2001 Annual Report - Heron Resources Limited

Transcription

A N N U A L
Heron Resources Limited
21 Close Way, West Kalgoorlie
PO Box 1280, Kalgoorlie, Western Australia, 6433
Telephone: (08) 9091 9253 Facsimile: (08) 9091 9256 Email: [email protected]
www.heronresources.com.au
R E P O R T
2 0 0 1
HERON RESOURCES LIMITED
CORPORATE DIRECTORY
SHAREHOLDER REVIEW
COMPANY SECRETARY
AUDITORS
Ross Arancini BBus, ACA
Company Secretary
110 Hensman Street
SOUTH PERTH WA 6151
Telephone: (08) 9367 1213
Facsimile: (08) 9367 7853
Email: [email protected]
Butler Settineri Chartered Accountants
35-37 Havelock Street
WEST PERTH WA 6005
Any Shareholder visiting Kalgoorlie is encouraged to drop in to the office and see how
it all works.
Usually a field trip to Goongarrie can be arranged with Pam Buchhorn, your most
capable tour guide.
BANKERS
REGISTERED AND PRINCIPAL OFFICE
21 Close Way
PO Box 1280
KALGOORLIE WA 6433
Telephone: (08) 9091 9253
Facsimile: (08) 9091 9256
Website: http://www.heronresources.com.au
“So this run-of-mine ore is worth $100 a
tonne, and Heron’s got 400 million tonnes!”
Local Kalgoorlie businessmen and
major Heron Shareholders Dean Willis,
Rino Borromei and Brett Nazzari
with David Crook.
Challenge Bank
230-236 Hannan Street
KALGOORLIE WA 6430
CORPORATE ADVISER
Carmichael First Capital Pty Limited
Level 11, 77 St Georges Terrace
PERTH WA 6000
Kalgoorlie businessman Nigel Byrd at
Goongarrie with some of the high grade
“$600 a tonne revenue value” drill samples.
Very encouraging when you’re a major
Heron Shareholder.
SOLICITORS TO THE COMPANY
SHARE REGISTRY
Security Transfer Registrars Pty Ltd
Level 1, 168 Adelaide Terrace
PERTH WA 6000
Telephone: (08) 9221 4200
Facsimile: (08) 9221 1581
McKenzie Lalor
74 Egan Street
KALGOORLIE WA
6430
Pullinger Readhead Stewart
46-50 Kings Park Road
WEST PERTH WA 6005
“A rose between two thorns....”
Alan Rudd, Libby Willis and
Simon Gobbett at
the Heron shed.
STOCK EXCHANGE
Front Cover: Holding high grade black
Goongarrie Ore, assaying 3% Ni and 2% Co.
Background montage of the exploration
journals of Keith Quartermaine
(Order of Australia), a Scientist and Historian.
Keith Quartermaine led his friends on expeditions into the
Heron, Avoca and Balladonia exploration country.
Between 1951 and 1976, Keith wrote 26 journals and took
over 10,000 photographs on his exploration of the
Nullarbor and Goldfields - exploring, recording and
researching the history, flora, fauna, caves, meteorites,
tektites and geological features of the region.
Keith began writing up his journals at the request of his
father who wanted to share in his activities in these remote
locations.
On these trips Keith was variously accompanied by Harry
Wheeler, John Carlisle (Order of Australia), Bill Cleverly,
Tom Bateman and Ross and Beverly Quartermaine.
Australian Stock Exchange Limited
2 The Esplanade
PERTH WA 6000
ASX CODE
HRR
SEAT ABBREVIATION
Heron
HOME BRANCH
Perth
INDUSTRY CLASSIFICATION
Other Metals 022 Base Metals
Jack Otway.
“There’s miles and
miles of that Laterite
at Perrinvale.”
Sue Geary, Administration Manager.
Easily the neatest office at Heron Kalgoorlie.
Please telephone Sue on (08) 9091 9253
if you have any enquiries.
RESEARCH SERVICE INDEX NO.
Mining H50
ISIN
AU000 000 HRR6
David Crook (far right) explaining the Pamela Jean Deeps to a very demanding
audience of Kalgoorlie-based Shareholders and the Board.
As Heron works in the same country, we take this
opportunity to acknowledge Keith Quartermaine,
a true Goldfields explorer.
from
All photographic page art by Justin Madden,
Kr
ep
p
are
Reynolds Graphics, Kalgoorlie.
Do
ug
Report
an
d
All sepia images in this
Keith Quartermaine’s volumes.
Footsteps of
Bill, Keith and Harry
across Lake Yindarlgooda.
C
y
tes
our
o
en
il e
E
f
DIRECTORS
Rodney Michael Evans
FCA, FCIS, FCIM, AlArbA
Chairman (Non Executive)
21 Close Way, Kalgoorlie, Western Australia, 6430
Ian James Buchhorn
BSc (Hons), Dipl Geosci, MAusIMM
Managing Director (Executive)
21 Close Way, Kalgoorlie, Western Australia, 6430
Robert George Colville
AssocRMIT, MAusIMM
Director (Non Executive)
Level 1, 1 Sleat Road, Applecross, Western Australia, 6153
Goongarrie Country
CONTENTS
ANNUAL REPORT 2001
Page 1
1.0
Chairman’s Review...............................................................................................3
2.0
Operations Review ...............................................................................................4
3.0
Corporate Profile ................................................................................................30
4.0
Directors’ Report ................................................................................................32
5.0
Financial Statements ........................................................................................36
Statement of Financial Performance ......................................................36
Statement of Financial Position.................................................................37
Statement of Cash Flows ..............................................................................38
Notes to and Forming Part of the Accounts ......................................39
Directors’ Declaration......................................................................................50
6.0
Independent Audit Report .............................................................................51
7.0
Shareholder Information ................................................................................52
8.0
Interest in Mining Tenements ......................................................................55
Glossary of Terms ..............................................................................................67
Avoca Country
FIG.1: EASTERN GOLDFIELDS PROJECT LOCATIONS
Heron, Avoca and Balladonia Tenements
Heron
Tenure
Avoca
Tenure
Balladonia
Tenure
Heron has
acquired a
quality project
portfolio covering
19,000 km2 of
Archaean Nickel
and Gold
mineralised
terrain.
Heron’s aim in
pegging is to
build up
contiguous
tenement
holdings
covering several
100km2 of
favourable
geological
structure.
Only projects
with known
mineral resource
potential or well
defined drilling
targets are
acquired.
Page 2
1.0
CHAIRMANS REVIEW
It is with pleasure that I present the sixth Annual Report of Heron Resources Limited ("Heron"). During 2001
the Company has significantly advanced its high quality assets in the Nickel and Precious Metal sectors,
while maintaining its strong cash position.
During the year, A$2.8 million was raised through a placement, resulting in A$3.1 million in cash at year’s
end.
Heron Nickel Assets
The commodity
emphasis for
Heron is
unequivocally
Nickel Laterite,
and the project
emphasis is
Goongarrie,
specifically the
Pamela Jean
Zone.
Exploration
success during
2001 at the
Goongarrie
Nickel Project
has resulted in
Heron identifying
the premium
Australian Nickel
Laterite deposit
in terms of
grade, thickness
and metallurgy.
Resource Definition Reverse Circulation drilling continued almost non-stop during 2001, with 67,017m in
1,335 holes now having been completed at Goongarrie.
Drilling results at the Pamela Jean Zone have been consistently exceptional, and validate the tenacity
and professionalism of the Heron team in exploring this project. Drill intercepts during 2001 include:
• GSRC1022 111m at 1.37% Ni and 0.07% Co
• GSRC1025 118m at 1.31% Ni and 0.12% Co
• GSRC1030 104m at 1.33% Ni and 0.09% Co
Discussions are continuing with parties involved in the sale and re-structuring of Cawse Nickel Operations.
Your Board is optimistic that the final outcome of these negotiations will be beneficial for your Company.
All key Mining Leases at Goongarrie have been granted. Heron is preparing a Notice of Intent to
commence mining at Goongarrie. I wish to specifically compliment the efforts of David Crook as Heron’s
Exploration Manager and Brian Wyatt representing the Goldfields Land Council for the good spirit shown in
negotiating the Native Title Land Access Deeds and State Deeds which will facilitate Goongarrie mining.
A substantial area of future infrastructure sites was acquired to the immediate west of Goongarrie. Heron
now has contiguous tenement coverage from Goongarrie southwest towards the Cawse plant site.
As at 30 June 2001, the total Measured, Indicated and Inferred Mineral Resource above a 0.75% Ni cut-off
for Goongarrie-Kalpini and satellite nickel projects was 180.1 million tonne at 1.05% Ni and 0.08% Co.
The Measured, Indicated and Inferred Mineral Resource above a 0.50% Ni cut-off for the GoongarrieKalpini and satellite nickel projects was 406 million tonne at 0.8% Ni and 0.06% Co.
During the year, Centaur variously nominated Peter Lee and Stephen Dennis to the Heron Board, both of
whom have now retired. I thank them for their contribution.
The Avoca IPO
aims to derive
value for Heron
shareholders
from Heron’s
quality Precious
Metal assets.
Together, Heron
and Avoca
control some
4,500km2 of the
tenement area
within a 100km
radius of
Kalgoorlie, being
14.3% of the
available ground.
Avoca Precious Metal Assets
Planning is advanced to "spin-off" Heron’s non-nickel assets into a listed company known as
Avoca Resources Limited ("Avoca"). Heron plans to transfer to Avoca 216 tenements in 23 projects,
including 15 Joint Ventures with an aggregate of A$9.2 million in farm-out expenditure and a substantial
royalty portfolio. Newly acquired projects to be owned 100% by Avoca will include:
•
Powder Sill Platinum Group Element (“PGE”) Project, PGE soil geochemical targets.
•
Jimberlana PGE Project, three advanced stage PGE-Ni-Cu sulphide layered mafic complex targets.
•
Mungari Gold Project, south along strike on the Zuleika Shear from the Frog’s Leg gold discovery.
•
Wiluna South Gold Project, 129km2 immediately SE of the Wiluna gold mining centre on Lake Way.
Should the listing proceed in the currently intended form, it is proposed to issue to Heron Shareholders one
Avoca share for every five Heron Shares held, for no payment to the Company.
Your Board looks forward to the continued support of its Shareholders. The Board again acknowledges
the enthusiastic efforts and technical professionalism of its management and staff, and expresses its
sincere thanks.
ROD EVANS
Chairman
Page 3
2.0
OPERATIONS REVIEW
HERON TECHNICAL ACTIVITY DURING 2001
Drilling Activity
High grade drilling results were continuously obtained throughout 2001, such that Heron expended
$3.0 million on exploration:
•
•
•
•
•
•
•
Goongarrie South
Goongarrie Hill
Scotia Dam
Siberia
Ghost Rocks
Kalpini
Mineral Patch Hill
and Merolia
382 Reverse Circulation ("RC") holes for 22,172m to confirm resource continuity.
83 RC holes for 2,177m, to close off the ore body to the west.
113 RC holes for 4,835m to outline resources and confirm geology.
12 RC holes for 417m to outline resources.
81 RC holes for 2,299m to outline resources and confirm geology.
53 RC holes for 1,355m, to confirm ore body lateral continuity.
51 RC holes for 1,923m to define the ultramafic stratigraphy.
Goongarrie has
been the focus of
drill exploration,
with patterns
now at a premine level of
detail at
40x20m.
Drill-out of High Grade Ore
Heron is aiming for a mining head grade exceeding 1.5% Ni, which requires a 1.25% Ni cut-off grade.
When determining cut-off grade, Heron views that a Nickel Laterite operation should stand alone on its
nickel grade, and cobalt should be considered as an additional bonus. The Goongarrie South 1.25% Ni
cut-off resource, occurring in three pits, is listed by ore category
TABLE 1: GOONGARRIE NICKEL PROJECT
Mineral Resource Inventory by Category, 1.25% Ni Cut Off
Category
Million Tonne
% Ni
% Co
% Ni4Co
SG
Proportion
Inferred
4.7
1.61
0.13
2.11
1.4
27%
Indicated
8.7
1.54
0.18
2.25
1.4
54%
Measured
3.2
1.53
0.16
2.15
1.4
19%
16.6
1.56
0.16
2.19
1.4
100%
Total
There is market
recognition that
Goongarrie is a
unique and
exceptional
nickel deposit,
with excellent
early cash flow
potential
resulting from
the high grades.
At average 15 year historical metal prices, this resource alone is able to support a Goongarrie-Cawse 0.5
million tonne per annum (“mtpa”) scale of operation for a 30 year mine life. More significantly, the resource
can potentially facilitate early project payback for a Goongarrie-Cawse 4mtpa scale of operation.
Production Opportunities Identified by Heron
•
•
•
The Cawse Nickel Operation Stage One ("CNO I") is for sale. Following de-bottlenecking to 1mtpa,
and using Heron’s high grade Goongarrie Goethite Ore feed, CNO I has a potential production of up
to 13,000tpa nickel as metal and intermediate product.
Heron alone has sufficient mineral resources for a 30 year mine life 4mtpa Nickel Laterite operation,
such as that proposed for the Cawse Nickel Operation Stage Two ("CNO II").
A Scoping Study has commenced for a joint venture evaluation involving the production of ferro-nickel
from the High Grade Saprolite Ore that underlies Heron’s Goethite Ore.
Goongarrie is
one of the
strategic keys to
the long term
and successful
development of
an Eastern
Goldfields Nickel
Laterite industry.
Ore Processing Objective
The strategy is to process Nickel Laterite through an existing plant using 1.25% Ni cut-off Goethite Ore with
a Leach Feed Grade (“LFG”) of 1.6% Ni. This can be supplemented with 1.0% Ni cut-off Siliceous Ore,
screen upgrading to a 1.6% Ni LFG. Based on current financial models, this blend is the preferred Nickel
Laterite feed stock for a Cawse Stage One processing operation.
Goongarrie Goethite Ore has a remarkable chemical consistency, which is a great advantage
when operating a complex chemical plant such as a Pressure Acid Leach (“PAL”), which
requires a consistent feedstock.
Goongarrie
Goethite is
undoubtably the
premium Nickel
Laterite ore feed.
Bill Cleverly, smoko at Mount Remarkable.
Simon Gobbett logging drill
samples. The task is demanding,
requiring intense concentration
from sunrise to sunset. Methodical
drilling practice is the only way to
discover world class ore bodies.
Page 4
2.0 CONTINUED
OPERATIONS REVIEW
HERON CORPORATE ACTIVITY DURING 2001
Capital Raising
Heron has
negotiated $2.8
million in capital
raisings since
March 2001.
The Company’s working capital position is robust at A$3.1 million (at 30 June 2001), and is such that the
cash demands of the proposed 2002 drilling programs are well accommodated. This position has arisen
through the placement of 10.0 million Shares at $0.28 in March 2001 to raise A$2.8 million.
Additional strategic capital raising discussions are current.
Avoca Resources Limited Precious Metal Spin-off
Subject to completion of due diligence, Heron intends to assign its non-nickel assets to Avoca Resources
Limited ("Avoca") in exchange for the issue to Heron of 20,191,745 fully paid shares in Avoca or such other
consideration as the Board may determine.
The quality of the
Avoca Precious
Metal portfolio is
a testament to
the tenement
acquisition skills
of Heron.
The insolvency of
Centaur resulted
in the CentaurHeron Strategic
Alliance being
terminated.
Heron is now
reviewing new
corporate
opportunities
involving major
base metal
producers and
marketers.
Following the completion of this transaction, and subject to market conditions, Heron proposes to make a
1 for 5 share distribution of ordinary shares in the capital of Avoca to Heron Shareholders with no payment
to the Company. It is envisaged that Heron Shareholders will in addition have a priority right to subscribe
to Avoca shares in the Initial Public Offer (“IPO”) capital raising.
Avoca has developed an active tenement pegging program, having acquired an outstanding Precious
Metal tenement portfolio since incorporation in June 2001. Avoca is the registered holder of 37 tenements.
Avoca is most pleased to announce the appointment of Rohan Williams as its founding Managing Director.
Rohan is a professional geologist of 14 years experience and was Chief Geologist of WMC’s St Ives Gold
Operation. He has been based in Canada researching layered complex Ni-Cu-PGE mineralisation, and
was a joint developer of the metallogenic model responsible for the discovery by WMC of the West
Musgrave Ni-Cu-PGE mineralisation.
Termination of the Strategic Alliance Agreement with Centaur Mining & Exploration Limited
Under the terms of the September 1999 Strategic Alliance Agreement ("SAA"), Centaur had the right to
complete a Bankable Feasibility Study ("BFS") for a Cawse Stage Two expansion (“CNO II”) on or before
19 August 2001 in order to secure toll milling entitlements in relation to Heron’s Goongarrie, Ghost Rocks
and Kalpini Projects.
Heron was advised on 14 March 2001 that its Strategic Alliance partners, Centaur Nickel Pty Ltd
("Centaur") and Centaur Mining & Exploration Limited ("CME") had appointed Administrators, and that the
Cawse Bondholders had subsequently appointed Receivers and Managers. Heron was entitled to
terminate the SAA as a result of the occurrence of an Insolvency Event on 90 days written notice.
On 30 April 2001, Heron served a 90 days Notice of Termination on the Centaur and CME Administrators
and Receivers and Managers to terminate the SAA. The nominated SAA Practical Termination Date was
30 July 2001.
On 27 June 2001, the Receivers and Managers gave notice to Heron of a dispute or difference concerning
the right of Heron to terminate the SAA. There has been no further action involving this alleged dispute.
Heron agreed to extend the Notice of Termination period to 31 August 2001, to allow various commercial
matters to be further discussed with the Receivers and Managers.
There was no presentation to Heron of a BFS for CNO II on or before 19 August 2001 as required by the SAA.
The Receivers and Managers to Centaur and CME are seeking to sell Cawse. This has generated considerable
corporate interest from several parties in Heron’s Goongarrie Nickel Project.
Calweld wide diameter drilling was carried out at the
Goongarrie Nickel Project to obtain bulk samples for
density determinations and for metallurgical test work.
The bulk samples confirmed that the run-of-mine
Goongarrie Goethite Ore is homogenous and shows
excellent materials handling properties.
Penetration rate for the Calweld drilling was fast,
suggesting Goongarrie Goethite will be free-digging.
Page 5
2.0 CONTINUED
OPERATIONS REVIEW
THE NICKEL LATERITE SECTOR DURING 2001
Heron’s Corporate Strategy
With all manner of media coverage during 2001 concerning the Murrin Murrin and Cawse "First Generation" Nickel Laterite
projects, it is appropriate to clarify the industry position of Heron, a "Second Generation" Nickel Laterite.
Heron is focussed on deriving Shareholder value from the acquisition and development at minimal risk of high
quality Nickel Laterite assets. Heron has one of the largest 100%-owned, unencumbered tenement portfolios
within Eastern Goldfields Nickel Laterite Province.
Heron’s low risk
strategy is to be
an ore supplier to
established
Nickel Laterite
plants.
Heron’s preference is to develop its tenement base and be an "upstream" ore supplier, rather than take on the
debt service risk of being a "downstream" ore processor. However, subject to appropriate terms, the sale of
Cawse provides an opportunity to merge the Goongarrie and Cawse Nickel Laterite assets. Any merger
mechanism must minimise debt service risk to Heron. This may be achieved either through Heron ore supply or
by Heron membership in a purchase consortium.
Strategic Role of Heron’s Goongarrie Nickel Project
The combined Goongarrie and Cawse Nickel Laterite resource base is some 0.7 billion tonne at 0.7% Ni at a
0.5% Ni cut-off, with Heron controlling more than half of the combined resource. Such a resource base could
potentially support a 30 year 4 to 10mtpa Nickel Laterite processing operation.
In the March 2000 Independent Expert’s Report by PricewaterhouseCoopers Securities Pty Ltd addressing the then
Centaur bid for Heron, it was stated that without Goongarrie "there is insufficient reserve tonnages on Centaur’s
own tenements" to support the Cawse Stage II expansion. More specifically, the Independent Expert stated
that "it appears unlikely that Cawse Stage II would proceed without access to Heron’s ore in one
manner or another". This is the longterm basis for seeking to merge the Goongarrie and Cawse nickel assets.
Goongarrie is a
“company
maker” and a
world class
discovery.
Its high grade
allows resilience
in times of low
metal prices.
The strategic significance of Goongarrie has become even more critical since July 2001, when the world nickel
price cycle moved towards the lower part of its historical range. At current nickel prices of around US$2.30 per
pound, only the highest grade and lowest cost operations within a given sector are likely to be viable. The high
nickel-cobalt grade of Goongarrie delivers considerable strategic advantage to Heron, particularly to weather low
metal price cycles.
Implications of the Ravensthorpe Nickel Laterite Sale and Indicative Resource Valuations
In March 2001, Billiton (now BHP Billiton) purchased the 50% of the Ravensthorpe Nickel Project which it did not
already own, for a cash and share consideration of approximately $34 million (a 100% interest valued at $68 million).
The Heron nickel projects and Ravensthorpe comparative resource position is:
Resource Status
Measured, Indicated
Billiton Ravensthorpe
million tonne
% Ni
% Co
million tonne
%Ni
%Co
108.6
0.8
0.06
169.4
0.8
0.03
Inferred
297.0
0.8
0.06
-
Total
405.6
0.8
0.06
169.4
-
-
0.8
0.03
Heron’s Future in the Nickel Laterite Industry
Heron’s preferred position is to develop its nickel assets as a consortium in association with a major base metal
company. The established infrastructure and the absence of sovereign risk in Western Australia is a significant
advantage for Heron’s strategy. The preferred scale of operation for a major base metal company would be 4mtpa
or more, such as that proposed for Cawse Stage Two.
Of key importance for commissioning a major Nickel Laterite project is pilot plant test work. The existing Cawse
plant can operate as a large-scale pilot plant suitable for metallurgical testing for future Goongarrie-Cawse "CNO II
scale" expansions. A firm foundation exists for Heron’s future as a Second Generation Nickel Laterite ore supplier.
Using
Ravensthorpe
as a yardstick,
Heron’s 406
million tonne
resource is a
most valuable
asset.
Heron’s Nickel
Laterite mineral
resource base
provides the
pathway to a
future 4 to 10 mtpa
Nickel Laterite
operation based
in the Kalgoorlie
region, and
producing up to
10% of the
world’s nickel.
Tektites found by Keith at
McAuliffe’s Soak, Avoca country.
Goongarrie Nickel Project.
There are 50,000 drill chip trays
catalogued at the Heron
Kalgoorlie office within Heron’s
drill chip archive system.
Page 6
2.0 CONTINUED
OPERATIONS REVIEW
HERON MANAGEMENT
Tenement Management
Heron’s tenement
portfolio is
without equal for
an emergent
resource
company.
Joint venturing is a key component of Heron’s non-nickel tenement management strategy. Heron has in
operation, or has offers on the table, for some 16 Joint Ventures involving Gold, Base Metals and Iron Ore.
These industry associations cover some 136 tenements and will see a minimum Department of Minerals
and Petroleum Resources ("DMPR") commitment of $1.4 million spent by our partners annually. In addition
a minimum total outlay of $9.675 million can be spent on Heron’s joint ventured tenements whilst Heron is
free-carried. By this process Heron retains free equity in its gold and non-nickel developments, and in
terms of risk-minimisation and success optimisation, the Heron non-nickel portfolio provides a low risk and
low cost means of asset creation. These assets are now the basis of the Avoca Initial Public Offer.
TABLE 2: HERON RESOURCES LIMITED
Summary of 100%-Owned and Joint Venture Tenements
Project
Number of Tenements
Pending Granted
Even with its
large tenement
holding,
