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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Van Dieman | LSE:VDM | London | Ordinary Share | GB00B03HFG82 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.875 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:8136M
Van Dieman Mines plc
26 May 2005
VAN DIEMAN MINES PLC ("Van Dieman" or "The Company")
26 May 2005
Annual Report and Financial Statements
for the period ended 31 December 2004
CHAIRMAN'S STATEMENT
I am pleased to present this, my first annual statement as chairman of Van
Dieman Mines, and to review a year in which the Company successfully listed on
AIM and raised #3.32 million towards the development of its tin and sapphire
mining operations in Tasmania.
STRATEGIC OBJECTIVES
The Company remains on course with its strategy of establishing stable, low cost
and profitable mining operations at its main mineral tenement areas, Scotia and
Endurance. The Company expects to begin mining operations in fourth-quarter 2005
and has a defined strategy for the next two years of optimising extraction and
processing and establishing reliable outlets for the mine production at premium
pricing.
We believe that Van Dieman Mines' strategy is both distinctive and innovative. A
number of features differentiate us from other juniors on AIM: our land position
is already consolidated and is being expanded; our mineable ore reserves are
established and well defined; we plan to use conventional, low-risk mining and
processing operations; and we have made significant progress towards securing
favourable marketing arrangements for our two principal products.
PROGRESS TOWARDS PRODUCTION
The Company has achieved the objectives defined at the time of its listing and
is now firmly on track with the process of securing the orderly development of
its principal properties. Applications for mining licences and other approvals,
as well as applications for extensions to these existing areas, have been lodged
with the Tasmania Dept of Mines. It is worth highlighting the excellent
relations we have established with this Government Department, and the fact that
the project has the support of the local community and local government
authorities. An Environmental Impact Study is under way and the Company is
advised that no significant impediments are anticipated.
As you will note from the more detailed progress report of the Chief Executive
Officer, Mr Clive Trist, the Company expects to secure mining lease approvals on
its main tenement areas by end-June 2005. Subsequent to the Company's year end
Van Dieman Mines made application for additional properties in adjacent areas.
It is important to note that this is a process of expansion into previously
explored areas rather than high-risk grass-roots exploration.
COMMODITY MARKETS
The fortuitous combination of tin and sapphires in the Company's ore reserve
(one of the very few such economic occurrences in the world) has created the
excellent marketing opportunity that is one of the cornerstones of Van Dieman
Mines' strategy.
A substantial improvement in the fundamentals of the tin market in recent years
has resulted in a sustained period of elevated prices. Tin demand remains firm,
with steady growth among existing uses as well as new, 'greener' applications
where tin substitutes for lead. On the supply side,
CHAIRMAN'S STATEMENT
CONTINUED
relatively few new additions to capacity are envisaged and the market overhang
of the US Government tin stockpile is finally disappearing.
Significantly, it is projected that on tin alone Van Dieman's project is
sufficiently robust to be profitable at a tin price as low as US$7,600/t. The
sapphire component of Van Dieman's output therefore represents an attractive
additional source of revenue. Gem quality sapphires continue to be the
number-one selling gemstone in the all-important US market. We can report good
progress with the arrangements for the planned marketing of both co-products
OUTLOOK
The mining component of the AIM market has seen unprecedented activity over past
18 months, underpinned by continuing economic growth in the West and the
powerful commodity-driven expansion of China and other Asian economies. The
recent volatility in mining markets has raised a degree of uncertainty but the
weight of opinion is that the current cycle has a considerable way to go. In
recent months, your Company's share price has remained stable, and enjoys solid
institutional support.
As Van Dieman enters the final stages of its progress towards production, the
Company continues to apply strict mine planning criteria and rigid operating
cost controls. We therefore believe the outlook for the Company is very
positive. Van Dieman has achieved its defined goals for the year and remains
firmly on course with production now in sight. I wish to thank my co-directors
who have worked so hard and so effectively to bring the Company to this point,
and also to thank our shareholders for their continuing support and confidence
in Van Dieman Mines.
M.J. Spriggs
Chairman
May, 2005
CHIEF EXECUTIVE OFFICER'S REPORT
Following its successful listing on AIM in November, 2004, the Company has moved
forward to implement the programme outlined in its prospectus with the objective
of commencing mining operations in Q4 this year. This report deals with the
activities undertaken since listing and currently underway towards achieving
that objective.
MINING LEASE APPROVALS
On 9 December 2004, the Company lodged mining lease applications to secure
approval for it to commence mining the Scotia (MLA 15M/2004) and Endurance (MLA
14M/2004) tenements.
The application process involves the preparation of an Environmental Impact
Statement (EIS), the preparation of a detailed mine plan and securing approvals
and licences from the following state and local government authorities, namely
Mineral Resources Tasmania (MRT), Department of Primary Industry, Water and
Environment (DPIWE) and the local council. Following meetings with
representatives from DPIWE the Company has prepared and circulated a detailed
work plan setting out the scope of work to be undertaken. Preparation of the EIS
is well advanced, consultants have been appointed, draft mine plans have been
submitted to MRT, initial meetings have been held with the local council and a
rehabilitation bond of A$100,000 has been paid to MRT pending their issuing the
mining lease approvals and finalizing the rehabilitation bond sum. At this time
the Company is on track to securing mining lease approvals by end June 2005.
GRANT OF ADDITIONAL LICENCES
On 7 April 2005, the Company was granted three additional exploration licences
adjoining its existing tenements and covering some 54 sq. km. The new areas form
potentially important extensions to the existing tin and sapphire resources in
the Scotia and Endurance licence areas.
DATABASE
The Company continues to add to its extensive database of drill logs as further
information comes to hand from MRT archives and private sources. Digitising of
the data is almost complete and the Company has entered into discussions with
Encom Technology Pty Ltd for that company to manage and update the database on
an ongoing basis. As this data has a very significant replacement value part of
any agreement with Encom will incorporate remote, secure backup storage for the
Company's database.
The Company has purchased and is currently commissioning a mine planning system
which comprises a GIS (Geographical Information System) software package and
state of the art GPS hardware. This will enable it to accurately locate in the
field, in three dimensional space, from the digitized drill log information, the
boundaries of the ore leads to be mined and will form the basis for the
Company's detailed mine plans at each location. On an ongoing basis earthmoving
equipment at each mine site will be fitted with GPS activated sensors which will
be programmed to guide operations according to the predetermined mine plan and
will prevent over or undermining of the ore body.
