Gladstone Pacific Nickel Ltd. - ACN 104 261 887 - Final Results for the year
ended 30 June 2009
Chairman and CEO Report
The Global Financial Crisis ("GFC") has changed world capital markets, impacted on business confidence in the nickel sector and general commodity markets, and in turn has affected the timing of the Gladstone Nickel Project ("GNP").
The nickel price started to collapse in the second quarter of 2008; by
A significant problem for nickel still remains in that there is substantial stock sitting on the
These new generation HPAL plants are built on dedicated ore bodies, do not have the ore supply flexibility (to process high grade ore) and do not have the high level of existing infrastructure support as does the GNP. We anticipate some consolidation in the industry and believe that increasing demand for sustainable long life projects will open the window for the next HPAL plant to be built at Gladstone within the coming two to three years.
HPAL is the only new commercial and environmentally sustainable technology available to process the dominant nickel laterite resources in the Pacific. Despite the operating successes of Minara's Murrin Murrin, and Sumitomo's
In May 2009 we received the final Environmental Approvals for the GNP
under the following acts:
- Queensland - State Development and Public Works Organisation Act; and
- Federal - Environment Protection and Biodiversity Conservation Act.
The approval was a very long and complex process and it is a critical
foundation in the project development. The community acceptance and support
for the GNP has set a new benchmark in Queensland and will ensure a smooth
transition through to development. The table below provides the 3.5 year
historical timeline for the key milestones involved in the approval process:
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Awarded Significant Project Status (Qld) November 2005
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Terms of Reference May 2006
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Major Projects facilitation (Fed) June 2006
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EIS Report May 2007
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Public Review June 2007
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EIS Supplemental February 2008
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Qld Gov Assessment Report January 2009
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Fed Gov Approval (EPBC) May 2009
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The State and Federal Government were complimentary of the innovative approach included in our Environmental Impact Study ("EIS") for the sulphur dioxide reduction scheme and the community infrastructure assistance program. Our project will have one of the lowest carbon dioxide ("CO(2)") foot-prints in the industry so we will be well positioned with the introduction of the Federal Government CPRS in full. Other outcomes from the EIS process have included co-operation with existing industries in Gladstone and it has also resulted in the high potential of improving residue and water management when the GNP proceeds. Environmentally sustainable solutions will remain a critical goal for the Company.
An Extraordinary General Meeting was held on
In early 2009 the Company completed a detailed review and due diligence for the potential acquisition of the BHPB Yabulu nickel plant in Queensland. There are a number of synergies between the GPN and the Yabulu refinery that could have added significant shareholder value and provided an immediate development pathway for the GNP, however, they were unable to be realized when the vendor of the Yabulu refinery chose not to deal with GPNL and negotiated a sale to a private company associated with
Over 8,500 m of diamond drilling has now been completed at Ouinné in
The Ouinné JV combined with the 100% owned Marlborough project continues to provide the strategic resource base of over 20 years required for the GNP.
We would like to acknowledge the strong and continued support from the GPNL Board and the enthusiasm and commitment from our management and staff during the past year. In addition, we would also like to pay special thanks to our Joint Venture partners in
The Company has reduced ongoing costs significantly in an effort to recognise the impact of the GFC. Key staff only have been retained and they are working reduced hours. All non essential work, including minimum travel and sponsorships, has been stopped.
Several projects are under consideration aimed at providing an early revenue stream while still preserving the critical GNP assets. The Board is actively pursuing ways to create value during this period of uncertainty and would like to thank our shareholders for their support.
Lastly, the Board extends a special thanks to Mr
Financial Performance
---------------------
The Company's net loss before income tax was A$98,513,230 (2008:A$7,657,682) which includes an impairment loss of A$96,015,663 (2008:A$2,114,981). The Company increased general expenditure (excluding foreign exchange and impairment losses) in the year from A$6,122,109 to A$7,328,826. This was due to a significant expenditure program during the period of A$904,000 on evaluation projects for proposed investments and expenditure on evaluation activities principally in
The Company continues to have a strong cash balance with A$13,566,123 on hand at the end of the period.
