wedgetail mining limited - millennium minerals · clive donner (chairman) terry stark ... resource...
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Wedgetail Mining LimitedA N N U A L R E P O R T 2 0 0 6
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Wedgetail Mining LimitedGround Floor,
24 Outram Street
West Perth WA 6005
Telephone: +61 (0)8 9488 8800
Facsimile: +61 (0)8 9481 0288
Email: [email protected]
Web: www.wedtgetail.net.au
ContentsCompany Details ........................................................................................... 1
Chairman’s Report ......................................................................................... 2
Review of Operations ..................................................................................... 4
Directors’ Report ......................................................................................... 10
Corporate Governance Statement ................................................................ 17
Income Statement For The Year Ended 31 December 2006 .......................... 21
Balance Sheet As At 31 December 2006 ..................................................... 22
Statement Of Cash Flows For The Year Ended 31 December 2006 ............... 23
Statement Of Changes in Equity For The Year Ended 31 December 2006 ..... 23
Notes To, And Forming Part Of, The Financial Statements ............................. 24
Directors’ Declaration ................................................................................... 41
Independent Audit Report ............................................................................ 42
Schedule Of Interests In Mining Tenements ................................................... 43
Supplementary Information ........................................................................... 47
Front cover photos (clockwise):
Looking southwest towards Golden Eagle,
Quartz vein outcrop, SAG Mill shell, Diamond drillrig
Wedgetail Mission Statement:
Wedgetail Mining
Limited’s mission
is to maximise
shareholder wealth
by finding and
developing quality
gold reserves in a
profitable and socially
responsible manner,
without compromising
the safe work ethic that
protects and maintains
the health and well-
being of our employees
and the environment.
Location map
DirectorsClive Donner (Chairman)
Terry Stark (Managing Director)
Frank Vanspeybroeck
Geoffrey Lambert
Ross Gillon
Evan Kirby
Richard Procter
Company SecretaryJames Moran
Registered Office and Principal Place of BusinessGround Floor
24 Outram Street
West Perth WA 6005
Telephone: +61 (0)8 9488 8800
Facsimile: +61 (0)8 9481 0288
AuditorRothsay Chartered Accountants
Level 1, 2 Barrack Street
Sydney NSW 2000
BankersWestpac Banking Corporation
Level 16, 109 St Georges Terrace
Perth WA 6000
Share Registry Advanced Share Registry
110 Stirling Highway
Nedlands WA 6009
Telephone: +61 (0)8 9389 8033
Facsimile: +61 (0)8 9389 7871
Australian Stock ExchangeHome Branch: Perth
CodeWTE
Company Details
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Dear Shareholder
I am pleased to present to you the Annual
Report of Wedgetail Mining Limited for the
financial year ended 31 December 2006.
Over the 2006 year many challenges have
confronted the Board and management as
they have progressed development of the
Nullagine Gold Project.
Nullagine Gold ProjectSince the successful completion of the
bankable feasibility study (“BFS”) in April
2006 the resource sector has been subject
to substantial increases in operating costs.
These have been well documented in the
media from time to time and consequently,
the management team has been engaged
extensively over the past months in
reviewing, revising and updating the
economic data on the project. Extensive
analysis was undertaken on the different
approaches to mining, haulage and
treatment of the ore in order to optimise
the net result.
Considerable work has been completed
on the approvals required to establish an
operating project. The completion and sign
off by the various authorities are at different
stages. Such approvals include:
• Clearing Permit
• Works Approval
• Mining Proposal
• Shire Approval
• Water Extraction
• Main Roads Department
• Dangerous Goods Storage
• Power Supply
All flora and fauna surveys required by
the Department of Environment and
Conservation (DEC) have been completed
and formal approval of the Mining Proposal
is expected shortly.
Chairman’s Report
The demand on mining equipment and
the long lead times currently experienced
by the industry in sourcing various items
of equipment was the catalyst for the
Company purchasing the SAG mill, the
old Sons of Gwalia camp from Southern
Cross, CIL tanks from Mt Todd and a
mobile crane. These assets are currently
in storage ready for installation at the
project when appropriate.
In October the Westpac Banking Group
Limited was mandated to assist the
Company in funding the development
of the Nullagine Project. Negotiations
and dialogue has continued with the
bank whilst the review of the economic
model is undertaken.
The Board is expected to make a decision
on the commencement and construction
of the mine in the short term.
ExplorationOur exploration strategy was successful
on a number of fronts during 2006,
through both new discoveries and
improvements in the overall resource
base. Underpinning this strategy has been
increased emphasis on target generation
through reconnaissance exploration, and
to this end the program of soil sampling
delineated eleven new geochemical
anomalies during the year. Seven of
these anomalies are located along the
high-grade Golden Gate trend, and scout
drilling of these resulted in the discovery of
the Condor, Harrier and Falcon prospects.
These prospects were quickly advanced
to the resource definition stage, and as
a result they have contributed to a 60%
increase in the resource base at Golden
Gate. Closer to Nullagine, drilling of a
strong soil anomaly near Golden Eagle
resulted in the delineation of extensive
zones of mineralisation at the Angela
prospect, and there appears to be
excellent potential for the delineation
of a bulk-tonnage resource at Beatons
Creek based on the scale and intensity of
the soil anomaly delineated at this prospect
and the results of preliminary drilling.
Looking forward, 2007 promises to be
a busy year, with soil sampling to continue
across Wedgetail’s large prospective
landholding, and drilling directed at the
large number of high quality targets
generated by this work.
Finally, I sincerely thank you all for your
patience and continued support over the
past year. I also extend my sincere thanks
to my board colleagues, the staff and all
the consultants engaged during 2006 for
their efforts and I trust with this continued
support 2007 will be an even more
promising year.
Clive Donner
Chairman
Signed at Perth this 18th day of April 2007
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INTRODUCTION The Company has progressed
towards becoming a gold producer
at the Nullagine Gold Project, with the
achievement of several milestones
during 2006.
The most significant of these was the
completion of a bankable feasibility study in
April 2006 which showed that the planned
Nullagine Gold Project is both technically
and financially robust and could support the
construction of a nominal 1 million tonnes
per annum CIL processing plant milling 4.5
million tonnes of ore to produce in excess
of 300,000 ounces of gold.
In July 2006, RSG Global, as consultants
to Westpac Banking Corporation
(“Westpac”) completed an audit of the
Project Financial Model which resulted
in the Company mandating Westpac to
provide up to $42 milllion of debt funding
for the project.
At an extra-ordinary general meeting in
August shareholders approved a change
of Company name to Wedgetail Mining
Limited to better reflect the Company’s
focus as well as a 1 for 10 consolidation
of the share capital and a subsequent
placement in late September to raise
$19 million for project capital.
DEVELOPMENTMajor development tasks undertaken
during the year were:
• A new SAG mill was ordered from
Polysius (a division of ThyssenKrupp
Engineering).
• The CIL tanks and other infrastructure
were purchased from the Mt Todd mine
site and the equipment dismantled and
transported to the Nullagine site.
• Other second-hand equipment
purchased included the crushing
plant and a large proportion of the
accommodation village buildings.
• Design of the processing plant was
commenced by Holtfreters Pty Ltd and
had reached 50% completion by year
end. The total capital cost of the project
was estimated to be $43 million.
• Tenders were called for the mining of
ore and waste from the Golden Eagle
and satellite pits as well as the road
haulage of ore from the satellite pits.
The costs for contract mining were
found to be significantly above those
used in the BFS and as a result the
Company had to explore other mining
alternatives to reduce these costs.
It is therefore likely the Company will
become an owner miner.
• A number of applications for the
necessary regulatory project approvals
were submitted to the State Government
and significant progress with the
approval of these was achieved by
the end of the year.
• A preliminary study was made of the
potential to heap leach low grade ore
material which will be won from the
Golden Eagle pit. There is the potential
for a large tonnage of this material to be
generated in the Golden Eagle area and
produce additional ounces of gold.
Review of Operations
EXPLORATION 1 Resource DevelopmentResource definition drilling in 2006
focused on new prospects delineated
along the Golden Gate trend during the
latter half of 2005. As a result of this work,
the mineral resource inventory at Golden
Gate was increased 60% by delineating
new resources at the Falcon, Harrier,
Condor and Crow prospects (Figure 1).
Much of the drilling was shallow, testing
above 40 metres depth, and there is the
potential to expand these resources
because mineralisation remains open
at depth in all cases.
Figure 1:
Outline of the Nullagine Project area
showing the location of the main resources
Review of Operations
In total, just over 6,500 metres were drilled
along the Golden Gate trend, and the
scope and results of the various drilling
campaigns are summarised in Table 1.
Table 1: Scope and summary of results of resource definition drilling
Deposit Reverse Circulation Results: Holes with Intercepts
No. Holes Metres >10 gmm* >30 gmm*
Golden Gate (ABC) 7 355 28% 28%
Harrier 34 2,372 35% 6%
Falcon 44 2,538 38% 20%
Condor 12 549 75% 17%
Crow 11 444 45% 18%
Buzzard 6 260 66% –
Total 114 6,518
* Note: gmm is an abbreviation for gram-metres, which is the product of the intercept grade, in g/t Au,
and the width of the intercept (e.g. 30 gmm is equivalent to 10 metres grading 3 g/t Au, or 5 metres
grading 6 g/t Au). A 1 g/t Au lower cut-off grade is used to calculate intercept grade.
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Standout results from the resource definition drilling include intercepts such as 12 metres
grading 6.82 g/t Au at Falcon, 16 metres grading 4.94 g/t Au at Condor, and 11 metres
grading 3.89 g/t Au at Harrier. An Australian Stock Exchange (ASX) announcement
detailing the location of these, and other exciting drill results, was released on the
24th of August 2006.
Following the success of resource definition drilling during 2006, an updated Mineral
Resource inventory for the Nullagine Project (at a 1 g/t Au lower cut-off grade) is
presented in Table 2.
Resource definition drilling in 2007
will continue to focus on new prospects
generated by recent and ongoing
reconnaissance exploration along the
Golden Gate trend and further east in
the Eastern Creek area.
