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SECURITIES AND EXCHANGE COMMISSION
o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Securities to be registered pursuant to Section 12(b) of the Act: | None | |
Securities to be registered pursuant to Section 12(g) of the Act: | common shares | |
(Title of Class) |
Large accelerated fileo | Accelerated fileo | Non-accelerated fileþ |
U.S. GAAP o | International Financial Reporting Standards as issued | Other þ | ||
By the International Accounting Standards Board o |
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artisanal mining | mining at small-scale mines (and to a lesser extent quarries) that are labor intensive, with mechanization being at a low level and basic. Artisanal mining can encompass all small, medium, large, informal, legal and illegal miners who use rudimentary processes to extract valuable rocks and minerals from ore bodies. | |
bitumen | known as asphalt or tar, bitumen is the brown or black viscous residue from the vacuum distillation of crude petroleum. | |
breccia | a rock in which angular fragments are surrounded by a mass of finer-grained material. | |
C-horizon soil | the soil parent material, either created in situ or transported into its present location. Beneath the C horizon lies bedrock. | |
concentrate | a concentrate of minerals produced by crushing, grinding and processing methods such as gravity, flotation or leaching. | |
exploration stage | the search for mineral deposits which are not in either the development or production stage. | |
Form 43-101 | technical report issued pursuant to Canadian securities rules, the objective of which is to provide a summary of scientific and technical information concerning mineral exploration, development and production activities on a mineral property that is material to an issuer. The NI 43-101 Report is prepared in accordance with the National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). The 43-101 Form sets out specific requirements for the preparation and contents of a technical report. | |
feasibility study | a comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production. | |
gneiss | a coarse-grained, foliated rock produced by regional metamorphism. The mineral grains within gneiss are elongated due to pressure and the rock has a compositional banding due to chemical activity. | |
grade | the metal content of rock with precious metals. Grade can be expressed as troy ounces or grams per tonne of rock. | |
granodiorite | a medium to coarse-grained intrusive igneous rock, intermediate in composition between quartz diorite and quartz monzonite. | |
gold deposit | a mineral deposit mineralized with gold. | |
hydrothermal | the products or the actions of heated waters in a rock mass such as a mineral |
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deposit precipitating from a hot solution. | ||
igneous | a primary type of rock formed by the cooling of molten material. | |
inferred mineral resource | that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and reasonable assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes. | |
intrusion | intrusive-molten rock which is intruded (injected) into spaces that are created by a combination of melting and displacement. | |
mafic | igneous rocks composed mostly of dark, iron- and magnesium-rich minerals. | |
metallurgical tests | scientific examinations of rock/material to determine the optimum extraction of metal contained. Core samples from diamond drill holes are used as representative samples of the mineralization for this test work. | |
mineral resource | a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. | |
ore | a naturally occurring rock or material from which minerals, such as gold, can be extracted at a profit; a determination of whether a mineral deposit contains ore is often made by a feasibility study. | |
open pit | a mining method whereby the mineral reserves are accessed from surface by the successive removal of layers of material usually creating a large pit at the surface of the earth. | |
ounce or oz. | a troy ounce or 20 pennyweights or 480 grains or 31.103 grams. | |
petrology | a field of geology which focuses on the study of rocks and the conditions by which they form. There are three branches of petrology, corresponding to the three types of rocks: igneous, metamorphic, and sedimentary. | |
pre-feasibility study | a comprehensive study of the viability of a mineral project that has advanced to a stage where the mining methods, in the case of underground mining, or the pit configurations, in the case of an open pit, has been established, where effective methods of mineral processing has been determined, and includes a financial analysis based on reasonable assumptions of technical, engineering, legal, operating, and economic factors and evaluation of other relevant factors which are sufficient for a Qualified Person, acting reasonably, to determine if all or part of the Mineral Resource |
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may be classified as a Mineral Reserve. | ||
probable reserve (Canadian definition) | the economically mineable part of an indicated and, in some circumstances, a measured mineral resource demonstrated by a least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. | |
probable reserve (U.S. definition) | reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation. | |
prospect | an area prospective for economic minerals based on geological, geophysical, geochemical and other criteria. | |
production stage | all companies engaged in the exploitation of a mineral deposit (reserve). | |
proven reserve (Canadian definition) | the economically mineable part of a measured mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. | |
proven reserve (U.S. definition) | reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quantity are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral contents of reserves are well established. | |
qualified person | an individual who is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these; has experience relevant to the subject matter of the mineral project and any technical reports; and is a member or licensee in good standing of a professional association. | |
reserve | that part of a mineral deposit, which could be economically and legally extracted or produced at the time of the reserve determination. Reserves are customarily stated in terms of “ore” when dealing with metalliferous minerals such as gold or silver. | |
schists | a metamorphic rock containing abundant particles of mica, characterized by strong foliation, and originating from a metamorphism in which directed pressure plays a significant role. | |
shaft | a vertical or inclined tunnel in an underground mine driven downward from surface. |
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shear | a tabular zone of faulting within which the rocks are crushed and flattened. | |
skarn | a lime-bearing silicate derived from nearly pure limestone and dolomite with the introduction of large amounts of silicon, aluminum, iron, and magnesium. | |
stoping | the act of mining in a confined space. | |
stratigraphic units | sequences of bedded rocks in specific areas. | |
strike | the direction of line formed by intersection of a rock surface with a horizontal plane. Strike is always perpendicular to direction of dip. | |
thrust fault | a particular type of fault, or break in the fabric of the Earth’s crust with resulting movement of each side against the other, in which a lower stratigraphic position is pushed up and over another. This is the result of compressional forces. | |
trenching | the surface excavation of a linear trench to expose mineralization for sampling. | |
vein | a tabular body of rock typically of narrow thickness and mineralized occupying a fault, shear, fissure or fracture crosscutting another pre-existing rock. |
1 mile (mi) | = 1.609 kilometres (km) | 2,204 pounds (lbs) | = 1 tonne | |||
1 yard (yd) | = 0.9144 meter (m) | 2,000 pounds/1 short ton | = 0.907 tonne | |||
1 acre | = 0.405 hectare (ha) | 1 troy ounce | = 31.103 grams | |||
1 kilometre (km) | = 1,000 meters |
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Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | ||||||||||||||||
December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(US$) | Audited | Audited | Audited | Audited | Audited | |||||||||||||||
CANADIAN GAAP | ||||||||||||||||||||
Revenue | 16,400,740 | 7,275,324 | 6,509,318 | 1,449,688 | Nil | |||||||||||||||
Income (Loss) for the Period | - | 9,346,892 | - | 20,200,995 | - | 5,031,456 | - | 8,358,483 | - | 2,285,088 | ||||||||||
Basic & Diluted Earnings (Loss) Per Share | -0.0383 | -0.0869 | -0.0251 | -0.0508 | -0.0173 | |||||||||||||||
Dividends Per Share | Nil | Nil | Nil | Nil | Nil | |||||||||||||||
Period-end Shares | 268,458,779 | 232,423,101 | 232,377,011 | 164,678,791 | 131,846,200 | |||||||||||||||
Cash | 5,718,725 | 4,161,735 | 27,144,487 | 3,516,452 | 347,325 | |||||||||||||||
Working Capital | 7,400,950 | 5,424,272 | 25,806,600 | 1,474,685 | - | 1,596,924 | ||||||||||||||
Mineral Properties | 7,203,352 | 7,810,307 | 9,998,806 | 8,587,008 | 8,628,432 | |||||||||||||||
Deferred Development and Exploration | 25,049,053 | 26,067,847 | 22,105,147 | 11,766,997 | 11,225,596 | |||||||||||||||
Long-term Liabilities | 770,010 | 1,046,883 | 734,907 | 763,318 | 301,392 | |||||||||||||||
Capital Stock | 97,318,003 | 88,904,501 | 88,360,218 | 56,648,979 | 42,632,008 | |||||||||||||||
Non-controlling Interest | (444,043 | ) | Nil | Nil | Nil | Nil | ||||||||||||||
Shareholders’ Equity | 48,314,083 | 48,940,283 | 50,766,055 | 30,833,615 | 23,487,295 | |||||||||||||||
Total Assets | 54,024,268 | 54,282,352 | 55,255,384 | 35,628,632 | 26,166,060 | |||||||||||||||
US GAAP | ||||||||||||||||||||
Net Comprehensive (Loss) | - | 8,056,464 | - | 20,957,186 | - | 10,440,892 | - | 9,021,981 | - | 6,136,585 | ||||||||||
Income (Loss) Per Share — basic & diluted | - | 0.03 | - | 0.05 | - | 0.08 | - | 0.05 | - | 0.05 | ||||||||||
Mineral Properties | 7,172,729 | 7,779,684 | 9,960,619 | 8,554,857 | 8,628,432 | |||||||||||||||
Deferred Development and Exploration | 4,797,776 | 3,545,531 | Nil | Nil | Nil | |||||||||||||||
Non-controlling Interest | (339,358 | ) | Nil | Nil | Nil | Nil | ||||||||||||||
Shareholders’ Equity | 27,967,401 | 26,313,898 | 28,541,936 | 18,966,452 | 12,261,699 | |||||||||||||||
Total Assets | 33,677,586 | 32,655,967 | 33,031,265 | 23,344,336 | 14,940,464 |
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• | increase our vulnerability to adverse industry and general economic conditions; | ||
• | require us to dedicate a material portion of our cash flow from operations to make scheduled principal payments on our debt, thereby reducing the availability of our cash flow for working capital, capital investments and other business activities; | ||
• | limit our ability to obtain additional financing to fund future working capital, capital investments and other business activities; | ||
• | limit our flexibility to plan for, and react to, changes in our business and industry; and | ||
• | place us at a competitive disadvantage relative to our less leveraged competitors. |
• | our business will generate sufficient cash flow from operations; | ||
or | |||
• | future sources of funding will be available to us in amounts sufficient to enable us to fund our capital needs. |
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Toronto, Ontario, M5C 1C3
Canada
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Fiscal Year | Nature of Issuance | Number of Shares | Capital Raised | |||||||
December 31, 2000 | Private Placement(1) | 6,625,000 | CAD$ | 1,840,000 | ||||||
December 31, 2001 | Private Placement(2) | 10,964,500 | CAD$ | 3,944,000 | ||||||
December 31, 2002 | Nil | Nil | Nil | |||||||
December 31, 2003 | Private Placement(3) | 21,163,459 | CAD$ | 6,832,063 | ||||||
December 31, 2004 | Private Placement(4) | Nil | Nil | |||||||
December 31, 2005 | Private Placement (5) | 32,645,000 | CAD$ | 11,063,500 | ||||||
December 31, 2006 | Private Placement(6) | 27,000,000 | CAD$ | 15,660,000 | ||||||
December 31, 2007 | Private Placement and Public Offering(7) (8) | 60,106,503 | CAD$ | 37,153,601 | ||||||
December 31, 2008 | Nil | Nil | Nil | |||||||
December 31, 2009 | Private Placement(9) | 16,216,216 | US$ | 3,000,000 |
Notes: | ||
(1) | In 2000, the Company raised a total of CAD $1,840,000 through two separated financings: |
(i.) | In March 2000, 4,500,000 units were sold for CAD$0.22/unit. Each unit was comprised of one common share and one two-year share purchase warrant entitling the holders to acquire up to 4,500,000 shares at CAD$0.30/unit during the first year and at CAD$0.40/unit during the second year; | ||
(ii.) | In August 2000, 2,125,000 common shares were issued at CAD$0.40/share to various holders. |
(2) | In 2001, the Company completed three financings and raised a total of CAD$3,944,000: |
(i.) | In February, 1,200,000 units were sold for CAD$0.60/unit. Each unit was comprised of one common share and one share purchase warrant, each whole purchase warrant exercisable at an exercise price of CAD$0.75/warrant for a one-year period, and CAD$1.00/warrant for the second year; | ||
(ii.) | In July, 552,000 units were sold for CAD$0.50/unit. Each unit was comprised of one common share and one share purchase warrant, each whole purchase warrant exercisable at an exercise price of CAD$0.65/warrant for a one-year period, and CAD$1.00/warrant for the second year; | ||
(iii.) | In December, 9,212,500 units were sold for CAD$0.32/unit. Each unit was comprised of one common share and one share purchase warrant, each whole purchase warrant exercisable at an exercise price of CAD$0.32. |
(3) | In 2003, a total placement, raising CAD$6,832,063 was completed in three closings: |
(i.) | In February, 1,562,750 units were sold for CAD$0.40/unit. Each unit was comprised of one common share and one share purchase warrant, each whole purchase warrant exercisable at an exercise price of CAD$0.40/unit for a one-year period; | ||
(ii.) | In March, 3,267,500 units were sold for CAD$0.40/unit. Each unit was comprised of one common share and one share purchase warrant, each whole purchase warrant exercisable at an exercise price of CAD$0.50/warrant for a one-year period; | ||
(iii.) | In October, 16,333,209 units were sold for CAD$0.30/unit. Each unit consists of one common share and one-half of one common share purchase warrant, each whole purchase warrant exercisable at an exercise price of CAD$0.40/unit for a one-year period and thereafter at a price of CAD$0.50/unit for a one-year period. |
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(4) | On June 29, 2004, the Company closed a “Vend-In Agreement”, whereby it acquired the remaining 42.82% interest in the NVMC joint venture. The acquisition resulted in the issuance of 13,483,133 common shares of the Company of which Zedex received 3,205,467 shares and Ivanhoe received 10,277,646 shares. No capital was raised in this transaction. |
(5) | In 2005, a total placement, raising CAD$11,063,500 was completed in two closings: |
(i.) | In January, the Company closed a CAD$5,080,000 private placement with Dragon Capital Markets Limited (“Dragon Capital”) by issuing 12.7 million common shares priced at CAD$0.40/unit. In consideration for its service, Dragon Capital was paid a finders’ fee of US$261,471 and was granted 1,270,000 warrants exercisable at CAD$0.40/unit for a period of one year from the date of closing; | ||
(ii.) | In September, the Company received CAD$5,983,500 from the closing of a private placement and issued 19,945,000 common shares priced at CAD$0.30/share. |
(6) | On March 31, 2006, a private placement closed where the Company issued 27,000,000 shares at CAD$0.58 raising CAD$15,660,000. |
(7) | On March 19, 2007, the Company completed a non-brokered private placement, of 21,428,571 shares at a price of CAD$0.56 per share, for gross proceeds of CAD$12,000,000 and net proceeds of CAD$11,967,772. The net proceeds were used for ongoing exploration, feasibility studies and development work on the Company’s mineral projects and for general corporate purposes. |
