BLACK MOUNTAIN RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 55 147 106 974
INTERIM FINANCIAL REPORT
FOR THE HALF-YEAR ENDED
31 DECEMBER 2014
Corporate Information
This financial report includes the consolidated financial statements of Black
Mountain Resources Limited and controlled entities (`Group'). The Group's
functional presentation currency is AUD ($).
A description of the Group's operations and of its principal activities is
included in the review of operations and activities in the Director's Report.
Directors
Mr Peter Landau - Executive Chairman
Mr John Ryan - Executive Director
Mr Jason Brewer - Non-Executive Director
Ms Shannon Robinson - Executive Director - resigned 27 July 2014
Company Secretaries
Ms Jane Flegg - appointed 21 July 2014
Ms Rebecca Sandford - resigned 21 July 2014
Registered Office Stock Exchange
Ground Floor, 1 Havelock Street Australian Securities Exchange
West Perth WA 6005 Exchange Plaza
Share Registry 2 The Esplanade
Computershare Investor Services Perth WA 6000
Level 2/45 St Georges Tce ASX Code: BMZ
Perth WA 6000 London Stock Exchange plc (AIM)
Auditors 10 Paternoster Square
RSM Bird Cameron Partners London EC4M 7LS
8 St Georges Terrace AIM Code: BMZ
Perth WA 6000 Website
Solicitors www.blackmountainresources.com.au
Steinepreis Paganin
Level 4, 16 Milligan Street
Perth WA 6000
Directors' Report
Your directors present their report on the consolidated entity of Black
Mountain Resources Limited and the entities it controlled at the end of, or
during, the half-year ended 31 December 2014.
Directors
The persons who were directors of Black Mountain Resources Limited during the
half -year and up to the date of this report are:
Mr Peter Landau (Executive Director)
Mr John Ryan (Executive Director)
Mr Jason Brewer (Non-Executive Director)
Ms Shannon Robinson (Executive Director) - resigned 21 July 2014
Results
The consolidated statement of comprehensive income shows a consolidated net
loss for the half-year ended 31 December 2014 of $7,173,438 (2013: net loss of
$1,215,178).
Directors' Report (Cont.)
Review of Operations for the Half-Year ended 31 December 2014
New Departure Silver Project, Montana
The Company's principal focus during the half-year continued to be on the New
Departure Silver Project ("New Departure") in Montana, USA.
Two phases of channel sampling were completed during the half year (refer to
ASX announcements of 22 July 2014 and 18 September 2014 for full drilling
results) which confirmed significant high grade results, highlighting that the
Blue Dot Level has the greatest potential for hosting a mineral resource in the
downward and northwest plunging remainder of the ore body, and extended the
silver mineralisation at the Main Zone. These results are being incorporated
into the Company's updated mine plan for the Project. During the half-year work
was completed by the Company's technical team and consultants on analizing the
3-D mine model. Hard Rock Consulting ("HRC") commenced modelling the silver
vein mineralisation to confirm historical resource estimates and to update the
mine plan for New Departure.
Further work during the half-year targeted a strategy of initially developing
13,000-15,000 identified tonnes at the upper Coppin Level at a targeted diluted
mining grade of approximately 30oz/t Ag before focussing on the Blue Dot Level.
This work is ongoing, however it is expected that development and mining could
possibly be achieved faster and at a reduced capital cost. Upon receipt of
financing the Company is confident of restarting development and operations
during the second half-year of the 2015 financial year.
Conjecture Silver Project and Tabor Gold Project
With the Company's focus being on the planned mine development and production
activities at New Departure, no significant work was undertaken during the
half-year at the Conjecture Silver Project ("Conjecture").
In light of the Company's immediate focus on New Departure and Conjecture, and
the need for the Company to optimise its allocation of capital and human
resources, the Company chose to relinquish the Tabor Project to the lease owner
during the half-year. Black Mountain had concluded very minimal desktop work on
the project and believes the relinquishment is a sensible move.
Directors' Report (Cont.)
Corporate
The Company continued to advance its discussions with financiers during the
half-year to enable development funding to be finalised and advanced for the
New Departure Silver Project. The process has taken significantly longer than
the Board had anticipated and has been impacted by the very difficult
prevailing market conditions for junior resource companies. However the Company
remains confident that considering the high grade nature of the mineralisation
at the project, and its forecast low cost production credentials, non-dilutive
funding for New Departure will be secured in the second half of the 2015
financial year.
Subsequent Events
There have been no significant events subsequent to the half-year up to the
date of this report.
Auditor's Independence Declaration
The Auditor's Independence Declaration included within these financial
statements forms part of the Director's Report for the half-year ended 31
December 2014.
