ABN 30 068 263 098
Annual Report 30 June 2016 Statutory InformationCHAIRMAN'S LETTER (included in final printed Annual Report)
MANAGING DIRECTOR'S REPORT (included in final printed Annual Report)
2.0 OPERATIONS REPORT (included in final printed Annual Report)
3.0 CORPORATE PROFILE 30
CORPORATE GOVERNANCE STATEMENT 31
4.0 DIRECTORS' REPORT 32
AUDIT INDEPENDENCE DECLARATION 41
5.0 CONSOLIDATED FINANCIAL STATEMENTS 42
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME 42
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 43
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 44
CONSOLIDATED STATEMENT OF CASHFLOWS 45
NOTES TO AND FORMING PART OF THE ACCOUNTS 46
DIRECTORS' DECLARATION 65
6.0 INDEPENDENT AUDIT REPORT 66
7.0 SHAREHOLDER INFORMATION 68
8.0 Appendix 1 - UNAUDITED QUARTERLY CONSOLIDATED
FINANCIAL STATEMENTS 70
9.0 Appendix 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS 74
10.0 STATEMENT OF MINERAL RESOURCES (included in final printed Annual Report)
11.0 INTEREST IN MINING TENEMENTS (included in final printed Annual Report)
12.0 GLOSSARY (included in final printed Annual Report)
3.0 Corporate ProfileHERON RESOURCES LIMITED ("Heron" or "the Company") is engaged in the exploration and development of base and precious metal deposits in Australia. The Company is focused on the development of the high grade Woodlawn Project located 250km south-west of Sydney in New South Wales (NSW). Heron also owns the Kalgoorlie Nickel Project located north of Kalgoorlie in Western Australia (WA), and holds a number of other quality base metal and copper-gold exploration properties located in the Lachlan Fold Belt of New South Wales. Please refer to the ASX/TSX announcement of 10 August 2016 for further details on the spin-out of a number of these assets in the latter half of 2016.
WOODLAWN ZINC-COPPER PROJECTHeron holds a direct 100% ownership of the mineral rights at the Woodlawn Mine site situated 40km south of Goulburn and 250km south-west of Sydney, in southern NSW, Australia (Figure 1). It is Heron's aim to create a profitable, long life and low cost mineral processing operation at Woodlawn that produces base and precious metal concentrates. Heron also holds a portfolio of advanced stage exploration tenements adjacent to the Woodlawn site covering the same prospective felsic volcanic units that host the Woodlawn Volcanogenic Massive Sulphide (VMS) deposit.
Historically, the Woodlawn Mine operated from 1978 to 1998 and processed 13.8 million tonnes of ore from the Woodlawn open pit, underground and satellite deposits grading 9.1% zinc, 1.6% copper; 3.6% lead, 0.5g/t gold and 74g/t silver.
Woodlawn Project Location Plan
Prior operators closed the mine in March 1998 due to prevailing low metal prices and external corporate issues. Post mine closure the mineral rights contained within the Woodlawn Mining Licence SML20 were purchased by TriAusMin Ltd. Since that time, work has focused on evaluating the potential to re-process tailings from previous mining operations (termed the Woodlawn Retreatment Project - WRP), and to re- develop the underground mine (the Woodlawn Underground Project - WUP). Regional exploration has also been undertaken in the vicinity of Woodlawn with the objective of discovering new, high grade satellite deposits (Woodlawn Exploration Project - WEP) which are common in these districts.
The brownfields drilling and down-hole Electro-Magnetic (DHEM) exploration surveys undertaken by Heron at the Woodlawn site continues to extend the known VMS systems and generate new targets, as expected from Australia's second largest historic VMS system (second only to Rosebery, Tasmania).