PILOT TREATMENT PLANT
In June the Company will take delivery of a portable, 15 m3 per hour, pilot
treatment plant which will form part of a bulk sampling programme to produce a
representative sample of approximately 2,000 gm of rough Sapphire for cutting
and evaluation by potential distributors and jewellery manufacturers in the USA.
Samples of tin concentrate produced from the sampling programme will be shipped
to Asian smelters as part of the programme to finalise off take agreements for
the tin concentrate.
Feedback from the pilot plant programme will also be used to fine tune final
design of the full scale treatment plants.
PREMISES
The Company has purchased premises in the village of Gladstone which is
centrally located close to the Company's tenements. This will serve as the
operations headquarters providing offices and limited accommodation.
EARTHMOVING EQUIPMENT
Following recent site visits by the earthmoving equipment supplier details of
the most suitable equipment for both the Scotia and Endurance sites are
currently being finalized. Schedules will then be drawn up to ensure equipment
is available, on site, to suit the Company's mine start up timetable in Q4 this
year. Negotiations to finalise a long term dry hire agreement, based on draft
terms and conditions provided last year, will be undertaken in the coming
months.
TREATMENT PLANT
In January this year, following shipment of a trial ore sample, discussions were
held in the USA with Goldfields Engineering regarding treatment plant design.
Those discussions are now to be followed up during May with the generation of a
detailed design and costings around a turnkey supply contract. Delivery lead
times will also be established to mesh with planned mine start up in Q4.
Discussions with potential suppliers of lease funding for the treatment plants
have commenced and will be accelerated as the capital costs are finalized.
TIN OFF-TAKE AGREEMENT
Negotiations based on the draft contract provided to the Company by Thaisarco
for their purchase and/or smelting of the Company's tin concentrates, including
both purchase of, and hedging options for, the refined tin metal are scheduled
to commence during May.
SAPPHIRE MARKETING PROGRAMME
The Sapphire marketing programme to establish reliable outlets for the Company's
stone with manufacturing jewellers in the USA has;
- established protocols for ensuring the stone can be
providenced from mine site to manufacturer
- evolved in conjunction with US marketers brand names
acceptable in the US market
- identified target high end manufacturing jewelers
- commenced working with a US marketing organization
specializing in the supply of gemstones to the jewellery trade
- established a programme, based on the bulk sampling
programme from the pilot treatment plant, to produce a representative sample of
rough Sapphire for cutting and evaluation by potential jewellery manufacturers
in the USA.
CONCLUSION
In conclusion we have a busy year ahead of us and much to achieve. We are indeed
fortunate to have a team of very able consultants and advisers supporting the
executive directors and a government in Tasmania which has made available senior
officers and directors from its Department of Infrastructure, Energy and
Resources to assist the Company in achieving its objectives.
C.N. Trist
Managing Director
May, 2005
REPORT OF THE DIRECTORS
The Directors present their report and financial statements for the period ended
31 December 2004.
RESULTS AND DIVIDEND
The consolidated loss for the period after taxation amounted to #559,367.
No dividends have been paid or proposed.
PRINCIPAL ACTIVITY AND REVIEW OF THE BUSINESS
The company was incorporated on 24 May 2004.
The group's principal activity is to acquire, explore, develop and mine tin,
precious stone and other mineral deposits in North Eastern Tasmania,
Australia.
On the 15 September 2004 the company acquired 100% of the share capital in Van
Dieman Mines Pty Limited, a company registered in NSW, Australia.
On the 23 November 2004, the company listed on the UK Alternative Investment
Market.
The funds raised from the share placement in November 2004 has enabled the
company through Van Dieman Mines Pty Limited, to embark on a programme to
commence mining two of the resource areas known as 'Scotia' and 'Endurance'. On
9 December 2004 the Company lodged mining lease applications for the Scotia and
Endurance areas. The measured and inferred reserves for these two areas are
18,347 tonnes of tin concentrate. In addition, associated minerals such as
Sapphire, Zircon, Rutile, Tantalite and Gold will be recoverable as a result of
the ore processing.
Future Operations
Van Dieman Mines strategy for the next two years centres around establishing
stable mining operations at Scotia and Endurance, optimizing minerals extraction
and processing and establishing reliable outlets for the mine production at
premium pricing. The Company also intends to complete exploration in zones
peripheral to the Scotia and Endurance leases.
Towards the end of this period Van Dieman Mines plans to complete exploration of
the Great Northern Plains tenements and to confirm their economic viability for
commencement of mining operations.
It is intended that mining of the Great Northern Plains tenements will commence
during the next three years. Exploration of the offshore areas would be
undertaken to confirm their economic viability for commencement of mining
operations.
EVENTS SINCE THE BALANCE DATE
In January 2005 the Company placed an order with Goldfield Engineering Company
for the supply of a 15 m3 per hour pilot treatment plant. The plant is scheduled
for delivery on site in Tasmania in June and will be used to produce a
representative sample of approximately 2,000 gm of rough Sapphire.
Van Dieman Mines has negotiated the purchase of premises in Gladstone, Tasmania
which is within close proximity of the proposed mine sites, to be used as
offices, storage and accommodation.
Since the balance date Van Dieman Mines has successfully applied for and has
been granted Exploration Licences (Nos. 57/2004, 58/2004 and 59/2004) over 54
square kilometers of potential tin and sapphire bearing alluvial zones.
SHARE CAPITAL AND SHARE OPTIONS
Details of changes in share capital and details of share options are given in
Notes 15, 16 and 17 to the financial statements.
DIRECTORS AND THEIR INTERESTS
As at 31 December 2004 and the date of this report, the identity and interests
of the directors are set out below::
Cargil Management Services Limited (appointed and resigned 24 May 2004)
Lea Yeat Limited (appointed 24 May, resigned 16 June 2004)
MJ Spriggs (appointed 15 October 2004)
CN Trist (appointed 24 May 2004)
KG Frey (appointed 16 June 2004)
NR Kinnane (appointed 16 June 2004)
At the date of their appointment, the directors did not hold any shares in the
company. At the year end Messrs Trist, Frey and Kinnane have an interest in
37,350,000 shares of the company through their investment in Markswift Limited.
Mr Spriggs has no interests.
POLITICAL AND CHARITABLE CONTRIBUTIONS
During the year, no political or charitable donations were made.
CREDITOR PAYMENT POLICY
It is the Company's normal practice to agree terms of transactions, including
payment terms, with suppliers and provided suppliers perform in accordance with
the agreed terms, it is the Company's policy that payment is made accordingly.
