlossattributabletoequityholdersofthecompany,excludinganycostsofservicingequityotherthanordinaryshares,bytheweightedaveragenumberofordinarysharesoutstandingduringthefinancialyear,adjustedforbonuselementsinordinarysharesissuedduringthefinancialyear.
(ii) Diluted earnings per share
Dilutedearningspershareadjuststhefiguresusedinthedeterminationofbasicearningspersharetotakeintoaccounttheafterincometaxeffectofinterestandotherfinancingcostsassociatedwithdilutivepotentialordinarysharesandtheweightedaveragenumberofsharesassumedtohavebeenissuedfornoconsiderationinrelationtodilutivepotentialordinaryshares.
(n) Goods and Services Tax (“GST”)
Revenues, expensesandassetsare recognisednetof theamountofGST, exceptwhere theamountofGST incurred is notrecoverablefromtheAustralianTaxOffice(“ATO”).InthesecircumstancestheGSTisrecognisedaspartofthecostofacquisitionoftheassetoraspartofanitemoftheexpense.ReceivablesandpayablesinthestatementoffinancialpositionareshowninclusiveofGST.ThenetamountofGSTrecoverablefrom,orpayabletotheATOisincludedasacurrentassetorliabilityinthestatementoffinancialposition.
Cashflowsarepresentedinthestatementofcashflowsonagrossbasis,exceptfortheGSTcomponentofinvestingandfinancingactivities,whicharedisclosedasoperatingcashflows.
(o) Non-current assets held for sale and discontinued operations
Non-currentassets(ordisposalgroups)thatareexpectedtoberecoveredprimarilythroughsaleratherthanthroughcontinuinguseareclassifiedasheldforsale.Immediatelybeforeclassificationasheldforsale,theassets(orcomponentsofadisposalgroup)areremeasuredinaccordancewiththeGroup’saccountingpolicies.Thereaftergenerallytheassets(ordisposalgroup)aremeasuredattheloweroftheircarryingamountandfairvaluelesscosttosell.Anyimpairmentlossonadisposalgroupfirstisallocatedtogoodwill,andthentoremainingassetsand liabilitiesonproratabasis,exceptthatno loss isallocatedto inventories,financialassets,deferredtaxassets,employeebenefitsassets,investmentpropertyandbiologicalassets,whichcontinuetobemeasuredinaccordancewiththeGroup’saccountingpolicies.Impairmentlossesoninitialclassificationasheldforsaleandsubsequentgainsorlossesonre-measurementarerecognisedinprofitorloss.Non-currentassets(ordisposalgroups)arepresentedseparatelyfromotherassetsorliabilitiesinthestatementoffinancialposition.
Adiscontinuedoperationisacomponentoftheentitythathasbeendisposedoforisclassifiedasheldforsaleandthatrepresentsaseparatemajorlineofbusinessorgeographicalareaofoperations,ispartofasingleco-ordinatedplantodisposeofsuchalineofbusinessorareaofoperations,orisasubsidiaryacquiredexclusivelywithaviewtoresale.Theresultsofdiscontinuedoperationsarepresentedseparatelyinthestatementofcomprehensiveincome.
(p) Employee benefits
(i) Defined contribution superannuation fundsObligationsforcontributionstodefinedcontributionsuperannuationfundsarerecognisedasanexpenseinprofitorlosswhentheyaredue.
(ii) Short-term benefitsLiabilities for employee benefits for wages, salaries, annual leave and sick leave represent present obligations resulting fromemployees’servicesprovidedtoreportingdateandarecalculatedatundiscountedamountsbasedonremunerationwageandsalaryratesthattheGroupexpectstopaywhentheliabilitiesaresettled,includingrelatedon-costs,suchasworkerscompensationinsuranceandpayrolltax.
(iii) Share-based payment transactionsThegrantdatefairvalueofoptionsgrantedtoemployeesisrecognisedasanemployeeexpense,withacorrespondingincreaseinequity,overtheperiodinwhichtheemployeesbecomeunconditionallyentitledtotheoptions.Theamountrecognisedisadjustedtoreflecttheactualnumberofshareoptionsthatvest,exceptforthosethatfailtovestduetomarketconditionsnotbeingmet.
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(q) New Accounting Standards and Interpretations
TheGrouphasadoptedthefollowingnewandamendedAustralianAccountingStandardsandAASBInterpretationsasof1July2011.Thesehavenothadamaterialimpactonthefinancialreport.:
Reference Title Application date of standard
Application date for the Company
AASB124(R) RelatedPartyDisclosures(December2009) 1January2011 1July2011
AASB2009-12 Amendments toAustralianAccountingStandards [AASB5,8,108,110,112,119,133,137,139,1023&1031andInterpretations2,4,16,1039&1052]
1January2011 1July2011
AASB2009-14 AmendmentstoAustralianInterpretation–PrepaymentsofaMinimumFundingRequirement
1January2011 1July2011
AASB1054 AustralianAdditionalDisclosures 1July2011 1July2011
AASB2010-4 Further Amendments to Australian Accounting Standards arisingfrom the Annual Improvements Project [AASB 1, 7, 101, 134 andInterpretation13]
1January2011 1July2011
AASB2010-5 AmendmentstoAustralianAccountingStandards[AASB1,3,4,5,101,107,112,118,119,121,132,133,134,137,139,140,1023&1038andInterpretations112,115,127,132&1042]
1January2011 1July2011
AASB2010-6 Amendments to Australian Accounting Standards – Disclosures onTransfersofFinancialAssets[AASB1&AASB7]
1July2011 1July2011
AASB2011-1 Amendments to Australian Accounting Standards arising from theTrans-TasmanConvergenceproject [AASB1,AASB5,AASB101,AASB107,AASB108,AASB121,AASB128,AASB132,AASB134,Interpretation2,Interpretation112,Interpretation113]
1July2011 1July2011
AustralianAccountingStandardsandInterpretationsthathavebeenrecentlyissuedoramendedbutarenotyeteffectivehavenotbeenadoptedbytheGroupfortheannualreportingperiodending30June2012.
TheCompanyanticipatesthatalloftherelevantpronouncementswillbeadoptedintheCompany’saccountingpoliciesforthefirstperiodbeginningaftertheeffectivedateofthepronouncement.Informationofnewstandards,amendmentsandinterpretationsthatareexpectedtoberelevanttotheGroup’sfinancialstatementsisprovidedbelow:
Reference Title Application date of standard
Application date for the Company
AASB9 FinancialInstruments 1January2013 1July2013
AASB10 ConsolidatedFinancialStatements 1January2013 1July2013
AASB11 JointArrangements 1January2013 1July2013
AASB12 DisclosureofInterestsinOtherEntities 1January2013 1July2013
AASB13 FairValueMeasurements 1January2013 1July2013
AASB2011-9 Amendments to Australian Accounting Standards Presentation ofItemsofOtherComprehensiveIncome(AASB101Amendments)
1July2012 1July2012
AASB2011-4 Amendments to Australian Accounting Standards to RemoveIndividual Key Management Personnel Disclosure Requirements(AASB124Amendments)
1July2013 1July2013
Interpretation20
StrippingCostsintheProductionPhaseofaSurfaceMine 1January2013 1July2013
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Note 4: Revenue and Income Note Group
2012$
2011$
(a) Revenue from continuing operations
Interest 651,267 345,209
Otherrevenue 127,436 28,087
778,703 373,296
(b) Other income from continuing operations
Baddebtrecoveries - 400,000
Profitondisposal-mineraltenement - 588,061
Foreignexchangegain 853,053 -
853,053 988,061
Other income from discontinued operations
Optionfeeincome - 335,785
Gainonsaleofinvestment 23 - 8,974,583
- 9,310,368
Note 5: Other Expenses
Lossbeforeincometaxincludesthefollowingspecificexpenses:
Other Expenses (net of expenses from discontinued operations)
Rentalexpenseonoperatingleases 142,935 87,528
Professionalandconsultantsfees 621,677 346,600
Allowancefordoubtfuldebts 11 823,000 1,000,000
Fairvaluechangesinfinancialassetsatfairvaluethroughprofitorloss
348,278
1,322,862
Explorationandevaluationassetsimpairment - 2,314,709
Foreignexchangeloss - 1,261,987
Lossonsaleofnon-currentassets 837 -
Insurances 115,979 58,699
Travel 201,067 118,525
Legal 94,379 8,692
Otheradministrationexpenses 386,593 390,467
2,734,745 6,910,069
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Note 6: Income Tax Expense
Group
2012$
2011$
(a) IncomeTaxExpense
Currenttax (693,936) (749,213)
Deferredtax 79,613 (999,105)
Withholdingtaxpaid - 886,569
Taxlossnotrecognised 918,958 1,748,318
(Under)/overprovisionforprioryears (304,635) -
- 886,569
Incometaxexpenseattributableto:
Continuingoperations - -
Discontinuedoperations - 886,569
- 886,569
(b) Theprimafacietaxonprofit/(loss)beforeincometaxisreconciledtotheincometaxasfollows: (2,326,986) 2,628,763
Primefacietaxpayableonprofit/(loss)beforeincometaxat30%(2011:30%) (698,096) 788,629
Add:
Taxeffectof:
-sharebasedpayment 83,773 155,429
Less:
Taxeffectof:
-non-taxableforeignincome - (2,692,375)
Withholdingtaxpaid - 886,569
Taxlossnotrecognised 918,958 1,748,318
(Under)/overprovisionfromprioryears (304,635) -
Incometaxexpense - 886,569
DeferredTaxAsset
Unusedtaxlossesandothertemporarydifferencesnotbroughttoaccount:
-temporarydifferences 1,150,787 1,225,469
-taxlosses:
-Domestic/foreignoperatinglosses 5,583,047 4,664,089
-capitallosses 181,883 181,883
6,915,717 6,071,441
DeferredTaxLiability
Thebalancecomprisestemporarydifferencesattributableto:
Explorationandevaluationassets 1,240,810 1,240,810
Totaldeferredtaxliabilities 1,240,810 1,240,810
Movements
Openingbalanceat1July 1,240,810 1,240,810
Movements - -
Closingbalanceat30June 1,240,810 1,240,810
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Note 7: Key Management Personnel
Group
2012$
2011$
Short-termemployeebenefits 755,575 387,087
Post-employmentbenefits 21,400 14,000
Share-basedpayments 171,334 306,234
948,309 707,321
(i) Option and performance right holdingsThenumbersofoptionsandperformance rightsoverordinaryshares in thecompanyheldduring thefinancialyearbydirectorsandotherkeymanagementpersonnel,includingtheirpersonallyrelatedparties,aresetoutbelow.