(8) | On August 10, 2007, the Company closed an offering (the “Offering”) of units of the Company (“Units”) for aggregate gross proceeds of CAD$25,000,000 (the “Closing”). Pursuant to the Offering, the Company issued and sold a total of 38,461,538 Units at a price of CAD$0.65 per Unit. Each Unit was comprised of one common share of the Company (a “Share”) and one-half of one common share purchase warrant (“Warrant”). Each whole Warrant will be exercisable at CAD$0.80 until August 10, 2009. The Company granted the Agents an over-allotment option (the “Over-Allotment Option”) exercisable in whole or in part at the sole discretion of the Agents, for a period of 30 days from closing of the Offering, to purchase up to an additional 5,769,230 Shares (“Additional Shares”) at a price of CAD$0.62 per Additional Share and up to an additional 2,884,615 Warrants (“Additional Warrants”) at a price of CAD$0.06 per Additional Warrant, for further gross proceeds of up to CAD$3,750,000, if exercised in full. In consideration for their services, the Corporation paid a fee of CAD$1,500,000 to the Agents (equal to 6% of the gross proceeds realized from the sale of Units). The Agents were also granted non-transferable options (the “Compensation Options”) to acquire 2,307,692 Units (each an “Agents’ Unit”) (equal to 6% of the number of Units issued pursuant to the Offering). Each Compensation Option is exercisable to acquire one Agents’ Unit at CAD$0.65 until August 10, 2009. Each Agent’s Unit consists of one common share of the Company and one-half of one common share purchase warrant (“Agents’ Warrants”). Each whole Agents’ Warrant will be exercisable to acquire one common share of the Company (a “Agents’ Warrant Share”) at a price of CAD$0.80 per Agents’ Warrant Share until August 10, 2009. On September 7, 2007,the over-allotment option granted to the agents in connection with the Company’s public offering of units (the “Offering”), was exercised in respect of 216,394 common shares (“Additional Shares”) at a price of CAD$0.62 per Additional Share and 323,947 warrants (“Additional Warrants”) at a price of CAD$0.06 per Additional Warrant, resulting in additional gross proceeds of CAD$153,601. Each whole Warrant will be exercisable at CAD$0.80 until August 10, 2009. The partial exercise of the over-allotment options brings the aggregate gross proceeds to the Company under the Offering to CAD$25,153,601. The net |
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proceeds from the Offering are being used for further exploration and feasibility studies at the Company’s Bong Mieu Gold and Phuoc Son Gold properties in Vietnam and the Capcapo property in the Philippines and for working capital and general corporate purposes. |
(9) | In May 2009 the Company completed a non-brokered private placement of 16,216,216 shares at a price of US$0.1850 per share, for gross proceeds of $3,000,000 and net proceeds of US$2,845,264. Agents for the private placement were paid a cash commission of 5% of the gross proceeds of the placement. |
(10) | In March 2010, the Company obtained private placement funding of CAD$12,750,000. The net funds will be used in the establishment of a processing plant at Phuoc Son. The financing is in the form of nine percent subordinated unsecured convertible promissory notes which mature on March 26, 2014. |
(11) | In June 2010 the Company obtained private placement funding of US$21,960,000. The net proceeds will be used for the construction of a processing facility at the Company’s Phuoc Son and Bong Mieu Mines in Vietnam and for general exploration and corporate purposes. The financing is in the form of gold delivery notes which mature on May 31, 2013 and bear interest at a rate of eight percent. |
Capital Assets, Mineral Properties and Deferred | ||||
As at December 31 | Exploration and Development Costs | |||
2000 | $ | 7,535,463 | ||
2001 | $ | 7,058,678 | ||
2002 | $ | 4,957,736 | ||
2003 | $ | 6,759,545 | ||
2004 | $ | 15,468,222 | ||
2005 | $ | 25,387,978 | ||
2006 | $ | 30,148,598 | ||
2007 | $ | 43,132,402 | ||
2008 | $ | 44,562,894 | ||
2009 | $ | 41,683,143 |
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1. | The amount of mineralization which has been established, and the likelihood of increasing the size of the mineralized deposit through additional drilling; | ||
2. | The expected mining dilution; | ||
3. | The expected recovery rates in processing; | ||
4. | The cost of mining the deposit; | ||
5. | The cost of processing the ore to separate the gold from the host rocks, including refining the precious or base metals; | ||
6. | The costs to construct, maintain, and operate mining and processing activities; | ||
7. | Other costs associated with operations including permit and reclamation costs upon cessation of operations; | ||
8. | The costs of capital; | ||
9. | The costs involved in acquiring and maintaining the property; and | ||
10. | The price of the precious or base minerals. For example, the price of one ounce of gold for the years 2001-2009 ranged from a low of $271 in 2001, to a high of $1,212.50 in 2009. At June 30 , 2010, the price of gold was $1,244 per ounce1. |
1 | Based upon the Average Spot Price of Gold, London PM fix. |
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• | seeking to sell the deposit or the Company to third parties; | ||
• | entering into a joint venture with larger mining company to mine the deposit; or | ||
• | placing the property into production ourselves. |
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PROJECT | OWNER | LICENSE | AREA | STATUS | GRANT DATE | TERM | EXPIRY DATE | |||||||
1. Bong Mieu | BOGOMIN | Certificate No 331022000008 | 30 Sq Km | Granted | 5/3/90 | 25 years | 5/3/2015 | |||||||
2. Phuoc Son | PSGC | IL 2355/GP | 70 Sq Km | Granted | 8/7/2008 | 25 years | 20/10/2033 |
EXPIRY | ||||||||||||||||
PROJECT | MINE | OWNER | LICENSE | AREA | STATUS | GRANT DATE | TERM | DATE | ||||||||
1. Bong Mieu | Ho Gan (VN220) | BOGOMIN | ML592/CNNg | 358 Ha | Granted | 22/7/92 | 25 years | 22/7/2017 | ||||||||
Bong Mieu | Nui Kem (VN230) | BOGOMIN | ML592/CNNg | 358 Ha | Granted | 22/7/92 | 25 years | 22/7/2017 | ||||||||
Bong Mieu | Ho Ray | BOGOMIN | Proposed new MLA | Not yet defined | Proposed | — | — | — | ||||||||
2. Phuoc Son | Dak Sa Bai Dat | PSGC | ML116/GP-BTNMT | 1.00 Ha | Granted | 23/1/2006 | 5.5 years | 31/7/2011 | ||||||||
Phuoc Son | Dak Sa Bai Go | PSGC | ML116/GP-BTNMT | 0.52 Ha | Granted | 23/1/2006 | 5.5 years | 31/7/2011 |
Phuoc Son | PSGC | EL 67/GP-BTNMT | 42 Sq Km | Granted | 10/01/2008 | 2 years | 10/01/2010 |
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Phuoc Son | PSGC | EL 67/GP-BTNMT | 28 Sq Km | Grant Pending | 10/01/2010 | 2 years | 10/01/2012 | |||||||||
Bong Mieu | BOGOMIN | EL 2125/GP- BTNMT | 30 Sq Km | Granted | 24/10/2008 | 2 years | 24/10/2010 |
COMPANY | TYPE OF CERTIFICATE | DATE GRANTED | TERM | EXPIRY DATE | ||||
Bong Mieu Gold Mining Company | Gold export certificate | Dec 31, 2009 | 1 year | Dec 31, 2010 | ||||
Phuoc Son Gold Mining Company | Gold export certificate | Dec 31, 2009 | 1 year | Dec 31, 2010 | ||||
Bong Mieu Gold Mining Company | Land Use Certificate | Oct 9, 1993 | 25 years | Sep 2017 |
PROJECT | E.L. REG. # | REG. HOLDER | ||||||
1. Phuoc Son | 67/GP-BTNMT | PSGMC | ||||||
2. Bong Mieu | 2125/GP BTNMT | BOGOMIN | ||||||
3. Capcapo | MPSA#141, EXPA#085 | AMIC | ||||||
4. Khau Pum | — | OPVL | ||||||
5. Phuoc Thanh | — | PSGC | ||||||
6. Sanakham | MEAPA | OYM |
MEASURED AND INDICATED MINERAL RESOURCES
INFERRED MINERAL RESOURCES
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Reserves | 2008 | 2009 | ||||||||||||||||||||||||
Property | Reserve Category | Tonnes | Gold Grade (g/t) | Contained Gold (oz) | Tonnes | Gold Grade (g/t) | Contained Gold (oz) | |||||||||||||||||||
Bong Mieu Gold Property(1) | Proven | 0 | — | 0 | — | — | — | |||||||||||||||||||
Probable | 289,000 | 2.90 | 26,900 | 254,627 | 2.72 | 22,236 | ||||||||||||||||||||
Total P&P | 289,000 | 2.90 | 26,900 | 254,627 | 2.72 | 22,236 | ||||||||||||||||||||
Phuoc Son Gold Property(2) | Proven | 235,650 | 8.72 | 66,070 | 205,053 | 6.53 | 43,031 | |||||||||||||||||||
Probable | 694,740 | 7.48 | 167,080 | 675,316 | 7.21 | 156,591 | ||||||||||||||||||||
Total P&P | 930,390 | 7.79 | 233,150 | 880,369 | 7.05 | 199,622 |
Resources | 2008 | 2009 | ||||||||||||||||||||||||
Property | Resource Category | Tonnes | Gold Grade (g/t) | Contained Gold (oz) | Tonnes | Gold Grade (g/t) | Contained Gold (oz) | |||||||||||||||||||
Bong Mieu Gold Property(3) | Measured | 1,071,900 | 2.13 | 73,400 | 973,660 | 2.02 | 63,080 | |||||||||||||||||||
Indicated | 2,511,600 | 1.75 | 141,310 | 2,257,640 | 1.66 | 120,545 | ||||||||||||||||||||
Total M&I | 3,800,200 | 2.13 | 260,010 | 3,231,300 | 1.77 | 183,624 | ||||||||||||||||||||
Inferred | 4,739,800 | 1.40 | 213,340 | 4,729,320 | 1.40 | 212,930 | ||||||||||||||||||||
Bong Mieu Ancillary Metal Credits(7) | Measured | 32,340 | 24,647 | |||||||||||||||||||||||
Indicated | 52,380 | 39,915 | ||||||||||||||||||||||||
Total M&I Credits | 84,720 | 64,562 | ||||||||||||||||||||||||
Inferred credits | 85,390 | 65,110 | ||||||||||||||||||||||||
Bong Mieu (Historic Nui Kem u/g) (3.3) | Measured | 24,200 | 5.00 | 3,890 | 24,200 | 5.00 | 3,890 | |||||||||||||||||||
Indicated | 192,700 | 6.60 | 40,890 | 192,700 | 6.60 | 40,890 | ||||||||||||||||||||
Total (M + I) | 216,900 | 6.42 | 44,780 | 216,900 | 6.42 | 44,780 | ||||||||||||||||||||
Inferred | 1,220,000 | 8.00 | 313,792 | 1,220,000 | 8.00 | 313,792 | ||||||||||||||||||||
Phuoc Son Gold Property(4) | Measured | 163,320 | 12.76 | 67,000 | 132,964 | 10.28 | 43,933 | |||||||||||||||||||
Indicated | 546,350 | 10.16 | 178,470 | 527,571 | 9.92 | 168,204 | ||||||||||||||||||||
Total M&I | 709,670 | 10.76 | 245,470 | 660,535 | 9.99 | 212,137 | ||||||||||||||||||||
Inferred | 1,884,200 | 6.63 | 401,640 | 1,878,685 | 6.63 | 399,017 | ||||||||||||||||||||
Tien Thuan Gold Property(5) | Project at initial exploration stage, no resource estimate conducted at date of publication | |||||||||||||||||||||||||
Bau Gold Property(6) | Resource in the process of being converted from JORC to NI 43-101 - results not available at date of publication |
Global Totals: | 2008 | 2009 | ||||||
Total Proven & Probable Reserves Contained Ounces | 260,050 | 221,858 | ||||||
Total Measured & Indicated Resource Contained Ounces | 505,480 | 395,761 | ||||||
Total Inferred Resource Contained Ounces | 614,980 | 611,946 | ||||||
Total Measured & Indicated Ancillary Metal Credit Contained Ounces | 84,720 | 64,562 | ||||||
Total Inferred Ancillary Metal Credit Contained Ounces | 85,390 | 65,110 | ||||||
Total Historic Measured + Indicated Resource Contained Ounces | 44,780 | 44,780 | ||||||
Total Historic Inferred Resource Contained Ounces | 313,792 | 313,792 |
* | Measured and Indicated Resource Estimates Includes Proven and Probable Reserves | |
(1) | Bong Mieu reserves were estimated by Olympus in accordance with Canadian National Instrument NI 43-101 and the Council of the Canadian Institute of Mining, Metallurgy and Petroleum definitions & standards and were independently reviewed by Terra Mining Consultants and Stevens & Associates (“TMC/SA”) in March 2009. Copy of the TMC/SA technical report entitled “Updated Technical Review of Bong Mieu Gold Project in Quang Nam Province, Vietnam”, dated April, 2009 can be found in the Company’s filings at www.sedar.com. Deposit notes and 2009 reserve impairments are as noted below: | |
1.1 Ho Gan Deposit-Lower and upper grade-cutoffs are 0.80 g/t Au and 10.00 g/t Au respectively. The mining dilution factor is 10% @ 0.30 g/t Au. | ||
No new reserves were developed during 2009. Accordingly, the remaining reserve was estimated by deducting the tonnage mined during 2009 from the official reserve remaining at YE 2008. The tonnage mined during 2009 was estimated by reconciling the tonnage (by truck count) with mill tonnage (by weightometer). | ||
1.2 Ho Ray-Thac Trang Deposit —No reserves have yet been estimated. | ||
1.3 Nui Kem Deposit —No reserves have yet been estimated. | ||
(2) | Dak Sa (Bai Dat and Bai Go Sector) reserves were estimated by Olympus (based on a 3.00 g/t Au stope cut-off, practical stope layouts and the application of appropriate mining dilution rules and minimum width criteria) in accordance with Canadian National Instrument NI 43-101 and the Council of the Canadian Institute of Mining, |
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Metallurgy and Petroleum definitions & standards. This estimate was independently audited by Terra Mining Consultants and Stevens and Associates (“TMC/SA”) in March 2008. This TCM/SA report entitled “Technical Report on the Phuoc Son Project in Quang Nam Province, Vietnam"(March 2008), is within Company filings at www.sedar.com. Deposit notes and 2009 reserve impairments are as noted below: | ||
2.1 Bai Dat Sector | ||
During 2009, ore was mined from Bai Dat, but no new (NI 43-101 status) reserves were developed. The 2009 reserve was therefore determined by deducting the ore mined during 2009 from the 2008 YE reserve. The ore mined during 2009 was determined by underground survey reconciled with the official milled tonnage (by weightometer). The 2008 reserve employed a lower grade-cutoff of 3.00 g/t Au and an upper cutoff of 100.00 g/t Au. | ||
2.2 Bai Go Sector | ||
During 2009, no mining was conducted and no new (NI 43-101 status) reserves were developed. Accordingly, the 2009 reserve remains the same as the YE 2008 reserve (at a lower grade-cutoff of 3.00 g/t Au and an upper cut of 80.00 g/t Au). | ||
(3) | Bong Mieu resources were first estimated by Olympus (in accordance with National Instrument NI 43-101 and the Council of the Canadian Institute of Mining, Metallurgy and Petroleum definitions & standards) and independently audited/updated by Watts Griffis and McOuat (WGM) (“A Technical Review of the Bong Mieu Gold Project in Quang Nam Province, Vietnam”), in September 2004, by Terra Mining Consultants and Stevens & Associates (“TMC/SA”) (“Technical Review of the Bong Mieu Gold Project in Quang Nam Province, Vietnam”) in August 2007 and by TMC/SA (“Updated Technical Review of Bong Mieu Gold Project in Quang Nam Province, Vietnam”) in March 2009. Copies of these reports can be found within Company filings at www.sedar.com. Deposit notes and 2009 resource impairments are as noted below: | |
3.1 Bong Mieu Central (Ho Gan) Deposit | ||
During 2009, no new (NI43-101 status) resources were developed. The 2009 resource was therefore determined by deducting the ore mined during 2009 (refer above) from the 2008 YE resource . | ||
3.2 Bong Mieu East (Ho Ray-Thac Trang) Deposit | ||
During 2009, no new (NI43-101 status) resources were developed. The 2009 estimate therefore remains the same as at YE 2008. The 2008 estimate incorporated drilling completed by Olympus during 2008 (using upper and lower grade cutoffs of 0.5 g/t Au and 10 g/t Au respectively) to update prior NI43-101 and CIMM standard estimates/audits, as independently reviewed by TMC/SA in March 2009 (refer above). | ||
3.3 Bong Mieu South (Nui Kem) Deposit (Historic Resource) | ||
The most recent independent estimate of the Nui Kem underground resource was by Continental Resource Management Pty Ltd (CRM) in 1993, in accordance with JORC (1989) standards. This estimate used lower and upper grade-cutoffs of 3.00 g/t Au and 30.00 g/t Au respectively. Although this CRM estimate pre-dates NI 43-101, it was independently reviewed by Watts, Griffis and McOuat (“WGM”) in 1997 and again in 2007 by TMC/SA (refer above). | ||
Neither WGM nor TMC/SA audited the CRM estimate, nor did they attempt to reclassify the Nui Kem resource to meet NI43-101 standards. Nonetheless, both independent consultant groups consider it to have been carried out in a manner consistent with standard industry practice of the time and deem it to be relevant and of historic significance. It is accordingly herein reported as a historical resource. | ||
