Alkane Resources Limited (ALK) 2006年年度報告「ASX」.pdf

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1、ALKANEExploration LtdACN 000 689 216ANNUAL REPORT 2006Company Information1Chairmans Report2Review of Operations4Directors Report18Income Statement26Balance Sheet27Statement of Changes in Equity28Cash Flow Statement29Notes to the Financial Statements30Directors Declaration44Independent Audit Report45

2、Corporate Governance46Shareholder Information49Tenement Schedule51Zirconium Sulphate crystals formed during processing of DZP ore.SEM ANSTO x 900 magnification.SHARE REGISTRYAdvanced Share Registry Services110 Stirling Highway Nedlands WA 6009Telephone:61 8 9389 8033 Facsimile:61 8 9389 7871AUDITORS

3、RothsayChartered Accountants2 Barrack Street Sydney NSW 2000Telephone:61 2 9299 0091 Facsimile:61 2 9299 2595STOCK EXCHANGEASX LimitedHOME EXCHANGEPerthASX CODEALKINTERNETInternet Home Page:http:/.auE-mail address:.au1ANNUAL REPORT 2006COMPANY INFORMATIONACN 000 689 216ABN 35 000 689 216DIRECTORSJ S

4、 F Dunlop(Chairman)D I Chalmers(Managing Director)I R CorneliusI J GandelA D LethleanSECRETARYL A CollessREGISTERED OFFICE129 Edward Street Perth WA 6000Telephone:61 8 9227 5677 Facsimile:61 8 9227 8178TECHNICAL OFFICE96 Parry Street Perth WA 6000Telephone:61 8 9328 9411 Facsimile:61 8 9227 6011CHAI

5、RMANS REPORT22006 has seen major advances on four fronts for Alkane with the receipt of the Commercial Ready Grant for the Dubbo Zirconia Project(DZP),the significantdiscovery at McPhillamys,the float of BC Iron Limited and progress with the feasibility for development of the Wyoming gold deposits.I

6、n April,the Company received approval for a grant of A$3.3 million from AusIndustry to assist with the development of the Dubbo project.This grant is givenon a dollar-for-dollar basis to advanced projects that can demonstrate a high level of innovation and the ability to increase Australias sustaina

7、ble economicgrowth.The Grant was the catalyst for the Board to approve a significant budget to progress the process flow sheet optimisation and,very importantly,to buildand operate the Demonstration Pilot Plant(DPP).ANSTO Minerals,a business unit of the Australian Nuclear Science and Technology Orga

8、nisation based at Lucas Heights in the south of Sydney,was contractedto carry out the process optimisation and to operate the DPP.Work got underway in July,and while much remains to be done,results available to date areshowing useful understanding of the process conditions and ways to improve that f

9、low sheet.Acquisition of components for the DPP has commenced and,interestingly,we have found that the carbon regeneration kiln at our now closed Peak Hill GoldMine is an ideal size for the kiln that forms the front end of the DPP.Utilisation of this existing capital equipment will save us time and

10、dollars and,even thoughwe are slightly behind schedule overall,we should have the demonstration plant operating in July 2007.Successful operation of the DPP should enable sign off on the engineering for the flow sheet as well as generating substantial product for distribution to endusers.This should

11、 ultimately lead to conclusion of off take agreements.The target date for a development decision for the DZP remains at mid 2008.The strategic significance of the DZP continues to be highlighted with the increasing demand for many of the commodities the project can produce such as thedeveloping use

12、of zirconium and hafnium metals in nuclear power plants.Also the research and development in these special metals keeps opening newopportunities.As an example,both Intel and IBM are reported to have separately discovered that hafnium is a major new component of the next generationmicroprocessors for

13、 computer chips.Our faith in the prospectivity of our tenements in the Orange area was rewarded with the spectacular gold-base metal discovery mid year at McPhillamys,withinthe Moorilda Project.This project forms part of the joint venture with the large American gold producer,Newmont.Newmont are the

14、 managers of the JV whichhas only been active for about 18 months,but Alkane remains as operator and our experience and expertise in the region has paid off with our motivation totest a target which did not fit the normal exploration models for this area.While exploration of McPhillamys is at a very

15、 early stage,ore grade gold and zinc intercepts have been recorded over a strike length of 400 metres and totalwidth of 200 metres.Drilling has tested the system to an open 150 metres vertical depth and the deposit appears to be amenable to open pit mining andstandard gold recovery techniques.Newmon

16、t have proposed a regional approach for this year with a view to identifying more McPhillamys type targets in the immediate vicinity to build up theoverall resource potential before embarking on a more detailed drill out.From our existing knowledge we believe there are numerous targets that could pr

17、ovidethat resource potential.After a long gestation period,the potential of the Nullagine area for channel iron deposits took a major step forward with the formation and float of BC IronLimited(BCI).In October we reached agreement with our partners in the Nullagine project,the Randolph Syndicate,to

18、combine tenements in the East Pilbarawith Consolidated Minerals Limited to form a substantial land holding.This land package covers a very prospective terrain with the potential to host severalchannel iron deposits of a type mined at Robe River and Yandicoogina by Rio Tinto and BHP Billiton.BC Iron

19、Limited(BCI)was formed to acquire this land package and raised A$6 million through float and listing on the ASX on 15 December 2006.BCI plans toinitiate a major drilling program to test the system(which has a potential in excess of 500 million tonnes)as soon as practical.Alkane retains 9 million sha

20、res(17%)in BCI and we believe that any significant success by their exploration programs should see a substantial increase in thevalue of this investment.3ANNUAL REPORT 2006As with previous years,a shortage of drilling equipment in New South Wales impacted on our ability to get programs completed in

21、 a timely manner.This wasparticularly evident with the Tomingley Gold Project(TGP)where we were trying to advance the feasibility studies for the development of the 600,000 ounceWyoming gold resources.Several conceptual development models have been considered with the most favourable being a one mil

22、lion tonne per annum open cut mining and carbon-in-leach gold recovery operation for the production of 60,000 to 70,000 ounces per year followed by a 250,000 tpa underground mining operation.To maximisethe financial return on this model,ideally we will need to add another one million tonnes to the o

23、pen pitable inventory within trucking distance of the Wyomingtreatment plant.The most likely source for this tonnage is the relatively recently discovered Caloma deposit which is only 500 metres east of the Wyomingdeposits.The delayed drilling programs were finally completed at Caloma late in 2006 a

24、nd early 2007,with enough encouragement to suggest that this deposit mayhave the potential to meet at least part of that additional tonnage requirement.Further drilling has been scheduled and we will endeavour to get to a logicaldecision on the development of this project by the middle of 2007.At Pe

25、ak Hill,most of the rehabilitation of the site has been completed with the exception of the office and gold recovery infrastructure.Finalisation of this workwill not be undertaken until after development of Wyoming,but may also await a further review of the potential to develop the large sulphide go

26、ld-copperresource beneath the existing open pits.Ground exploration will continue to advance the other projects at Wellington,Bodangora and Cudal in the Central West of New South Wales which we believeare very prospective for gold and copper deposits.In particular,we plan to advance the Galwadgere c

27、opper deposit in Wellington with ground geophysics anddrilling to build a resource additional to that identified to date,and to look towards development options for this relatively small but potentially viable deposit.I would like to thank my fellow directors,and our consultants,exploration team and

28、 gold operations management and staff for their continued efforts during theyear.In particular,I thank Inky Cornelius,who continues as a director,but from whom I took over as Chairman;David Kennedy and Lindsay Colless who retiredas a directors during the year,and I welcome Ian Gandel to the Board.Jo

29、hn S F DunlopChairmanSulphide Breccia MDD028 at the Charlies prospect,Molong.REVIEW OF OPERATIONS4TOMINGLEY GOLD PROJECTGOLD NEW SOUTH WALESAlkane Exploration Ltd 100%(subject to separate royalty agreements withCompass Resources NL,Golden Cross Operations Pty Ltd and Climax Mining Ltd)The Tomingley

30、Gold Project(TGP)extends over 60 kilometres from nearParkes in the south,to north of Tomingley in the Central West of New SouthWales and covers a narrow sequence of Ordovician volcanic rocks.TheWyoming Prospect,within the TGP,is situated about 14 kilometres northof the Companys Peak Hill Gold Mine a

31、nd immediately north of thehistoric 70,000 ounce gold producing Myalls United Mine(McPhails).The Wyoming area forms one of a number of prospects and goldoccurrences,including Peak Hill,located along this volcanic belt.Goldmineralisation at Wyoming has a close spatial relationship to a feldsparporphy

32、ry which intrudes into andesitic volcaniclastic rocks near theirwestern contact with a more pelitic sequence.Mineralisation is associatedwith extensive alteration and quartz veining of the porphyry and volcanicrocks.Several distinct target areas have been identified to date within athree kilometre c

33、orridor extending from McLeans in the south,throughWyoming One to Wyoming Three in the north.A potential new deposit hasrecently been discovered at Caloma which is located 500 metres east ofWyoming ThreeMuch of the Wyoming area is covered by transported and unmineralisedclay sediments and this has i

34、mpacted on both the exploration techniquesused to locate and define orebodies,but also on development options andcosts.This cover ranges from about 5 to 10 metres at Wyoming Three andCaloma,to more than 60 metres over Wyoming Two.The major orebody atWyoming One averages 25 metres of cover.Drilling r

35、ig at Charlies prospect,Molong.5ANNUAL REPORT 2006Since 2001 more than 125,000 metres of drilling has been completed in approximately 1,300 holes.Expenditure to date has totalled A$7.5 million,orapproximately A$12 per resource ounce defined.This level of expenditure is well inside the industry avera

36、ge of A$25-30 per resource ounce.At 31 December 2006,Identified Mineral Resources stood at:WYOMING RESOURCES(0.75G/T AU CUT OFF)MEASUREDINDICATEDINFERREDTOTALDEPOSITTONNAGEGRADETONNAGEGRADETONNAGEGRADETONNAGEGRADEOUNCES(T)(G/T)(T)(G/T)(T)(G/T)(T)(G/T)Wyoming One4,020,0002.251,010,0002.771,270,0004.0

37、96,300,0002.70547,700Wyoming Three815,0002.2015,0002.32830,0002.2058,700TOTAL4,835,0002.241,025,0002.761,270,0004.097,130,0002.70606,400These Mineral Resources are based upon information compiled by Mr Terry Ransted MAusIMM(Principal,Multi Metal Consultants Pty Ltd)who is a competent person as defin

38、ed in the 2004 Editionof the Australasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves.Terry Ransted consents to the inclusion in the report of the matters based on his information inthe form and context in which it appears.The full details of methodology were given i

39、n the 2004 Annual Report.FEASIBILITY STUDYFeasibility studies have been ongoing since 2005 and have consideredvarious development scenarios,most of which involve all mining andinfrastructure to be located at the Wyoming site,about 2 kilometres southof the Tomingley town site.The current conceptual d

40、evelopment consists of two open pit mines,Wyoming One and Three,followed by an initial underground operationfocussed on Wyoming One.Gold production would be through aconventional CIL gold recovery circuit at an open pit rate of 0.5 to 1.0million tonnes per annum followed by an underground mine at 0.

