half-year report

OROPA LIMITED 1
HALF-YEAR REPORT
OROPA LIMITED
ACN 009 241 374
HALF-YEAR REPORT
31 DECEMBER 2005
OROPA LIMITED 2
HALF-YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
HALF YEAR REPORT
For the Half Year Ended 31 December 2005
CONTENTS
Directors’ Report..............................................................................................................................3
Auditor’s Independence Declaration ..............................................................................................17
Consolidated Income Statement ....................................................................................................18
Consolidated Balance Sheet ..........................................................................................................19
Consolidated Statement of Changes in Equity...............................................................................20
Consolidated Statement of Cash Flows .........................................................................................21
Notes to the Consolidated Financial Statements ...........................................................................22
Directors’ Declaration .....................................................................................................................36
Independent Review Report ...........................................................................................................38
OROPA LIMITED 3
HALF-YEAR REPORT
OROPA LIMITED
ACN 009 241 374
DIRECTORS’ REPORT
For the Half Year Ended 31 December 2005
Your directors present their report on the consolidated entity consisting of Oropa Limited
(“Oropa”) and the entities it controlled at the end of, or during the half-year ended 31 December
2005.
DIRECTORS
The following persons were directors of Oropa during the whole of the half-year and up to the
date of this report:
BJ Hurley
PCJ Christie
RG Murchison
BNV Tomich
RESULT
The loss for the half-year ended 31 December 2005 was $986,611 and for the half year ended 31
December 2004 the loss was $956,757.
REVIEW OF OPERATIONS
Corporate
In late September, Oropa announced that it had raised $1,452,000 before costs and fees to fund
expanded exploration and development programmes at the Pungkut gold project in Indonesia
(“Pungkut”). These funds were raised in two tranches, $1,011,600 under the Company’s 15%
capacity and the balance, by obtaining shareholder’s approval at a Shareholders Meeting
convened on 31 October 2005. At that meeting, shareholders also overwhelmingly endorsed a
consolidation of the Company’s share capital on a 1:10 basis, resulting in a post consolidation
share capital of 68,224,000 ordinary shares on issue and 13,280,500 listed options exercisable at
50 cents on or before 31 December 2007.
At the Company’s Annual General Meeting (“AGM”) held on 29 November 2005, all resolutions
were passed.
Prior to the AGM, on 22 November 2005, the Company announced a pro rata non-renounceable
rights issue to shareholders to raise up to $3.82 million via the issue of up to 27,290,678 shares
on the basis of two shares for every five held at an issue price of $0.14 per share, together with
up to 13,645,340 free attaching options, each to acquire one share at $0.20 on or before 31
December 2006. The rights issue was initially scheduled to close on 21 December 2005, but was
subsequently extended up until 20 January 2006 to allow shareholders more time to respond to
the offer. The Australian Stock Exchange Limited (“ASX”) granted the Company a further 2 week
extension up until 5:00pm Friday, 3 February 2006 after considering the increase in Oropa’s
OROPA LIMITED 4
HALF-YEAR REPORT
share price and also as a result of encouraging trenching assays at the Sambung prospect at the
Pungkut Gold Project in Sumatra, Indonesia (“Pungkut”).
Indonesia
Pungkut Gold Project, Sumatra (75%)
During the half year ended 31 December 2005, Oropa undertook exploration programmes in both
Pungkut blocks. Work included exploration at a number of prospects in the southern block, and
thereafter an initial trenching programme at the Sambung prospect in the northern block was
undertaken.
SOUTHERN BLOCK
Tambang Hitam
Tambang Hitam, located 5km from the Trans Sumatran highway, attracted concerted exploration
attention due to the presence of a cohesive soil gold anomaly, high-grade rock chip and trenching
gold values, an extensive lithological alteration pattern and artisanal mining activity.
Oropa completed a scout-drilling programme at Tambang Hitam, which consisted of seven drill
holes for 855.9 metres. Drilling tested mineralised vein systems delineated by surface mapping,
trenching, sampling and surveying of underground workings. The Company was primarily testing
for shallow mineralisation amenable to an open pit style mining operation.
Gold mineralisation was intersected in several holes, with better results of 1m @ 3.93g/t Au from
105m in drill hole THDD001, 4m @ 2.75g/t Au from 80m in THDD002, which included 1m @
10.10g/t Au from 76m and 2m @ 2.01g/t Au from surface in THDD005, which also intersected 2m
@ 2.58g/t Au from 109m.
The type of alteration and quartz vein textures observed in both core and outcrop indicates that
drilling intersected the uppermost, lower temperature zone of a low sulphidation epithermal
system.
Geological modelling of the deposit suggests that better gold grades may be present at depth as
both bonanza and vein-hosted zones; a concept that can only be tested through deeper drilling.
Although drilling intersected significant mineralisation, it is now apparent that the probability of
defining a near-surface resource at Tambang Hitam amenable to open pit mining is low.
Consequently, the Company decided to test other high priority, near-surface targets in the
immediate vicinity before contemplating any further work at Tambang Hitam.
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Tambang Hitam Geological Model and Drill Hole Plan
Figure 1
OROPA LIMITED 6
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Tambang Tinggi
Oropa completed five scout drill holes for 633.5 metres at Tambang Tinggi. The prospect,
located approximately 2km east of Tambang Hitam, was selected as a primary target area due to
highly anomalous rock chips collected from small-scale local workings.
Tambang Tinggi: Visible Gold in Rock Chip
Figure 2
Drill hole TTDD001 intersected several zones of mineralisation that included 25m @ 0.68g/t Au
from 22m and 25m @ 1.4g/t Au from 59m. Copper mineralisation was also intersected in several
zones that included 11m @ 0.12% Cu from 45m and 7.8m @ 0.2% Cu from 64m
The second drill hole TTDD002, drilled in a direction 120 degrees around from THDD001 from
the same pad also intersected several zones of gold mineralisation that included 25m @ 4.58g/t
Au from 31m, which included 1.2m @ 60.5g/t from 52.8m, 16m @ 1.28g/t Au from 80m and 2.6m
@ 5.1g/t Au from 110m.
Hole TTDD003 was drilled a further 120 degrees around from hole TTDD002 from the same drill
pad, encountering numerous small zones of mineralisation that included 2m @ 1.25g/t from
surface and 5m @ 1.06g/t Au from 40m.
TTDD004, collared 100m to the east of the previous hole and drilled towards the north, also
encountered numerous zones of mineralisation that included 1m @ 2.20g/t Au from surface, 1m
@ 2.44g/t Au from 71m and 3m @ 1.21g/t Au from 78m.
TTDD005, drilled to the northwest of holes 1, 2 and 3, intersected two near – surface zones of 8m
@ 1.03g/t Au from surface and 9m @ 0.82g/t from 15m, plus an isolated zone of 0.25m @
24.6g/t Au from 95.5m.
