condensed interim financial report for the half year ended ...€¦ · condensed interim financial...

ABN 85 003 257 556

Condensed Interim Financial Report

For the Half Year Ended 30 June 2008

This document contains the half year information lodged with the ASX under listing rule 4.2A and the interim financial report prepared in accordance with the requirements of Accounting Standard AASB 134 Interim Financial Reporting.

This information should be read in conjunction with the 31 December 2007 Annual Report.

MILLENNIUM MINERALS LIMITED STATUTORY FINANCIAL STATEMENTS FOR THE HALF‐YEAR ENDED 30 JUNE 2008 Page 1 of 21

Corporate Particulars

DIRECTORS

Barry Eldridge (Non-Executive Chairman) Andrew Law (Managing Director)

Michael Grigson (Exploration Director) Clive Donner Ross Gillon

COMPANY SECRETARY

Mark Freeman

PRINCIPAL PLACE OF BUSINESS AND REGISTERED OFFICE

Ground Floor

24 Outram Street WEST PERTH WA 6005

Telephone: +61 (0)8 9488 8800 Facsimile: +61 (0)8 9481 0288

SHARE REGISTRY

Advanced Share Registry Services 150 Stirling Highway

NEDLANDS WA 6009 Telephone: +61 (0)8 9389 8033 Facsimile: +61 (0)8 9389 7871

AUDITORS

Rothsay Chartered Accountants Level 18, 6 O’Connell Street

SYDNEY NSW 2000 Telephone: +61 (0)2 8815 5400 Facsimile: +61 (0)2 8815 5401

Australian Stock Exchange

Home Branch: Perth

Code: MOY

Australian Business Number (ABN)

85 003 257 556


Directors’ Report

Your directors present their report on the financial statements for the half-year ended 30 June 2008.

DIRECTORS

The names of the Company’s directors in office during the half year and until the date of this report are as below. Directors were in office for this entire period.

Barry Eldridge BSc (Geology), BE (Mining) – Non Executive - Chairman – Appointed 6 September 2007

Andrew Law MBA (UWA), HND (MetMin) – Managing Director – Appointed 7 September 2007

Michael Grigson BSc (Geology), PhD (Geology) – Executive Director - Exploration – Appointed 26 October 2007

Clive Donner BComm – Non Executive Director – Appointed 5 September 2003

Ross Gillon BJurisLLB – Non Executive Director – Appointed 16 June 2003

PRINCIPAL ACTIVITY

The principal activity of the Company during the half year was the continued exploration for molybdenum and gold.

EVENTS SUBSEQUENT TO BALANCE DATE

There were no significant events subsequent to balance date.

RESULT

The loss after income tax for the half financial year was $1,623,466 (2007 Half Year: Loss of $4,292,077).

DIVIDENDS

No dividend was paid during the financial half year and the directors do not recommend payment of a dividend.

REVIEW OF OPERATIONS

The principle activity of the Company over the first half of the year was the continued exploration for molybdenum and gold at Nullagine, in the East Pilbara of Western Australia. The Company incurred a loss of $1,623,466 (2007: loss of $4,292,077) for the first half of the year.

During the first half of the year the Company’s name officially changed (effective 7 March 2008) to Millennium Minerals Limited to better reflect the Company’s new strategic direction. This new strategy is based on the repositioning of the Company as a diversified molybdenum and gold explorer after the discovery of a large-scale Millennium molybdenum soil anomaly in early 2007.


Directors’ Report (con’t)

Focused exploration efforts, during the half year at the Millennium molybdenum project, saw the completion of a comprehensive 72 line-kilometre dipole-dipole IP survey, with data being collected along 18 main lines and 7 infill lines, to effectively cover the full extent of the Millennium aeromagnetic anomaly to a depth of 400 metres. The data was interpreted and integrated into a three-dimensional geological model, which has led to the formulation of the 2008 drilling program.