41、25 milliontonnes per annum.This treatment rate would recover 35,000 to 70,000ounces of gold a year for a minimum of six years.It is anticipated that thecurrent feasibility study should be completed by mid 2007,leading to afinal definitive feasibility study and hopefully a development decision bythe

42、end of the year.Capital costs remain crucial to the financial viability of the project and theCompany has been actively reviewing available plant and equipmentthroughout Australia.As the final specifications are not yet available,noplant has been sourced to date.A 1Mtpa operation is anticipated to c

43、ostaround A$40 million.6While general industry operating costs have escalated over the last few years,theTGP is located in an area of substantial existing infrastructure with the majorNewell Highway transecting the project,linking a number of towns with a regionalpopulation base exceeding 150,000.No

44、 camp facilities are required and theworkforce can be sourced locally.A natural gas pipeline and railway are locatedfive kilometres west of Tomingley,and power is available from the New SouthWales state grid.These factors should help minimise the impact of rising costs.Water supply remains an issue

45、but it is thought that a pipeline could be laid fromthe Macquarie River at Narromine,40 kilometres to the north of the project site.EXPLORATIONThe TGP is considered to have substantial exploration potential and while theimmediate focus is the development of the Wyoming deposits,numerous targetsremai

46、n to be evaluated.Specifically in the Wyoming area,resource potential existsat Caloma,Wyoming Two,McLeans and deeper underground potential below thehistoric Myalls United workings.Caloma was located early in 2006,when aircore drilling of the Patons East targetwas extended to the south to test an aer

47、omagnetic anomaly.A Wyoming styleporphyry intrusive with associated quartz veining and alteration was identifiedbeneath 5 metres of transported clay cover.Follow up aircore and RC drillingtested a north-south strike length of 300 metres.Gold mineralisation was recordedover that full 300 metre length

48、 with several lenses possible and additional drillingis in progress to establish a resource potential.Intercepts included:PE 0793 metres grading 3.47g/t gold from 21 metres and12 metres grading 2.27g/t gold from 69 metresPE 08211 metres grading 2.10g/t gold from 36 metres PE 08521 metres grading 2.3

49、3g/t gold from 66 metresincluding6 metres grading 5.60g/t gold from 72 metresREVIEW OF OPERATIONS7ANNUAL REPORT 2006PEAK HILL GOLD MINEThe Peak Hill Gold Mine commenced operation in 1996 based upon the oxidized cap of a high sulphidation type epithermal gold system within the Ordovicianvolcanic rock

50、s.The mine ceased production in 2006 with its final gold output over the 10 year mine life totalling over 153,000 fine ounces.The operation wasan open cut mine with heap leach-dump leach gold recovery and was commissioned at a capital cost of A$5 million.The project generated A$15 millioncash flow o

51、ver its life.Final rehabilitation involving major works in reshaping,topsoiling and seeding of the heaps to create a long-term stable landform has been completed but theoffice infrastructure and exploration base will remain until development of Wyoming is completed.The significant(450,000 ounce)but

52、moderately refractory sulphide gold-copper orebody below the oxide mine remains subject to ongoing review and willbe re-assessed following successful development of the Wyoming deposits.Several process options were previously trialled and an innovative bio-heap leachwas considered the most favourabl

53、e alternative.The proximity to the town of Peak Hill houses and infrastructure however,means any mine development wouldbe underground.The Peak Hill Gold Mine represented Alkanes first substantial operating venture and it is one the Company intends to build on in the future.As at December 31,2006,Min

54、eral Resources remained as:Sulphide(Proprietary orebody only)0.5g/t gold cut offINDICATED RESOURCES 9.44 million tonnes1.35g/t Au0.11%CuINFERRED RESOURCES 1.83 million tonnes0.98g/t Au0.10%CuTOTAL11.27 million tonnes1.29g/t Au0.11%Cu467,570 ouncesSulphide(Proprietary orebody only)3.0g/t gold cut off

55、INFERRED RESOURCES 0.81 million tonnes4.40g/t Au114,000 ouncesThese Mineral Resources are based upon information compiled by Mr Terry RanstedMAusIMM(Principal,Multi Metal Consultants Pty Ltd)who is a competent person as definedin the 2004 Edition of the Australasian Code for Reporting of Exploration

56、 Results,MineralResources and Ore Reserves.Terry Ransted consents to the inclusion in the report of thematters based on his information in the form and context in which it appears.The full detailsof methodology were given in the 2004 Annual Report.Peak Hill Gold Mine showing rehabilitation of waste

57、rock emplacement and heap leach pads.8DUBBO ZIRCONIA PROJECTZIRCONIUM-HAFNIUM,NIOBIUM-TANTALUM,YTTRIUM-RARE EARTHS,URANIUM NSWAustralian Zirconia Ltd(AZL)100%The Dubbo Zirconia Project(DZP)is located 20 kilometres south of thelarge regional centre of Dubbo,approximately 400 kilometres northwest ofSy

58、dney in the Central West Region of New South Wales.The DZP is basedupon one of the worlds largest in-ground resources of the metalszirconium,hafnium,niobium,tantalum,yttrium and rare earth elements.Over several years the Company has developed a flow sheet consisting ofsulphuric acid leach followed b

59、y solvent extraction recovery and refining toproduce several products.This flow sheet has been trialled to Mini PilotPlant level,to recover a suite of zirconium chemicals,zirconia,a niobium-tantalum concentrate and a yttrium-rare earth concentrate which are usedin the expanding ceramic,catalyst,elec

60、tronics,engineering ceramic,andspecialty glasses and alloys industries.The Perth based specialist zircon,titanium mineral and pigment industryconsultants,TZ Minerals International Pty Ltd,continued to provideprocess and marketing advice,and project management for the DZPfeasibility studies.In April

61、Alkane received a Commercial Ready Grant totalling$3.29million over a twenty seven month period.The Grant was offered on adollar for dollar basis to enable process optimisation,and construction andoperation of the Demonstration Pilot Plant(DPP)for the DZP.CommercialReady(CR)is an initiative of AusIn

62、dustry,a division of the AustralianGovernments Department of Industry,Tourism and Resources.The grantsare given to projects with a high commercial potential and are designed toincrease Australias sustainable economic growth by stimulating innovationin businesses.Process optimisation and development

63、work commenced at the laboratoryfacilities of ANSTO Minerals at Lucas Heights south of Sydney in July.ANSTO Minerals is a business unit of the Australian Nuclear Science andTechnology Organisation and comprises a group of over 30 professionalscientists and technicians with expertise that covers chem

64、ical engineering,metallurgy,mineralogy,chemistry,physics,applied mathematics,geologyand radiation safety.REVIEW OF OPERATIONSDirectors inspecting bulk sample pit for Dubbo Zirconia Project9ANNUAL REPORT 2006In the second half of 2006 ANSTO progressed with process optimisation with promising results

65、in minimising acid consumption and improving metalrecoveries.Procurement of components for the DPP is underway and it is anticipated that construction of plant should commence shortly.The plant isscheduled to be operated for at least six months and this could be extended to twelve months depending u

66、pon any process issues and the amount of sampleproducts required to be distributed to potential consumers.The feasibility database will be progressively updated to enable a development decision to beadvised by the middle of 2008.Over the last four years markets for DZP products has continued to grow

67、 and new applications for the metals become evident.Of particular interest are theuses of zirconium and hafnium metals in nuclear power facilities;the replacement of lead chemicals by zirconium in undercoating of all metal components ofvehicles;and the recent separate announcements by Intel and IBM

68、on the discovery that hafnium is a key component in new generation microprocessors.ANSTO are reviewing the process to recover separated zirconium and hafnium,and the recovery of uranium.Production of uranium remains prohibited in NewSouth Wales but the current flow sheet requires removal of uranium

69、from the zirconium process stream otherwise it contaminates the end products.Theuranium recovered by this process would be stabilised and dispersed in to the residue storage facility.The Project would benefit from the flow on effect ofless residue management costs and increased revenue from the sale

70、 of a uranium product.Identified Mineral Resources as at 31 December 2006 were:MEASURED RESOURCES(0-55m,340mRL)35.7 million tonnes1.96%ZrO2,0.04%HfO2,0.46%Nb2O5,0.03%Ta2O5,0.14%Y2O3,0.014%U3O8,0.745%Total REOINFERRED RESOURCES(55-100m,295mRL)37.5 million tonnesSimilar gradesTOTAL73.2 million tonnesS

71、imilar gradesThese Mineral Resources are based upon information compiled by Mr Terry Ransted MAusIMM(Principal,Multi Metal Consultants Pty Ltd)who is a competent person as defined in the 2004 Editionof the Australasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves.Terr

72、y Ransted consents to the inclusion in the report of the matters based on his information inthe form and context in which it appears.The full details of methodology were given in the 2004 Annual Report.Crushing ore from bulk sample pit for the Dubbo Zirconia Project.10WELLINGTONCOPPER,GOLD NSWAlkane

73、 Exploration Ltd 100%The Wellington Project is centred 15 kilometres to the southeast of the town of Wellington.The project hosts several targets,including the Federal gold andGalwadgere copper-gold prospects.The Galwadgere deposit,which has been the focus of most of the recent exploration effort,is

74、 located adjacent tofavourable infrastructure,being three kilometres from the main Western Railway,near to power and water.The Company carried out a drilling program in 2004-5 which has enabled an initial shallow resource to be calculated.The main zone of mineralisationoutcrops over a strike length

75、of approximately 350 metres and is modelled over a total strike length of about 500 metres extending below Permian cover to thenorth.The zone dips east at approximately 55,plunges north at about 30 and varies in thickness from 5 to 35 metres.The mineralisation consists ofdisseminated and stringer py

76、rite-chalcopyrite lenses within altered felsic volcanic rocks.The system is structurally overturned and appears to be capped by alead-zinc-silver-gold rich bedded massive sulphide with results up to 4%zinc,but to date this has rarely exceeded two to three metres in width.There ispotential for this h

77、orizon to increase in thickness to the north and down plunge.The initial resource estimate at 0.5%copper cut off is:-INDICATED RESOURCE 2.09 million tonnes0.99%Cu and 0.3g/t AuThese Mineral Resources are based upon information compiled by Mr Terry Ransted MAusIMM(Principal,Multi Metal Consultants Pt

78、y Ltd)who is a competent person as defined in the 2004 Editionof the Australasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves.Terry Ransted consents to the inclusion in the report of the matters based on his information inthe form and context in which it appears.The

79、full details of methodology were given in the 2005 Annual ReportA scoping study based upon open pit mining and flotation concentration generated a positive cash flow but it was thought that a further 2 million tonnes wererequired to generate a favourable return on capital.Several untested targets ex

80、ist in the project area and these also have potential for copper and goldmineralisation and an Induced Polarisation survey has been planned to test the immediate Galwadgere area for additional resources.REVIEW OF OPERATIONSGalwadgere copper deposit,Wellington.11ANNUAL REPORT 2006ORANGE DISTRICT EXPL

81、ORATION JOINT VENTURE-ODEJV GOLD,COPPER NSWAlkane Exploration Ltd 100%,subject to Newmont Australia Limited earning aninitial 51%In August 2005,Alkane reached agreement with Newmont Australia Limited(Newmont)to farmin to Alkanes Orange Project which includes theMolong and Moorilda tenements located

82、near the city of Orange in theCentral West of New South Wales,adjacent to Newcrest Mining Ltds CadiaValley Operations(30Moz total resources).During 2006,exploration programs tested targets at Charlies,Gallowayand Borenore within the Molong tenements.Two deep diamond coreholes were drilled to follow

83、up encouraging alteration and mineralisationassociated with monzonite type intrusives and skarn-sedimentaryreplacement style mineralisation intercepted by the 2005 drilling.While nosignificant grades were returned the drilling continued to confirm that theproject area still has potential to host sig

84、nificant gold and gold-copperdeposits.Further modelling of the aeromagnetic data and Induced Polarisationsurveys are planned to assist with target definition.In March 2006 a soil auger sampling program over the McPhillamysProspect within the Moorilda Project delineated a robust+100ppb goldresponse w

85、ithin a 650 x 200 metres area with coincident anomalousindicator trace elements.Reconnaissance geological mapping of this arearecorded intensely altered felsic volcanic rocks hosting iron-oxide aftersulphide,and sheeted quartz veins within the target zone.A reconnaissance aircore drilling program of

