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ARUMA
Aruma Resources Limited
ABN 77 141 335 364
www.arumaresources.com
PROSPECTUS
For the Offer of 25,000,000 Shares at an issue price of 20 cents
each to raise $5,000,000 with the capacity to accept Oversubscriptions for up to
10,000,000 Shares to raise up to a further $2,000,000.
Proposed ASX Code: AAJ
Lead Manager
Patersons Securities Limited
AFSL 239052
This Prospectus provides important information to assist investors in deciding whether or not to invest in the Company
and should be read in its entirety, together with the Application Form attached to this Prospectus. If, after reading
this Prospectus, you have any questions about the Shares being offered under this Prospectus, or any other matter
relating to an investment in the Company, you should consult your professional adviser. An investment in the Shares
offered under this Prospectus should be considered highly speculative.
CORPORATE DIRECTORY
DIRECTORS
Mr Paul Boyatzis (Non-Executive Chairman)
Mr Peter Schwann (Managing Director)
Mr Danny Costick (Non-Executive Director)
COMPANY SECRETARY
Mr Phillip MacLeod
PRINCIPAL PLACE OF BUSINESS
24 Colin Street
West Perth WA 6005
Tel: +61 8 9481 2425
Fax: +61 8 9481 1756
CONTENTS
KEY POINTS
2
LETTER FROM THE BOARD
3
1.
INVESTMENT OVERVIEW
4
2.
DETAILS OF THE OFFER
6
3.
COMPANY AND PROJECT OVERVIEW
10
4.
DIRECTORS AND CORPORATE GOVERNANCE
16
5.
RISK FACTORS
20
6.
INDEPENDENT GEOLOGIST’S REPORT
24
7.
INVESTIGATING ACCOUNTANT’S REPORT
72
8.
SOLICITOR’S REPORT ON TENEMENTS
80
9.
MATERIAL CONTRACTS
92
10.
ADDITIONAL INFORMATION
93
11.
DIRECTORS’ RESPONSIBILITY AND CONSENT
99
12.
GLOSSARY
100
PRIORITY OFFER APPLICATION FORM
101
PUBLIC OFFER APPLICATION FORM
103
ARUMA RESOURCES LI MITED
WEBSITE
www.arumaresources.com
SOLICITORS TO THE OFFER
Fairweather & Lemonis
Ground Floor
1 Havelock Street
West Perth WA 6005
INDEPENDENT GEOLOGIST
Hellman & Schofield Pty Ltd
Suite 6, 3 Trelawney Street
Eastwood NSW 2122
INVESTIGATING ACCOUNTANT
Ord Nexia Pty Ltd
Level 1, 47-49 Striling Highway
Nedlands WA 6009
SHARE REGISTRY
Advanced Share Registry Services
Unit 2, 150 Stirling Highway
Nedlands WA 6009
Tel: +61 8 9389 8033
LEAD MANAGER TO THE OFFER
Paterson Securities Limited
Level 23, 2 The Esplanade
Perth WA 6000
AFSL Number 239052
Tel: +61 8 9263 1111
Fax: +61 8 9325 6452
IMPORTANT NOTICE
This Prospectus is dated 27 April 2010 and was lodged
with ASIC on that date. Neither ASIC, ASX nor any of their
respective officers takes any responsibility for the contents of
this Prospectus or the merits of the investment to which this
Prospectus relates.
No securities will be allotted or issued on the basis of this
Prospectus later than 13 months after the date of this
Prospectus.
Application will be made to ASX within seven days after the
date of this Prospectus for the quotation of the Shares the
subject of this Prospectus.
The distribution of this Prospectus in jurisdictions outside
Australia may be restricted by law and persons who come
into possession of this Prospectus should seek advice on and
observe any of these restrictions. Failure to comply with these
restrictions may violate securities laws. Applicants who are
resident in countries other than Australia should consult their
professional advisers as to whether any governmental or other
consents are required or whether any other formalities need to
be considered and followed.
This Prospectus does not constitute an offer in any place in
which, or to any person to whom, it should not be lawful to
make such an offer.
It is important that investors read this Prospectus in its entirety
and seek professional advice where necessary. An investment
in the securities the subject of this Prospectus should be
considered highly speculative.
WEBSITE – E LECTRON IC PROSPECTUS
A copy of this Prospectus is available and can be downloaded
from the website of the Company at www.arumaresources.com.
Any person accessing the electronic version of this Prospectus
for the purpose of making an investment in the Company must
be an Australian resident and must only access the Prospectus
from within Australia.
EXPOSUR E PERIOD
In accordance with Chapter 6D of the Corporations Act, this
Prospectus is subject to an exposure period of seven days
from the date of lodgement with ASIC. This period may be
extended by ASIC for a further period of up to seven days. The
purpose of this exposure period is to enable this Prospectus
to be examined by market participants prior to the raising
of funds. If this Prospectus is found to be deficient, any
Application Forms received during the exposure period will be
dealt with in accordance with section 724 of the Corporations
Act. Application Forms received prior to the expiration of the
exposure period will not be processed until after the exposure
period. No preference will be conferred on Application Forms
received during the exposure period and all Application Forms
received during the exposure period will be treated as if they
were simultaneously received on the Opening Date.
M I NERALISATION ESTIMATES
The information contained in the Independent Geologist’s
Report Section 6 was compiled by Hellman & Schofield Pty
Ltd. Otherwise information in this Prospectus that relates to
exploration results has been compiled by the Company and
is based on information provided by Mr Peter Schwann, the
Managing Director of the Company, who is a Fellow of the
Australasian Institute of Mining and Metallurgy (AusIMM). All
information of this type is expressed in terms of the JORC
Code. Mr Peter Schwann has sufficient experience which is
relevant to the style of mineralisation and type of deposit under
consideration and to the activity he is undertaking to qualify as
a competent person as defined in the JORC Code.
DEFI N ITIONS AN D GLOSSARY
Certain terms and abbreviations used in this Prospectus have
defined meanings which appear in the Glossary.
The assets depicted in photographs in this Prospectus are not
assets of the Company unless otherwise stated.
The Corporations Act prohibits any person passing onto another
person an Application Form unless it is attached to a hard
copy of this Prospectus or it accompanies the complete and
unaltered version of this Prospectus. Any person may obtain a
hard copy of this Prospectus free of charge by contacting the
Company.
ARUMA RESOURCES LI MITED
1
KEY POINTS
The Com pa ny
Through its 100%-owned Glandore, Kurnalpi South, Laverton East and Jundee South Projects, Aruma Resources will control a
consolidated regional tenement package of approximately 374km2 in the prospective region to the east of Kalgoorlie-Boulder, east
of Laverton and to the east of Wiluna. The Company is focused on discovering high-grade, high-margin resources.
The flagship Glandore Project in the Eastern Goldfields is prospective for several styles of gold mineralisation and contains a
number of small historic high-grade mines. More generally, the project lies within a region hosting a number of historic mines that
produced substantial amounts of gold from high-grade ore. Previous exploration has identified a number of advanced exploration
areas.
Explora t ion prog ra ms
Exploration programs at Glandore will commence as soon as practicable after this capital raising has been completed.
Boa rd a nd ma nagement
The Company has a skilled and experienced Board in exploration, project evaluation and development, mining and public company
corporate skills.
Other oppor tunit ies
The Company may seek to pursue other complementary resource opportunities that the Directors consider have the potential to add
value for Shareholders.
Key r isks
The key risks of an investment in the Company include exploration and development risk, resource and reserve estimation risk,
commodity price volatility risk and licence application and licence conversion risk associated with the risk that a number of the
licences are in application or are subject to a conversion application and the grant of such an application cannot be guaranteed.
Risks associated with an investment in the Company are outlined in Section 5 of this Prospectus. You should consider these risks
before applying for Shares and, where necessary, seek independent professional advice.
This information is a selective overview only and should be read in conjunction with the more detailed information appearing
elsewhere in this Prospectus. Investors should read this Prospectus in its entirety and not rely solely on this overview.
Ind ica t ive Timet a ble
Priority Offer Opening Date
5 May 2010
Public Offer Opening Date
5 May 2010
Estimated Priority Offer Closing Date
26 May 2010
Estimated Public Offer Closing Date
2 June 2010
Expected Despatch of Holding Statements
7 June 2010
Expected Date for Quotation of Shares on ASX
14 June 2010
The above dates are indicative only and may change without notice. The Company reserves the right to extend the Closing Dates
and the Offer or close the Offer early without notice. Applicants are encouraged to apply as soon as possible after the relevant
Offer opens.
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ARUMA RESOURCES LI MITED
LETTER FROM THE BOARD
Dear Investor
On behalf of Aruma Resources Limited, the Board is pleased to invite you to become a Shareholder in the Company.
The Company’s objective is to explore its tenements which are strategically located in the major gold-producing areas of the Eastern
Goldfields. Exploration will target gold with the capacity to identify other commodities. The Board believes the Company has acquired
projects with resource potential, however all investors should keep in mind the speculative nature of mineral exploration.
The projects have been sourced from Hemisphere Resources Limited to allow that entity to focus on its iron, nickel and uranium
projects, especially the iron projects in the Pilbara. Aruma Resources will have a management and infrastructure sharing arrangement
with Hemisphere that will minimise costs and maximise field time.
The flagship Glandore Gold Project, which is some 40km east of Kalgoorlie-Boulder, has undergone significant exploration
by major companies as well as Hemisphere in the last three years. The project has a database which has responded to
three-dimensional modelling and this will be further refined as exploration continues. Glandore will be the major focus of
Aruma Resources to identify resources.
The significance of our total ground holding is explained further in detail in the Company and Project Overview (Section 3)
and the Independent Geologist’s Report (Section 6) which you are invited to read in this Prospectus.
The Board brings together technical and corporate experience in the fields of exploration and mining and the equities
markets. Our Managing Director, Mr Peter Schwann, is a geologist with more than 30 years’ experience and has been
involved in project generation, evaluation, exploitation and management of gold and other commodities. Our Non Executive
Director, Mr Danny Costick, has more than 25 years’ experience in the mining industry including exploration for and
production of gold. Our Chairman, Mr Paul Boyatzis, has more than 25 years’ experience in the investment and equity
markets.
We will be actively reviewing and assessing other projects as they may be presented to, or sourced by, our Board. The
Company is seeking to raise $5,000,000 at Full Subscription with the capacity to accept a further $2,000,000 by way of
Oversubscriptions.
Details of Aruma Resources tenement interests, its proposed activities and the investment risks are contained in this
Prospectus. Please study this document carefully and seek professional advice if necessary to make an informed
decision.
Of behalf of Aruma Resources the Board commend this Offer to you and look forward to welcoming you as a Shareholder
in the Company.
The Board
Aruma Resources Limited
ARUMA RESOURCES LI MITED
3
1
INVESTMENT OVERVIEW
1.1
Im por t a nt Not ice
This section is not intended to provide full information for investors intending to apply for Shares offered under this Prospectus. This
Prospectus should be read and considered in its entirety.
1.2
Key Of fer St a t ist ics
Full Subscription
($5,000,000)
Full Subscription with all Oversubscriptions
($7,000,000)
Offer price per Share
20 cents
20 cents
Shares held by Hemisphere Resources Limited
(an existing Shareholder and vendor)
40,000,000
40,000,000
Shares to be held by Plasia Pty Ltd (a vendor)
125,000
125,000
Shares offered under Prospectus
25,000,000
35,000,000
Total Shares at listing on ASX
65,125,000
75,125,000
Market capitalisation upon Shares at listing based
on Offer price
$13,025,000
$15,025,000
1.2
Ind ica t ive Timet a ble
Prospectus lodged with ASIC
27 April 2010
Priority Offer Opening Date
5 May 2010
Public Offer Opening Date
5 May 2010
Estimated Priority Offer Closing Date
26 May 2010
Estimated Public Offer Closing Date
2 June 2010
Completion under tenement acquistion agreements with Plasia Pty Ltd
4 June 2010
Expected despatch of Holding Statements
7 June 2010
Expected date for quotation of Shares on ASX
14 June 2010
The above dates are indicative only and may change without notice. The Company reserves the right to extend the Closing Dates and
the Offer or close the Offer early without notice. Applicants are encouraged to apply as soon as possible after the relevant Offer opens.
1.4
Object ives
The objectives of the Offer are to:
(a) fund a two year program to explore and develop the current projects of the Company;
(b) provide general working capital which may be applied in undertaking a review of any complementary resource projects that the
Board considers have the potential to add value for Shareholders;
(c) fund corporate administration costs;
(d) pay the costs of the Prospectus process including repaying a loan to Hemisphere; and
(e) allow access to equity markets in order to assist in funding any future development of the Company’s projects and pursuing
other complementary resource opportunities.
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ARUMA RESOURCES LI MITED
1.5
Use of Funds
The Company intends to use funds raised from the Offer at Full Subscription and Full Subscription with all Oversubscriptions broadly as
follows:
Full Subscription
Full Subscription with all Oversubscriptions
$5,000,000
$7,000,000
Two year exploration budget2
$2,943,000
$3,553,000
Two year corporate administration costs
$1,124,000
$1,124,000
$480,000
$580,000
$453,000
$1,743,000
$5,000,000
$7,000,000
Funds from this
Offer1
Application of proceeds
Costs of the
Offer3
General working
capital4
Total
The actual expenditures may vary from the above estimates and the Board reserves the right to appropriately vary the expenditures
dependent on circumstances and other opportunities.
Notes:
1.
The Company has nominal cash at hand at the date of this Prospectus (see the Investigating Accountant’s Report at Section 7).
The operation of the Company to date (including a number of the costs of this Offer) has, and until ASX listing, will be funded
by loans totalling up to $250,000 from Hemisphere. The loans are on a no-interest basis and repayment of the principal will
discharge the loans in full and there will be no outstanding liability to Hemisphere.
2.
The two-year exploration budget is itemised and commented upon in the Independent Geologist’s Report at Section 6.
3.
The costs of the Offer include a $60,000 corporate advisory fee and a selling fee of 5% plus GST of the amount raised under the
Offer. The costs of the Offer include repayment of the loan to Hemisphere.
4.
It is anticipated that the funds available as general working capital may be applied towards expenses incurred in identifying and
generating new mineral resource projects. Such expenses may include the cost of purchasing exploration data, commissioning
expert reports and studies, acquiring exploration rights and due diligence costs of reviewing potentially suitable projects including
associated travel, legal and other professional expenses.
To the extent that any Oversubscriptions are received (that is an amount more than $5,000,000), those net funds will be applied firstly
to further RC drilling ($390,000), then further diamond drilling ($120,000) and then further geological work ($100,000) in year 2 of the
Glandore Project exploration budget. Thereafter, net funds are intended to be applied to general working capital.
1.6
Wor ki ng Ca pit al
On successful completion of the Offer with at least Full Subscription, the Company will have enough working capital to carry out the
objectives stated in this Prospectus.
1.7
Ca pit al Structure
Prior to ASX listing, Shares on issue at Full Subscription and Full Subscription with all Oversubscriptions will be:
Full Subscription
Full Subscription with all Oversubscriptions
Shares held by Hemisphere Resources Limited
(an existing Shareholder and vendor)
40,000,000
(61.4%)
40,000,000
(53.24%)
Shares issued to Plasia Pty Ltd (a vendor)
125,000 (0.2%)
125,000 (0.17%)
Shares under this Prospectus
25,000,000 (38.4%)
35,000,000 (46.59%)
Total Shares
65,125,000
75,125,000
Additionally, the Company has issued 4,000,000 Options to the Directors. The Options have an exercise price of 27 cents and an expiry
date of 31 March 2012. The full terms of the Options are set out in Section 10.4.
ARUMA RESOURCES LI MITED
5
2
DETAILS OF THE OFFER
2.1
Sha res of fered for subscr ipt ion
By this Prospectus the Company offers for subscription 25,000,000 Shares at 20 cents each to raise $5,000,000 at Full
Subscription. The Company may accept Oversubscriptions for up to 10,000,000 Shares to raise up to a further $2,000,000. The
maximium amount that may be raised under this Prospectus including Oversubscriptions is therefore $7,000,000. The Shares offered
for subscription under this Prospectus consist of:
•
Priority Offer to Hemisphere Shareholders with a registered address in Australia or New Zealand; and
•
Public Offer.
The details of how to apply for Shares are set out below.
2.2
Pr ior ity Of fer to Hemisphere Sha reholders
The Company invites the shareholders of Hemisphere Resources Limited that have a registered address in Australia or New Zealand
(Hemisphere Shareholders) to subscribe for up to 7,500,000 Shares in priority to the Public Offer on a first-come-first-served basis,
subject to the Director’s discretion. Applications received during the exposure period will be treated as having been received on the
day after the exposure period. Any excess priority applications will be considered part of the Public Offer.
All Shares issued under the Priority Offer will rank equally with all other Shares on issue or issued under this Prospectus.
2.3
Publ ic Of fer
The allocation for the Public Offer will be a minimum of 17,500,000 Shares. The balance of any Shares not applied for by
Hemisphere Shareholders under the Priority Offer will be added to the allocation of Shares for the Public Offer.
All Shares issued under the Public Offer will rank equally with all other Shares on issue or issued under this Prospectus.
2.4
Mi nimum Subscr ipt ion
The minimum subscription under the Offer is $5,000,000. The Company will not issue any Shares pursuant to this Prospectus until
the minimum subscription is satisfied.
Should the minimum subscription not be reached within four months from the date of this Prospectus, the Company will either repay
the Application moneys to the Applicants or issue a supplementary prospectus or replacement prospectus and allow Applicants one
month to withdraw their Applications and be repaid their Application moneys. No interest will be paid on these moneys.
2.5
Lead Ma nager to the Of fer
The Offer is not underwritten. Patersons Securities Limited is the Lead Manager to the Offer. The Company will pay the Lead Manager
a $60,000 corporate advisory fee and a selling fee of 5% plus GST of the amount raised under the Offer.
2.6
Appl ica t ions for Sha res
Applications for Shares must be made using an Application Form as follows:
Who should apply
Application Form
Priority Offer
Hemisphere Shareholders with a registered address in
Australia or New Zealand
Priority Application Form
Public Offer
All other investors
Public Offer Application Form
Payment for the Shares must be made in full at the issue price of 20 cents per Share. Applications for Shares must be for a
minimum of 10,000 Shares ($2,000) and thereafter in multiples of 1,000 Shares ($200). All Application Forms must be completed
in accordance with the detailed instructions on how they are to be completed and must be accompanied by a cheque in Australian
dollars payable to “Aruma Resources – Share Offer Account” and crossed “Not Negotiable”. No brokerage or stamp duty is payable.
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ARUMA RESOURCES LI MITED
All Priority Offer Application Forms and accompanying cheques must be received by the Priority Offer Closing Date.
All Public Offer Application Forms and accompanying cheques must be received by the Public Offer Closing Date.
Completed Application Forms and accompanying cheques must be mailed or delivered to either of the following addresses:
Posted to:
OR
Advanced Share Registry Services
PO Box 1156
Nedlands WA 6909
2.7
Delivered to:
Advanced Share Registry Services
Unit 2, 150 Stirling Highway
Nedlands WA 6009
Alloca t ion a nd Allotment of Sha res
Final allocation of Shares under the Priority Offer will depend on the overall demand from the Hemisphere Shareholders that apply. In
the event that Applications are received for more than 7,500,000 Shares, it is currently intended that Applications will be treated on a
first-come-first-served basis.
Final allocation decisions will be at the sole discretion of the Company. The Company reserves the right to allocate Shares in full for
any Application or to allocate any lesser number, or to decline any Application. Allotment of Shares will be made as soon as possible
after the Closing Date.
Applications received during the exposure period will be treated as having been received on the day after the exposure period.
Where no allotment is made to an Applicant, the Application moneys will be returned in full by cheque with the relevant Application
Form within 14 days of the Closing Date. Where the number of Shares allotted is less than the number of Shares applied for, the
surplus Application moneys will be returned by cheque to the Applicant within 14 days of the Closing Date. Interest will not be paid on
refunded Application money. Unbanked cheques will be returned to unsuccessful Applicants.
Pending the issue and allotment of Shares or payment of refunds pursuant to this Prospectus, all Application moneys will be held by
the Company in trust for the Applicants in a separate bank account as required by the Corporations Act. The Company, however, will
be entitled to retain all interest that accrues on such bank account and each Applicant waives the right to claim any such interest.
It is the responsibility of Applicants to determine their allotment prior to trading in Shares. Applicants who sell Shares before they
receive their holding statements will do so at their own risk.
2.8
ASX List i ng
The Company will apply to ASX within seven days after the date of this Prospectus for quotation of the Shares offered by this
Prospectus on ASX. If ASX does not grant permission for the quotation of the Shares offered under this Prospectus within three
months after the date of this Prospectus, or such longer period as is permitted by the Corporations Act, none of the Shares offered
by this Prospectus will be allotted or issued. In these circumstances, all Applications will be dealt with in accordance with the
Corporations Act including the return of all Application Moneys without interest.
A decision by ASX to grant official quotation of the Shares is not to be taken in any way as an indication of ASX’s view as to the merits
of the Company or of the Shares. ASX and its officers take no responsibility for the contents of this Prospectus. Quotation of the
Shares offered by this Prospectus, if granted, will commence as soon as practicable after statements of holdings of the Shares are
dispatched.
2.9
Restr icted Secur it ies
ASX may classify certain securities as being subject to the restricted securities provisions of the Listing Rules. Accordingly, a
proportion of such securities may be required to be held in escrow.
None of the Shares offered under this Prospectus will be treated as restricted securities; they will be freely transferable from their
date of allotment.
ARUMA RESOURCES LI MITED
7
2.10 Appl ica nts outs ide Austral ia
This Prospectus does not, and is not intended to, constitute an offer in any place or jurisdiction, or to any person to whom it would not
be lawful to make such an offer to issue this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia may be
restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions.
Any failure to comply with such restrictions may constitute a violation of applicable securities law. No action has been taken to
register or qualify the Shares or otherwise permit a public offering of the Shares the subject of this Prospectus in any jurisdiction
outside Australia.
It is the responsibility of Applicants outside Australia to obtain all necessary approvals for the allotment and issue of Shares under this
Prospectus. The return of a completed Application Form will be taken by the Company to constitute a representation and warranty by
the Applicant that all relevant approvals have been obtained.
2.11 C H ESS
The Company will apply to participate in the Clearing House Electronic Subregister System (CHESS). CHESS is operated by ASX
Settlement and Transfer Corporation Pty Ltd (ASTC), a wholly owned subsidiary of ASX.
Under CHESS, the Company will not issue certificates to investors. Instead, security holders will receive a statement of their holdings
in the Company. If an investor is broker sponsored, ASTC will send a CHESS statement.
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ARUMA RESOURCES LI MITED
2.12 Pr ivacy Act
If you complete an Application Form, you will be providing personal information to the Company (directly or by the Share Registry).
The Company will collect, hold and use that information to assess your Application, service your needs as a Shareholder, facilitate
distribution payments (if made) and send corporate communications to you as a Shareholder and carry out administration.
The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the
context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers,
mail houses and the Share Registry.
You can access, correct and update the personal information that we hold about you. Please contact the Company or the Share
Registry if you wish to do so at the relevant contact numbers set out in this Prospectus.
Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988, the
Corporations Act and certain rules such as the ASTC Settlement Rules. You should note that if you do not provide the information
required on the Application Form, the Company may not be able to accept or process your Application and, accordingly, you may not
be allotted any Shares.
2.13 No Prospect ive Fi na ncial Forecasts
The Directors have considered the matters outlined in ASIC Regulatory Guide 170. Given that the Company is a resource exploration
company and given the highly speculative nature of exploration and any subsequent development and production, the Company
considers that it is unable to provide potential investors with any reliable revenue, profit or cash flow projections or forecasts.
ARUMA RESOURCES LI MITED
9
3
COMPANY AND PROJECT OVERVIEW
3.1
Introduct ion
The prime objective of the Company is to increase the value of assets to maximise Shareholder value. The Company has identified
and assembled a portfolio of properties which are considered to have strong potential for gold. Upon listing, the Company will focus
on exploration with a highly qualified and dedicated team.
3.2
Cor pora te Stra teg y
The Company’s strategy is to initiate in-ground exploration on advanced projects where the capacity to host gold mineralisation has
already been established. The Company’s projects are strategically positioned in well endowed greenstone belts of the Yilgarn Craton
of Western Australia. The Company aims to generate cash flows to assist the Company in developing its projects and to acquire
additional projects that are considered to add value.
3.3
Explora t ion
Methodolog y
The Company will use a staged approach
in exploration by systematically testing
the advanced target areas followed
by evaluating and testing the regional
projects. All appropriate techniques will be
used which may include remote sensing
and geochemical methods.
3.4P roject Overviews
All of the properties are located in
Western Australia within close proximity
to infrastructure. All projects are in
locations with proven gold prospectivity.
The lead project, Glandore, is 40km
east of Kalgoorlie-Boulder and has been
successfully tested to date with numerous
high-grade intersections including:
8m at 10.4g/t Au from 18m,
9m at 8.37g/t Au from 17m,
2m at 43.4g/t Au from 38m,
5m at 4.99g/t Au from 36m,
4m at 18.8g/t Au from 103m, and
10.25m at 10.3g/t Au from 58m.
Kurnalpi South which includes Mt Quin,
Steeple Hill and Pinnacles South, are
serviced from Kalgoorlie-Boulder; Laverton
East is serviced from Laverton and Jundee
South is serviced from Wiluna.
Figure 1 Project Location Map
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Figure 2 Detail locations
ARUMA RESOURCES LI MITED
11
GLAN DORE PROJECT
The flagship Glandore Project comprises 17 granted Prospecting Licenses, six Prospecting License Applications and three Mining
Lease Applications located 37km east of Kalgoorlie-Boulder in Archean Norseman-Wiluna Greenstone Belt.
Mineralisation identified to date has defined advanced exploration targets. The most advanced are Axial Planar Fault Zone and
Supergene Zone. Other targeted areas showing strong mineralisation include Eastern Lode, southern part of the Central Fault Zone
and along strike of Lake Consols. The stylised interpretation of the principal target areas based on exploration to date is shown below
as Figure 3.
Figure 3 Stylised interpretation of principal target areas
Axial Planar Fault Zone
Drilling to date has defined a strike of approximately 250m, 3m width and a vertical depth of 150m. The target is open along strike
and at depth. Significant intersections include 4m @18.8g/t Au from 103m and 10.25m at 10.3g/t Au from 58m.
Supe r ge ne Zone
The Supergene Zone is located adjacent to the Axial Planar Fault. It was named due to a sub-horizontal supergene blanket of
some 100m by 100m. Primary mineralisation has been identified beneath the supergene blanket and is open at depth. Significant
intersections include 8m at 10.4g/t Au from 18m, 9m @ 8.37g/t Au from 17m, 2m at 43.4g/t Au from 38m and 5m at 4.99g/t Au
from 36m.
Easte rn Lode
Drilling has intersected a stratabound zone on the eastern limb of the Glandore Sill. This zone ranges in thickness from 1 to 13m. The
Eastern Lode dips shallowly to the east. Significant intersections include 10m @ 3.05 g/t Au from 150m (including 3m at 6.5 g/t Au
from 155m) and 6m @ 2.08 g/t Au from 27m.