At 31 December 2004, the trade creditors of the Group were on average 18 days
old.
SUBSTANTIAL SHAREHOLDINGS
The company has been notified on 29 April 2005, the last practicable date prior
to the publication of these accounts of the following interests of 3 per cent or
more in its issued share capital.
Ordinary shares of 1p each Number Percentage
Chase Nominees Limited 3,055,501 4.26%
Credit Suisse First Boston 6,900,000 9.63%
client Nominees
HSBC Global Custody Nominee 5,315,000 7.42%
(UK) Limited
Markswift Limited 37,350,000 52.12%
Vidacos Nominees Limited 2,150,000 3.00%
Z Nominees Limited 2,163,333 3.02%
CORPORATE GOVERNANCE
The Company joined the Alternative Investment Market (AIM) on 23 November 2004.
Companies listed on AIM are not required to make an annual statement to
shareholders regarding compliance with The Combined Code - Principles of Good
Governance and Code of Best Practice ("The Combined Code"). However, the Board's
objective is to endeavour to comply with The Combined Code principles and code,
in so far as it is appropriate and practical for a company the size of Van
Dieman Mines Plc, to do so.
DIRECTORS
Mr Michael J. Spriggs, Non Executive Chairman
Michael Spriggs (aged 61) has 27 years mining sector experience. He graduated
from Oxford University with a B.A. (Honours) in 1964 and he obtained a M.Sc. in
Geology and Mineral Sciences from the University of Leicester in 1969. He worked
as an exploration geologist on a range of international assignments for a number
of major mining groups, including Anglo American, Falconbridge and Rio Tinto. He
spent 11 years with the mining team of the UK investment bank, SG Warburg (now
UBS) from 1986-97. He was appointed Head of the South African Mining Equities
Research Team, was subsequently appointed Director of Corporate Finance, and was
involved in a number of major cross-BORDER="0" mining transactions. In 1997, he
was appointed a Partner at College Hill, the UK public relations consultancy, as
Head of the Mining Team. He is a Member of the Institute of Mining, Metals &
Materials and a Chartered Engineer.
Mr Clive Trist, Managing Director
Mr Clive Trist (aged 60) has over 10 years senior management experience with
Australian and multinational public companies in general management and new
business venture roles. He has spent the last 18 years with venture capital,
investment banking and corporate advisory firms involved in corporate
restructuring, M & A, debt and equity fund raisings and company start-ups.
Between 1991 and 1995 he was a Partner in the investment banking firm MACC
Partners, a joint venture with Malaysia Borneo Finance Corporation. He has held
various directorships including Chairman, for 10 years of a successful UK
engineering group operating in Europe, North America and S.E. Asia. Mr Trist
holds a Bachelors Degree in Engineering, a Masters Degree in Business
Administration and is a Foundation Fellow of the Australian Institute of Company
Directors.
Mr Ken Frey, Executive Director, Marketing
Mr Ken Frey (age 58) has over 20 years experience with a leading Japanese
trading house and merchant bank involved in major infrastructure projects.
Projects managed during that period included the funding, supply and
commissioning of water turbines for six of the Tasmanian government's
electricity grid power stations and the initiation of Facom's computer marketing
programme in Australia. Mr Frey spent over 7 years in New York as a director of
a successful group of start up companies. This involved the establishment and
maintenance of a network of distributors stretching from Chicago through eastern
seaboard Boston to San Juan. He has also undertaken M & A assignments, debt and
equity fund raisings and company start ups in Australia and the US. Mr Frey
holds a Bachelors Degree in Economics.
Mr Neil Kinnane, Executive Director, Exploration & Operations
Mr Neil Kinnane (age 57) has over 35 years geology, exploration and mining
experience, much of it involving alluvial gold, tin and gemstone projects. In
1978, Mr Kinnane was instrumental in establishing a large alluvial tin operation
in North Queensland. During the period 1980 to 1988 Mr Kinnane was Chief
Geologist with Normin Consultants specialising in the field of alluvial mine
developments in Australia and Papua New Guinea. Since 1990, he has provided
geotechnical services to clients in Papua New Guinea, Lao People's Democratic
Republic, Thailand, Vietnam, Cambodia and the US in the areas of alluvial
gemstones and gold and hard rock gold, industrial minerals and petroleum. During
this period, in a trouble shooting capacity, Mr Kinnane managed the Great
Northern Sapphire mining operation. Mr Kinnane holds a Fellowship Diploma in
Geology from the Royal Melbourne Institute of Technology. He is a Fellow of the
Australasian Institute of Mining and Metallurgy and a Chartered Professional
Geologist.
DIRECTORS' REMUNERATION
All matters concerning the remuneration of executive directors are considered by
the remuneration committee. This committee is chaired by Mr Michael Spriggs.
Directors do not participate when their own individual remuneration is
discussed.
REMUNERATION POLICY
It is the Committee's policy that directors' remuneration should be commensurate
with services provided by them to the Company. The main elements of the
remuneration packages for directors are basic annual fees. There are no formal
bonus arrangements in place or other long-term incentive schemes.
The remuneration of the non-executive directors is determined by the Board and
comprises basic salary only.
The directors have service agreements but no pension contributions are paid by
the Company.
RELATIONS WITH SHAREHOLDERS
It is the intention of the Board to meet institutional investors on at least an
annual basis.
At the Annual General Meeting, the proxy votes lodged on each resolution are
indicated after a show of hands. Shareholders are encouraged to attend the
Annual General Meeting, at which time there is an opportunity for discussion
with members of the Board.
ACCOUNTABILITY AND AUDIT
Financial reporting
A statement about the directors' responsibilities for the Group's financial
statements appears on page 39.
Internal control
The Board is ultimately responsible for the Group's system of internal control
and for reviewing its effectiveness. However, such a system is designed to
manage rather than eliminate the risk of failure to achieve business objectives
and can provide only reasonable and not absolute assurance against material
misstatement or loss.
AUDIT COMMITTEE AND AUDITORS
The Audit Committee is composed of Mr Clive Trist and Mr Gary Douglas. The Audit
Committee has not met during the year but will normally meet twice a year or
more often if required. Because of the size of the Board, it is not possible to
comply with the Combined Code requirement that the Audit Committee should be
composed of at least three non-executive directors. The Board considers that the
present size of the Group does not justify a separate internal audit function.
The responsibilities of the Company's auditors appear in the auditors' report on
page 40.
ANNUAL GENERAL MEETING
Notice of this year's Annual General Meeting of the company, convened for 17
August 2005 is set out on the separate document.