Review of Operations
Measured Indicated Inferred Total
Deposit Millions Au Millions Au Millions Au Millions Au
Tonnes (g/t) koz Tonnes (g/t) koz Tonnes (g/t) koz Tonnes (g/t) koz
Golden Eagle 4.74 2.04 311 1.44 1.75 80.8 1.34 1.72 74.2 7.52 1.93 466
Barton 0.71 2.11 48.1 0.46 2.13 31.1 0.20 2.70 17 1.36 2.20 96.2
Beatons Creek* – – – – – – 1.60 2.15 110.6 1.60 2.15 110.6
Golden Gate 0.37 3.76 45.1 0.11 3.59 13.1 0.08 3.17 7.8 0.56 3.64 66
Harrier 0.11 2.19 7.5 0.27 2.66 2.3 0.02 2.24 1 0.15 2.28 10.8
Condor 0.10 2.38 7.6 0.03 2.44 2.6 0.03 2.75 2.3 0.16 2.46 12.5
Falcon 0.10 2.58 8.2 0.03 2.33 2.3 0.03 2.40 2.1 0.16 2.50 12.6
Crow 0.02 2.77 2.3 0.01 2.72 0.2 – – – 0.03 2.76 2.6
All Nations 0.50 2.04 32.6 0.06 1.75 3.5 0.04 2.23 2.6 0.60 2.02 38.7
Shearers 0.21 1.81 11.9 0.22 1.51 10.9 0.09 1.50 4.2 0.52 1.60 27.1
Little Wonder – – – 0.19 1.70 10.2 0.21 1.70 11.2 0.39 1.70 21.4
Otways – – – – – – 0.49 1.40 22.1 0.49 1.40 22.1
Gambols – – – – – – 0.20 1.50 9.6 0.20 1.50 9.6
Total 6.85 2.15 474.2 2.57 1.90 157.1 4.31 1.91 265 13.73 2.03 896.3
* Note: Resource estimates prepared by Hellman & Schofield Pty Ltd using a multiple indicator kriging technique, apart from the
Beatons Creek resource which is based on an estimation by the previous owner.
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Table 2: Mineral Resource Inventory for the Nullagine Project
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2 Reconnaissance Exploration
Surface SamplingMajor programs of soil sampling and
follow-up rock-chip sampling continued
this year, and in tandem these surface
sampling techniques have been very
effective tools for quickly advancing
geological targets through to the drilling
stage. Figure 2 shows the new target
areas evaluated by soil sampling
during 2006.
The soil sampling technique employed by
the Company was developed from rigorous
study of the gold and pathfinder metal
behaviour in the soil horizon above the
known gold mineralisation at Golden Eagle
and Shearers deposits. The technique has
already proven to be far more reliable than
Scout DrillingMuch of the 2006 exploration expenditure
was directed towards first-pass drilling of
a series of strong gold-in-soil anomalies
delineated along the Golden Gate trend
and in the area between Golden Eagle
and the Five Mile Creek. In excess of
45,000 metres of inclined RAB drilling was
undertaken over 16 prospects (Figure 3).
The scope and results of the scout drilling
campaigns are summarised in Table 3.
previous soil sampling surveys undertaken
by other companies, and there is the
potential to re-evaluate some of the older
exploration areas using the new sampling
technique, particularly those areas that
encompass what appear to be compelling
geological targets.
Review of Operations
Figure 2:
Target areas evaluated by soil sampling
Figure 3:
Prospects tested by scout drilling
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Stand-out RAB drill hole intercepts
from these prospects include 20 metres
grading 12.9 g/t Au at Harrier, 8 metres
grading 7.21 g/t Au at Condor and 8
metres grading 9.58 g/t Au at Crow
(ASX announcements released on
29th May and 24th August 2006).
The Company intends to continue
exploration using the methods adopted
in late 2005 and during 2006, whereby
scout drilling is directed at selected surface
sampling anomalies within prospective
target areas that are delineated by
structural mapping. This approach will
ensure that maximum benefit is derived
from exploration expenditure, and should
enable the Company to quickly evaluate
the resource potential of its large, highly
prospective landholding.
Results: Rotary Air Blast Holes with Intercepts
Prospect No. Holes Metres >2 gmm* >5 gmm*
Project Area: Golden Gate
Harrier 33 1,349 58% 42%
Falcon 29 1,198 3% 3%
Condor 37 1,667 62% 54%
Crow 59 2,392 37% 17%
Buzzard 49 2,160 31% 18%
Goshawk 41 1,615 27% 8%
Hawk 28 1,120 14% 7%
Kestrel 149 5,945 10% 3%
Kite 26 1,040 31% –
Osprey 64 2,549 8% 3%
Vulture 46 1,084 11% 4%
Golden Gate Sterilisation 50 2,012 – –
Project Area: Golden Eagle
Angela 95 3,433 57% 21%
Golden Eagle South 110 4,333 10% 3%
Cajuput 51 1,850 2% –
South Dromedary 31 1,240 13% –
Golden Eagle Sterilisation 86 3,436 2% 1%
Project Area: Five Mile
Molly 109 4,393 3% –
Kuwait 42 2,188 19% 7%
1,135 45,724
* Note: A 0.5 g/t Au lower cut-off grade is used to calculate the gram-metre values of scout drill hole intercepts.
Review of Operations
Table 3: Scope and Summary of Results of Scout Drilling
The information in this report that relates to
Exploration Results is based on information
compiled by Dr Michael Grigson, who is a
Member of the Australasian Institute of Mining
and Metallurgy. Dr Grigson is a full time employee
of Wedgetail Mining Limited. Dr. Grigson has
sufficient experience which is relevant to the style
of mineralisation and type of deposit under
consideration and to the activity which he is
undertaking to be qualified as a Competent
Person as defined by the 2004 Edition of the
‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’.
Dr Grigson consents to the inclusion in the report
of the matters based on his information in the
form and context in which it appears.
Terry Stark
Managing Director
Signed at Perth this 18th day of April 2007
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
ABN 85 003 257 556
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Wedgetail Mining LimitedF I N A N C I A L R E P O R T
For the year ended 31 December 2006
and shareholders information
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
10
DIRECTORS
The names and details of the Directors of the Company
in office during or since the end of the financial year are:
Clive Donner (Non-Executive Chairman)
Clive Donner has substantial skills in fundraising
and project financing spanning over 26 years. He
was previously the project finance head and Director
responsible for Rothschild Australia’s project finance
mining business in Western Australia before spending
over a decade in venture capital and equities in the
resources sector. Mr Donner is the Managing Director
of LinQ Resources Fund, a mining and resources fund
specialising in small cap resources.
Mr Donner was appointed non-executive Chairman
of the Company on 5 September 2003.
Frank Vanspeybroeck (Non-Executive Director)
Frank Vanspeybroeck is the founder of Wedgetail.
He has over 23 years experience in the exploration
and mining industry in Australia. His experience includes
gold mining, commissioning and operating carbon in pulp
gold processing plants. He is also the Managing Director
of the AIM listed China Goldmines plc.
Mr Vanspeybroeck was Managing Director of the
Company from 23 November 1999 until 31 January
2006, and remains a non-executive director.
Geoffrey Lambert (Non-Executive Director)
Geoffrey Lambert holds BEc and MEc degrees from the
University of Sydney and has had over thirty years experience
in investment banking. Mr Lambert has served on the Boards
of a number of public companies and is currently a Director
of ICS Global Ltd, Stratatel Ltd and Reward Minerals Ltd.
Mr Lambert was appointed a non-executive director of the
company on 23 November 1999.
Ross Gillon (Non-Executive Director)
Ross Gillon is a solicitor in Perth and has previously
been a director of a number of exploration companies.
Mr Gillon was appointed a non-executive director of
the Company on 16 June 2003.
Directors report
The Directors of
Wedgetail Mining
Limited (“Company”
or “Wedgetail”)
present their report
on the Company
for the financial
year ended 31
December 2006.
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
11
Evan Kirby (Non-Executive Director)
Evan Kirby holds BSc and PhD degrees from the
University of Newcastle upon Tyne. He is a metallurgist with
over 30 years international experience covering operations
management, technical support, engineering design, and
feasibility study management. His work has covered a wide
range of processes associated with gold, platinum group
metals, base metals and sulphuric acid production.
Since 2002, he has operated his own consulting
business, Metallurgical Management Services Pty Ltd.
Mr Kirby was appointed a non-executive director of the
Company on 23 March 2004.
Richard Procter (Non-Executive Director)
Richard Procter holds BSc (Eng) (University of the
Witwatersrand) and MBA (Cape Town) degrees. He
is a mining engineer with over 30 years international
experience covering corporate, operations, contracting,
consulting and project developments. These positions
have included the leadership and management of base
and precious metal mining concerns (at both executive
and general management levels), development of
bankable feasibility studies and their conversion into
mining operations; responsibility for mining asset
evaluations; undertaking valuations including technical
and operational audits, involvement in mining asset due
diligence and Expert reporting; and providing technical
and strategic planning advice to both mining and
industrial organisations.
Mr Procter was appointed a non-executive director of
the Company on 15 February 2005.
Terry Stark (Managing Director, appointed
23 February 2007)
Terry Stark is a mining engineer with more than 35 years
experience in the gold, nickel, manganese and chromite
industries. He is a former managing director of Horizon
Mining Limited and PMA Limited and brings extensive
operating and project development experience to the
Company.
Mr Stark was appointed managing Director of the
Company on 23 February 2007.
DIRECTORSHIPS OF OTHER LISTED COMPANIES
Directorships of other Australian listed companies held by directors in the three years immediately before the end of the
financial year are as follows:
Name Company
Clive Donner Matrix Metals Limited, Dioro Exploration NL and the LinQ Resources Fund
Geoffrey Lambert ICS Global Limited, Stratatel Limited, Reward Minerals Limited, Riversdale Mines Limited
and QMASTOR Limited
Ross Gillon Red River Resources Limited
Evan Kirby Dwyka Diamonds Limited, Sylvania Resources Limited
Richard Procter Nil
Terry Stark Nil
DIRECTORSHIPS INTERESTS
As at the date of this report, the
interests of the Directors and their
associates in the shares of the
Company are:
Clive DONNER – –
Frank VANSPEYBROECK – 1,281,517
Geoffrey LAMBERT – 283,572
Ross GILLON – 475,001
Evan KIRBY – 32,500
Richard PROCTER 42,500 –
Terry STARK – –
Directors report
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
12
COMPANY SECRETARY
James Moran (Appointed 27 October 2006)
James Moran is a qualified CPA, Chartered Corporate
Secretary and has a Diploma with The Australian Institute
of Company Directors. He has 25 years resources sector
experience gained both locally and overseas. He has had
extensive exposure to both the corporate and operational
sides of financial and management accounting and general
administration functions.
Stephen Brown (Resigned 27 October 2006)
Stephen Brown is a CPA and Chartered Secretary and
has over 20 years experience in the areas of financial and
management accounting, administration and company
secretarial functions.
PRINCIPAL ACTIVITY
The principal activity of the Company during the year
was exploration for gold in Western Australia. There
was no change in the nature of the Company’s principal
activity during the year.
RESULT
The loss after income tax for the financial year was
$2,209,098 (2005: loss of $3,829,112).
DIVIDENDS
No dividend was paid during the financial year and the
directors do not recommend payment of a dividend.
