Final Results

Centamin Egypt Limited 30 September 2002 CENTAMIN EGYPT LIMITED ABN 86 007 700 352 Annual Report 30 June 2002 C O N T E N T S COMPANY 1 PARTICULARS........................................................ CHAIRMAN'S 2 REPORT.............................................................. REVIEW OF 3 OPERATIONS........................................................ DIRECTORS' 10 REPORT............................................................... CORPORATE GOVERNANCE STATEMENT............................. 15 INDEPENDENT AUDIT REPORT............................................... 17 DIRECTORS' 18 DECLARATION.................................................... STATEMENT OF FINANCIAL PERFORMANCE........................ 19 STATEMENT OF FINANCIAL POSITION................................... 20 STATEMENT OF CASH FLOWS................................................ 21 NOTES TO THE FINANCIAL STATEMENTS............................. 22 ADDITIONAL ASX INFORMATION............................................. 39 COMPANY PARTICULARS DIRECTORS Mr Sami El-Raghy BSc (Hons), FAusIMM, FSEG - Chairman Mr Josef El-Raghy BComm - Managing Director Mr Colin Cowden FAII, ASA, ACIS, ACIM, FNIBA, CD - Non Executive Director Mr Gordon B Speechly FAusIMM - Non Executive Director Mr Thomas Elder PhD, FIMM, FGS - Non Executive Director COMPANY SECRETARY Mr Roland Bocso CPA EXPLORATION Mr Michael Kriewaldt MSc FINANCIAL CONTROLLER Mr Simon Durack BComm, Post Grad Dip Bus, CA, FCIS, AFAIM, JP PERTH OFFICE MANAGER Mr John Lynch HEAD OFFICE 57 Kishorn Road Mount Pleasant WA 6153 Telephone: (08) 9316 2640 Facsimile: (08) 9316 2650 E mail: centamin@centamin.com.au www.centamin.com.au BANKERS National Australia Bank Limited 197 St George's Terrace Perth WA 6000 AUDITORS Deloitte Touche Tohmatsu Level 16 Central Park 152-158 St George's Terrace Perth WA 6000 NOMINATED BROKER & ADVISOR Williams de Broe Plc 6 Broadgate London EC 2M 2RP United Kingdom LOCATION OF REGISTER OF SECURITIES Advanced Share Registry Services Computershare Level 7, 200 Adelaide Terrace PO Box 82 Peth, WA 6000 The Pavilions, Bridgewater Road Telephone: (08) 9221 7288 Bristol BS99 7NH Facsimile: (08) 9221 7869 England. Telephone: 44 0870 702 0003 Facsimile: 44 0870 703 6116 STOCK EXCHANGE The Company is listed on the Australian Stock Exchange and the Alternative Investment Market of the London Stock Exchange. The Home Exchange is Perth. CHAIRMAN'S REPORT Dear Shareholders Once again it is my pleasure, to present to you the annual report of the Company for the year ending 30 June 2002. It has been a year of substantial achievements for your Company, as it continues to build a solid foundation for growth into a major mining company. These achievements and their significance to the Company are:- 1. The conversion of the Concession Agreement from exploration to exploitation status covering the total area (4600km2) for an initial period of thirty years plus a thirty year option to extend, ensures the long term future of the Company in Egypt and the retention and development of other significant projects; 2. The successful capital raising and listing of the Company on the AIM of the London Stock Exchange, positions the Company closer to the equity capital markets of Europe that are more attuned to investing in Egypt; 3. The completion of the review of the two million tonne per annum bankable feasibility study demonstrates favourable economics for the Sukari project, with an attractive Internal Rate of Return (28.4%). This 'Base Case' study forms the basis for an additional study into the development of a larger operation of 4 to 5 million tonne per annum to produce up to 300,000 ounces of gold a year and to commence discussions with banks and other financial institutions for the financing of the project; 4. An increase of the gold resource at Sukari from 1.6 million to 2.04 million ounces continues to highlight the significant potential of Sukari, in particular that these resources are contained in an estimated 10% of the Sukari mineralised system; 5. Further high-grade intersections in the Hapi shoot. This indicates the continuity of the Hapi shoot along the footwall of the Amun zone and the possibility that it could extend into the RA zone; 6. The discovery of a new high grade zone on the hanging wall of the Amun zone continuing into the RA zone; What sets Centamin apart from other mining companies, junior or senior for that matter, is that it already has in its exploration portfolio, projects containing known mineral occurrences which form the foundation for the creation of a major mining house. It also has the dedicated and experienced management to oversee that growth. The Company will continue to strengthen and add to this management team as the need arises and as the company moves into the development of its first gold operation in Egypt. In the near future, Centamin will move from an explorer to a producer with a substantial asset base. To lead this development, Centamin has been fortunate to obtain the services of Mr. Josef El-Raghy as managing director. Josef comes to the company after a successful 10 year career in the stock broking and equities industry. His youth and enthusiasm coupled with his knowledge of mining and the international capital markets will be a great asset to the company as it builds on its substantial opportunities. It is also with pleasure that the board welcomes another new member, Dr. Tom Elder who has an outstanding record of achievement and experience in the minerals industry. Tom has agreed to join the board as a UK based non-executive director. As mentioned previously, it has been a year of achievement and hard work by dedicated staff and consultants in Australia and Egypt and the ongoing support of the company's major shareholders. The Board acknowledges their contribution and also that of Williams de Broe Plc in London and we thank them for their continuing support. I look forward to welcoming you to the annual general meeting of the Company. On behalf of the Board Sami El-Raghy Chairman REVIEW OF OPERATIONS HIGHLIGHTS â€¢ Eastern Desert Concession converted to 30 + 30 year Exploitation Lease â€¢ Sukari Resource exceeds 2 million ounces of contained gold â€¢ Successful A$7.5 million (Â£2.7 million) Fund Raising and Listing on the Alternative Investment Market (AIM) of the London Stock Exchange â€¢ Completion of Independent Review of Bankable Feasibility Study â€¢ New directors appointed to the Board â€¢ Protracted Legal actions resolved EGYPTIAN OPERATIONS Tenure On the 4th November 2001 the Egyptian Geological Survey and Mining Authority notified Pharaoh Gold Mines NL (99.9% owned subsidiary) of the acceptance of a ' commercial discovery' at Sukari and the granting of exploitation status over the whole of the Eastern Desert Concession Areas. This exploitation status grants the Company a thirty-year tenure over approximately 4600km2 of the most prospective gold and base metals areas in Egypt, with the option to renew the tenure for a further thirty years. The Concession comprises three separate areas that contain sixty-six known old gold workings. Completion of The Bankable Feasibility Study Review Subsequent to the 30th June 2002, SNC-Lavalin Australia Pty Ltd conducted the review of the metallurgy, process plant (including tailings disposal), capital cost, operating costs, infrastructure and implementation of the study into the development of a 2 million tonne per annum processing facility at the Sukari Gold Project. The mine scheduling, pit optimisation and design work was carried out by Mining Solutions Consultancy Pty Ltd and are based on the Measured and Indicated Resources of 2.04m ounces (0.5g/t cut-off), prepared by Hellman & Schofield Pty Ltd. The financial model that was prepared by the company as a result of this feasibility study is referred to as the Sukari Base Case Model and is derived from data relating predominantly to the Amun zone (estimated to be 10% of the volume of the Sukari Hill). The Sukari Base Case Model is the foundation for an additional study of a larger facility to process up to 5 million tonne per annum based on an upgraded resource figure that is expected to be announced by the end of the year. In support of this concept, two additional studies referred to as the Sukari Base + Inferred Model and the Sukari Inferred Pit Expansion Model have been developed. These additional models demonstrate the potential upside of the Project. The Base + Inferred Model takes into account inferred resources, rather than only the measured and indicated resources used in the Base Case model. The Inferred Pit Expansion Model assumes that the base case ultimate pit limits would expand to the larger pit shell limits optimised with the inclusion of the Inferred resources. Key Financial Data from the Feasibility Study ($US) Base Case Base + Inferred Inferred Pit Expansion Recovered Ounces oz 589,411 646,555 942,452 Strip Ratio t/t 4.38 3.93 4.51 Recovery % 80.07 80.16 81.60 Total Operating Costs $ 107,244,434 113,206,666 154,787,257 Net Sales Revenue $ 177,041,244 194,205,846 270,289,768 Spot Gold Price $ 297/oz 297/oz 297/oz Forward Sale Price $ 317/oz 317/oz 317/oz Cash Cost Per Ounce $/oz 182/oz 175/oz 164/oz Project Net Cash Flow $ 39,634,991 51,903,991 97,340,993 NPV @ 8% DCF $ 23,692,199 31,024,322 55,789,787 Internal Rate of Return % 28.4 32.2 37.8 BASE CASE (Recovered Ounces - 589,411 oz): The base case scenario includes Measured and Indicated resources with forecast cash costs per ounce of $182 per oz over the 6.5 year processing period which includes processing of the low grade stockpiles after the mining has ceased. During the 5 year mining period cash costs average $167 per oz. BASE CASE + INFERRED MODEL (Recovered Ounces - 646,555 oz): As well as the project reserves (based on Measured and Indicated resources), the Inferred resources reported in the base case pit designs have been included in this model. The production schedule and the cash flow model have been adjusted for longer operation life and lower mining rates at the later years of the operation. INFERRED PIT EXPANSION CASE. (Recovered Ounces - 942,452oz): In this model it is assumed that the base case ultimate pit limits would expand to the larger pit shell limits optimised with the inclusion of the Inferred resources. The Base + Inferred Case production schedule has been further