The following resolutions are to be proposed at the Meeting :
1.
To receive and adopt the financial statements for the financial period ended
31 December 2004 together with the Reports of the Directors and Auditors
thereon.
2.
To re-elect Messrs M.J Spriggs, C. Trist, K. Frey and N. Kinnane who retire
pursuant to Article 89 of the Articles of Association of the company and who
being eligible offer themselves for re-election as directors of the company.
3.
To re-appoint PKF (UK) LLP as Auditors until the conclusion of the next annual
general meeting and to empower the directors to agree their remuneration.
BY ORDER OF THE BOARD
Clive Trist
Managing Director
May, 2005.
VAN DIEMAN MINES PLC
CONSOLIDATED PROFIT & LOSS ACCOUNT
Notes Period from
24 May 2004 to
31 December
2004
#
TURNOVER -
Administrative Expenses
Continuing (50,610)
Acquired business (515,127)
-----------
(565,737)
-----------
OPERATING LOSS
Continuing 3A (50,610)
----------
Acquired business (515,127)
-----------
(565,737)
Interest received 6,370
-----------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (559,367)
Tax on loss on ordinary activities 6a -
-----------
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (559,367)
-----------
-----------
RETAINED LOSS FOR THE PERIOD 18 (559,367)
-----------
Loss per share - basic 7 (0.99p)
Loss per share - diluted 7 (0.97p)
There are no other recognized gains and losses other than those shown above. All
the group's activities consist of continuing operations.
VAN DIEMAN MINES PLC
CONSOLIDATED RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Notes Period ended
31 December
2004
#
Loss for the financial period 18 (559,367)
Other movements:
New shares issued 16 4,618,881
Exchange gain on consolidation of foreign subsidiary 18 115,239
-----------
Total movements during the period 4,174,753
-----------
Shareholders' funds at end of year 4,174,753
-----------
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Period ended
31 December
2004
#
Loss for the financial period (559,367)
Exchange gain on consolidation of foreign subsidiary 115,239
-----------
Total gains and losses in period (444,128)
-----------
VAN DIEMAN MINES PLC
BALANCE SHEETS
Group Company
31 December 31 December
Notes 2004 2004
FIXED ASSETS # #
Tangible assets 8 1,597,680 -
Investments 9 - 4,561,158
---------- ------------
1,597,680 4,561,158
---------- ------------
CURRENT ASSETS
Debtors 10 69,542 -
Cash at bank and in hand 2,603,870 73,768
---------- ------------
2,673,412 73,768
Creditors: amounts falling due within 11 96,339 64,957
one year ---------- ------------
NET CURRENT ASSETS 2,577,073 8,811
---------- ------------
---------- ------------
TOTAL ASSETS LESS 4,174,753 4,569,969
CURRENT LIABILITIES
---------- ------------
CAPITAL AND RESERVES
Called up share capital 15 716,577 716,577
Share premium account 16 3,902,304 3,902,304
Profit and loss account 18 (444,128) (48,912)
---------- ------------
TOTAL EQUITY SHAREHOLDERS' FUNDS 4,174,753 4,569,969
---------- ------------
The financial statements were approved by the Board on May 2005.
Director
VAN DIEMAN MINES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
Notes Period ended
31 December
2004
#
NET CASH OUTFLOW FROM OPERATING ACTIVITIES 19(a) (382,825)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire tangible fixed assets and mining
exploration expenditure (85,973)
RETURNS ON INVESTMENTS & SERVICING OF FINANCE
Interest Receivable 6,370
ACQUISITIONS AND DISPOSALS
Fees on acquisition of investment (6,885)
Net cash acquired with subsidiary undertaking 167,138
---------
160,253
---------
NET CASH OUTFLOW BEFORE FINANCING (302,175)
---------
FINANCING
Issue of ordinary share capital 2,843,032
Receipt of loan funds 63,013
---------
2,906,045
MANAGEMENT OF LIQUID RESOURCES
Increase in cash on short term deposits (2,275,152)
---------
INCREASE IN CASH 19(b) 328,718
---------
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET
FUNDS
Increase in cash 328,718
Increase in short term deposits 2,275,152
---------
MOVEMENT IN NET FUNDS 19(b) 2,603,870
NET FUNDS AT BEGINNING OF PERIOD -
---------
NET FUNDS AT END OF PERIOD 19(b) 2,603,870
---------
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
1. GENERAL
Van Dieman Mines plc is a public limited company incorporated in the
United Kingdom and listed on the UK Alternative Investment Market. The
company was incorporated on 24 May 2004. On 15 September the company
acquired all the issued capital of Van Dieman Mines Pty Ltd, a company
incorporated in Australia.
These financial statements are prepared for the period from date of
incorporation to the 31 December 2004.
2. ACCOUNTING POLICIES
Basis of Preparation
The financial statements have been prepared under the historical cost
convention, and in accordance with applicable United Kingdom accounting
standards.
Application of the going concern basis
In common with many mining companies, the successful outcome of the
project is dependent upon the granting of mining licenses and the Group
controlling its development costs and realizing income from its production
in line with its business plan.
The Group is firmly on track with the process of securing the orderly
development of its principal properties. Applications for mining licenses
and other and other approvals have been lodged and no significant
impediments are anticipated. The directors have prepared profit and cash
flow projections which support the view that the group has adequate
financial resources to develop the existing properties to the point of
profitable production without any need for further fundraising. The
directors therefore believe that it is appropriate to prepare the accounts
on a going concern basis.
Basis of consolidation
The financial statements consolidate the accounts of Van Dieman Mines plc
and its subsidiary undertakings. The results of subsidiaries are included
from the date of acquisition.
Depreciation
Depreciation is provided on all tangible fixed assets, at rates calculated
to write off the cost, less estimated residual value based on prices
prevailing at the date of acquisition of each asset evenly over its
expected useful life as follows:
Plant and equipment - over 3 to 15 years
Exploration expenditure will be amortised over expected production volumes
from the date production commences.
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
2. ACCOUNTING POLICIES (continued)
Deferred Taxation
Deferred taxation is recognised in respect of all timing differences that
have originated at the balance sheet date where transactions or events
have occurred at that date that will result in an obligation to pay more,
or a right to pay less or to receive more tax with the following
exceptions:
Provision is made for tax on gains arising from the revaluation (and
similar fair value adjustments) of fixed assets and gains on disposal of
fixed assets that have been rolled over into replacements assets, only to
the extent that, at the balance sheet date, there is a binding agreement
to dispose of the assets concerned. However, no provision is made where,
on the bases of all available evidence at the balance sheet date, it is
more likely than not that the taxable gain will be rolled over into
replacement assets and charged to tax only where the replacements assets
are sold.
