half yearly report

WESTERN METALS LIMITED
ABN 69 009 150 618
HALF YEARLY REPORT FOR THE PERIOD ENDED
31 DECEMBER 2007
CONTENTS
Directors’ Report 1
Income Statement 6
Balance Sheet 7
Statement of Changes in Equity 8
Cash Flow Statement 9
Notes to and Forming Part of the Financial Statements 10
Directors’ Declaration 13
Auditor’s Declaration of Independence 14
Independent Review Report to the Members 15
CORPORATE DIRECTORY
Directors
Chris Greig (Non-Executive Chairman)
George Bauk (Managing Director)
Geoffrey Chapman (Executive Director)
Peter Smith (Executive Director)
Marc Cardaci (Non-Executive Director)
Company Secretary
Morgan Ball
Registered Office
Unit 7, 100 Railway Road
Subiaco WA 6008
Tel: +61 8 6380 3600
Fax: +61 8 9382 8022
Auditors
BDO Kendalls Audit and Assurance (WA) Pty Ltd
128 Hay Street
Subiaco WA 6008
Tel: (08) 9380 8400
Fax: (08) 9380 8499
Share Registry
Security Transfer Registrars Pty Ltd
770 Canning Hwy
Applecross WA 6153
Tel: (08) 9315 2333
Fax: (08) 9315 2233
Home Stock Exchange
Australian Stock Exchange Limited
Level 2, Exchange Plaza
2 The Esplanade
Perth WA 6000
ASX Code: WMT/WMTO
WESTERN METALS LIMITED
ABN 69 009 150 618
DIRECTORS’ REPORT
Your directors present their report on Western Metals Limited for the half-year ended 31 December 2007.
Directors
The names of the Directors who held office during or since the end of the half-year and up to the date of this report:
Chris Greig (Non-Executive Chairman) Appointed 1 September 2007 George Bauk (Managing Director)
Geoffrey Chapman (Executive Director)
Peter Smith (Executive Director)
Marc Cardaci (Non-Executive Chairman) Appointed 17 September 2007
Results and Review of Operations
The economic entity incurred an operating loss after income tax of $3,647,573 (31 December 2006: $1,053,741) for the half-year ended 31 December 2007.
Western Metals Limited (ASX:WMT) is pleased to report significant progress during the December Half Year which has it well placed to execute an aggressive growth strategy in 2008.
Western Metals is a diversified uranium, base metals and gold explorer with a portfolio of potential world-class projects in Africa, Australia and the Americas.
With a highly experienced management team and cash reserves of approximately $30 million, Western Metals has the resources to maintain both an aggressive exploration strategy and actively pursue corporate opportunities, particularly in light of the current uncertainty affecting international equities markets.
During the December Half Year, the company made significant progress on all fronts in pursuit of its business strategy.
Tanzania - Uranium
During the December Half Year, two exploration programmes were completed on the Mtonya, Ruhuhu and Ruvumu areas.
Final assay results from the Phase 2 RC drilling programme, which comprised 40 holes for 2,545 metres and was completed during August 2007, were received and reported to the ASX on 26th November 2007.
This Phase 2 programme focused on further testing of the Henri, Para, Tahbilk and Moysten Prospects. Results of the Phase 2 drilling programme were considered very encouraging and further extended the areas of uranium mineralisation defined during Phase 1 drilling that was completed in June 2007. Broad spaced drilling has now partially tested the Para, Henri, Tahbilk and Moysten anomalies with the latest results continuing to identify widespread sub-surface uranium mineralisation for all the prospects tested.
Drilling of a single traverse of wide spaced holes across the Moysten radiometric anomaly resulted in seven of the nine holes returning U3O8 values in excess of 100 ppm with three containing intervals greater than 300ppm U3O8.
Half Yearly Report to 31 December 2007
Western Metals Limited ACN 69 009 150 618
1
WESTERN METALS LIMITED
ABN 69 009 150 618
DIRECTORS’ REPORT (CONTINUED)
Tanzania - Uranium (Continued)
Significant intercepts from this round of drilling include:
•
3 meters at 863 ppm U3O8 from 46 metres
•
3 meters at 750 ppm U3O8 from 47 metres
•
2 metres at 355 ppm U3O8 from 32 metres
•
1 metre at 960 ppm U3O8 from 10 metres
•
6 metres at 287 ppm U3O8 from 39 metres
•
3 metres at 447 ppm U3O8 from 16 metres
•
6 metres at 178 ppm U3O8 from 37metres.