REVIEW OF OPERATIONS
The prime activity of the Company during the 2006 financial
year was the continued exploration and development of the
Nullagine Gold Project in the Pilbara region northern Western
Australia.
A detailed review of the operations for the year is included
in the Review of Operations section of the Annual Report.
STATE OF AFFAIRS
In the opinion of the Directors, there were no other significant
changes to the state of affairs of the Company that occurred
during the financial year under review not otherwise disclosed
in this report or the financial statements.
SIGNIFICANT EVENTS AFTER THE
BALANCE DATE
No matter or circumstance has arisen since the end of
the financial year that has significantly affected, or may
significantly affect the operations of the Company, the
results of those operations or the state of affairs
of the Company in financial years subsequent to
31 December 2006.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS OF OPERATIONS
The Company intends to continue the exploration and
development of its existing tenements at the Nullagine
Gold Project.
REMUNERATION REPORT
The Remuneration Report outlines the remuneration
arrangements which were in place during the year,
and remain in place at the date of this report, for the
Directors and executives of the Company.
Remuneration Philosophy
The performance of the Company depends on the quality
of its Directors and executives. To prosper, the Company
must attract, motivate and retain highly skilled Directors
and executives.
To this end, the Company embodies the following
principles in its remuneration framework:
• Retention and motivation of key executives
• Attraction of quality management to the Company, and
• Performance incentives which allow executives to
share the rewards of the success of the Company.
Remuneration Committee
The Company is not of sufficient size to warrant the
formation of a remuneration committee. It is the Board
of Directors responsibility for determining and reviewing
compensation arrangements for the Directors and senior
executives.
The Board assesses the appropriateness of the nature
and amount of remuneration of Directors and senior
executives on a periodic basis by reference to relevant
employment market conditions with the overall objective
of ensuring maximum stakeholder benefit from the
retention of a highly qualified Board and executive team.
Remuneration Structure
The structure of non-executive Director and senior
executive remuneration is separate and distinct.
Objective
The Board seeks to set remuneration at a level which
provides the Company with the ability to attract and retain
Directors and executives of the highest calibre, whilst
incurring a cost which is acceptable to shareholders.
Directors report
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
13
Structure
Remuneration of non-executive Directors comprises
fees determined having regard to industry practice
and the need to attract appropriately qualified persons.
Fees do not contain any non-monetary elements.
Remuneration of executive Directors and other senior
executives are determined after consideration is given to
normal commercial rates of remuneration for similar levels
of responsibility, industry practices and the need to obtain
appropriately qualified persons to fill the executive positions
necessary for the Company to operate. Remuneration is
not linked to the performance of the Company, but rather
on the ability to attract and retain Directors and senior
executives of the highest calibre within the industry.
The granting of remuneration options is done by the
Board. The Board grants the options by giving consideration
to the seniority of the employee’s position and the need
to retain highly qualified employees and executive team.
The granting of options is in substance a performance
incentive which allows employees to share the rewards
of the success of the Company.
Director’s Remuneration
Details of the remuneration of each Director of Wedgetail,
including their personally-related entities, for the year ended
31 December 2006 are set out as follows:
Mr C Donner 2006 50,000 – – – – 50,000
Mr F Vanspeybroeck 2006 22,000 17,500 – – – 39,500
Mr G Lambert 2006 24,000 – – – – 24,000
Mr R Gillon 2006 24,000 – – – – 24,000
Mr E Kirby 2006 24,000 3,450 – – – 27,450
Mr R Procter 2006 24,000 134,760 – – – 158,760
Mr T Stark (appointed Managing
Director 23 Feb 2007) 2006 – 64,000 – – – 64,000
The Company did not have any other executives (“specified
executive”) with authority for the strategic direction and
management of the Company during the year.
Director Employment Contracts
Frank Vanspeybroeck is a Director of IMMO Services (WA)
Pty Ltd. The Company has entered into a contract with
IMMO Services (WA) Pty Ltd for the supply of management
services under normal commercial terms and conditions.
The agreement terminated on 31 January 2006,
with no termination benefits payable.
Mr Evan Kirby is a Director of Metallurgical
Management Services (Pty) Ltd which provides
metallurgical consultancy services to the Company.
Mr Terry Stark is a Director of T A Stark and Associates
Pty Ltd who received consulting fees up to the end of
the financial year totalling $64,000. Mr Stark was
subsequently appointed Managing Director of the
Company on February 23, 2007.
Directors Consulting Non- Super- Value of
Fees Fees monetary annuation Share
Benefits Options
Year $ $ $ $ $ Total
Directors report
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
14
Clive DONNER 17 17
Ross GILLON 17 16
Evan KIRBY 17 11
Geoffrey LAMBERT 17 16
Richard PROCTER 17 13
Frank VANSPEYBROECK 17 15
MEETINGS OF DIRECTORS
The number of meetings of Directors
held during the year and the number
of meetings attended by each Director
was as follows:
INSURANCE OF DIRECTORS AND OFFICERS
The Company agreed to pay a premium in respect of a contract insuring the Directors and Officers of the Company.
Full details of the cover and premium are not disclosed as the insurance policy prohibits the disclosure.
Expiry Date Number of Options Exercise Price
11 October 2007 (unlisted) 3,000,000 55 cents
17 April 2007 (unlisted) 16,000 55 cents
CORPORATE GOVERNANCE
In recognising the need for the highest standards of
corporate behaviour and accountability, the Directors
of Wedgetail support and have adhered to the principles
of corporate governance. The Company’s corporate
governance statement is contained within the
Annual Report.
SHARE OPTIONS
Options on Issue
At the date of this report
unissued shares of the company
under option are:
ENVIRONMENTAL REGULATION
AND PERFORMANCE
The Company’s operations are subject to environmental
regulation under the laws of the Commonwealth and of the
State, with specific conditions relating to rehabilitation.
In the case of Approved Notices of Intent to Mine,
bonds are held by the Company’s bank which may be
released to the company when Department of Industry
and Resources is satisfied that conditions imposed on
those licences have been met.
Notices of Intent to Mine incorporate environmental
conditions, including those related to noise, dust,
water run off, rare and endangered flora and fauna,
sites of historical and aboriginal significance as well
as rehabilitation criteria.
The Directors advise that during the year ended
31 December 2006, no claim has been made by any
competent authority that any environmental issues,
condition of licence or notice of intent have been
breached, or any bond forfeited.
Directors report
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
16
Non-Audit Services
The Board of Directors has considered the position and
is satisfied that the provision of non-audit services is
compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001.
The Directors are satisfied that the provision of non-
audit services by the auditor, as set out below, did not
compromise the auditor independence requirements
of the Corporations Act 2001 for the following reasons:
Directors report
The following amounts were paid to the auditors:
• all non-audit services have been reviewed by the
Directors to ensure they do not impact the impartiality
and objectivity of the auditor; and
• none of the services undermine the general principles
relating to auditor independence as set out in
Professional Statement F1, including acting in a
management or a decision-making capacity for the
Company or acting as advocate for the Company.
Signed at Perth this 29th day of March 2007
in accordance with a resolution of the Directors.
Terry Stark
Managing Director
Auditors’ Remuneration
Auditing accounts 14,000 15,200
Non-audit Services
Independent report 5,700 2,750
2006 2005 $ $
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
17
This statement outlines the main corporate governance
practices in place throughout the year, which comply with
the ASX Corporate Governance Council recommendations
unless otherwise stated.
Role of the Board
The Board is responsible for ensuring that the Company
is managed in a manner which protects and enhances
the interests of its shareholders and takes into account
the interests of all stakeholders. To fulfil this role, the
Board is responsible for setting the strategic directions
for the Company, establishing goals for management
and monitoring the achievement of these goals.
Because of the limited size of the Company and its
financial affairs and operations, the use of separate
committees of the Board of Directors is not considered
generally appropriate. All matters that might properly be
dealt with by such committees are currently dealt with
by the full Board of Directors. Decisions of the Board
are, to the extent practicable, unanimous.
Composition of the Board
The names and details of the Directors of the Company
in office at the date of this Statement are set out in the
Directors’ Report.
The composition of the Board is determined using the
following principles:
• Persons nominated as Non-Executive Directors shall
be expected to have skills, experience and expertise
of benefit to the Company and to bring an independent
view to the Board’s deliberations. Persons nominated
as Executive Directors must be of sufficient stature and
security of employment to express independent views
on any matter.
• The Chairperson should ideally be non-executive and
independent and be elected by the Board based on
his/her suitability for the position. The Board believes
that the Chairperson is able and brings quality and
independent judgment to all relevant issues falling
within the scope of the role of a Chairperson and
remains up-to-date with current issues facing the
Company by frequent contact with the Managing
Director and executive of the Company.
• All Non-Executive Directors are expected voluntarily to
review their membership of the Board from time-to-time
taking into account length of service, age, qualifications
and expertise relevant to the Company’s then current
policy and programme, together with the other criteria
considered desirable for composition of a balanced
Board and the overall interests of the Company.
• Under the Company’s Constitution, the minimum
number of Directors is three. At each Annual General
Meeting, one third of the Directors (excluding the
Managing Director) must resign, with Directors
resigning by rotation based on the date of their
appointment. Directors resigning by rotation may
offer themselves for re-election.
The Board has accepted the following definition of an
Independent Director:
“An Independent Director is a Director who is not a
member of management (a Non-Executive Director)
and who:
1. is not a substantial shareholder of the Company or an
officer of, or otherwise associated, directly or indirectly,
with a substantial shareholder of the Company;
2. has not within the last three years been employed in
an executive capacity by the Company or another group
member, or been a Director after ceasing to hold any
such employment;
3. is not a principal of a professional adviser to the
Company or another group member;
4. is not a significant consultant, supplier or customer
of the Company or another group member, or an officer
of or otherwise associated, directly or indirectly, with a
significant consultant, supplier or customer;
5. has no significant contractual relationship with the
Company or another group member other than as
a Director of the Company;
6. has not served on the Board for a period which could,
or could reasonably be perceived to, materially interfere
with the Director’s ability to act in the best interests of
the Company; and
7. is free from any interest and any business or other
relationship which could, or could reasonably be
perceived to, materially interfere with the Director’s
ability to act in the best interests of the Company.”
Corporate Governance Statement
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
18
Wedgetail considers a significant consultant, supplier or
customer to be material if the total of their annual invoices
amounts to more than 5% of the Company’s total
expenditure in that category.
Consistent with the Corporations Law the Company
considers that the Board should have at least three
Directors and strives to have a majority of Independent
Directors. Currently the Board has seven directors, six are
non-executive and Terry Stark the Managing Director was
appointed on February 23, 2007. Messrs Donner and
Gillon are not considered to be independent as Mr Donner
is an officer of a substantial shareholder and Mr Gillon
is a principal of a professional advisor to the Company.