Scout mapping encountered hill float of gossanous material to the north east of holes TTDD001,2
& 3, that returned assays of 17.5g/t Au and 16g/t Ag.
These results are highly encouraging and confirm the exploration potential of the general area.
The Company plans to undertake more work at Tambang Tinggi in the form of additional and
broader scale mapping, surface geochemical sampling, ground geophysics and more drilling. As
the drilling completed to date is of a preliminary scout-drilling basis, much work remains to be
done to begin to
OROPA LIMITED 7
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understand the nature of mineralisation at Tambang Tinggi.
Figure 3
Tambang Babisik
Reconnaissance mapping of the broader Tambang Tinggi area resulted in the discovery of the
Tambang Babisik prospect, located approximately 2km to the east of Tambang Tinggi. Limited rock
chip sampling of outcropping vein systems returned better gold/silver assays of 2.94g/t Au/2.8g/t
Ag, 57.5g/t Au/85.1g/t Ag, 3.41g/t Au/95.2g’t Ag.
Oropa intends to follow up these encouraging results with additional mapping and sampling over
the next quarter, with a view towards undertaking a scout-drilling programme in the coming quarter
if warranted.
New Porphyry
Channel sampling of an outcropping porphyry system adjacent to the Tambang Ubi prospect
returned results of up to 0.58g/t Au and 2.1% Cu. Mineralisation encountered at this outcrop was
identified in the diorite porphyry and in skarn altered limestone into which the diorite has intruded.
Additional mapping and sampling of the area is continuing.
Tambang Ubi
Gridding and mapping of the Tambang Ubi prospect, located approximately 1km north of
Tambang Hitam commenced in December. These work programmes are designed to accurately
map and survey historical Dutch and more recent artisanal workings and to compile accurate
OROPA LIMITED 8
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geological, alteration and geochemical maps of the area with a view towards commencing drill
testing selected targets during the coming months.
NORTHERN BLOCK
Sambung
Trenching, mapping and sampling at the Sambung prospect, located approximately 2.5 kms south
of the gold resource at Sihayo 1 North commenced in December and the final assay results were
reported to the ASX on 20 January 2006.
This trenching programme was designed to investigate the upslope margins of mineralised colluvial
material shedding from an unidentified source and trenches were sited close to an area observed to
have gold mineralisation associated with silicified outcrop based upon a previous rock chip
sampling programme, and an initial scout drilling phase carried out by Oropa in 2003 (SAMDD001 –
SAMDD005).
The manually excavated trenches ranged from 0.5 metres to 1.5 metres in depth, with samples
comprised of continuous chip-channels taken from near the base of the trenches, with samples
composited predominantly on 3-metre intervals. The samples comprised loose friable soil and
silicified fragments and other rock float, hard boulders and weathered bedrock.
Oropa considers these initial trench sampling results to be highly promising in view of the
widespread nature of high grade gold mineralisation, the likelihood for extensions at depth as
demonstrated by previous Sambung drilling (refer SAMDD003; 20cm @ 443 g/t Au from 22.55m,
SAMDD004; 13.8m @ 2.69 g/t Au from surface and SAMDD005; 5.2m @ 3.79 g/t Au from surface)
and the potential for substantial high-grade resources related to an epithermal source of
mineralisation. These trenches cover a strike of in excess of 1km. A drill rig is currently on site and
drill testing of higher trench values, anomalous soil sample results and geophysical anomalies has
commenced.
Individual trench assay results are summarized hereunder, and the attached plan outlines the
location of individual trenches relative to past exploration work:
OROPA LIMITED 9
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Table 1 Sambung Trenching Summary (data incomplete)
Trench Length, m Number of Intervals >1 g/t Au (with 0.5 g/t cut-off)
Number Total Sampled Samples From To Length Au g/t
1 125.1 63 21
4 13 25 12 1.49
1 46 49 3 2.13
3 52 61 9 1.24
2 160 102 34
1 21 24 3 3.25
3 30 39 9 1.80
2 42 48 6 2.53
3 132 99 33
1 9 12 3 1.18
16 24 72 48 7.34
including 24 27 3 45.9
72 76.4 4.4 Gap
1 76.4 79.4 3 55.5
4 189.1 126 42
1 48 51 3 1.06
5 156.4 129 43
1 28 31 3 1.73
1 40 43 3 2.52
6 160 69 23
57 66 9 26.7
7 155.7 129 43 maximum assay 0.48
8 172.4 122 61 maximum assay 0.35
9 107.5 66 33
0 24 24 4.77
including 0 2 2 20.3
28 36 8 2.54
40 42 2 1.13
52 54 2 1.22
10 22.2 16.7 7
1 17.1 19.1 2 1.78
11 58.9 30 15 maximum assay 0.30
Totals 1,439.30 951.70 391
Note 1: all sample positions measured from NE (downslope) end of trenches
Note 2: all analysis determined by 50gm fire assay
Note 3: gaps in trench sampling relate to physical obstructions to sampling, including tree roots and large extremely
hard boulders.
