2002 Annual Report

Comments

Transcription

2002 Annual Report
ABN 45 076 318 173
ANNUAL REPORT 2002
Designed and printed by PMP Print, Level 1, 303 Collins Street, Melbourne.
Indophil’s Mission
Corporate Directory
Indophil is a mineral exploration company incorporated in Australia in December 1996 and focusing its
activities on the discovery and subsequent development of copper and gold resources in the Philippines.
DIRECTORS
SOLICITORS
Australia
Mission Statement
Bryan Davis
Non Executive Chairman
To grow shareholder wealth by the discovery, acquisition and subsequent development of gold and
copper-gold resources in the Philippines.
Tony Robbins
Managing Director
Objectives
Chris Middleton
Director of Exploration
To employ effective and cost efficient modern exploration techniques, to discover gold, and copper –
gold deposits.
Through the discovery and development of major ore deposits, become a significant producer in the
region.
Strategy
To maintain and strengthen the portfolio of quality projects in those geological provinces identified as
having high prospectivity for the discovery of major deposits.These projects will be subjected to
focused, effective and cost-efficient exploration.
Kevin Robinson
Non Executive Director
Peter Maloney
Non Executive Director
COMPANY SECRETARY
Colin Walker
To maintain and strengthen the experienced team of dedicated and professional staff that has already
been recruited to pursue a successful program based on technical excellence.
PRINCIPAL AND
REGISTERED OFFICE
To direct all of our efforts and resources to the acquisition and field-testing of quality properties.
Suite 3 Level 2
50 Market Street
Melbourne VIC 3000
REGIONAL OFFICE
Contents
Level 3, L & F Building
107 Aguirre Street
Legaspi Village Makati City 1299
Message to Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AUDITOR
Statement of Corporate Governance Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Operations Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Notes to the Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Directors’ Declaration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Independent Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Shareholder and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Ernst & Young
120 Collins Street
Melbourne VIC 3000
Freehills
Level 43 101 Collins Street
Melbourne Victoria 3000
Philippines
Carag, Caballes, Jamora & Somera Law Offices
2nd Floor The Plaza Royale
120 Alfaro Street
Salcedo Village
Makati City
Metro Manila
Philippines
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 12 565 Bourke Street
Melbourne Victoria 3000
BANKERS
Australia and New Zealand Banking Group Ltd
388 Collins Street
Melbourne Victoria 3000
Philippines
Message to Shareholders
We are very pleased to report that the Company has made excellent progress since its last report
to shareholders on 20 December 2001 which covers the year ended 31st July 2001.The two major
highlights since that last report were the completion of the Initial Public Offering (IPO) with listing
on the Australian Stock Exchange in May 2002 and the finalisation of the Tampakan Acquisition.
This report is for the 17 month period ending 31st December 2002.The reason for this extended
period is a result of the Board’s decision, following listing on the ASX, to bring our fiscal and reporting
year in line with our exploration and budget year.
The completion of the IPO and our subsequent listing on the Australian Stock Exchange was the
successful culmination of a great deal of effort by our fellow Directors and staff. It was a great thrill
for us all to see the Company listed.
At the time of the IPO we undertook to achieve the following objectives:
Complete the Tampakan Acquisition
Complete the next stage of drilling to enhance the Manat Resource
Complete IP and drilling at Hinotongan
Advance the property portfolio
We are pleased to announce that all of these were achieved.
The finalisation of the acquisition of our operating interest in the Tampakan project is a great
achievement for the Company.This gives the Company access to a world class deposit in its portfolio
with a global resource of 16 million ounces of gold and 12 million tonnes of copper metal. In addition
the acquisition comes with a wealth of data and a number of prefeasibility reports. In particular your
attention is drawn to the details of a scoping study, prepared for the previous owner, that were
announced in February 2002.This particular study determined that the project at a gold price of
US$280/oz. and a copper price of US$0.80/lb., would generate an IRR of 20% before tax and financing,
a NPV of US$280million at an 11% discount rate and produce 170,000 ounces of gold and 158,000
tonnes of copper annually. Capital costs were estimated at $US 420 million.These results are based on
one of a range of different scenarios for development which does not necessarily represent the scale
and technology to be adopted for any potential development.
A preliminary review of previous exploration data from the Columbia FTAA, the mining title to the
Tampakan project, has highlighted that the area external to the main Tampakan deposit is significantly
under-explored and has outstanding potential for the discovery of further gold-copper mineralization.
This is exemplified by results from the Balol Bato prospect located approximately 1.1 km. NNE where
drillhole TMPD57 intersected 157.65 m at 0.52g/t gold and 0.41% copper.
Our efforts at Tampakan are now focused on further evaluating the data and reports produced by the
previous owner, prior to commencing drilling by mid year aimed at further enhancing the resource
base. A complementary review and evaluation is also being undertaken by MIM Holdings Ltd which
has an option to acquire a 60% operating interest in the project.
The Company is committed to good corporate citizenship and is aware of the importance of building
lasting relationships with all stakeholders and keeping them well informed. As an early priority for the
development of Tampakan, a corporate affairs and community relations group has been put in place
and a community centre opened in Tampakan Township.
The finalisation of the Tampakan acquisition was made possible by the company achieving exclusively
favourable results in legal and administrative challenges by another party to the transfer of ownership
and although there is still an appeal current we remain confident in respect of future outcomes.
1
Message to Shareholders
(Cont)
We look forward to reporting our progress on advancing the Tampakan Project and surrounding
exploration targets to shareholders over the next twelve months.
At Manat, the drilling program was completed on schedule. Representative ore samples have been
forwarded to Australia for metallurgical testing and work has commenced on a new resource
estimation.When these results are available we will undertake a scoping study upon which to focus
future programs.
The Hinotongan project was an excellent geological concept based on similarities with Tampakan and
other copper-gold mineral systems. A two hole drilling program confirmed the discovery of a new
porphyry copper system, however it was not significantly anomalous in gold.The company’s policy is
to focus on gold and copper properties and the future plans for Hintongan are under review.
Although our main focus in the coming year will be Tampakan, further evaluation of the other
properties in the portfolio will continue. Considerable progress has been made in finalising the Palado
application in the Labo district of the Paracale Goldfield in Luzon and the Sogod property in Leyte.
Exploration results continue to be encouraging at the St. Bernard property in Leyte.
The Philippines Government has recently announced a major policy development to promote the
Mining Industry. A number of initiatives are taking place and are being supported by the World Bank,
and aid from the US, Canada and Australia.This is excellent news for Indophil and the change in policy
has been welcomed by the Industry.
The Company believes it is important to work with local partners in its activities in the Philippines.
The Alsons Group, which has substantial business interests in Mindanao, are our partners in both the
Manat and Tampakan Projects.Their guidance and advice has been invaluable in many aspects of our
work on these projects and also in the wider context of our activities in the Philippines.
Our commitment to best environmental practice was recognised when the Company was awarded
the ANZ Bank Business Awards 2002 Special Environmental Commendation Award.
We look forward to another exciting year as we continue the evaluation of Tampakan and progress
the other projects in the portfolio.
We would like to take this opportunity to record our deep appreciation for the continuing support of
our Shareholders and to thank our fellow Directors and all the Indophil staff for their dedication, effort
and support.
R Bryan Davis
Chairman
2
Tony W Robbins
Managing Director
Exploration diamond
drilling on the Magas Vein
Zone at Manat
3
Statement of Corporate Governance Practices
The Board of directors of Indophil Resources NL has adopted the following set of principles for the
corporate governance of the Company. These principles establish the framework of how the Board
carries out its duties and obligations on behalf of the shareholders.
Role of the Board
The Board is responsible for protecting the rights and interests of shareholders and for the overall
corporate governance of the Company. The Board’s responsibilities include
formulating the strategic objectives of the Company and establishing goals designed to promote
the achievement of those strategic objectives
considering and approving the Managing Director’s proposals for the Company’s annual work
programs and budgets
monitoring the performance of management against these goals and objectives
ensuring that there are appropriate internal controls and ethical standards of behaviour adopted
and met within the Company
ensuring that the business risks facing the Company are, wherever possible, identified and that the
appropriate monitoring and reporting controls are in place to manage these risks and
appointing the Managing Director, evaluating the performance and determining the remuneration
of senior management and ensuring that the appropriate policies and procedures are in place for
recruitment, remuneration and succession planning.
Composition of the Board
The Board currently consists of five directors, with two executive directors and three non-executive
directors including the Chairman.
Any changes to directorships will, for the foreseeable future, be dealt with by the full Board subject
to any applicable laws and accordingly a nominations committee has not been established.
Independent Professional Advice
In fulfilling their duties, each Director dealing with corporate governance matters may obtain
independent professional advice at the expense of the Company subject to prior approval of the
Chairman, whose approval will not be unreasonably withheld.
Board Committees
The Board has a Remuneration Committee consisting of Bryan Davis as Chairman and Kevin Robinson.
The remuneration of Directors and senior management is determined periodically by the
Remuneration Committee.
4
The specific functions to be undertaken by the Committee include
remuneration arrangement for the Managing Director and other Senior Executives including
incentive plans, share options and service contracts
establishing and monitoring remuneration policies and practices
recruitment and termination policies and practices
establishment of an Employee Share and Option Plan
superannuation policies
remuneration arrangement for Directors.
The Board has established an Audit Committee.
The Audit Committee consists of two non-executive Directors, Mr. Peter Maloney and Mr. Bryan Davis.
At the discretion of the committee, the external auditors and the Managing Director will be invited to
attend Audit Committee meetings. The Audit Committee will consider any matters relating to the
financial affairs of the Company and other matters referred to it by the Board. The Audit Committee
intends to meet not less than three times per year or more frequently if circumstances require.
The Board may sometimes delegate some of its monitoring and routine functions to other committees.
Directors’ and Senior Managements’ Dealings in the Company’s Shares and Options
The Company requires that
directors discuss any proposed trade in shares and options with the Chairman prior to any trade
senior management must discuss any proposed trade in shares and options with the Company
Secretary or the Managing Director prior to any trade
trades in shares and options by directors and senior management are limited to stipulated periods
unless there are unusual circumstances and
directors and senior management are aware of their obligations under the Corporations Act not to
trade or procure trades in shares and options if possession of price sensitive non-public information
to any other person who is likely to trade shares and options or communicate such information to
another party.
Ethical Standards
The Board believes that the success of the Company to date has been partly based upon the strong
ethical culture within the organisation. As the Company grows, the need to ensure that these ethical
standards remain is leading to greater emphasis on developing policies to ensure that all directors,
senior managers and employees act with the utmost integrity and objectivity in their business dealings.
A Code of Conduct has been adopted by the Board.
5
Exploration Projects
Figure 1 - Indophil Exploration Projects
6
Operations Review
Project Portfolio & Operations Overview
Indophil has developed a substantial portfolio of projects in the Philippines for copper and gold
comprising eight geographically separate projects ranging from the advanced Tampakan gold-copper
Project currently in a preliminary-feasibility stage, to the early reconnaissance stage Northern Sierra
Madre Project in Northern Luzon (Figure 1). These projects currently comprise five granted licenses
and twelve tenement applications totalling 2,163 sq. km.Tenements include Financial and Technical
Assistance Agreements (FTAA), Mineral Production Sharing Agreements (MPSA) and Exploration
Permits (EP).
The Company is now one of the most active explorers in the country and has established a strong
reputation within the mineral exploration industry. Exploration focus is on the discovery of epithermal,
porphyry copper and related styles of mineralisation including skarn deposits.Table 1 provides a
current project summary listing tenements, target types, current status, maximum Indophil equity and
highlights.
Since listing on the ASX in May 2002, the Company’s efforts have been strongly focussed on the
acquisition of an operating interest in the Tampakan Project. This was finalised in August 2002 with the
transfer of shares from the Projects previous owner WMC Philippines Inc. to Sagittarius Mines Inc., an
affiliate of Indophil. Indophil has now assumed management of the Project and has commenced a review
of a comprehensive historical Project database generated by the previous owner. In addition, the
Company has undertaken a 15 hole (2073m) program of delineation and resource definition diamond
drilling at the Manat gold-basemetal project in SE Mindanao and an exploration diamond drilling
program comprising 2 holes (804.8m) at the Hinotongan Project on the Island of Negros that has lead
to the discovery of a low grade porphyry copper system.