Ce ntral Fault Zone
Drilling of the southern area has returned significant intersections including 9m @ 4.22 g/t Au from 13 m and 7m @ 2.48 g/t Au
from 23m.
12
ARUMA RESOURCES LI MITED
Other Ta rgets
Several significant soil anomalies between the Eastern Lode and Central Fault Zone will require testing. RAB and RC drilling have
shown intercepts of significant gold grades (such as 5m @ 35.8 g/t Au from 24m and 5m @ 1.58 g/t Au from 23m). Previous
intercepts will require detailed evaluation and will be included in the three-dimensional modelling, Hyvista mineral mapping and
geochemical appraisals.
KU RNALPI SOUTH PROJECT
Aruma’s Kurnalpi South Project comprises
three separate prospects, with three granted
Exploration Licences, namely the:
• Pinnacles South Prospect,
• Mt Quin Prospect, and
• Steeple Hill Prospect.
All three prospects comprising the Kurnalpi South
Project are located over major regional structures
and cover geological sequences that host known
gold mineralisation elsewhere in the region.
Aruma gold mineralisation targets at the Kurnalpi
South Project are the intersection of the major
N-S structures with pronounced cross trending
features. This provides the mineralised fluids
from the sediments a receptive mafic host for
mineralisation. The bulk of the area is covered
by wash sediments but has subcrop and will be
tested by Hyvista evaluation.
Old Shafts at Glandore along the Lake Consols Line
Pi nnacles South Prospect
Mafic volcanics, undivided felsic-intermediate
volcanics and sediments occupy the central
portion of the Pinnacles South Prospect.
This central area has been tested by various
companies to the north of Gilgarna Rock, on the
NE edge of the Licence area.
Field inspection by Aruma showed that the Central Mafic zone is covered by laterites and calcretes. Review of available data has
shown that this area has not been drilled. This area is considered by Aruma to be prospective as it is between granites and adjacent
to major lineaments that can direct fluids to receptive mafics for gold mineralisation.
Mt Qui n Prospect
The Mt Quin Prospect is in a similar structural setting that hosts gold mineralisation at the Karonie gold camp (located 20km to the
south).
The Company intends to focus on the potential for gold mineralisation on the eastern portion of the Mt Quin Prospect. Most of the Mt
Quin area has had very little exploration to date and it represents an early stage exploration project.
Stee ple Hi ll Prospect
The Steeple Hill Prospect straddles the regional Emu Shear Zone which separates felsic volcanics and sediments to the east from
dominantly mafic rocks to the west.
ARUMA RESOURCES LI MITED
13
Initial targets for gold mineralisation
at the Steeple Hill Prospect are
the intersection of the Emu Shear
Zone with a pronounced north-east
trending structure. This will give
the mineralised fluids from the
felsics a receptive mafic host for
mineralisation. The area is covered by
wash sediments but has subcrop in
the west that will be tested by Hyvista
evaluation.
LAVERTON EAST
PROJECT
The project covers a sequence of
mafic and ultramafic rocks to the east
of Laverton comprising five granted
Prospecting Licences.
Gold mineralisation at nearby Granite
Well is related in part to a sheared
mafic-ultramafic contact. This style of mineralisation will be the focus of Aruma’s exploration on the Laverton East Project. Hemisphere
has performed rock chip sampling over the lease area. This sampling has identified a linear trend of anomalous gold assays.
Old workings at Glandore showing alteration and angle to bedding
JU N DEE SOUTH PROJECT
The Jundee South Project is located 51km east of Wiluna on the north-northwest trending regional Jundee – Lake Violet – Yandal
Greenstone Belt and comprises one Exploration Licence Application. No previous mining has been conducted on the tenement,
however the Belt contains a number of recent and historic gold mines, including the currently producing Jundee Operation with open
pit deposits located along strike north and south of the project area.
Upon the grant of the tenement, Aruma’s exploration focus will be directed at compiling historical data for the project and assessing
the effectiveness of past drilling at testing geological and structural targets within the tenement.
The list of the Projects and their status are included in the table below:
Prospect
Tenements
Status
Glandore
17 x PL
Granted
Glandore
6 x PLA
Application
Glandore
3 x MLA
Application
Kurnalpi South - Pinnacles South
1 x EL
Granted
Kurnalpi South - Mt Quin
1 x EL
Granted
Kurnalpi South - Steeple Hill
1 x EL
Granted
Laverton East
5 x PL
Granted
Jundee South
1 x ELA
Application
Inde pe nde nt Geolog ist’s Re por t
Investors are referred to the Independent Geologist’s Report for an overview of the Company’s projects. In particular, comprehensive
lists of all significant intersections set out above are referred to in the Independent Geologist’s Report which is Section 6 of this
Prospectus.
14
ARUMA RESOURCES LI MITED
3.5
Com pa ny Structure
The Company was incorporated on 5 January 2010 as a wholly owned subsidiary of Hemisphere Resources Ltd (“Hemisphere”),
for the purpose of holding the gold tenements of Hemisphere.
Hemisphere originally owned five shares in the Company which represented the incorporation capital and has been issued with
39,999,995 shares in consideration of the transfer of the tenement interests to the Company’s subsidiary Aruma Exploration Pty
Ltd. Hemisphere therefore owns 40,000,000 shares in Aruma Resources and Aruma Resources owns 100% of Aruma Exploration
Pty Ltd.
Aruma Resources will maintain an office in Perth, Western Australia, initially with Hemisphere to minimise costs.
The successful capital raising proposed by this Prospectus will allow the Company to fund the accelerated exploration of these
assets and give opportunity for Hemisphere shareholders to participate in a company specifically directed at the development of
these gold assets.
CORPORATE STRUCTUR E DIAGRAM OF
ARUMA R ESOURCES LIM ITED AT ASX LISTI NG
Aruma Resources Limited
(ASX Listed)
100%
Aruma Explora t ion Pty Ltd
100%
Explora t ion Projects
ARUMA RESOURCES LI MITED
15
4
DIRECTORS AND CORPORATE GOVERNANCE
4.1
Directors a nd Com pa ny Secret a ry
Mr Paul Boyatzis
Chairman, Non-Executive Director, appointed 5 January 2010
Qualifications B Bus, ASA, MSDIA
Experience Mr Boyatzis has more than 25 years’ experience in the investment and equity markets and an extensive working
knowledge of public companies, specifically in Australia and the UK.
In early 2007 Mr Boyatzis was instrumental in the formation of Hemisphere Resources Limited. As founding
Chairman he has played a pivotal role in the strategic development of that company.
During the previous 18 years, Mr Boyatzis had been actively involved in the equity markets, of which, 13 years
has been as a director of two stockbroking firms. He has assisted many mining companies, both locally and
internationally, to raise funds through the IPO and secondary market process. He is currently a director of KSL
Corp Pty Ltd, an investment company with a primary focus on emerging resource companies.
He is also Chairman of a London incorporated company and was instrumental in assisting that company to secure
funding from London-based institutional investors.
Mr Boyatzis is a current member of the Australian Institute of Company Directors, Securities and Derivatives
Industry Association and a current member of the Certified Practicing Accountants of Australia.
Interest in Shares and Options
Mr Boyatzis has an (in)direct interest in 1,000,000 Director’s
Options
Specific Duties
Non-Executive Chairman
Other Current Directorships of Listed Companies
Hemisphere Resources Limited, QED Occtech Limited
Former Directorships of Listed Companies in the last three years
None
Mr Peter Schwann
Managing Director, appointed 11 February 2010
16
Qualifications Ass. of App. Geology, FAIMM, CP Geology
Experience
Peter has more than 35 years’ experience in mineral exploration, company management and consulting.
During his early years he worked with some of Australia’s biggest companies exploring for nickel, iron ore, gold
and mineral sands. Peter has recently held project generation and evaluation roles with resource companies in
Africa, Asia, Australia and Eastern Europe. He has participated in evaluations of precious and base metal deposits
in Mexico, Africa, Madagascar, China and Kyrgyzstan.
As a former exploration director of Kingsgate Consolidated Limited he has previous experience as a director of a
listed resource company.
Peter has consulted to Hemisphere Resources Limited and already has an in-depth understanding of the assets to
be acquired by Aruma.
Peter is a Fellow of the Australasian Institute of Mining and Metallurgy and a Chartered Professional in geology.
ARUMA RESOURCES LI MITED
Interest in Shares and Options Mr Schwann has an indirect interest in 125,000 shares and a
direct interest in 2,000,000 Director’s Options
Specific Duties
Managing Director
Other Current Directorships of Listed Companies
nil
Former Directorships of Listed Companies in the last three years
None
Mr Danny Cost ick
Non-Executive Director, appointed 5 January 2010
Qualifications BEng MSc
Experience Mr Costick has more than 25 years’ experience in the mining industry. For the last three years, Mr Costick has
been Managing Director of ASX-listed company Hemisphere Resources Limited and remains current in that role.
Prior to listing Hemisphere Resources Limited, Mr Costick spent some 15 years actively involved in a professional
capacity in operation and management of mines throughout Australia and internationally.
Relevant mining operations experience include Wannaway Nickel Mine, Ora Banda Gold Mine, Agnew Gold
Operations, Leinster Nickel Operations, Tennant Creek Operations, Mt Lyell Copper Mine, New Bendigo Gold
Project, Gidgee Gold Mine, and Oceana Gold Limited’s New Zealand Operations.
His experience includes corporate management, extensive hands-on mining, mine design, mine development and
production, feasibility studies, project valuation and mine management in a wide range of commodities including
gold, base metals and mineral sands.
Mr Costick is a graduate of the Western Australian School of Mines, having completed his Mining Engineering
Qualifications in 1991 and Mineral Economics Master’s Degree in 1999.
Interest in Shares and Options
Mr Costick has an (in)direct/ beneficial interest in 1,000,000
Directors Options
Specific Duties
Non-Executive Director
Other Current Directorships of Listed Companies
Hemisphere Resources Limited (Managing Director)
Former Directorships of Listed Companies in the last three years
None
Phi llip MacLeod
Company Secretary
Qualifications
B Bus, ASA
Experience Mr MacLeod has more than 18 years’ commercial experience and has held the position of company secretary
with listed public companies since 1995. He has provided corporate, management and accounting advice to a
number of public and private companies involved in the resource, technology, property and healthcare industries.
ARUMA RESOURCES LI MITED
17
4.2
Cor pora te gover na nce
The primary responsibility of the Board is to represent and advance Shareholders’ interests and to protect the interests of all
stakeholders. To fulfil this role the Board is responsible for the overall corporate governance of the Company including its strategic
direction, establishing goals for management and monitoring the achievement of these goals.
The responsibilities of the Board include:
•
Protection and enhancement of Shareholder value;
•
Formulation, review and approval of the objectives and strategic direction of the Company;
•
Approving all significant business transactions including acquisitions, divestments and capital expenditure;
•
Monitoring the financial performance of the Company by reviewing and approving budgets and results;
•
Ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures
is maintained;
•
Identifying significant business risks and ensuring that such risks are adequately managed;
•
The review of performance and remuneration of executive directors and key staff;
•
The establishment and maintenance of appropriate ethical standards; and
•
Evaluating and, where appropriate, adopting with or without modification, the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations.
The Board recognises the need for the Company to operate with the highest standards of behaviour and accountability.
Subject to the exceptions outlined below the Company has adopted the ASX Corporate Governance Council’s Corporate Governance
Principles and Recommendations to determine an appropriate system of control and accountability to best fit its business and
operations commensurate with these guidelines.
As the Company’s activities develop in size, nature and scope, the implementation of additional corporate governance structures will
be given further consideration.
The Board sets out below its “if not, why not” report in relation to those matters of corporate governance where the Company’s
practices depart from the recommendations.
18
ARUMA RESOURCES LI MITED
Recommendation
Reference ASX Guidelines
Notification of Departure
Explanation for Departure
2.1 and 2.2
A majority of the Board are
not independent directors.
The Board takes the view that Mr Boyatzis (Chairman), Mr Costick
(Non-Executive Director) and Mr Schwann (Managing Director) are
not independent in terms of the ASX Corporate Governance Council’s
discussion of independent status. Mr Boyatzis and Mr Costick are both
directors of Hemisphere Resources Limited. Hemisphere Resources
Limited will hold between 53.24% and 61.4% of the Shares in the
Company on listing on ASX (depending on the amount of funds
raised under this Prospectus). Mr Schwann as Managing Director
is an executive of the Company. Despite these relationships, the
Board believes that the Directors are able, and do make, quality and
independent judgement in the best interests of the Company on all
relevant issues before the Board.
The Chairman is not an
independent director.
The Board considers that the Company is not currently of a size, nor are
its affairs of such complexity to justify the expense of the appointment of
a majority of independent Non Executive Directors.
Directors having a conflict of interest in relation to a particular item
of business must absent themselves from the Board meeting before
commencement of discussion on the topic.
2.4
A nomination committee has
not been established.
The Board considers that the Company is not currently of a size to
justify the formation of a nomination committee. The Board as a whole
undertakes the process of reviewing the skill base and experience of
existing Directors to enable identification of attributes required in new
Directors. Where appropriate, independent consultants will be engaged
to identify possible new candidates for the Board.
4.1, 4.2, 4.3
An audit committee has not
been established.
The Board considers that the Company is not of a size, nor are its
financial affairs of such complexity to justify the formation of an audit
committee. The Board as a whole undertakes the selection and proper
application of accounting policies, the integrity of financial reporting, the
identification and management of risk and review of the operation of the
internal control systems.
8.1
A remuneration committee
has not been established.
The Board considers that the Company is not currently of a size, nor are
its affairs of such complexity to justify the formation of a remuneration
committee. The Board as a whole is responsible for the remuneration
arrangements for Directors and Executives of the Company and
considers it more appropriate to set aside time at Board meetings
each year to specifically address matters that would ordinarily fall to a
remuneration committee.
The Company has adopted corporate governance policies common with other public listed companies of similar size and business.
Copies of these policies will be accessible on the Company’s website at www.arumaresources.com
ARUMA RESOURCES LI MITED
19
5
RISK FACTORS
5.1
Introduct ion
An investment in the Shares the subject of this Prospectus is highly speculative as the Company is a resource exploration
company. The Board recommends that investors consider the risks described below and information contained elsewhere
in this Prospectus, as well as consulting with their professional advisers before deciding whether or not to apply for the
Shares.
The following is a non-exhaustive list of the risks that may have a material effect on the financial position and performance
of the Company and the value of its securities, as well as the Company’s exploration, any development and mining activities
and an ability to fund those activities.
The specific risks below are some of the risks specific to the Company including specific exploration business risks. The
general investment risks below are some of the risks to the Company of a general economic nature.
5.2
Specif ic r isks
Explorat ion
Investors should understand that exploration, by its nature, is a high-risk undertaking. There can be no assurance that the
Company’s exploration of its tenements or any other exploration projects that may be acquired in the future will result in the
delineation or discovery of a significant mineral resource. Even if a significant mineral resource is identified, there can be
no guarantee that it can be economically exploited.
Resource est i mat ions
Resources estimates are expressions of judgment based on knowledge, experience and resource modelling. As such,
resource estimates are inherently imprecise and rely to some extent on interpretations made.
Additionally, resource estimates may change over time as new information becomes available. If the Company encounters
mineralisation or geological formations different from those predicted by past drilling, sampling and interpretations,
resource estimates may need to be altered in a way that could adversely affect the Company’s operations.
Gold and othe r commodity pr ices
As a proposed explorer for gold and potentially other minerals, any earnings of the Company are expected to be closely
related to the price of gold and other commodities.
Commodities prices fluctuate and are affected by numerous factors beyond the control of the Company. These factors
include worldwide and regional supply and demand for commodities, general world economic conditions and the outlook for
interest rates, inflation and other economic factors on both a regional and global basis. These factors may have a positive
or negative effect on the Company’s exploration, project development and production plans and activities, together with the
ability to fund those plans and activities.
Te ne me nt r ights
The Company has 25 granted licences (either exploration or prospecting) and 10 licences under application (either mining,
exploration or prospecting) across four projects - Glandore, Kurnalpi South, Laverton East and Jundee South.
The Glandore Project consists of 17 granted prospecting licences and six prospecting licence applications. Eleven of the
17 granted prospecting licences have expired but are subject to one of three applications for conversion to a mining lease.
An underlying prospecting licence continues in force pending the determination of an application for a mining lease.
Potential investors should note that if the conversion applications or any renewal of or grant of applications for the other
tenements are not successful, then the Company would lose title to those tenements. The various applications are subject
to the discretion of the relevant government authority and there is no guarantee they will be granted. The failure of any
application may lead to the Company suffering significant damage through the loss of opportunity to develop any mineral
resources on that area.
20
ARUMA RESOURCES LI MITED
Additionally, licences are subject to a number of specific legislative conditions. The inability to meet these conditions could affect the
standing of a licence or restrict its ability to be renewed.
Investors are referred to the Solicitor’s Report on the Tenements in Section 8 for information generally on the licences.
Nat ive t itle and land access
The Native Title Act 1993 (Cth) recognises and protects the rights and interests in Australia of Aboriginal and Torres Strait Islander
people in land and waters, according to their traditional laws and customs. There is a significant uncertainty associated with native
title in Australia and this may impact upon the Company’s operations and future plans.
Native title can be extinguished by valid grants of land or waters to people other than the native title holders or by valid use of land
or waters. It can also be extinguished if the indigenous group has lost their connection with the relevant land or waters. Native title
is not necessarily extinguished by the grant of mining licences, although a valid mining lease prevails over native title to the extent of
any inconsistency for the duration of the title.
All tenements granted prior to 1 January 1994 are valid or validated by the Native Title Act. For tenements to be validly granted (or
renewed) after 1 January 1994, the future act regime established by the Native Title Act must be followed.
It is important to note that the existence of a native title claim is not an indication that native title in fact exists to the land covered
by the claim, as this is a matter ultimately determined by the Federal Court. If native title rights do exist, the ability of the Company
to gain access to tenements (through obtaining consent of any relevant landowner) or to progress from the exploration phase to the
development and mining phases of operations, may be adversely affected.
The Company must also comply with Aboriginal heritage legislation requirements which require heritage survey work to be undertaken
ahead of the commencement of mining operations.
Environme ntal
The Company’s projects are subject to rules and regulations regarding environmental matters and the discharge of hazardous wastes
and materials. As with all mineral projects, the Company’s projects are expected to have a variety of environmental impacts should
development proceed. Development of any of the Company’s projects will be dependent on the Company satisfying environmental
guidelines and, where required, being approved by government authorities.
The Company intends to conduct its activities in an environmentally responsible manner and in accordance with all applicable laws,
but may still be subject to accidents or other unforeseen events which may compromise its environmental performance and which
may have adverse financial implications.
Mi n i ng
Possible future development of a mining operation at any of the Company’s projects is dependent on a number of factors including,
but not limited to, failure to acquire and/or delineate economically recoverable ore bodies, unfavourable geological conditions, failing
to receive the necessary approvals from all relevant authorities and parties, unseasonal weather patterns, unanticipated technical
and operational difficulties encountered in extraction and production activities, mechanical failure of operating plant and equipment,
unexpected shortages or increases in the price of consumables, spare parts and plant and equipment, cost overruns, risk of access to
the required level of funding and contracting risk from any third parties providing essential services.
In the event that the Company commences production, its operations may be disrupted by a variety of risks and hazards which are
beyond its control, including environmental hazards, industrial accidents, technical failures, labour disputes, unusual or unexpected
rock formations, flooding and extended interruptions due to inclement or hazardous weather conditions and fires, explosions and
other accidents.
ARUMA RESOURCES LI MITED
21
Reliance on key pe r sonnel
The Company’s success largely depends on the core competencies of its Directors and their familiarisation with, and ability to operate
in, the mining industry and the Company’s ability to retain its key executives.
Mr Peter Schwann is Managing Director and holds a service agreement with the Company summarised in Section 10.
Insurance
The Company, where economically feasible, intends to insure its operations in accordance with industry practice. However, in certain
circumstances, the Company’s insurance may not be of a nature or level to provide adequate insurance cover. The occurrence of an
event that is not covered or not fully covered by insurance could have a material adverse effect on the business, financial condition
and results of the Company.
Insurance of all risks associated with mineral exploration and production is not always available and where available the costs can be
prohibitive.
Fut ure capital needs and addit ional fu ndi ng
The funds raised by the Offer will be used to carry out the Company’s objectives as detailed in this Prospectus. The Company’s ability
to raise further capital (equity or debt) within an acceptable time, of a sufficient amount and on terms acceptable to the Company will
vary according to a number of factors, including prospectivity of projects (existing and future), the results of exploration, subsequent
feasibility studies, development and mining, stock market and industry conditions and the price of relevant commodities and exchange
rates.
No assurance can be given that future funding will be available to the Company on favourable terms (or at all). If adequate funds are
not available on acceptable terms the Company may not be able to further develop its projects and it may impact on the Company’s
ability to continue as a going concern.
Li mited ope rat ional history
While the Company’s management have significant experience and have previously carried out or been exposed to exploration and
production activities while employed or engaged by other companies, the Company was not incorporated until 5 January 2010.
Accordingly, the Company has limited historical, financial or operating information. The Company’s ability to achieve its objectives
depends on the ability of its Directors and officers to implement current plans and to respond to any unforeseen circumstances that
require changes to those plans.
Acquisit ions and pote nt ial acquisit ions
As part of its business strategy, the Company may make acquisitions of or significant investments in other resource projects. The
Company has already acquired tenements or rights to tenements from Hemisphere and Plasia Pty Ltd (see Schedule 2 to Section 8).
Any acquisitions are accompanied by risks commonly encountered in making such acquisitions. This includes stamp duty and taxation
obligations that may be incurred. In relation to the acquisition of tenements from Hemisphere, the Company considers that it, and its
subsidiary, will be able to successfully apply for an exemption from stamp duty under a reconstruction excemption. There is a risk in
the future that any exemption may be revoked so that stamp duty becomes payable if certain future events occur such as Hemisphere
failing to hold more than 50% of the Shares in the Company in the period of 3 years after the transfer of tenements.
22
ARUMA RESOURCES LI MITED
Valuat ion of Te ne me nts
There has been no valuation of the Company’s tenements or the Shares. The Company makes no representation as to the value of
the tenements. It is recommended that prospective investors and their advisers make their own assessment as to the value of the
tenements.
5.3
General i nvestment r isks
Secur it ies i nvestme nts and share market condit ions
There are risks associated with any securities investment. The prices at which the securities trade may fluctuate in response to a
number of factors.
Furthermore, the stock market, and in particular the market for exploration and mining companies may experience extreme price and
volume fluctuations that may be unrelated or disproportionate to the operating performance of such companies. These factors may
materially adversely affect the market price of the securities of the Company regardless of the Company’s operational performance.
Neither the Company nor the Directors warrant the future performance of the Company, or any return of an investment in the
Company.
Economic r isk
Changes in both Australian and world economic conditions may adversely affect the financial performance of the Company. Factors
such as inflation, currency fluctuations, interest rates, industrial disruption and economic growth may impact on future operations and
earnings.
Le g islat ive
Changes in relevant taxes, legal and administration regimes, accounting practice and government policies in Australia may adversely
affect the financial performance of the Company.
ARUMA RESOURCES LI MITED
23
6
INDEPENDENT GEOLOGIST’S REPORT
16th April 2010
The Directors
Aruma Resources Limited
24 Colin Street
West Perth, WA 6005
Dear Sirs,
Independent Geologist’s Report on the Mineral Properties of Aruma Resources Ltd
By way of letter dated 14th January 2010, Hellman & Schofield Pty Ltd (H&S) has been commissioned by Aruma Resources Limited
(Aruma) to provide an Independent Geologist’s Report on the exploration properties that are the subject of Aruma’s Prospectus to be
dated on or about the 23rd of April 2010.
The objective of the report is to present for each project, a geological description, an outline of previous exploration work, and
an opinion on Aruma’s proposed exploration programmes for the first two years of operations. The properties were Hemisphere
Resources Limited (Hemisphere) exploration projects and are without currently defined Mineral Resources. H&S was not requested to
assign a value for the projects.
H&S has based its review on information provided by Aruma, technical reports by previous tenement holders and site visits to the
properties. Information provided by Aruma has been verified by reference to publicly available reports.
H&S has based its findings upon information known to us as at the 16th of April 2010, and believes that all material information in the
possession of Aruma has been fully disclosed to H&S. A listing of referenced documents is provided at the end of the report. Aruma
has stated that none of the information provided is regarded as confidential and has given permission for inclusion in the report.
Aruma has agreed to indemnify H&S from any liability arising from its reliance upon information provided or from information not
provided. A draft version of the report was provided to the Directors of Aruma for comment in respect of omission and factual
accuracy.
H&S has prepared this report with the understanding that all granted tenements within the project areas are currently in good
standing and that there is no cause to doubt the eventual granting of any tenement applications. H&S has not attempted to establish
the legal status of tenements within each project area with respect to potential environmental and access restrictions. H&S has not
independently verified ownership and current standing of the tenements and is not qualified to make legal representations in this
regard. It is our understanding that the current ownership status and standing of the tenements are dealt with in a separate Solicitor’s
Report (Section 8) within this Prospectus.
SYDNEY
6 / 3 Trelawney Street Eastwood, NSW 2122
P.O. Box 599, Beecroft, NSW 2119
Ph: (02) 9858 3863 Fax: (02) 9858 4057
Email: [email protected]
24
BRISBANE
Lvl 4, 46 Edward St, Brisbane, QLD 4000
P.O Box 16116, City East, QLD 4002
Ph: (07) 3012 9393 Fax: (07) 3012 9373
Email: [email protected]
www.hellscho.com.au
ARUMA RESOURCES LI MITED
PERTH
102 Colin St, W.Perth, WA 6005
P.O. Box 125, W.Perth, WA 6872
Ph: (08) 9485 0403 Fax: (08) 9485 0406
Email: [email protected]
The project areas have been subjected to varying degrees of mineral exploration, which has included identification of some advanced
exploration areas, allowing Aruma to plan appropriate exploration activities. The exploration programmes proposed by Aruma are
consistent with Aruma exploration objectives and are appropriate for investigating the mineral prospectivity of each project area as
identified by previous exploration activities.
The project areas are subject to the risks inherent in exploration projects, and as such there can be no assurance that future
exploration will confirm the presence of mineralisation, or that any mineralisation identified will prove to be economic to mine.
The Independent Geologist’s Report has been prepared in accordance with the Code for the Technical Assessment and Valuation of
Mineral and Petroleum Assets and Securities for Independent Export Reports (The VALMIN Code), which is binding upon members of
the Australian Institute of Mining and Metallurgy and applies to all relevant reports issued from 1998.
Neither H&S, nor the authors of this report, have or have previously had any material interest in Aruma or the exploration projects that
are the subject of this report. Our relationship with Aruma is solely one of professional association between client and independent
consultant. This report was prepared in return for professional fees based upon agreed commercial rates and the payment of these
fees is in no way contingent on the results of the report.
H&S is a mineral resource evaluation consulting firm which was formed in 1998. This report has been prepared by Jonathon Abbott,
who is a professional geologist with more than 19 years’ experience in the evaluation of mineral resources, and is a member of the
Australian Institute of Mining and Metallurgy.
