half year report - lpe...this declaration is made in connection with our review of the financial...

ABN 90 147 867 301

Half Year Report

For the Half Year ended 31 December 2011

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CONTENTS

Stratum Metals Limited

CORPORATE DIRECTORY 1 DIRECTORS’ REPORT 2 AUDITOR’S INDEPENDENCE DECLARATION 4 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 5 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 6 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 7 CONSOLIDATED STATEMENT OF CASH FLOWS 8 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 9 DIRECTORS’ DECLARATION 16 AUDITOR’S REPORT 17

CORPORATE DIRECTORY

Stratum Metals Limited 1

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Martin Holland

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Richard Anthon Michael Addison

Kent Hunter

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Elizabeth Hunt

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7 / 151 Macquarie Street SYDNEY NSW 2000

Telephone: (02) 9276 1245 Facsimile: (02) 9276 1284

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Bentleys Level 1, 12 Kings Park Road

WEST PERTH WA 6005

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Advanced Share Registry Services 150 Stirling Highway

NEDLANDS WA 6009 Telephone: (08) 9389 8033 Facsimile: (08) 9389 7871

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Australian Securities Exchange Code: SXT

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National Australia Bank 50 St Georges Terrace

PERTH WA 6000

DIRECTORS’ REPORT


Your directors submit the financial report of the Group for the half year ended 31 December 2011. DIRECTORS

Directors holding office during and up to the date of this report are: Martin Holland (appointed 15 December 2010) Kent Hunter (appointed 15 December 2010) Richard Anthon (appointed 18 April 2011) Michael Addison (appointed 16 May 2011) Directors have been in office since the start of the financial period to the date of this report unless otherwise stated. RESULTS

The loss after tax for the half year ended 31 December 2011 was $297,973. REVIEW OF OPERATIONS Overview Stratum Metals Limited (‘Stratum’ or ‘the Group’) commenced ASX quotation on 11 October 2011 following the $4 million oversubscribed Initial Public Offering (IPO). Corporate At the end of the period the Group had $3,087,385 in cash, 41,150,003 shares on issue, 3,000,000 options exercisable at $0.25 on or before 7 June 2016 granted and 3,000,000 options exercisable at $0.35 on or before 7 June 2016 options granted. Also, during the half year the Group incorporated Stratum Coal Pty Limited as a 100% subsidiary of Stratum. Stratum Coal will look to acquire coking or thermal coal tenements located in and around Western Australia’s Canning Basin and internationally. Exploration

Gidgee

The Gidgee Project is located 640 kilometres northeast of Perth, within the Gum Creek Greenstone Belt, East Murchison Mineral Field of Western Australia, and consists of exploration licences E53/1440 (Gidgee South) and E53/1494 (Gidgee North), covering 9 and 4 sub-blocks respectively. The project is close to existing civil and mining infrastructure. Results of the drilling program presented drilling intersection grades of up to 60.90g/t at shallow depths. Full results are detailed in ASX announcement released 6 December 2011. During the half year, Stratum expanded the Gidgee North project through the acquisition of three prospecting licences, P53/1552, P53/1553 and P53/1554 located adjacent to the south-east of the existing Gidgee North tenement.

DIRECTORS’ REPORT


Canning Basin Stratum additionally acquired two additional prospective thermal coal tenements, held by subsidiary Stratum Coal Pty Limited. The tenements are located adjacent to Stratum’s existing holdings in the Canning Basin (E04/2160 to the north and E04/2161 to the south) and are in close proximity to Rey Resources Limited’s (“REY.AX”) Duchess Paradise 2.5 million tonne per annum thermal coal project. As a result, Stratum has now secured rights over a total of 700km2 of coal prospective tenements located within the Canning Basin. Subsequent to 31 December 2011 and as announced 19 January 2012, the Heritage Protection Agreement for tenement E04/1993 and E04/2124 was successfully finalised between the Company, State Resources Limited and the Kimberly Land Council on behalf of the Nyikina Mangala group. This is now a granted exploration licence. An extensive desktop study is underway with a plan to commence drilling in due course. EVENTS SUBSEQUENT TO REPORTING DATE No matters or circumstances have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial periods. AUDITOR’S INDEPENDENCE DECLARATION UNDER s 307C OF THE

CORPORATIONS ACT 2001

The auditor’s independence declaration for the half year ended 31 December 2011 has been received and is included within the financial statements. Signed in accordance with a resolution of directors.

Martin Holland Managing Director Perth, 21 February 2012

To the Board of Directors

This declaration is made in connection with our review of the financial report of Stratum

Metals Limited and Controlled Entities for the half-year ended 31 December 2011 and in

accordance with the provisions of the Corporations Act 2001.

