ANNUAL REPORT

1999

GME RESOURCES NL
A.C.N. 009 260 315

GME RESOURCES NL
A.C.N. 009 260 315

ANNUAL REPORT
1

GME

Annual Report 1999

Contents

PAGE
CORPORATE DIRECTORY

REVIEW

OF

OPERATIONS

DIRECTORS REPORT

10

FINANCIAL INFORMATION

16

DIRECTORS DECLARATION

33

INDEPENDENT AUDIT REPORT

34

SHAREHOLDER INFORMATION

35

TENEMENT DIRECTORY

37

Cover Photo: Lake Raeside by Robert Garvey

1

GME

Annual Report 1999

1. CORPORATE DIRECTORY
DIRECTORS

AUDITORS
HLB Mann Judd

Chairman

Chartered Accountants

Michael Delaney PERROTT B.Com

15 Rheola Street
West Perth WA 6005

Managing Director

SHARE REGISTRY

Peter Ross SULLIVAN B.E., MBA

Computershare Registry Services Pty Ltd

Technical Director

Level 2, Reserve Bank Building

Geoffrey Mayfield MOTTERAM B.Met. E(Hons),

45 St Georges Terrace

M.Aus.I.M.M.

Perth WA 6000
GPO Box D 182

Company Secretary

Perth WA 6000

Niels J KROYER

Telephone: (08) 9323 2000

Facsimile:

(08) 9323 2033

REGISTERED OFFICE
Level 2, Troika House

STOCK EXCHANGE LISTING

129 Melville Parade

The Companys shares are quoted on the

Como WA 6152

Official List of Australian Stock Exchange Limited

Locked Bag 4
Como WA 6952

STATE

Telephone: (08) 9474 1799

Western Australia

Facsimile:

(08) 9474 2281

E-Mail:

enq@gme-resources.com.au

Web Site:

www.gme-resources.com.au

OF INCORPORATION

GME

Annual Report 1999

2.

REVIEW

2.1

INTRODUCTION

OF

expand the plant from 4Mt per annum to 10Mt

per annum.

OPERATIONS

During 1998/99, GME Resources NL more than

trebled its lateritic nickel resources, moved to
full ownership of the Ilgarari copper project
and farmed out three of its gold exploration
projects to leading regional explorers.

The establishment of this plant is significant for

GME as it provides a low cost low risk
development option for its resources. The
quantum and timing of returns from this
approach are driven by the differential ore
grade and cost structure between the plant
owners ore feed and that which could be
supplied by GME.

The Companys primary exploration activities

continued to focus on the Leonora-Laverton
region of Western Australia, and on nickel
laterite exploration in particular, along with a
lower key focus on other commodities and
regions.

The laterite nickel industry is in its infancy and

can be expected to evolve further as the
technical and economic aspects of treatment
plants are better understood.

Key developments for the company during the

year included:

Further exploration by GME is expected to

identify additional resources, and progress it
towards a target of at least 50 Mt (using a
0.7%Ni cut-off grade) in the region, which
would allow a stand alone venture to be
included in the options for development.

The granting of the Mt Kilkenny exploration

licence in November 1998, and the
subsequent RC drilling delineation of a
significant lateritic nickel resource on the
property.
Completion of construction of the $1.1billion
Murrin Murrin nickel laterite treatment plant
by its owners .

The farm-out of the Oberwyl Mt Ida gold

exploration project to Acacia Resources Ltd
and of the Mt Marven and Mt Morgans South
projects to Metex Resources NL, in the
September 1998 quarter, has helped to reduce
GMEs expenditure commitments during
troubled times for the gold sector whilst at the
same time advancing the projects.

Negotiation of an option to purchase

prospective lateritic nickel tenements north
and south of the Companys Waite Kauri
project.
Farm-out of the Oberwyl Mt Ida, Mt
Marven and Mt Morgans South gold projects.

Acquisition of former joint venture partner

West Australian Metals NLs 52.5% interest in
the Ilgarari copper project means that GME
now has full ownership and control of the
future exploration and possible eventual
development of the prospect.

Attainment of 100% ownership of the Ilgarari

copper project through the acquisition of a
52.5% interest held by a former joint
venturer partner.
The successful reverse circulation drilling
program at Mt Kilkenny, which outlined a 27.6
Mt lateritic nickel resource, increased the
Companys directly owned lateritic nickel
resource base to 39.2 Mt averaging 1.03% Ni
and 0.08% Co, at a 0.7% Ni lower cut-off
grade.
All of the lateritic nickel resources lie within a
35km radius of the Murrin Murrin treatment
plant of Anaconda Nickel Ltd and Glencore
International AG. Construction of this $1.1
billion plant was completed during the year
and the commissioning and ramp up phases
are expected to be completed over the next
twelve months.

GME raised $680,000 through placements

during the year, in what was a difficult fund
raising environment for junior resource
companies. The funds have been used to
advance the companys laterite nickel position
in the Murrin Murrin area. The levels of capital
raising have been modest to ensure
shareholders best benefit from exploration
success.

2.2 LEONORA-LAVERTON NICKEL-COBALT

PROJECTS
Mt Kilkenny
E39/688
The Mt Kilkenny licence covers an area of
approximately 200 sq km. It is centred 35 km

As well, the plant owners have committed to

3

GME

Annual Report 1999

380 000mE

6 840 000mN

10km

Mertondale

WAITE KAURI
2.1MT @ 1.07% Ni
MURRIN MURRIN
NORTH
3.56MT @ 1.05% Ni

"Mertondale"

PLANT SITE

MERTONDALE
2.23MT @ 1.08%Ni
MURRIN MURRIN
3.68MT @ 1.0% Ni

Old

6 810 000mN

ra
no

on
ert

ad

Ro

av

-L

Le

ad

Ro
Leonora

ROYALTY PAYMENTS

ton

Laver

Murrin Murrrin
Eulaminna
LEGEND

MACEY HILL

MURRIN MURRIN PROJECT

GME RESOURCES

MT KILKENNY
27.6MT @ 1.03% Ni

GME
GME Resources NL

6 780 000mN

ACN 009 260 315

"Yundamindera"

LEONORA LAVERTON
LATERITIC NICKEL PROJECTS

LOCATION MAP

GME

Annual Report 1999

Extensive RC drilling and minor RAB drilling in

1996-97 outlined Ni-Co mineralisation over a
strike length of 1,500 m and widths of 100m to
400m on GMEs existing tenements. Quantified
resources include a measured resource of 1.4 Mt
grading 1.09% Ni and 0.06% Co and an inferred
resource of 0.8 Mt at 1.04% Ni and 0.07% Co.

SSE of the Murrin Murrin JV plant and adjoins

that projects Murrin Murrin South tenements.
GME holds a two year option to purchase the
property.
Following a review of previous exploration
over the area and granting of the exploration
licence in early November, GME conducted resampling and nickel-cobalt assaying of midnineties gold exploration RAB drill holes which
encountered ultramafic bedrock.

Field reconnaissance was carried out over the

extended project area during 1998 and the full
extent of mineralisation is to be tested over the
next twelve months.

The assay results indicated the presence of

significant lateritic nickel mineralisation
associated with the eastern-most of three
ultramafic units defined from aeromagnetic
data and geological mapping. The eastern unit
has a north-south strike extent of
approximately 10 km and an average width of
around 500m.

Murrin Murrin
P39/3366-75, MLA 39/717-718
The Murrin Murrin Group of ten prospecting
licences covers approximately 13 sq km of
ground centred 42km east of Leonora. The
tenement block lies between the Companys
Abednego West and Murrin Murrin
(Anaconda/Golden Cliffs) projects.

In December 1998, a limited program of

vertical RC drilling of 3 holes for 145m (av.
48.3m) successfully confirmed the results of
the earlier RAB re-sampling in the northern
half of the eastern ultramafic unit.

Reconnaissance RAB drilling by GME during

1996/1997 outlined an inferred nickel-cobalt
resource of 3.7 Mt grading 1.00% Ni and 0.08%
Co, using a 0.7% Ni lower cut-off grade.

Subsequently, during the first half of 1999, two

programs of RC drilling totalling 152 vertical
holes for 5,465 (av. 36m) systematically tested
the weathering profile of the three ultramafic
units. Ground magnetic surveys were useful in
outlining the units, particularly in areas of
superficial cover, prior to the drilling. The results
of the drilling programs indicate that economic
grade lateritic nickel mineralisation is essentially
concentrated in the northern half of the eastern
ultramafic unit. Resource calculations using a
0.7% lower cut-off grade quantified an inferred
resource of 27.6 Mt at 1.03% Ni and 0.08% Co. At
a 1% Ni cut-off grade there is 11.4 Mt of higher
grade material averaging 1.33% Ni and 0.12% Co.