During 2009, Olympus produced a total of 41,316 tonnes of ore grading 5.94 g/t Au from stoping and underground exploration developments. Although depth considerations effectively preclude exploratory drilling from surface, it is anticipated that underground drilling and exploratory headings will generate sufficient data to enable a NI 43-101 compliant estimate to be prepared at some time in the future. The CRM 1993 resource is not considered to be a “current” resource and should not be relied upon pending re-estimation to current NI43-101 standards. | ||
(4) | The Phuoc Son resources were first independently reviewed by Watts, Graffis and McOuat Limited. Copy of their report entitled “A Technical Review of the Phuoc Son Gold Project in Quang Nam Provience, Vietnam”, dated January 30, 2004, can be found in the Company’s filings atwww.sedar.com. Dak Sa (Bai Dat and Bai Go Sector) resources were estimated by Olympus in January 2008, in accordance with National Instrument NI 43-101 and the Council of the Canadian Institute of Mining, Metallurgy and Petroleum definitions & standards. This estimate was independently reviewed by TCM/SA in a technical report entitled “Technical Report on the Phuoc Son Project in |
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Quang Nam Province, Vietnam”, dated March 2008, copy of which can be found in the Company’s filings at www.sedar.com. Deposit notes and 2009 resource impairments are as noted below: | ||
4.1 Dak Sa South (Bat Dat) Deposit | ||
During 2009 ore was mined from Bai Dat, but no additional (NI43-101 status) resources were defined. Accordingly, the YE 2009 resource estimate (which includes mining reserves) was determined by impairing the 2008 resource by 2009 mining depletion (refer above). The 2008 estimate employed lower and upper grade cutoffs of 3.00 g/t Au and 100.00 g/t Au respectively. | ||
4.2 Dak Sa North (Bai Go) Deposit | ||
During 2009, no mining was conducted and no additional (NI43-101 status) resources were defined. The 2009 YE resource estimate (which includes mining reserves) accordingly remains as at YE 2008. The 2008 estimate employed lower and upper grade cutoffs of 3.00 g/t Au and 80.00 g/t Au respectively. | ||
(5) | No Tien Thuan resource is disclosed in 2009 because an estimate (to NI43-101 standard) is yet to be conducted. A historic (1993) gold resource estimate by the Geological Survey of Vietnam cannot presently be disclosed because it is neither JORC nor NI43-101 compliant. It is contemplated that drilling by Olympus during 2010 may enable an NI43-101 standard estimate by year end 2010. | |
(6) | The 2009 estimate of Bau resources is not disclosed because the estimate to NI43-101 standard is still in progress. The Bau mineral property was acquired from Zedex Minerals Ltd in January 2010. At that time, the property was attributed with a resource that had been estimated to Australian (JORC) standards by consultants to Zedex Minerals Ltd. Olympus is presently having those resources independently verified and converted to the equivalent Canadian standards pursuant to NI43-101 and CIMM guidelines by independent consultants Terra Mining Consultants and Stevens Associates of New Zealand. This work is presently ongoing. When complete, the new resource estimate will be separately announced and the related technical report will be included within the company filings on www.sedar.com. | |
(7) | The gold-equivalent value of the Tungsten in the Bong Mieu East Resource was calculated using Tungsten value of US$200/MTU ($210 in 2008) and gold value of US$1100/oz ($880 in 2008) . Other metals, such as silver, copper, lead, zinc and fluorine, have not been included in the 2009 estimate because they are of insignificant value or are uneconomic to recover. | |
(8) | The mineral reserve and mineral resource estimates contained in the above table have been prepared in accordance with the Canadian Securities Administrators’ National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). Although generally the NI 43-101 standards are similar to those used by the United States Securities and Exchange Commission’s (“SEC”) Industry Guide No. 7, the definitions in NI 43-101 differ in certain respects from those under Industry Guide No. 7. Accordingly, mineral reserve and mineral resource information contained herein may not be comparable to similar information disclosed by U.S. companies. The diluted reserve estimates were first prepared by Olympus Staff in January 2008 and validated by Terra Mining Consultants and Stevens and Associates (“TMC/SA”) in March 2008. These estimates were both prepared in accordance with National Instrument NI 43-101 and the Council of the Canadian Institute of Mining, Metallurgy and Petroleum definition standards. The reserve estimates are based on a 3 g/t Au stope cut-off, practical stope and ore development layout and the application of appropriate dilution factors. | |
(9) | Commodity prices used over the last three years (in USD) were as follows: |
Commodity | 2007 Price | 2008 Price | 2009 Price | |||
Gold | US$700/oz | US$880/oz | US$1,120/oz | |||
Tungsten | US$250/MTU | US$210/MTU | US$150/MTU |
The 2008 - 2014 gold metal price forecasts used were those of Macquarie Bank (consistent with near term trailing gold price averages and the January 2008 Reuters poll), as follows: |
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YEAR | GOLD PRICE (US$) | |||
2008 | 960 | |||
2009 | 1050 | |||
2010 | 1000 | |||
2011 | 900 | |||
2012 | 800 | |||
2013 | 750 | |||
2014 | 750 | |||
2015 | 750 |
(10) | The Company currently operates three mines (Bong Mieu Central, Bong Mieu Underground and Phuoc Son), company ownership of which is 80% at Bong Mieu and 85% at Phuoc Son. The quantities disclosed relate to the whole mines. | |
Minor differences between estimated reserves and actual production have been accounted for in the respective reserve tables. There are no material variations to be disclosed. | ||
The Phuoc Son processing plant is yet to be constructed. Once steady-state metallurgical recovery has been achieved, metallurgical recovery factors for this mine will be reported by year-end average. | ||
An independent financial analysis of the Phuoc Son Deposit was conducted in 2008 by Mr John Glen of Meridian Capital Group Pty Ltd. | ||
The metallurgical recovery factor used was 90%, with sensitivity analyses at: +5%, -5% and -10%. |
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(c) | Geology |
• | Stage 1 (October 1998 — March 1999): reconnaissance surveying of the then 100 square kilometres license area, identification of the three major mineralized shear structures, and commencement of detailed exploration over the first of these structures (the Dak Sa shear zone); | |
• | Stage 2 (April 1999 — December 1999): continuation of detailed exploration over the southern end of the Dak Sa shear zone (including mapping/sampling and diamond drilling six holes at Bai Dat) and follow-up exploration at other sites (particularly at K7) within the balance of the license area; |
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• | Stage 3 (January 2000 to June 2000): grid soil sampling in the Dak Sa & K7 shear zones, rock sampling, geological mapping, pan concentrate survey, diamond drilling of 29 holes at Bai Dat, Bai Cu, Bai Chuoi and Bai Go, within the Dak Sa shear zone; | |
• | Stage 4 (July 2000 to December 2000): detailed geological mapping, nine square kilometres soil survey north of Bai Go, rock geochemistry, petrology and diamond drilling of 17 holes at Bai Dat, Bai Cu, Bai Chuoi and Bai Go; | |
• | Stage 5 (January 2001—December, 2001): continuation of drilling with 31 additional holes at the Bai Go, Bai Gio and Bo prospects, as well as geological mapping, rock and soil geochemistry, pitting, surface and underground channel sampling, petrology, and gridding at other prospects including K7, Hoa Son, Tra Lon, Suoi Cay, Vang Nhe, Khe Rin, Khe Do and Khe Cop; | |
• | Stage 6 (January 2002 to December, 2002): scout drilling at the Khe Rin, North Khe Do, Khe Do, Bai Buom, Tra Long and K7 prospects (32 drillholes), as well as pitting at Nui Vang, geological mapping/sampling, soil geochemistry, ground magnetometer surveying at Khe Rin-Khe Do and Bai Buom, reconnaissance mapping elsewhere, including Vang Nhe, Tra Long, K7 and Hoa Son; commencement of mine scoping studies at Dak Sa; and | |
• | Stage 7 (January 2003 to December 31, 2003): in-fill, step-out and geotechnical diamond drilling at Bai Dat, Bai Go, Bai Chuoi and Bai Cu (27 holes); preparation of mineral resource estimates for the Bai Dat and Bai Go deposits; continuation of the scoping studies. A diamond drilling program was completed at Bai Chuoi sector (between the Bai Dat and Bai Go deposits) and soil geochemical surveys were being conducted elsewhere on the property. |
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(f) | Resource Estimates |
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(e) | History of Exploration on Bong Mieu Gold Property |
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(f) | Main mineral occurrences |
(g) | Resource and Reserve Estimates |
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(e) | Resource and Reserve Estimates |
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(g) | Resource and Reserve Estimates |
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Q1-2009 | Q2-2009 | Q3-2009 | Q4-2009 | YTD 2009 | ||||||||||||||||
Tonnes of ore milled* | 37,576 | 32,288 | 37,231 | 33,164 | 140,259 | |||||||||||||||
Grade (g/t Au) | 4.07 | 10.64 | 5.50 | 13.04 | 7.94 | |||||||||||||||
Mill recoveries (percent) | 55 | % | 69 | % | 62 | % | 72 | % | 68 | % | ||||||||||
Gold production (ounces) | 2,692 | 7,588 | 4,053 | 9,984 | 24,317 |
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Q1-2009 | Q2-2009 | Q3-2009 | Q4-2009 | YTD 2009 | ||||||||||||||||
Gold sales (ounces) | 2,947 | 6,944 | 4,201 | 10,106 | 24,198 | |||||||||||||||
Sales (US$)** | $ | 2,666,638 | $ | 6,396,532 | $ | 4,042,701 | $ | 11,222,989 | $ | 24,328,860 | ||||||||||
Cost of Sales (US$)*** | $ | 2,304,961 | $ | 3,449,697 | $ | 2,479,674 | $ | 5,762,303 | $ | 13,996,635 | ||||||||||
Amortization (US$) | $ | 591,306 | $ | 804,819 | $ | 655,193 | $ | 2,585,507 | $ | 4,636,825 | ||||||||||
Royalties — Zedex & Govt (US$) | $ | 111,997 | $ | 386,463 | $ | 200,735 | $ | 648,020 | $ | 1,347,215 |
* | The Bong Mieu Production Plant processes ore from Bong Mieu Central (VN220), Bong Mieu Underground (VN230), Tailings (VN220)andPhuoc Son Projects (VN320). | |
** | Total Gold Sales includes $7,216,077 YTD of gold sales from the Phuoc Son ore (VN320) and $712,043 Q1 gold sales from Nui Kem ore (VN230) which, as they were not in commercial production, have been offset against deferred exploration and development expenditure. | |
*** | Total cost of sales includes $4,315,244 YTD of gold cost of sales and royalty expenses associated with the Phuoc Son ore and $807,680 expenses associated with Nui Kem sales which as they were not in commercial production have been recognized as deferred exploration and development expenditure. |
Q1-2009 | Q2-2009 | Q3-2009 | Q4-2009 | YTD 2009 | YTD 2008 | |||||||||||||||||||
Tonnes of ore milled | 35,081 | 19,257 | 34,135 | 14,323 | 102,796 | 159,624 | ||||||||||||||||||
Grade (g/t Au) | 2.94 | 4.85 | 4.54 | 5.78 | 4.07 | 2.82 | ||||||||||||||||||
Mill recoveries (percent) | 53 | % | 67 | % | 60 | % | 67 | % | 63 | % | 61 | % | ||||||||||||
Gold production (ounces)* | 1,745 | 2,013 | 2,977 | 1,787 | 8,522 | 8,871 | ||||||||||||||||||
Gold sales (ounces)* | 1,865 | 1,994 | 2,521 | 2,186 | 8,566 | 9,110 | ||||||||||||||||||
Sales* | $ | 1,719,145 | $ | 1,756,460 | $ | 2,414,190 | $ | 2,383,490 | $ | 8,273,285 | $ | 8,160,530 | ||||||||||||
Cost of sales* | $ | 1,508,352 | $ | 1,058,063 | $ | 1,782,153 | $ | 1,059,066 | $ | 5,407,634 | $ | 6,917,161 | ||||||||||||
Amortization* | $ | 591,306 | $ | 804,819 | $ | 655,193 | $ | 880,137 | $ | 2,931,455 | $ | 2,814,227 | ||||||||||||
Amortization oncharged to Phuoc Son | — | — | — | ($1,957,838 | ) | ($1,957,838 | ) | — | ||||||||||||||||
Royalties* | $ | 78,604 | $ | 81,804 | $ | 109,306 | $ | 92,894 | $ | 362,608 | $ | 374,196 |
* | Q1 sales and associated costs of sales shown above including amortization and royalties for the Bong Mieu Underground project have been capitalized as the project did not commence commercial production until April 1, 2009. | |
(a) | A total of 24,198 ounces of gold were sold for proceeds of $24,328,860 during 2009 of which 8,489 ounces with net proceeds of $2,675,515 were netted against deferred development costs for projects while they were not in commercial production. |
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1. | Gold price volatility could impact profitability at the current operating mine and economic viability at development and exploration projects; | ||
2. | The ability of the Company to continue its activities is dependent upon obtaining the necessary funding and/ or generating funds to continue its exploration and development programs and/or the realization of proceeds from the sale of one or more of its properties and/or assets. Management has determined that in the current economic circumstances, and because of the uncertainty of raising funds in the capital markets, self funding of the development of the Phuoc Son mine is the preferred option. Accordingly, the Company has commenced toll treatment of the Phuoc Son ore at the Bong Mieu plant to enable self funding; | ||
3. | As a result of the Company’s decision to fund its Phuoc Sun operations internally, and in order to conserve cash, the Company’s current policy is to ensure the Company operations are cash positive before it expands its exploration programs. The key focus of the Company in 2009 and 2010 is to increase production output to ensure the Company operations are cash flow positive and to develop a production plant at Phuoc Son to enable processing of ore at that site rather than trucking it to Bong Mieu; | ||
4. | Refer to Item 3D for a complete list of risks the Company faces. |
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2009 | 2008 | % | ||||||||||||
($) | ($) | Change | Comments on variances | |||||||||||
Sales | 16,400,740 | 7,275,324 | 125 | The Bong Mieu central plant sold 15,709 oz of gold during the 2009 year(at an average realized price of US$1,044 per ounce) compared to 8,489 oz of gold in the same period last year (at an average realized price of US$883 per ounce). An additional 8,489 oz of gold sales worth $7,928,120 in 2009 were capitalised for projects prior to their commercial production start date. | ||||||||||
Cost of sales | 9,448,441 | 5,820,382 | 62 | Costs of sales increased due to increased sales in 2009. The cost per ounce of gold produced were lower due to increased throughput and efficiency gains achieved by modifications to the Plant and Equipment during the year. | ||||||||||
Amortization | 4,392,945 | 2,468,047 | 78 | Increased as a result of two mines coming into commercial production during 2009 which resulted in the commencement of amortisation of those Capital Assets. | ||||||||||
Management fees and salaries | 2,944,646 | 2,901,152 | 2 | decreases as a result of reduced corporate office staffing in 2009 compared with 2008 and offset by inflation. | ||||||||||
Professional fees | 2,429,012 | 968,020 | 151 | Increased as a result of the engagement of additional external professionals in relation to the amalgamation with Zedex Minerals Ltd | ||||||||||
Travel | 581,024 | 604,493 | -4 | No significant movement in this item during the 2009 year. | ||||||||||
Investor relations and promotion | 232,090 | 440,884 | -47 | Lower for the 2009 year due to change in marketing plans in 2008 flowing through to 2009 which had an overall reduction in costs. | ||||||||||
Stock-based compensation | 3,569,314 | 997,336 | 258 | Increased as at the time the stock options were awarded the company share price was significantly lower than when they were considered granted for accounting purposes later in the year and the valuation of those options changed significantly. | ||||||||||
Interest expense (income) | (11,795 | ) | (551,023 | ) | -98 | Interest income decreased in 2009 due to the decreased cash balances held and reduced rates on available balances. |
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2009 | 2008 | % | ||||||||||||
($) | ($) | Change | Comments on variances | |||||||||||