Messrs Lambert, Vanspeybroeck, Procter and Kirby are
considered to be independent of Wedgetail. The number
of Directors is maintained at a level which optimises the
spread of the workload and efficient decision making.
The composition of the Board is reviewed on an annual
basis to ensure the Board has the appropriate mix of
expertise and experience. Where a vacancy exists, through
whatever cause, or where it is considered that the Board
would benefit from the services of a new Director with
particular skills, the Board determines the selection criteria
for the position based on the skills deemed necessary for the
Board to best carry out its responsibilities and then appoints
the most suitable candidate who must stand for election at
the next general meeting of shareholders.
Performance of Directors
The performance of Directors is assessed through review
by the Board as a whole of director’s attendance at and
involvement in Board meetings, his performance and other
matters identified by the Board or other directors. Due to
the Board’s assessment of the effectiveness of these
processes, the Board has not otherwise formalised
measures of a director’s performance.
The Company has not conducted a performance evaluation
of the members of the Board during the reporting period,
however the Board conducts a review of the performance of
the Company against budgeted targets on an ongoing basis.
Conflict of Interest
In accordance with the Corporations Act 2001 and the
Company’s constitution, Directors must keep the Board
advised, on an ongoing basis, of any interest that could
potentially conflict with those of the Company. Where the
Board believes a significant conflict exists, the Director
concerned does not receive the relevant Board papers
and is not present at the Board meeting whilst the item
is considered. Details of Directors related entity
transactions with the Company are set out in the related
parties note in the financial statements.
Independent Professional Advice and
Access to Company Information
Each Director has the right of access to all relevant
Company information and to the Company’s executives
and, subject to prior consultation with the Chairman, may
seek independent professional advice at the Company’s
expense. A copy of advice received by the Director is
made available to all other members of the Board.
Remuneration
The Board of Directors maintains remuneration policies
which are aimed at attracting and retaining a motivated
workforce and management team. The intention is to
match the outcomes from the remuneration system with
the performance of the Company and ultimately the value
received by our shareholders on a long-term basis.
The Company embodies the following principles in its
remuneration framework:
• retention and motivation of key executives;
• attraction of quality management to the Company; and
• performance incentives which allow executives to
share the rewards of the success of the Company.
Full details of Directors’ and specified executives’
remuneration is set out in the Directors’ Report and in
the Directors’ and Executives’ Disclosures note in the
financial statements.
Due to the limited size of the Company and of its
operations and financial affairs, the use of a separate
remuneration committee is not considered appropriate
for Wedgetail.
Corporate Governance Statement
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
1�
Committees
To assist the Board in achieving the highest standards
of Corporate Governance, the Directors will aim in
due course to establish an Audit Committee, and
a Remuneration Committee, both to be constituted
with a majority of non-executive Directors.
Audit Committee:
Wedgetail did not have a separately established audit
committee. However, the duties and responsibilities
typically delegated to such a committee are expressly
included in the board’s responsibilities and therefore
were not in compliance with item 4.2 of the ASX
Corporate Governance Principles. The Board does
not believe any marked efficiencies or enhancements
would be achieved by the creation of a separate
committee. An Audit Committee Charter is currently
being planned.
Remuneration Committee:
Recommendation 9.2 of the ASX Corporate Governance
Principles requires the establishment of a remuneration
committee. During the year, Wedgetail did not have a
separately established remuneration committee. However,
the duties and responsibilities typically delegated to such
a committee are expressly included in the main board’s
responsibilities. The Board does not believe that any
marked efficiencies or enhancements would be achieved
by the creation of a separate committee.
Ethics
It is the policy of Wedgetail that all Directors, managers
and employees are expected to act with the utmost
integrity and objectivity, striving at all times to enhance
the reputation and performance of Wedgetail.
Risk Management
The company has in place a framework to safeguard
company assets and ensure that business risks are
identified and properly managed. The company has
in place a number of risk management controls which
include the following:
• Performance and funding of exploration activities;
• Budget controls;
• Guidelines and limits for the approval of capital
expenditure and investments;
• A comprehensive insurance programme;
• Status of Mining Tenements; and
• Continuous disclosure obligations.
Management is required to provide to the Board regular
reports on all these matters.
The Board receives regular reports about the financial
condition and operating results of the company.
The Chief Executive Officer and Chief Financial Officer
annually provide a formal statement to the Board that in
all material respects and to the best of their knowledge
and belief:
• The Company’s financial reports present a true and
fair view of the Company’s financial condition and
operational results and are in accordance with relevant
accounting standards; and
• The Company’s risk management and internal control
systems are sound, appropriate and operating efficiently
and effectively.
Group Strategic Planning
The company has adopted a formal and dynamic process
of strategic planning. The Board reviews and endorses
strategies designed to ensure the long term successful
outcome for the company.
Corporate Governance Statement
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
20
Trading in the Company’s Securities by
Directors and Employees
The Board has adopted a policy in relation to dealings in
the Company’s securities which applies to all directors and
employees. Under the policy, directors are prohibited form
short term or “active” trading in the Company’s securities,
and directors and employees are prohibited form dealing
in the Company’s securities whilst in possession of price
sensitive information. The Chairman or Company Secretary
must be notified of any proposed transaction.
Role of Shareholders
The shareholders of the company play an important role
in corporate governance by virtue of their responsibilities
for voting on the appointment of directors.
The Board ensures that shareholders are kept fully
informed on developments affecting the company through:
• The Annual Report and Wedgetail newsletters are
distributed to shareholders;
• Compliance with Australian Stock Exchange’s
continuous disclosure requirements (and subsequent
shareholder announcements); and
• The annual general meeting and other meetings
called to obtain approval for Board action.
Corporate Governance Statement
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
21
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
21
Income Statement For The Year Ended 31 December 2006
Note 2006 2005 $ $
Revenue from ordinary activities 3 692,146 239,643
Bad Debt written off – (250,000)
Carrying amount of non current assets sold – (1,869)
Depreciation and amortisation (107,937) (268,506)
Employment /consultants (1,234,607) (947,532)
Non cash fair value adjustment – (74,500)
Finance costs (756,438) (1,313,090)
Management and administration expenses (796,793) (1,206,171)
Other expenses from ordinary activities (5,469) (7,087)
Profit/(Loss) from ordinary activities before income
tax expense 4 (2,209,098) (3,829,112)
Income tax expense 5 – –
Net profit/(loss) attributable to the members of
Wedgetail Mining Limited 16 (2,209,098) (3,829,112)
Total Changes In Equity Other Than Those Resulting
From Transactions With Owners As Owners (2,209,098) (3,829,112)
Earnings per share – Basic 23 (0.0012) (0.004)
The accompanying notes form part of the financial statements.
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
22
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
22
Balance Sheet For The Year Ended 31 December 2006
Note 2006 2005 $ $ Current Assets
Cash and cash equivalents 6 11,865,433 4,430,059
Receivables 7 144,357 9,148,851
Total Current Assets 12,009,790 13,578,910
Non-Current Assets
Exploration assets 8 24,078,865 17,268,213
Property plant and equipment 9 10,139,530 3,002,372
Other financial assets 10 – 582,772
Total Non-Current Assets 34,218,395 20,853,357
Total Assets 46,228,185 34,432,267
Current liabilities
Trade & Other Payables 11 3,806,511 3,712,157
Provisions 12 82,034 38,024
Interest Bearing Liabilities 13 369,077 6,655,634
Total Current Liabilities 4,257,622 10,405,815
Non Current Liabilities
Interest Bearing Liabilities 14 340,295 2,602,668
Total Non Current Liabilities 340,295 2,602,668
Total Liabilities 4,597,917 13,008,483
Net Assets 41,630,268 21,423,784
Equity
Contributed equity 15 50,452,239 28,183,910
Accumulated losses 16 (8,821,971) (6,760,126)
Total Equity 41,630,268 21,423,784
The accompanying notes form part of the financial statements.
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
23
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
23
Statement Of Cash Flows For The Year Ended 31 December 2006
Note 2006 2005 $ $ Cash Flows From Operating Activities
Rental and other income 237,197 130,194
Interest and borrowing costs paid (498,000) (775,336)
Payments to suppliers and employees (1,998,490) (1,924,132)
Interest and distributions received 439,102 107,081
Net Cash Used In Operating Activities 21 (b) (1,820,191) (2,462,193)
Cash Flows From Investing Activities
Payments for plant and equipment (6,990,119) (1,282,593)
Payment for mineral exploration areas (3,990,054) (8,448,085)
Proceeds from sale of investments 450,738 –
Proceeds from sale of plant and equipment 14,000 2,181
Payments for mineral exploration security deposits (115,000) (45,678)
Net Cash Used In Investing Activities (10,630,435) (9,774,175)
Cash Flows From Financing Activities
Drawdown on borrowings – 6,624,862
Proceeds from shares issued 28,695,000 7,524,643
Repayments of borrowings (8,809,000) –
Net Cash Provided By Financing Activities 19,886,000 14,149,505
Net Increase / (Decrease) In Cash Held 7,435,374 1,913,137
Cash Held At The Beginning Of Period 4,430,059 2,516,922
Cash Held At The End Of The Financial Year 21 (a) 11,865,433 4,430,059
Statement Of Changes In Equity For The Year Ended 31 December 2006
Total equity at the beginning of the year 21,423,784 10,888,428
Net loss 16 (2,209,298) (3,829,112)
Equity settled transactions:
Value of share options expensed 16 147,453 412,717
Transactions with equity holders in their capacity as
equity holders:
Contributions of equity, net of transaction costs 15 22,268,329 13,951,751
Total equity at the end of the year 41,630,268 21,423,784
Note 2006 2005 $ $
The accompanying notes form part of the financial statements.
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
24
(a) Basis Of Presentation
This is a general purpose financial report of the Company
that has been prepared in accordance with applicable
accounting standards and other mandatory professional
reporting requirements (Urgent Issues Group Consensus
Views) and the Corporations Act 2001. The accounting
policies have been consistently applied.
The financial statements have been prepared on the basis
of historical costs, except where stated certain current and
non-current assets are held at current valuation.
(b) Statement of Compliance
The full year financial report complies with Australian
Accounting Standards, which include Australian
equivalents to International Financial Reporting Standards
(‘AIFRS’). Compliance with AIFRS ensures that the full year
financial report, comprising the financial statements and
notes thereto, complies with International Financial
Reporting Standards (‘IFRS’).
(c) Income Tax
Income tax on the income statement for the periods
presented comprises current and deferred tax. Income tax
is recognised in the income statement except to the extent
that it relates to items recognised directly in equity, in which
case it is recognised in equity.
Current tax is the expected tax payable on the taxable
income for the year, using tax rates enacted or substantially
enacted at the balance sheet date, and any adjustment to
tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability
method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation
purposes.
