Gladstone Pacific Nickel Ltd (ACN 104 261 887) - Final Results for the year ended 30 June 2008



    LONDON, ON, Sept. 22 /CNW/ - Gladstone Pacific Nickel Limited ("GPNL" or
"the Company) is pleased to report its Final Results for the year ended
30 June 2008.

    Chairman's and CEO's Report

    It has been a busy year and it is pleasing to report that we have
advanced the Gladstone Nickel Project ("GNP") to a point where the Company was
able to progress negotiations with China Metallurgical (Group) Corporation
("MCC") to ensure commercialisation of this nationally significant project.
    The Company has received a proposal for a merger from the Clive Palmer
led Resource Development International Limited ("RDI") which when completed
would result in shareholders becoming part of RDI, a company formed to acquire
a portfolio of resource assets, which is seeking to raise US$5 billion and
list on the Hong Kong Stock Exchange in the coming months. The base value for
GPNL shareholders is to be set at (pnds stlg)2.20, per GPNL share, in RDI
shares.
    The 2008 financial year has been packed with corporate and commercial
activity and we are confident that the increase in the underlying value of the
Company as a result of this activity is not reflected by the current share
price.

    Changes to the Board

    The founding Directors, Robert Pearce and Peter Matheson together with
Andrew Daley and Peter Watson stepped aside at the end of 2007, making way for
new Board members to focus on funding and accelerating the development of the
GNP. The contribution from the founding Directors has been outstanding and
they have contributed significantly to the positioning of the Company for
continued growth and development.
    The new Directors, Domenic Martino, Geoffrey Smith, Benjamin Hill and
Chairman, Professor Clive Palmer joined existing Directors James Henderson and
John Downie on the Board. Since early 2008, the Company has moved through a
change process which included finalisation of the Feasibility Study ("IDFS"),
signing an MOU for funding and turnkey construction with MCC and restructuring
ready for commercialisation of the Project.
    In August 2008, RDI proposed a Merger Agreement with GPNL. Following
this, Professor Palmer and Geoffrey Smith resigned, as Chairman and
Non-Executive Director respectively. James Henderson, with his extensive
experience and record as a Director of GPNL, became the new Chairman.
    During the year, we moved office in Brisbane from the Christie Centre to
380 Queen Street. This significant move consolidated permanency, ownership and
a sense of teamwork for the entire group.

    Ore Supply

    In August 2007, GPNL signed off on the Ouinne Joint Venture (JV) in New
Caledonia and established a strong relationship with our partner Société
Minière Georges Montagnat ("SMGM"). This provided impetus for continued
operational and organisational growth and increased the Project's strength.
Expansion into New Caledonia is consistent with our strategy to ensure high
quality long term diversified ore resources are available for the Project.
    This expansion required the development of a team to be based in Noumea.
Our strong Geological expertise includes Albert Mostert and John Levings
supported by Sarah Manzanares, Olivier Pecqueux and Murray Jerome.
    The Ouinne deposit is proving to be a substantial ore body. Helicopter
supported core drilling has confirmed initial expectations that a significant
resource will be developed. Drilling is progressing with a total of
5,525 metres of our 9,000 metre drill program completed to date. The JV Board
meets regularly providing strong support and constructive input to the JV
team. SMGM has proven to be a most efficient and responsible mining company
and we are working together to develop additional areas of interest.
    Exciting additions to the team have been Tim Riley and Debra Carpin both
from the large Goro nickel mine in New Caledonia. Their experience is
invaluable, as the Goro Project is in many ways comparable with the GNP.
    The Solomon Islands team has worked patiently to gain support and
acceptance for the Project and our objective of obtaining mining rights in
that country. Gaining access to the extensive ore deposits on Isabel Island
would improve the diversification of ore supply for the future. GPNL will
continue to work with government officials and the community to progress its
plans to participate in the proposed international tender process.