Deferred tax assets are recognised only to the extent that the directors
consider that it is more likely than not that there will be suitable
taxable profits from which the future reversal of the underlying timing
differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that
are expected to apply in the periods in which the timing differences
reverse, based on tax rates and laws enacted or substantively enacted at
the balance sheet date.
Foreign Currencies
Transactions in foreign currencies are recorded at the rate ruling at the
date of the transaction or at the contracted rate if the transaction is
covered by a forward exchange contract. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of exchange
ruling at the balance sheet date or if appropriate at the forward contract
rate and differences taken to the profit and loss account.
The accounts of overseas subsidiary undertakings are translated at the
rate of exchange ruling at the balance sheet date. The exchange difference
arising on the retranslation of opening net assets are eliminated against
reserves. All other translation differences are taken to the profit and
loss account.
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
2. ACCOUNTING POLICIES (continued)
Exploration and Evaluation Expenditure
Costs arising from exploration and evaluation activities are carried
forward provided such costs are expected to be recouped through successful
development or by sale or where exploration and evaluation activities have
not, at the reporting date, reached a stage to allow a reasonable
assessment regarding the existence of economically recoverable reserves.
Costs are not carried forward where the directors believe the recovery of
those assets is not probable.
Costs carried forward in respect of an area of interest that is abandoned
are written off in the period in which the decision to abandon is made.
Segment Reporting
A business segment is a group of assets and operations engaged in
providing products or services that are subject to risks and returns that
are different from those of other business segments. A geographical
segment is engaged in providing products or services within a particular
economic environment that are subject to risks and returns that are
different from those of segments operating in other economic
environments.
Financial Liability and Equity
Financial liabilities and equity instruments are classified according to
the substance of the contractual arrangements entered into. Debt
instruments issued which carry a right to convert to equity that is
dependent on the outcome of uncertainties beyond the control of both the
company and the holder are classified as liabilities except where the
possibility of non-conversion is remote.
Cash and Cash Equivalents
Cash and cash equivalent include cash in hand, deposits held with banks,
other short term highly liquid investments with original securities of
three months or less, and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities in the Balance Sheet.
Share Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
Incremental costs directly attributable to the issue of new shares or
options, or for the acquisition of a business, are included in the cost of
acquisition as part of the purchase consideration.
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
2. ACCOUNTING POLICIES (continued)
Borrowings
Borrowings are recognised initially at fair value, net of transaction
costs incurred. Borrowings are subsequently stated at amortised costs; any
difference between the proceeds (net of transaction costs) and the
redemption value is recognised in the profit and loss account over the
period of the borrowing using the effective interest method.
The fair value of the liability portion of the convertible bond is
determined using a market interest rate for an equivalent non convertible
bond. This amount is recorded as a liability on an amortised cost basis
until extinguished on conversion or maturity of the bonds. The remainder
of the proceeds is allocated to the conversion option. This is recognised
and included in shareholders' equity, net of income tax effects.
Borrowings are classified as current liabilities unless the company has an
unconditional right to defer settlement of the liability for at least 12
months after the balance sheet date.
Mining Tenements
Mining tenements are amortised by the straight line method over the period
during which benefits are expected to be received. This is taken as being
10 years.
Revenue Recognition
* Sale of Minerals
Sales revenue comprises revenue earned from the provision of products to
entities outside the company. Sales revenue is recognised when the control
of goods passes to the customer.
* Interest Income
Interest income is recognised as it accrues.
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
Period ended
31 December
2004
#
3A. OPERATING LOSS
This is stated after charging:
Auditors' remuneration - audit services
18,123
- corporate finance and tax services
65,032
Depreciation
1,053
Exceptional items:
Borrowing costs (note 12b)
122,371
Restructuring costs arising on flotation of the group
216,480
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
4. TURNOVER AND SEGMENTAL ANALYSIS
The Group operates in one principal area of activity, that the exploration
and development of mineral tenements. It also operates within two
geographical markets: United Kingdom and Australia.
Turnover, Group loss on ordinary activities before tax and net assets are
all within the one activity, that of mineral exploration and development.
Segment information on a geographical basis is set out below. Group
turnover for the period ended 31 December 2004 was #nil. Accordingly, no
segment turnover information has been provided.
LOSS ON ORDINARY ACTIVITIES
UK Australia Total
# # #
(continuing) (acquired)
Geographical area - 2004
Loss on ordinary activities before (48,912) (510,455) (559,367)
taxation
---------- --------- --------
NET ASSETS
UK Australia Total
# # #
(continuing) (acquired)
Geographical area - 2004
- At 31 December 2004
Net assets by segment:
Continuing operations 55,150 4,119,603 4,174,753
---------- --------- --------
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
5. DIRECTORS' EMOLUMENTS
Directors' Remuneration
2004
#
Director
M.J. Spriggs 11,677
C.N. Trist -
K.G. Frey -
N.R. Kinnane -
Details of fees paid to director related entities are included in Note
21.
Period ended
31 December
2004
#
6a TAX ON LOSS ON ORDINARY ACTIVITIES
Current tax -
Deferred tax -
-----------
-
-----------
6b FACTORS AFFECTING THE TAX CHARGE FOR THE PERIOD
The tax assessed for the period is different from the standard
rate of corporation tax in the UK (30%). The differences are
explained below:
Loss on ordinary activities (559,367)
-----------
Loss on ordinary activities multiplied by the
standard rate (30%) of (167,810)
corporation tax
Effect of:
Expenses not deductible for tax purposes 34,910
Tax relief on share issue costs (34,439)
Restructuring and debt costs not qualifying for 82,188
relief in the period
Tax losses prior to acquisition (47,103)
Tax losses carried forward 132,254
-----------
-
-----------
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
6c FACTORS AFFECTING FUTURE TAX CHARGE
AND DEFERRED TAXATION
The group has taxable losses available to be carried forward for offset against
the future taxable profits of certain group companies amounting to approximately
#441,000. These tax losses will reduce the tax charge of future years until the
companies concerned achieve sufficient taxable profits to utilize the losses.
The group will also obtain the benefit in the next four years of tax relief of
approximately #274,000 of restructuring and debt finance costs which were
expensed during the period. No deferred tax asset in respect of these losses and
costs has been recognized as there is currently insufficient certainty that the
related tax assets will be realized.