During 1998/99 mining lease applications were

lodged to cover the area held under prospecting
licences.
Murrin Murrin North
P39/3515-22
The Murrin Murrin North group of prospecting
licences lies 53 km ENE of Leonora. It abuts parts
of the Murrin Murrin Joint Venture lateritic nickelcobalt project to the south and east.
Following the acquisition of the tenements in
October 1997, GME Resources carried out a RAB
drilling program to test a series of aeromagnetic
highs interpreted to reflect underlying ultramafic
rocks.

Waite Kauri
P37/4149, 5264, 5555 and PLA37/5821-24,
MLA37/580

The program outlined an inferred resource at the

Tomahawk prospect of 3.6 Mt of lateritic nickel
mineralisation in the weathering profile, with a
grade of 1.05% Ni and 0.08% Co, using a 0.7% Ni
lower cut-off grade. Encouraging intercepts were
also obtained from the bottom of some holes, at
the Wedge prospect, which were amongst a
number of holes that were not able to fully
penetrate the weathered zone. Deeper RC drilling
will ultimately be required to complete resource
definition at the Wedge prospect.

During August 1998, GME secured a 2 year

option to purchase P37/5821-5824 which cover
5km of strike extensions of an ultramafic
sequence to the north and south of GMEs
existing tenements which contain economic
grade lateritic mineralisation.
The tenement package now covers a total area
of 10 sq km. It is located approximately 45 km
northeast of Leonora.
5

GME

Annual Report 1999

Eucalyptus
ELA 39/703

NICKEL RESOURCE SUMMARY

Deposit

Category

Tonnes

Ni%

Co% NiEq%

Waite Kauri

Measured

1,416,000

1.09

0.06

1.35

758,000

1.04

0.07

1.33

2,174,000

1.07

0.07

1.34

3,680,000

1.00

0.08

1.32

Inferred
SUB-TOTAL
Murrin Murrin Inferred

GME is the priority applicant for this 11 sq km

tenement. Aeromagnetic interpretation of the
soil covered terrain indicates the presence of an
ultramafic unit approximately 2,000 m long and
400 m wide.

Murrin Murrin

The Company is awaiting grant of the tenement.

Nth

Inferred

3,570,000

1.05

0.08

1.37

Mertondale

Inferred

2,228,000

1.08

0.08

1.39

Mt Kilkenny

Inferred

27,558,000

1.03

0.08

1.35

39,210,000

1.03

0.08

1.35

TOTAL

Murrin Murrin (Anaconda)

P39/3158-71, 3176-79 and 3281, MLA39/426,
456, 552, 553 and 569
Anaconda Nickel Ltd has rights to nickel-cobalt
laterite mineralisation on the tenements. GME
retains the right to any precious metals or other
base metals discovered on these tenements,
including nickel sulphides. Whilst Anaconda
retains the right to the lateritic nickel-cobalt
resources, it pays GME a fee of $100,000 p.a. In
addition, it will pay GME $0.20 per tonne on all
nickel laterite ore that is mined and treated.

(Ni Eq% = Ni% + 4Co%)

Within these deposits there are zones of higher grade
mineralisation which, at a 1.0% Ni lower cut-off grade,
amount to 16.4 million tonnes at 1.32% Ni and 0.11% Co.

Mertondale
P37/4201-05, MLA 37/591
The 8 km long by 0.5 to 1.5 km wide
Mertondale tenement block lies approximately
33 km northeast of Leonora. It covers an
ultramafic sequence with nickel enrichment in
the lateritic weathering profile.

Anaconda Nickel has successfully outlined the

following nickel resources on the tenements as
a result of its exploration efforts to the end of
1997.

Based on systematic RAB drilling and localised

RC drilling by GME during 1996-97 commercial
grade lateritic nickel mineralisation was
outlined over a strike length of 6.5 km and
widths of up to 125m. Subsequent calculations
defined an inferred resource of 2.2Mt grading
1.08% Ni and 0.08% Co, or 1.39% Ni Eq, using
a 0.7% Ni lower cut-off grade.

Deposit

Million

Ni%

Co%

Tonnes

Macey Hill
P39/3814-15

Resource
Status

MM4

5.6

1.03

0.07

Measured

MM4

4.8

0.97

0.07

Indicated

MM4E

3.8

1.07

0.09

Inferred

MM13

7.2

1.11

0.07

Inferred

Total

21.4

1.05

0.07

During the March 1999 quarter Golden Cliffs NL,

a 100% subsidiary of GME issued a writ of
summons against each of Anaconda Nickel,
Murrin Murrin Holdings Pty Ltd, Glenmurrin Pty
Ltd, ANZ Capel Court Limited, Chase Securities
Australia Limited and the Minister for Mines.

These two adjacent prospecting licences lie

42km ESE of Leonora and cover a combined
area of 228ha. They are surrounded by the
Murrin Murrin South tenements of the Murrin
Murrin Joint Venture.
Aeromagnetic interpretation of largely laterite
covered terrain indicates the presence of an
ultramafic unit 1,400 m long and
approximately 500m wide within the Macey
Hill licences. It is considered prospective for
lateritic nickel-cobalt mineralisation.

Golden Cliffs alleges that Anaconda Nickel has

entered into agreements over these tenements
without complying with specific conditions
contained in its agreement with Golden Cliffs
that protect Golden Cliffs interest.
The action is listed on the expedited list of the
Supreme Court and is proceeding to trial. The
Company and the various parties involved are
attempting to settle the matter prior to the trial.

The prospecting licences were granted during

August 1998 and subsequent field
reconnaissance has been carried out.

GME

Annual Report 1999

2.3 LEONORA-LAVERTON GOLD PROJECTS

Metex Resources NL entered into a joint

venture with GME, during the September 1998
quarter, to explore the tenements for their gold
potential. Under the terms of the agreement,
designated the Mt Morgans Joint Venture,
Metex can progressively earn up to a 75%
interest in the properties by expending a total
of $250,000 over 3 years, including a minimum
expenditure of $40,000 in the first 12 months.

Linden
P39/3417-18 GME 100%
P39/2974-76, MLA 39/500 Haoma
Mining NL 90%, GME 10%
The Linden tenements cover a total area of
479 ha near the southern margin of Lake
Carey, some 75 km south of Laverton.
Prospecting licences 39/3417 and 3418
encompass the old Devon, Olympic and
Danube mines. Based on a 1997 assessment of
1980s drilling of the main quartz-sulphide lode
at Devon by previous explorers, GME
calculated an inferred resource of 240,000
tonnes grading 7.15 gpt Au.

Metex carried out field geological

reconnaissance, an assessment of historical
data, outcrop mapping and a regolith
interpretation in late 1998 and early 1999.
Subsequently it curtailed its exploration
activities in general, including the Mt Morgans
joint venture. It is currently seeking additional
joint venture partners to carry out further
evaluation of the project.

Bindah
M39/1, 198 and 286, P39/3758
The tenements cover a total area of 75 ha on
the southern margin of Lake Carey, about
12 km southeast of Linden.

Other Leonora-Laverton Gold Projects

No substantial field activities were conducted
on the Abednego West, Chain Bore, Hawks
Nest, Leonora East and Murrin Murrin (Golden
Cliffs) projects during 1998/99.

A shallow, high grade, gold ore body was

mined on the tenements in 1985/86 by WMC
Resources Ltd. Approximately 70,000 tonnes at
an average grade of about 7 gpt Au was mined
from the pit and treated at the Windara plant.
Mining was conducted to approximately 50m
depth. GME acquired the project with a view
to investigating the potential for both alongstrike and deeper mineralisation.
Following the modest success of an RC Drilling
program conducted in June 1998 quarter,
Acacia Resources Ltd has subsequently
withdrawn from an option to purchase the
tenements. The best drill results were 12m
grading 1.93 ppm Au from 80m to 102m in
hole BNRC006, including 2m at 3.75 ppm Au
from 94m to 96m. Acacia completed technical
reporting on the project in November 1998.

The 71 sq km Ghan Well exploration licence

39/679 and the 68 sq km Pyke Hill EL 39/633
on the northwestern margin of Lake Carey are
awaiting grant of title.

2.4 OTHER REGIONAL WA PROJECTS

Ilgarari
M52/539, 540 and E52/1003
The Ilgarari Project is located in the Bangemall
Basin north of Meekatharra. It covers an under
explored area of similar geology to the Zairian
and Zambian copper belts, with potential for a
large tonnage stratiform base metal deposit.
Work to date has identified a major structural
shear 7 km long that has anomalous copper
geochemistry along its entire length. The last
major exploration program on the tenements
was conducted in 1990 and targeted shallow
copper oxide mineralisation on this shear
around the old Ilgarari mine. An inferred
resource of 255,000 tonnes at 3.3% Cu was
defined by this program.