86、 30 holes tested part of the soilanomaly over a 600 metre strike length.The holes intersected highly alteredvolcanics with variable sulphide and quartz veining with significant gold andbase metal values.A follow up drilling program of 8 RC holes and 1 corehole was completed with five sections tested

87、 on lines at approximately 150metre spacing over a strike length of 600 metres.The results confirmed thatMcPhillamys hosts a major mineralised system which comprises at leasttwo distinct gold bearing zones(Western and Eastern)which are up to 50 to100 metres wide,are at least 400 metres in strike len

88、gth,extend from theground surface to at least 150 metres vertical depth and are separated by azinc rich zone.RC drilling at McPhillamys,Moorilda Project.12Aircore results from the Western Gold Zone:KP 00624 metres grading 2.03g/t gold from 4 metres including5 metres grading 5.69g/t gold from 5 metre

89、sKP 00717 metres grading 1.50g/t gold from 32 metres(to EOH)Diamond core hole KPD 001,drilled towards the southern end of the known mineralisation,intersected the Western Gold Zone and the Central Zinc Zone.Results from this hole were summarised as:KPD 00177 metres grading 1.65g/t gold from 140 metr

90、es including13 metres grading 2.78g/t gold from 165 metresalso7 metres grading 5.56g/t gold from 191 metresKPD 00131 metres grading 1.64%zinc,12g/t silver,0.18g/t gold from 64 metresincluding7 metres grading 2.49%zinc,17g/t silver,0.22g/t gold from 65 metresRC holes also returned significant results

91、 from the Eastern Gold Zone:KP 04754 metres grading 1.69g/t gold from 123 metres including20 metres grading 3.10g/t gold from 146 metresKP 048123 metres grading 1.96g/t gold from the surfaceincluding28 metres grading 3.83g/t gold from 19 metresand12 metres grading 3.48g/t gold from 101 metresREVIEW

92、OF OPERATIONSAir core drilling at McPhillamys Moorilda Project.13ANNUAL REPORT 2006While exploration of the prospect is at a very early stage,the workcompleted to date at McPhillamys indicates that with the geometry of themineralisation and the outcrop of the gold bearing zones(no cover),thedeposit

93、would present no apparent open pit mining impediments.It is alsoapparent that with the data available,the gold and base metal rich zonesare present as distinct bodies and could be mined as separate entities.A very preliminary metallurgical scan of a composite sample from the goldmineralisation in co

94、re hole,KPD 001,gave a gold recovery of 87%from astandard cyanide leach at a nominal 75 micron grind.This would suggestthat there are no refractory issues with the gold mineralisation.Themetallurgical characteristics of the base metal mineralisation are still to beassessed.Newmont,the JV manager,hav

95、e advised that their preference for 2007 wasto test several targets in the project area to add to the regional resourceinventory and build up a substantial potential resource base before drillingout the main zone of McPhillamys.The targets include a number ofgeological and geophysical features,sites

96、 of historic workings and areasthat have shown positive geochemical signatures.The early-stage exploration targets around McPhillamys include extensionsto the McPhillamys alteration zone,where the original drilling has onlytested about 600 metres north-south strike length.The drill data suggeststhat

97、 the low grade mineralised envelope remains open to the north andsouth of McPhillamys and soil auger sampling has commenced to coverthis area.LEINSTER REGION JOINT VENTURENICKEL,GOLD WAAlkane Exploration Ltd 25%,Jubilee Mines NL 75%During the year Jubilee advised that they had reached the expenditur

98、erequired to achieve a 75%interest in the three prospects LEINSTERDOWNS,MIRANDA and McDONOUGH LOOKOUT.Jubilee completed aircore drilling,surface EM surveys,geochemical soilsampling and diamond drilling.This work included a re-interpretation ofthe local geology at the Miranda Project based on the air

99、core drillinginformation,generation of a number of targets for both nickel and goldbased on drilling and surface geochemical sampling,and evaluation of themoving loop electromagnetic(MLEM)survey.A program of 249 aircore drill holes was completed at Miranda designedto define bedrock stratigraphy and

100、regolith geochemistry.The aircoretraverses intersected several cumulate ultramafic horizons,felsic volcanics,basalts,dolerites and graphitic metasedimentary schists.Traces ofweathered disseminated and stringer sulphides were viewed in samplesfrom a number of ultramafic hosts.The most anomalous nicke

101、l results,including MAC149 18 metres at0.54%nickel and 5 metres at 0.58%nickel,were returned from theTaurus North prospect and are interpreted to be associated with a basalcontact position.Follow-up drilling is required to effectively test this newtarget.Assessment of the surface geochemical results

102、 has identified 20 nickel and14 gold anomalies.These anomalies require further integration withdrilling,magnetics,and EM along with field inspection to place them into ageological context and assign a priority.14At McPhillamys East,which is about 1 kilometre to the east of the mainzone,the limited 2

103、006 drilling demonstrated the McPhillamys stylealteration and mineralisation extended over a north-south strike length of1.5 kilometres.Soil sampling to cover this in underway and has alsocommenced at the Grahams Prospect,located 4.5 kilometres to thenorthwest,to cover a geophysical anomaly.The hist

104、oric Confidence Mine is 5 kilometres east of McPhillamys andlimited exploration in the 1980s generated several intersections including7 metres at 2.85g/t gold.Regionally there is a 20 kilometre structuralcorridor with scattered historical gold workings running down the centre ofthe project.The explo

105、ration effort in this area is minimal with the mostserious being prospecting activities in the 1880s and 1890s.The Moorilda Complex(15 kilometres south of McPhillamys)is a CadiaRidgeway-style monzonite intrusive complex where previous drilling hasintersected 19 metres at 1.23 g/t gold and 0.2%copper

106、.Soil geochemistryand modelling of aeromagnetic data has defined a number of targets in thisarea.Reconnaissance Induced Polarisation surveys are planned for several targetareas prior to drill testing.BODANGORA AND CUDALGOLD,COPPER NSWAlkane Exploration Ltd 100%(subject to 2%NSR and buy back option t

107、o Rio TintoExploration Pty Limited)Data review and ground reconnaissance continued on both projects.AtCudal a soil sampling program tested several areas.The best results werereturned from the Bowan Park area where the sampling infilled andextended soil coverage from previous surveys.This target is n

108、ow definedby a+50ppb gold anomaly over a 300 metre in strike,with a maximum of700ppb gold.The anomaly covers the mineralised contact of a micro-syenite intrusive where rock chip sampling from the same area returnedvalues to 1g/t gold&0.17%copper.Both projects are considered to have potential for mon

109、zonite porphyryassociated gold copper and structural gold mineralisation.RC drillingwas originally scheduled to test the Bowan Park target late in the year butlack of available drill rigs caused this program to be moved to 2007.REVIEW OF OPERATIONSThe Project is made up of three prospect areas each

110、comprisingpalaeochannels with infill material which is highly prospective for CID.Previous work in the region by Alkane concentrated on diamond explorationbetween 1992 and 1998.The programs focused on existing and palaeo-river systems using airphoto and satellite image interpretation,streamsediment

111、sampling,detailed and reconnaissance mapping,andstratigraphic drilling of the channels.Based on the detailed mapping,thedrilling intersections and a standard specific gravity of 2.6 tonnes percubic metre,BCI determined that a potential for 40 million tonnes pervertical metre of iron rich pisolitic m

112、aterial may exist within the mainBonnie Creek palaeochannel system.This provides an exploration target ofbetween 200 million tonnes(5m thick)and 600 million tonnes(15mthick)of iron rich channel deposit within this system.Other,but smaller,potential exists within the nearby Shaw River and Nullagine R

113、iver systems.BCI successfully listed on the ASX on 15 December and plans a major RCdrilling program to be scheduled as soon as practical to complete an initialassessment of the systems.This program should enable BC Iron to focuson the areas with potential to achieve the goal of identifying significa

114、nttonnages of direct shipping quality product.Unless otherwise stated this report is based on information compiled by Mr D I Chalmers,FAusIMM,FAIG,(director of the Company)who has sufficient experience which is relevant tothe style of mineralisation and type of deposit under consideration and to the

115、 activity which heis undertaking to qualify as Competent Person as defined in the 2004 Edition of theAustralasian Code for Reporting of Exploration Results,Mineral Resources and Ore Reserves.Ian Chalmers consents to the inclusion in the report of the matters based on his informationin the form and c

116、ontext in which it appears.15ANNUAL REPORT 2006NULLAGINEIRON,DIAMONDS,GOLD WAAlkane Exploration Ltd-60%Randolph Syndicate 40%In October,Alkane and the Randolph Syndicate reached agreement withConsolidated Minerals Limited(CSM)to jointly float a new company,BCIron Limited(BCI),to acquire 100%of all m

117、inerals within 14 explorationlicences in the East Pilbara region of Western Australia.The BCI agreementexcludes diamonds and an option granted to Vaalbara Resources Pty Ltd toacquire an 80%interest in gold,silver and uranium and Witwatersrand stylemineralisation in the three Alkane-Randolph tenement

118、s(ELs 46/522-524).The combined tenements cover approximately 1500km2 and include anumber of Tertiary aged palaeochannel systems which host extensiveoutcrops of iron rich pisolitic accumulations with similarity to the ChannelIron Deposits(CID)currently being mined at Robe River in the westHamersley R

119、ange.The project is centred about 200 kilometres southeast of Port Hedland and100 kilometres north of Newman.The nearest existing significantinfrastructure is the Newman to Port Hedland(BHPBilliton)iron ore railwaywhich is located 50 to 100 kilometres to the west.The Fortescue MetalsGroup Cloud Brea

120、k and Christmas Creek iron deposits and their proposedrail link to Port Hedland,are located 20 to 30 kilometres to the south.Blotched Blue-Tongued lizard at the Confidence Mine,Moorilda Project.ENVIRONMENTAL AND OCCUPATIONAL HEALTH AND SAFETY REVIEWAlkane is committed in all its activities to compli

121、ance with all laws and regulations in relation to environment and occupational health and safety.TheCompany strives to improve its standards in parallel with industry best practice for both the Peak Hill Gold Mine operations and exploration.PEAK HILL GOLD MINEOccupational Health and Safety The numbe

122、r of personnel employed at the Peak Hill Gold Mine has contracted with mine closure.Exploration personnel continue to access the Peak Hill GoldMine facilities to support their activities on the Tomingley Gold Project 15km to the north of Peak Hill.There were no lost time injuries in 2006.OH&S Result

123、s 2006200420052006MINORMINOR MINOR MAN HRSLTISINJURIESMAN HRSLTISINJURIESMAN HRSLTISINJURIESAlkane17,2410211,4400210,80000Contractors80005,56000000Visitors0000000Total17,3210217,0000210,80000ENVIRONMENTAL MANAGEMENT IN 2006There are currently in place 19 Approvals and Licences for the mining and pro

124、cessing operation,access to water and for pipeline routes.During 2006,the mine was in compliance with all consent conditions and approvals.There were no complaints received by the Company in 2006.The Open Cut Experience(tourist mine)was open for self-guided tours during the school holiday periods(ex

125、cluding summer)and hosted several guidedschool excursion groups during the year.The Peak Hill Gold Mine,fundamentally on care and maintenance,is still a contributor to the local economy and community.The mine employed on averagetwo personnel in 2006.Three local organizations and charities were assis

126、ted by the Peak Hill Gold Mine in 2006.The area of the open cuts and haul roads,including the Open Cut Experience tourist attraction,has reached the status of final rehabilitation and has been“signed off”by the regulatory authorities.Wet plant decommissioning continued through 2006.Alkane reviewed t