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Sambung – Trenching Locations
Figure 4
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Table 2 Tambang Hitam Drill Collar and Intercept Table
Hole Northing
(local)
Easting
(local)
RL Azimuth
(Magnetic)
Dip Depth
(m)
From
(m)
To
(m)
M Au
g/t
THDD001 67458 589918 1192 290 -60 120 6 10 4 0.60
16 18 2 0.56
105 106 1 3.93
THDD002 67425 589900 1191 240 -60 117.2 56 58 2 0.60
76 80 4 2.75
including 76 77 1 10.10
82 89 7 0.79
including 83 84 1 1.43
88 89 1 1.90
THDD003 67537.7 589942 1152 270 -60 113.4 86 87 1 0.60
91 92 1 0.67
THDD004 67600 589958 1128 270 -45 129.1 113 114 1 0.68
116 117 1 0.52
THDD005 67275 589687 1212 240 -45 148.55 0 2 2 1.94
109 111 2 2.58
THDD006 67258 589654 1218 305 -45 145.95 61 63 2 1.19
77 78 1 0.61
85.25 86.25 1 0.60
87.25 88.25 1 0.62
THDD007 67207 590350 1092 120 -55 81.7 No significant values
Notes
1. All assays were determined by 50gm fire assay
2. A 0.5ppm Au lower cut was used
3. A maximum of 2m of consecutive internal waste (material less than 0.5ppm Au) per reported intersection
4. All interval grades were calculated as a weighted average
5. All intervals reported as down hole lengths
Table 3 Rock Chip Sample Assays
Sample
Number
Northing Easting Location Au ppm
(Gold)
Ag
ppm
(Silver)
Cu %
(Copper)
Rock Type
946938 68151 589776 Ubi Porphyry 0.45 2.1% Porphyritic diorite
946939 68145 589770 Ubi Porphyry 0.58 0.89% Limestone skarn xenolith in
diorite
946940 68209 589782 Ubi Porphyry 0.52 0.39% Limestone skarn at contact
with diorite
947953
66023 593147
Tb Babisik
2.944 2.8
Manganese quartz vein
947954
66025 593159
Tb Babisik
57.5 85.1
2m thick manganese / adularia
vein
947955
66025 593168
Tb Babisik
3.41 95.2
Oxidised quartz vein
947959 67514 59199 Tb Hitam 17.75 16 Gossanous granitic hill float
Notes
1 Au analysis determined by 50gm fire assay
2 Ag analysis by 50gm AAS
3 Cu analysis determined by 50gm AAS
OROPA LIMITED 12
HALF-YEAR REPORT
Table 4 Tambang Tinggi Drill Collar and Intercept Table
Hole No. Northing Easting RL Azimuth Dip Total
Depth
From To M Au g/t Cu% Zn%
TTDD001 67535 592072 1061 010 -60 127.9 1 2 1 0.73
12 13 1 1.56
22 47 25 0.69
including 27 30 3 1.73
45 56 11 0.12%
53 55 2 0.53
59 84 25 1.40
including 70 71.8 1.8 2.84
And 77.9 84 6.1 3.29
64 71.8 7.8 0.2%
77.9 84 6.1 0.15%
TTDD002 67535 592072 1061 130 -60 152 0 1 1 2.07
6 7 1 0.52
12 13 1 1.21
18 19 1 1.82
25 28 3 1.00
31 56 25 4.58
including 52.8 54 1.2 60.5
38 46 8 0.21%
51.85 54 2.15 0.58%
60 61 1 0.54
68.2 71 2.8 0.78
80 96 16 1.28
including 87 88 1 8.93 0.11%
90 91 1 1.85%
100 102 2 0.64
110 112.6 2.6 5.10
124.8 125 0.2 2.66
OROPA LIMITED 13
HALF-YEAR REPORT
Table 4 continued
Hole No. Northing Easting RL Azimuth Dip Total
Depth
From To M Au g/t Cu% Zn%
TTDD003 67535 592072 1061 250 -60 118.1 0 2 2 1.26
11 12 1 0.5
15 16 1 2.41
29 30 1 0.59
33 37 4 0.84
40 45 5 1.06
53 54 1 0.64
65 66 1 1.10
80 85 5 0.60
107.15 107.7 0.55 0.75
TTDD004 67490 592116 1063 010 -60 135.5 47 48 1 2.02
59 61 2 0.63
64 66 2 1.68
71 72 1 2.44
78 81 3 1.21
86 87 1 5.14
99 101 2 0.56
130 130.2 0.2 0.92
TTDD005 67576 592000 1043 335 -60 100.0 0 8 8 1.03
including 2 3 1 2.03
15 24 9 0.92
including 23 24 1 3.16
28 33 5 0.23%
95.5 95.7 0.25 24.6 0.25%
Notes
1. All gold assays were determined by 50gm fire assay
2. Lower cuts used: gold:0.5ppm, Copper:0.1%, Zinc: 1%
3. A maximum of 2m of consecutive internal waste (material less than 0.5ppm Au, 0,1% Cu or 1% Zn) per reported intersection
4. All interval grades were calculated as a weighted average
5. All intervals reported as down hole lengths
OROPA LIMITED 14
HALF-YEAR REPORT
India
Chattisgarh
Block D-7 Diamond Project, (18%)
Holder of the Block D-7 Prospecting Licence (“P/L”), [B.Vijaykumar Chhattisgarh Exploration Pvt Ltd
(“BVCE”)], continued to strenuously lobby with the Chhattisgarh state government and the high court
throughout 2005 to have its case against the state government dismissed to facilitate the
reinstatement of the P/L and a resumption of fieldwork on this highly prospective diamond project.
During the latter half of the year, several meetings were convened between BVCE and high ranking
state government officials in order to collectively urge the high court to expedite the case (as reported
by Oropa in March 2005, BVCE had received written notification from the court that the case would be
heard in early April, but for whatever reason, the case was not determined).
In mid-January this year, the case was placed in a more active category by the high court and it has
continuously been listed on the court’s Weekly Cause Lists pending a hearing by the presiding judge.
Furthermore, in mid-January a decision to dismiss two third party claims over very small portions of
the 4,600 sq km block (two areas totalling approximately 1.5 ha.) paved the way for the court to now
dismiss the case and hand it back to the state government for processing the documentation to
reinstate the project. Issues between the state and BVCE have been resolved amicably and our
Indian joint venture partners are confident that these outstanding court matters will be determined in
the near future.
Unfortunately, under the stay order imposed by the high court, a resumption of field work will not
commence until after all formal documentation is re-issued to BVCE and depending on when this
occurs will determine when work resumes. Oropa plans to undertake bulk sampling of the Behradih
kimberlite pipe (approximately 1,000 tonnes of surface kimberlite material) and process it at the
nearby Mainpur base camp as a priority. Additionally, follow up stream sediment and loam sampling
of other high ranking targets will commence at the earliest opportunity.
Raipur West Project, (20% with option to increase to 30%)
Although the Chhattisgarh state government is now supporting BVCE’s quest to resume work on
Block D-7, it has not issued the Raipur West Reconnaissance Permit (“RP”) to B.Vijaykumar
Technical Services Pvt Ltd (“BVTS”), although the application is presently under review.
Raipur West is located immediately to the west of Block D-7 and covers an area of 2,600km2. There
are a number of major structural lineaments that trend north-west from Block D-7 into Raipur West
which warrant detailed investigation. This RP area could be evaluated in conjunction with ongoing
programmes at Block D-7, including airborne geophysics, although Oropa has been pushing BVTS to
have the Raipur West RP granted as soon as possible to permit work on the ground while the Block
D-7 matter is being resolved.
OROPA LIMITED 15
HALF YEAR REPORT
Andhra Pradesh
Krishna River Gravels, (20%, option to increase to 30%)
Discussions have been ongoing between BVTS and the Andhra Pradesh (“AP”) state government for
the past 12 months to progress BVTS’ first-in-time RP applications covering two contiguous areas of
the lower reaches of the Krishna River and its delta. The two applications with a combined area of in
excess of 9,000km2 cover the lower meandering reaches of the river, where some of the world’s
largest diamonds were recovered in the middle ages. The AP government is yet to process these
applications, although they indicated that they would consider them in June/July 2005.