Release of Feasibility Statement
On 29 June 2016 the Company announced the results of the Woodlawn Feasibility Study (FS). The complete NI 43-101 Technical Report in support of the FS study was published on Heron's website and lodged on SEDAR www.sedar.com (TSX:HER) on 26 July 2016. The key outcomes of this study include:
Attractive project characteristics
Initial 9.3 year mine life based upon the combined underground and tailings Mineral Reserves ("Starter Case")
Campaign processing rate of up to 1.0Mtpa from underground mining, and up to 1.5Mtpa from reclaiming tailings, processed through a standard single-sulphide flotation facility
Steady-state (2020-2023) annual Production Target of 40kt Zn, 10kt Cu, 12kt Pb, 900koz Ag and 4koz Au contained within zinc, copper, and lead concentrates
Project is totally contained upon granted Special Mining Lease SML20 - Woodlawn is fully 'permitted' and 'mine ready'
Utilising existing local and regional infrastructure to achieve significant reductions in development costs
Close proximity to large service and employment centres (Sydney, Wollongong, Canberra, Goulburn)
Strong local community and regulator support
Inferred Mineral Resources defined in both the underground and tailings projects demonstrate excellent potential to extend mine life to more than 11.5 years
3.0 CORPORATE PROFILE CONTINUED
Mineral Resources & Mineral Reserves
Underground mine plan focused on the shallower areas of the deposit reflecting the success of the recent Preliminary Economic Assessment (PEA) & FS drilling programs. There is a high level of confidence based on historic data for extensions to this mineralisation both at-depth and along strike
Two separate production sources, mining from underground and reclaiming of tailings, provides operational flexibility and reduces risk
20 years of historical operational data removes 'greenfield' unknowns
Robust economics
C1 costs of US$-0.05/lb zinc and C3 of US$0.34/lb are expected to place Woodlawn firmly in the lower half of the cost curve
Attractive "peer project" capital cost metrics based on annual metal Production Targets and Reserves-based mine life
Life extension case (PEA equivalent mine plan) shows excellent consistency with previously published PEA
Significant leverage to the price outlook for zinc, which comprises approximately 48% of total payable metal value
Expedited development and financing pathway to meet market opportunity
The Company has commenced a structured project funding process with the assistance of Azure Capital and is targeting finalisation in the later part of 2016
A number of optimisation opportunities that have the potential to further enhance the project outcomes were identified during the FS program. A number of these options will be pursued in parallel to the funding and include aspects such as equipment sourcing alternatives and additional shallow mineralised positions
Rapid development schedule of 15 months from commencement of construction until completion of wet commissioning
First production targeted early 2018 to meet projected favourable zinc market conditions
CORPORATE GOVERNANCE STATEMENTThe Board of Heron is committed to achieving and demonstrating the highest standards of Corporate Governance. The Board is responsible to its Shareholders for the performance of the Company and seeks to communicate extensively with Shareholders. The Board believes that sound Corporate Governance practices will assist in the creation of Shareholder wealth and provide accountability.
In accordance with Listing Rule 4.10.3, the Company has elected to disclose its Corporate Governance policies and its compliance with them on its website, rather than in the Annual Report. Accordingly the following information about the Company's Corporate Governance practices is set out on the Company's website at www.heronresources.com.au:
Board Charter;
Audit & Governance Committee Charter;
Remuneration & Nomination Committee Charter
Policy on securities trading;
Policy on continuous disclosure;
Policy regarding communication with Shareholders;
Policy on the Company's risk management;
Policy on Employee Diversity;
Policy on HSEC;
Policy on Whistleblowers; and
Code of Conduct.
The Directors submit their Report on the Company and its controlled entities for the year ended 30 June 2016.
DIRECTORSThe names and details of the Directors of the Company in office at any time during or since the end of the year are:
Director Stephen Dennis - BCom BLLB GDipAppFin(Finsia) CFTP. Appointed 05 December 2006
Position Chairman (Non-Executive) of the Board, Member of Audit and Corporate Governance Committee, Member of Remuneration and Nomination Committee
Stephen Dennis has been actively involved in the mining industry for 30 years. He has held senior management positions at Toho Zinc, MIM Holdings Limited, Minara Resources Limited, and Brambles Australia Limited.
Other current directorships
Non-executive Chairman of Cott Oil and Gas Limited; Non-executive Chairman of Rox Resources Limited and Non-executive Chairman of Graphex Mining Limted.
Former directorships in last 3 years
Managing Director of CBH Resources Limited.
Director Wayne Taylor - BEng (Mining), MBA Appointed 11 August 2014
Position Managing Director and CEO
Mr. Taylor is a mining engineer with over 25 years' experience in the mining industry. He holds a Bachelor of Engineering (Mining) degree from the University of New South Wales and a Masters of Business Administration from the University of New England. Mr Taylor has held senior operational management roles with Western Mining Corporation and Glencore International's Australian operations. For the six years prior to joining TriAusMin he managed Glencore's base metal business development based out of Australia which involved assessing mining projects throughout the world. Mr. Taylor was the Managing Director and CEO of TriAusMin for the last 3 years prior to the merger.
Other current directorships
None.
Former directorships in last 3 years
Managing Director and CEO of TriAusMin Ltd until August 2014.
Director Ian Buchhorn - BSc (Hons), Dip Geosci (Min Econ), MAusIMM. Appointed 17 February 1995
Position Executive Director
Ian Buchhorn is a Mineral Economist and Geologist with over 35 years' experience. Prior to listing Heron in 1996 as founding managing director, Mr Buchhorn worked with Anglo American Corporation in southern Africa, and Comalco, Shell/Billiton and Elders Resources in Australia, as well as setting up and managing Australia's first specialist mining grade control consultancy. Mr Buchhorn has worked on feasibility studies, bauxite and industrial mineral mining and exploration, gold and base metal project generation, and in corporate evaluations. For the last 25 years Mr Buchhorn has acquired and developed mining projects throughout the Eastern Goldfields of Western Australia and operated as a Registered Mine Manager.
Other current directorships
Non-executive Director of Rubicon Resources Limited since August 2005.
Former directorships in last 3 years
Non-executive Director of Golden Cross Resources Limited.
Heron Resources Limited published this content on 24 August 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 25 August 2016 02:34:01 UTC.
Original documenthttp://www.heronresources.com.au/downloads/asx/2016/hrr2016082401.pdf
Public permalinkhttp://www.publicnow.com/view/56E329F93FECF40764688639E6C5CAD104DA92D3