127、he Security Deposit calculations for the Peak Hill Gold Mine given that 80%of the minesite has been rehabilitated to final land form.It isanticipated that the Department of Primary Industries will release a significant proportion of the Security Deposit in 2007.REVIEW OF OPERATIONS1617ANNUAL REPORT

128、2006A L K A N E E X P L O R A T I O N L T DF I N A N C I A L S T A T E M E N T SThis financial report covers both Alkane Exploration Ltd as an individual entity and the consolidated entity consisting of Alkane Exploration Ltd and its subsidiaries.The financial report is presented in the Australian c

129、urrency.The directors present their report on the consolidated entity consisting of Alkane Exploration Ltd(ACN 000 689 216)and the entities it controlled at the endof,or during,the year ended 31 December 2006.DIRECTORSThe following persons were directors of Alkane Exploration Ltd during the whole ye

130、ar and up to the date of this report:J S F Dunlop(Chairman)(appointed 4 July 2006)D I Chalmers I R Cornelius(resigned as Chairman 4 July 2006,continuing as director)L A Colless(resigned 25 July 2006)I J Gandel(appointed 25 July 2006)A D Lethlean H D Kennedy(resigned 31 July 2006)(appointed alternate

131、 director for Mr Cornelius on 31 July 2006 resigned 5 December 2006)PRINCIPAL ACTIVITIESThe principal activities of the Company during the course of the financial year were mining and exploration for gold,and other minerals and metals.There hasbeen no significant change in the nature of these activi

132、ties during the financial year.RESULTSThe net amount of consolidated loss of the economic entity for the financial year after income tax was$3,655,095(2005 loss$1,772,472).DIVIDENDSNo dividends have been paid by the Company during the financial year ended 31 December 2006,nor have the directors reco

133、mmended that any dividends bepaid.REVIEW OF OPERATIONSThe Company continues to advance its core projects at Tomingley and Dubbo in New South Wales(NSW),where feasibility studies are in progress for thedevelopment of the 600,000 ounce Wyoming gold deposit and the strategically important Dubbo Zirconi

134、a Project(DZP)respectively.Further drilling isscheduled at Wyoming to attempt to define additional open pitable ore in proximity to the planned development,while optimisation of the existing resourcemodel is continuing.Following receipt of a Commercial Ready Grant from AusIndustry for the DZP,a prog

135、ram of process optimisation commenced at the ANSTO facilities located atLucas Heights near Sydney.This program should lead to construction and operation of a Demonstration Pilot Plant later in 2007 and hopefully a completedfeasibility study in 2008.Work also continues on the Orange District Explorat

136、ion Joint Venture with Newmont Australia where a significant gold discovery was made during the year,andon advancing the copper sulphide deposit at Wellington in NSW.The Nullagine channel iron deposits were floated into BC Iron Ltd.SIGNIFICANT CHANGES IN STATE OF AFFAIRSThe state of affairs of the C

137、ompany was not affected by any significant changes during the year.EVENTS SUBSEQUENT TO BALANCE DATEOn 19 April 2007,the Company is scheduled to hold a shareholders meeting to approve the issue of options to employees and consultants and to directorsof the Company.No other matter or circumstance has

138、 arisen since 31 December 2006 that has or may significantly affect the operations of the Company,theresults of the Company,or the state of affairs of the Company in the financial year subsequent to the financial year ended 31 December 2006.DIRECTORS REPORT18LIKELY DEVELOPMENTSThe Company intends to

139、 continue exploration on its existing tenements,to acquire further tenements for exploration of all minerals,to seek other areas ofinvestment in the resources industry and to develop the resources on its tenements.ENVIRONMENTAL REGULATIONThe consolidated entity is subject to significant environmenta

140、l regulation in respect of its development,construction and mining activities as set out below.MININGDuring the year there were no breaches of the requirements relating to certain environmental restrictions at the Companys mine site at Peak Hill,NSW.Management is constantly working with the New Sout

141、h Wales Environment Protection Authority to ensure compliance with the regulatory requirements.TheCompany employs a full time environmental manager.EXPLORATIONThe Company is subject to environmental controls and restrictions on all its mineral exploration tenements relating to any exploration activi

142、ty on thosetenements.No breaches of any environmental restrictions were recorded during the year.GENERALThe consolidated entity aspires to the highest standards of environmental management and insists its entire staff and contractors maintain that standard.PARTICULARS OF DIRECTORSJOHN STUART FERGUSO

143、N DUNLOP(Non-Executive Chairman)BE(Min),MEng Sc(Min),FAusIMM(CP),FIMM,MAIME,MCIMMMr Dunlop(56)is a consultant mining engineer with over 36 years surface and underground mining experience both in Australia and overseas.He is a formerdirector of the Australian Institute of Mining and Metallurgy(2001-2

144、006)and is currently Chairman of its affiliate,the Mineral Industry ConsultantsAssociation.John is Chairman of Alliance Resources Ltd and non-executive director of Gippsland Ltd.Former public company directorships in the last threeyears:Encore Metals NL(November 1999 to November 2006).Mr Dunlop is a

145、 member of the Audit Committee.DAVID IAN(IAN)CHALMERS(Managing Director)MSc,FAusIMM,FAIG,FIMMM,FSEG,MSGA,MGSA,FAICD Mr Chalmers(58)is a geologist and graduate of the Western Australian Institute of Technology(Curtin University)and has a Master of Science degree fromthe University of Leicester in the

146、 United Kingdom.He has worked in the mining and exploration industry for over 37 years,during which time he has hadexperience in all facets of exploration through feasibility and development to the production phase.Mr Chalmers is currently a principal in Multi Metal Consultants Pty Ltd and is also a

147、 non-executive director of Northern Star Resources Ltd.Formerdirectorships held in the last three years are:AuDAX Resources Ltd(October 1993 to February 2007).IAN RAYMOND(INKY)CORNELIUS(Non-executive Director)FAICD Mr Cornelius(66)has had over 40 years experience in the minerals and petroleum indust

148、ry.He spent the first nine years of his career with the WesternAustralian Department of Mines before leaving to manage his own tenement consulting business.Since 1976 he has held senior executive positions in anumber of public exploration and mining companies.In this capacity he has had extensive ex

149、perience and success in the selection,management anddevelopment of deposits of many commodities.Mr Cornelius is a non-executive director of Pancontinental Oil&Gas NL,Montezuma Mining Company Ltd and New World Alloys Ltd.19ANNUAL REPORT 2006IAN JEFFREY GANDEL(Non-executive Director)LLB,BEc,FCPA,FAICD

150、 Mr Gandel(49)is a successful Melbourne businessman with extensive experience in retail management and retail property.He has been a director of theGandel Retail Trust and has had an involvement in the construction and leasing of Gandel shopping centres.Through his private investment vehicles,Mr Gan

151、del has been an investor in the mining industry since 1994.Gandel Metals Pty Ltd is currently a substantial holder in a number of publicly listedAustralian companies and now holds and explores tenements in its own right in Victoria and Western Australia.Ian is also a non-executive director of Allian

152、ceResources Ltd.Mr Gandel is a member of the audit committee.ANTHONY DEAN LETHLEAN(Non-executive Director)BAppSc(geology)Mr Lethlean(43),is a geologist with 10 years mining experience including 4 years underground on the Golden Mile in Kalgoorlie.In later years Mr Lethleanhas been working as a resou

153、rces analyst with various stockbrokers and currently consults to Cartesian Capital Pty Ltd.Mr Lethlean is a non-executive directorof Alliance Resources Ltd.Mr Lethlean is Chairman of the audit committee.COMPANY SECRETARYLINDSAY ARTHUR COLLESS CA,JP(NSW),FAICDMr Colless(61)is a member of the Institut

154、e of Chartered Accountants in Australia with 15 years experience in the profession and a further 27 yearsexperience in Commerce,mainly in the mineral and petroleum exploration industry in the capacities of financial controller,company secretary and director.He is a director and/or secretary of a num

155、ber of public listed companies.DIRECTORS INTERESTSDetails of each directors relevant interest in shares and rights or options of the Company as at the date of this report are:FULLY PAID ORDINARY SHARESOPTIONSOPTION EXERCISE DIRECTINDIRECTINDIRECTCONDITIONSNAME OF DIRECTORNUMBER HELDNUMBER HELDNUMBER

156、 HELDJ S F Dunlop-D I Chalmers3,780805,9581,000,00060c-24 May 2007I R Cornelius7,8751,291,5001,000,00060c-24 May 2007I J Gandel-34,245,674-A D Lethlean-250,00040c-24 May 2007750,00060c-24 May 2007No options were granted to directors during the financial year or since the end of the year.NOMINATION C

157、OMMITTEEThe Nomination Committee comprises the full Board.DIRECTORS REPORT20DIRECTORS MEETINGSThe following sets out the number of meetings of the Companys directors held during the year ended 31 December 2006 and the number of meetingsattended by each director.There were fifteen(15)Directors Meetin

158、gs,two(2)Audit,four(4)Nomination and three(3)Remuneration Committee Meetings held during the financial year.The number of meetings attended by each director during the year(while they were a director or committee member)is as follows:COMMITTEE MEETINGSBOARD OF DIRECTORSAUDITNOMINATIONREMUNERATIONDIR

159、ECTORHELDATTENDEDHELDATTENDEDHELDATTENDEDHELDATTENDEDJ S F Dunlop1010112222D I Chalmers1515N/AN/A4433I R Cornelius1515N/AN/A4433I J Gandel88111111A D Lethlean1514224332H D Kennedy76113322L A Colless77N/AN/A3322REMUNERATION REPORTThe information provided within this remuneration report includes remun

160、eration disclosures that are required under Accounting Standard AASB 124 RelatedParty Disclosures.These disclosures have been transferred from the financial report and have been audited.All remuneration of directors is further disclosed in Note 13 in the Notes to the Financial Statements.A.PRINCIPLE

161、S USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATIONThe objective of the Companys executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered.Theframework aligns executive reward with achievement of strategic objectives and the creatio

162、n of value for shareholders,and conforms to market best practicefor delivery of reward.The Board ensures that executive reward satisfies the following key criteria for good reward corporate governance practices:competitiveness and reasonablenessacceptability to shareholdersperformance linkage/alignm

163、ent of executive compensationtransparencycapital managementThe Company has structured an executive remuneration framework that is market competitive and complementary to the reward strategy for the organisation.Non-executive directorsFees and payments to non-executive directors reflect the demands w

164、hich are made on,and the responsibilities of,the directors.Non-executive directors feesand payments are reviewed annually by the Board.The Chairmans fees are determined independently to the fees of non-executive directors based oncomparative roles in the external market.The Chairman is not present a

165、t any discussions relating to determination of his own remuneration.Directors feesDirectors fees are determined within an aggregate directors fee pool limit,which is periodically recommended for approval by shareholders.This amount isseparate from any specific tasks the directors may take on for the

166、 Company.For example,Multi Metal Consultants Pty Ltd of which Messrs Chalmers is aprincipal,provides some administration services for the Company,separate from his task as an executive Director.The Company has no performance based remuneration component built into director and executive remuneration

167、 packages.Other than the managing director,there are no other executive officers or senior managers of the Company or Group.21ANNUAL REPORT 2006The names of Directors who have held office during the financial year are:Alkane Exploration LtdJohn S F Dunlop(appointed 4 July 2006),D Ian Chalmers,Ian R

168、Cornelius,Ian J Gandel(appointed 25 July 2006),Anthony D Lethlean,H David Kennedy(resigned 31 July 2006)and Lindsay A Colless(resigned 25 July 2006)SubsidiariesLFB Resources NL,Kiwi Australian Resources Pty Ltd,Australasian Geo-Data Pty Ltd,Australian Zirconia LtdI R Cornelius,D I Chalmers,L A Colle