The Tampakan project contains one of the largest known undeveloped copper-gold deposit in the
SE Asia Region and as such the Company’s ongoing focus will be on the consolidation of preliminary
feasibility studies, including further drilling.This strategic focus will require a review of the Company’s
portfolio and if necessary a rationalisation including the possible introduction of joint venture partners,
or in some cases tenement relinquishment.
Presidential adviser to Mindanao Jesus Dureza (second from left) and Sagittarius President Mario Jalandoni (center) witnessing
new administrative arrangements with B’laan trivia chieftans in the newly refurbished Community Development Centre,
Tampakan Township.
7
Operations Review (Cont)
Table 1: Project Portfolio Summary as at 31 December 2002
Project
Tenements
Area
(km2)
Target Type
IRN
Equity
Status & Highlights
Tampakan
1 FTAA(A)
1 FTAA
759.67
Epithermal disseminated
Cu-Au & Porphyry Cu-Au
95
Pre-feasibility. Indicated
and inferred mineral resource
estimate of main deposit
900Mt @ 0.75% Cu, 0.30g/tAu.
Manat
1MPSA
15.47
Epithermal Au-Ag-Zn-Pb
veins & Porphyry Cu-Au
50
Current metallurgical studies
and revised resource estimate
leading to a preliminary minescoping study on established
gold-basemetal resource.
Hinotongan
1EP
89.69
Epithermal & Porphyry
Cu-Au
65
Currently reviewing the results
of 2 exploration drillholes that
have intersected low-grade
porphyry copper
mineralisation.
Leyte
1 MPSA,
1 MPSA(A)
1 EP(A)
238.14
Epithermal Au and Porphyry
Cu-Au. Possible VMS style
50-100
Grid-based early exploration
Large areas of hydrothermal
alteration with anomalous
geochemistry. Cu-Pb-Zn
inferred resource at Pandan
prospect.
Bunawan
1 MPSA(A)
24.30
Vein & volcanic hosted
disseminated Au
100
Early exploration. Strong
stream sediment Au anomalies
associated with extensive areas
of hydrothemal alteration.
Delays due to title conflict.
Labo
1 MPSA
1 EP(A)
28.73
Epithermal Au, porphyry
& skarn associated Cu-Au
100
Early exploration drilling.
Significant gold intersected in
10 of 11 drillholes including
5.99m @ 4.87 g/t. Gold
geochemical anomalies for
follow-up
NSM
4 EP(A)
588.87
Porphyry Cu-Au
100
Early reconnaissance
exploration.
Cu & As stream sediment
anomalies associated with
large areas of hydrothermal
alteration
Buda
3 EP(A)
417.74
Porphyry Cu-Au and VMS
100
Early reconnaissance
exploration. Channel sampling
of a massive sulphide lens has
returned 5.8m @ 31 g/t Au,
80g/t Ag and 1.05% Cu.
Notes: IRN equity is maximum attainable on tenement approval or meeting earn-in obligations. (A) – Application
8
Tampakan Gold-Copper Project
Overview
Located approximately 50km north of General Santos City, a major growth centre in the Philippines
(Figure 2), the Tampakan Project contains one of the largest known undeveloped copper-gold deposit in
the SE Asia Pacific Region. The global drill-indicated mineral resource estimate at a 0.2% copper cut-off
grade represents a coherent body of mineralisation containing approximately 16 million ounces of gold
and 12 million tonnes of copper metal. Exploration of the deposit by the previous owner WMC
Philippines Inc. (WMCP), has reached an advanced stage and preliminary-feasibility studies including
resource estimation, geotechnical, metallurgical, mining, environmental and community studies are
moderately well advanced although not consolidated at this time.
Since acquiring an interest in the Project in August 2002, the Company, through a technical services
agreement with the Project’s owner Sagittarius Mines Inc. (Sagittarius), has been providing technical
services to the Tampakan Project and a core group of employees has been located to the Project’s
Operations Office in General Santos City. An audit of technical data (both digital and hardcopy) has
been completed and a four-month data review period is currently underway.Whilst the results of this
review will dictate the future work program, it is anticipated that the consolidation of preliminary
feasibility studies, including further infill drilling and metallurgical studies, will take approximately 2 years.
The Board has approved a 2003 provisional work program and net operating budget of $2.86 million.
This program will include approximately 2000m of infill drilling due to commence in the second half.
Figure 2 - Tampakan Gold-Copper Project
9
Operations Review (Cont)
Tenure and Ownership
The Tampakan Project area is held under a Financial and Technical Assistance Agreement (the Columbio
FTAA) with the Government of the Republic of the Philippines that allows a company with up to 100%
foreign control to explore for and develop major mineral projects.The Columbio FTAA currently
covers an area of 304.9 sq km. A contiguous FTAA application (Hillcrest) forms part of the Project
area (Figure 2).
The Project is owned by Sagittarius Mines Inc.(Sagittarius), a Philippine corporation representing former
claim owners, who finalised the purchase of the property from WMCP in August 2002. Another party,
Lepanto Consolidated Mining Corporation (Lepanto), has challenged the sale process before the courts.
Lepanto’s action has been unsuccessful, losing before a lower regional trial court and subsequently in the
Philippines Court of Appeals. An appeal before the Supreme Court is currently pending and Sagittarius
is confident that this action will also be unsuccessful. In a separate move by the same party, a motion
lodged before the Office of the President was also rejected.
Indophil currently has 40% equity in Sagittarius and through a series of agreements with Sagittarius
has acquired substantial vested rights to the Tampakan Project in exchange for certain payments and
a royalty from future production.The Company has also entered into option agreements with MIM
Holdings Limited (MIM) and Alsons Corporation (Alsons), that allows them to purchase part of the
Company’s interest in the Tampakan Project which would give a final proportion of: MIM 60%, Indophil
30% and Alsons 10%. Alsons Corporation, is a member of the respected Alcantara Group, which has
major business interests in Mindanao.
Data Audit & Review
On finalisation of the sale and purchase agreement between WMC and Sagittarius in August 2002,
Indophil in its role as Project Manager commenced an audit and review of the comprehensive Project
technical database. Project expenditure by the previous owner to that time amounted to $US38
million. By year-end, all existing technical data had been retrieved from storage, indexed, filed and the
digital data transferred to a new secure database.The Company has commenced a detailed review
of the comprehensive technical database likely to take approximately 5 months. An initial review
has revealed that a number of advanced studies have already been completed. These studies include
mineral resource estimations, metallurgical tests, mine optimisation, waste disposal, environmental,
preliminary feasibility and financial modelling.These studies and data are currently being evaluated
with results to be released progressively as the evaluation progresses.
Geology & Mineral Resources
The main Tampakan gold-copper deposit comprises a tabular body of disseminated mineralisation
up to 260m thick containing higher copper and gold grades superimposed on an underlying lower
grade porphyry gold-copper deposit. It has been drilled by 85 diamond drillholes over an area of
2km x 1.6km at a density ranging from 320m to 160m with limited infill drilling at 80m spacing
(Figures 3 & 4). The Company’s review of the existing drillhole database has highlighted a strong
clustering of better grade drillhole intersections (≥ 100 metre% copper and ≥ 1% copper) in the
northern shallower part of the deposit (Figure 3). In addition, there appears to be a correlation of
better intersections with a NNE trending corridor through the deposit associated with interpreted
faults that may have controlled mineralising fluids. Table 2 lists the better gold-copper intersections
within the deposit resulting from the review.
10
In 1998,WMC Resources (WMC) published an indicated and inferred mineral resource estimate for
the Tampakan gold-copper deposit at differing cut-off grades (Table 3).The resource estimation was
based on a block model using inverse distance squared methodology and Datamine software. The
Company is currently reviewing the resource estimation procedures used by WMC but has yet to
establish if this estimate conforms to the Australian Joint Ore Reserves Committee (JORC) standards.
The global resource at a 0.2% copper cut-off grade represents the largest undeveloped copper-gold
resource in the SE Asia Region. At a 0.5% copper cut-off, the resource represents a thick and very
coherent tabular mineralised zone as exemplified in section 715790N (Figure 4). The Company’s
review has also established that there are zones of higher gold grades, typically between 1and 2g/t,
within the mineralised resource envelope which will be the subject of further investigation.
Table 2: Selected Intersections* from the Tampakan Deposit
Hole No.
From (m)
Interval (m)
Cu (%)
Au (g/t)
TMPD22
27.00
375.45
1.08
0.58
TMPD27
50.00
142.00
1.24
0.45
TMPD35
168.00
84.00
1.14
0.54
TMPD37
48.00
100.00
1.39
0.55
TMPD39
98.00
172.00
1.04
0.40
TMPD40
83.00
130.00
1.38
0.54
TMPD41
48.00
194.00
1.16
0.50
TMPD42
125.90
110.10
1.20
0.65
TMPD46
86.00
76.00
2.20
0.50
TMPD47
78.25
102.75
1.34
0.31
TMPD51
106.20
94.80
1.09
0.31
TMPD53
243.00
138.00
1.08
0.39
TMPD55
62.00
76.00
1.46
0.68
TMPD62
89.00
196.00
1.48
0.50
TMPD64
100.00
144.00
0.99
0.70
TMPD67
165.50
185.50
1.31
0.35
TMPD71
138.00
130.00
1.18
0.37
TMPD81
235.00
46.00
2.00
0.42
TMPD85
106.00
71.00
1.38
0.48
TMPD87
258.00
130.00
0.99
0.57
TMPD88
170.00
148.00
1.00
0.31
TMPD90
103.00
92.00
1.15
0.43
TMPD92
144.00
196.00
1.55
0.47
TMPD96
56.00
110.00
1.75
0.70
* Downhole intersections with ≥ 100 metre% Cu and ≥ 1% Cu
11
Operations Review (Cont)
Table 3: Tampakan Geological Indicated and Inferred Mineral Resource Estimate
at varying COG’s
COG Cu (%)
Resource (Mt)
Copper (%)
Copper (Mt)
Gold (g/t)
Gold (Mozs)
0.2
2,500
0.48
11.96
0.20
16.08
0.5
900
0.75
6.75
0.30
8.68
0.7
430
0.93
4.00
0.37
5.12
COG = Cut-off grade, Mt = million tonnes, Mozs = million ounces
Mine Scoping Studies
The Company’s data review has revealed that as part of an ongoing scoping study process the project’s
previous owner arrived at a likely base case scenario with a schedule of tonnage and costs.Two process
options were investigated:
(1) Production of a concentrate with a grade of 35% copper, and
(2) A hydro-metallurgical process route producing metal by SXEW
After preliminary modelling, the concentrate route was chosen for more detailed studies.
Input parameters included a gold price of US$280/oz and a copper price of $US 0.80/lb.
An optimisation of one of a number of cases studied based on a minimum mine life of 20 years
produced an IRR of 20% before tax and finance and a NPV of $US280 million at a discount rate of
11%. Maximum annual metal production in concentrate in this case would be 158,000 tonnes copper
and 170,000 ounces gold. Construction was estimated to cost US$ 420m (1999 $).
It should be noted that these results represent the work of the previous owner.The results are based
on one of a range of different scenarios for the development which does not necessarily represent the
scale and technology to be adopted for any potential development.
Exploration basecamp located near the main Tampakan copper-gold deposit
12
Figure 3 - Tampakan Copper-Gold Project Plan Projection of Mineralisation and Drillhole Location
Exploration Potential
A preliminary review of exploration data external to the main Tampakan gold-copper deposit has
recently been completed. Systematic exploration of the Colombio FTAA by WMC included geological
mapping, stream sediment surveys, soil surveys and geophysical exploration including airborne
magnetics and IP traversing.This work defined 9 prospect areas (Figure 2) some of which were the
subject of more detailed exploration. Only 14 diamond drillholes (5,450m) were drilled on 5 of the
prospects external to the Tampakan drill grid.The Company’s review to date has highlighted two of the
prospects that merit early priority exploration follow up for gold-copper mineralisation.
At the Bolol Bato (Camp 5) prospect located approximately 1.1km NNE of the northernmost
drilling traverse on the Tampakan deposit, drillhole TMPD57 intersected 157.65m at 0.52g/t Au and
0.41% Cu from 92.25m, including 76.2m at 0.69g/t Au and 0.75% Cu from 162.9m. Geological and
geophysical data indicates a potential NNE trending mineralised corridor linking this intersection with
the main Tampakan gold-copper deposit.
At the Silway prospect located 4 km southeast of the Tampakan deposit, outcrops of silica-clay
alteration containing visible bornite (copper mineralisation) have been observed in stream outcrops.