    Financial Strength

    The finance group, headed by Julien McInally, resolved many complex
issues. These included the completion of the US$40 million equity raising (led
by Transocean Securities Pty Ltd, a Company associated with James Henderson
and Research Capital Corporation) as part of achieving a listing on the
Toronto Stock Exchange, progressing the SMGM Joint Venture Agreement, Share
Subscription Agreements with Professor Palmer, the Independent Experts Report,
the Extraordinary General Meetings and the proposed merger agreement with RDI.
Following a shift in the Company's focus to the south-west Pacific region the
Company delisted from the Toronto Stock Exchange. This was all achieved while
the team of Ian Megom, Marianne Joseph, Karen Williams and Jane Kirchin
continued to provide management with a high standard of financial support.
During the year our banking business was transferred to the National Australia
Bank with the Company ending the year with $23 million in the bank.

    Commercial Persistence

    The Commercial team of Bruce McCleary, John Miller and James Kastelein
have completed the Land Purchase Agreement of approximately 2,000 hectares at
Yarwun. This land positions the Company in an excellent industrial location,
with deep water port access, established industrial work force and existing
power, water, road, rail and shipping infrastructure. The plant will be
strategically positioned alongside other large scale mineral and chemical
industries with sufficient land for stage 1 and 2 of the Project.
    The team has progressed towards finalisation of key terms to major
contracts such as water supply, easement access, power, port access, rail
transport, key reagents, earthmoving and land for rail sidings. The progress
has been significant with the Project poised to complete many of these
contracts upon conclusion of financing arrangements.

    Marlborough Indigenous Land Use Agreement ("ILUA") Finalised

    Gavin Becker, Bill Stacey and Peter Hughes worked tirelessly to finalise
and secure agreements with the Traditional Land Owners (TO's) and ensure a
fair and respectful long term ILUA which was registered with the Queensland
Government. The TO's continue the operation of a successful, 2,000 head,
cattle business on GPNL's 12,000 hectares Coorumburra property.

    Environmental Approval and Community Acceptance

    The Commonwealth government changed, global warming became a National
priority and the intensity of competing projects in Gladstone put additional
pressure on Gavin Becker and James MacDermott to deliver environmental
approval for the project from state and federal regulators. At the time of
releasing this annual report all submissions had been completed and licence
conditions have been agreed and we are awaiting sign off from the regulators.
Use of sea water in the process, very low carbon dioxide emissions, design of
the world's most efficient sulphur dioxide gas cleaning equipment, new and
innovative wastewater treatment design and advanced discussions on blending
our residue with waste from the alumina plants will make GPNL's Plant a
showcase which the Directors believe will set a new benchmark for
environmental performance.

    Progressed to Turn Key Bid

    Gavin Becker's progressive team in Process and Engineering Tim Riley,
Peter Mason, Paige Martin, Greg Bond, Jeremy Tape and Arnel Nalangan have
considerable experience on High Pressure Acid Leach ("HPAL") projects
including Goro, Ramu, Koniambo, Coral Bay, Ravensthorpe and Murrin Murrin. The
Engineering team has worked closely with MCC in Beijing to progress the
design. Our new office in Beijing headed up by Wang Gongping has been
important in developing a strong relationship with MCC. The detail provided in
the Feasibility Study ("IDFS") has been refined and optimised to incorporate
improvements such as the Counter Current Atmospheric Leach process to improve
performance and reduce capital and operating costs.

    The Timing

    The project is planned to commence production in late 2012. The Directors
are confident that this will coincide with an increase in demand for nickel
and the reduction and stabilisation of sulphur and shipping prices the
combined effect of which will enhance shareholder value.

    Forward Outlook - Restructuring

    The final step in positioning the Project for commercialisation will be
the successful completion of the proposed merger with RDI. Following its
planned listing on the Hong Kong Stock Exchange, RDI will be a diversified
mining house with a planned capital raising expected to exceed US$5 billion.
The Hong Kong listing and additional Chinese investor interest will further
cement the Company's links with MCC leading to the Project achieving fully
funded status, completion of detailed engineering design, ordering of long
lead items and commencement of construction of the plant.
    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. The current year is proving to be every bit as exciting
and we look forward to continuing on this rewarding pathway.