Foreign exchange loss (gain) | (196,962 | ) | (330,916 | ) | -40 | Exchange gain reduced mainly as a result of no longer having to translate US dollars to CAD as the functional currency has changed to US Dollars and the majority of the Company Cash and Investments are held in US dollars. |
2008 | 2007 | % | ||||||||||||
$ | $ | Change | Comments on variances | |||||||||||
Sales | 7,275,324 | 6,509,318 | 12 | The Bong Mieu central plant sold 8,084 oz of gold during the 2008 year(at an average realized price of US$883 per ounce) compared to 9,198 oz of gold in the same period last year (at an average realized price of US$708 per ounce). | ||||||||||
Cost of sales | 5,820,382 | 5,138,779 | 13 | Costs per ounce of gold produced were higher in the last two quarters of 2008 mainly due to lower recovery rates as a result of high base metal content and processing of development ore. The 2007 costs per ounce were also considered high due to lower recovery rates and lower mill tonnage. | ||||||||||
Amortization | 2,468,047 | 1,791,446 | 38 | Increased as a result of increased investment in Capital Assets. | ||||||||||
Management fees and salaries | 2,901,152 | 2,577,924 | 13 | Increased as a result of new expenses for deferred share units issued under a new deferred share unit plan for non-executive directors and higher independently assessed salaries. | ||||||||||
Professional and Consulting fees | 968,020 | 1,093,681 | -11 | Decreased as a result of lower regulatory activity and fees in 2008 when compared to 2007 which had more audit and SOX review fees, US registration costs and fees related to the 2007 proposed Zedex merger that was withdrawn. |
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2008 | 2007 | % | ||||||||||||
$ | $ | Change | Comments on variances | |||||||||||
Travel | 604,493 | 534,579 | 13 | Increase in number of flights taken by senior management to Vietnam and Toronto. | ||||||||||
Investor relations and promotion | 440,884 | 565,644 | -22 | Lower for the 2008 year due to change in marketing plans in the second half of the year to reduce costs. | ||||||||||
Stock-based compensation | 997,336 | 2,114,536 | -53 | Increased earlier in 2008 due to the retention of a compensation consultant (see salaries above) however over the year less stock-based compensation has been awarded | ||||||||||
Interest expense (income) | (551,023 | ) | (525,090 | ) | 5 | Interest income increased in 2008 due to increased cash balance held in the early part of 2008. | ||||||||
Foreign exchange loss (gain) | (330,916 | ) | 527,438 | 163 | Exchange gain mainly as a result of the foreign exchange rate fluctuations impacting the value of investments denominated in US dollars. |
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Year 5 | ||||||||||||||||||||||||
and | ||||||||||||||||||||||||
Total | Less than one year | Year 2 | Year 3 | Year 4 | thereafter | |||||||||||||||||||
Payment Due | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Capital lease obligations | 171,001 | 171,001 | — | — | — | — | ||||||||||||||||||
Operating leases | 628,758 | 192,242 | 114,969 | 114,312 | 99,235 | 108,000 | ||||||||||||||||||
Purchase obligations — supplies & services | 3,520,340 | 3,519,480 | 860 | — | — | — | ||||||||||||||||||
Purchase obligations — capital | — | — | — | — | — | — | ||||||||||||||||||
Asset retirement obligations | 974,726 | 204,716 | 179,188 | 128,243 | 430,843 | 31,736 | ||||||||||||||||||
Total | $ | 5,294,825 | $ | 4,087,439 | $ | 295,017 | $ | 242,555 | $ | 530,078 | $ | 139,736 | ||||||||||||
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Date of First | ||||||||
Election or | Term of Office | |||||||
Name | Title | Date of Birth | Appointment | of the Directors | ||||
David A. Seton | Executive Chairman, Chief Executive Officer and Director | Dec. 13, 1955 | Aug. 23, 1996 | 3 year | ||||
Jon Morda | Director | Jan. 13, 1952 | Aug. 16, 2005 | 3 years | ||||
John A.G. Seton | Director | Jan. 10, 1963 | July 7, 1999 | 2 years | ||||
T. Douglas Willock | Director | Jan. 8, 1953 | Feb. 16, 2006 | 2 years | ||||
Les Robinson | Director | Aug. 31, 1960 | Dec 17, 2009 | 3 years | ||||
Peter Tiedemann | Chief Financial Officer | Sept 18,1942 | July 25, 2006 | n/a | ||||
Charles Barclay | Chief Operating Officer | Dec. 18, 1950 | July 13, 2006 | n/a | ||||
Jane Bell | VP — Finance | July 27, 1967 | Dec. 17, 2009 | n/a | ||||
Russell Graham | VP — Finance Vietnam | May 21, 1965 | Aug. 6, 2007 | n/a | ||||
Paul Seton | VP — Commercial Development | October 10, 1953 | Dec. 17, 2009 | n/a | ||||
Louis Montpellier | Corporate Secretary | Nov 13, 1953 | Mar. 17, 2008 | n/a | ||||
Jim Hamilton | VP — Investment Relations | Oct. 7, 1951 | Mar. 17, 2008 | n/a |
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Long Term Compensation | ||||||||||||||||||||||||||||||||
Annual Compensation | Awards | |||||||||||||||||||||||||||||||
Other | Restricted | All | ||||||||||||||||||||||||||||||
Annual | Securities | Shares or | Payouts | Other | ||||||||||||||||||||||||||||
Name and | Compen- | Under Options/ | Restricted | LTIP | Compen- | |||||||||||||||||||||||||||
Principal | Salary | Bonus | sation | SARs Granted | Share Units | Payouts | sation | |||||||||||||||||||||||||
Position | Year | (CAD$)(1) | (CAD$) | (CAD$) | (#)(2) | (CAD$) | (CAD$) | (CAD$) | ||||||||||||||||||||||||
David A. Seton(3) Executive Chairman | 2009 | 240,000 | 180,000 | N/A | 9,444,440 | N/A | N/A | N/A | ||||||||||||||||||||||||
John Seton(4) Director | 2009 | 25,000 | Nil | 35,000 | Nil | N/A | N/A | 205,687 | ||||||||||||||||||||||||
Jon Morda Director | 2009 | 30,000 | Nil | 35,000 | Nil | N/A | N/A | N/A | ||||||||||||||||||||||||
Kevin Flaherty Director | 2009 | 15,000 | Nil | 35,000 | Nil | N/A | N/A | N/A | ||||||||||||||||||||||||
Douglas Willock Director | 2009 | 30,000 | Nil | 35,000 | Nil | N/A | N/A | N/A | ||||||||||||||||||||||||
Leslie Robinson Director | 2009 | Nil | Nil | N/A | Nil | N/A | N/A | N/A | ||||||||||||||||||||||||
Louise Montpellier Corporate Secretary | 2009 | Nil | Nil | N/A | 200,000 | N/A | N/A | N/A | ||||||||||||||||||||||||
Peter Tiedemann CFO(7) | 2009 | 160,000 | 96,000 | N/A | 2,222,220 | N/A | N/A | N/A | ||||||||||||||||||||||||
Paul Seton Senior VP Commercial(8) | 2009 | Nil | Nil | N/A | Nil | N/A | N/A | N/A | ||||||||||||||||||||||||
Charles Barclay(5) VP Operations | 2009 | 175,000 | 105,000 | N/A | 2,222,220 | N/A | N/A | N/A | ||||||||||||||||||||||||
James Hamilton VP Investor Relations | 2009 | 132,000 | 59,400 | N/A | 1,666,670 | N/A | N/A | N/A | ||||||||||||||||||||||||
Russell Graham VP Finance Vietnam | 2009 | 142,000 | 63,900 | N/A | 1,666,670 | N/A | N/A | N/A | ||||||||||||||||||||||||
HuongLe-Dao VP Human Resources(9) | 2009 | 150,000 | 67,500 | N/A | 1,666,670 | N/A | N/A | N/A | ||||||||||||||||||||||||
Rodney Jones(6) VP Exploration | 2009 | 120,937 | 54,422 | N/A | 1,666,670 | N/A | N/A | N/A | ||||||||||||||||||||||||
S. Jane Bell VP Finance(10) | 2009 | 6,273 | Nil | N/A | Nil | N/A | N/A | N/A |
(1) | All Officer Compensation packages are denominated in Canadian Dollars. | |
(2) | Figures represent options granted during a particular year; see “Aggregate Option” table for the aggregate number of options outstanding at year end. | |
(3) | Mr. Seton was appointed as CEO on February 4, 2008, |
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(4) | During 2009 the Company paid or accrued CAD$205,687 for consulting and legal fees to entities associated with John Seton, a director of the Company. These entities included (i) Jura Trust, which is associated with John Seton, and (ii) Claymore Law, a law firm in which John Seton is a principal | |
(5) | Mr. Barclay was appointed Chief Operating Officer on March 17, 2008. | |
(6) | Mr. Jones joined as VP — Exploration on August 6, 2007. | |
(7) | Mr. Tiedemann was appointed VP — Corporate Affairs of the Company on March 17, 2008. Prior to that, he was the CFO and Corporate Secretary. He was reappointed to the role of CFO in October 2008. | |
(8) | Mr.P Seton was appointed Senior VP — Commercial on December17,2009, and commenced his contract on January 1, 2010. | |
(9) | Ms Le-Dao ceased as VP Human Resources on December 31, 2009 | |
(10) | Ms Bell joined as VP-Finance on December 17, 2009 | |
(11) | Mr. Robinson was appointed as a director on December 17, 2009 |
1) | a receiver or liquidator is appointed in respect of the Company; or | ||
2) | the Company fails to pay any moneys payable hereunder within fourteen (14) calendar days of the due date and shall further fail to pay such moneys within fourteen (14) calendar days of receiving written notice of such failure from the Executive. |
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(i) | the Executive’s full fee through to the date of termination at the amount in effect at the time the Company’s Notice of Termination was given, the amount of any allowable expenses reimbursable, plus an amount equal to the amount, if any, of any bonuses previously made to the Executive which have not been paid; | ||
(ii) | in lieu of further fees for periods subsequent to the date of the Company’s Notice of Termination, a payment: |
(iii) | the Executive’s options on shares of the Company shall remain in full force and effect for the earlier of the expiry date of such options or twelve (12) months following the Company’s Notice of Termination and the option agreements shall be deemed to have been amended, to the extent required, to the effect that any provision which would otherwise terminate such options as a result of the termination of the Executive’s services shall be null and void. |
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(i) | the Executive’s fees through to the Date of Resignation at the amount of the Executive’s then existing annual fee at the time notice of termination or notice of resignation was given, the amount of any reimbursable expenses, plus an amount equal to the amount, if any, of any bonuses previously made to the Executive which have not been paid, accrued vacation and any other amounts due upon termination or resignation; | ||
(ii) | in lieu of further fees for periods subsequent to the Date of Resignation, a payment equal to the number of months set out in Schedule “B” at the rate of the Executive’s then existing annual fee and incentive bonus pursuant to Schedule “B”; and | ||
(iii) | in lieu of common shares of the Company issuable upon exercise of options, if any, previously granted to the Executive under the Company’s incentive programs and remaining unexercised at 5:00 p.m. (Toronto time) on the fourth calendar day following the Date of Resignation, which options shall be cancelled upon the payment referred to herein, a cash amount equal to the aggregate difference between the exercise price of all options held by the Executive, whether or not then fully exercisable, and the higher of (i) the average of the closing prices of the Company’s common shares as reported on the Toronto Stock Exchange (or such other stock exchange on which the Company’s shares may be listed) for thirty (30) calendar days preceding the Date of Resignation or (ii) the average price actually paid for the most highly priced one percent (1%) of the Company’s common shares, however and for whatever reason by any person who achieves control of the Company as such term is defined in Section 2(g); and | ||
(iv) | the Executive shall have the right, exercisable up to the fourth calendar day following the Date of Resignation, to elect to waive the application of the provisions regarding stock options, following the Date of Resignation. The Executive may exercise this election on or before 5:00 p.m. Toronto time on such fourth calendar day by delivering a notice in writing to the Company of such waiver whereupon: |
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(v) | The Executive agrees to accept such compensation in full satisfaction of any and all claims the Executive has or may have against the Company and the Executive agrees to execute and deliver a full and final release in writing of the Company with respect to the same upon payment of said sum, except monies owing by either party to the other up to the Date of Resignation. |
1. | The maximum number of options that can be issued at any one time cannot be higher than 12% of the Company’s issued and outstanding share capital (on a non-diluted basis). |
2 | Options are subject to an accelerated expiry term (the “Accelerated Term”) for those options held by individuals who are no longer associated with the Company. The Accelerated Term requires that options held by individuals who resign or are terminated from the Company expire on the earlier of: (i) the original expiry term; or (ii) 90 days from the date of resignation or termination; or (ii) the date provided for in the employment or consulting agreement between participant and the Company; however, shareholder approval is required if this would cause the options to extend beyond original expiry. |
3. | The maximum number of shares that may be reserved for option grant to any one individual insider in any 12 month period may not exceed 5% of the common shares issued and outstanding (on a non-diluted basis) on the date of grant; |
4. | The maximum number of shares that may be reserved for issuance to insiders of the Company may not exceed 10% of the common shares issued and outstanding (on a non-diluted basis) on the date of grant; |
5. | The maximum number of shares that may be issued to insiders, as a group, within a one year period may not exceed 10% of the common shares issued and outstanding (on a non-diluted basis) on the date of issuance; |
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6. | The maximum number of shares that may be issued to any non-employee directors, as a group, during any 12 month period shall not exceed 5% of the common shares issued and outstanding (on a non-diluted basis) on the date of grant; |
7. | Subject to the policies, rules and regulations of any lawful authority having jurisdiction (including Exchange), the Board may, at any time, without further action by its shareholders, amend the Plan or any Option granted hereunder in such respects as it may consider advisable. The Board may not, however, without the consent of the Participant, alter or impair any of the rights or obligations under an Option theretofore granted. No Common Shares shall be issued under any amendment to this Plan unless and until the amended Plan has been approved by the Exchange. The Plan may be abandoned or terminated in whole or in part at any time by the Board, except with respect to any Option then outstanding under the Plan |
8. | The Option Price of any Option granted shall be determined by the Board but shall not be less than the volume weighted average trading price of the common shares on the Exchange, or another stock exchange where the majority of the trading volume and value of the listed shares occurs, for the 5 trading days immediately prior to the date of grant (or, such other price required by the Exchange) (calculated by dividing the total value by the total volume of securities traded for the relevant period) (“Market Price”). |
9. | Upon the announcement of any form of transaction (a “Change of Control Transaction”) which, if completed, would constitute a Change of Control and under which Common Shares of the Company are to be exchanged, acquired or otherwise disposed of, including a take-over bid, or tender offer made for all or any of the issued and outstanding common shares, the Company shall, as soon as practicable following the announcement of such Change of Control Transaction, notify each Participant currently holding an Option of the Change of Control Transaction, and all Options of the Participant which have not vested shall be deemed to be fully vested and exercisable solely for purposes of permitting the Participant to exercise such Options in order to participate in the Change of Control Transaction in respect of the Common Shares (the “Optioned Shares”) thereby acquired. |
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2007 | 2008 | 2009 | ||||||||||
Vietnam | 471 | 539 | 600 | |||||||||
Elsewhere Worldwide | 6 | 8 | 5 | |||||||||
Total | 477 | 547 | 605 |
Shares of | ||||||||||||||||||