The majority of assay results from the third phase of RC drilling completed during October 2007 have been received and were reported to the ASX on the 18th of January 2008. A small number of assays are still outstanding from the shoulders of gamma anomalies. Drilling focused on further evaluation of the prospects within the Mtonya Corridor. Seventeen holes were drilled at Moysten, 6 holes at Tahbilk, 10 holes at Henri and 3 holes at Para. A further 3 relatively deep stratigraphic holes were drilled to the east and west of the main Mtonya Corridor.
Results of this third phase of RC drilling were once again considered encouraging and again continued to support and extend areas of known subsurface uranium mineralisation defined during phases 1 and 2 completed in June and August 2007 respectively.
Of particular significance is that there is some indication of a relatively deep zone at Moysten that strikes north from hole MRC51 (3m at 750ppm U3O8 from 47m, through hole MRC44 (3m at 863ppm U3O8 from 44m) to hole MRC75 (4m at 737ppm U3O8 from 44m) at about 40m depth. Significant intercepts included:
•
4 metres at 737ppm U3O8 from 44 metres
•
1 metre at 1140 ppm U3O8 from 25 metres
•
2 metres at 970 ppm U3O8 from 20 metres
•
3 metres at 216 ppm U3O8 from 61 metres.
In addition to this, a new zone of anomalous mineralisation was intersected in regional stratigraphic drill hole MRC113 (3m at 216ppm U3O8), located midway between the Henri and Moysten prospects in an area of relatively low airborne radiometric anomalism. This intersection indicates that uranium mineralisation is possible in areas of low surface radiometric response at Mtonya.
Detailed mineralogical work carried out using in-house expertise provided important technical information that will be used to further refine the genetic model and to direct future exploration in the search for primary uranium mineralisation. The report concluded that surface secondary uranium mineralogy at Mtonya appears to be dominated by meta-uranocircite which is followed by autunite at depth. Holes deeper than 40m have been observed to carry very fine-grained, poorly-characterised uranium minerals which may be primary in origin. The grainsize of secondary autunite decreases with depth, and may reflect dissolution / re-precipitation cycles associated with wet / dry season water table depth variation.
Half Year Report to 31 December 2007
Western Metals Limited ABN 69 009 150 618
2
WESTERN METALS LIMITED
ABN 69 009 150 618
DIRECTORS’ REPORT (CONTINUED)
Tanzania - Uranium (Continued)
Drilling to date has been of a broad spaced reconnaissance nature and designed to achieve enough data coverage for identification of high grade zones and controls on mineralisation. Depth of drilling has
been limited to approximately 50 metres to ensure maximum coverage in each campaign. There remains further potential below 50 metres depth for mineralisation.
Assay results from five trenches excavated at the Grandfather Prospect during the August 2007 field programme to evaluate high surface scintillometer readings and anomalous surface grab samples (4.64% U3O8, 0.20% U3O8) were received and released to the ASX on 26th November 2007. The trench locations ranged from Trench 23 (T23) in the north east to Trench 28 (T28), 1.4 kilometres to the south east along the strike of the Grandfather anomaly. These results are considered very encouraging.
The results show high grade uranium mineralisation in all trenches with T25 giving a peak interval of 1.2 metres at 7,723 ppm U3O8 including 0.4 metres at 2.13% U3O8; T27 giving intervals of 1.2 metres at 4,773ppm U3O8 and 1.2 metres at 2,393 ppm U3O8 and T28 giving a peak interval of 1.2 metres at 746ppm U3O8. Visual uranium mineralisation was identified in several of the trenches.
During the December Half Year, Western Metals has earned its 40% interest through the farm in agreement and is on track to complete the 60% earn in by the end of the second quarter 2008 with the completion of $4m expenditure.
