condensed interim financial report for the half year … · rental and other income 6,002 123,232...

ABN 85 003 257 556

Condensed Interim Financial Report

For the Half Year Ended 30 June 2009

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 2008 Annual Report.

MILLENNIUM MINERALS LIMITED STATUTORY FINANCIAL STATEMENTS FOR THE HALF‐YEAR ENDED 30 JUNE 2009 Page 1 of 21

Corporate Particulars

DIRECTORS

Peter Rowe Clive Donner Ross Gillon

Simon Durack

COMPANY SECRETARY

Mark Killmier

PRINCIPAL PLACE OF BUSINESS AND REGISTERED OFFICE

Suite 7

19 Outram Street WEST PERTH WA 6005

Telephone: +61 (0)8 9486 8808 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 2009.

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 unless otherwise indicated.

Michael Grigson BSc (Geology), PhD (Geology) – Executive Director - Exploration – Resigned 2 February 2009

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

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

Simon Durack B.Comm, CA, FCIS - Non Executive Director – Appointed 2 February 2009

Peter Rowe BSc (Chem Eng), FAusImm, FAICD - Non Executive Chairman – Appointed 21 July 2009

PRINCIPAL ACTIVITY

The principal activity of the Company during the half year was the re-examination of the basic economics of the Company’s flagship asset, the Nullagine Gold Project.

EVENTS SUBSEQUENT TO BALANCE DATE

Subsequent to the balance date, Mr Peter Rowe was appointed as Non Executive Chairman on 21 July 2009 and Mr Brian Rear was appointed Chief Executive Officer on 21 July 2009.

RESULT

The loss after income tax for the half financial year was $311,218 (2008 Half Year: Loss of $1,623,466).

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 re-examination of the basic economics of the Company’s flagship asset, the Nullagine Gold Project, located south east of Port Hedland in Western Australia’s richly mineralised East Pilbara region, approximately 10 kilometres from the town of Nullagine. The Company incurred a loss of $311,218 (2008: loss of $1,623,466) for the first half of the year.

The Company re-examined the economics of the Project in light of the improvement in the Australian dollar denominated gold price. The current Mineral Resource Estimate for the five project areas now totals 28.1 Mt @ 1.26 g/t Au using a 0.5 g/t Au lower cut-off grade for approximately 1.14 million ounces of contained gold.


Directors’ Report (con’t)

A total of 22.49 Mt at 1.28 g/t Au is contained within the Measured and Indicated Mineral Resource categories which represent approximately 80% of the total Mineral Resource for the Nullagine Gold Project.

During the period, a scoping level assessment of the 2007 base case feasibility study indicated the potential for an 8-10 year operation, milling 1 million tonnes annually through a CIL processing plant. The scoping study was based on the following:

• A series of pit optimisations of the five deposits available for practical mine design based on the Measured and Indicated Resources only.

• A spot gold price of US$900/oz.

• Operating cost inputs internally updated from the 2007 feasibility study base numbers with the US$/A$ exchange rate set at 0.7.

• Preliminary pit designs and associated material movement scheduling.

Various studies were undertaken to assess the potential for CIL stand alone, heap leach stand alone and a base CIL operation with heap leaching of medium to low grade material that will be mined and otherwise treated as waste. All cases demonstrated favourable technical and economic outcomes sufficient to warrant completion of the feasibility update and final optimisation studies. The study does indicate that depending on the cut-off grade used for the base case CIL option a substantial amount of medium to low grade material would be removed from the pits. Further metallurgical testing on this material is warranted to assess the potential for introducing a stage two development based on heap leaching to maximise the economic return from the deposits. Outside of the existing deposits exploration potential is evident, particularly to the South West of the main deposit Golden Eagle. This potential and other target areas are under review and will be reported on when that work is completed.

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) 6,700,000 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

2009 2008

Number Number

Options – unlisted

Balance at beginning of half year 29,900,000 16,500,000

Issued during half year - 14,640,000

Expired or cancelled during half year (3,700,000) (2,500,000)

Balance at end of half year 26,200,000 28,640,000

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 period. All directors’ options are fully vested.

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.


Condensed Income Statement

For The Half Year Ended 30 June 2009

6 Months to June

2009

6 Months to June

2008

Note $ $

Revenue from ordinary activities 2 177,458 528,521

Carrying amount of non-current assets sold (117,462) (261,085)

Exploration expenses written off - -

Value of share options expensed - (974,096)

Depreciation and amortisation (29,236) (64,339)

Employment/Consultants (109,485) (392,690)

Non cash fair value adjustment / Impairment of Assets - -

Finance costs (19,465) (30,166)

Management and administration (213,055) (429,611)

Other expenses from ordinary activities - -

Profit/(Loss) from ordinary activities before income tax expense (311,218) (1,623,466)

Income Tax Expense - -

Net profit/(loss) attributable to the members of Millennium Minerals Limited (311,218) (1,623,466)

Total changes in equity other than those resulting from transactions with owners as owners (311,218) (1,623,466)

Earnings Per Share - Basic (0.001) (0.007)


Condensed Balance Sheet

As at 30 June 2009

30 Jun

2009

31 Dec

2008

30 Jun

2008

Note $ $ $

CURRENT ASSETS

Cash and cash equivalents 2,090,014 1,273,316 3,746,477

Trade & other receivables 5,662 23,509 296,338

Total current assets 2,095,676 1,296,825 4,042,815

NON-CURRENT ASSETS

Exploration and evaluation expenditure 3 22,235,251 22,047,029 25,615,951

Property plant and equipment 4 1,379,408 1,526,107 2,408,092

Total non-current assets 23,614,659 23,573,136 28,024,043

Total assets 25,710,335 24,869,961 32,066,858


Condensed Balance Sheet (con’t)