Common | ||||||||||||||||||
Stock | Options Vested | |||||||||||||||||
(“Shares”) | or Vesting | Beneficial | Percent of | |||||||||||||||
Title of Class | Name of Beneficial Owner | Held | within 60 days | Ownership | Class | |||||||||||||
Common | David A. Seton(1) | 4,360,784 | 9,105,490 | 13,466,274 | 3.83 | % | ||||||||||||
Common | John A. G. Seton(2) | 5,945,164 | 4,625,000 | 10,570,164 | 3.00 | % | ||||||||||||
Common | Jon Morda | 19,500 | 2,030,000 | 2049,500 | 0.58 | % | ||||||||||||
Common | T. Douglas Willock | 91,000 | 2,159,000 | 2,250,000 | 0.64 | % | ||||||||||||
Common | Peter Tiedemann | 1,087,732 | 2,274,684 | 3,362,416 | 0.96 | % | ||||||||||||
Common | Leslie Robinson | 2,362,005 | 2,166,667 | 4,528,672 | 1.29 | % | ||||||||||||
Common | Charles Barclay | 1,152,066 | 2,466,351 | 3,618,417 | 1.03 | % | ||||||||||||
Common | Jane Bell | 399,999 | 590,198 | 990,197 | 0.28 | % | ||||||||||||
Common | Paul Seton | 130,530 | 2,701,227 | 2,831,757 | 0.80 | % | ||||||||||||
Common | Russell Graham | 769,552 | 874,263 | 1,643,815 | 0.47 | % | ||||||||||||
Common | Louis Montepellier | — | 800,000 | 800,000 | 0.23 | % | ||||||||||||
Common | Jim Hamilton | 929,262 | 1,024,263 | 1,953,525 | 0.55 | % |
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Number of | Exercise | |||||||||||
Common-voting | Price | Expiration | ||||||||||
Name | Shares | [CAD $] | Grant Date | Date | ||||||||
David A. Seton | 1,000,000 | 0.32 | Aug 31, 2005 | Aug 31, 2010 | ||||||||
1,000,000 | 0.32 | Sept 29, 2005 | Sept 29, 2010 | |||||||||
3,000,000 | 0.75 | Mar 5, 2007 | Mar 5, 2012 | |||||||||
1,809,000 | 0.40 | Jun 18, 2008 | Jan 1, 2013 | |||||||||
722,872 | 0.12 | Jan 2, 2009 | Jan 2, 2014 | |||||||||
1,573,618 | 0.40 | Jan 4, 2010 | Dec 31, 2014 | |||||||||
John A. G. Seton | 500,000 | 0.32 | Aug 31, 2005 | Aug 31, 2010 | ||||||||
1,000,000 | 0.75 | Mar 5, 2007 | Mar 5, 2012 | |||||||||
625,000 | 0.5742 | Jan 12, 2010 | Jun 15, 2012 | |||||||||
750,000 | 0.42 | Jun 1, 2010 | Apr 1, 2015 | |||||||||
750,000 | 0.60 | Jun 1, 2010 | Apr 1, 2015 | |||||||||
Leslie Robinson | 500,000 | 0.40 | Jan 4, 2010 | Dec 31, 2014 | ||||||||
166,667 | 0.87278 | Jan 12, 2010 | Apr 30, 2012 | |||||||||
750,000 | 0.42 | Jun 1, 2010 | Apr 1, 2015 | |||||||||
750,000 | 0.60 | Jun 1, 2010 | Apr 1, 2015 | |||||||||
Jon Morda | 180,000 | 0.32 | Aug 31, 2005 | Aug 31, 2010 | ||||||||
350,000 | 0.65 | Mar 5, 2007 | Mar 5, 2012 | |||||||||
750,000 | 0.42 | Jun 1, 2010 | Apr 1, 2015 | |||||||||
750,000 | 0.60 | Jun 1, 2010 | Apr 1, 2015 | |||||||||
T. Douglas Willock | 159,000 | 0.55 | Feb 16, 2006 | Feb 16, 2011 | ||||||||
500,000 | 0.65 | Mar 5, 2007 | Mar 5, 2012 | |||||||||
750,000 | 0.42 | Jun 1, 2010 | Apr 1, 2015 | |||||||||
750,000 | 0.60 | Jun 1, 2010 | Apr 1, 2015 | |||||||||
Peter Tiedemann | 100,000 | 0.51 | Jul 18, 2006 | Jul 18, 2011 | ||||||||
1,000,000 | 0.65 | Mar 5, 2007 | Mar 5, 2012 | |||||||||
208,333 | 0.5742 | Jan 12, 2010 | Apr 30, 2012 | |||||||||
426,000 | 0.40 | Jun 12, 2008 | Jan 1, 2013 | |||||||||
170,088 | 0.12 | Jan 2, 2009 | Jan 2, 2014 | |||||||||
370,263 | 0.40 | Jan 4, 2010 | Dec 31, 2014 | |||||||||
Charles Barclay | 500,000 | 0.36 | Jan 25, 2006 | Jan 25, 2011 | ||||||||
500,000 | 0.43 | Nov 3, 2006 | Nov 3, 2011 | |||||||||
500,000 | 0.65 | Aug 15, 2007 | Aug 15, 2012 | |||||||||
426,000 | 0.40 | Jun 18, 2008 | Jan 1, 2013 | |||||||||
170,088 | 0.12 | Jan 2, 2009 | Jan 2, 2014 | |||||||||
370,263 | 0.40 | Jan 4, 2010 | Dec 31, 2014 | |||||||||
Paul Seton | 555,394 | 0.40 | Jan 4, 2010 | Dec 31, 2014 | ||||||||
1,000,000 | 0.40 | Jan 4, 2010 | Dec 31, 2014 | |||||||||
Jane Bell | 104,167 | 0.45936 | Jan 12, 2010 | Sep 29, 2011 | ||||||||
104,167 | 0.91872 | Jan 12, 2010 | Apr 30, 2012 | |||||||||
104,167 | 0.80388 | Jan 12, 2010 | Sep 28, 2013 | |||||||||
277,697 | 0.40 | Jan 4, 2010 | Dec 31, 2014 | |||||||||
James Hamilton | 150,000 | 0.32 | Nov 22, 2005 | Nov 22, 2010 | ||||||||
150,000 | 0.65 | Aug 15, 2007 | Aug 15, 2012 | |||||||||
319,000 | 0.40 | Jun 13, 2008 | Jan 1, 2013 | |||||||||
127,566 | 0.12 | Jan 2, 2009 | Jan 2, 2014 | |||||||||
277,697 | 0.40 | Jan 4, 2010 | Dec 31, 2014 | |||||||||
Louis Montpellier | 250,000 | 0.62 | May 1, 2008 | May 1, 2013 | ||||||||
200,000 | 0.12 | Jan 2, 2009 | Jan 2, 2014 |
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Number of | Exercise | |||||||||||
Common-voting | Price | Expiration | ||||||||||
Name | Shares | [CAD $] | Grant Date | Date | ||||||||
350,000 | 0.42 | Jun 1, 2010 | Apr 1, 2015 | |||||||||
Russell Graham | 150,000 | 0.65 | Aug 15, 2007 | Aug 15, 2012 | ||||||||
319,000 | 0.40 | Jun 13, 2008 | Jan 1, 2013 | |||||||||
127,566 | 0.12 | Jan 2, 2009 | Jan 2, 2014 | |||||||||
277,697 | 0.40 | Jan 4, 2010 | Dec 31, 2014 |
Name | No. of Shares | Percentage | ||||
Dragon Capital Group Limited Ho Chi Minh City, Vietnam | 98,369,184(1) | 30.38 | % | |||
Vina Capital Group Limited Ho Chi Minh City, Vietnam | Awaiting shareholder disclosure (2) | Awaiting shareholder disclosure |
(1) | According to a Schedule 13D filed jointly with the Commission on June 30, 2010 by Vietnam Enterprise Investments Limited, Vietnam Growth Fund Limited, Vietnam Dragon Fund Limited, Vietnam Resource Investments (Holdings) Limited, Dragon Capital Markets Limited, Dragon Capital Management Limited, and Enterprise Investment Management Limited (“Dragon Schedule 13D”), (i) Vietnam Growth Fund Limited is the sole beneficial owner of 45,077,560 Shares, (ii) Vietnam Enterprise Investments Limited is the sole beneficial owner of 19,708,500 Shares, (iii) Vietnam Resources Investments(Holdings) Limited is the sole beneficial owner of 13,000,000 Shares, (iv) Vietnam Dragon Fund Limited is the sole beneficial owner of 19,163,124 Shares, (v) Dragon Capital Markets Limited is the sole beneficial owner of 1,270,000 Shares, (vi) Dragon Capital Management Limited has the sole dispositive and voting power over 150,000 Shares, and shared dispositive and voting power of 96,949,184 Shares, and (vii) Enterprise Investment Management Limited has shared dispositive and voting power over 19,708,500 Shares. | |
Reference is made to the Dragon Schedule 13D for additional information on Dragon Capital Group Limited including the source and amount of funds utilized in the investments in the Company’s Shares, the purpose of Dragon Capital Group Limited’s investments in the Company, information relating to the voting and dispositive power over the Company’s Shares, and the executive officers and directors of each member of Dragon Capital Group Limited. | ||
(2) | We believe that, at June 30, 2010, VinaCapital Group beneficially owns, directly or indirectly, or exercises control or direction over shares carrying more than 5%, but less than 10%, of the Company’s outstanding Shares. We believe that VinaCapital Group became a greater than 5% shareholder following the Zedex amalgamation as its previous holdings in Zedex and the Company are now combined. We have advised VinaCapital Group of its obligation to file a Schedule 13D if it beneficially owns at least 5% of the Company’s outstanding Shares. Once VinaCapital Group files a Schedule 13D, if required to do so, we will disclose the amount of its beneficial shareholdings in the Company. |
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(a) | Paid or accrued $916,409 in 2009 for management fees and $390,048 in 2009 in reimbursement of expenses incurred on behalf of the Company to companies controlled by officers of the Company. The companies that were paid for management fees and reimbursement of expenses include the following: Orangue Holdings Limited associated with David Seton; Momentum Resources International Pty Ltd associated with Colin Patterson; Action Management Limited associated with Charles Barclay; Wholesale Products Trading Limited associated with Peter Tiedemann; and Cawdor Holdings Limited associated with Russell Graham. Expenses that were reimbursed include the following costs: airfare, accommodation, meals, car rental, telecommunications, computer, training courses, conferences and licenses. All of these management and consulting fees have been disclosed in “Item 6. B Directors, Senior Management, and Employees. Compensation.” |
(b) | Paid or accrued $184,852 in 2009 for consulting and legal fees. The companies that were paid for consulting fees include the following: Jura Trust (“Jura”) associated with John Seton, a director of the Company; Claymore Law (“Claymore”) where John Seton is a principal. The services provided are not under contract as the consulting and legal services are provided on an ad hoc basis based on requests by the Company. These fees have been included in “Item 6. B Directors, Senior Management, and Employees. Compensation.” for John Seton under “All Other Compensation.” |
(c) | On January 1, 2006, Zedex Minerals Limited (Zedex) (a significant shareholder of the Company at the time) was assigned the 2% gross production royalty, on the Bong Mieu sales, less incremental costs when Ivanhoe assigned to Zedex all its rights, title and interest in and to the debt, gross production royalties and royalty agreement. Refer to Exhibit 3.16. The Company paid or accrued $128,746 in 2009 for royalties to Zedex, a shareholder of the |
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Company. The royalty is calculated as 2% of the net sales amount equal to the revenues for gold and silver less refining and delivery costs. As a result of the amalgamation of Zedex Minerals Ltd and Olympus Pacific Minerals Ltd, Olympus Pacific Minerals Inc. no longer has an obligation to pay the 2 percent royalty from December 17, 2009. |
(d) | As part of the amalgamation with Zedex, Olympus advanced $1,406,908 in funds in December to enable settlement of creditors at year end. The balance advanced to Zedex and its subsidiaries at December 31, 2009 is recognised in Accounts Receivable. |
• | On January 12, 2010, the Company and Zedex amalgamated and Zedex shareholders’ shares were cancelled and they were allocated 1 common share in Olympus in exchange for 2.4 common shares in Zedex. Total consideration for the amalgamation amounted to approximately US$34.8 million, and was paid to Zedex shareholders by way of distribution to them, on a pro-rata basis, of the 65,551,043 common shares of Olympus owned by Zedex, along with the issuing of a further 54,226,405 new Olympus shares. In addition, 4,395,835 stock options were issued by Olympus to compensate the cancellation of Zedex options. The 54,226,405 new common shares in Olympus were issued on January 25, 2010. | ||
Zedex management staff were provided with contracts with Olympus. Mr. Leslie Robinson, director of Zedex, was appointed to the Board of Olympus on December 17, 2009. Mr. Rodney Murfitt, formerly Chief Geologist for Zedex, became Group Exploration Manager for Olympus. Mr. Paul Seton, formerly CEO of Zedex, became Senior Vice President Commercial for Olympus and Ms. Jane Bell (previously Baxter), |
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formerly CFO and Company Secretary for Zedex, became Vice president Finance for Olympus. | ||
All costs associated with the amalgamation have been expensed during the year, these being recorded in professional and consulting fees in the consolidated statement of operations and comprehensive loss. | ||
The acquisition is being accounted for as a business combination with Olympus being identified as the acquirer. The purchase method of accounting will be used and earnings will be consolidated from the acquisition date. The Company is in the process of evaluating the fair value of assets acquired and liabilities assumed, including goodwill, if any. As a result of this acquisition, the Company will no longer have the obligation to pay the 2% royalty to Zedex. | ||
• | On January 4, 2010 the Company issued 3,702,629 options to officers of the Company in relation to their 2010 management contracts. The options vest immediately, have an exercise price of CAD$0.40 and can be exercised on or before December 31, 2014. | |
• | In 2010 the Company agreed to issue 951,703 common shares in settlement of AUD$319,335 consultancy fee related to the amalgamation with Zedex. The fee is included in accounts payable at December 31, 2009. | |
• | In March 2010 the Company sold a total of CAD$12,750,000 of units. The funds will be used in the establishment of a processing plant at Phuoc Son. Each unit (a “Unit” and collectively, the “Units”) consists of: (i) a nine (9%) percent subordinated unsecured convertible promissory note (each a “Note,” and, collectively, the “Notes”) of the Company in the aggregate principal amount of CAD $0.84, which Note shall be convertible into shares (each a “Conversion Share” and collectively, the “Conversion Shares”) of the Company’s common stock, with no par value (together with any securities into which such shares may be reclassified, the “Common Stock”) at CAD $0.42 per Conversion Share (subject to adjustment as set forth in the certificate representing the Note), (ii) two (2) separate common stock purchase warrants (each a “Warrant,” and, collectively, the “Warrants”), the first of which is fully vested and immediately exercisable for the purchase one (1) share of Common Stock at an exercise price of CAD $0.50 per Warrant Share (as defined below) (subject to adjustment as set forth in the certificate representing the Warrants), and the second of which is exercisable, subject to vesting as specified in the certificate representing the Warrant, for the purchase of two (2) shares of Common Stock at an exercise price of CAD $0.42 per Warrant Share (subject to adjustment as set forth in the certificate representing the Warrants. Each share issuable upon exercise of the Warrants is referred to as a “Warrant Share,” and collectively, as the “Warrant Shares”. | |
• | In June 2010, the Company obtained private placement funding of US$21,960,000 in the form of gold delivery notes. Each unit (a “Unit”) consists of: (i) an eight percent (8%) senior secured redeemable gold delivery promissory note of the Company (each, a “Note” and, collectively, the “Notes”) in the stated or deemed principal amount of US$10,000, and (ii) a detachable common stock purchase warrant (each, a “Warrant” and, collectively, the “Warrants”) for the purchase of 3,470 common shares (“Common Shares”), exercisable on or before May 31, 2013 at an exercise price of CAD $0.60 per share (subject to standard antidilution adjustment). The Warrants may be exercised on a “cashless” or “net exercise” basis at the option of the holder. The Company will issue the warrants attached to this agreement under its 15% placement capacity as described in Listing Rule 7.1 of the Listing Rules of the Australian Securities Exchange. The Notes |
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mature on May 31, 2013 (the “Maturity Date”), bear interest at the rate of 8%per annum, and are secured obligations of the Company. |
• | Subsequent to December 31, 2009, the Company announced further gold resource increases. New independent resource assessments were completed in the second quarter of 2010 at the Bau and Phuoc Son projects. The current gold resource total for the Company (including the Bong Mieu Gold Project) is now estimated at 1,022,398M oz of measured and indicated resources and 2,651,758M oz of inferred resources. | |
• | In May 2010 the Company increased the quantum of shares reserved with the Toronto Stock Exchange to the maximum allowable for issuance upon the exercise of stock options granted pursuant to the terms of its Stock Option Plan as approved by the TSX. | |
• | In May 2010 shareholders approved the issue of 3,000,000 incentive stock options to Directors of the Company and 350,000 incentive stock options to the Company Secretary, each option exercisable for a period of five years for the purchase of one common share of the Company at a price of CAD$0.42 per common share. | |
• | In May 2010 shareholders approved the issue of 3,000,000 incentive stock options to Directors of the Company and 350,000 incentive stock options to the Company Secretary, each option exercisable for a period of five years for the purchase of one common share of the Company at a price of CAD$0.60 per common share. |