A deferred tax asset is recognised only to the extent that
it is probable that future taxable profits will be available
against which the asset can be utilised.
(d) Property, Plant and Equipment
Cost and valuation
Items of property, plant and equipment comprising a class
of non current assets are carried at cost less accumulated
depreciation and any impairment in value.
Land and buildings are measured at cost.
The carrying amount of plant and equipment is reviewed
annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable
amount is assessed on the basis of the expected net cash
flows that will be received from the assets employed and
subsequent disposal. The expected net cash flows have
been discounted to their net present values in determining
recoverable amounts.
Subsequent costs are included in the assets
carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Company
and the cost of the item can be measured reliably. All other
repairs and maintenance are charged to the income
statement during the financial period in which they
are incurred.
Depreciation
Depreciation is calculated on a diminishing value basis to
write off the net cost of each item of plant and equipment
over its expected useful life to the company. The expected
useful lives are as follows:
Plant and equipment 5 – 10 years.
(e) Mineral Exploration Expenditure
Costs incurred during the exploration and evaluation
phases are accumulated in respect of each identifiable
area of interest.
Exploration and evaluation costs shown in the Balance
Sheet represent an accumulation of net direct exploration
and evaluation costs incurred by the company in relation
to the acquisition of areas of interest for which rights of
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
Wedgetail Mining Limited (“Wedgetail” or the “Company”)
is a public listed limited company that is incorporated and
domiciled in Australia.
During the year, the principal activity of Wedgetail was gold
exploration and development of the Nullagine gold project
in Western Australia.
1. CORPORATE INFORMATION
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
25
tenure are current and expected to be maintained and
in respect of which:
i) such costs are expected to be recouped through
successful development and exploitation of the area;
or
ii) exploration and/or evaluation activities in the areas have
not yet reached a stage which permits an assessment of
the existence or otherwise of economically recoverable
reserves.
The directors regularly review the capitalised exploration
costs and where appropriate areas of interest are written
down to their recoverable amount.
The ultimate recoupment of costs related to the areas
of interest in the exploration and evaluation phase is
dependent on the successful and commercial
exploitation of the relevant areas.
(f) Investments and other financial assets
The Company classifies its investments in the following
categories: financial assets at fair value through profit and
loss, loan and receivables, held-to-maturity investments,
and available-for-sale financial assets. The classification
depends on the purpose for which the investments were
acquired. Management determines the classification of
its investments at initial recognition and re-evaluates this
designation at each reporting date.
(g) Leases
Leases are classified at their inception as either operating
or finance leases based on the economic substance of the
agreement so as to reflect the risks and benefits incidental
to ownership.
Operating leases
The minimum lease payments of operating leases, where
the lessor effectively retains substantially all of the risks and
benefits of ownership of the leased item, are recognised
as an expense on a straight line basis.
Contingent rentals are recognised as an expense in the
financial year in which they are incurred.
Finance leases
Leases which effectively transfer substantially all of the
risks and benefits incidental to ownership of the leased
item to the economic entity are capitalised at the present
value of the minimum lease payments. A lease liability of
equal value is also recognised.
Capitalised lease assets are depreciated over the
estimated useful life of the assets. Minimum lease
payments are allocated between interest expense and
reduction of the lease liability with the interest expense
calculated using the interest rate implicit in the lease
and charged directly to the Income Statement
The cost of improvements to or on leasehold property
is capitalised, disclosed as leasehold improvements,
and amortised over the unexpired period of the lease
or the estimated useful lives of the improvements,
whichever is the shorter.
(h) Segment reporting
A segment is a distinguishable component of the
consolidated entity that is engaged either in providing
products or services (business segment), or in providing
products or services within a particular economic
environment (geographical segment), which is subject
to risks and rewards that are different from those of
other segments.
(i) Goods and Services Tax
Revenue, expenses and assets are recognised net of the
amount of goods and services tax (“GST”), except where
the amount of GST incurred is not recoverable from the
taxation authority. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset
or as part of the expense.
Receivables and payables are stated with the amount of
GST included. The net amount of GST recoverable from,
or payable to, the ATO is included as a current asset or
liability in the Balance Sheet.
Cash Flows are included in the statement of cash flows
on a gross basis.
The GST components of cash flows arising from investing
and financing activities which are recoverable from, or
payable to, the ATO are classified as operating cash flows.
(j) Trade Payables and Other Creditors
These amounts represent liabilities for goods and services
provided to the company prior to the end of the financial
year and which are unpaid, together with assets ordered
before the end of the financial year. The amounts are
unsecured and are usually paid within 30 days of
recognition.
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
26
(k) Trade Receivables and Revenue Recognition
Interest revenue is recognised on a proportional basis
taking into account the interest rates applicable to the
financial assets.
Other debtors are recognised at the amount receivable
and are due for settlement within 30 days from the end
of the month in which services were provided.
(l) Cash and cash equivalents
Cash and cash equivalents include cash on hand and
in banks and investments in money market instruments,
net of any outstanding bank overdraft.
(m) Borrowing Costs
Borrowing costs are recognised as an expense when
incurred.
(n) Interest Bearing Loans and Borrowings
All loans and borrowings are initially recognised at cost.
Any accrued interest is recorded in payables.
(o) Revenues
Revenue is recognised to the extent that it is probable
that the economic benefits will flow to the Company and
the revenue can be reliably measured.
Dividend and distribution revenue is recognised when
the shareholders right to receive payment is established.
Interest revenue is recognised as the interest accrues.
Rental revenue is recognised in accordance with rental
agreements.
(p) Share Based Payment Transactions
Equity based compensation benefits are provided to
certain employees and suppliers as consideration for
goods and services received.
The fair value of options granted is recognised as an
expense. The fair value is measured at grant date and
recognised over the period that the holder becomes
unconditionally entitled to the options.
(q) Employee Entitlements
(i) Wages and Salaries and Annual Leave
Liabilities for wages and salaries, including annual
leave expected to be settled within twelve months of
the reporting date are recognised in the provision for
employee benefits up to the reporting date and are
measured at the amounts expected to be paid when
the liabilities are settled.
(ii) Employee Benefit on-costs
Employee benefit on costs, including payroll tax and
superannuation guarantee charge, are charged as an
expense when incurred.
(r) Comparatives
Where required by Accounting Standards, comparative
figures have been adjusted to conform to changes in
presentation for the current financial year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
27
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
27
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $
5. INCOME TAX
Profit / (loss) before income tax expense (2,209,098) (3,829,112)
Prima facie tax on operating profit/(loss) (662,729) (1,148,734)
Tax effect of permanent and timing differences
Non-deductible expenses 50,108 –
Provision for diminution in value of investments – 22,350
Future income tax benefit not brought to account 612,621 1,126,384
Income Tax Expense Attributable To Operating Profit (Loss) – –
The company has approximately $14,139,970 (2005:
$12,097,900) in losses for income tax purposes
unrecouped at balance date (subject to confirmation
by the Commissioner of Taxation). The aggregate future
income tax benefit of $4,241,991 (2005: $3,629,370)
has not been carried forward as an asset in the Balance
Sheet as realisation of the benefit is not regarded as
virtually certain and will only be obtained if:
(a) the company derives future assessable income of
a nature and of an amount sufficient to enable the
benefit from the exploration expenditure and tax
losses to be realised;
(b) the company continues to comply with the conditions
for deductibility imposed by the law; and
(c) no changes in tax legislation adversely affect the
company in realising the benefit from the tax losses.
3. REVENUE FROM ORDINARY ACTIVITIES
Interest received 440,573 97,081
Distributions received 37,249 10,000
Proceeds from disposal of fixed assets – 2,181
Proceeds from sale of financial asset – –
Rental & others 214,324 130,381
692,146 239,643
4. OPERATING PROFIT / (LOSS)
Loss before income tax expense includes the following specific gains
and expenses:
Expenses
Bad debt written off – 250,000
Non cash fair value adjustment – 74,500
Depreciation and amortisation 107,937 268,506
Value of share options expensed 147,453 412,717
Finance costs
Interest paid or payable – other persons 360,397 619,724
Borrowing costs paid – other persons 396,041 693,366
Net Gains
Gain on disposal of shares (11,734) –
Gain on disposal of fixed asset (1,043) 312
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
28
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
28
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $
9. PLANT AND EQUIPMENT
Plant and Equipment – at cost 2,373,870 2,024,851
Less Accumulated Depreciation (610,794) (416,267)
Written Down Value 1,763,076 1,608,584
MOTOR VEHICLES
Motor Vehicles – at cost 155,936 124,081
Less Accumulated Depreciation (63,820) (29,562)
Written Down Value 92,116 94,519
LAND AND BUILDINGS
Land and Buildings – at cost 1,214,356 1,214,356
Less Accumulated Depreciation – –
Written down Value 1,214,356 1,214,356
LEASEHOLD IMPROVEMENTS
Leasehold Improvements – at cost 138,145 133,486
Less Accumulated Depreciation (55,022) (48,573)
Written down Value 83,123 84,913
6. CURRENT ASSETS - CASH
Cash at bank and on hand 1,741,092 192,746
Cash on deposit 10,124,341 4,237,313
11,865,433 4,430,059
7. CURRENT ASSETS - RECEIVABLES
Debtors 27,288 9,085,802
GST refundable 73,381 63,049
Prepayments 43,688 –
144,357 9,148,851
8. EXPLORATION TENEMENTS
Mineral Exploration And Evaluation Expenditure
Carrying amount at beginning of year 17,268,213 8,820,128
Current year expenditure 6,810,652 8,448,085
Carrying Amount At End Of Year 24,078,865 17,268,213
Recoverability of the company’s carrying value of interests in mineral projects
is subject to the successful development and exploitation of the exploration
properties or alternatively, the sale of these tenements at amounts at least equal
to the book values.
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
2�
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
2�
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $
CAPITAL WORKS IN PROGRESS
Capital Works – Nullagine project 6,989,428 –
Less Accumulated Depreciation – –
Written down Value 6,989,428 –
Total Written Down Value at End of Year 10,142,099 3,002,372
PLANT AND EQUIPMENT - RECONCILIATION
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
MOTOR VEHICLES - RECONCILIATION
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
LAND AND BUILDINGS - RECONCILIATION
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
LEASEHOLD IMPROVEMENTS – RECONCILIATION
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
CAPITAL WORKS IN PROGRESS – RECONCILIATION
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
9. PLANT AND EQUIPMENT (continued)
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
30
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
30
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ 10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
11. CURRENT LIABILITIES – PAYABLES
Trade creditors 3,617,872 3,712,157
Other creditors and accruals 188,639 –
3,806,511 3,712,157
Trade creditors are non interest bearing and are generally on 30 day terms.