These first-in-time applications were lodged in late 2000 and early 2001, but the AP government has
been reluctant to process them, preferring to wait on the outcome of the Block D-7 issue in
Chhattisgarh. In September, BVTS met with the Central government’s Mines Department in Delhi to
solicit their assistance in persuading the AP government to award the RPs to BVTS under the Central
government’s Mining Act regulations. Although sympathetic towards our cause, BVTS was advised
that the Central government would not interfere in the state governments’ processing criteria.
The Krishna River gravels are highly prospective for containing alluvial diamonds. The kimberlite
sources of the world famous diamonds recovered from the river gravels in the middle ages have never
been discovered. Owing to the protracted delays in the AP government’s review and processing of
those applications, other companies have also expressed interest in the general area. BVTS is
presently pressing the state to process the applications under the Mining Act and not consider any
subsequent applications. BVTS is hopeful that in the event that the Block D-7 impasse is resolved in
the near future, the AP government will give favourable consideration to the BVTS applications.
Australia
Lake Deborah Gold Project (5% free carried)
The Golden Valley tenements comprise a portion of a portfolio of tenements subject to a Joint Venture
Agreement (“JVA”) entered into between Polaris Metals NL (“Polaris”), Western Areas NL,
Geoinformatics Exploration Limited and Oropa. In this particular portion of the JVA, Oropa is free
carried to the completion of a bankable feasibility study by Polaris with an option for Oropa to increase
its interest in the Lake Deborah tenements (“designated area” of the JVA) to a 15% participating
interest by paying Polaris $50,000 cash consideration, plus 15% of Polaris’ total expenditure on the
designated area.
As reported by Polaris in their December 2005 Quarterly Report, the Trident and Aquarius gold targets
within the salt flats of Lake Deborah West were evaluated by a gravity survey during June 2005
quarter and areas suitable for practical drill testing were outlined. These two gold targets had been
identified by the Polaris-Geoinformatics prospectivity studies as “priority one” and were scheduled for
immediate follow up drilling. However, information obtained in the course of preparing an application
for ground disturbance prior to drilling showed that the whole of Lake Deborah is entered on the
Interim Register in the Department of Indigenous Affairs as an Aboriginal heritage “mythological” site.
The consent of the parties who recorded the site, and the approval of the Minister for Indigenous
Affairs under Section 18 of the Aboriginal Heritage Act, are required before any work on the lake can
proceed, thereby postponing the commencement of drilling these targets.
A consulting anthropologist was commissioned by Polaris to assist in obtaining the necessary
clearances and his work was completed satisfactorily during the December 2005 Quarter.
Mulgabbie Gold Project (95% diluting to 44%)
The Mulgabbie gold project is operated under a farm-in agreement with Mulgabbie Mining Pty Ltd
(“Mulgabbie Mining”). Mulgabbie Mining is earning a 51% interest in the project by spending $100,000
on exploration over a 3 year period, which expired during this reporting period. Oropa and Mulgabbie
Mining have reached agreement to extend the term of this farm-in arrangement. No fieldwork was
undertaken after the extension was agreed to.
OROPA LIMITED 16
HALF YEAR REPORT
Project Evaluation
The Company’s priorities were confined to the development of Pungkut and the resurrection of the
Block D-7 P/L. Consequently, although a small number of projects were assessed during the latter
half of 2005, none were considered to be suitable for any farmins or acquisitions.
Non Mineral Assets
CEPO Systems Pty Ltd (19.9%)
Oropa currently retains its 19.9% interest in a restructured CEPO Systems Pty Ltd ("CEPO").
However, in order to concentrate on its core mineral assets, Oropa has agreed to relinquish 10% of its
equity in CEPO to permit CEPO’s substantial shareholders to source more appropriate industry
investors that are able to better assist CEPO to develop its medium to long term financial
requirements and marketing strategies. CEPO continues to systematically expand its client base in
Australia with the introduction of its Mobile Ordering and Processing Solutions (CEPO Mobile) to
complement its now established e-solutions and invoicing products.
SUBSEQUENT EVENTS
On the 19 of January 2006, it was announced that the non-renounceable rights issue detailed in the
prospectus dated 22 November 2005 had been further extended to the 3 February 2006.
On the 9 February 2006, it was announced that the non-renounceable rights issue raised a total of
$1,607,888 for working capital and corporate overheads.
ADOPTION OF AUSTRALIAN EQUIVALENTS TO AIFRS
This interim financial report has been prepared under Australian Equivalents to IFRS. A reconciliation
of differences between previous GAAP and Australian equivalents to IFRS has been included in Note
2 of this report.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditors independence declaration under section 307C of the Corporations Act 2001 is set
out on page 17 for the half year ended 31 December 2005.
This report is signed in accordance with a resolution of the board of directors.
PHILIP C CHRISTIE
Director
16 March 2006
Decl Ind YE Dec 2005-01 on lh.doc36/audit independence letterDec2005 19
16 March 2006
Board of Directors
Oropa Limited
25 Charles Street
SOUTH PERTH WA 6151
Dear Sirs,
RE: OROPA LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide
the following declaration of independence to the directors of Oropa Limited.
As Audit Partner for the review of the financial statements of Oropa Limited for the half
year ended 31 December 2005, I declare that to the best of my knowledge and belief,
there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to
the review; and
(ii) any applicable code of professional conduct in relation to the review.
Yours sincerely
STANTONS INTERNATIONAL
John Van Dieren
Partner
17
OROPA LIMITED 18
HALF YEAR REPORT
OROPA LIMITED
ACN 241 374
CONSOLIDATED INCOME STATEMENT
For the Half Year Ended 31 December 2005
Note 31 December 2005 31 December 2004
$ $
Revenue 200,736 19,326
Total Revenue 200,736 19,326
Corporate secretarial expenses (33,953) (31,178)
Depreciation (8,470) (4,848)
Diminution of investments (333) -
Directors’ fees (7,750) (7,750)
Employee benefits expense (140,389) (73,611)
Exchange rate loss - (438,478)
Exploration expenditure written off (634,115) (100,072)
External consultancy expenses (116,718) (79,155)
Insurance expenses (38,347) (16,296)
Legal costs (778) (527)
Postage (1,473) (8,787)
Project office costs - (113,564)
Printing and stationary (37,135) (20,382)
Rates and taxes (5,459) (5,678)
Rental expense (26,866) (17,062)
Travel and entertainment (60,654) (16,289)
Other expenses (74,907) (42,406)
Loss before income tax 3 (986,611) (956,757)
Income tax expense - -
Loss after income tax (986,611) (956,757)
Loss attributable to members of Oropa Limited (986,611) (956,757)
Loss per share (cents per share) (1.6) (2.0)
Diluted earnings per share is not disclosed as this
would not reflect an inferior position.
The accompanying notes form part of these financial statements.