Subsequent to the end of the reporting period, Western Metals announced the discovery of two new uranium prospects within the Ruvuma project area on 18th January 2008. These two new discoveries, Foxy and Eland, are considered very encouraging. At Foxy, outcropping uranium mineralisation was traced over an area of approximately 0.5 km2 from which one grab sample returned an assay value of up to 13,400 ppm U3O8. At Eland, anomalism was identified over an area measuring 0.6 km2 and suggested the presence of a type of basement-hosted uranium mineralisation previously unkown in SW Tanzania.
Australia, West Georgetown - Ag-Pb-Zn Project
Western Metals has received all airborne geophysical data from surveys flown by BHP Billiton during the March quarter for the North and South Blocks, EL 14724 and EL 14722, of the West Georgetown project in Queensland.
The data, FalconTM airborne gravity, magnetics and radiometrics, was acquired, processed and interpreted by BHP Billiton, resulting in the identification of 14 anomalies considered worthy of follow-up. The anomaly signatures are considered to be consistent with the size expected from a Broken Hill Type Ag-Pb-Zn mineralised system.
The anomaly targets are characterised by discrete excess mass anomalies identified from FalconTM gravity data, as well as coincident magnetic responses on some of the anomalies. The technology applied has been successful in “seeing” these significant anomalies through up to 200m of cover. They are in structurally and stratigraphically favourable locations, occurring in the Daniel Creek, Corbett, Lane Creek, and Townley geological formations, all considered favourable host stratigraphy for Ag-Pb-Zn mineralisation within the Robertson River Subgroup. All 14 anomalies have been modelled and sit below cover in metasediments at depths of between 200 and 300m.
The process of notification for ground disturbing exploration activity, including drilling, on EPM 14724 has been initiated with the Traditional Owners, Pastoralists and Government Departments. Ground visits have been conducted by Western Metals personnel including meetings with local pastoralists and government representatives.
Assignment of Exploration Lease EPM 14724 from BHPB Billiton to Western Metals has been completed.
Half Year Report to 31 December 2007
Western Metals Limited ABN 69 009 150 618
3
WESTERN METALS LIMITED
ABN 69 009 150 618
Half Year Report to 31 December 2007
Western Metals Limited ABN 69 009 150 618
4
DIRECTORS’ REPORT (CONTINUED)
Australia, West Georgetown - Ag-Pb-Zn Project (Continued)
An external consultant completed a detailed structural / magnetic interpretation and targeting exercise on the Northern of the two West Georgetown Blocks. The interpretation is quite different in some aspects from the previous interpretations / solid geology maps and has resulted in the identification of a number of additional targets considered worthy of follow up.
USA – Glade Uranium Project
Permitting was undertaken and approvals granted for RC drilling at the Glade project area located in Southern Colorado. Diversified Drilling was contracted to conduct the 4,000 to 6,000 metre drilling programme.
The drill programme has been designed to evaluate the northwest portion of the claim block for uranium mineralisation within the Salt Wash member of the Jurassic Morrison Formation. The Salt Wash member (which contains a number of historic uranium mines) is exposed in the sides of the Delores Rivers canyon some 800m west of the claim block. Favourable stratigraphy and conceptual targets relating to preferential paleo-channel development and supporting radon and multi-element geochemical data will be targeted during this round of drilling.
Drilling commenced at the Glade Uranium Project on Friday 16th November but was unfortunately suspended on Friday 7th of December due to unseasonal wet conditions compromising the safety and productivity of the drilling operations. A total of 3 holes were drilled during this time.
The 3 holes were completed using RC drilling methods for a total of 2,870 feet (875 meters).
A decision was made to postpone the drilling operation on the 16th December and it is scheduled to recommence in June / July 2008.
Peru – Lukkacha Copper Project
A detailed mapping program and litho-geochemical sampling programmes of the northern and southern alteration / geochemical anomalies was carried out in November 2007. Experienced Peruvian contractor GeoAndina was contracted to provide logistical support for the programmes and to conduct detailed litho-geochemical sampling of the areas being mapped.
During November, GeoAndina collected a total of 390 rock chip samples on a pre-determined 200m x 200m grid over the southern and northern alteration / geochemical anomalies. Data is currently being assessed.
Western Metals is also continuing to make good progress in relation to the necessary Governmental authorisations required to permit foreign companies to operate within 50km of the Peruvian border.