12. CURRENT LIABILITIES – PROVISIONS
Provision for employee entitlements 82,034 38,024
The provision consists of annual leave expected to be settled within twelve
months of the reporting date.
13. CURRENT LIABILITIES – INTEREST BEARING LIABILITIES
Convertible note 300,000 2,500,000
Hire Purchase Liability 69,077 90,117
Borrowings – 4,065,517
369,077 6,655,634
On the 25th August 2004, the Company issued a
Convertible Note for $2.5m to Rothschild Australia
Global Resources Fund Ltd, subsequently renamed LinQ
Capital Limited (“LinQ”), as trustee for the LinQ Resources
Fund. Interest is calculated at 10% per annum. The
note originally matured on the 31st May 2006 and in
accordance with the original agreement this was extended
for 12 months. It can be converted into shares in the
company at 35 cents per share. There is a Mining
Mortgage and a fixed and floating charge over the
company’s assets as security for the Convertible Note.
At the shareholders general meeting in August 2006
shareholders approved the deed between LinQ and the
Company whereby LinQ could convert the note into
shares at a conversion price equal to the price (22 cents)
at which shares under the share placement approved in
August were issued. The maximum number of shares to
be issued upon conversion was 10,000,000, resulting
in a partial conversion of the original note.
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
31
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
31
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ 14. NON CURRENT LIABILITIES - INTEREST BEARING LIABILITIES
Interest Bearing Liabilities
Hire Purchase Liability 40,295 102,668
Convertible Note 300,000 2,500,000
Total Non Current Interest Bearing Liabilities 340,295 2,602,668
15. CONTRIBUTED EQUITY
(a) Issued Capital
235,852,176 (2005: 1,274,355,298) ordinary shares 50,452,239 28,183,910
(b) Movement In Issued Capital
Balance at the beginning of the financial year 28,183,910 14,232,159
21,392,889 ordinary shares issued 4 cents per share pursuant to share
purchase plan 855,716 –
85,045,886 ordinary shares were issued on 28 September 2006 at 22 cents
per share pursuant to share placement ($18,710,096 less costs of $1,205,017) 17,505,079 –
20,000,000 ordinary shares were issued on 4 October 2006 at 22 cents per
share for the conversion of Convertible Notes. 4,400,000 –
227,272 ordinary shares were issued on 5 December 2006 at 22 cents per
share. This was a rectification following the reconciliation of the share
placement on 28 September 2006 50,000 –
1,003,902 ordinary shares were issued on 5 December 2006 at 24.62 cents
per share for the provision of drilling services in the Nullagine area. 247,161 –
254,221,235 ordinary shares were issued on 31 December 2005 at 5 cents
per share pursuant to the Underwriting Agreements dated December 2005
(Refer Notes 7 and 12).($12,711,062 less costs 2,573,952) 10,137,110
Additional issue costs brought to account (789,627)
On the 3rd March 2005, the company issued a Convertible
Note for $2.5m to LinQ Capital Limited as trustee for the
LinQ Resources Fund. Interest is calculated at 10% per
annum. The note will mature on the 31st January 2007,
however may be extended to no later than 31 January
2008. It can be converted into shares in the company at
5.5 cents per share. There is a Mining Mortgage and a
fixed and floating charge over the company’s assets as
security for the Convertible Note. The LinQ Resources
Fund received interest totalling $396,050 for the convertible
notes and an extension fee of $25,000 was paid for the
extension of the convertible note expiry date.
At the shareholders general meeting in August 2006
shareholders approved the deed between LinQ and the
Company whereby LinQ could convert the note into shares
at a conversion price equal to the price (22 cents) at which
shares under the share placement approved in August
were issued. The maximum number of shares to be issued
upon conversion was 10,000,000, resulting in a partial
conversion of the original note.
2006 2005 $ $
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
32
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
32
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
(c) Terms and Conditions of Contributed Equity
Ordinary Shares
Ordinary shares have the right to receive dividends as declared and, in the event
of winding up the company, to participate in the proceeds from the sale of all
surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at
a meeting of the company.
15. CONTRIBUTED EQUITY (continued)
3,173,962 ordinary shares were issued on 31 December 2005 from the
exercise of options at an exercise price of 5 cents – 158,698
10,715 ordinary shares were issued on 1 November 2005 from the exercise of
options at an exercise price of 5 cents – 536
77,700,120 ordinary shares were issued on 27 April 2005 at 5 cents per share
for exploration and working capital requirements
($3,885,006 less costs 237,600) – 3,647,406
100,000 ordinary shares were issued on 15 April 2005 from the exercise
of options at an exercise price of 5 cents – 5,000
60,032 ordinary shares were issued on 24 March 2005 from the exercise of
options at an exercise price of 5 cents – 3,001
Balance At The End Of Year 50,452,239 28,183,910
2006 2005 $ $
2006 2005 Number Number (d) Options
Options - listed
Balance at beginning of year – 205,765,862
Issued during year – 51,800,082
Exercised during year – (257,565,944)
Expired during year – –
Balance at end of year – –
Options - unlisted
Balance at beginning of year 34,700,000 –
Issued during year 300,000 34,700,000
Share Capital consolidation (27,270,000) –
Exercised during year – –
Expired during year (4,714,000) –
Balance at end of year 3,016,000 34,700,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
33
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
33
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
(e) Convertible Notes
Movement in notes convertible to ordinary shares in the capital of the parent entity are as follows:
No. of Convertible Conversion Price No. of Potential
Notes Ordinary Shares Balance
$ $ $ $
Opening balance 300,000 0.35 857,142 300,000
Issue of convertible notes 300,000 0.55 545,455 300,000
Closing balance 600,000 1,402,597 600,000
The total number of potential ordinary shares outstanding in the capital of the parent entity at 31 December 2006, in respect
of options and convertible notes, is 4,418,597 (2005: 151,583,116) ordinary shares.
16. ACCUMULATED LOSSES
Opening balance at the beginning of year (6,760,126) (3,343,731)
Net profit/(loss) attributable to members of Wedgetail Mining Limited (2,209,298) (3,829,112)
Equity settled transactions 147,453 412,717
Closing Balance At The End Of Year (8,821,971) (6,760,126)
17. SEGMENTAL INFORMATION
The company operated for the financial year within Australia.
The principal activity of the company was mineral exploration.
2006 2005 $ $
The 30,000,000 unlisted options to subscribe for fully
paid ordinary share which were granted to the Investec
Australia Bank on 3 November 2005 were reduced to
3,000,000 following the 1 for 10 share capital reduction
ratified by shareholders on 29 August 2006. Subsequent
to that shareholders meeting these options now have an
exercise price of 55 cents per share, and expire on
11 October 2007.
On 19 April 2006 Employee Options totalling 160,000
were issued with an exercise price of 4.8 cents. These
expire on 17 April 2007. As a result of the 1 for 10 share
capital consolidation mentioned in the above paragraph
the exercise price is now 48 cents.
15. CONTRIBUTED EQUITY (continued)
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
34
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
34
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ 18. EXPENDITURE COMMITMENTS
(a) Exploration
Due to the nature of the company’s activities, it is difficult to accurately
forecast the amount of future expenditure that will be necessary to incur in
order to maintain present interests. Expenditure contracts on mineral tenure
can be reduced by selective relinquishment of exploration tenements, or by
the re-negotiation of expenditure commitments.
The minimum level of exploration commitments:
– Not later than one year is 1,565,000 991,000
– later than one year and not later than five years is 3,000,000 2,887,500
– later than five years is 2,000,000 1,800,000
(b) Operating Lease Commitments
The minimum level of operating lease commitments:
– Not later than one year is 227,952 255,862
– later than one year and not later than five years is 189,960 111,393
c) Finance Lease Commitments
The minimum level of operating lease commitments:
– Not later than one year is 69,077 90,117
– later than one year and not later than five years is – 102,667
19. REMUNERATION OF AUDITOR
Amounts received, or due and receivable by the auditor for:
Auditing 14,000 15,200
Other services 5,700 2,750
19,700 17,950
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
35
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
35
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
20. RELATED PARTY INFORMATION
(a) Names Of Directors
The persons holding positions as Directors of the Company during the financial year were:
C Donner F Vanspeybroeck
G Lambert R Gillon
E Kirby R Procter
(b) Directors’ Remuneration
Non–Executive Directors
Mr C Donner 2006 50,000 – – – – 50,000
2005 46,500 – – – – 46,500
Mr G Lambert 2006 24,000 – – – – 24,000
2005 24,000 – – – – 24,000
Mr R Gillon 2006 24,000 – – – – 24,000
2005 24,000 – – – – 24,000
Mr E Kirby 2006 24,000 3,450 – – – 27,450
2005 24,000 19,650 – – – 43,650
Mr R Procter 2006 24,000 134,760 – – – 158,760
2005 20,000 – – – – 20,000
Mr F Vanspeybroeck 2006 22,000 17,500 – – – 39,500
2005 – 185,500 – – – 185,500
Post Equity
Short Term Employment Compensation
Directors Consulting Non-monetary Super- Value of Share Total
Fees Fees Benefits annuation Options
Year $ $ $ $ $ $
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
36
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
36
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
20. RELATED PARTY INFORMATION (continued)
(e) Other Transactions With Specified Directors
Frank Vanspeybroeck is a Director of IMMO Services (WA)
Pty Ltd. The Company has entered into a contract with
IMMO Services (WA) Pty Ltd for the supply of management
services under normal commercial terms and conditions.
During the period that company was paid $17,500 (2005:
$185,500). The agreement terminated on 31 January 2006,
with no termination benefits payable.
Mr Ross Gillon is a partner of Lawton Gillon which
provides legal services to the Company. During the period
that Partnership was paid $48,084 (2005: $29,010).
Mr Evan Kirby is a Director of Metallurgical Management
Services (Pty) Ltd which provides metallurgical consultancy
to the Company. During the period that Company was paid
$3,450 (2005 $19,650).
Mr Clive Donner is a director of LinQ Corporate Pty Ltd,
which is owned by a trust in which Mr Donner is one of
the beneficiaries. During the year this company received
a net fee of $60,000 for corporate and financial advice
provided at normal commercial rates. LinQ Corporate
Pty Ltd also received gross fees at commercial rates of
$777,638 for and on behalf of sub-underwriters to the
share placement in August 2006.
Mr Clive Donner is a director and a beneficiary of
Woodcross Holdings Pty Ltd, the trustee of the
Woodcross Trust, which received $21,744 for the lease
of office furniture to the Company at commercial rates.
Prior to his appointment as Managing Director
Mr Terry Stark was engaged as a consultant to the
Company providing mining engineering services on
the Nullagine Gold Project. Monies paid to him up to
the end of the financial year totalled $64,000.
(c) Executives’ Remuneration
The company does not employ any executive officers apart from the Directors.