    
    John Downie                    James Henderson
    Chief Executive Officer        Chairman



    Income Statement for the year ended 30 June 2008

                     Notes        Consolidated                 Parent
                             June 08      June 07       June 08      June 07
                               ($A)         ($A)          ($A)         ($A)
                         ----------------------------------------------------
    Interest Income  5(b)  2,303,943      896,699     2,125,229      878,254
                         ----------------------------------------------------
    Revenues from
     Continuing
     Operations            2,303,943      896,699     2,125,229      878,254
                         ----------------------------------------------------
    Impairment Loss   11   2,114,981            -     1,423,082            -
    Evaluation Costs         613,865      433,063       535,935      311,758
    China
     Representative          228,588            -       228,588            -
    Foreign Exchange
     Loss            5(a)  1,724,535      300,809     1,713,049      284,165
    Directors' Fees/
     Remuneration            789,409      649,038       789,049      649,038
    Directors'
     Option Expense 19(a)     24,101      353,200        24,101      353,200
    Brokers'
     Option Expense 19(a)     14,083            -        14,083            -
    Professional
     Fees                  1,207,513      262,026       888,019      253,638
    Travel and
     Accommodation           459,662      229,477       397,059      224,288
    Wages and On-
     costs           5(d)  1,190,582      442,888       928,806      438,823
    Office Rental    5(c)    365,524      136,151       306,976      128,039
    Public Relations
     and Ongoing
     Listing Fees            368,574      227,056       368,574      227,056
    IT and
     Communication           182,551       72,709       142,432       72,709
    Marketing                 60,595            -        31,820            -
    Depreciation     5(a)    134,620       54,656       112,952       51,217
    Other            5(e)    482,442      212,733       380,458      203,792
                         ----------------------------------------------------
    Expenses               9,961,625    3,373,806     8,284,983    3,197,723
                         ----------------------------------------------------

                         ----------------------------------------------------
    Profit/(Loss)
     Before Income
     Tax Expense          (7,657,682)  (2,477,107)   (6,159,754)  (2,319,469)
                         ----------------------------------------------------

                         ----------------------------------------------------
    Income Tax
     (Expense)/
     Benefit           6  (1,274,440)      (5,673)   (1,228,001)     483,869
                         ----------------------------------------------------

                         ----------------------------------------------------
    Profit/(Loss)
     After Income
     Tax Expense          (8,932,122)  (2,482,780)   (7,387,755)  (1,835,600)
    Attributable to:
     Minority Interest        36,889            -             -            -
    Parent Interest       (8,969,011)  (2,482,780)   (7,387,755)  (1,835,600)
                         ----------------------------------------------------
                          (8,932,122)  (2,482,780)   (7,387,755)  (1,835,600)
                         ----------------------------------------------------

    Basic and Diluted
     Earnings (Loss)
     per Share (Cents
     per Share)       23      (22.07)        (8.13)
                         ----------------------------------------------------



    Balance Sheet as at 30 June 2008

                     Notes        Consolidated                 Parent
                             June 08      June 07       June 08      June 07
                               ($A)         ($A)          ($A)         ($A)
                         ----------------------------------------------------
    CURRENT ASSETS
    Cash Assets        7  23,735,508   37,563,730    23,381,961   37,163,764
    Trade and Other
     Receivables       8     286,213      706,580       192,818      342,034
    Other Current
     Assets            9       9,231       33,363         3,900       31,415
                         ----------------------------------------------------
    Total Current
     Assets               24,030,952   38,303,673    23,578,679   37,537,213
                         ----------------------------------------------------
    Non Current Assets
    Property Plant and
     Equipment        10     874,778      592,810       377,326      104,044
    Investment in
     Subsidiaries     14           -            -    32,525,085       73,016
    Deferred
     Evaluation and
     Exploration
     Costs            11 111,984,745   35,562,039     1,387,021    1,423,082
    Trade and Other
     Receivables      12   8,767,140      575,415    12,538,865   26,404,374
    Deferred
     Tax Asset    6(d)(i)          -            -    10,617,537    8,640,273
                         ----------------------------------------------------
    Total Non Current
     Assets              121,626,663   36,730,264    57,445,834   36,644,789
                         ----------------------------------------------------