Heron’s DMPR
expenditure
commitment is
managed at
$1.2m per
annum, through
joint venture.
Heron Nickel
Heron 100% - owned
Area
DMPR*
Expenditure Commitment
$million
Total
km2
HRR
JV
Total
121
35
156
4,607
0.92
0.00
0.92
Avoca Precious Metal
Avoca 100% - owned
84
12
96
4,089
0.16
0.00
0.16
Joint Venture Current
39
89
128
3,809
0.00
1.42
1.42
8
0
8
83
0.00
0.00
0.00
131
101
232
7,981
0.16
1.42
1.58
Balladonia Oil Shale
Heron 100% - owned
33
7
40
5,246
0.04
0.00
0.04
Yilgarn Regional
Heron 100% - owned
40
8
48
1,222
0.06
0.00
0.06
325
151
476
19,056
1.18
1.42
2.60
JV Negotiations
Avoca sub-total
TOTAL
*DMPR WA Department of Minerals and Petroleum Resources
Heron in the Community
The Company appreciates the assistance provided by the Goongarrie, Gindalbie, Hampton Hill and Mount
Vetters pastoral stations in terms of field camp sites, drill site preparation and rehabilitation. These stations
have a long established land care ethic, under which Heron works at all times.
Heron has at all
times attempted
to respect
Indigenous
Culture in the
course of its
exploration.
Heron is an equal opportunity employer, committed to the community of Kalgoorlie-Boulder. It has
supported Work for the Dole programs, and several Aboriginal training schemes. The Company is proud
to be a long term sponsor of Ngunytju Tjitji Pirni Aboriginal Corporation ("NTP"), an organisation committed
to Aboriginal mother and children’s health in the Eastern Goldfields. Heron’s funding of NTP is part of its
Native Title access arrangement. The funding assistance provided by Heron has helped NTP achieve a
nation-wide recognition as a leader in indigenous pediatrics, for which Heron is most proud. Well done to
Jenny, Coral, Paula and dedicated staff and committee members.
Heron, as do all Australian mineral explorers, works within the framework of Native Title. The Company is
committed to a policy of cultural respect and negotiation with the Aboriginal custodians of our exploration
land. To the claimants of this land and the Goldfields Land Council, we once again express our
appreciation of their patient negotiation, and ongoing site clearance field work.
The Heron Team
During year, Senior Geologist Alan Rudd and Mara had their third child, a son Ben Diesel. Project Geologist
Simon Gobbett and Olivia married. Long term stalwart, Doug Krepp from Karlkurla Environmental has fully
recovered from major surgery. Exploration Manager Dave Crook became president of the HannansKalgoorlie Rotary Club.
Geoff Collis and Des Steel joined the team during 2001 with Geoff as Exploration Manager of Avoca, and
Des as Tenement Manager of Heron. Their impact has been immediate, with the impressive Avoca project
list largely due to their efforts.
Page 7
2.0 CONTINUED
OPERATIONS REVIEW
RESOURCE STATUS OF NICKEL LATERITE PROJECTS
Detailed resource estimation incorporating the 2001 Pamela Jean Zone exploration successes is current.
On the basis of 40x20m pre-mine drilling (Measured Mineral Resource), 80x80m resource definition drilling
(Indicated Mineral Resource) and 400x80m reconnaissance drilling (Inferred Mineral Resource), the total
Heron resource inventory as at January 2001 at a 0.75% Ni cut-off is detailed below. Updated resource
estimates will be completed once recent drilling results are fully interpreted and validated.
TABLE 3: HERON RESOURCES LIMITED NICKEL PROJECTS
Indicated and Inferred Mineral Resource Inventory, 0.75% Ni Lower Cut-Off
Project
Ni
%
Co
%
17.7
62.4
6.2
4.3
5.8
12.3
1.08
1.08
1.07
1.04
0.91
1.02
0.06
0.10
0.11
0.08
0.12
0.06
1.31
1.47
1.52
1.34
1.39
1.26
108.6
1.06
0.09
1.41
8.5
2.3
3.9
8.1
1.4
9.8
5.0
1.3
1.4
2.8
0.7
0.5
1.04
1.02
1.04
1.17
1.23
1.04
0.96
0.85
0.87
0.91
0.83
0.75
0.06
0.09
0.08
0.07
0.10
0.07
0.09
0.08
0.05
0.09
0.04
0.04
1.29
1.37
1.35
1.45
1.63
1.32
1.31
1.15
1.09
1.28
0.99
0.91
45.7
1.03
0.07
1.33
154.3
1.05
0.08
1.39
11.6
2.1
1.15
1.03
0.08
0.03
1.46
1.16
13.6
1.13
0.07
1.41
6.4
2.8
2.9
0.93
1.11
0.99
0.09
0.05
0.10
1.27
1.30
1.37
Total Yerilla
12.1
0.99
0.08
1.30
KEITH KILKENNY LAVERTON SUB-TOTAL
25.7
1.06
0.08
1.36
180.1
1.05
0.08
1.38
Goongarrie Hill
Goongarrie South
Scotia Dam
Siberia
Ghost Rocks
Ghost Rocks
Pit
GN1
GN2
GN3
SB1
GR1
GR2
Strike
km
Width
km
5.80
7.00
2.40
1.60
3.00
4.50
0.20
0.60
0.30
0.24
0.08
1.00
Total Goongarrie
Acra North
Acra North
Wellington East
Wellington East
Wellington East
Wellington East
Wellington East
Wellington Fold
Wellington North
Binti Binti
Wyo Well
Acra
KA1
KA2
KA3
KA4
KA5
KA6
KA8
KA9
KA10
BB1
WW1
AA1
1.60
0.40
0.40
1.90
1.70
0.50
0.50
2.50
3.60
2.40
1.00
0.70
0.12
0.20
0.12
0.20
0.16
0.08
0.08
0.20
0.16
0.16
0.16
0.30
Total Kalpini
KALGOORLIE REGION SUB-TOTAL
Lake Rebecca
Lake Rebecca
LR1
LR2
2.20
1.10
0.30
0.15
Total Lake Rebecca
Boyce Creek
Lady Byron
Aubils
HERON TOTAL
YE1
YE2
YE3
1.00
0.60
0.80
0.20
0.20
0.20
Tonne
Million
Ni4Co*
%
During 2001,
Heron has
converted the
majority of its
Goongarrie South
mineral resources
to the Measured
and Indicated
status required
for Feasibility
Studies.
* “Ni4Co%” is %Ni plus 4 times %Co, and is an “equivalent” nickel grade. The multiplier factor reflects the price
of cobalt generally being around four times that of nickel.
Page 8
2.1
OPERATIONS REVIEW
KALGOORLIE NICKEL PROVINCE
Ore Genesis Studies
The priority
during the 2001
Financial Year
has been to drill
out the various
Goongarrie South
resources to a
40x20m pattern,
and complete an
8 hole Diamond
Drill program for
metallurgy and
ore genesis
studies.
Detailed research studies were completed at the Pamela Jean Zone to elucidate the controls on
Goongarrie mineralisation, particularly bedrock controls.
There is a strong correlation of ore zone mineralogy with ore grades and metallurgical performance. The
premium ore is dominantly goethite with subordinate gibbsite and kaolin, and is termed
"Goongarrie Goethite" (CUP, subordinate CUF ore types, refer Table 4). The ore zones have a
remarkably uniform mineralogy, related to three separate cycles of weathering and duricrust formation:
TABLE 4: ORE TYPE MINERALOGY
Duricrust Cycle
Associated Ore Type
Mineralogy
Upper Carbonate Cycle
not applicable
calcite-ankerite-quartz
Middle Ferricrete Cycle
Laterite Ferruginous
LF
goethite-alunite-kaolin
Lower Goethite Cycle
Clay Upper
CU
gibbsite-goethite
Clay Upper Pyrolusitic
CUP
goethite-gibbsite
Clay Upper Ferruginous
CUF
goethite-kaolin-maghemite
Clay Upper Siliceous
CUS
quartz-maghemite-goethite
Magnesia Discontinuity
Clay Lower Siliceous
CLS
antigorite-chlorite-talc-quartz
The Pamela Jean Zone deep drilling has encountered brecciated and sulphide-bearing ultramafic
bedrock. This mineralogy has promoted particularly intense weathering conditions, leading to the formation
of exceptionally thick laterite.
Brecciation is related to fault splays of the Bardoc Tectonic Zone, which occurs at the eastern contact of
the mineralised Goongarrie ultramafic unit.
The breccia zones provide a conduit for ground water, allowing oxidising fluids to percolate below the limit
of normal near-surface weathering. The groundwater has also removed oxidation products, such as
dolomite/magnesite and silica, leaving behind a residual nickel-cobalt bearing goethite.
Metallurgy
Goongarrie
Goethite has the
best documented
bench scale
metallurgical
performance for an
Eastern Goldfields
Laterite, notably
the low acid
consumption.
Metallurgical assessment was completed on 14 drill core samples by Lakefield Oretest of Perth.
TABLE 5: METALLURGICAL PERFORMANCE
Ore Type
Clay Upper Pyrolusitic
Screen
Upgrade
%
Nickel
Recovery
%
Cobalt
Recovery
%
Acid
Slurry
Consume Density
kg/tonne w/w%
Settling
Rates
minutes
CUP
Nil
97.5%
95.0%
283
31%
2.15
Clay Upper Ferruginous CUF
Nil
96.7%
82.9%
285
28%
84.50
Clay Upper Siliceous
CUS
55%
95.9%
92.3%
389
32%
10.83
Clay Lower Siliceous
CLS
28%
92.5%
78.5%
616
32%
27.25
Pyrolusitic Ore, which is the dominant ore type at the Pamela Jean Zone, is confirmed as a premium
product with high metal recovery, low acid consumption, good ore slurry density and fast settling from the
slurry. More importantly, the Goongarrie Goethite Ore displays remarkable continuity in mineralogy and
chemistry, which is a critical feedstock parameter. At a 1.25% Ni cut-off grade, Goongarrie Goethite
consistently assays in excess of 1.5% Ni, 0.15% Co and 40% FeO, with less than 0.5% MgO.
Hydrological Studies
Future
Goongarrie
mining operations
should not be
impacted by
ground water
flow.
Page 9
Hydrological studies are well advanced, with a detailed drill hole piezometer array having been installed for
water level monitoring. A confined aquifer is present below 60m at the base of the main Goethite Ore
profile, associated with Lower Siliceous Ore. Water quality is 38,000-50,000 mg/l TDS, which is
comparable to the process water currently in use at Cawse. The good water quality indicates the aquifer
is not being recharged from surrounding hypersaline lake systems.
The shallow Goethite Ore zones do not carry significant ground water, and there should be minimal wet
mining difficulties.
2.1 CONTINUED
OPERATIONS REVIEW
TABLE 6: GOONGARRIE SOUTH PROJECT
RC Drilling Significant Intersections, 0.75% Ni Cut-off, 2001 Drilling
Hole
Number
North
m
East
m
GSRC672
GSRC724
including at a
GSRC870
GSRC876
including at a
GSRC891
GSRC898
including at a
GSRC901
GSRC902
GSRC907
GSRC912
GSRC916
GSRC924
GSRC942
including at a
GSRC966
including at a
GSRC970
including at a
GSRC973
including at a
GSRC990
GSRC992
GSRC1001
including at a
GSRC1008
GSRC1012
GSRC1020
including at a
GSRC1022
including at a
GSRC1023
GSRC1025
including at a
GSRC1030
including at a
GSRC1032
GSRC1034
including at a
GSRC1036
including at a
GSRC1037
GSRC1039
GSRC1040
including at a
GSRC1049
including at a
GSRC1052
GSRC1100
including at a
GSRC1106
GSRC1126
including at a
70,637 2,855
71,440 2,454
1.25% Ni cutoff
69,356 3,236
69,397 3,236
1.25% Ni cutoff
69,377 3,237
69,680 3,140
1.25% Ni cutoff
69,640 3,180
69,640 3,140
69,600 3,140
69,560 3,140
69,520 3,140
69,440 3,220
69,200 3,220
1.25% Ni cutoff
69,000 3,140
1.25% Ni cutoff
68960 3140
1.25% Ni cutoff
68920 3220
1.25% Ni cutoff
69,380 3,200
69,360 3,200
69,720 3,140
1.25% Ni cutoff
69,800 3,100
69,840 3,060
69,680 3,120
1.25% Ni cutoff
69,600 3,120
1.25% Ni cutoff
69,560 3,120
69,640 3,120
1.25% Ni cutoff
69,720 3,120
1.25% Ni cutoff
69,680 3,160
69,640 3,160
1.25% Ni cutoff
69,600 3,160
1.25% Ni cutoff
69,560 3,200
69,520 3,200
69,520 3,160
1.25% Ni cutoff
69,440 3,200
1.25% Ni cutoff
69,380 3,160
68,960 3,160
1.25% Ni cutoff
69,000 3,160
69,200 3,240
1.25% Ni cutoff
From
m
49
10
12
20
12
17
17
67
75
29
39
35
38
29
21
21
24
18
42
21
32
22
25
17
18
42
77
38
30
29
43
30
66
30
26
118
40
73
37
36
66
33
44
34
26
29
31
20
21
20
16
36
17
19
27
To
m
91
33
33
63
58
56
57
106
105
97
117
124
124
94
52
64
52
57
50
46
45
41
38
94
66
112
112
101
97
103
80
141
121
87
144
139
144
128
118
107
106
82
82
82
85
122
98
52
50
76
62
62
58
63
49
Interval
m
42
23
21
43
46
39
40
39
30
68
78
89
86
65
31
43
28
39
8
25
13
19
13
77
48
70
35
63
67
74
37
111
55
57
118
21
104
55
81
71
40
49
38
48
59
93
67
32
29
56
46
26
41
44
22
Ni
%
Co
%
Ni4Co*
%
1.25
1.65
1.71
1.39
1.48
1.57
1.51
1.42
1.52
1.15
1.11
1.19
1.23
1.11
1.62
1.34
1.54
1.13
2.03
1.30
1.54
1.58
1.81
1.32
1.41
1.30
1.59
1.23
1.28
1.29
1.55
1.37
1.85
1.28
1.31
1.82
1.33
1.59
1.24
1.39
1.60
1.47
1.59
1.37
1.33
1.33
1.49
1.62
1.67
1.33
1.30
1.58
1.17
1.39
1.68
0.223
0.325
0.354
0.187
0.111
0.122
0.115
0.253
0.232
0.073
0.094
0.131
0.081
0.088
0.212
0.112
0.203
0.291
1.147
0.425
0.775
0.315
0.424
0.084
0.127
0.152
0.245
0.057
0.076
0.077
0.110
0.070
0.111
0.101
0.123
0.393
0.087
0.129
0.197
0.150
0.208
0.141
0.175
0.124
0.126
0.141
0.182
0.208
0.222
0.042
0.254
0.408
0.194
0.198
0.314
2.14
2.95
3.13
2.14
1.93
2.06
1.97
2.43
2.44
1.44
1.49
1.71
1.55
1.46
2.47
1.78
2.35
2.30
6.62
2.99
4.64
2.84
3.50
1.66
1.92
1.90
2.57
1.46
1.58
1.59
1.99
1.65
2.30
1.68
1.80
3.39
1.68
2.10
2.03
1.98
2.44
2.03
2.29
1.86
1.83
1.89
2.22
2.45
2.56
1.50
2.31
3.21
1.95
2.18
2.93
Ni4Co*
m.%
90.06
67.83
65.63
91.96
88.59
80.31
78.66
94.92
73.28
97.85
115.91
152.17
133.71
95.16
76.49
76.61
65.81
89.56
52.96
74.86
60.36
53.97
45.54
127.52
92.24
133.18
90.05
91.93
106.08
118.02
73.66
183.15
126.38
96.04
212.64
71.10
174.51
115.76
164.55
140.91
97.41
99.62
87.09
89.46
108.05
176.14
148.89
78.33
74.10
84.17
106.48
83.41
79.91
95.99
64.49
In Nickel Laterite
mines,
15 Ni4Co.m% is
an acceptable
ore body. At the
Pamela Jean
Zone,
100 Ni4Co.m% is
consistently
recorded.
The spectacular
Ni-Co grades and
substantial ore
zone thickness
underpins the
profitability of the
future Goongarrie
mining operation.
* Ni4Co m.% for a drill intercept is the value of %Ni plus 4 times %Co of the interval multiplied by the intercept in metres.
Page 10
2.1 CONTINUED
OPERATIONS REVIEW
2.1.1 Goongarrie Nickel Project
Heron 100%
Nickel (- gold).
The 521km2 project area covering 44 tenements is located 50-130km NNW of Kalgoorlie along the eastern
flank of the Goongarrie Dome. The western flank of this structure hosts the Cawse Nickel Laterite mine.
The lithological precursor of the Goongarrie and Cawse Nickel Laterite mineralisation is the Walter Williams
Formation komatiite.
Goongarrie South Nickel Prospect
The continuity
and thickness of
high grade ore at
Goongarrie is
without parallel
in Australian
Nickel Laterite
deposits.
During 2001, Heron completed 382 RC drill holes at Goongarrie South for 22,172m.
Exploration has concentrated on 40x20m pre-mine drilling at the Pamela Jean Zone, being the likely
starter pit for future Goongarrie mining operations. The Pamela Jean Zone is characterised by:
•
•
•
•
•
•
Sulphides
occur within the
ultramafic
bedrock
underlying the
Pamela Jean
Zone.
Detailed EM
surveying and
diamond drilling
is required in
order to define
Nickel Sulphide
targets.
The priority is
however to
continue to block
out the Pamela
Jean Nickel
Laterite ore body.
N-S strike length of 2,000m at a 1.25% Ni cut-off.
Mineralisation width typically 80-200m at a 1.25% Ni cut-off.
Shallow depth to the top of the ore envelope, typically 12 to 25m, generating exceptionally low
stripping ratios. The overburden is amenable to low cost scaper mining.
Depths to the base of ore consistently exceeding 100m vertical, with the deepest high grade
intercepts at 144m in the Pamela Jean Deeps.
Metallurgically uniform Goongarrie Goethite assaying less than 0.5% MgO, with low acid consumption.
Good ore zone continuity at high grade. A selected test area was drilled on a 20x20m grid to produce
continuity data for ore reserve modelling. The target area (GSRC036) had a block grade of 1.08% Ni
and 0.08% Co. The in-fill drilling returned a block grade of 1.25% Ni and 0.11% Co with a significantly
higher tonnage estimate.
Within the central Pamela Jean Zone, RC drilling has defined a discrete zone of exceptionally deep
weathering. Drill holes have been completed to depths of up to 160m, still in ore grade saprolite. These
holes confirm complete alteration and weathering of the ultramafic host rock into limonitic clay to depths of
up to 144m (GSRC1025, 1030). This zone, termed the Pamela Jean Deeps, has now been defined
over a strike length of 800m and remains open to the north and south.
The final hole of the 2001 drilling campaign confirmed the Deeps are open to the south, having been offset
to the west by a previously unidentified fault. The necessity for 40x20m detailed drill patterns was
reinforced by this latest Deeps discovery.
The ultramafic bedrock underlying the Pamela Jean mineralisation contains a structurally complex zone of
brecciation and shearing. Discrete zones of talc-carbonate and talc-chlorite schist separated by bleached
but otherwise undeformed olivine adcumulate are present. Disseminated and stringer sulphide
mineralisation (typically 5%) has been identified within the shear zones. ElectroMagnetic (“EM”) surveys
were completed by Curtin University testing potential Nickel Sulphide targets. Interpretations are awaited.
Having elucidated the mineralisation controls at the Pamela Jean Deeps, it is now apparent that a number
of earlier Goongarrie 80x80m drill holes have not gone to sufficient depth. In order to screen for such
under-tested areas, trial gravity and EM surveys were completed to map the base of mineralisation.
Interpretations are awaited.
Heron has received several joint venture expressions of interest to explore for Nickel Sulphides beneath the
Pamela Jean Deeps. At the current time however, Heron wishes to retain a 100% unencumbered interest
at Goongarrie, to help facilitate the potential rationalisation of the Goongarrie and Cawse nickel assets.
Simon Gobbett (left) and Geoff Collis (right)
during the Goongarrie piezometer installation, for
monitoring the ground water levels.
Doug Krepp was responsible for setting up the
piezometer field management.
Page 11
FIG.2: GOONGARRIE NICKEL PROJECT
Goongarrie South Ore Zones
The high grade
1.5% Ni drill
holes show
excellent
clustering into
specific ore
zones. These are
future Stage I
pits, being the
Pamela Jean,
Elsie Tynan and
Patricia Anne
Zones.
The Pamela
Jean, Elsie Tynan
and Patricia
Anne most likely
represent the
main central
channel of an
ancient komatiite
lava flow, and the
Daphne Mina,
Sylvia Virginia
and Mavis Irene
represent flood
plain subsidiary
lava flows.
Drill section interpretations,
Goongarrie South.
Page 12
2.1 CONTINUED
OPERATIONS REVIEW
Goongarrie Hill Prospect
Goongarrie Hill
contains a large
tonnage of
screen-upgrade
Siliceous Ore
suitable for
processing in a
CNO II scale of
operation.
During 2001, Heron completed 83 RC drill holes at Goongarrie Hill for 2,177m, closing off low grade ore
positions on the western side of the ore body.
TABLE 7: GOONGARRIE HILL PROSPECT
Hole
Number
North
m
East
m
From
m
To
m
Interval
m
Ni
%
Co
%
Ni4Co
%
Ni4Co
m.%
GWRC150
GWRC124
GWRC174
76,456
76,356
76,577
1,656
1,656
1,574
6
5
4
13
11
11
7
6
7
1.24
1.19
1.14
0.111
0.171
0.056
1.46
1.53
1.25
10.25
9.16
8.75
The ore type is uniformly shallow Cawse-style Siliceous Ore, with excellent screen upgrade characteristics.
The current Goongarrie Hill drilling is almost entirely on a 400x80m pattern, with a major 80x80m infill drilling
program required. The Goongarrie South 40x20m RC drilling currently has priority.
Scotia Dam Prospect
Scotia Dam
contains
exceptional
cobalt grades in
Goethite Ore,
suitable for
immediate
processing in a
CNO I scale of
operation.
During 2001, Heron completed 113 RC drillholes at Scotia Dam for 4,835m. Significant intercepts include:
TABLE 8: SCOTIA DAM PROSPECT
Hole
Number
North
m
East
m
From
m
To
m
Interval
m
Ni
%
Co
%
Ni4Co
%
Ni4Co
m.%
GSRC759
GSRC767
GSRC788
GSRC792
GSRC802
58,638
58,801
59,278
59,442
59,599
6,457
6,375
6,216
6,138
6,130
18
17
15
14
15
53
56
35
31
30
35
39
20
17
15
1.10
1.10
1.15
1.19
1.54
0.206
0.072
0.142
0.137
0.376
1.92
1.39
1.72
1.74
3.04
67.34
54.34
34.36
29.58
45.67
The Scotia Dam ore is relatively shallow, and uniformly cobalt-rich. Detailed 40x20m pre-mine drilling will
be completed once mining leases are granted.
Siberia Prospect
Siberia is the
northern strike
extension of the
Cawse laterite
deposits, suitable
for a CNO II
scale of
operation.
During 2001, Heron completed 12 RC drillholes at Siberia for 417m. Significant intercepts include:
TABLE 9: SIBERIA PROSPECT
Hole
Number
North
m
East
m
From
m
To
m
Interval
m
Ni
%
Co
%
Ni4Co
%
Ni4Co
m.%
SBRC003
SBRC007
SBRC009
SBRC010
62,758
62,358
62,358
62,358
4,496
4,496
4,656
4,736
5
2
4
10
56
9
14
16
51
7
10
6
1.03
1.26
1.05
0.78
0.076
0.074
0.072
0.169
1.33
1.56
1.34
1.46
68.03
10.89
13.35
8.74
Siberia is dominantly Siliceous Ore, entirely comparable to “run-of-mine” Cawse ore.
Ghost Rocks Prospect
Ghost Rocks is a
further resource
of screenupgrade
Siliceous Ore,
suitable for a
CNO II scale of
operation.
During 2001, Heron completed 81 RC drillholes at Ghost Rocks for 2,299m. Significant intercepts include:
TABLE 10: GHOST ROCKS PROSPECT
RC Drilling Significant Intersections, 0.75% Ni Cut-Off, 2001 Drilling
Hole
Number
North
m
East
m
From
m
To
m
Interval
m
Ni
%
Co
%
Ni4Co
%
Ni4Co
m.%
GRRC145
GRRC158
GRRC166
GRRC168
31,758
30,958
30,158
30,158
3,095
3,495
4,375
4,215
2
16
4
8
22
14
20
12
16
28
12
4
8
8
6
1.01
1.33
1.30
1.12
1.00
0.071
0.083
0.089
0.127
0.048
1.30
1.66
1.65
1.63
1.19
15.57
6.63
13.22
13.02
7.13
Ghost Rocks is dominantly Siliceous Ore, entirely comparable to “run-of-mine” Cawse ore.
Page 13
2.1 CONTINUED
OPERATIONS REVIEW
FIG.3: GOONGARRIE CROSS SECTIONS
Showing RC Drill Intersections and Pamela Jean Zone Proposed Pit Outline
These four drill
Sections are
regularly spaced
at 200m N-S,
and show the
consistency of
“run-of-mine”
drilling results at
the Pamela Jean
Zone.
The Pamela Jean
Zone has a
shallow
overburden of
12-25m, and
thick ore zone of
20-118m. This
results in a low
stripping ratio,
which underpins
the profitability of
the future
Goongarrie
mining operation.
Strip ratios are
also minimised
due to pit wall
batter angles
naturally
following the ore
body shape.
The continuity of
high grade ore
(>1.25%Ni) is
remarkable, both
within and
between
sections.
Flitch plans
(which are
horizon sections
through the ore
body) also show
remarkable
continuity, and
confirm
individual
1.5% Ni mining
ore blocks to
consistently
exceed 400x40m.
Page 14
2.1 CONTINUED
OPERATIONS REVIEW
2.1.2 Kalpini Nickel Project
Heron 100%.
Nickel (- gold).
Heron has
one of the
largest ultramafic
tenement holdings
in the Eastern
Goldfields.
As well as
hosting Nickel
Laterite, these
ultramafics have
excellent
potential for
Nickel Sulphide
targets.
The 1,041km2 project area covering 39 tenements is located 65km NE of Kalgoorlie. Infrastructure is good.
Kalpini is 75km E of the Cawse processing plant, and 45km NE of the Bulong Nickel Operation. Four key
Mining Leases have been granted, and subject to Notice of Intent, are open to mining.
Several new tenements have been acquired, such that Heron now has a near contiguous landholding from
Kookynie in the north to Transline in the south, an ultramafic strike of 150km. This includes from north to
south the Boomerang, Binti Binti, Kalpini, Acra, Transline and Cowarna Rocks Nickel Laterite deposits and
of particular significance, two recorded Nickel Sulphide occurrences at Binti Binti and Acra. The
demonstrated sulphide endowment of the Kalpini belt is an important exploration guide for Nickel Sulphide.
In-fill drilling on an 80x40m pattern to confirm ore continuity was completed at Kalpini, with 53 RC drill holes
for 1,355m.
TABLE 11: KALPINI PROJECT
Hole
Number
North
m
East
m
WNRC015 52,400 7,240
WNRC016 52,400 7,280
WERC362 37,760 15,720
WERC364 37,760 15,640
ANRC114
28,477 7,576
ANRC116
28,477 7,656
ANRC117
28,477 7,696
including at a 1.25% Ni cutoff
ANRC123
25,357 9,576
including at a 1.25% Ni cutoff
Whereas
Goongarrie is
a Goethite Ore
with low Mg and
high Co, Kalpini
tends to be a
Saprolite Ore
with higher Mg
and relatively
low Co.
The Kalpini ore
type is suited to
the production of
ferro-nickel in an
arc furnace.
From
m
To
m
Interval
m
Ni
%
Co
%
Ni4Co
%
Ni4Co
m.%
27
24
14
4
3
3
13
14
19
21
35
41
23
12
12
20
59
32
34
23
8
17
9
8
9
17
46
18
15
2
0.98
0.87
1.42
1.03
0.99
0.92
1.10
1.52
1.02
1.57
0.107
0.054
0.048
0.077
0.04
0.042
0.057
0.096
0.096
0.29
1.40
1.09
1.61
1.34
1.15
1.09
1.33
1.90
1.40
2.73
11.24
18.46
14.49
10.70
10.35
18.496
61.09
34.27
21.06
5.46
A geological evaluation of basal komatiite nickel-copper sulphide targets was completed, with the
Wellington East Prospect laterite resources at Zones 4 to 6 emerging as the prime Nickel Sulphide
targets. Soil geochemistry within the Nickel Sulphide target area has coincident anomalies of 114-602ppm
Cu and 788-1,941ppm Ni, notably at the Zone 4 Western Ultramafic. A soil anomaly of 50-230ppb Pd
occurs at Zone 6, again indicating a potentially favourable Nickel Sulphide setting.
The Acra Nickel Sulphide Prospect immediately south of Acra North Laterite Zone 1 consists of three