Canada – Snowbird Nickel Project
The project consists of claims comprising 261.3km2 within the Snowbird Tectonic Zone, located 625 km NW of the city of Thompson. The Snowbird Tectonic Zone is on the margin of an ancient continent that hosts the Thompson, Raglan and Voisey’s Bay nickel deposits.
Encouraging results from various exploration programs in the Snowbird area conducted by Phelps Dodge from the late 1950s through to 2000 were reviewed by BHP Billiton in 2005 and led to a helicopter supported reconnaissance geological mapping, geochemical sampling and VTEM airborne electromagnetic survey of the Snowbird area.
Interpretation of the VTEM data resulted in the identification of a number of EM bedrock anomalies and confirmed the presence of elevated Cu-Ni sulphides in boulders. These anomalies represent drill-ready targets and will be explored by the Western Metals team of nickel experts.
WESTERN METALS LIMITED
ABN 69 009 150 618
DIRECTORS’ REPORT (CONTINUED)
Canada – Snowbird Nickel Project (Continued)
Surface sampling has been reported from previous work that yielded assay values up to 2.92% Cu and 2.29% Ni from surface grab samples. Trench sampling was reported to include assays of 22.2% Zn, 4.7% Pb, 2.85 g/t Au and 976 g/t Ag. Western Metals has the right to purchase 100% interest in the Snowbird tenements by paying a non-refundable $US250,000 cash payment following a due diligence period (DD to be completed before 30 June 2008), drilling one hole to test anomaly KB-1, and paying a further cash payment of $US1,250,000 by 31 July 2009.
Australia - Zeehan Tin Project
In October 2007, the company decided to divest its interest in the Zeehan Tin Project. Prime Corporate Finance has been engaged to coordinate the sale which will be finalised in the first quarter of 2008.
Personnel
On the 20th of August 2008, we announced the appointment of Dr. Chris Greig as Non-Executive Chairman replacing Mr. Peter Smith who has taken on the position as Executive Director (full-time) focussing on business development. Mr. Marc Cardaci has been appointed as Non-Executive Director. Mr Richard Lindsay joined the company as Senior Project Geologist in September. Mr Lindsay brings with him significant geological experience with particular experience in the Karoo region of Southern Africa.
Corporate
Western Metals held its Annual General Meeting on Friday, 23 November. Twelve Resolutions were put to the meeting and passed by the requisite majority of shareholders on a show of hands.
Business Development
Western Metals is a company which aspires to become a significant resource business. The path to this outcome will require a balance of world class exploration programmes complimented with targeted corporate activities. This is a complex process requiring dedicated resources and capital – we have invested well in both and intend to utilise this unique position to our advantage. We have a highly skilled and balanced team with a cross section of capabilities across the competencies required to run a dynamic growth business. We have also built a portfolio of world class exploration assets in base metals, uranium and gold, all of which have the potential to substantially grow the business.
In 2007 we took the opportunity to raise $32m in capital which provides an opening balance for 2008 of $30m. This secure position means that we can manage the work programs on current assets in an aggressive but responsible manner for some time to come.
Whilst successful greenfields exploration will ultimately lead to the greatest multiples on investment, the Board is committed to complimenting this process through a programme of acquisitions of advanced projects and or, cash producing assets. In support of these business development activities we have secured the ongoing support of Azure Capital to assist in the identification and evaluation of project and corporate opportunities.
Significant progress has been made during the Half Year in identifying likely corporate and project opportunities. These investigations will progress through a rigorous but efficient assessment process in coming months.