The impairment loss of A$96,015,663 for the year includes a write down of A$86,367,475 on Deferred Evaluation and Exploration Assets. The Company has taken a conservative approach to the evaluation of its Deferred Evaluation and Exploration Assets and hence has taken a significant write down to this asset. The impairment loss includes an amount of
Note 1:
i. Ravensthorpe (BHPB) 45kt/a (Commissioned but now on care and
maintenance)
ii. Goro (Vale) 65kt/a (Commissioning but not yet producing)
iii. Ambatovy (Sherritt) 60kt/a (construction recommenced, commissioning
in late 2010)
iv. Ramu (MCC) 35kt/a (commissioning to start in early 2010)
Income Statement
for the year ended 30 June 2009
Notes Consolidated Parent
June 09 June 08 June 09 June 08
($A) ($A) ($A) ($A)
Interest
Income 5(b) 1,369,181 2,303,943 1,119,326 2,125,229
Foreign
Exchange Gain 5(a) 3,466,424 - 3,466,424 -
----------------------------------------------------
REVENUES FROM
CONTINUING
OPERATIONS 4,835,605 2,303,943 4,585,750 2,125,229
----------------------------------------------------
Impairment
Loss 10/11/12/14 96,015,663 2,114,981 82,604,027 1,423,082
Evaluation Costs 1,696,911 613,865 872,161 535,935
China
Representative 187,788 228,588 178,592 228,588
Foreign Exchange
Loss 5(a) 4,346 1,724,535 - 1,713,049
Directors'
Fees/
Remuneration 19 665,389 789,409 665,389 789,049
Directors'
Option
Expense 20(a) 52,583 24,101 52,583 24,101
Brokers'
Option
Expense 20(a) 42,350 14,083 42,350 14,083
Professional
Fees 1,668,934 1,207,513 1,362,468 888,019
Travel and
Accommodation 398,830 459,662 231,556 397,059
Wages and
On-costs 5(d) 974,640 1,190,582 816,482 928,806
Office Rental 5(c) 434,846 365,524 340,552 306,976
Public Relations
and Ongoing
Listing Fees 398,467 368,574 398,467 368,574
IT and
Communication 201,530 182,551 149,619 142,432
Marketing 18,231 60,595 7,965 31,820
Depreciation 5(a) 167,172 134,620 146,179 112,952
Other 5(e) 421,155 482,442 281,731 380,458
----------------------------------------------------
EXPENSES 103,348,835 9,961,625 88,150,121 8,284,983
----------------------------------------------------
----------------------------------------------------
PROFIT/(LOSS)
BEFORE INCOME
TAX EXPENSE (98,513,230) (7,657,682) (83,564,371) (6,159,754)
----------------------------------------------------
----------------------------------------------------
INCOME TAX
(EXPENSE)/
BENEFIT 6 2,429,251 (1,274,440) (6,249,260) (1,228,001)
----------------------------------------------------
----------------------------------------------------
PROFIT/(LOSS)
AFTER INCOME
TAX EXPENSE (96,083,979) (8,932,122) (89,813,631) (7,387,755)
ATTRIBUTABLE TO:
Minority Interest - 36,889 - -
Parent Interest (96,083,979) (8,969,011) - (7,387,755)
----------------------------------------------------
(96,083,979) (8,932,122) (89,813,631) (7,387,755)
----------------------------------------------------
EARNINGS PER SHARE
Basic and Diluted
Earnings (Loss)
per Share (Cents
per Share) 24 (150.00) (22.07)
Balance Sheet
as at 30 June 2009
Notes Consolidated Parent
June 09 June 08 June 09 June 08
($A) ($A) ($A) ($A)
----------------------------------------------------
CURRENT ASSETS
Cash Assets 7 13,566,123 23,735,508 13,503,342 23,381,961
Trade and Other
Receivables 8 194,815 286,213 115,566 192,818
Other Current
Assets 9 898 9,231 - 3,900
----------------------------------------------------
TOTAL CURRENT
ASSETS 13,761,836 24,030,952 13,618,908 23,578,679
----------------------------------------------------
NON CURRENT ASSETS
Property Plant
and Equipment 10 852,596 874,778 433,462 377,326
Investment in
Subsidiaries 14 - - 7,807,908 32,525,085
Investment in
Joint Venture 15 1,712 - 1,712 -
Deferred
Evaluation and
Exploration
Costs 11 18,222,910 111,984,745 - 1,387,021
Trade and Other
Receivables 12 2,092,547 8,767,140 6,905,990 12,538,865
Deferred
Tax Asset 6(d)(i) - - 5,068,136 10,617,537
----------------------------------------------------
TOTAL NON
CURRENT ASSETS 21,169,765 121,626,663 20,217,208 57,445,834
----------------------------------------------------
TOTAL ASSETS 34,931,601 145,657,615 33,836,116 81,024,513
----------------------------------------------------