The sole purpose of this report is for inclusion in Aruma’s prospectus dated on or about 23rd of April 2010 relating to the proposed
equity raising of A$5,000,000 by the issue of 25,000,000 fully paid ordinary Shares at an offer price of $0.20 per Share. The
proposed equity raising has provision to raise up to A$7,000,000 through the acceptance of oversubscriptions which would result
in up to 35,000,000 fully paid ordinary shares being issued at an offer price of $0.20 per share. Neither the whole nor part of this
report nor any reference thereto may be included in or attached to any document or used for any other purpose, without H&S’s written
consent to the form and context in which it appears.
H&S have given consent in writing to the inclusion of this Independent Geologist’s Report in the Prospectus to be issued by Aruma in
the form and context in which it appears and has not withdrawn consent prior to issue. Except for this Independent Geologist’s Report,
H&S:
a)
has not authorised or caused the issue of the prospectus;
b)
is not responsible for any matter included or omitted from this Prospectus;
c)
makes no representation or warranty, either express or implied, with respect to the accuracy or completeness of the
information contained in the Prospectus; and
d)
disclaims liability to any persons in respect of any statement included or omitted from the prospectus.
Yours sincerely,
Jonathon Abbott
Hellman & Schofield Pty Ltd
The contents of this report are CONFIDENTIAL and PROPRIETARY. This report may not be released to any third party without the
written consent of both Hellman & Schofield and Aruma Resources.
Copyright ©2010 Hellman & Schofield Pty Ltd. April 2010
ARUMA RESOURCES LI MITED
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Contents
6.1. INTRODUCTION
6.2. TENEMENTS
6.3. GLANDORE PROJECT
6.3.1. Introduction
6.3.2. Project Geology
6.3.2.1. Lithology and Structure
6.3.2.2. Mineralisation and Alteration
6.3.2.3. Regolith
6.3.3. Previous Mining
6.3.4. Previous Exploration
6.3.5. Advanced Exploration Areas
6.3.5.1. Axial Planar Fault Zone
6.3.5.2. Supergene Zone
6.3.5.3. Eastern Lode Zone
6.3.5.4. Central Fault Zone
6.3.6. Prospective Exploration Targets
6.3.7. Proposed Exploration
6.4. KURNALPI SOUTH PROJECT
6.4.1. Introduction
6.4.2. Regional Geological Setting
6.4.3. Regional Gold Mineralisation
6.4.4. Pinnacles South Prospect
6.4.4.1. Introduction
6.4.4.2. Regional Geological Setting
6.4.4.3. Geological Setting and Mineralisation
6.4.4.4. Previous Exploration
6.4.4.5. Exploration Targets
6.4.5. Mt. Quin Prospect
6.4.5.1. Introduction
6.4.5.2. Geological Setting and Mineralisation
6.4.5.3. Previous Exploration
6.4.5.4. Exploration Targets
6.4.6. Steeple Hill Prospect
6.4.6.1. Introduction
6.4.6.1. Geological Setting and Mineralisation
6.4.6.3. Previous Exploration
6.4.7. Proposed Exploration Programme
6.5. LAVERTON EAST PROJECT
6.5.1. Introduction
6.5.2. Regional Geological Setting and Gold Mineralisation
6.5.3. Project geology
6.5.4. Previous Exploration
6.5.5. Proposed Exploration Programme
6.6. JUNDEE SOUTH PROJECT
6.6.1. Introduction
6.6.2. Geological Setting
6.6.3. Regional Gold Mineralisation
6.6.4. Previous Exploration
6.5.5. Proposed Exploration programme
6.7. PROPOSED EXPLORATION FOR ALL PROJECTS
6.7.1. Proposed activities
6.8. REFERENCES
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List of Figures
Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Figure 11: Figure 12: Figure 13: Figure 14: Figure 15: Figure 16: Figure 17: Figure 18: Figure 19: Figure 20: Location of Aruma Projects
Glandore Project Location and Geological Setting
Glandore Satellite Image and Tenement Outlines
Glandore Tenements, geology, mines and advanced exploration targets Schematic Interpretation of Glandore Anticline and exploration targets
Axial Planar Fault Zone Plan View of Drilling
Axial Planar Fault Zone Cross Section
Supergene Zone Mineralised Intercepts
Supergene Zone Cross Section B-B’
Kurnalpi South Project Tenements and Regional Geology
Pinnacles South Regional Geology
Pinnacles South Prospect Geology
Pinnacles South Prospect Previous Exploration
Mt. Quin Prospect Geology
Steeple Hill Prospect Geology
Laverton East Project regional geology and mineralisation
Laverton East Project Geology
Laverton East significant Hemisphere rock chip results
Jundee South Project Geology and location
Jundee South Project historic Drilling and Target Geology
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List of Ta bles
Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Tenement Status
Historic Production from Glandore Project
Axial Planar Fault Zone Significant Intersections
Supergene Zone Significant Intersections
Eastern Lode Zone Significant Intersections
Central Fault Zone Significant Intersections
Prospective Exploration Target Significant Intersections
Glandore Exploration Budget
Kurnalpi South Exploration Budget
Laverton East CRA RAB Drilling Results
Laverton East Project - Chip Sampling Results
Laverton East Exploration Budget
Jundee South Anomalous Drill Hole Intersections Total Exploration Budget Minimum Case
Total Exploration Budget Maximum Case
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6.1
Introduct ion
Subject to successful listing on the Australian Securities Exchange, Aruma Resources Limited (Aruma) will acquire interests in four
project areas within the Goldfields region of Western Australia. Inclusive of several tenements which are still under application,
Aruma’s tenement package totals 374 km2. Figure 1 shows the location of Aruma’s project areas.
The Glandore Project, which is approximately 40 km east of Kalgoorlie-Boulder in a region hosting a number of historic mines
that produced substantial amounts of gold from high-grade ore, is prospective for several styles of gold mineralisation. Previous
exploration of the Glandore Project, including geophysical surveying, surface geochemical sampling and approximately 41,000 m
of exploration drilling, has identified a number of advanced exploration areas and several, less advanced currently under-explored
prospective exploration targets.
Aruma proposes to explore the Glandore Project using drilling targeted at defining discrete high-grade gold mineralisation associated
with previously identified advanced exploration targets.
The Kurnalpi South Project lies approximately 100 km to the east of Kalgoorlie-Boulder and comprises three gold exploration
prospects designated as Pinnacles South, Mt Quin and Steeple Hill, within a minimally explored area of a greenstone belt that hosts
several major mines. Previous exploration in the project area included soil and auger sampling and minor RAB drilling.
Aruma proposes to explore the three prospects comprising the Kurnalpi South Project by evaluating the relatively untested areas
identified by previous explorers for potential gold mineralisation. This will be done by Hyvista Thermal Mineral Imaging and follow up
geochemistry. In that area the soil cover is apparently dominantly residual and reflects the bedrock.
The Laverton East Project, which is approximately 20 km east of Laverton, lies within a region hosting several major and relatively
recently discovered major gold deposits. Previous exploration of the area includes relatively shallow RAB drilling over much of the
tenement and reconnaissance rock chip sampling by Hemisphere Resources which returned several gold assays of greater than
0.2 g/t.
Aruma proposes to explore the Laverton East Project, by targeting areas untested by previous companies. It is anticipated that remote
sensing including hyper-spectral thermal mineral imaging will be used to aid targeting of ground-based geochemical and geophysical
surveys. Identified targets will be further clarified by RAB drilling.
The Jundee South Project lies approximately 50 km to the east of Wiluna within the Yandal Greenstone belt which hosts several
major relatively recent gold discoveries such as the Jundee deposit. Although much of the project area has been tested by surface
sampling and shallow exploration drilling, the effectiveness in identifying underlying mineralisation is diminished by the ubiquitous
transported cover.
Aruma proposes to explore the Jundee South Project in structural and lithologically favourable areas identified from a regional study
of the known gold mineralisation controls with reference to the body of existing previous work.
Each of the project areas can be readily accessed from the regional towns of Kalgoorlie-Boulder, Laverton or Wiluna. Access within
the generally flat-lying to gently undulating tenements via station and previous exploration tracks is good.
The climate of the Kalgoorlie region is characterised by warm, dry summers with average maximum daily temperatures of 33°C, and
rare thunderstorms. Winter months are relatively mild with average daily temperature ranges of 7 to 17 °C. Annual rainfall averages
around 250 millimetres with most falling during winter.
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Figure 1: Location of Aruma Projects
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6.2
Tenements
Aruma’s tenements as listed in Table 1 include 22 granted Prospecting Licences, 6 Prospecting Licences under application, three
Mining Lease applications, three granted Exploration Licences and one Exploration Licence which is currently in application for a
combined total of 37,416 ha.
Table 1: Tenement Status
Project
Lease
Status
Date
Area
Expenditure
Rent
Glandore
M25/327
Appl’n
15/04/2004
122 ha
$12,200
$1,503.04
M25/329
Appl’n
11/08/2004
456 ha
$45,600
$5,617.92
M25/330
Appl’n
23/08/2004
703 ha
$70,300
$8,660.96
P25/1581
Granted
5/09/2000
120 ha
$4,800
$277.20
P25/1582
Granted
5/09/2000
120 ha
$4,800
$277.20
P25/1583
Granted
5/09/2000
120 ha
$4,800
$277.20
P25/1584
Granted
5/09/2000
120 ha
$4,800
$277.20
P25/1585
Granted
5/09/2000
120 ha
$4,800
$277.20
P25/1586
Granted
5/09/2000
120 ha
$4,800
$277.20
P25/1587
Granted
5/08/2000
120 ha
$4,800
$277.20
P25/1588
Granted
5/09/2000
120 ha
$4,800
$277.20
5/09/2000
120 ha
$4,800
$277.20
P25/1589
Granted
P25/1590
Granted
5/08/2000
120 ha
$4,800
$277.20
P25/1620
Granted
19/04/2000
120 ha
$4,800
$277.20
P25/1806
Granted
23/05/2007
45 ha
$2,000
$103.95
P25/1807
Granted
23/05/2007
116 ha
$4,640
$267.96
P25/2073
Granted
5/02/2010
177 ha
$7,080
$311.52
P25/2074
Granted
5/02/2010
141 ha
$5,640
$248.16
P25/2075
Granted
5/02/2010
195 ha
$7,800
$343.20
P25/2076
Granted
5/02/2010
197 ha
$7,880
$346.72
P25/2089
Appl’n
20/04/2009
174 ha
$6,960
$306.24
P25/2090
Appl’n
20/04/2009
182 ha
$7,280
$320.32
P25/2091
Appl’n
20/04/2009
196 ha
$7,840
$344.96
P25/2092
Appl’n
20/04/2009
187 ha
$7,480
$329.12
P25/2093
Appl’n
20/04/2009
188 ha
$7,520
$330.88
P25/2094
Appl’n
20/04/2009
191 ha
$7,640
$336.16
Steeple Hill
E28/1833
Granted
19/06/2009
4,022 ha
$20,000
$1,302.84
Pinnacles South
E28/1849
Granted
9/02/2009
3,845 ha
$20,000
$1,209.78
Mt Quin
E28/1855
Granted
1/04/2010
19,741 ha
$67,000
$7,377.37
P38/3782
Granted
29/01/2009
196ha
$7,840
$452.76
P38/3783
Granted
29/01/2009
169ha
$6,760
$390.39
P38/3784
Granted
29/01/2009
194ha
$7,760
$448.14
P38/3785
Granted
29/01/2009
194 ha
$7,760
$448.14
P38/3786
Granted
29/01/2009
194 ha
$7,760
$448.14
E53/1461
Appl’n
11/02/2009
4,296 ha
$20,000
$1,302.84
Kurnalpi
South
Laverton East
Jundee South
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6.3
Gla ndore Project
6.3.1 Introduct ion
The Glandore Project lies on the south-western shore of Lake Yindarlgooda, approximately 40 km east of Kalgoorlie-Boulder, in the
Eastern Goldfields of Western Australia (Figure 2). Access to the area is via Bulong Road (sealed) to within eight km of the project
area and then the next eight km southeast from the historic Bulong Township along all-weather gravel roads.
Figure 2: Glandore Project Location and Geological Setting
The northern and eastern parts of the project area are dominated by the usually dry Lake Yindarlgooda, and adjacent low gently
undulating dunes. To the south and west, the topography rises to a series of low sparsely wooded hills. Figure 3 presents a satellite
image of the project area and tenement outlines.
The project comprises 17 granted Prospecting Licenses, six Prospecting License Applications and three Mining Lease Applications
that total 33 km2 in area. Status of the Glandore Project tenements is shown in Table 1. Three small mining leases (M25/31, M25/87
and M25/154) covering the historical Sunrise/Grunts mine are excised from the project area.
Recent exploration of the project area for gold began in 1986, and has included geochemical sampling, RAB, aircore, RC and
diamond drilling and geophysical surveys. Companies who have previously explored in the Glandore project area include Lynas Gold
NL, Melbourne Exploration NL, Western Mining Ltd, Anglogold Australia Ltd and Hemisphere Resources Ltd.
The previous exploration has identified three advanced gold exploration targets, known as the Axial Planar Fault Zone, Supergene
Zone and Eastern Lode (Figure 4). Several less advanced and under-explored prospective exploration targets have also been
identified including an area known as the Central Fault Zone. Three-dimensional modelling of the mineralisation and geology by
Hemisphere has aided development of drilling targets.
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6.3.2 Project Geology
6.3.2.1 Lithology and Str uct ure
Bedrock lithologies in the Glandore region are
described by Steuart and Kneeshaw (2001). These
rock types include the Bulong Ultramafic Complex
to the west of Glandore. In the central project
area, a layered mafic sill is overlain by a sequence
of sediments, basalts and felsic to intermediate
volcaniclastics which have been intruded by felsic
dykes and granites and subsequently folded into a
broad, northerly plunging anticline (Figures 4 and 5).
The Bulong Ultramafic Complex, which lies
approximately 500 m west of the project area,
comprises a series of cumulate textured peridotites.
It is separated from the volcaniclastic unit to the
east by the west dipping Hampton (Bulong) Fault.
Within the project area, a layered mafic sill,
informally known as the Glandore Sill, occupies the
core of the anticline. The sill is broadly conformable
with overlying stratigraphy, and consists of a 90
to 120 m thick upper unit of gabbro, and a lower
dolerite unit that is at least 500 m thick. The lower
dolerite is subdivided into an upper melanodolerite,
a central leucodolerite, and a lower cumulate unit.
The Glandore Sill is overlain by a 50 to 150 m thick
assemblage of sedimentary units comprising shale
with zones of siltstone, greywacke and chert.
A 500-m-thick basalt unit overlies these sediments.
The basalt is generally massive and aphanitic, with
plagioclase-phyric examples rarely noted in previous
drilling. Two outcrops of moderate to well defined
pillows have been reported on the edge of Lake
Yindarlgooda (Steuart and Kneeshaw, 2001).
Figure 3: Glandore Satellite Image and Tenement Outlines
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The basalt is overlain by a unit of felsic to
intermediate volcaniclastic sediments which
ranges from fine silts and sandstones to coarse
conglomerates with pebble to boulder sized clasts
varying in composition from rhyolitic to dacitic.
Figure 4: Glandore Tenements, geology, mines and advanced exploration targets
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Figure 5: Schematic Interpretation of Glandore Anticline and exploration targets
6.3.2.2 Mi neralisat ion and Alterat ion
Drill core results from previous explorers suggest that Glandore mineralisation is associated with hydrothermal alteration typical in
many gold deposits in the Eastern Goldfields. Primary gold mineralisation is interpreted to be controlled by the intersection of faults
and shear zones with favourable lithologies, with the coarse-grained phases of the Glandore Sill being the most favourable hosts for
gold mineralisation.
In fresh rock, gold mineralisation is associated with biotite-pyrite alteration with variable sericite, and ankerite. Lower-grade
mineralisation (0.5 to 2 g/t Au) is associated with quartz-pyrite veins within breccias with pervasive ankerite, pyrite and biotite
alteration. Medium-grade gold mineralised zones (2 to 10 g/t Au) are commonly associated with brittle quartz-pyrite veins with well
developed ankerite, sericite, biotite and pyrite halos. Higher-grade gold mineralisation (>10 g/t Au) is associated with narrow shear
zones containing quartz-arsenopyrite-pyrite veins that cross cut veining and alteration associated with medium-grade mineralisation.
Previous explorers (Clark, 1988) drew parallels between the associations of gold mineralisation within the iron-rich members of the
Glandore Sill to the Golden Mile Dolerite in Kalgoorlie.
6.3.2.3 Regolith
Much of the project area is covered by the Lake Yindarlgooda salt lake, adjacent mud flats and dunes. Previous exploration drilling
on the lake surface has intersected a thin, generally less than 0.8-m-thick layer of lake sediments. Away from the lake, regolith is
generally limited to a relatively thin veneer of transported cover.
6.3.3 Previous Mi n i ng
The Glandore Project tenements cover a number of historic gold mines from which Kelly (1954) reports that gold production totalled
approximately 1,139 ounces (Table 2). In addition, a number of larger, high-grade historic mines are located proximal to the Glandore
project.
Historic gold mines in the Glandore region include the Bulong mining area, approximately 10km west of the project, which produced
an estimated 80,000 ounces of gold from two sub-parallel lines of workings, and the Jarvis deposit, to the northeast of Bulong, which
produced approximately 22,000 ounces of gold (Kelly, 1954).
At the Morelands Find mining centre, within the southern portion of the Glandore Project, mineralisation occurs within a sequence of
dolerites, gabbros and basalts adjacent to an anticlinal axis. At the main “Sweet Nell” group of workings which is excised from the
Glandore Project by a small lease, Kelly (1954) reported that gold was mined from narrow sub-vertical quartz veins which produced
980 ounces of gold from ore grading 74.8 g/t.
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Table 2: Historic Production from Glandore Project
Lease Name and (Years)
Ninety Eight Leases (1898 – 1903)
(plus dollied gold)
Pyrites King (1899 – 1905)
Golden Lake (1904)
Mount Craig (1897)
Jillian (1983)
Lake Consols (1935 – 1936)
Sunrise/Grunts Mine (1899 – 1935)
Lady Ann (1899)
Tonnes Ore
Gold Grade (g/t Au)
Contained Gold (Oz)
594
39.18
10
10
12
12
152
104
20
30.3
20.3
24.66
3.916
21.58
38.61
1.35
748
127
10
7
10
2
105
129
1
6.3.4 Previous Explorat ion
Recent exploration of the project area for gold began in 1986, and has included geochemical sampling, geophysical surveys and RAB,
RC, aircore and diamond drilling for a total of approximately 815 holes for around 41,230 m of drilling.
The following summary of exploration activities excludes some minor early programmes, such as reconnaissance rock chip sampling,
which have been superseded by more comprehensive newer work, and several small phases of nickel exploration of limited relevance
to gold mineralisation.
Melbourne Exploration NL/Lynas Gold NL (1986-1989)
Work completed by Melbourne Exploration NL and Lynas Gold NL in the Glandore area included geological mapping, rock chip
sampling, costean mapping and sampling, shallow RAB and RC drilling. At least 1,240 m were drilled in some 38 holes.
The location of holes from this phase of exploration is uncertain, with digital databases showing substantially different coordinates to
historic reports and field investigations. Tabulated significant intercepts include only holes for which locations could be estimated. A
programme of surveying is likely to be required before these holes could be used for targeting future exploration.
Western Mining Corporation Limited (1989-1995)
Western Mining Corporation Limited (WMC) performed the largest amount of work of previous explorers. WMC’s exploration activities
concentrated on the Axial Planar Fault Zone and included geophysical surveys, geochemical auger and soil sampling, aircore, RC and
diamond drilling to a maximum of 405 m depth. A total of 22,307 m was drilled in 450 holes.
Anglo Gold Australia Limited (2000-2003)
Exploration completed by Anglo Gold Limited (Anglo) included geological mapping, a high-resolution aeromagnetic survey, auger
sampling, RAB, aircore, RC and diamond drilling and Total Field Magneto-Metric Resistivity (TFMMR) geophysical surveys. More than
9000 m were drilled in more than 140 holes.
Anglo’s auger sampling which tested an area of transported cover on the western side of the project area at 50 by 200 m spacing,
showed several zones of anomalous gold values associated with the Central Fault Zone over a two-km strike length. Limited follow-up
RAB drilling failed to return economically significant results.
Although Anglo’s RC and diamond drilling around the Axial Planar Fault and Eastern Lode Zones gave some significant mineralisation,
results were generally lower than WMC’s earlier drilling. The results were interpreted to suggest that the axial planar fault
mineralisation decreases in intensity to the south, and that the Eastern Zone has been terminated to the north by a later diorite
intrusion.
Surface sampling and aircore drilling (21 holes for 355 m) within P25/1635 failed to yield any assay results of significance.
Although Anglo concluded that the magnitude of the project’s resource potential was insufficient to satisfy their corporate
requirements, they considered there was some potential to discover significant mineralisation in the area (Newton & Kneeshaw, 2003).
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Hemisphere Resources Limited (2007-2009)
Hemisphere undertook several programmes of RC drilling to investigate mineralisation associated with the Supergene, Axial Planar
Fault and Eastern Lode Zones which confirmed the presence of gold mineralisation in these areas. A total of 4,178 m was drilled in
73 holes.
In addition to drilling, Hemisphere conducted in-house three-dimensional modelling resulting in the identification of additional
exploration targets.
6.3.5 Advanced Explorat ion Areas
6.3.5.1 Axial Planar Fault Zone
Lake-based aircore, RC and diamond drilling by WMC, Anglo and Hemisphere have all intersected a relatively continuous zone of
steeply southwest-dipping gold mineralisation within the dolerite sill beneath Lake Yindarlgooda. The mineralisation is interpreted to
be associated with an axial planar fault.
Gold mineralisation associated with the Axial Planar Fault Zone has been intersected by drilling over a strike length of approximately
400 m, to a maximum depth of around 150 m below surface and is open at depth. Drilling to date suggests that gold has been
depleted in the upper approximately 30 m of weathered rock and has been locally dispersed as a thin low-grade supergene
blanket. Below this zone of depletion, gold grades generally range from 1 to 10 g/t over down-hole lengths of 0.5 to 2 m, although
mineralisation can exceed these widths in places.
Drill holes and significant intersections in the Axial Planar Fault Zone are shown in Figures 6 and 7, and show an interpreted cross
section of the mineralisation. Table 3 lists significant intersections from drilling by Hemisphere and previous explorers.
Table 3: Axial Planar Fault Zone Significant Intersections
Drill Hole
Location (GDA 94)
Orient. (Dip/Az)
Comment
GDJC183
6,595,857 mN 391,857 mE
Vertical
4m @ 1.36 g/t from 20m
WMC
GDJD259
6,595,857 mN 391,777 mE
60/090
0.6m @ 6.80 g/t from 68.2m
WMC 1996
GDJD260
6,595,857 mN 391,757 mE
60/090
3.3m @ 1.97 g/t from 90.7m
WMC 1996
GDJD336
6,595,783 mN 391,840 mE
60/000
10.25m @ 10.3 g/t from 58m
WMC 1996
GDJD339
6,595,804 mN 391,781 mE
60/090
1.0m @ 10.9 g/t from 103.9m
WMC 1996
GDJD340
6,595,763 mN 391,839 mE
59/000
4.8m @ 2.84 g/t from 81m
WMC 1996
GDJD341
6,595,743 mN 391,839 mE 60/000
1.7m @ 3.30 g/t from 105.7m
WMC 1996
GDJD342
6,595,723 mN 391,838 mE
60/000
2.75m @ 2.57 g/t from 125.8m
WMC 1996
GDJD343
6,595,805 mN 391,797 mE
60/000
1.2m @ 12.5 g/t from 92.5m
WMC 1996
GDJD344
6,595,800 mN 391,840 mE
60/000
6.0m @ 1.79 g/t from 54m
incl 2.5m @ 2.88 g/t from 57m
WMC 1996
GDJD345
6,595,846 mN 391,796 mE 60/000
3.3m @ 0.86 g/t from 55.7m and
0.8m @ 3.89 g/t from 62.1m
WMC 1996
GDJD348
6,595,867 mN 391,797 mE
60/000
1.6m @ 3.61 g/t from 48.4m
WMC 1996
GDJD353
6,595,727 mN 391,796 mE
60/000
3.9m @ 1.23 g/t from 167.1m
WMC 1996
GDJD81
6,596,056 mN 391,677 mE
60/270
7m @ 2.61 g/t from 49m,
10m @ 1.55 g/t from 88m and
3m @ 4.63 g/t from 106m
WMC 1996
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Down Hole Intercept
EGRC002
6,595,683 mN 391,868 mE
60/050
2m @ 2.21 g/t from 100m
Anglo 2002
HGRC032
6,595,746 mN 391,816 mE
60/055
1m @ 1.01 g/t from 96m and
4m @ 18.8 g/t from 103m
Hemisphere 2008
HGRC034
6,595,788 mN 391,842 mE
60/055
3m @ 0.93 g/t from 42m
Hemisphere 2008
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Figure 6: Axial Planar Fault Zone Plan View of Drilling
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Figure 7: Axial Planar Fault Zone Cross Section
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6.3.5.2 Super gene Zone
Drilling by AngloGold, WMC and Hemisphere shows a relatively flat-lying zone of supergene gold mineralisation occurring beneath
lake sediments of Lake Yindarlgooda. This Supergene Zone is located approximately 120 m southeast of the Axial Planar Fault
mineralised zone. Later drilling by Hemisphere intersected deeper primary mineralisation in this area. Although the deeper
mineralisation is not supergene in nature, the name Supergene has been retained for consistency with previous reports.
The Supergene Zone has been intersected over an area of approximately 50 by 130 m (Figures 8 and 9). Significant intercepts from
this area are listed in Table 4.