extended with mining of quantities in an additional cutback expansion to the north. The feasibility study is predominantly over the Amun Zone, which covers approximately 25% by area but even less percentage by volume of the 2.5km long Sukari hill. Drilling is ongoing as infill to the Amun zone and into the adjacent Ra zone. Along with the Company's three diamond drills two RC/diamond rigs were contracted but their capacity was limited. Another contractor with two large diamond rigs is expected to arrive on site at the end of September, adding to the company's capability for further increases in mineralised metres. Exploration and Drilling Drilling during the year has been focussed on both step out and infill of the Amun Zone and more recently new drilling into the Ra Zone. Further extensions of the high grade 'Hapi' shoot first encountered at 10400N have been intersected along the footwall contact as drilling extends north. Intersections of 1m @ 21.00g/t on section 10175N, 1m @ 228.00g/t on 10475N, 3m @ 56.83g/t and 3m @ 15.20g/t on 10700N and 4m @ 42.18g/t on 10800N, highlight the possibility that the Hapi shoot extends along the strike length of the footwall contact or that there are further high grade shoots at depth, in the footwall contact. Other high-grade intersections of 12m @ 11.99g/t and 17m @ 6.06g/t in horizontal holes SDDH208 and SDDH255 at 10625N and 10800N respectively are also very encouraging in that they are in the upper region of the hill. If these grades continue along strike it could have a significant positive impact on mining costs as most of the top of the hill is currently being treated as waste until such time as the drill rigs can gain better access. Significant intersections since the 2001 Annual Report are:- Hole No. Northing Easting Intersection 'm' Average Gold grade From 'm' To 'm' g/t DDH187 10526 10512 35.00 2.03 94.00 129.00 DDH194 10376 10522 24.00 2.62 121.00 145.00 DDH196 10347 10537 61.00 2.25 100.00 161.00 DDH198 10301 10536 59.00 2.77 104.00 163.00 1.00 53.80 145.00 146.00 DDH199 10475 10538 27.00 3.99 120.00 147.00 4.00 13.02 171.00 175.00 DDH201 10450 10519 21.00 2.53 116.00 137.00 DDH202 10575 10642 3.00 3.17 175.00 178.00 DDH203 10475 10538 15.00 2.65 86.00 101.00 1.00 228.00 289.00 290.00 DDH205 10624 10606 7.00 2.75 237.00 244.00 DDH208 10625 10428 12.00 11.99 66.00 78.00 RCD213 10700 10574 19.00 2.19 197.00 216.00 28.00 6.85 230.00 258.00 incl 3.00 56.83 236.00 239.00 RC221 10250 10224 53.00 2.36 57.00 110.00 RC223 10175 10475 1.00 36.00 10.00 11.00 1.00 21.00 164.00 165.00 RC224 10146 10465 56.00 2.32 74.00 130.00 RC225 10125 10447 11.00 4.63 100.00 111.00 DDH227 10800 10358 14.00 2.99 162.00 176.00 DDH229 10850 10381 5.00 6.09 88.00 93.00 RC231 9975 10425 3.00 3.34 71.00 74.00 RC237 9965 10480 7.00 2.57 131.00 138.00 RC238 10200 10346 3.00 3.81 7.00 10.00 RCD242 10750 10604 62.00 2.00 192.00 254.00 incl. 8.00 4.83 208.00 216.00 1.00 11.80 310.00 311.00 RCD243 10750 10604 5.00 3.31 33.00 38.00 19.00 2.08 228.00 247.00 RC244 10500 10413 15.00 2.60 26.00 41.00 DDH246 10649 10402 8.00 2.26 29.00 37.00 DDH249 10775 10650 2.00 7.74 236.00 238.00 RCD251 10850 10720 6.00 3.44 262.00 268.00 14.00 2.48 408.00 422.00 10800 10358 17.00 6.06 37.00 54.00 DDH255 incl 6.00 14.87 43.00 49.00 2.00 7.66 83.00 85.00 RCD256 10455 10693 10.00 3.54 58.00 68.00 7.00 3.18 169.00 176.00 7.00 5.45 332.00 339.00 RCD260 10700 10575 14.00 4.69 175.00 189.00 incl 2.00 17.30 181.00 183.00 11.00 2.40 271.00 282.00 26.00 3.74 309.00 335.00 incl 3.00 15.20 332.00 335.00 RCD261 10590 10580 4.00 6.74 233.00 237.00 14.00 14.31 282.00 296.00 incl 4.00 42.18 289.00 293.00 Note: RC = Reverse circulation hole, DDH = Diamond drill hole, RCD = RC hole with diamond tail. Surface Mapping Geological mapping has continued over the Sukari Hill and in the northern area one mineralised zone has been mapped over a length of 1500m. Ancient Pharaonic and Roman diggings are common indicating favourable conditions for locating further mineralisation. Geological surface mapping has defined west dipping and north dipping structures with well developed halos. With surface mineralisation in the Ra zone being generally of a higher grade and more widely distributed than in the Amun zone (400m compared with 70-90m) there is every indication that the volume of mineralisation in the Ra zone will be greater and of a higher grade. The mapping program is continuing with the aim of compiling a geological map of the entire Sukari Hill that will also incorporate the structural controls on the mineralisation. Resources In July 2000, consultants, Hellman & Schofield upgraded the resource estimate. The current resource estimate has been derived from data sourced from drilling, up to hole 253 with assays reporting mineralisation in all holes intersecting the porphyry. Data was not available for the following holes: Hole 204A surface to 150m; 212, surface to 110m; 218, surface to 115m, 145-275m and 315-385m; 227, 191-246m; 242, 218-354; 250, 195-349m & 251, 171-442m. Table of Resource Estimates: Measured and Indicated Inferred TOTAL COG M.Tonnes Grade-g/t M.oz M.Tonnes Grade-g/t M.oz M.oz 0.5 26.4 1.42 1.20 16.9 1.54 0.84 2.04 0.8 17.4 1.82 1.02 11.2 2.01 0.72 1.74 1.0 13.5 2.09 0.91 8.7 2.33 0.65 1.56 2.0 4.5 3.51 0.50 3.0 4.09 0.40 0.90 Note: COG = Cut-off grade, M = Million, g/t = grams/tonne of gold Recoverable resources have been estimated using Multiple Indicator Kriging with block support correction, effectively incorporate mining dilution. Measured resources are in areas drilled at 25m x 25m spacing, Indicated resources in areas drilled at approximately 50m x 50m spacing and Inferred resources in areas of incomplete drill coverage at approximately 50m x 50m spacing. About ninety per cent of samples are diamond drill core, the remainder being from reverse circulation drilling. Samples are prepared on site and assayed for gold by aqua regia digest and AAS in Australia. A sampling and assaying quality assurance regime, incorporating blind repeats and reference standards, is in place. Mining Reserves Following the resource upgrade, Mining Solutions carried out pit optimisation, mine planning and scheduling for inclusion in the feasibility study. The reserves included in the 'Base Case' financial model of the feasibility study are listed below: Table of Reserves: Cut-off Grade Proven Reserve Probable Reserve Total Range -Au (g/t) Tonnes Au (g/t) Tonnes Au (g/t) Tonnes Au (g/t) 0.8 - 1.0 1 353 000 0.89 1 304 000 0.91 2 657 000 0.90 >1.0 5 063 000 2.07 4 828 000 2.07 9 891 000 2.07 >0.8 6 416 000 1.82 6 132 000 1.82 12 548 000 1.82 The reserve does not include 38,380t of existing tailings. Rosetta No exploration was carried out over the Rosetta mineral sands project during the year. AUSTRALIAN PROJECTS Nelson's Fleet - Western Australia The Company agreed to the assignment of the Nelson's Fleet royalty agreement from WMC Resources to the St Ives Gold Mining Co Pty Ltd a subsidiary of Gold Fields Ltd. To date the company has not been informed of any excavation of mineralised ore from the royalty area. Nicholls Diamonds - Western Australia The Joint venture between the Company, Mandor Mining and Castlegem is still in effect. The Company has not carried out any exploration over its Australian interests. Adamus Resources Ltd (Castlegem P/L) is earning an 80% interest in the Nicholls diamond project; Centamin and Mandor Mining will each retain a 10% free carried interest to the completion of a bankable feasibility study. Mineral exploration and mining tenements held in Egypt: Name Tenement Note Interest at Interest at reference 30th June 2000 30th June 2001 Eastern Desert Law 222 for 1995 1 100% 100% Rosetta Concession 2 50% 50% Notes: 1. Pharaoh Gold Mines NL (a 99.99% owned subsidiary of Centamin Egypt Ltd) holds the Eastern Desert Concession that consists of three defined project area, and comprises a total area of over 4600km2. On 4th November 2001, the Eastern Desert Concession was converted into an Exploitation Lease with tenure of thirty years with the option to renew for a further thirty years. 2. Egyptian mineral concession held by Egyptian Pharaoh Investment (EPI) an Egyptian company jointly owned by Centamin Egypt Limited and Kara Gold NL under an agreement with the Egyptian Government. Under the terms of this agreement to develop a heavy minerals project at Rosetta on the Mediterranean coast, east of Alexandria, any profit from mining and separation of the heavy minerals will be shared with the Egyptian Government after EPI recoups all of its development expense. Any profit from the upgrading of the ilmenite to pigment quality TiO2 (titanium oxide) will be 100% EPI. Mineral Exploration and mining tenements held in Western Australia: Name Tenement Note Interest at Interest at reference 30th June 2000 30th June 2001 Nicholls WA E80/1708 1 50% 10% Notes: 1. Joint venture with Mandor Mining Pty Ltd and Castlegem Pty Ltd earning upto 80% through expenditure on exploration. 