The IP survey identified two large, strong chargeability anomalies. The largest and most coherent chargeability anomaly lies beneath flood-plain alluvium, on the eastern side of the Five Mile Creek. At a threshold of 12 milliseconds, this anomaly extends for over 3km in a north-south direction, and is up to 1km wide. The second major chargeability anomaly lies at the south-western end of the full IP survey area, and whilst this anomaly is more compact than that to the east, the peak chargeability level is much higher at 72 milliseconds. Importantly, the level of chargeability within these anomalies greatly exceeds the levels obtained around the known Mo mineralisation (intersected by the 2007 drill hole pattern), and the response extends over a much larger area.

The 2008 drilling program has been designed primarily to test the two large chargeability anomalies defined by the recent IP survey, but consideration has also been given to testing below the Mo mineralisation intersected by the 2007 reverse circulation (RC) holes, and testing a prominent conductivity anomaly defined by a heliborne electromagnetic (EM) survey undertaken in 2004. Up to fifteen holes, with varying depths from 200 to 800 metres, are programmed to be drilled using a combination of RC (precollar) and diamond core drill rigs during the remainder of the year.

On the broader reconnaissance exploration front during the half year, the regional soil sampling program along 800m spaced lines has now been extended across the entire 680km2 land holding at Nullagine. This important initiative has taken just under two years to complete on a campaign basis, and was instrumental in the discovery of the Millennium molybdenum project in the Five Mile Creek area, and a series of new gold resources along strike from the Golden Gate deposit. A number of broad gold anomalies delineated by this first-pass sampling program in the eastern part of the land holding will be further refined over the coming months by infill sampling along closer spaced lines.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

There were no significant events after the balance date.



SHARE OPTIONS

Options on Issue

At the date of this report unissued shares of the Company under option are:

Expiry Date Number of Options Exercise Price

19 December 2011 (unlisted) 10,700,000 29 cents

19 December 2011 (unlisted) 5,000,000 23 cents

31 October 2011 (unlisted) 3,500,000 30 cents

31 October 2011 (unlisted) 8,500,000 20 cents

21 February 2012 (unlisted) 2,500,000 20 cents

20 September 2008 (unlisted) 140,000 35 cents

2008 2007

Number Number

Options – unlisted

Balance at beginning of half year 16,500,000 3,016,000

Issued during half year 14,640,000 12,450,000

Expired or cancelled during half year (2,500,000) (5,366,000)

Balance at end of half year 28,640,000 10,100,000

Note: The Company had no listed options during the periods.



On 25 February 2008 the following Directors’ options were issued: (i) 5,000,000 exercisable at 20 cents each and expiring 31 October 2011 were issued to Mr Barry Eldridge; (ii) 3,500,000 exercisable at 20 cents each and expiring 31 October 2011 together with a further 3,500,000 exercisable at 30 cents each and expiring 31 October 2011 were issued to Mr Andrew Law; and (iii) 2,500,000 exercisable at 20 cents each expiring 21 February 2012 together with a further 140,000 options exercisable at 35 cents each expiring 20 September 2008 were issued to Mr Michael Grigson. The 11,000,000 options issued to previous directors prior to 31 December 2007 also remain on issue. None of these options were exercised during the year. All directors’ options are fully vested.

On 7 July 2008 Employee Options totalling 1,800,000 were issued with an exercise price of 29 cents and expiry date of 19 December 2011.

Fair Value of options granted to directors on 25 February 2008

The fair value at grant date is independently determined using the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the share price at valuation date (being 10 cents on 11 January 2008), and the expected price volatility (100%) of the underlying share, the expected dividend yield (0%) and the risk-free interest rate (6.3%) for the term of the option. A discount of 20% was applied as the options will not be listed. The abovementioned options for Messrs Eldridge, Law and Grigson were valued at: (i) $0.0486 each; (ii) $0.0486 and $0.0423 each; and (iii) $0.0499 and $0.0014 each.



CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Millennium support and have adhered to the principles of corporate governance. The Company's corporate governance statement is contained within the 31 December 2007 Annual Report.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Company’s operations are subject to environmental regulation under the laws of the Commonwealth and of the State, with specific conditions relating to rehabilitation.