separate steeply dipping komatiite horizons, interlayered with mafic and felsic volcanics. The uppermost
Acra komatiite unit hosts Nickel Sulphide mineralisation.
Metallurgical Scoping Studies were commenced to evaluate the viability of a ferro-nickel smelting operation
at Kalpini. Previous metallurgical results from Kalpini have been re-evaluated, and on initial studies, confirm
a suitable ferro-nickel smelter feed stock.
2.1.3 Widgiemooltha Nickel Project
Heron 100%.
Nickel - gold.
The 185km2 Widgiemooltha project area covering 7 tenement applications is located 120km SSE of
Kalgoorlie within the southern extension of the Kunanalling and Zuleika Shear systems.
The project area covers the Mariners-Dordie Rocks Nickel Sulphide-hosting komatiite succession. An
advanced stage Nickel Sulphide target has been generated at the Pioneer Prospect. Field checking has
confirmed a felsite-sulphidic black shale footwall contact overlain by sulphide-bearing komatiite. Stream
geochemistry is anomalous, with 700ppm Ni and 16ppb Pd.
Aeromagnetic interpretation at Pioneer confirms three well defined ultramafic units striking N-S. The
eastern-most ultramafic correlates with the highly mineralised Mariners-Redross Nickel Sulphide line. The
western-most ultramafic unit is a well exposed ridge of tremolite-actinolite-chlorite-biotite schist. Significant
rock-chip anomalism indicative of Nickel Sulphide settings was identified, with up to 0.23% Ni, 0.03% Cu,
25ppb Pt and 18ppb Pd.
Page 15
2.2
OPERATIONS REVIEW
SOUTHERN CROSS NICKEL PROVINCE
NICKEL LATERITE EXPLORATION, IRON PRODUCTION ROYALTY
2.2.1 Bungalbin Nickel Project
Heron 100%.
Nickel - gold.
The 983km2 project area covering 10 tenement applications is located 100-130km NNE of Southern
Cross. Dominant lithology is ultramafic, basalt and banded iron formation (BIF).
Nickel Exploration
High priority Siliceous Nickel Laterite targets are indicated from Heron’s literature reviews. Follow up of the
nickel targets will commence once tenements are granted.
Previous nickel exploration at Bungalbin was directed towards ground EM targeting of Nickel Sulphides,
with very few drill holes completed. Heron plans to carry out systematic RC drilling of the Nickel Laterite
horizons. The aim is to identify a stand alone Nickel Laterite operation.
Gold Exploration
Mafic-hosted gold mineralisation targets are indicated from Heron’s literature research. Historic gold
production from the eastern project area is recorded from the excised Mount Dimer mine which produced
126,000 ounces of gold at a head grade of 7.5g/t Au, along with 189,000 ounces of silver. Gold
mineralisation occurs within an enriched laterite profile developed above quartz stockwork systems. There
is a major NW trending structural corridor that controls mineralisation in the Mount Dimer area. The
structure is 1km wide and has been traced over a strike length of 5.5km within Heron’s project area.
Heron controls a
40km strike
length of
ultramafic rock at
Bungalbin, totally
covered by
surficial laterite.
This represents a
significant new
Nickel Laterite
target.
At the Marda gold mining centre in the western project area, located 5km NW along strike of Heron’s
ground, recent exploration success has resulted in the definition of a gold resource of 2.49 million tonnes
at a grade of 1.99g/t Au. The Marda deposits occur within intensely folded BIF and mineralisation is
associated with the most deformed and structurally thickened BIF zones. The ore zones are steeply
plunging and rich in sulphide mineralisation.
2.2.2 Bungalbin Iron Ore Project
Heron 100%. Portman Limited right to acquire Iron Ore rights by providing a Royalty.
Heron retains all other mineral rights, notably Nickel-Gold.
The 202km2 project area covering 3 granted tenements is located 105km N of Southern Cross and 60km
N of the Portman Koolyanobbing Iron Ore operation. Dominant lithology is an E-W trending ridge of BIF.
The project area includes an Iron Ore Inferred Mineral Resource estimated from Heron’s open file study
at 65.7 million tonne at 57.9% Fe, with a calcined grade of 64.1% Fe. Within this global resource, there
is good potential for smaller structurally controlled high grade iron-low phosphorus ore positions. The total
prospective BIF strike extent within the project area is 40km.
Portman has commenced exploration within the Royalty tenements. Initial drilling at the Mount Jackson J4
deposit amounted to 1,400m within 12 wide spaced drill holes. Limonite-goethite mineralisation was
routinely intersected yielding an average grade of 57.2% Fe when using a lower cutoff of 55% Fe. A
comprehensive costeaning program is planned to evaluate the eluvial deposits (kankar) recently identified
at Bungalbin.
The current
feasibility
schedule by
Portman is for
possible mining
at Bungalbin in
2003, providing
Heron with a
cash flow to help
fund future Nickel
Laterite
developments.
An updated Inferred Mineral Resource is currently being estimated and all information will be incorporated
into a feasibility study by Portman. This study may include planning for a railway spur-line into the Bungalbin
and Mount Jackson deposits to supplement an enlarged Koolyanobbing Iron Ore operation. The
Esperance Port Authority has completed dredging of the harbour to accommodate full loading of 75,000t
Panamax vessels for shipping Iron Ore.
John Carlisle’s camp, a
touch of style in the
Balladonia bush.
Not much style but a shovel
makes a good hotplate for the
lunch time barbecue.
Page 16
2.3
OPERATIONS REVIEW
KEITH KILKENNY-LAVERTON NICKEL PROVINCE
NICKEL LATERITE EXPLORATION
Heron’s
Keith Kilkenny
Province nickel
tenements cover
a 400km strike
length sequence
which includes
rift-related
ultramafic rocks.
The ultramafics
host documented
Nickel Laterite
occurrences and
include highly
prospective
Nickel Sulphide
settings.
Heron’s Keith Kilkenny Province Nickel Laterite projects are associated with discrete rift-related ultramafic
olivine mesocumulate channels, in contrast to the more sheet-like olivine adcumulates of the Kalgoorlie
Nickel Province Walter Williams Formation. The Keith Kilkenny ultramafic lava channels are considered
prospective for Silver Swan style Nickel Sulphide mineralisation. Heron’s exploration to date has however
been restricted to Nickel Laterite.
2.3.1 Edjudina Nickel Project
Heron 100%.
Nickel (- gold).
The 706km2 project area covering 35 tenements is located 145-175km NNE of Kalgoorlie within the Keith
Kilkenny Tectonic Zone. This rift structure contains ultramafic complexes from north to south at Aubils,
McAuliffe West, Boyce Creek and Lake Rebecca. The ultramafic flows are located on the rift margins
interbedded with basalt, with the rift axes containing coarse sediments.
Nickel targets include the Boomerang Prospect, a series of komatiite mega-channels localised within
the Emu Fault, in an analogous geological setting to the Silver Swan Nickel Sulphide deposit. At the
Monks Well Prospect, Heron has identified Nickel Laterite.
In the course of field work at the Yerilla Prospect, Nickel Sulphide settings were identified, with gossan
assays of up to 0.23% Ni, 0.17% Co, 0.04% Cu, 8ppb Pt and 18ppb Pd. Additionally, semi-massive pyrite
float was located in felsic volcanics. A Teutonic Bore - style VMS setting has been identified, which is
confirmed by anomalous regional lag samples of 203ppm Cu and 395ppm Zn. Gossan assays of up to
0.23% Co, 0.05% Cu and 0.14% Zn are associated with the soil Cu-Zn anomaly.
2.3.2 Mulgabbie Nickel Project
Heron 100%.
Nickel (- gold).
The 4km2 project area covering 2 tenements is located 110km NE of Kalgoorlie. The project area covers
rift-related mafic to ultramafic units striking NNW along the southwest shore of Lake Rebecca.
Advanced discussions are current and previous metallurgical work has been re-assessed indicating
Saprolite Ore at Lake Rebecca may be suited to smelter ferro-nickel production. The ore chemistry is
comparable to Nickel Saprolite Ores being smelted in the Pacific Rim region.
2.3.3 Laverton Nickel Project
Heron 100% Nickel.
MPI Gold Pty Ltd has the Gold rights for Merolia and Mineral Patch Hill.
The 448km2 project area covering 4 tenements is located 50km ESE of Laverton. The main nickel target
is at the Merolia-Mineral Patch Hill Prospects adjoining and immediately north along strike of the
Coglia Well-Irwin Hills Nickel Laterite prospects.
Detailed aeromagnetic coverage has been acquired, and interpretation completed to define zones with
olivine adcumulate units. An 800x80m RC stratigraphic drilling program was completed at Merolia-Mineral
Hill, confirming low grade ore occurrences.
TABLE 12: LAVERTON PROJECT
Hole
Number
North
m
East
m
From
m
To
m
Interval
m
Ni
%
Co
%
Ni4Co
%
Ni4Co
m.%
MPRC003
MPRC007
90,800
89,520
8,940
8,140
63
66
70
72
7
6
0.82
0.89
0.028
0.078
0.93
1.20
6.54
7.20
On the basis of intersected lithologies and komatiite styles, it is
apparent that the Laverton Prospects are more prospective for
Nickel Sulphide mineralisation. Reconnaissance ground EM
surveying is planned.
Drilling at Laverton,
March to July, 2001.
Page 17
2.4
OPERATIONS REVIEW
JIMBERLANA PLATINUM PROVINCE
The Jimberlana Dyke is a layered mafic to ultramafic intrusion emplaced into the granite-greenstone terrain
of the Yilgarn Craton. The Dyke is Lower Proterozoic in age and exhibits many similarities to the Great Dyke
of Zimbabwe, which hosts PGE resources of over 300 million ounces. Similarities to the Great Dyke
include host rocks, age, strike length, width, cross sectional lopolith shape, magmatic stratigraphy and
PGE anomalism documented at the mafic-ultramafic boundary.
PROPOSED
AVOCA
RESOURCES
ASSET
2.4.1 Cowan PGE Project
Heron 100%. Avoca assignment of all mineral rights.
PGE-nickel-copper (-gold).
The 209km2 project area covering 10 tenements is located 12km N of Norseman. Previous drill testing of
ultramafic units during gold exploration programs has intersected up to 10m at 0.8% Ni.
The Cowan Complex of the Jimberlana Dyke was explored for PGE mineralisation by Barrier Exploration
in the early 1970s. The economically significant Lower Layered Series mafic-ultramafic contact is exposed
near Lake Cowan, however most of this Complex is covered by ferruginous laterite and residual soil. Deep
auger sampling by Barrier identified significant Cu-Ni anomalism within the centre of the Dyke as well as
along its margins. Values exceeding 2,000ppm Cu (background 100ppm Cu) and 9,000ppm Ni
(background 500ppm Ni) are common within the anomalous areas. Nickel, copper and chromium are
excellent pathfinder elements used in the search for PGE mineralisation.
Barrier drilled two diamond holes in the centre of the Dyke and three along its margins. The central holes
passed through 80m of heavily weathered ultramafic rock before entering the Lower Layered Series
gabbro-norite sequence. Drill logs recorded considerable limonite staining, possibly after sulphide
mineralisation and a 12m intercept near the base of the ultramafic contained massive bands of magnetite
(-chromite). The best recorded intercept is 1.52m at 0.39g/t Pt and 2.7 g/t Pd, although not all drill core
was sampled. The mineralisation is associated with zones of disseminated sulphide mineralisation located
within a layered dunite-norite sequence.
The Jimberlana
Dyke PGE
Province is the
closest Australian
analogy to the
Great Dyke of
Zimbabwe, one
of the world’s
foremost PGE
resources.
Avoca’s
Jimberlana field
reconnaissance
has confirmed
geological
settings identical
to the Great Dyke
of Zimbabwe.
2.4.2 Dundas Hills PGE Project
The 6km2 Dundas Hills project area covering 4 tenements is located at the western end of the
Norcott Complex and has been explored by both Central Norseman Gold Corporation and WMC at
different times since the early 1970s. Detailed geological mapping shows a completely differentiated rock
suite ranging from serpentinised dunite at the base, through pyroxenite and gabbro, to anorthosite at the
top. Numerous zones of copper mineralisation are present immediately below the mafic-ultramafic contact
within the prospective PGE zone. Rock chip samples from this horizon returned a maximum assay of
9,250ppm Cu.
Detailed soil geochemistry was completed. Coincident copper, platinum and palladium anomalies are
defined over a strike length of 4km and are open to the east. The threshold contours define an arcuate
anomaly coincident with the mapped location of the prospective mafic-ultramafic contact.
The Dundas Hills
platinumpalladium target
zone is
highlighted by
anomalous
Cu-Ni-Pt-Pd soil
geochemistry,
and has not been
tested by
previous drilling.
TABLE 13: DUNDAS HILLS PROJECT
Soil Anomalism
Element
Cu (ppm)
Pt (ppb)
Pd (ppb)
Background
15-20
<10
<5
Threshold
50
20
30
Peak
295
90
440
A bulk sample of soil and saprock was collected from the peak of the anomalous area and
concentrated using a jig. The concentrate assayed 540ppb Pt, 61ppb Pd and 2.1% Cr.
An igneous stratigraphy endowed with PGEs is confirmed.
Bill Cleverly with dried
clay at Lake Raeside
crossing,
Avoca country.
Exploration Manager
David Crook,
Nickel Laterite Clay,
Goongarrie.
Page 18
2.4 CONTINUED
OPERATIONS REVIEW
2.4.3 Mount Norcott PGE Project
The Norcott
Complex has
demonstrated
PGE occurrences
within sulphide
horizons.
Avoca plans
systematic drill
exploration of the
generally soil
covered PGE
target horizon.
The 518km2 Mount Norcott Project covering 3 tenements is located in the central part of the
Norcott Complex approximately 25km ENE of Norseman. Newmont Holdings explored a 20km section
of this Complex in the late1980s. Detailed geological mapping defined a strongly differentiated maficultramafic sequence termed the Upper Layered Series conformably overlying gabbro-norite of the Lower
Layered Series. Numerous copper mineralised outcrops were rock chip sampled with maximum assays
of 0.49g/t Pt and 1.20g/t Pd.
Newmont drilled a single vertical diamond hole through the basal section of the Upper Layered Series
locating patchy sulphides near the top of the gabbro-norite unit. Only two samples were collected, being
from the more sulphidic zones :
TABLE 14: MOUNT NORCOTT PROJECT
WMC Sampling of Newmont Diamond Core
Hole
From
m
To
m
Interval
m
Cu
%
Pt+Pd
g/t
ND1
ND1
67.50
72.80
67.55
72.85
0.05
0.05
0.48
1.12
0.83
1.57
Again, significant PGE endowment is confirmed, with immediate drill targets available to Avoca.
2.4.4 Fraser Range PGE Project
Reconnaissance
soil geochemistry
at Fraser Range
has confirmed
favourable
Voisey’s Bay
style geological
settings.
The 784km2 Fraser Range Project covering 4 tenements is located 170km ENE of Norseman north of the
Eyre Highway.
A research project was completed by Heron for the Albany-Fraser Province which aimed to identify Voisey’s
Bay style nickel-copper-PGE sulphide targets (comparable in age and geological setting to the WMC West
Musgrave discovery). The Heron study has identified a deep crustal structural corridor containing a
discrete suite of magnetic features interpreted as packages of Proterozoic ultramafics within the Fraser
Range Complex. The corridor is marked by elevated Cu, Ni, Co, Cr, Au and Pd soil geochemistry
associated with interpreted anorthosite and troctolite.
The metallogenic concept is the localisation of nickel-copper-PGE sulphides within structurally prepared
targets. Heron has pegged four exploration licence applications to cover these and other targets.
Previous explorers in the project area have confirmed chromite-bearing ultramafic rocks assaying up to
20% Cr and 800 ppb Pt, with drilling returning up to 16m at 1.3% Ni in saprolite.
FIG.4: JIMBERLANA DYKE
Idealised Geological Cross Section through the Jimberlana Dyke
Page 19
2.5
OPERATIONS REVIEW
ILLAARA PROVINCE
VOLCANOGENIC MASSIVE SULPHIDE EXPLORATION
2.5.1 Perrinvale Joint Venture Project
Heron 100%. Subject to Agreement, proposed assignment of Precious and Base Metal rights to Avoca.
Mount Burgess Mining NL right to earn 70% through spending $0.5m.
Copper-zinc-gold.
The 945km2 contiguous project area covering 7 tenements and applications is
located 170-290km NW of Kalgoorlie. The project covers the Illaara Greenstone
Province over a continuous strike of 120km. Heron retains Nickel and Sulphur rights.
PROPOSED
AVOCA
RESOURCES
ASSET
FIG.5: PERRINVALE JOINT VENTURE
Aeromagnetics
A review of all available exploration data within the area has identified several target
areas, including a 30km strike of a multi-element soil anomaly and a 50m thick
possible massive "VMS" gossan. Several under-explored gold occurrences occur
throughout the project area, and a copper occurrence was drilled previously within
the northern project area.
Upper cycle felsic volcanic exhalative units are extensive, and include chert, BIF
and muscovite schist. Three target areas have to date been identified which
warrant follow-up drill exploration:
•
Day Rock Prospect
•
Central Felsic Volcanic Complex
•
Regional As-Sb-Bi-Se anomalies
Possible Volcanogenic
massive sulphide Cu-Zn-Au
Possible Volcanogenic
massive sulphide Cu-Zn-Au
Multi-element target
Since the establishment of the Mount Burgess joint venture, work completed
includes a review of previous exploration, the acquisition and interpretation of
aeromagnetic and Landsat 7 data, field mapping and re-sampling of holes drilled
by previous explorers. A soil sampling program is current.
Jack Otway
is a ‘legend’ in the ranks
of Kalgoorlie prospectors.
Jack is our 19th largest
Shareholder, and is always putting
Heron onto likely prospects such
as Perrinvale.
On his last solo trip to Perrinvale in
the trusty ‘Landie’, Jack had 22
punctures.
Jack has now donated the ‘Landie’
as an exhibit to the Museum of the
Goldfields, Kalgoorlie.
Ian Buchhorn and Jack Otway,
at Jack’s office
Gold prospecting, dry
blowing spoil heaps at
Pennyweight Point, in
Avoca country.
Nickel Laterite drill sample
piles. The dark earthy
material is the high grade ore.
Page 20
2.6
OPERATIONS REVIEW
PROPOSED
AVOCA
RESOURCES
ASSET
ZULEIKA SHEAR ZONE PROVINCE
PRECIOUS METALS EXPLORATION JOINT VENTURES
2.6.1 Snake Hill Joint Venture Project
Heron 100%. Avoca assignment of Precious Metal rights. Heron retains Nickel rights.
Barra Resources Limited right to earn 70% of Gold rights through spending $0.3m.
Gold (-nickel).
The 14km2 project area covering 2 tenements is located 140km NW of Kalgoorlie immediately west of the
Ida Fault. Nickel and gold soil geochemical targets have been defined for RAB drill testing. Exploration
expenditure to date is $0.2 million.
2.6.2 Blister Dam Joint Venture Project
Heron 100%. Avoca assignment of Precious Metal rights.
Placer Dome Asia Pacific right to earn 70% through spending $1.2m. Heron retains Nickel rights.
Gold-nickel.
The Zuleika
Shear Zone is
one of the prime
gold mineralised
structures of the
Eastern
Goldfields, with
intense corporate
activity aimed at
expanding
control of the
Kundana gold
mining centre.
Avoca has a
significant
100% owned,
unencumbered
tenement holding
on the Zuleika
Shear Zone.
Placer Dome Asia
Pacific has been
attracted as a
joint venture
partner at
Blister Dam.
The 120km2 project area covering 8 tenements is located 70km NW of Kalgoorlie on the Zuleika Shear
Zone. The area consists of an extensive sand cover between the Dunnsville, Hawkins Find, Carbine and
Chadwin gold mining centres.
The northern tenement area covers part of the Walter Williams and Siberia Formation ultramafics. Additional
ultramafics are associated with the Zuleika - Kunanalling Shear Zones, and occur at Blister Dam as well as
Frances Lesley and adjacent Heron tenements. These are prospective for Nickel Sulphide and Heron
accordingly retains all nickel rights
Aircore, RC and diamond drilling was completed by Heron and its previous joint venture partners at Blister
Dam, testing beneath previously discovered supergene gold mineralisation. Broad zones of low order
mineralisation (0.1-0.3g/t Au) suggest the presence of a large bedrock alteration system, with a peak
intercept of 14m at 2.89g/t Au. Sub-vertical zones of altered feldspar-phyric basalt, with up to 10%
sulphide (pyrite, pyrrhotite and arsenopyrite), silica flooding and textural destruction within mylonitic zones
all confirm a favourable gold mineralised setting.
2.6.3 Powder Sill Project
PGE-gold.
The 47km2 project area covering 7 tenements is located 45km WNW of Kalgoorlie within the Zuleika Shear
Zone.
The central tenement area contains extensive outcrop of the Powder Sill gabbro. The Powder Sill is a highly
fractionated layered mafic intrusion that is hosted within the Black Flag Group sediments. The sill, a southeast plunging syncline reaches a maximum width of 2.8km within the Heron project area.
Gold occurrences in the Powder Sill region are generally associated with the two major NW trending
regional structures, being the Kunanalling and the Zuleika Shear Zones. Additionally, a NNE trending brittle
fault system traverses the entire project area, being the Black Flag-Royal Standard Faults. These structures
localise the Mount Pleasant gold mining centre 15km NNE.
Detailed geochemistry has been completed with 4,591 auger samples generating a number of coherent
Au and Au-As anomalies.
Gold targets have been partially tested with 590 RAB drill holes completed for a total drill advance of
22,513m. In addition, 400 Aircore holes for 20,000m were completed. Anomalous intersections include
12m at 0.46g/t Au from 36m, 4m at 0.36g/t Au from 52m, and 4m at 0.35g/t Au from 56m, confirming
alteration systems are present, but as yet no ore grade mineralisation. It should be noted that gold
mineralisation in the district is characterised by minimal dispersion halos.
In terms of PGE targets, a well defined PGE soil anomaly is associated with the lower Powder Sill layered
sequence, peaking at 41ppb Pt with coincident 16ppb Pd. Avoca’s Powder Sill PGE exploration target is
considered to be a "Lac des Iles" brecciated gabbro PGE system.
Page 21
2.6 CONTINUED
OPERATIONS REVIEW
2.6.4 Mungari Gold Project
Gold.
The 35km2 project area covering 11 tenements is located 45km WNW of Kalgoorlie in the Kundana gold
mining centre associated with the Zuleika Shear Zone.
Avoca has lodged tenement applications 10km SSE along strike from the Frogs Leg gold discovery on the
ore hosting Zuleika Shear Zone. This is a prime structural setting, hosting from north to south the Kundana,
Raleigh, Kurrawang, Rubicon, Hornet and Frogs Leg gold deposits.
The Avoca Mungari Prospect is interpreted from aeromagnetics as a dolerite sill intruding felsic
volcaniclastics. Avoca mapping confirms abundant quartz vein float. The Mungari geological setting is
entirely comparable to that of Frog’s Leg, in respect of the Zuleika Shear structural association. There have
been a series of major new gold discoveries at the Kundana gold mining centre which together with past
production represent a total endowment for this area of over 4 million ounces of gold. The major recent
discoveries are:
FIG.6: ZULEIKA SHEAR PROJECTS
•
The ABC Line is the continuation of the Strzelecki structure
currently being exploited by Goldfields Ltd at Kundana.
Exploration along this line-of-lode is on-going and resources
currently stand at 971,000 ounces of gold at a grade of 6.6 g/t
Au, divided between the Pegasus, Rubicon and Hornet
deposits. A thin laminated quartz reef emplaced along a
lithological contact hosts the mineralisation.
•
The White Foil gold discovery at Mungari West is now owned
by Mines and Resources Australia Pty Ltd and Goldfields Ltd.
At both White Foil and Avoca’s Mungari Project, the prospective
geological setting is dolerite units occurring between the Zuleika
Shear Zone to the east and Kunanalling Shear Zone to the west.
Resources at White Foil are currently quoted as 11.8mt at 2.4g/t
Au for a total endowment of 915,000 ounces of gold.
•
The Raleigh deposit is a laminated quartz vein emplaced along
lithological contacts. The structure trends parallel to the
Strzelecki-ABC line and can be traced for the full length of