As at 30 June 2009

30 June

2009

31 Dec

2008

30 June

2008

$ $ $

CURRENT LIABILITIES

Trade & other payables 164,916 288,433 343,430

Provisions 628 44,147 44,252

Financial liabilities - 615,250 600,000

Total current liabilities 165,544 947,830 987,682

NON-CURRENT LIABILITIES

Financial Liabilities - - -

Total non-current liabilities - - -

Total liabilities 165,544 947,830 987,682

Net assets 25,544,791 23,922,131 31,079,176

EQUITY

Contributed equity

Reserves

52,511,117

2,081,048

50,577,239

2,081,048

50,577,239

2,081,048

Accumulated losses (29,047,374) (28,736,156) (21,579,111)

Total equity 25,544,791 23,922,131 31,079,176


Condensed Statement of Changes in Equity


Equity: Issued capital

Accumulated losses

Other reserves

Total Equity

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

At 1 January 2009 50,577,239 (28,736,156)

2,081,048 23,922,131

Total income / (expense) for the period - (311,218) - (311,218)

Issue of Share Capital (net of issue costs) 1,933,878 - - 1,933,878

Equity settled payments - - - -

Balance at 30 June 2009 52,511,117 (29,047,374) 2,081,048 25,544,791


Condensed Statement of Cash Flows


6 Months

to

Jun 2009

6 Months

to

Jun 2008

$ $

CASH FLOWS FROM OPERATING ACTIVITIES

Payments to suppliers and employees (601,717) (2,494,408)

Interest received 34,075 152,020

Interest and borrowing costs paid - (30,166)

Rental and other income 6,002 123,232

Net cash used in operating activities (561,640) (2,249,322)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for plant and equipment - (300,141)

Proceeds from sale of plant and equipment 138,182 14,818

Payment for mineral exploration security deposits - 55,448

(Refund) of security deposits (63,176) -

Net cash provided by investing activities 75,006 (229,875)


Condensed Statement of Cash Flows (con’t)


6 Months

to

Jun 2009

6 Months

to

Jun 2008

$ $

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of shares 1,933,878 -

Repayment of loan (630,546) -

Net cash provided by financing activities 1,303,332 -

Net increase / (decrease) in cash held 816,698 (2,479,197)

Cash at the beginning 1,273,316 6,227,674

Cash held at the end of the half-year 2,090,014 3,748,477


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 2009 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 2008 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 2009 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 2009 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 2010

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 2010

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

(d) Critical accounting estimates and judgements

As at 30 June 2009, the carrying value of exploration expenditure of the Company is $22,235,251.




2009 2008

$ $

2. REVENUE FROM ORDINARY ACTIVITIES

Interest received 29,143 153,087

Proceeds from disposal of fixed assets 138,154 280,899

Fuel Tax Credits - 844

Rental & Others 10,161 93,691

177,458 528,521

3. EXPLORATION TENEMENTS

Mineral Exploration And Evaluation Expenditure

Carrying amount at beginning of half year 22,047,029 24,124,683

Current half year expenditure 188,222 1,491,268

Net gain (loss) from fair value adjustment - -

Carrying Amount At End Of Half Year 22,235,251 25,615,951

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.




2009

$

2008

$

4. PLANT AND EQUIPMENT

Plant and Equipment – at cost 606,786 895,325

Less Accumulated Depreciation (336,010) (308,895)

Written Down Value 270,776 586,430

MOTOR VEHICLES

Motor Vehicles – at cost - 192,879

Less Accumulated Depreciation - (44,374)

Written Down Value - 148,505

LAND AND BUILDINGS

Land and Buildings – at cost 424,262 524,262

Less Accumulated Depreciation - -

Written down Value 424,262 524,262

LEASEHOLD IMPROVEMENTS

Leasehold Improvements – at cost - 138,145

Less Accumulated Depreciation - (79,749)

Written down Value - 58,396

CAPITAL WORKS IN PROGRESS

Capital Works – Nullagine project 684,370 1,090,499

Less Accumulated Depreciation - -

Written down Value 684,370 1,090,499

Total Written Down Value at End of Half Year

1,379,408 2,408,092




2009

$

2008

$

PLANT AND EQUIPMENT - RECONCILIATION

Carrying amount at beginning of year 341,759 730,099

Additions - 120,710

Disposals (35,720) (226,453)

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

Less Depreciation (35,263) (37,926)

Carrying Amount At End Of Half Year 270,776 586,430

MOTOR VEHICLES - RECONCILIATION


Additions - 114,779

Disposals (75,716) (34,632)

Less Depreciation - (8,364)

Carrying Amount at End of Half Year - 148,505

LAND AND BUILDINGS - RECONCILIATION


Additions at cost - -

Disposals - -

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

Less Depreciation - -

Carrying Amount at End of Half Year 424,262 524,262




2009

$

2008

$

LEASEHOLD IMPROVEMENTS - RECONCILIATION

Carrying amount at beginning of year - 76,673

Additions - -

Less Depreciation - (18,277)

Carrying Amount at End of Year - 58,396

CAPITAL WORKS IN PROGRESS

Carrying amount at beginning of year 684,370 1,079,564

Additions at cost - 11,787

Disposals - (852)

Net gain (loss) from fair value adjustment - -

Carrying Amount at End of Half Year 684,370 1,090,499

Total Amount at End of Half Year 1,379,408 2,408,092




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 (2008 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) $39,750

(c) Related Party Transactions

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

condensed interim financial report for the half year … · rental and other income 6,002 123,232...

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