Mt Morgans South and Mt Marven

P39/2753, 3347-56, 3531-32, M39/162, 325
and MLA 39/481, 702 and 703
GME 100%, Metex Resources NL
earning 75%
The project areas lie about 80km east of
Leonora and some 10km SE and 12 km SSE
respectively from the Mt Morgans mine. They
cover a combined area of 18 sq km at the
north end of Lake Carey.

A review of all project data including feasibility

studies, was undertaken during the June 1999
quarter.
7

GME

Annual Report 1999

Stophanis Well Joint Venture

E31/90, 97, 129, 165, 202 and 223,
P31/1453-58, MLA 31/168-170, 233-235,
260-262
ELA 31/420 and 421, 427 and 428
GME 50%, Capricorn Resources NL 50%

Oberwyl Mt Ida
E29/159, MLA29/252-253 (Acacia Resources
Ltd earning 80%)
E29/199 and P29/1561
The Oberwyl Mt Ida tenements are located
approximately 100km northwest of Menzies in
the Mt Ida greenstone belt. They cover an area
of approximately 28 sq km and encompass soil
geochemical anomalies, outlined by a former
joint venturer during 1996/1997, some of
which are either untested or have been only
partially drill tested by GME and previous
explorers.

The project area lies approximately 145km

northeast of Kalgoorlie-Boulder and 150km
south of Laverton. It covers part of the Pinjin
Fault and adjacent terrain in the vicinity of the
old Patricia and Pinjin mining centres in the
north and south respectively.

During the September 1998 quarter GME

entered into a joint venture agreement with
Acacia Resources Ltd, designated the Mt Ida
Joint Venture. Acacia may acquire an interest
of 80% in EL29/159 and MLA29/252-253 by
expending a total of $400,000 over the next
four years, with a minimum commitment of
$100,000 in the first 12 months.

Project activities during 1998/99 included

technical assessments, reporting and tenement
maintenance. The joint venturers won the
ballots for three of the four Pinjin exploration
licence applications (ELA31/420, 421 & 428)
and are the second priority applicant for
ELA31/427 behind Mt Kersey Mining NL. Grant
of title for the first priority applications is
awaited.

Acacia carried out data compilation and

interpretation, surveying of drill hole positions
and tracks, detailed field mapping, rock chip
sampling and initial RAB drilling.

Bullabulling Joint Venture

M15/513 (Resolute Ltd, GME 10% freecarried interest)

A total of fifty vertical RAB holes were drilled

for 1,845 m (av 37m) to infill old drill lines and
test the extent of an auger soil gold anomaly
(peak 99 ppb, average 30 ppb) that is located
over the hinge zone of the Kurrajong Anticline,
and in a possible pressure shadow of the
Copperfield Granite. The drilling intersected
variably foliated basalt with little alteration but
common quartz veining. Assay results of
composite samples returned a number of
geochemically anomalous intercepts from 11 of
the 50 holes.

No field work was carried out on the 160 ha

lease during 1998/99. Resolute held
discussions with a number of other companies
with a view to divesting the project.

2.5 QUEENSLAND GOLD PROJECT

Clermont Joint Venture
EPM5741, 10455, 11235-236, EPMA 11575,
11793, 11806 and 12164
(GME 40% contributing interest, Australian
Gold Fields NL 60% and manager)

An environmental audit was completed and

rehabilitation advanced with the capping of
approximately 150 historical drill holes.

The Companys joint venturer at Clermont

(AGF) was placed into administration during
the March 98 quarter. As a result GME has
been reviewing its position under the Joint
Venture Agreement.

Towards the end of the financial year, planning

of a second program of RAB drilling was
completed with a view to testing 3 gold
geochemical anomalies with 7,000 m of drilling.

No field work was conducted on the project

during the year. Minor expenditure was
incurred on tenement maintenance and general
administration.

GME

Annual Report 1999

GME Resources NL
A.C.N. 009 260 315

FINANCIAL
S

GME

Annual Report 1999

3.

DIRECTORS REPORT
Your directors present their report of GME Resources NL and its controlled entities
for the financial year ended 30 June 1999.

3.1

DIRECTORS
The names of directors in office at the date of this report are:
Michael Delaney Perrott (Chairman)
Peter Ross Sullivan (Managing Director)
Geoffrey Mayfield Motteram (Technical Director)

3.2

PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity are mineral exploration and investment.
No significant change in the nature of these activities occurred during the year.

3.3

OPERATING RESULT
The consolidated loss after income tax for the year ended 30 June 1999 was $1,019,270 (1998: $1,083,795)

3.4

DIVIDENDS
No dividends have been paid or declared since the start of the financial year. No recommendation is made as to
dividends.

3.5

REVIEW

OF

OPERATIONS

A detailed review of operations for the financial year and up to the date of this report is included in the annual
report and should be read with this directors report.

3.6

SIGNIFICANT CHANGES

IN

STATE

OF

AFFAIRS

The significant changes in the state of affairs of the consolidated entity during the financial year were:
(1) On 8 July 1998 the Company resolved to issue 2 million shares at 6.5 cents each to raise $130,000 to be used
to repay debt.
(2) On 30 July 1998 the Company resolved to enter into an agreement with Mr John Flint for an option for two
years over additional Waite Kauri lateritic nickel tenements around the Companys existing resource and to
pay an option fee of $20,000 with a $300,000 payment on exercise of the option to be satisfied by 50% in
cash and 50% issue of company shares.
(3) On 1 September 1998 the Company entered into an agreement with Acacia Resources on the Companys
Oberwyl tenements whereby Acacia Resources can earn 80% by spending $400,000 over 4 years.
(4) On 1 October 1998 the Company resolved to enter into a joint venture agreement with Metex Resources on
the Companys Mt Morgan South and Mt Marven tenements whereby Metex Resources can earn 60% by
spending $250,000 over three years and up to 75% by spending an additional $150,000.
(5) On 2 November 1998 the Company issued and allotted 1,000,000 Shares at 6 cents each as a part payment
due under the Purchase Agreement of the Murrin Murrin North tenements.
(6) In January 1999 a controlled entity instigated legal proceedings against Anaconda Nickel Limited and number
of other companies for breach of contract in relation to certain tenements.
(7) On 12 February 1999 the Company made a placement of 4,891,666 Shares at 6 cents to various parties to
raise $293,500 to be used for exploration at Mt Kilkenny and as working capital.
(8) On 22 March 1999 the Company issued and allotted 1,500,000 Shares at an issue price of 13 cents and paid
$9,863 in cash to Western Australian Metals NL as consideration for their remaining 52.5% interest of the
Ilgarari Project. The Company now owns 100% of the project.
(9) On 28 April 1999 the Company made a placement of 4,000,000 Shares at 6.5 cents to various parties to raise
$260,000 to be used for exploration at Mt Kilkenny and as working capital.

10

GME

Annual Report 1999

3.7 AFTER BALANCE DATE EVENTS

No matter or circumstance has arisen since 30 June 1999 that has significantly affected, or may
significantly affect:
(a) the consolidated entitys operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the consolidated entitys state of affairs in future financial years.

3.8 LIKELY DEVELOPMENTS

The consolidated entity will continue its mineral exploration and investment with the object of finding a
mineralised resource.

11

GME

Annual Report 1999

3.9

INFORMATION ON DIRECTORS

Michael Delaney Perrott

B.Com
(Director)
53 Years
Qualifications and Experience
Mr Perrott has been involved in the construction and contracting industry since 1969. He is currently a director of
a number of private and public listed companies and he is on the boards of Notre Dame University and West
Coast Eagles.
Peter Ross Sullivan
B.E., MBA
(Engineer)
43 years
Qualifications and Experience
Mr Sullivan is an engineer and has been involved in the development of resource companies and projects for
more than 15 years.
His project engineering experience was followed by four years in corporate finance with an investment bank and
two years in a corporate development role with an Australian resource group. Mr Sullivan has considerable
experience in the management and strategic development of resource companies.
Geoffrey Mayfield Motteram
B.Met E(Hons) M.Aus.I.M.M.
(Metallurgical Engineer)
50 years
Qualifications and Experience
Mr Motteram is a metallurgical engineer with over 25 years experience in the development of projects in the
Australian resources industry.
He has extensive experience in gold and base metals having been involved with WMCs Kwinana Nickel Refinery
and Kalgoorlie Nickel Smelter. He subsequently joined BHP, and later Metals Exploration, where he was involved
in the evaluation of gold and base metal projects. Since 1989 he has acted as a Mining Project and Metallurgical
Consultant. He was involved in the formation of Anaconda Nickel Limited in 1994 and controlled the technical
development of the Anaconda Nickel Ltd Murrin Murrin Joint Venture until the end of 1997. He is a former
director of Anaconda Nickel Limited and is currently a director of Black Range Minerals NL (ACN 009 079 047),
responsible for the Syerston Nickel Cobalt Laterite Project.