    Total Assets         145,657,615   75,033,937    81,024,513   74,182,002
                         ----------------------------------------------------
                         ----------------------------------------------------
    Current Liabilities
    Trade and Other
     Payables         13   2,186,788    2,728,963       815,764      630,743
    Provisions        15     130,614       98,345        92,131       85,514
                         ----------------------------------------------------
    Total Current
     Liabilities           2,317,402    2,827,308       907,895      716,257
                         ----------------------------------------------------

    Non Current
     Liabilities
    Trade and Other
     Payables         16     812,109      770,979       100,820            -
    Deferred Tax
     Liabil-
     ities       6(d)(ii)  2,429,251    1,233,720             -            -
    Provisions        15     196,426      176,549        19,877            -
                         ----------------------------------------------------
    Total Non Current
     Liabilities           3,437,786    2,181,248       120,697            -
                         ----------------------------------------------------
    Total Liabilities      5,755,188    5,008,556     1,028,592      716,257
                         ----------------------------------------------------
    Net Assets           139,902,427   70,025,381    79,995,921   73,465,745
                         ----------------------------------------------------
                         ----------------------------------------------------

    Equity
    Contributed
     Equity           22  84,259,743   70,943,008    84,259,743   70,943,008
    Reserves          22  36,012,711    1,904,003     2,505,198    1,904,003
    Retained Earnings
    /(Accumulated
     Losses)             (11,790,641)  (2,821,630)   (6,769,020)     618,734
                         ----------------------------------------------------
    Parent Interest      108,481,813   70,025,381    79,995,921   73,465,745
                         ----------------------------------------------------
    Minority Interest     31,420,614
                         ----------------------------------------------------
    Total Equity         139,902,427   70,025,381    79,995,921   73,465,745
                         ----------------------------------------------------
                         ----------------------------------------------------



    Cash Flow Statement for the year ended 30 June 2008

                     Notes        Consolidated                 Parent
                             June 08      June 07       June 08      June 07
                               ($A)         ($A)          ($A)         ($A)
                         ----------------------------------------------------
    Cash Flows from
     Operating
     Activities
    Payments to
     Suppliers and
     Employees            (6,351,983)  (1,879,498)   (8,055,763)  (4,227,868)
    Payments for
     Exploration and
     Evaluation          (12,199,687) (11,880,288)            -   (2,184,145)
    Interest Received      2,202,129      913,547     2,017,139      911,061
                         ----------------------------------------------------
    Net Cash Flows
     from (Used) in
     Operating
     Activities       24 (16,349,541) (12,846,239)   (6,038,624)  (5,500,952)
                         ----------------------------------------------------
                         ----------------------------------------------------

    Cash Flows from
     Investing
     Activities
    Purchase of
     property plant
     and equipment          (416,589)    (519,948)     (386,234)     (29,130)
    Escrow money paid
     for the
     establishment of
     a joint venture      (5,318,688)           -    (5,318,688)           -
    Deposit for land
     purchase             (1,684,490)           -             -            -
    Increase in other
     non current
     receivables          (1,086,733)           -      (179,988)           -
    Purchase of
     Investment in
     Subsidiaries                  -            -             -      (73,004)
    Advanced to
     Subsidiaries                  -            -   (12,855,573)  (8,019,796)
                         ----------------------------------------------------
    Net Cash Flows
     (Used) from
     Investing
     Activities           (8,506,500)    (519,948)  (18,740,483)  (8,121,930)
                         ----------------------------------------------------

    Cash Flows from
     Financing
     Activities
    Proceeds from Issue
     of Ordinary Shares
     and Warrants         12,249,479   31,847,889    12,249,479   31,847,889
    Proceeds from Issue
     of Converting Shares     42,000            -             -            -
                         ----------------------------------------------------
    Net Cash Flows from
     (Used) Financing
     Activities           12,291,479   31,847,889    12,249,479   31,847,889
                         ----------------------------------------------------

    Net Increase/
     (Decrease) in Cash
     Held                (12,564,562)  18,481,702   (12,529,629)  18,225,007
    Net Foreign Exchange
     Differences          (1,263,660)    (300,809)   (1,252,174)    (284,165)
    Opening Cash
     Brought Forward      37,563,730   19,382,837    37,163,764   19,222,922