----------------------------------------------------
CURRENT
LIABILITIES
Trade and Other
Payables 13 811,489 2,186,788 566,936 815,764
Provisions 16 136,265 130,614 108,427 92,131
----------------------------------------------------
TOTAL CURRENT
LIABILITIES 947,754 2,317,402 675,363 907,895
----------------------------------------------------
NON CURRENT
LIABILITIES
Trade and Other
Payables 17 725,690 812,109 71,314 100,820
Deferred Tax
Liabilities 6(d)(ii) - 2,429,251 - -
Provisions 16 132,096 196,426 17,236 19,877
----------------------------------------------------
TOTAL NON CURRENT
LIABILITIES 857,786 3,437,786 88,550 120,697
----------------------------------------------------
TOTAL LIABILITIES 1,805,540 5,755,188 763,913 1,028,592
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
NET ASSETS 33,126,061 139,902,427 33,072,203 79,995,921
----------------------------------------------------
----------------------------------------------------
EQUITY
Contributed
Equity 23 127,456,754 84,259,743 127,456,754 84,259,743
Reserves 23 13,522,927 36,012,711 2,198,100 2,505,198
Retained
Earnings/
(Accumulated
Losses) (107,874,620) (11,790,641) (96,582,651) (6,769,020)
----------------------------------------------------
Parent Interest 33,105,061 108,481,813 33,072,203 79,995,921
----------------------------------------------------
Minority Interest 21,000 31,420,614 - -
----------------------------------------------------
TOTAL EQUITY 33,126,061 139,902,427 33,072,203 79,995,921
----------------------------------------------------
----------------------------------------------------
Cash Flow Statement
for the year ended 30 June 2009
Notes Consolidated Parent
June 09 June 08 June 09 June 08
($A) ($A) ($A) ($A)
----------------------------------------------------
CASH FLOWS FROM
OPERATING
ACTIVITIES
Payments to Suppliers
and Employees (8,328,342) (6,351,983) (5,447,031) (8,055,763)
Payments for
Exploration and
Evaluation (3,146,455) (12,199,687) - -
Interest Received 900,993 2,202,129 900,993 2,017,139
----------------------------------------------------
NET CASH FLOWS FROM
(USED) IN
OPERATING
ACTIVITIES 25 (10,573,804) (16,349,541) (4,546,038) (6,038,624)
----------------------------------------------------
CASH FLOWS FROM
INVESTING
ACTIVITIES
Purchase of
property plant
and equipment (217,301) (416,589) (220,155) (386,234)
Escrow money paid
for the
establishment of
a joint venture - (5,318,688) - (5,318,688)
Deposit for
land purchase - (1,684,490) - -
Advances to
Joint Venture - - - -
Increase (decrease)
in other non
current receivables - (1,086,733) 5,314,665 (179,988)
Advanced to
Subsidiaries and
Joint Ventures (1,730,598) - (12,779,409) (12,855,573)
----------------------------------------------------
NET CASH FLOWS (USED)
FROM INVESTING
ACTIVITIES (1,947,899) (8,506,500) (7,684,899) (18,740,483)
----------------------------------------------------
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from Issue
of Ordinary Shares
and Warrants - 12,249,479 - 12,249,479
Proceeds from Issue
of Converting Shares - 42,000 - -
----------------------------------------------------
NET CASH FLOWS FROM
(USED) FINANCING
ACTIVITIES - 12,291,479 - 12,249,479
----------------------------------------------------
Net Increase/(Decrease)
in Cash Held (12,521,703) (12,564,562) (12,230,937) (12,529,629)
Net Foreign
Exchange Differences 2,352,318 (1,263,660) 2,352,318 (1,252,174)
Opening Cash
Brought Forward 23,735,508 37,563,730 23,381,961 37,163,764
----------------------------------------------------
CLOSING CASH
CARRIED FORWARD 13,566,123 23,735,508 13,503,342 23,381,961
----------------------------------------------------
----------------------------------------------------
Statement of Changes in Equity -
for the year ended 30 June 2009
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Issued Special Accumulated
Consolidated Notes capital Warrants Losses
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AS AT 1 JULY 2007 58,757,554 12,185,454 (2,821,630)
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Reserve Arising from
deemed partial disposal
of interest in subsidiary 23(g) - -