We declare that, to the best of our knowledge and belief, there have been:

no contraventions of the auditor independence requirements of the Corporations Act

2001 in relation to the review;

no contraventions of the Code of Professional Conduct of the Institute of Chartered

Accountants in Australia in relation to the review.

Yours faithfully

BENTLEYS CHRIS WATTS CA

Chartered Accountants Director

DATED at PERTH this 21st day of February 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2011


Note 31 December

2011

$

15 December 2010 to 31

December 2010 $

Interest revenue 34,587 - Accounting and Audit fees (5,500) - Directors fees (165,000) - Consulting fees (6,364) - Insurance (11,729) - Printing and Stationery (4,019) - Travel expenses (38,628) - Occupancy expenses (20,400) - Website (3,916) - Other expenses 2 (77,004) - Loss before income tax benefit (297,973) - Income tax benefit - - Loss for the period

(297,973)

-

Other comprehensive income Other comprehensive income (net of income tax) - - Total comprehensive income for the period

(297,973)

-

Basic loss per share (cents) (1.01) - The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011


Note 31 December 2011

$

30 June 2011

$ ASSETS Current Assets Cash and cash equivalents 3,087,385 299,647 Trade and other receivables 59,679 6,837

Total Current Assets 3,147,064 306,484

Non-Current Assets Exploration and evaluation expenditure 3 677,938 382,921

Total Non-Current Assets 677,938 382,921

Total Assets 3,825,002 689,405

LIABILITIES Current Liabilities Trade and other payables 70,273 428,091

Total Current Liabilities 70,273 428,091

Total Liabilities 70,273 428,091

Net Assets 3,754,729 261,314

EQUITY Issued capital 4 4,260,746 469,358 Accumulated losses (506,017) (208,044)

Total Equity 3,754,729 261,314

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2011


Consolidated Entity Issued Capital

$

Accumulated Losses

$

Total

$ Balance at 15 December 2010 - - - Loss during the period - - - Other comprehensive income - - -

Total comprehensive income - - -

Shares issued during the period 3 - 3 Share issue expenses - - - Balance at 31 December 2010 3 - 3

Balance at 1 July 2011 469,358 (208,044) 261,314 Loss during the period - (297,973) (297,973) Other comprehensive income - - -

Total comprehensive income - (297,973) (297,973)

Shares issued during the period 4,180,000 - 4,180,000 Share issue expenses (388,612) - (388,612)

Balance at 31 December 2011 4,260,746 (506,017) 3,754,729


CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2011


1 July 2011 to 31 December

2011 $

Inflows/ (Outflows)

15 December 2010 to 31 December

2010 $

Inflows/ (Outflows)

Cash flows from operating activities Payments to suppliers and employees (443,453) - Interest received 34,587 - Payment for Exploration and evaluation expenditure (295,367) -

Net cash used in operating activities

(704,233)

-

Cash flows from investing activities Payment for exploration related asset (112,384) -

Net cash used in investing activities

(112,384)

-

Cash flows from financing activities Proceeds from issue of shares 4,000,000 3 Payment of share issue costs (395,645) -

Net cash provided by financing activities

3,604,355

3

Net increase in cash held 2,787,738 3 Cash at beginning of the financial period 299,647 -

Cash and cash equivalents at period end

3,087,385

3


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2011


1. Statement of Significant Accounting Policies

Basis of Preparation The financial report of Stratum Metals Limited and its controlled entity (the Group) for the half-year ended 31 December 2011 was authorised for issue in accordance with a resolution of the directors on 21 February 2012. Stratum Metals Limited is a company incorporated in Australia and limited by shares.

The half-year financial report is a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and Accounting Standards AASB 134: Interim

Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standards IAS 34 Interim Financial Reporting.

This half-year financial report is intended to provide users with an update on the latest annual financial statements of the Group. As such, it does not contain information that represents relatively insignificant changes occurring during the half-year within the Group. It is therefore recommended that this half-year financial report be read in conjunction with the annual financial report of the Group for the year ended 30 June 2011, together with any public announcements made during the half-year.

The same accounting policies and methods of computation have been followed in this half-year financial report as were applied in the most recent annual financial report, except for the adoption of amending standards mandatory for annual periods beginning on or after 1 July 2011, as noted below. Reporting Basis and Conventions The half-year report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. Comparative Figures

The Company was incorporated on 15 December 2010. As such the comparative statement of comprehensive income, comparative statement of cash flows, and comparative statement of changes in equity may not be entirely comparable.