In the case of Approved Mining Proposals, bonds are held by the Company’s bank which may be released to the Company when Department of Industry and Resources is satisfied that conditions imposed on those licences have been met.

Mining Proposals incorporate environmental conditions, including those related to noise, dust, water run off, rare and endangered flora and fauna, sites of historical and aboriginal significance as well as rehabilitation criteria.

The Directors advise that during the half year ended 30 June 2008, no claim has been made by any competent authority that any environmental issues condition of licence or notice of intent have been breached, or any bond forfeited.

AUDITOR’S INDEPENDENCE DECLARATION

The following is a copy of a letter received from the Company's auditors:

"Dear Sirs,

In accordance with Section 307C of the Corporations Act 2001 (the "Act") I hereby declare that to the best of my knowledge and belief there have been:

i) no contraventions of the auditor independence requirements of the Act in relation to the audit review of the 30 June 2008 half-year financial statements; and

ii) no contraventions of any applicable code of professional conduct in relation to the audit review.

Frank Vrachas (Lead Auditor)

Rothsay Chartered Accountants”

This report is made in accordance with a resolution of the directors.

Dated this 11th day of September 2008.

On behalf of the directors

Andrew Law, Managing Director


Condensed Income Statement

For The Half Year Ended 30 June 2008

6 Months to June

2008

6 Months to June

2007

$ $

Revenue from ordinary activities 528,521 344,178

Carrying amount of non-current assets sold (261,085) -

Exploration expenses written off - (307,277)

Value of share options expensed (974,096) -

Depreciation and amortisation (64,339) (53,969)

Employment/Consultants (392,690) (505,151)

Non cash fair value adjustment / Impairment of Assets - (3,008,350)

Finance costs (30,166) (31,441)

Management and administration (429,611) (730,067)

Other expenses from ordinary activities - -

Profit/(Loss) from ordinary activities before income tax expense (1,623,466) (4,292,077)

Income Tax Expense - -

Net profit/(loss) attributable to the members of Millennium Minerals Limited (1,623,466) (4,292,077)

Total changes in equity other than those resulting from transactions with owners as owners (1,623,466) (4,292,077)

Earnings Per Share - Basic (0.007) (0.009)


Condensed Balance Sheet

As at 30 June 2008

30 Jun

2008

31 Dec

2007

30 Jun

2007

$ $ $

CURRENT ASSETS

Cash and cash equivalents 3,746,477 6,227,674 4,566,680

Trade & other receivables 296,338 76,990 20,469

Total current assets 4,042,815 6,304,664 4,587,149

NON-CURRENT ASSETS

Exploration and evaluation expenditure 25,615,951 24,124,683 24,113,500

Property plant and equipment 2,408,092 2,487,320 10,426,425

Total non-current assets 28,024,043 26,612,003 34,539,925

Total assets 32,066,858 32,916,667 39,127,074


Condensed Balance Sheet (con’t)

As at 30 June 2008

30 June

2008

31 Dec

2008

30 Jun

2007

$ $ $

CURRENT LIABILITIES

Trade & other payables 343,430 532,768 948,879

Provisions 44,252 55,353 40,170

Financial liabilities 600,000 600,000 634,538

Total current liabilities 987,682 1,188,121 1,623,587

NON-CURRENT LIABILITIES

Financial Liabilities - - 40,295

Total non-current liabilities - - 40,295

Total liabilities 987,682 1,188,121 1,663,882

Net assets 31,079,176 31,728,546 37,463,192

EQUITY

Contributed equity

Reserves

50,577,239

2,081,048

50,577,239

1,106,952

50,724,692

-

Accumulated losses (21,579,111) (19,955,645) (13,261,500)

Total equity 31,079,176 31,728,546 37,463,192


Condensed Statement of Changes in Equity


Equity: Issued capital

Accumulated losses

Other reserves

Total Equity

At 1 January 2007 50,452,239 (8,969,424) 147,453 41,630,268

Total income / (expense) for the period - (4,292,077) - (4,292,077)