OROPA LIMITED 19
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
CONSOLIDATED BALANCE SHEET
As at 31 December 2005
31 December 2005 30 June 2005
$ $
Current Assets
Cash and cash equivalents 564,921 459,356
Receivables 217,808 177,305
Financial assets 1,333 1,667
Deferred expenditure 29,322 -
Total Current Assets 813,384 638,328
Non-Current Assets
Plant & equipment 90,787 73,609
Other 39,075 37,661
Total Non-Current Assets 129,862 111,270
Total Assets 943,246 749,598
Current Liabilities
Trade and other payables 200,542 290,116
Provisions 203,100 227,766
Funds received in advance 66,037 -
Other 12,811 12,874
Total Current Liabilities 482,490 530,756
Non-Current Liabilities
Non interest bearing loans 43,670 42,087
Total Non-Current Liabilities 43,670 42,087
Total Liabilities 526,160 572,843
Net Assets 417,086 176,755
Equity
Issued Capital 28,080,589 26,686,002
Reserves 468,554 636,199
Accumulated losses (28,230,508) (27,243,897)
Total parent entity interest 318,635 78,304
Minority interest in controlled entities 98,451 98,451
Total Equity 417,086 176,755
The accompanying notes form part of these financial statements.
OROPA LIMITED 20
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the half-year ended 31 December 2005
$ $ $ $ $
Share Capital Reserves Accumulated Outside Equity Total
Losses Interest
Balance at 1.7.04 24,032,599 486,171 (21,615,792) 885,427 3,788,405
Issue of shares 1,551,111 - - - 1,551,111
Share issue costs (35,742) - - - (35,742)
Foreign currency reserve - 141,334 - - 141,334
Loss for the half year - - (956,757) - (956,757)
Balance at 31.12.04 25,547,968 627,505 (22,572,549) 885,427 4,488,351
$ $ $ $ $
Share Capital Reserves Accumulated Outside Equity Total
Losses Interest
Balance at 1.7.05 26,686,002 636,199 (27,243,897) 98,451 176,755
Issue of shares 1,451,600 - - - 1,451,600
Share issue costs (57,013) - - - (57,013)
Foreign currency reserve - (167,645) - - (167,645)
Issue of options - - - - -
Loss for the half year - - (986,611) - (986,611)
Balance at 31.12.05 28,080,589 468,554 (28,230,508) 98,451 417,086
The accompanying notes form part of these financial statements.
OROPA LIMITED 21
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Half Year Ended 31 December 2005
31 December 2005 31 December 2004
Note $ $
Cash flows from operating activities
Payments to suppliers and employees (726,849) (487,018)
GST input credit refunds received 23,925 31,699
Interest received 15,018 9,326
Net cash (used in) operating activities (687,906) (445,993)
Cash flows from investing activities
Purchase of plant & equipment (23,910) (20,800)
Proceeds from sale of plant & equipment - 10,000
Mining exploration and evaluation expenditure (624,572) (272,054)
Net cash (used in) investing activities (648,482) (282,854)
Cash flows from financing activities
Proceeds from share issue 1,451,600 690,000
Share issue costs (86,335) (35,742)
Funds received in advance 66,037 -
Net cash provided by financing activities 1,431,302 654,258
Net increase /(decrease) in cash and cash
equivalents held 94,914 (363,628)
Cash and cash equivalents at the beginning
of the reporting period 446,482 763,293
Effects of exchange rate changes on cash 10,713 (31,333)
Cash and cash equivalents at the end of
the reporting period 9 552,109 368,332
The accompanying notes form part of these financial statements.
OROPA LIMITED 22
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
1. BASIS OF PREPARATION
The half-year consolidated financial statements are a general purpose financial report
prepared in accordance with the requirements of the Corporations Act 2001, Accounting
Standard AASB 134: Interim Financial Reporting, Urgent Issues Group Consensus Views and
other authoritative pronouncements of the Australian Accounting Standards Board.
It is recommended that this financial report be read in conjunction with the annual financial
report for the year ended 30 June 2005 and any public announcements made by Oropa
Limited during the half-year in accordance with the continuous disclosure requirements
arising under the Corporations Act 2001.
As this is the first interim financial report prepared under Australian equivalents to AIFRS, the
accounting policies applied are inconsistent with those applied in the 30 June 2005 annual
report as this report was presented under previous Australian GAAP. Accordingly, a
summary of the significant accounting policies under Australian equivalents to IFRS has been
included below. A reconciliation of equity and profit and loss between previous GAAP and
Australian equivalents to IFRS has been prepared per note 2.
The half-year report does not include full disclosures of the type normally included in an
annual financial report.
The financial statements have also been prepared on the going concern basis of accounting,
which assumes that the company will be able to meet its commitments, realise its assets and
discharge its liabilities in the ordinary course of business.
However, the ability of the company and the consolidated entity to actively explore and
continue as a going concern, and to meet their debts and commitments as they fall due, is
dependant upon further capital raisings.
The Directors are confident that the company will be successful in raising further capital and,
accordingly, have prepared the financial report on a going concern basis. At this time, the
directors are of the opinion that no asset is likely to be realised for an amount less than the
amount at which it is recorded in the financial report at 31 December 2005. Accordingly, no
adjustments have been made to the financial report relating to the recoverability and
classification of the asset carrying amounts or the amounts and classification of liabilities that
might be necessary should the company not continue as a going concern.
Accounting Policies
(a) Principles of Consolidation
A controlled entity is any entity Oropa Limited has the power to control the financial and
operating policies of so as to obtain benefits from its activities.
All controlled entities have a June financial year end.
All inter-company balances and transactions between entities in the economic entity,
including any unrealised profit or losses have been eliminated on consolidation.
Accounting policies of subsidiaries have been changed where necessary to ensure
consistencies with those policies applied by the parent entity.
Where controlled entities have entered or left the economic entity during the year, their
operating results have been included / excluded from the date control was obtained or until
the date control ceased.
OROPA LIMITED 23
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 39 006 710 774
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
(b) Income Tax
The charge for current income tax expenses is based on the profit for the year adjusted for
any non-assessable or disallowed items. It is calculated using tax rates that have been
enacted or are substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of
temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. No deferred income tax will be recognised
from the initial recognition of an asset or liability, excluding business combination, where
there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the
asset is realised or liability is settled. Deferred tax is credited in the income statement
except where it relates to items that may be credited directly to equity, in which case the
deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax
profits will be available against which deductible temporary differences can be utilised.
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 economic entity 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) Property, Plant & Equipment
Each class of property, plant and equipment is carried at cost or fair value less, where
applicable, any accumulated depreciation and impairment losses.