7. LOSS PER SHARE
Period ended
31 December
2004
Basic loss per share (0.99p)
Diluted loss per share (0.97p)
The calculation of basic loss per share is based on a loss for the period of
#559,367 and on 56,313,819 ordinary shares, being the weighted average number of
ordinary shares in issue during the year.
The diluted loss per share assumes dilutive share options are converted into
ordinary shares. The calculation is as follows:
Profit Share
# No
Basic loss 559,367 56,313,819
Dilutive effects -
options - 1,180,000
-------- -----------
Diluted loss 559,367 57,493,819
-------- -----------
8. TANGIBLE FIXED ASSETS Group Group Group
Plant & Equipment Exploration Expenditure Total
# # #
Cost
Acquisition of
subsidiary undertaking 5,093 1,438,166 1,443,259
Additions 9,944 76,029 85,973
Exchange adjustment 245 69,256 69,501
--------- ---------- --------
At end of period 15,282 1,583,451 1,598,733
--------- ---------- --------
Depreciation
Charge for period (1,053) - (1,053)
--------- ---------- --------
Net Book Value at 31
December 2004 14,229 1,583,451 1,597,680
--------- ---------- --------
The company holds no
fixed assets.
The recoverability of the Group's interests in exploration and evaluation is
dependent upon successful development, exploration or sale of the interests for
an amount at least equal to net book value.
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
Group Company
31 December 31 December
2004 2004
# #
9. INVESTMENTS
Shares in
subsidiary
undertakings - 4,561,158
---------- ----------
- 4,561,158
---------- ----------
Shares in
subsidiary undertakings
Movements in Investments (The Company) #
Cost:
At beginning of period -
Additions -
acquisitions
of subsidiary
(see below) 632,734
- investment
re conversion
of loan notes
to equity 1,150,000
- acquisition
of new shares
in subsidiary 2,778,424
----------
At end of
period 4,561,158
----------
Net book value
at 31 December
2004 4,561,158
----------
Details of the investments in which the group or the company hold 20% or more of the nominal value of any
class of share capital are as follows:
Subsidiary undertakings
Name of Voting Rights Country of Incorporation Nature of Business
Subsidiary Holding
Van Dieman
Mines Pty
Limited 100 % Australia Ordinary Shares Tin and Sapphire
Exploration
The company acquired the entire share capital of Van Dieman Mines Pty Ltd on 15 September 2004 in
consideration for the issue of 52,925,000 Ordinary Shares of 1 pence, fully paid.
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
9. INVESTMENTS (continued)
At the date of acquisition, the assets of Van Dieman Mines Pty Limited were
as follows:
Book Value Fair Value Fair Value
Adjustment
Assets
Plant & equipment 5,093 - 5,093
Exploration Expenditure 1,438,166 - 1,438,166
Debtors 91,631 - 91,631
Cash 167,138 - 167,138
--------- ---------- ---------
Total Assets 1,702,028 - 1,702,028
--------- ---------- ---------
Liabilities
Payables 652 - 652
Convertible note 1,068,642 - 1,068,642
--------- ---------- ---------
Net Assets 632,734 - 632,734
--------- ---------- ---------
Consideration
52,925,000 Ordinary Shares of 1 pence 632,734
----------
The summarized results of Van Dieman Mines Pty Limited for the
accounting period commencing 1 January 2004 to the date of acquisition
were as follows:
Turnover -
Administration Expenses (160,843)
----------
Operating loss (160,843)
----------
Interest receivable 3,832
----------
Loss on ordinary activities before
taxation (157,011)
Tax on loss on ordinary activities -
----------
Loss on ordinary activities after
taxation (157,011)
----------
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
Group Company
31 December 31 December
2004 2004
# #
10. DEBTORS - Current
Other debtors 36,806 -
Prepayments 12,276 -
---------- ----------
49,082 -
---------- ----------
DEBTORS - Non Current
Other debtors 20,460 -
---------- ----------
Total 69,542 -
---------- ----------
Group Company
31 December 31 December
2004 2004
# #
11. CREDITORS : amounts falling due within
one year
Loan from Van Dieman Mines Pty Ltd - 46,339
Trade creditors and accruals 96,339 18,618
---------- ----------
96,339 64,957
---------- ----------
12. CONVERTIBLE NOTES
Zero Coupon Convertible Notes 2004
During the period the Zero Coupon Convertible Notes were issued on the
following terms and conditions. All had been converted to equity shares by
the period end.
(a) The notes, with the face value of #1,150,000 were
converted into ordinary shares at a price of 50% of the listing price of
Van Dieman Mines Plc.
The notes were converted to 7,666,663 ordinary shares of 1 pence on
11 November 2004 by resolution of the Board of Directors.
(b) Transaction costs amounting to #122,371 applying to the
Notes, have been expensed during the period.
(c) Had admission of Van Dieman Mines Plc not occurred on
the Alternative Investment Market ("AIM") index on or before 31 December
2004, the Company would have had to allot all the note holders ordinary
shares that in aggregate equate to 40 per cent of the ordinary shares on a
fully diluted basis.
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
13. FINANCIAL INSTRUMENTS
The Group's financial instruments comprise trade debtors, trade creditors,
cash and loan notes. The group policy is not to enter into any derivative
or hedging transaction. As permitted by FRS13, amounts dealt with in the
disclosures exclude short term debtors and creditors.
The group's liquidity, interest rate and foreign exchange risks are
managed centrally following guidelines laid down by the board. All
non-routine transactions require board approval.
The group's objective is to maintain a balance between continuity of
funding and flexibility through the use of borrowings with a range of
maturities. An analysis of the maturity of the group's borrowings is given
above as is the details of the group's principal financial instruments.
The company's principal method of securing funding has been through the
issue of issued capital.
During the period, the group did not use financial derivatives to provide
protection against foreign exchange exposures.
Interest Rate Risk
Interest rate risk profile of financial liabilities
During the period the group issued Zero Coupon Convertible Notes referred
to in Note 12 bearing a zero interest rate. The financial liability was
denominated in Sterling.
Interest rate risk profile of financial assets
Cash balances of #328,152 are Sterling and Australian dollar denominated
and attract a floating rate of interest based on a base rate. The group's
term deposits of #2,275,152 are Australian dollar denominated and the
interest rates are fixed at a rate of 5.5 % with the bank rollover of the
deposits.
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
Liquidity risk
The group's policy has been to finance its operations and expansions
through the issue of equity share capital and convertible loan notes
where available. In the future, the Directors plan to raise debt finance
secured on the group's mineral properties in addition to further equity
raisings. The group does not have any overdraft facility.