2012 Balance at start of year or on
appointment
Granted during the year as
Compensation
Expired during the year
Exercised during the year
Balance at the end of the year
Vested and exercisable at the end of the
year
Directors
PeterCook 5,000,000 - - - 5,000,000 5,000,000
DavidOsikore 4,500,000 - - (3,000,000) 1,500,000 1,500,000
SamAkoitai - - - - - -
PaulCmrlec 5,200,000 - - - 5,200,000* 3,200,000
DennisLovell 1,700,100 - - - 1,700,100 1,700,100
16,400,100 - - (3,000,000) 13,400,100 11,400,100* Comprises 3,200,000 options and 2,000,000 performance rights-see Remuneration Report section of Directors Report fordetails.Theperformancerightshavenotvestedattheendoftheyear.
2011 Balance at start of year or on
appointment
Granted during the year as
Compensation
Expired during the year
Balance at the end of the year
Vested and exercisable at the end of the
year
Directors
PeterCook 5,000,000 - - 5,000,000 5,000,000
DavidOsikore 4,500,000 - - 4,500,000 4,500,000
SamAkoitaiappointed23/5/11 - - - - -
PaulCmrlec 1,200,000 4,000,000** - 5,200,000 3,200,000
AndrewWallerresigned1/4/2011 - - - - -
DennisLovell 1,700,100 - - 1,700,100 1,700,100
12,400,100 4,000,000 - 16,400,100 14,400,100** Comprises 2,000,000 options and 2,000,000 performance rights-see Remuneration Report section of Directors Report fordetails.Theperformancerightshavenotvestedattheendoftheyear.
Alloptionsarevestedandexercisableattheendoftheyear.Performancerightsaresubjecttohurdleconditions-seeRemunerationReportsectionofDirectorsReportfordetails
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Note 7: Key Management Personnel (continued)(ii) Share holdings
ThenumbersofsharesinthecompanyheldduringthefinancialyearbyeachdirectorandotherkeymanagementpersonneloftheCompany,includingtheirpersonallyrelatedparties,aresetoutbelow.Nosharesweregrantedasremuneration.1,500,000shareswereissuedontheexerciseofremunerationoptions(2011:nil).
2012 Balance at start of year
Acquired during the year
Other changes during the year
Balance at the end of the year
PeterCook 14,713,838 351,818(i) - 15,065,656
DavidOsikore(ii) 6,000,000 3,000,000 (3,000,000) 6,000,000
SamAkoitai - - - -
PaulCmrlec 408,500 - - 408,500
DennisLovell 3,400,200 - - 3,400,200
Total 24,522,538 3,351,818 (3,000,000) 24,874,356(i)Onmarketpurchaseduringtheyear.(ii)DuringtheyearDavidOsikoreexercised3,000,000$0.20optionsandsold3,000,000fullypaidordinaryshares.
2011 Balance at start of year
Acquired during the year
Other changes during the year
Balance at the end of the year
AndrewWallerresigned1/4/11 5,467,070 - (5,467,070)* -
PeterCook 14,713,838 - - 14,713,838
DavidOsikore 6,000,000 - - 6,000,000
SamAkoitaiappointed23/5/11 - - - -
PaulCmrlec 408,500 - - 408,500
DennisLovell 3,400,200 - - 3,400,200
Total 29,989,608 - (5,467,070) 24,522,538*Heldatdateofresignation
Note 8: Auditors’ Remuneration
Group
2012$
2011$
Auditservices:
AmountspaidorpayableforauditorreviewofthefinancialstatementsforthecompanyoranyentityintheGroup.
BDOAudit(WA)PtyLtd - 34,286
BDOAuditPtyLtd. 62,570 16,000
SintonSpenceCharteredAccountants(PNG) 10,714 7,359
73,284 57,645
Taxationservices:
AmountspaidorpayablefortaxationservicesperformedforthecompanyoranyentityintheGroup.
BDOCorporateTax(WA)PtyLtd - 8,131
BDO(QLD)PtyLtd 10,750 3,266
SintonSpenceCharteredAccountants(PNG) 6,885 4,645
17,635 16,042
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 9: Earnings per Share
Group
2012$
2011$
(a) Basic earnings per share
Fromcontinuingoperations(centspershare) (0.94) (2.90)
Fromdiscontinuedoperations(centspershare) - 3.66
Totalbasicearningspershare (0.94) 0.76
(b) Reconciliation of earnings used in calculating earnings per share
Basicanddiluted
Profit/(Loss)fromcontinuedoperations (2,326,986) (6,681,604)
Profit/(Loss)fromdiscontinuedoperations - 8,423,798
Profit/(Loss)fortheyear (2,326,986) 1,742,194
(c) Weightedaveragenumberofordinary sharesoutstandingduring the yearusedincalculatingbasicEPS 247,350,623 230,689,088
At30June201223,400,100(2011:45,075,101)optionsand2,500,000performancerights(2011:2,000,000)wereoutstandingwhichcouldpotentiallydilutebasicearningspershareinthefuture.Becausethereisalossfromcontinuingoperations,thesewouldhaveanantidilutiveeffectandthereforedilutedearningspershareisthesameasbasicearningspershare.
Note 10: Cash and Cash Equivalents
Group
2012$
2011$
Cashatbankandonhand 10,717,727 17,185,823
10,717,727 17,185,823
Note 11: Trade and Other Receivables
Group
CURRENT 2012$
2011$
OtherReceivables 2,343,908 2,038,869
Allowancefordoubtfuldebts (1,823,000) (1,000,000)
520,908 1,038,869Allloansthatarepastduehavebeenimpaired.
Group
2012$
2011$
Movementinallowancefordoubtfuldebts:
Balanceat1July (1,000,000) -
Decrease(Increase)inProvisionfordoubtfulreceivables (823,000) (1,000,000)
Receivableswrittenoffduringtheyear - -
Balanceat30June (1,823,000) (1,000,000)
Included in other receivables is a convertible note for $1,823,000 (2011: 1,823,000). A provision for doubtful receivables of$1,823,0000(2011:1,000,000)hasbeenrecognised inrelationtothis.TheCompanycontinuestopursuetherecoveryoftheconvertiblenote.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 12: Financial Assets at fair value through profit or loss
Group
2012$
2011$
Financialassetsasat30Juneatfairvalue(current) 110,091 458,369
ThefinancialassetsatfairvalueareheldfortradingandcompriseonlyequityinvestmentsquotedonASXandhavebeenvaluedatmarketpricesrulingon30June2012(AASB7-level1).