Changes in Accounting Policies and Disclosures

In the half-year ended 31 December 2011, the Group has reviewed all of the new and revised standards and interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2011. The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to their operations and are effective for the current financial reporting period. It has been determined by the Group that there is no impact, material or otherwise, of the new and revised standards and interpretations on its business and, therefore no change is necessary to the Group's accounting policies.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) FOR THE HALF YEAR ENDED 31 DECEMBER 2011


31 December

2011 $

31 December 2010

$

2. Other expenses Meals & Conferences 55,821 - Telephone 4,816 - Stamp Duty 3,713 - Promotion & Marketing 7,510 - Interest Paid 1,265 - Bank Charges 515 - Other expenses 3,364 -

77,004

-

31 December

2011 $

30 June 2011

$

3. Exploration and evaluation expenditure Costs carried forward in respect of Exploration and evaluation expenditure: Exploration at cost

Balance at beginning of period 382,921 - Exploration expenditure incurred 296,636 382,921 Exploration expenditure written off (1,619) -

Balance at end of period 677,938 382,921

The ultimate recoupment of the exploration expenditure carried forward is dependent on the successful development and commercial exploitation and/or sale of the relevant areas of interest, at amounts at least equal to book value.

31 December 2011

Number

30 June 2011

Number

4. Issued capital (a) Issued and paid up capital Ordinary shares fully paid of no par value 41,150,003 20,250,003

41,150,003 20,250,003



Number $ 4. Issued capital (Continued) (b) Movement in ordinary shares on issue Balance at 1 July 2010 - -

Issued for cash on 15 December 2010 (i) 3 3 Issued for cash on 15 April 2011 (ii) 15,000,000 1,500 Issued for cash on 18 April 2011 (iii) 2,400,000 240,000 Issued for cash on 12 May 2011 (iv) 950,000 95,000 Issued for cash on 23 May 2011 (v) 1,700,000 170,000 Issued for cash on 31 May 2011 (vi) 200,000 20,000 Transaction costs relating to share issues - (57,145)

Balance at 30 June 2011 20,250,003 469,358

Balance at 1 July 2011 20,250,003 469,358

Issued for cash on 11 October 2011 (vii) 900,000 180,000 Issued for cash on 11 October 2011 (viii) 20,000,000 4,000,000 Transaction costs relating to share issues - (388,612)

Balance at 31 December 2011 41,150,003 4,260,746

(i) On 15 December 2010 the Company issued 3 incorporation shares for $1.00 per share. (ii) On 15 April 2011 the Company issued 15,000,000 promoter shares for $0.0001 per share. (iii) On 18 April 2011 the Company issued 2,400,000 seed shares for $0.10 per share. (iv) On 12 May 2011 the Company issued 950,000 seed shares for $0.10 per share. (v) On 23 May 2011 the Company issued 1,700,000 seed shares for $0.10 per share. (vi) On 31 May 2011 the Company issued 200,000 vendor shares for $0.10 per share. (vii) On 11 October 2011 the Company issued 900,000 vendor shares for $0.20 per share. (viii) On 11 October 2011 the Company issued 20,000,000 IPO shares for $0.20 per share. (c) Share options At the end of the period, the following options over unissued ordinary shares were outstanding:

• 3,000,000 options expiring 7 June 2016 at an exercise price of $0.25 each.

• 3,000,000 options expiring 7 June 2016 at an exercise price of $0.35 each.



31 December 2011

$

30 June 2011

$ 5. Commitments Expenditure commitments There is a company secretarial, compliance and financial advisory contract in place. The contract commenced upon ASX listing and has a minimum 12 month period. The company secretarial, compliance and financial advisory fee is $6,000 per month for corporate and statutory compliance and financial advisory services provided by Mining Corporate Pty Ltd. The committed expenditure is:

Within one year 54,000 - One to five years - -

54,000

-

Exploration commitments Within one year 95,000 95,000 One to five years 204,740 252,370

299,740

347,370

6. Contingent liabilities There are no contingent liabilities as at the date of this report. 7. Business Combination On 15 November 2011 Stratum Metals Limited incorporated Stratum Coal Pty Limited as a 100% subsidiary of Stratum. Stratum Coal will look to acquire coking or thermal coal tenements located in and around Western Australia’s Canning Basin and internationally.

8. Financial reporting by segments During the financial period, the Group operated principally in one business segment (for primary reporting) being exploration. The Group has identified its operating segments based on the internal reports that are provided to the Board of Directors on a monthly basis. Management has identified the operating segments based on the one principal location of its projects – Australia. Basis of accounting for purposes of reporting by operating segments Accounting policies adopted Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Company.