                         ----------------------------------------------------
    Closing Cash
     Carried Forward      23,735,508   37,563,730    23,381,961   37,163,764
                         ----------------------------------------------------
                         ----------------------------------------------------



    Statement of Changes in Equity for the year ended 30 June 2008

    Consolidated              Notes       Issued       Special      Retained
                                         capital      Warrants      Earnings
                                   ------------------------------------------

    As at 1 June 2006                 37,942,416             -      (338,850)

    Ordinary Shares
     Issued During
     the Year                         20,100,232             -             -

    Special Warrants
     Issued During
     the Year                                  -    11,747,658             -

    Share Based Payment -
     Employees and
     Directors' Options                        -             -             -

    Share Based Payment -
     Broker Special
     Warrants                                  -             -             -

    Share Issue Costs
     (Tax Effected)                      714,906       437,796             -

    Profit/Loss for
     the Year                                  -             -    (2,482,780)
                                   ------------------------------------------

    As at 1 July  2007                58,757,554    12,185,454    (2,821,630)

    Reserve Arising from
     deemed partial
     disposal of interest
     in subsidiary                             -             -
    Ordinary Shares Issued
     During the Year           22(d)  25,423,256   (23,554,042)            -
    Special Warrants Issued
     During the Year           22(e)           -    11,368,588             -
    Share Based Payment -
     Employees and Directors'
     Options                   22(g)           -             -             -
    Share Based Payment -
     Director                  22(g)           -             -             -
    Share Based Payment -
     Director                  22(g)           -             -             -
    Share Issue Costs
     (Tax Effected)                       78,933             -             -
    Translation Reserve                        -             -             -
    Minority Interest
     acquired in MNPL                          -             -             -
    Profit/(Loss) for
     the Year                                  -             -    (8,969,011)
                                   ------------------------------------------

    As at 30 June 2008                84,259,743             -   (11,790,641)
                                   ------------------------------------------
                                   ------------------------------------------



    Consolidated              Notes        Other      Minority         Total
                                        Reserves      Interest
                                   ------------------------------------------

    As at 1 June 2006                    217,991             -    37,821,557
    Ordinary Shares
     Issued During
     the Year                                  -             -    20,100,232
    Special Warrants
     Issued During
     the Year                                                -    11,747,658
    Share Based Payment -
     Employees and
     Directors' Options                  803,558             -       803,558
    Share Based Payment -
     Broker Special
     Warrants                            882,454             -       882,454
    Share Issue Costs
     (Tax Effected)                            -             -      1,152,702
    Profit/Loss for
     the Year                                  -             -    (2,482,780)
                                   ------------------------------------------

    As at 1 July  2007                 1,904,003             -    70,025,381

    Reserve Arising from
     deemed partial
     disposal of interest
     in subsidiary                    (9,696,433)            -    (9,696,433)
    Ordinary Shares Issued
     During the Year           22(d)           -             -     1,869,214
    Special Warrants Issued
     During the Year           22(e)           -             -    11,368,588
    Share Based Payment -
     Employees and Director'
     Options                   22(g)     202,493             -       202,493
    Share Based Payment -
     Director                  22(g)  43,290,591             -    43,290,591
    Share Based Payment -
     Director                  22(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 30 June 2008                36,012,711    31,420,614   139,902,427
                                   ------------------------------------------
                                   ------------------------------------------


    Parent                    Notes       Issued       Special      Retained
                                         capital      Warrants      Earnings
                                   ------------------------------------------
    As at 1 June 2006                 37,942,416             -     2,454,334
    Ordinary Shares Issued
     During the Year                  20,100,232             -             -
    Special Warrants Issued
     During the Year                           -    11,747,658             -
    Share Based Payment -
     Employees and Directors'
     Options                                   -             -             -
    Share Based Payment -
     Broker Special Warrants                   -             -             -
    Tax Effect of Share Issue
     Cost                                714,906       437,796             -
    Profit/Loss for the Year                  -             -    (1,835,600)
                                   ------------------------------------------
    As at 1 July 2007                 58,757,554    12,185,454       618,734
    Ordinary Shares Issued
     During the Year           22(d)  25,423,256   (23,554,042)            -
    Special Warrants Issued
     During the Year           22(e)           -    11,368,588             -
    Share Based Payment -
     Employees and Directors'
     Options                   22(g)           -             -             -
    Share Based Payment -
     Director                  22(g)           -             -             -
    Tax Effect of Share
     Issue Cost                           78,933             -             -
    Profit/(Loss) for the
     Year                                      -             -    (7,387,754)
                                   ------------------------------------------
    As at 30 June 2008                84,259,743             -    (6,769,020)
                                   ------------------------------------------
                                   ------------------------------------------