Ordinary Shares Issued
During the Year 23(d) 25,423,256 (23,554,042) -
Special Warrants Issued
During the Year 23(e) - 11,368,588 -
Share Based Payment -
Employees and Directors'
Options 23(g) - - -
Share Based Payment -
Director 23(g) - - -
Share Based Payment -
Director 23(g) - - -
Share Issue Costs
(Tax Effected) 78,933 - -
Translation Reserve - - -
Minority Interest
acquired in MNPL - - -
Profit/(Loss) for
the Year - - (8,969,011)
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AS AT 1 JULY 2008 84,259,743 - (11,790,641)
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---------------------------------------
Ordinary Shares Issued
During the Year 23(d) 43,197,011 - -
Minority Interest
prior to Purchase - - -
Share Based Payment -
Employees and Directors'
Options 23(g) - - -
Share Based Payment -
Director 23(g) - - -
Translation Reserve 23(g) - - -
Purchase of Egidia Pty Ltd 23(d) - - -
Profit/Loss for the Year - - (96,083,979)
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---------------------------------------
AS AT 30 JUNE 2009 127,456,754 - (107,874,620)
---------------------------------------
---------------------------------------
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Other Minority
Consolidated Notes Reserves Interest Total
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AS AT 1 JULY 2007 1,904,003 - 70,025,381
---------------------------------------
Reserve Arising from
deemed partial disposal
of interest in subsidiary 23(g) (9,696,433) - (9,696,433)
Ordinary Shares Issued
During the Year 23(d) - - 1,869,214
Special Warrants Issued
During the Year 23(e) - - 11,368,588
Share Based Payment -
Employees and Directors'
Options 23(g) 202,493 - 202,493
Share Based Payment -
Director 23(g) 43,290,591 - 43,290,591
Share Based Payment -
Director 23(g) 398,702 - 398,702
Share Issue Costs
(Tax Effected) - - 78,933
Translation Reserve (86,645) - (86,645)
Minority Interest
acquired in MNPL - 31,383,725 31,383,725
Profit/( Loss) for
the Year - 36,889 (8,932,122)
---------------------------------------
AS AT 1 JULY 2008 36,012,711 31,420,614 139,902,427
---------------------------------------
---------------------------------------
Ordinary Shares Issued
During the Year 23(d) - - 43,197,011
Minority Interest
prior to Purchase (58,049) (1,054) (59,103)
Share Based Payment -
Employees and Directors'
Options 23(g) 91,603 - 91,603
Share Based Payment -
Director 23(g) (10,698,879) - (10,698,879)
Translation Reserve 23(g) (26,008) - (26,008)
Purchase of Egidia Pty Ltd 23(d) (11,798,451) (31,398,560) (43,197,011)
Profit/Loss for the Year - - (96,083,979)
---------------------------------------
---------------------------------------
AS AT 30 JUNE 2009 13,522,927 21,000 33,126,061
---------------------------------------
---------------------------------------
-------------------------------------------------------------------------
Issued Special Accumulated
Parent Notes capital Warrants Losses
-------------------------------------------------------------------------
AS AT 1 JULY 2007 58,757,554 12,185,454 618,734
---------------------------------------
Ordinary Shares Issued
During the Year 23(d) 25,423,256 (23,554,042) -
Special Warrants Issued
During the Year 23(e) - 11,368,588 -
Share Based Payment -
Employees and Directors'
Options 23(g) - - -
Share Based Payment -
Director 23(g) - - -
Tax Effect of Share
Issue Cost 78,933 - -
Profit/(Loss) for the Year - - (7,387,754)
---------------------------------------
AS AT 1 JULY 2008 84,259,743 - (6,769,020)
---------------------------------------
---------------------------------------
Ordinary Shares Issued
During the Year 23(d) 43,197,011 -
Special Warrants Issued
During the Year 23(e) - - -
Share Based Payment -
Employees and Directors'
Options 23(g) - - -
Share Based Payment -
Director 23(g) - - -
Tax Effect of Share
Issue Cost - - -
Profit/(Loss) for the Year - - (89,813,631)
---------------------------------------
---------------------------------------
AS AT 30 JUNE 2009 127,456,754 - (96,582,651)
---------------------------------------
---------------------------------------