George Bauk
Managing Director
Dated this 7th day of March 2008
Half Yearly Report to 31 December 2007
Western Metals Limited ACN 69 009 150 618
5
WESTERN METALS LIMITED
ABN 69 009 150 618
Half Yearly Report to 31 December 2007
Western Metals Limited ACN 69 009 150 618
6
CONSOLIDATED INCOME STATEMENT
FOR THE HALF YEAR ENDED
31 DECEMBER 2007
Half Year
Notes
31 December 2007
$
31 December
2006
$
Revenue from continuing operations
2
1,042,010
70,750
Employee benefits expense
(1,372,281)
(365,255)
Depreciation expense
(38,359)
(6,891)
Administrative expenses
(609,532)
(132,337)
Compliance fees
(133,032)
(61,062)
Computer and software expenses
(138,070)
(20,668)
Consultants
(138,986)
(1,250)
Foreign exchange loss
(156,715)
-
Legal expenses
(60,826)
(18,995)
Share based payments
(1,616,565)
(360,025)
Promotion expenses
(64,333)
(86,807)
Rent expense
(146,254)
(41,867)
Travel and accommodation
(214,630)
(29,334)
Total Expenses
(4,689,583)
(1,124,491)
Loss Before Income Tax
(3,647,573)
(1,053,741)
Income Tax Expense
-
-
Loss for the half year
(3,647,573)
(1,053,741)
Loss Attributable To Members of Western Metals Limited
(3,647,573)
(1,053,741)
Basic earnings per share (cents per share)
(0.59)
(0.25)
Where diluted earnings per share are not dilutive, they have not been disclosed.
The accompanying notes form part of this financial report.
WESTERN METALS LIMITED
ABN 69 009 150 618
Half Yearly Report to 31 December 2007
Western Metals Limited ACN 69 009 150 618
7
CONSOLIDATED BALANCE SHEET
AS AT
31 DECEMBER 2007
Notes
31 December 2007
$
30 June
2007
$
Current Assets
Cash and cash equivalents
29,928,512
34,061,586
Trade and other receivables
57,239
249,882
Other current assets
275,573
302,648
Total Current Assets
30,261,324
34,614,116
Non-Current Assets
Property, plant & equipment
819,448
144,582
Exploration assets
3
5,821,153
3,391,366
Total Non-Current Assets
6,640,601
3,535,948
Total Assets
36,901,925
38,150,064
Current Liabilities
Trade and other payables
1,251,178
611,463
Other current liabilities
136,854
73,762
Financial liability
37,493
-
Total Current Liabilities
1,425,525
685,225
Total Liabilities
1,425,525
685,225
Net Assets
35,476,400
37,464,839
Equity
Contributed equity
39,651,019
39,554,024
Reserves
3,297,787
1,735,648
Accumulated losses
(7,472,406)
(3,824,833)
Total Equity
35,476,400
37,464,839
The accompanying notes form part of this financial report.
WESTERN METALS LIMITED
ABN 69 009 150 618
Half Yearly Report to 31 December 2007
Western Metals Limited ACN 69 009 150 618
8
STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED
31 DECEMBER 2007
Half-Year
31 December 2007
$
31 December 2006
$
Total equity at the beginning of the half-year
37,464,839
3,105,368
Profit/(loss) for the half-year
(3,647,573)
(1,053,741)
Total recognised income and expense for the half-year
(3,647,573)
(1,053,741)
Contributions of equity, net of transaction costs
96,995
3,340,233
Share options
1,616,565
360,025
Exchange differences on translation of foreign subsidiaries
(54,426)
-
Total equity at the end of the half-year
35,476,400
5,751,885
Total recognised income and expense for the half-year is attributable to:
Members of Western Metals Limited
(3,647,573)
(1,053,741)
The accompanying notes form part of this financial report.
WESTERN METALS LIMITED
ABN 69 009 150 618
Half Yearly Report to 31 December 2007
Western Metals Limited ACN 69 009 150 618
9
CASH FLOW STATEMENT
FOR THE HALF YEAR ENDED
31 DECEMBER 2007
Half Year
31 December 2007
$
31 December 2006
$
Cash Flows From Operating Activities
Payments to suppliers and employees (inclusive of GST)
(2,227,783)
(569,221)
Interest received
1,023,321
70,750
Rent received
6,107
-
Receipts from JV partner
221,801
-
Net Cash (Outflows) From Operating Activities
(976,554)
(498,471)
Cash Flows From Investing Activities
Purchase of property, plant and equipment
(713,212)
(41,982)
Payments for exploration expenditure
(2,406,319)
(550,073)
-
Net Cash (Outflows) From Investing Activities
(3,119,531)
(592,055)
Cash Flows From Financing Activities
Proceeds from issues of shares
136,661
3,393,333
Payment for expenses from share issue
-
(197,100)
Net Cash Inflows From Financing Activities
136,661
3,196,233
Net Increase/Decrease In Cash and Cash Equivalents
(3,959,424)
2,105,707
Cash and cash equivalents at beginning of the half year
34,061,586
3,045,195
Effects of exchange rate changes on cash and cash equivalents
(173,650)
-
Cash and Cash Equivalents At End Of the Half Year
29,928,512
5,150,902
WESTERN METALS LIMITED
ABN 69 009 150 618
Half Yearly Report to 31 December 2006
Western Metals Limited ACN 69 009 150 618
10
NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF-YEAR ENDED
31 DECEMBER 2007
1. Basis of Preparation
The half-year 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 Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.