169、ssSkyray Properties Ltd(BVI)L ThomasExecutives during yearIan R Cornelius,member of the Executive Management Committee until his resignation as Executive Chairman on 4 July 2006.D Ian Chalmers,member of the Executive Management Committee,appointed as Managing Director on 6 October 2006.Lindsay A Col

170、less,member of the Executive Management Committee until his resignation as a director on 25 July 2006.There were no other executive officers during the year.B.DETAILS OF REMUNERATIONCONSOLIDATEDPARENT ENTITY2006200520062005$Total income received,or due and receivable by the directors993,384978,78788

171、1,247866,394The details of directors remunerations paid or payable or payments to related companies for services provided are as follows:2006 YEAR SHORT-TERM BENEFITSPOST-EMPLOYMENT BENEFITSTOTALDIRECTORSPER DIEM CASH FEES/RETAINERCASH FEES SUPERANNUATIONOTHERNAME$Executive DirectorsD I Chalmers15,0

172、00521,662(a)-536,662I R Cornelius-75,000(c)-80,000(c)155,000 L A Colless-92,475(f)-92,475Non-executive DirectorsJ S F Dunlop25,0007,288(b)-32,288I R Cornelius20,0001,200(c)-21,200 I J Gandel16,667-16,667A D Lethlean37,20020,100(d)-57,300H D Kennedy26,667(e)-26,667L A Colless-55,125(f)-55,125DIRECTOR

173、S REPORT22a)technical services,geological consulting and management fees of$521,662 paid or due and payable to companies in which Mr Chalmers has asubstantial financial interest for services provided in the normal course of business and at normal commercial rates.During the year,five technical andsu

174、pport staff,including Mr Chalmers,were employed to carry out work programs for Alkane on an as needs basis.b)consulting fees of$7,288(2005$nil)paid or due and payable to John S Dunlop&Associated Pty Ltd for services provided in the normal course ofbusiness and at normal commercial rates.c)consulting

175、 fees of$76,200($75,000+$1,200)paid or due and payable to Goldtrek Pty Ltd as trustee for the Lewis Trust of which Mr Cornelius is abeneficiary for services provided in the normal course of business and at normal commercial rates.A one off fee,on termination as Executive Chairman,of$80,000 in apprec

176、iation of Mr Corneliuss long period of service in that role.d)amounts of$20,100 paid or due and payable to Rocky Rises Pty Ltd,a company in which Mr Lethlean has a substantial financial interest,for consultingservices provided in the normal course of business and at normal commercial rates.e)amounts

177、 of$26,667 paid or due and payable to a company in which Mr Kennedy has a substantial financial interest for directors fees.f)administration,accounting and secretarial fees of$147,600($92,475+$55,125)paid or due and payable to a company in which Mr Colless has asubstantial financial interest for ser

178、vices provided in the normal course of business and at normal commercial rates.2005 YEAR SHORT-TERM BENEFITSPOST-EMPLOYMENT BENEFITSTOTALDIRECTORSPER DIEMCASH FEES/RETAINERCASH FEESSUPERANNUATIONOTHERNAME$Executive CommitteeI R Cornelius-150,000-150,000 D I Chalmers-540,387-540,387L A Colless-169,20

179、0-169,200Non-executive DirectorsA D Lethlean-79,200-79,200H D Kennedy40,000-40,000C.SERVICE AGREEMENTSFormal written consultancy agreements exist with companies of which directors have a substantial financial interest as detailed below.No performance related bonuses or benefits are provided.J S F Du

180、nlopRetainer payable to John S Dunlop&Associates Pty Ltd,in which Mr Dunlop has a substantial financial interest,of$50,000 per annum plus per diem of$1,200 per day up to 4 days per month for consulting services over and above normal director duties.D I ChalmersManaging director retainer of$60,000 pe

181、r annum payable to Leefab Pty Ltd in which Mr Chalmers has a substantial financial interest pursuant to a formalagreement for an initial term of two years commencing 1 October 2006.Geological consulting and management services provided by Multi Metal Consultants Pty Ltd in which Mr Chalmers has a su

182、bstantial financial interestpursuant to a formal agreement for an initial term of two years commencing 1 October 2006.I R CorneliusRetainer payable to Goldtrek Pty Ltd as trustee for the Lewis Trust,of which Mr Cornelius is a beneficiary,of$40,000 per annum plus per diem of$1,200 perday up to 4 days

183、 per month for consulting services over and above normal director duties.I J GandelRetainer payable to Gandel Metals Pty Ltd in which Mr Gandel has a substantial financial interest of$40,000 per annum plus per diem of$1,200 per day upto 4 days per month for consulting services over and above normal

184、director duties.23ANNUAL REPORT 2006A D LethleanRetainer payable to Rocky Rises Pty Ltd,in which Mr Lethlean has a substantial financial interest,of$40,000 per annum plus per diem of$1,200 per day upto 4 days per month for consulting services over and above normal director duties.D.SHARE-BASED PAYME

185、NTSNo share based remuneration compensation plan exists.DIRECTORS INDEMNITIESDuring the financial year,Alkane Exploration Ltd incurred premiums to insure the directors and secretary of the Company and its Australian based controlledentities.The liabilities insured are costs and expenses that may be

186、incurred in defending civil or criminal proceedings that may be brought against the officersin their capacity as officers of entities in the controlled entity.CORPORATE GOVERNANCEThe Company strives to comply with the ASX Principles of Good Corporate Governance and Best Practice Recommendations and

187、is dealt with in theSupplementary Information section of the Annual Report.AUDITORS INDEPENDENCE-SECTION 307CThe following is a copy of a letter received from the Companys auditors:Dear Sirs,In accordance with Section 307C of the Corporations Act 2001(the Act)I hereby declare that to the best of my

188、knowledge and belief therehave been:i)no contraventions of the auditor independence requirements of the Act in relation to the audit of the 31 December 2006 annual financialstatements;and ii)no contraventions of any applicable code of professional conduct in relation to the audit.Frank Vrachas(Lead

189、auditor)Rothsay Chartered Accountants”NON-AUDIT SERVICESThe board of directors has considered the position and,in accordance with the advice received from the audit committee is satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors im

190、posed by the Corporations Act 2001.The directors are satisfied that theprovision of non-audit services by the auditor,as set out below,did not compromise the auditor independence requirements of the Corporations Act 2001 forthe following reasons:all non-audit services have been reviewed by the audit

191、 committee to ensure they do not impact the impartiality and objectivity of the auditornone of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics forProfessional Accountants issued by the Accounting Professional&Ethica

192、l Standards Board,including acting in a management or a decision-makingcapacity for the Company or acting as advocate for the Company.DIRECTORS REPORT2425ANNUAL REPORT 2006CONSOLIDATED20062005$The following amounts were paid to the auditorsAuditors remuneration-auditing the accounts27,00029,700Non-A

193、udit Services-taxation services6,0005,000SHARE OPTIONSOptions to take up ordinary shares in the capital of Alkane Exploration Ltd have been granted as follows:Outstanding as at the date of this report:The following options are exercisable at 40 cents each on or before 24 May 2007T W&J Ransted250,000

194、Rocky Rises Pty Ltd250,000The following are exercisable at 60 cents on or before 24 May 2007Leefab Pty Ltd1,000,000Mineral Administration Services Pty Ltd1,000,000Goldtrek Pty Ltd1,000,000Sundowner International Limited1,000,000Rocky Rises Pty Ltd750,000The following options are exercisable at 45 ce

195、nts each on or before 29 May 2008GR Meates&Associates Pty Ltd250,000S Allison150,000M&K Sutherland150,000G Morgan50,000M Morgan25,000Smiff Pty Ltd150,000Locksley Holdings Pty Ltd100,000D Meates50,000D Moyses50,000None of the existing options are listed on Australian Stock Exchange Limited.No person

196、entitled to exercise any option has or had,by virtue of the option,aright to participate in any share issue of any other body corporate.Signed in accordance with a resolution of the Directors.D I ChalmersDirectorDated at Perth this 29th day of March 2007CONSOLIDATEDPARENT ENTITYNOTE2006200520062005$

197、Revenue from continuing operationsRent received 55,01025,08855,01025,088Gold sales229,987551,872229,987551,872Silver sales-Revenue from sale of assets800182,082800182,082Revenue from sale of shares-2,659-2,659Interest received or due and receivable from other corporations192,748132,117188,932128,273

198、Government grant451,511-451,511-Other revenue176,83986,121176,83986,1211,106,895979,9391,103,079976,095Expenses from continuing operationsRent(51,390)(40,901)(47,754)(40,901)Filing fees(28,998)(26,230)(18,621)(16,055)Annual reports(30,426)(31,959)(30,426)(31,959)Directors consulting(297,455)(229,200

199、)(297,455)(229,200)Consulting,administration and secretarial(226,347)(182,315)(184,347)(140,315)Public relations(93,369)(70,013)(93,369)(70,013)Travel,entertainment&seminars(73,131)(231,868)(73,131)(231,658)Insurances(35,621)(40,391)(35,189)(40,391)Directors fees(26,667)(40,000)(26,667)(40,000)Provi

200、sion for subsidiaries-(2,878,619)(38,808)Costs of Open Cut Experience(23,608)(55,857)(23,608)(55,857)Administration expenses(117,391)(180,436)(121,589)(177,425)Audit fees(27,000)(29,700)(27,000)(29,700)Auditor-other services(6,000)(5,000)(6,000)(3,000)Depreciation and amortisation(18,964)14,368(18,7

201、93)15,564Cost of quoted shares sold-Gold production,mine closure,site maintenance and rehabilitation costs(472,733)(1,025,312)(472,733)(1,025,312)Cost of assets sold(3,815)(310,000)(3,815)(310,000)Exploration costs(3,227,125)(355,059)(391,767)(301,369)Provision for quoted shares written back-71,887-

202、71,887Quoted shares written down(1,950)-(1,950)-Deconsolidation of subsidiary-15,575-(4,761,990)(2,752,411)(4,752,833)(2,694,512)Loss before income tax(3,655,095)(1,772,472)(3,649,754)(1,718,417)Income tax attributable 2-Loss for the year(3,655,095)(1,772,472)(3,649,754)(1,718,417)Loss attributable

203、to minority interests5575-Loss attributable to members of Alkane Exploration Ltd16(3,655,040)(1,772,397)(3,649,754)(1,718,417)Accumulated losses at beginning of financial year(21,717,702)(19,945,305)(21,605,207)(19,886,790)Accumulated losses at end of financial year(25,372,742)(21,717,702)(25,254,96

204、1)(21,605,207)Earnings per share for loss attributable to the ordinary equity holders of the Company:20($0.02)($0.01)($0.02)($0.01)26INCOME STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2006The above income statement should be read in conjunction with the accompanying notes.CONSOLIDATEDPARENT ENTITYNOTE20

205、06200520062005$Current AssetsCash and cash equivalent174,754,6002,773,7344,742,7652,765,926Receivables3456,397226,353448,827201,243Available for sale financial assets42,4004,3502,4004,350Other financial assets51,233,996747,0501,133,562645,675Total Current Assets6,447,3933,751,4876,327,5543,617,194No

206、n-Current AssetsAvailable for sale financial assets69,000-9,000-Held-to-Maturity Investments7-5,724,1497,899,669Property,Plant&Equipment8791,876761,447670,885656,649Capitalised Exploration and Evaluation Expenditure914,538,92215,970,7619,010,1998,255,599Total Non-Current Assets15,339,79816,732,20815