Plant and equipment
Property, plant and equipment are measured on the cost basis less depreciation and
impairment losses.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it
is not in excess of the recoverable amount from these assets. The recoverable amount is
assessed on the basis of the expected net cash flows that will be received from the assets
employment and subsequent disposal. The expected net cash flows have been
discounted to their present values in determining recoverable amounts.
Depreciation
The depreciable amount of all fixed assets is based on the diminishing value method over
their useful lives to the group commencing from the time the assets are held ready for use.
The depreciation rates used for plant and equipment vary between 2.5% and 40%.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at
each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the
asset’s carrying value is greater than its estimated recoverable amount.
OROPA LIMITED 24
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
Gains and losses on disposals are determined by comparing proceeds with the carrying
amount. These gains and losses are included in the income statement.
(d) Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of each
identifiable area of interest and expensed to the income statement in the year incurred.
(e) Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade date, which includes
transaction costs, when the related contractual rights or obligations exist. Subsequent to
initial recognition these instruments are measured as set out below.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market and are stated at amortised cost using
the effective interest rate method.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original
debt less principal payments and amortisation.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation
techniques are applied to determine the fair value for all unlisted securities, including
recent arm’s length transactions, reference to similar instruments and option pricing
models.
Impairment
At each reporting date, the group assess whether there is objective evidence that a
financial instrument has been impaired. Impairment losses are recognised in the income
statement.
(f) Impairment of Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible
assets to determine whether there is any indication that those assets have been impaired.
If such an indication exists, the recoverable amount of the asset, being the higher of the
asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying
value. Any excess of the asset’s carrying value over its recoverable amount is expensed
to the income statement.
OROPA LIMITED 25
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 39 006 710 774
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
(g) Interests in Joint Ventures
The economic entity’s share of the assets, liabilities, revenue and expenses of joint
venture operations are included in the appropriate items of the consolidated income
statement and consolidated balance sheet.
The economic entity’s interest in joint venture entities are brought to account using the
equity method of accounting in the consolidated financial statements. The parent entity’s
interest in joint venture entities are brought to account using the cost method.
(h) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the group’s entities is measured using the currency of
the primary economic environment in which that entity operates. The consolidated
financial statements are presented in Australian dollars which is the parent entity’s
functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange
rates prevailing at the date of the transaction. Foreign currency monetary items are
translated at the year end exchange rate. Non-monetary items measured at historical
costs continue to be carried at the exchange rate at the date of the transaction. Nonmonetary
items measured at fair value are reported at the exchange rate at the date when
fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the
income statement, except where deferred in equity as qualifying cashflow or net
investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised
directly in equity to the extent that the gain or loss is directly recognised in equity,
otherwise the exchange difference is recognised in the income statement.
Group Companies
The financial results and position of foreign operations whose functional currency is
different from the group’s presentation currency are translated as follows:
- Assets and Liabilities are translated at year-end exchange rates prevailing at that
reporting date.
- Income and expenses are translated at average exchange rates for the period.
- Retained profits are translated at the exchange rates prevailing at the date of the
transaction.
Exchange rate differences arising on translation of foreign operations are transferred
directly to the group’s foreign currency translation reserve in the balance sheet. These
differences are recognised in the income statement in the period in which the operation is
disposed.
OROPA LIMITED 26
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
(i) Revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets.
Revenue from the sale of assets is recognised at the date that the contract is entered into.
All revenue is stated net of the amount of goods and services tax (GST).
(j) Employee Benefits
Provision is made for the group’s liability for employee benefits arising from services
rendered by employees to balance date. Employee benefits that are expected to be
settled within one year have been measured at the amounts expected to be paid when the
liability is settled, plus related on-costs. Employee benefits payable later than one year
have been measured at the present value of the estimated future cash outflows to be
made for those benefits.
(k) Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a
result of a past event, for which it is probable that an outflow of economic benefits will
result and that outflow can be reliably measured.
(l) Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other
short term highly liquid investments with original maturities of three months or less, and
bank overdrafts. Bank overdrafts are shown within short term borrowings in current
liabilities on the balance sheet.
(m) Goods and Services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where
the amount of GST is not recoverable from the Australian Taxation Office. In these
circumstances the GST is recognised as part of the cost of acquisition of the asset or as
part of an item of the expense. Receivables and payables in the balance sheet are
shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the
GST component of investing and financing activities, which are disclosed as operating
cash flows.
(n) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to
conform to changes in presentation for the current financial year.
OROPA LIMITED 27
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
(o) Share-based Payment Transactions
The group provides benefits to the directors and senior executives in the form of sharebased
payment transactions, whereby services are rendered in exchange for shares or
rights over shares (‘equity settled transactions’).
The cost of these equity settled transactions with directors is measured by reference to the
fair value at the date at which they are granted. The fair value is determined by an
external valuer using a binomial model.
In valuing equity-settled transactions, no account is taken of any performance conditions,
other than conditions linked to price of the shares of Oropa Limited.
The cost of equity-settled transactions is recognised, together with a corresponding
increase in equity, over the period in which the market conditions are fulfilled.
The cumulative expense recognised for equity settled transactions at each reporting date
until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the
number of awards that in the opinion of the directors will ultimately vest. The opinion is
formed on the best available information at balance date. No adjustment is made for the
likelihood of market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where
vesting is conditional upon market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is
recognised as if the terms had not been modified. In addition, an expense is recognised
for any increase in the value of the transaction as a result of the modification, as measured
at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognised for the award is recognised immediately.
However, if a new award is substituted for the cancelled award, and designated as a
replacement award on the date that it is granted, the cancelled and new award are treated
as if they were a modification of the original award, as described in the previous
paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in
the computation of earnings per share.