Avoca’s project area, a distance of 4.5km. The current Raleigh
resource is 0.747mt at 41.7 g/t Au for a total endowment of
1,002,000 ounces of gold.
•
The Frog’s Leg discovery by Mines and Resources Pty LtdDioro Exploration NL is a continuation of the ABC line.
Exploration is on-going and the deposit is open in all directions,
including south towards Avoca’s tenements. Resources
currently stand at 5.07mt at 4.6g/t Au for a total endowment of
750,000 ounces of gold.
Prospect Locations and Targets
Exploration by Heron and its former Joint Venture partner on Avoca’s
northern project area between 1998 and 2000 included a comprehensive program aimed at locating
extensions to the Kundana gold deposits. High resolution aeromagnetic surveys confirmed similar
lithologies and structural settings to both the Kundana and White Foil deposits. Auger soil geochemistry
defined six significant gold-anomalous targets, all coincident with dilatant structural sites identified using the
geophysical data. Four of these targets were RAB drill tested, defining 100ppb Au gold-in-saprock
anomalism. Deep follow-up of these anomalies was not undertaken. These targets will be reevaluated in light of recent exploration success at Raleigh, which comprises a very small target
and is not accompanied by a large dispersion halo.
Bill Cleverly, shaving
day at Billy Goat Donga,
east of Balladonia.
Field Supervisor,
Fred Andrei, at the
Goongarrie field camp.
Page 22
2.7
OPERATIONS REVIEW
PROPOSED
AVOCA
RESOURCES
ASSET
The Gindalbie
Terrain was
previously
explored by
Heron for Nickel
Sulphides.
Importantly,
there are major
regional
structures
present in the
Avoca Shear
Province,
favourable for
large scale gold
systems.
At the Gidgi
Project, Avoca
controls 98km2 of
prime gold
mineralised
ground on the
north and
northeast
outskirts of
Kalgoorlie, the
world’s greatest
gold mining
centre for the last
Century.
AVOCA SHEAR PROVINCE
GOLD EXPLORATION JOINT VENTURES
2.7.1 Gindalbie Terrain Joint Venture Project
Delta Gold NL right to earn 70% in respect of gold through spending $1.0m. Heron retains Nickel rights.
Gold-nickel.
The 200km2 project area covering 5 tenements is located 25-60km NE of Kalgoorlie on the eastern flank
of the Scotia Kanowna Anticline. The main structural control of the project area is the Moriaty Shear Zone,
a bifurcation of the intensely gold-mineralised Boorara Shear Zone, which occurs on the western flank of
the Scotia Kanowna Anticline. The Gindalbie Terrain adjoins the Golden Cities-Federal granitoid gold
province.
Joint venture partner Delta has completed a 800x100m Vacuum drill soil program, to target the northern
extension of the Mulgarrie East gold mine structure. A 40ppb gold anomaly was identified. Ultramafic
rocks are clearly identified by elevated nickel-chrome-copper values. Data interpretation and in-fill sampling
is current.
2.7.2 Gidgi Project
Gold-nickel.
The 98km2 project area covering 7 tenements is located 10-30km N of Kalgoorlie associated with felsic
volcaniclastics and lateritised ultramafic within the Boorara Shear Zone.
The Roaster Prospect is located 15km N of Kalgoorlie associated with the Boorara Shear Zone.
Previous exploration of the tenement area includes aeromagnetics, airborne EM, gravity, geological and
regolith mapping, auger sampling, several phases of follow up RAB and RC drilling at the Roaster and
Penghana Prospects, and regional Aircore-RAB drilling traverses. The geological setting outlined by this
exploration is highly prospective for Kanowna Belle style gold mineralisation.
The Kanowna South Prospect is
located 3km S of Kanowna, some 20km
NE of Kalgoorlie. Previous RAB drilling
includes intersections of up to 1m at
0.95g/t Au. Regional Aircore drilling and
limited RC drilling produced up to 4m at
2.35g/t Au at the Phoenix Prospect. In
view of the deep surface depletion zone,
further drill testing is required. The
similarity of the geological setting to that of
the nearby Kanowna Belle gold mine
means that very detailed drill exploration is
warranted once the tenements are
granted.
At the Kurramia South Prospect,
several extremely large old gold mine
shafts are present on two separate NW
trending lines of lode. Of interest, six
separate sulphide gossans were located.
Peak assays were 0.5% Ni, 0.6% Co,
22ppb Pt and 31ppb Pd. Interestingly, the
host lithology for the gossans is a siliceous
breccia, rather than the ultramafic rock
normally associated with nickel gossans.
Avoca has now
generated several
Eastern Goldfields PGE targets in "nontraditional" host rocks.
Gold joint
advanced.
Page 23
venture
discussions
are
FIG.7: GINDALBIE-GIDGI PROJECTS
Prospect Locations and Targets
2.7 CONTINUED
OPERATIONS REVIEW
2.7.3 Roe Hills Joint Venture Project
Delta Gold NL right to earn 80% in Gold through spending $1.0m. Heron retains Nickel rights.
Gold-nickel.
The 403km2 project area covering 6 tenements is located 60-90km E of Kalgoorlie, adjoining Heron’s
Transline Joint Venture Project. Following a GIS data review and target generation by Heron, a farm-out
has been agreed whereby Delta Gold may earn 80%, with Heron free-carried to decision to mine.
There is a major suite of ultramafic rocks with documented Nickel Laterite occurrences within the project
area. Heron retains all Nickel rights.
A further 9 tenement applications covering 730km2 are currently subject to farm-out negotiation. This
project area has an excellent structural setting, covering the Emu-GMQ-Avoca Fault System. The dominant
outcrop lithology is felsic volcaniclastics and lateritised meta-sediments. From data reviews, several gold
targets have been generated for drill follow-up once the tenements are granted.
2.7.4 Transline Joint Venture Project
Harmony Gold Limited right to earn 80% through spending $0.8m.
Gold-nickel.
The 558km2 contiguous project area covering 14 tenements is located 60km ESE of Kalgoorlie on the
Bulong Anticline straddling the Emu Fault. The project area is partly underlain by the Juglah Monzogranite
which intrudes felsic volcanics. Gold mineralisation is extensively developed, and includes the adjoining
Juglah, Trojan and Transfind gold mining centres.
Heron previously generated several +50ppb gold in soil targets associated with the GMQ Shear Zone,
following which a tenement acquisition program was carried out. GIS compilations were subsequently
completed, identifying from previous exploration several +1g/t Au RAB anomalies, peaking at 6g/t Au.
Harmony has commenced systematic pedogenic carbonate sampling, with 1,500 samples collected.
Several coherent soil gold anomalies have been defined, peaking at 45ppb Au. Reconnaissance drilling
programs have commenced, with initial results including 4m at 1.24g/t Au.
2.7.5 Avoca Project
Heron 100%. Avoca assignment Precious Metal rights. Heron retains Nickel rights.
Gold - nickel.
The 818km2 project area covering 14 tenements is located 80km ESE of Kalgoorlie associated with felsic
volcaniclastic and lateritised ultramafic associated with the Avoca Shear Zone.
The Avoca Shear Zone is a zone of deformation which bisects and runs the entire length of the project area.
This is a major crustal structure controlling gold mineralisation along its length. Gold deposits associated
with the Avoca Shear Zone include Success, Kurnalpi Consols, Scottish Lass, Old Harriett, Rising Sun and
Gessners Find.
The Avoca Shear Zone divides the project into two separate stratigraphic sequences. The western
lithologies consist of sediments that have a significant component of ultramafic units. The eastern area
contains a mixture of felsic volcaniclastics, sediments and banded iron formation. In the southern project
area the Avoca Shear Zone can be traced beneath recent sediments of Lake Randall using aeromagnetic
data. This area is totally unprospected.
The Avoca Shear Zone is in fact covered by recent lake sediments, aeolian sand and transported colluvium
for much of its length. This lack of exposure largely renders historic prospecting activities ineffective, as
well as the more modern surface geochemical based exploration. The focus of exploration in the Avoca
area has previously been towards VMS style base metal deposits and hence exploration for gold has only
been cursory.
The Avoca Shear
Province
contains belts of
Nickel Laterite
bearing
ultramafics.
The ultramafics
are associated
with major
crustal structures
being the
Emu-GMQ-Avoca
Faults.
These structures
localise
regional gold
mineralisation.
To help retain
tenure on the
Nickel Laterites,
Heron has joint
ventured out the
Gold rights, to
assist in meeting
expenditure
commitments.
The Gold Joint
Ventures are now
to be assigned to
Avoca, but Heron
will retain the
Nickel Laterites.
This strategy
allows Heron to
control over
2,000km2 of
Nickel Laterite
terrain in the
Avoca Shear
Province, and
provide Avoca
Resources
Limited with a
free carried
interest in gold
exploration.
Tektite, found by
Keith Quartermaine near
Yerilla, Avoca country.
Typical Goongarrie
Goethite Ore.
Page 24
2.8
PROPOSED
AVOCA
RESOURCES
ASSET
The Keith
Kilkenny Tectonic
Zone ranks
equally with the
Zuleika Shear
and Boulder
Lefroy Fault
as a major
control on gold
mineralisation in
the Eastern
Goldfields.
Heron controls
some 1,900km2
of the
Keith Kilkenny
Province, largely
farmed out with
free carry to
mining.
Heron is
assigning this
free-carried gold
asset to Avoca.
KEITH KILKENNY PROVINCE
GOLD EXPLORATION JOINT VENTURE
2.8.1 Wiluna South Project
Avoca 100%.
Gold.
The 129km2 tenement is located 15km SSE of the currently operating Wiluna gold mining centre.
The project area is largely covered by Lake Way which has precluded systematic modern exploration. Avoca’s
exploration will be based on aeromagnetic interpretation, and will require specialist lake drilling rigs.
The NNW trending sequence of basalts and dolerites that hosts the Wiluna gold mining centre is present
over a strike of 12km within the project area, associated with the Wiluna ore-hosting fault system.
Wiluna South is one of the prime gold exploration plays in Western Australia. Normandy
Exploration has recently announced exceptional drilling results on Lake Way to the immediate north and
west of Avoca’s project area, highlighting Lake Way as an Avoca project of great potential.
2.8.2 Wildara North Project
Gold.
The 56km2 project area covering 5 tenements is located 120km N of Leonora within the western margin of
the Keith Kilkenny Tectonic Zone.
The project area is largely a soil covered basalt and felsic volcanic terrain occurring between the
Bronzewing gold mining centre to the north and the recent Thunderbox gold discovery to the south. Strike
parallel structures occur along the western contact of the greenstone belt, and link a number of significant
gold deposits, including from north to south Bronzewing, Mount McClure, Success, Parmellia, Challenger
and Thunderbox.
The Thunderbox gold deposit was discovered in 1999, and is located 40km S along strike of the Avoca
project area. Thunderbox has a resource of 30mt at 2.2g/t gold for a total of 2.1 million ounces.
Avoca has completed a GIS target generation study, with field mapping confirming favourable structural
sites. At the Mount McClure South Prospect a small internal circular granite plug has been intruded
into the western structural corridor. The intersection of strike-parallel gold-bearing structures with the plug
is interpreted to create significant dilatancy sites with gold deposition potential.
2.8.3 Victory Joint Venture Project
WMC Resources Ltd right to earn 80% through spending $0.125m.
Gold - nickel.
The 24km2 project area covering 6 tenements is located 50-120km NW of Leonora, adjoining the Victory
and Bannockburn gold mining centres. WMC has completed a GIS review, followed by field validation.
2.8.4 Kookynie Joint Venture Project
Avoca 100% of Precious Metal rights.
Newcrest Operations Limited right to earn 75% in Gold through spending $0.8m,
subject to completion of formal documentation.
Heron retains Nickel rights.
Gold-nickel.
The 87km2 project area covering 3 tenements is located 20-60km SE of Leonora within the western margin
of the Keith Kilkenny Tectonic Zone.
The project area is largely soil covered basalt and felsic volcanics occurring along strike from the Apollo Hill
gold occurrence. Lateritic nickel targets are present, associated with rift margin ultramafics. Heron retains all
nickel rights.
Newcrest has completed a data review and GIS target generation study. The main regional target in the project
area is the Ulster Prospect, an historic gold mine. Sulphidic quartz float is present, linking a series of old
shafts that extend over a strike length exceeding 300m. The mineralisation strikes E-W, which is significant in
that regionally the Butterfly-Tampa gold mineralisation is hosted by similar trending flat lying shears.
At the Tampa and Mount Melita East Prospects, residual laterite with quartz vein float is present. Lag
sample anomalism is present in Heron’s sampling on a 400x400m grid pattern.
Page 25
2.8 CONTINUED
OPERATIONS REVIEW
2.8.5 Edjudina-Laverton Joint Venture Project
Croesus Mining NL right to earn 80% in respect of Gold through spending $1.0m.
Gold.
The 562km2 joint venture area covering 13 tenements is located within two separate areas. The southern
joint venture Edjudina area is 120-160km NE of Kalgoorlie immediately northwest and east of the Porphyry
gold mine within the Keith Kilkenny Tectonic Zone. Gold mineralisation dominantly occurs as quartz
stockworks within felsic and granitoid host rocks.
The northern joint venture Laverton area is 55km N of Laverton within the Laverton Tectonic Zone. Major
gold mining centres in the area are generally associated with BIF, and from north to south include
Rosemont, King of Creation and Corktree Well.
Croesus has expended $0.5 million on exploration to date, with in excess of 12,000m of drilling completed.
Several mineralised intercepts have been recorded, but as yet, none of economic potential.
2.8.6 Southern Laverton Tectonic Zone Joint Venture Project
Heron 100%. Subject to Agreement, proposed assignment of Precious Metal rights to Avoca.
Gutnick Resources NL right to earn 80% in respect of Gold through spending $1.2m.
Gold.
The Southern Laverton Tectonic Zone Project is located 150km NE of Kalgoorlie. Heron’s project area
comprises 34 tenements covering 305km2. Heron’s tenements within the Tectonic Zone extend 100km,
from the Red October gold mine (340,000oz) in the north to the Anglo-Saxon gold mine (170,000oz) in the
south. This structural zone hosts gold mineralisation from north to south at Laverton, Sunrise Dam, Red
October, Safari Bore, Edjudina and Pinjin.
A drill program has been designed to test the Yundamindera Flash Prospect, generated from a 1,500
sample regional auger program. This target is defined by a threshold value of 15ppb Au against a
background of <4ppb. Significant soil spikes consistent with near surface gold development are present,
with peak soil gold values to 290,000ppb. Two significant N-S anomalies have been defined over 5km.
The western anomaly represents northern extension to the historic Gardners Find workings, which are goldmineralised strike parallel shears. Heron sampling of old workings yielded gold values to 6.4g/t.
2.8.7 Karonie South Joint Venture Project
WMC Resources Ltd right to earn 80% through spending $0.30m.
Gold (- nickel).
Heron’s previous
work in the Keith
Kilkenny
Province
concentrated on
Nickel Laterite
RC drilling.
Now that the
Avoca IPO is in
train, Exploration
Manager
Geoff Collis
has been
systematically
completing
reconnaissance
Precious Metal
soil and rock
chip sampling of
the project areas.
Several
advanced stage
Precious Metal
and VMS targets
have been
generated, which
will become a
drilling focus
once Avoca has
listed on ASX.
The 653km2 contiguous project area covering 8 tenements is located 140-170km SE of Kalgoorlie associated
with the Keith Kilkenny Tectonic Zone. This structure hosts gold mineralisation from Old Plough Dam in the
north, through to Carosue Dam, Karonie and French Kiss in the south.
Following start up of the Joint Venture, WMC has completed a high resolution aeromagnetic
survey and a 474 station 1x1km grid gravity survey. These have provided excellent differentiation
of the mafic and sedimentary packages of the Roe Hills and Karonie Greenstone Belts.
The entire project area has broad spaced soil geochemical coverage and ultra-detailed 50m line
spacing aeromagnetics. Several high priority follow-up gold targets have been generated:
•
HSK1 Prospect, 1.2km soil gold anomaly, peak 29ppb Au against a <2ppb
background, dolerite setting.
•
HSK2 Prospect, 4.6x2.5km soil gold anomaly, peak 27ppb Au against a <2ppb
background, dolerite-sediment contact in a major regional structural setting.
•
HSK3 Prospect, 2.5km soil gold anomaly, peak 30ppb Au against a <2ppb
background, granite contact.
Gnamma hole east of
Karonie, Avoca country.
Avoca’s Exploration
Manager, Geoff Collis
Page 26
2.9
OPERATIONS REVIEW
PROPOSED
AVOCA
RESOURCES
ASSET
The LavertonCelia Tectonic
Zone is the
dominant
metallogenic
structure of the
Northeastern
Goldfields.
Heron acquired
Nickel Laterite
targets on the
Tectonic Zone,
and will assign
the Precious
Metal rights to
Avoca.
LAVERTON-CELIA TECTONIC ZONE PROVINCE
GOLD JOINT VENTURES
2.9.1 Erlistoun Project
Gold.
The 212km2 project area covering 12 tenements is located from Laverton to 50km N, between the Celia
Tectonic Zone in the west and Laverton Tectonic Zone in the east. GIS data compilation is current, awaiting
tenement grant.
The historical Euro gold mining centre was recently acquired by Avoca. Extensive alluvial gold workings are
present, with potential bedrock gold sources having had minimal exploration.
2.9.2 Mount Zephyr Project
Avoca 100%. Heron retains Nickel rights.
Gold - nickel.
The 154km2 contiguous project area covering 4 tenements is located 35km NW of Laverton.
An aeromagnetic target is located in the southern project area overlain by sheetwash. Sparse subcrop
includes komatiite with silica cap. Heron field mapping identified a Nickel Laterite profile, with RAB
intercepts in previous drilling of up to 8m at 1.2% Ni. Heron will retain these Nickel Rights, while Avoca will
hold Gold rights.
Gold prospectivity is high, due to the presence of the Celia Tectonic Zone (hosts the Mount Morgans gold
mining centre 60km SE).
2.9.3 Laverton Joint Venture Project
Metex Resources Limited right to earn 70% through spending $0.5m.
Gold.
The 31km2 contiguous project area covering 2 tenements is located 15km WSW of Laverton immediately
west of the Chatterbox Shear Zone. The project area surrounds the Hawks Nest-Mt Gooses gold mining
centres.
Metex advises that reinterpretation of gravity and aeromagnetic data has been completed and a number of
targets generated. Expenditure to date has been $0.3 million.
2.9.4 Mount Morgans Joint Venture Project
Metex Resources Limited 80%, Heron non-contributing and free-carry at 20%.
Gold.
The 14km2 project area covering 8 tenements is located 40km WSW of Laverton immediately west of the
Celia-Mount Morgans-Korong Shear Zone. The main prospects are 5km NW along strike from the Mount
Morgans gold mining centre, associated with an intra-greenstone granitoid.
Aeromagnetic, DEMs, open file and geological compilations have been completed, and vacuum and RAB
drilling carried out to quantify the regolith profile. Expenditure to date has been $0.2 million, with Metex
having now earnt their equity.
Des Steel (Tenement Manager) - left
and Alan Rudd (Senior Geologist) - right
administer Heron’s substantial
tenement portfolio, with check audit by
Resource Mapping Pty Ltd, Perth.
Heron’s excellent tenement acquisition
record reflects the monitoring procedures
implemented by Des and Alan.
Page 27
2.10
OPERATIONS REVIEW
BREMER-EUCLA PALAEODRAINAGE PROVINCE
OIL SHALE SCOPING STUDY
2.10.1 Balladonia and Ravensthorpe-Norseman Oil Shale Projects
Heron 100%.
Oil shale - lignite - sulphur - limestone - heavy mineral sands - kaolin - vanadium.
PROPOSED
BALLADONIA
ENERGY
ASSET
The 3,648km2 Balladonia project area covering 21 tenement applications is located 20-180km E of
Norseman. The 1,597km2 Ravensthorpe-Norseman project area covering 19 tenement applications is
located from Norseman and SW to Ravensthorpe.
Energy
FIG.8: BALLADONIA
Lignite deposits with high oil yields have
been identified in Heron’s literature
reviews.
Resource estimates are
qualitative at best, but from reviewing
previous 1980s exploration data,
there is a stated resource potential of
2.6 billion tonne at a Fischer Oil
Yield of 133 litre per tonne and a strip
ratio of 4:1. The Balladonia lignite has a
higher ash content and lower specific
energy values than Victorian Tertiary
brown coals, but is comparable to the
Leigh Creek deposits being actively
mined in South Australia. All of the
Bremer-Eucla lignite resources have a
high oil yield, being up to 190 litre per
tonne. The oil yields are comparable to
Oil Shale deposits in Queensland, which
are now in production. The Bremer-Eucla
Oil Shales do not have the environmental
issues related to the Queensland
projects operating in proximity to the
Great Barrier Reef.
Resource Occurrences
Sulphuric Acid
The Bremer-Eucla lignite is strongly pyritic. Following flotation, this pyrite would be suitable for sulphuric
acid manufacture. Sulphuric acid is a major feedstock in nickel laterite processing. This sulphur
requirement was the prime reason for Heron acquiring the Bremer-Eucla Oil Shale tenements.
Corporate
The long term corporate objective is for Heron’s Oil Shale assets to be spun off into Balladonia Energy.
Heron will seek to introduce a technology joint venture partner to the Oil Shale projects.
IAN BUCHHORN
Managing Director
The information is based on, and accurately reflects, information compiled by
Ian James Buchhorn, who is a Member of the Australasian Institute of Mining and Metallurgy.
John Carlisle on the beach south of
Balladonia.
The Heron Board,
Rod Evans, Bob Colville, and
Ian Buchhorn in the
bush.
Page 28
CORPORATE DIRECTORY
3.0
CORPORATE PROFILE
30
CORPORATE GOVERNANCE PRACTICES
30
4.0
DIRECTORS’ REPORT
32
5.0
FINANCIAL STATEMENTS
36
STATEMENT OF FINANCIAL PERFORMANCE
36
STATEMENT OF FINANCIAL POSITION
37
STATEMENT OF CASH FLOWS
38
NOTES TO AND FORMING PART OF THE ACCOUNTS
39
DIRECTORS’ DECLARATION
50
6.0
INDEPENDENT AUDIT REPORT
51
7.0
SHAREHOLDER INFORMATION
52
8.0
INTEREST IN MINING TENEMENTS
55
Jurandah
rock hole
, Israelite
Bay
nie
ol, Kooky
Mar y’s Po
Page 29
Nullarbor sunset
Grevillea mill, Narina
CORPORATE DIRECTORY
3.0
Corporate Profile
HERON RESOURCES LIMITED is a Kalgoorlie-based exploration and development company. The corporate aim is to
become a profitable mining company through the development of mineral deposits. Heron is focused on the exploration and
development of its Nickel Laterite projects in the Eastern Goldfields of Western Australia.
The Company undertakes cost-effective exploration based on literature reviews, aeromagnetic interpretation, and ore resource
drill testing of targets so generated.
The management of the Company is based in Kalgoorlie. Accordingly, the Company has excellent access to tenement
acquisition opportunities, and to specialist contractor services. Administrative overheads are also maintained at lower levels due
to the Kalgoorlie base.
The Company is managed and staffed by a team of six professional geoscientists with extensive industry experience. Specialist
consultants are used as required, particularly in disciplines where due diligence may be required. Field programs such as drill rig
access, drill site rehabilitation and hydrological monitoring are implemented under long-term contracts to experienced operators.
OBJECTIVES
a)
To convert the existing Nickel Laterite mineral resources into profitable mining operations for the Company;
b)