Table 4: Supergene Zone Significant Intersections
Hole
Location (GDA 94)
Orient. (Dip/Az)
Down Hole Intercept
Phase
EGRC003
6,595,652 mN 391,827 mE
60/060
4m @ 2.04 g/t from 14m
Anglo 2002
EGRC004
6,595,623 mN 391,786 mE
59/050
20m @ 4.53 g/t from 12m incl
8m @ 10.4 g/t from 18m incl
6m @ 13.4 g/t from 18m
Anglo 2002
GDJD329
6,595,577 mN 391,777 mE
59/088
6m @ 1.17 g/t from 7m
WMC 1996
GDJC290
6,595,577 mN 391,816 mE
Vertical
6m @ 1.04 g/t from 10m
WMC 1996
GDJC357
6,595,536 mN 391,776 mE Vertical
4m @ 1.06 g/t from 6m and
6m @ 0.76 g/t from 16m
WMC 1996
GDJC363
6,595,618 mN 391,817 mE
Vertical
4m @ 1.06 g/t from 20m
WMC 1996
GDJC289
6,595,575 mN 391,776 mE
Vertical
8m @ 0.72g/t from 8m
WMC 1996
GDJC364
6,595,618 mN 391,777 mE
Vertical
12m @ 0.53 g/t from 18m and
6m @ 2.83 g/t from 32m
WMC 1996
HGRC014
6,595,637 mN 391,777 mE
Vertical
9m @ 8.37g/t from 17m
Hemisphere 2007
HGRC017
6,595,623 mN 391,787 mE
60/060
1m @ 1.73 g/t from 11m,
9m @ 3.43 g./t from 15 m and
8m @ 1.6 g/t from 30m
Hemisphere 2007
HGRC105
6,595,667 mN 391,786 mE
Vertical
2m @ 1.17 g/t from 19m
Hemisphere 2008
HGRC106
6,595,656 mN 391,773 mE
Vertical
3m @ 2.42 g/t from 9m
Hemisphere 2008
HGRC107
6,595,649 mN 391,763 mE
Vertical
2m @ 43.4 g/t from 38m
Hemisphere 2008
HGRC117
6,595,592 mN 391,770 mE
60/050
5m @ 4.99 g/t from 36m,
1m @ 1.28 g/t from 55m and
5m @ 2.54 g/t from 65m
Hemisphere 2008
HGRC118
6,595,598 mN 391,756 mE
60/050
4m @ 0.82 g/t from 1m and
4m @ 1.25 g/t from 38m
Hemisphere 2008
HGRC120
6,595,630 mN 391,739 mE
60/050
1m @ 1.22 g/t from 16m
Hemisphere 2008
HGRC121
6,595,645 mN 391,733 mE
60/050
1m @ 1.43 g/t from 20m
Hemisphere 2008
HGRC130
6,595,649 mN 391,763 mE
Vertical
12m @ 0.51 g/t from 15m incl
3m @ 1.26 g/t from 15m
Hemisphere 2008
HGRC124
6,595,572 mN 391,781 mE
60/050
2m @ 6.07g/t from 72m
Hemisphere 2009
HGRC125
6,595,569 mN 391,793 mE
60/050
1m @ 1.19 g/t from 19m and
2m @ 2.38 g/t from 25m
Hemisphere 2009
HGRC131
6,595,579 mN 391,778 mE
60/050
15m @ 0.81 g/t from 5m incl
7m @ 1.07g/t from 9m
Hemisphere 2009
ARUMA RESOURCES LI MITED
39
Figure 8: Supergene Zone Mineralised Intercepts
40
ARUMA RESOURCES LI MITED
Figure 9: Supergene Zone Cross Section B-B’
ARUMA RESOURCES LI MITED
41
6.3.5.3 Easter n Lode Zone
The Eastern Lode Zone is an apparently relatively continuous zone of moderately east-dipping shear hosted mineralisation within the
melano-diorite phase of the Glandore Sill. Mineralisation related to the Eastern Lode Zone has been identified on the eastern limb of
the anticline to date.
Significant drill intercepts in the Eastern Lode area are listed in Table 5.
RC and diamond holes drilled by WMC and Anglo show intersections in the Eastern Lode Zone ranging from 1 to 13 m down hole at
gold grades of between 0.8 to 6.6 g/t. Many of the holes intersecting the Eastern Lode Zone were drilled obliquely to the east and
down the dip of the structure. The continuity of subsidiary mineralisation intersected in this area is yet to be established.
The northern part of the Eastern Lode Zone has been broadly defined over a strike length of approximately 400 m drilled on 100
to 150 m spaced sections. The northern extent of this zone is interpreted to be truncated by a granite intrusion and the southern
extent is yet to be closed off. Broad spaced drilling along the southern extension suggests that Eastern Lode Zone mineralisation may
continue for a further 800 m south of the better understood northern portion giving an overall strike length of around 1.2 km.
Drill intercepts which appear to be associated with the Eastern Lode Zone include WMC aircore holes GDJC378 and GDJC386 drilled
on Lake Yindarlgooda which are both mineralised at the hole with intercepts of 3 m @ 3.20 g/t, and 1 m @ 1.83 g/t respectively.
Hemisphere’s intercepts of 4 m @ 1.41 g/t and 1 m @ 2.20 g/t in HGRC141 and HGRC143 respectively may suggest a previously
unidentified zone of hanging wall mineralisation.
Table 5: Eastern Lode Zone Significant Intersections
42
Hole
Location (GDA 94)
Orient. (Dip/Az)
Down Hole Intercept
Phase
EGRC005
6,595,594 mN 391,993 mE 60/060
10m @ 3.05 g/t from 150m incl
3m @ 6.5 g/t from 155m
Anglo 2002 EGRC006 6,595,564 mN 391,952 mE
59/050
2m @ 3.08 g/t from 118m
Anglo 2002 EGRC014
6,595,345 mN 392,169 mE
60/060
12m @ 1.2 g/t from 166m
Anglo 2002
EGRC015 6,595,304 mN 392,115 mE
59/050
1m @ 1.82 g/t from 72m and
10m @ 1.33 g/t from 82m
Anglo 2002 EGRC021
6,595,498 mN 391,123 mE
60/060
13m @ 2.12 g/t from 118m
Anglo 2002
EGRC024
6,595,364 mN 392,195 mE
60/060
10m @ 2.2 g/t from 198m
Anglo 2002
EGRC026
6,595,551 mN 392,195 mE
61/230
2m @ 1.70 g/t from 96m and
8m @ 1.85 g/t from 106m
Anglo 2002 EGRC027
6,595,362 mN 392,198 mE
60/230
7m @ 1.19 g/t from 95m
Anglo 2002
EGRC030
6,595,257 mN 392,288 mE
60/270
2m @ 6.62 g/t from 142m
6m @ 1.05 g/t from 149m
Anglo 2002
EGRC032
6,595,158 mN 392,337 mE
60/270
2m @ 1.32 g/t from 186m
Anglo 2002
EGRC034
6,594,061 mN 392,338 mE
60/270
3m @ 1.23 g/t from 175m
Anglo 2002
GDJC38
6,595,257 mN 392,137 mE
60/270
6m @ 2.08 g/t from 27m
WMC 1996 GDJC40
6,595,156 mN 391,096 mE
60/270
6m @ 1.33 g/t from 34m
WMC 1996
GDJC378
6,594,457 mN 392,137 mE
Vertical
8m @ 0.76 g/t from 2m
2m @ 3.20 g/t from 30m (to EOH)
WMC 1996
GDJC386
6,594,382 mN 392,256 mE
Vertical
1m @ 1.83 g/t from 24m (to EOH)
WMC 1996
GDJD104
6,595,556 mN 392,136 mE
60/270
11m @ 1.77 g/t from 72m,
2m @ 2.35 g/t from 115m and
3m @ 1.72 g/t from 128m
Anglo 2002
GDJD107
6595,356 mN 392,255 mE
60/270
5m @ 2.21 g/t from 126m
Anglo 2002
GDJD334
6595,555 mN 392,176 mE
61/270
4m @ 1.29 g/t from 50m,
2.2m @ 1.53 g/t from 102m and
2.2m @ 1.53 g/t from 102m
Anglo 2002
HGRC141
6,595,517 mN 392,108 mE
60/050
1m @ 1.77 g/t from 19m and
4m @ 1.41 g/t from 50m (to EOH)
Hemisphere 2009
HGRC143
6,595,586 mN 392,028 mE
60/050
2m @ 1.79 g/t from 65m and
1m @ 2.2 g/t from 69m
Hemisphere 2009
ARUMA RESOURCES LI MITED
6.3.5.4 Central Fault Zone
The Central Fault Zone is marked by anomalous soil sample results, coincident with a strong TFMMR conductor. A small number of
wide spaced RAB, aircore and RC holes drilled by WMC and Anglo showed near-surface gold mineralisation of potentially economic
significance including drill hole intercepts such as 9 m at 4.22 g/t in drill hole GDJC10. Drilling by Hemisphere in 2007 outlined
further intersections (Table 6).
H&S believe additional drilling would be required to define the orientation, style and tenor of Central Fault Zone mineralisation.
Table 6: Central Fault Zone Significant Intersections
Hole
Location (GDA 94)
GDJC8
6,592,117 mN 392,322 mE GDJC10
Orient. (Dip/Az)
Down Hole Intercept
Phase
60/270
1m @ 1.06 g/t from 10 m and
3m @ 1.64 g/t from 16 m
WMC 1996
6,592,157 mN 392,317 mE
60/270
9m @ 4.22 g/t from 13 m
WMC 1996
HGRC18
6,592,160 mN 392,337 mE
60/270
7m @ 2.48 g/t from 23m
Hemisphere 2007
HGRC19
6,592,136 mN 392,338 mE
60/270
7m @ 1.49 g/t from 24m incl
1m @ 3.85 g/t from 26m
Hemisphere 2007
HGRC20
6,592,136 mN 392,325 mE
60/270
1m @ 1.88 g/t from 13m and
4m @ 1.48 g/t from 18m
Hemisphere 2007
HGRC21
6,592,137 mN 392,307 mE
60/270
2m @ 1.05 g/t from 14m
Hemisphere 2007
HGRC22
6,592,119 mN 392,339 mE
60/270
7m @ 1.43 g/t from 24m
Hemisphere 2007
HGRC24
6,592,178 mN 392,340 mE
Vertical
1m @ 2.3 g/t from 21m and
2m @ 3.99 g/t from 34m
Hemisphere 2007
ARUMA RESOURCES LI MITED
43
6.3.6 Prospect ive Explorat ion Tar gets
On the western limb of the anticline, historic RAB and more recent RC drilling, have shown intercepts of economically significant gold
grades associated with northwest-trending faults which have been interpreted as being similar to those recorded for the Axial Planar
Fault Zone.
As listed in Table 7, these intercepts include 5m @ 35.8g/t Au in RAB hole GP61B along strike from the historic Lake Consols shaft,
and intercepts of 1 m @ 7.6 g/t and 1 m @ 6.3 g/t in Hemisphere drill holes HGRC048 and HGRC051 respectively.
Table 7: Prospective Exploration Target Significant Intersections
Hole
Location (GDA 94)
GP61B
6,593,141 mN 390,937 mE
GDJC17
EGRB108
Orient. (Dip/Az)
Down Hole Intercept
Phase
59/240
2m @ 2.32 g/t from 17 m and
5m @ 35.8 g/t from 24 m
Melbourne 1987, RC
6,593,357 mN 390,737 mE
60/270
5m @ 1.58 g/t from 23 m
WMC 1996 RC
6,593,355 mN 391,057 mE
60/090
2m @ 2.22 g/t from 13 m
Anglo 2002, RAB
EGRB109
6,593,357 mN 391,017 mE
60/090
1m @ 2.35 g/t from 30 m
Anglo 2002, RAB
EGRB138
6,594,857 mN 390,917 mE
60/090
2m @ 4.72 g/t from 3 m
Anglo 2002, RAB
HGRC048
6,593,055 mN 390,937 mE
60/270
1m @ 7.57 g/t from 32m
Hemisphere 2008
HGRC051
6,593,026 mN 390,955 mE
60/270
1m @ 6.26 g/t from 26m
Hemisphere 2008
HGRC052
6,593,086 mN 390,917 mE
60/270
1m @ 2.31 g/t from 28m
Hemisphere 2008
6.3.7 Proposed Explorat ion
Whilst it is evident that previous tenement holders for the Glandore project were exploring for large-scale gold mineralisation, Aruma’s
focus will be on evaluating smaller discrete high-grade targets. Subject to successful listing on the Australian Securities Exchange,
Aruma proposes to explore the Glandore project including drilling targeted at previously identified advanced exploration areas.
Aruma’s modelling of the Glandore geology shows favourable lithological units intersecting numerous northwest and north trending
faults. Exploration targets identified by this work include a series of relatively steep west-dipping mineralised structures intersected by
a series of relatively flat easterly dipping mineralised structures with higher gold grades interpreted at the intersection of these flatter
and steeper structures. At the detailed level, the targets are interpreted as being a series of regular en echelon plate or pipe-like
lodes with extensive strike extension and open at depth.
The Glandore exploration budget as summarised in Table 8 is drilling intensive, reflecting the advanced nature of the key targets.
The proposed exploration programme will commence with a drilling program initially targeting previously identified higher-grade
exploration targets with the aim of defining Mineral Resources. Principal focus will be the Axial Planar Fault, Supergene and East Lode
Zones. Over the first two years it is proposed to conduct up to 14,000 m of RC and 2,000 m of diamond drilling.
The proposed drilling will be accompanied by systematic geological interpretation with detailed assessment of higher-grade
intercepts and geochemical anomalies, including those identified by WMC over the central dolerite, and higher-grade intercepts
to develop a comprehensive model of the local structural framework and to improve understanding of the controls over gold
mineralisation in these settings.
44
ARUMA RESOURCES LI MITED
Table 8: Glandore Exploration Budget
Year 1
Year 2
Total
Geochemistry/Geophysics
RAB drilling
RC drilling
Diamond drilling
Field support
Geology
Heritage and environment
Technical services
$30,000
$100,000
$360,000
$150,000
$50,000
$100,000
$100,000
$40,000
$30,000
$100,000
$360,000
$150,000
$50,000
$200,000
$100,000
$40,000
$60,000
$200,000
$720,000
$300,000
$100,000
$300,000
$200,000
$80,000
Total
$930,000
$1,030,000
$1,960,000
The above table represents expenditure based on the minimum case of $5,000,000 raised under the Prospectus. To the extent that
oversubscriptions are received (that is, an amount more than $5,000,000) the net funds will be applied as follows:
(a) RC drilling will increase by $390,000 in the second year (to $750,000); then
(b) diamond drilling will increase by $120,000 in the second year (to $270,000); then
(c) geology will increase by $100,000 in the second year (to $300,000).
Total increased expenditure in the second year will be $610,000 assuming at least this net sum is raised.
The substantial amount of exploration by previous tenement holders has provided Aruma with a strong basis for planning future work.
Previously identified gold mineralisation, which includes several advanced exploration targets, will allow Aruma to focus its drilling
programmes on prospective areas and provide a greater chance of short-term success.
Aruma’s proposed programme and budget is consistent with the objective of exploring for targets of discrete high-grade
mineralisation, and is appropriately focused on targeting previously identified advanced exploration projects. The proposed budget
significantly exceeds the tenement group’s minimum statutory expenditure requirements.
ARUMA RESOURCES LI MITED
45
Figure courtesy Aruma: Geology derived from GSWA 1:500,000 Mapping
Figure 10: Kurnalpi South Project Tenements and Regional Geology
46
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6.4
Kur nal pi South Project
6.4.1 Introduct ion
The Kurnalpi South Project lies approximately 100 km to the east of Kalgoorlie-Boulder and comprises three separate exploration
licenses within a region approximately 30 km east-west by 65 km north-south with a combined area of 27,608 ha.
The prospects within these three tenements are designated as Pinnacles South which lies within E28/1849, Mt Quin which lies within
E28/1855 and Steeple Hill within E28/1833. Status of these tenements is summarised in Table 1.
The project areas can be accessed from Kalgoorlie-Boulder via the all-weather gravel Kurnalpi road. Local roads and old exploration
tracks provide reasonable access within the project areas. Topography of the region is generally gently undulating, with the deeply
weathered bedrock overlain by colluvial sands and gravels. The Lake Yindarlgooda-Lake Roe system transects the area.
No previous mining has been conducted on the tenements comprising the Kurnalpi South project. The projects have been variously
and sporadically explored from the early 1970s to the mid 1980s for nickel and base metals and subsequently for gold from the
early 1990s to 2007. None of Kurnalpi South has had extensive previous exploration, with previous work generally limited to surface
sampling and limited RAB drilling.
Aruma intends to explore the Kurnalpi South Project for gold in favourable structural and lithological settings.
The following summary of exploration activities excludes some minor early programmes, such as reconnaissance rock chip sampling,
which have been superseded by more comprehensive newer work, and several small phases of nickel exploration of limited relevance
to gold mineralisation.
6.4.2 Re g ional Geolog ical Sett i ng
The Kurnalpi South Project lies off the eastern margin of the Norseman-Wiluna Greenstone Belt in the Laverton-Karonie Greenstone
belt of the Eastern Goldfields Province of the Achaean Yilgarn Craton. Bedrock lithologies of the area (Figure 10) are interpreted from
public domain mapping.
The following description of regional geological setting of the Kurnalpi South area is summarised from Swager (1994, 1995). The use
of the term “Terrane” is required as Swager is differentiating between differing rock suites from the ultramafic-rich west to the maficsediment dominant eastern areas.
The Kurnalpi South project lies within the Mulgabbie Terrane of the Laverton-Karonie greenstone belt which lies to the west of
the Jubilee and Kurnalpi Terranes. The westernmost Jubilee Terrane is bounded to the west by the Railway Fault, to the east by
the Avoca Fault (Emu Shear Zone) and consists of mafic and ultramafic volcanics. East of the Avoca Fault is the Kurnalpi Terrane,
which is bounded by the Cowarna Fault (Keith Kilkenny Lineament) to the east and consists of metasedimentary rocks comprising
banded iron formation and greywackes overlying mafic-felsic volcanic rocks. The Cowarna Fault separates the Kurnalpi Terrane from
the easternmost Mulgabbie Terrane which comprises a sequence of mafic-felsic volcanic rocks that transition laterally to maficmetasedimentary lithologies.
Metamorphic grade of the terranes ranges from lower greenschist facies to upper amphibolite facies with increasing metamorphic
grade from west to east.
Each of the terranes has been intruded by granitic units, the most substantial of which is the Yindi Monzogranite within the Mulgabbie
Terrane.
The Cowarna Fault is intruded by a granitoid, which post dates regional folding. Proterozoic east-west dykes designated as the
Celebration and Randall’s dykes crosscut the Achaean basement within the project area.
The Mulgabbie Terrane hosts the Roe Shear, a 1 to 5 km wide deformation zone containing sheared mafic to felsic volcaniclastic rocks
with minor interlayered slate, as well as massive felsic volcanic and volcaniclastic rocks and basalt. Some thin ultramafic units are
located in the northern and southern parts of the Mulgabbie terrane.
ARUMA RESOURCES LI MITED
47
6.4.3 Re g ional Gold Mi ne ralisat ion
Gold prospectivity of the Kurnalpi district is demonstrated by the number of known gold deposits and mines in the region. The
Kurnalpi South Project area lies on the Laverton-Karonie greenstone belt which extends from the Karonie-Roe Hills goldfield located
some 20km to the south of the project and north through the Pinjin-Edjudina goldfields to the Wallaby-Sunrise Dam and Laverton
gold centres approximately 300 km to the north.
Two main historic gold-mining centres, Kurnalpi and Jubilee, occur north of the Kurnalpi South Project. Kurnalpi, which is located
approximately 25 km north of the project, contains numerous small workings of alluvial gold and narrow gold-bearing quartz veins
associated with shears in basalt. The Jubilee mining centre is situated approximately 15 km north of the project. At the Jubilee
mining centre, gold workings are associated with the contact between sedimentary rocks and schistose ultramafics (Swager, 1995).
The Karonie Mining Centre lies about 20km to the south of the project area. Historical production to 1986 from the mine was 418
ounces of gold from 1500 tonnes of ore (Kelly, 1954).
Integra Mining Limited (Integra) is exploring the same greenstone belt immediately south of Aruma’s tenements as part of their Aldis
Project and have reported a combined Mineral Resource estimate for several deposits in the project of 7 million tonnes at 2.2 g/t gold
for 500,000 contained ounces (Cairns, 2008).
6.4.4 Pi nnacles South Prospect
6.4.4.1 Introduct ion
The Pinnacles South Prospect, with an area of 3845 ha is covered by granted exploration license E28/1849 and lies approximately
100 km east northeast of Kalgoorlie-Boulder. Although no mining has been undertaken within the project area, the historic Mulgabbie
mine area with recorded production of 10,470 oz of gold from treatment of 1,481 tonnes of ore (Morris, 1994), lies approximately 15
km to the north.
The prospect is located within a favourable structural setting and a major flexure within host greenstone sequences adjacent to a
crustal scale lineament, and is considered prospective for gold mineralisation.
6.4.4.2 Reg ional Geolog ical Sett i ng
The Pinnacles South Prospect is located on the western margin of the Laverton-Karonie greenstone belt in the eastern part of the
Norseman-Wiluna belt in the Eastern Goldfields Province of the Achaean Yilgarn Craton.
The project area covers a significant flexure of the regional greenstone stratigraphy (Figure 11) and straddles a major northnortheast trending regional scale shear zone that is subsidiary to, and parallel with, the Keith-Kilkenny Lineament. The Keith-Kilkenny
Lineament is a feature which is spatially related to several significant gold mining centres in the northern part of the NorsemanWiluna greenstone belt such as Sons of Gwalia, Tarmoola, Thunder Box and Wiluna (Binns et al. 1976).
6.4.4.3 Geolog ical Sett i ng and Mi neralisat ion
Geology of the Pinnacles South area is described by Zhang (2006, 2007) and shown in Figure 12 includes a south-western granitic
batholith and greenstone units in the northwest. The greenstone units comprise a basal mafic sequence of basalts and dolerites with
an upper volcaniclastic sedimentary sequence separated by a schistose felsic volcanic unit representing a major regional shear zone
that is part of the Keith-Kilkenny Lineament.
The relatively limited exploration to date has shown some surface anomalism but has not tested bedrock mineralisation. The
presence of favourable lithologies typical of many lode-style gold deposits in the Laverton Karonie Greenstone Belt, and proximity to
major regional linear structures Zhang (2006, 2007) suggest that the area may be prospective for gold mineralisation.
48
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Figure courtesy Aruma: Geology derived from GSWA 1:500,000 Mapping
Figure 11: Pinnacles South Regional Geology
ARUMA RESOURCES LI MITED
49
Figure courtesy Aruma: Geology derived from GSWA 1:500,000 Mapping
Figure 12: Pinnacles South Prospect Geology
50
ARUMA RESOURCES LI MITED
6.4.4.4 Previous Explorat ion
A number of companies have conducted previous exploration in the general area of the Pinnacles South Prospect. The results of
previous exploration are summarised as follows:
Troy Resources NL (1993-1996)
Troy’s exploration activities as described by Stadler (1994), Ringrose (1995) and Dixon (1998) included reconnaissance geological
mapping, rock chip sampling, soil sampling and a 100 by 400 m spaced auger sampling programme which covered the northern
part of the project area. The auger sampling gave a 150 m east-west by 650 m north-south zone of anomalous gold values to the
northwest of the project area.
Newcrest Operations Ltd (1996-1998)
As part of a joint venture with Troy Resources, Newcrest explored the Pinnacles South region and completed several programmes
of surface sampling and vertical RAB drilling (Marshall, 1997; Wright and Marshall, 1997; Wright, 1998). Approximately 52 of
Newcrest’s RAB holes fall within Aruma’s project area with depths ranging from 6 to 89 m and averaging approximately 45 m.
Although they did not intersect significant gold grades, very few of Newcrest’s RAB holes in the project area intersect fresh rock.
Yilgarn Mining Pty Ltd (2006-07)
Yilgarn Mining compiled work by previous explorers and undertook reconnaissance field investigations leading to a proposed 30
hole RAB programme testing the previously defined soil anomalies. Due to revised corporate priorities, this work was not undertaken
(Zhang, 2006, 2007).
6.4.4.5 Explorat ion Tar gets
The Pinnacles South prospect area is considered to be prospective for gold mineralisation as it is located within a favourable
structural setting, a major flexure within host greenstone sequences adjacent to a crustal scale lineament. Previous exploration has
identified a soil geochemical anomaly within this flexure zone that appears to have been inadequately tested by previous exploration
(dashed oval on Figure 12).
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Figure 13: Pinnacles South Prospect Previous Exploration
52
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6.4.5 Mt. Qui n Prospect
6.4.5.1 Introduct ion
The Mt Quin Prospect which is approximately 100 km east of Kalgoorlie-Boulder is covered by granted exploration license F28/1855
with an area of 19,741 ha.
6.4.5.2 Geolog ical Sett i ng and Mi neralisat ion
The Mt Quin Prospect lies in the west side of the north-south trending Karonie-Edjudina sequence of ultramafic rocks, mafic and
felsic volcanics and sediments. The tenements lie on the north-east side of a late stage granitic batholith and straddle a cross cutting
Proterozoic east-west dyke. A large NNE regional shear zone also passes through the western area of the lease (Figure 14).
Although no mineralisation has been identified at Mt Quin, the area has had very little exploration to date. The favourable location
including lithologies typical of many lode-style gold deposits in the Laverton Karonie Greenstone Belt, and proximity to major regional
linear structures suggest that the area may be prospective for gold mineralisation.
6.4.5.3 Previous Explorat ion
The area containing the prospect was initially
explored for nickel in the early 1970s and
then for base metals from the mid 1970s to
the mid 1980s. More recent exploration has
focused on gold.
Golden State Resources NL (1994-1995)
Golden State’s exploration activities in the
Mt Quin area included vacuum drilling for
geochemical sampling of a target identified
from aeromagnetic interpretation which
lies to around the south margin of Aruma’s
project. The drilling programme was
terminated due to difficult drilling conditions
(O’Hara and Berven, 1995).
Normandy Exploration Ltd (1994-1996)
Exploration of Normandy’s Lorraine’s Reward
project which overlapped with the southwest
corner of E28/1855 is described by Perger
(1996). Soil sampling on a 500 m by 500
m grid returned anomalous gold grades of
up to 8 ppb over 2 km of strike. A follow up
programme of 25 angled RAB holes drilled
to an average depth of 45 m intersected
granite in all holes and returned a maximum
gold grade of 5 ppb.
Figure courtesy Aruma: Geology derived from GSWA 1:500,000 Mapping
Figure 14: Mt. Quin Prospect Geology
ARUMA RESOURCES LI MITED
53
Mt Monger Gold Project Pty Ltd (1996-1999)
Mt Monger Gold’s exploration of their Cowarna Rocks Project which overlapped with the southern half of Aruma’s project area is
described by Jerinic (1997), Pottenger (1998) and Harris (1999). Exploration activities included interpretation of satellite imagery and
aeromagnetic data, geological mapping and extensive soil sampling which covered the south-western portion of E28/1855, but did
not show anomalous results in Aruma’s area.
South Kal Mines Pty Ltd (2000-2002)
South Kal Mines Roe Project covered a small portion of the central area of E28/1855 to the west of the excised portion of the
tenement. Auger sampling on an 80 by 320 m pattern returned a maximum gold grade of 12 ppb.
6.4.5.4 Explorat ion Tar gets
Most of the Mt Quin tenement area has had very little exploration and represents an early stage exploration project. Aruma proposes
to undertake grass roots exploration focused on coincident zones of shearing and elevated magnetics along the flexured western
granite contact.
Figure courtesy Aruma: Geology derived from GSWA 1:500,000 Mapping
Figure 15: Steeple Hill Prospect Geology
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ARUMA RESOURCES LI MITED
6.4.6 Stee ple Hi ll Prospect
6.4.6.1 Introduct ion
The Steeple Hill Prospect is situated 75 km southeast of Kalgoorlie is covered by granted exploration license E28/1833 with an area
of 4,022 ha.
6.4.6.2 Geolog ical Sett i ng and Mi neralisat ion
The Steeple Hill Prospect lies in the east side of the north-northwest trending Karonie-Gindalbi sequence of mafic and felsic volcanics
and sediments. The prospect lies on a felsic volcanic-mafic contact to the south-west of a late stage granitic batholith. The tenement
also straddles a major north-northwest trending regional shear zone and is interpreted to have geological and geophysical similarities
with the overall setting of the Kanowna Belle-Red Hill area (Figure 15).