OROPA LIMITED 28
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
2. FIRST TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL
REPORTING STANDARDS
Previous GAAP Adjustment on Australian
at 1.7.04 introduction of equivalents
Australian to IRFS
Equivalents at
1.7.04
To IFRS
$ $ $
Reconciliation of Equity at 1 July 2004
ASSETS
Current assets
Cash and cash equivalents 776,218 - 776,218
Trade and other receivables 130,524 - 130,524
Financial assets 10,916 - 10,916
Total current assets 917,658 - 917,658
Non-current assets
Plant & equipment 2a 69,881 1,240 71,121
Other 2b 3,819,640 48,312 3,867,952
Financial assets 100,200 - 100,200
Total non-current assets 3,989,721 49,552 4,039,273
Total assets 4,907,379 49,552 4,956,931
Current liabilities
Trade and other payables 233,470 - 233,470
Provisions 14,583 - 14,583
Deferred Consideration 861,111 - 861,111
Other 12,935 - 12,935
Total current liabilities 1,122,099 - 1,122,099
Non-current liabilities
Trade and other payables 44,584 1,843 46,427
Total non-current liabilities 44,584 1,843 46,427
Total liabilities 1,166,683 1,843 1,168,526
Net assets 3,740,696 47,709 3,788,405
Equity
Issued Capital 24,032,599 - 24,032,599
Reserves 486,171 - 486,171
Accumulated losses 2c (21,663,501) 47,709 (21,615,792)
Total parent entity interest 2,855,269 47,709 2,902,978
Outside equity interest 885,427 - 885,427
Total Equity 3,740,696 47,709 3,788,405
OROPA LIMITED 29
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
2. FIRST TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL
REPORTING STANDARDS (CONT)
Previous GAAP Adjustment on Australian
at 30.6.05 introduction of equivalents
Australian to IRFS
Equivalents at
30.6.05
To IFRS
$ $ $
Reconciliation of Equity at 30 June 2005
ASSETS
Current assets
Cash and cash equivalents 459,356 - 459,356
Trade and other receivables 177,305 - 177,305
Financial assets 1,667 - 1,667
Total current assets 638,328 - 638,328
Non-current assets
Plant & equipment 74,123 (514) 73,609
Other 2a 37,661 - 37,661
Total non-current assets 111,784 (514) 111,270
Total assets 750,112 (514) 749,598
Current liabilities
Trade and other payables 290,116 - 290,116
Provisions 227,766 - 227,766
Other 12,874 - 12,874
Total current liabilities 530,756 - 530,756
Non-current liabilities
Trade and other payables 42,087 - 42,087
Total non-current liabilities 42,087 - 42,087
Total liabilities 572,843 - 572,843
Net assets 177,269 (514) 176,755
Equity
Issued Capital 26,686,002 - 26,686,002
Reserves 2d 486,171 150,028 636,199
Accumulated losses 2c (27,093,355) (150,542) (27,243,897)
Total parent entity interest 78,818 (514) 78,304
Outside equity interest 98,451 - 98,451
Total Equity 177,269 (514) 176,755
OROPA LIMITED 30
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
2. FIRST TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL
REPORTING STANDARDS (CONT)
Previous GAAP Adjustment on Australian
at 31.12.04 introduction of equivalents
Australian to IRFS
Equivalents at
31.12.04
To IFRS
$ $ $
Reconciliation of Equity at 31 December 2004
ASSETS
Current assets
Cash and cash equivalents 381,038 - 381,038
Trade and other receivables 188,191 - 188,191
Financial assets 10,916 - 10,916
Total current assets 580,145 - 580,145
Non-current assets
Plant & equipment 2a 72,490 (1,819) 70,671
Financial assets 100,200 - 100,200
Exploration expenditure 2b 4,245,574 (223,551) 4,022,023
Total non-current assets 4,418,264 (225,370) 4,192,894
Total assets 4,998,409 (225,370) 4,773,039
Current liabilities
Trade and other payables 202,224 - 202,224
Provisions 15,927 - 15,927
Other 25,458 - 25,458
Total current liabilities 243,609 - 243,609
Non-current liabilities
Trade and other payables 2e 44,584 3,505 41,079
Total non-current liabilities 44,584 - 41,079
Total liabilities 288,193 3,505 284,688
Net assets 4,710,216 (221,865) 4,488,351
Equity
Issued Capital 25,547,968 - 25,547,968
Reserves 2d 486,171 141,333 627,504
Accumulated losses 2c (22,209,350) (363,198) (22,572,548)
Total parent entity interest 3,824,789 221,865 3,602,924
Outside equity interest 885,427 - 885,427
Total Equity 4,710,216 (221,865) 4,488,351
OROPA LIMITED 31
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
2. FIRST TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL
REPORTING STANDARDS (CONT)
Previous GAAP Adjustment on Australian
introduction of equivalents
Australian to IRFS
Equivalents
To IFRS
$ $ $
Reconciliation of Profit or Loss for the half year 31 December 2004
Revenue from ordinary activities 19,326 - 19,326
Expenses
Corporate secretarial expenses (31,178) - (31,178)
Depreciation (4,848) - (4,848)
Directors’ fees (7,750) - (7,750)
Employee benefits expense (73,611) - (73,611)
Exchange rate loss (27,570) (410,908) (438,478)
Exploration expenditure written off (100,072) - (100,072)
External consultancy expenses (79,155) - (79,155)
Insurance expenses (16,296) - (16,296)
Legal costs (527) - (527)
Postage (8,787) - (8,787)
Project office costs (113,564) - (113,564)
Printing and stationary (20,382) - (20,382)
Rates & taxes (5,678) - (5,678)
Rental expense (17,062) - (17,062)
Travel and entertainment (16,289) - (16,289)
Other expenses from ordinary activities (42,406) - (42,406)
Loss from ordinary activities
before income tax expense (545,849) (410,908) (956,757)
Income tax expense - -
Loss attributable to
members of Oropa Limited (545,849) (410,908) (956,757)
OROPA LIMITED 32
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
2. FIRST TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL
REPORTING STANDARDS (CONT)
Previous GAAP Adjustment on Australian
introduction of equivalents
Australian to IRFS
Equivalents
To IFRS
$ $ $
Reconciliation of Profit or Loss for the half year 30 June 2005
Revenue from ordinary activities 33,923 (14) 33,909
Expenses
Corporate secretarial expenses (38,049) - (38,049)
Depreciation (15,907) 45 (15,862)
Employee benefits expense (322,529) 1,119 (321,410)
Exchange rate loss (38,893) (326,225) (365,118)
Exploration expenditure written off (4,382,241) 125,933 (4,256,308)
External consultancy expenses (208,000) 116 (207,884)
Insurance expenses (28,814) 42 (28,772)
Provision for diminution of investments (108,250) - (108,250)
Provision for doubtful debts (1,412) - (1,412)
Rental expense (44,727) 66 (44,661)
Travel (4,948) 13 (4,935)
Other expenses from ordinary activities (270,007) 655 (269,352)
Loss from ordinary activities
before income tax expense (5,429,854) (198,250) (5,628,104)
Income tax expense - - -
Loss attributable to
members of Oropa Limited (5,429,854) (198,250) (5,628,104)
OROPA LIMITED 33
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
2. FIRST TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL
REPORTING STANDARDS (CONT)
30.6.05 31.12.04 1.7.04
$ $ $
Notes to the reconciliation of equity and profit and loss
At 1 July 2004, 31 December 2004 and 30 June 2005
(a) Plant & equipment
Difference in exchange rates
used under AIFRS (514) (1,819) 1,240
(b) Other
Mineral exploration expenditure
difference in exchange rates
used under AIFRS - (260,403) 11,460
Mineral exploration expenditure
difference in acquisition amount under AIFRS - 36,852 36,852
- (223,551) 48,312
(c) Accumulated losses
Foreign exchange expense
differences on conversion to AIFRS (377,372) (465,229) (54,322)
Difference in mineral exploration writeoff
due to consolidation difference 124,799 - -
Accumulated losses on consolidation
differences 102,031 102,031 102,031
150,542 (363,198) 47,709
(d) Reserves
Increase in foreign currency reserve 150,028 141,333 -
(e) Trade & other payables
Foreign currency exchange differences
on conversion to AIFRS 3,505 1,843
OROPA LIMITED 34
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
Consolidated
31 December 2005 31 December 2004
$ $
3. OPERATING LOSS
Operating loss from ordinary activities before
income tax has been determined after:
(a) crediting as revenue:
interest received 15,018 9,326
foreign exchange gain 184,229 -
Proceeds from sale of
non-current assets - 10,000
(b) charging as expense:
depreciation 8,470 4,848
exploration expenditure written off 634,115 100,072
foreign exchange loss - 438,478
4. SEGMENT INFORMATION
Primary Reporting – geographical segments
The geographical segments of the consolidated entity are as follows:
Half year 2005
South East
Australia Asia India Unallocated Consolidated
$ $ $ $ $
Total Segment
Revenue 1,453 - 36 199,247 200,736
Segment Results (192,404) (553,178) (31,907) (209,122) (986,611)
Half year 2004
South East
Australia Asia India Unallocated Consolidated
$ $ $ $ $
Total Segment Revenue 10,000 - - 9,326 19,326
Segment Results (30,145) (113,563) (69,294) (743,755) (956,757)
OROPA LIMITED 35
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Half Year Ended 31 December 2005
6. SUBSEQUENT EVENTS
On the 19 of January 2006, it was announced that the non-renounceable rights issue detailed
in the prospectus dated 22 November 2005 had been further extended to the 3 February
2006.