2. The Nelson's Fleet Royalty Agreement with WMC Resources has been assigned to St Ives Gold Mining Company Pty Ltd, a subsidiary of Gold Fields Ltd. CORPORATE ACTIVITIES â€¢ Capital Raising and AIM Listing On the 18th December 2001, the company, via Williams de Broe Plc, its UK nominated adviser and stockbroker, completed a successful Placing of 45 million new ordinary shares at 6 pence per share to raise a total of A$7.5 million (Â£2.7 million). The funds were raised to primarily fund the completion of the review of the current Feasibility Study, to undertake further drilling to significantly increase the resource base for the Sukari Project, and to fund the working capital requirements of the Group. On the 21st December 2001, the company's ordinary shares and options already listed and trading on the Australian Stock Exchange, together with the new ordinary shares issued pursuant to the Placing, were admitted to the Alternative Investment Market ('AIM') of the London Stock Exchange at which time dealings in these equities commenced in the UK. â€¢ Changes to the Board of Directors On the 23rd August 2002, Mr Sami El-Raghy stepped down as Managing Director and Mr Josef El-Raghy was appointed. Mr El-Raghy, age 31, holds a Bachelor of Commerce Degree and was until his appointment to the board involved in the Australian stock broking industry. He was formerly a director of both CIBC Wood Gundy and Paterson Ord Minnett Limited. Josef has had a long association with the development of the company and his expertise in the international equity capital markets has greatly assisted the company in its fund raising activity todate. Mr Sami El-Raghy is to continue as the executive Chairman of the board and will devote more of his time resident in Egypt, to liaise with the government and other key participants in the lead up to the proposed development of the Sukari Project. On the 8th May 2002, Mr Tom Elder was appointed as a non executive Director. Mr Elder, a UK resident, is a graduate geologist and President/Chief Executive Officer of Canadian and AIM listed Mano River Resources Inc and a director of Gold Mines of Sardinia Limited. He has an extensive background in mineral exploration with companies such as BP Minerals, Rio Tinto and Cominco Ltd and has managed projects in the United Kingdom, Spain, Italy, Portugal and Greenland as well as project development in Russia and Europe. â€¢ Legal Actions Resolves Supreme Court Action CIV 2081 Of 1996 Between Pharaoh Gold Mines NL, Sami El-Raghy, North African Resources NL and Allied Mining & Processing Ltd and Counter Claims by Pharaoh Gold Mines NL and Sami El-Raghy. On the 6th August 2001, the parties agreed to settle the claims by Allied and the counter claims by Pharaoh Gold Mines and Mr El-Raghy. The terms of settlement were confidential and the parties agreed that upon execution of a deed of release and settlement, that the action and the counter claims each be dismissed with no orders as to costs. Further, all parties unequivocally retracted any allegations that any party acted contrary to the respective interests of any other party. Supreme Court Action COR350 of 1998 - El-Ansary and Another vs El-Raghy and others On the 25th March 2002, Justice Templeman in the Supreme Court of Western Australia dismissed the above action with costs against the plaintiffs. This action was commenced by Mohamed and Barbara El-Ansary against Sami El-Raghy, Michael Kriewaldt, El-Raghy Kriewaldt Pty Ltd, Nordana Pty Ltd, Pharaoh Gold Mines NL and Centamin Egypt Limited. ASX Listing Rule 5.10.1 Information in this report which relates to exploration, geology, sampling and drilling is based on information compiled by consulting geologist Mr M Kriewaldt who is a corporate member of the Australasian Institute of Mining and Metallurgy with more than five years experience in the fields of activity being reported on and is not a full time employee of the Company. His written consent has been received by the Company for this information to be included in this report in the form and context that it appears. Mr Kriewaldt declares an interest in shares of the Company. The information in this report that relates to mineral resources is based on information compiled by Mr Gary Brabham, a member of the Australasian Institute of Mining and Metallurgy. Mr Brabham is employed by Hellman & Schofield Pty Ltd a consultancy primarily concerned with estimation of mineral resources worldwide. Mr Brabham is a Competent Person under the meaning of the J.O.R.C. code with respect to the mineralisation being reported in this report. Mr Brabham has more than five years' experience in the mining industry and has given his consent to the public reporting of this information in the section headed Mineral Resources. The information in this report that relates to open pit mine design is based on information compiled by Mr Tamer Dincer of Mining Solutions Consultancy Pty Ltd. Mr Dincer is a member of the Australasian Institute of Mining and Metallurgy, a member of the Mineral Industry Consultants Association and has 15 years experience in the mining industry. Mr Dincer has given his consent for this information to be included in this report as presented under the heading Open Pit Design. DIRECTORS' REPORT The Directors submit herewith the annual directors' report together with the financial report of Centamin Egypt Limited ('the Company'). DIRECTORS The Directors of the Company in office during or since the end of the financial year are: Mr Sami El-Raghy B.Sc. (Hons), FAusIMM, FSEG Chairman A graduate of Alexandria University in 1962, Mr. El-Raghy worked in Egypt and Europe before moving to Australia in 1968 and joining American Smelting and Refining Company (Asarco). He was the prime mover in the discovery and development of a number of gold mines, including the Wiluna Gold Mine for Asarco and the Mt Wilkinson Gold mine for Chevron Exploration. Mr. El-Raghy recognised the potential of the Marymia Dome and the Barwidgee Yandal Belt long before these areas became the most sought after mining areas in Australia. Mr. El-Raghy has been a director of the Company since 1993. He brings to the board over 36 years' experience in the industry, both in Australia and overseas. Mr Josef El-Raghy B.Comm Managing Director Appointed 26 August 2002 Josef El-Raghy holds a Bachelor of Commerce from the University of Western Australia and has a ten year career in stock broking. He was formerly a director of both CIBC Wood Gundy and Paterson Ord Minnett. His expertise in international capital markets has greatly assisted the Company in its fundraising activities. Mr Colin Cowden FAII, ASA, ACIS, ACIM, FNIBA, CD Non Executive Director Member Audit Committee Member Remuneration Committee Director since March 1982 Colin Cowden is the Executive Chairman of Cowden Limited, a licensed insurance broking company formed in 1972. Cowden Limited has grown into a prominent broking firm in Western Australia with branch offices in Sydney, Melbourne and Adelaide. Mr Gordon B Speechly FAusIMM Non Executive Director Member Audit Committee Member Remuneration Committee Mr Speechly is a Fellow of the Australasian Institute of Mining and Metallurgy with over 45 years experience in the mining industry. During his career, Mr Speechly has been involved in over 300 mining projects and is recognised in Australia and overseas as an expert in both underground and open pit mining and design. He is particularly noted for his innovative and low cost approaches to mining issues. Mr Thomas G. Elder PhD, FIMM, FGS Non Executive Director Appointed 8 May 2002 Mr Elder brings a wealth of experience to the Company and is currently President and Director of Mano River Resources and non-executive Director of Gold Mines of Sardinia. He is a graduate geologist who has been involved with companies such as BP Minerals, Rio Tinto and Cominco. MANAGEMENT Mr Michael Kriewaldt. MSc, FAusIMM, MGSA, FSEG, MAIG Mr Kriewaldt holds the degree of Master of Science and has worked as a geologist since 1955 with Mt Isa Mines, Broken Hill South, The Geological Survey of Western Australia, Asarco Australia and Eon Metals, during which time he has amassed considerable knowledge and experience in the exploration for gold and base metals. He is credited with directing the attention of Asarco to the Wiluna Gold Mines area and was instrumental in the success of the company in that area. Mr Kriewaldt also recognised the potential of the Nelson's Fleet project and was solely responsible for the success of Centamin's exploration effort in that area. He is a member of the following professional bodies: â€¢ The Australasian Institute of Mining and Metallurgy. â€¢ The Australian Institute of Geoscientists. â€¢ The Geological Society of Australia. â€¢ The Society of Economic Geologists Mr Roland Bocso CPA Mr Bocso is a Certified Practising Accountant and practises under the name of Bocso & Associates, Certified Practising Accountants. Mr Bocso has served on a number of listed mining company boards and as Company Secretary brings to the Company a wide degree of management and financial experience. Mr Simon Durack BComm, Post Grad Dip Bus, CA, FCIS, MAICD, AFAIM, JP Mr Durack is a Chartered Accountant and has many years experience in financial control, auditing and company administration. Mr Durack is also a Justice of the Peace. Mr John Lynch Mr. Lynch has been in the mining industry in a technical capacity for over 31 years, with Western Mining, Chevron Exploration and Eagle Mining. DIRECTORS' MEETINGS The number of directors' meetings and number of meetings attended by each of the directors of the Company during the financial year were: Director No of Meetings No of Meetings Held Attended Mr S El-Raghy 4 4 Mr C Cowden 4 4 Mr G B Speechly 4 4 Mr T G Elder 1 1 Mr J El-Raghy Note 1 Note 1 Note 1 - Mr Josef El-Raghy was not a director of the Company for the year ended 30 June 2002. During the financial year, the Remuneration Committee held one meeting to consider matters within its terms of reference. The meeting was attended by all member Directors. Since year end, the Audit Committee has met once to consider matters within its terms of reference. No Audit Committee meetings were held during the financial year. PRINCIPAL ACTIVITIES The principal activity of the consolidated entity during the course of the financial year was the exploration for precious and base metals. There were no significant changes in the nature of the activities of the consolidated entity during the year. DIVIDENDS No dividends have been declared or paid since the end of the previous financial year. STATE OF AFFAIRS The following changes in the state of affairs of the consolidated entity occurred in the financial year: â€¢ The granting of the exploitation lease over the eastern desert concession in Egypt by the Egyptian Geological Survey & Mining Authority on 4 November 2001. â€¢ The successful listing of the Company on the Alternative Investment Market of the London Stock Exchange on 21 December 2001. â€¢ The successful capital raising in London of $7,750,485 from the placement of 45 million ordinary shares. â€¢ The court action COR 350 of 1998 brought by El-Ansary and another against the Company and others was dismissed on 25 March 2002. â€¢ Mr. Thomas G Elder was appointed a non executive director of the Company on 8 May 2002. â€¢ On 26 August 2002, Mr Sami El-Raghy stepped down as Managing Director of the Company, but will remain as Chairman of the Company. On the same day, Mr Josef El-Raghy, was appointed Managing Director of the Company. LIKELY DEVELOPMENTS It is anticipated that the consolidated entity will continue to operate in the field of gold and mineral exploration and in particular to further develop the Egyptian operation. The consolidated