Annual Report 2016
TABLE OF CONTENTS
CORPORATE DIRECTORY 1
CHAIRMAN'S LETTER 2
REVIEW OF OPERATIONS 4
DIRECTORS' REPORT 12
AUDITOR'S INDEPENDENCE DECLARATION 25
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME 26
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 27
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 29
CONSOLIDATED STATEMENT OF CASH FLOWS 30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31
DIRECTORS' DECLARATION 64
INDEPENDENT AUDIT REPORT 65
CORPORATE GOVERNANCE STATEMENT 2015 - 2016 67
ADDITIONAL ASX INFORMATION 74
TENEMENTS SCHEDULE 77
AUSTRALIAN MINES LIMITED ANNUAL REPORT 2016
CORPORATE DIRECTORY
Directors
Michael Ramsden, Chairman Benjamin Bell, Managing Director Mick Elias, Non-Executive Director
Dominic Marinelli, Non-Executive Director Neil Warburton, Non-Executive Director
Auditors
BDO Audit (WA) Pty Ltd 38 Station Street
Subiaco, WA 6008
Telephone: +61 8 6382 4600
Facsimile: +61 8 6382 4601
Company Secretary
Michael Ramsden
Share Registry
Advanced Share Registry Services 110 Stirling Hwy
Nedlands, WA 6009
Telephone: +61 8 9389 8033
Facsimile: +61 8 9262 3723
Registered & Principal Office
Level 1, 83 Havelock St West Perth, WA 6005 Australia
Telephone: +61 8 9481 5811
Facsimile: +61 8 9481 5611 www.australianmines.com.au
Solicitors
Allion Legal Pty Ltd Level 9, 863 Hay Street
Perth, WA 6000
Telephone +61 8 9216 7100
Facsimile: +61 8 9324 1075
Stock Exchange
Australian Securities Exchange Limited Level 40, Central Park
152-158 St George's Terrace Perth WA 6000
ASX Code: AUZ
AUSTRALIAN MINES LIMITED ANNUAL REPORT 2016 Page 1
CHAIRMAN'S LETTER
Dear Shareholder,
I am pleased to provide you with this report detailing what has been a highly active year for Australian Mines progressing its diversified pipeline of existing projects, while also updating you on a significant change in strategic direction for the Company following the conclusion of the 2016 Financial Year.
We as a Board applied significant corporate resources in the September quarter of 2016 to the evaluation and negotiation of two separate agreements, signed in October, which pave the way for Australian Mines to acquire majority positions in, and operate, advanced scandium projects on the east coast of Australia.
The Company entered into an option agreement with Jervois Mining to acquire 100% of the Flemington Scandium-Cobalt Project near Fifield in New South Wales, while simultaneously entering into another agreement with Metallica Minerals to earn up to a 75% interest in the Sconi Scandium-Cobalt Project near the historic mining centre of Greenvale in Queensland.
Completion of these transactions will mark a major milestone for Australian Mines and offer the Company a clear pathway to production through the initial development of the premium- quality scandium resource at Sconi, where we have started a Definitive Feasibility Study, before subsequently developing the high grade resource at Flemington, where we are now completing a Scoping Study.
The potential cash flow from these developments will allow us to fund our ongoing exploration activities on the other promising projects within our portfolio, including the highly prospective Doolgunna-Marymia project in Western Australia, which was the primary focus of exploration activities during 2015 and 2016.
The Company deepened its understanding of Doolgunna- Marymia through two relatively successful drilling campaigns in 2016, centred largely on the Dixon gold prospect following the highly encouraging results from an initial drill hole in the September quarter, which produced a 10 metre intersection grading 8.79 grams per tonne gold.
The Dixon prospect is just 50 kilometres to the east of Northern Star's Plutonic mine that has continuously produced gold for the last 20 years, with total production of about 5 million ounces. It also sits on a tenement that is immediately adjacent to Sandfire's Resources' tenement boundary, where the giant 13 million tonne Degrussa project was discovered with copper grades of 4.7 per cent and gold grades touching 1.9 per cent.
However, in keeping with our strategy to ensure the company operates a diversified project base, we entered into a separate joint venture with Jervois Mining in the June quarter over a highly encouraging piece of ground in the Lake McKay district on the border of Western Australia and the Northern Territory.
The tenements, which are known as the Arunta West project, are prospective for Ernest Henry-style copper-gold mineralisation and already boast a ready-made drill target, known as North Drovers, identified but not tested by BHP Billiton back in the 1990s.
According to publically available reports, it was the large scale nature of the iron-oxide copper gold mineralisation in the Arunta district that originally attracted the major to the area.
The base metal potential of the province was reaffirmed in October 2015 when Independence Group, in partnership with ABM Resources, announced a new copper-gold- silver-lead-zinc-cobalt discovery immediately east of Australian Mines' Arunta West project area.
During the course of 2015, Australian Mines elected to withdraw from the Neds Creek joint venture with Lodestar Minerals, having determined that the tenements had limited prospectivity of hosting a major base metals find.
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AUSTRALIAN MINES LIMITED ANNUAL REPORT 2016