Previous exploration has defined an extensive IP geophysical anomaly that has been tested by a single
drillhole (TMDP93) which intersected 380m of silica and silica-clay alteration. This alteration is similar
in style to the alteration that is spatially associated with the Tampakan deposit.This hole intersected
significantly anomalous copper (0.1-0.2%Cu) between 193 and 355m, reflecting encouraging potential
for this prospect area.
Following its preliminary review, the Company believes that the FTAA is significantly under-explored
and has outstanding potential for the discovery of copper-gold mineralisation, including direct Tampakan
analogues. There is also scope for the discovery of discrete vein and stockwork precious metal (goldsilver) mineralisation as evidenced by the existence of gold mineralised epithermal veins that have been
identified to the immediate north of the main deposit.
13
Operations Review (Cont)
Figure 4 - Tampakan Copper-Gold Deposit Cross-Section 715790mN
Community
The Company acknowledges that the future development of the Tampakan Project relies heavily on
community support.There are many stakeholders that will benefit directly from a future mine
development, including local and Provincial Government, Indigenous Groups, the local community
(employment and commercial opportunities) etc.The Company has already carried out considerable
consultation with the local communities in a spirit of openness and transparency and has honoured
all existing contractual arrangements entered into by the project’s previous owner. A Community
Development section has already been established headed by a former senior staffer from the Office
of the President for Regional Development in Mindanao. A Community Development Centre has also
been established in the Tampakan Township, in proximity to Project site. Health and education are an
important focus for the Company’s support to the community.
Future Program
The future work program will depend largely on the results of the detailed technical data review
currently underway. At this stage it is anticipated that implementation of a field program including
re-establishment of the Projects field camp and survey control will commence in May, leading to the
commencement of a program of evaluation infill diamond drilling scheduled in July, probably focussed
on the northern part of the main deposit.The Company plans to spend A$2.86 million on the
Tampakan Project this Calendar year.This expenditure forms part of an ongoing preliminary feasibility
study into the viability of mine development that is likely to take at least 2 years.The Company will
also be initiating environmental programs including community assisted monitoring programs and
re-forestation.
Manat Project
Overview
The Manat project is located in the Masara mineral district of SE Mindanao approximately 60km NE of
the major growth centre and Port City of Davao (Figure 1).The Masara mineral district hosts a number
of significant epithermal gold and porphyry copper-gold deposits including the King King deposit –
398 Mt @ 0.34% Cu and 0.52g/t Au. Indophil, through a farmin and joint venture arrangement with
Aldevinco, a member of the Alcantara Group of Companies, is managing the exploration activity and
earning to a 50% equity position.The JV area comprises an approved Mineral Production Sharing
Agreement (MPSA) of 15.47 sq km.
Exploration by Indophil to date has identified three sub-parallel NW trending mineralised structures
within the Project area. The focus of the Company’s exploration activity has been on the central Magas
structure where Indophil has discovered a mineralised epithermal vein system containing gold, silver,
14
lead and zinc (the Magas Vein Zone – MVZ).This vein system has been the subject of a delineation and
resource definition diamond drilling program comprising 30 diamond drillholes for 4990m over a strike
length of 1.2km.
Prior to the 2002 field season, drilling on the MVZ (to MNTD22) had defined an inferred mineral
resource estimate of 3.07 million tonnes at 2.76g/t Au, 17.78g/t Ag, 1.20% Zn and 0.6% Pb containing
an insitu 272,000 ounces of gold and 1.75 million ounces of silver.
2002 Exploration Activity
Shortly after listing on the ASX the Company commenced a program of delineation and resource
definition diamond drilling on the Magas Vein Zone. A total of 14 DDH’s were completed (MNTD23-36,
1903.2m) demonstrating generally good continuity to mineralisation. Better intersections from the 2002
drilling program are given in Table 4 and a longitudinal projection of the MVZ is given in Figure 5.
Table 4: Selected Drilling Intersections form 2002 Drilling - Magas Prospect
Hole No.
23
23A
24
25
26
26
30
31
32
33
34
From (m)
27.00
9.40
40.00
61.80
118.00
142.40
77.00
55.80
161.00
56.60
109.00
To (m)
39.00
10.90
45.60
76.50
125.00
154.50
88.50
75.00
187.00
76.10
110.00
Interval (m)
12.00
1.50
5.60
14.70
7.00
12.10
11.50
19.20
26.00
19.50
1.00
Au (g/t)
Ag (g/t)
4.43
8.47
4.90
2.89
4.26
6.44
2.13
2.67
2.38
2.40
10.40
9.64
26.47
15.47
15.29
6.60
10.25
69.03
37.01
23.08
27.06
15.60
Pb (%)
Zn (%)
0.24
1.73
0.73
0.51
0.09
0.14
2.60
2.18
0.64
0.66
0.98
0.57
4.49
2.38
0.95
0.08
0.66
0.97
4.59
1.03
1.19
1.10
Au
Equiv.(g/t)
5.11
13.04
7.26
4.06
4.46
7.16
5.01
7.67
3.78
3.99
11.90
Note: The gold equivalent values are based on 2002 median metal prices as follows:
Au US$315/oz, Ag US$ 4.60/oz, Pb US$ 440/tonne and Zn US$775/tonne. Drillhole prefix MNTD
Figure 5 - Manat Project/Magas Prospect Longitudinal Projection - Magas Main Vein Intersection
15
Operations Review (Cont)
An induced polarisation geophysical survey of 4.3 line km was undertaken over the southern part of
the Manat grid to both map the southern extension of the MVZ and map alteration associated with
porphyry copper mineralisation intersected in previous drillhole MNTD14 (227m at 0.19% Cu and
0.30g/t Au).This survey highlighted a strong IP anomaly approximately 150m NE of MNTD14 which
was subsequently drilled by drillhole MNTD37 (170.2m). As well as intersecting ubiquitous
disseminated pyrite, this hole intersected some intervals of disseminated copper-gold mineralisation
(30.2m at 0.33g/t Au, 0.13% Cu from 140m) associated with sericitic alteration.
Metallurgical testwork is currently underway at AMMTECH on a bulk 168kg composite sample
prepared from individual drillhole samples from eight (8) selected drillhole intersections from the
2002 drilling program.This composite sample is generally representative of the Magas mineralisation.
The testwork is looking at both precious and base metal recoveries. In addition, the mineral resource
estimate is currently being reviewed by an external consultant and will take into account the results
of the 2002 drilling program.
Future Program
A preliminary mine scoping study is planned once the results the metallurgical testwork and revised
resource estimate are known.This will establish the viability or otherwise of mineralisation intersected
to date (in particular grade) in supporting a future mining operation. In the event of a positive
outcome, it is anticipated that further delineation drilling will be undertaken to augment the resource.
Hinotongan Project
Overview
The Hinotongan Project is a joint venture arrangement with the Philippine National Oil Company
(PNOC) with Indophil earning to maximum 65% equity through a sole funding farmin arrangement.
Hinotongan has strong geological analogies with the Tampakan copper-gold deposit with similar
structures, host rocks, siliceous caprock and late stage intrusives.Well preserved volcanic features
are also present.
Prior to the 2002 field season, exploration by WMC Exploration and Indophil defined anomalous
copper with associated elements in soil and stream sediment samples. Outcropping disseminated
copper mineralisation (up to 0.3% Cu) associated with siliceous breccias and major structures had
also been observed over approximately three kilometres along the deeply incised Hinotongan River.
2002 Exploration Activity
Exploration during 2002 focussed on a well preserved volcanic feature with pervasive hydrothermal
alteration at the intersection of the Hinotongan River and Amlan River structural corridors.Three lines
of 100m dipole-dipole induced polarisation profiling totalling 6 line kilometres were undertaken over
the target area covering approximately 1.2 km strike of the Hinotongan River structure.This survey
highlighted a strong IP anomaly underlying a highly resistive zone interpreted to be associated with a
leached silica caprock, consistent with the Company’s geological model.Two (2) diamond drillholes
(HIND 1 & 2) totaling 804.8m and spaced approximately 800m apart were drilled to test the inferred
geological model, a tabular body of mineralisation underlying a barren silica cap.
HIND1 (406.6m) intersected wide intervals of silica and silica-clay altered andesitic volcanics with
ubiquitous disseminated pyrite and weakly anomalous copper values. HIND2 (398.2m) intersected
advanced argillic altered andesitic volcanics to 226m followed by highly altered intrusive rocks to the
EOH. Several zones of weakly anomalous copper (0.1 to 0.25% Cu, peak 0.41% Cu) were intersected in
the hole, the best being 56.6m at 0.17% Cu from 169.6m. No significant gold, silver or basemetal
anomalism was recorded. Selective sampling (4 samples) of one of the copper anomalous zones recorded
significantly anomalous molybdenum (peak 1.14%).This drilling has confirmed the discovery of a new
porphyry copper mineralised system that has associated anomalous molybdenum but no significant gold.
16
The Company is currently reviewing all exploration results from Hinotongan. Given the Company’s
strategy of focussing on gold and copper and the need for a strong focus on the Tampakan Project the
Board is evaluating the future exploration at Hinotongan.
Other Projects
Leyte Project
The Leyte project comprises two tenement groups in southern Leyte, St. Bernard and the Sogod
Joint Venture.The area has similar geology and is along trend from the Surigao gold district in
northeast Mindanao, a very productive mineral district which includes the newly discovered high
grade Boyongan porphyry copper-gold deposit.
The properties include widespread areas of hydrothermal alteration associated with anomalous
geochemistry. At the Pandan prospect within the Sogod JV, a previous exploration in the 1970’s that
included 28 diamond drillholes (4574m) defined a drill indicated copper-lead-zinc-gold-silver resource
of 1.334 million tonnes at 0.49% copper, 1.17% lead, 2.26% zinc, 0.48g/t gold and 9.63g/t silver (assumed
not to JORC standards). A major data review and further exploration is planned here once title is
granted.
On the St Bernard tenement, exploration by Indophil prior to 2002 defined a 3 sq km gold anomalous
area of advanced-argillic alteration. Exploration during 2002 included grid based geological mapping and
a 200 x 80m soil sampling program with some subsequent infill to 100m x 80m.The mapping has
defined 3 areas of intense silica-clay-pyrite alteration, one of which appears associated with a breccia
pipe.The soil sampling defined coherent and near coincident weak to moderate gold and arsenic
anomalies that will be the focus of further exploration during 2003.
Labo Project
The Labo Project is located in the Paracale gold district in Camarines Norte Province, which has
historical production exceeding 5 million ounces of gold and significant silver. Indophil is a significant
tenement holder in the district with 2 adjacent tenements, De Jesus and Palado. Several styles of
precious and basemetal mineralisation are present within and adjacent to the Project area.
Previous grid-based exploration by Indophil on the De-Jesus tenement prior to 2002 defined four
major soil gold anomalies leading to encouraging trench results at the Pael and Gaerlan prospects
including 8m at 8.03g/t gold, 7m at 7.34g/t gold, 13m at 4.97g/t gold and 20m at 1.58g/t gold. A limited
program of shallow exploration diamond drilling (1028.4m) was subsequently completed at the Pael
and Gaerlan prospects with 10 out of 11 drill holes intersecting significant gold mineralised zones
including 5.99m at 4.87g/t gold and 8.24m at 2.61g/t gold. Activity during 2002 included a complete
review of exploration data generated by Indophil with future work on this tenement to be prioritised
once the Palado tenement is formally approved.
Previous reconnaissance geological and stream sediment geochemical exploration by Indophil coupled
with an integration of historical exploration data over the area of the Palado tenement has identified
several prospect areas for diverse styles of mineralisation.This includes an area within and adjacent to
the northern part of the tenement application where a previous district wide stream sediment survey
by the United Nations had recorded its highest gold values. In this area 16 out of 57 stream sediment
samples gave gold values above 0.5g/t with 9 samples averaging 3.4g/t.There was no field activity on the
Palado tenement area during 2002 pending formal grant of title, which is anticipated shortly.
Bunawan Project
The Bunawan Project is located in Agusan Del Sur Province, eastern Mindanao within the highly mineralised
eastern Mindanao volcanic arc that includes the Diwalwal (6mozs gold) and the Co-O, (Banahaw)
epithermal gold deposits.The project area has a history of significant small-scale gold mining activity.