                                                         Other
                              Notes                   Reserves         Total
                                   ------------------------------------------
    As at 1 June 2006                                  217,991    40,614,741
    Ordinary Shares Issued
     During the Year                                         -    20,100,232
    Special Warrants Issued
     During the Year                                         -    11,747,658
    Share Based Payment -
     Employees and Directors'
     Options                                           803,558       803,558
    Share Based Payment -
     Broker Special Warrants                           882,454       882,454
    Tax Effect of Share Issue
     Cost                                                    -     1,152,702
    Profit/Loss for the Year                                 -    (1,835,600)
                                   ------------------------------------------
    As at 1 July 2007                                1,904,003    73,465,745
    Ordinary Shares Issued
     During the Year           22(d)                         -     1,869,214
    Special Warrants Issued
     During the Year           22(e)                         -    11,368,588
    Share Based Payment -
     Employees and Directors'
     Options                   22(g)                   202,493       202,493
    Share Based Payment -
     Director                  22(g)                   398,702       398,703
    Tax Effect of Share
     Issue Cost                                              -        78,993
    Profit/(Loss) for the
     Year                                                    -    (7,387,754)
                                   ------------------------------------------
    As at 30 June 2008                               2,505,198    79,995,921
                                   ------------------------------------------
                                   ------------------------------------------



    Notes to the Financial Statements for the year ended 30 June 2008

    1.  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, except for available for sale assets 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

    Australian Accounting Standards and Interpretations that have recently
    been issued or amended but are not yet effective have not been adopted by
    the Group for the annual reporting period ended 30 June 2008.

    2.  EARNINGS PER SHARE

                                               Consolidated
                                            Jun-08       Jun-07
                                             ($A)         ($A)
                                        --------------------------

    Net Profit (Loss)                    (8,969,011)   (2,482,780)
    Earnings used in Calculation of
     Basic and Diluted Earnings per
     Share                               (8,969,011)   (2,482,780)

    Weighted Average Number of
     Ordinary Shares on Issue Used in
     the Calculation of Basic Earnings
     per Share                           40,517,126    30,501,062

    Basic Earnings per Share                  (0.22)        (0.08)

    Options on issue are not considered dilutive.


    3. CASH FLOW STATEMENT RECONCILIATION

        a) RECONCILIATION OF OPERATING PROFIT / (LOSS) AFTER TAX TO THE NET
           CASH FLOWS FROM OPERATIONS

                             Consolidated                    Parent
                         June 08       June 07       June 08       June 07
                           (A$)          (A$)          (A$)          (A$)
                       ------------------------------------------------------
    Operating Profit/
     (Loss) After Tax   (8,932,122)   (2,482,780)   (7,387,754)   (1,835,600)

    Adjusted for:
    Provision for
     Employee
     Entitlements           32,269        34,717         6,617        39,038
    Loss on Foreign
     Exchange            1,263,660       300,809     1,252,174       284,165
    Impairment Loss      2,114,981             -     1,423,082             -
    Depreciation -
     Charged to
     Operations            134,620        54,656       112,952        51,217
    Depreciation -
     Charged to
     Evaluation             15,096        14,387             -             -
    Movement in Shares
     Based Payments and
     other reserves.        49,118     1,686,012        49,118     1,686,012