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Other
Parent Notes Reserves Total
------------------------------------------------------------
AS AT 1 JULY 2007 1,904,003 73,465,745
--------------------------
Ordinary Shares Issued
During the Year 23(d) - 1,869,214
Special Warrants Issued
During the Year 23(e) - 11,368,588
Share Based Payment -
Employees and Directors'
Options 23(g) 202,493 202,493
Share Based Payment -
Director 23(g) 398,702 398,702
Tax Effect of Share
Issue Cost - 78,933
Profit/(Loss) for the Year - (7,387,754)
--------------------------
AS AT 1 JULY 2008 2,505,198 79,995,921
--------------------------
--------------------------
Ordinary Shares Issued
During the Year 23(d) - 43,197,011
Special Warrants Issued
During the Year 23(e) - -
Share Based Payment -
Employees and Directors'
Options 23(g) 91,603 91,603
Share Based Payment -
Director 23(g) (398,701) (398,701)
Tax Effect of Share
Issue Cost - -
Profit/(Loss) for the Year - (89,813,631)
--------------------------
--------------------------
AS AT 30 JUNE 2009 2,198,100 33,072,203
--------------------------
--------------------------
Notes to the Financial Statements (Extracts)
for the year ended 30 June 2009
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
The financial statements are general purpose financial statements, which
have been prepared in accordance with the requirements of the Corporation
Act 2001 and Australian Accounting Standards.
The financial statements have been prepared in accordance with the
historical cost convention, which have been measured at fair value. The
financial statements are presented in Australian dollars.
The accounts have been prepared using the going concern assumption. This
assumes that the Group will be able to settle all debts as and when they
fall due in the ordinary course of business. Management and the directors
monitor the forecast cash flows to ensure that sufficient funds exists to
cover overheads, retain title to mineral properties and to progress the
project.
(b) Statement of Compliance
The financial report complies with Australian Accounting Standards as
issued by the Australian Accounting Standards Board and International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
NOTE 10. PROPERTY PLANT AND EQUIPMENT
Consolidated Parent
Year Ended Plant and Land and Plant and
30 June 2009 Equipment Improvements Total Equipment Total
($A) ($A) ($A) ($A) ($A)
-------------------------------------------------------
As at 1 July 2008
Net carrying
amount 511,227 363,551 874,778 377,326 377,326
Additions 226,535 - 226,535 217,363 217,363
Disposals (6,379) - (6,379) - -
Depreciation charge
for the year -
Operations (167,172) - (167,172) (146,179) (146,179)
Depreciation charge
for the year -
Evaluation (24,916) (9,000) (33,916) (15,048) (15,048)
Impairment (41,250) (41,250)
-------------------------------------------------------
As at 30 June 2009
Net carrying
amount 539,295 313,301 852,596 433,462 433,462
-------------------------------------------------------
-------------------------------------------------------
As at 30 June 2009
Cost 957,570 376,250 1,333,820 782,244 782,244
Accumulated
Depreciation (418,275) (21,699) (439,974) (348,782) (348,782)
Impairment (41,250) (41,250)
-------------------------------------------------------
As at 30 June 2009
Net Carrying
Amount 539,295 313,301 852,596 433,462 433,462
-------------------------------------------------------
-------------------------------------------------------
As at 30 June 2008
Cost 737,189 376,250 1,113,439 564,881 564,881
Accumulated
Depreciation (225,962) (12,699) (238,661) (187,555) (187,555)
-------------------------------------------------------
As at 30 June 2008
Net Carrying
Amount 511,227 363,551 874,778 377,326 377,326
-------------------------------------------------------
-------------------------------------------------------
Year Ended Plant and Land and Plant and
30 June 2008 Equipment Improvements Total Equipment Total
($A) ($A) ($A) ($A) ($A)
-------------------------------------------------------
As at 1 July 2007
Net carrying
amount 220,233 372,576 592,809 104,044 104,044
Additions 458,407 - 458,407 386,234 386,234