12

GME

Annual Report 1999

3.10 DIRECTORS INTERESTS

The relative interest of directors either directly or through entities controlled by the directors in the share capital
of the company as at the date of this report is:
Director

3.11 MEETINGS

Ordinary Shares

31/8/2000 Options
Exercisable at 20 cents

Michael D Perrott

3,026,580

Peter R Sullivan

4,943,264

975,000

Geoffrey M Motteram

1,164,052

500,000

OF

DIRECTORS

During the year, eight meetings of directors were held. Attendances were:
Name

Number
Eligible to Attend

Number
Attended

Michael D Perrott

Peter R Sullivan

Geoffrey M Motteram

3.12 SHARE OPTIONS

At the end of the financial year the Company had on issue the following options to acquire ordinary shares:Number of Options
3,500,000

Exercise Price

Exercisable Dates

20 cents

Before 31 August 2000

No person entitled to exercise any of the above options has any right, by virtue of the option, to participate in
any share issue of any other corporation.
No options were issued during, or have been issued since the end of, the financial year.

3.13 AUDIT COMMITTEE

The Company does not have an audit committee as, in the opinion of the directors, the scope and size of the
Companys operations do not warrant it.

13

GME

Annual Report 1999

3.14 CORPORATE GOVERNANCE

The board of directors consisting of three directors is responsible for corporate governance of the Company.
Mr Sullivan has been appointed Managing Director of the Company. The other two directors are non-executive
directors of the Company. Mr M D Perrott is the non-executive chairman of the Company. The maximum number
of directors shall not exceed 10 without the approval of shareholders at a meeting of shareholders.
Directors appointed by the board hold office only until the next Annual General Meeting and are eligible for reelection. One third of the directors, including executive directors, but excluding the managing director, shall
retire by rotation at each Annual General Meeting. The managing director is not required to retire by rotation.
The directors are not required to hold any qualifying shares.
Directors of the Company may be proposed by shareholders at the Annual General Meeting in accordance with
the Constitution of the Company. However, in most cases, the board of directors nominates and appoints new
directors with due regard to the Companys needs and skills and the contribution which a proposed director can
bring to the Company. Each director has the right to seek independent professional advice at the Companys
expense for which the prior approval of the Chairman is required and is not unreasonably withheld.
Directors fees are only paid subject to shareholders approval.
Generally the directors are remunerated for the services they render the Company and such services are normally
carried out under normal commercial terms and conditions. Engagement and payment for such services are
approved by the other directors with no interest in the engagement of services.
The board of directors receives and reviews exploration programs, operational reports and monitors the
operational and financial performance of the consolidated entity, its operations and its risks.
The board of directors approves budgets, operational plans, strategic plans and all major business strategies. The
board of directors also review the adequacy and quality of the external audit and expenditure.

3.15 DIRECTORS BENEFITS

Other than as disclosed in Note 21 (Related Party Disclosures) during or since the financial year, no Director of
the Company has received or become entitled to receive a benefit because of a contract that the Director or a
firm of which the Director is a member or an entity in which the Director has a substantial financial interest
made with the Company or an entity that the Company controlled, or a body corporate that was related to the
Company, when the contract was made or when the Director received, or became entitled to receive the benefit
other than a benefit included in the aggregate amount of emoluments received or due and receivable by the
Directors shown in Note 17 to the financial statements.

14

GME

Annual Report 1999

3.16 INDEMNIFYING OFFICERS

OR

AUDITORS

The company has not, during or since the financial year, in respect of any person who is or has been an officer
or the auditor of the Company or of a related body corporate:

indemnified or made any relative agreement for indemnifying against a liability incurred as an officer or
auditor, including costs and expenses in defending legal proceedings; or

paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer or
auditor for the costs or expenses to defend legal proceedings.

3.17 YEAR 2000

The consolidated entity has completed a review to ensure, as far as possible, that business operations will not be
adversely affected by the year 2000 systems issue.
Key computer software and embedded systems have been checked for year 2000 compatibility, and adequate
contingency plans have been developed to help ensure continuity of supply to the consolidated entity. No
significant costs have been or are expected to be incurred in relation to the review.

3.18 ENVIRONMENTAL REGULATION

The consolidated entitys exploration and mining tenements are located in Western Australia and Queensland.
There are significant regulations under the Western Australian Mining Act 1978 and the Queensland Mineral
Resources Act 1989 and both states Environmental Protection Acts that apply. Licence requirements relating to
ground disturbance, rehabilitation and waste disposal exist for all tenements held.
The directors are not aware of any significant breaches during the period covered by this report.

This report is signed in accordance with the Resolution of Directors.

__________________________________________
PR Sullivan
Managing Director
Dated 16 September 1999
Perth, Western Australia

15

GME

Annual Report 1999

PROFIT

AND

LOSS STATEMENTS

for the year ended 30 June 1999

Note

Operating revenue

2(a)

Operating loss

2(b)

Income tax expense attributable

to operating loss

Consolidated
1999

1998

1999

1998

111,206
___________
___________
1,019,270

119,751
___________
___________
1,083,795

11,206
___________
___________
1,083,709

___________
Operating loss after income tax

Parent Entity

19,751
___________
___________
1,183,593

___________

___________

___________

1,083,795

1,083,709

1,183,593

9,240,819
___________

8,157,024
___________

9,424,454
___________

8,240,861
___________

10,260,089
___________

9,240,819
___________

10,508,163
___________

9,424,454
___________

1,019,270

Accumulated losses at the

beginning of the financial year

Accumulated losses at the end

of the financial year

The accompanying notes form part of these financial statements.

16

GME

Annual Report 1999

BALANCE SHEETS
as at 30 June 1999

Note

Consolidated

Parent Entity

1999

1998

1999

1998

353,578

182,888

353,578

CURRENT ASSETS
Cash

14

182,888

Receivables

3,495
___________
186,383
___________
___________

Total Current Assets

33,426
___________
387,004
___________
___________

3,264
___________
186,152
___________
___________

33,194
___________
386,772
___________
___________

NON CURRENT ASSETS

Receivables

6,568

Investments

615,600

615,600

Plant and equipment

1,163

1,979

1,163

1,979

Exploration costs carried forward

Total Non Current Assets

TOTAL ASSETS

5,898,427
___________
5,899,590
___________
___________

5,609,365
___________
5,611,344
___________
___________

5,044,021
___________
5,660,784
___________
___________

4,803,794
___________
5,427,941
___________
___________

6,085,973
___________
___________

5,998,348
___________
___________

5,846,936
___________
___________

5,814,713
___________
___________

CURRENT LIABILITIES
Accounts payable

772,427

Borrowings

10

220,000
___________
992,427
___________
___________

350,000
___________
805,897
___________
___________

220,000
___________
1,001,464
___________
___________

350,000
___________
805,897
___________
___________

11

500,000
___________
500,000
___________
1,492,427
___________

500,000
___________
500,000
___________
1,305,897
___________

500,000
___________
500,000
___________
1,501,464
___________

500,000
___________
500,000
___________
1,305,897
___________

4,593,546
___________
___________

4,692,451
___________
___________

4,345,472
___________
___________

4,508,816
___________
___________

Total Current Liabilities

455,897

781,464

455,897

NON CURRENT LIABILITIES

Borrowings
Total Non-Current Liabilities
Total Liabilities
NET ASSETS

EQUITY
Issued capital

12

13,434,532

12,036,322

13,434,532

12,036,322

Reserves

13

1,419,103

1,896,948

1,419,103

1,896,948

(10,260,089)
___________
4,593,546
___________
___________

(9,240,819)
___________
4,692,451
___________
___________

(10,508,163)
___________
4,345,472
___________
___________

(9,424,454)
___________
4,508,816
___________
___________

Accumulated losses
TOTAL EQUITY

The accompanying notes form part of these financial statements

17

GME

Annual Report 1999

STATEMENTS

OF

CASH FLOWS

for year ended 30 June 1999

Note

Consolidated

Parent Entity

1999

1998

1999

1998

(425,814)
(183,161)

(591,997)
(466,560)

(341,419)
(183,161)

(469,432)
(465,542)

CASH FLOWS FROM OPERATING ACTIVITIES

Payments for:
Exploration and evaluation
Administration
Proceeds from facilitation fee for
prospecting rights
Interest received
Borrowing costs
Other