TSX and TSX-V Common — Voting Shares Trading Activity | ||||||||
Month and Year | Low (CAD$) | High (CAD$) | ||||||
June 30, 2010 | $ | 0.26 | $ | 0.37 | ||||
May 31, 2010 | $ | 0.35 | $ | 0.40 | ||||
April 30, 2010 | $ | 0.32 | $ | 0.38 | ||||
March 31, 2010 | $ | 0.23 | $ | 0.38 | ||||
February 28, 2010 | $ | 0.23 | $ | 0.29 | ||||
January 31, 2010 | $ | 0.24 | $ | 0.34 |
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TSX and TSX-V Common — Voting Shares Trading Activity | ||||||||
Month and Year | Low (CAD$) | High (CAD$) | ||||||
Month and Year | ||||||||
April - June 2010 | $ | 0.31 | $ | 0.38 | ||||
January - March 2010 | $ | 0.23 | $ | 0.34 | ||||
October - December 2009 | $ | 0.25 | $ | 0.32 | ||||
July - September 2009 | $ | 0.20 | $ | 0.32 | ||||
April - June 2009 | $ | 0.18 | $ | 0.36 | ||||
January - March 2009 | $ | 0.07 | $ | 0.21 | ||||
October - December 2008 | $ | 0.04 | $ | 0.125 | ||||
July - September 2008 | 0.115 | 0.25 | ||||||
April - June 2008 | 0.205 | 0.39 | ||||||
January - March 2008 | 0.35 | 0.50 | ||||||
Annual (Fiscal Year): | ||||||||
Ended December 31, 2009 | $ | 0.07 | $ | 0.36 | ||||
Ended December 31, 2008 | $ | 0.04 | $ | 0.50 | ||||
Ended December 31, 2007 | 0.40 | 1.20 | ||||||
Ended December 31, 2006 | 0.30 | 0.94 | ||||||
Ended December 31, 2005 | 0.215 | 0.45 |
Month and Year | Low | High | ||||||
March 5, 2008- March 31, 2008 | 0.36 | 0.40 |
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Month and Year | Low | High | ||||||
April - June 2008 | 0.20 | 0.38 | ||||||
July - September 2008 | 0.12 | 0.25 | ||||||
October - December 2008 | 0.04 | 0.12 | ||||||
January - March 2009 | 0.06 | 0.16 | ||||||
April - June 2009 | 0.13 | 0.35 | ||||||
July - September 2009 | 0.17 | 0.34 | ||||||
October - December 2009 | 0.17 | 0.35 | ||||||
January 2010 - March 2010 | 0.20 | 0.35 | ||||||
April 2010 - June 2010 | 0.28 | 0.37 |
Month and Year | Low | High | ||||||
January 2010 | $ | 0.17 | $ | 0.35 | ||||
February 2010 | $ | 0.21 | $ | 0.35 | ||||
March 2010 | $ | 0.23 | $ | 0.36 | ||||
April 2010 | $ | 0.25 | $ | 0.38 | ||||
May 2010 | $ | 0.33 | $ | 0.39 | ||||
June 2010 | $ | 0.26 | $ | 0.35 |
Australian Securities exchange (a $) | ||||||||
Month and Year | Low | High | ||||||
Feb.5,2010-Mar 31, 2010 | $ | 0.22 | $ | 0.31 | ||||
April 2010-June 2010 | $ | 0.33 | $ | 0.41 | ||||
Feb. 5 2010 - Feb. 28, 2010 | $ | 0.22 | $ | 0.27 | ||||
March 2010 | $ | 0.22 | $ | 0.35 | ||||
April 2010 | $ | 0.31 | $ | 0.40 | ||||
May 2010 | $ | 0.36 | $ | 0.44 | ||||
June 2010 | $ | 0.33 | $ | 0.40 |
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Australian Securities exchange (a $) | ||||||||
Month and Year | Low | High | ||||||
Feb.5,2010-Mar 31, 2010 | $ | 0.22 | $ | 0.31 | ||||
April 2010-June 2010 | $ | 0.33 | $ | 0.41 |
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1) | Gold Export Certificates — Phuoc Son Gold Company Limited — dated 29 August, 2008, 31 December, 2008 and 31 December, 2009 and Bong Mieu Gold Mining Company Limited dated January 5, 2007, December 31, 2008 and December 31, 2009. Refer to Items 4D.1 (a) and 4D.2 (a) for details on these licenses. | ||
2) | Convertible Promissory Notes — dated March 26, 2010. In March 2010 the Company obtained private placement funding of CAD$12,750,000 through issuance of convertible promissory notes. Refer to Items 4A and 8B for details of this debt. |
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3) | Gold Loan Notes — dated June 19, 2010. In June 2010, the Company obtained private placement funding of US$21,960,000 in the form of gold delivery notes. Refer to Items 4A and 8B for details of this debt. | ||
4) | Amalgamation with Zedex Minerals Limited — announced November 10, 2009, approved December 17, 2009 and amalgamation date of January 12, 2010 — refer to Form CB filed with SEC on November 19, 2009. | ||
5) | Bau joint venture agreement — Olympus acquired a 50.05% controlling interest in the Bau Gold Project when it merged business with Zedex Minerals Ltd in January 2010. Under the Bau joint venture agreement the company operates in Joint Venture with a Malaysian mining group, Gladioli Enterprises SDN BHD (Bau Agreement). The joint venture agreement is dated November 2006 and under the terms of the agreement Olympus is the project operator. | ||
6) | Tien Thuan joint venture agreement — The Tien Thuan Gold Project is owned by the Binh Dinh New Zealand Gold Company (BNG), which is a joint venture between a Zedex Minerals Ltd subsidiary (KS Mining Ltd) and a company owned by the Provincial Government (Biotan Minerals Ltd). BNG has been exploring the Tien Thuan Gold Project since grant of Investment Certificate No: 351022000036 (August 2007). Pursuant to the Investment Certificate, Zedex may earn 75% project equity, by funding exploration through to completion of a bankable freasibility study (such funding to be repayable from future profits). Upon reaching a “decision to mine”, project development will be jointly funded on a pro-rata basis and (December 2007) receipt of Provincial Government approval for the proposed exploration and development programme. |
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Financial Year | Audit Related | |||||||||||||||
Ending | Audit Fees(1) | Fees(2) | Tax Fees(3) | All Other Fees(4) | ||||||||||||
2009 | $ | 448,919 | $ | 315,018 | Nil | Nil | ||||||||||
2008 | $ | 117,850 | Nil | Nil | Nil |
(1) | The aggregate audit fees billed. | |
(2) | The aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements which are not included under the heading “Audit Fees”. | |
(3) | The aggregate fees billed for professional services rendered for tax compliance, tax advice and tax planning. | |
(4) | The aggregate fees billed for products and services other than as set out under the headings “Audit Fees”, “Audit Related Fees” and “Tax Fees”. |
1. | Consolidated Balance Sheets of Olympus Pacific Minerals Inc. as at December 31, 2009 and 2008, Consolidated Statements of Operations and Deficit and Cash Flows for each of the three years ended December 31, 2009, 2008, and 2007, reported on by Ernst & Young LLP, Chartered Accountants. These statements are prepared in accordance with Canadian generally accepted accounting principles, which differ in certain respects from United States generally accepted accounting principles. See Note 17 to the consolidated financial statements. |
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1. | Consolidated Balance Sheets of Olympus Pacific Minerals Inc. as at December 31, 2009 and December 31, 2008,Consolidated Statements of Operations and Deficit and Cash Flows for each of the three years ended December 31, 2009, 2008, and 2007, reported on by Ernst & Young LLP, Chartered Accountants. These statements are prepared in accordance with Canadian generally accepted accounting principles, which differ in certain respects from United States generally accepted accounting principles. See Note 17 to the consolidated financial statements. |
1. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 1. Articles of Incorporation and By Laws | |
1.1. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 1.1 Certificates of Status, Amendment, Continuance | |
1.2. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 1.2 Bylaws as currently in effect. | |
2. | Instruments defining the rights of holders of equity — refer to exhibit 1 under 19B. | |
3. | Material Contracts |
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3.1. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.1 — Mining Permit — dated July 22, 1992 | |
3.2. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.2 — Right to Use Land Certificate — dated October 9, 1993 | |
3.3. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.3 — Investment License — No: 140 / GP, dated March 5, 1991 and Amendments | |
3.4. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.4 — Debt Finance Facility Agreement — dated February 8, 2006 | |
3.5. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.5 — Mining License No 116/GP —BTNMT — dated January 23, 2006 | |
3.6. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.7 — Investment License No. 2355/GP — dated October 20, 2003 | |
3.7. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.8 — Joint Venture Agreement — dated March 5, 2003. | |
3.8. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.9 — Agreement for Fulfilment of Contract, dated September 16, 2006 and cancellation of agreement on November 27, 2006. | |
3.9. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.9 — Memorandum of Agreement and Supplement — November 24, 2006 | |
3.10. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.9 — Stock Option Plan — September 12, 2003 | |
3.11. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.13 — Management service agreement with Momentum Resources International Pty Ltd. �� dated July 16, 2005 and amendment dated January 28, 2008. | |
3.12. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.17 — Argor Heraeus Refining Contract — dated January 11, 2005 | |
3.13. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.18 — Dragon Equity and Debt Financing dated December 17, 2004 | |
3.14. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.19 — Assignment Agreement among Ivanhoe Mines Ltd., Zedex Minerals Limited, and Olympus Pacific Minerals, Inc. dated January 1, 2006 | |
3.15. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.20 — Certificate of Incorporation and Articles of Incorporation of Kadabra Mining Corp — May, 2007. | |
3.16. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.22 — Share Placement Documents dated March 19, 2007 | |
3.17. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.23 — Shareholders Rights Plan — dated June 25, 2007 | |
3.18. | Stock Option Plan — dated June 7, 2007. Reference is made to the Amended Annual Report on Form 20-F for the year ended December 31, 2008, dated February 3, 2010. | |
3.19. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.25 — Code of Ethics — September 19, 2006 |
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3.20. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.27 — Framework of Laos and Cambodia Joint Venture Agreement, July 17, 2007. | |
3.21. | Reference is made to the 2007 20F Annual Report dated March 28, 2008 exhibit 3.28 — Exploration License dated January 10, 2008 | |
3.22. | Reference is made to the Amended Registration Statement of Form 20-F-A dated June 29, 2007, submitted to the Securities and Exchange Commission on June 29, 2007 for exhibits 19B.1 - 19B.3.24. | |
3.23. | Reference is made to the Amended Registration Statement of Form 20-F-A dated July 13, 2007 for exhibit 19B3.25 and November 13, 2007 for exhibits 19B.3.26 and 19B.3.27. | |
3.24. | Reference is made to the 2008 20F Annual Report dated March 31,2009 exhibit 3.24 Management Service Agreement with Huong Le-Dao dated September 1, 2008. | |
3.25. | Reference is made to the 2008 20F Annual Report dated March 31,2009 exhibit 3.25 Employment Agreement with Thomas Rodney Pervical Jones dated January 1, 2008. | |
3.26. | Reference is made to the 2008 20F Annual Report dated March 31,2009 exhibit 3.26 Management service agreement with Orangue Holdings Limited, dated January 1, 2008 to provide the services of David Seton. | |
3.27. | Reference is made to the 2008 20F Annual Report dated March 31,2009 exhibit 3.27 Management service agreement with Action Management Limited, dated January 1, 2008, to provide the services of Charles Barclay. | |
3.28. | Reference is made to the 2008 20F Annual Report dated March 31,2009 exhibit 3.28 Management Service Agreement with Wholesale Products Limited, dated January 1, 2008, to provide the services of Peter Tiedemann. | |
3.29. | Reference is made to the 2008 20F Annual Report dated March 31,2009 exhibit 3.29 Management Service Agreement with Cawdor Holdings Limited, dated January 1, 2008, to provide the services of Russell Graham. | |
3.30. | Management Service Agreement with Avora Limited as Trustee of Lloyd Beaumont Trust, dated January 1, 2010, to provide the services of Paul Seton. | |
3.31. | Management Service Agreement with Whakapai Consulting Limited, dated January 1, 2010, to provide the services of S. Jane Bell | |
3.32. | Reference is made to the 2008 20F Annual Report dated March 31,2009 exhibit 3.30 Employment Agreement with James Hamilton dated January 1, 2008. | |
3.33. | Reference is made to the 2008 20F Annual Report dated March 31,2009 exchibit 3.31 Bong Mieu Exploration Licence No 2125/GP-BTNMT | |
3.34. | Reference is made to the 2008 20F Annual Report dated March 31,2009 exhibit 3.32 Gold Export Certificates — dated December 31, 2008 | |
3.35. | Reference is made to the 2008 20F Annual Report dated March 31,2009 exhibit 3.33 Addendum 3 to the Refining Contract of November 1st 2005 dated December 10, 2008 between Argor-Hearaeus SA and Bong Mieu Gold Mining Company. | |
3.36. | Gold Export Certificates — dated December 31, 2009 | |
3.37. | Convertible Loan Note Agreement and attachment dated March 26, 2010 | |
3.38. | Gold Loan Note Agreement dated June 19, 2010 |
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3.39. | Zedex Amalgamation Document — reference is made to Form CB filed with the SEC on November 19, 2009. | |
3.40. | Bau Joint Venture Agreement dated November 2006 and Schedules to Joint Venture Agreement | |
3.41. | Foreign Investment Committee Approval of Bau Joint Venture dated November 9, 2007 | |
3.42. | Tien Thuan Joint Venture Agreement — dated November 1, 2006 |
a. | Formwell Holdings Ltd. — incorporated in British Virgin Islands; | ||
b. | Bong Mieu Holdings Ltd. — incorporated in Thailand; | ||
c. | Bong Mieu Gold Mining Company Limited — incorporated in Vietnam (80% owned by Bong Mieu Holdings Ltd.; | ||
d. | Olympus Pacific Vietnam Ltd. — incorporated in British Virgin Islands; | ||
e. | New Vietnam Mining Corporation (NVMC) — incorporated in British Virgin Islands; | ||
f. | Phuoc Sun Gold Company Limited — incorporated in Vietnam (85% owned by New Vietnam Mining Corporation (NVMC); | ||
g. | Olympus Pacific Thailand Ltd. — incorporated in British Virgin Islands; | ||
h. | Kadabra Mining Corp. — incorporated in Philippines; | ||
i. | Olympus Pacific Minerals Inc Vietnam Ltd. — incorporated in Vietnam; | ||
j. | Olympus Pacific Minerals NZ Ltd. — incorporated in New Zealand; | ||
k. | Parnell Cracroft Ltd — incorporated in British Virgin Islands; | ||
l. | GR Enmore Pty Ltd. — incorporated in Australia (acquired as a result of the Zedex transaction which completed on January 12, 2010); | ||
m. | Binh Dinh NZ Gold Company Ltd. — incorporated in Vietnam (acquired as a result of the Zedex transaction which completed on January 12, 2010); | ||
n. | North Borneo Gold Sdn Bhd — incorporated in Malaysia (acquired as a result of the Zedex transaction which completed on January 12, 2010); | ||
o. | Bau Mining Co Ltd — incorporate in Samoa (acquired as a result of the Zedex transaction which completed on January 12, 2010); | ||
p. | KS Mining Ltd — incorporated in Samoa (acquired as a result of the Zedex transaction which completed on January 12, 2010) |
5.1. | Consent of Terra Mining Consultants and Stevens & Associates |
12.1 | Certification of Chief Executive Officer | ||
12.2 | Certification of Chief Financial Officer |
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13.1 | Certification of Chief Executive Officer | ||
13.2 | Certification of Chief Financial Officer |
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Olympus Pacific Minerals Inc. | ||||
By: | /s/ Peter Tiedemann | |||
Peter Tiedemann | ||||
Chief Financial Officer | ||||
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prepared in accordance with accounting principles generally accepted in Canada and reflect management’s best estimates and judgements based on currently available information. The Company has a system of internal controls designed to provide reasonable assurance that the financial statements are accurate and complete in all material respects. Management believes that the internal controls provide reasonable assurance that our financial information is reliable and relevant, and that assets are properly accounted for and safeguarded from loss.