On the 9 February 2006, it was announced that the non-renounceable rights issue raised a
total of $1,607,888 for working capital and corporate overheads.
7. CONTINGENT LIABILITIES
There has been no change in contingent liabilities since the previous annual reporting date.
31 December 2005 30 June 2005
$ $
8. ISSUED CAPITAL
Ordinary shares
Issued & fully paid 28,080,589 26,686,002
31 December 2005 31 December 2005
Number $
Movements in ordinary shares on issue:
At 1 July 2005 561,301,683 26,686,002
30 September 2005 Share Issue 84,300,000 1,011,600
1 November 2005 Share Issue 36,666,666 440,000
682,268,349 28,137,602
Consolidation of share capital 1:10 (Rounded down) 68,226,697 28,137,602
Placement fees - (57,013)
68,226,697 28,080,589
31 December 2005 30 June 2005
$ $
9. RECONCILIATION OF CASH
Cash and cash equivalents 552,109 446,482
Restricted cash 12,812 12,874
564,921 459,356
OROPA LIMITED 36
HALF YEAR REPORT
The restricted cash at bank is unclaimed monies from the sale of un-marketable parcels of
shares. The amount represents the cheques sent to shareholders that were returned to
Oropa Limited.
OROPA LIMITED 37
HALF YEAR REPORT
OROPA LIMITED AND CONTROLLED ENTITIES
ACN 009 241 374
DIRECTORS’ DECLARATION
The directors declare that the financial statements and notes set out on pages 18 to 35:
(a) comply with Accounting Standard AASB 134: – Interim Financial Reporting, the Corporations
Regulations; and
(b) give a true and fair view of the consolidated entity’s financial position as at 31 December 2005
and of its performance for the half-year ended on that date.
In the directors’ opinion there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the directors.
Dated at Perth this 16th day of March 2006
PC CHRISTIE
Director
INDEPENDENT REVIEW REPORT
TO THE MEMBERS OF
OROPA LIMITED
Scope
We have reviewed the financial report comprising of the income statement, balance
sheet, statement of changes in equity, statement of cash flows, accompanying notes to
the financial statements and the directors’ declaration of Oropa Limited (the Company) for
the half-year ended 31 December 2005 set out on pages 18 to 36. The directors of the
Company are responsible for preparing a financial report that gives a true and fair view of
the financial position and performance of the Company that complies with Accounting
Standard AASB 134 “Interim Financial Reporting” in accordance with the Corporations
Act 2001. This includes responsibility for the maintenance of adequate accounting
records and internal controls that are designed to prevent and detect fraud and error, and
for the accounting policies and accounting estimates inherent in the report.
Review Approach
We have performed an independent review of the financial report in order to state
whether, on the basis of the procedures described, anything has come to our attention
that would indicate that the financial report is not presented fairly in accordance with
Accounting Standard AASB 134 “Interim Financial Reporting” and other mandatory
financial reporting requirements in Australia and statutory requirements, so as to present
a view which is consistent with our understanding of the disclosing entity's financial
position, and performance as represented by the results of its operations and its cash
flows, and in order for the disclosing entity to lodge the financial report with the Australian
Securities and Investments Commission.
Our review has been conducted in accordance with Australian Auditing and Assurance
Standards applicable to review engagements. A review is limited primarily to inquiries of
the disclosing entity's personnel and analytical procedures applied to the financial data.
These procedures do not provide all the evidence that would be required in an audit, thus
the level of assurance is less than given in an audit. We have not performed an audit and,
accordingly, we do not express an audit opinion.
Independence
We are independent of the Company, and have met the independence requirements of
Australian professional ethical pronouncements and the Corporations Act 2001. We have
given to the directors of the Company a written Auditor’s Independence Declaration.
A
u:ORO5544\2006-01 Half Year IRR - 37-
Statement
Based on our review, which is not an audit, we have not become aware of any matter that
makes us believe that the half-year financial report of Oropa Limited is not in accordance
with:
(a) the Corporations Act 2001, including:
(i) giving a true and fair view of the Company's financial position as at
31 December 2005 and of its performance for the half-year ended on that
date; and
(ii) complying with Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Regulations 2001; and
(b) other mandatory financial reporting requirements in Australia.
Inherent Risk Regarding Non Current Assets and Going Concern
Without qualification to the review, as referred to in note 1 of the financial statements, the
financial statements have been prepared on a going concern basis. The ability of the
consolidated entity to continue as a going concern and to meet planned and committed
expenditure requirements is subject to the consolidated entity successfully exploiting the
investments and mining projects owned by the consolidated entity and/or the raising of
further equity and/or loan capital.
In the event that the consolidated group is not successful in raising further funds, the
realisable value of the consolidated entity’s non-current assets may be significantly less
than their current carrying values and the consolidated entity may not be able to continue
in its present form.
STANTONS INTERNATIONAL
J P Van Dieren
Partner
West Perth, Western Australia
16 March 2006
Au:ORO5544\2006-01 Half Year IRR - 38 -