This report is signed in accordance with a resolution of the Board of
Directors.
Peter Landau
Executive Director
Perth, Western Australia, 16 March 2015
Competent Persons Statement
The information included in this release that relates to historical mining data
and exploration results is based on information compiled by Mr. James Baughman,
a technical consultant to the Company. Mr. Baughman is a qualified geologist
and has sufficient experience in exploration and mine development which is
relevant to the style of mineralisation and type of deposit under consideration
and to the activity which he is undertaking to qualify as a Competent Person as
defined in the 2004 Edition of the `Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves'. Mr. Baughman has
reviewed this release and consents to the inclusion in the release of the
matters based on his information in the form and context in which it appears.
The Company confirms that it is not aware of any new information or data that
materially affects the information included in the original market
announcements. The Company confirms that the form and context in which the
Competent Person's findings are presented have not been materially modified
from the original market announcements.
Statement of Comprehensive Income
For the half-year ended 31 December 2014
Consolidated
Half-Year Half-Year
31 Dec 2014 31 Dec 2013
$ $
Interest revenue - 2,185
Other income 53,750 -
Finance costs (130,298) (146,654)
Employee and director benefits expense (98,205) (250,195)
Financial and company secretarial (174,607) (185,434)
management expenses
ASX and share registry fees (117,773) (104,091)
Consultants and travel (260,271) (196,987)
Depreciation (28,537) (106,822)
Exploration cost written off - (186,532)
Impairment for exploration assets (6,315,924) -
Other expenses (101,573) (40,648)
Loss before income tax expense (7,173,438) (1,215,178)
Income tax expense - -
Loss for the half-year (7,173,438) (1,215,178)
Other comprehensive income, net of tax
Items that may be reclassified
subsequently to operating result
Foreign currency translation differences 549,378 117,645
Total comprehensive income for the (6,624,060) (1,097,533)
half-year
Loss attributable to:
Owners of the Company (7,087,519) (1,119,242)
Non-controlling Interests (85,919) (95,936)
(7,173,438) (1,215,178)
Total comprehensive loss attributable to:
Owners of the Company (6,289,252) (961,328)
Non-controlling Interests (334,808) (136,205)
(6,624,060) (1,097,533)
Basic and diluted loss per share (cents (7.49) (1.30)
per share)
The above statement of comprehensive income should be read in conjunction with
the accompanying notes.Statement of Financial Position
As at 31 December 2014
Consolidated
Note 31 December 2014 30 June 2014
$ $
ASSETS
Current Assets
Cash and cash equivalents 32,166 61,785
Trade and other receivables 38,617 320,634
Other assets 9,747 12,340
Total Current Assets 80,530 394,759
Non-Current Assets
Plant and equipment 98,597 158,644
Exploration and evaluation 3 12,631,848 18,349,689
expenditure
Total Non-current Assets 12,730,445 18,508,333
TOTAL ASSETS 12,810,975 18,903,092
LIABILITIES
Current Liabilities
Trade and other payables 1,585,159 1,679,697
Interest bearing liabilities 4,254,191 3,627,710
Total Current Liabilities 5,839,350 5,307,407
TOTAL LIABILITIES 5,839,350 5,307,407
NET ASSETS 6,971,625 13,595,685
EQUITY
Issued capital 4 20,785,216 20,785,216
Reserves 2,919,128 2,120,861
Accumulated losses (14,862,258) (7,774,739)
Parent interest 8,842,086 15,131,338
Non-controlling interest (1,870,461) (1,535,653)
TOTAL EQUITY 6,971,625 13,595,685
The above statement of financial position should be read in conjunction with
the accompanying notes.
Statement of Changes in Equity
For the half-year ended 31 December 2014
Consolidated Issued c Accumulated Option r Foreign Non- Total
apital losses eserve currency controlling
translation interest
reserve
$ $ $ $ $ $
Balance at 1 July 20,328,656 (4,197,258) 1,161,244 738,762 (1,209,184) 16,822,220
2013
Loss for the - (1,119,242) - - (95,936) (1,215,178)
half-year
Other comprehensive - - - 157,914 (40,269) 117,645
income
Total comprehensive - (1,119,242) - 157,914 (136,205) (1,097,533)
loss for the
half-year
Balance at 31 20,328,656 (5,316,500) 1,161,244 896,676 (1,345,389) 15,724,687
December 2013
Balance at 1 July 20,785,216 (7,774,739) 1,557,813 563,048 (1,535,653) 13,595,685
2014
Loss for the - (7,087,519) - - (85,919) (7,173,438)
half-year
Other comprehensive - - - 798,267 (248,889) 549,378
income
Total comprehensive - (7,087,519) - 798,267 (334,808) (6,624,060)
loss for the
half-year
Balance at 31 20,785,216 (14,862,258) 1,557,813 1,361,315 (1,870,461) 6,971,625
December 2014
The above statement of changes in equity should be read in conjunction with the
accompanying notes.