17
Operations Review (Cont)
Previous reconnaissance exploration by Indophil has produced very encouraging coherent streamsediment gold anomalies (32 of 204 samples exceeding 1g/t gold) correlating with extensive areas
of hydrothermal alteration and associated gold mineralised veining.The geological environment and
anomalous geochemistry implies excellent potential for the discovery of both vein and disseminated
style gold mineralisation.
The was no field activity on the Bunawan Project during 2002 pending resolution of a tenement
dispute currently before the Mines Adjudication Board in respect of an MPSA application over which
the Company has an option agreement.
Buda
The Buda project is located in the Central Mindanao Cordillera on the interpreted continuation of
the volcanic arc segment that hosts the Tampakan copper-gold deposit in southern Mindanao.There
are a number of areas of small-scale gold mining activity within the area of the 3 exploration permit
applications of Indophil and the Company has defined several gold geochemical anomalies (prospects)
from a limited orientation stream sediment survey.
Previous exploration including channel sampling of outcropping massive sulphides at the Bangan
prospect returned the highly anomalous response of 5.8m at 31g/t gold, 80g/t silver and 1.05% copper.
To date this is the only work on this prospect.
Future grid based exploration by Indophil, including follow-up at Bangan, is contingent on the formal
approval of title (3 exploration permit applications).
Northern Sierra Madre (NSM)
This project area, which comprises four (4) exploration permit applications, has strong geological
similarities with the Baguio and Mankayan Mineral Districts that host several major ore deposits
including Antamok, Acupan, Lepanto, Lepanto Far Southeast and Victoria gold and copper deposits.
In the NSM, reconnaissance by Indophil has identified large areas of hydrothermal alteration associated
with stream sediment anomalies for copper and associated elements defined during a previous lowdensity Government survey.This same survey located several occurrences of porphyry-copper style
stockwork mineralisation.
Whilst the area has high prospectivity for the discovery of major porphyry style copper-gold and
related epithermal mineralisation further exploration is contingent on the formal approval of title
(4 exploration permit applications).
18
Directors’ Report
The Board of Directors of Indophil Resources NL has pleasure in submitting its report in respect
of the financial period ended 31 December 2002.
Directors
The names and details of the directors in office during or since the end of financial period are:
R Bryan Davis BSc (Tech) FAusIMM MAICD (Chairman – Non Executive) Age - 60 years
Bryan Davis is a mining engineer with more than 30 years experience in the industry and was
appointed Chairman of Indophil in November 2000. He worked for the CRA group (now Rio Tinto)
from 1965 to 1987 holding senior positions of Manager Mining Zinc Corporation/New Broken Hill
Consolidated Mines, Manager Technology and Development and General Manager of the CSA Mine at
Cobar. He then joined the Australian Consolidated Minerals Group holding the positions of General
Manager Mining and Executive Director (ACM Gold Limited). In 1991 he joined Pasminco Limited
assuming executive responsibility for base metal mines throughout Australia and becoming Executive
Director Mining in 1991 before retiring in 1999. He is currently a Non-Executive Director of Coal
and Allied Industries Limited and Newcrest Mining Limited.
Tony Robbins BSc (Hons) MSc MAusIMM (Managing Director) Age - 59 years
Tony Robbins is a geologist/geochemist with over 30 years experience in mineral exploration with
WMC Limited where he held a number of senior and executive positions including Senior Geochemist,
Chief Geochemist, Operations Manager, Exploration Manager Eastern Australia and Exploration
Manager Southeast Asia Pacific Region. In the last position he managed the exploration program in the
Philippines and led the team that made the discovery of the Tampakan copper-gold ore deposit. He had
been previously involved in the discovery of the Edwin nickel deposit, the Benambra copper deposit,
Olympic Dam, and the Yandan, Redeemer and Junction gold deposits. He has taught and published on
the subject of exploration geochemistry, and exploration opportunities in Southeast Asia, and has
represented the Philippines on a United Nations project.Tony lives in the Philippines and is President
of the Philippine Mineral Exploration Association and is also on the Board of the Chamber of Mines.
Chris Middleton BSc MSc FAusIMM (Director of Exploration) Age - 55 years
Chris Middleton is a geologist with over 30 years experience in the resources sector mainly with WMC
Limited. Whilst with WMC he held a number of senior and executive staff positions including Senior
Mine Geologist-Kambalda, Chief Geologist and Exploration Manager Brazil, Assistant Chief Scientist
Exploration Division, Exploration Manager Western Pacific, Exploration Manager Eastern Australia and
Manager Geology for the Exploration Division. During that time he made a significant contribution to
the discovery of several mineral deposits including the Foster and Edwin nickel deposits at Kambalda,
the Ernest Henry copper gold deposit in Queensland and the Jenipapo gold deposit in Brazil. In
December 1996 he co-founded Indophil with Tony Robbins and served as General Manager Exploration
until May 1999 when he was appointed Director of Exploration.
Kevin Robinson BSc (Hons) ASIA MAusIMM (Non Executive) Age - 44 years
Kevin Robinson was appointed a Director of the Company in 1997. He has over 18 years experience
in the mining and investment industries. Kevin is a geologist by training and has held technical and
investment positions with RGC, Normandy Mining Limited, Devex Limited, Prudential Assurance and
Legal & General. He is an Executive Director of Selection (LSG) Management Pty Ltd, the Manager of
the Lion Selection Group Limited, and a non-executive Director of Lafayette Mining Limited and
Sedimentary Holdings NL.
19
Directors’ Report
(Cont)
Peter Maloney B. Comm., MBA (Non Executive) Age – 53 years
Peter Maloney has held executive positions with financial and commercial responsibility with several
Australian companies including WMC Ltd., FH Faulding and Co. and Santos Ltd. Mr. Maloney has been
a director of several private and public companies and is currently a Director of Southern Health.
Directors’ Interests
Relevant interests of the directors in the shares, options or other instruments of the Company and
related corporations are:
Directors
Shares
Options
R Bryan Davis
100,000
Tony Robbins
1,000,000
1,055,750 with an exercise price of 35 cents
exercisable on or before 10 May 2004
1,055,750 with an exercise price of 50 cents
exercisable on or before 10 May 2004.
Chris Middleton
1,366,001
1,055,750 with an exercise price of 35 cents
exercisable on or before 10 May 2004
1,055,750 with an exercise price of 50 cents
exercisable on or before 10 May 2004.
Kevin Robinson
Nil
Peter Maloney
100,000 with an exercise price of 20 cents
exercisable on or before 1 October 2003.
200,000 with an exercise price of 35 cents
exercisable on or before 10 May 2004
200,000 with an exercise price of 50 cents
exercisable on or before 10 May 2004.
Nil
40,000
40,000 with an exercise price of 25 cents
exercisable on or before 31 December 2004.
Directors’ Meetings
The number of meetings of the Board of Directors and of the Board Committee during the period were:
Board or Committee
Number of Meetings
Full Board
27
Remuneration
4
The attendance of directors at meetings of the board and its committee were:
Full Board *
Remuneration
R Bryan Davis
27
4
Tony Robbins
27
-
Chris Middleton
27
-
Kevin Robinson
27
4
Peter Maloney
5 (5)
-
* Where a director did not attend all meetings of the Board or committee, the number of meetings for which the director
was eligible to attend is shown in brackets.
20
Principal Activities
The principal activities of the Consolidated entity during the financial period comprised exploration
for minerals in the Philippines.
Results
The consolidated loss of the Consolidated entity for the financial period after income tax was
$2,950,329 (2001: $6,589,380).
Dividends
No dividends have been paid, declared or recommended since the end of the preceding financial year.
Review of Operations
The Consolidated entity listed on the ASX in May 2002 raising funds to enable it to continue it’s prime
objectives.
Since listing the Consolidated entity’s efforts have been strongly focussed on the acquisition of an
operating interest in the Tampakan Project. This was finalised in August 2002 with the transfer of shares
from the projects previous owner WMC Philippines Inc. to Sagittarius Mines Inc., an affiliate of Indophil.
Indophil has now assumed management of the Project and has commenced a review of a
comprehensive historical project database generated by the previous owner.
The Consolidated entity also commenced a program of delineation and resource definition diamond
drilling on the Magas Vein Zone in the Manat tenement during the period.
Significant Changes in the State of Affairs
Significant changes in the state of affairs of the Consolidated entity that occurred during the 17 months
to December 31, 2002, and which are reported in the consolidated financial statements, were:
an increase in contributed equity of $6.4 million;
an increase in total current assets and total non-current assets of $1,230,862 and $1,515,254
the proceeds raised from the IPO of the Company had been used to fund the exploration activities
as anticipated at the time of the IPO.
Significant Events after Period End
There have been no significant events since year-end.
Likely Developments and Future Results
The Directors expect the entity to continue its exploration activities in the Philippines.
The Tampakan project is a major asset and the Company will continue to progress it to enable a
Bankable Feasibility Study to be undertaken as quickly as practicable.
Evaluation of Manat will proceed so an early decision can be made on its full potential.
The Company will continue with maximum effort to finalise the applications to enable the grant of the
Palado and Leyte titles.
Environmental Regulation Performance
The Consolidated entity’s environmental obligations arise primarily in the Philippines from field
exploration activity and are monitored by the Board. These obligations are regulated by Philippines law.
21
Directors’ Report
(Cont)
The Consolidated entity has a policy of at least complying, or in most cases exceeding its
environmental performance obligations. No environmental breaches have been notified by any
Government agency in the Philippines or Australia.
Options and Shares or Other Interests Under Option
Details of options granted to directors or relevant officers as part of their remuneration are set out in
the section of this report headed Directors’ Interests. Details of shares and interests under option, or
issued during or since the end of the financial period due to the exercise of an option, are set out in
Note 14 of the financial statements and form part of this report.
Directors’ and Officers’ Remuneration
Remuneration of Board members and senior executives are determined on the basis of market
conditions and the level of responsibility associated with their position. Details of remuneration
provided to directors and officers during the 17 months to December 31, 2003 is as follows:
Directors
Salary/Fees $
Superannuation $
Total $
215,074
185,699
29,163
75,000
52,333
6,312
15,276
6,250
4,660
221,386
200,975
29,163
81,250
56,993
15,000
70,270
1,350
-
16,350
70,270
T W Robbins (i)
CN Middleton (i)
KP Robinson (ii)
RB Davis
PJ Maloney (iv)
Officer
C Walker
JH Barry (iii)
(i) Executive Director
(ii) Paid to Lion Selection Group Limited.
(iii) Paid to JHB Corporate Pty Ltd.
(iv) This payment comprise of $12,300 directors fees and $40,033 for professional services rendered.
There are no other executive directors in the Group.
No options were issued to any director during the period.
Indemnification of Officers
The Company, to the extent permitted by law, indemnifies each officer of the Company on a full
indemnity basis against any liability (including costs and expenses) incurred by the person as an officer
of the Company or a related body Corporate of Indophil. The Company paid an insurance premium
of $16,650 in respect of a contract insuring each of the directors and officers of the Company.
This report has been made in accordance with a resolution of directors.