Disposals (26,722) - (26,722) - -
Depreciation charge
for the year -
Operations (134,620) - (134,620) (112,952) (112,952)
Depreciation charge
for the year -
Evaluation (6,071) (9,025) (15,096) - -
-------------------------------------------------------
As at 30 June 2008
Net carrying
amount 511,227 363,551 874,778 377,326 377,326
-------------------------------------------------------
-------------------------------------------------------
Consolidated Parent
June 09 June 08 June 09 June 08
($A) ($A) ($A) ($A)
-----------------------------------------------------
NOTE 11. DEFERRED
EVALUATION
AND
EXPLORATION
Opening balance 111,984,745 35,562,039 1,387,021 1,423,082
Foreign Currency
Translation 127,053 - - -
Additions 3,177,466 12,214,783 - -
Share Based Payments
(refer Note19(a)) - 66,322,904 - 1,387,021
Reversal of Share
Based Payment (i) (10,698,879) - (398,702) -
Impairment (ii) (86,367,475) (2,114,981) (988,319) (1,423,082)
-----------------------------------------------------
18,222,910 111,984,745 - 1,387,021
-----------------------------------------------------
-----------------------------------------------------
Exploration and Evaluation expenditure incurred by the Group is
accumulated for each area of interest. This expenditure is carried at
cost and is comprised of direct costs and an appropriate directly
attributable portion of related salary and contractor costs and overhead
costs.
When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area on a production output
basis. The amount will be recovered through successful development or
sale.
i. Share Based Payments associated with progressing the evaluation of
the Marlborough Nickel Project:
------------------------------------------------------------------
On 7 December 2007, MNPL entered into Share Subscription Agreements with
Dasines Pty Ltd. An amendment to the milestones in the Dasines Share
subscription agreement was approved on 14 August 2008. Under the
subscription agreements, shares issued to Dasines would convert to
ordinary shares in MNPL on the achievement of certain milestones. The
milestones were:
1. Execution of a binding agreement for the turnkey construction of the
Gladstone Nickel Project; and
2. Execution of a binding agreement for the financing of or assistance
with the financing of the Gladstone Nickel Project or
3. The Company entering a Scheme of Arrangement with Resource
Developments International Limited ("RDI").
The Scheme of Arrangement with RDI was not completed by 31 March 2009,
and Milestone 3 was not achieved. The Memorandum of Understanding ("MOU")
with MCC lapsed on 30 June 2009. As a result, it is not probable that
Milestone 1 and 2 will be achieved. Based on this, the portion of the
Dasines Share based payment previously capitalised to Deferred Evaluation
and Exploration has been reversed.
ii. Impairment:
Exploration and Evaluation expenditure incurred by the Group is
accumulated for each area of interest. This expenditure is carried at
cost and is comprised of direct costs and an appropriate directly
attributable portion of related salary and contractor costs and overhead
costs.
When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area on a production output
basis. The amount will be recovered through successful development or
sale.
The Group determines whether Deferred Evaluation and Exploration Costs
are impaired at least on a bi-annual basis.
In assessing whether impairment is required to the carrying value of an
asset, its carrying value is compared with its recoverable amount. The
recoverable amount is the higher of the asset's fair value less costs to
sell and value in use. Given the nature of the groups activities, the
fair value less costs to sell' approach has been used in assessing the
impairment charges.
The triggers for the impairment test were the significant fall in the
price of nickel, the closing of major nickel operations and write down of
associated carrying values, proposed RDI listing not proceeding and the
MOU with MCC lapsing as at 30 June 2009.
Total impairment charges of $86,367,475 have been recognised in respect
of the Deferred Evaluation and Exploration asset.