Statement of Cash Flows
For the half-year ended 31 December 2014
Consolidated
Half Year Half Year
31 Dec 2014 31 Dec 2013
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (25,350) (749,222)
Interest and other receipts - 2,185
Net cash (used in) operating activities (25,350) (747,037)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation (68,009) (716,670)
Purchase of plant and equipment - (45,096)
Proceeds from disposal of plant and 63,740 19,156
equipment
Net cash (used in) investing activities (4,269) (742,610)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from borrowings - 1,249,980
Net cash provided by financing activities - 1,249,980
Net (decrease) in cash held (29,619) (239,667)
Cash and cash equivalents at the beginning 61,785 329,346
of the half-year
Cash and cash equivalents at end of 32,166 89,679
half-year
The above statement of cash flows should be read in conjunction with the
accompanying notes.
Notes to the Financial Statements
For the half-year ended 31 December 2014
Note 1 - Summary of Significant Accounting Policies
Basis of Preparation
These general purpose interim financial statements for the half-year reporting
period ended 31 December 2014 has been prepared in accordance with Australian
Accounting Standard AASB 134: Interim Financial Reporting and the Corporations
Act 2001. The consolidated entity is a for-profit entity for financial
reporting purposes under Australian Accounting Standards. Compliance with AASB
134 ensures compliance with International Financial Reporting Standard IAS 34
'Interim Financial Reporting'.
These half-year financial statements do not include all notes of the type
normally included within the annual financial statements and therefore cannot
be expected to provide as full an understanding of the financial performance,
financial position and financing and investing activities of the consolidated
entity as the full financial statements.
It is recommended that the half-year financial statements be read in
conjunction with the annual financial report for the year ended 30 June 2014
and any public announcements made by Black Mountain Resources Limited during
the half-year reporting period in accordance with the continuous disclosure
requirements of the Corporations Act 2001.
The accounting policies have been consistently applied with those of the
previous financial year and corresponding interim reporting period, except in
relation to the matters disclosed below.
New and Revised Accounting Standards
The consolidated entity has adopted all of the new and revised Accounting
Standards and Interpretations issued by the Australian Accounting Standards
Board that are mandatory for the current reporting period. The adoption of
these new and revised Accounting Standards and Interpretations has not resulted
in a significant or material change to the consolidated entity's accounting
policies.
Any new, revised or amending Accounting Standards or Interpretations that are
not yet mandatory have not been early adopted by the consolidated entity.
Notes to the Financial Statements
For the half-year ended 31 December 2014
Going concern
The financial statements have been prepared on a going concern basis, which
contemplates the continuity of normal business activity and the realisation of
assets and discharge of liabilities in the normal course of business.
As disclosed in the financial statements, the consolidated entity incurred a
loss of $7,173,438 and had net cash outflows from operating and investing
activities of $25,350 and $4,269 respectively for the half-year ended 31
December 2014. As at that date, the consolidated entity had net current
liabilities of $5,758,820.
The Directors believe that there are reasonable grounds to believe that the
consolidated entity will be able to continue as a going concern, after
consideration of the following factors:
* The company plans to issue additional shares in the next 12 months in
accordance with Corporation Act 2001, which has proven to be successful in
the past;
* As disclosed in the statement of financial position, the consolidated
entity has interest bearing liabilities of $4,254,191 which are classified
as current as at 31 December 2014. The directors believe that the company
will be able to negotiate repayment terms of these loans in its favour,
when they become due and payable;
* The consolidated entity has received confirmation from related party
creditors amounting to $399,891 as at 31 December 2014, to defer the
payment of their debts until the consolidated entity has sufficient cash on
hand and the ability to make repayment;
* The Company has established a number of strategies to obtain the greatest
benefit from its exploration assets, including the potential development
and commercial exploitation of some of the tenements disclosed in Note 3 to
generate cash inflows; and
* The ability to scale down its operations in order to curtail expenditure,
in the event insufficient cash is available to meet projected expenditure.
Accordingly, the Directors believe that the consolidated entity will be able to
continue as a going concern and that it is appropriate to adopt the going
concern basis in the preparation of the financial report.