T W Robbins
Managing Director
Melbourne, 17 March 2003
22
Financial Reports
Indophil Resources NL
Statement of Financial Position As at 31 December 2002
Note
Consolidated
2002
2001
$
$
Parent
2002
$
2001
$
Current Assets
Cash Assets
Receivables
Other
17
5
6
2,004,109
7,963
43,266
780,530
12,953
30,993
1,841,406
2,780
12,248
532,354
10,486
7,071
2,055,338
824,476
1,856,434
549,911
70,557
4,446,869
7,323
22,976
2,986,519
-
13,073
154,569
-
7,764
-
Total Non-Current Assets
4,524,749
3,009,495
167,642
7,764
Total Assets
6,580,087
3,833,971
2,024,076
557,675
288,121
29,235
405,856
33,827
118,582
22,836
312,517
19,500
317,356
439,683
141,418
332,017
-
600,000
-
600,000
-
600,000
-
600,000
317,356
1,039,683
141,418
932,017
6,262,731
2,794,288
1,882,658
(374,342)
Total Current Assets
Non-Current Assets
Plant and equipment
Deferred exploration costs
Other financial assets
Other
7
8
9
10
Current Liabilities
Payables
Provisions
11
12
Total Current Liabilities
Non-Current Liabilities
Interest bearing liabilities
13
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Accumulated losses
14
15
17,855,755
(11,593,024)
11,436,983
(8,642,695)
17,855,755
(15,973,097)
11,436,983
(11,811,325)
Total Equity
16
6,262,731
2,794,288
1,882,658
(374,342)
The accompanying notes form an integral part of this Statement of Financial Position
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
23
Financial Reports
(Cont)
Indophil Resources NL
Statement of Financial Performance for the financial period ended 31 December 2002
Note
Revenues from ordinary activities
Occupancy expenses
Administration
Borrowing costs
Other expenses
2
Consolidated
2002
2001
$
$
Parent
2002
$
2001
$
153,512
(92,493)
(418,417)
(13,451)
(2,579,480)
104,485
(62,576)
(386,070)
(29,750)
(6,215,469)
147,422
(33,504)
(451,891)
(13,451)
(3,810,348)
55,028
(18,785)
(326,201)
(29,750)
(9,750,709)
(2,950,329)
(6,589,380)
(4,161,772)
(10,070,417)
-
-
-
-
Loss from ordinary activities
after income tax expense
(2,950,329)
(6,589,380)
(4,161,772)
(10,070,417)
Net Loss
(2,950,329)
(6,589,380)
(4,161,772)
(10,070,417)
-
-
-
-
(2,950,329)
(6,589,380)
(4,161,772)
(10,070,417)
-
-
-
-
(2,950,329)
(6,589,380)
(4,161,772)
(10,070,417)
2
2
Loss from ordinary activities
before income tax expense
Income tax expense relating
to ordinary activities
3
Net loss attributable to outside
equity interest
Net loss attributable to members
of Indophil Resources NL
Total revenues, expenses and
valuation adjustments attributable to
members of Indophil Resources NL
and recognised directly in equity
Total changes in equity other than
those resulting from transactions
with owners as owners attributable
to members of Indophil Resources NL
Earnings per Share
Basic - cents
Diluted - cents
2
(3.51)
(3.43)
The accompanying notes form an integral part of this Statement of Financial Performance
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
24
Indophil Resources NL
Statement of Cash Flows for the financial period ended 31 December 2002
Note
Consolidated
2002
2001
$
$
Parent
2002
$
2001
$
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Interest paid
(641,161)
153,512
(13,451)
(580,377)
73,218
(29,750)
(666,783)
147,422
(13,451)
(331,790)
55,680
(29,750)
(501,100)
(536,909)
(532,812)
(305,860)
Payments for property, plant and equipment
Payments for exploration and evaluation
Payments for Tampakan acquisition costs
Payments for shares in related entities
Loans made
Loan repayments received
(69,171)
(1,563,816)
(752,979)
(1,438,456)
53,380
(16,403)
(509,794)
(1,148,344)
(256,000)
(2,794,346)
587,500
(11,991)
(154,569)
(752,979)
(2,804,511)
53,380
(8,453)
(1,242,576)
(256,000)
(3,485,594)
587,500
Net investing cash flows
(3,771,042)
(4,137,387)
(3,670,670)
(4,405,123)
Proceeds from issue of shares
Payments for Initial Public Offering
Proceeds from borrowings
Payments for postponed Initial Public Offering
6,389,250
(570,478)
(304,866)
4,220,000
600,000
(659,093)
6,389,250
(570,478)
(304,866)
4,220,000
600,000
(659,093)
Net financing cash flows
5,513,906
4,160,907
5,513,906
4,160,907
Net increase (decrease) in cash held
1,241,764
(513,389)
1,310,424
(550,076)
Cash at the beginning
of the financial period
780,530
1,262,000
532,354
1,082,471
Exchange rate variations on
foreign cash balances
(18,185)
31,919
(1,372)
(41)
2,004,109
780,530
1,841,406
532,354
Net operating cash flows
17
Cash Flows from Investing Activities
Cash Flows from Financing Activities
Cash at the end of the financial period 17
The accompanying notes form an integral part of this Statement of Cash Flows
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
25
Notes to the Financial Reports
Note 1. Statement of Significant Accounting Policies
(a) Change of Financial Year
Indophil Resources has received permission from the Australian Stock Exchange and the Australian
Taxation Office to change its financial year to finish at December 31 rather than July 31. Consequently,
the financial year reported as "2002" in the financial statements and notes to the financial statements is
for the 17 (seventeen) months August 1, 2001 to December 31, 2002. The comparatives shown as
"2001" is for the 12 (twelve) months August 1, 2000 to July 31, 2001.
(b) Basis of Accounting
The financial statements have been prepared as a general purpose financial report in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards, other authoritative
pronouncements of the Australian Accounting Standards Board and Urgent Issues Group Consensus
views. The accounting policies used are consistent with those adopted in the previous year unless
otherwise stated at Note 1(az). The financial statements have also been prepared in accordance with
the historical cost convention and do not take account of changes in either the general purchasing
power of the dollar or in the prices of specific assets.
The accounts have been prepared on a going concern basis, which contemplates the continuity of
normal business activity, and the realisation of assets and settlement of liabilities in the ordinary course
of business. The ability of the Company to continue to operate as a going concern is dependent upon
the raising of additional finance to fund future operations through placements, exercise of options, or
by other means.
Having regard to these factors, the directors are of the opinion that the basis upon which the accounts
are presented is appropriate in the circumstances.
(c) Principles of Consolidation
The consolidated financial statements include the financial statements of the parent entity, Indophil
Resources NL, and its controlled entities, referred to collectively throughout these financial statements
as the "Consolidated entity".
All inter-entity balances and transactions have been eliminated. Where an entity either began or ceased
to be controlled during the period, the results are included only from the date control commenced or
up to the date control ceased.
Financial statements of foreign controlled entities presented in accordance with overseas accounting
principles are, for consolidation purposes, adjusted to comply with group policy and general accepted
accounting principles in Australia.
(d) Foreign Currency Transactions
Foreign currency items are translated to Australian currency on the following basis:
transactions are converted at exchange rates approximating those in effect at the date of each
transaction;
amounts payable and receivable are translated at the average of the buy and sell rates available on
the close of business at balance date.
the financial statements of all foreign operations are translated using the temporal method as they
are considered inter-dependent.
Exchange differences relating to monetary items are included in the Statement of Financial
Performance, as exchange gains or losses, in the period when the exchange rates change.
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
26
(e) Exploration Expenditure
Exploration expenditure incurred is charged against earnings as incurred, except in the case of areas
of interest where title is granted and:
it is expected that the expenditure will be recouped by future exploitation or sale; or
at balance date, exploration activities have not reached a stage which permits a reasonable
assessment of the existence of economically recoverable reserves, and active and significant
operations are continuing.
In these cases the expenditure is recognised as an asset. Ultimate recoupment of these costs is
dependent on the successful development and commercial exploitation, or sale, of the respective areas
of interest.
(f)
Plant and Equipment
Property, plant and equipment is depreciated over the useful economic lives as follows:
Item
Leasehold improvements
Owned plant and equipment
Life
3 years
2-5 years
Method
Straight line
Straight line
(g) Income Tax
Tax effect accounting has been adopted by the Consolidated entity. Future income tax benefits are
available to the Consolidated entity in respect of tax losses. However as there is no certainty that
entities in the Consolidated entity will derive sufficient future assessable income to realise these
benefits, no amount has been benefited in the financial statements in respect thereof.
(h) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
Where the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
Receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of
cash flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable
to, the taxation authority.
(i)
Recoverable Amounts of Non-current Assets
All non-current assets other than deferred exploration expenditure are reviewed at least annually to
determine whether their carrying amounts require writing down to recoverable amount. Recoverable
amount is determined using net cash flows not discounted to present values.
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
27
Notes to the Financial Reports
(Cont)
(i)
Joint Ventures
An interest in a joint venture is brought to account by including in the respective financial statement
categories:
the Consolidated entity’s share in each of the individual assets employed in the joint venture;
liabilities incurred by the Consolidated entity in relation to the joint venture including the
Consolidated entity’s share of any liabilities for which the Consolidated entity is jointly and/or
severally liable; and
the Consolidated entity’s share of expenses of the joint venture.
Interests in the joint venture partnerships are carried at the lower of the equity–accounted amount
and recoverable amount in the consolidated financial report.
(k) Leased Assets
Assets acquired under finance leases are recognised and amortised over the life of the relevant lease
or, where ownership is likely to be obtained on expiration of the lease, over the expected useful life of
the asset. Lease payments are allocated between borrowing costs and reduction in the lease liability.
Operating lease assets are not recognised and rental payments are charged to the Statement of
Financial Performance in the period in which they are incurred.
(l)
Goodwill on Acquisition
On acquisition of a controlled entity, the difference between the purchase consideration plus incidental
expenses and the fair value of identifiable net assets acquired is initially brought to account as goodwill
or discount on acquisition. Goodwill is amortised on a straight line basis over the period during which
the benefits are expected to arise. The unamortised balance of goodwill is reviewed at each balance
date and are charged to the Statement of Financial Performance to the extent that applicable future
benefits are no longer probable.
(m) Provision for Employee Entitlements
Provision has been made in the financial statements for benefits accruing to employees in relation to
annual leave. No provision is made for non-vesting sick leave as the anticipated pattern of future sick
leave taken indicates that accumulated non-vesting leave is not expected to be paid. All on-costs,
including payroll tax, workers’ compensation premiums and fringe benefits tax are included in the
determination of provisions. Annual leave provisions are measured at their nominal amounts.
(n) Financial Instruments included in Assets
Bank deposits, bills of exchange, promissory notes, loans, marketable securities and marketable equity
securities are carried at cost. Purchases and sales of investments are recognised on the trade date.
Other investments are included in investments at the lower of cost or recoverable amount.
Trade and other debtors are recorded at the amount of contracted proceeds.
(o) Financial Instruments included in Liabilities and in Equity
Convertible notes are recorded at cost.
Ordinary share capital bears no special terms or conditions affecting income or capital entitlements of
the shareholders.
(p) Provision for Restoration and Rehabilitation
Restoration costs that are expected to be incurred are provided for as part of the cost of the
exploration, evaluation, development, construction or production phases that give rise to the need for
restoration. Accordingly, these costs are recognised gradually over the life of the facility as these
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
28
phases occur. The costs include obligations relating to reclamation, waste site closure, plant closure,
platform removal and other costs associated with the restoration of the site. These estimates of the
restoration obligations are based on anticipated technology and legal requirements and future costs,
which have been discounted to their present value. Any changes in the estimates are adjusted on a
retrospective basis. In determining the restoration obligations, the entity has assumed no significant
changes will occur in the relevant legislation in relation to restoration of such tenements in the future.
No provision has been recognised in the financial statements, as there is no expectation of future costs
at the current stage of exploration.
(q) Superannuation Plans
The parent entity contributes to individual prescribed superannuation funds of employees.
Contributions of up to 9% of employee’s salaries are legally enforceable in Australia. All the funds are
fully vested accumulated contribution type plans.
(r)
Comparative Figures
Where necessary, comparatives have been reclassified and repositioned for consistency with current
period disclosures as a result of the first-time application of revised Accounting Standards AASB 1005
"Segment Reporting".
(s ) Cash and cash equivalents
Cash on hand and in banks and short-term deposits are stated at nominal value. For the purposes of
the Statement of Cash Flows, cash includes cash on hand and in banks, and money market investments
readily convertible to cash within 2 working days.
(t)
Receivables
Trade receivables are recognised and carried at original invoice amount less a provision for any
uncollectable debts. An estimate for doubtful debts is made when collection of the full amount is no
longer probable. Bad debts are written-off as incurred.
Receivables from related parties are recognised and carried at the nominal amount due. Interest is
taken up as income on an accrual basis.
(u) Investments
Investments in associates are carried at the lower of the equity-accounted amount and recoverable
amount in the consolidated financial report.
All other non-current investments are carried at the lower of cost and recoverable amount.
(v) Payables
Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the
consideration to be paid in the future for goods and services received, whether or not billed to the
consolidated entity.
Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is
recognised as an expense on an accrual basis.
(w) Interest-bearing liabilities
All loans are measured at the principal amount. Interest is charged as an expense as it accrues.
(x) Contributed equity
Issued and paid up capital is recognised at the fair value of the consideration received by the company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a
reduction of the share proceeds received.
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
29
Notes to the Financial Reports
(y)
(Cont)
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
entity and the revenue can be reliably measured.The following specific recognition criteria must also
be met before revenue is recognised:
Interest
Control of the right to receive the interest payment.
(z)
Earnings per share
Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing
equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted
for any bonus element.