Note 13: Controlled EntitiesControlled Entities Consolidated
Country of Incorporation Percentage Owned (%)
Parent Entity 2012 2011
PacificNiuginiLtd Australia
Subsidiaries and Associates of Pacific Niugini Ltd
PacificNiuginiMineralsPtyLtd Australia 100 100
PacificNiuginiMinerals(PNG)Ltd PNG 100 100
ChromeHoldingsSAPtyLtd Australia 100 100
PacificNiuginiMinerals(Bulolo)Ltd(i) PNG 100 -
(i)Entitywasincorporatedbythegroupduringtheyear
Note 14: Plant and Equipment Group
2012$
2011$
(a) At cost
Plantandequipment 1,128,889 262,119
Accumulateddepreciation (239,995) (72,183)
Totalplantandequipment 888,894 189,936
Motorvehicles 306,719 182,662
Accumulateddepreciation (103,111) (42,386)
Totalmotorvehicles 203,608 140,276
Leaseholdimprovements 1,816 1,816
Accumulateddepreciation (1,614) (1,009)
Totalleaseholdimprovements 202 807
Capitalworkinprogress-plantandequipment 2,778,192 828,491
Totalcost 4,215,616 1,275,088
Totalaccumulateddepreciation (344,720) (115,578)
Totalnetbookvalue 3,870,896 1,159,510
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 14: Plant and Equipment (Cont)
Group
2012$
2011$
(b) Reconciliation
Plant and equipment
Asat1July 189,936 116,185
Additions 872,721 129,782
Disposals (4,715) -
Depreciationexpense (169,048) (56,031)
Netcarryingvalue 888,894 189,936
Motor vehicles
Asat1July 140,276 128,515
Additions 124,057 40,378
Disposals - -
Depreciationexpense (60,725) (28,617)
Netcarryingvalue 203,608 140,276
Leasehold improvements
Asat1July 807 1,412
Additions - -
Disposals - -
Depreciationexpense (605) (605)
Netcarryingvalue 202 807
Capital work in progress-plant and equipment
Asat1July 828,491 -
Additions 1,949,701 828,491
Netcarryingvalue 2,778,192 828,491
Total Reconciliation Summary
Asat1July 1,159,510 246,113
Additions 2,946,478 998,650
Disposals (4,715) -
Depreciationexpense (230,377) (85,253)
Netcarryingvalue 3,870,896 1,159,510
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 15: Exploration and Evaluation Assets
Group
2012$
2011$
Capitalised exploration and evaluation assets:
Carryingamountinrespectofareasofinterestinexplorationandevaluationphase 12,357,921 6,098,966
Reconciliation Areconciliationofthecarryingamountsofexplorationandevaluationassetsissetoutbelow:
Carryingamountatbeginningofyear 6,098,966 5,218,721
Additions 6,258,955 3,366,893
Disposals(note24(b)) - (171,939)
Explorationimpairmentwriteoff - (2,314,709)
Carryingamountatendofyear 12,357,921 6,098,966
PacificNiuginiMinerals (PNG)Ltd (PNM)at30June2012 is theholderofPapuaNewGuineaExplorationLicencesEL1589,EL1613,EL1614,EL1615andEL1616.Theselicenceswereallissuedon7July2008foratwoyeartermandwererenewedforafurthertwoyeartermexpiringon6July2012.AtthedateofthesefinancialstatementsthetwoyearrenewalprocessinrespectofthesefiveEL’sforthethirdrenewaltermexpiringon6July2014wasstillinprogress.TheCompanyhasreceivedwrittenconfirmationfromtheMineralResourcesAuthorityinPNGthatthesetenementsareintherenewalprocessandthattheyareingoodstanding.Thecompanyisoftheviewthattherenewalofthesetenementswilltakeplaceinthenormalcourseofbusiness.
DuringthepastfinancialyearanadditionalfournewExplorationLicencesweregrantedforatwoyearperiodexpiringon11March2014.TheseareEL1869,EL1827,EL1828andEL2013.
Recovery of the carrying amount of the exploration and evaluation assets is dependent on the successful development andcommercialexploitation,oralternatively,saleoftherespectiveareasofinterest.
Note 16: Trade and Other PayablesUnsecured liabilities
Group
2012$
2011$
Tradepayables 678,385 496,571
Sundrypayablesandaccruedexpenses 123,858 89,309
802,243 585,880
Note 17: Provisions
Current
Employeebenefits 89,412 51,095
Note 18: Deferred tax liability
NON-CURRENT
DeferredtaxliabilityarisingonthefairvalueadjustmentofthePNGexplorationandevaluationassetsacquired 1,240,810
1,240,810
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 19: Issued Capital
(a) Issued and paid up capital Group
2012$
2011$
251,284,667(2011:239,069,666)fullypaidordinaryshares 132,430,888 129,083,287
(i)Thecompany’sshareshavenoparvalueandthereisnolimittotheamountofauthorisedcapital.
(b) Movement in shares on issue 2012 2011
Number of shares $ Number of shares $
Beginningoftheyear 239,069,666 129,083,287 203,184,922 121,979,494
Issuedduringtheyear
• placements(i) - - 30,450,000 6,090,000
• lesstransactioncosts(i) - - - (512,630)
• Optionsexercised(ii) - - 4,634,744 1,390,423
• Optionsexercised(ii) - - 800,000 136,000
• Optionsexercised(iii) 9,085,001 2,725,501 - -
• Optionsexercised(iii) 130,000 22,100 - -
• Optionsexercised(iii) 3,000,000 600,000 - -
Endoftheyear 251,284,667 132,430,888 239,069,666 129,083,287
i. TheCompanymadea shareplacementduring the year ended30June2011of 30,450,000sharesat an issuepriceof$0.20each.Costsof theplacementamounted to$512,630. Included in thecostof theplacement is$241,130 for2,000,000optionsissuedtoanadviserthatassistedwiththeplacement.ThefairvalueoftheseoptionsatgrantdatewasdeterminedbyanindependentvaluerusingaBlack-Scholesoptionpricingmodel.
ii. Duringthepreviousfinancialyear4,634,744$0.3030Sept2011optionsand800,000$0.1723February2013employeeoptionswereexercised.
iii. During the current financial year 9,085,001$0.3030Sept 2011options, 130,000$0.1723February 2013employeeoptions,1,500,000$0.2026Nov2012directoroptionsand1,500,000$0.2030Jun2014directoroptionswereexercised.
iv. Termsandconditions
Fullypaidordinarysharescarryonevotepershareandcarrytherighttodividends.
(c) Options and Performance Rights outstanding 2012 Number 2011 Number
Atbalancedatetherewereunissuedordinarysharesofthecompanyunderoptionandperformancerightsasfollows:
Unlisted30September2011optionsatanexercisepriceof$0.30each - 19,085,001
Unlisted26November2012employeeoptionsatanexercisepriceof$0.20each - 1,500,000
Unlisted30June2014optionsatanexercisepriceof$0.20each 16,450,100 17,950,100
Unlisted23February2013employeeoptionsatanexercisepriceof$0.17each 1,150,000 1,440,000
Unlisted31March2013optionsatanexercisepriceof$0.28each 2,000,000 2,000,000
Unlisted21December2013employeeoptionsatanexercisepriceof$0.47each 1,000,000 1,100,000
Unlisted23June2014directoroptionsatanexercisepriceof$0.38each 2,000,000 2,000,000
Unlisted23June2014directorperformancerights–nilexerciseprice 2,000,000 2,000,000
Unlisted30November2014employeeoptionsatanexercisepriceof$0.48each 800,000 -
Unlisted30November2012employeeperformancerights–nilexerciseprice 300,000 -
Unlisted30November2013employeeperformancerights–nilexerciseprice 200,000 -
25,900,100 47,075,101
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 20: Reserves
Group
2012$
2011$
OptionReserve 1,803,626 1,803,626
ShareBasedPaymentsReserve 1,580,238 1,300,992
Foreigncurrencytranslationreserve 90,531 9,066
3,474,395 3,113,684
(a) Foreign Currency Translation Reserve Theforeigncurrencytranslationreserverecordsexchangedifferencesarisingontranslationofforeignsubsidiaries.
(b) Option Reserve Theoptionreserverecordsitemsrecognisedasexpensesonvaluationofshareoptionsissuedtothirdparties.
(c) Share Based Payment Reserve Thesharebasedpaymentreserverecordsitemsrecognisedasexpensesonvaluationoftheoptionsissuedtodirectorsandemployees.
Note 21: Contingent Liabilities and Contingent Assets
Therearenocontingentliabilitiesorcontingentassetsatbalancedate.
Note 22: Segment Reporting
(a) Description of segments
TheGrouphasidentifieditsoperatingsegmentsbasedontheinternalreportsthatarereviewedandusedbytheCEOandtherestoftheBoardofDirectors(chiefoperatingdecisionmakers)inassessingperformanceanddeterminingtheallocationofresources.OperatingsegmentsaredeterminedonthebasisoffinancialinformationreportedtotheBoardwhichisattheconsolidatedentitylevel.Accordingly,theconsolidatedentityistreatedasoneoperatingsegment.
Therefore,management identifies theGroupashavingonlyone reportable segment.The financial results from this reportablesegmentareequivalenttothefinancialstatementsoftheconsolidatedentityasawhole
(b) Entity-wide disclosures
TheGroup’sgeographicalinformationisasfollows:
Australia$
Papua New Guinea$
Non-currentassets 2012 11,245 16,216,898
Non-currentassets 2011 14,405 7,244,071
TheGroupoperatesprimarilyinmineralexplorationlocatedinPapuaNewGuinea.TheGroup’sheadquartersofficeisinAustralia.TheGroupdoesnothaveanyproducts/servicesthatitderivesmaterialrevenuefromexceptinterest.
Note 23: Discontinued Operation
InMarch2008theGroupannouncedthat ithadentered intoanagreementwithAMCOLInternationalCorporation (“AMCOL”)topurchase theGroup’s74% interest in theRuighoekChromeProject inSouthAfrica forUS$26.4million.Settlementof thistransactionoccurredon26February2009for53%oftheGroup’sinterestintheRuighoekprojectfortheamountofUS$14million(Stage1)andthesaleandsettlementoftheremaining47%fortheamountofUS$12.4millionoccurredinSeptember2010(Stage2).Asa resultof thesettlementof the remaining47%ofRuighoek inSeptember2010, the investment inRuighoekandthe loanaccountstotheRuighoekentities,whichwereassignedtoAMCOLonsettlement,weredisclosedasheldforsalefinancialassetsat30June2010.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 23: Discontinued Operation (cont)
At30June2011theGroupreportedallamountsrelatedtothesettlementoftheremaining47%oftheRuighoekproject,includingthegainondisposal,asadiscontinuedoperation.