It is recommended that this financial report be read in conjunction with the financial report for the year ended 30 June 2007 and any public announcements made by Western Metals Limited during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001.
The half-year report does not include full disclosure of the type normally included in an annual financial report.
The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.
2. Profit for the half-year
Half Year
31 December 2007
$
31 December 2006
$
Profit for the half-year includes the following items that are unusual because of their size:
Interest
1,023,231
70,750
Interest revenue has increased significantly as a result of capital raising carried out in May 2007.
3. Exploration Assets
$
Balance as at 30 June 2007
3,391,366
Expenditure during the six months to 31 December 2007
2,429,787
Balance as at 31 December 2007
5,821,153
Capitalised exploration and evaluation expenditure represents the accumulated cost of acquisition and subsequent cost of exploration and evaluation of the properties. In the opinion of the directors the value of the properties is at least that at which they are carried in the financial report.
Ultimate recoupment of these costs is dependent on the successful development and commercial exploitation, or alternatively sale of the respective areas of interest.
WESTERN METALS LIMITED
ABN 69 009 150 618
Half Yearly Report to 31 December 2006
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
FOR THE HALF-YEAR ENDED
31 DECEMBER 2007
4.
Events Subsequent To Reporting Date
No matter or circumstances have arisen since the end of the reporting period and the date of this report which significantly affect or may significantly affect the results or the operations of the company.
5.
Contingent Liabilities
The Directors are not aware of any contingent liabilities as at 31 December 2007. There has been no change in liabilities since the last annual reporting date.
6.
Segment Information
During the half year ended 31 December 2007, the company operated in the mineral exploration industry in Australia, Tanzania, Peru and the United States. Due to the immaterial nature of the segment results and assets in Tanzania, Peru and the United States (less than 10% of total segment), the geographical segments are not considered reportable.
7.
Equity Securities Issued
Half Year
Half Year
2007
2006
2007
2006
Shares
Shares
$
$
Ordinary Shares
(a) Issues and paid up capital
Ordinary shares fully paid
619,550,797
429,833,334
39,651,018
7,291,585
(b) Movements in ordinary shares on issue
Balance at beginning of the period
617,598,057
378,500,000
39,554,024
345,807,668
Reduction of share capital
-
-
-
(341,856,316)
617,598,057
378,500,000
3,951,352
Issued during the period:
Issue of shares at 3.60 cents
-
4,000,000
-
144,000
Conversion of options at 1.00 cents
-
2,500,000
-
25,000
Placement at 9.00 cents
-
36,500,000
-
3,285,000
Conversion of options at 1.00 cents
-
8,333,334
-
83,333
Conversion of options at 2.50 cents
1,250,000
-
31,250
-
Conversion of options at 15.00 cents
332,876
-
49,931
-
Conversion of options at 15.00 cents
369,864
-
55,479
-
Transaction costs
-
-
(39,666)
(197,100)
Balance at end of period
619,550,797
429,833,334
39,651,018
7,291,585
Western Metals Limited ACN 69 009 150 618
11
WESTERN METALS LIMITED
ABN 69 009 150 618
Half Yearly Report to 31 December 2006
Western Metals Limited ACN 69 009 150 618
12
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
FOR THE HALF-YEAR ENDED
31 DECEMBER 2007
8.
Dividends
No dividends have been paid or declared and no dividends have been recommended by the Directors.
9.
Director Share-Based Payments
The following options were granted to Directors as compensation benefits during the period 1 July 2007 to 31 December 2007. All options granted are for ordinary shares in Western Metals Limited, which confer a right of one ordinary share for every option held.