100,000
8,615
(45,695)
10,000
___________
(985,637)
___________
___________

11,342
1,000
___________
(512,238)
___________
___________

8,615
(45,695)
10,000
___________
(962,054)
___________
___________

(240,761)
___________
(240,761)
___________
___________

(209,422)
___________
(209,422)
___________
___________

(225,330)
___________
(225,330)
___________
___________

665,365
(130,000)
___________

787,834
500,000
(116,536)
___________

665,365
(130,000)
100,000
(84,395)
___________

787,834
500,000
(116,536)
101,051
(138,997)
___________

Net Financing Cash Flows

535,365
___________
___________

1,171,298
___________
___________

550,970
___________
___________

1,133,352
___________
___________

Net Decrease in Cash Held

Cash at the Beginning of the Year

(170,690)
353,578
___________
182,888
___________
___________

(55,100)
408,678
___________
353,578
___________
___________

(170,690)
353,578
___________
182,888
___________
___________

(54,032)
407,610
___________
353,578
___________
___________

Net Operating Cash Flows

14(a)

100,000
11,342
1,000
___________
(496,633)
___________
___________

CASH FLOWS RELATED TO INVESTING ACTIVITIES

Payments for:
Prospects

(209,422)
___________
(209,422)
___________
___________

Net Investing Cash Flows

CASH FLOWS RELATING TO FINANCING ACTIVITIES

Proceeds from issue of
shares/options
Proceeds from borrowings
Repayment of borrowings
Loans from wholly owned entity
Loans repaid to wholly owned entity

CASH AT THE END OF THE YEAR 14(b)

The accompanying notes form part of these financial statements

18

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

1.

STATEMENT OF ACCOUNTING POLICIES

The following is a summary of the significant accounting policies adopted by the Company in the preparation of the
financial statements:

(a)

Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with
applicable Accounting Standards and other mandatory professional reporting requirements and the
Corporations Law. The financial report has also been prepared on the basis of historical costs and does not
take into account changing money values or, except where stated, current valuations of non current assets.
Cost is based on fair values of the consideration given in exchange for assets. The accounting policies have
been consistently applied, unless otherwise stated.

(b)

Principles of Consolidation
The consolidated financial statements have been prepared by combining the financial statements of all the
entities that comprise the consolidated entity, being the Company (the parent entity) and its controlled
entities as defined in AASB1024, Consolidated Accounts. A list of controlled entities appears in Note 6.
Consistent accounting policies have been employed in the preparation and the presentation of the
consolidated financial statements.
The consolidated financial statements include the information and results of each controlled entity from the
date on which the Company obtains control and until such time as the Company ceases to control such
entity.
In preparing the consolidated financial statements, all inter Company balances and transactions, and
unrealised profits arising within the consolidated entity are eliminated in full.

(c)

Exploration and Development Expenditure

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area or where activities in the area have not yet reached a stage
which permits reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full to the profit and loss account in
the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the
life of the area according to the rate of depletion of the economically recoverable reserves. Any costs of site
restoration are provided for during the relevant production stage and included in the costs of that stage.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest.

19

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued

(d) Income Tax

The consolidated entity adopts the liability method of tax-effect accounting whereby the income tax expense
shown in the profit and loss account is based on the operating result before income tax adjusted for any
permanent differences.
Timing differences which arise due to the different accounting periods in which items of revenue and expense are
included in the determination of operating result before income tax and taxable income are brought to account as
either a provision for deferred income tax or an asset described as future income tax benefit at the rate of income
tax applicable to the period in which the benefit will be received or the liability will become payable.
Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable
doubt. Future income tax benefits in relation to tax losses are not brought to account unless there is virtual
certainty of realisation of the benefit.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that
no adverse change will occur in income taxation legislation and the anticipation that the consolidated entity will
derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of
deductibility imposed by law.

(e) Plant and Equipment

The depreciable amount of plant and equipment is depreciated over their estimated useful lives commencing from
the time the asset is held ready to use. Predominantly, the straight line method of depreciation has been used.
Class of fixed assets:
Plant and equipment

Depreciation rate:
20-27%

(f) Investments
The consolidated entitys interests in entities which are not controlled are brought to account at cost or directors
valuation or in accordance with AASB 1016 Accounting for Investments in Associates.
Marketable securities held as inventory are valued at the lower of cost and net realisable value as determined in
respect of each security holding.
The recoverable amount of non-current marketable securities is reviewed at balance date in relation to each
security holding. The excess of carrying value over recoverable amount is charged to the profit and loss account
except to the extent that it reverses a previous revaluation increment still included in the asset revaluation reserve,
in which case it is treated as a reduction in that reserve.
(g) Cash
For the purpose of the statements of cash flows, cash includes deposits which are readily convertible to cash on
hand and which are used in the cash management function on a day to day basis, net of outstanding bank
overdrafts.

(h) Comparative Figures

Where required by accounting standards comparative figures have been adjusted to conform with changes in
presentation for the current financial year.

20

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued

(i)

Going Concern
These financial statements have been prepared on a going concern basis, notwithstanding the deficit in working
capital. The directors believe that the going concern basis is appropriate for the following reasons:

(j)

(a)

The directors believe that further capital raisings from the finance market are possible.

(b)

The directors are of the opinion that under existing loan arrangements, the repayment of all current
borrowings can, if necessary, at the option of the lender, be converted to equity, or be deferred.

(c)

The directors are prepared, subject to shareholders approval to convert half of the amounts outstanding to
director related entities, as detailed in Note 21(c), to shares in the Company and accept that the remaining
half of the amounts outstanding, to director related entities, may not be paid until the Company is in a
financial position to do so.

Revenue Recognition
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
Other revenue is recognised when all obligations by the consolidated entity has been fulfilled and the right to the
revenue has been established.

21

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued

Consolidated

2.

Parent Entity

1999

1998

1999

1998

OPERATING LOSS
(a)

Operating revenue
Included in the operating loss are the
following items of operating revenue:

Interest received
- other persons
Proceeds from:
Facilitation fee for prospecting rights
Other revenue

(b)

10,206

9,751

100,000
1,000
___________
111,206
___________
___________

100,000
10,000
___________
119,751
___________
___________

10,206
1,000
___________
11,206
___________
___________

9,751
10,000
___________
19,751
___________
___________

Operating loss before income tax

has been determined after:

Crediting as income
Interest received other persons
Charging as an expense
Depreciation of plant & equipment
Mineral exploration expenditure
written off
Interest Paid other persons

10,206

9,751

10,206

9,751

816

816

816

816

658,370
86,032
___________
___________

628,363
92,468
___________
___________

22

622,811
86,032
___________
___________

628,179
92,468
___________
___________

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued
Consolidated

3.

Parent Entity

1999

1998

1999

1998

(366,937)

(390,166)

(390,136)

(426,093)

TAX NOTE
Income Tax
(a) The prima facie tax on operating
result is reconciled to the income tax
provided in the financial statements
as follows:
Prima facie tax benefit on
operating loss before income
tax at 36%

Tax effect of permanent differences:

Non-deductible expenditures
Regarding capital raising, corporate
advice etc.
83
Option application reserve re:
expired options
Exploration expenditures written off 237,013
Exploration expenditures incurred ___________
(174,539)
Tax effect of timing differences

21,424

(304,380)
(17,992)
___________
(322,372)

(b)

83

21,424

373,433
226,211
(170,302)
___________

224,212
(144,458)
___________

373,433
226,144
(126,179)
___________

60,600
11,384
___________
71,984

(310,299)
(17,992)
___________

68,729
11,744
___________
80,473

(328,291)

Future Income tax benefits

brought to account
Tax losses transferred
Future Income tax benefits not brought
to account
(322,372)
___________
Income tax expense
___________
___________

___________
___________
___________

(322,373)
___________

___________
___________

___________

___________
___________

The directors estimate that the potential

future income tax benefits not brought to
account are:
Revenue losses
801,639
Section 330-15 exploration expenses 1,529,822
Capital losses
9,606
___________

434,395
1,393,854
285,059
___________

753,837
1,529,822
___________

301,611
1,385,364
285,059
___________

2,341,067
___________
___________

2,113,308
___________
___________

2,283,659
___________
___________

1,972,034
___________
___________

71,984
-

5,918

80,473
-

These taxation benefits will only be obtained if:

(i)
the consolidated entity derives future assessable income of a nature and of an amount sufficient to enable
the benefit from the deduction for the losses to be realised, or
(ii) the losses are transferred to an eligible entity in the consolidated entity, and
(iii) the consolidated entity continues to comply with the conditions for deductibility imposed by tax legislation; and
(iii) no changes in tax legislation adversely affect the consolidated entity in realising the benefits for the
deductions for the losses.
23

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued
Consolidated

4.

5.

6.