207、,414,23316,811,917Total Assets21,787,19120,483,69521,741,78720,429,111Current LiabilitiesPayables10570,016603,316524,564554,025Provisions1127,63230,48827,63230,488Total Current Liabilities597,648633,804552,196584,513Non-Current LiabilitiesProvisions11117,902184,977117,902184,977Total Non-Current Lia

208、bilities117,902184,977117,902184,977Total Liabilities715,550818,781670,098769,490Net Assets21,071,64119,664,91421,071,68919,659,621EquityContributed equity1246,326,65041,264,82846,326,65041,264,828Accumulated losses(25,372,742)(21,717,702)(25,254,961)(21,605,207)Total parent entity interest20,953,90

209、819,547,12621,071,68919,659,621Outside equity interests in controlled entities117,733117,788-Total Equity21,071,64119,664,91421,071,68919,659,621BALANCE SHEETAS AT 31 DECEMBER 200627ANNUAL REPORT 2006The above balance sheet should be read in conjunction with the accompanying notes.CONSOLIDATEDPARENT

210、 ENTITYNOTE2006200520062005$Total equity at the beginning of the financial year19,664,91416,566,09119,659,62116,506,743Loss for the year(3,655,095)(1,772,472)(3,649,754)(1,718,417)Total recognised income and expense for the year(3,655,095)(1,772,472)(3,649,754)(1,718,417)Transactions with equity hol

211、ders in their capacity as equity holders:Options exercised-8,003-8,003Share placement(net of costs)5,061,8224,863,2925,061,8224,863,2925,061,8224,871,2955,061,8224,871,295Total equity at the end of the financial year21,071,64119,664,91421,071,68919,659,621Total recognised income and expense for the

212、year is attributable to:Members of Alkane Exploration Ltd(3,655,040)(1,772,397)(3,649,754)(1,718,417)Minority interests(55)(75)-(3,655,095)(1,772,472)(3,649,754)(1,718,417)28STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 DECEMBER 2006The above statement of changes in equity should be read in co

213、njunction with the accompanying notes.CONSOLIDATEDPARENT ENTITYNOTE2006200520062005$Cash Flows from Operating ActivitiesRent received55,01025,08855,01025,088Proceeds from gold&silver sales229,987596,652229,987596,652Payments to suppliers(inclusive of goods and services tax)(1,802,197)(2,309,180)(1,7

214、47,644)(2,324,733)Other income107,708321,464107,708321,464Interest received192,748132,117188,932128,273Goods and services tax receipts479,479120,923463,475114,586Net cash from operating activities18(737,265)(1,112,936)(702,532)(1,138,670)Cash Flows from Investing ActivitiesProceeds of sale of plant,

215、property&equipment80010,00080010,000Purchase of plant,property&equipment(53,262)(23,203)(36,898)(3,203)Proceeds from sale of investment securities-161,464-161,464Payments for investment securities(9,000)-(9,000)-Payments for loans to subsidiaries-(703,100)(129,926)Proceeds from sale of investments-1

216、50,000-150,000Loss of cash from deconsolidation-(571)-Proceeds from security deposits-390,723-394,547Payments for security deposits(486,945)-(487,886)-Mine site rehabilitation expenditure-(325,000)-(325,000)Exploration expenditure(1,795,284)(1,904,491)(1,146,367)(1,768,723)Net cash provided for inve

217、sting activities(2,343,691)(1,541,078)(2,382,451)(1,510,841)Cash Flows from Financing ActivitiesProceeds from issue of shares and options5,186,5955,116,4635,186,5955,116,463Cost of share issues(124,773)(245,168)(124,773)(245,168)Net cash flow from financing activities5,061,8224,871,2955,061,8224,871

218、,295Net increase(decrease)in cash and cash equivalents1,980,8662,217,2811,976,8392,221,784Cash and cash equivalents at the beginning of the financial year2,773,734556,4532,765,926544,142Cash and cash equivalents at the end of the financial year174,754,6002,773,7344,742,7652,765,926CASH FLOW STATEMEN

219、TFOR THE YEAR ENDED 31 DECEMBER 200629ANNUAL REPORT 2006The accompanying notes form part of these financial statements1.STATEMENT OF SIGNIFICANT ACCOUNTING POLICIESThe principal accounting policies adopted in the preparation of the financial report are set out below.These policies have been consiste

220、ntly applied to all the years presented,unless otherwise stated.The financial report includes separate financialstatements for Alkane Exploration Ltd(“the Company”)as an individual entity and the consolidated entity consisting of Alkane Exploration Ltd and itssubsidiaries.a)BASIS OF PREPARATIONThis

221、general purpose financial report has been prepared in accordance with the Corporations Act 2001,Australian Accounting Standards andInterpretations and complies with other requirements of the law.All amounts are presented in Australian dollars,unless otherwise noted.Compliance with IFRSsAustralian Ac

222、counting Standards include Australian equivalents to International Financial Reporting Standards(IFRSs).Compliance with AIFRSs ensuresthat the consolidated financial statements and notes of Alkane Exploration Ltd comply with IFRSs.Historical cost conventionThese financial statements have been prepar

223、ed under the historical cost.Cost is based on the fair values of the consideration given in exchange forassets.b)CONSOLIDATIONThe consolidated financial statements incorporate the assets and liabilities of all entities controlled by Alkane Exploration Ltd(the Company)as at 31December 2006 and the re

224、sults of all controlled entities for the year then ended.Control is achieved where the Company has the power to govern thefinancial and operating policies of an entity so as to obtain benefits from its activities.Alkane Exploration Ltd and its controlled entities are referred to inthis financial rep

225、ort as the Group or the consolidated entity.The effects of all intercompany transactions,balances and unrealised gains on transactions between entities in the Group are eliminated in full.Outside equity interests in the results and equity of controlled entities are shown separately in the consolidat

226、ed profit and loss account and balancesheet respectively.Where control of an entity is obtained during a financial year,its results are included in the consolidated profit and loss account from the date on whichcontrol commences.Where control of an entity ceases during a financial year its results a

227、re included for that part of the year during which control exists.c)INCOME TAXThe income tax expense or revenue for the year is the tax payable on the current years taxable income based on the national income tax rate,adjustedby changes in deferred tax assets and liabilities attributable to temporar

228、y differences between tax bases of assets and liabilities and their carryingamounts in the financial statements,and to unused tax losses.Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilitiesare set

229、tled,based on those tax rates which are enacted or substantively enacted for each jurisdiction.The relevant tax rates are applied to the cumulativeamounts of deductible and taxable temporary differences to measure the deferred tax asset or liability.An exception is made for certain temporarydifferen

230、ces arising from the initial recognition of an asset or a liability.No deferred tax asset or liability is recognised in relation to these temporarydifferences if they arose in a transaction,other than a business combination,that at the time of the transaction did not affect either accounting profit

231、ortaxable profit or loss.Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will beavailable to utilise those temporary differences and losses.Deferred tax assets and liabilities are offset when there is a

232、legally enforceable right to offset current tax assets and liabilities and when the deferred taxbalances relate to the same taxation authority.Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset andintends either to settle on a net basis,or to rea

233、lise the asset and settle the liability simultaneously.Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.30NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2006d)GOODS AND SERVICES TAX(GST)Revenues,expenses a

234、nd assets are recognised net of the amount of GST except:where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,in which case the GST is recognised aspart of the cost of acquisition of the asset or as part of the expense item as applicable;andreceiv

235、ables and payables are stated with the amount of GST included.The net amount of GST recoverable from,or payable to,the taxation authority is included as part of receivables or payables in the Balance Sheet.Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component

236、of cash flows arising from investing and financingactivities,which is recoverable from,or payable to,the taxation authority,are classified as operating cash flows.Commitments and contingencies are disclosed net of the amount of GST recoverable from,or payable to,the taxation authority.e)SEGMENT REPO

237、RTINGA business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are differentto those of other business segments.A geographical segment is engaged in providing products or services within a particular economic environme

238、ntand is subject to risks and returns that are different from those of segments operation in other economic environments.f)REVENUE RECOGNITIONRevenue is measures at the fair value of the consideration received or receivable.Amounts disclosed as revenue are net of returns,trade allowances andamounts

239、collected on behalf of third parties.Interest income is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.g)GOVERNMENT GRANTSGrants from the government are recognised at their fair value where there is a reasonable assurance that the grant wi

240、ll be received and the Group willcomply with all attached conditions.Government grants relating to costs are deferred and recognised in the income statement over the period necessary to match them with the costs thatthey are intended to compensate.Government grants that are receivable as compensatio

241、n for expenses or losses already incurred or for the purpose of giving immediate financial supportto the Group with no future related costs are recognised as income of the period in which it becomes receivable.h)ROYALTIES AND OTHER MINING IMPOSTSAd valorem royalties and other mining imposts are accr

242、ued and charged against earnings when the liability from production or sale of the mineralcrystallises.Profit based royalties are accrued on a basis which matches the annual royalty expense with the profits on which the royalties are assessed(after allowing for permanent differences).i)DEPRECIATIOND

243、epreciation is provided on plant and equipment and is calculated on a straight line basis so as to write off the net cost of each asset during theirexpected useful life of 3 to 5 years.j)CASH AND CASH EQUIVALENTSCash includes cash on hand and deposits held at call with financial institutions.Cash eq

244、uivalents are short-term,highly liquid investments with originalmaturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes invalue.k)TRADE AND OTHER RECEIVABLESTrade and other receivables are recognised initially

245、 at fair value and subsequently measured at amortised cost,less provision for doubtful debts.Tradereceivables are due for settlement no more than 30 days from the date of recognition.Collectibility of trade receivables is reviewed on an ongoing basis.Debts which are known to be uncollectible are wri

246、tten off.A provision for doubtful debts is established when there is objective evidence that theCompany will not be able to collect all amounts due according to the original terms of receivables.The amount of the provision is recognised in theincome statement.31ANNUAL REPORT 20061.STATEMENT OF SIGNI

247、FICANT ACCOUNTING POLICIES CONTINUEDl)INVESTMENTS AND OTHER FINANCIAL ASSETSThe Group classifies its investments in the following categories:loan and receivables,held-to-maturity investments,and available-for-sale financialassets.The classification depends on the nature and purpose of the financial

248、asset and is determined at the time of initial recognition.This designationis re-evaluated at each reporting date.m)IMPAIRMENT OF ASSETSAt each reporting date,the Company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assetshave suffered a

249、n impairment loss.If any such indication exists,the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss(if any).Where the asset does not generate cash flows that are independent from other assets,the Company estimates the recoverableamount of the cash-

250、generating unit to which the asset belongs.Recoverable amount is the higher of fair value less costs to sell and value in use.In assessing value in use,the estimated future cash flows arediscounted to their present value using a pre-tax discount rate that reflects current market assessments of the t

251、ime value of money and the risks specificto the asset for which the estimates of future cash flows have not been adjusted.If the recoverable amount of an asset(or cash-generating unit)is estimated to be less than its carrying amount,the carrying amount of the asset(cash-generating unit)is reduced to

252、 its recoverable amount.An impairment loss is recognised in the profit or loss immediately,unless the relevant assetis carried at fair value,in which case the impairment loss is treated as a revaluation decrease.Where an impairment loss subsequently reverses,thecarrying amount of the asset(cash-gene

253、rating unit)is increased to the revised estimate of its recoverable amount,but only to the extent that theincreased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset(cash-generating unit)in prior years.A reversal

254、of an impairment loss is recognised in the profit or loss immediately,unless the relevant asset is carried at fair value,in which case theimpairment loss is treated as a revaluation increase.n)JOINT VENTURESThe consolidated entitys proportionate interests in the assets,liabilities and expenses of a

255、joint venture have been incorporated in the financialstatements under the appropriate headings.Where part of a joint venture interest is farmed out in consideration of the farminee undertaking to incurfurther expenditure on behalf of both the farminee and the economic entity in the joint venture are