Group
Results of discontinued operation2012
$2011
$
Optionfeeincome - 335,785
Gainonsaleofdiscontinuedoperationbeforeincometax(seebelow) - 8,974,582
Profit/(loss)fromdiscontinuedoperationsbeforeincometax - 9,310,367
Less:Incometaxexpense - (886,569)
Profit/(loss)fromdiscontinuedoperationsafterincometax - 8,423,798
Details of the sale to AMCOL of the remaining 47% of the Ruighoek mine
Saleproceeds - 13,243,674
Less:Carryingvalueofheldforsaleassets - (4,269,092)
Gainonsaleofdiscontinuedoperationbeforeincometax(note4) - 8,974,582
Note 24: Cash Flow Information
Group
2012$
2011$
(a) Reconciliation of Cash Flow from Operations withProfit/(Loss) after Income Tax
Profit/(Loss)afterincometax (2,326,986) 1,742,194
Depreciation 230,377 85,253
Sharebasedpayments 279,245 518,096
GainonsaleofRuighoekChromeproject - (8,974,583)
Bonmercioptionfees - (335,785)
Explorationimpairment - 2,314,709
(Gain)ondisposalofmineraltenement - (588,061)
Baddebtprovision 823,000 1,000,000
Baddebtrecovery - (400,000)
Unrealisedexchangegain 80,793 1,243,063
Realisedexchangegain (853,053) -
Fairvaluechangeinfinancialassets 348,278 1,322,862
Changesinoperatingassetsandliabilities,netoftheeffectsofpurchaseanddisposalsubsidiaries
Increase/(decrease)inpayables 48,370 316,584
Increase/(decrease)inprovisions 38,317 32,109
(Increase)/decreaseinotheroperatingassets (19,725) (355,871)
(Increase)/decreaseinreceivables (99,281) 59,371
Netcashprovidedby/(usedin)operatingactivities (1,450,665) (2,020,059)
(b) Non-cash investing activitiesTherewerenonon-cashinvestingactivitiesduringthefinancialyear.Duringthe2011financialyearthecompanysoldcertainmineraltenementswithabookvalueof$171,939inconsiderationforASXlistedsharestothevalueof$760,000.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 25: Share-based Payments
Group
2012$
2011$
Share-based payment expenses recognised during the financial year
Equitysettledoptions/rightsissuedtodirectors - 333,862
Equitysettledoptions/rightsissuedtoemployees 279,245 184,234
279,245 518,096
Theweightedaverageremainingcontractuallifeofshareoptionsoutstandingattheendofthefinancialyearwas1.68years(2011:2.38years)Theweightedaverageexercisepriceofshareoptionsoutstandingattheendofthefinancialyearwas$0.243(2011:$0.227)
DetailsofShare-basedpaymentsmadeduringthe2012financialyear:(a) On30thNovember2011900,000shareoptionswereissuedtoanumberofemployeesintermsoftheCompanyemployee
shareoptionplanwithanexercisepriceof$0.48each,anexpirydateof30November2014andvestingtwelvemonthsafterissuedate.
(b) On30thNovember2011500,000performancerightswereissuedtotwoconsultants.Theexercisepricewasnilandtheexpirydatewas30Nov2012inrespectof300,000rightsand30Nov2013inrespectof200,000rights.Therightswereissuedsubjecttoanumberofperformancehurdleswhicharesetoutinthetablebelow.
DetailsofShare-basedpaymentsmadeduringthe2011financialyear:(a) On21stDecember20101,100,000shareoptionswereissuedtoanumberofemployeesandaconsultantintermsofthe
Companyemployeeshareoptionplanwithanexercisepriceof$0.47eachandanexpirydateof21December2013.
(b) On23rdJune2011shareholdersapprovedtheissueof2,000,000shareoptionstoadirectorMrPaulCmrlec.Theoptionsweregrantedandvestedonthatdate.Theexercisepricewas$0.38eachandtheexpirydate23rdJune2014.
(c) On23rdJune2011shareholdersapprovedtheissueof2,000,000performancerightstoadirectorMrPaulCmrlec.Therightsweregrantedonthatdate.Theexercisepricewasnilandtheexpirydate23rdJune2014.Therightswereissuedsubjecttoanumberofperformancehurdleswhicharesetoutinthetablebelow.
FairValueofOptionsandRightsGrantedTheweightedaveragefairvalueofoptionsandrightsgrantedduringtheyearwas29.5cents(2011:22.2cents).Thefairvalueatgrantdatewasdeterminedbyanindependentvaluerusinganoptionpricingmodelthattakesintoaccountthesharepriceatgrantdate,exerciseprice,expectedvolatility,optionorrightlife,expecteddividends,theriskfreerate,andthefactthattheoptionsandrightsarenottradeable.Thepricingmodelandinputsusedfortheoptionsandrightsgrantedduringtheyearended30June2012aresetoutinthetablebelow:
Details2012 Financial year
Employee Options Consultant Performance Rights
Consultant Performance Rights
Numberofoptions/rights 900,000 300,000 200,000
Pricingmodelusedtocalculatefairvalue
Black-ScholesandBinomialmodel
Black-Scholesmodel Black-Scholesmodel
Consideration nil nil nil
Option/PerformanceRightlife 3years 1year 2years
Exerciseprice $0.48 nil nil
Grantdate 30-11-2011 30-11-2011 30-11-2011
Vestingdate 30-11-2012 Seenote(ii)below Seenote(ii)below
Expirydate 30-11-2014 30-11-2012 30-11-2013
Sharepriceatgrantdate $0.36 $0.36 $0.36
Fairvalueofoptions/rightsgranted 12.6cents $0.36 $0.36
Expectedvolatility% 61.48% 61.48% 61.48%
Expecteddividendyield% nil nil nil
Riskfreerate% 3.15% 3.12% 3.12%
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 25: Share-based Payments (cont)
(i) VolatilityhasbeendeterminedbasedonPacificNiugini’ssharepriceoverthe12monthsimmediatelyprecedingtheoptionsissue.Duetothecompany’shistoricalsharepricemovements,andtherelativepercentageofeachmovementagainsttheshareprice,itisexpectedthatthisvolatilitywillnotchangesignificantlyoverthelifeoftheoptionsandthereforethevolatilityassetoutabovehasbeenusedastheexpectedfuturesharepricevolatilityoverthelifeoftheoptions.
(ii)
No. Rights Performance hurdle type Vesting date
Vesting probability*
150,000 Firstcommerciallyviablegoldproductionfromfirstcommercialscalegoldproductionplant
30-11-2012 nil
150,000 Productionrateof3,500,000m3/annumoverthreemonthperiod 30-11-2012 nil
100,000 Commerciallyviablegoldproductionfromsecondcommercialscalegoldproductionplant
30-11-2013 nil
100,000 First50,000ozgoldproduction 30-11-2013 15%
*Thisistheprobabilityappliedtodeterminethenumberofperformancerightstobeincludedinthemeasurementoftheirissueovertheexpectedvestingperiod.
Details2011 Financial year
Employee Options Director Options Director Performance Rights
Numberofoptions/rights 1,100,000 2,000,000 2,000,000
Consideration nil nil nil
Option/PerformanceRightlife 3years 3years 3years
Exerciseprice $0.47 $0.38 nil
Grantdate 21-12-2010 23-06-2011 23-06-2011
Vestingdate 21-12-2010 23-06-2011 Seenote(ii)below
Expirydate 21-12-2013 23-06-2014 23-06-2014
Sharepriceatgrantdate $0.35 $0.34 $0.34
Fairvalueofoptions/rightsgranted 13.6cents 15.2cents 34.0cents
Expectedvolatility% 65.31% 67.35% 67.35%
Expecteddividendyield% nil nil nil
Riskfreerate% 5.25% 4.67% 4.67%
(i) VolatilityhasbeendeterminedbasedonPacificNiugini’ssharepriceoverthe12monthsimmediatelyprecedingtheoptionsissue.Duetothecompany’shistoricalsharepricemovements,andtherelativepercentageofeachmovementagainsttheshareprice,itisexpectedthatthisvolatilitywillnotchangesignificantlyoverthelifeoftheoptionsandthereforethevolatilityassetoutabovehasbeenusedastheexpectedfuturesharepricevolatilityoverthelifeoftheoptions.
(ii)
Performance rights hurdles
No. Rights Performance hurdle type Probability*
500,000 Commerciallyviablegoldproduction 75%
500,000 50,000ozgoldproduction 15%
500,000 100,000ozgoldproduction nil
500,000 Marketcapitalisation$200Million nil
*Thisistheprobabilityappliedtodeterminethenumberofperformancerightstobeincludedinthemeasurementoftheirissueovertheexpectedvestingperiod.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 25: Share-based Payments (cont)Summary of share-based payment options/rights issued
Thefollowingtableillustratesthenumberandweightedaverageexerciseprices(WAEP)ofshare-basedpaymentoptionsandrightsissuedduringthefinancialyear.
2012Number
2012WAEP
2011Number
2011WAEP
Outstandingatthebeginningoftheyear 8,040,000 0.23 3,740,000 0.18
Expiredduringtheyear - - - -
Grantedduringtheyear 1,400,000 0.30 5,100,000 0.25
Forfeitedduringtheyear (360,000) 0.29 - -
Exercisedduringtheyear (1,630,000) 0.20 (800,000) 0.17
Outstandingattheendoftheyear 7,450,000 0.24 8,040,000 0.23
Note 26: Subsequent Events
Thereisnoothermatterorcircumstancethathasarisensincetheendofthefinancialyeartothedateofthisreport,whichhassignificantlyaffected,ormaysignificantlyaffecttheoperationsoftheconsolidatedentity,theresultsofthoseoperationsorthestateofaffairsoftheconsolidatedentityinsubsequentfinancialyears
Note 27: Parent Entity Information
Thefollowinginformationrelatestotheparententity,PacificNiuginiLtd,at30June2012.TheinformationpresentedherehasbeenpreparedusingconsistentaccountingpoliciesaspresentedinNote1.