    Changes in Assets
     and Liabilities:
    (Increase)/Decrease
     in Receivables        444,499      (314,419)      176,731       (40,599)
    (Increase)/Decrease
     in Deferred
     Evaluation Costs  (12,289,066)  (13,022,977)            -    (1,423,082)
    (Increase)/Decrease
     in Prepayments and
     other Assets           24,132      (232,982)            -       (12,532)
    (Increase)/Decrease
     in Deferred Tax
     Asset/Liability     1,274,440         5,673    (1,977,264)   (3,488,497)
    Increase/(Decrease)
     in Payables          (542,175)    1,142,681       185,021      (761,074)
    Increase/(Decrease)
     in Non-Current
     Payables               41,130       (61,428)      100,822             -
    Increase/(Decrease)
     in Non-Current
     Provisions             19,877        29,412        19,877             -
                        -----------------------------------------------------
    Net Cash Flow Used
     from Operating
     Activities        (16,349,541)  (12,846,239)   (6,038,624)   (5,500,952)
                       ------------------------------------------------------
                       ------------------------------------------------------

    Reconciliation of Cash:

    Cash Balance
     Comprises
    Cash at Bank and
     on Short Term
     Deposit            23,735,508    37,563,730    23,381,961    19,222,922
                       ------------------------------------------------------
    Closing Cash
     Balance            23,735,508    37,563,730    23,381,961    19,222,922
                       ------------------------------------------------------
                       ------------------------------------------------------


        b) NON CASH FINANCING AND INVESTMENT ACTIVITES

                             Consolidated                    Parent
                         June 08       June 07       June 08       June 07
                           (A$)          (A$)          (A$)          (A$)
                       ------------------------------------------------------
    Share Based
     Payments (note 21) 66,322,904             -     1,387,022             -
    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             -


    4.  EVENTS AFTER BALANCE DATE

    a)  Finalisation of shares to be issued to Société Minière Georges
        Montagnat

        On 01 July 2008 the Company agreed to amend its Joint Venture
        Agreement with Société Minière Georges Montagnat ("SMGM") and fix the
        number of shares to be issued to SMGM at 15 million. The original
        agreement provided for the issue of approximately 12 million shares
        with the exact number of shares to be determined using a formula
        based on the Company's share price at the time of issue. The
        remaining conditions of the agreement are unchanged. Following the
        finalisation of certain administrative matters, GPNL will acquire an
        initial 1% shareholding in a JV entity established under the
        agreement and appoint half the JV Company's directors. In return the
        shareholders of SMGM will be offered a seat on the GPNL board. The
        issue of the fixed 15 million GPNL shares, in August 2010, will be
        consideration for the purchase of an additional 48% interest in the
        JV entity taking GPNL's interest in the Joint Venture entity, at that
        time, to 49%.

    b)  Share Sale agreements

        On 22 July 2008 the Company entered into agreements to acquire 100%
        of the issued share capital of Egidia Pty Ltd ("Egidia") and
        Dasines Pty Ltd ("Dasines") from Mr. Clive Palmer, in consideration
        for the issue of GPNL Shares representing a minimum of 50% of the
        issued shares in the Company on a fully diluted basis. Egidia and
        Dasines together hold or will hold 49.99% of MNPL. The acquisition of
        Egidia and Dasines was approved by the shareholders of the Company
        not associated with Mr. Clive Palmer on 14 August 2008 and is
        conditional on the satisfaction of certain conditions. Mr. Palmer
        currently holds 13.95% of the issued share capital of GPNL. The
        effect of the acquisitions is that the Company will regain 100%
        ownership of MNPL whilst Mr. Palmer's interests in MNPL (held through
        Egidia and Dasines) will be rolled up to a direct interest in GPNL
        which will simplify the capital structure and facilitate the
        financing and development of the Project. The Egidia acquisition will
        be finalised during September 2008 whilst the Dasines acquisition is
        conditional upon achieving certain milestones, one of which is the
        success of the proposed Scheme of Arrangement ("the GPNL Scheme")
        referred to below. If the Scheme is successful it will trigger the
        issue of 20,999,999 MNPL shares to Dasines. This will result in the
        Company acquiring all of the shares in Dasines in return for the
        issue of 28,465,233 ordinary shares in the Company to Mr. Palmer.
        GPNL has agreed to issue to Mr Palmer the same number of shares as
        are issued by the Company pursuant to the exercise of options or any
        pre-existing agreements to issue shares. This will have the effect of
        ensuring Mr Palmers interest in GPNL is not diluted as a result of
        the issue of such shares.