entity's intention is to become a major mining house in Egypt. The company will continue to drill and prove up a multi-million ounce resource for the Sukari Hill before seeking funding for a larger 5 million tonne per year operation. Once Sukari is brought into production the company's intention is to systematically test the numerous gold occurrences in the Egyptian concession areas, bringing further gold and base metal mines into production. The Directors are currently seeking project finance for the Sukari Project development, however further shareholder support may be required. OPTIONS OPTIONS ISSUED DURING THE FINANCIAL YEAR: In August 2001, the Company issued 4,000,000 options at an exercise price of 20 cents with an expiry date of 3 March 2003 to consultants to the Company in part consideration for services rendered. OPTIONS CONVERTED DURING THE FINANCIAL YEAR: 1,888,067 options expiring on 3 March 2003 were converted during the financial year, raising some $377,613 in additional capital. Particulars of unissued shares under option as at the date of this report are: Number of Ordinary Exercise Expiry Unissued Shares Price Date 7,700,000 20 cents 30 November 2002 111,245,179 20 cents 3 March 2003 49,999,744 20 cents 9 November 2003 An additional 546,047 options expiring on 3 March 2003 have been converted since year end, raising an additional $109,209 in capital. All options are for ordinary issued shares in Centamin Egypt Limited. The shares will have the same rights and entitlements as all other issued shares. OPTIONS ISSUED SUBSEQUENT TO BALANCE DATE No options have been issued subsequent to balance date. Details of the number of options held by Directors or held in companies controlled by them at the date of this report are set out in 'Directors' Shareholdings'. There are no unissued shares under option at the date of this report other than the shares referred to above. These options do not entitle the holder to participate in any share issue of any other corporation. ENVIRONMENTAL REGULATIONS The consolidated entity is currently complying with relevant environmental regulations and has no outstanding environmental orders against it. EVENTS SUBSEQUENT TO BALANCE DATE On 10 September 2002, the Company announced the completion of a Bankable Feasibility Study for the development of a 2 million tpa processing facility for the Sukari Gold Project in Egypt. The Study forms the foundation of the Company's strategy to become a substantial producer of gold and has resulted in an increase in the measured and indicated resource to 2.04 million ounces. REVIEW OF OPERATIONS A review of the company's operations is located at the front of this report. INDEMNIFICATION OF OFFICERS & AUDITORS During the financial year, the Company paid a premium in respect of a contract insuring the directors of the Company and any related body corporate against a liability incurred as a director to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has agreed to indemnify the Chairman, Mr Sami El-Raghy against any claims made by Allied Mining and Processing in relation to the settlement as agreed to in the 'Deed of Settlement' of the Court action CIV2081 of 1996. The Company has not otherwise indemnified its officers or auditors. DIRECTORS' REMUNERATION The Remuneration Committee review the remuneration packages of all directors on an annual basis. Remuneration packages are reviewed with due regard to performance and other relevant factors. Name Office Salary/ Directors Fees Benefits Options Total Fees Issued $ $ $ $ $ Mr S El-Raghy Managing Director 210,000 25,000 2,000 - 237,000 Mr C N Cowden Non-Executive Director - 25,000 2,000 - 27,000 Mr G B Speechly Non-Executive Director - 25,000 2,000 - 27,000 Mr T G Elder Non-Executive Director - 3,709 297 - 4,006 (Appointed 8 May 2002) Mr Josef El-Raghy did not receive any remuneration during the financial year, as he was not appointed a director of the Company until 26 August 2002. EXECUTIVES' REMUNERATION There were no Executives of the Company who were not Directors during the year. DIRECTORS' SHAREHOLDINGS The relevant interest of each Director in the share capital of the Company shown in the Register of Directors' Shareholdings as at the date of this report is: Fully Paid Ordinary Shares Opening Additions/ Closing Options Balance (Disposals) Balance over Shares Mr S El-Raghy 79,146,067 599,920 79,745,987 49,999,488 Mr C N Cowden 123,026 100,000 223,026 - Mr G B Speechly - - - - Mr T G Elder - - - - Mr J El-Raghy - 850,000 850,000 - The additional shares were acquired through on and off market transfers at the prevailing share price on that day. Since the end of the previous financial year no Director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by Directors shown in the consolidated accounts) because of a contract made by the Company, its controlled entities or a related body corporate with the Director or with a firm of which the Director is a member, or with an entity in which the Director has a substantial interest. Signed in accordance with a resolution of the directors made pursuant to s. 298 (2) of the Corporations Act 2001. On behalf of the Directors G B SPEECHLY Director Perth, 27 September 2002 CORPORATE GOVERNANCE STATEMENT The Board is comprised of five directors, of which the Chairman and the Managing Director are the only executive directors. Details of the Directors are set out in the Directors' Report. The Board (subject to members voting rights in general meeting) is responsible for selection of new members and has regard to a candidates experience and competence in areas such as mining, exploration, geology, finance and administration that can assist the Company in meeting its corporate objectives and plans. The Board delegates responsibility for the Company's administration to its Managing Director who is accountable to the Board. Under the Company's Constitution: â€¢ the maximum number of directors on the Board is ten; â€¢ a director (other than the Managing Director) may not retain office for more than three years without submitting for re-election; and â€¢ at the Annual General Meeting each year effectively one third of the directors in office (other than the Managing Director) retire by rotation and must seek re-election by shareholders. INDEPENDENT ADVICE Each Director is entitled to independent professional advice at the Company's expense provided that prior approval of the Managing Director is obtained. COMPENSATION ARRANGEMENTS All compensation arrangements for Directors and Senior Executives are determined by the remuneration committee and approved by the Board, after taking into account the current competitive rates prevailing in the market. EXTERNAL AUDITORS The auditors of the Company, Deloitte Touche Tohmatsu ('Deloittes'), have open access to the Board of Directors at all times. Deloittes have audited the Company and its subsidiaries for a number of years and have adopted a policy of rotating audit partners every five years. The last rotation of the audit partner occurred during the financial year ended 30 June 2001, when Mr Peter Messer replaced Mr Keith Jones. AUDIT COMMITTEE The Company has a duly constituted Audit Committee. The responsibilities of the Audit Committee are laid out in its terms of reference, and amongst other things, includes the responsibility to ensure that an effective internal control framework exists within the entity, to produce half year and annual financial statements. This includes the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as non-financial considerations. The Audit Committee also extensively consults with the external auditors. MANAGING RISKS The Board meets regularly to evaluate, control, review and implement the Company's operations and objectives. Regular controls established by the Board include: â€¢ detailed monthly financial reporting; â€¢ delegation of authority to the Managing Director to ensure approval of expenditure obligations; â€¢ implementation of operating plans, cash flows and budgets by management and Board monitoring of progress against projections; and â€¢ procedures to allow directors, and management in the furtherance of their duties, to seek independent professional advice via the utilisation of various external technical consultants. The Board recognises the need to identify areas of significant business risk and to develop and implement strategies to investigate these risks. ETHICAL STANDARDS The Board supports the highest standards of corporate governance and requires its members and the staff of the Company to act with integrity and objectivity in relation to: â€¢ Compliance with the law; â€¢ Record keeping; â€¢ Conflict of interests; â€¢ Confidentiality; and â€¢ Inside information. SHAREHOLDERS The Board aims to ensure that shareholders are at all times fully informed in accordance with the spirit and letter of the Stock Exchange's continuous disclosure requirements. MONITORING OF THE BOARD'S PERFORMANCE AND COMMUNICATION TO SHAREHOLDERS In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the performance of all directors is constantly reviewed by the Chairman. The Board of directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary to assess the performance of the directors. Information is communicated to the shareholders through: â€¢ the Annual Report which is distributed to all shareholders; â€¢ the availability of the Company's Quarterly Report to shareholders so requesting; â€¢ the Half-Yearly Report distributed to shareholders so requesting; â€¢ adherence to continuous disclosure requirements; â€¢ the Annual General Meeting and other meetings so called to obtain shareholder approval for Board action as appropriate; and â€¢ the provision of the Company's website and its constant update and maintenance. Deloitte Touche Tohmatsu A.B.N 74 490 121 060 Central Park Level 16 152-158 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia DX 206 Telephone (08) 9365 7000 Facsimile (08) 9365 7001 www.deloitte.com.au INDEPENDENT AUDIT REPORT TO THE MEMBERS OF CENTAMIN EGYPT LIMITED Scope We have audited the financial report of Centamin Egypt Limited for the financial year ended 30 June 2002 as set out on pages 19 to 39. The company's directors are responsible for the financial report. We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with Accounting Standards and other mandatory professional reporting requirements in Australia and statutory requirements so as to present a view which is consistent with our understanding of the company's financial position, and performance as represented by the results of its operations and its cash flows. The audit opinion expressed in this report has been formed on the above basis. Audit Opinion In our opinion, the financial report of Centamin Egypt Limited is in accordance with: (a) the Corporations Act 2001, including: (i) giving a true and fair view of the company's financial position as at 30 June 2002 and of its performance for the year ended on that date; and (ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and (b) other mandatory professional reporting requirements in Australia. DELOITTE TOUCHE TOHMATSU Peter J Messer Partner Chartered Accountants Perth, 27 September 2002 The liability of Deloitte Touche Tohmatsu is limited by, and to the extent of, the Accountants' Scheme under the Professional Standards Act 1994 (NSW). DIRECTORS' DECLARATION The directors declare that: a. The attached financial statements and notes thereto comply with Accounting Standards; b. The attached financial statements and notes thereto give a true and fair view of the financial position and performance of the Company and the consolidated entity; c. In the directors' opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001; and d. 