Name
Issue Date
Number of Options
Exercise Price
Vesting Date
Expiry Date
Underlying Share Price
Expected Volatility
%
Risk Free Rate %
G. Bauk
27/11/07
3,000,000
$0.35
1 Dec 2009
30 June 2011
$0.175
70
6.38
G. Chapman
27/11/07
3,000,000
$0.35
1 Dec 2009
30 June 2011
$0.175
70
6.38
P. Smith
27/11/07
6,000,000
$0.35
1 Dec 2009
30 June 2011
$0.175
70
6.38
C. Greig
27/11/07
4,000,000
$0.26
1 Sep 2009
30 June 2011
$0.175
70
6.38
M. Cardaci
27/11/07
2,000,000
$0.26
1 Sep 2009
30 June 2011
$0.175
70
6.38
10. Commitments
31 December
2007
$
30 June
2007
$
Non-cancellable operating leases contracted for but not capitalised in the financial instruments
Payable – minimum lease payments
-
Not later than 12 months
339,658
74,643
-
Between 12 months and 5 years
1,233,355
108,203
1,573,013
182,846
WESTERN METALS LIMITED
ABN 69 009 150 618
DIRECTOR’S DECLARATION
The Directors of the company declare that:
1) The financial statements and notes set out on pages 6 to 12 are in accordance with the Corporations Act 2001, including:
(i) Give a true and fair view of the financial position of the Company as at 31 December 2007 and the performance of the Company, as represented by the results of its operations, changes in equity and its cash flows for the half-year ended on that date, and
(ii) Comply with Accounting Standards AASB 134 “Interim Financial Reporting” and the Corporations Regulations 2001; and
2) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of the Board of Directors.
George Bauk
Managing Director
Dated this 7th day of March 2008
Half Year Report to 31 December 2007
Western Metals Limited ABN 69 009 150 618
13
BDO Kendalls Audit & Assurance (WA) Pty Ltd
128 Hay Street
SUBIACO WA 6008
PO Box 700
WEST PERTH WA 6872
Phone 61 8 9380 8400
Fax 61 8 9380 8499
[email protected]
www.bdo.com.au
ABN 79 112 284 787
BDO Kendalls is a national association of
separate partnerships and entities
14
7 March 2008
The Directors
Western Metals Ltd
PO Box 1674
SUBIACO WA 6904
Dear Sirs
DECLARATION OF INDEPENDENCE BY GLYN O’BRIEN TO THE DIRECTORS OF WESTERN METALS LIMITED
As lead auditor for the review of Western Metals Limited for the half-year ended 31 December 2007, I declare that to the best of my knowledge and belief, there have been:
•
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
•
no contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of Western Metals Limited and the entities it controlled during the period.
Glyn O’Brien
Director
BDO Kendalls Audit & Assurance (WA) Pty Ltd
Perth, Western Australia
BDO Kendalls Audit & Assurance (WA) Pty Ltd
128 Hay Street
SUBIACO WA 6008
PO Box 700
WEST PERTH WA 6872
Phone 61 8 9380 8400
Fax 61 8 9380 8499
[email protected]
www.bdo.com.au
ABN 79 112 284 787
BDO Kendalls is a national association of
separate partnerships and entities
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INDEPENDENT AUDITOR’S REVIEW REPORT
TO THE MEMBERS OF WESTERN METALS LIMITED
We have reviewed the accompanying half-year financial report of Western Metals Limited, which comprises the condensed balance sheet as at 31 December 2007, and the condensed income statement, condensed statement of changes in equity and condensed cash flow statement for the half-year ended on that date, a statement of accounting policies, other selected explanatory notes and the directors’ declaration of the consolidated entity comprising the disclosing entity and the entities it controlled at the half-year end or from time to time during the half-year in order for the disclosing entity to lodge the half-year financial report with the Australian Securities and Investments Commission.
Directors’ Responsibility for the Half-Year Financial Report
The directors of the disclosing entity are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the disclosing entity’s financial position as at 31 December 2007 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Western Metals Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001 would be in the same terms if it had been given to the directors at the time that this auditor’s review report was made.
Conclusion
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 Western Metals Limited is not in accordance with the Corporations Act 2001 including:
(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2007 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.
BDO Kendalls Audit & Assurance (WA) Pty Ltd
Glyn O’Brien
Director
Perth, Western Australia
Dated this 7th day of March 2008
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