The regolith is dominated by sandy sheet-wash plains with shallow lateritic cover on the mafics in the west. Incised creek systems
within the sheet-wash plains commonly expose saprock within one metre of the surface.
Outcropping rocks within the hanging wall of the west-dipping Emu (Avoca) Fault Zone comprise intercalated mafic, felsic and
metasedimentary units with minor ultramafic, chert, black shale, quartz-feldspar porphyry and medium- to coarse-grained mafic
units.
There is no known mineralisation in the lease area. At the Kurnalpi Mining centre some 15 km to the north gold mineralisation is
associated with quartz veins in narrow shears within basalts and at lithological contacts (Swager, 1995).
Aruma consider that the most prospective regions of the Steeple Hill project include the contact between mafic and felsic volcanics
and the internal mafic dykes, in areas of the EW and NE magnetic zones and the NNW shear zones.
6.4.6.3 Previous Explorat ion
Several companies have sporadically explored the Steeple Hill area for gold since 1990. Nickel and base metal exploration of the
general Steeple Hill area during the 1980s did not include any significant work within the tenement area and is not reported here.
CRA Exploration Pty Ltd (1990-1993)
Although primarily focused on base metals, CRA’s exploration of their Big Dam project which encompassed most of the eastern
segment of E28/1833 included routine analysing for gold and is described by Davies and Cotton (1994).
Auger sampling over an interpreted EM conductor covered the majority of the tenement area at 50 by 400 m spacing and returned a
maximum gold grade of 32 ppb which was considered insignificant by CRA. No elevated gold grades were reported for a single 196
m deep diamond hole drilled around the eastern margin of E28/1833.
Mt Kersey Mining NL (1994-2001)
Mt Kersey’s exploration of their Big Dam Project area which encompassed most of the western segment of E28/1833 is described
by Lewis (1996), Howland (1998), Carnes, (1998) and Horvath (1999). Mt Kersey interpreted aeromagnetic data to suggest that the
tenement was intersected by a regional shear zone associated with mineralisation at Kurnalpi. Their field work included limited rock
chip sampling and a small area of soil sampling, neither of which returned significant gold grades.
Mt Monger Gold Project Pty Ltd
(1996-1999)
Mt Monger Gold’s exploration of their Cowarna Rocks Project which overlapped with the southeast corner of the eastern segment
of E28/1833 is described by Jerinic (1997) and Pottenger (1998). Field work within the area of Aruma’s tenement was limited to
reconnaissance mapping and a single rock chip sample.
North Ltd (1998-1999)
North’s Cowarna Rocks project overlapped with the western half of the eastern segment of E28/1833. Field work within the area
covered by Aruma’s tenement as described by Ion et al. (1999) included auger sampling which returned two zones of anomalous gold
grades of 10 to 30 ppb.
ARUMA RESOURCES LI MITED
55
Croesus Mining (1999-2000)
Croesus followed up the soil anomalies identified by North (Siggs, 2000a, 2000b) with 16 vertical RAB holes which ranged in depth
from 7 to 77 m and averaged
40 m deep. This drilling returned a single anomalous gold grade of 5m @ 0.16 g/t from 30 m in hole CORB146 around the northern
margin of Aruma’s tenement.
Teck-Cominco Australia Pty Ltd (2005-2006)
Although Teck’s Kalgoorlie East Project included two tenements which overlapped large portions of E28/1833, Teck’s field work as
described by Griggs (2005) and Tillick (2006a, 2006b, 2007) covered only relatively small areas of Aruma’s tenement.
Soil and follow up auger sampling showed an 18 to 21 ppb anomaly extending over two 500 m spaced soil sampling lines in the
southern central portion of Aruma’s tenement. Subsequent RAB drilling totalling 51 drill holes on a 100 by 200 m pattern returned a
single anomalous gold intersection of 1 m @ 0.3 g/t from 39-40 m in hole KERB69.
6.4.7 Proposed Explorat ion Progra mme
Subject to successful listing on the Australian Securities Exchange, Aruma proposes to explore the Kurnalpi South Project by
reconnaissance methods followed by drilling where appropriate of suitable targets identified during the reconnaissance and through a
search of previous exploration results. Conceptual targets identified may also be drilled at this time.
This work will be accompanied by systematic geological interpretation to develop a model of the local structural framework.
The summary of the Kurnalpi South Project exploration budget is presented in Table 9 and will not change in the event of
oversubscription under the Prospectus.
Table 9: Kurnalpi South Exploration Budget
Year 1
Year 2
Total
Geochemistry/Geophysics
RAB drilling
RC drilling
Diamond drilling
Field support
Geology
Heritage and environment
Technical services
$20,000
$60,000
$60,000
$80,000
$40,000
$40,000
$20,000
$100,000
$60,000
$80,000
$40,000
$40,000
$40,000
$160,000
$120,000
$160,000
$80,000
$80,000
Total
$300,000
$340,000
$640,000
Aruma’s proposed exploration programme and budget are consistent with the conceptual exploration targets and significantly exceed
the tenements’ minimum statutory expenditure requirements.
H&S believe that the proposed budget is sufficient to effectively test previously identified targets for gold mineralisation.
56
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6.5
Laver ton East Project
6.5.1 Introduct ion
The Laverton East Project comprises five granted prospecting licences covering an area of 9.2 km2 in the north-eastern Goldfields
region of Western Australia and is approximately 20km east of Laverton (Figure 16). Status of the Laverton East tenements is shown
in Table 1.
Access from Laverton to the project area is via the Cosmo Newberry all-weather gravel road and established station tracks.
Topography of the area is generally gently undulating with little outcrop. Vegetation is generally sparse and dominated by low
mulga scrub.
The outcrop is weathered bedrock overlain by colluvial sands and gravels. Bedrock lithologies of the general project area have been
interpreted as a north-northwest trending sequence of ultramafic and mafic rocks with minor sedimentary units and late stage granitic
intrusions. No previous mining has been reported for the tenements.
6.5.2 Re g ional Geolog ical Sett i ng and Gold Mi ne ralisat ion
The Laverton East Project lies on the eastern margin of the Laverton-Karonie Greenstone Belt and is located to the east of the Duketon
Shear in the Laverton Tectonic Zone.
Figure 16: Laverton East Project regional geology and mineralisation
ARUMA RESOURCES LI MITED
57
Regional geology of the project area (Goleby et al., 2005) is dominated by north-northwest trending mafic volcanics interspersed with
narrow bands of ultramafics and volcanogenic sediments. There are numerous intrusives in the general area including the Hanns
Camp Syenite Complex in the west side of the project. The Diorite Hill Layered Intrusive Complex on the eastern portion of the project.
East west trending dolerite dykes crosscut the sequence as a result of north-south extension during the Proterozoic.
Gold prospectivity of the Laverton district is demonstrated by the number of known gold deposits and mines in the region. Major gold
mines in the Laverton region include the Granny Smith, Sunrise Dam and Wallaby gold mines (Figure 16). With discovery dates of
1979 to 1997 (Gray, Linter and Butt, 2005, Gray and Britt, 2005, Coggon, 2003), these are relatively recent discoveries attesting to
the exploration potential of the Laverton region.
The area to the east of Laverton has generally a greater degree of recent cover than the Laverton area and has not been prospected
as thoroughly as the Laverton area.
A1 Minerals Limited Alpha and Beta projects, with mineral resources of 134,000 and 266,000 ounces respectively (A1 Minerals,
2008), lie within the Laverton Greenstone Belt approximately 20 to 30 km to the south of the Laverton East project. Aruma interpret
these projects to lie within the same structural corridor as the Laverton East project. A1 Minerals have reported additional recent
discoveries in this belt (Williams, 2009), which appear to have been made in a range of geological environments.
The Mikado gold deposit which lies approximately 25 km to the south-southeast of the Laverton East project was mined historically
as a high-grade underground, and more recently as a lower-grade open pit (Williams, 2005).
Figure courtesy Aruma: Geology derived from GSWA 1:500,000 Mapping
Figure 17: Laverton East Project Geology
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ARUMA RESOURCES LI MITED
6.5.3 Project geology
Geology of the Laverton East Project area has been described in detail by both Williams et al. (1976) and Hallberg (1985).
The Laverton East project area lies on the western boundary of a layered ultramafic – mafic complex comprising the northern extremity
of the Diorite Hill Layered Sill Complex (DHLSC) and a strike parallel peridotite unit stratigraphically one km below (to the west of)
the main DHLSC body. These units are generally deeply weathered with limited outcrop of bedrock units, with surface expressions
dominated by lateritic duricrust and transported alluvial silts.
Several granitic units mostly comprising medium-grained massive biotite bearing monzogranites have been mapped on the project
area. Numerous faults inferred from Landsat images cross cut the project stratigraphy.
Bedrock geology interpreted from government geological mapping is shown in Figure 17. Mapping by the Geological Survey of Western
Australia shows that a late stage granite contact is located two km to the west and that the project tenements cover a contact zone
between mafic rocks and a late-stage granitic stock. Moreover, late-stage granite intrusive is located 15 km to the south which is
considered important for gold mineralisation. The Mikado mine is hosted by this late-stage granitic intrusive. A further granitic contact
zone is located north of the Laverton East Project.
6.5.4 Previous Explorat ion
Modern exploration of the general Laverton East Project area commenced in the late 1960s. Initial exploration during the late 1960s
and early 1970s targeted base metals and platinum group elements and is not relevant to this report. More recent exploration activities
within the project area include regolith, auger and RAB sampling with limited rock chip sampling by Hemisphere during 2009.
CRA Exploration Ltd (1993-1996)
CRA explored the Laverton East area as part of a larger exploration project designated as the Granite Well project, which is described
by Lennox and Maniw, 1994, Healy, 1995, Humphries 1996a and Humphries 1996b.
Reconnaissance regolith sampling at 1 km by 1 km spacing over an aeromagnetic anomaly interpreted to represent an elongate slither
of ultramafic rocks returned anomalous gold values. Follow up auger samples gave anomalous gold grades in the northwest of the
current project area. CRA interpreted the discontinuity of the anomaly to reflect variability of the surficial sediments in this area.
RAB drilling undertaken by CRA in 1994 sampled areas in the northwest and southeast of the project area at 100 by 400 metre
spacing with traverses oriented towards the northeast. The drilling programme comprised 76 RAB holes which were drilled to depths
ranging from 8 to 53 m and averaging 28 m. Approximately three quarters of these holes fall within Aruma’s tenement package
including the five holes which returned anomalous gold assay grades (Table 10).
Table 10: Laverton East CRA RAB Drilling Results
Hole
GWR216
GWR217
GWR229
GWR232
GWR242
Approximate Location (GDA 94)
458,707 mE 6,838,028 mN
458,637 mE 6,837,959 mN
458,847 mE 6,837,619 mN
458,647 mE 6,837,409 mN
459,567 mE 6,837,769 mN
Down Hole Intercept
1m @ 0.10 g/t from 26m
4m @ 0.30 g/t from 4m
4m @ 0.41 g/t from 36m
1m @ 0.11 g/t from 30m
4m @ 0.13 g/t from 32m
Phase
CRA 1994
CRA 1994
CRA 1994
CRA 1994
CRA 1994
Aarex Resources NL (1997-1998)
Aarex Resources’ exploration of their Barnicoat project which overlaps with the Laverton East Project as described by Moeller, 1998
comprised a review of available sampling data, data compilation and geological reconnaissance. This review indicated that previously
defined anomalies had never been followed up. These included coincident Pt-Pd of 41 ppb and 26 ppb respectively and Cu and Zn
anomalies of 600 ppm and 450 ppm respectively.
Aarex did not undertake any substantial field work and relinquished the tenement.
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59
NiWest Ltd (2001-2002)
During 2001 and 2002, NiWest Ltd evaluated the potential of ultramafic units within the project area to host laterite nickel cobalt
mineralisation. NiWest’s field activities as described by Goertz, 2002 included drilling four aircore holes for a total of 109 m testing
targets interpreted from geological and aeromagnetic data in conjunction with historic data review and field assessment. This drilling
failed to locate any lateritic nickel-cobalt mineralisation and NiWest relinquished the option in 2002.
Hemisphere Resources (2009)
Hemisphere Resources undertook field reconnaissance of the project area which included collection of 84 rock chip samples of
material visually estimated to be mineralised. This included 20 samples where GPS locations were not recorded. Table 11 lists results
for samples for which GPS coordinates were recorded and anomalous gold grades are displayed in Figure 18.
Table 11: Laverton East Project - Chip Sampling Results
Sample
Easting
Northing
Au g/t
Sample
Easting
Northing
Au g/t
B1
B2
B3
B4
B5
B6
B7
B8
B9
B10
B11
B12
B13
B15
B16
B17
B18
B19
B20
C1
C2
C3
C4
C5
C6
C7
C8
C9
C10
C11
C12
460,067
460,109
460,003
459,854
459,734
459,634
459,419
459,289
459,096
458,936
458,827
458,713
458,626
460,051
459,907
459,423
460,086
460,219
460,442
459,889
459,688
459,574
459,474
459,362
459,254
458,985
458,765
458,659
459,795
459,523
458,708
458,708
6,837,969
6,837,822
6,837,769
6,837,744
6,837,747
6,837,771
6,837,743
6,837,721
6,837,751
6,837,753
6,837,737
6,837,740
6,837,731
6,836,455
6,836,507
6,836,558
6,837,216
6,837,297
6,837,158
6,838,409
6,838,408
6,838,402
6,838,414
6,838,407
6,838,404
6,838,406
6,838,411
6,838,405
6,839,030
6,839,029
6,839,026
6,839,026
<0.01
0.01
0.18
<0.01
0.24
<0.01
0.02
<0.01
<0.01
0.02
0.02
0.09
<0.01
0.10
0.14
0.41
0.06
0.09
0.49
0.15
0.16
0.15
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
C15
C16
C17
C18
C19
C20
D1
D2
D3
D4
D5
D6
D7
D8
D12
D13
D14
E1
E2
E3
E4
E5
E6
E7
E8
E9
E10
E11
E12
E13
E14
E15
458,654
458,925
459,197
459,469
459,740
459,293
460,401
460,397
460,398
460,399
460,416
460,406
460,404
460,402
460,407
460,372
460,371
461,762
461,874
461,874
461,875
461,871
461,877
461,875
461,876
462,003
462,255
462,257
462,261
462,252
461,868
461,670
6,839,149
6,839,150
6,839,151
6,839,152
6,839,153
6,837,995
6,838,109
6,837,801
6,837,494
6,837,186
6,836,872
6,836,570
6,836,407
6,836,263
6,836,392
6,836,946
6,837,457
6,836,366
6,836,175
6,836,268
6,835,960
6,835,643
6,835,344
6,835,037
6,834,729
6,834,877
6,835,192
6,835,493
6,835,703
6,836,059
6,836,378
6,836,230
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
<0.01
0.04
0.02
<0.01
<0.01
<0.01
<0.01
0.26
0.01
0.03
0.14
<0.01
0.02
<0.01
0.08
<0.01
0.04
0.02
<0.01
0.25
C13
60
ARUMA RESOURCES LI MITED
6.5.5 Proposed Explorat ion Progra mme
Aruma proposes to explore the Laverton East Project by targeting areas untested by previous companies. It is anticipated that remote
sensing including hyper spectral thermal mineral imaging (Hyvista) will be used to aid targeting of ground-based geochemical and
geophysical surveys. Identified targets will be followed by RAB drilling.
The Laverton East Project exploration budget is summarised in Table 12 and will not change in the event of oversubscription under
the Prospectus.
Table 12: Laverton East Exploration Budget
Year 1
Year 2
Total
Geophysical/Geochemistry
RAB drilling
RC drilling
Diamond drilling
Field support
Geology
Heritage and environment
Technical services
$12,000
$36,000
$15,000
$30,000
$40,000
$20,000
$20,000
$3,000
$42,000
$15,000
$30,000
$40,000
$20,000
$20,000
$15,000
$78,000
$30,000
$60,000
$80,000
$40,000
$40,000
Total
$173,000
$170,000
$343,000
Aruma’s proposed exploration programme and budget is consistent with conceptual exploration targets, and H&S believe the
proposed budget is sufficient to effectively test previously identified targets for gold mineralisation. The budget significantly exceeds
the tenement’s minimum statutory expenditure requirements.
Figure 18: Laverton East Project significant rock chip results
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61
Figure courtesy Aruma: Geology derived from GSWA 1:500,000 Mapping
Figure 19: Jundee South Project Geology and location
62
ARUMA RESOURCES LI MITED
6.6
Jundee South Project
6.6.1 Introduct ion
The Jundee South Project comprises one exploration license application (ELA53/1461) which covers 4,296 ha (Table 1)
approximately 50 km to the east of Wiluna. Access from Wiluna to the project is via the Jundee all-weather gravel road together with
local and exploration survey tracks (Figure 19). Topography of the project area is generally flat.
On a regional scale, the Jundee goldfield is part of a line of anomalies and prospects on an inferred zone trending southeast for 80
km. The nature of this trend is not well understood. Outcrop in the Jundee area is sparse, weathering is extensive, and much of the
area is covered by transported material.
As far as can be ascertained, no previous mining has been conducted on the tenement. The project has been sporadically explored
since 1987 by surface sampling, RAB and aircore drilling.
Aruma intends to explore the Jundee South project for gold in structural and lithologically favourable zones. This will be guided by a
regional study of the known controls over gold mineralisation with reference to previous work.
6.6.2 Geolog ical Sett i ng
Geological setting of the Jundee South Project is described by Howland (1999, 2000) and Peachy (2005). The Yandal greenstone
belt in the northeast part of the Yilgarn Block is up to 30 km wide, elongate north-northwest, with Achaean granitoids on the east and
west flanks. Some granitoids occur within the belt.
In the northern part of the Yandal belt around Jundee, the oldest components are inferred to be banded iron formation (BIF) and
ultramafic to mafic rocks. These form a recognisable, linear magnetic unit of 80 km strike length on the western margin of the belt,
and are juxtaposed against mylonitic granitic rocks to the west. East of this is a mafic sequence dominated by tholeiitic and highmagnesium basalt and dolerite, with minor sediments.
Overlying the mafic-rich package is an upper greenstone sequence dominated by felsic to intermediate volcanic rocks with minor
chert, basalt and shale. The upper greenstone sequence contains a few discrete horizons of felsic volcanic composition, but the
majority is more andesitic.
Jundee is close to the eastern contact of the upper greenstone sequence with the ultramafic to mafic sequence. With the exception
of some dykes, all components of the greenstone belt are regionally metamorphosed. The metamorphic grade in the Jundee South
area is lower greenschist facies.
Local geology of the Jundee South Project area as shown in Figure 19 is interpreted to comprise a sequence of northwest-trending
felsic sediments and mafics.
6.6.3 Re g ional Gold Mi ne ralisat ion
There are few old gold workings in the Yandal belt compared to many other Achaean greenstone belts of WA. This lack of success by
early prospectors, despite the proximity to major gold mining centres of Wiluna and Leonora, can be attributed to the thick blanket
of alluvial cover over much of the belt, obscuring the prospective greenstone rocks. Despite very limited exploration prior to 1990,
between 1990 and 1997 gold deposits totalling 12 million ounces were discovered in the Yandal belt (Phillips, Vearncombe and
Eshuys, 1998).
Gold prospectivity of the Jundee South area is demonstrated by the number of gold deposits and mines in the region such as Gourdis
to the southeast and the relatively recently discovered Jundee deposit to the northwest of the project area respectively. The Jundee
South Project lies directly between these two mines.
6.6.4 Previous Explorat ion
Since 1987 the Jundee South Project area has been subjected to several phases of exploration including geological mapping, stream
sediment, soil and lag sampling, geophysical surveys, and wide spaced RAB and minor aircore drilling.
BHP-Utah Minerals (1987-1988)
BHP’s exploration of their Jonch Bore project which encompassed the current project area is described by Wong, 1989.
Reconnaissance sampling was followed with rock chip, auger and BLEG soil sampling which sampled areas of transported cover at a
spacing of 100 by 400 m and returned a marginally anomalous zone of approximately 4 ppb gold.
ARUMA RESOURCES LI MITED
63
Figure 20: Jundee South Project historic Drilling and Target Geology
The BLEG anomaly and a target identified from regional aeromagnetic surveys were tested by 26 vertical RAB holes which were
drilled to an average depth of 20 m and failed to intersect any significant gold mineralisation.
BHP utilised a local grid for their sampling programmes, and the precise locations of their drilling and sampling relative to the current
project area has not yet been established. However, BHP’s work provides only a small proportion of the information available for the
tenement, and does not form a major component of Aruma’s exploration targeting.
Asarco Australia Ltd (1988-1993)
Exploration of Asarco’s Jundee Project, which included part of Aruma’s Jundee South Project, is described by Johnson (1993a,
1993b) and McGrath (1992). Field work with Aruma’s tenement included a small number of reconnaissance RAB holes. The exact
amount, and locations of Asarco’s RAB drilling within EL(A)53/1461 have not yet been established, however there do not appear to be
a significant number of holes and this work will not form a significant component of Aruma’s potential exploration targeting.
Great Central Mines NL (1993-1999)
Great Central’s exploration activities within EL(A)53/1461 and surrounding regions are described by Smith and Lewis, 1994, while
Lewis, (1996a, 1996b), Carnes (1998), Van Kann, (1997, 1998 and 1999) describe Great Central’s regional exploration.
Great Central’s initial exploration of the general region comprised lag and minor rock chip sampling which identified several
anomalous zones, including an area of elevated zinc grades to the west of EL(A)53/1461, an area of anomalous gold values in the
Lenny’s East area within EL(A)53/1461. Subsequent work by Great Central, including substantial RAB programmes, was focused
outside the limits of EL(A)53/1461.
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Wiluna Mines Ltd (1995-99)
Wiluna Mines explored several tenement packages in the region of EL(A)53/1461, which included much of Aruma’s project area.
Wiluna Mines’ regional exploration activities included soil sampling, RAB, RC and diamond drilling and are described by Putt (1996),
Giddey and Lach (1998) and Daley (2000).
Wiluna Mines’ initial exploration in the vicinity of EL(A)53/1461 as described by Sugden (1996) and Harrison et al. (1997), included
lag sampling and RAB drilling in the Lenny’s East area on the eastern margin of the tenement. This drilling totalled 55 vertical holes
drilled on a 50 by 100 m grid to an average depth of 57 m and returned anomalous gold grades including 6 m @ 0.2 g/t and 18 m
@ 0.14 g/t (Table 13).
As shown in Figure 19, subsequent vertical AC and RAB drilling by Wiluna Mines tested large portions of EL(A)53/1461 at variable
spacing ranging from approximately 160 m by 1.3 km to 160 by 640 m pattern with average hole depths of approximately 55 m. This
work is described by Howland (1999, 2000) and returned anomalous intersections of 5 m @ 0.2 g/t Au in aircore hole RGDA28 in the
middle of the tenement, 4m @ 0.2 g/t from 92 m in RAB hole RDGB100 around the northern tenement boundary.
Table 13: Jundee South Anomalous Drill Hole Intersections
Drill Hole
Location (AMG)
Orient. (Dip/Az)
JR8696
JR8711
RGDA28
RDGB100
276,299 mE, 7,064,163 mN
276,520 mE, 7,063,387 mN
275,200 mE, 7,062,240 mN
272,858 mE, 7,066,075 mN
Vertical
Vertical
Vertical
Vertical
Down Hole Intercept
18m @ 0.14 g/t from 18m
6m @ 0.20 g/t from 26m
5m @ 0.20 g/t from 76m
4m @ 0.20 g/t from 92m
Phase
Wiluna Mines RAB 1996
Wiluna Mines RAB 1996
Wiluna Mines Aircore 1998
Wiluna Mines RAB 1998
Jindalee Resources Limited (2006-08)
Jindalee’s assessment of a tenement coincident with EL(A)53/146 as described by Peachey (2005) was limited to review of previous
work including several phases of field reconnaissance. Jindalee’s reconnaissance work confirmed that the majority of the tenement is
overlain by variably transported cover such as colluvial and alluvial sediments that would reduce the effectiveness of surface sampling
in identifying underlying mineralisation.
From their interpretation of the project’s geological setting and potential mineralisation styles, Jindalee concluded that the previous
drill coverage was sufficient to have tested the potential for significant mineralisation in the project area and thus relinquished the
tenement in 2009.
6.6.5 Proposed Explorat ion progra mme
Aeromagnetics of the lease area show a west-northwest trend which is the same orientation as the trend from the Gourdis mines in
the south to the Jundee mines to the north. Most of the mines in the area are located on the SW flank of the magnetic highs. There
are several magnetic highs within the tenement and these will be tested.
Although much of the project area has been tested by surface sampling the effectiveness of this sampling in identifying underlying
mineralisation is diminished by the common transported cover. With an average drill hole depth of less than 60 m, the vertical AC and
RAB drilling that covers much of the project area does not effectively test for deeper, or steeply dipping, mineralisation.
Subject to successful listing on the Australian Securities Exchange and the granting of EL(A)53/1461, Aruma proposes to explore the
Jundee South project in structural and lithologically favourable areas derived from a regional study of the known gold mineralisation
controls with reference to the body of existing previous work.
Since it is currently in application, Aruma have not allocated exploration funds to the Jundee South project. However, upon granting
the minimum expenditure requirements for this tenement can be met from funds allocated to working capital.
ARUMA RESOURCES LI MITED
65
6.7
Proposed Explora t ion for All Projects
6.7.1 Proposed act ivit ies
Subject to successful listing on the Australian Securities Exchange, Aruma proposes to commence drilling on current drill-ready
targets and to explore the described projects in structural and lithologically favourable areas derived from a regional study of the
known gold mineralisation controls. In addition, targets defined through a study of previous exploration will be explored. Conceptual
targets identified may also be explored at this time.
This work will be accompanied by systematic geological interpretation to develop a model of the local structural framework.
The exploration targets will be ranked according to various criteria and will be explored in tandem to create a pipeline of projects.
Aruma’s overall exploration budget is summarised in Table 14. Table 15 shows maximum budgeted costs if the share offer is oversubscribed to the maximum amount of $7,000,000.
Table 14: Total Exploration Budget Minimum Case
Geochemistry/Geophysics
RAB Drilling
RC Drilling
Diamond Drilling
Field Support
Geology
Heritage and Environment
Technical Services
Total
Year 1
Year 2
Total
$62,000
$196,000
$375,000
$150,000
$140,000
$220,000
$160,000
$100,000
$53,000
$242,000
$375,000
$150,000
$140,000
$320,000
$160,000
$100,000
$115,000
$438,000
$750,000
$300,000
$280,000
$540,000
$320,000
$200,000
$1,403,000
$1,540,000
$2,943,000
Year 1
Year 2
Total
$62,000
$196,000
$375,000
$150,000
$140,000
$220,000
$160,000
$100,000
$53,000
$242,000
$765,000
$270,000
$140,000
$420,000
$160,000
$100,000
$115,000
$438,000
$1,140,000
$420,000
$280,000
$640,000
$320,000
$200,000
$1,403,000
$2,150,000
$3,553,000
Table 15: Total Exploration Budget Maximum Case
Geochemistry/Geophysics
RAB Drilling
RC Drilling
Diamond Drilling
Field Support
Geology
Heritage and Environment
Technical Services
Total
The additional expenditure in the event of oversubscriptions is in relation to year 2 expenditure upon RC drilling, diamond drilling and
geology for the Glandore Project as detailed in Section 6.3.7.