    c)  Amendment to Share Based Payment Milestones

        The shareholders approved an amendment to the milestones in the
        Dasines Share subscription agreement on 14 August 2008. The amendment
        provided for an alternative additional milestone being the entering
        into a Scheme of Arrangement with Resource Developments International
        Limited ("RDI"). The amendment allows for issue of 28,465,233
        ordinary shares in the Company to Mr. Palmer in return for the
        successful implementation of a takeover event. On the 1st August,
        2008 the Company entered into a Scheme Implementation Agreement,
        which once accomplished will satisfy the alternative takeover
        milestone. The amendment to the milestones will affect the accounting
        for the Share Based Payments to Director related entities. Prior to
        the amendment the share based payment was recognised by capitalising
        the cost to deferred exploration and evaluation over the vesting
        period. Subsequent to the amendment the treatment is dependent on
        an assessment of the most likely milestone to be achieved by Mr
        Palmer. If the most likely outcome is that the milestones relating to
        the execution of binding construction and financing agreements will
        be achieved, the company will continue to recognise the cost in
        accordance with the above treatment.

        If however, it is more likely that the Takeover Milestone will be
        achieved then the post amendment cost, being the cost vesting after
        the 14th August, 2008 would be recognised as an expense. The
        accounting treatment for costs vesting prior to the 14th August would
        remain unchanged.

        The Company expects that is most likely that the takeover milestone
        to be achieved prior to 31 December 2008 and consequently
        $ 43.7 million will be recognised as an expense in the 2008/09
        accounts.

    d)  Turn key proposal

        Pursuant to the Memorandum of Understanding signed by the Company and
        China Metallurgical Construction (Group) Corporation ("MCC") on 30
        January 2008 the Company received construction proposal from MCC for
        the Gladstone Nickel Project ("GNP") in July 2008. The proposal is
        currently under evaluation by GPNL's project team following which
        negotiations with MCC will commence to develop an agreement for the
        construction of the GNP.

    e)  Merger Scheme Implementation Agreement signed

        The company agreed, on 8 August 2008, to enter into a Scheme
        Implementation Agreement (SIA) with RDI a company recently formed,
        and controlled by Mr Clive Palmer, to acquire substantial iron ore,
        nickel, exploration and energy interests, including rights to extract
        20 billion tonnes of iron ore from the Balmoral tenements in Western
        Australia held by Mineralogy Pty Ltd. The SIA provides for GPNL to
        propose a scheme of arrangement (the GPNL Scheme) under which RDI
        will acquire all of the shares in GPNL for a scrip consideration of
        (pnds stlg)2.20 for each GPNL share based on RDI's share price. The
        GPNL Scheme which is subject to shareholder and court approvals, is
        conditional on RDI listing on the Hong Kong Stock Exchange or
        Australian Stock Exchange and raising a minimum of $1 billion in cash
        and GPNL receiving a satisfactory Independent Experts Report.

        It is anticipated that the GPNL Scheme will be finalised in December
        2008. If the GPNL Scheme is successful RDI will own 100% of the
        Company and it is anticipated that the Company would seek to cancel
        its AIM listing.

    f)  Extension of memorandum of understanding with MCC

        GPNL and MCC have agreed to extend the expiry date of the exclusivity
        period of the MOU from 30 September 2008 to 30 June 2009, due to
        previously noted corporate restructuring activities.

    5.  A copy of the Annual Report for the year ended 30 June 2008 will be
        sent to shareholders in due course.
    





For further information:

For further information: John Downie, Chief Executive Officer, Gladstone
Pacific Nickel, Tel: +61 (0)7 3231 7100; Fiona Owen, Grant Thornton UK LLP,
Tel: +44 207 383 5100; John Prior, Arbuthnot Securities Limited, Tel: +44 207
012 2000; Simon Rothschild, Bankside Consultants, Tel: +44 207 367 8888, Web:
www.gladstonepacific.com.au, Email: info@gladstonepacific.com.au

Organization Profile

Gladstone Pacific Nickel Ltd.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890