Currency risk
The group has operations in Australia and any gains and losses from
these structural currency differences will be taken to the Statement of
Total Recognised Gains and Losses. All material monetary assets and
liabilities are denominated in the functional currency of the operating
unit.
Fair values of financial assets and liabilities
The group has performed a review of the financial assets and liabilities
as at 31 December 2004 and has concluded that the fair value of those assets
and liabilities is not materially different to book value.
14. LOSS ATTRIBUTABLE TO MEMBERS OF PARENT COMPANY
The loss dealt within the financial statements of the parent company was
#48,912.
No profit and loss account was presented for Van Dieman Mines Plc as permitted
by S230 of the Companies Act 1985.
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
15. SHARE CAPITAL
Authorised Numbers 2004
#
Ordinary shares of 1 pence each 211,500,000 2,115,000
--------- ----------
Allotted, Called-up and Fully Paid
Ordinary shares of 1 pence each 71,657,663 716,577
---------- ----------
During the period the following shares were issued:
(i) 1,150,000 "A" Ordinary Shares were issued on conversion of the 2004
Convertible Note Issue.
(ii) Bonus issue of "A" Ordinary Shares on a 65.66 : 1 basis, as satisfaction
of the interest in 2004 Convertible Notes.
(iii) The conversion of all the "A" Ordinary Shares (76,666,630) to Ordinary
Shares on the basis of 1 ordinary share for every 10 'A' ordinary shares
held. As a result 7,666,663 Ordinary shares were issued.
(iv) 52,925,000 Ordinary Shares were issued at 1 pence in connection with the
acquisition of all the shares in Van Dieman Mines Pty Ltd.
(v) 11,066,000 Ordinary Shares were issued as part of the share placement at
30 pence per share for cash.
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
16. SHARE PREMIUM ACCOUNT
2004
#
Share premium of 29 pence on the issue of 11,066,000 ordinary shares in respect
of AIM float
3,209,140
1,150,000 A ordinary shares issued with a nominal value of 1p
1,148,850
Bonus issue 65 2/3 A ordinary shares for every 1A share on issue
(75,517)
Share premium arising on issue of 52,925,000 ordinary shares in connection with
the acquisition of Van Dieman Mines Pty Ltd
96,599
Issue costs in respect of AIM float
(476,768)
3,902,304
17. OPTIONS
2004
Company
Number
Options exercisable at 20 pence expiring 31 December 2009
Granted during the period
1,180,000
End of the period
1,180,000
Group
Options exercisable at 1 pence expiring 30 June 2009
Granted during the period
1,980,000
Exercised during the period
800,000
End of the period
1,180,000
During the period Van Dieman Mines Pty Ltd issued 1,980,000 share options as
part of its capital raising. On 14 September 2004, 800,000 options were
exercised resulting in the issue of 800,000 Ordinary Shares in Van Dieman Mines
Pty Ltd.
On 15 September 2004, pursuant to the terms and conditions in the original deed,
the share options issued by Van Dieman Mines Pty Ltd were cancelled and replaced
by option deeds issued by Van Dieman Mines Plc.
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
17. OPTIONS (continued)
The following options are outstanding:
Option Date of Grant No. of Exercise Exercise
Holder Ordinary Shares Price Period
Grant 15 Sept 2004 800,000 The lesser of 30 June 2004 to
Thornton 1p and 30 June 2009
Corporate the Placing
(NSW) Pty Price/20px1p
Limited
Conduit PR 5 Sept 2004 180,000 125% of 30 June 2004 to
Limited Placing Price 30 June 2009
Kata 15 Sept 2004 200,000 130% of 30 June 2004 to
Holdings Placing Price 30 June 2009
Limited
18. RECONCILIATION OF MOVEMENTS IN SHAREHOLDER'S FUNDS AND STATEMENT OF
MOVEMENTS IN RESERVES
Share Capital Share Premium Profit and Total
Reserve Loss Account
Group
Retained Loss for the period - - (559,367) (559,367)
Exchange gain on consolidation
of foreign subsidiary - - 115,239 115,239
Shares issued 716,577 3,902,304 - 4,618,881
--------- --------- --------- --------
At end of period 716,577 3,902,304 (444,128) 4,174,753
--------- --------- --------- --------
Company
At beginning of the period - - - -
Retained Loss for the period - - (48,912) (48,912)
Shares issued 716,577 3,902,304 - 4,618,881
--------- --------- --------- --------
At end of period 716,577 3,902,304 (48,912) 4,569,969
--------- --------- --------- --------
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
19. NOTES TO THE STATEMENT OF CASH FLOWS
Period ended
31 December
2004
#
(a) Reconciliation of operating loss to net cash flow
Operating loss (565,737)
(Increase) in debtors (21,375)
Increase in creditors 195,185
Depreciation 9,102
----------
Net cash outflow from operating activities (382,825)
----------
(b) Analysis of changes in net funds
Cash Flows Other Non-Cash At
# Movements 31 December
# 2004
#
Cash 328,718 - 328,718
Short term deposits 2,275,152 - 2,275,152
_____________ ______________ ____________
TOTAL 2,595,821 - 2,603,870
_____________ ______________ ____________
Major non-cash transactions
On 15 September 2004, 52,925,000 shares were issued in consideration for the
acquisition of all the shares in Van Dieman Mines Pty Ltd. The fair value of the
net assets acquired was #632,734.
Convertible loan notes with a carrying value of #1,150,000 issued by Van Dieman
Mines Pty Limited, were acquired during the period by Van Dieman Mines Plc by
way of the issue of Ordinary A class shares (as per note 15), and were
subsequently converted to 7,666,663 ordinary shares on 23 November 2004.
20. CAPITAL COMMITMENTS
As at 31 December 2004 the company had the following capital
commitments :
Exploration and evaluation expenditure :
The company is committed to the Department of Infrastructure Energy
and Resources in Tasmania, to a minimum amount required over a two
year period with respect to the statutory commercial costs for
tenements held by the company of #117,440.