The Impairment charge includes the full impairment of the Deferred
Evaluation and Exploration asset associated with the Ouinne SAS Joint
Venture. As part of the Joint venture agreement, GPNL was to provide
financing for the GNP. As the current Dasines agreement for funding of
the GNP is not proceeding, the Group has assessed that an impairment
trigger exists in relation to the assessment of the recoverable amount of
the Deferred Evaluation and Exploration asset associated with the JV. The
recoverable amount of the Deferred Exploration and Evaluation asset was
based on the groups estimate of fair value less costs to sell, consistent
with recent transactions of nickel projects having regard to the
recoverable amounts work undertaken in relation to engineering,
environmental and metallurgical activities.
Consolidated Parent
June 09 June 08 June 09 June 08
($A) ($A) ($A) ($A)
-----------------------------------------------------
NOTE 12. TRADE AND
OTHER
RECEIVABLES
(NON-CURRENT)
-----------------------------------------------------
Amounts Receivable
from Subsidiaries (a)
(Refer Note 19) - - 12,724,579 7,040,189
Impairment of
Receivables from
Subsidiaries (b) - - (6,012,603) -
Security Deposits -
Bank Guarantees 352,807 1,215,787 194,014 179,988
Amounts in Escrow - 5,318,688 - 5,318,688
Amounts receivable
from Joint Venture
parties (c) 7,688,918 - 7,688,918 -
Impairment of
Receivables from
JV parties (e) (7,688,918) - (7,688,918) -
Amounts receivable
from Joint Venture
Parties (d) 1,918,020 482,991 - -
Impairment of
Receivables from
JV parties (e) (1,918,020) - - -
Others 55,250 65,184 - -
Deposits - Land
(Note 18 (g)) 1,684,490 1,684,490 - -
-----------------------------------------------------
2,092,547 8,767,140 6,905,990 12,538,865
-----------------------------------------------------
-----------------------------------------------------
(a) This amount is unsecured, interest free and repayable on demand.
(b) The loan balances arise from the transfer of cash and exploration and
evaluation expenditure incurred by GPNL on behalf of the MNPL, GNPP
and GNC in relation to their exploration assets. The subsidiaries
major assets are deferred exploration expenditure leaving them unable
to repay in full their loans to GPNL until production commences or
the asset is sold. The Exploration and Evaluation assets have been
impaired and are written down to their recoverable value. The Group
has assessed that an impairment trigger exists in relation to GPNL'S
loan receivables with its Subsidiaries and these amounts have been
impaired to the amount recoverable by the parent as at 30 June 2009.
(c) This amount forms part of the arrangements to earn an interest in the
JV in New Caledonia. (refer also Note 18(e)).
(d) This amount is interest bearing and represents advances made for the
payment of exploration and evaluation activities in New Caledonia.
The loans will be repaid by way of reduction in the Groups' purchase
price of materials from the entity.
(e) As part of the Joint venture agreement, with SMGM, GPNL was to
provide financing for the GNP. As the current agreement for funding
of the GNP is not proceeding, the group has assessed that all
receivables from Ouinné SAS are subject to impairment. The
recoverable amount of the receivable has been assessed as zero. An
impairment expense has been included in the income statement.
NOTE 14. INVESTMENTS IN SUBSIDIARIES
Consolidated Parent
June 09 June 08 June 09 June 08
($A) ($A) ($A) ($A)
-----------------------------------------------------
Investments in
Subsidiaries
Marlborough Nickel
Pty Ltd (a) - - 32,452,079 32,452,079
Gladstone Nickel
Pipeline Pty Ltd - - 1 1
Gladstone Nickel
Project Pty Ltd - - 1 1
Gladstone New
Caledonia SAS - - 71,145 71,145
Gladstone Solomon
Islands Pty Ltd - - 1,859 1,859
Egidia Pty Ltd - - 43,197,011 -
Impairment Provision - - (67,914,188) -
-----------------------------------------------------
- - 7,807,908 32,525,085
-----------------------------------------------------
-----------------------------------------------------
Equity Interests are listed in Note 19
The subsidiaries major assets are deferred exploration expenditure
leaving them unable to repay their loans to GPNL until production
commences or the asset is sold The Exploration and Evaluation assets have
been impaired and are written down to their recoverable value. The Group
has assessed that an impairment trigger exists in relation to the
carrying amount of the parent's investment in Subsidiaries. As a result,
the recoverable amount of the Investments in Subsidiaries has been
assessed as the amount recoverable by the parent and impairment charge of
$67,914,188 has been included in the income statement.