Diluted EPS is calculated as net profit attributable to members, adjusted for:
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that
have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from
the dilution of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares,
adjusted for any bonus element.
(az) Changes in Accounting Policy
AASB 1027 Earnings Per Share
The consolidated entity has adopted the revised Accounting Standard AASB 1027 "Earnings Per Share"
and has for the first time, determined basic and diluted earnings per share in accordance with the
revised Standard. Basic earnings per share (EPS) was previously calculated by dividing the profit from
ordinary activities after tax and preference dividends by the weighted average number of ordinary
shares outstanding during the financial period. In accordance with the revised AASB 1027, basic EPS is
now calculated as net profit attributable to members, adjusted to exclude costs of servicing equity
(other than dividends) and preference share dividends, divided by the weighted average number of
ordinary shares, adjusted for any bonus element.
Diluted EPS was previously determined by dividing the profit from ordinary activities after tax and
preference dividends adjusted for the effect of earnings on potential ordinary shares, by the weighted
average number of ordinary shares (both issued and potentially dilutive) outstanding during the financial
period. In accordance with AASB 1027, diluted EPS is now calculated as net profit attributable to
members, adjusted for:
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that
have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would
result from the dilution of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares,
adjusted for any bonus element.
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
30
Consolidated
2002
2001
$
$
Parent
2002
$
2001
$
72,566
31,919
147,422
-
55,028
-
Note 2. Profit and Loss Items
Loss from ordinary activities is after crediting the following revenues:
Revenues from ordinary activity:
Interest from unrelated persons
153,512
Net foreign exchange gains
Total revenues from ordinary activity
153,512
104,485
147,422
55,028
Total revenues
153,512
104,485
147,422
55,028
Loss from ordinary activities is after charging the following expenses:
Depreciation:
Depreciation of:
- Plant and equipment
6,682
- Leasehold improvements
-
7,048
1,673
6,682
-
7,048
1,673
Total depreciation
6,682
8,721
6,682
8,721
Operating Lease rentals:
Lease payments
116,511
79,673
26,588
18,026
Borrowing Costs:
Interest paid or payable to:
- Related entity
13,451
29,750
13,451
29,750
1,385,076
2,206,846
2,751,131
7,207,081
752,979
118,374
1,285,841
1,626,188
752,979
-
1,285,841
110,981
304,866
18,185
840,594
256,000
-
304,866
1,372
840,594
306,171
41
2,579,480
6,215,469
3,810,348
9,750,709
Loss from Ordinary activities before
income tax includes the following
significant items above:
(a) Provisions for:
Loan to Sagittarius Mines Inc
Loan to Southcot Mining Corp
Loan to Tampakan Mining Corp
Loans to controlled entities
1,051,776
166,650
166,650
-
2,206,846
-
1,045,728
166,650
166,650
1,372,103
2,206,846
5,000,235
Net charge to provision for non-recoverable loans
1,385,076
2,206,846
2,751,131
7,207,081
(b) Includes diminution for:
Investment in Sagittarius Mines Inc
Investment in controlled entities
-
256,000
-
-
256,000
50,171
Total diminution in value of investments
-
256,000
-
306,171
Other Expense Items:
Net charge to provision for
non-recoverable loans
Write off of costs associated with
Tampakan acquisition
Write off of exploration expenditure
Write off of postponed
Initial Public Offering costs
Diminution in value of investments
Net foreign exchange losses
(a)
(b)
There was nil tax effect on all significant items.
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
31
Notes to the Financial Reports
(Cont)
Consolidated
2002
2001
$
$
(a)
Earnings per share
The following represents the income and
share data used in the calculations of basic
and diluted earnings per share:
Earnings used in calculating basic and diluted
earnings per share:
(2,950,329)
-
Consolidated
2002
2001
No of Shares
No of Shares
(a)
Weighted average number of ordinary shares
used in calculating basic earnings per share
83,944,349
Effect of Dilutive Securities:
Share Options
Adjusted weighted average number of
ordinary shares used in calculating diluted
earnings per share
1,955,556
85,899,905
(a) No comparatives are presented as the consolidated entity did not prepare earnings per share calculations prior to listing
on the Australian Stock Exchange in May 2002.
Consolidated
2002
2001
$
$
Parent
2002
$
2001
$
Note 3. Income Tax
(a) Income tax expense
The difference between income tax expense provided in the financial statements and the prima facie income tax expense is
reconciled as follows:
Loss from ordinary activities
Prima facie tax (benefit) thereon at 30% (2001: 34%)
Tax effect of permanent and other differences:
- Non deductible project acquisition costs
- Non deductible interest
- Non deductible provision for doubtful debts
- Diminution in value of investments
- Postponed Initial Public Offering costs written off
- non deductible
- Exploration costs written off – non deductible
Future income tax benefit not brought to account
Total income tax attributable to loss from
Ordinary activities
(2,950,329)
(6,589,380)
(4,161,772)
(10,070,417)
(885,099)
(2,240,389)
(1,248,532)
(3,423,942)
225,893
4,035
415,523
-
437,186
10,115
87,040
225,893
4,035
825,339
-
437,186
10,115
2,450,408
104,098
91,460
35,512
112,676
279,492
37,734
1,388,822
91,460
101,805
279,492
37,734
104,909
-
-
-
-
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
32
(b) Benefit of income tax losses not brought to account
As at 31 December 2002, the Consolidated entity has estimated future income tax benefits arising from tax losses and mining
expenditure of $1,409,132 (2001: $1,296,456). This benefit has not been brought to account as realisation is not virtually
certain. The benefit will only be obtained if:
(i) the Consolidated entity derives future assessable income of a nature and of an amount sufficient to enable the benefits
from the deductions to be realised;
(ii) the Consolidated entity continues to comply with the conditions for deductibility imposed by the law; and
(iii) no changes in tax legislation adversely affect the Consolidated entity in realising the benefit from the deductions
for the losses.
The future income tax benefit has been reduced to reflect the effect of legislated changes to income tax rates from
34% to 30%.
Income tax expense and deferred tax balances presented in this financial report do not take into account the impact,
if any, that may arise should the group elect to enter into a tax consolidation group.
Note 4. Segment Reporting
Phillipines
2002
2001
$
$
Australia
2002
2001
$
$
Eliminations
2002
2001
$
$
Consolidated
2002
2001
$
$
Revenue
Sales to customers outside the
consolidated entity
Other revenues from customers
outside the consolidate entity
Inter segment revenues
-
-
-
-
-
-
-
-
6,090
-
49,457
-
147,422
-
55,028
-
-
-
153,512
-
104,485
-
Total segment revenue
6,090
49,457
147,422
55,028
-
-
153,512
104,485
-
-
153,512
104,485
Unallocated revenue
Total consolidated revenue
Results
Segment result
(947,814) (2,966,191) (2,002,515) (3,623,189)
-
- (2,950,329) (6,589,380)
Unallocated expenses
-
-
Consolidated entity loss from
ordinary activities before
income tax expense
Income tax expense
(2,950,329) (6,589,380)
-
Consolidate entity loss from
ordinary activities after income tax
(2,950,329) (6,589,380)
Assets
Segment assets
4,732,377
3,446,386
4,496,951
3,070,999 (2,649,241) (2,683,414)
Unallocated assets
Total Assets
Liabilities
Segment liabilities
1,792,500
1,329,047
141,418
932,017 (1,616,562) (1,221,381)
Unallocated liabilities
Total liabilities
Other segment information
Acquisition of property,
plant and equipment
Increase in capitalized
exploration costs
Depreciation
Non-cash expenses other than
depreciation and amortisation
57,180
6,580,087
3,833,971
-
-
6,580,087
3,833,971
317,356
1,039,683
-
-
317,356
1,039,683
7,950
11,991
8,453
-
-
69,171
16,403
1,460,350 (1,116,394)
14,908
45,656
6,682
8,721
(14,908)
(45,656)
1,460,350
6,682
1,116,394
8,721
1,385,076
2,462,846
-
-
1,385,076
2,462,846
-
-
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
33
Notes to the Financial Reports
(Cont)
Consolidated
2002
2001
$
$
Parent
2002
$
2001
$
Note 5. Receivables (current)
Advances to staff
Other receivables
1,512
6,451
1,368
11,585
2,780
10,486
Total current receivables
7,963
12,953
2,780
10,486
43,266
30,993
12,248
7,071
Cost
Opening balance
Additions
Disposals
45,288
(9,586)
45,288
-
9,586
(9,586)
9,586
-
Closing balance
35,702
45,288
-
9,586
Accumulated depreciation
Opening balance
Depreciation for the period
Disposals
41,569
3,719
(9,586)
30,971
10,598
-
9,586
(9,586)
7,913
1,673
-
Closing balance
35,702
41,569
-
9,586
Net book value
-
3,719
-
-
Cost
Opening balance
Additions
Disposals
236,909
69,171
-
223,195
16,403
(2,689)
30,161
11,991
-
21,708
8,453
-
Closing balance
306,080
236,909
42,152
30,161
Accumulated depreciation
Opening balance
Depreciation for the period
Disposals
217,652
17,871
-
175,609
43,779
(1,736)
22,397
6,682
-
15,349
7,048
-
Closing balance
235,523
217,652
29,079
22,397
Net book value
70,557
19,257
13,073
7,764
Total Plant and equipment
70,557
22,976
13,073
7,764
Note 6. Other Assets (current)
Prepayments
Note 7. Plant and Equipment
(a) Leasehold Improvements:
(b) Plant and Equipment:
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
34
Consolidated
2002
2001
$
$
Parent
2002
$
2001
$
Note 8. Deferred Exploration Costs
Opening balance
2,986,519
4,102,913
-
111,758
Additions
1,578,724
509,794
154,569
(777)
Exploration written off
(118,374)
(1,626,188)
-
(110,981)
Closing balance
4,446,869
2,986,519
154,569
-
The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful
development and commercial exploitation or sale of the respective mining areas. Amortisation of the costs carried forward
for the development phase is not being charged pending the commencement of production.
Note 9. Other Financial Assets (non-current)
Investments
Securities, carried at cost, not quoted on prescribed stock exchanges:
- Shares in controlled entities
- Shares in Sagittarius Mines Inc
256,000
256,000
50,171
256,000
50,171
256,000
256,000
256,000
306,171
306,171
Less diminution of value of investments
(256,000)
(256,000)
(306,171)
(306,171)
Total non-current other financial assets
-
-
-
-
3,258,622
166,650
166,650
-
2,206,846
-
4,483,437
3,252,574
166,650
166,650
2,609,930
3,934,596
2,206,846
1,786,668
3,591,922
2,206,846
10,679,241
7,928,110
(3,591,922)
(2,206,846)
(10,679,241)
(7,928,110)
Refundable deposits
7,323
-
-
-
Total non-current other assets
7,323
-
-
-
Trade creditors – unsecured
Sundry creditors and accruals
147,202
140,919
153,504
252,352
20,094
98,488
94,442
218,075
Total current payables
288,121
405,856
118,582
312,517
29,235
33,827
22,836
19,500
Note 10. Other Assets (non-current)
Loans to other entities
Loans to controlled entities
Loans to Sagittarius Mines Inc
Loan to Southcot Mining Corp
Loan to Tampakan Mining Corp
Loans to other entities – controlled entites
Less provision for non-recoverability
Note 11. Payables (current)
Note 12. Provisions (current)
Employee entitlements
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
35
Notes to the Financial Reports
(Cont)
Consolidated
2002
2001
$
$
Parent
2002
$
2001
$
Note 13. Interest Bearing Liability (non-current)
Unsecured:
Convertible Notes
600,000 of $1each
-
600,000
-
600,000
A loan from Australian Selection Pty Ltd was taken out on 8 January 2001 for a minimum of three months, repayable on
demand with an interest rate of 8.5% p.a. payable monthly in arrears. On 10th July 2001 the loan was converted into $600,000
unsecured convertible notes. On 12 November 2001 the Company resolved that the convertible notes be exercisable into
equity at $0.10 per share with a free attaching option exercisable at the discretion of the holder at any time prior to 31
January 2002 at $0.10 per option. These terms were similar to the October 2001 offer to shareholders. The convertible
notes were exercised on 12 November 2001 and resulted in the allotment of 6,000,000 shares and options to Australian
Selection Pty Ltd.