RECEIVABLES (Current)
Sundry debtors

Parent Entity

1999

1998

1999

1998

3,495
___________
3,495
___________
___________

33,426
___________
33,426
___________
___________

3,264
___________
3,264
___________
___________

33,194
___________
33,194
___________
___________

RECEIVABLES (Non Current)

Loans to controlled entities (wholly owned)
Provision for non recovery
___________
___________
___________

___________
___________
___________

1,322,695
(1,322,695)
___________
___________
___________

1,329,263
(1,322,695)
___________
6,568
___________
___________

___________
___________

616,893
(1,293)
___________

616,893
(1,293)
___________

615,600
___________

615,600
___________

INVESTMENTS (Non Current)

Unlisted shares (controlled entities)
Provision for diminution in value

___________
___________

Name/(Country Of Incorporation)

GME Sulphur Inc (USA)

GME Investments Pty Ltd (Australia)
Golden Cliffs NL (Australia)

Percentage Owned
1999
1998
%
%
100
100
100
100
100
100

All investments comprise ordinary shares and no shares held in related corporations are listed on a prescribed
stock exchange.
The recoverability of the carrying value of shares in controlled entities is dependent on the successful development
and commercial exploration or, alternatively, sale of the respective areas in which those controlled entities have an
interest.

24

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued
Consolidated

7.

PLANT AND EQUIPMENT

(Non Current)
Plant and equipment at cost
Less provision for depreciation

1999

1998

1999

1998

3,140
(1,977)
___________
1,163
___________

3,140
(1,161)
___________
1,979
___________

3,140
(1,977)
___________
1,163
___________

3,140
(1,161)
___________
1,979
___________

EXPLORATION EXPENDITURE
CARRIED FORWARD
(Non Current)
Deferred exploration expenditure at cost
Movements:
Balance at beginning of the year
5,609,365
Direct expenditure
947,432
___________
6,556,797
Less exploration expenditure written off
(658,370)
___________
5,898,427
___________
___________

4,926,078
1,311,650
___________
6,237,728
(628,363)
___________
5,609,365
___________
___________

4,803,794
863,038
___________
5,666,832
(622,811)
___________
5,044,021
___________
___________

4,258,319
1,173,654
___________
5,431,973
(628,179)
___________
4,803,794
___________
___________

Total Plant and Equipment

8.

Parent Entity

The ultimate recoupment of the above deferred exploration expenditure is dependent on the successful
development and commercial exploitation or, alternatively, sale of the respective areas.

9.

ACCOUNTS PAYABLE (Current)

Sundry creditors
498,963
Loan from related parties (i)
273,464
Amount payable to wholly owned entity ___________
772,427
___________
___________

(i)

182,433
273,464
___________

498,963
273,464
9,037
___________

182,433
273,464
___________

455,897
___________
___________

781,464
___________
___________

455,897
___________
___________

The loan from M R, P R, D A and J N Sullivan (Vendors) arose as a result of a purchase of a number of
tenements (approved by shareholders on 20 June 1996). P R Sullivan is a director of the company.
The debt may be satisfied by the issue of shares in the Company, should the Company have insufficient
financial resources. However, the Vendors may at their discretion extend the payment date for the loan.
Interest will accrue at 12% p.a. for each period the loan is extended. The interest amount accrued and
unpaid as at 30 June 1999 is $51,426.

10. BORROWINGS (Current)

Unsecured Loan

220,000
___________
220,000
___________
___________

350,000
___________
350,000
___________
___________

220,000
___________
220,000
___________
___________

350,000
___________
350,000
___________
___________

The loan carries interest at the Bank Bill Rate plus three per cent per annum. The loan may be satisfied by the
issue of shares in the Company, should the Company have insufficient financial resources. However, the lender
may at its discretion extend the payment date for the loan.
25

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued
Consolidated

Parent Entity

1999

1998

1999

1998

11. BORROWINGS (Non Current)

Unsecured convertible note

500,000
500,000
500,000
500,000
___________
___________
___________
___________
___________
___________
___________
___________
The convertible note was issued on 30 June 1997 to Retirewise Capital Pty Ltd. Under the terms of the note the
funds are to be advanced unsecured for five years with interest payable half yearly at a rate of 7% per annum.
During the term of the note Retirewise has the option to convert the debt into ordinary fully paid shares in the
Company at a conversion price of 14 cents per share.

12. ISSUED CAPITAL

Issued and fully paid
83,358,403 shares (1998: 69,966,737 shares):

13,434,532
___________
___________

12,036,322
___________
___________

Opening balance

12,036,322

10,632,487

Transfer from Share Premium Reserve (Note 13)

477,845
___________
___________
12,514,167

___________
___________
10,632,487

Movements in Share Capital

Issues during the period ((a) to (e))

938,500

Less: share issue costs

(18,135)
___________
13,434,532
___________
___________

1,403,835
___________
12,036,322
___________
___________

(a)

On 8 July 1998 the Company issued 2 million Shares at 6.5 cents each to raise $130,000 to be used to repay
debt.

(b)

On 2 November the Company issued 1,000,000 Shares at 6 cents each raising $60,000 as part of a payment
due under the Purchase Agreement of the Murrin Murrin North tenements.

(c)

On 12 February 1999 the Company made a placement of 4,891,666 Shares at 6 cents to various parties to
raise $293,500 to be used for exploration at Mt Kilkenny and as working capital.

(d)

On 22 March 1999 the Company issued 1,500,000 Shares at an issue price of 13 cents as part consideration
for the remaining 52.5% interest in the Ilgarari Project.

(e)

On 28 April 1999 the Company made a placement of 4,000,000 Shares at 6.5 cents to various parties to raise
$260,000 to be used for exploration at Mt Kilkenny and as working capital.

No. of
Options on
Issue
30 June 1999
Options Over Unissued Capital
At 30 June 1999, the following options were on issue:
Options exercisable at 20 cents before 31/8/2000

3,500,000
___________
___________

26

No. of
Options on
Issue
30 June 1998

3,500,000
___________
___________

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued
Consolidated

13. RESERVES
Forfeited share reserve
Option application reserve
Share premium reserve (Note 12)
Capital reserve

Parent Entity

1999

1998

1999

1998

83,300
1,199,815
135,988
___________

83,300
1,199,815
477,845
135,988
___________

83,300
1,199,815
135,988
___________

83,300
1,199,815
477,845
135,988
___________

1,419,103
___________
___________

1,896,948
___________
___________

1,419,103
___________
___________

1,896,948
___________
___________

14. STATEMENT OF CASH FLOWS

(a)

(b)

(c)

Reconciliation of the operating loss after tax to the net cash flows from operations
Operating loss after tax
(1,019,270)
(1,083,795)
(1,083,709)
Depreciation Plant and Equipment
816
816
816
Write off of exploration expenditure 658,370
628,363
622,811
Exploration costs capitalised
(excluding creditors)
(483,008)
(473,060)
(398,615)
Decrease/(Increase) in receivables
29,930
(9,938)
29,930
Increase/(decrease) in sundry creditors ___________
316,529
(48,023)
316,529
___________
___________
Net Cash Flows from
Operating Activities
(496,633)
(985,637)
(512,238)
___________
___________
___________
___________
___________
___________

Reconciliation of Cash
Cash balance comprises:
Cash at bank
Deposits at call

(1,183,593)
816
628,179
(350,495)
(9,938)
(47,023)
___________
(962,054)
___________
___________

171,888
11,000
___________
182,888
___________
___________

342,578
11,000
___________
353,578
___________
___________

171,888
11,000
___________
182,888
___________
___________

342,578
11,000
___________
353,578
___________
___________

Non Cash Financing and Investing

Activities
Issue of fully paid shares
and options as consideration for the
acquisition of mineral exploration
tenements and as satisfaction
for reducing debt.
255,000
___________
___________

766,000
___________
___________

255,000
___________
___________

766,000
___________
___________

27

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued
Consolidated

Parent Entity

1999

1998

1999

1998

15. AUDITORS REMUNERATION

Amounts received or due and receivable
by the auditors of GME Resources NL for:

an audit or review of the financial

statements of the company and any
other entity in the consolidated entity

6,750

8,218

other services in relation to the

company and any other entity in the
consolidated entity
1,750
___________
8,500
___________
___________

6,750

8,218

1,930
___________
10,148
___________
___________

1,750
___________
8,500
___________
___________

1,930
___________
10,148
___________
___________

___________
___________

___________
___________

___________
___________

3
___________
3
___________
___________

3
___________
3
___________
___________

3
___________
3
___________
___________

3
___________
3
___________
___________

Executive Officers Remuneration

Income received and due and receivable
by executive officers of the consolidated
entity, from all entities in the consolidated
entity and any related entities, whose
income is $100,000 or more.

___________
___________

___________
___________

___________
___________

___________
___________

16. SEGMENT REPORTING

There are no individual segments to be
reported as the Companys operations are
predominantly in the Mining Industry
in Australia.