2012$
2011$
CurrentAssets 11,451,942 18,482,539
Non-currentassets 23,447,147 12,710,527
Totalassets 34,899,089 31,193,066
Currentliabilities 404,358 168,980
Non-currentliabilities 11,150,705 11,150,705
Totalliabilities 11,555,063 11,319,685
NetAssets 23,344,026 19,873,381
Issuedcapital 132,430,887 129,083,287
Accumulatedlosses (112,470,723) (112,314,524)
Optionreserve 1,803,625 1,803,625
Share-basedpaymentsreserve 1,580,237 1,300,993
Totalequity 23,344,026 19,873,381
Profit(Loss)fortheyear (156,200) (3,258,699)
Othercomprehensiveincomefortheyear - -
Totalcomprehensiveincomefortheyear (156,200) (3,258,699)
Thecompanyhadnocommitments,guaranteesorcontingentliabilitiesasat30June2012and2011.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 28: Financial Risk ManagementOverviewThis note presents information about the Group’s exposure to credit, liquidity and market risks, their objectives, policies andprocessesformeasuringandmanagingrisk,andthemanagementofcapital.
TheGroupdoesnotuseanyformofderivativesasitisnotatalevelofexposurethatrequirestheuseofderivativestohedgeitsexposure.Exposurelimitsarereviewedbymanagementonacontinuousbasis.Thegroupdoesnotenterintoortradefinancialinstruments,includingderivativefinancialinstruments,forspeculativepurposes.
TheBoardofDirectorshasoverallresponsibilityfortheestablishmentandoversightoftheriskmanagementframework.Managementmonitorsandmanagesthefinancialrisksrelatingtotheoperationsofthegroupthroughregularreviewsoftherisks.
Credit riskCreditriskistheriskoffinanciallosstotheGroupifacustomerorcounterpartytoafinancialinstrumentfailstomeetitscontractualobligations,andarisesprincipallyfromtheGroup’sreceivablesandcashheldatfinancialinstitutions.
Exposuretocreditrisk
ThecarryingamountoftheGroup’sfinancialassetsrepresentsthemaximumcreditexposure.TheGroup’smaximumexposuretocreditriskatthereportingdatewas:
Note Group
Carrying Amount
2012$
2011$
Cashandcashequivalents 10 10,717,727 17,185,823
Tradeandotherreceivables 11 520,908 1,038,869
Cash and cash equivalentsTheGrouplimitsitsexposuretocreditriskbyonlyinvestinginliquidsecuritiesandonlywithcounterpartiesthathaveanacceptablecreditrating.AllcashisheldwithWestpacandANZbanks.
Trade and other receivablesAstheGroupoperatesprimarilyinexplorationactivities,itdoesnothavetradereceivablesandthereforeisnotexposedtocreditriskinrelationtotradereceivables.
Liquidity riskLiquidityriskistheriskthattheGroupwillnotbeabletomeetitsfinancialobligationsastheyfalldue.TheGroup’sapproachtomanagingliquidityistoensure,asfaraspossible,thatitwillalwayshavesufficientliquiditytomeetitsliabilitieswhendue,underbothnormalandstressedconditions,withoutincurringunacceptablelossesorriskingdamagetotheGroup’sreputation.
TheGroupmanages liquidity riskbymaintainingadequatecashreserves fromfundsraised in themarketandbycontinuouslymonitoringforecastandactualcashflows.TheGroupdoesnothaveanyexternalborrowings.Thefollowingarethecontractualmaturitiesoffinancialliabilities:
Group 30 June 2012
Carrying amount$
Contractual cash flows
$
6 mths or less$
6-12 mths 1-2 years 2-5 years
Tradeandotherpayables–Note16
(802,242) (802,242) (802,242) - - -
Group
30 June 2011
Carrying amount
$
Contractual cash flows
$
6 mths or less$
6-12 mths 1-2 years 2-5 years
Tradeandotherpayables–Note16
(585,880) (585,880) (585,880) - - -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 28: Financial Risk Management (cont)
Market RiskMarketriskistheriskthatchangesinmarketprices,suchasforeignexchangerates,interestratesandequitypriceswillaffecttheGroup’snetincomeorthevalueofitsholdingsoffinancialinstruments.Theobjectiveofmarketriskmanagementistomanageandcontrolmarketriskexposureswithinacceptableparameters,whileoptimisingthereturn.
Currency riskTheGroupisexposedtocurrencyriskonpurchasesandpayablesthataredenominatedinacurrencyotherthantherespectivefunctionalcurrenciesofGroupentities.ThecurrencyinwhichtransactionsprimarilyaredenominatedisthePapuaNewGuineaKina.
TheGrouphasnotenteredintoanyderivativefinancialinstrumentstohedgesuchtransactionsotherthan:
Thecompanyenteredintoa12monthforwardcovercontracttobuyPNGKinaattherateofAU$250,000permonthforthe12monthperiodJanuarytoDecember2012atabasespotraterangingfromPNGKina2.057to2.036.Theoutstandingcommitmentat30June2012inrespectofthiscontractis$1,500,000.
Basedon theGroup’soperations inPapuaNewGuinea (PNG)during the financial year, had theAustralianDollarweakened/strengthenedby10%againstthePNGKinawithallothervariablesheldconstant,theGroup’sothercomprehensiveincomeandequitywouldhavebeen$134,800higher/lower.
Interest rate riskTheGroupisexposedtointerestraterisk(primarilyonitscashandcashequivalents),whichistheriskthatafinancialinstrument’svalueorfuturecashflowswillfluctuateasaresultofchangesinthemarketinterestratesoninterest-bearingfinancialinstruments.TheGroupdoesnotusederivativestomitigatetheseexposures.TheGroupadoptsapolicyofensuringthatasfaraspossibleitmaintainsexcesscashandcashequivalentsinshorttermdepositswithreputablefinancialinstitutionsatinterestratesmaturingover90-180dayrollingperiodsorless.
ProfileAtthereportingdatetheinterestrateprofileoftheGroup’sinterest-bearingfinancialinstrumentswas:
Weighted Average
Interest Rate
Carrying Amount
$
Weighted Average
Interest Rate
Carrying Amount
$
Consolidated 2012 2011
Cashandcashequivalents 4.0-5.5% 10,717,727 4.0-5.7% 17,185,823
Tradeandotherreceivables - - 10% 1,038,864
10,717,727 18,224,687
SensitivityanalysisTheBoardhasestimatedthatgivenmarketconditionsachangeof100basispointsininterestratesisappropriatetoassesstheGroup’ssensitivitytovariablerate instruments.Achangeof100basispoints in interestratesatthereportingdatewouldhaveincreased(decreased)equityandprofitor lossbytheamountsshownbelow.Thisanalysisassumesthatallothervariables, inparticularforeigncurrencyrates,remainconstant.Theanalysisisperformedonthesamebasisfor2011.
Group
Profit/Equity
100bp increase 100bp decrease
30 June 2012 $ $
Variablerateinstruments 107,177 (107,177)
30 June 2011
Variablerateinstruments 171,858 (171,858)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 28: Financial Risk Management (cont)Equity Price RiskEquitypriceriskistheriskthatthevalueofaninstrumentwillfluctuateasaresultofchangesinmarketprices(otherthanthosearisingfrominterestrateriskorcurrencyrisk),whethercausedbyfactorsspecifictoanindividualinvestment,itsissuerorallfactorsaffectingallinstrumentstradedinthemarket.
TheGroupisexposedtoequitypriceriskarisingfromitsfinancialassetsatfairvaluethroughprofitorloss.Withrespecttotheequitypriceriskarisingfromthesefinancialassets,themaximumexposureisequaltothecarryingamountofthefinancialassetsatfairvaluethroughprofitorlosswhichatbalancedateis$110,091(2011-$458,369).
Based on the equity investments held at the end of the financial year, had the Australian Securities Exchange strengthened/weakenedby10%withallothervariablesheldconstant,theGroup’spre-taxprofitandequitywouldhavebeen$11,000higher/lower(2011:$45,837)
Commodity Price RiskTheGroupoperatesprimarilyintheexplorationandevaluationphaseandaccordinglytheGroup’sfinancialassetsandliabilitiesaresubjecttonocommoditypricerisk.
Fair valuesThecarryingamountsoffinancialassetsandliabilitiesapproximatefairvalue.Thebasisfordeterminingfairvaluesisdisclosedinnote12.
Capital ManagementTheGroup’sobjectiveswhenmanagingcapital are to safeguard theGroup’sability tocontinueasagoingconcern, soas tomaintainastrongcapitalbasesufficienttomaintainfutureexplorationanddevelopmentofitsprojects.Inordertomaintainoradjustthecapitalstructure,theGroupmayreturncapitaltoshareholders,issuenewsharesorsellassetstoreducedebt.TheGroup’sfocushasbeentoraisesufficientfundsthroughequitytofundexplorationandevaluationactivities.TheGroupmonitorscapitalonthebasisofthegearingratio,howevertherearenoexternalborrowingsasatbalancedateorat30June2011.
TherewerenochangesintheGroup’sapproachtocapitalmanagementduringtheyear.Riskmanagementpoliciesandproceduresareestablishedwithregularmonitoringandreporting.NeithertheCompanynoranyofitssubsidiariesaresubjecttoexternallyimposedcapitalrequirements.Capitalcomprisesequityasdisclosedinthestatementoffinancialposition.