Note 14. Contributed Equity
Ordinary shares
17,855,755
11,436,983
17,855,755
11,436,983
Movements in contributed equity for the period:
No of Ordinary Shares
2002
2001
$
$
On issue at start
Issued during the period (i)
Conversion from Convertible Note (ii)
Conversion of share options
Public Equity Raising (i)
less transaction costs
On issue at end
Value of Ordinary Shares
2002
2001
$
$
60,152,005
3,958,750
6,000,000
9,933,750
20,000,000
39,052,005
21,100,000
11,436,983
395,875
600,000
993,375
5,000,000
(570,478)
7,216,983
4,220,000
100,044,505
60,152,005
17,855,755
11,436,983
(i) During the period shares were issued as part of the equity raising exercise and initial public offering to fund future
activities of the controlled entity.
(ii) see note 13.
Options Over Ordinary Shares:
Month of
issue
Note
Nov 1999
Number Number of Number
issued
recipients exercised
1,000,000
1
-
Options
outstanding at Exercise
balance date
price
1,000,000
$0.50
Exercise period
Expiration
date
Nov 1999 to May 2004
10-May-04
Sep 2000
7,500,000
3
-
7,500,000
$0.20
Dec 2000 to Oct 2003
1-Oct-03
Oct 2000
7,000,000
9
-
7,000,000
$0.20
Dec 2000 to Oct 2003
1-Oct-03
Nov 2000
2,236,500
3
-
2,236,500
$0.35
Nov 2000 to May 2004
10-May-04
Nov 2000
2,236,500
3
-
2,236,500
$0.50
Nov 2000 to May 2004
10-May-04
Nov 2000
200,000
1
-
200,000
$0.35
Dec 2000 to May 2004
10-May-04
Nov 2000
200,000
1
-
200,000
$0.50
Dec 2000 to May 2004
10-May-04
Jan 2001
100,000
1
-
100,000
$0.20
Jan 2001 to Oct 2003
1-Oct-03
Jan 2001
May 2002
(1)
3,000,000
1
-
3,000,000
$0.20
Jan 2001 to Oct 2003
1-Oct-03
20,000,000
578
-
20,000,000
$0.25
May 2002 to Dec 2004
31-Dec-04
43,473,000
(1) Pursuant to the Initial Public Offering the parent issued 20,000,000 options at an exercise price of $0.25 exercisable
by 31 December 2004.
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
36
During the period the parent had available to exercise 9,958,750 options at an exercise price of $0.10 of which 9,933,750
were exercised and 25,000 lapsed without being exercised. In addition a further 1,000,000 options at an exercise price of
$0.35 lapsed without being exercised during the period.
If the Tampakan Acquisition is consummated then 6,629,630 shares and 4,629,630 options (exercisable at $0.20) will be issued
to Sagittarius Mines Inc. at no cost as per the Agreement with Sagittarius Mines Inc.
Consolidated
2002
2001
$
$
Parent
2002
$
2001
$
Note 15. Accumulated Losses
Accumulated losses at the beginning of
the financial period
Net loss
Accumulated losses at the end of
the financial period
(8,642,695)
(2,950,329)
(2,053,315)
(6,589,380)
(11,811,325)
(4,161,772)
(1,740,908)
(10,070,417)
(11,593,024)
(8,642,695)
(15,973,097)
(11,811,325)
2,794,288
5,163,668
(374,342)
5,476,075
(2,950,329)
(6,589,380)
(4,161,772)
(10,070,417)
6,989,250
(570,478)
4,220,000
-
6,989,250
(570,478)
4,220,000
-
6,262,731
2,794,288
1,882,658
(374,342)
Note 16. Equity
Total equity at beginning of financial period
Total changes in equity recognised in the
Statement of Financial Performance
Transactions with owners as owners:
Contributed equity
Less transaction costs
Total equity at the reporting date
Note 17. Notes to the Statement of Cash Flows
(a) Reconciliation of Cash
For the purposes of the Statements of Cash Flows, cash includes cash on hand and in bank and short term deposits at call, net
of outstanding bank overdrafts.
Cash as at the end of the financial period as shown in the Statement of Cash Flows is reconciled to the related items in the
Statement of Financial Position as follows:
Cash on hand
Call deposits with banks
230,359
1,773,750
192,734
587,796
67,656
1,773,750
32,354
500,000
2,004,109
780,530
1,841,406
532,354
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
37
Notes to the Financial Reports
(Cont)
Consolidated
2002
2001
$
$
Parent
2002
$
2001
$
Note 17. Notes to the Statement of Cash Flows (cont)
(b) Reconciliation of Net Loss after Income Tax to Net Cash used in Operating Activities
Net loss after income tax
Adjustments for non-cash income
and expense items:
Depreciation of property, plant and equipment
Net loss for property, plant and
equipment written off
Exploration costs written off
Acquisition costs written off
Postponed Initial Public Offering costs written off
Net foreign exchange losses (gains)
Transfers to provisions:
Employee entitlements
Provision for non-recoverable loans
Diminution in value of investments
(2,950,329)
(6,589,380)
(4,161,772)
(10,070,417)
6,682
8,721
6,682
8,721
118,374
752,979
304,866
18,185
953
1,626,188
1,285,841
840,594
(31,919)
752,979
304,866
1,372
110,981
1,285,841
840,594
41
(4,592)
1,385,076
-
(3,963)
2,206,846
256,000
3,336
2,751,131
-
4,001
7,207,081
306,171
Changes in assets and liabilities:
(Increase)/decrease in assets:
Accounts receivable
Prepayments and other assets
(Decrease)/Increase in liabilities:
Trade Creditors
4,990
(19,596)
(1,868)
(8,474)
7,706
(5,177)
(3,947)
(7,071)
(117,735)
(126,448)
(193,935)
12,144
Net cash from operating activities
(501,100)
(536,909)
(532,812)
(305,860)
15
15
3
3
29,235
33,827
22,836
19,500
2,467
-
-
48,612
60,060
-
11,400
2,670
-
12,866
5,199
Note 18. Employee Entitlements
The number of full-time equivalents employed as at
December 31, 2002 (July 31, 2001) are:
Employee Entitlements Recognised
Aggregate employee entitlement
liability (refer to note 12)
Note 19. Foreign Currency Exposure
Current assets
Amounts receivable in foreign currency which are not effectively hedged:
- Philippine pesos
5,183
Current liabilities
Amounts payable in foreign currency which are not effectively hedged:
- United States dollars
11,400
- Philippine pesos
127,108
- British pounds
2,670
- Singapore dollars
-
The Australian dollar equivalents of foreign currency monetary items included in the Statement of Financial Position headings
to the extent that they are not effectively hedged, are set out above. These amounts include the payables and receivables of
foreign subsidiaries which are not effectively hedged by other foreign currency denominated items.
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
38
Consolidated
2002
2001
$
$
Parent
2002
$
2001
$
Note 20. Commitments
(a) Operating lease expenditure contracted for is payable as follows:
Not later than one year
Later than one year but not later than five years
Later than five years
50,240
15,293
-
28,682
-
26,596
15,293
-
4,935
-
65,533
28,682
41,889
4,935
Operating leases are entered into as a means of acquiring access to office facilities. Rental payments are generally fixed, but
with inflation escalation clauses. No renewal or purchase options exist in relation to operating leases and no operating leases
contain restrictions on financing or other leasing activity.
(b) Capital expenditure commitments contracted for is payable as follows
Not later than one year
Later than one year but not later than five years
Later than five years
-
-
-
-
-
-
-
-
2,219,000
-
800,000
2,900,000
-
2,000,000
-
-
2,219,000
3,700,000
2,000,000
-
(c) Commitments for exploration expenditure are scheduled as follows:
Not later than one year
Later than one year but not later than five years
Later than five years
Due to the uncertain nature of exploration the Consolidated entity believes the provision of any estimated expenditure is
unable to be forecast with any reliability. The Consolidated entity is able to relinquish interest in tenements or exploration
permits at any stage.
However, should the Consolidated entity decide to retain its existing interests the minimum expenditure payable in the next
year would be $2,219,000 (included in the table above).
Note 21. Contingent Liabilities
Amounts payable to Sagittarius Mines Inc on successful
acquisition of Tampakan tenements (US$500,000)
1,000,000
Amount of unpaid capital (75%) in the issued capital
of Sagittarius Mines Inc liable to be called.
768,000
1,000,000
1,000,000
1,000,000
768,000
768,000
768,000
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
39
Notes to the Financial Reports
(Cont)
Note 22. Controlled Entities
The consolidated financial statements at 31 December 2002 include the following controlled entities. The financial years of all
controlled entities are the same as that of the parent entity.
Name of controlled entity
Indophil Resources (Phils) Inc
Osprey Mineral Exploration Corporation
Pulong Ilog Mineral Exploration Corporation
San Leonardo Mineral Exploration Corporation
San Eduardo Mineral Exploration Corporation
San Christo Mineral Exploration Corporation
Omega Mineral Exploration Co Inc
Xenia Mineral Exploration Co Inc
Southern Philippines Exploration Pty Ltd
Luzon Resources Pty Limited
Visayan Resources Pty Limited
Southern Exploration Corporation
Place of Incorporation
(1)
(2)
(2)
(2)
(2)
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
Australia
Australia
Australia
Philippines
% of shares held
2002
2001
40
64
64
64
100
100
100
100
100
100
100
100
40
64
64
64
100
100
100
100
100
100
100
100
(1) Though 40% owned, Indophil Resources NL has a call option to purchase the 60% equity held by other shareholders. In
consideration for the grant of the call option, the option deed requires Indophil Resources NL to advance loans to the
60% shareholders to enable those shareholders to meet cash calls for exploration expenditure. Therefore the assets and
net loss have been attributed 100% to the members of Indophil Resources NL.
(2) These companies made no contribution to the consolidated results for the period.
Note 23. Interests in Joint Venture Operations
Joint venture name
Principal Activity
Interest held in output
2002
2001
%
%
Manat
(1)
Mineral exploration
25
25
Leyte-Sogod
(1)
Mineral exploration
0
0
(1) Earning up to 50% interest.
Consolidated
2002
2001
$
$
Assets employed in joint venture operations:
Capitalised Exploration Costs
2,301,738
1,547,873
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
40
Note 24. Remuneration of officers
(a) Income of Directors
The number of directors of the parent entity who were paid, or were due to be paid, income (including brokerage,
commission, bonuses, retirement payments, salaries, and payments to a prescribed superannuation fund) directly or indirectly
from the Company or any related party, were:
Parent
2002
$
2001
$
$10,000 – 19,999
-
$20,000 – 29,999
1
-
$40,000 – 49,999
-
1
$50,000 – 59,999
1
-
$80,000 – 89,999
1
-
$130,000 – 139,999
-
1
$140,000 – 149,999
-
1
$200,000 – 209,999
1
-
$220,000 – 229,999
The aggregate income of the directors referred to above
1
1
-
$589,767
$331,891
The total income paid or payable, directly or indirectly, from the respective entities of which they are director, or from any
related party, to all the directors of each entity in the Consolidated entity was $591,367 (2001: $333,491).
(b) Income of Executives
The number of executive officers whose total income for the period falls within the following bands, were:
Consolidated
2002
2001
$
$
$130,000 – 139,999
Parent
2002
$
-
1
$140,000 – 149,999
-
$200,000 – 209,999
1
$220,000 – 229,999
The aggregate income of
the executives referred to above
2001
$
-
1
1
-
1
-
1
-
1
-
1
-
$422,361
$281,289
$422,361
$281,289
Income of executives comprises amounts paid or payable to executive officers, directly or indirectly, by the Consolidated
entity or any related party in connection with the management of the affairs of the entity or Consolidated entity, whether as
executive officers or otherwise. These amounts are paid to executive directors included above in Income of Directors.
Note 25. Remuneration of Auditors
Remuneration received, or due and receivable, by the auditor of the parent entity:
- Audit or review of the financial statements (i)
- Other services (i)
28,563
73,187
19,000
184,250
28,563
73,187
19,000
184,250
-
-
Remuneration received, or due and receivable, by a related practice of the auditor for:
- Audit or review of the financial statements
- Other services
17,544
-
20,992
110,659
(i) Effective 27 May 2002, the partnership of Arthur Andersen Australia (AA) was dissolved. Consequently AA resigned as
auditors of Indophil Resources NL and applicable subsidiaries, and the Directors resolved to appoint Ernst & Young as the
successor auditor to these entities.