17. REMUNERATION OF DIRECTORS

(a) Directors Remuneration
Amounts paid or due and payable to
the directors of each entity in the
consolidated entity and any related
bodies corporate, from all companies
in the consolidated entity including
insurance premiums to indemnify
liabilities while acting as a director.
___________
___________
The number of chief entity directors
whose income from the chief entity
and any related bodies corporate was
within the following bands:
0 9999

(b)

28

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued
18. FINANCIAL INSTRUMENT DISCLOSURES
(a) Interest Rate Risk
The consolidated entitys exposure to interest rate risk, which is the risk that a financial instruments value
will fluctuate as a result of changes in market interest rates, and the effective weighted average interest rates
on those financial assets and financial liabilities, is as follows:

1999

Weighted
Average
Effective
Interest Rate

Financial Assets
Cash

3.7%

Floating
Interest Rate

Fixed Interest Rate Maturing

Within 1 year
Over 1 year

Non-interest
Bearing

Total

171,888
___________
171,888
___________
___________

11,000
___________
11,000
___________
___________

___________
___________
___________

___________
___________
___________

182,888
___________
182,888
___________
___________

Financial Liabilities
Accounts payable

12.0%

Borrowings

7.3%

220,000
___________
220,000
___________
___________

Weighted
Average
Effective
Interest Rate

Floating
Interest Rate

1998

Financial Assets
Cash

3.9%

273,464
___________
273,464
___________
___________

500,000
___________
500,000
___________
___________

Fixed Interest Rate Maturing

Within 1 year
Over 1 year

498,963

772,427

___________
498,963
___________
___________

720,000
___________
1,492,427
___________
___________

Non-interest
Bearing

Total

342,578
___________
342,578
___________
___________

11,000
___________
11,000
___________
___________

___________
___________
___________

___________
___________
___________

353,578
___________
353,578
___________
___________

Financial Liabilities
Accounts payable

12.0%

Borrowings

7.5%

(b)

350,000
___________
350,000
___________
___________

273,464
___________
273,464
___________
___________

500,000
___________
500,000
___________
___________

182,433
___________
182,433
___________
___________

455,897
850,000
___________
1,305,897
___________
___________

Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, to recognised
financial assets is the carrying amount as disclosed in the balance sheet and notes to the financial statements.
The consolidated entity does not have any material credit risk exposure to any single debtor or group of
debtors under financial instruments entered into by the consolidated entity.

(c)

Net Fair Values

The net fair value of the financial assets and financial liabilities approximates their carrying value. No
financial assets and financial liabilities are readily traded on organised markets in standardised form.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in
the balance sheet and in the notes to and forming part of the financial statements.
29

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued
19. COMMITMENTS AND CONTINGENT LIABILITIES
There were no capital commitments or contingent liabilities, not provided for in the financial statements of the
consolidated entity as at 30 June 1999, other than:
(a)

Mineral Tenement Leases

In order to maintain current rights of tenure to mining tenements, the consolidated entity in its own right or
in conjunction with its joint venture partners may be required to outlay amounts of approximately $743,655
(1997: $987,822) per annum on an ongoing basis in respect of tenement lease rentals and to meet the
minimum expenditure requirements of the Western Australian and Queensland Mines Department. These
obligations are expected to be fulfilled in the normal course of operations by the consolidated entity or its
joint venture partners and are subject to variations dependent on various matters, including the results of
exploration on the mineral tenements.

(b)

Claims of Native Title

Legislative developments and judicial decisions (in particular the uncertainty created in the area of Aboriginal
land rights by the High Court decision in the Mabo case and native title legislation) may have an adverse
impact on the consolidated entitys exploration and future production activities and its ability to fund those
activities. It is impossible at this stage to quantify the impact (if any) which these developments may have on
the consolidated entitys operations.
Native title claims have been made over ground in which the consolidated entity currently has an interest. It
is possible that further claims could be made in the future. However, the Company has not undertaken the
considerable legal, historical, anthropological and ethnographic research which would be necessary to
determine whether any current or future claims, if made, will succeed and, if so, what the implications
would be for the consolidated entity.

(c)

In November 1996 the Company entered into an agreement to acquire ten tenements located at Murrin
Murrin from Hepi Exploration Pty Ltd. The purchase price was $50,000 plus an escalated amount calculated
on the number of tonnes in the geological measured resource of lateritic nickel. The escalated amount is
now to be settled in full through the issue of shares in the Company. As at 30 June 1999, the Company has
paid a total of $150,000 of which $100,000 is an advance payment on the escalated amount. Final settlement
is to take place in November 1999. The Company may return the tenements and not make any further
payments. If the Company elects to do so, then the Companys rights of tenure to the area of interest will be
forfeited. At 30 June 1999 the Company had accumulated expenditure of $286,562 on the area of interest.

(d)

In October 1997 the Company entered into an agreement to acquire seven tenements located at Murrin
Murrin North from Hepi Exploration Pty Ltd and John Charles Hocking. The purchase price is based on an
amount calculated on the number of tonnes in the geological measured resource of lateritic nickel. The
purchase price is to be paid with 50% in cash and 50% in issue of shares in the Company. As at 30 June
1999, the Company has paid advances of $230,000 in cash and share issues. Final payment is to take place in
October 1999. The Company may return the tenements and not make any further payments. If the Company
elects to do so, then the Companys rights of tenure to the area of interest will be forfeited. At the end of 30
June 1999 the Company had accumulated expenditure of $306,823 on the area of interest.

30

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued
20. SUBSEQUENT EVENTS
No matter or circumstance has arisen since 30 June 1999 that has significantly affected, or may significantly affect:
(a) the consolidated entitys operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the consolidated entitys state of affairs in future financial years.
21. RELATED PARTIES
Related parties of GME Resources NL fall into the following categories:
(a) Directors
(i)
The names of persons who were directors of the Company at any time during the financial year are as
follows:
MD Perrott
PR Sullivan
GM Motteram
(ii) Information on the remuneration of directors is set out in note 17.
(b)

Directors Holdings of Shares and Options

The relevant interests of directors of the reporting entity and their director related entities in shares and
options of entities within the consolidated entity at year end are set out below.
Number Held
1999
Ordinary shares
Options (unlisted)

9,133,896
1,475,000

Number Held
1998
8,633,896
1,475,000

Mr Peter Sullivan owns 975,000 unlisted options exercisable at 20 cents on or before 31 August 2000; and
Mr Geoffrey Motteram is the beneficial owner of the 500,000 unlisted options held in the name of a related
entity exercisable at 20 cents each on or before 31 August 2000.
(c)

Transactions with Director Related Entities

(All transactions were made under normal commercial terms and conditions unless otherwise stated).
Consultancy services have been provided by Hardrock Capital Pty Ltd, a company of which Mr Sullivan is a
director, to the value of $90,000 (1998:$90,000), of which $75,000 remains unpaid as at 30 June 1999.
Consultancy services have been provided by Geomett Pty Ltd, a company of which Mr Motteram is a
director, to the value of $18,000 (1998:$18,000), of which $13,500 remains unpaid as at 30 June 1999.
Office management services, which includes administration support, office facilities, accounting and company
secretarial services were provided during the year from Perrott Management Services, an entity of which
Mr Perrott is associated, to the value of $180,000 (1998: $180,000). Geological staff services were also
provided by Perrott Management Services to the value of $23,269 (1998: $121,561) along with consultancy
services to the value of $30,000 (1998: $30,000). An amount of $203,700 remains unpaid as at 30 June 1999.

31

GME

Annual Report 1999

NOTES

TO THE

FINANCIAL STATEMENTS

for year ended 30 June 1999

continued
22. INTERESTS IN BUSINESS UNDERTAKINGS JOINT VENTURES
The Company has entered into a number of agreements with other companies to gain interests in project areas.
These interests will be earned by expending certain amounts of money on exploration expenditure within a
specific time. The Company can however, withdraw from these projects at any time without penalty. The amounts
required to be expended in the next year have been included in note 19 Commitments and Contingent
Liabilities.
Consolidated

23. EARNINGS PER SHARE

Basic earning (loss) per share (cents)
Weighted average number of ordinary
shares outstanding during the year used
in calculation of basic EPS.

1999

1998

(1.35)

(1.90)

75,567,947
___________
___________

57,066,964
___________
___________

Options
Options are considered to be potential ordinary shares. However, they are not considered to be dilutive in nature
as their exercise will not result in a diluted earnings per share that shows an inferior view of earnings performance
of the Company than is shown by basic earnings per share. The options have not been included in the
determination of basic earnings per share. Details relating to options are set out in Note 12.