Signed:“David A. Seton” | Signed:“Peter Tiedemann” | |
David A. Seton | Peter Tiedemann | |
Chairman and | Chief Financial Officer | |
Chief Executive Officer | March 31, 2010 | |
March 31, 2010 |
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Chartered Accountants
Licensed Public Accountants
March 31, 2010
(Except for notes 16(b) and 17, as to which the date is July 14, 2010)
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As at | December 31 | December 31 | ||||||
(United States dollars) | 2009 | 2008 | ||||||
ASSETS | ||||||||
Current | ||||||||
Cash | $ | 5,718,725 | $ | 4,161,735 | ||||
Accounts receivable and prepaid expenses | 3,544,182 | 2,487,361 | ||||||
Inventory (note 12) | 3,078,218 | 3,070,362 | ||||||
12,341,125 | 9,719,458 | |||||||
Long-term | ||||||||
Property, plant and equipment (note 6) | 9,430,738 | 10,684,740 | ||||||
Mineral properties (note 3) | 7,203,352 | 7,810,307 | ||||||
Deferred exploration and development costs (note 3) | 25,049,053 | 26,067,847 | ||||||
41,683,143 | 44,562,894 | |||||||
54,024,268 | 54,282,352 | |||||||
LIABILITIES | ||||||||
Current | ||||||||
Accounts payable and accrued liabilities | 4,564,458 | 3,611,948 | ||||||
Capital lease obligations (note 11) | 171,001 | 570,216 | ||||||
Asset retirement obligation (note 4) | 204,716 | 113,022 | ||||||
4,940,175 | 4,295,186 | |||||||
Long-term | ||||||||
Asset retirement obligation (note 4) | 770,010 | 1,046,883 | ||||||
770,010 | 1,046,883 | |||||||
5,710,185 | 5,342,069 | |||||||
Commitments, contingencies and contractual obligations (note 9) | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Equity attributable to equity owners | ||||||||
Share capital (note 7a) | 97,318,003 | 88,904,501 | ||||||
Contributed surplus (note 7a) | 6,938,486 | 6,631,296 | ||||||
Accumulated Other Comprehensive Loss | (2,513,078 | ) | (2,513,078 | ) | ||||
Deficit | (52,985,295 | ) | (44,082,436 | ) | ||||
48,758,116 | 48,940,283 | |||||||
Non-controlling interest | (444,033 | ) | — | |||||
Total share holders’ Equity | 48,314,083 | 48,940,283 | ||||||
$ | 54,024,268 | $ | 54,282,352 | |||||
For and on behalf | Signed:“David A. Seton” | Signed:“Jon Morda” | ||
of the Board | David A Seton | Jon Morda | ||
March 31, 2010 | Chairman & | Director & Chairman | ||
Chief Executive Officer | of Audit Committee |
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For the years ended December 31 (United States dollars) | 2009 | 2008 | 2007 | |||||||||
Sales — Gold | $ | 16,400,740 | $ | 7,275,324 | $ | 6,509,318 | ||||||
Cost and expenses | ||||||||||||
Cost of sales | 9,448,441 | 5,820,382 | 5,138,779 | |||||||||
Amortization | 4,392,945 | 2,468,047 | 1,791,446 | |||||||||
Management fees and salaries | 2,944,646 | 2,901,152 | 2,577,924 | |||||||||
Professional and consulting fees | 2,429,012 | 968,020 | 1,093,681 | |||||||||
Travel | 581,024 | 604,493 | 534,579 | |||||||||
Investor relations and promotion and Shareholders’ information | 232,090 | 440,884 | 565,644 | |||||||||
Office and general administrative | 559,055 | 642,076 | 388,466 | |||||||||
Transfer agent and regulatory fees | 211,032 | 187,129 | 150,175 | |||||||||
Royalty expense | 884,704 | 128,650 | 104,517 | |||||||||
General exploration and development | (21,227 | ) | 65,005 | 69,261 | ||||||||
Stock-based compensation (note 7b) | 3,569,314 | 997,336 | 2,114,536 | |||||||||
25,231,036 | 15,223,174 | 14,529,008 | ||||||||||
Other (income) expense | ||||||||||||
Interest income | (11,795 | ) | (551,023 | ) | (525,090 | ) | ||||||
Write-off of deferred exploration costs (note 3) | — | 865,779 | — | |||||||||
Write-off of deferred transaction costs | — | — | 247,010 | |||||||||
Loss on disposal of capital asset | 211,231 | 18,340 | — | |||||||||
Debt extinguishment cost (note 5) | — | — | 50,297 | |||||||||
Foreign exchange loss/(gain) | (196,962 | ) | (330,916 | ) | 527,438 | |||||||
2,474 | 2,180 | 299,655 | ||||||||||
Loss for the year before tax | (8,832,770 | ) | (7,950,030 | ) | (8,319,345 | ) | ||||||
Taxation expense | ||||||||||||
Corporate Income Tax | 514,122 | — | — | |||||||||
Loss for the year after tax | (9,346,892 | ) | (7,950,030 | ) | (8,319,345 | ) | ||||||
Currency Translation Adjustment | $ | — | $ | (12,250,965 | ) | $ | 3,287,889 | |||||
Comprehensive loss | $ | (9,346,892 | ) | $ | (20,200,995 | ) | $ | (5,031,456 | ) | |||
Attributable to: | ||||||||||||
Equity owners | $ | (8,902,859 | ) | $ | (20,200,995 | ) | $ | (5,031,456 | ) | |||
Non-Controlling Interest | $ | (444,033 | ) | $ | — | $ | — | |||||
$ | (9,346,892 | ) | $ | (20,200,995 | ) | $ | (5,031,456 | ) | ||||
Basic and diluted loss per common share attributable to equity holders | $ | (0.0383 | ) | $ | (0.0869 | ) | $ | (0.0251 | ) | |||
Weighted average number of common shares outstanding | 243,834,003 | 232,402,999 | 200,364,897 |
For the years ended December 31 (United States dollars) | 2009 | 2008 | 2007 | |||||||||
Deficit | ||||||||||||
Beginning of the year | $ | 44,082,436 | $ | 36,132,406 | $ | 27,813,061 | ||||||
Loss for the year attributable to equity owners | 8,902,859 | 7,950,030 | 8,319,345 | |||||||||
Deficit, end of the year | $ | 52,985,295 | $ | 44,082,436 | $ | 36,132,406 | ||||||
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For the years ended December 31 (United States dollars) | 2009 | 2008 | 2007 | |||||||||
Accumulated other comprehensive loss/(income) | ||||||||||||
Beginning of the year | $ | 2,513,078 | $ | (9,737,887 | ) | $ | (6,449,998 | ) | ||||
Currency Translation Adjustment | — | 12,250,965 | (3,287,889 | ) | ||||||||
Accumulated other comprehensive loss/(income), end of the year | $ | 2,513,078 | $ | 2,513,078 | $ | (9,737,887 | ) | |||||
For the years ended December 31 (United States dollars) | 2009 | 2008 | 2007 | |||||||||
Operating activities : | ||||||||||||
Loss for the year after tax | $ | (9,346,892 | ) | $ | (7,950,030 | ) | $ | (8,319,345 | ) | |||
Items not affecting cash | ||||||||||||
Amortization | 4,392,945 | 2,468,047 | 1,791,446 | |||||||||
Loss on disposal of capital assets | 211,231 | 18,340 | — | |||||||||
Stock-based compensation expense | 3,569,314 | 997,336 | 2,114,536 | |||||||||
ARO Adjustment (net) | (191,454 | ) | (117,197 | ) | (39,242 | ) | ||||||
Foreign exchange | (28,222 | ) | (128,494 | ) | 215,013 | |||||||
Write-off of deferred transaction costs | — | — | 247,010 | |||||||||
Write-off of deferred exploration and mineral property costs | — | 865,779 | — | |||||||||
Changes in non-cash working capital balances | ||||||||||||
Accounts receivable and prepaid expenses | (1,056,821 | ) | (1,844,652 | ) | 580,928 | |||||||
Accounts payable and accrued liabilities | 1,052,569 | 1,258,061 | 894,407 | |||||||||
Inventory | (7,856 | ) | (2,103,235 | ) | (629,339 | ) | ||||||
Cash used in operating activities | (1,405,186 | ) | (6,536,044 | ) | (3,144,586 | ) | ||||||
Investing activities : | ||||||||||||
Deferred exploration and development costs, net | (342,421 | ) | (8,505,450 | ) | (7,083,030 | ) | ||||||
Acquisition of property, plant and equipment | (1,417,444 | ) | (4,888,159 | ) | (1,514,249 | ) | ||||||
Cash used in investing activities | (1,759,865 | ) | (13,393,610 | ) | (8,597,279 | ) | ||||||
Financing activities : | ||||||||||||
Capital lease payments | (399,215 | ) | (530,242 | ) | (342,201 | ) | ||||||
Warrants issued | — | — | 1,016,893 | |||||||||
Shares issued on warrants exercised | — | — | 2,228,296 | |||||||||
Repayment of debt | — | — | (2,006,405 | ) | ||||||||
Share issue cost | (154,736 | ) | 16,867 | (1,924,113 | ) | |||||||
Shares Issued | 5,206,056 | — | 34,265,702 | |||||||||
Cash provided by/(used in) financing activities | 4,652,105 | (513,375 | ) | 33,238,172 | ||||||||
Increase/(decrease) in cash during the year | 1,487,054 | (20,443,029 | ) | 21,496,307 | ||||||||
Cash — beginning of the year | 4,161,735 | 24,310,245 | 3,325,436 | |||||||||
Effect of foreign exchange rate changes on cash | 69,936 | 294,519 | (511,499 | ) | ||||||||
Cash — end of the year | $ | 5,718,725 | $ | 4,161,735 | $ | 24,310,244 | ||||||
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Exchange rate at December 31, 2008 | 0.8166 | |||
Average exchange rate during the year ended December 31, 2008 | 0.9381 | |||
Average exchange rate during the year ended December 31, 2007 | 0.9304 |
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Deferred Exploration and | ||||||||||||||||
Mineral Properties | Development Costs | |||||||||||||||
December 31 | 2009 | 2008 | 2009 | 2008 | ||||||||||||
Bong Mieu Gold Co(4) | $ | 3,219,595 | $ | 3,220,670 | $ | 11,270,751 | $ | 9,271,355 | ||||||||
Phuoc Son Gold Co(3) | 4,993,450 | 4,995,064 | 15,465,134 | 17,100,323 | ||||||||||||
Capcapo | — | — | — | 753,656 | ||||||||||||
Other | — | — | 914 | 914 | ||||||||||||
8,213,045 | 8,215,734 | 26,736,799 | 27,126,248 | |||||||||||||
Accumulated amortization(1) | (1,009,693 | ) | (405,427 | ) | (1,687,746 | ) | (304,745 | ) | ||||||||
Write-off(2) | — | — | — | (865,779 | ) | |||||||||||
Foreign Exchange Adjustment | — | — | 112,123 | |||||||||||||
Total | $ | 7,203,352 | $ | 7,810,307 | $ | 25,049,053 | $ | 26,067,847 | ||||||||
(1) | Accumulated amortization relates to the Bong Mieu central mine which commenced commercial production on October 1, 2006 and the Phuoc Son mine which commenced commercial production on October 1, 2009. | |
(2) | Write-off of $865,779 of deferred exploration costs in 2008 relates to the Capcapo property where exploration activities have been halted due to the uncertainty of the current economic climate and the outcome of community consultation. | |
(3) | Deferred exploration and development costs are net of revenues and costs associated with ore mined and processed during the period prior to commercial operations of $3,056,091 for the 2009 year. | |
(4) | Deferred exploration and development costs include net revenues and costs associated with ore mined and processed during the period prior to commercial operations of $95,637 for the 2009 year. |
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December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Balance, beginning of the year | $ | 1,159,905 | $ | 699,842 | ||||
Liabilities incurred | (168,339 | ) | 402,036 | |||||
Liabilities settled and adjusted | (129,640 | ) | (145,013 | ) | ||||
Foreign exchange adjustment | 6,275 | 160,046 | ||||||
Accretion | 106,525 | 42,994 | ||||||
Balance, end of the period | 974,726 | 1,159,905 | ||||||
Current portion | 204,716 | 113,022 | ||||||
Non-current portion | $ | 770,010 | $ | 1,046,883 | ||||
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December 31, 2009 | December 31, 2008 | |||||||||||||||||||||||
Accumulated | Net book | Accumulated | Net book | |||||||||||||||||||||
Cost | depreciation | value | Cost | depreciation | value | |||||||||||||||||||
Building | $ | 917,564 | $ | 605,271 | $ | 312,293 | $ | 884,337 | $ | 360,726 | $ | 523,611 | ||||||||||||
Leasehold improvements | 123,433 | 104,234 | 19,199 | 122,644 | 67,100 | 55,544 | ||||||||||||||||||
Machinery and equipment | 9,060,946 | 3,883,501 | 5,177,445 | 7,112,255 | 2,332,826 | 4,779,429 | ||||||||||||||||||
Office equipment, furniture and fixtures | 987,863 | 719,380 | 268,483 | 1,030,157 | 613,132 | 417,025 | ||||||||||||||||||
Vehicles | 370,251 | 307,426 | 62,825 | 363,505 | 238,101 | 125,404 | ||||||||||||||||||
Infrastructure | 4,422,529 | 1,831,897 | 2,590,632 | 3,313,310 | 1,043,317 | 2,269,993 | ||||||||||||||||||
Capital Assets in progress | 999,861 | — | 999,861 | 2,513,734 | — | 2,513,734 | ||||||||||||||||||
$ | 16,882,447 | $ | 7,451,709 | $ | 9,430,738 | $ | 15,339,942 | $ | 4,655,202 | $ | 10,684,740 | |||||||||||||
• | Maintaining a liquidity cushion in order to address the operational and/or industry disruptions or downturns; | ||
• | Preparing detailed budgets by project that are approved by the Board for development, exploration and corporate costs; | ||
• | Routine internal reporting and Board meetings to review actual versus budgeted spending; and | ||
• | Detailed project financial analysis to determine new funding requirements. |
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Number of | Amount | |||||||
Shares | $ | |||||||
Common shares, January 1, 2008 | 232,377,011 | $ | 88,860,318 | |||||
Share Issue Costs | — | 19,375 | ||||||
Bonus common shares issued | 46,090 | 24,808 | ||||||
Common shares, December 31, 2008 | 232,423,101 | $ | 88,904,501 | |||||
Bonus common shares issued | 784,480 | 343,537 | ||||||
Private Placement (1) | 16,216,216 | 3,000,000 | ||||||
Common shares issued | 52,734 | 3,375 | ||||||
Exercise of options (2) | 18,982,248 | 5,221,326 | ||||||
Share issue costs (1) | — | (154,736 | ) | |||||
Common shares, December 31, 2009 | 268,458,779 | $ | 97,318,003 | |||||
(1) | In May 2009 the Company completed a non-brokered private placement of 16,216,216 shares at a price of US$0.1850 per share, for gross proceeds of $3,000,000 and net proceeds of $2,845,264. Agents for the private placement were paid a cash commission of 5 percent of the gross proceeds of the placement. | |
(2) | In December 2009 several officers of the Company exercised their 2009 options. |
December 31 | December 31 | |||||||
2009 | 2008 | |||||||
Balance, beginning of the period | $ | 6,631,296 | $ | 5,582,694 | ||||
Options granted and vested during the year | 3,569,313 | 949,795 | ||||||
Options exercised during the year | (3,018,645 | ) | — | |||||
Bonus common shares granted and vested during the year | — | 109,362 | ||||||
Bonus common shares issued | (149,851 | ) | (10,555 | ) | ||||
Tax recovery on expiry of warrants | (93,627 | ) | — | |||||
Balance, end of the period | $ | 6,938,486 | $ | 6,631,296 | ||||
F-16
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December 31, 2009 | December 31, 2008 | |||||||||||||||
Weighted Average | Weighted Average | |||||||||||||||
Number | Exercise | Number | Exercise | |||||||||||||
of Options | Price $CAD | of Options | Price $CAD | |||||||||||||
Outstanding, beginning of the period | 19,589,184 | 0.52 | 17,592,334 | 0.53 | ||||||||||||
Granted | 20,755,560 | 0.12 | 4,121,850 | 0.42 | ||||||||||||
Exercised | (18,982,248 | ) | 0.12 | — | — | |||||||||||
Cancelled/ Expired | (3,150,000 | ) | 0.43 | (2,125,000 | ) | 0.42 | ||||||||||
Outstanding, end of the period | 18,212,496 | 0.50 | 19,589,184 | 0.52 | ||||||||||||
Options exercisable at the end of the period | 15,531,262 | 0.51 | 14,789,890 | 0.52 |
Options Outstanding | Options Exercisable | |||||||||||||||||||
Number | Weighted | |||||||||||||||||||
Range of | Outstanding | Weighted | Average | Number | ||||||||||||||||
Exercise | As at | Average | Exercise | Exercisable | Weighted Average | |||||||||||||||
Prices | Dec 31, | Remaining | Price | As at | Exercise Price | |||||||||||||||
$CAD | 2009 | Life (years) | $CAD | Dec 31, 2009 | $CAD | |||||||||||||||
$0.12 | 1,773,312 | 4.01 | 0.12 | 1,773,312 | 0.12 | |||||||||||||||
$0.30 - 0.36 | 3,530,000 | 0.84 | 0.33 | 3,530,000 | 0.33 | |||||||||||||||
$0.40 - 0.45 | 4,350,184 | 1.97 | 0.40 | 1,835,617 | 0.41 | |||||||||||||||
$0.50 - 0.55 | 459,000 | 1.60 | 0.53 | 459,000 | 0.53 | |||||||||||||||