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
41
Notes to the Financial Reports
(Cont)
Note 26. Related Party Disclosures
(a) Directors
The following persons held the position of director of Indophil Resources NL during all of the past two financial years, unless
otherwise stated:
R.B Davis (Chairman)
T W Robbins
C N Middleton
K P Robinson
P Maloney (appointed 13 May 2002)
(b) Directors' Shareholdings
Shares issued
by the parent entity
2002
2001
Shares and share options acquired from the entity during the period:
Ordinary shares
Ordinary share options
40,000
40,000
100,000
500,000
2,506,001
4,763,000
2,466,001
4,723,000
Shares and share options held at the end of the period:
Ordinary shares
Ordinary share options
(c) Transactions with Related Parties
Loans have been made to Indophil Resources (Phils.) Inc. and other controlled entities, for funding of exploration and working
capital needs.
On 10 July 2001 the Company issued to Australian Selection Pty Ltd 600,000 unsecured convertible notes with a face value of
$1 each. On 12 November 2001 the Company resolved that the convertible notes be exercisable into equity at $0.10 per
share with a free attaching option exercisable at the discretion of the holder at any time prior to 31 January 2002 at $0.10
per option. These terms were similar to the October 2001 offer to shareholders. The convertible notes were exercised on
12 November 2001 and resulted in the allotment of 6,000,000 shares and options to Australian Selection Pty Ltd.
(d) Ultimate Parent
Indophil Resources NL is the ultimate parent company.
Note 27. Subsequent Events
There have been no significant events since year end.
Note 28. Financial Instruments
The Consolidated entity has not entered into any forward foreign exchange agreements and foreign currency options.
Remittances to the Philippines have been in Australian dollars on a needs basis.
Most of the Consolidated entity’s expenditure in the foreseeable future will be in Philippine pesos, so the Consolidated entity
is exposed to the Australian dollar – Philippine peso exchange rate.
Net Fair Value of Financial Assets and Liabilities
The Consolidated entity does not have any financial derivative liabilities. The financial liabilities of the Consolidated entity are
carried at the amount at which the liability could be settled. Accordingly the net fair value is the same as the carrying value.
Receivables, other current assets, cash and call deposits are immediately realisable. Accordingly the net fair value is the same
as the carrying amount.
Interest Rate Risk Exposure
The Consolidated entity is exposed to interest rate risk through primary financial assets and liabilities. The following table
summarises interest rate risk for the Consolidated entity together with effective interest rates as at balance date.
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
42
2002
Floating
interest rate
$
Financial Assets
Cash
Receivables
Other Assets
Financial Liabilities
Payables
Interest bearing liability
2001
Financial Liabilities
Payables
Interest bearing liability
Non-interest
bearing
Floating (a)
1,773,750
-
-
-
230,359
7,963
7,323
-
1,773,750
-
245,645
-
-
-
288,121
-
-
-
-
288,121
Floating
interest rate
Fixed interest rate
maturing in:
1 year or
Over 1 to 5
less
years
$
$
Average interest rate
Fixed (b)
$
-
$
Financial Assets
Cash
Receivables
Fixed interest rate
maturing in:
1 year or
Over 1 to 5
less
years
$
$
Non-interest
bearing
-
4.6%
-
-
-
Average interest rate
Floating (a)
Fixed (b)
$
-
587,796
-
-
192,734
12,953
-
587,796
-
205,687
-
-
600,000
405,856
-
-
-
600,000
405,856
-
4.8%
-
-
8.5%
(a) Floating interest rates represent the most recently determined rate applicable to the instrument at balance date.
(b) The fixed rate of interest rate represents the weighted average contract rate in place at period end.
The controlled entity does not have any financing facilities available to it.
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
43
Directors’ Declaration
In accordance with a resolution of the directors of Indophil Resources NL,
In the opinion of the directors:
(a) the financial statements and notes of the company and of the consolidated entity are in
accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at
31 December 2002 and of their performance for the period ended on that date; and
(ii) complying with Accounting Standards and Corporations Regulations 2001; and
(b) the ability of the Company to pay its debts as and when they fall due is dependent upon certain
developments outlined in Note 1(b) of the Notes to the Financial Statements. At the date of this
declaration, there are reasonable grounds to believe that the developments will take place in
such a way as to enable the Company to pay its debts as and when they fall due.
On behalf of the Board
T W Robbins
Director
Melbourne, 17 March 2003
Note: "2002" refers to the 17 month period ended 31 December 2002 and "2001" refers to the 12 month period ended
31 July 2001.
44
Liability limited by the Accountants Scheme, approved under the Professional Standards Act 1994 (NSW)
45
Shareholder and Other Information
Top 20 Shareholders as recorded on the register of members at 28 February 2003
Shareholder
Lion Selection Group Limited
Lion Selection Group Limited
Australian Selection Pty Ltd
Becalm Pty Ltd & Elmlore Pty Ltd
Alsons Development & Investment Corp.
MIM Holdings Limited
Haustella Pty Ltd <Ransom Family A/C>
Chardere Pty Ltd
Harry Fishman <Fishman Super Fund A/C>
Chris Neil Middleton
Palliser Limited
Thomas Stirling Tootel
Leslie Alan Wilson
Weresyd Proprietary Limited
Helgeo Nominees Pty Ltd
Capx Limited
John/Anne/Alex Sinclair
Tony William Robbins
Yandal Investments Pty Ltd
KAP Investments Pty Ltd
Number of Shares
28,775,000
7,000,000
6,000,000
3,400,000
2,937,500
2,500,000
2,124,815
2,000,000
1,914,814
1,366,001
1,275,560
1,111,180
1,080,000
1,045,000
1,014,813
1,000,000
1,000,000
1,000,000
1,000,000
859,783
68,404,466
Substantial Shareholder at as 28 February 2003
Lion Selection Group Limited
42,375,000
%
28.76
7.00
6.00
3.40
2.94
2.50
2.12
2.00
1.91
1.37
1.27
1.11
1.08
1.04
1.01
1.00
1.00
1.00
1.00
0.86
68.37
42.4
Distribution schedule of holders of ordinary share capital
The number of fully paid ordinary shares issued at 28 February 2003 was 100,044,505 held by 832
shareholders whose voting rights are one vote for each share held.
Size of Shareholding
1 - 1000
1001 - 5000
5001 - 10000
10001 - 100000
100001 - OVER
Shareholdings of less than a marketable
parcel as defined in the Australian
Stock Exchange listing rules
Number of Shareholders
2
62
220
457
91
832
16
Number of Shares
401
219,256
1,927,083
15,136,183
82,761,582
100,044,505
27,880
Shares Subject to Escrow
The number of fully paid ordinary shares subject to escrow issued at 28 February 2003 was
17,766,001. The escrow period ends on 2 May 2004.
Unquoted Shares
The number of unquoted fully paid ordinary shares issued at 28 February 2003 was 17,766,001 held
by 21 shareholders. Lion Selection Group Limited hold 11,200,000 shares.
46
Top 20 Optionholders as recorded on the register of option holders at 28 February 2003
Optionholder
Weresyd Proprietary Limited
Lyall Theodore Christensen
C M Abbott Pty Limited
Harry Fishman <Fishman Super Fund A/C>
Yandal Investments Pty Ltd
Pacific Tristar Pty Limited
Lion Selection Group Limited
Exwere Investments Pty Ltd
Eileen Alma Duhs
Ginga Pty Ltd
Biotec International Pty Ltd
Tierra Rist Pty Ltd
Peter Charles Barnett
Biotec International Pty Ltd <Bigum Super A/C>
Stephen Stanley Brown & Philippa Anne Brown
Cathedral Nominees Pty Ltd
Dai Kyu Kim
Zooup Pty Ltd
John Francis Sidney O’Rourke
F E G Pty Ltd
Number of Options
1,000,000
545,000
470,000
400,000
400,000
380,000
375,000
360,000
320,000
260,000
236,000
214,570
200,000
200,000
200,000
200,000
200,000
200,000
170,000
160,000
%
5.00
2.73
2.35
2.00
2.00
1.90
1.88
1.80
1.60
1.30
1.18
1.07
1.00
1.00
1.00
1.00
1.00
1.00
0.85
0.80
6,490,570
32.46
Distribution schedule of holders of options
The number of options issued at 28 February 2003 was 20,000,000 held by 501 holders.
Size of Optionholding
1 - 1000
1001 - 5000
5001 - 10000
10001 - 100000
100001 - OVER
Optionholdings of less than a marketable
parcel as defined in the Australian
Stock Exchange listing rules
Number of Optionholders
0
3
146
318
34
Number of Options
0
11,500
1,264,000
10,356,330
8,368,170
501
20,000,000
100
785,500
Options Subject to Escrow
The number of options subject to escrow issued at 28 February 2003 was 11,473,000. The escrow
period for 6,850,000 options ends on 1 October 2003 and the escrow period for 4,623,000 ends on
10 May 2004.
Unquoted Options
The number of unquoted options issued at 28 February 2003 was 23,573,000 held by 24 option
holders. No person holds more than 20% of the options.
47
Shareholder and Other Information
(Cont)
Schedule of Interests in Approved Mining Tenements
Tenement
Approval
Date
Current
Ownership
Project
Area
(Km2)
Agreement
Type
IRN Equity
31/12/02
FTAA 02-95-X1
(Columbio)
23/03/1995
(R)11/12/02
Sagittarius
Mines Inc.
Tampakan
304.9
Operating
Royalty
95
MPSA 094-97-XI
20/11/1997
(R)12/4/2002
Alsons
Development Corp.
(ALDEVINCO)
Manat
15.47
Farmin & JV
25
MPSA 119-98-V
4/06/1998
(R)26/9/2001
IR Phils., Inc.
Labo
9.95
Operating
Royalty
100
EP 006(97)
21/11/1997
(R)10/1/2002
PNOC-EDC
Hinotongan
89.69
Farmin & JV
0
16/01/2001
San Christo MEC
LeyteSt Bernard
8.91
Operating
Royalty
100
MPSA 169-2001-VIII
Stock Exchange Listing
Indophil Resources NL shares are traded on the Australian Stock Exchange. The codes under which
the shares are traded are:
IRN
IRNO
48
Fully paid ordinary shares
options exercisable at $0.25 each before 31 December 2004
Indophil’s Mission
Corporate Directory
Indophil is a mineral exploration company incorporated in Australia in December 1996 and focusing its
activities on the discovery and subsequent development of copper and gold resources in the Philippines.
DIRECTORS
SOLICITORS
Australia
Mission Statement
Bryan Davis
Non Executive Chairman
To grow shareholder wealth by the discovery, acquisition and subsequent development of gold and
copper-gold resources in the Philippines.
Tony Robbins
Managing Director
Objectives
Chris Middleton
Director of Exploration
To employ effective and cost efficient modern exploration techniques, to discover gold, and copper –
gold deposits.
Through the discovery and development of major ore deposits, become a significant producer in the
region.
Strategy
To maintain and strengthen the portfolio of quality projects in those geological provinces identified as
having high prospectivity for the discovery of major deposits.These projects will be subjected to
focused, effective and cost-efficient exploration.
Kevin Robinson
Non Executive Director
Peter Maloney
Non Executive Director
COMPANY SECRETARY
Colin Walker
To maintain and strengthen the experienced team of dedicated and professional staff that has already
been recruited to pursue a successful program based on technical excellence.
PRINCIPAL AND
REGISTERED OFFICE
To direct all of our efforts and resources to the acquisition and field-testing of quality properties.
Suite 3 Level 2
50 Market Street
Melbourne VIC 3000
REGIONAL OFFICE
Contents
Level 3, L & F Building
107 Aguirre Street
Legaspi Village Makati City 1299
Message to Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AUDITOR
Statement of Corporate Governance Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Operations Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Notes to the Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Directors’ Declaration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Independent Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Shareholder and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Ernst & Young
120 Collins Street
Melbourne VIC 3000
Freehills
Level 43 101 Collins Street
Melbourne Victoria 3000
Philippines
Carag, Caballes, Jamora & Somera Law Offices
2nd Floor The Plaza Royale
120 Alfaro Street
Salcedo Village
Makati City
Metro Manila
Philippines
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 12 565 Bourke Street
Melbourne Victoria 3000
BANKERS
Australia and New Zealand Banking Group Ltd
388 Collins Street
Melbourne Victoria 3000
Philippines
ABN 45 076 318 173
ANNUAL REPORT 2002
Designed and printed by PMP Print, Level 1, 303 Collins Street, Melbourne.