Note 29: Capital and other commitments
(a) Operating lease commitments
Group
2012$
2011$
Futureoperatingleaserentalsofofficespacenotprovidedforinthefinancialstatementsandpayable:
-notlaterthanoneyear 21,100 44,514
-laterthanoneyearbutnotlaterthanfiveyears - 14,838
21,100 59,352
(b) Exploration commitments
Group
2012$
2011$
Inordertomaintaincurrentrightsoftenuretoexplorationpermits,theconsolidatedentityhascertainobligationstoexpendminimumamountsofmoney.Thefollowingexplorationexpenditurerequirementshavenotbeenprovidedforinthefinancialreportandarepayable:
notlaterthanoneyear 331,000 517,391
laterthanoneyearbutnotlaterthanfiveyears 331,000 -
662,000 517,391
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Note 30: Related Party Transactions
Ultimate parent
PacificNiuginiLimitedistheultimateparententity.
Identification of Related parties
OwnershipinterestsinwhollyownedentitiesaresetoutinNote13.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2012
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Inthedirectors’opinion:
(a) thefinancialstatementscomprisingthestatementofcomprehensiveincome,statementoffinancialposition,statementofcashflows,statementofchangesinequityandaccompanyingnotesareinaccordancewiththeCorporations Act 2001 and :
(i) complywithAccountingStandardsandtheCorporations Regulations 2001and:
(ii) giveatrueandfairviewofthefinancialpositionasat30June2012andoftheperformancefortheyearendedonthatdateoftheconsolidatedentity.
(b) the consolidated entity has included in the notes to the financial statements an explicit and unreserved statement ofcompliancewithInternationalFinancialReportingStandards.
(c) therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebtsasandwhentheybecomedueandpayable;and
(d) theremunerationdisclosuressetout intheDirectors’Report(aspartoftheauditedRemunerationReport)fortheyearended30June2012complywithsection300AoftheCorporations Act 2001.
Thedirectorshavebeengiventhedeclarationsbythechiefexecutiveofficerandchieffinancialofficerrequiredbysection295Aofthe Corporations Act 2001.
ThisdeclarationismadeinaccordancewitharesolutionoftheBoardofDirectors.
_________________MrPCmrlecManagingDirector
Datedthis24September2012
DIRECTORS’ DECLARATIONF
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INDEPENDENT AUDITOR’S REPORT
TothemembersofPacificNiuginiLimited
Report on the Financial ReportWehaveaudited theaccompanyingfinancial reportofPacificNiuginiLimited,whichcomprises theconsolidatedstatementoffinancial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement ofchangesinequityandtheconsolidatedstatementofcashflowsfortheyearthenended,notescomprisingasummaryofsignificantaccountingpoliciesandotherexplanatory information,and thedirectors’declarationof theconsolidatedentitycomprising thecompanyandtheentitiesitcontrolledattheyear’sendorfromtimetotimeduringthefinancialyear.
Directors’ Responsibility for the Financial ReportThedirectorsofthecompanyareresponsibleforthepreparationofthefinancialreportthatgivesatrueandfairviewinaccordancewithAustralianAccountingStandardsandtheCorporations Act 2001andforsuchinternalcontrolasthedirectorsdetermineisnecessarytoenablethepreparationofthefinancialreportthatgivesatrueandfairviewandisfreefrommaterialmisstatement,whetherduetofraudorerror.InNote2,thedirectorsalsostate,inaccordancewithAccountingStandardAASB101Presentation of Financial Statements,thatthefinancialstatementscomplywithInternational Financial Reporting Standards.
Auditor’s Responsibility Our responsibility is toexpressanopinionon thefinancial reportbasedonouraudit.Weconductedouraudit inaccordancewithAustralianAuditingStandards.Thosestandardsrequirethatwecomplywithrelevantethicalrequirementsrelatingtoauditengagements andplan andperform the audit to obtain reasonable assurance aboutwhether the financial report is free frommaterialmisstatement.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialreport.Theproceduresselecteddependontheauditor’s judgement, includingtheassessmentoftherisksofmaterialmisstatementofthefinancialreport,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttothecompany’spreparationofthefinancialreportthatgivesatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessofthecompany’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebythedirectors,aswellasevaluatingtheoverallpresentationofthefinancialreport.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.
Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au
Level 18, 300 Queen St Brisbane QLD 4000, GPO Box 457 Brisbane QLD 4001 Australia
BDO Audit (QLD) Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (QLD) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
57
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001. We confirm that the independence declaration required by the Corporations
Act 2001, which has been given to the directors of Pacific Niugini Limited, would be in the same
terms if given to the directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of Pacific Niugini Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June
2011 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b) the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 1 to of the directors’ report for
the year ended 30 June 2011. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Pacific Niugini Limited for the year ended 30 June 2011
complies with section 300A of the Corporations Act 2001.
BDO Audit (QLD) Pty Ltd
A J Whyte
Director
Brisbane: 26 September 2011
228
AUDITORS REPORT
BDOAuditPtyLtdABN33134022870isamemberofanationalassociationofindependententitieswhichareallmembersofBDO(Australia)LtdABN77050110275,anAustraliancompanylimitedbyguarantee.BDOAuditPtyLtdandBDO(Australia)LtdaremembersofBDOInternationalLtd,aUKcompanylimitedbyguarantee,andformpartoftheinternationalBDOnetworkofindependentmemberfirms.LiabilitylimitedbyaschemeapprovedunderProfessional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
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IndependenceInconductingouraudit,wehavecompliedwiththeindependencerequirementsoftheCorporations Act 2001.WeconfirmthattheindependencedeclarationrequiredbytheCorporations Act 2001,whichhasbeengiventothedirectorsofPacificNiuginiLimited,wouldbeinthesametermsifgiventothedirectorsasatthetimeofthisauditor’sreport.
Opinion
Inouropinion:
(a) thefinancialreportofPacificNiuginiLimitedisinaccordancewiththeCorporations Act 2001,including:
(i) givingatrueandfairviewoftheconsolidatedentity’sfinancialpositionasat30June2012andofitsperformancefortheyearendedonthatdate;and
(ii) complyingwithAustralianAccountingStandardsandtheCorporations Regulations 2001;and
(b) thefinancialreportalsocomplieswithInternational Financial Reporting StandardsasdisclosedinNote2.
Report on Other Legal and Regulatory Requirements
WehaveauditedtheRemunerationReportincludedinpages16to20ofthedirectors’reportfortheyearended30June2012.ThedirectorsofthecompanyareresponsibleforthepreparationandpresentationoftheRemunerationReportinaccordancewithsection300AoftheCorporations Act 2001.OurresponsibilityistoexpressanopinionontheRemunerationReport,basedonourauditconductedinaccordancewithAustralianAccountingStandards.
Opinion
Inouropinion,theRemunerationReportofPacificNiuginiLimitedfortheyearended30June2012complieswithsection300AoftheCorporations Act 2001.
BDO Audit Pty Ltd
A J WhyteDirector
Brisbane: 24 September 2012
Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au
Level 18, 300 Queen St Brisbane QLD 4000, GPO Box 457 Brisbane QLD 4001 Australia
BDO Audit (QLD) Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (QLD) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
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Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001. We confirm that the independence declaration required by the Corporations
Act 2001, which has been given to the directors of Pacific Niugini Limited, would be in the same
terms if given to the directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of Pacific Niugini Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June
2011 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b) the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 1 to of the directors’ report for
the year ended 30 June 2011. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Pacific Niugini Limited for the year ended 30 June 2011
complies with section 300A of the Corporations Act 2001.
BDO Audit (QLD) Pty Ltd
A J Whyte
Director
Brisbane: 26 September 2011
228
AUDITORS REPORT
BDOAuditPtyLtdABN33134022870isamemberofanationalassociationofindependententitieswhichareallmembersofBDO(Australia)LtdABN77050110275,anAustraliancompanylimitedbyguarantee.BDOAuditPtyLtdandBDO(Australia)LtdaremembersofBDOInternationalLtd,aUKcompanylimitedbyguarantee,andformpartoftheinternationalBDOnetworkofindependentmemberfirms.LiabilitylimitedbyaschemeapprovedunderProfessional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.
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AllASXlistedentitiesarerequiredtodiscloseagainsttherecommendationsanddisclosureobligationscontainedintherevisedASXCorporateGovernanceCouncilCorporateGovernancePrinciplesandRecommendationsintheannualreportandininitialpublicofferdocuments.TheCompanyhasadoptedsystemsofcontrolandaccountabilityasthebasisfortheadministrationofcorporategovernance.TheBoardiscommittedtoadministeringthepoliciesandprocedureswithopennessandintegrity,pursuingthetruespiritofcorporategovernancecommensuratewiththeCompany’sneeds.Totheextenttheyareapplicable,theCompanyhasadoptedthesecondeditionoftheCorporateGovernancePrinciplesandRecommendations(“Recommendations”)aspublishedbytheASXCorporateGovernanceCouncil.CopiesoftheCompany’scorporategovernancepoliciesaresetoutinthe“CorporateGovernancePolicies”availableontheCompany’swebsiteatwww.niugini.com.au.AstheCompany’sactivitiesdevelop insize,natureandscope,thesizeoftheBoardandtheimplementationofadditionalcorporategovernancepoliciesandstructureswillbegivenfurtherconsideration.InviewofthesizeoftheCompanyandthenatureof itsactivities,theBoardconsidersthatthecurrentboardisacosteffectiveandpracticalmethodofdirectingandmanagingtheCompany.TheCompanyreportsthefollowingdeparturesfromtheASXPrinciplesandRecommendations:
RECOMMENDATION PRINCIPAL 2: STRUCTURE THE BOARD TO ADD VALUE
Recommendation 2.1:Amajorityoftheboardshouldbeindependentdirectors.