(d) Directors’ Interests as at 22 March 2007
Director Ordinary Shares
Direct Interest Indirect Interest
Clive DONNER – –
Frank VANSPEYBROECK – 1,281,517
Geoffrey LAMBERT – 283,572
Ross GILLON – 475,001
Evan KIRBY – 32,500
Richard PROCTER 42,500 –
Terry STARK – –
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
37
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
37
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ 21. NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation Of Cash
Cash as at the end of the financial year as shown in the Statement of
Cash Flows is reconciled to the related items in the Statement of Financial
Position as follows:
Cash at bank 1,741,092 192,746
Cash on deposit 10,124,341 4,237,313
11,865,433 4,430,059
(b) Reconciliation Of Net Cash Provided By Operating Activities
To Operating Loss After Income Tax
Profit/(Loss) after income tax (2,209,298) (3,829,112)
Profit on sale of property, plant and equipment (1,043) (312)
Profit on sale of investments (6,000) –
Depreciation 107,937 273,194
Provision on diminution in financial assets 6,000 74,500
Share based payments 147,453 412,717
Provisions 44,010 38,024
Interest expense capitalised – 65,517
Bad debt written off – 250,000
Exploration written off 10,160 –
Movement in assets and liabilities
Trade receivables (3,432) (67,691)
Tax asset (10,332) 230,128
Trade creditors and accruals 94,354 90,842
Net Cash Used In Operating Activities (1,820,191) (2,462,193)
(c) Non-Cash Investing Activities
There were no non-cash investing activities.
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
38
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 $ $ Plant and equipment – reconciliation
Carrying amount at beginning of year 1,608,584 1,354,509
Additions 247,389 483,219
Disposals – (1,869)
Less Depreciation (92,897) (227,275)
Carrying Amount At End Of Year 1,763,076 1,608,584
Motor vehicles – reconciliation
Carrying amount at beginning of year 94,519 101,738
Additions 6,853 12,900
Less Depreciation (9,256) (20,119)
Carrying Amount at End of Year 92,116 94,519
Land and buildings – reconciliation
Carrying amount at beginning of year 1,214,357 432,669
Additions at cost – 781,687
Carrying Amount at End of Year 1,214,357 1,214,356
Leasehold improvements – reconciliation
Carrying amount at beginning of year 84,913 105,926
Additions 4,660 4,787
Less Depreciation (6,450) (25,800)
Carrying Amount at End of Year 83,123 84,913
Capital works in progress – reconciliation
Carrying amount at beginning of year – –
Additions at cost 6,986,858 –
Carrying Amount at End of Year 6,986,858 –
Total Amount at End of Year 10,139,530 3,002,372
10. NON CURRENT ASSETS – OTHER FINANCIAL ASSETS
Available for sale financial assets at fair value – 457,000
Security deposits – 125,772
– 582,772
Market Value Of Shares In Listed Companies – 457,000
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
38
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
The Company’s accounting policies, including the
terms and conditions of each class of financial liability
and equity instrument, both recognised and unrecognised
at the balance date, are as follows:
Short Term Deposits
Short term deposits are stated at the lower of cost and net
realisable value. Interest is recognised in the Statement of
Financial Performance when earned.
22. FINANCIAL INSTRUMENTS
Listed Shares
Listed shares are carried at the lower of cost or
recoverable amount. Dividend income is recognised
when the dividends are declared by the investee.
Trade Payables and Accruals
Liabilities are recognised for amounts to be paid in the
future for goods and services received, whether or not
billed to the Company. Trade liabilities are normally settled
on 60 day terms.
(a) Interest Rate Risk
The Company’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of
changes in market, interest rates and the effective weighted average interest rates on these financial assets, is as follows:
Weighted Average Floating Fixed Maturing Non-Interest
2006 Effective Interest Interest Interest Bearing Total
% $ 1 Year 1 – 5 years $ $
Financial Assets
Interest bearing deposits 6.30% 9,915,251 – – – 9,915,251
Cash at bank 5.80 1,741,092 – – – 1,741,092
Receivables/tax asset – – – – –
Shares in listed companies – – – – –
Security deposits 5.70% 209,090 – – – 209,090
Total Financial Assets 11,865,433 – – – 11,865,433
Financial Liabilities
Payables – – – 3,617,872 3,617,872
Hire Purchase Liability – 69,077 – – 69,077
Provisions – – – – –
Borrowings – – – – –
Convertible notes 10.0% – 300,000 300,000 – 600,000
Total Financial Liabilities – 369,077 300,000 3,617,872 4,286,949
Net Financial Assets 11,865,433 (369,077) (300,000) (3,617,872) 7,578,484
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
3�
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
Financial Assets
Interest bearing deposits 5.4% 4,237,313 – – – 4,237,313
Cash at bank 3.7% 192,746 – – – 192,746
Receivables/tax asset – – – 9,148,851 9,148,851
Shares in listed companies – – – 457,000 457,000
Security deposits 5.4% – 125,772 – – 125,772
Total Financial Assets 4,430,059 125,772 – 9,605,851 14,161,682
Financial Liabilities
Payables – – – 3,712,157 3,712,157
Hire Purchase Liability – 90,117 102,668 – 192,785
Provisions – – – 38,024 38,024
Borrowings 8.5% – 4,065,517 – – 4,065,517
Convertible note 10.0% – 2,500,000 2,500,000 – 5,000,000
Total Financial Liabilities – 6,655,634 2,602,668 3,750,181 13,008,483
Net Financial Assets 4,430,059 (6,529,862) (2,602,668) 5,855,670 1,153,199
Weighted Average Floating Fixed Maturing Non-Interest
2005 Effective Interest Interest Interest Bearing Total
% $ 1 Year 1 – 5 years $ $
(b) Credit Risk
The maximum exposure to credit risk, excluding the value
of any collateral or other security, at balance date, to
recognised financial assets is the carrying amount, net
of any provisions for doubtful debts, as disclosed in the
Balance Sheet and notes to the financial statements.
The Company does not have any material risk exposure
to any single debtor or group of debtors, under financial
instruments entered into by it.
(c) Net Fair Values
Methods and assumptions used in determining net
fair value.
For assets and other liabilities, the net fair value
approximates their carrying value. No financial assets
and financial liabilities are readily traded on organised
markets in standardised form, other than listed invest-
ments. The Company has no financial assets where
carrying amount exceeds net fair values at balance date.
The aggregate net fair values and carrying amounts of
financial assets and financial liabilities are disclosed in the
Statement of Financial Position and in the notes to and
forming part of the financial statements.
22. FINANCIAL INSTRUMENTS (continued)
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
40
Notes To, And Forming Part Of, The Financial Statements For The Year Ended 31 December 2006
2006 2005 Cents per share Cents per share 23. EARNINGS PER SHARE
Basic earnings per share – (loss) (0.0012) (0.004)
Weighted Average number of ordinary shares outstanding during the year
calculation of basic EPS 1,862,814,457 992,002,115
Diluted earnings per share are not considered to be materially different from
basic earnings per share and accordingly are not disclosed.
24. CONTINGENT LIABILITES
Bonds are held with respect to mining licences for which Notices of Intent have been lodged. Bonds are set by the
Department of Minerals and Energy, however there is no certainty that such bonds will be adequate to cover any
environmental damage in the event of mining. The Company is not able to determine the nature or extent of any further
requirement in respect of changing environmental requirements.
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
41
In accordance with a resolution of the Directors of Wedgetail Mining Limited, I state that:
In the opinion of the Directors:
(a) The statements and notes of the Company are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s financial position as at 31 December 2006, and performance for the year
ended on that date; and
(ii) complying with Accounting Standards and Corporations Regulations 2001; and
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
On behalf of the Board.