256、a of interest,exploration expenditure incurred andcarried forward prior to farmout continues to be carried forward without adjustment,unless the terms of the farmout indicate that the value of theexploration expenditure carried forward is excessive based on the diluted interest retained or it is not

257、 thought appropriate to do so.A provision is madeto reduce exploration expenditure carried forward to its recoverable or appropriate amount.Any cash received in consideration for farming out part of ajoint venture interest is treated as a reduction in the carrying value of the related mineral proper

258、ty.o)EXPLORATION EXPENDITUREExpenditure on acquisition,exploration and evaluation relating to an area of interest is carried forward where rights to tenure of the area of interest are current and:i)the area has proven commercially recoverable reserves;orii)exploration and evaluation activities are c

259、ontinuing in an area of interest but have not yet reached a stage which permits a reasonable assessmentof the existence or otherwise of economically recoverable reserves.At the end of each financial year the Directors assess the carrying value of the exploration expenditure carried forward in respec

260、t of each area of interestand where the carried forward carrying value is considered to be in excess of(i)above,the value of the area of interest is written down.Capitalised exploration expenditure is considered for impairment based upon areas of interest on an annual basis,depending on the existenc

261、e ofimpairment indicators including:the period for which the Company has the right to explore in the specific area has expired during the period or will expire in the near future,and isnot expected to be renewed;substantive expenditure on further exploration for and evaluation of mineral resources i

262、n the specific area is neither budgeted or planned;exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineralresources and the Company has decided to discontinue such activities in the specific area;and sufficie

263、nt data exists to indicate that,although a development in the specific area is likely to proceed,the carrying amount of the exploration andevaluation asset is unlikely to be recovered in full from successful development or by sale.Costs carried forward in respect of an area of interest that is aband

264、oned are written off in the year in which the decision to abandon is made.NOTES TO THE FINANCIAL STATEMENTS32p)MINERAL TENEMENTSThe Companys activities in the mining industry are subject to regulations and approvals including mining heritage,environmental regulation,theimplications of the High Court

265、 of Australia decision in what is known generally as the Mabo case and any State or Federal legislation regarding nativeand mining titles.Approvals,although granted in most cases,are discretionary.The question of native title has yet to be determined and could effect anymining title area whether gra

266、nted by the State or not.q)RESTORATION,REHABILITATION AND ENVIRONMENT EXPENDITURERestoration,rehabilitation and environmental costs necessitated by exploration and evaluation activities are accrued at the time of those activities andtreated as exploration and evaluation expenditure.Restoration,rehab

267、ilitation and environmental expenditure necessitated by the development and production activities are accrued on an ongoing basisover the production life of the mining activity and treated as costs of production.Restoration,rehabilitation and environmental obligations recognised include the costs of

268、 reclamation,plant and waste site closure,current andsubsequent monitoring of the environment.r)TRADE PAYABLESTrade payables and other accounts payable are recognised when the Company becomes obliged to make future payments resulting from the purchase ofgoods and services.The amounts are unsecured a

269、nd are usually paid within 30 days of recognition.s)EMPLOYEE BENEFITSWages and salaries,annual leave and sick leaveLiabilities for wages and salaries,including non-monetary benefits,annual leave and accumulating sick leave expected to be settled within 12 months ofthe reporting date are recognised i

270、n creditors and borrowings in respect of employees services up to the reporting date and are measured at the amountsexpected to be paid when the liabilities are settled.Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured atthe rates paid or payable.Long se

271、rvice leaveThe liability for long service leave expected to be settled within 12 months of the reporting date is recognised in the provision for employee benefits andis measured in accordance with wages and salaries above.The liability for long service leave expected to be settled more than 12 month

272、s from thereporting date is recognised in the provision for employee benefits only where there is a reasonable expectation that a liability will be incurred.SuperannuationThe amounts charged to the statement of financial performance for superannuation represents the contributions to superannuation f

273、unds in accordancewith the statutory superannuation contributions requirements or an employee salary sacrifice arrangement.No liability exists for any further contributionsby the Company in respect to any superannuation scheme.Equity based compensation benefitsThe Company does not operate an employe

274、e option scheme.The amounts disclosed for remuneration of directors and executives include the assessedfair values of options granted during the year at the date they were granted.RedundancyThe liability for redundancy is provided in accordance with work place agreements.t)CONTRIBUTED EQUITYOrdinary

275、 shares are classified as equity.Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction,net of tax,from the proceeds.u)EARNINGS PER SHAREBasic earnings per share is determined by dividing the operating profit after income tax attributable to

276、members of Alkane Exploration Ltd by theweighted average number of ordinary shares outstanding during the year.33ANNUAL REPORT 20061.STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES CONTINUEDv)SHARE BASED PAYMENTSWhere shares or options are issued to employees,including directors,as remuneration for ser

277、vices,the difference between fair value of the shares oroptions issued and the consideration received,if any,from the employee is expensed.The fair value of the shares or options issued is recorded incontributed equity.w)NEW ACCOUNTING STANDARDS AND UIG INTERPRETATIONSCertain new accounting standard

278、s and UIG interpretations,effective for the 2007 financial statements,have been published that are not mandatory for 31December 2006 reporting period.The Company has elected not to adopt,where available,theses standards and UIG interpretations early.Application ofthe standards and UIG interpretation

279、s is not expected to effect any of the amounts recognised in the financial statements,but will impact the type ofinformation disclosed in the notes to the financial statements.CONSOLIDATEDPARENT ENTITY2006200520062005$2.INCOME TAX EXPENSEa)Income tax expenseCurrent tax-Deferred tax-b)Tax lossesUnuse

280、d tax losses for which no deferred tax asset has been recognised:Operating loss(3,655,095)(1,772,472)(3,649,754)(1,718,417)Potential tax benefit at 30%(1,096,528)(531,741)(1,094,926)(515,525)Add tax effect of permanent differences:Tax losses not brought to account as deferred tax asset(1,096,528)531

281、,741(1,094,926)515,525Income tax attributable to operating profit(loss)-c)Deferred tax asset.Certain future tax benefits have not been recognised as an asset:Attributable to tax losses,the benefits of which are not certain of realisation at 30%(30%2005)10,066,7848,970,25610,105,6999,010,773The benef

282、it will only be obtained if the economic entity derives future assessable income of a nature and of an amount sufficient to enable the benefit tobe realised,continues to comply with the conditions for deductibility imposed by taxation legislation and there are no changes in tax legislationadversely

283、affecting the economic entity in realising the benefit.3.TRADE AND OTHER RECEIVABLES(Current)Debtors including GST refunds456,397266,353448,827201,2434.AVAILABLE FOR SALE FINANCIAL ASSETS(Current)Quoted Shares-At fair valueOpening balance at 1 January 20064,35091,2674,35091,267Disposals-(89,577)-(89

284、,577)Net gain(loss)from fair value adjustment(1,950)2,660(1,950)2,660Closing balance at 31 December 20062,4004,3502,4004,350NOTES TO THE FINANCIAL STATEMENTS34CONSOLIDATEDPARENT ENTITY2006200520062005$5.OTHER FINANCIAL ASSETS(Current)Interest bearing deposits800,00067,070800,00067,070Interest bearin

285、g security deposits(not available for use)433,996679,980333,562578,6051,233,996747,0501,133,562645,675Deposits bear a weighted average interest at the rate of 6.1%(2005 4.9%).6.AVAILABLE FOR SALE FINANCIAL ASSETS(Non-Current)Quoted Shares-At fair valueOpening balance at 1 January 2006-Additions9,000

286、-9,000-Net gain(loss)from fair value adjustment-Closing balance at 31 December 20069,000-9,000-7.HELD-TO-MATURITY INVESTMENTS(Non-current)Shares in controlled entities-carried at cost(Note 16)Opening balance at 1 January 2006-5,865,5656,115,565Disposal(sale of Ventron Enterprises Ltd)-(250,000)Closi

287、ng balance at 31 December 2006-5,865,5655,865,565Loans to(from)subsidiaries At fair valueOpening balance at 1 January 2006-2,036,9661,942,985Addition-703,10093,981Closing balance at 31 December 2006-2,740,0662,036,966Net gain(loss)from fair value adjustment-(2,881,482)(2,862)-5,724,1497,899,6698.PRO

288、PERTY,PLANT AND EQUIPMENTProperty,plant&equipment-at cost975,845926,452827,537794,508Less:Accumulated depreciation(183,969)(165,005)(156,652)(137,859)791,876761,447670,885656,649Reconciliation of carrying amountOpening balance at 1 January 2006761,447995,647656,649675,800Plant&equipment acquired dur

289、ing year53,26323,23536,8993,235Disposals(3,815)(233,853)(3,815)-Depreciation during year(19,019)(23,582)(18,848)(22,386)Closing balance at 31 December 2006791,876761,447670,885656,64935ANNUAL REPORT 2006CONSOLIDATEDPARENT ENTITY2006200520062005$9.EXPLORATION AND DEVELOPMENT EXPENDITURE(Non-Current)P

290、eak Hill Mine development at fair value1111Peak Hill Project acquisition and exploration at fair valueOpening balance at 1 January 20062,630,8492,630,848500,000500,000Addition5,16317,4815,16317,480Net gain(loss)from fair value adjustment(1,636,012)(17,480)494,837(17,480)Closing balance at 31 Decembe

291、r 20061,000,0002,630,8491,000,000500,000Accumulated contributions to other ongoing exploration projects at fair value Opening balance at 1 January 200613,339,91111,790,4817,755,5986,288,245Addition1,531,1351,508,981882,2181,427,041Net gain(loss)from fair value adjustment(1,332,124)40,449(627,618)40,

292、312Closing balance at 31 December 200613,538,92213,339,9118,010,1987,755,59814,538,92215,970,7619,010,1998,255,599The Companys activities in the mining industry are subject to regulations and approvals including mining,heritage,environmental regulation,theimplications of the High Court of Australia

293、decisions in what is known generally as the Mabo and the Wik cases and any State or Federal legislationregarding native and mining titles.Approvals,although granted in most cases,are discretionary.The question of native title has yet to be determined andcould affect any mining title area whether gra

294、nted by the State or not.10.PAYABLES(Current Liabilities)Trade creditors570,016603,316524,564554,02511.PROVISIONS(Current Liabilities)Provision for annual leave27,63230,48827,63230,488Provision for rehabilitation-27,62330,48827,63230,488PROVISIONS(Non-current Liabilities)Provision for redundancy/lon

295、g service leave117,902184,977117,902184,977NOTES TO THE FINANCIAL STATEMENTS36PARENT ENTITY20062005NUMBER$NUMBER$12.SHARE CAPITALMovements in issued capitalOpening balance at 1 January 2006165,999,50141,763,877138,151,85736,647,414Rights issue7,781,9761,167,296-Rights shortfall1,762,066264,310-Vendo

296、r issue*100,00020,000-Placement24,899,9253,734,98927,824,7775,108,460Exercise of options-22,8678,003Closing balance at 31 December 2006200,543,46846,950,472165,999,50141,763,877Less:Costs of Issues-(623,822)-(499,049)As per Balance Sheet200,543,46846,326,650165,999,50141,264,828*In 2006,the Company

297、issued 100,000 shares to a vendor for the purchase of mineral interest within a tenement.Options-ListedExercisable at 35 cents expiring 31 March 2005Balance at beginning of year-9,790,425-Exercised during year-(22,867)-Expired during the year-(9,767,558)-Balance as at 31 December 2006-Options-Unlist

298、edExercisable at 35 cents expiring 31 May 2005Balance at beginning of year-3,000,000-Expired during the year-(3,000,000)-Balance as at 31 December 2006-Exercisable at 40 cents expiring 24 May 2007Issued during year-Balance 31 December 2006500,000-500,000-Exercisable at 50 cents between 25 May 2004 a