To increase the value of the Company through the continued acquisition, exploration and development of mineral resources;
c)
To establish mining cash flows that increase the Company's market capitalisation and value to Shareholders;
d)
To conduct operations in a safe and environmentally responsible manner, to offer employment opportunities to those who
live in the exploration provinces, and to respect and nurture the Indigenous culture of the exploration provinces; and
e)
Manage the risk in all exploration, development and corporate endeavours.
STRATEGY
a)
Acquire the maximum available equity in Nickel Laterite and associated commodity projects through pegging, optioning or
outright purchase, concentrating within the Eastern Goldfields of Western Australia;
b)
Focus on cost-effective drill exploration to convert exploration targets into mineral resources;
c)
Location of the corporate base at Kalgoorlie within the principal area of operation;
d)
Active acquisition and testing of new exploration concepts and targets, such as the Avoca PGE projects;
e)
Use of best management, technical and financial control techniques; and
f)
Utilise farm-outs where appropriate to spread exploration and commodity risk.
CORPORATE GOVERNANCE PRACTICES
General
The Company does not have any formally constituted committees of the Board of Directors. The Company is not of a size nor
are its affairs of such complexity to justify the formation of separate or special committees. The Board as a whole is able to
address the governance aspects of the full scope of the Company's activities and to ensure that it adheres to appropriate ethical
standards.
Composition of the Board
At the date of this statement the Board comprises three Directors, two of whom are non executive Directors. The names,
qualifications and relative experience of each Director are included in the Directors' Report, Section 4.0.
The Company's Constitution provides that the number of Directors shall not be less than three and not more than ten (Clause
11.1.1). There is no requirement for any Share holding qualification although it is preferable that Directors will become significant
Shareholders. An Employee Option Plan has been in operation to encourage Directors to take significant Shareholdings.
As the Company's activities increase in their size, nature and scope, the size of the Board will be reviewed periodically and the
optimum number of Directors required to adequately supervise the Company's activities determined within the limitations imposed
by the Constitution and as circumstances demand.
Page 30
3.0
Corporate Profile cont
Board Membership
The membership of the Board, its activities and composition is subject to periodic review. The criteria for determining the
appointment of a suitable candidate for the Board shall include the quality of the individual, experience and achievement,
compatibility with other Board members, credibility within the Company's scope of activities and the mining industry, intellectual
ability to contribute to the Board's duties and physical ability to undertake the Board's duties and responsibilities.
Under the Company's Constitution the tenure of the Directors (other than the Managing Director) is subject to re-appointment by
Shareholders not later than the third anniversary following their last appointment (Clause 11.1.3). The Board does not subscribe
to the principle of a retirement age and there is no maximum period of service as a Director.
Appointment to Other Boards
Directors are required to take into consideration any conflicts when accepting appointment to other boards. Accordingly,
Directors wishing to accept appointment to other boards must first seek approval from the Board, approval of which will not
unreasonably be withheld.
Directors' Remuneration
At the date of this statement the maximum per annum total amount payable to Directors as Director's fees was set by
Shareholders at a general meeting on 21 June 1996 at $100,000.
No Director's fees are paid to the Managing Director, who receives a salary approved by the Board.
Independent Support
The Board has determined that individual Directors may in appropriate circumstances engage outside advisers at the Company's
expense. The engagement of an outside adviser is subject to the prior approval of the Board, approval of which will not
unreasonably be withheld.
Compensation Arrangements
The Board is responsible for reviewing compensation arrangements (including superannuation and other benefits) for the
Managing Director and other senior executives.
Continuous Review of Corporate Governance
Directors consider on an ongoing basis how management information is presented to them and whether such information is
sufficient to enable them to discharge their duties as Directors of the Company. Such information must be sufficient to enable
Directors to determine appropriate operating and financial strategies from time to time in light of changing circumstances and
economic conditions.
The Directors recognise that mineral exploration has inherent risks and that operational strategies adopted should,
notwithstanding, be directed towards improving the value of the net worth of the Company.
Page 31
4.0 Directors’ Report
The Directors submit their Report on the operations of the Company and its controlled entities for the year ended 30 June 2001
including the accounts for the financial year ended on that date in accordance with a resolution of the Directors of the Company.
DIRECTORS
The names and details of the Directors of the Company in office at any time during or since the end of the year are:
Director
Appointed
Position
Rodney Michael Evans - FCA, FCIS, FCIM, AIArbA
26 March 1996
Chairman (Non-Executive)
Rod Evans is a chartered accountant and consultant who has had wide experience in corporate administration and
finance. Mr Evans is a Director and Chairman of RAC WA Holdings Pty Limited and RAC Finance Limited, and a
past Chairman of Clark Kenneth Leventhal a world-wide association of accounting firms, the Australian Automobile
Association, and a number of publicly listed companies involved in mining and exploration in Australia.
Director
Appointed
Position
Ian James Buchhorn - BSc (Hons), Dip Geosci, MAusIMM
17 February 1995
Managing Director
Ian Buchhorn is a Mineral Economist and Geologist. He has worked on nickel, gold, lead-zinc and diamond
projects in southern Africa. In Australia, Mr Buchhorn has worked on bauxite and industrial mineral mining and
exploration, gold and base metal project generation, gold mine operation and in corporate evaluations. He has 28
years' experience as an economic geologist, and for the last 15 years, has acquired and developed projects
throughout the Eastern Goldfields of Western Australia, commissioned several open cut gold mines, and has been
a Registered Mine Manager. Mr Buchhorn is responsible for the day to day technical management of the
Company. He is active within the local community, serving as a Councillor for the City of Kalgoorlie-Boulder.
Director
Appointed
Position
Robert George Colville - AssocRMIT, MAusIMM
09 December 1996
Director (Non-Executive)
Bob Colville has over 29 years' exploration experience predominantly within the Eastern Goldfields of Western
Australia. Mr Colville has held a number of senior and executive positions with both major companies and junior
explorers. He has been associated with the discovery and development of mines at Ranger Uranium (NT), and
New Celebration, Goongarrie and Davyhurst (Eastern Goldfields WA). Mr Colville is an executive director of
Barminco Pty Limited, the largest private underground mining contractor in Australia, and Managing Director of
Barra Resources Limited, a publicly listed company involved in gold exploration in Australia.
Director
Appointed
Position
Craig Leslie Readhead - B.Juris. LL.B. (alternate for R M Evans)
03 September 2001
Craig Readhead is a lawyer with 25 years' legal and corporate advisory experience with specialisation in the
resources sector. Mr Readhead is a partner of the law firm Pullinger Readhead Stewart and is a director of a
number of listed and unlisted public companies involved in mining and exploration in Australia.
Directors who have resigned during the reporting period are:
Director
Appointed
Position
Peter James Lee
Resigned 20 October 2000; Re-appointed 29 November 2000; Resigned 31 August 2001
Director
Appointed
Position
Stephen Bruce Dennis
Appointed 20 October 2000; Resigned 20 November 2000
Director
Appointed
Position
Richard Monti (alternate for S B Dennis)
Appointed 20 October 2000; Resigned 20 November 2000
Page 32
4.0 Directors’ Report cont
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the year were:
a)
Nickel Laterite mineral exploration and development;
b)
Various Heron non-nickel mineral exploration activities, often implemented through farm-out; and
c)
De-merger of the Heron non-nickel assets into Avoca Resources Limited.
There has been no significant change in the nature of these activities during the year.
OPERATING RESULTS
The loss of the consolidated entity for the 2001 financial year after income tax of nil (2000 : nil) was $558,500 (2000 : $535,636).
DIVIDENDS
No dividends were paid during the year and the Directors do not recommend the payment of a dividend.
OPERATIONS REVIEW
The detailed review of operations of the consolidated entity for the year is contained in Section 2.0 of this Annual Report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than noted below there were no significant changes in the state of affairs of the consolidated entity during the year.
During the year 9,999,855 shares were placed at $0.28 each raising $2,799,960 (less costs) to fund exploration activities and
for additional working capital.
On 8 June 2001 the subsidiary entity Avoca Resources Limited ("Avoca") was registered. Avoca was registered to allow a spinoff of the non-nickel exploration assets of Heron Resources Limited ("Heron"), to enable the Company to focus on its Nickel
Laterite assets and allow more appropriate resources to be devoted to the development of the non-nickel assets.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Other than noted, at the date of this Report there is no matter or circumstance which has arisen since 30 June 2001 that has
significantly affected or may significantly affect:
a)
The operations, in the financial years subsequent to 30 June 2001, of the consolidated entity;
b)
The results of those operations; or
c)
The state of affairs, in the financial years subsequent to 30 June 2001, of the consolidated entity.
As announced on 3 September 2001, subject to certain conditions precedent (including approval by the shareholders of Heron
Resources Limited) to be satisfied or waived on or before 15 October 2001 or such later date as may be agreed, it has been
agreed to make a private placement to Resource Capital Fund II L.P. of 10 million ordinary shares in the capital of the Company
at $0.30 per share, to raise $3,000,000, together with 10 million three year options to subscribe for Heron shares at $0.35 per
share (issued for no consideration).
OPTIONS
No Options in the Company were exercised during the year.
1,670,000 Options were issued by the Company during the year.
290,000 Options expired during the year and to the date of this Report.
As at the date of this report the Company had the following Options on issue:
Number Issued
350,000
50,000
200,000
200,000
200,000
200,000
200,000
100,000
785,000
785,000
Expiry Date
15 December 2001
05 March 2002
19 December 2002
19 December 2002
19 December 2002
19 December 2002
19 December 2002
04 February 2004
19 October 2004
19 October 2004
3,070,000
Page 33
Exercise Price
$0.25
$0.25
$0.25
$0.35
$0.45
$0.55
$0.65
$0.25
$0.35
$0.50
LIKELY DEVELOPMENTS
The Company will continue its core nickel development activities through sole funded exploration and joint ventures where
appropriate. It is proposed to spin-off of the Heron Resources Limited non-nickel exploration assets into Avoca Resources
Limited, which will enable Heron to focus on its Nickel Laterite assets and allow more appropriate resources to be devoted to the
development of the non-nickel assets.
The Company is continually assessing commercial opportunities for corporate growth. Because of the unpredictable nature of
these opportunities, developments could occur at short notice.
Further information is not included on the likely developments in the operations of the consolidated entity and the expected results
of those operations, as it is the opinion of the Directors that this would prejudice the interests of the consolidated entity if included
in this Report.
DIRECTORS’ BENEFITS
Disclosure of benefits provided to Directors during the financial year is made in Notes 15 and 17 of the financial statements, in
accordance with ASIC class order 98/2395.
DIRECTORS’ INTEREST IN CONTRACTS WITH THE COMPANY
There are no material contracts involving Directors’ interests at the end of the financial year nor have any been entered into since
the end of the previous financial year not otherwise disclosed in this Report.
DIRECTORS’ SHAREHOLDING IN THE COMPANY
As at the date of this Report the interests of the Directors in the Shares of the Company were:
Director
Ordinary Shares
Direct
Indirect
R M Evans
I J Buchhorn
Options over Ordinary Shares
Direct
Indirect
-
800,000
-
200,000
2,447,857
33,793,155
1,000,000
-
-
140,000
-
150,000
R G Colville
DIRECTORS MEETINGS
During the year the Company held 12 meetings of Directors. The attendance of the Directors at meetings of the Board were:
Director
Meetings held
while a Director
Number of
meetings
attended
R M Evans
12
12
I J Buchhorn
12
12
R G Colville
12
12
PJ Lee
11
10
1
1
R Monti (alternate for S B Dennis)
EMOLUMENTS OF DIRECTORS AND SENIOR EXECUTIVES
Executive remuneration and other terms of employment are reviewed by the Board on an ongoing basis having regard to
performance against goals set at the start of the year, the relevant comparative information and independent expert advice.
Remuneration packages are set at levels that are intended to attract and retain executives capable of managing the
consolidated entity’s operations.
Page 34
Director
Salary
R M Evans
I J Buchhorn
R G Colville
S B Dennis
P J Lee
$
Directors
Fees
$
130,000
-
20,000
1,667
18,333
43,200
20,000
1,600
133
1,467
-
-
$
$
$
$
$
90,500
-
29,500
25,600
12,500
Senior Executive
D J Crook
Superannuation
Other
Options
$
$
$
Mr Crook is the only employee of the consolidated entity qualifying as a Senior Executive.
500,000 Options in the parent entity were issued to entities associated with D J Crook during the year:
Number Issued
250,000
250,000
Expiry Date
19 October 2004
19 October 2004
Exercise Price
$0.35
$0.50
The value of the 500,000 19 October 2004 Options issued to DJ Crook is estimated to be $12,500.
AUDIT COMMITTEE
At the date of this Report the Company has not formed an Audit Committee, and as such the Board effectively acts as the Audit
Committee. The Directors discuss the Company’s activities with the auditors throughout the year. Due to the size and nature of
operations, it has not been considered necessary to form an Audit Committee of the Board of Directors.
INSURANCE OF OFFICERS
During the financial year the Company has paid an insurance premium in respect of a Directors’ and Officers Liability Insurance
Contract. The insurance premium relates to liabilities that may arise from an officer’s position, with the exception of conduct
involving a wilful breach of duty or improper use of information or position to gain personal advantage.
The officers covered by the insurance policies are the Directors and the Company Secretary.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Heron Resources
Limited support and have adhered to the principles of corporate governance. The consolidated entity’s corporate governance
statement is contained in the Corporate Profile section of the Annual Report.
ENVIRONMENTAL REGULATION
The consolidated entity is subject to and compliant with all aspects of environmental regulation in respect of its exploration
activities. The Directors are not aware of any environmental regulation which is not being complied with.
ABORIGINAL CULTURE AND HERITAGE
The consolidated entity is subject to and compliant with all aspects of Aboriginal Heritage regulation in respect of its exploration
and development activities. The Directors are not aware of any regulation which is not being complied with. The Directors are
committed to cultural respect and Indigenous Reconciliation.
Signed in accordance with a resolution of Directors
R G COLVILLE
Director
Perth, 28 September 2001
Page 35
5.0
Financial Statements
STATEMENT OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2001
Consolidated Entity
2001
2000
$
$
Parent Entity
2001
2000
$
$
179,149
171,718
179,149
171,718
Administration expenses from ordinary activities
(581,213)
(678,000)
(548,264)
(678,000)
Mineral exploration expenditure written off
(156,436)
(29,354)
(154,643)
(29,354)
Notes
REVENUES FROM ORDINARY ACTIVITIES
2
LOSS FROM ORDINARY ACTIVITIES
BEFORE INCOME TAX
3
(558,500)
(535,636)
(523,758)
(535,636)
INCOME TAX RELATING TO ORDINARY ACTIVITIES
4
-
-
-
-
LOSS FROM ORDINARY ACTIVITIES AFTER
INCOME TAX
(558,500)
(535,636)
(523,758)
(535,636)
NET LOSS
(558,500)
(535,636)
(523,758)
(535,636)
Basic earnings per share
25
$(0.0059)
$(0.0068)
Diluted earnings per share is not materially different from basic earnings per share
The accompanying notes form part of these financial statements
Page 36
5.0
Financial Statements cont
STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2001
Notes
Consolidated Entity
2001
2000
$
$
Parent Entity
2001
2000
$
$
CURRENT ASSETS
Cash assets
Receivables
5
TOTAL CURRENT ASSETS
3,130,967
3,925,296
3,130,947
3,925,286
119,554
6,661
116,885
6,661
3,250,521
3,931,957
3,247,832
3,931,947
NON-CURRENT ASSETS
Receivables
6
-
-
436,320
363,346
Investments
7
-
-
20
10
Property, plant and equipment
8
126,511
117,632
126,511
117,632
Exploration and evaluation costs carried forward
9
13,126,872
10,263,600
12,727,963
9,900,254
TOTAL NON-CURRENT ASSETS
13,253,383
10,381,232
13,290,814
10,381,242
TOTAL ASSETS
16,503,904
14,313,189
16,538,646
14,313,189
256,885
172,323
256,885
172,323
CURRENT LIABILITIES
Payables
10
Provisions
11
93,829
77,769
93,829
77,769
TOTAL CURRENT LIABILITIES
350,714
250,092
350,714
250,092
TOTAL LIABILITIES
350,714
250,092
350,714
250,092
16,153,190
14,063,097
16,187,932
14,063,097
NET ASSETS
EQUITY
Contributed equity
12
24,018,094
21,369,501
24,018,094
21,369,501
Accumulated losses
13
(7,864,904)
(7,306,404)
(7,830,162)
(7,306,404)
16,153,190
14,063,097
16,187,932
14,063,097
TOTAL EQUITY
Page 37
5.0
STATEMENT OF CASH FLOWS
Consolidated Entity
2001
2000
$
$
Parent Entity
2001
2000
$
$
179,149
161,007
179,149
161,007
-
15,000
-
15,000
GST Paid
(112,893)
-
(110,224)
-
Payments to suppliers
(442,570)
(619,699)
(409,621)
(619,699)
(376,314)
(443,692)
(340,696)
(443,692)
(3,013,211)
(2,454,234)
(2,975,855)
(2,090,888)
(53,407)
(2,355)
(53,407)
(2,355)
(3,066,618)
(2,456,589)
(3,029,262)
(2,093,243)
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received
Proceeds from sale of tenements
NET CASH OUTFLOWS FROM
OPERATING ACTIVITIES
14(a)
CASH FLOWS FROM INVESTING ACTIVITIES
Exploration expenditure
Acquisition of plant & equipment
NET CASH OUTFLOWS FROM INVESTING ACTIVITIES
CASH INFLOWS FROM FINANCING ACTIVITIES
Loan to controlled entities
Proceeds from issue of Shares
Share issue costs
NET CASH FLOWS FROM FINANCING ACTIVITIES
NET INCREASE / (DECREASE) IN CASH HELD
Cash at the beginning of the financial year
-
-
(72,974)
(363,346)
2,799,970
5,669,510
2,799,960
5,669,500
(151,367)
(130,000)
(151,367)
(130,000)
2,648,603
5,539,510
2,575,619
5,176,154
(794,329)
2,639,229
(794,339)
2,639,219
3,925,296
1,286,067
3,925,286
1,286,067
CASH AT THE END OF THE FINANCIAL YEAR
14(c)
3,130,967
3,925,296
3,130,947
3,925,286
Non-cash financing and investing activities
14(b)
-
176,841
-
176,841
Page 38
5.0
NOTES TO AND FORMING PART OF THE ACCOUNTS
NOTE 1.
STATEMENT OF ACCOUNTING POLICIES
The financial report is a general purpose financial report which has been prepared in accordance with applicable Accounting
Standards and other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) and the
Corporations Act 2001. The financial report has been prepared on the basis of historical costs and does not take into account
changing money values or, except where stated, current valuations of non-current assets. The accounting policies have been
consistently applied, unless otherwise stated.
The following is a summary of the material accounting policies adopted by the Company in the preparation of the financial
statements.
a) Principles of Consolidation
The consolidated accounts comprise the accounts of Heron Resources Limited (the parent entity) and its controlled entities.
A controlled entity is any entity controlled by Heron Resources Limited. Control exists where Heron Resources Limited has
the capacity to dominate the decision making in relation to the financial and operating policies of another entity so that the
other entity operates with Heron Resources Limited to achieve the objectives of Heron Resources Limited. A list of controlled
entities is contained in Note 23.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent
accounting policies.
All inter-company balances and transactions between entities in the consolidated entity, including any unrealised profits or
losses, have been eliminated on consolidation.
Where controlled entities have entered or left the consolidated entity during the year, their operating results have been
included from the date control was obtained or until the date control ceased.
b) Income Tax
The consolidated entity adopts the liability method of tax-effect accounting whereby the income tax expense shown in the
profit and loss account is based on the operating profit before income tax adjusted for any permanent differences.
Timing differences which arise due to the different accounting periods in which items of revenue and expense are included
in the determination of operating profit before income tax and taxable income are brought to account as either a provision
for deferred income tax or an asset described as future income tax benefit at the rate of income tax applicable to the period
in which the benefit will be received or the liability will become payable.
Future income tax benefits are not brought to account unless realisation of the asset is assured beyond any reasonable
doubt. Future income tax benefits in relation to tax losses are not brought to account unless there is virtual certainty of the
realisation of the benefit.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income tax legislation and the anticipation that the Company will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
c) Exploration, Evaluation, Development and Restoration Costs
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest.
Accumulated costs are only carried forward to the extent that they are expected to be recouped through the successful
development of the area, or by its sale, or where the activities in the area have not reached a stage which permits a
reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to
abandon the area is made.
Accumulated costs are not carried forward in respect of any area of interest unless rights to tenure of that area are current.
Restoration costs that are expected to be incurred are provided for as part of the cost of the exploration, evaluation and
development phases that give rise to the need for restoration.
d) Investments
Investments are brought to account at cost or at Directors’ valuation. The carrying amount of investments is reviewed
annually by Directors to ensure it is not in excess of the recoverable amount of these investments.
Page 39
5.0