Terry Stark
Managing Director
Directors report
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
42
Independent Audit Report To The Members Of Wedgetail Mining Limited
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
43
Schedule Of Interests in Mining Tenements
Prospect Area Tenement Registered Holder Wedgetail Beneficial
Interest
ALL NATIONS M46/199 Wedgetail Mining Limited 100%
M46/225 Wedgetail Mining Limited 100%
M46/98 Wedgetail Mining Limited 100%
BARTONS G46/02 *Livestock Marketing Pty Ltd 75%
M46/164 *Livestock Marketing Pty Ltd 75%
M46/3 *Livestock Marketing Pty Ltd 75%
M46/441 TupperGlenda Pty Ltd 75%
BEATONS CREEK M46/10 Wedgetail Mining Limited 100%
M46/11 Wedgetail Mining Limited 100%
M46/9 Wedgetail Mining Limited 100%
BEATONS CREEK EAST P46/1263 Wedgetail Mining Limited 100%
P46/1264 Wedgetail Mining Limited 100%
P46/1329 Wedgetail Mining Limited 100%
P46/1330 Wedgetail Mining Limited 100%
CAJUPUT P46/1289 Wedgetail Mining Limited 100%
P46/1290 Wedgetail Mining Limited 100%
P46/1292 Wedgetail Mining Limited 100%
P46/1298 Wedgetail Mining Limited 100%
COOKES CREEK E46/591 *Furnace Technology 80%
E46/486 Wedgetail Mining Limited 100%
E46/573 Wedgetail Mining Limited 100%
DAVIS RIVER L46/41 Wedgetail Mining Limited 100%
EASTERN CREEK M46/124 DMF Pty Ltd 100%
M46/142 Young, John William 100%
FEDERATION M46/64 Wedgetail Mining Limited 100%
FIVE MILE P46/1368 Ruane, Michael 100%
M46/50 *Simba Holdings Pty Ltd 75%
E46/308 Tyson Resources Pty Ltd 100%
P46/1123 Wedgetail Mining Limited 100%
L46/33 Wedgetail Mining Limited 100%
M46/261 Wedgetail Mining Limited 100%
M46/262 Wedgetail Mining Limited 100%
P46/1328 Wedgetail Mining Limited 100%
P46/1369 Wedgetail Mining Limited 100%
P46/1370 Wedgetail Mining Limited 100%
P46/1371 Wedgetail Mining Limited 100%
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
44
Schedule Of Interests in Mining Tenements
Prospect Area Tenement Registered Holder Wedgetail Beneficial
Interest
FIVE MILE P46/1372 Wedgetail Mining Limited 100%
P46/1404 Wedgetail Mining Limited 100%
P46/1405 Wedgetail Mining Limited 100%
P46/1406 Wedgetail Mining Limited 100%
P46/1407 Wedgetail Mining Limited 100%
P46/1408 Wedgetail Mining Limited 100%
P46/1409 Wedgetail Mining Limited 100%
P46/1418 Wedgetail Mining Limited 100%
P46/1419 Wedgetail Mining Limited 100%
P46/1420 Wedgetail Mining Limited 100%
P46/1436 Wedgetail Mining Limited 100%
P46/1437 Wedgetail Mining Limited 100%
P46/1445 Wedgetail Mining Limited 100%
P46/1446 Wedgetail Mining Limited 100%
P46/1447 Wedgetail Mining Limited 100%
P46/1448 Wedgetail Mining Limited 100%
P46/1449 Wedgetail Mining Limited 100%
P46/1450 Wedgetail Mining Limited 100%
P46/1451 Wedgetail Mining Limited 100%
P46/1458 Wedgetail Mining Limited 100%
P46/1461 Wedgetail Mining Limited 100%
GOLDEN EAGLE E46/394 Wedgetail Mining Limited 100%
L46/45 Wedgetail Mining Limited 100%
M46/186 Wedgetail Mining Limited 100%
M46/300 Wedgetail Mining Limited 100%
P46/1444 Wedgetail Mining Limited 100%
GOLDEN GATE P46/1421 Bighead Enterprises Pty Ltd 100%
P46/1422 Bighead Enterprises Pty Ltd 100%
E46/279 *Simba Holdings Pty Ltd 75%
M46/129 *Simba Holdings Pty Ltd 75%
M46/187 *Simba Holdings Pty Ltd 75%
M46/189 *Simba Holdings Pty Ltd 75%
M46/47 *Simba Holdings Pty Ltd 75%
M46/163 Wedgetail Mining Limited 100%
LITTLE WONDER M46/146 Wedgetail Mining Limited 100%
M46/198 Wedgetail Mining Limited 100%
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
45
Schedule Of Interests in Mining Tenements
MIDDLE CREEK E46/391 Wedgetail Mining Limited 100%
E46/449 Wedgetail Mining Limited 100%
P46/1270 Wedgetail Mining Limited 100%
P46/1300 Wedgetail Mining Limited 100%
P46/1410 Wedgetail Mining Limited 100%
P46/1411 Wedgetail Mining Limited 100%
P46/1412 Wedgetail Mining Limited 100%
P46/1413 Wedgetail Mining Limited 100%
P46/1414 Wedgetail Mining Limited 100%
P46/1415 Wedgetail Mining Limited 100%
P46/1416 Wedgetail Mining Limited 100%
P46/1417 Wedgetail Mining Limited 100%
P46/1423 Wedgetail Mining Limited 100%
P46/1424 Wedgetail Mining Limited 100%
P46/1425 Wedgetail Mining Limited 100%
P46/1426 Wedgetail Mining Limited 100%
P46/1427 Wedgetail Mining Limited 100%
P46/1428 Wedgetail Mining Limited 100%
P46/1429 Wedgetail Mining Limited 100%
P46/1430 Wedgetail Mining Limited 100%
P46/1431 Wedgetail Mining Limited 100%
P46/1432 Wedgetail Mining Limited 100%
P46/1433 Wedgetail Mining Limited 100%
P46/1453 Wedgetail Mining Limited 100%
P46/1454 Wedgetail Mining Limited 100%
P46/1455 Wedgetail Mining Limited 100%
P46/1456 Wedgetail Mining Limited 100%
P46/1457 Wedgetail Mining Limited 100%
MIDDLE CREEK NORTH P46/1478 Wedgetail Mining Limited 100%
P46/1479 Wedgetail Mining Limited 100%
P46/1480 Wedgetail Mining Limited 100%
P46/1481 Wedgetail Mining Limited 100%
P46/1482 Wedgetail Mining Limited 100%
P46/1483 Wedgetail Mining Limited 100%
P46/1484 Wedgetail Mining Limited 100%
P46/1485 Wedgetail Mining Limited 100%
P46/1486 Wedgetail Mining Limited 100%
P46/1487 Wedgetail Mining Limited 100%
Prospect Area Tenement Registered Holder Wedgetail Beneficial
Interest
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
46
Schedule Of Interests in Mining Tenements
MOSQUITO CREEK E46/572 Tyson Resources Pty Ltd 100%
P46/1384 Tyson Resources Pty Ltd 100%
E46/450 Wedgetail Mining Limited 100%
E46/452 Wedgetail Mining Limited 100%
P46/1388 Wedgetail Mining Limited 100%
P46/1459 Wedgetail Mining Limited 100%
P46/1460 Wedgetail Mining Limited 100%
P46/1488 Wedgetail Mining Limited 100%
P46/1489 Wedgetail Mining Limited 100%
P46/1490 Wedgetail Mining Limited 100%
P46/1491 Wedgetail Mining Limited 100%
MT MCKAY E46/659 Wedgetail Mining Limited 100%
ONE MILE P46/1309 Wedgetail Mining Limited 100%
P46/1310 Wedgetail Mining Limited 100%
P46/1311 Wedgetail Mining Limited 100%
P46/1312 Wedgetail Mining Limited 100%
P46/1313 Wedgetail Mining Limited 100%
P46/1314 Wedgetail Mining Limited 100%
P46/1315 Wedgetail Mining Limited 100%
P46/1316 Wedgetail Mining Limited 100%
P46/1317 Wedgetail Mining Limited 100%
P46/1318 Wedgetail Mining Limited 100%
P46/1319 Wedgetail Mining Limited 100%
TWENTY MILE SANDY P46/1291 Wedgetail Mining Limited 100%
P46/1293 Wedgetail Mining Limited 100%
P46/1302 Wedgetail Mining Limited 100%
P46/1303 Wedgetail Mining Limited 100%
P46/1304 Wedgetail Mining Limited 100%
P46/1305 Wedgetail Mining Limited 100%
P46/1306 Wedgetail Mining Limited 100%
* Net Profit interest.
Prospect Area Tenement Registered Holder Wedgetail Beneficial
Interest
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
47
Category Number of shareholders Units
1-1,000 512 299,729
1,001-5,000 1,910 5,634,204
5,001-10,000 930 7,847,560
10,001-100,000 1,502 47,852,080
100,001-99999999999 181 174,218,603
5,035 235,852,176
Holders holding less than a marketable parcel 1,493 2,152,795
Percentage held by twenty largest holders is 56.63%
SUBSTANTIAL SHAREHOLDINGS
The number of ordinary shares held by the substantial shareholders as at 28 March 2007 were
LinQ Capital Ltd 69,220,078
Supplementary Information
SHAREHOLDERS INFORMATION
DISTRIBUTION OF SHAREHOLDERS AT 28 MARCH 2007
WEDGETAIL MINING LIMITED ANNUAL REPORT 2006
48
Supplementary Information
RBC Dexia Investor Services Australia Nominees Pty Limited 69,220,078 29.35
Westpac Custodian Nominees Limited 17,901,352 7.59
HSBC Custody Nominees (Australia) Limited 11,272,818 4.78
HSBC Custody Nominees (Australia) Limited-GSI ECSA 5,913,500 2.51
Yandal Investments Pty Ltd 5,000,000 2.12
Westpac Direct Equity Investments Pty Ltd 4,883,549 2.07
Geraldton Agricultural Services Pty Ltd 2,500,000 1.06
Citicorp Nominees Pty Limited 2,404,455 1.02
Lando Pty Ltd 2,300,000 0.98
RFC Growth Fund Limited 1,400,000 0.59
J P Morgan Nominees Australia 1,237,559 0.52
ANZ Nominees Limited 1,180,800 0.50
Link Traders (Aust) Pty Ltd 1,136,000 0.48
Mr Paul Neville Griffin 1,100,000 0.47
Vanspeybroeck Superannuation Pty Ltd 1,069,312 0.45
Mr Minlu Fu 1,061,851 0.45
Rod Pearce (The Rod Pearce Family Fund A/C) 1,003,902 0.43
Karari Australia Pty Ltd 1,000,000 0.42
Perpetual Trustee Co Ltd (RFC Growth Fund II A/C) 1,000,000 0.42
Mr Ronald George Martin & Mrs Marie Joyce Martin 1,000,000 0.42
133,585,176 56.63
Category Number of shares % of Issued shares
SHAREHOLDERS INFORMATION
COMPANY DETAILS
i) The name of the Company Secretary is James Moran.
ii) The address of the registered and principal office in
Australia is Ground Floor, 24 Outram Street, West
Perth, WA, AUSTRALIA, 6005.
The telephone number is +61-8-94888800 and the
facsimile number is +61-8-9481 0288.
VOTING RIGHTS
a) On a show of hands each member present in person
or by proxy has one vote.
b) On a poll every member present in person or by proxy
has one vote for each share held in the company.
STOCK EXCHANGES THAT HAVE GRANTED
QUOTATION TO THE COMPANY’S SECURITIES
The company’s securities are quoted on the Australian
Stock Exchange Limited.
UNLISTED OPTIONS ON ISSUE
Options issued by the Company which is not listed on
the Australian Stock Exchange is as follows:
• 3,000,000 options exercisable on or before 11 October
2007 at an exercise price of $0.55 each;
• 16,000 options exercisable on or before 17 April 2007
at an exercise price of $0.48 each; and
• 12,450,000 options exercisable on or before
19 December 2011 at an exercise price of $0.29 each.
TOTAL HOLDING OF THE TWENTY LARGEST HOLDERS OF EACH SECURITY
Top twenty shareholders as at 28 March 2007
ContentsCompany Details ........................................................................................... 1
Chairman’s Report ......................................................................................... 2
Review of Operations ..................................................................................... 4
Directors’ Report ......................................................................................... 10
Corporate Governance Statement ................................................................ 17
Income Statement For The Year Ended 31 December 2006 .......................... 21
Balance Sheet As At 31 December 2006 ..................................................... 22
Statement Of Cash Flows For The Year Ended 31 December 2006 ............... 23
Statement Of Changes in Equity For The Year Ended 31 December 2006 ..... 23
Notes To, And Forming Part Of, The Financial Statements ............................. 24
Directors’ Declaration ................................................................................... 41
Independent Audit Report ............................................................................ 42
Schedule Of Interests In Mining Tenements ................................................... 43
Supplementary Information ........................................................................... 47
Front cover photos (clockwise):
Looking southwest towards Golden Eagle,
Quartz vein outcrop, SAG Mill shell, Diamond drillrig
Wedgetail Mission Statement:
Wedgetail Mining
Limited’s mission
is to maximise
shareholder wealth
by finding and
developing quality
gold reserves in a
profitable and socially
responsible manner,
without compromising
the safe work ethic that
protects and maintains
the health and well-
being of our employees
and the environment.
Location map
Wedgetail Mining LimitedA N N U A L R E P O R T 2 0 0 6
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Wedgetail Mining LimitedGround Floor,
24 Outram Street
West Perth WA 6005
Telephone: +61 (0)8 9488 8800
Facsimile: +61 (0)8 9481 0288
Email: [email protected]
Web: www.wedtgetail.net.au