KASBAH RESOURCES LIMITED
ACN 116 931 705
ANNUAL REPORT
For the Year Ended 30 June 2016
Directors
Rod Marston (Non-executive Chairman) Wayne Bramwell (Managing Director) Ian McCubbing (Non-executive Director)
Gabrielle Moeller (Non-executive Director) Giles Robbins (Non-executive Director) Mike Brook (Non-executive Director)
Company Secretary
Trevor O'Connor
Principal Registered Office in Australia
11 Moreau Mews
Applecross WA 6153
Telephone: +61 8 9463 6651
Facsimile: +61 8 9463 6652
E-mail:[email protected]
Web:www.kasbahresources.com
Stock Exchange Listing
The Company is listed on the Australian Securities Exchange Limited under the trading code KAS.
Share Registry
Link Market Services Limited Level 4
152 St Georges Terrace Perth WA 6000
Telephone: +61 1300 554 474
Bankers
Westpac Banking Corporation 1257 - 1261 Hay Street
West Perth WA 6005
Solicitors
In Australia
Steinepreis Paganin Lawyers & Consultants Level 4
The Read Buildings 16 Milligan Street
Perth WA 6000
Telephone: +61 8 9321 4000
Facsimile: +61 8 9321 4333
Auditors
BDO Audit (WA) Pty Ltd 38 Station Street
Subiaco WA 6008
Telephone: +61 8 6382 4600
Facsimile: +61 8 6382 4601
CHAIRMAN'S LETTER 1
CORPORATE STRATEGY 2
HIGHLIGHTS 3
OPERATIONS REVIEW 4
DIRECTORS' REPORT 18
AUDITOR'S INDEPENDENCE DECLARATION 35
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 36
CONSOLIDATED BALANCE SHEET 38
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 39
CONSOLIDATED STATEMENT OF CASH FLOWS 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT 41
DIRECTORS' DECLARATION 68
INDEPENDENT AUDITOR'S REPORT 69
ASX ADDITIONAL INFORMATION 71
Dear Shareholders,
The tin market has remained erratic during the last year with the LME tin price falling to US$13,000 / t in early 2016 then rebounding to above US$18,000 / t in August. In response to continued low tin prices and unpredictable market supply from countries such as Myanmar, the year began with Kasbah adopting an interim development strategy and a significant corporate cost reduction programme, alongside a $3M placement to our major shareholders.
These funds were principally used to examine a smaller scale, lower capital start up scenario, termed the Small Start Option (SSO) for the Achmmach Tin Project.
A Pre-Feasibility Study (PFS) on the SSO released in February 2016 confirmed the concept of a lower capital cost, higher grade, staged mine development commencing at 0.5Mtpa, was a more appropriate solution to a lower tin price environment than the 1 Mtpa scale, higher cost Enhanced Definitive Feasibility Study (EDFS) project developed in early 2015.
Kasbah and its Joint Venture partners in Atlas Tin SAS (Toyota Tsusho Corporation and Nittetsu Mining Company) have funded advancing the SSO concept from PFS to DFS status from January to August 2016. DFS construction capital costs for the SSO were estimated at US$62M, compared with US$131M for the larger 1Mtpa EDFS project.
The Company believes that with the SSO project, it is now in a position to seek finance for development, at current tin prices of around $18,000/t tin. However, the prospect of raising significant equity finance remains a major hurdle for Kasbah, given the ongoing constraints on junior companies to maintain the viability of their development projects.
Kasbah has for many years endeavoured to attract new cornerstone investors to assist in the development of Achmmach. This process finally succeeded when in August 2016 Kasbah announced, jointly with nickel mining company Asian Mineral Resources (AMR), a proposed scheme of arrangement transaction, which if approved by shareholders would result in a merger of the two companies to form a larger base metals company. This new entity would have proven expertise in exploration, resource development, underground mining development and mine operations. A key element in this transaction is the presence and financial support of Pala Investments Ltd., a leading mining investment fund, as a cornerstone investor of the combined entity of Kasbah and AMR.
The Board of Kasbah has unanimously recommended that all Kasbah shareholders vote in favour of the transaction in the absence of a superior proposal. Three major shareholders of Kasbah have also agreed, in the absence of a superior proposal, to vote in favour of the transaction.
As I said a year ago, I would like to reaffirm to all our shareholders that the company remains focused on seeking funding mechanisms to advance the Achmmach Tin Project to production and I believe that the proposed merger transaction can provide a mechanism to achieve that ultimate objective. I thank you, our loyal shareholders and Kasbah's dedicated staff for the continued support given during these difficult and challenging times.
Rod Marston
Chairman