8. Financial reporting by segments (Continued)

Inter-segment transactions Inter-segment loans payable and receivable are initially recognised at the consideration received net of transaction costs. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates. This policy represents a departure from that applied to the statutory financial statements. Segment assets Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location. Segment liabilities

Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Company as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings. Unallocated items The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

• administration and other operating expenses not directly related to a specific segment. Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and intangible assets have not been allocated to operating segments. Exploration

The exploration segment explores for minerals, metals and coal. Segment assets including cash paid to joint venture partners for the costs associated with the exploration and are reported in this segment.



Australian Exploration

$

Total

$ 8. Financial reporting by segments (Continued) 31 December 2011 Segment revenue - -

Segment results - -

Amounts not included in segment results but reviewed by Board: Corporate charges (5,929) Other expenses (292,044)

Loss before income tax (297,973)

During the comparative period from 15 December 2010 to 31 December 2011 there were no revenue or expense transactions, and therefore no segment report for this period has been presented. 31 December 2011 Segment assets 677,938 677,938

Segment asset increases for the period: Capital expenditure 295,017 295,017

Unallocated assets: Cash and cash equivalents 3,087,385 Trade and other receivables 59,679 Other non-current assets -

Total assets 3,825,002

Segment liabilities

Unallocated liabilities: Trade and other payables 70,273

Total liabilities 70,273



Australian Exploration

$

Total

$ 8. Financial reporting by segments (Continued) 30 June 2011 Segment assets 382,921 382,921

Segment asset increases for the period: Capital expenditure 382,921 382,921

Unallocated assets: Cash and cash equivalents 299,647 Trade and other receivables 6,837 Other non-current assets -

Total assets 689,405

Segment liabilities 290,000 290,000

Unallocated liabilities: Trade and other payables 138,091

Total liabilities 428,901

9. Events subsequent to period end No matters or circumstances that have arisen since 31 December 2011 that have or may significantly affect the operations, results, or state of affairs of the Company’s in future financial years.

DIRECTORS’ DECLARATION


The directors of the company declare that:

1. the financial statements and notes, as set out on pages 5 to 15 are in accordance with the Corporations Act 2001 and:

a. comply with Accounting Standard AASB 134: Interim Reporting; and b. giving a true and fair view of the consolidated entity’s financial position as at 31

December and of its performance for the half year ended on that date.

2. In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

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

Martin Holland Managing Director Perth, 21 February 2012

We have reviewed the accompanying half-year financial report of Stratum Metals Limited

(“the Company”) and Controlled Entities (“the Consolidated Entity”) which comprises the

consolidated statement of financial position as at 31 December 2011, and the

consolidated statement of comprehensive income, consolidated statement of changes in

equity and consolidated statement of cash flows for the half-year ended on that date, a

statement of accounting policies, other selected explanatory notes and the directors’

declaration.

The directors of the Company are responsible for the preparation of the half-year

financial report that gives a true and fair view in accordance with Australian Accounting

Standards and the Corporations Act 2001 and for such control as the directors determine

is necessary to enable the preparation of the half-year financial report that is free from

material misstatement, whether due to fraud or error.

Our responsibility is to express a conclusion on the half-year financial report based on

our review. We conducted our review in accordance with Auditing Standard on Review

Engagements ASRE 2410 Review of a Financial Report Performed by the Independent

Auditor of the Entity, in order to state whether, on the basis of the procedures described,

we have become aware of any matter that makes us believe that the financial report is

not in accordance with the Corporations Act 2001 including: giving a true and fair view of

the Consolidated Entity’s financial position as at 31 December 2011 and its performance

for the half-year ended on that date; and complying with Accounting Standard AASB 134

Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of

Stratum Metals Limited, ASRE 2410 requires that we comply with the ethical

requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons

responsible for financial and accounting matters, and applying analytical and other

review procedures. A review is substantially less in scope than an audit conducted in

accordance with Australian Auditing Standards and consequently does not enable us to

obtain assurance that we would become aware of all significant matters that might be

identified in an audit. Accordingly, we do not express an audit opinion.

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe

that the half-year financial report of Stratum Metals Limited and Controlled Entities is not in accordance with

the Corporations Act 2001 including:

a. Giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2011 and of

its performance for the half-year ended on that date; and

b. Complying with Accounting Standard AASB 134: Interim Financial Reporting and Corporations

Regulations 2001.

BENTLEYS CHRIS WATTS CA

Chartered Accountants Director

DATED at PERTH this 21st day of February 2012

half year report - lpe...this declaration is made in connection with our review of the financial...

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