Issue of Share Capital (net of issue costs) 125,000 - - 125,000

Equity settled payments - - - -

Balance at 30 June 2007 50,577,239 (13,261,501) 147,453 37,463,191

At 1 January 2008 50,577,239 (19,955,645)

1,106,952 31,728,546

Total income / (expense) for the period - (1,623,466) - (1,623,466)

Issue of Share Capital (net of issue costs) - - - -

Equity settled payments 974,096 974,096

Balance at 30 June 2008 50,577,239 (21,579,111) 2,081,048 31,079,176


Condensed Statement of Cash Flows


6 Months

to

Jun 2008

6 Months

to

Jun 2007

$ $

CASH FLOWS FROM OPERATING ACTIVITIES

Payments to suppliers and employees (2,494,408) (1,107,715)

Interest received 152,020 239,380

Interest and borrowing costs paid (30,166) (31,441)

Rental and other income 123,232 92,253

Net cash used in operating activities (2,249,322) (807,523)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for plant and equipment (300,141) (4,421,761)

Payments for mineral exploration areas - (74,785)

Proceeds from sale of plant and equipment 14,818 (2,072,507)

Payment for mineral exploration security deposits 55,448 9,159

Net cash provided by investing activities (229,875) (6,559,894)


Condensed Statement of Cash Flows (con’t)


6 Months

to

Jun 2008

6 Months

to

Jun 2007

$ $

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of shares - 125,000

Repayment of loan - (35,867)

Net cash provided by financing activities - 89,133

Net increase / (decrease) in cash held (2,479,197) (7,278,284)

Cash at the beginning 6,227,674 11,865,433

Cash held at the end of the half-year 3,748,477 4,587,149


Notes To And Forming Part Of The Financial Statements


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

This general purpose financial report for the half year reporting period ended 30 June 2008 has been prepared in accordance with Accounting Standard AASB134 Interim Financial Reporting and the Corporations Act 2001.

This interim financial report does not include all of the notes that are typically included in an annual financial report. Accordingly, it is recommended that this financial report be read in conjunction with the annual financial report for the year ended 31 December 2007 and any public announcements made by Millennium Minerals Limited during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001.

(b) Significant accounting policies

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the adoption of accounting standards mandatory for accounting periods beginning on or after 1 January 2008 which have had no effect on the result for the period or contributed equity.

This interim half-year financial report has been prepared on an historical cost basis and the half-year has been treated as a discrete reporting period.


Notes To And Forming Part Of The Financial Statements (con’t)


(c) New accounting standards and UIG interpretations

Certain new accounting standards have been published that are not mandatory for 30 June 2008 reporting periods. The Company has not applied any of the following in preparing this financial report:

Affected Standard Nature of Change to Accounting Policy Application *

AASB 8: Operating Segments

No impact on accounting policy, affects disclosures in relation to operating segments instead of business and geographical segments for the financial report ending 30 June 2010.

1 January 2009

AASB 2007-3: Amendments to Australian Accounting Standards arising from AASB 8 [AASB5, AASB6, AASB102, AASB 107, AASB119, AASB127, AASB134, AASB136, AASB 1023 and AASB1038]

No impact on accounting policy, affects disclosures only

1 January 2009

* Applicable to reporting periods commencing on or after the given date

(d) Critical accounting estimates and judgements

As at 30 June 2008, the carrying value of exploration expenditure of the Company is $25,615,951.




2008 2007

$ $

2. REVENUE FROM ORDINARY ACTIVITIES

Interest received 153,087 242,874

Proceeds from disposal of fixed assets 280,899 -

Fuel Tax Credits 844 -

Rental & Others 93,691 101,304

528,521 344,178

3. EXPLORATION TENEMENTS

Mineral Exploration And Evaluation Expenditure

Carrying amount at beginning of half year 24,124,683 24,078,865

Current half year expenditure 1,491,268 1,934,342

Net gain (loss) from fair value adjustment - (1,899,707)

Carrying Amount At End Of Half Year 25,615,951 24,113,500

Recoverability of the carrying value of interests in mineral projects is subject to the successful development and exploitation of the exploration properties or alternatively, the sale of these tenements at amounts at least equal to the book values.