32

GME

Annual Report 1999

DIRECTORS DECLARATION
The directors declare that the financial statements and notes set out on pages 16 to 32:
(a)

comply with Accounting Standards; and

(b)

give a true and fair view of the Companys and consolidated entitys financial position as at 30 June 1999 and
of their performance for the financial year ended on that date.

In the directors opinion:

(a)

the financial statements and notes are in accordance with the Corporations Law; and

(b)

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.

________________________________
PR SULLIVAN
Managing Director
Perth, WA
16 September 1999.

33

GME

Annual Report 1999

To the Members of GME RESOURCES NL

Scope
We have audited the financial report of GME Resources NL (the Company) for the financial year ended 30 June 1999 as
set out on pages 16 to 33. The Companys directors are responsible for the financial report which includes the financial
statements of the Company and the consolidated financial statements of the consolidated entity comprising the
Company and the entities it controlled at the end of, or during, the financial year. We have conducted an independent
audit of the financial report in order to express an opinion on it to the members of the Company.
Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance as to
whether the financial report is free of material misstatement. Our procedures included examination, on a test basis, of
evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies
and significant accounting estimates. These procedures have been undertaken to form an opinion as to whether, in all
material respects, the financial report is presented fairly in accordance with Accounting Standards, other mandatory
professional reporting requirements and the Corporations Law so as to present a view which is consistent with our
understanding of the Companys and the consolidated entitys financial position, and performance as represented by the
results of their operations and their cashflows.
The names of the entity controlled during all, or part of, or at the end of, the financial year, but of which we have not
acted as auditor is GME Sulphur Inc. We have, however, received sufficient information and explanations concerning
this controlled entity to enable us to form an opinion on the consolidated financial statements.
The audit opinion, expressed in this report has been formed on the above basis.
Audit opinion
In our opinion, the financial report of the Company is in accordance with:
(a) the Corporations Law, including:
(i)

giving a true and fair view of the Companys and consolidated entitys financial position as at 30 June 1999
and of their performance for the financial year ended on that date; and

(ii)

complying with Accounting Standards and the Corporations Regulations; and

(b) other mandatory professional reporting requirements.

HLB MANN JUDD
Chartered Accountants

WM CLARK
Partner

Perth, WA
23 September 1999.
HLB Mann Judd (WA Partnership)

15 Rheola Street West Perth 6005. PO Box 263 West Perth 6872 Western Australia. DX 238 Telephone +61 (08) 9481 0977. Fax +61 (08) 9481 3686
Email: hlb@mjwa.com.au Website: http//www.mannjudd.com.au
Partners: Ian H Barsden, Terry M Blenkinsop, Wayne M Clark, Lucio Di Giallonardo, Colin D Emmott, Peter M Forbes, Trevor G Hoddy, Peter Speechley
HLB Mann Judd (WA Partnership) is a member of

International and the HLB Mann Judd National Association of Independent accounting firms.

34

GME

Annual Report 1999

SHAREHOLDER
Information

The shareholder information set out below was applicable as at 13 September 1999.
A.

Distribution of Securities
(a)

Analysis of numbers of shareholders by size and holding:

Category
(size of holding)
1

1,001

5,001

10,001

100,000 and

1,000
5,000
10,000
100,000
over

Ordinary
Shares
339
202
116
357
102
__________________
1,116
__________________
__________________

(b)

There were 543 holders of less than marketable parcel of ordinary shares.

(c)

The percentage of the total holding of the twenty largest shareholders are:
Ordinary Shares 61.63%

B.

Voting Rights
The voting rights attaching to each class of shares are set out below:
(a) Ordinary Shares:
On a show of hands every member present in person or by proxy shall have one vote and upon a poll each share
shall have one vote.

C.

Substantial Shareholders
Substantial shareholders who have notified the Company as at 13 September 1999, are:
Name

Retirewise Capital Pty Ltd

Guiness Peat Group plc, Mid-East Minerals Limited
and Retford Resources NL
Peter Ross Sullivan

35

21.11
7.72
5.93

GME

Annual Report 1999

SHAREHOLDER
Information
The names of the 20 largest security holders of each class of equity security as at 13 September 1999 are listed below:
TWENTY LARGEST SECURITY HOLDERS
Ordinary Shares
Name

Number

Issued Shares Held

%

Retirewise Capital Pty Ltd

Retford Resources NL
Contours Pty Ltd
James Noel Sullivan
Peter Ross Sullivan
Donald Anthony Sullivan
Hardrock Capital Pty Ltd
West Australian Metals NL
Tunza Holdings Pty Ltd
Mervyn Ross Sullivan
Geoffrey Mayfield Motteram
Gratedock Pty Limited
Gratedock Pty Ltd
Bivaru Pty Limited
Nigel Kirwan
Townson Holdings Pty Ltd
Steven Crome
Barlestone Holdings Pty Ltd
Mark Nicholaeff
Gratedock Pty Ltd

17,596,011
6,437,385
3,026,580
2,996,875
2,996,875
2,372,083
1,946,389
1,500,000
1,468,888
1,393,750
1,164,052
1,103,601
1,011,913
1,000,000
1,000,000
991,332
908,799
875,500
813,105
681,870
____________
51,285,008
____________
____________

36

21.11
7.72
3.63
3.60
3.60
2.85
2.33
1.80
1.76
1.67
1.40
1.32
1.31
1.20
1.20
1.19
1.09
1.05
0.98
0.82
________
61.63
________
________

GME

Annual Report 1999

TENEMENT
Directory

PROJECT

TENEMENTS

COMPANY
INTEREST

P39/2690 2691 converted to MLA39/427,

P39/3732-33, PL39/3735-3751
Bindah
M39/1, M39/198, M39/286, P39/3758
Bullabulling
M15/513
Chain Bore
P37/4490, 4616-4618 converted
to MLA37/581
Clermont
EPM5741, 10455, 11235-236,
EPMA11575, 11793, 11806, 12164
Eucalyptus
ELA39/703
Ghan Well
ELA39/679
Hawks Nest
M38/218, P38/2515 converted to
MLA 38/683
Ilgarari
M52/539-540, E52/1003
Leonora East
P37/4106 converted to MLA37/566,
P37/4807-4811 converted to MLA 37/876,
P37/5330-5333, P37/5477
Linden
P39/2974-76 converted to MLA 39/500
P39/3417-18
Macey Hill
P39/3814-15
Mertondale
P37/4201-05 converted to MLA37/591
Mt Kilkenny
ELA39/688
Mount Marven
M39/162, M39/325,
P39/2753 converted to MLA39/481
Mt Morgan South P39/3347 3352 converted to MLA39/703,
P39/3353 3356 converted to MLA 39/702,
P39/3531 3532
Murrin Murrin
P39/3172 3175 converted to MLA39/554,
(Golden Cliffs)
P39/3180-3183 converted to MLA39/457,
P39/3551-3552
Murrin Murrin
P39/3158 3171, P39/3176 3179 &
(Anaconda)
P39/3281, Converted to MLA39/426,
456, 552, 553 & 569
Murrin Murrin
P39/3366 3375 converted to
MLA39/717, 718
Murrin Murrin
P39/3515-22
North
Oberwyl Mt Ida E29/159, parts converted to M29/252
& 253, E29/199, P29/1561
Patricia Joint
E31/90 converted to MLA31/168 & 169,
Venture
E31/97 converted to MLA 31/170 & 233,
(Stophanis Well) E31/129, parts converted to MLA31/260-262,
E31/165, 202 & 223, P31/1453-58 parts
converted to MLA31/234-235,Pinjin ELAs
31/420 & 421, 427 & 428
Pyke Hill
ELA39/633
Waite Kauri
P37/4149 converted to MLA37/580,
P37/5264 & PLA37/5555
PLA37/5821-5824

COMMENTS

Abednego West

100%
100%
10% Free Carried
100%
Contributing 40%

Joint Venture with Resolute Ltd

Joint Venture with

Australian Gold Fields NL

100%
100%
100%
100%
100%

10%
100%
100%
100%
Option for 100%
100%

Metex earning 75%

100%

Metex earning 75%

100%
100% of Non
Lateritic Nickel
Mineral Rights
100%

Anaconda Nickel Ltd has rights

to all lateritic nickel

100%
100%

Acacia Resources earning 80%

50%

Joint Venture with Capricorn Resources NL

100%
100%
Option for 100%

LEGEND:
E: Exploration Licence

P: Prospecting Licence

EPM: Exploration Permit for Minerals

M: Mining Lease

ELA: Exploration Licence

Application

EPMA: Exploration Permit for Minerals

Application

37

PLA: Prospecting Licence

Application
MLA: Mining Lease
Application

GME

Annual Report 1999

Notes

38

GME

Annual Report 1999

Notes

39

GME

Annual Report 1999

Notes

40