e) Property, Plant and Equipment
Plant and equipment is measured at cost.
Depreciation is calculated on a straight line or diminishing value basis to write off the net cost of each item of property, plant
and equipment over its expected useful life. Major depreciation periods for plant and equipment are 5 to 15 years.
f)
Interests in Joint Ventures
The consolidated entity’s share of the assets, liabilities, revenue and expenses of joint ventures is included in the appropriate
items of the balance sheet and the profit and loss account.
Details of the joint ventures are set out in Note 22.
g) Employee Entitlements
Liabilities for wages and salaries, annual leave and sick leave are recognised and are measured as the amount unpaid at
the reporting date at current pay rates in respect of employees’ service up to that date.
h) Cash
Cash on hand and in banks and short-term deposits are stated at the lower of cost and net realisable 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 two working days, net of outstanding bank overdrafts.
i)
Acquisition of Assets
The cost method of accounting is used for all acquisitions of assets regardless of whether shares or other assets are
acquired. Cost is determined as the fair value of the assets given up at the date of acquisition plus costs incidental to the
acquisition. Where shares are issued in an acquisition, the value of the shares is determined by reference to the fair value
of the assets acquired, including goodwill where applicable.
Costs relating to the acquisition of new areas of interest are classified as either exploration and evaluation expenditure,
development properties or mine properties based on the stage of development reached at the date of acquisition. Assets
acquired may also include mineral reserves, mineral resources and unexplored and unevaluated acreage.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of acquisition. The discount rate used is the rate at which a similar borrowing could be obtained
under comparable terms and conditions.
A liability for restructuring costs is recognised as at the date of acquisition of an entity or part thereof when there is a
demonstrable commitment to a restructuring of the acquired entity and a reliable estimate of the amount of the liability can
be made.
j)
Recoverable Amount of Non-Current Assets
The recoverable amount of an asset is the net amount expected to be recovered through the net cash inflows arising from
its continued use and subsequent disposal.
Where the carrying amount of a non-current asset is greater than its recoverable amount the asset is revalued to its
recoverable amount. Where the net cash inflows are derived from a group of assets working together, recoverable amount
is determined on the basis of the relevant group of assets. To the extent that a revaluation decrement reverses a revaluation
increment previously credited to, and still included in the balance of, the asset revaluation reserve, the decrement is debited
directly to that reserve. Otherwise the decrement is recognised as an expense in the profit and loss account.
The expected net cash flows included in determining recoverable amounts of non-current assets are discounted to their
present values using a market-determined, risk adjusted discount rate.
k) Trade and Other 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. These amounts are unsecured
and are usually paid within 30 days of recognition.
Page 40
5.0
l)
Receivables and Revenue Recognition
Bills of Exchange
Bills of Exchange have been purchased in the market at a discount to face value. The Bills are carried at an amount
representing cost and a portion of the discount recognised as income on an effective yield basis. The discount brought to
account each period is accounted for as interest received.
Interest
Interest is recognised on control of the right to receive the interest payment.
m) Earnings per Share
i)
Basic Earnings per share
Basic earnings per share is determined by dividing the profit from ordinary activities after related income tax expense by the
weighted average number of ordinary Shares outstanding during the financial year.
ii)
Diluted Earnings per share
Diluted earnings per share is determined by dividing the profit from ordinary activities after related income tax expense
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 year.
Consolidated Entity
2001
2000
$
$
NOTE 2.
Parent Entity
2001
2000
$
$
REVENUE FROM ORDINARY ACTIVITIES
Revenues from operating activities
Proceeds from sale of tenements
-
15,000
-
15,000
Revenues from non-operating activities
Interest received – other persons/corporations
179,149
156,718
179,149
Total revenues from ordinary activities
179,149
171,718
179,149
171,718
Depreciation and amortisation expenses
(44,529)
(50,858)
(44,529)
(50,858)
Salaries and employee benefits expense
(77,867)
(64,517)
(67,117)
(64,517)
Other expenses from ordinary activities
(458,817)
(562,625)
(436,618)
(562,625)
Mineral exploration expenditure written off
(156,436)
(29,354)
(154,643)
(29,354)
NOTE 3.
NOTE 4.
156,718
EXPENSES
INCOME TAX
Prima facie income tax benefit on loss from ordinary activities reconciles to the income tax expense as follows:
Loss from ordinary activities
(558,500)
(535,636)
(523,758)
(535,636)
Prima facie tax at 34% (2000 : 36%)
(189,890)
(192,829)
(178,078)
(192,829)
Non deductible items
Timing differences and tax losses not brought to account
Income tax expense
12,281
62,492
5,121
62,492
177,609
130,337
172,957
130,337
-
-
-
-
The Directors estimate the potential tax losses and section 330 exploration expenditure deduction entitlements available to the
consolidated entity to be $11,662,896 (2000 : $7,748,391).
The future income tax benefit arising from tax losses has not been recognised as an asset because recovery is not virtually
certain.
The tax benefits will only be obtained if:
Page 41
a)
The consolidated entity derives future assessable income of a nature and of an amount sufficient to enable the benefit from
the deductions for the losses to be realised;
b)
The consolidated entity continues to comply with the conditions for deductibility imposed by tax legislation; and
c)
No changes in tax legislation adversely affect the Company in realising the benefit from the deductions for losses.
5.0
Consolidated Entity
2001
2000
$
$
Parent Entity
2001
2000
$
$
119,554
6,661
116,885
6,661
119,554
6,661
116,885
6,661
-
-
436,320
363,346
-
-
436,320
363,346
-
-
20
10
-
-
20
10
Plant and equipment at cost
85,448
62,605
85,448
62,605
Accumulated depreciation
(60,540)
(48,995)
(60,540)
(48,995)
NOTE 5.
RECEIVABLES (CURRENT)
Goods & Services Tax Paid
NOTE 6.
RECEIVABLES (NON CURRENT)
Loan to controlled entities (Note 17)
NOTE 7.
INVESTMENTS IN CONTROLLED ENTITIES
Shares in controlled entities – at cost (Note 23)
NOTE 8.
PROPERTY PLANT AND EQUIPMENT
24,908
13,610
24,908
13,610
Office equipment & furniture at cost
32,730
24,251
32,730
24,251
(21,194)
(14,625)
(21,194)
(14,625)
11,536
9,626
11,536
9,626
Motor vehicles at cost
198,254
176,168
198,254
176,168
(108,187)
(81,772)
(108,187)
(81,772)
90,067
94,396
90,067
94,396
126,511
117,632
126,511
117,632
Total property, plant and equipment
Consolidated Entity
2001
$
Parent Entity
2001
$
Reconciliation
Plant and equipment:
Carrying amount at 1 July 2000
13,610
13,610
Additions
22,843
22,843
Disposals
-
-
Depreciation Expense
(11,545)
(11,545)
Carrying value at 30 June 2001
24,908
24,908
Office equipment and furniture:
9,626
9,626
Additions
8,478
8,478
Disposals
-
-
(6,568)
(6,568)
11,536
11,536
Motor vehicles:
94,396
94,396
Additions
22,086
22,086
Disposals
-
-
(26,415)
(26,415)
90,067
90,067
Page 42
5.0
Consolidated Entity
2001
2000
$
$
NOTE 9.
Parent Entity
2001
2000
$
$
EXPLORATION AND EVALUATION
COSTS CARRIED FORWARD
Balance at beginning of year
10,263,600
7,681,825
9,900,254
7,681,825
138,027
350,286
138,027
350,286
2,881,681
2,260,843
2,844,325
1,897,497
Acquisition costs
Exploration and evaluation costs incurred during the year
Exploration and evaluation costs written off
Balance at end of year
(156,436)
(29,354)
(154,643)
(29,354)
13,126,872
10,263,600
12,727,963
9,900,254
The ultimate recoupment of costs carried forward is dependant upon the successful development and/or commercial
exploitation or alternatively, sale of respective areas of interest.
NOTE 10. PAYABLES (CURRENT)
Trade creditors and accruals
256,885
172,323
256,885
172,323
Trade creditors are non-interest bearing and are normally settled on 30 day terms.
NOTE 11. PROVISIONS (CURRENT)
Employee entitlements
93,829
77,769
93,829
77,769
24,476,302
21,676,342
24,476,302
21,676,342
NOTE 12. CONTRIBUTED EQUITY
Issued and paid up capital
100,958,727 (2000 : 90,958,872)
Ordinary Shares fully paid
Less: Capital Raising Expenses
(458,208)
(306,841)
(458,208)
(306,841)
24,018,094
21,369,501
24,018,094
21,369,501
Movements in issued and paid up capital of the parent entity during the year are as follows:
2001
Number
Balance at beginning of year
$
90,958,872
21,676,342
Issued during the year
9,999,855
2,799,960
Balance at end of year
100,958,727
24,476,302
9,999,855 Shares were issued during March 2001 at $0.28 per share to fund exploration activities and for additional working
capital.
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in
the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
Options
No Options in the Company were exercised during the year.
1,670,000 Options were issued by the Company to employees during the year.
40,000 Options expired during the year.
Page 43
5.0
As at 30 June 2001 the Company had the following Options on issue:
Number Issued
Expiry Date
Exercise Price
100,000
28 August 2001
$0.25
150,000
01 September 2001
$0.25
350,000
15 December 2001
$0.25
50,000
05 March 2002
$0.25
200,000
19 December 2002
$0.25
200,000
19 December 2002
$0.35
200,000
19 December 2002
$0.45
200,000
19 December 2002
$0.55
200,000
19 December 2002
$0.65
100,000
4 February 2004
$0.25
785,000
19 October 2004
$0.35
785,000
19 October 2004
$0.50
3,320,000
Consolidated Entity
2001
2000
$
$
Parent Entity
2001
2000
$
$
NOTE 13. ACCUMULATED LOSSES
Balance at the beginning of the year
Net Loss
Balance at end of the year
7,306,404
6,770,768
7,306,404
6,770,768
558,500
535,636
523,758
535,636
7,864,904
7,306,404
7,830,162
7,306,404
(558,500)
(535,636)
(523,758)
(535,636)
156,436
29,354
154,643
29,354
44,529
50,858
44,529
50,858
-
4,289
-
4,289
(18,779)
7,443
(16,110)
7,443
(376,314)
(443,692)
(340,696)
(443,692)
-
176,841
-
176,841
3,130,967
2,431,839
3,130,947
2,431,829
-
1,493,457
-
1,493,457
3,130,967
3,925,296
3,130,947
3,925,286
NOTE 14. STATEMENT OF CASH FLOWS
a)
Reconciliation of loss from ordinary activities after
income tax to the net cash flows from operations
Loss from ordinary activities after income tax
Add/(less)
Exploration and evaluation costs written off
Depreciation
(Increase)/decrease in accrued interest
Increase/(decrease) in creditors, accruals and receivables
b)
Non-Cash Financing and Investing Activities
Issue of 768,872 shares to a nominee of Carmichael
First Capital Pty Limited pursuant to a negotiated
success fee which crystallised with the signing of the
Strategic Alliance with Centaur Mining & Exploration
Limited on 17 September 1999
c)
Reconciliation of Cash
Cash on hand and at bank
Commercial bills
Closing cash balance
Environmental Bonds of $25,960 (2000 : $25,960) are included in Cash on hand and at bank. This amount is held as security
term deposits and is not available to the Company for ordinary activities.
Page 44
5.0
Consolidated Entity
2001
2000
$
$
Parent Entity
2001
2000
$
$
236,400
291,388
236,400
2001
Number
2000
Number
$0 - $9,999
2
1
$10,000 - $19,999
1
-
$20,000 - $29,999
1
2
$40,000 - $49,999
1
1
$150,000 - $159,999
1
-
$210,000 - $219,999
-
1
NOTE 15. REMUNERATION OF DIRECTORS
Income paid or payable, or otherwise made available to
Directors by the consolidated entity and related parties in
connection with the management of affairs of
the Company:
The numbers of the consolidated entity’s Directors whose
income (including superannuation contributions) was
within the specified bands are as follows:
291,388
NOTE 16. REMUNERATION OF EXECUTIVES
Income paid or payable, or otherwise made available to
Executives by the consolidated entity and related parties
in connection with the management of affairs
of the Company:
The numbers of the Company’s Executives whose income
(including superannuation contributions) was within
the specified bands are as follows:
$150,000 - $159,999
2001
$
2000
$
158,100
150,000
2001
Number
2000
Number
1
1
The consolidated entity employs a single Senior Executive, being the Exploration Manager.
The terms Director and Executive Officer have been treated as mutually exclusive for the purposes of this disclosure.
In the opinion of the Directors, remuneration paid to Directors and Executives is considered fair and reasonable.
NOTE 17. RELATED PARTY DISCLOSURES
Page 45
a)
The directors of the parent entity during the financial year were:
Rodney Michael Evans
Ian James Buchhorn
Robert George Colville
Peter James Lee (resigned 20 October 2000, re-appointed 29 November 2000, resigned 31 August 2001)
Stephen Bruce Dennis (appointed 20 October 2000, resigned 20 November 2000)
Richard Monti (alternate for S B Dennis - appointed 20 October 2000, resigned 20 November 2000)
b)
Related party transactions during the financial year were:
• payment of $60,000 (2000 : $60,000) to parties related to Mr I J Buchhorn for the provision of office accommodation
on normal commercial terms and conditions;
• payment of $nil (2000 : $1,068) for residential accommodation secured by the Company for an employee from a party
related to Mr I J Buchhorn on normal commercial terms and conditions;
• payment of $2,228 (2000 : $1,256) to parties related to Mr I J Buchhorn for the provision of secretarial services and
temporary staff on normal commercial terms and conditions;
• payments of $nil (2000 : $75,000) for acquisition of mining tenements from parties related to Mr I J Buchhorn on
normal commercial terms and conditions;
• information on remuneration of Directors and Executives of the consolidated entity is disclosed in Notes 15 and 16;
• Interest-free loan of $366,192 (2000 : $363,346) was made by the parent entity to the controlled entity Balladonia Energy NL;
• Interest-free loan of $70,128 (2000 : $nil) was made by the parent entity to the controlled entity Avoca Resources Limited.
5.0
c)
Transactions of Directors and Director related entities concerning Shares or Options were:
• Aggregate number of Shares and Options of the parent entity held directly, indirectly or beneficially by Directors or
Director-related entities at balance date:
2001
2000
Ordinary Shares held
Options over Ordinary Shares held
34,233,155
31,609,855
1,350,000
1,350,000
• During the year Directors and Director related entities Share transactions resulted in an increase in their Shareholding of
2,623,300 shares which were acquired on the same basis as similar transactions with other Shareholders;
d)
No other benefits have been received or are receivable by Directors or Director related entities, other than those already
disclosed in the notes to the accounts.
e)
Heron Resources Limited is the ultimate parent entity. Heron Resources Limited is a company that is incorporated and
domiciled in Australia. During the year the Company changed its status from a no liability company to a company limited by
shares. Ownership interest in the controlled entities is as set out in Note 23.
NOTE 18. FINANCIAL INSTRUMENTS
a)
Terms, conditions and accounting policies
The consolidated entity’s accounting policies, including the terms and conditions of each class of financial asset, financial
liability and equity instrument, both recognised and unrecognised at the balance date, are as follows:
Recognised Financial Balance
Instruments
Sheet Notes
Accounting Policies
Terms and Conditions
11am Call Accounts
11am Call Accounts are carried at cost.
The 11am Call Accounts are at call
with an interest rate of 4.75%
(2000 : 5.75%).
Commercial Bills
Commercial Bills are carried at an
amount representing cost and a portion
of the discount recognised as
income on an effective yield basis.
Commercial Bills have a term
of 26 days with an interest
rate of 4.75% (2000 : 6.15%).
Environmental Bonds
Environmental Bonds are carried at cost. Environmental Bonds are security
term deposits with a 6 month term
with an interest rate of 4.9%
(2000 : 5.5%).
i) Financial assets
ii) Financial liabilities
Trade creditors
and accruals
10
Liabilities are recognised for amounts
to be paid in the future for goods and
services received, whether or not billed
to the economic entity.
Trade liabilities are normally settled
on 30 day terms.
12
Ordinary Share capital is recognised at
the fair value of the consideration
received by the Company.
Details of the Shares issued and the
terms and conditions of the Options
outstanding over ordinary Shares at
balance date are set out in Note 12.
iii) Equity
Ordinary Shares
Page 46
5.0
b)
Interest rate risk
The consolidated entity’s exposure to interest rate risks and the effective interest rates of financial assets and financial
liabilities, both recognised and unrecognised at the balance date are as follows:
Financial Instruments
Floating
interest rate
Fixed interest
rate maturing in
1 year or less
Total carrying
amount as per
balance sheet
2001
$
2000
$
2001
$
2000
$
2001
$
2000
$
35,502
1,866,425
-
-
35,502
1,866,425
- 1,493,457
Weighted average
effective
interest rate
2001
%
2000
%
i) Financial assets
Cash at bank
Commercial Bills
-
-
11am Call Accounts
3,069,505
539,454
-
- 3,069,505
Environmental Bonds
25,960
25,960
-
-
3,130,967 3,925,296
-
- 3,130,967 3,925,296
Total financial assets
Floating
Interest Rate
2001
$
- 1,493,457
25,960
4.85
-
6.15
539,454
4.75
5.75
25,960
4.90
5.50
Total carrying
amount as per
balance sheet
2001
2000
$
$
2000
$
4.00
n/a
n/a
Weighted average
effective
interest rate
2001
2000
%
%
ii) Financial liabilities
256,885
172,323
256,885
172,323
n/a
n/a
Total financial liabilities
256,885
172,323
256,885
172,323
n/a
n/a
c)
Net fair values
Total carrying amount as per
balance sheet
2001
2000
$
$
Aggregate net fair value
2001
$
2000
$
35,502
1,866,425
Financial assets
Cash at bank
35,502
1,866,425
Commercial Bills
-
1,493,457
-
1,493,457
3,069,505
539,454
3,069,505
539,454
Environmental Bonds
25,960
25,960
25,960
25,960
Total financial assets
3,130,967
3,925,296
3,130,967
3,925,296
11am Call accounts
Financial liabilities
d)
256,885
172,323
256,885
172,323
Total financial liabilities
256,885
172,323
256,885
172,323
The following methods and assumptions are used to determine the net fair values of financial assets and liabilities.
Recognised financial instruments:
Cash, cash equivalents and short-term investments:
The carrying amount approximates fair value
because of their short-term maturity.
Receivables and trade creditors:
The carrying amount approximates fair value.
NOTE 19. AUDITORS’ REMUNERATION
Consolidated Entity
2001
2000
$
$
Parent Entity
2001
2000
$
$
Amounts received or due and receivable by the auditors for:
Page 47
- audit services
10,175
11,345
10,175
- other services
4,638
-
4,638
11.345
-
5.0
NOTE 20. COMMITMENTS FOR EXPENDITURE
Exploration Commitments
In order to maintain current rights of tenure to exploration and mining tenements, the consolidated entity has the following
discretionary exploration expenditure requirements up until expiry of leases. These obligations, which are subject to renegotiation
upon expiry of the leases, are not provided for in the financial statements and are payable:
Consolidated Entity
2001
2000
$
$
Parent Entity
2001
2000
$
$
Not later than 1 year
2,000,000
2,000,000
1,500,000
1,800,000
Later than 1 year but not later than 5 years
8,000,000
8,000,000
6,000,000
6,800,000
-
-
-
-
Later than 5 years
If the consolidated entity decides to relinquish certain leases and/or does not meet these obligations, assets recognised in the
balance sheet may require review to determine the appropriateness of carrying values. The sale, transfer or farm-out of
exploration rights to third parties will reduce or extinguish these obligations. Those amounts detailed above do not include
expenditure commitments which are the responsibility of joint venture partners (Note 22).
NOTE 21. SEGMENT INFORMATION
The consolidated entity operates in the mineral exploration industry in Australia.
NOTE 22. JOINT VENTURE AGREEMENTS
The consolidated entity has entered into or is negotiating the following joint venture agreements:
Project
Operator
Laverton
Mt Morgans
Snake Hill
Southern Laverton Tectonic Zone
Edjudina and Laverton
Bungalbin and Mount Jackson
Karonie South
Scotia Kanowna
Transline
Binduli East
Victory
Perrinvale
Kookynie
Blister Dam
Roe Hills
Metex Resources Limited
Metex Resources Limited
Barra Resources Limited
Gutnick Resources NL
Croesus Mining NL
Portman Limited
WMC Resources Limited
Delta Gold NL
Harmony Gold Limited
AngloGold Australasia Limited
WMC Resources Limited
Mt Burgess Mining NL
Newcrest Operations Limited
Place Dome Asia Pacific
Delta Gold NL
Right to
Earn
70%
70%
70%
80%
80%
100%*
80%
70%
80%
75%
80%
70%
75%
70%
80%
TOTAL
*
Farm-in
Expenditure
$500,000
$200,000
$300,000
$1,200,000
$1,000,000
$250,000
$300,000
$1,000,000
$800,000
$500,000
$125,000
$500,000
$800,000
$1,200,000
$1,000,000
$9,675,000
The Company has a royalty based on tonnes of Iron Ore sold by Portman Limited.
NOTE 23. INVESTMENTS IN CONTROLLED ENTITIES
Name of
Entity
Balladonia Energy NL
Avoca Resources Limited
Country of
Incorporation
Australia
Australia
Class of
Shares
Ordinary
Ordinary
Equity Holding
2001
2000
100%
100%
100%
-
Cost of Parent Entity’s
Investment
2001
2000
$
$
10
10
10
-
Balladonia Energy NL was registered to evaluate the potential of documented Oil Shale occurrences in the Balladonia area to
contribute to the generation of the energy, sulphur and lime requirements of Heron’s Nickel Laterite projects. The corporate objective
has been to introduce a technical partner with demonstrated Oil Shale expertise, to further advance the Oil Shale projects.
Avoca Resources Limited was registered to spin-off the Heron Resources Limited non-nickel exploration assets in order to enable
Heron to focus on its Nickel Laterite assets and allow more appropriate resources to be devoted to the development of nonnickel assets.
Page 48
5.0
NOTE 24. CONTINGENT LIABILITIES
Native title claims have been made with respect to areas which include tenements in which the consolidated entity has interests.
The consolidated entity is unable to determine the prospects for success or otherwise of the claims and, in any event, whether
or not and to what extent the claims may significantly affect the consolidated entity or its projects. Agreement is being reached
with native title claimants regarding certain areas in which the consolidated entity has interests.
NOTE 25. EARNINGS PER SHARE
2001
$
Basic earnings per Share
Weighted average number of ordinary Shares outstanding
during the year used in the calculation of basic earnings per Share.
2000
$
(0.0059)
(0.0068)
94,070,707
77,925,300
As diluted earnings per Share is not materially different from
basic earnings per Share it has not been disclosed.
NOTE 26. EMPLOYEE ENTITLEMENTS
Consolidated Entity
2001
2000
$
$
a)
Parent Entity
2001
2000
$
$
Employee Entitlements:
The aggregate employee entitlement is comprised of:
Provisions (Current)
b)
93,829
77,769
93,829
77,769
Employee Share Scheme
An employee share option plan has been established for Heron Resources Limited, where employees, directors and officers of
the consolidated entity are issued with Options over ordinary Shares of Heron Resources Limited. The Options, issued for no
consideration, are in general exercisable at any time during the period commencing 12 months after the commencement date