If the consolidated entity is unable to raise further funding or successfully
extend the repayment terms of the interest bearing liabilities, there would be
a material uncertainty as to whether the consolidated entity will continue as a
going concern and therefore whether it will realise its assets and extinguish
its liabilities in the normal course of business and at the amounts stated in
the financial report.
The financial report does not include any adjustments relating to the amounts
or classification of recorded assets or liabilities that might be necessary if
the consolidated entity does not continue as a going concern.
Notes to the Financial Statements
For the half-year ended 31 December 2014
Note 2 - Segment Information
Management has determined the operating segments based on the reports reviewed
by the board of directors that are used to make strategic decisions. The
Company does not have any customers, operates only in the mineral exploration
industry within the geographical segments of Australia and USA.
Australia USA Total
31 December 2014 $ $ $
Revenue
Other revenues from external customers - - -
Total segment revenue - - -
Result
Segment result (571,116) (6,602,322) (7,173,438)
Interest revenue - - -
Assets and Liabilities at 31 December 201
4
Segment assets
- Exploration expenditure - 12,631,848 12,631,848
* Plant and equipment - 98,597 98,597
- Cash and cash equivalents 1,216 30,950 32,166
- Other assets 9,747 - 9,747
- Trade and other receivables 8,842 29,775 38,617
Total assets as per the statement of 19,805 12,791,170 12,810,975
financial position
Segment liabilities
- Trade and other payables 1,405,471 179,688 1,585,159
* Interest bearing liabilities 4,254,191 - 4,254,191
Total liabilities as per the statement of 5,659,662 179,688 5,839,350
financial position
Australia USA Total
31 December 2013 $ $ $
Revenue
Other revenues from external customers - - -
Total segment revenue - - -
Result
Segment result (895,396) (319,782) (1,215,178)
Interest revenue 2,073 112 2,185
Depreciation expense - 106,822 106,822
Notes to the Financial Statements
For the half-year ended 31 December 2014
Note 2 - Segment Information (continued)
Australia USA Total
Assets and Liabilities at 31 December $ $ $
2013
Segment assets
- Exploration expenditure - 18,854,862 18,854,862
* Plant and equipment - 927,411 927,411
- Cash and cash equivalents 35,580 54,099 89,679
- Other assets 19,013 - 19,013
- Trade and other receivables 121,580 190,411 311,991
Total assets as per the statement of 176,173 20,026,783 20,202,956
financial position
Segment liabilities
- Trade and other payables 724,440 423,869 1,148,309
* Borrowings 3,329,960 - 3,329,960
Total liabilities as per the statement of 4,054,400 423,869 4,478,269
financial position
Note 3 - Deferred exploration expenditure
31 December 30 June
2014 2014
$ $
Costs carried forward in respect of areas of interest in the following phases:
Deferred exploration and evaluation 12,631,848 18,349,689
Movement:
Balance at beginning of half-year 18,349,689
Exploration and evaluation expenditure incurred 68,008
Impairment of exploration and evaluation (6,315,924)
expenditure
Effects of foreign currency translation 530,075
Balance at end of half-year 12,631,848
The carrying value of the consolidated entity's interest in exploration
expenditure is dependent upon the continuance of the consolidated entity's
right to tenure of the areas of interest, results of future exploration and the
recoupment of costs through successful development and exploitation of the
areas of interest, or alternatively, by their sale.
Notes to the Financial Statements
For the half-year ended 31 December 2014
31 December 30 June
2014
2014
$
$
Note 4 - Issued Capital
Issued Capital
Ordinary shares - fully paid 15,947,716 15,947,716
Performance shares - fully paid 4,837,500 4,837,500
20,785,216 20,785,216
a. Movements for the period:
* Ordinary shares No of Shares $
Opening Balance 94,625,361 15,947,716
Closing Balance 94,625,361 15,947,716
Performance shares
Opening Balance 25,000,000 4,837,500
Closing Balance 25,000,000 4,837,500
Note 5 - Dividends
No dividend has been declared or paid during the half-year ended 31 December
2014 (2013: Nil).
Note 6 - Events subsequent to Reporting Date
There have been no subsequent events since the half year reporting date.
Note 7 -Contingent Liabilities
There has been no change in contingent liabilities since the last annual
reporting date.
Directors' Declaration
The directors of the company declare that:
1. The financial statements and notes are in accordance with the Corporations
Act 2001, including:
a. complying with the Accounting Standard AASB 134: Interim Financial
Reporting and the Corporations Regulations 2001; and
b. giving a true and fair view of the consolidated entity's financial position
as at 31 December 2014 and of its performance for the half-year then ended.
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 made in accordance with a resolution of the Board of
Directors.
Executive Chairman
Peter Landau
Dated this 16 March 2015