Explanation for Departure:TheBoardcomprisesfourdirectors,oneofwhichisindependent.TheremainingdirectorsarenotindependentbecausetwoareemployedinanexecutivecapacityandtheChairman,whilstanon-executive,holdsasubstantialinterest in the Company. The Board considers that the merits of appointing additional directors in order to achieve majorityindependentstatusareoutweighedbytheBoard’swishtomaintainarelativelysmallboardwithrelevantexperience,whichtheBoardbelievesisadequatehavingregardtotheoperationsoftheCompany.
Recommendation 2.2: The Chairman should be an independent director.
Notification of Departure: TheChairisnotIndependent.
TheChairman,MrCookdoesnotmeettherequirementforIndependence(assetoutintherecommendations)duetohissubstantialshareholdingintheCompany.
MrCook’sexperienceandknowledgeoftheindustryinwhichtheCompanyoperatesmakehiscontributiontotheBoardsuchthatitisappropriateforhimtoremainasChairmanoftheBoard.
Giventhesizeoftheindustryinwhichitoperates,thecurrentBoardstructureisconsideredtobestservetheCompanyinmeetingitsobjectives,givenitssmallcapitalization,limitedresourcesandexistingoperations.ThecompositionoftheBoardwillbereviewedonanannualbasistoensurethattheboardhastheappropriatemixofexpertiseandexperience.
Recommendation 2.4:TheCompanyshouldestablishanominationcommitteeconsistingofamajorityofindependentdirectors.
Notification of Departure:Thereisnoseparatenominationcommittee.Dueto thesizeandnatureof theCompany, the fullBoardconsiders themattersand issues thatwould fall to thenominationcommittee.TheCompanyhasadoptedaNominationChartersettingouttheBoardprocessestoraiseissuesthatwouldotherwisebeconsideredbythenominationcommittee.TheBoardconsidersthatatthisstage,noefficienciesorotherbenefitswouldbegainedbyestablishingaseparatenominationcommittee.
TheBoardintendstoreconsidertherequirementforandbenefitsofaseparatenominationcommitteeastheCompany’soperationsgrowandevolve.
RECOMMENDATION PRINCIPAL 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKING
Recommendation 3.3: Discloseineachannualreportthemeasurableobjectivesforachievinggenderdiversitysetbytheboardinaccordancewiththediversitypolicyandprogresstowardsachievingthem.
Recommendation 3.4: Discloseineachannualreporttheproportionofwomenemployeesinthewholeorganisation,womeninseniorexecutivepositionsandwomenontheboard.
Notification of Departure:DisclosuresarenotmadewithregardtoRecommendations3.3and3.4above.
DuetothesizeandnatureoftheCompany’sbusinessandgiventhatthemajorityofoperationsandemploymenttakesplaceinPNG,theBoardconsidersthatatthisstagenobenefitswouldbegainedbymakingsuchdisclosures.
TheBoard intendstoreconsidertherequirementforandbenefitsofthesedisclosuresastheCompany’soperationsgrowandevolve.
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RECOMMENDATION PRINCIPAL 4: SAFEGUARD INTEGRITY AND FINANCIAL REPORTING
Recommendation 4.1: TheCompanyshouldestablishanauditcommittee.
Recommendation 4.2: Theauditcommitteeshouldbestructuredsothatitconsistsofnon-executivedirectorswhoareamajorityofindependentdirectors.
Notification of Departure:Thereisnoseparateauditcommittee.
DuetothesizeandnatureoftheCompany,theBoardhasnotestablishedanauditcommitteeratherthefullBoardformstheauditcommittee.TheCompanyhasadoptedanAuditChartersettingouttheBoardprocessesthatwouldotherwisebeconsideredbytheauditcommittee.TheBoardconsidersthatitissufficientfortheBoardtoassumetheresponsibilitiesthatareordinarilyassignedtoanauditcommittee.
TheBoardintendstoreconsidertherequirementforandbenefitsofaseparateauditcommitteeastheCompany’soperationsgrowandevolve.
RECOMMENDATION PRINCIPAL 8: REMUNERATE FAILRLY AND RESPONSIBLY
Recommendation 8.1: TheCompanyshouldestablisharemunerationcommittee.
Recommendation 8.2: Theremunerationcommitteeshouldbestructuredsothatitconsistsofnon-executivedirectorswhoareamajorityofindependentdirectors.
Notification of Departure: Thereisnoseparateremunerationcommittee.
DuetothesizeandnatureoftheCompany,aseparateremunerationcommitteeisnotconsideredtoaddanyefficiencytotheprocess of determining the levels of remuneration for the Directors and key executives. The Board considers that it is moreappropriatethatitsetasidetimeatBoardmeetingstoaddressmattersthatwouldnormallyfalltotheremunerationcommittee.TheCompanyhasadoptedaRemunerationChartersettingouttheBoardprocessesthatwouldotherwisebeconsideredbytheremunerationcommittee.
In addition allmattersof remunerationwill continue tobedetermined in accordancewith theCorporationsAct requirements,especiallyinrelationtorelatedpartytransactions.Thatis,noDirectorwillparticipateindeliberationsregardingtheirownremunerationorrelatedissues.
Recommendation 8.3: The structure of non-executive directors’ remuneration from that of executive director and seniormanagementremunerationshouldbeclearlydistinguished.
Notification of Departure: Guidelines for non-executive director remuneration state that non-executive directors should notnormally participate in schemes designed for the remuneration of executives and non-executive directors should not receiveoptionsorbonuspayments.TheCompany’snon-executivedirectorsareeligibletoparticipateintheCompany’slongtermincentiveplan.TheBoardconsidersthatthisisanecessarymotivationtoattractthehighestcalibrecandidatestotheBoardatthisstageintheCompany’soperations.TheCompanycurrentlyhastwonon-executivedirectors.
The table below summarises the Company’s compliance with the ASX Corporate Governance Council’s Principles and Recommendations:
Principle # ASX Corporate Governance Council Recommendations Reference Comply
Principle 1 Lay solid foundations for management and oversight
1.1 EstablishthefunctionsreservedtotheBoardandthosedelegatedtoseniorexecutivesanddisclosethosefunctions.
BoardCharter Yes
1.2 Disclosetheprocessforevaluatingtheperformanceofseniorexecutives. BoardCharter,BoardPerformanceEvaluation
Policy,RemunerationReport
Yes
1.3 ProvidetheinformationindicatedintheGuidetoreportingonprinciple1. BoardCharterRemunerationReport
Yes
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Principle # ASX Corporate Governance Council Recommendations Reference Comply
Principle 2 Structure the Board to add value
2.1 AmajorityoftheBoardshouldbeindependentdirectors. BoardCharter No
2.2 Thechairshouldbeanindependentdirector. BoardCharter No
2.3 Therolesofchairandchiefexecutiveofficershouldnotbeexercisedbythesameindividual.
BoardCharter Yes
2.4 TheBoardshouldestablishanominationcommittee. Nominationcharter No
2.5 Disclose the process for evaluating the performance of the Board, itscommitteesandindividualdirectors.
BoardPerformanceEvaluationPolicy
Yes
2.6 ProvidetheinformationindicatedintheGuidetoreportingonprinciple2. Yes
Principle 3 Promote ethical and responsible decision-making
3.1 Establishacodeofconductanddisclosethecodeorasummaryasto: Directorsandexecutiveofficerscodeof
conductEmployeecodeof
conduct
Yes
• the practices necessary to maintain confidence in the company’sintegrity;
• the practices necessary to take into account the company’s legalobligationsandthereasonableexpectationsofitsstakeholders;and
• the responsibility and accountability of individuals for reporting andinvestigatingreportsofunethicalpractices.
3.2 Establishapolicyconcerningdiversityanddisclosethepolicyorasummaryof that policy. The policy should include requirements for the board toestablishmeasurableobjectivesforachievinggenderdiversityfortheboardtoaccessannuallyboththeobjectivesandprogressinachievingthem.
DiversityPolicy Yes
3.3 Disclose in each annual report the measurable objectives for achievinggenderdiversitysetbytheboardinaccordancewiththediversitypolicyandprogresstowardsachievingthem.
DiversityPolicy No
3.4 Disclose ineachannualreporttheproportionofwomenemployees inthewholeorganisation,womeninseniorexecutivepositionsandwomenontheboard.
DiversityPolicy No
3.5 ProvidetheinformationindicatedintheGuidetoreportingonprinciple3. Codesofconduct Yes
Principle 4 Safeguard integrity in financial reporting
4.1 TheBoardshouldestablishanauditcommittee. Auditcharter Yes
4.2 Theauditcommitteeshouldbestructuredsothatit: No
• consistsonlyofnon-executivedirectors;
• consistsofamajorityofindependentdirectors;
• ischairedbyanindependentchair,whoisnotchairoftheBoard;and
• hasatleastthreemembers.