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. Signed in accordance with a resolution of the directors made pursuant to s. 295 (5) of the Corporations Act 2001. On behalf of the Directors G B SPEECHLY Director Perth, 27 September 2002 STATEMENT OF FINANCIAL PERFORMANCE for the FINANCIAL YEAR ENDED 30 JUNE 2002 Consolidated Company Note 2002 2001 2002 2001 $ $ $ $ Revenue from ordinary activities 2 140,650 230,537 139,373 229,752 Administration expenses (607,785) (314,110) (584,843) (280,790) Foreign exchange loss (346,986) - (346,986) - Promotional expenses (131,524) (16,608) (131,524) (16,608) Travelling expenses (200,535) (5,816) (172,273) (5,816) Other expenses (16,262) (10,700) (20,005) (7,182) Loss From Ordinary Activities (1,162,442) (116,697) (1,116,258) (80,644) Before Income Tax Benefit Income tax benefit relating to ordinary activities 3 - - - - Net Loss (1,162,442) (116,697) (1,116,258) (80,644) Net loss attributable to outside equity interests 18 - 38 - - Net Loss Attributable to Members of the Parent Entity (1,162,442) (116,659) (1,116,258) (80,644) Decrease in asset revaluation reserve - arising on adoption of AASB 1041 (28,326,589) - (28,325,591) Total Changes in Equity Other than those Resulting from Transactions (1,162,442) (28,443,248) (1,116,258) (28,406,235) with Owners as Owners Earnings Per Share: Basic (cents per share) 27 (0.34) (0.04) Diluted (cents per share) 27 (0.34) (0.04) The statement of financial performance is to be read in conjunction with the notes to the financial statements. STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2002 Consolidated Company Note 2002 2001 2002 2001 $ $ $ $ CURRENT ASSETS Cash assets 20(a) 3,954,083 3,071,644 3,787,821 2,919,938 Receivables 5 23,548 51,942 579 25,162 Prepayments 6 45,430 22,823 - 12,256 Total current assets 4,023,061 3,146,409 3,788,400 2,957,356 NON-CURRENT ASSETS Receivables 5 - - 13,952,216 3,144,237 Plant and equipment 7 99,387 62,187 29,769 25,367 Investments 8 - - 5,495,421 5,495,421 Exploration expenditure 9 21,092,284 17,376,083 - 5,985,851 Total non-current assets 21,191,671 17,438,270 19,477,406 14,650,876 Total assets 25,214,732 20,584,679 23,265,806 17,608,232 CURRENT LIABILITIES Accounts payable 10 574,509 910,565 99,257 90,307 Interest bearing liabilities 11 - 280,000 - - Non-Interest bearing liabilities 12 141,961 141,961 141,961 141,961 Total current liabilities 716,470 1,332,526 241,218 232,268 NON-CURRENT LIABILITIES Accounts payable 10 1,556,909 1,913,240 - - Total non-current liabilities 1,556,909 1,913,240 - - Total liabilities 2,273,379 3,245,766 241,218 232,268 Net assets 22,941,353 17,338,913 23,024,588 17,375,964 EQUITY Contributed equity 13 39,669,533 32,895,211 39,669,533 32,895,211 Reserves 14 3,368,243 3,377,683 3,968,243 3,977,683 Accumulated losses 15 (20,088,733) (18,926,291) (20,613,188) (19,496,930) Parent entity interest 22,949,043 17,346,603 23,024,588 17,375,964 Outside equity interest 18 (7,690) (7,690) - - Total equity 22,941,353 17,338,913 23,024,588 17,375,964 The statement of financial position is to be read in conjunction with the notes to the financial statements. STATEMENT OF CASH FLOWS for the FINANCIAL YEAR ENDED 30 JUNE 2002 Consolidated Company Note 2002 2001 2002 2001 $ $ $ $ CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts in the course of operations 9,799 50 9,800 50 Cash payments in the course of operations (1,492,502) (260,725) (868,983) (267,234) Interest received 131,851 90,768 130,573 89,933 Net cash used in operating activities 20(b) (1,350,852) (169,907) (728,610) (177,251) CASH FLOWS FROM INVESTING ACTIVITIES Payment for plant and equipment (93,141) (92,625) (17,275) (18,500) Advances to controlled entities - - (3,738,349) (1,851,000) Payments for exploration (3,724,903) (1,972,326) (1,083,779) (254,969) Refund of tenement security deposits 18,000 20,000 18,000 20,000 Net cash used in investing activities (3,800,044) (2,044,951) (4,821,403) (2,104,469) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the issue of shares 7,750,485 3,000,000 7,750,485 3,000,000 Capital raising costs (1,363,216) - (1,363,216) - Proceeds from the conversion of options 377,613 - 377,613 - Repayment of borrowings (280,000) (372,125) - (372,125) Repayment of borrowings - related entities (156,331) - - - Net cash provided by financing 6,328,551 2,627,875 6,764,882 2,627,875 activities Net increase in cash held 1,177,655 413,017 1,214,869 346,155 Effect of exchange rate changes on the balance of cash held in foreign currencies (295,216) 155,656 (346,986) 139,769 Cash at the beginning of the financial year 3,071,644 2,502,971 2,919,938 2,434,014 Cash at the end of the financial year 20(a) 3,954,083 3,071,644 3,787,821 2,919,938 The statements of cash flows are to be read in conjunction with the notes to the financial statements. NOTES TO THE FINANCIAL STATEMENTS for the FINANCIAL YEAR ENDED 30 JUNE 2002 1. Statement of Significant Accounting Policies The significant policies which have been adopted in the preparation of this financial report are: (A) BASIS OF PREPARATION The financial report is a general purpose financial report and has been prepared in accordance with applicable Accounting Standards, Urgent Issues Group Consensus Views, the Corporations Act 2001, and complies with other requirements of the law. They have been prepared on the basis of historical costs and do not take into account changing money values or, except where stated, current valuations of non-current assets. The accounting policies have been consistently applied by the entities in the economic entity and, except where there is a note of a change in accounting policy, are consistent with those of the previous year. (B) PRINCIPLES OF CONSOLIDATION The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the economic entity, being the Company and its controlled entities as defined in accordance with accounting standard AASB 1024 'Consolidated Accounts'. Where an entity either began or ceased to be controlled during the year, the results are included only from the date control commenced or up to the date control ceased. The balances, and effects of transactions, between controlled entities included in the consolidated financial statements have been eliminated in full. (C) TAXATION The economic entity adopts the liability method of tax effect accounting. Income tax benefit is calculated on the loss from ordinary activities adjusted for permanent differences between taxable and accounting income. The tax effect of timing differences, which arise from items being brought to account in different periods for income tax and accounting purposes, is carried forward in the statement of financial position as a future income tax benefit or a provision for deferred income tax. Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable doubt. Future income tax benefits relating to tax losses are only brought to account when their realisation is virtually certain. (D) NON-CURRENT ASSETS The carrying amounts of all non-current assets, except exploration expenditure, are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount of a non-current asset exceeds the recoverable amount, the asset is written down to the lower amount. In assessing recoverable amounts the relevant cash flows have not been discounted to their present value. (E) INVESTMENTS Investments in controlled entities are carried at recoverable amount. Dividends and distributions are brought to account in the statement of financial performance when they are proposed by the controlled entities. (F) EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE Exploration, evaluation and development costs are accumulated in respect of each separate area of interest where rights of tenure are current. These costs are carried forward where they are expected to be recouped through sale or successful development and exploitation of the area of interest, or, where activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in respect of that area are written off in the year the decision is made. Each area of interest is also reviewed annually and accumulated costs written off to the extent that they will not be recoverable in the future. As at balance date: â€¢ The economic entity is still progressing exploration to deliniate reserves; â€¢ A final feasibility study with respect to the areas of interest is in the process of being completed; and â€¢ The realisable value is dependant upon the current and future gold and mineral sands prices. As a consequence of the above, the ability of the Company and economic entity to recover the carrying amount of the investment and areas of interest respectively, is dependant upon the successful development and commercial exploitation and/or sale of the relevant areas of interest. Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences. When production commences, carried forward exploration, evaluation and development costs will be amortised on units of production basis over the life of the economically recoverable reserves. Restoration costs are provided for at the time of the activities which give rise to the need for restoration. If this occurs prior to commencement of production, the costs are included in deferred exploration and development expenditure. If it occurs after commencement of production, restoration costs are provided for and charged to the statement of financial performance as an expense. (G) PLANT AND EQUIPMENT Items of plant and equipment are recorded at cost and depreciated from the date of acquisition on a reducing balance method over their estimated useful lives. The following estimated useful lives are used in the calculation of depreciation: Plant & Equipment - 2 years Motor Vehicles - 2 years Drilling Rig - 1 year (H) SUPERANNUATION FUND The Company contributes to, but does not participate in, compulsory superannuation funds on behalf of the Directors' in respect of directors' fees paid. Contributions are charged against income as they are made. (I) FOREIGN CURRENCY All foreign currency transactions during the year have been brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at balance date are translated at the exchange rate existing at that date. All exchange differences are brought to account in the statement of financial performance of the financial period in which they arise. The assets and liabilities of the controlled entity incorporated overseas (being an integrated foreign operation) are translated using the temporal method. Monetary items are translated using the exchange rate at balance date and non-monetary items are translated at exchange rates current at the transaction dates. The financial statements are translated at the exchange rate current at the transaction date, except that non-monetary items are translated at the original rates. Exchange differences arising on translation are taken directly to the statement of financial performance. (J) RECEIVABLES Trade receivables and other receivables are recorded at amounts due less any allowance for doubtful debts. (K) ACCOUNTS PAYABLE Trade payables and other accounts payable are recognised when the economic entity becomes obliged to make future payments resulting from the purchase of goods and services. (L) INTEREST-BEARING LIABILITIES Bank loans and other loans are recorded at an amount equal to the net proceeds received. Interest expense is recognised on an accrual basis. Ancillary costs incurred in connection with the arrangement of borrowings are deferred and amortised over the period of the borrowing. (M) DEBT AND EQUITY INSTRUMENTS ISSUED BY THE COMPANY Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement. (N) REVENUE RECOGNITION Sale of Goods and Disposal of Assets - Revenue from the sale of goods and disposal of other assets is recognised when the consolidated entity has passed control of the goods or other assets to the buyer. Contribution of Assets - Revenue arising from the contribution of assets is recognised when the consolidated entity gains control of the contribution or the right to receive the contribution. (O) JOINT VENTURES Interest in joint venture operations are reported in the financial statements by including the consolidated entity's share of assets employed in the joint venture, the share of liabilities incurred in relation to the joint venture and the share of any expenses incurred in relation to the joint venture in their respective classification categories. (P) GOODS AND SERVICES TAX Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except: i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or ii. for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. (Q) COMPARATIVE AMOUNTS The comparative amounts in the Statement of Financial Performance have been reclassified following the disclosure of expense items by function for the first time this year. The reclassification of the comparative amounts has not resulted in any change to the previously reported aggregate Loss from Ordinary Activities. Consolidated Company 2. Loss from Ordinary Activities 2002 2001 2002 2001 $ $ $ $ Loss from ordinary activities has been arrived at after including: OPERATING REVENUE Interest received or due and receivable from: Other persons 131,850 90,768 130,573 89,933 Foreign exchange rate gain - 139,769 - 139,769 Miscellaneous income 8,800 - 8,800 - 140,650 230,537 139,373 229,702 OPERATING EXPENSES Depreciation - plant and equipment 12,873 1,820 12,873 1,820 Allowance for doubtful debts - Subsidiaries - wholly owned controlled entities - - 5,700 2,668 3. Taxation The prima facie income tax benefit on the Loss from Ordinary Activities reconciles to the income tax benefit in the financial statements as follows: Loss from Ordinary Activities 1,162,442 116,697 1,116,258 80,644 Income tax benefit calculated at 30% (2001: 34%) of Loss from Ordinary Activities (348,733) (39,676) (334,877) (27,419) Permanent differences: Other 120,977 (43,313) 120,344 (43,333) Tax benefit of losses not brought to account 227,756 82,989 214,533 70,752 Income tax benefit attributable to Loss from Ordinary Activities - - - - The future benefit of tax losses and other timing differences have not been brought to account because there is no virtual certainty as to their recovery. They are estimated to be: Consolidated Company 2002 2001 2002 2001 $ $ $ $ Tax Losses 8,846,829 8,087,642 1,164,098 448,988 Tax Effect at 30% (2001: 34%) 2,654,049 2,426,293 349,229 134,696 The above carried forward tax losses with respect to exploration expenditure can only be utilised to offset foreign sourced mining income. The future income tax benefit will only be utilised if: â€¢ the companies that make up the economic entity derive future assessable income of a nature and amount sufficient to enable the benefit from the losses to be realised; â€¢ the companies that make up the economic entity continue to comply with the conditions for deductibility imposed by the law; and â€¢ no changes in taxation legislation adversely affect the companies that make up the economic entity in realising the benefit from the losses. 4. Segment Reporting Primary reporting - Business Segments The economic entity is engaged in the business of exploration for precious and base metals only, which is characterised as one business segment only. As the economic entity has only one business segment, all the necessary reporting disclosures are disclosed elsewhere in the notes to the financial statements. Secondary reporting - Geographical Segments The principal activity of the economic entity during the year was the exploration for precious and base metals in Egypt and funding is sourced from Australia. Consolidated Company 5. Receivables 2002 2001 2002 2001 $ $ $ $ CURRENT GST receivable 23,548 33,942 579 7,162 Tenement security deposits - 18,000 - 18,000 23,548 51,942 579 25,162 NON-CURRENT Loans and advances to controlled entities - - 17,139,958 6,326,279 Less: Allowance for doubtful debts - - (3,187,742) (3,182,042) - - 13,952,216 3,144,237 The loans to controlled entities are amounts that have been advanced for expenditure on exploration, prospecting and development activities. The recovery of these loans is dependent upon the successful development and commercial exploitation and/or sale of the exploration leases. Consolidated Company 6. Prepayments 2002 2001 2002 2001 $ $ $ $ CURRENT Other 45,430 22,823 - 12,256 7. Plant and Equipment Plant, Equipment & Motor Vehicles Office Furniture Total CONSOLIDATED $ $ $ Gross Carrying Amount Balance at 30 June 2001 697,259 107,143 804,402 Additions 86,494 7,082 93,576 Disposals - (15,005) (15,005) Balance at 30 June 2002 783,753 99,220 882,973 Accumulated Depreciation Balance at 30 June 2001 (692,722) (49,493) (742,215) Depreciation expense (9,810) (46,566) (56,376) Disposals - 15,005 15,005 Balance at 30 June 2002 (702,532) (81,054) (783,586) Net Book Value As at 30 June 2001 4,537 57,650 62,187 As at 30 June 2002 81,221 18,166 99,387 7. Plant and Equipment (continued) Plant, Equipment & Office Furniture Motor Vehicles Total COMPANY $ $ $ Gross Carrying Amount Balance at 30 June 2001 372,650 33,505 406,155 Additions 17,275 - 17,275 Disposals - (15,005) (15,005) Balance at 30 June 2002 389,925 18,500 408,425 Accumulated Depreciation Balance at 30 June 2001 (368,113) (12,675) (380,788) Depreciation expense (4,012) (8,861) (12,873) Disposals - 15,005 15,005 Balance at 30 June 2002 (372,125) (6,531) (378,656) Net Book Value As at 30 June 2001 4,537 20,830 25,367 As at 30 June 2002 17,800 11,969 29,769 Consolidated Company 2002 2001 2002 2001 $ $ $ $ Aggregate depreciation allocated, whether recognised as an expense or capitalised as part of the carrying amount of other assets during the year: Plant, equipment and office furniture 9,810 325,752 4,012 1,143 Motor vehicles 46,566 37,495 8,861 677 56,376 363,247 12,873 1,820 8. Investments Consolidated Company NON CURRENT Note 2002 2001 2002 2001 $ $ $ $ Shares in controlled entities 19 - - 5,943,707 5,943,707 Recoverable amount write down - - (448,286) (448,286) - - 5,495,421 5,495,421 9. Exploration Expenditure Exploration, evaluation and development expenditure (a) - At Cost Balance at the beginning of the year 17,376,083 1,784,546 5,985,851 5,730,882 Assets previously recognised at valuation 9(c) - 12,347,442 - - Adjusted balance at the beginning of the year 17,376,083 14,131,988 5,985,851 5,730,882 Expenditure for the year 3,716,201 3,269,095 1,083,779 254,969 Prior years expenditure written off - (25,000) - - Re-allocation of expenditure to Pharaoh Gold Mines NL - - (7,069,630) - Balance at the end of the year 21,092,284 17,376,083 - 5,985,851 (b) - At Directors Valuation 30 June 1999 Balance at the beginning of the year - 40,673,033 - - Reversion to cost - (28,325,591) - - Transfer expenditure back to at cost - (12,347,442) - - Balance at the end of the year - - - - 21,092,284 17,376,083 - 5,985,851 (c) - Included within the cost amount of assets previously recognised at valuation is $5,311,744 being the excess of consideration over the net tangible assets acquired on the acquisition of Pharaoh Gold Mines NL in January 1999. This amount has been treated as part of the cost of exploration and evaluation. (d) - The recoupment of exploration and prospecting expenditure is dependent on the successful development and commercial exploitation and/ or sale of the respective leases. Consolidated Company 10. Accounts Payable Note 2002 2001 2002 2001 $ $ $ $ CURRENT Trade payables 291,010 311,060 47,990 29,787 Other creditors and accruals - director related 11,959 41,500 11,959 29,500 entities Other creditors and accruals 271,540 558,005 39,308 31,020 574,509 910,565 99,257 90,307 NON-CURRENT Other creditors and accruals - director related 1,356,909 1,513,240 - - entities Other creditors and accruals 200,000 400,000 - - 1,556,909 1,913,240 - - 11. Interest Bearing Liabilities Consolidated Company Note 2002 2001 2002 2001 CURRENT $ $ $ $ Loans & advances - other corporations - 280,000 - - (Note (a) & (b)) Note (a) - An amount of $280,000 was repaid in October 2001. Note (b) - The Company has a Loan facility with an Egyptian Bank for a total of US$500,000. Security for the loan is a right of offset over the funds held on deposit in Egypt. As at 30 June 2002, the balance of this loan was $nil (2001: $nil). 