and ending on the expiry date. There are currently nine employees, directors and officers eligible for this scheme.
The Options cannot be transferred and will not be quoted on the ASX.
During the year 1,670,000 Options were issued, 40,000 Options expired and no Options were exercised under the scheme.
As at 30 June 2001 options on issue under this scheme were:
Number
Issued
100,000
150,000
350,000
50,000
100,000
785,000
785,000
2,320,000
Expiry Date
28 August 2001
01 September 2001
15 December 2001
05 March 2002
4 February 2004
19 October 2004
19 October 2004
Exercise
Price
$0.25
$0.25
$0.25
$0.25
$0.25
$0.35
$0.50
c) The consolidated entity employed seven employees as at 30 June 2001 (2000 : six employees).
NOTE 27. SUBSEQUENT EVENTS
As announced on 3 September 2001, subject to certain conditions precedent (including approval by the Shareholders of
Heron Resources Limited) to be satisfied or waived on or before 15 October 2001 or such later date as may be agreed, it has
been agreed to make a private placement to Resource Capital Fund II L.P. of 10 million ordinary Shares in the capital of the
Company at 30 cents per Share, to raise $3,000,000, together with 10 million three year Options to subscribe for Heron
Shares at 35 cents per Share (issued for no consideration).
Page 49
5.0 Directors’ Declaration
In accordance with a resolution of the Directors of Heron Resources Limited it is declared that:
a)
The financial statements and notes comply with Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
b)
Give a true and fair view of the Company’s and consolidated entity’s financial position as at 30 June 2001 and of their
performance, as represented by the results of their operations and their cash flows, for the financial year ended on that date.
In the Directors’ opinion:
a)
The financial statements and notes are in accordance with the Corporations Act 2001; and
b)
At the date of this declaration there are reasonable grounds to believe that the Company will be able to pay its debts when
they become due and payable.
On behalf of the Board
R G COLVILLE
Director
Page 50
6.0
Independent Audit Report
To the members of Heron Resources Limited
Scope
We have audited the financial report of Heron Resources Limited for the year ended 30 June 2001 as set out on pages 36 to
50, including the Directors’ Declaration. The Company’s Directors are responsible for the financial report which includes the
financial statements of Heron Resources Limited and the consolidated financial statements of the consolidated entity comprising
the Company and the entities it controlled at the end of, or during, the financial year. We have conducted an independent audit
of the financial report in order to express an opinion on it to the members of the Company.
Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the
financial report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting
the amounts and other disclosures in the financial report and the evaluation of accounting policies and significant accounting
estimates. These procedures have been undertaken to form an opinion as to whether, in all material respects, the financial report
is presented fairly in accordance with Accounting Standards, other mandatory professional reporting requirements and statutory
requirements, in Australia, so as to present a view which is consistent with our understanding of the Company’s and the
consolidated entity’s financial position and performance as represented by the results of their operations and their cash flows.
The audit opinion expressed in this report has been formed on the above basis.
Audit Opinion
In our opinion, the financial report of Heron Resources Limited is in accordance with:
a)
the Corporations Act 2001 including:
i) giving a true and fair view of the Company’s and consolidated entity’s financial position as at 30 June 2001 and of their
performance for the year ended on that date; and
ii) complying with Accounting Standards and the Corporations Regulations 2001; and
b)
other mandatory professional reporting requirements.
BUTLER SETTINERI
Chartered Accountants
Page 51
COLIN BUTLER
Partner
7.0 Shareholder Information
SHAREHOLDER INFORMATION AT 05 SEPTEMBER 2001
1. Issued Shares and Options
a)
Distribution of Shareholders:
Size of Holding
Number of Holders
Shares Held
1
-
1,000
41
28,990
1,001
-
5,000
476
1,557,278
5,001
-
10,000
429
3,701,315
10,001
-
100,000
687
22,460,317
100,001
-
76
73,210,827
1709
100,958,727
b)
The twenty largest Shareholders hold 59.35% of the issued fully paid capital of the Company.
c)
Substantial Shareholder who has notified the Company:
Holder
d)
Number of Shares
%
Hazurn Pty Ltd
25,750,000
25.51
Centaur Nickel Investments Pty Ltd
15,890,310
15.74
Distribution of Optionholders:
The following Options were on issue:
i)
350,000
exercisable on or before 15 December 2001
payment of $0.25 per Option exercised;
ii)
50,000
exercisable on or before 05 March 2002
iii)
200,000
iv)
200,000
v)
200,000
vi)
200,000
vii)
200,000
viii)
100,000
exercisable on or before 04 February 2004
ix)
785,000
exercisable on or before 19 October 2004
x)
785,000
exercisable on or before 19 October 2004
Size of Holding
Number of Holders
0
Options Held
1
-
1,000
0
1,001
-
5,000
0
0
5,001
-
10,000
0
0
10,001
-
100,000
100,001
-
3
175,000
7
2,895,000
10
3,070,000
e)
There were 179 Shareholders who held less than a marketable parcel.
f)
Nil securities have been classified by ASX as restricted.
VOTING RIGHTS
In accordance with the Company’s Constitution, voting rights are on the basis of a show of hands, one vote for every registered
holder and on a poll, one vote for each Share held by registered holders.
Page 52
7.0 Shareholder Information cont
Twenty Largest Shareholders as at 05 September 2001
Number of Shares
%
1.
Hazurn Pty Ltd
25,750,000
25.51
2.
Centaur Nickel Investments Pty Ltd
15,890,310
15.74
3.
Koltai Holdings Pty Ltd
2,675,679
2.65
4.
Buchhorn Ian James
2,447,857
2.42
5.
Buchhorn Pamela Jean
1,519,998
1.51
6.
Killoran NL
1,480,074
1.47
7.
National Nominees Limited
1,217,605
1.21
8.
Dolerite Investments Pty
1,100,000
1.09
9.
Baracus Pty Ltd
1,000,000
0.99
10.
Commonwealth Custodial Pty Ltd
1,000,000
0.99
11.
Bronwen Pty Ltd
800,000
0.79
12.
Kett Peter John
701,300
0.69
13.
Overnight Nominees Pty Ltd
621,985
0.62
14.
GHK Mining Pty Ltd
600,000
0.59
15.
Ufar Pty Ltd
560,000
0.55
16.
Jayleaf Holdings Pty Ltd
550,000
0.54
17.
Hawke Robert Lawrence
506,666
0.50
18.
Goldenstate Holdings Pty Ltd
500,000
0.50
19.
Otway John Percival
500,000
0.50
20.
Yengage Pty Ltd
500,000
0.50
59,921,474
59.35
TOTAL
Optionholders as at 5 September 2001
Optionholders (Options exercisable on or before 15 December 2001) were:
Number of Options
% of Issued Options
Whitebeach Pty Ltd
200,000
57.14
Colville Marilyn
150,000
42.86
TOTAL
350,000
100.00
Optionholders (Options exercisable on or before 05 March 2002) were:
Number of Options
% of Issued Options
Rudd Mara
50,000
100.00
TOTAL
50,000
100.00
Optionholders (Options exercisable on or before 19 December 2002) were:
Number of Options
% of Issued Options
Buchhorn Ian James
1,000,000
100.00
TOTAL
1,000,000
100.00
Optionholders (Options exercisable on or before 4 February 2004) were:
Number of Options
Gobbett Simon
Geary Susan
Rudd Alan
TOTAL
Page 53
% of Issued Options
25,000
25,000
50,000
25.00
25.00
50.00
100,000
100.00
7.0 Shareholder Information cont
Optionholders (Options exercisable on or before 19 October 2004) were:
Number of Options
Geary Peter
Gobbett Simon
Parkway Superannuation Fund
Rudd Alan
Arancini Sandra
TOTAL
% of Issued Options
150,000
320,000
500,000
500,000
100,000
9.55
20.38
31.85
31.85
6.37
1,570,000
100.00
Summary of Optionholders as at 05 September 2001
Number of Options
1.
Buchhorn Ian James
2.
3.
% of Issued Options
1,000,000
32.57
Rudd Alan
550,000
17.92
Parkway Superannuation Fund
500,000
16.29
4.
Gobbett Simon
345,000
11.24
5.
Whitebeach Pty Ltd
200,000
6.51
6.
Colville Marilyn
150,000
4.89
7.
Geary Peter
150,000
4.89
8.
Arancini Sandra
100,000
3.26
9.
Rudd Mara
50,000
1.63
10.
Geary Susan
25,000
0.81
3,070,000
100.00
Page 54
8.0
Interest in Mining Tenements
Prospect
Geographic
Location
Tenement
Identifier
Area Status Interest
km2
Held
HERON RESOURCES LIMITED NICKEL PROVINCES
Scotia
65km NW of Kalgoorlie
Goongarrie West
Goongarrie West
66km NNW of Kalgoorlie
Goongarrie
Goongarrie South
Siberia
Menzies South
Goongarrie
Comet Vale
Twin Hills
150km N of Kalgoorlie
Comet Vale
Scotia Dam
Scotia North
Vettersberg
Vettersberg
Scotia East
Scotia
62km NNE of Kalgoorlie
Goongarrie West
GoongarrieWest
Menzies East
Goongarrie South
Canegrass
Ghost Rocks
Ghost Rocks
Ghost Rocks
Scotia Dam
Scotia Dam
Scotia Dam
Vettersberg
Vetters North
Camperdown
Camperdown
Camperdown
Goongarrie
Menzies East
Menzies East
Menzies East
Goongarrie West
Goongarrie West
Goongarrie
Ghost Rocks
Yunndaga
Yunndaga
44
Goongarrie Nickel Project
E24/00113
5.60
E24/00116
98.00
E24/00117
126.00
E24/00119
2.80
E29/00148
14.00
M29/00283
M29/00303
M29/00304
E29/00356
4.78
E29/00433
11.20
E29/00437
19.60
E29/00462
89.60
E29/00490
42.00
E29/00508
8.40
M24/00542
7.18
M24/00744
0.06
M24/00749
9.37
M24/00750
4.48
M24/00798
0.26
M24/00843
4.71
M29/00167
1.09
M29/00202
5.95
M29/00231
1.29
M29/00272
5.94
M29/00278
8.14
M29/00289
8.96
M29/00290
5.97
M29/00291
8.96
P24/02754
1.82
P24/02755
2.00
P24/02756
1.28
M24/00541
P24/03695
1.95
M24/00691
P24/03734
1.84
P24/03748
1.62
P24/03749
1.87
P24/03750
1.82
P24/03763
1.79
P29/01413
0.10
M29/00230
P29/01500
1.20
M29/00274
6.76
P29/01634
1.84
P29/01635
1.39
M29/00292
P29/01671
0.39
P29/01682
0.75
P29/01734
1.89
P29/01735
1.21
521.05
Frances
Frances Lesley
Frances Lesley
Frances Lesley
Frances Lesley
Frances Lesley
Saddle Dam
Saddle Dam
Saddle Dam
8
Page 55
Lesley Nickel Project
E16/00174
5.60
E16/00192
86.80
E16/00239
36.40
E16/00240
2.80
M16/00385
2.00
P16/02123
1.75
P16/02124
1.86
P16/02125
1.30
138.51
Ni(-Au)
A
A
A
A
G
A
A
A
G
G
A
A
A
A
A
G
A
A
G
A
G
G
A
G
G
A
A
A
G
G
G
A
A
A
A
A
A
A
A
G
A
G
A
G
G
A
A
A
A
A
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
G
A
A
B
A
A
A
A
100%
100%
100%
100%
100%
100%
100%
100%
Ni
8.0
Interest in Mining Tenements cont
Prospect
Geographic
Location
Tenement
Identifier
km2
Held
Lake Emu West
68km NE of Kalgoorlie
Binti Binti South
Emu Lake
Sampson
Grey Dam
Betsy Bore
Mooree Hill
Jubilee
Acra
Wellington North
Boomerang Lake
Mt Ballona
Jungle Hill
Boomerang North
Acra North
Kalpini
Wellington North
Wellington North
Wellington East
Wellington East
Wellington North
Wellington North
Binti Binti South
Binti Binti South
Binti Binti South
Acra Chrysoprase
Wellington East
Acra North
Acra North
Acra North
Acra North
Betsy Bore
Betsy Bore
Wellington East
Barton Dam
Acra
Binti Binti
Binti Binti
Jubilee
39
Kalpini Nickel Project
E27/00188
16.80
E27/00251
39.20
E27/00260
2.80
E27/00273
176.40
E28/00991
11.20
E28/01100
173.60
E28/01187
28.00
E28/01191
64.40
E28/01223
109.20
E28/01224
196.00
E31/00519
156.80
E31/00575
67.20
E31/00579
81.20
E31/00581
78.40
M27/00349
1.14
M27/00350
4.28
M27/00361
6.17
M27/00362
7.46
M27/00364
2.14
M27/00365
8.09
M27/00395
2.61
M27/00402
1.55
M27/00408
8.90
M27/00409
5.94
M27/00410
8.90
M28/00127
0.32
M28/00169
1.48
M28/00199
9.76
M28/00200
8.43
M28/00201
9.63
M28/00202
9.17
M28/00205
8.50
M28/00206
8.88
M28/00215
3.30
M28/00259
3.41
M28/00260
9.03
M31/00297
8.90
M31/00305
5.93
P28/00980
1.01
1040.93
A
A
A
A
G
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Ni(-Au)
Pioneer
125km SSE of Kalgoorlie
Larkinville
Pioneer
Larkinville
Larkinville
Logans
Widgiemooltha
7
Widgimooltha Nickel Project
E15/00573
47.60
G
E15/00689
100.80
A
E63/00753
33.60
A
P15/04213
1.22
G
P15/04214
1.21
G
P15/04464
0.22
A
P15/04475
0.04
A
184.69
100%
100%
100%
100%
100%
100%
100%
Clinker Hill
32km SE of Kalgoorlie
Wombola North
Wombola North
3
Bulong South Project
E25/00250
58.80
P26/03090
1.41
P26/03091
1.08
61.29
100%
100%
100%
Ni-Au
Ni-Au
A
A
A
Page 56
8.0
Prospect
Geographic
Location
Mount Dimer
112km NNE of Southern Cross
Timberfield
Yeeding Hill South
95km N of Southern Cross
Yendilberin Hills
Helena
Mount Dimer
Yeeding Hill
108km N of Southern Cross
Bungalbin Hill
Bungalbin Hill
Bungalbin Hill
10
Tenement
Identifier
km2
Held
Bungalbin Nickel Project
E77/00946
170.80
E77/00947
89.60
E77/00975
196.00
E77/00976
109.20
E77/01067
184.80
E77/01068
8.40
E77/01071
22.40
E77/01076
123.20
E77/01077
28.00
E77/01082
50.40
982.80
Ni(-Au)
G
A
A
A
A
A
A
A
A
A
Bungalbin Iron Ore Project
Bungalbin
E77/00842
112.58
G
Mount Jackson
E77/00896
36.40
G
Mount Jackson
E77/00919
53.20
G
3
202.18
1
Portman Limited right to acquire Iron Ore rights through spending $0.25m, and
providing Heron with an Iron Ore Production Royalty. Heron retain all other minerals.
Page 57
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Fe
100%
100%
100%
Lake Barlee
Lake Barlee
Elvire Rock
3
Mount Elvire Project
E29/00503
16.80
E30/00267
92.40
E30/00268
128.80
238.00
A
A
A
100%
100%
100%
Maggie Hays Hill
140km SE of Southern Cross
1
Maggie Hays Hill Project
E63/00625
81.20
81.20
A
100%
Mount Catherine South
Mount Remarkable
Claypan Dam
Yerilla Creek Dam
Mount Catherine East
Mount Catherine East
Yerilla
Duck Hill South
Claypan Well
McAuliffe Well
Mount Catherine
Westward Ho Well
Yerilla
Wallbrook Hill
Kilmore Hill
Kilmore Hill
Lake Raeside
Lake Raeside
Aubils
Aubils
Lake Raeside
Murphy Well
Mount Percy
Yerilla
Yerilla
Boyce Creek
Boyce Creek
Boyce Creek
Aubils
Aubils
Aubils
Aubils
Aubils
Aubils
Aubils
35
Edjudina Nickel Project
E31/00279
14.00
E31/00346
2.80
E31/00347
2.80
E31/00348
11.20
E31/00372
5.60
E31/00373
2.80
E31/00399
2.80
E31/00415
81.20
E31/00446
8.40
E31/00518
50.40
E31/00529
2.80
E31/00576
30.80
E31/00584
47.60
E31/00586
86.80
E39/00694
14.00
E39/00695
2.80
E39/00700
32.88
E39/00725
16.80
M39/00658
1.48
M39/00659
1.48
E39/00726
8.40
E39/00831
33.60
E39/00883
196.00
M31/00105
2.40
M31/00110
7.20
M31/00278
0.70
M31/00296
5.80
M31/00300
1.11
M39/00656
1.48
M39/00657
4.44
M39/00660
1.48
M39/00662
2.96
M39/00805
5.98
M39/00806
5.98
M39/00807
8.97
705.93
G
B
B
B
B
B
A
B
A
B
A
A
A
A
G
G
B
B
A
A
B
B
A
G
G
A
A
A
A
A
A
A
A
A
A
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
1
1
1
Ni-Au
Ni-Au
Ni(-Au)
8.0
Prospect
Geographic
Location
Lake Rebecca
Lake Rebecca
2
Mineral Patch Hill
75km SE of Laverton
Merolia
50km SE of Laverton
Jasper Hill
168km SE of Laverton
Jasper Hills
120km SE of Laverton
4
2
MPI Gold Pty Ltd own the Gold rights.
Tenement
Identifier
km2
Held
Mulgabbie Nickel Project
M31/00080
2.02
M31/00081
1.21
M31/00312
3.23
G
G
A
100%
100%
100%
Ni(-Au)
Laverton Nickel Project
E38/00931
196.00
E38/01179
196.00
E39/00880
30.80
E39/00907
25.20
448.00
G
G
G
A
100%
100%
100%
100%
A
A
G
A
A
A
A
A
A
A
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Ni
2
2
2
2
AVOCA RESOURCES LIMITED PRECIOUS METAL PROVINCES
JIMBERLANA PLATINUM
Bronzite Ridge
Norseman Highway
Norseman Highway
Norseman Highway
Norseman Highway
Norseman Highway
Norseman Highway
Norseman Highway
Norseman Highway
Norseman Highway
10
PROVINCE
40km W of Norseman
9km NW of Norseman
9km NW of Norseman
8km NW of Norseman
7km NW of Norseman
9km NW of Norseman
10km NW of Norseman
9km NW of Norseman
8km W of Norseman
8km W of Norseman
Cowan Project
E63/00797
P63/01137
P63/01138
P63/01139
P63/01140
P63/01141
P63/01142
P63/01143
P63/01144
P63/01145
PGE-Ni-Cu
196.00
1.19
1.43
1.21
1.21
1.96
1.21
1.24
1.51
1.77
208.74
Norseman
5km N of Norseman
Norseman
5km N of Norseman
Jimberlana
8km NNE of Norseman
Jimberlana
8km NNE of Norseman
4
Dundas Hills Project
P63/01160
1.17
P63/01161
1.22
P63/01162
1.87
P63/01163
1.92
6.18
A
A
A
A
100%
100%
100%
100%
PGE-Ni-Cu
Heartbreak
39km NE of Norseman
Heartbreak
52km NE of Norseman
Mount Norcott
21km ENE of Norseman
3
Mount Norcott Project
E63/00709
196.00
E63/00712
196.00
E63/00798
126.00
518.00
A
A
A
100%
100%
100%
JIMBERLANA PLATINUM
Frasers Range West
Heartbreak 1
Heartbreak 2
Heartbreak
Heartbreak
Woodline Hills
6
PROVINCE
75km NE of Norseman
76km E of Norseman
70km NE of Norseman
82km E of Norseman
81km NE of Norseman
77km NE of Norseman
Ten Mile Rock Project
E63/00631
36.40
E63/00707
196.00
E63/00708
196.00
E63/00711
196.00
E63/00713
103.60
E63/00795
162.40
786.80
G
A
A
A
A
A
100%
100%
100%
100%
100%
100%
Fraser Range
163km NE of Norseman
Fraser Range
Fraser Range
Fraser Range
4
Fraser Range Project
E28/01162
196.00
E28/01163
196.00
E28/01164
196.00
E28/01165
196.00
784.00
A
A
A
A
100%
100%
100%
100%
PGE-Ni-Cu
PGE-Ni-Cu
PGE-Ni-Cu
Page 58
8.0
Prospect
Geographic
Location
ILLAARA PROVINCE
Ranford Peak
Mount Marmion
Metzkes Find
Lawrence Find
Lawrence Find North
Lawrence Find
Illaara
7
3
Mount Burgess Mining NL right to earn 70% through spending
Heron retains Nickel and Sulphur rights.
Tenement
Identifier
Perrinvale Joint
E29/00434
E29/00435
E29/00455
E30/00203
E30/00226
E30/00228
E30/00254
km2
Held
Venture Project
VMS-Au-Ni
98.00
G
100% 3
95.20
G
100% 3
156.80
A
100% 3
208.52
A
100% 3
196.00
G
100% 3
64.40
G
100% 3
126.00
A
100% 3
944.92
$0.5m.
Snake Hill North
Snake Hill Joint Venture Project:
E29/00290
5.60
G
100%
M29/00310
A
100%
Snake Hill
E30/00166
8.40
G
100%
2
14.00
4
Barra Resources Limited right to earn 70% through spending $0.3m.
Blister Dam Joint Venture
Dunnsville
E16/00181
2.80
Dunnsville
E16/00182
14.00
Carbine
E16/00195
44.80
Carbine
E16/00254
0.02
Chadwin
E16/00264
5.60
Lake Carnage
E24/00115
42.00
Blister Dam
M16/00435
6.84
Blister Dam
M24/00842
3.87
8
119.93
5
Place Dome Asia Pacific right to earn 70% through spending $1.2m.
Mungari Northwest
27km W of Kalgoorlie
Mungari Northwest
Mungari West
Mungari
Mungari
Mungari
Mungari
7
Northwest
Northwest
Northwest
Northwest
44km
42km
37km
44km
NW
NW
NW
NW
of
of
of
of
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Mungari
20km WNW of Kalgoorlie
Mungari
Dryden's Find
Dryden's Find
Dryden's Find
Dryden's Find
Dryden's Find
Dryden's Find
Dryden's Find
Dryden's Find
Mungari
11
Page 59
Project
G
100%
A
100%
G
100%
A
100%
A
100%
A
100%
A
100%
A
100%
Au(-Ni)
4
4
4
Au-Ni
5
5
5
5
5
5
5
5
Powder Sill Project
E15/00411
2.08
E16/00121
25.20
E16/00146
5.60
M16/00446
M16/00377
2.00
M16/00378
2.74
M16/00379
7.30
M16/00414
2.00
46.92
A
G
G
A
A
A
A
A
PGE-Ni-Cu-Au
100%
100%
100%
100%
100%
100%
100%
100%
Mungari Gold Project
E15/00726
19.60
M15/01350
1.55
P15/04416
0.33
P15/04417
1.88
P15/04418
2.00
P15/04419
1.86
P15/04420
1.87
P15/04421
1.86
P15/04422
1.14
P15/04425
1.87
P15/04472
1.12
35.08
A
A
A
A
A
A
A
A
A
A
A
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Au
8.0
Prospect
Geographic
Location
Tenement
Identifier
km2
Held
Mount Hunt
16km S of Kalgoorlie
Binduli East
8km SSW of Kalgoorlie
Binduli East
Binduli East
Binduli East
Binduli East Joint Venture
E26/00081
14.00
P26/02791
1.98
P26/02792
1.82
P26/02794
1.60
P26/02800
1.68
M26/00751
Binduli East
P26/02801
1.50
Binduli East
P26/02802
1.73
M26/00762
Binduli East
7km SW of Kalgoorlie
P26/02803
1.96
M26/00750
Binduli East
P26/02814
0.71
Binduli East
P26/02815
1.96
M26/00763
Binduli East
P26/02904
1.84
Binduli East
P26/02905
2.00
Binduli East
P26/02972
1.96
13
34.74
6
AngloGold Australasia Limited right to earn 75% through spending $0.5m.
Project
A
100%
G
100%
G
100%
G
100%
G
100%
A
100%
G
100%
G
100%
A
100%
G
100%
A
100%
G
100%
G
100%
A
100%
G
100%
G
100%
G
100%
Gindalbie Terrian Joint Venture
Mulgarie North
E24/00097
28.00
G
Gindalbie
E27/00145
47.60
G
Scotia East
E27/00169
108.40
G
Scotia East
M24/00799
9.53
A
Scotia East
M24/00800
6.41
A
5
199.94
7
Delta Gold NL right to earn 70% in respect of gold through spending $1.0m.
Gidji Roaster
Five Mill Hill
Kanowna
Kanowna
Kanowna
Kurramia
Kurramia South
7
Gidgi Project
E24/00111
M26/00736
M27/00392
M27/00393
M27/00394
P26/02898
P26/02977
Au
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
6
Project
100% 7
100% 7
100% 7
100% 7
100% 7
Au-Ni
Au-Ni
64.40
7.04
7.70
8.02
8.02
1.60
0.89
97.67
A
A
A
A
A
G
G
Roe Hills Joint Venture Project
Kurnalpi East
E28/00886
53.20
G
Tap Rock Hill
E28/00927
190.40
A
Kurnalpi Hill
E28/01012
53.20
G
Jumungie Hill
E28/01013
8.40
B
Kurnalpi Hill
E28/01108
92.40
A
Hampton
E28/01166
5.60
A
6
403.20
8
Delta Gold NL right to earn 80% in respect of gold through spending $1.0m.
100%
100%
100%
100%
100%
100%
100%
Au-Ni
100%
100%
100%
100%
100%
100%
8
8
8
8
8
8
Page 60
8.0
Prospect
Geographic
Location
Tenement
Identifier
km2
Held
Gundocketa Hill
65km ESE of Kalgoorlie
Transline Joint Venture Project
E25/00114
16.80
G
100%
M25/00267
A
100%
Gundocketa Hill
E25/00167
2.80
G
100%
Gundocketa Hill
E25/00168
2.80
G
100%
Trans Find North
54km E of Kalgoorlie
E25/00179
89.60
G
100%
Trans Find
E25/00184
53.20
G
100%
Gundockerta Hill West
E25/00186
8.40
G
100%
Seabrook Hills
E25/00189
2.80
G
100%
Seabrook Hills
E25/00191
14.00
B
100%
Trans Find
E25/00195
42.00
G
100%
Hawke Hill
E25/00204
8.40
G
100%
Pipeclay Peaks
E25/00216
120.40
A
100%
Kim's Dam
E28/01003
56.00
G
100%
Gundocketa Hill
66km ENE of Kalgoorlie
E28/01116
140.00
A
100%
Randalls
P25/01580
1.00
A
100%
14
558.20
9
Harmony Gold Limited right to earn 80% through spending $0.8m.
Transline
Pipeclay Peaks
Lake Sloan
Trans East
Hampton
Hampton
Sawmill Dam
Transline
Transline
Round Hill
Pineapple Dam
Lake Yindarlgooda
Avoca Downs
Adelaide Dams
14
Avoca Project
E25/00234
E25/00241
E25/00248
E28/01079
E28/01117
E28/01118
E28/01129
E28/01136
E28/01137
E28/01148
E28/01188
E28/01192
E28/01199
E28/01207
Wiluna South
30km SE of Wiluna
1
Yandal Project
E53/1010
B
A
A
A
A
A
B
B
B
A
A
A
A
A
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
128.80
128.80
A
100%
9
9
9
9
9
9
9
9
9
9
9
9
Wildara North Project
E36/00387
16.80
E36/00388
5.60
E36/00432
19.60
E36/00458
5.60
E36/00459
8.40
56.00
Au-Ni
100%
100%
100%
100%
100%
100%
100%
10
10
10
10
10
10
10
Au-Ni
A
G
A
A
A
100%
100%
100%
100%
100%
Kookynie Joint Venture Project
Glenorn Station South
59km SW of Leonora
E31/00410
67.20
G
100%
Friday Well
47km SW of Leonora
E31/00484
16.80
G
100%
Mount Melita East
38km SW of Leonora
E40/00127
2.80
G
100%
3
86.80
11
Newcrest Operations Limited right to earn 75% in respect of Gold through spending $0.8m.
9
Au
Victory Joint Venture Project
E37/00406
16.80
G
M37/01088
A
Victory Gold Mine
50km NW of Leonora
M37/00931
0.18
A
Victory
53km NW of Leonora
P37/05830
1.95
G
Victory
52km NW of Leonora
P37/05831
1.96
G
Victory
51km NW of Leonora
P37/05832
1.87
G
Victory
50km NW of Leonora
P37/05833
1.00
G
6
23.76
10
WMC Resources Limited right to earn 80% through spending $0.125m.
Page 61
9
Au-Ni
53.20
11.20
196.00
44.80
33.60
5.60
19.60
14.00
33.60
196.00
11.20
8.40
165.20
25.20
817.60
Doyle Well
59km NW of Leonora
Mount McClure
135km NNW of Leonora
Mount McClure
Try Again Bore
Table Hill
Table Hill East
97km NW of Leonora
5
Au-Ni
9
Au-Ni
11
11
11
8.0
Prospect
Geographic
Location
Desdemona North
21km SSE of Leonora
Morapoi
57km S of Leonora
Tampa
30km SSE of Leonora
Tampa
33km SSE of Leonora
Tampa
35km SSE of Leonora
Mt Melita
30km SE of Leonora
Malcolm East
22km ESE of Leonora
Malcolm East
21km ESE of Leonora
Malcolm East
23km ESE of Leonora
Malcolm East
22km ESE of Leonora
Alice Gold Mine
17km ESE of Leonora
Eulaminna
46km ESE of Leonora
Eulaminna
47km ESE of Leonora
Eulaminna
47km ESE of Leonora
Eulaminna
46km ESE of Leonora
Eulaminna
46km ESE of Leonora
16
Tenement
Identifier
km2
Held
Kookynie Project
E40/00122
2.80
E40/00132
5.97
E40/00140
8.98
E40/00141
2.99
E40/00142
14.00
E40/00186
58.80
M37/00727
4.43
M37/00728
5.73
M37/00729
9.74
M37/00730
8.00
M37/00953
0.10
P39/04127
1.20
P39/04128
1.20
P39/04129
1.20
P39/04130
1.20
P39/04131
1.28
121.54
Au-Ni
A
A
A
A
G
A
A
A
A
A
A
A
A
A
A
A
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Edjudina Laverton Joint Venture Project
Yarri South
E31/00235
5.60
G
100% 12
Yarri East
E31/00312
68.41
A
100% 12
Seddon Bore
E31/00354
16.80
B
100% 12
Webb Find West
E31/00374
14.00
G
100% 12
Boyce Creek South
E31/00377
28.00
G
100% 12
Duck Hill West
E31/00430
84.00
G
100% 12
Lake Rebecca
E31/00465
2.80
G
100% 12
Lake Rebecca
E31/00479
11.20
B
100% 12
Mount Boyce
E31/00524
176.40
A