$0.60 - 0.65 | 3,850,000 | 2.60 | 0.65 | 3,683,333 | 0.65 | |||||||||||||||
$0.75 | 4,250,000 | 2.26 | 0.75 | 4,250,000 | 0.75 | |||||||||||||||
18,212,496 | 0.50 | 15,531,262 | 0.51 | |||||||||||||||||
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December 31, 2009 | December 31, 2008 | |||||||||||||||
Weighted Average | ||||||||||||||||
Exercise | Weighted Average | |||||||||||||||
Number | Price | Number | Exercise | |||||||||||||
of Warrants | $CAD | of Warrants | Price $CAD | |||||||||||||
Outstanding, beginning of the period | 19,554,716 | 0.80 | 21,344,716 | 0.78 | ||||||||||||
Granted | — | — | — | |||||||||||||
Exercised | — | — | — | |||||||||||||
Expired1 | (19,554,716 | ) | 0.80 | (1,790,000 | ) | 0.58 | ||||||||||
Outstanding, end of the period | — | — | 19,554,716 | 0.80 | ||||||||||||
1. | The warrants that expired related to the August 10, 2007 private placement. (2008 relates to the March 31, 2007 private placement) |
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Year-to-date December 31 | ||||||||
2009 | 2008 | |||||||
Consulting and legal fees | $ | 184,852 | $ | 103,804 | ||||
Management fees | $ | 916,409 | $ | 834,755 | ||||
Reimbursement of expenses | $ | 390,048 | $ | 282,955 | ||||
Royalties | $ | 128,746 | $ | 134,177 | ||||
Loans | $ | 1,563,753 | — | |||||
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Less than | Year 5 and | |||||||||||||||||||||||
Payment Due | Total | one year | Year 2 | Year 3 | Year 4 | thereafter | ||||||||||||||||||
Capital lease obligations | 171,001 | 171,001 | — | — | — | — | ||||||||||||||||||
Operating leases | 628,758 | 192,242 | 114,969 | 114,312 | 99,235 | 108,000 | ||||||||||||||||||
Purchase obligations — supplies & services | 3,520,340 | 3,519,480 | 860 | — | — | — | ||||||||||||||||||
Purchase obligations — capital | — | — | — | — | — | — | ||||||||||||||||||
Asset retirement obligations | 974,726 | 204,716 | 179,188 | 128,243 | 430,843 | 31,736 | ||||||||||||||||||
Total | $ | 5,294,825 | $ | 4,087,439 | $ | 295,017 | $ | 242,555 | $ | 530,078 | $ | 139,736 | ||||||||||||
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December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Total minimum lease payment | $ | 171,001 | $ | 570,216 | ||||
Less: current portion | (171,001 | ) | (570,216 | ) | ||||
$ | — | $ | — | |||||
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December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Doré Bars | $ | 259,524 | $ | 155,518 | ||||
Ore in stockpiles | 524,978 | 311,371 | ||||||
Gold in circuit | 26,115 | 174,375 | ||||||
Mine operating supplies | 2,267,601 | 2,429,098 | ||||||
Total | $ | 3,078,218 | $ | 3,070,362 | ||||
2009 | 2008 | 2007 | ||||||||||
Loss | $ | (8,833,000 | ) | $ | (7,950,000 | ) | $ | (8,319,000 | ) | |||
Expected tax benefit | (2,915,000 | ) | (2,662,000 | ) | (2,839,000 | ) | ||||||
Issue costs | (304,000 | ) | (276,000 | ) | (321,000 | ) | ||||||
Foreign tax differential | 111,000 | 200,000 | (785,000 | ) | ||||||||
Foreign exchange on Vietnam losses | — | 1,174,000 | — | |||||||||
Non-deductible portion | 1,192,000 | (1,635,000 | ) | 1,981,000 | ||||||||
Other | 204,000 | 812,000 | — | |||||||||
Benefit of current year loss not recognized | 2,226,000 | 2,387,000 | 1,964,000 | |||||||||
Total income tax expense | $ | 514,000 | $ | — | $ | — | ||||||
2009 | 2008 | 2007 | ||||||||||
Non-capital losses carried forward | $ | 7,576,000 | $ | 7,288,000 | $ | 5,332,000 | ||||||
Issue costs | 500,000 | 616,000 | 707,000 | |||||||||
Capital assets | 53,000 | 64,000 | 49,000 | |||||||||
Resource related deductions | 500,000 | 572,000 | 592,000 | |||||||||
Future income tax asset | 8,629,000 | 8,540,000 | 6,680,000 | |||||||||
Future income tax liability | (329,000 | ) | (1,712,000 | ) | — | |||||||
Net future income tax asset | 8,300,000 | 6,828,000 | 6,680,000 | |||||||||
Valuation allowance | (8,300,000 | ) | (6,828,000 | ) | (6,680,000 | ) | ||||||
Net future income tax asset | $ | — | $ | — | $ | — | ||||||
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Non-capital loss carryforwards | Year of loss | Note | Amount | Expiry Date | ||||||||||||
Canada | 2009 | 1 | 2,510,000 | 2029 | ||||||||||||
Vietnam | 2009 | 2 | 2,228,000 | 2014 | ||||||||||||
Canada | 2008 | 1 | $ | 3,201,000 | 2028 | |||||||||||
Vietnam | 2008 | 2 | 1,308,000 | 2013 | ||||||||||||
Canada | 2007 | 1 | $ | 7,605,000 | 2027 | |||||||||||
Vietnam | 2007 | 2 | 1,342,000 | 2012 | ||||||||||||
Canada | 2006 | 1 | 2,654,000 | 2026 | ||||||||||||
Vietnam | 2006 | 2 | 8,059,000 | 2011 | ||||||||||||
Canada | 2005 | 3 | 1,088,000 | 2015 | ||||||||||||
Canada | 2004 | 3 | 2,313,000 | 2014 | ||||||||||||
Canada | 2003 | 4 | 816,000 | 2010 | ||||||||||||
Total non-capital loss carryforwards | $ | 33,124,000 | ||||||||||||||
(1) | — Loss carryforward of 20 years | |
(2) | — Vietnam has a loss carryforward of 5 years | |
(3) | — Loss carryforward of 10 years | |
(4) | — Loss carryforward of 7 years |
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a) • | On January 12, 2010, the Company and Zedex amalgamated and Zedex Shareholders shares were cancelled and they were allocated 1 common share in Olympus in exchange for 2.4 common shares in Zedex. Total consideration for the amalgamation amounted to approximately US$34.8 million, and was paid to Zedex shareholders by way of redistribution of the 65,551,043 Olympus shares that Zedex already held along with the issuing of a further 54,226,405 new Olympus shares. In addition, 4,395,835 stock options were issued by Olympus to compensate the cancellation of Zedex options. The 54,226,405 new common shares in Olympus were issued on January 25, 2010. | ||
Zedex management staff were provided with contracts with Olympus. Mr. Leslie Robinson, director of Zedex, was appointed to the Board of Olympus on December 17, 2009. Mr. Rodney Murfitt, formerly Chief Geologist for Zedex, became Group Exploration Manager for Olympus. Mr. Paul Seton, formerly CEO of Zedex, became Senior Vice President Commercial for Olympus and Ms. Jane Bell (previously Baxter), formerly CFO and Company Secretary for Zedex, became Vice president Finance for Olympus. | |||
All costs associated with the amalgamation have been expensed during the year, these being recorded in professional and consulting fees in the consolidated statement of operations and comprehensive loss. | |||
The acquisition will be accounted for as a business combination with Olympus being identified as the acquirer. The purchase method of accounting will be used and earnings will be consolidated from the acquisition date. The Company is in the process of evaluating the fair value of assets acquired and liabilities assumed, including goodwill, if any. As a result of this acquisition, the Company will no longer have the obligation to pay the 2 percent royalty to Zedex. | |||
• | On January 4, 2010 the Company issued 3,702,629 options to officers of the Company in relation to their 2010 management contracts. The options vest immediately, have an exercise price of CAD$0.40 and can be exercised on or before December 31, 2014. | ||
• | In 2010 the Company agreed to issue 951,703 common shares in settlement of AUD$319,335 consultancy fee related to the amalgamation with Zedex. The fee is included in accounts payable at December 31, 2009. | ||
• | In March 2010 the Company entered into a Securities Purchase Agreement with an independent investor for the issue of CAD$10,000,000 and a maximum of CAD$12,750,000 of Units. The funds will be used in the establishment of a processing plant at Phuoc Son. Each Unit consist of: (i) a nine (9) percent subordinated unsecured convertible promissory note of the Company in the aggregate principal amount of CAD $0.84 per unit, which is convertible into shares of the Company’s common stock, with no par value at CAD $0.42 per share, and (ii) two (2) separate common stock purchase warrants, the first of which is fully vested and immediately exercisable for the purchase of one share of Common Stock at an exercise price of CAD $0.50 per share and the second of which is exercisable for the purchase of two shares of Common Stock at an exercise price of CAD $0.42 per share. On March 26, 2010, the Company closed this transaction and received CAD$11,729,988 in net proceeds. | ||
b) — | In June 2010 the Company completed the placement of US$21.96 million of Gold Delivery Notes. The funds will be used for the construction of a processing facility at the Company’s Phuoc son and Bong Mieu Mines in Vietnam, general exploration and corporate purposes. Each Gold Delivery Unit consists of: (i) an eight percent (8%) senior secured redeemable gold delivery promissory note of the Company (each, a “Note” and, collectively, the “Notes”) in the stated or deemed principal amount of US$10,000, and (ii) a detachable common stock purchase warrant (each, a “Warrant” and, collectively, the “Warrants”) for the purchase of 3,470 common shares (“Common Shares”), exercisable on or before May 31, 2013 at an |
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exercise price of CAD $0.60 per share (subject to standard anti-dilution adjustment). The Warrants may be exercised on a “cashless” or “net exercise” basis at the option of the holder. | |||
The Notes mature on May 31, 2013 (the “Maturity Date”), bear interest at the rate of 8% per annum, and are secured obligations of the Company. | |||
• | In May 2010 the Company increased the quantum of shares reserved with the Toronto Stock Exchange to the maximum allowable for issuance upon the exercise of stock options granted pursuant to the term’s of its Stock Option Plan as approved by the TSX. | ||
• | In May 2010 shareholders approved the issue of 3,000,000 incentive stock options to Directors of the Company and 350,000 incentive stock options to the Company Secretary, each option exercisable for a period of five years for the purchase of one common share of the Company at a price of CAD$0.42 per common share. | ||
• | In May 2010 shareholders approved the issue of 3,000,000 incentive stock options to Directors of the Company and 350,000 incentive stock options to the Company Secretary, each option exercisable for a period of five years for the purchase of one common share of the Company at a price of CAD$0.60 per common share. |
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F-26
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F-27
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2009 | 2008 | |||||||||||||||||||||||||||
Canadian | US | Canadian | US | |||||||||||||||||||||||||
For the years ended December 31 | Notes | GAAP | Adjustments | GAAP | GAAP | Adjustments | GAAP | |||||||||||||||||||||
Current assets | $ | 12,341,125 | — | $ | 12,341,125 | $ | 9,719,458 | $ | — | $ | 9,719,458 | |||||||||||||||||
Long-term assets | ||||||||||||||||||||||||||||
Mineral properties | (b | ) | 7,203,352 | (30,623 | ) | 7,172,729 | 7,810,307 | (30,623 | ) | 7,779,684 | ||||||||||||||||||
Capital assets(i) | (b | ) | 9,430,738 | (64,782 | ) | 9,365,956 | 11,676,076 | (64,782 | ) | 11,611,294 | ||||||||||||||||||
Deferred exploration and development costs | (a | ) | 25,049,053 | (20,251,277 | ) | 4,797,776 | 25,076,511 | (21,530,980 | ) | 3,545,531 | ||||||||||||||||||
41,683,143 | (20,346,682 | ) | 21,336,461 | 44,562,894 | (21,626,385 | ) | 22,936,509 | |||||||||||||||||||||
Total Assets | $ | 54,024,268 | $ | (20,346,682 | ) | $ | 33,677,586 | $ | 54,282,352 | $ | (21,626,385 | ) | $ | 32,655,967 | ||||||||||||||
Total Liabilities | 5,710,185 | — | 5,710,185 | 5,342,069 | — | 5,342,069 | ||||||||||||||||||||||
Equity attributable to equity owners | 48,758,116 | (20,451,357 | ) | 28,306,759 | 48,940,283 | (21,626,385 | ) | 26,313,898 | ||||||||||||||||||||
Non-controlling interest | (444,033 | ) | 104,675 | (339,358 | ) | — | — | — | ||||||||||||||||||||
Total Shareholders’ equity | 48,314,083 | (20,346,682 | ) | 27,967,401 | 48,940,283 | (21,626,385 | ) | 26,313,898 | ||||||||||||||||||||
Total liabilities and Shareholders’ equity | $ | 54,024,268 | $ | (20,714,437 | ) | $ | 33,677,586 | $ | 54,282,352 | $ | (21,626,385 | ) | $ | 32,655,967 | ||||||||||||||
(i) | Under Canadian GAAP, capitalized interest is recorded as an addition to deferred development costs and under US GAAP, capitalizated interest is recorded as an addition to capital assets. |
F-28
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2008 | ||||||||||||||||
For the years ended December 31 | Notes | 2009 | -Restated | 2007 | ||||||||||||
Net loss under Canadian GAAP | $ | 9,346,892 | $ | 7,950,031 | $ | 8,319,348 | ||||||||||
Sales | (b | ) | (7,928,120 | ) | (2,303,888 | ) | — | |||||||||
Cost, amortization and expenses | (a)& | (b) | 4,733,933 | 2,554,950 | — | |||||||||||
Exploration expenditures | (a | ) | 1,903,759 | 5,390,363 | 7,427,030 | |||||||||||
Reverse write-down | (a | ) | — | (865,791 | ) | — | ||||||||||
Net loss under US GAAP | $ | 8,056,464 | $ | 12,725,665 | $ | 15,746,378 | ||||||||||
Attributable to Non-controlling interest | 339,358 | — | — | |||||||||||||
Attributable to equity owners | $ | 7,717,106 | $ | 12,725,665 | $ | 15,746,378 | ||||||||||
Currency Translation Adjustment under Canadian GAAP | — | 12,250,965 | (3,287,889 | ) | ||||||||||||
US GAAP Adjustment | — | (4,019,444 | ) | (2,017,597 | ) | |||||||||||
Currency Translation Adjustment under Canadian GAAP | — | 8,231,521 | (5,305,486 | ) | ||||||||||||
Total Comprehensive loss under US GAAP | $ | 8,056,464 | $ | 20,957,186 | $ | 10,440,892 | ||||||||||
Attributable to Non-controlling interest | 339,358 | — | — | |||||||||||||
Attributable to equity owners | $ | 7,717,106 | $ | 20,957,186 | $ | 10,440,892 | ||||||||||
Basic and diluted loss per common share attributable to equity holders under US GAAP | $ | 0.03 | $ | 0.05 | $ | 0.08 | ||||||||||
2008- | ||||||||||||
For the years ended December 31 | 2009 | Restated | 2007 | |||||||||
Activities | ||||||||||||
Operating | (114,758 | ) | (12,177,469 | ) | (10,571,616 | ) | ||||||
Investing | (3,050,293 | ) | (7,752,185 | ) | (1,170,249 | ) | ||||||
Financing | 4,652,105 | (513,375 | ) | 33,238,172 | ||||||||
Cash and equivalents at the beginning of year | 4,161,735 | 24,310,245 | 3,325,436 | |||||||||
Effect of foreign exchange rate changes on cash | 69,936 | 294,519 | (511,499 | ) | ||||||||
Cash and equivalent at end of year | $ | 5,718,725 | $ | 4,161,735 | $ | 24,310,245 | ||||||
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(i) | The power to direct the activities of a VIE that most significantly impact the entity’s economic performance; and | ||
(ii) | The obligation to absorb losses or receive benefits from the entity that could potentially be significant to the VIE. |
F-30
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(i) | Transfers in and out of level 1 and 2 fair value measurements; and | ||
(ii) | Enhanced detail in the level 3 reconciliation. |
(i) | The level of disaggregation required for assets and liabilities; and | ||
(ii) | The disclosures required for inputs and valuation techniques used to measure fair value for both recurring and nonrecurring measurements that fall in either level 2 or level 3. |
F-31