4.3 Theauditcommitteeshouldhaveaformalcharter Auditcharter Yes
4.4 ProvidetheinformationindicatedintheGuidetoreportingonprinciple4. Auditcharter Yes
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Principle # ASX Corporate Governance Council Recommendations Reference Comply
Principle 5 Make timely and balanced disclosure
5.1 EstablishwrittenpoliciesdesignedtoensurecompliancewithASXListingRuledisclosurerequirementsandtoensureaccountabilityatseniorexecutivelevelforthatcomplianceanddisclosethosepoliciesorasummaryofthosepolicies.
ASXDisclosurepolicyShareholder
communicationpolicy
Yes
5.2 ProvidetheinformationindicatedintheGuidetoreportingonprinciple5. ASXDisclosurepolicyShareholder
communicationpolicy
Yes
Principle 6 Respect the rights of shareholders
6.1 Designacommunicationspolicyforpromotingeffectivecommunicationwithshareholdersandencouragingtheirparticipationatgeneralmeetingsanddisclosethepolicyorasummaryofthatpolicy.
ASXDisclosurepolicyShareholder
communicationpolicy
Yes
6.2 ProvidetheinformationindicatedintheGuidetoreportingonprinciple6. ASXDisclosurepolicyShareholder
communicationpolicy
Yes
Principle 7 Recognise and manage risk
7.1 Establishpoliciesfortheoversightandmanagementofmaterialbusinessrisksanddiscloseasummaryofthosepolicies.
Riskmanagementpolicy
Auditcharter
Yes
7.2 TheBoardshouldrequiremanagementtodesignandimplementtheriskmanagementandinternalcontrolsystemtomanagethecompany’smaterialbusinessrisksandreporttoitonwhetherthoserisksarebeingmanagedeffectively.TheBoardshoulddisclosethatmanagementhasreportedtoitastotheeffectivenessofthecompany’smanagementofitsmaterialbusinessrisks.
Riskmanagementpolicy
Auditcharter
Yes
7.3 TheBoardshoulddisclosewhetherithadreceivedassurancefromthechiefexecutiveofficerandthechieffinancialofficerthatthedeclarationprovidedinaccordancewithsection295AoftheCorporationsActisfoundedonasoundsystemofriskmanagementandinternalcontrolandthatthesystemisoperatingeffectivelyinallmaterialrespectsinrelationtofinancialreportingrisks.
Riskmanagementpolicy
Auditcharter
Yes
7.4 ProvidetheinformationindicatedintheGuidetoreportingonprinciple7. Riskmanagementpolicy
Auditcharter
Yes
Principle 8 Remunerate fairly and responsibly
8.1 TheBoardshouldestablisharemunerationcommittee. Remunerationcharter No
8.2 Theremunerationcommitteeshouldbestructuredsothatit:
• consistsofamajorityofindependentdirectors• ischairedbyanindependentchair• hasatleastthreemembers
8.3 Clearly distinguish the structure on non-executive directors’ remunerationfromthatofexecutivedirectorsandseniorexecutives.
RemunerationcharterRemunerationReport
Yes
8.4 ProvidetheinformationindicatedintheGuidetoreportingonprinciple8. Remunerationcharter Yes
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Additional information requiredby theAustralianStockExchangeLimitedListingRulesnotdisclosedelsewhere in thisAnnualReportissetoutbelow.
1. ShareholdingsTheissuedcapitaloftheCompanyasat30September2012is251,284,667.ordinaryfullypaidsharesand25,900,100unlistedoptionsandperformancerights.
Ordinary Shares Ranges No. of Holders No. of Shares
1-1,000 174 48,209
1,001-5,000 162 537,935
5,001–10,000 131 1,073,631
10,001-100,000 506 19,937,189
100,001andover 170 229,687,703
1,143 251,284,667
Numberholdinglessthanamarketableparcel(2,778shares) 240 183,891
2. Top 20 Ordinary Fully Paid Shareholders as at 30 September 2012
Units % of Issued Capital
1 NATIONALNOMINEESLIMITED 42,802,783 17.03
2 HSBCCUSTODYNOMINEES(AUSTRALIA)LIMITED 30,951,891 12.32
3 AJAVAHOLDINGSPTYLTD 15,065,636 6.00
4 CITICORPNOMINEESPTYLTD 10,145,623 4.04
5 LIBERTYMANAGEMENTPTYLTD<LIBERTYSUPERFUND> 9,920,000 3.95
6 MRDAVIDMIRINGTOROOSIKORE 6,000,000 2.39
7 SKIPTANPTYLTD<P&MMEURSFAMILYA/C> 5,311,906 2.11
8 JAMARIPTYLTD<STAFFSUPERFUNDA/C> 5,069,000 2.02
9 RELLAVPTYLTD<THECOSGROVESUPERFUNDA/C> 4,942,591 1.97
10 ALLSTATESSECRETARIATEPTYLTD 4,500,000 1.79
11 MRTERRENCEJOSEPHCAPLICE 3,503,727 1.39
12 MRDENNISJLOVELL+JCLOVELL<LOVELL&COSUPERFUND> 3,400,200 1.35
13 SKIPTANPTYLTD<ANZMARGINLENDINGA/C> 3,333,333 1.33
14 FITELNOMINEESLIMITED 3,000,000 1.19
15 PONTEGOINVESTMENTSSOLEESTABLISHMENT<PONTEGOINVA/C> 3,000,000 1.19
16 MRLAWRENCEWILLIAMHAWKE<HAWKEFAMILYSUPERFUNDA/C> 2,875,000 1.14
17 DLNPTYLTD 2,577,192 1.03
18 BROKENRIDGEPTYLTD 2,200,000 0.88
19 SAINTHOTELS&RESORTSPTYLTD<SHAFSTONPROPERTYA/C> 2,200,000 0.88
20 WOORABINDAENTERPRISESPTYLTD<MJS1974A/C> 2,000,000 0.80
162,798,882 64.79
3. Substantial Shareholders as at 24 September 2012
No.ofSharesHeld %Held
3.1 AjavaHoldingsPtyLtd 15,065,636 6.00%
3.2 BlackRockInvestmentManagement(Australia)Limitedandassociated 18,400,000 7.32%
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4. Unlisted Options and Performance Rights
Asat30September2012therewere25,900,100unlistedoptionsandperformancerightsoutstanding.Theoptionandperformancerightsholdersdonothaveanyvotingrights.
Thenumberofholdersofoptionsandperformancerightsonissueareasfollows:
UNLISTED OPTIONS Total No. No. Holders
Holder with 20% or greater of the total number issued
Name % held No.
$0.20Expire30June2014 16,450,100 12AjavaHoldingsPtyLtd 30 5,000,000
LibertyManagementPtyLtd<ATFLibertySuperFund> 30 4,960,000
$0.17Expire23Feb2013 1,150,000 2 BerrimilServicesPtyLtd 87 1,000,000
$0.28Expire31Mar2013 2,000,000 1 GoldRubyInvestmentsLtd 100 2,000,000
$0.47Expire21Dec2013 1,000,000 5 YarranvaleProcessConsultingPtyLtd 75 750,000
$0.38Expire23Jun2014 2,000,000 1 BerrimilServicesPtyLtd 100 2,000,000
$0.48Expire30Nov2014 800,000 9
UNLISTED PERFORMANCE RIGHTS
Expire23Jun2014 2,000,000 1 BerrimilServicesPtyLtd 100 2,000,000
Expire30Nov2012 300,000 2 YarranvaleProcessConsultingPtyLtd 67 200,000
Expire30Nov2013 200,000 1 YarranvaleProcessConsultingPtyLtd 100 200,0000
TOTAL 25,900,100 34
5. Voting Rights
OrdinaryFullyPaidShareholders
AtageneralmeetingoftheCompanyshareholdersareentitled:
• Onashowofhands,eachpersonwhoisamemberorsoleproxyhasonevote.• Onapoll,eachshareholderisentitledtoonevoteforeachfullypaidshare.
Options
Optionholdershavenovotingrightsuntilthesecuritiesareconvertedintofullypaidordinaryshares.
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Asat30September2012
Project Name Location in PNG Tenement No. Date of Grant Pacific Niugini Interest
Zenag MorobeProvince EL1589 07-07-2008 100%
MtHagen WesternHighlands EL1613 07-07-2008 100%
Garaina MorobeProvince EL1614 07-07-2008 100%
Gusap MadangProvince EL1615 07-07-2008 100%
Bulolo MorobeProvince EL1616 07-07-2008 100%
Mutzing MadangProvince EL1869 12-03-2012 100%
Dumpu MadangProvince EL1827 12-03-2012 100%
Pindu MorobeProvince EL1828 12-03-2012 100%
Garawaria MorobeProvince EL2013 12-03-2012 100%
PacificNiuginiMinerals (PNG)Ltd (PNM)at30June2012 is theholderofPapuaNewGuineaExplorationLicencesEL1589,EL1613,EL1614,EL1615andEL1616.Theselicenceswereallissuedon7July2008foratwoyeartermandwererenewedforafurthertwoyeartermexpiringon6July2012.AtthedateofthesefinancialstatementsthetwoyearrenewalprocessinrespectofthesefiveEL’sforthethirdrenewaltermexpiringon6July2014wasstillinprogress.TheCompanyhasreceivedwrittenconfirmationfromtheMineralResourcesAuthorityinPNGthatthesetenementsareintherenewalprocessandthattheyareingoodstanding.Thecompanyisoftheviewthattherenewalofthesetenementswilltakeplaceinthenormalcourseofbusiness.
DuringthepastfinancialyearanadditionalfournewExplorationLicencesweregrantedforatwoyearperiodexpiringon11March2014.TheseareEL1869,EL1827,EL1828andEL2013.
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