2008

$

2007

$

4. PLANT AND EQUIPMENT

Plant and Equipment – at cost 1,121,778 1,058,998

Less Accumulated Depreciation (308,895) (252,497)

Written Down Value 812,883 806,501

MOTOR VEHICLES

Motor Vehicles – at cost 192,879 155,936


Written Down Value 148,505 84,169

LAND AND BUILDINGS

Land and Buildings – at cost 524,262 674,261

Less Accumulated Depreciation - -

Written down Value 524,262 674,261

LEASEHOLD IMPROVEMENTS

Leasehold Improvements – at cost 138,145 138,145


Written down Value 58,396 83,123

CAPITAL WORKS IN PROGRESS

Capital Works – Nullagine project 1,090,499 8,778,371

Less Accumulated Depreciation - -

Written down Value 1,090,499 8,778,371

Total Written Down Value at End of Half Year

2,634,545 10,426,425




2008

$

2007

$

PLANT AND EQUIPMENT - RECONCILIATION

Carrying amount at beginning of year 730,099 1,763,076

Additions 120,710 12,712

Disposals (226,453) (264,665)

Add: Net gain (loss) from fair value adjustment - (663,898)

Less Depreciation (37,926) (40,724)

Carrying Amount At End Of Half Year 586,430 806,501

MOTOR VEHICLES - RECONCILIATION

Carrying amount at beginning of year 76,722 92,114

Additions 114,779 -

Disposals (34,632) -

Less Depreciation (8,364) (7,947)

Carrying Amount at End of Half Year 148,505 84,167

LAND AND BUILDINGS - RECONCILIATION

Carrying amount at beginning of year 524,262 1,214,356

Additions at cost - 231,636

Disposals - -

Add: Net gain (loss) from fair value adjustment - (751,658)

Less Depreciation - (20,072)

Carrying Amount at End of Half Year 524,262 674,262




2008

$

2007

$

LEASEHOLD IMPROVEMENTS - RECONCILIATION

Carrying amount at beginning of year 76,673 83,123

Additions - -

Less Depreciation (18,277) -

Carrying Amount at End of Year 58,396 83,123

CAPITAL WORKS IN PROGRESS

Carrying amount at beginning of year 1,079,564 6,989,427

Additions at cost 11,787 1,788,945

Disposals (852) -

Net gain (loss) from fair value adjustment - -

Carrying Amount at End of Half Year 1,090,499 8,778,372

Total Amount at End of Half Year 2,408,092 10,426,425




5. KEY MANAGEMENT PERSONNEL DISCLOSURE

(a) Other Transactions With Specified Directors

Mr Ross Gillon is a partner of Lawton Gillon which provides legal services to the Company. During the period that Partnership was paid $Nil (2006 Half Year: $Nil).

(b) Outstanding Balances

The following balances were outstanding at the reporting date in relation to the transactions with related parties:

Current payables – Director’s fees

i) Lawton Gillon (R Gillon) $38,764

(c) Related Party Transactions

Other than the transactions disclosed above there are no other transactions between related parties that require disclosure.


Director’s Declaration


The Directors of Millennium Minerals Limited declare that in their opinion:

a) The financial statements and notes set out in pages 7 to 19 are in accordance with the Corporations Act 2001 including:

i) Giving a true and fair view of the Company’s financial position as at 30 June and of its performance, as represented by the results of its operations and its cash flows, for the financial year ended on that date; and

ii) Complying with Australian Accounting Standard AASB 134 Interim Financial Statements, the Corporations Regulations 2001 and other mandatory professional reporting requirements

b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable

The directors have been given the declarations by the Chief Executive Officer and the Chief Financial Officer required by Section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the Directors.

Andrew Law

Managing Director

Perth, 11th September 2008


Independent Review Report to the Members of Millennium Minerals Limited

condensed interim financial report for the half year ended ...€¦ · condensed interim financial...

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