12. Non-Interest Bearing Liabilities CURRENT Loans and advances from director related entity 141,961 141,961 141,961 141,961 Note (a) - El-Raghy Kriewaldt Pty Ltd - debt relating to various amounts advanced to the company since Mr. S. El-Raghy and Mr. M. Kriewaldt commenced their involvement with the Company. No interest was paid on this amount and the lenders have agreed that they will not make any demands upon the Company to repay the loan. 13. Contributed Equity Balance at beginning of year 32,895,211 29,895,211 32,895,211 29,895,211 Issue of 45,000,000 fully paid shares (2001: 25,000,000) 7,750,485 3,000,000 7,750,485 3,000,000 Cost of AIM Capital raising (1,363,216) - (1,363,216) - 1,888,067 3 March 2003 options converted to fully paid shares @ 20 cents each 377,613 - 377,613 - Transfer from Option Reserve following conversion of options 9,440 - 9,440 - Balance at end of year 39,669,533 32,895,211 39,669,533 32,895,211 2002 2001 No. $ No. $ Fully Paid Ordinary Shares Balance at beginning of year 312,950,949 32,895,211 287,950,949 29,895,211 Issue of fully paid shares net of capital 45,000,000 6,387,269 25,000,000 3,000,000 raising costs Issue of fully paid shares following early exercise of 3 March 2003 options, plus transfer - - from Option Reserve 1,888,067 387,053 Balance at end of year 359,839,016 39,669,533 312,950,949 32,895,211 Unlisted Options Listed Options Unlisted Options Options 2002 Expiring 30/11/02 Expiring 3/03/03 Expiring 9/11/03 (Exercise Price 20 cents each) No. No. No. Balance at beginning of year 7,700,000 109,679,293 49,999,744 Issued during the year - 4,000,000 - Exercised during the year - (1,888,067) - Balance at end of year 7,700,000 111,791,226 49,999,744 Options 2001 (Exercise Price 20 cents each) Balance at beginning of year 7,700,000 109,679,293 49,999,744 Issued during the year - - - Exercised during the year - - - Balance at end of year 7,700,000 109,679,293 49,999,744 Consolidated Company 14. Reserves 2002 2001 2002 2001 $ $ $ $ Option reserve Balance at the beginning of the year 2,842,109 2,842,109 2,842,109 2,842,109 Transfer to Contributed Equity following conversion of Options issued for consideration (9,440) - (9,440) - Balance at the end of the year 2,832,669 2,842,109 2,832,669 2,842,109 Reserve created from the issuing of options for consideration. Asset revaluation reserve Balance at the beginning of the year - 30,477,642 - 28,325,591 Reversal of Revaluation - (28,326,589) - (28,325,591) Transfer to Accumulated Losses - (2,151,053) - - Balance at the end of the year - - - - Asset realisation reserve 535,574 535,574 535,574 535,574 Reserve created from the realisation of particular assets. Capital reserve - - 600,000 600,000 Reserve created from the cancellation of shares in the Company held by Pharaoh Gold Mines NL. 3,368,243 3,377,683 3,968,243 3,977,683 Consolidated Company 15. Accumulated Losses 2002 2001 2002 2001 $ $ $ $ Balance at the beginning of the 18,926,291 20,960,685 19,496,930 19,416,286 year Current year's loss 1,162,442 116,659 1,116,258 80,644 Transfer from Asset revaluation - (2,151,053) - reserve Balance at the end of the year 20,088,733 18,926,291 20,613,188 19,496,930 16. Contingent Liabilities The details and estimated maximum amounts of contingent liabilities, classified according to the party from whom the contingent liability arises, are set out below. Benefits payable on termination in certain circumstances to directors under service agreements: â€¢ Mr. S. El-Raghy - 515,000 - 150,000 â€¢ Mr M Kriewaldt 350,000 350,000 - - 350,000 865,000 - 150,000 17. Commitments There are no definitive expenditure commitments at the date of this report. Consolidated 18. Outside Equity Interests 2002 2001 $ $ Interest in accumulated losses at the beginning of the financial year (7,690) (7,652) Interest in operating loss after income tax - (38) Interest in accumulated losses at the end of the financial year (7,690) (7,690) Interest in share capital - - Total outside equity interests (7,690) (7,690) Centamin Egypt Limited has a 50% interest in Egyptian Pharaoh Investment ('EPI') with the balance being held by Kara Gold NL, a company in which a director Mr S El-Raghy has a beneficial interest and is also a director. EPI was incorporated under Egyptian law in January 1995, however, no shares have yet been issued in EPI. 19. Particulars in Relation to Controlled Entities Interest Country of Incorporation Held 2002 2001 PARENT ENTITY % % Centamin Egypt Limited CONTROLLED ENTITIES Viking Resources Limited Australia 100 100 Eucalyptus Nickel NL Australia 100 100 Egyptian Pharaoh Investment Egypt 50 50 North African Resources NL Australia 100 100 Pharaoh Gold Mines NL Australia 99.99 99.99 20. Notes to the Statements of Cash Flows (a) RECONCILIATION OF CASH For the purpose of the Statements of Cash Flows, cash includes cash on hand and at bank and deposits. Cash as at the end of the financial year as shown in the Statements of Cash Flows is reconciled to the related item in the statement of financial position as follows: Consolidated Company 2002 2001 2002 2001 $ $ $ $ Cash 3,954,083 3,071,644 3,787,821 2,919,938 (b) RECONCILIATION OF LOSS FROM ORDINARY ACTIVITIES TO NET CASH USED IN OPERATING ACTIVITIES Loss from ordinary activities before income tax (1,162,442) (116,697) (1,116,258) (80,644) Add/(less) non-cash items: Depreciation 12,873 1,820 12,873 1,820 Foreign exchange rate (gain)/loss 346,986 (155,656) 346,986 (139,769) Changes in assets and liabilities during the year: (Increase)/decrease in receivables 10,394 (33,942) 6,583 (7,144) (Increase)/decrease in prepayments (22,607) 40,889 12,256 (12,256) Increase/ (decrease) in trade creditors & accruals (536,056) 93,679 8,950 60,742 Net cash used in operating activities (1,350,852) (169,907) (728,610) (177,251) 21. Related Parties DIRECTORS a. The names of each person holding the position of Director of Centamin Egypt Limited during the financial year were Messrs S El-Raghy, C Cowden and G B Speechly. Mr. T. G. Elder was appointed as a non executive director on 8 May 2002. b. Details of directors' remuneration are set out in Note 22. c. Directors' equity holdings in the Company:- Fully Paid Options to Acquire Ordinary Shares Ordinary Shares 2002 2001 2002 2001 Issued during the financial year to directors and their director-related entities by the Company - - - - Redeemed, exercised by or bought back during the financial year from directors and their director-related entities by the Company - - - - Held as at the reporting date by directors and their director-related entities in the Company 79,969,013 88,512,093 49,999,488 49,999,488 Apart from the details disclosed in this note, no Director has entered into a material contract with the Company or the economic entity since the end of the previous financial year and there were no material contracts involving directors' interests at year-end. OTHER TRANSACTIONS WITH DIRECTORS A director of the Company, Mr. S. El-Raghy has an interest as a director and controlling shareholder of Nordana Pty Ltd. This company previously provided premises, consulting, administration and management services to the Company. All dealings with this company were in the ordinary course of business and on normal terms and conditions. Amounts paid to Nordana Pty Ltd during the year were $318,741 (2001:$358,659). 21. Related Parties (continued) Mr. S. El-Raghy is also a director and shareholder of El-Raghy Kriewaldt Pty Ltd ('El-Raghy Kriewaldt'). El-Raghy Kriewaldt provide office premises to the Company. All dealings with El-Raghy Kriewaldt are in the ordinary course of business and on normal terms and conditions. Fees paid to El-Raghy Kriewaldt during the year were $16,000 (2001: Nil) A director of the Company, Mr. C. Cowden has an interest as a director and controlling shareholder of Cowden Limited, Insurance Brokers. This company provides insurance broking services to the Company. All dealings with this company are in the ordinary course of business and on normal terms and conditions. Premiums paid to Cowden Limited during the year were $50,133 (2001: $44,609). Mr. G. Brian Speechly, a director of the company is a Mining Consultant, who provides specialist mining services to the Company. All dealings with G Brian Speechly Mining Consultant are in the ordinary course of business and on normal terms and conditions. Fees paid to G Brian Speechly Mining Consultant during the year were $10,000 (2001:$25,000). LOANS RECEIVABLE During the year the Company provided funds to its controlled entities. Refer Note 5 for details. LOANS PAYABLE The economic entity has outstanding loans owing to director related entities as at 30 June 2002. There was no interest paid on the loans during the year and the lenders have agreed that they will not make any demands upon the economic entity to repay the loans unless such repayments can be made without prejudice to any other financial commitments it may have (refer Notes 10 & 12). Consolidated Company 22. Directors' Remuneration 2002 2001 2002 2001 $ $ $ $ Aggregate of income paid or payable, or otherwise made available, in respect of the financial year, to all directors of the Company, directly or indirectly, by the 225,709 Company or by any related party. 179,835 Aggregate of income paid or payable, or otherwise made available, in respect of the financial year, to all directors of the each entity in the consolidated entity, directly or indirectly, by the entities in which they are directors or by any related party. 