299、nd 24 May 2006,or at 60 cents between 25 May 2006 and 24 May 2007Issued during year-Balance 31 December 20064,750,000-4,750,000-Exercisable at 45 cents each expiring 29 May 2008Issued during year-Balance 31 December 2006975,000-975,000-37ANNUAL REPORT 200613.REMUNERATION OF DIRECTORSA.THE NAMES OF D

300、IRECTORS WHO HAVE HELD OFFICE DURING THE FINANCIAL YEAR ARE:ALKANE EXPLORATION LTDJohn S F Dunlop(appointed 4 July 2006),D Ian Chalmers,Ian R Cornelius,Ian J Gandel(appointed 25 July 2006),Anthony D Lethlean,H DavidKennedy(resigned 31 July 2006)and Lindsay A Colless(resigned 25 July 2006).SUBSIDIARI

301、ESLFB Resources NL,Kiwi Australian Resources Pty Ltd,Australasian Geo-Data Pty Ltd,Australian Zirconia LtdI R Cornelius,D I Chalmers,L A CollessSkyray Properties Ltd(BVI)L ThomasEXECUTIVES DURING YEARIan R Cornelius,member of the Executive Management Committee until his resignation as Executive Chai

302、rman on 4 July 2006.D Ian Chalmers,memberof the Executive Management Committee,appointed as Managing Director on 6 October 2006.Lindsay A Colless,member of the Executive ManagementCommittee until his resignation as a director on 25 July 2006.There were no other executive officers during the year.B.D

303、ETAILS OF REMUNERATIONCONSOLIDATEDPARENT ENTITY2006200520062005$Total income received,or due and receivable by the directors993,384978,787881,247866,394The details of directors remunerations paid or payable or payments to related companies for services provided are as follows:2006 YEARSHORT-TERM BEN

304、EFITSPOST-EMPLOYMENT BENEFITSTOTALDIRECTORSCASH FEES/PER DIEMRETAINERCASH FEESSUPERANNUATIONOTHERNAME$Executive DirectorD I Chalmers15,000521,662(a)-536,662I R Cornelius-75,000(c)-80,000(c)155,000 L A Colless-92,475(f)-92,475Non-executive DirectorsJ S F Dunlop25,0007,288(b)-32,288I R Cornelius20,000

305、1,200(c)-21,200 I J Gandel16,667-16,667A D Lethlean37,20020,100(d)-57,300H D Kennedy26,667(e)-26,667L A Colless-55,125(f)-55,125a)technical services,geological consulting and management fees of$521,662 paid or due and payable to companies in which Mr Chalmers has asubstantial financial interest for

306、services provided in the normal course of business and at normal commercial rates.During the year,five technical andsupport staff,including Mr Chalmers,were employed to carry out work programs for Alkane on an as needs basis.b)consulting fees of$7,288(2005$nil)paid or due and payable to John S Dunlo

307、p&Associated Pty Ltd for services provided in the normal course ofbusiness and at normal commercial rates.c)consulting fees of$76,200($75,000+$1,200)paid or due and payable to Goldtrek Pty Ltd as trustee for the Lewis Trust of which Mr Cornelius is abeneficiary for services provided in the normal co

308、urse of business and at normal commercial rates.A one off fee,on termination as Executive Chairman,of$80,000 in appreciation of Mr Corneliuss long period of service in that role.NOTES TO THE FINANCIAL STATEMENTS38d)amounts of$20,100 paid or due and payable to Rocky Rises Pty Ltd,a company in which M

309、r Lethlean has a substantial financial interest,for consultingservices provided in the normal course of business and at normal commercial rates.e)amounts of$26,667 paid or due and payable to a company in which Mr Kennedy has a substantial financial interest for directors fees.f)administration,accoun

310、ting and secretarial fees of$147,600($92,475+$55,125)paid or due and payable to a company in which Mr Colless has asubstantial financial interest for services provided in the normal course of business and at normal commercial rates.2005 YEARSHORT-TERM BENEFITSPOST-EMPLOYMENT BENEFITSTOTALDIRECTORSCA

311、SH FEES/PER DIEMRETAINERCASH FEESSUPERANNUATIONOTHERNAME$Executive CommitteeI R Cornelius-150,000-150,000 D I Chalmers-540,387-540,387L A Colless-169,200-169,200Non-executive DirectorsA D Lethlean-79,200-79,200H D Kennedy40,000-40,000C.SERVICE AGREEMENTSFormal written consultancy agreements exist wi

312、th companies of which directors have a substantial financial interest as detailed below.No performance related bonuses or benefits are provided.J S F DunlopRetainer payable to John S Dunlop&Associates Pty Ltd,in which Mr Dunlop has a substantial financial interest,of$50,000 per annum plus per diem o

313、f$1,200 per day up to 4 days per month for consulting services over and above normal director duties.D I ChalmersManaging director retainer of$60,000 per annum payable to Leefab Pty Ltd in which Mr Chalmers has a substantial financial interest pursuant to aformal agreement for an initial term of two

314、 years commencing 1 October 2006.Geological consulting and management services provided by Multi Metal Consultants Pty Ltd in which Mr Chalmers has a substantial financial interestpursuant to a formal agreement for an initial term of two years commencing 1 October 2006.I R CorneliusRetainer payable

315、to Goldtrek Pty Ltd as trustee for the Lewis Trust,of which Mr Cornelius is a beneficiary,of$40,000 per annum plus per diem of$1,200 per day up to 4 days per month for consulting services over and above normal director duties.I J GandelRetainer payable to Gandel Metals Pty Ltd in which Mr Gandel has

316、 a substantial financial interest of$40,000 per annum plus per diem of$1,200 per dayup to 4 days per month for consulting services over and above normal director duties.A D LethleanRetainer payable to Rocky Rises Pty Ltd,in which Mr Lethlean has a substantial financial interest,of$40,000 per annum p

317、lus per diem of$1,200 perday up to 4 days per month for consulting services over and above normal director duties.D.SHARE-BASED PAYMENTSNo share based remuneration compensation plan exists.39ANNUAL REPORT 200614.SEGMENTAL INFORMATIONThe economic entity operates predominantly in one geographic locati

318、on.The operations of the economic entity consist of mining and exploration forgold and other minerals within Australia.15.RELATED PARTY TRANSACTIONSDIRECTORS(CURRENT)CONSOLIDATEDPARENT ENTITYRELATED PARTY2006200520062005TYPE OF TRANSACTION-DIRECTORSTERMS AND CONDITIONS$Management consultingDirectors

319、 retainerJ S F DunlopNormal commercial7,288-7,288-25,000-25,000-Geological consulting,including geological and technical support staff Directors retainerD I ChalmersNormal commercial521,662540,387451,524476,99415,000-15,000-Management consultingDirectors retainerI R CorneliusNormal commercial156,200

320、150,000156,200150,00020,000-20,000-Directors retainerI J Gandel16,667-16,667-ConsultingDirectors retainerA D LethleanNormal commercial20,10079,20020,10079,20037,200-37,200-Underwriting agreementI J Gandel5%of underwritten value71,580-71,580-DIRECTORS(RESIGNED DURING THE YEAR)CONSOLIDATEDPARENT ENTIT

321、YRELATED PARTY2006200520062005TYPE OF TRANSACTION-DIRECTORSTERMS AND CONDITIONS$Financial,administration,accounting and Company Secretarial services and staffL A CollessNormal commercial147,600169,200105,600127,200Directors feesH D KennedyDirectors fees26,66740,00026,66740,000DIRECTORS SHARES AND OP

322、TIONSAggregate number of shares and share options of Alkane Exploration Ltd acquired from the Company during the year by Directors or their director-relatedentities:-20062005Ordinary shares1,762,066-Options over ordinary shares-1,762,066-Aggregate numbers of shares and share options of Alkane Explor

323、ation Ltd held directly,indirectly or beneficially by Directors or their director-relatedentities at balance date:20062005Ordinary shares35,354,787 13,813,978Options3,000,0005,000,000NOTES TO THE FINANCIAL STATEMENTS4016.CONTROLLED ENTITIESBOOK VALUEEQUITYCONTRIBUTION TO GROUPNAMEINCCLASS20062005200

324、6200520062005$%$Ventron Enterprises Ltd*BVIOrd-15,575Australian Zirconia LtdWAOrd11100100(23,546)(26,952)Skyray Properties LtdBVIOrd2,300,0002,300,000100100(2,255,774)(7,481)Kiwi Australian Resources Pty LtdNSWOrd-100100-(52,767)LFB Resources NLNSWOrd3,558,7003,558,700100100(604,428)(20,951)Australa

325、sian Geo-Data Pty LtdQldOrd6,8646,8647474(157)(212)5,865,5655,865,565Contribution to Group Profit(Loss)after minorities(2,883,905)(92,788)Parent Alkane Exploration Ltd(771,135)(1,679,609)Profit(loss)for year group(3,655,040)(1,772,397)Loans to(from)subsidiaries7,346,3026,643,203Provision for loss(7,

326、487,718)(4,609,099)Parent net investment in subsidiaries5,724,1497,899,669*Ventron Enterprises Ltd was disposed of on 19 September 2005CONSOLIDATEDPARENT ENTITY2006200520062005$17.RECONCILIATION OF CASH Cash as at the end of the financial year as shown in the Cash Flow Statement is reconciled to the

327、 related items in the balance sheet as follows:Cash at bank869,6842,773,733857,8492,765,926Call deposits3,884,916-3,884,916-4,754,6002,773,7334,742,7652,765,926Cash at bank bear a weighted average interest rate of 5.08%(2005 4.15%)18.RECONCILIATION OF NET CASH OUTFLOW FROM OPERATING ACTIVITIES TO OP

328、ERATING LOSS AFTER INCOME TAXOperating Profit(Loss)(3,655,095)(1,772,472)(3,649,754)(1,718,417)Write down in value of tenements in subsidiaries-2,878,61938,808Non-cash fair value adjustments(49,017)(114,337)(49,188)(99,958)Exploration3,227,124355,060391,767301,369(Profit)Loss on share trading(2,659)

329、(2,659)Loss on sale of assets3,015127,9183,015127,918Changes in net current assets and liabilities(263,292)293,554(276,991)214,269Net cash provided for operating activities(737,265)(1,112,936)(702,532)(1,138,670)The Company has no credit standby or financing facilities in place other than disclosed

330、on the statement of financial position.41ANNUAL REPORT 200619.SUBSEQUENT EVENTSOn 19 April 2007,the Company is scheduled to hold a shareholders meeting to approve the issue of options to employees and consultants and todirectors of the Company.No other matter or circumstance has arisen since 31 Dece

331、mber 2006 that has or may significantly affect the operations of the Company,the results ofthe Company,or the state of affairs of the Company in the financial year subsequent to the financial year ended 31 December 2006.20.EARNINGS PER SHARE(EPS)CONSOLIDATEDPARENT ENTITY2006200520062004$Basic earnin

332、gs per share(0.02)(0.01)(0.02)(0.01)2006200520062005NUMBERNUMBERNUMBERNUMBERThe weighted average number of ordinary shares on issue used in the calculation of basic earnings per share179,716,591151,986,034179,716,591151,986,034The diluted earnings per share is not materially different from the basic

333、 earnings per share.21.COMMITMENTS FOR EXPENDITUREMineral Tenement LeasesIn order to maintain current rights of tenure to mining tenements,the Company will be required to outlay in 2007 amounts of approximately$1,715,000(2006$1,256,000)in respect of tenement lease rentals and exploration expenditures to meet the minimum expenditure requirements of the variousMines Departments in Australia.These ob