Aruma’s proposed exploration programme and budget is consistent with the conceptual exploration targets, and H&S believe the
proposed budget is sufficient to effectively test previously identified targets for gold mineralisation. The budget significantly exceeds
the tenements’ minimum statutory expenditure requirements.
66
ARUMA RESOURCES LI MITED
6.8
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Glossa ry of Geolog ical Ter ms
70
Aeromagnetic
Measurement of the earth’s magnetic field from a surveying aircraft, for the purpose of recording magnetic
characteristics of rocks.
Aircore drilling
An air drilling technique employed in poorly consolidated rocks where the sample is recovered via an inner
tube within the drill rods.
Alluvium
Silt, sand and gravel material transported and deposited by a river.
Altered
Change in mineralogical composition of a rock, commonly brought about by reactions with hydrothermal
fluids.
Amphibolite
A metamorphic rock composed mainly of amphibole.
Ankerite
A calcium iron magnesium manganese carbonate mineral.
Anticline
Rocks folded in the form of an arch.
Aphanitic
Very fine grained igneous rocks.
Achaean
The oldest period of geological time, from about 2,500 million years before the present.
Arsenopyrite
An iron, arsenic sulphide mineral.
Banded iron
formation
A chemically precipitated siliceous sedimentary rock composed of layers of chert, chalcedony, jasper or
quartz and iron oxides.
Basalt
A fine-grained mafic volcanic rock composed primarily of pyroxene and feldspar, mineralogically comparable
to dolerite and gabbro.
ARUMA RESOURCES LI MITED
Biotite
A potassium, iron magnesium mica mineral.
BLEG
Bulk Leach Extractable Gold. An analytical method for relatively large (2-5 kg) samples involving leaching
with a sodium cyanide solution.
Chert
Fine-grained sedimentary rocks composed of crystalline silica.
Cumulate
Igneous rock texture resulting from crystals precipitated from magma.
Diamond drilling
A method of drilling with a diamond impregnated bit, giving a cylindrical core of rock.
Dip
The angle at which a rock stratum or structure is inclined from the horizontal.
Dolerite
A medium-grained mafic intrusive igneous rock mineralogically comparable to basalt and gabbro.
Dyke
Thin, sheet like intrusion of igneous rock.
Fault
A fracture in the rock along which there has been relative displacement on the two sides either vertically or
horizontally.
Felsic
Silica-rich rock (above ~ 63%), containing abundant feldspar and quartz.
g/t
Grams per tonne, equivalent to ppm.
Gabbro
Coarse grained intrusive igneous rock mineralogically comparable to basalt and dolerite.
Granite
A coarse-grained intrusive rock containing mainly quartz and feldspar with subordinate micas.
Granitoid
Coarse-grained felsic igneous rock, resembling granite.
Greenstone
Generic term for metamorphosed sequences of igneous, and lesser sedimentary rocks, commonly applied
to sequences of Achaean rock.
Greywacke
Sedimentary rocks consisting of fine to coarse angular rock fragments.
Igneous
Rocks that have solidified from magma.
Intermediate
Igneous rocks with 52 to 63% silica.
Mafic
Igneous rocks of low silica content, generally between 45 and 62%.
Peridotite
Ultramafic composed predominantly of olivine.
Plunge
Inclination of a fold axis or other structure.
ppb
Measurement of concentration in parts per billion.
ppm
Measurement of concentration in parts per million.
Pyrite
An iron sulphide mineral.
Quartz
A mineral composed of silicon dioxide (SiO2).
RAB drilling
Rotary Air Blast drilling method, where sample is forced to surface outside the drill rods.
RC drilling
Reverse Circulation drilling method, with an air-driven hammering drill bit, where sample is forced to surface
within the drill rods.
Schist
Metamorphic rock having a foliated or parallel structure due to recrystallisation of constituent minerals.
Sericite
A white or pale apple green potassium mica.
Shale
Fine grained, laminated sedimentary rock formed from clay, mud and silt.
Stratigraphy
Depositional layering of sedimentary or igneous rocks.
Strike
Horizontal direction or trend of a geological structure.
Supergene
Mineral enrichment produced by chemical remobilisation in an oxidised or transitional environment.
Ultramafic
Igneous rocks with very low silica content (below 45%), consisting essentially of iron-magnesium minerals
with virtually no quartz and feldspar.
Vein
Thin sheet-like body of minerals intruded into joints or fissures.
Volcaniclastic
Sedimentary rocks predominantly composed of volcanic material.
ARUMA RESOURCES LI MITED
71
7
INVESTIGATING ACCOUNTANT’S REPORT
BUSINESS ADVISORY
CORPORATE ADVISORY
AUDIT & ASSURANCE
FINANCIAL SERVICES
SE
TE
CV
OIN
B USSYI N
SM
S SA D
SS
OU
RLYT I N G
CORPORATE ADVISORY
AUDIT & ASSURANCE
FINANCIAL SERVICES
SYSTEMS CONSULTING
27 April 2010
The Directors
Aruma Resources Limited
PO Box 2803
WEST PERTH, WA 6872
Dear Sirs
I NVESTIGATI NG ACCOUNTANT’S R EPORT
Introduct ion
This Investigating Accountant’s Report (the “Report”) has been prepared at the request of the Directors of Aruma Resources Limited
(“Aruma” or “the Company”) for inclusion in a Prospectus to be dated on or around 27 April 2010 (the “Prospectus”).
The Prospectus will offer up to 25,000,000 shares at an issue price of 20 cents each to raise $5,000,000 before costs. The Company
may accept oversubscriptions for up to 10,000,000 shares to raise a further $2,000,000. The maximum amount that may be raised
under the Prospectus is therefore $7,000,000 before costs.
Basis of pre parat ion
The report has been prepared to provide investors with information on the historical financial position of the Company and the pro
forma historical statement of financial position at 16 April 2010 as noted in Appendix 1. The pro forma historical statement of financial
position is presented in an abbreviated form insofar as it does not include all of the disclosures required by the Australian Accounting
Standards applicable to annual financial reports in accordance with the Corporations Act 2001.
This Report does not address the rights attaching to the shares to be issued in accordance with the Prospectus, nor the risk
associated with the investment, and has been prepared based on the complete offer being achieved. Ord Nexia Pty Ltd (“Ord Nexia”)
has not been requested to consider the prospects for the Company, the shares on offer and related pricing issues, nor the merits and
risks associated with becoming a shareholder and accordingly, has not done so, nor purport to do so. Ord Nexia accordingly takes no
responsibility for these matters or for any matter or omission in the Prospectus, other than responsibility for this Report. Risk factors
are set out in Section 5 of this Prospectus.
Expressions defined in the Prospectus have the same meaning in this report.
Level 1, 47-49 Stirling Highway Nedlands WA 6009 � PO Box 3437 Broadway Nedlands
WA 6009
T: (08) 9321 3514 � F: (08) 9321 3523 � ABN: 39 097 206 874
E: [email protected] � W: www.ordnexia.com.au
Liability
limited
by a scheme
approved
under
Professional
Level 1, 47-49
Stirling
Highway
Nedlands
WA 6009
� PO
Box 3437Standards
BroadwayLegislation
Nedlands
Member of Nexia International – A Worldwide Network of Independent Accounting &
WA 6009
Consulting Firms
T: (08) 9321 3514 � F: (08) 9321 3523 � ABN: 39 097 206 874
E: [email protected] � W: www.ordnexia.com.au
72
ARUMA R
E S Olimited
U R by
C aEscheme
S LIM
I T E under
D Professional Standards Legislation
Liability
approved
Member of Nexia International – A Worldwide Network of Independent Accounting &
Consulting Firms
Backgrou nd
The Company was incorporated on 5 January 2010 as a wholly owned subsidiary of Hemisphere Resources Limited (“Hemisphere”),
a listed entity on the ASX. The Company then incorporated a wholly owned subsidiary, Aruma Exploration Pty Ltd (“Aruma
Exploration”), on 27 January 2010 with a view of acquiring the gold projects from Hemisphere and list on the ASX.
On 14 April 2010, the Company executed a Tenement Acquisition Agreement with Hemisphere to acquire 100% of Hemisphere’s
interest in a number of exploration tenements (refer to the Solicitor’s Report on Tenements in Section 8 for more information on the
tenements acquired). As consideration, the Company issued 39,999,995 shares to the value of $224,945, representing the total cost
of the tenements transferred.
At present, the only significant asset held by the Company is its exploration tenements.
Key personnel of Aruma include:
•
Mr Peter Schwann (Managing Director)
•
Mr Paul Boyatzis (Non- executive Chairman)
•
Mr Danny Costick (Non- executive Director)
Scope of Re por t
We have reviewed the pro forma historical statement of financial position in order to report whether anything has come to our
attention which causes us to believe that the pro forma historical statement of financial position, as set out in Appendix 1 of the
Report, does not present fairly the pro forma historical statement of financial position at 16 April 2010, on the basis of preparation,
accounting policies and the pro forma transactions and/or adjustments described in Appendix 2, and in accordance with the
recognition and measurement requirements (but not all of the disclosure requirements) of Australian Accounting Standards (including
the Australian Accounting Interpretations).
The historical financial information set out in Appendix 1 to this Report has been extracted from the management accounts of the
Company for the period ended 16 April 2010.
The directors of the Company are responsible for the preparation and presentation for the historical financial information including the
determination of the pro forma transactions and/or adjustments.
We have conducted our review of the pro forma historical balance sheet in accordance with Australian Standard on Review
Engagements ASRE 2405 “Review of historical financial information other than a financial report”. We made enquiries and performed
such procedures as we, in our professional judgement, considered reasonable in the circumstances, including:
•
A review of the management accounts for the period ended 16 April 2010;
•
Analytical procedures on the pro forma historical balance sheet;
•
Consideration of the pro forma transactions/or adjustments made to the historical balance sheet at 16 April 2010;
•
Enquiry of directors, management and others;
•
Review of contractual arrangements; and
•
A review of work papers, accounting records and other documents.
ARUMA RESOURCES LI MITED
73
These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than
given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.
Our review was limited primarily to an examination of the historical financial information, the pro forma financial information, analytical
review procedures and discussions with both management and directors. A review of this nature provides less assurance than an
audit and, accordingly, this Report does not express an audit opinion on the historical information or pro forma financial information
included in this Report or elsewhere in the Prospectus.
In relation to the information presented in this Report:
•
support by another person, corporation or an unrelated entity has not been assumed;
•
the amounts shown in respect of assets do not purport to be the amounts that would have been realised if the assets were
sold at the date of this Report; and
•
the going concern basis of accounting has been adopted.
Review state me nt
(a) Historical statement of financial position
Based on our review, which is not an audit, nothing has come to our attention which causes us to believe that the historical
statement of financial position, as set out in Appendix 1 of this Report is not presented fairly in accordance with the
recognition and measurement requirements (but not all of the disclosure requirements) of Australian Accounting Standards
(including the Australian Accounting Interpretations).
(b) Pro-forma historical statement of financial position
Based on our review, which is not an audit, nothing has come to our attention which causes us to believe that the pro-forma
historical statement of financial position, as set out in Appendix 1 of this report, is not properly drawn up in accordance
with basis of preparation , accounting policies and pro forma adjustment described in Appendix 2 and the recognition and
measurement requirements (but not all of the disclosure requirements) of Australian Accounting Standards (including the
Australian Accounting Interpretations) as if the pro forma transactions had occurred on that date.
Subseque nt Eve nts
To the best of Ord Nexia’s knowledge and belief, there have been no material items, transactions or events subsequent to the date of
this Report and not otherwise disclosed in this Report, that have come to our attention during the course of our review which would
cause the information included in this Report to be misleading.
Inde pe nde nce
Ord Nexia does not have any interest in the outcome of the listing of the share, other than in connection with the preparation of this
Report for which normal professional fees will be received. Ord Nexia does not hold nor have any interest in the ordinary shares of
the Company.
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ARUMA RESOURCES LI MITED
Responsi bi lity
Ord Nexia was not involved in the preparation of any part of the Prospectus, and accordingly, makes no representations or warranties
as to the completeness and accuracy of any information contained in any other part of the Prospectus.
Ord Nexia consents to the inclusion of this Report in the Prospectus in the form and content in which it is included. At the date of this
Report, this consent has not been withdrawn.
Ge ne ral advice warn i ng
This Report has been prepared, and included in the Prospectus, to provide investors with general information only and does not take
into account the objectives, financial situation or needs of any specific investor. It is not intended to take the place of professional
advice and investors should not make specific investment decisions in reliance on the information contained in this Report. Before
acting or relying on any information, an investor should consider whether it is appropriate for their circumstances having regard to
their objectives, financial situation or needs.
Yours faithfully
Ord Nexia Pty Ltd
Ian Macpherson
Director
ARUMA RESOURCES LI MITED
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APPEN DIX 1
Aruma Resources Limited
Pro For ma Histor ical St a tement of Fi na ncial Pos it ion
Reviewed
16 April 2010
Pro forma adjustments
Pro forma
16 April 2010
$
$
$
Note
2(a)
2(b)
2(c)
Current assets
Cash and cash equivalents
1
5,000,000
(424,733)
-
4,575,268
GST receivable
3
5,527
-
-
-
5,527
Total current assets
5,528
5,000,000
(424,733)
-
4,580,795
Non-current assets
Exploration and evaluation
expenditure
224,945
-
-
25,000
249,945
Total non-current assets
4
224,945
-
-
25,000
249,945
Total assets
230,473
5,000,000
(424,733)
25,000
4,830,740
15,278
-
-
-
15,278
45,516
-
-
-
45,516
60,794
-
-
-
60,794
169,679
5,000,000
(424,733)
25,000
4,769,946
169,679
5,000,000
(424,733)
25,000
4,769,946
169,679
5,000,000
(424,733)
25,000
4,769,946
Current Liabilities
Trade and other payables
Loan from Hemisphere
7
Total current liabilities
Net assets
Equity
Issued capital
Total equity
5
The pro forma statement of financial position is to be read in conjunction with the notes to and forming part of the pro forma
statement of financial position in Appendix 2.
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ARUMA RESOURCES LI MITED
APPEN DIX 2
Aruma Resources Limited
Notes to a nd For mi ng Pa r t of the Pro For ma St a tement of Fi na ncial Pos it ion
1. Summa ry of s ignif ica nt account i ng pol icies
The significant accounting policies adopted in the preparation of the historical and the pro forma historical statement of financial
position are:
(a) Basis of preparation of pro forma historical statement of financial position
The pro forma historical statement of financial position and notes has been prepared in accordance with the recognition
and measurement requirements of Australian Accounting Standards and Accounting Interpretations issued by the Australian
Accounting Standards Board.
The pro forma historical statement of financial position is presented in a condensed form and does not contain all the
disclosures that are usually provided in accordance with the Australian Accounting Standards and the Corporations Act 2001.
The pro forma historical statement of financial position have been prepared on an accrual basis, are based on historical cost
and except where stated do not take into account changing money values or current valuations of non-current assets. Cost
is based on the fair values of the consideration given in exchange for assets. The accounting policies have been consistently
applied, unless otherwise stated.
(b) Income tax
Income tax on the income statement for the periods presented comprises current and deferred tax. Income tax is recognised
in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised
in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at
the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition of assets or liabilities that affect neither accounting, nor
taxable profit and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the
foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
(c) Cash and cash equivalents
Cash and cash equivalents include cash on hand and short term deposit with banks or financial institutions and investments in
money market instruments which are readily convertible to cash and used in the cash management function on a day to day
basis, net of bank overdrafts.
(d) Exploration and evaluation
Exploration and evaluation costs, excluding the costs of acquiring licences, are expensed as incurred. Acquisition costs will be
assessed on a case by case basis and, if appropriate, they will be capitalised. These acquisition costs are only carried forward
only if the rights to tenure of the area of interest are current and either:
•
They are expected to be recouped through successful development and exploitation of the area of interest or;
•
The activities in the area of interest at the reporting date have not reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in,
or in relation to, the area of interest are continuing.
ARUMA RESOURCES LI MITED
77
Accumulated acquisition costs in relation to an abandoned area are written off in full against profit in the year in which the
decision to abandon the area is made.
The carrying values of acquisition costs are reviewed for impairment when events or changes in circumstances indicate the
carrying value may not be recoverable.
(e) Trade and other payables
Liabilities for trade and other creditors are carried at amortised cost which is the fair value of the consideration to be paid in
future for goods and services received, whether billed or not billed to the Company.
(f)
Share capital
Ordinary shares
Ordinary shares are classified as share capital. Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
(g) Share Based Payments
Shares and options issued to directors and employees will be expensed in accordance with the requirements of AASB 2
“Share-based Payment”.
(h) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
•
where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which
case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable;
and
•
receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in
the balance sheet.
Commitments and contingencies are disclosed net of amounts of GST recoverable from, or payable to, the taxation authority.
2.
Pro forma adjustme nts
(a)
Proceeds from share issue
The Company will issue 25,000,000 shares at 20 cents each to raise capital of $5,000,000. This amount represents the minimum
subscription.
Should the maximum subscription of 35,000,000 shares be obtained the amount raised will increase by $2,000,000 to $7,000,000
with a $100,000 increase in the capital raising costs to $580,000.
(b)
Capital ra isi ng cost
The transaction costs of an equity transaction are accounted for as a deduction from the equity raised in accordance with Australian
Accounting Standards. The capital raising costs represent registration and other regulatory fees, legal, accounting and other
professional fees and printing costs.
(c)
Acquisit ion of tenements
The Company entered into a Tenement Acquisition Agreement with Plasia Pty Ltd (“Plasia”) to issue 125,000 shares at 20 cents each
in exchange for the Glandore Project tenements held by Plasia.
Please refer to the Solicitor’s Report on Tenements in Section 8 of this Prospectus for the tenements transferred.
78
ARUMA RESOURCES LI MITED
3.
Cash and Cash Equivale nts
Note
Cash on hand- unaudited 16 April 2010
Unaudited
16 April 2010
Unaudited Pro-forma
16 April 2010
$
1
1
Issue of shares per prospectus
2(a)
-
5,000,000
Share issue costs
2(a)
-
(424,733)
1
4,575,268
Should the Company achieve the maximum subscription pursuant to the prospectus, cash on hand will be approximately $6,420,001
after allowing for $100,000 broker fees on the additional $2,000,000 subscriptions.
4.
Explorat ion Expe ndit ure
Note
Capitalised exploration expenditure at cost – unaudited 16 April 2010
Vendor share issue
5.
Unaudited
16 April 2010
Unaudited Pro-forma
16 April 2010
$
224,945
224,945
-
25,000
224,945
249,945
2(c)
Issued Equity
Note
Balance at 16 April 2010 – unaudited (40,000,000 shares)
Issue of shares under prospectus (25,000,000 shares)
Acquisition of tenements (125,000shares)
Capital raising costs
(Pro forma ordinary shares 65,125,000)
2(a)
2(c)
2(b)
Unaudited
16 April 2010
Unaudited Pro-forma
16 April 2010
$
224,946
224,946
(55,267)
5,000,000
169,679
4,769,946
25,000
(480,000)
If the maximum subscription pursuant to the prospectus is achieved there will be 75,125,000 shares on issue and the contributed
equity will be approximately $6,669,946.
6. Commitme nts
Explorat ion and other commitments
The Company has contractual commitments relating to minimum exploration obligations pursuant to the terms and conditions of
Tenement Licences and other contractual commitments. These are discussed in more detail in the Solicitor’s Report on Tenements
(Section 8) and the Material Contracts (Section 9) sections of this Prospectus.
7.
Related Par ty Transact ions
In order to finance the transaction costs of the capital raising, Hemisphere and Aruma entered into a funding agreement whereby
Hemisphere will provide up to $250,000 to Aruma. The amount due will be settled out of the proceeds from the capital raising.
Hemisphere will either pay the capital raising costs directly at the direction of Aruma or forward funds to the Aruma to enable the
Aruma to pay capital raising costs as and when they fall due. As of 16 April 2010, the Company owed Hemisphere $45,516.
Refer to Section 10 of the Prospectus for details of Directors’ share and option holdings.
ARUMA RESOURCES LI MITED
79
8
SOLICITOR’S REPORT ON TENEMENTS
Fairweather&Lemonis
Lawyers
20 April 2010
The Directors
Aruma Resources Limited
24 Colin Street
West Perth WA 6005
Dear Sirs
SOLICITOR’S R EPORT ON WESTER N AUSTRALIAN TENEMENTS
This Solicitor’s Report (the “Report”) is prepared for inclusion in a Prospectus to be dated on or about 23 April 2010 (“Prospectus”) for
the issue by Aruma Resources Limited (the “Company”) of up to a maximum of $7,000,000 (including oversubscriptions) by issuing
up to 35,000,000 Shares at an issue price of 20 cents per Share.
The Report relates to 22 prospecting licences, 6 prospecting licence applications, 3 exploration licences, 1 exploration licence
application and 3 mining lease applications in Western Australia (the “Tenements”), details of which are set out in the attached
tenement schedule - Schedule 1 (“Tenement Schedule”) and summaries of the material agreements (“Material Agreements”) under
which it has acquired, or is entitled to acquire an interest in the Tenements as set out in the attached Schedule 2 (“Material Tenement
Agreements Schedule”), which forms part of this Report.
Words and expressions that are defined in this Prospectus have the same meanings when used in this Report, unless the contrary
intention is expressed.
1
SEARC H ES OF TH E TENEMENTS
We have caused to be conducted the following searches at or obtained the following reports from the relevant Western Australian or
Commonwealth government departments:
(a) Tenements searches of the Tenements conducted on 19 January, 4 March and 8 April 2010;
(b) “Quick Appraisal” reports summarising information available on the Western Australian “TENGRAPH” system to determine
native title claims upon all the Tenements were obtained on 19 January 2010; and
(c) a search of the Register of Native Title Claims maintained by the National Native Title Tribunal in respect of registered native
title claims upon the Tenements was conducted on 20 January 2010.
On the basis of the searches, materials and information supplied to us by the Company, subject to our qualifications set out below, we
consider that this Report provides an accurate statement of the status of the Tenements as at the dates on which the searches were
conducted and the Company’s interest in the Tenements as at the date of this Report.
Ground Floor, 1 Havelock Street
West Perth WA 6005
Telephone: (08) 9420 5000
Facsimile: (08) 9420 5001
www.fairweatherlemonis.com.au
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ARUMA RESOURCES LI MITED
2
TENEMENTS G ENERALLY
The Tenements comprise of prospecting licences, exploration licences and prospecting, exploration and mining lease applications
granted or applied for under the Mining Act 1978 (WA). Details are provided in the Tenement Schedule. We provide below a brief
summary of certain types of tenements in Western Australia.
The impact of native title on the Tenements is set out in section 3 below, however, assuming each government department complied
with native title legislative requirements, we are of the opinion that each granted Tenement has been validly granted with respect to
native title. The valid grant of any application for a tenement and which may be affected by native title will require compliance with the
application provisions and processes of the native title legislation set out in section 3.
2.1
Weste rn Australia
Tenements in Western Australia are granted subject to various conditions prescribed by the Mining Act 1978 (WA) including, payment
of rent, expenditure and reporting requirements and each tenement is granted subject to standard environmental conditions designed
to regulate the holder’s activities and protect the environment. These standard conditions are not detailed in this Report.
The holder of a granted prospecting licence, exploration licence or mining lease is required to spend, or cause to be spent, a set
amount per hectare or, in the case of exploration licences, per block in each tenement year on prospecting, exploration or mining
activities. The Tenement Schedule sets out the details of the current minimum expenditure obligations for each granted Tenement.
The Company may apply for exemption from compliance with the minimum expenditure requirements on certain grounds set out in
section 102(2) of the Mining Act 1978 (WA) or at the discretion of the Minister. A failure to comply with the expenditure requirements
renders the mining tenement open to forfeiture.
An application for a mining tenement is not a property right but a right in priority to have the application heard prior to any competing
application which is later in time. An applicant cannot carry out any mining operations on the application area unless the application
is a “conversion” application and the underlying tenement remains in force. No dealings can be registered against an application.
There can be no guarantee that any applications will be granted at all or on favourable terms.
The holder of a mining tenement wishing to access private land or certain areas within a pastoral lease may have to agree the terms
of compensation for the rights to access and work the land. We express no opinion on whether such arrangements are required or
have been obtained.
2.2
Prospect i ng Lice nces
A prospecting licence entitles the holder, to the exclusion of others, to prospect for minerals in the area of the licence but not to
conduct commercial mining. A prospecting licence may cover a maximum area of 200 hectares and if granted or applied for before
10 February 2006 remains in force for up to 4 years and does not include a right of renewal. Prospecting licences granted or applied
for after 10 February 2006 will also be granted for a period of 4 years and may be extended at the discretion of the Minister for Mines
for a further period of 4 years.
The holder of a prospecting licence has the right, prior to the expiry of the prospecting licence, to apply for one or more mining leases
over any of the land the subject of the prospecting licence. A prospecting licence, subject to a conversion application to a mining
lease, remains in force pending the determination of the application for that mining lease.
There is no restriction on the assignment of a prospecting licence.
The Tenements which are granted prospecting licences were granted both prior to and after 10 February 2006 and all of the 6
prospecting licence applications were applied for after 10 February 2006.
2.3
Explorat ion Lice nces
An exploration licence entitles the holder, to the exclusion of others, to explore for minerals in the area of the licence but not to
conduct commercial mining. The maximum area of an exploration licence in Western Australia is 70 graticular blocks (between 196
and 231 square kilometres depending on the latitude).
ARUMA RESOURCES LI MITED
81
An exploration licence granted after 10 February 2006 remains in force for up to 5 years and may be extended in certain
circumstances by one period of 5 years and a further period or periods of 2 years on application. The prescribed circumstances,
in which an extension of an exploration licence may be granted include, where the Minister is satisfied that delays or difficulties in
carrying out an exploration program or the marking-out of a mining lease could not be undertaken, completed or was subject to
impracticable conditions. An exploration licence remains in force pending a decision to extend its term. If an extension of term is
granted then the minimum annual expenditure is increased as follows:
•
to $50,000 during the 6th and 7th years; and
•
to $100,000 during the 8th and any subsequent years.
For exploration licences granted or applied for after 10 February 2006 the surrender requirement is 40% of the exploration licence at
the end of the fifth year.
Both of the exploration licences and the exploration licence applications were granted or applied for (as the case may be) after 10
February 2006.
The holder of an exploration licence has the right under the Mining Act 1978 (WA) to peg and apply for one or more mining leases
over any of the land the subject of the licence prior to the expiry of the licence. That part of an exploration licence, the subject of a
conversion application to a mining lease, remains in force pending the determination of that mining lease application.
An exploration licence can only be assigned during the first year of its term with Ministerial approval.