NOTE 24. EARNINGS PER SHARE
Consolidated
June 09 June 08
($A) ($A)
--------------------------
Net Profit (Loss) (96,083,979) (8,969,011)
Earnings used in Calculation of Basic
and Diluted Earnings per Share (96,083,979) (8,969,011)
Weighted Average Number of Ordinary Shares
on Issue Used in the Calculation of Basic
Earnings per Share 63,970,835 40,517,126
Basic Earnings per Share (1.50) (0.22)
Options on issue are not considered dilutive.
NOTE 25. CASH FLOW STATEMENT RECONCILIATION
Consolidated Parent
June 09 June 08 June 09 June 08
($A) ($A) ($A) ($A)
-----------------------------------------------------
a) Reconciliation of operating profit/(loss) after tax to the net cash
flows from operations
Operating Profit/(Loss)
After Tax (96,083,979) (8,932,122) (89,813,631) (7,387,754)
Adjusted for:
Interest (218,333) (218,333)
Provision for Employee
Entitlements 10,618 32,269 24,921 6,617
Gain on Foreign
Exchange (3,462,078) 1,263,660 (3,466,424) 1,252,174
Impairment Loss 96,015,663 2,114,981 82,604,027 1,423,082
Depreciation - Charged
to Operations 167,172 134,620 146,179 112,952
Depreciation - Charged
to Evaluation 15,096 33,916 -
Movement in Shares
Based Payments and
other reserves. (6,491) 49,118 91,604 49,118
Changes in Assets
and Liabilities:
(Increase)/Decrease
in Receivables 91,398 444,499 93,149 176,731
(Increase)/Decrease
in Deferred Evaluation
Costs (3,146,455) (12,289,066) (26,025) -
(Increase)/Decrease in
Prepayments and other
Assets 8,333 24,132 -
(Increase)/Decrease in
Deferred Tax Asset/
Liability (2,429,253) 1,274,440 6,249,260 (1,977,264)
Increase/(Decrease) in
Payables (1,369,655) (542,175) (248,829) 185,021
Increase/(Decrease) in
Non-Current Payables (86,414) 41,130 (13,212) 100,822
Increase/(Decrease) in
Non-Current
Provisions (64,330) 19,877 (2,640) 19,877
-----------------------------------------------------
Net Cash Flow Used
from Operating
Activities (10,573,804) (16,349,541) (4,546,038) (6,038,624)
-----------------------------------------------------
-----------------------------------------------------
Reconciliation of Cash:
Cash Balance Comprises
Cash at Bank and on
Short Term Deposit 13,566,123 23,735,508 13,503,342 23,381,961
-----------------------------------------------------
Closing Cash Balance 13,566,123 23,735,508 13,503,342 23,381,961
-----------------------------------------------------
-----------------------------------------------------
b) Non cash financing and investments activities
Share Based Payments
(note 21) - 66,322,904 - 1,387,022
Ordinary Shares Issued
as per (note 19) 43,197,011 43,197,011 -
Reversal of Share
Based Payments (10,698,879) - (10,698,879) -
Conversion of Special
Warrants to Ordinary
Shares (note 22 (e)) - 12,185,454 - 12,185,454
Conversion of
Subsidiary Debt in
parent to Equity
(note 14) - - - 32,452,079
NOTE 26. EVENTS AFTER BALANCE DATE
(a) Extension of Memorandum of Understanding with MCC.
GPNL and MCC have not extended the expiry dates of the exclusivity period
of the MOU from 30 June 2009. The MOU announced on 30 January 2008
provided MCC with an exclusive right to negotiate and finalise financing
and construction agreements for the GNP.
For further information: or comment: James Henderson, Chairman - Gladstone Pacific Nickel, Tel: +61 (0) 2 9252 8466; Fiona Owen, Robert Beenstock - Grant Thornton UK LLP, Tel: +44 207 383 5100; John Prior - Arbuthnot Securities, Tel: +44 207 012 2000; Email: [email protected]
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