100% 12
Camel Hump
49km N of Laverton
E38/00945
9.06
G
100% 12
Mount Varden West
55km N of Laverton
E38/01152
117.60
G
100% 12
Mount Varden West
55km N of Laverton
E38/01153
19.60
G
100% 12
Yabboo Hill East
E39/00795
8.40
G
100% 12
13
561.87
12
Croesus Mining NL right to earn 80% in respect of gold through spending $1.0m.
Au-Ni
Pinjin South
Patricia West
Pinjin
Au-Ni
Stophanis East
Yarri North East
Yarri North East
Edjudina East
Stophanis East
Broken Hill Bore
Clymies Well
Hobble Gap
Patricia South
Deep Well South
Deep Well North
Deep Well
Gardners Find
Mount Hornet
Gardners Find
Crab Hill
Crab Hill
Crab Hill
Crab Hill
Crab Hill
150km
150km
152km
144km
151km
150km
147km
155km
150km
168km
174km
173km
170km
177km
174km
135km
135km
135km
135km
135km
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
of
of
of
of
of
of
of
of
of
of
of
of
of
of
of
of
of
of
of
of
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Sth Laverton Tectonic Zone JV Project
E28/00891
11.20
G
100% 13
E31/00244
16.80
A
100% 13
E31/00263
2.80
G
100% 13
M31/00280
A
100% 13
M31/00313
A
100% 13
E31/00265
2.80
G
100% 13
E31/00313
2.80
G
100% 13
E31/00315
2.80
G
100% 13
E31/00317
38.65
G
100% 13
E31/00343
2.97
G
100% 13
E31/00352
2.86
A
100% 13
E31/00353
37.46
A
100% 13
E31/00434
44.80
G
100% 13
E31/00489
16.80
G
100% 13
E39/00661
2.80
G
100% 13
E39/00662
2.98
A
100% 13
E39/00663
2.98
A
100% 13
E39/00721
47.60
G
100% 13
E39/00729
33.60
G
100% 13
E39/00734
5.60
A
100% 13
P28/00923
1.38
G
100% 13
P28/00924
1.71
G
100% 13
P28/00925
1.95
G
100% 13
P28/00926
1.64
G
100% 13
P28/00927
1.14
G
100% 13
M28/00261
A
100% 13
Page 62
8.0
Prospect
Geographic
Location
Tenement
Identifier
km2
Held
Sth Laverton Tectonic Zone
P31/01546
1.61
P31/01547
1.20
P31/01569
1.79
P31/01570
2.00
P31/01571
1.83
P31/01572
1.86
P31/01573
0.76
P31/01574
1.87
P31/01575
1.72
P39/03691
2.00
M39/00812
34
304.76
13
Gutnick Resources NL right to earn 80% in respect of gold through spending $1.2m.
Stophanis South
143km
Stophanis South
143km
Edjudina
150km
Edjudina
150km
Edjudina
150km
Edjudina
150km
Edjudina
150km
Edjudina
150km
Edjudina
150km
Gardners Find
171km
NW
NW
NW
NW
NW
NW
NW
NW
NW
NW
of
of
of
of
of
of
of
of
of
of
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
JV Project cont Au-Ni
G
100% 13
G
100% 13
A
100% 13
A
100% 13
A
100% 13
A
100% 13
A
100% 13
A
100% 13
A
100% 13
G
100% 13
A
100% 13
Karonie South
Karonie South
Karonie South Joint venture Project
E28/00631
196.00
G
100%
E28/00665
67.20
G
100%
M28/00248
A
100%
M28/00249
A
100%
M28/00250
A
100%
M28/00251
A
100%
Karonie South
E28/00860
8.78
G
100%
Karonie South
E28/00861
58.54
G
100%
Karonie South
E28/00862
33.60
G
100%
Karonie South
E28/00929
95.20
G
100%
Buningonia
E28/01014
42.00
G
100%
Fraser
E63/00691
151.20
A
100%
8
652.52
14
WMC Resources Limited right to earn 80% through spending $0.3m.
CELIA-LAVERTON TECTONIC ZONE PROVINCE
Corktree Well South
29km N of Laverton
Corktree Well West
36km N of Laverton
Bandya Hill
107km NNW of Laverton
Mulga Queen
Doris Well
60km N of Laverton
King of Creation
53km N of Laverton
Mineshaft Well
72km N of Laverton
Hackwell
90km N of Laverton
Ingi-Jingi Hill
Perseverance Well
53km WNW of Laverton
Euro
10km S of Laverton
Euro
10km S of Laverton
12
Erlistoun Project
E38/00947
E38/00948
E38/01270
E38/01329
E38/01368
E38/01375
E38/01380
E38/01404
E38/01418
E39/00738
M38/00404
M38/00405
Mount Zephyr
79km NE of Leonora
Mount Zephyr
71km NE of Leonora
Mount Zephyr
71km NE of Leonora
Mount Zephyr
72km NE of Leonora
4
Mount Zephyr Project
E39/00538
50.40
E39/00927
25.20
E39/00928
19.60
E39/00940
58.80
154.00
14
14
14
14
14
14
14
14
14
14
14
Au-Ni
5.60
30.80
36.40
2.80
22.40
2.80
25.20
22.40
22.40
36.40
2.88
1.77
211.85
B
B
A
A
A
A
A
A
A
G
G
G
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
G
A
A
A
100%
100%
100%
100%
Au-Ni
Laverton Joint Venture Project
Hawkes Nest
14km WSW of Laverton
E38/00831
16.80
G
Hawkes Nest South
E38/00832
14.00
G
2
30.80
15
Metex Resources Limited right to earn 70% through spending $0.5m.
Page 63
Au-Ni
14
Au-Ni
100%
100%
15
15
8.0
Prospect
Geographic
Location
Mount Morgans Northwest
Mount
Mount
Mount
Mount
44km
45km
46km
46km
Morgans
Morgans
Morgans
Morgans
West
West
West
West
WSW
WSW
WSW
WSW
of
of
of
of
Laverton
Laverton
Laverton
Laverton
Tenement
Identifier
Mount Morgans Joint Venture Project
P39/03454
1.56
G
20%
M39/00754
A
20%
P39/03455
1.95
G
20%
P39/03456
1.95
G
20%
P39/03457
1.86
G
20%
M39/00755
A
20%
P39/03466
1.71
G
20%
P39/03467
1.71
G
20%
P39/03468
1.71
G
20%
P39/03469
1.71
G
20%
M39/00753
A
20%
8
16
km2
Held
Au-Ni
16
16
16
16
16
16
16
16
16
16
16
14.15
Metex Resources Limited have earnt 70% through spending $0.5m.
Heron free carry to mining at 20%.
BALLADONIA ENERGY NL OIL SHALE PROVINCES
BREMER_EUCLA PALAEODRAINAGE PROVINCE
The Yates
146km S of Norseman
Mount Beaumont
154km SSE of Norseman
Charlina Rocks
153km ESE of Norseman
Balladonia
Boingaring Rocks
Afghan Rock
Balladonia West
Charlina South
Charlina West
Curnadinia Rock
Yalodinya Rock
Charlina East
Balladonia Central
Chidalinya Rock
Jerandilla
Eclipse Hill
189km SE of Norseman
Bonnie Hill
Florabell Hill
Balladonia
184km E of Norseman
Balladonia Central
Balladonia Central
21
Oil-Sulphur
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
3648.40
BREMER_EUCLA PALAEODRAINAGE PROVINCE
Lake Cowan
Heartbreak 9
Geordie Rock
Lake Dundas
Lort River
Flower
Lake Three Star
Lake Sharpe
Recruit Hill
Lake Fitzgerald
Mount Deans
Mount Deans
Lake Kirk
Lake Kirk
Lake Kirk
Lake Cowan
Lake Cowan
Lake Cowan
Lake Cowan
19
Balladonia Oil Shale Project
E63/00731
196.00
A
E63/00732
196.00
A
E69/01473
196.00
A
E69/01474
196.00
A
E69/01475
196.00
A
E69/01476
196.00
A
E69/01477
196.00
A
E69/01478
196.00
A
E69/01479
196.00
A
E69/01480
196.00
A
E69/01481
134.40
A
E69/01482
81.20
A
E69/01483
39.20
A
E69/01492
106.40
A
E69/01493
196.00
A
E69/01495
196.00
A
E69/01499
196.00
A
E69/01500
196.00
A
E69/01717
196.00
A
E69/01742
179.20
A
E69/01743
168.00
A
44km NNE of Norseman
46km NNE of Norseman
87km SSW of Norseman
161km SW of Norseman
8km SSW of Norseman
9km SSW of Norseman
6km SSW of Norseman
5km SSW of Norseman
4km SSW of Norseman
7km SSW of Norseman
5km SSW of Norseman
Ravensthorpe-Norseman
Oil Shale Project
E15/00570
204.01
E15/00656
61.60
E63/00720
112.00
E63/00736
64.40
E74/00278
151.20
E74/00279
193.20
E74/00280
193.20
E74/00281
196.00
E74/00282
196.00
E74/00283
196.00
M63/00417
9.87
M63/00418
9.26
P63/01114
1.69
P63/01115
1.86
P63/01116
1.95
P63/01119
1.06
P63/01122
1.77
P63/01123
1.80
P63/01124
0.49
1597.36
Oil-Sulphur
A
A
A
A
A
A
A
A
A
A
A
A
G
G
G
G
G
G
G
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Page 64
8.0
Prospect
Geographic
Location
Tenement
Identifier
km2
Held
HERON RESOURCES LIMITED NICKEL AND PRECIOUS METAL PROVINCES
ILLAARA PROVINCE
Meninga Soak
1
Lawrence Find Project
E30/00262
81.20
81.20
A
100%
IDA FAULT PROVINCE
Mulline
Mulline
Morleys
3
Ida Fault Project
E30/00158
39.20
E30/00159
28.00
E30/00247
61.60
128.80
B
B
B
100%
100%
100%
IDA FAULT PROVINCE
Bullabulling
Bullabulling
Jaurdie Hills
Jaurdie Hills
Londonderry
Londonderry
Londonderry
Londonderry
Londonderry
Londonderry
10
Bullabulling Project
E15/00679
114.80
E16/00172
11.80
E16/00265
50.40
E16/00269
100.80
P15/04435
1.62
P15/04436
1.90
P15/04437
1.87
P15/04438
1.92
P15/04439
2.00
P15/04440
0.27
287.39
A
A
A
A
A
A
A
A
A
A
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Mount Martin Project
E26/00080
53.20
M26/00667
2.27
P26/02907
1.60
P26/02908
2.00
P26/02909
1.66
60.73
A
A
A
A
A
100%
100%
100%
100%
100%
A
A
A
A
B
A
A
A
A
A
A
A
A
A
A
A
G
G
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
KAMBALDA DOMAIN PROVINCE
Cutters Luck
32km SSE
Cutters Luck
48km SSE
Cutters Luck
29km SSE
Cutters Luck
27km SSE
Cutters Luck
44km SSE
5
EMU FAULT PROVINCE
Yindarlgooda
Lake Yindarlgooda
Qeen Lapage
Qeen Lapage
Mt Mcleay
Mayday North
Lindsays Find
Kalpini West
Kalpini West
Lindsays North
Gindalbie
Garibaldi
Silver Swan North
Mount Magnetic
Mount Magnetic
Mount Magnetic
Lindsays Find
Garibaldi
18
Page 65
of
of
of
of
of
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Kalgoorlie
Garibaldi Project
E25/00222
E25/00251
E25/00254
E25/00256
E27/00243
E27/00264
M27/00305
M27/00371
M27/00372
M27/00382
M27/00383
M27/00386
M27/00388
P25/01720
P25/01721
P25/01722
P27/01474
P27/01491
Ni-Au
Ni-Au
Ni-Au
Ni-Au
Ni-Au
58.80
8.40
28.00
28.00
16.80
14.00
1.20
3.37
1.64
1.15
3.57
0.29
5.54
1.20
1.20
1.04
0.08
1.34
147.61
8.0
Prospect
Geographic
Location
Mulgabbie
Mulgabbie West
Rebecca East
Crab Hill
Oak Bore
Oak Bore South
Yilgangi East
Yilgangi
Deenya Hill
Yarri
Yilgangi Castle
Mt Catherine
Webb Find
Banjo Well
Yarri
Yilgangi North
Yilgangi North
Yilgangi North
18
Tenement
Identifier
Yarri Project
E28/00823
E28/00976
E28/01082
E28/01138
E31/00233
E31/00234
E31/00236
E31/00494
E31/00582
M31/00141
M31/00173
M31/00249
M31/00281
M31/00310
M31/00314
P31/01580
P31/01581
P31/01582
km2
Held
Au
8.40
8.40
5.60
5.60
2.80
2.80
1.60
81.20
8.40
0.20
0.34
0.58
1.20
4.70
440.00
1.85
1.76
1.65
B
B
B
A
G
G
G
A
A
A
A
A
A
A
A
G
G
G
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
577.09
TOTAL 476
A = Application
19,056.00
G= Granted
B = Exploration Licence Application in Ballot
Page 66
Glossary of Terms
"Alteration" means rock-forming minerals which have been chemically changed.
"Ankerite" means Carbonate of Calcium, Iron, Magnesium and Manganese.
"Anomaly" means a value higher or lower than expected, which outlines a zone of potential exploration interest but not necessarily
of commercial significance.
"Antigorite" means a platy green Magnesium Silicate of the serpentine group, derived from the weathering of olivine.
Goongarrie, antigorite is diagnostic in the lowermost ore profile.
At
"Au" means gold.
"Autoclave" means a reaction vessel in which ore is mixed with high temperature and pressure solutions to enable metals to enter
into solution as a precursor to extraction in metallic form.
"Breccia" means a broken fragmental rock, usually related to fault zones. Due to the open spaces within a breccia, such rocks
are a favourable site for groundwater movement.
"Chlorite" means a platy green Magnesium Aluminosilicate resembling the mica group, derived from the weathering of antigorite.
At Goongarrie, chlorite is diagnostic in the lower ore profile.
"Co" means cobalt.
"Cu" means copper.
"Dunite" means peridotite where the mafic mineral is olivine.
"Duricrust" means a hard weathering crust which is typically ferruginous and aluminous.
"Feasibility Study" means:
A "Pre-feasibility Study" is an engineering and cost study of a mining operation, processing plant and plant infrastructure,
which for the Goongarrie Nickel Project includes a flow sheet of the "Cawse" type that covers ore beneficiation, high pressure
acid leach, CCD washing, solution purification, cobalt and nickel solvent extraction, formation of an intermediate precipitate
and electrowinning to produce nickel and cobalt metal. Included in the cost estimates will be infrastructure, tailings disposal,
power supply, and owner's costs. The plant design may change as a result of testwork analysis, optimisation studies and
engineering improvements performed during execution of the Pre-feasibility Study. Operating and capital cost estimates are
to an accuracy of ± 30%. In the case of the Goongarrie Nickel Project, the drill density would be such that the resource
status is Indicated Mineral Resource.
A "Bankable Feasibility Study" is an engineering and cost study addressing the same issues as a "Pre-feasibility Study", but
in such detail that it contains sufficient information to satisfy a bank, that it can rely on cash flows and earnings from the
project to repay any project loan, and that the assets of the project are suitable as collateral for the loan. The bank must
feel comfortable that on a worst case scenario the loan will be repaid. Engineering design concepts will have largely been
finalised, and operating and capital cost estimates are to an accuracy of ± 10%. In the case of the Goongarrie Nickel Project,
the drill density would be such that the resource status is Proved Ore Reserve.
"Felsic" means light coloured feldspar and silica rich igneous rock.
"Gabbro" means a dark colored mafic intrusive rock consisting dominantly of feldspar and pyroxene.
"Geochemical Survey" means the systematic study of the variation of chemical elements in rocks or soils.
"Gibbsite" means Aluminium Hydroxide, a principal component of bauxite. At Goongarrie, gibbsite is diagnostic in the uppermost
ore profile.
"Goethite" means Iron Hydroxide, being a yellow, red and brown ochre. At Goongarrie, goethite occurs throughout the total upper
ore profile.
"Goethite Ore" means nickel-cobalt laterite ore composed mainly of the iron mineral goethite (+40% Fe2O3), which is an optimum
ore type.
"Gossan" means the weathered oxidised surface expression of a sulphide-bearing deposit, and consists predominantly of
hydrated iron oxides.
"g/t" means grams per tonne.
"km" means kilometres.
"km2" means square kilometres.
"Komatiite" means an ultramafic rock with high magnesium content extruded from a volcano. Textural variations include:
"Orthocumulate" means a rock which exhibits a high proportion of crystallised trapped interstitial ("intercumulus") liquid. The
surrounded ("cumulus") olivine crystals are subhedral to enhedral in form. This komatiite type is regarded as prospective for
Nickel Sulphide mineralisation (e.g. Kambalda nickel mine).
"Mesocumulate" means a rock with cumulus crystals exhibiting extensive mutual boundary contact, but retaining some
recognisable interstitial material. This komatiite type is regarded as prospective for Nickel Laterite mineralisation.
"Adcumulate" means a rock with little or no intercumulus material and characterised dominantly by anhedral crystals. This
komatiite type is regarded as prospective for Nickel Laterite mineralisation.
"m" means metres.
"Maghemite" means a strongly magnetic form of hematite, an Iron Oxide.
"Mineralisation" means, in economic geology, the introduction of valuable elements into a rock body.
"Ni" means nickel.
"Nickel Laterite" means nickel and cobalt occurring as an oxidised hydrated iron oxide and ferruginous clay assemblage overlying
weathered ultramafic rock.
"Nickel Sulphide" means nickel and copper occurring as an un-oxidised sulphide assemblage associated with fresh ultramafic
rock.
Page 67
Glossary of Terms cont
"Norite" means a form of gabbro where hypersthene is the mafic material.
"Oil Shale" means a sedimentary rock containing low grade lignite coal and a hydrocarbon material termed kerogen.
"Olivine" means a magnesium-iron silicate mineral, often occurring in rocks prospective for nickel.
"Option" means a Share option to subscribe for fully paid ordinary Shares in Heron.
"PAL" means Pressure Acid Leach, a nickel laterite processing technique in which ore is dissolved in hot high pressure sulphuric
acid contained within a titanium-lined reaction vessel termed an autoclave, to release nickel and cobalt into solution, for
precipitation as an intermediate product or electroplating as a pure metal.
"Pedogenic" means pertaining to soil formation.
"Peridotite" means an ultramafic rock consisting of olivine and pyroxene, with minimal feldspar.
"PGE" means Platinum Group Elements.
"prospect" means a target upon which exploration programs are planned or have commenced.
"project" means a grouping of prospects within a specific geographic location, often with a common geological setting.
"province" means a grouping of projects within a geological district defined by a major mineralised crustal structure.
"ppb" means parts per billion.
"ppm" means parts per million.
"Precious Metals" means gold, silver and the Platinum Group Elements, ruthenium, rhodium, palladium, osmium, iridium and
platinum. The metals are chemically inert, malleable, dense and used in jewellery, and are of high unit value.
"RAB drilling" means the drilling technique in which a sample is returned to surface outside the rod string by compressed air.
Sample quality is poor.
"RC drilling" means the drilling method employing a rotating or hammering action on a drill bit which returns a sample to the
surface inside the rod string by compressed air. Sample quality is very good, particularly if the drill hole is dry.
"Resources and Ore Reserves" means:
"Proved Ore Reserve" is the economically mineable part of a Measured Mineral Resource. It includes diluting materials and
allowances for losses which may occur when the material is mined. Appropriate assessments, which may include Feasibility
Studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical,
economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time
of reporting that extraction could reasonably be justified. The term "economic" implies that extraction of the Ore Reserve
has been established or analytically demonstrated to be viable and justifiable under reasonable investment assumptions.
Proved Ore Reserve will require some degree of lateral continuity validation through diamond drilling, wide diameter (900mm)
bulk sample drilling, trial mining, exploration winze or most likely for Goongarrie, 10x10m pattern RC drilling.
"Measured Mineral Resource" is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics,
grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are spaced closely enough to confirm geological and/or grade continuity. At the
Goongarrie Nickel Project, Heron’s least dense drill RC pattern for Measured Mineral Resource status is 40x20m.
"Indicated Mineral Resource" is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics,
grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and
testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and
drill holes. The locations are too widely or inappropriately spaced to confirm geological and / or grade continuity but are
spaced closely enough for continuity to be assumed. At the Goongarrie Nickel Project, Heron’s least dense RC drill pattern
for Indicated Mineral Resource status is 80x80m.
"Inferred Mineral Resource" is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated
with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and / or grade
continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes which may be limited or of uncertain quality and reliability. At the Goongarrie Nickel Project,
Heron’s least dense RC drill pattern for Inferred Mineral Resource status is 400x80m.
"ROM" means run of mine ore, referring to the grade and type of ore that is expected to be fed to the processing plant on a day
to day basis.
"Rift" means a zone of crustal extension in which the predominant sediment deposition is conglomerate, and the predominant
volcanic activity is a bimodal basalt-rhyolite association which is intruded by co-magmatic granitoids. The high geothermal
gradients are very favourable for gold mineralisation.
"Shear Zone" means a zone in which crushed rock has been produced by the action of a shearing stress as on a fault.
"Saprolite" means strongly weathered clay-rich rock, often retaining original rock textures. Nickel Laterite ore is restricted to the
saprolite zone of weathering.
"Specific Gravity" or "SG" means the mass per unit volume of material, usually in reference to ore and waste.
"Waste: Ore ratio" means BCM of waste + BCM of low grade sub-ore divided by BCM of ROM ore.
"Tectonic Zone" means a major structural feature characterised by deformation of several kilometres in width.
"Ultramafic" means rocks composed almost entirely of mafic minerals which are prospective for nickel mineralisation.
"VMS" means volcanogenic massive sulphide, which relates to base metal Cu-Zn-Pb-Au-Ag sulphide mineralisation.
"Volcaniclastics" means sedimentary rocks derived from fragmental volcanic rocks.
"XRD" means X-ray Diffraction, which is an analytical means of identifying microscopic minerals.
Page 68
CORPORATE DIRECTORY
SHAREHOLDER REVIEW
COMPANY SECRETARY
AUDITORS
Ross Arancini BBus, ACA
Company Secretary
110 Hensman Street
SOUTH PERTH WA 6151
Telephone: (08) 9367 1213
Facsimile: (08) 9367 7853
Butler Settineri Chartered Accountants
35-37 Havelock Street
WEST PERTH WA 6005
Any Shareholder visiting Kalgoorlie is encouraged to drop in to the office and see how
it all works.
Usually a field trip to Goongarrie can be arranged with Pam Buchhorn, your most
capable tour guide.
BANKERS
REGISTERED AND PRINCIPAL OFFICE
21 Close Way
PO Box 1280
KALGOORLIE WA 6433
Telephone: (08) 9091 9253
Facsimile: (08) 9091 9256
Website: http://www.heronresources.com.au
“So this run-of-mine ore is worth $100 a
tonne, and Heron’s got 400 million tonnes!”
Local Kalgoorlie businessmen and
major Heron Shareholders Dean Willis,
Rino Borromei and Brett Nazzari
with David Crook.
Challenge Bank
230-236 Hannan Street
KALGOORLIE WA 6430
CORPORATE ADVISER
Carmichael First Capital Pty Limited
Level 11, 77 St Georges Terrace
PERTH WA 6000
Kalgoorlie businessman Nigel Byrd at
Goongarrie with some of the high grade
“$600 a tonne revenue value” drill samples.
Very encouraging when you’re a major
Heron Shareholder.
SOLICITORS TO THE COMPANY
SHARE REGISTRY
Security Transfer Registrars Pty Ltd
Level 1, 168 Adelaide Terrace
PERTH WA 6000
Telephone: (08) 9221 4200
Facsimile: (08) 9221 1581
McKenzie Lalor
74 Egan Street
KALGOORLIE WA
6430
Pullinger Readhead Stewart
46-50 Kings Park Road
WEST PERTH WA 6005
“A rose between two thorns....”
Alan Rudd, Libby Willis and
Simon Gobbett at
the Heron shed.
STOCK EXCHANGE
Front Cover: Holding high grade black
Goongarrie Ore, assaying 3% Ni and 2% Co.
Background montage of the exploration
journals of Keith Quartermaine
(Order of Australia), a Scientist and Historian.
Keith Quartermaine led his friends on expeditions into the
Heron, Avoca and Balladonia exploration country.
Between 1951 and 1976, Keith wrote 26 journals and took
over 10,000 photographs on his exploration of the
Nullarbor and Goldfields - exploring, recording and
researching the history, flora, fauna, caves, meteorites,
tektites and geological features of the region.
Keith began writing up his journals at the request of his
father who wanted to share in his activities in these remote
locations.
On these trips Keith was variously accompanied by Harry
Wheeler, John Carlisle (Order of Australia), Bill Cleverly,
Tom Bateman and Ross and Beverly Quartermaine.
Australian Stock Exchange Limited
2 The Esplanade
PERTH WA 6000
ASX CODE
HRR
SEAT ABBREVIATION
Heron
HOME BRANCH
Perth
INDUSTRY CLASSIFICATION
Other Metals 022 Base Metals
Jack Otway.
“There’s miles and
miles of that Laterite
at Perrinvale.”
Sue Geary, Administration Manager.
Easily the neatest office at Heron Kalgoorlie.
Please telephone Sue on (08) 9091 9253
if you have any enquiries.
RESEARCH SERVICE INDEX NO.
Mining H50
ISIN
AU000 000 HRR6
David Crook (far right) explaining the Pamela Jean Deeps to a very demanding
audience of Kalgoorlie-based Shareholders and the Board.
As Heron works in the same country, we take this
opportunity to acknowledge Keith Quartermaine,
a true Goldfields explorer.
from
All photographic page art by Justin Madden,
Kr
ep
p
are
Reynolds Graphics, Kalgoorlie.
Do
ug
Report
an
d
All sepia images in this
Keith Quartermaine’s volumes.
Footsteps of
Bill, Keith and Harry
across Lake Yindarlgooda.
C
y
tes
our
o
en
il e
E
f
A N N U A L
21 Close Way, West Kalgoorlie
PO Box 1280, Kalgoorlie, Western Australia, 6433
Telephone: (08) 9091 9253 Facsimile: (08) 9091 9256 Email: [email protected]
www.heronresources.com.au
R E P O R T
2 0 0 1

2001 Annual Report - Heron Resources Limited

Transcription

Similar documents

Israel: 1st-7th February 2015

Exploration Update - Windward Resources

A Mass for St Margaret

- Virginia Beach City Public Schools

A new process for the enrichment of nickel in

Will Use Permanent Equipment For Sinking New Shaft at Garson

A SHORT HISTORY of BAINSFORD CHURCH

1950, August - Sudbury Museums

SIA Indicators

Motu Akitua (Akitua Island)