2.4
Mi n i ng Leases
A mining lease entitles the holder, to the exclusion of others, to work, mine and take minerals won from the mining lease, subject
to any conditions imposed on the mining lease. A mining lease remains in force for 21 years. The holder has the right, subject to
complying with the Mining Act 1978 (WA), to an extension of a further 21 years and at the end of the second 21 year term may apply
to the Minister for Mines for successive terms of 21 years. As with other mining tenements granted under the Mining Act 1978 (WA),
a mining lease is granted subject to conditions regulating the conduct of activities. In particular, the holder of a mining lease cannot
commence developmental or productive mining unless the approval of the State Mining Engineer is first obtained.
It is a breach of the conditions of a mining lease to assign it without the prior written consent of the Minister for Mines.
3.
NATIVE TITLE
3.1
Nat ive Title
From inquiries we have made of the National Native Title Tribunal (“NNTT”), we are aware of native title claims over some of the
Tenements as identified in the Tenement Schedule.
Where land is subject to native title, the Native Title Act 1993 (Cth) (“Native Title Act”) imposes restrictions upon the grant of mining
tenements in relation to that land, including the requirement to negotiate with native titleholders. As such, the existence and
determination of native title in relation to the land the subject of the Tenements could inhibit exploration and mining operations, or
cause significant delays in relation to future conversion of licences and applications for tenements over the subject land, or possibly
challenge the validity of the grant of part or all of the rights conferred therein.
We have assumed the information in the registers maintained by the NNTT are accurate and up to date.
3.2
Nat ive Title Act
Native title refers to the unique title held by Australian indigenous peoples over Australian land or waters, first recognised in Australia
in the landmark Mabo v Queensland (“Mabo”) case on 3 June 1992.
To establish native title, a claimant group must show that they have historically enjoyed certain customary rights and privileges and
a traditional connection in respect of a particular area of land. Native title may be extinguished either by voluntary surrender to the
Crown, death of the last survivor of a community entitled to native title, abandonment of the land in question by that community or the
granting of an inconsistent interest in the land by the Crown.
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ARUMA RESOURCES LI MITED
The Commonwealth Parliament responded to the Mabo decision by passing the Native Title Act which:
(a) recognised native title rights;
(b) validated certain ‘past acts’, including the grant of mining tenements and ancillary titles which would otherwise be invalidated
due to native title;
(c) provided for the protection of native title in ‘future acts’ after the introduction of the Native Title Act; and
(d) provided for the procedures to claim and register native title, provided for a negotiation process in relation to future uses of
native title land and to claim compensation for the extinguishment or impairment of native title.
The Native Title Amendment Act 1998 (Cth) (the “Amendment Act”) extensively amended the Native Title Act. The Amendment Act
validated titles which may have been invalidly granted over pastoral leases and certain other leasehold interests during the period 1
January 1994 to 23 December 1996. The Amendment Act also included a revised threshold test for the acceptance of native title
claims, confirmed the extinguishment of native title by the grant of “exclusive possession” pastoral leases and certain other leasehold
interests and included provisions intended to deal with overlapping claims.
Anyone who claims to hold native title, either alone or with others, may lodge a claim with the Native Title Registrar. However, the
claimants must establish the claim before native title can exist in the area. The absence of native title claims in an area does not
mean that native title does not exist in an area. If the claimants satisfy the Native Title Registrar that the claim meets the legislative
requirements, then the claim will be registered by the NNTT on the Register of Native Title claims. This registration entitles the
claimants to procedural rights. Importantly, it entitles the claimants to the ‘right to negotiate’.
Native title claims that are not registered by the NNTT are recorded on the Schedule of Applications Received. Claims entered on the
Schedule of Applications Received can, at a later date, be properly registered if the claimant provides additional information and the
Native Title Registrar is satisfied that the claimants rights and interests can prima facie be established.
3.3
Validity of Titles
(a)
TEN EMENTS GRANTE D AFTER 23 DECEMBER 1996
Tenements granted or renewed since 23 December 1996 which affect native title rights and interests will be valid provided that the
Native Title Act has been complied with. All the granted Tenements as detailed in the Tenement Schedule have been granted since
23 December 1996.
(b)
APPLICAT IONS AN D REN EWALS
Future tenement grants including the valid grant of any tenement that may affect native title will require full compliance with the
provisions of the Native Title Act, being in effect successful negotiation with registered native title claimant groups. The ‘conversion’ of
a prospecting licence or exploration licence to one or more mining leases is a future act, giving rise to a ‘right to negotiate’.
Any renewal of a tenement occurring after 31 December 1996 will not be subject to the ‘right to negotiate’ unless the renewal seeks
to extend the area of the tenement, is for a longer term than the previous term or confers greater rights than the previous grant.
3.4
The Right to Ne got iate
The Native Title Act allows for the ‘right to negotiate’. The right to negotiate consists of a statutory period of negotiation between the
Government party, the native title party and the grantee party.
The parties must negotiate in good faith and if no agreement is reached, and at least six months have passed since the notification
day, the matter is referred to the arbitral body for determination. The arbitral body then determines whether the act can be done, not
done or done subject to conditions. A right then exists for the relevant minister to overrule the determination of the arbitral body if it
considers it to be in the interest of the State.
The right to negotiate process is not required to be followed in certain cases in respect of generally low impact mining tenements and
future acts. In such cases, an expedited procedure can apply where unless a native title party lodges an objection within a prescribed
period, the grant of the tenement can proceed.
ARUMA RESOURCES LI MITED
83
Further, the Native Title Act authorises the entering of Indigenous Land Use Agreements (“ILUAs”), which provide for native title
claimants or holders and the grantee party to enter into agreements, which are registered at the NNTT and once registered, can
serve to validate tenements that have already been granted and that may be invalid. ILUAs can also be used to obtain the native
title claimant’s or holder’s consent to the granting of current tenement applications and to obtain the native title claimants or holders
consent for future tenement applications within a certain area. ILUAs are a contractual arrangement between the current native title
claimants and the relevant grantee party (mining company).
Similarly, the grantee party and native title claimant groups can negotiate and enter into agreements covering heritage protocols for
exploration and/or mining, which will facilitate the grant of tenement applications.
4.
ABORIG I NAL H ERITAG E AN D ABORIG I NAL SITES
4.1
Commonwealth
There is Commonwealth heritage legislation, the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) (“National
Heritage Act”), which applies to the Tenements. The Act is aimed at the preservation and protection of significant Aboriginal areas
and objects through their use in a manner inconsistent with Aboriginal traditions. There may be sites of Aboriginal heritage or
significance that are subject to such legislation that are located on the land on which the Tenements are situated. This may affect
prospecting, exploration or mining activities on the Tenements.
In respect of any Aboriginal sites or places of Aboriginal heritage that are on the Tenements or may be identified on the Tenements,
the Company will need to ensure that any interference with Aboriginal sites is in strict conformity with the provisions of the National
Heritage Act.
4.2
Weste rn Australia
The Aboriginal Heritage Act 1972 (WA) also applies to the Tenements (“WA Heritage Act”). This Act makes it an offence to alter
or damage an Aboriginal site or object on or under an Aboriginal site. An ‘Aboriginal site’ is defined to include any sacred, ritual or
ceremonial site which is of importance and special significance to persons of Aboriginal descent.
Although the WA Heritage Act states that the Minister has a duty to keep a record of Aboriginal sites, there is no requirement for an
Aboriginal site to be registered in any public manner or, indeed, in any way acknowledged as an Aboriginal site for it to qualify as an
Aboriginal site for the purposes of the WA Heritage Act.
We have not undertaken searches to ascertain if any Aboriginal sites have been registered in the vicinity of the Tenements under
either the National Heritage Act or the WA Heritage Act as there is no obligation to register sites and in any event, the exact location of
the sites is not ascertainable from such searches. Further, these enquiries are generally done by the mining company after the mining
tenure applied for is granted and once a particular programme of work has been determined.
In respect of any Aboriginal sites or places of Aboriginal heritage that are on the Tenements or may be identified on the Tenements, the
Company may need to ensure that any interference with Aboriginal sites is in strict conformity with the provisions of the WA Heritage
Act and the National Heritage Act.
5.
QUALIFICATIONS
Our Report is based on, and subject to, the assumptions and qualifications set out below and as otherwise specified elsewhere in this
Report:
84
•
We have relied upon information provided by third parties, including government departments and have relied upon that
information being accurate, complete and up to date as at the date of its receipt.
•
References to areas in the Tenement Schedule are taken from the searches and we have not verified the accuracy of such
areas. We have not conducted positioning and spatial searches of the Tenements on the “TENGRAPH” system to determine
the exact areas of the Tenements or the locations of any limitations or excisions upon the Tenements.
•
Compensation may have to be agreed and/or paid to the owner and occupier of private land situated within the Tenements and
we express no opinion whether such arrangements are in place or need to be put into place.
ARUMA RESOURCES LI MITED
•
In relation to registration of agreements against the Tenements, we have had no instructions in relation to the registration
of any agreements and express no opinion on the consequences of non-registration or otherwise. In addition, we cannot
comment on any agreements that are not registered as a dealing, encumbrance or otherwise noted in the searches of the
Tenements.
•
Native Title or Aboriginal heritage sites or objects may exist in the areas covered by the Tenements. We have conducted
searches to ascertain what Native Title claims, if any, have been registered over these areas, but we have not conducted any
independent investigations regarding the likely existence or non-existence of Native Title, Aboriginal heritage sites or objects.
•
Where Ministerial consent is required in relation to the Tenements or to the transfer the Tenements, we express no opinion as
to whether such consent will be granted, or the consequences of consent being refused, although we are not aware of any
matter which would cause consent to be refused.
•
We have assumed that other than as may otherwise be noted in our Report the tenement holders and the Company (where
appropriate) have complied with all applicable provisions of the Mining Act 1978 (WA), and all other legislation or regulations
relating to the Tenements and we note that the interest or rights of the Company in relation to the Tenements is subject to the
current registered holders or the Company as the case may be, continuing to comply with all the applicable provisions of the
Mining Act 1978 (WA), and other legislation or regulations relating to the Tenements and any conditions specifically applicable
to the Tenements. We express no opinion on any compliance not disclosed on the face of the searches conducted for the
purposes of this Report.
•
We have assumed that all instructions or information which we have received from the Company or any of its officers, agents,
or representatives is accurate and complete in all respects.
•
This Report relates solely to the laws of Western Australia, to the extent applicable to the Tenements. We do not express or
imply any opinion on, and have made no investigation of the laws of any other jurisdiction.
6.
CONSENT
Fairweather & Lemonis consent to being named in the Prospectus as being responsible for the preparation of this Report. Except for
this Report, Fairweather & Lemonis:
(a) has not authorised or caused the issue of the Prospectus;
(b) is not responsible for any matter included in or omitted from this Prospectus;
(c) makes no representation or warranty, either express or implied, with respect to the accuracy or completeness of the
information contained in the Prospectus; and
(d) disclaims liability to any persons in respect of any statement included in or omitted from the Prospectus.
This Report is made solely for the benefit of the Company and its Directors in connection with the issue of the Prospectus and it is not
to be relied on or disclosed to any other person or used for any other purpose without prior written consent.
Yours faithfully
FAIRWEATHER & LEMONIS
ARUMA RESOURCES LI MITED
85
86
ARUMA RESOURCES LI MITED
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
P25/1582
P25/1583
P25/1584
P25/1585
P25/1586
P25/1587
P25/1588
P25/1589
P25/1590
P25/1620
P25/1806
Current Registered
Holder or Applicant
P25/1581
Glandore Project
Project Name
and Tenement
No (Western
Australia)
100
100
100
100
100
100
100
100
100
100
100
100
Shares/
Ownership
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Status
23/05/2007
19/04/2000
15/08/2000
05/09/2000
05/09/2000
15/08/2000
05/09/2000
05/09/2000
05/09/2000
05/09/2000
05/09/2000
05/09/2000
Grant/
Application
Date
(Schedule 1 to Solicitor s Re por t)
Key:
E = Exploration Licence
ELA = Exploration Licence Application TENEMENT SC H EDULE
22/05/2011
18/04/2004
14/08/2004
04/09/2004
04/09/2004
14/08/2004
04/09/2004
04/09/2004
04/09/2004
04/09/2004
04/09/2004
04/09/2004
Expiry Date
45ha
120ha
120ha
120ha
120ha
120ha
120ha
120ha
120ha
120ha
120ha
120ha
Area
(Hectares
or Blocks)
$103.95
$277.20
$277.20
$277.20
$277.20
$277.20
$277.20
$277.20
$277.20
$277.20
$277.20
$277.20
Current
Annual Rent
PLA = Prospecting Licence Application $2,000
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
$4,800
Current Annual
Minimum
Expenditure
Nil
Agreement
3H/045
Agreement
3H/045
Agreement
3H/045
Agreement
3H/045
Agreement
3H/045
Agreement
3H/045
Agreement
3H/045
Agreement
3H/045
Agreement
3H/045
Agreement
3H/045
Agreement
3H/045
Central East
Goldfields people
Widgi people
and Central East
Goldfields people
Widgi people
Widgi people
and Central East
Goldfields people
Widgi people
and Central East
Goldfields people
Widgi people
Widgi people
and Central East
Goldfields people
Widgi people
and Central East
Goldfields people
Widgi people
Widgi people
and Central East
Goldfields people
Widgi people
Widgi people
and Central East
Goldfields people
Native Title Claims
Accepted for
Registration
5 and 10
3, 4, 5, 6
and 10
2, 4, 6, 7
and 10
2, 4, 5, 6
and 10
2, 4, 5, 6
and 10
2, 4, 6, 7
and 10
1, 4, 5, 6
and 10
1, 4, 5, 6
and 10
1, 4, 6
and 10
1, 4, 5, 6
and 10
1, 4, 6
and 10
1, 4, 5, 6
and 10
Notes
MLA = Mining Lease Application
Registered
Encumbrances
P = Prospecting Licence
ARUMA RESOURCES LI MITED
87
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
PLA25/2092
PLA25/2093
PLA25/2094
Plasia Pty Ltd
P25/2075
PLA25/2091
Plasia Pty Ltd
P25/2074
Hemisphere
Resources Limited
Plasia Pty Ltd
P25/2073
PLA25/2090
Hemisphere
Resources Limited
MLA25/330
Hemisphere
Resources Limited
Hemisphere
Resources Limited
MLA25/329
PLA25/2089
Hemisphere
Resources Limited
MLA25/327
Plasia Pty Ltd
Hemisphere
Resources Limited
P25/1807
P25/2076
Current Registered
Holder or Applicant
Project Name
and Tenement
No
(Western
Australia)
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Shares/
Ownership
Application
Application
Application
Application
Application
Application
Granted
Granted
Granted
Granted
Application
Application
Application
Granted
Status
21/04/2009
21/04/2009
21/04/2009
21/04/2009
21/04/2009
21/04/2009
05/02/2010
05/02/2010
05/02/2010
05/02/2010
23/08/2004
12/08/2004
16/04/2004
23/05/2007
Grant/
Application
Date
N/A
N/A
N/A
N/A
N/A
N/A
04/02/2014
04/02/2014
24/02/2014
24/02/2014
N/A
N/A
N/A
22/05/2011
Expiry Date
191ha
188ha
187ha
196ha
182ha
174ha
197ha
195ha
141ha
177ha
703ha
456ha
122ha
116ha
Area
(Hectares
or Blocks)
N/A
N/A
N/A
N/A
N/A
N/A
$455.07
$450.45
$325.71
$408.87
N/A
N/A
N/A
$267.96
Current
Annual Rent
N/A
N/A
N/A
N/A
N/A
N/A
$7,880
$7,880
$5,640
$7,080
N/A
N/A
N/A
$4,640
Current Annual
Minimum
Expenditure
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Registered
Encumbrances
Widgi people
Widgi people
Widgi people
Widgi people
Widgi people
and Central East
Goldfields people
Widgi people
Central East
Goldfields people
Central East
Goldfields people
Central East
Goldfields people
Central East
Goldfields people
Widgi people
and Central East
Goldfields people
Widgi people
and Central East
Goldfields people
Widgi people
and Central East
Goldfields people
Central East
Goldfields people
Native Title Claims
Accepted for
Registration
4 and 10
4 and 10
4 and 10
4 and 10
4, 5 and
10
4 and 10
5 and 9
5 and 9
5 and 9
5 and 9
4, 5 and
10
4, 5 and
10
4, 5 and
10
5 and 10
Notes
88
ARUMA RESOURCES LI MITED
Current Registered
Holder or Applicant
Hemisphere
Resources Limited
Hemisphere
Resources Limited
E28/1849
E28/1855
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
Hemisphere
Resources Limited
P38/3783
P38/3784
P38/3785
P38/3786
ELA53/1461
Hemisphere
Resources Limited
Jundee South Project
Hemisphere
Resources Limited
P38/3782
Laverton East Project
Hemisphere
Resources Limited
E28/1833
Kurnalpi South Project
Project Name
and Tenement
No
(Western
Australia)
100
100
100
100
100
100
100
100
100
Shares/
Ownership
Application
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Status
11/02/2009
29/01/2009
29/01/2009
29/01/2009
29/01/2009
29/01/2009
01/04/2010
09/02/2009
19/06/2009
Grant/
Application
Date
N/A
28/01/2013
28/01/2013
28/01/2013
28/01/2013
28/01/2013
31/03/2010
08/02/2014
18/06/2014
Expiry Date
14 Blocks
194ha
194ha
194ha
169ha
196ha
67 Blocks
13 Blocks
14 Blocks
Area
(Hectares
or Blocks)
N/A
$448.14
$448.14
$448.14
$390.39
$452.76
$7,944.86
$1,541.54
$1,660.12
Current
Annual Rent
N/A
$7,760
$7,760
$7,760
$6,760
$7,840
$67,000
$20,000
$20,000
Current Annual
Minimum
Expenditure
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Registered
Encumbrances
Wiluna
Nil
Nil
Nil
Nil
Nil
Central East
Goldfields people
Central East
Goldfields people
Central East
Goldfields people
Native Title Claims
Accepted for
Registration
8 and 10
10
10
10
10
10
5 and 10
5 and 10
5 and 10
Notes
ARUMA RESOURCES LI MITED
89
P25/1587, P25/1588, P25/1589 and P25/1590 are the subject of conversion application 201417 under section 49 of the Mining Act which, if granted, will convert P25/1587, P25/1588,
P25/1589 and P25/1590 into Mining Lease 25/329. A prospecting licence remains in force pending the determination of a conversion application to a mining lease.
P25/1620 is the subject of conversion application 195972 under section 49 of the Mining Act which, if granted, will convert P25/1620, into Mining Lease 25/327. A prospecting licence
remains in force pending the determination of a conversion application to a mining lease.
The land the subject of this tenement is affected by native title claim WC98/27 (Federal Court Number WAD 6243/98) made on behalf of the Widgi people and registered on 15 June 1998.
The land the subject of this tenement is affected by native title claim WC99/30 (Federal Court Number WAD 70/98) made on behalf of Central East Goldfields people and registered on
4 October 1999.
Agreement 3H/045 is the sale and purchase agreement dated 26 November 2003 between AngloGold Ashanti Australia Ltd, (“AngloGold”) Lakewood Mill Pty Ltd and Mario Epis
(“AngloGold Agreement”) pursuant to which AngloGold sold the tenements to Lakewood Mill Pty Ltd and by which Lakewood Mill Pty Ltd is required to pay AngloGold and Mario Epis in
total the once only sum of $50,000 upon submitting a notice of intent to mine at the Department of Mines and Petroleum, Western Australia in respect of any of the following tenements
P25/1581, P25/1582, P25/1583, P25/1584, P25/1585, P25/1586, P25/1587, P25/1588, P25/1589, P25/1590 and P25/1620. Hemisphere Resources Limited assumed the obligation
of Lakewood Mill Pty Ltd to pay the sum of $50,000. Aruma Exploration Pty Ltd by the Tenement Acquisition Agreement referred to in Note 10 below has agreed to reimburse Hemisphere
Resources Limited for up to $50,000 that it has to pay to AngloGold and Mario Epis in accordance with the AngloGold Agreement.
According to the Quick Appraisal reports on the Western Australian “TENGRAPH” system maintained by the Department of Mines and Petroleum (but not the National Native Tribunal)
P25/1587 and P25/1590 are subject to a native title claim by the Central East Goldfields people (see Note 5 above).
The land the subject of this tenement is affected by native title claim WC99/24 (Federal Court Number WAD 6164/980) known as the Wiluna claim registered on 24 September 1999.
This tenement is subject to the Tenement Acquisition Agreement between Aruma Exploration Pty Ltd and Plasia Pty Ltd dated 20 April 2010 and which is summarised in Schedule 2 of this
Report.
2.
3.
4.
5.
6.
7.
8.
9.
10. This tenement is subject to the Tenement Acquisition Agreement between the Company, Aruma Exploration Pty Ltd and Hemisphere Resources Limited dated 12 April 2010 and which is
summarised in Schedule 2 of this Report.
P25/1581, P25/1582, P25/1583, P25/1584, P25/1585 and P25/1586 are the subject of conversion application 201743 under section 49 of the Mining Act which, if granted, will convert
P25/1581, P25/1582, P25/1583, P25/1584, P25/1585 and P25/1586 into Mining Lease 25/330. A prospecting licence remains in force pending the determination of a conversion
application to a mining lease.
1.
Notes:
MATERIAL TENEMENT AGR EEMENTS SC H EDULE
(Schedule 2 to Solicitor’s Re por t)
1.
Tenement Acquis it ion Ag reement – Hemisphere Resources Limited
On 12 April 2010, Aruma Exploration Pty Ltd (“Aruma Exploration”) and the Company entered into a Tenement Acquisition Agreement
with Hemisphere Resources Limited (“Hemisphere Resources”) who is the holder of tenements E28/1833, E28/1849, E28/1855,
P25/1581, P25/1582, P25/1583, P25/1584, P25/1585, P25/1586, P25/1587, P25/1588, P25/1589, P25/1590, P25/1620,
P25/1806, P25/1807, P38/3782, P38/3783, P38/3784, P38/3785, P38/3786 and the applicant for ELA53/1461, PLA25/2089,
PLA25/2090, PLA25/2091, PLA25/2092, PLA25/2093, PLA25/2094, MLA25/327, MLA25/329 and MLA25/330 (together the
“Tenements”) by which, Aruma Exploration is to acquire all the right, title and interest to the Tenements and be provided with access
to relvant mining information.
On 15 April 2010, completion occurred under the agreement and Hemisphere Resources transfered all right, title and interest in
the Tenements to Aruma Exploration and provided Aruma Exploration with access to the relevant mining information. At completion,
amongst other things, Hemisphere Resources delivered to Aruma Exploration duly executed registrable transfers of the Tenements,
disclosed all mining information held in relation to the Tenements and delivered all documents necessary to effect transfers of the
Tenement. Aruma Exploration may now register the transfers subject to obtaining any necessary Ministerial approval.
The consideration satisfied at completion was as follows:
(a) the Company issued 39,999,995 Shares in the capital of the Company to Hemisphere Resources; and
(b) Aruma Exploration covenanted in favour of Hemisphere Resources to reimburse up to $50,000 that Hemisphere Resources is
obliged to pay to AngloGold Ashanti Australia Pty Ltd and Mario Epis upon submitting a notice of intent to mine in respect of
some of the Tenements and otherwise in accordance with the terms of a deed of assumption with AngloGold Ashanti Australia
Pty Ltd and Mario Epis.
On and from completion, Aruma Exploration is entitled to possession of the Tenements and the mining information and became solely
responsible for all rent, expenditure, rates and other obligations in respect of the Tenements.
Hemisphere Resources provides warranties and covenants in relation to the Tenements that are usual in an agreement of this nature
including that Hemisphere Resources is the sole holder or sole applicant of the Tenementsn and has full right, title and authority to
enter into the agreement.
90
ARUMA RESOURCES LI MITED
2.
Tenement Acquis it ion Ag reement – Plas ia Pty Ltd
On 20 April 2010, Aruma Exploration Pty Ltd (“Aruma Exploration”) and the Company entered into a Tenement Acquisition Agreement
with Plasia Pty Ltd (“Plasia”) who is the registered holder of prospecting licences 25/2073, 25/2074, 25/2075 and 25/2076 (together
the “Tenements”) by which Aruma Exploration will acquire all right, title and interest in the Tenements. Plasia Pty Ltd is a company
controlled by Mr Peter Schwann, the managing director of Aruma Resources Limited (“Company”).
Under the terms of the agreement, Plasia will from completion sell to Aruma Exploration all of its right, title and interest in the
Tenements free of encumbrances and disclose relevant mining information.
Completion under the agreement is conditional upon the Company completing the capital raising under this Prospectus and receiving
conditional approval to be admitted to the official list of the ASX on conditions acceptable to the Company by 31 May 2010 or such
later date as the parties may agree in writing. Completion will occur within 3 business days of satisfaction of the condition.
The consideration for the acquisition of the Tenements and the disclosure of the mining information is 125,000 fully paid ordinary
shares in the capital of the Company.
At completion, amongst other things, Plasia will deliver to Aruma Exploration duly executed registrable transfers of the Tenements
and all other documents necessary to effect a transfer of the Tenements. Plasia will also disclose to Aruma Exploration all mining
information in relation to the Tenements. From completion, Aruma Exploration may register the transfers.
Plasia appoints Aruma Exploration as its attorney from completion, for the purposes of doing all things necessary to transfer the
Tenements to Aruma Exploration.
Plasia provides warranties and covenants in relation to the Tenements that are usual in an agreement of this nature including that
Plasia is the registered holder of the Tenements and has full right, title and authority to enter into and perform its obligations under the
agreement.
ARUMA RESOURCES LI MITED
91
9 MATERIAL CONTRACTS
Set out below is a summary of the contracts to which the Company is a party which may be material in terms of this
Prospectus and which are not otherwise summarised in Schedule 2 to the Solicitor’s Report. That Schedule summarises the
tenement acquisition agreement with Hemisphere Resources Limited and the tenement acquisition agreement with Plasia Pty
Ltd being the agreements by which the Company has or will acquire an interest in the tenements.
To fully understand all rights and obligations of a material contract it would be necessary to review each contract in full and the
summaries below should be read in that light.
9.1
Execut ive service ag reement the Mr Peter Schwa nn
The Company has entered into an Executive Service Agreement with Mr Peter Schwann.
By the agreement Mr Schwann is employed as managing director of the Company to perform the functions and responsibilities
of the role of managing director.
The agreement commences from the date of listing of the Company on the ASX and continues until terminated by either party.
The Company may terminate the employment without notice upon limited events akin to misconduct or incapacity. Additionally,
either party may terminate the agreement without cause upon three months’ written notice.
Mr Schwann’s remuneration will consist of $200,000 per annum base salary plus statutory superannuation and provision
of a laptop computer and mobile telephone. The remuneration of Mr Schwann will be reviewed 12 months from the
commencement date and every 12 months thereafter. Mr Schwann will not be paid a separate director’s fee for serving on the
Board.
The agreement is governed by the laws of Western Australia.
9.2
Lead Ma nager Ma nda te Ag reement with Pa tersons Secur it ies Limited
The Company has entered into an agreement with Patersons Securities Limited (“Patersons”) by which Patersons has been
appointed as the sole Lead Manager to the Offer under this Prospectus. The services that Patersons will perform relate to the
management, marketing and selling/distribution of the Offer.