295,006 317,835 No. No. The number of directors of the Company whose total income falls within each successive $10,000 band of income (commencing at $0). $ 0 - $ 9,999 1 1 $ 20,000 - $29,999 2 2 $ 30,000 - $39,999 - 1 $ 80,000 - $89,999 - 1 $160,000 - $169,999 1 - 23. Executives' Remuneration There were no executive employees of the Company that were not Company Directors during the financial year. Consolidated Company 2002 2001 2002 2001 $ $ $ $ 24. Auditors' Remuneration Auditing the financial report 43,750 44,800 37,800 37,000 Other services - Tax 26,860 3,500 26,860 3,500 70,610 48,300 64,660 40,500 25. Interests in Joint Ventures The consolidated entity has material interests in the following unincorporated venture:- JOINT VENTURES Principal Activities Percentage Interest 2002 2001 Australia - Nicholls - WA - EL80/1708 % % Mandor Mining Pty Ltd Exploration 10 10 On 22 September 2000, Centamin agreed to transfer 40% of its joint interest in this tenement to Castlegem Pty Ltd, leaving Centamin with a 10% interest in the tenement. Castlegem has agreed to fund all exploration until completion of a bankable feasibility study. The following amount represents the economic entity's interest in assets employed in the above joint venture. The amount is included in the consolidated financial statements under the respective category. Consolidated 2002 2001 $ $ Non Current Assets Exploration expenditure 1 1 26. Superannuation The Company contributes to, but does not participate in, compulsory superannuation funds on behalf of its employees and Directors. Contributions are charged against income as they are made. Consolidated 27. Earnings Per Share 2002 2001 Cents Per Share Cents Per Share Basic earnings per share (0.34) (0.04) Diluted earnings per share (0.34) (0.04) Basic Earnings per Share The earnings and weighted average number of ordinary shares used in the 2002 2001 calculation of basic earnings per share are as follows: $'000 $'000 Loss (a) (1,162,442) (116,697) 2002 2001 No. No. Weighted average number of ordinary shares (b) 336,746,329 289,252,319 (a) The Loss used in the calculation of basic earnings per share equates to the Net Loss in the Statement of Financial Performance. (b) The options are considered to be potential ordinary shares and are therefore excluded from the weighted average number of ordinary shares used in the calculation of basic earnings per share. Where dilutive, potential ordinary shares are included in the calculation of diluted earnings per share. Diluted Earnings per Share The earnings and weighted average number of ordinary shares used in the 2002 2001 calculation of diluted earnings per share are as follows: $'000 $'000 Loss (a) (1,162,442) (116,697) 2002 2001 No. No. Weighted average number of ordinary shares and potential ordinary shares (b) 336,746,329 289,252,319 (a) The Loss used in the calculation of diluted earnings per share equates to the Net Loss in the Statement of Financial Performance. (b) Weighted average number of ordinary shares and potential ordinary shares used in the calculation of diluted earnings per share equates to the weighted average number of ordinary shares used in the calculation of basic earnings per share, because the potential ordinary shares have no dilutive effect. (c) The following potential ordinary shares are not dilutive and are therefore excluded from the weighted average number of ordinary shares and potential 2002 2001 ordinary shares used in the calculation of diluted earnings per share: No. No. Other 169,490,970 167,379,037 28. Events Subsequent to Balance Date On 10 September 2002, the Company announced the completion of a Bankable Feasibility Study for the development of a 2 million tpa processing facility for the Sukari Gold Project in Egypt. The Study forms the foundation of the Company's strategy to become a substantial producer of gold and has resulted in an increase in the measured and indicated resource to 2.04 million ounces. 29. Financial Instruments a) Interest Rate Risk The following table details the consolidated entity's exposure to interest rate risk as at reporting date: Ave Int Rate Variable Fixed Non Interest Total % Interest Rate Interest Rate Bearing (less than 1 year) 2002 FINANCIAL ASSETS Cash 4.0 504,750 3,434,308 15,025 3,954,083 Receivables - - - 23,548 23,548 504,750 3,434,308 38,573 3,977,631 FINANCIAL LIABILITIES Accounts payable - - - 2,131,418 2,131,418 Borrowings - - - 141,961 141,961 - - 2,273,379 2,273,379 2001 $ $ $ $ FINANCIAL ASSETS Cash 4.9 352,967 2,646,560 72,117 3,071,644 Receivables - - - 51,942 51,942 352,967 2,646,560 124,059 3,123,586 FINANCIAL LIABILITIES Accounts payable - - - 2,823,805 2,823,805 Borrowings 11.5 - 280,000 141,961 421,961 - 280,000 2,965,766 3,245,766 b) Credit Risk Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial loss to the economic entity. The economic entity has adopted a policy of only dealing with credit-worthy counter-parties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The economic entity measures credit risk on a fair value basis. The economic entity does not have any significant credit risk exposure to any single counter-party or any group counter-parties having similar characteristics. The carrying amount of financial assets recorded in the financial statements represents the economic entity's maximum exposure to credit risk without taking account of the value of collateral or other security obtained. c. Net Fair Value The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective net fair values, determined in accordance with the accounting policies disclosed in note 1 to the financial statements. d. Currency Risk The economic entity holds the majority of its funds in an Australian bank and periodically forwards British Pounds to its office in Egypt. The majority of transactions performed in Egypt are conducted in British Pounds or US dollars however a small reserve of Egyptian Pounds is maintained to meet day to day administration expenses. The economic entity has not entered into any forward foreign exchange contracts to hedge the exchange rate risk arising from any anticipated future transactions. As at 30 June 2002, Egyptian Â£Nil (2001: Â£6,286), US$ (224) (2001: US$78,371) and GBPÂ£1,163,152 (2001: Nil) bank balances were unhedged. 30. Number of Employees Consolidated Company 2002 2001 2002 2001 No. No. No. No. Number of Employees 45 42 3 - ADDITIONAL ASX INFORMATION Additional information required by the Australian Stock Exchange Limited Listing Rules and not disclosed elsewhere in this report is as follows. The information is as at 23rd August 2002. Substantial Shareholders The number of shares held by the substantial shareholders listed in the Company's register of substantial shareholders as at 23rd August 2002 were: ORDINARY SHARES QUOTED OPTIONS UNQUOTEDOPTIONS SHAREHOLDER El-Raghy Kriewaldt Pty Ltd 56,809,372 - 37,820,028 NEFCO Nominees Ltd 50,008,080 3,284,000 - National Nominees Ltd 25,582,285 18,737,970 - WILLBRO Nominees Limited 23,011,363 - - Nordana Pty Ltd 22,586,382 - 5,128,140 Distribution of Holders of Equity Securities HOLDING RANGE ORDINARY SHARES QUOTED OPTIONS UNQUOTED OPTIONS 1 - 1,000 1,025 30 3 1,001 - 5,000 558 28 - 5,001 - 10,000 338 24 - 10,001 - 100,000 705 133 - 100,001 and over 160 111 4 2,786 326 7 Holding less than a marketable parcel 1,177 63 - Statement of Shareholdings (a) SHARES QUOTED SHARES NUMBER % HELD El-Raghy Kriewaldt Pty Ltd 56,809,372 15.76 NEFCO Nominees Ltd 50,008,080 13.88 National Nominees Ltd 25,582,285 7.10 WILLBRO Nominees Limited 23,011,363 6.39 Nordana Pty Ltd 22,586,382 6.27 Goldman Sachs Securities (Nominees) 12,000,000 3.33 The Bank of New York (Nominees) 9,900,000 2.75 Apollo Nominees Ltd 9,833,333 2.73 El-Mohfoza Real Estate 9,177,000 2.55 Brincliff Pty Ltd 7,315,975 2.03 Callion Capital Corp 6,009,450 1.67 ANZ Nominees Ltd 5,383,733 1.49 Equitas Nominees Ltd 5,200,000 1.44 T Hoare Nominees Limited 5,000,000 1.39 HSBC Global Custody Nominee (UK) 4,955,838 1.38 Pershing Keen Nominees Limited 4,166,667 1.16 Mr Brian Peter Byass 3,820,000 1.06 HSBC Custody Nominees 2,515,803 0.70 Mr Azmi Wan Hamzah 2,000,000 0.55 SGJ Investments Pty Ltd 2,000,000 0.55 267,275,281 74.16 CLASS OF SHARES AND VOTING RIGHTS The voting rights attaching to the ordinary shares, set out in Clause 12.8 of the Company's Constitution are: 'Subject to any rights or restrictions for the time being attached to any class or classes of shares' - a. at meetings of members or classes of members each member entitled to vote may vote in person or by proxy or attorney; and b. on a show of hands every person present who is a member has one vote for each ordinary share held and on a poll every person present or by proxy or attorney has one vote for each ordinary share held.' VENDOR SHARES There are no vendor securities on issue at the date of this report. (b) OPTIONS QUOTED UNQUOTED OPTIONS OPTIONS NUMBER % HELD NUMBER % HELD El-Raghy Kriewaldt Pty Ltd 37,820,028 65.54 National Nominees Limited 18,737,970 16.84 Exchange Nominees Ltd 7,700,000 13.34 Abbotsleigh Pty Ltd 11,010,000 9.90 7,051,192 12.22 Mr Brian Peter Byass 7,120,000 6.39 - - HSBC Custody Nominees (Australia) Limited 6,000,000 5.39 Nordana Pty Ltd (Superannuation Fund) 5,128,140 8.89 NEFCO Nominees Pty Ltd 3,284,000 2.95 - - Aquilla International Ventures Limited 3,000,000 2.70 Colburn Fiduciary Nominees Pty Ltd 2,561,100 2.30 - - GOVOW Pty Ltd 2,500,000 2.25 David Davidson Financial Planning Pty Ltd 2,470,000 2.22 Mr Paul Anthony Gill & Mrs Cathleen Mary Gill 2,400,000 2.16 Brincliff Pty Ltd 1,905,576 1.71 ANZ Nominees Limited 1,765,000 1.59 F A Moore Pty Ltd 1,500,000 1.35 Mr Taha Lamada 1,500,000 1.35 Mr Frank Albert Moore 1,400,000 1.26 Mr Darryl Hicks White 1,325,000 1.19 Batterbury Holdings Pty Ltd 1,300,000 1.17 Australian Investment Holdings 1,263,250 1.14 Mr Michael John Lynch 1,200,000 1.08 Fairlanes Bowling Centres Pty Ltd 1,000,000 0.90 Mr Peter Nelson 1,000,000 0.90 74,241,896 66.74 57,699,360 99.99% Total number of Issued Options 111,245,179 - 57,699,744 - VOTING RIGHTS There are no voting rights attached to unissued ordinary shares. Voting rights will be attached to the unissued ordinary shares when the options have been exercised. This information is provided by RNS The company news service from the London Stock Exchange

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