VAN DIEMAN MINES PLC
NOTES OF THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
21. RELATED PARTY
Directors
The names of the each person holding the position of director of Van Dieman
Mines Plc during the period are:
Cargil Management Services Limited (appointed and resigned 24 May 2004)
Lea Yeat Limited (appointed 24 May, resigned 16 June 2004)
Mr Michael J Spriggs
Mr Clive Trist
Mr Ken Frey
Mr Neil Kinnane
Other Transactions with the Company
Messrs. Trist, Frey and Kinnane have interests in companies that provide
management services to the company and its subsidiary. The cost of services are
based on normal commercial terms and conditions. Management fees paid to these
companies by the company during the period were as follows:
Consultancy Expenses
2004 Reimbursed
# 2004
#
Hanbury Capital Ltd 24,294 998
Pacific Partnerships Pty Ltd 24,294 8,349
Nuigini Resources Pty Ltd 24,294 3,049
There existed no contingent liabilities of the company for termination benefits
under service agreements with directors or persons who take part in the
management of the company as at 31 December 2004.
Directors' shareholdings and share options
At 31 December 2004 the total number of fully paid ordinary shares held
beneficially by the directors and their director-related entities are:
Direct Indirect Total
Messrs Trist, Frey and Kinnane
---------- ---------- ------------
through their interest in Markswift - 37,350,000 37,350,000
Limited
---------- ---------- ------------
VAN DIEMAN MINES PLC
NOTES TO THE FINANCIAL STATEMENTS
PERIOD ENDED 31 DECEMBER 2004
21. RELATED PARTY (Continued)
Service Agreements :
The company entered into service agreements with Messrs. Trist, Frey and
Kinnane and their related entities on the 19 August, 2004. The terms and
conditions are :
1. The provision of consultancy services for an initial term of 2 years at an
annual fee of :
Pacific Partnerships Pty Limited
#73,656
Hanbury Capital Limited
#73,656
Nuigini Resources Pty Limited
#73,656
2. The company will provide the directors and director related entities with
appropriate directors and officers insurance.
3. An entitlement to reimbursement of expenses in accordance with the terms of
the company's travel and expense policy.
The services of Michael Jeremy Spriggs as Non-Executive Chairman are
provided under the terms of an appointment letter dated 23 August, 2004 for
an initial period of one year, continuing thereafter subject to termination
upon at least three months' notice, at an initial fee of #35,000 per
annum.
22. FINANCIAL COMMITMENTS
A royalty agreement exists between Van Dieman Mines Pty Ltd and Mineral
Holdings Australia Pty Ltd ("MHA") dated 23 August 2004. Van Dieman Pty Ltd
has agreed to pay MHA a gross royalty of 2 per cent of ex works sales
revenue derived from the mining tenements in Tasmania which were
transferred to Van Dieman Mines Pty Ltd by MHA. The agreement gives MHA the
option of electing to take a percentage of the pre-processed raw material
product (payment in kind) derived from the mining tenements in lieu of
cash. MHA are prohibited from selling the payment in kind to third parties
at a price which is less than Van Dieman's selling price.
As a result of the current nature of the group's activities, it is not
possible to reliably quantify the potential amount payable under the
royalty agreement.
23. CONTROLLING PARTY
At 31 December 2004, by virtue of holding 52.12% of the ordinary share
capital of the Company, Markswift Limited, a company in which each of
Messrs. Clive Trist, Ken Frey and Neil Kinnane are indirectly interested,
was considered the ultimate controlling party.
In September 2004, 37,350,000 were issued to Markswift Limited as part of
the acquisition of the entire share capital of Van Dieman Mines Pty Ltd by
the company.
STATEMENT OF DIRECTORS RESPONSIBILITIES IN RESPECT
OF THE FINANCIAL STATEMENTS
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and the group and of the profit or loss of the group for that year. In
preparing those financial statements, the directors are required to:
* select suitable accounting policies and then apply them consistently ;
* make judgements and estimates that are reasonable and prudent ; and
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the group will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
group and the company and to enable them to ensure that the financial statements
comply with the Companies Act 1985. They are also responsible for safeguarding
the assets of the group and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The directors are responsible for ensuring that the directors' report and other
information included in the annual report are prepared in accordance with
company law in the United Kingdom.
REPORT OF THE AUDITORS
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF
VAN DIEMAN MINES PLC
We have audited the group's financial statements for the period ended 31
December, 2004 which comprise the Consolidated Profit and Loss Account, the
Consolidated Reconciliation of Movement in Shareholders' Funds, the Consolidated
Statement of Total Recognised Gains and Losses, the Consolidated Balance Sheet,
the Company Balance Sheet, Consolidated Statement of Cash flows and the related
notes. These financial statements have been prepared on the basis of the
accounting policies set out therein.
This report is made solely to the company's members as a body, in accordance
with Section 235 of the Companies Act 1985. Our audit work has been undertaken
so that we might state to the company's members those matters we are required to
state to them in an auditors' report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company's members as a body, for our audit work,
for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors' responsibilities for preparing the Annual Report and the
financial statements in accordance with applicable United Kingdom law and
accounting standards are set out in the Statement of Directors'
Responsibilities.
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and United Kingdom Auditing
Standards.
We report to you our opinion as to whether the financial statements give a true
and fair view and are properly prepared in accordance with the Companies Act
1985. We also report to you if, in our opinion, the Directors' Report is not
consistent with the financial statements, if the company has not kept proper
accounting records, if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding
directors' remuneration and transactions with the company is not disclosed.
We read the other information contained in the Annual Report and consider
whether it is consistent with the audited financial statements. This other
information comprises only the Directors' Report, the Chairman's Statement and
the Chief Executive Officer's report. We consider the implications for our
report if we become aware of any apparent misstatements or material
inconsistencies with the financial statements. Our responsibilities do not
extend to any other information.
Basis of Audit Opinion
We conducted our audit in accordance with United Kingdom Auditing Standards
issued by the Auditing Practices Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and
judgements made by the directors in the preparation of the financial statements,
and of whether the accounting policies are appropriate to the group's
circumstances, consistently applied and adequately disclosed.
REPORT OF THE AUDITORS
CONTINUED
We planned and performed our audit to as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Going concern
In forming our opinion, we have considered the adequacy of the disclosures made
in note 2 of the notes to the financial statements setting out the group's going
concern basis for preparing the financial statements. As indicated in the note,
this is dependent on the granting of mining licences and the group achieving its
business plan. In view of the significance of this uncertainty, we consider that
these disclosures should be brought to your attention but our opinion is not
qualified in this respect.
Opinion
In our opinion the financial statements give a true and fair view of the state
of affairs of the company and the group as at 31 December 2004 and of the loss
of the group for the period then ended and have been properly prepared in
accordance with the Companies Act 1985.
PKF (UK) LLP
Registered Auditor
LONDON
May 2005
This information is provided by RNS
The company news service from the London Stock Exchange
END
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