The fees payable to Patersons upon successful completion of the Offer is a $60,000 corporate advisory fee and a selling fee
of 5% plus GST of the amount raised under the Offer. Patersons may pass on any part of the selling fee to other Australian
financial services licensees.
The agreement is governed by the laws of Western Australia.
92
ARUMA RESOURCES LI MITED
10
ADDITIONAL INFORMATION
10.1 Interests of Directors
Other than as set out below or elsewhere in this Prospectus, no Director or proposed Director holds at the date of this Prospectus, or
held at any time during the last two years before the date of lodgement of this Prospectus with ASIC, any interest in:
(a) the formation or promotion of the Company; or
(b) any property acquired or proposed to be acquired by the Company in connection with its formation or promotion of the
Company or the Offer; or
(c) the Offer;
and no amounts have been paid or agreed to be paid by any person and no benefits have been given or agreed to be given by any
person:
(d) to a Director or proposed Director to induce him or her to become, or to qualify as, a Director; or
(e) for services provided by a Director or proposed Director in connection with the formation or promotion of the Company or
the Offer.
Holdi ngs of Director s
As at the date of ASX listing the Directors will have a relevant interest in Shares and Options of the Company as set out in the table
below.
Director
Shares
Options
Paul Boyatzis
Nil
1,000,000
Peter Schwann
125,000
2,000,000
Danny Costick
Nil
1,000,000
Each Option is exerciseable at 27 cents by 31 March 2012. Full terms of the Options are set out in Section 10.4.
The Directors are not required to hold any Shares in the Company under the Constitution.
Re m u ne rat ion of Director s
Mr Paul Boyatzis will be paid $72,000 per annum as a director’s fee plus statutory superannuation. In the two years prior to the date
of this Prospectus Mr Boyatzis has received no renumeration.
Mr Peter Schwann will be paid $200,000 per annum plus statutory superannuation as set out in section 9.1. Mr Schwann will not
receive a separate director’s fee. In the two years prior to the date of this Prospectus Mr Schwann has received no renumeration.
Mr Danny Costick will be paid $40,000 per annum as a director’s fee plus statutory superannuation. In the two years prior to the date
of this Prospectus Mr Costick has received no renumeration.
Directors may be paid reasonable expenses incurred by them on business of the Company.
ARUMA RESOURCES LI MITED
93
10.2 Interests of exper ts a nd advisors
Except as disclosed in this Prospectus, no expert, promoter or any other person named in this Prospectus as performing a function in
a professional advisory or other capacity in connection with the preparation or distribution of the Prospectus, nor any firm in which any
of those persons is or was a partner nor any company in which any of those persons is or was associated with, has now, or has had,
in the two-year period ending on the date of this Prospectus, any interest in:
(a) the formation or promotion of the Company; or
(b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
(c) the Offer.
Except as disclosed in this Prospectus, no amounts of any kind (whether in cash, securities or otherwise) have been paid or agreed
to be paid to any expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory
or other capacity in connection with the preparation or distribution of the Prospectus, or to any firm in which any of those persons is
or was a partner or to any company in which any of those persons is or was associated with, for services rendered by that person in
connection with the formation or promotion of the Company or the Offer.
Fairweather & Lemonis have acted as solicitors to the Offer. In respect of this work, the Company will pay approximately $25,000
exclusive of GST and disbursements. Additionally, Fairweather and Lemonis will be paid approximately $15,000 exclusive of
GST for the provision of the Solicitor’s Report in this Prospectus. Subsequently fees will be paid in accordance with normal hourly
rates. Fairweather & Lemonis has not received any other fees for services to the Company in the two years prior to the date of this
Prospectus for other legal services.
Hellman & Schofield Pty Ltd has prepared the Independent Geologist’s Report in this Prospectus. In respect of this work, the
Company will pay approximately $30,000. Hellman & Schofield Pty Ltd has not received any other fees for services to the Company
in the two years prior to the date of this Prospectus.
Ord Nexia Pty Ltd has prepared the Investigating Accountant’s Report in this Prospectus. In respect of this work, the Company will
pay approximately $8,000. Ord Nexia Pty Ltd has not received any other fees for services to the Company in the 2 years prior to the
date of this Prospectus.
Patersons Securities Limited is the Lead Manager to the Offer and will receive a $60,000 corporate advisor fee and a selling fee of
5% plus GST of the amount raised under the Offer. Patersons Securities Limited has not received any other fees for services to the
Company in the two years prior to the date of this Prospectus.
10.3 Rig hts a nd l ia bil it ies a tt achi ng to Sha res
Full details of the rights and liabilities attaching to the Shares are:
•
detailed in the Constitution, a copy of which can be inspected, free of charge, at the registered office of the Company during
normal business hours; and
•
in certain circumstances, regulated by the Corporations Act, the Listing Rules and the general law.
The following is a summary of the more significant rights and liabilities attaching to the Shares. This summary is not exhaustive and
does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should
seek independent legal advice.
Vot i ng Rights
Subject to any rights or restrictions for the time being attached to any class or classes of shares, at a general meeting of members
every member has one vote on a show of hands and one vote per Share on a poll. The person who holds a share which is not fully
paid shall be entitled to a fraction of a vote equal to that proportion of a vote that the amount paid on the relevant share bears to the
total issue price of the share. Voting may be in person or by proxy, attorney or representative.
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ARUMA RESOURCES LI MITED
Divide nds
Subject to the rights of holders of shares issued with any special rights (at present there are none), the profits of the Company which
the Board may from time to time determine to distribute by way of dividend are divisible to each share of a class on which the Board
resolves to pay a dividend in proportion to the amount for the time being paid on a share bears to the total issue price of the share.
All Shares currently on issue and the shares to be issued under this Prospectus are fully paid Shares.
Fut ure Issues of Secur it ies
Subject to the Corporations Act and the Listing Rules, the Directors may issue, grant options over, or otherwise dispose of unissued
shares in the Company at the times and on the terms that the Directors think proper and a share may be issued with preferential or
special rights.
Transf e r of Shares
A shareholder may transfer Shares by a market transfer in accordance with any computerised or electronic system established or
recognised by ASX for the purpose of facilitating transfers in Shares or by an instrument in writing in a form approved by ASX or the
Board.
Meet i ngs and Not ices
Each shareholder is entitled to receive notice of, and to attend, general meetings for the Company and to receive all notices, accounts
and other documents required to be sent to shareholders under the Constitution, the Corporations Act or the Listing Rules.
Shareholders may requisition meetings in accordance with the Corporations Act.
Elect ion of Director s
There must be a minimum of three Directors. At every annual general meeting one third of the Directors (rounded to the nearest
whole number) must retire from office. If the Company has fewer than three Directors, one Director must retire from office together
with any Director who would have held office for more than three years if that Director remains in office until the next general meeting.
These retirement rules do not apply to certain appointments including the managing director.
Inde mn it ies
To the extent permitted by law the Company must indemnify each past and present Director and secretary against any liability
incurred by that person as an officer of the Company and any legal costs incurred in defending an action in respect of such liability.
Wi ndi ng Up
If the Company is wound up, the liquidator may, with the sanction of a special resolution of the shareholders:
•
divide the assets of the Company among the members in kind;
•
for that purpose fix the value of assets and decide how the division is to be carried out as between the members and different
class of members; and
•
vest assets of the Company in trustees on any trusts for the benefit of the members as the liquidator thinks appropriate.
Shareholde r Liabi lity
As the Shares under the Prospectus are fully paid Shares, they are not subject to any calls for money by the Directors and will
therefore not become liable for forfeiture.
Alte rat ion to the Const it ut ion
The Constitution can only be amended by a special resolution passed by at least three quarters of shareholders present and voting at
the general meeting. At least 28 days written notice specifying the intention to propose the resolution as a special resolution must be
given.
ARUMA RESOURCES LI MITED
95
List i ng Rules
If the Company is admitted to trading on the Official List, then despite anything in the Constitution, if the Listing Rules prohibit an
act being done, the act must not be done. Nothing in the Constitution prevents an act being done that the Listing Rules require to
be done. If the Listing Rules require an act to be done or not to be done, authority is given for that act to be done or not to be done
(as the case may be). If the Listing Rules require the Constitution to contain a provision and it does not contain such a provision, the
Constitution is deemed to contain that provision. If the Listing Rules require the Constitution not to contain a provision and it contains
such a provision, the Constitution is deemed not to contain that provision. If a provision of the Constitution is inconsistent with the
Listing Rules, the Constitution is deemed not to contain that provision to the extent of the inconsistency.
10.4 Ter ms of Exist i ng Directors’ Opt ions
The Company has issued 4,000,000 Options to the Directors.
The terms and conditions of the Options are as follows:
(a) Each Option entitles the holder to one (1) Share.
(b) The Options are exercisable at any time prior to 5.00pm WST on 31 March 2012 (“Expiry Date”).
(c) The exercise price of the Options is 27 cents per Option.
(d) The Options are freely transferable and quotation of the Options will not be sought.
(e) The Company will provide to each Options holder a notice that is to be completed when exercising the Options (“Notice of
Exercise”). The Options may be exercised wholly or in part by completing the Notice of Exercise and delivering it together
with payment to the secretary of the Company to be received any time prior to the Expiry Date. The Company will process all
relevant documents received at the end of every calendar month.
(f)
Upon the exercise of an Option and receipt of all relevant documents and payment, the holder in accordance with paragraph
(e) will be allotted and issued a Share ranking pari passu with the then issued Shares.
(g) There will be no participating rights or entitlements inherent in the Options and the holders will not be entitled to participate in
new issues of capital which may be offered to Shareholders during the currency of the Options. However, the Company will
ensure that for the purposes of determining entitlements to any such issue, the record date will be at least seven business
days after the issue is announced. This will give Option holders the opportunity (where available) to exercise their Options
prior to the date for determining entitlements to participate in any such issue.
(h) If there is a bonus issue (“Bonus Issue”) to Shareholders, the number of Shares over which an Option is exercisable will be
increased by the number of Shares which the holder would have received if the Option had been exercised before the record
date for the Bonus Issue (“Bonus Shares”). The Bonus Shares must be paid up by the Company out of profits or reserves (as
the case may be) in the same manner as was applied in the Bonus Issue, and upon issue will rank equally in all respects with
the other Shares on issue as at the date of issue of the Bonus Shares.
(i)
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In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the
Company prior to the Expiry Date, all rights of an Option holder are to be changed in a manner consistent with the Listing
Rules.
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10.5 Com pa ny t ax st a tus a nd f i na ncial yea r
The Company will be taxed in Australia as a public company. The financial year of the Company ends on 30 June annually.
10.6 Dividend pol icy
The Company does not intend to pay dividends on securities for the year ending 30 June 2010.
Any future determination as to the payment of dividends by the Company will be at the discretion of the Directors and will depend
upon matters such as the availability of distributable earnings, the operating results and financial condition of the Company, future
capital requirements, general business and other factors considered relevant by the Directors. No assurances in relation to the
payment of dividends, or the franking credits attached to such dividends, can be given.
10.7 Expenses of the Of fer
The total estimated costs of this Prospectus at Full Subscription with all Oversubscriptions, including fees to be paid to the Lead
Manager, solicitors, independent geologist and investigating accountant, listing fees, Prospectus design, printing and other
miscellaneous expenses will be payable by the Company and these expenses are estimated to be approximately $580,000 exclusive
of any GST which may be payable on that amount. This sum includes estimated fees to the Lead Manager of $410,000 at Full
Subscription with all Oversubscriptions.
10.8 Consents
The following parties have given their written consent to be named in this Prospectus and for the inclusion of statements made by
those parties (as described below in the form and context in which they are included), and have not withdrawn such consent before
lodgement of this Prospectus with ASIC.
(a) Fairweather & Lemonis has consented to being named as the Solicitors to the Offer and the inclusion of the Solicitors Report
in this Prospectus.
(b) Hellman & Schofield Pty Ltd has consented to being named as the Independent Geologist to the Company and the inclusion of
the Independent Geologist’s Report in this Prospectus.
(c) Ord Nexia Pty Ltd has consented to being named as the Investigating Accountant to the Company and the inclusion of the
Investigating Accountant’s Report in this Prospectus.
(d) Patersons Securities Limited has consented to being named as Lead Manager to the Offer.
(e) Advanced Share Registry Services has consented to being named as the Share Registry to the Offer.
(f)
Hemisphere Resources Limited has consented to the inclusion in this Prospectus of all statements referring to it.
Each of the parties referred to above in this section:
•
does not make, or purport to make any statement in this Prospectus, or on which a statement made in this Prospectus is
based other than as specified in this section;
•
to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Prospectus other
than a reference to its name and a statement included in the Prospectus with the consent of that party as specified in this
section; and
•
has not caused or authorised the issue of this Prospectus.
ARUMA RESOURCES LI MITED
97
10.9
Legal Proceed i ngs
Legal proceedings may arise from time to time in the course of the business of the Company.
As at the date of this Prospectus, there are no material legal proceedings affecting the Company and the Directors are not aware of
any legal proceedings pending or threatened against or affecting the Company.
10.10 Electronic Prospectus
Pursuant to Class Order 00/44 the ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution
of an electronic prospectus and electronic application form on the basis of a paper prospectus lodged with ASIC and the publication of
notices referring to an electronic prospectus or electronic application form, subject to compliance with certain conditions.
If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus
accompanied by the Application Form. If you have not, please contact the Company and the Company will send you, for free, either a
hard copy or a further electronic copy of the Prospectus or both.
The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person
was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant
supplementary or replacement prospectus or any of those documents were incomplete or altered.
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11
DIRECTORS’ RESPONSIBILITY AND CONSENT
The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that any
statements made by the Directors in this Prospectus are not misleading or deceptive and that in respect to any other statements
made in the Prospectus by persons other than Directors, the Directors have made reasonable enquiries and on that basis have
reasonable grounds to believe that persons making the statement or statements were competent to make such statements, those
persons have given their consent to the statements being included in this Prospectus in the form and context in which they are
included and have not withdrawn that consent before lodgement of this Prospectus with the ASIC, or to the Directors knowledge,
before any issue of the Shares pursuant to this Prospectus.
Each Director has consented to the lodgement of this Prospectus with the ASIC and has not withdrawn that consent.
27 April 2010
Signed for and on behalf of
Aruma Resources Limited by
Mr Paul Boyatzis
Chairman
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12
GLOSSARY
Where the following terms are used in this Prospectus they have the following meanings:
100
AFSL
Australian Financial Services Licence.
Applicant
a person who submits a valid Application Form pursuant to this Prospectus.
Application
a valid application to subscribe for Shares pursuant to either the Priority Offer or the Public Offer under this
Prospectus.
Application Form
a Priority Offer Application Form or a Public Offer Application Form attached to this Prospectus.
ASIC
the Australian Securities & Investments Commission.
ASX
the ASX Limited ACN 008 624 691.
Board
the Board of Directors.
Closing Date
the Priority Offer Closing Date and the Public Offer Closing Date or an amended time as set by the Board.
Company or Aruma Resources
Aruma Resources Limited ABN 77 141 335 364
Constitution
the constitution of the Company.
Corporations Act
the Corporations Act 2001 (Cth).
Director
a director of the Company.
Full Subscription
the amount to be raised under this Prospectus being $5,000,000 excluding Oversubscriptions.
Hemisphere
Hemisphere Resources Limited ABN 96 122 074 006
Hemisphere Shareholder
shareholder of Hemisphere with a registered address in Australia or New Zealand.
Independent Geologist
Hellman & Schofield Pty Ltd
JORC Code
means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared
by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of
Geoscientists and Minerals Council of Australia.
Lead Manager
Patersons Securities Limited ACN 008 896 311 AFSL 239 052
Listing Rules
the listing rules of the ASX.
Offer
the Priority Offer and the Public Offer or either of them, as the context requires.
Official List
the official list of the ASX.
Opening Date
the Priority Offer Opening Date or the Public Offer Opening Date as the context requires.
Oversubscription
any amount to be raised under this Prospectus in excess of $5,000,000 and up to $7,000,000.
Priority Offer
the offer of up to 7,500,000 Shares to Hemisphere Shareholders with a registered address in Australia or New
Zealand pursuant to this Prospectus and more particularly described in Section 2.2.
Priority Offer Application Form
the Application Form attached to or accompanying this Prospectus and which relates to the Priority Offer.
Priority Offer Closing Date
26 May 2010 or an amended date as set by the Board.
Priority Offer Opening Date
the opening date for the Priority Offer under this Prospectus being 5 May 2010,
Project
a project in which the Company has an interest.
Prospectus
this Prospectus and includes the electronic prospectus.
Public Offer
the offer of Shares to the general public pursuant to this Prospectus and more particularly described in Section 2.3.
Public Offer Application Form
the Application Form attached to or accompanying this Prospectus and which relates to the Public Offer.
Public Offer Closing Date
2 June 2010 or an amended date as set by the Board.
Public Offer Opening Date
the opening date for the Public Offer under this Prospectus being 5 May 2010.
Share
a fully paid ordinary share in the Company.
Shareholder
the registered holder of Shares in the Company.
Share Registry
Advanced Share Registry Services.
WST
Western Standard Time, Perth, Western Australia.
$ or Dollars
Australian dollars unless otherwise stated.
ARUMA RESOURCES LI MITED
PRIORITY OFFER APPLICATION FORM
FOR SHAREHOLDERS OF HEMISPHERE RESOURCES LIMITED ONLY
This Priority Offer Application Form relates to the issue of Shares in Aruma Resources Limited at 20 cents per Share pursuant to a
Prospectus dated 27 April 2010. The expiry date of the Prospectus is the date which is 13 months after the date of the Prospectus.
The Prospectus contains information about investing in the Shares of the Company and it is advisable to read this document before
applying for Shares. A person who gives another person access to this Priority Offer Application Form must at the same time and
by the same means give the other person access to the Prospectus, and any supplementary prospectus (if applicable). While the
Prospectus is current, the Company will send paper copies of the Prospectus, and any supplementary prospectus (if available) and a
Priority Offer Application Form, on request and without charge.
Number of Shares applied for:
Broker Stamp
Application moneys at 20 cents per Share: $
Title
Given Names/Company Name
Surname/ACN
Joint applicants or account designation
Postal Address
City/Town State Contact Name
Daytime Contact No.
Email contact
CHESS Details: PID
HIN
Tax File No/Exemption Category
Applicant 1
Payment Details
Drawer
Applicant 2
Postcode
Applicant 3
Bank
Branch
Amount
$
$
DECLARATION
By lodging this Priority Offer Application Form and a cheque for the application money the Applicant hereby:
(a) applies for the number of Shares specified in the Priority Offer Application Form or such lesser number as may be allocated
by the Directors;
(b) agrees to be bound by the Constitution of the Company; and
(c) authorises the Directors to complete or amend this Priority Offer Application Form where necessary to correct any errors or
omissions.
ARUMA RESOURCES LI MITED
101
INSTRUCTIONS
1.
Enter the number of Shares you wish to apply for. Applications must be for a minimum of 10,000 Shares and thereafter in
multiples of 1,000 Shares.
2.
Enter the total amount of application moneys payable. To calculate this amount, multiply the number of Shares you are
applying for by the issue price for each Share.
3.
Enter the full name(s) of all legal entities that are to be recorded as the registered holders.
4.
Enter the postal address for all communications from the Company.
5.
Enter the name and telephone number of the person who should be contacted if there are any questions with respect to this
application.
6.
If you are CHESS sponsored, enter your Participant Identification Number (PID) and Holder Identification Number (HIN),
otherwise leave this box blank and a Shareholder Reference Number (SRN) will be allocated to you on issue.
7.
Enter the tax file number(s) of the Applicant(s) - this is not mandatory.
8.
Unless otherwise agreed by the Company, payment must be made to “Aruma Resources Limited - Share Offer Account”
by cheque drawn or payable on a bank within Australia, crossed “Not Negotiable” and be in Australian dollars. Receipt of
payment will not be acknowledged.
9.
This Priority Offer Application Form does not need to be signed. Return of this Priority Offer Application Form with the required
application moneys will constitute acceptance of that number of Shares stated on this form.
If you have received a Priority Offer Application Form without a complete and unaltered copy of this Prospectus, please contact the
Company who will send you, free of charge, either a printed or electronic version of this Prospectus (or both).
CORRECT FORMS OF REGISTRABLE TITLE
Note that only legal entities are allowed to hold securities. Priority Offer Application Forms must be in the name(s) of a natural
person(s), companies or other legal entities acceptable to the Company. At least one full name and the surname is required for each
natural person. Priority Offer Application Forms cannot be completed by persons less than 18 years of age. Examples of the correct
form of registrable title are set out below:
Type of Investor
Correct Form of Registrable Title
Incorrect Form of Registrable Title
Trusts
Mr John David Brown <John David Brown A/C>
John Brown Family Trust
Deceased Estates
Mr John David Brown <Est John David Brown A/C>
John Brown <Deceased>
Partnerships
Mr John David Brown and Mr Michael James Brown
John Brown & Son
Clubs/
Unincorporated Bodies
Mr John David Brown <ABC Tennis Association A/C>
Brown Investment Club or
ABC Tennis Association
Super Funds
John Brown Pty Ltd <Super Fund A/C>
John Brown Superannuation Fund
PAYMENT DETAILS
Please note that if a Priority Offer Application Form is not completed correctly, or if the accompanying payment is for the wrong
amount, it may still be accepted. Any decision of the Directors as to whether to accept a Priority Offer Application Form, and how to
construe, amend or complete it, shall be final. A Priority Offer Application Form will not be treated as having offered to subscribe for
more Shares than is indicated by the amount of the accompanying cheque. Please deliver the completed Priority Offer Application
Form (accompanied by a cheque for the application moneys) at any time prior to closing date to the Company:
Delivery:
Advanced Share Registry Services
Unit 2, 150 Stirling Highway
Nedlands WA 6009
Post:
Advanced Share Registry Services
PO Box 1156
Nedlands WA 6909
Applications must be received by the Priority Offer Closing Date.
Please telephone the Company on (08) 9481 2425 if you have any questions with respect to this Priority Offer Application form.
Applications are for Shares as detailed in the Prospectus dated 27 April 2010.
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ARUMA RESOURCES LI MITED
PUBLIC OFFER
APPLICATION FORM
This Public Offer Application Form relates to the issue of Shares in Aruma Resources Limited at 20 cents per Share pursuant to a
Prospectus dated 27 April 2010. The expiry date of the Prospectus is the date which is 13 months after the date of the Prospectus.
The Prospectus contains information about investing in the Shares of the Company and it is advisable to read this document before
applying for Shares. A person who gives another person access to this Public Offer Application Form must at the same time and
by the same means give the other person access to the Prospectus, and any supplementary prospectus (if applicable). While the
Prospectus is current, the Company will send paper copies of the Prospectus, and any supplementary prospectus (if available) and a
Public Offer Application Form, on request and without charge.
Number of Shares applied for:
Broker Stamp
Application moneys at 20 cents per Share: $
Title
Given Names/Company Name
Surname/ACN
Joint applicants or account designation
Postal Address
City/Town State Contact Name
Daytime Contact No.
Email contact
CHESS Details: PID
HIN
Tax File No/Exemption Category
Applicant 1
Payment Details
Drawer
Applicant 2
Postcode
Applicant 3
Bank
Branch
Amount
$
$
DECLARATION
By lodging this Public Offer Application Form and a cheque for the application money the Applicant hereby:
(a) applies for the number of Shares specified in the Public Offer Application Form or such lesser number as may be allocated
by the Directors;
(b) agrees to be bound by the Constitution of the Company; and
(c) authorises the Directors to complete or amend this Public Offer Application Form where necessary to correct any errors or
omissions.
ARUMA RESOURCES LI MITED
103
INSTRUCTIONS
1.
Enter the number of Shares you wish to apply for. Applications must be for a minimum of 10,000 Shares and thereafter in
multiples of 1,000 Shares.
2.
Enter the total amount of application moneys payable. To calculate this amount, multiply the number of Shares you are
applying for by the issue price for each Share.
3.
Enter the full name(s) of all legal entities that are to be recorded as the registered holders.
4.
Enter the postal address for all communications from the Company.
5.
Enter the name and telephone number of the person who should be contacted if there are any questions with respect to this
application.
6.
If you are CHESS sponsored, enter your Participant Identification Number (PID) and Holder Identification Number (HIN),
otherwise leave this box blank and a Shareholder Reference Number (SRN) will be allocated to you on issue.
7.
Enter the tax file number(s) of the Applicant(s) - this is not mandatory.
8.
Unless otherwise agreed by the Company, payment must be made to “Aruma Resources Limited - Share Offer Account”
by cheque drawn or payable on a bank within Australia, crossed “Not Negotiable” and be in Australian dollars. Receipt of
payment will not be acknowledged.
9.
This Public Offer Application Form does not need to be signed. Return of this Public Offer Application Form with the required
application moneys will constitute acceptance of that number of Shares stated on this form.
If you have received a Public Offer Application Form without a complete and unaltered copy of this Prospectus, please contact the
Company who will send you, free of charge, either a printed or electronic version of this Prospectus (or both).
CORRECT FORMS OF REGISTRABLE TITLE
Note that only legal entities are allowed to hold securities. Public Offer Application Forms must be in the name(s) of a natural
person(s), companies or other legal entities acceptable to the Company. At least one full name and the surname is required for each
natural person. Public Offer Application Forms cannot be completed by persons less than 18 years of age. Examples of the correct
form of registrable title are set out below:
Type of Investor
Correct Form of Registrable Title
Incorrect Form of Registrable Title
Trusts
Mr John David Brown <John David Brown A/C>
John Brown Family Trust
Deceased Estates
Mr John David Brown <Est John David Brown A/C>
John Brown <Deceased>
Partnerships
Mr John David Brown and Mr Michael James Brown
John Brown & Son
Clubs/
Unincorporated Bodies
Mr John David Brown <ABC Tennis Association A/C>
Brown Investment Club or
ABC Tennis Association
Super Funds
John Brown Pty Ltd <Super Fund A/C>
John Brown Superannuation Fund
PAYMENT DETAILS
Please note that if a Public Offer Application Form is not completed correctly, or if the accompanying payment is for the wrong
amount, it may still be accepted. Any decision of the Directors as to whether to accept a Public Offer Application Form, and how to
construe, amend or complete it, shall be final. A Public Offer Application Form will not be treated as having offered to subscribe for
more Shares than is indicated by the amount of the accompanying cheque. Please deliver the completed Public Offer Application
Form (accompanied by a cheque for the application moneys) at any time prior to closing date to the Company:
Delivery:
Advanced Share Registry Services
Unit 2, 150 Stirling Highway
Nedlands WA 6009
Post:
Advanced Share Registry Services
PO Box 1156
Nedlands WA 6909
Applications must be received by the Public Offer Closing Date.
Please telephone the Company on (08) 9481 2425 if you have any questions with respect to this Public Offer Application form.
Applications are for Shares as detailed in the Prospectus dated 27 April 2010.
104
ARUMA RESOURCES LI MITED
ARUMA RESOURCES LI MITED
105
ARUMA
Aruma Resources Limited
ABN 77 141 335 364
24 Colin Street
West Perth WA 6005
Tel: +61 8 9481 2425
Fax: +61 8 9481 1756
www.arumaresources.com