CRUSADER RESOURCES LIMITED ABN: 94 106 641 963 HALF-YEAR REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2012
Corporate Directory Directors Stephen Copulos (Chairman) Robert Smakman (Managing Director) Paul Stephen (Executive Director) Justin Evans David Netherway Company Secretary Andrew Beigel Registered office Principal place of business Suite 1, Level 1, Suite 1, Level 1 35 Havelock Street 35 Havelock Street West Perth WA 6005 West Perth WA 6005 Australia Australia Telephone: +61 8 9320 7500 Facsimile: +61 8 9320 7501 Brazil 329 Avenida Francisco Sales - Loja 9 70 Rua Antonio Gomes de Oliviera Bairro Floresta 30.150-220 Bairro Manaíra 58038-040 Belo Horizonte - MG João Pessoa PB Brazil Brazil Telephone: +55 31 2515 0740 Phone/fax: +55 83 8881 8608 Auditors Bankers Deloitte Touche Tohmatsu Bank of Western Australia Limited Level 14, Woodside Plaza Perth Business Banking Centre 240 St Georges Terrace Level 30, Bank West Tower Perth WA 6000 108 St Georges Terrace Telephone: +61 8 9365 7000 Perth WA 6000 Facsimile: +61 8 9365 7001 Share Register Solicitors Security Transfers Registrars Pty Ltd GTP Legal 770 Canning Highway Level 1 Applecross WA 6959 28 Ord Street Telephone: +61 8 9315 0933 West Perth WA 6005 Facsimile: +61 8 9315 2233 Telephone: +61 8 6555 1867 ASX Code: Ordinary shares - CAS Page 2
Directors Report The directors of Crusader Resources Limited submit herewith the financial report of Crusader Resources Limited and its subsidiaries (the Group) for the half-year ended 31 December 2012. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: Directors The names of the directors of the company during or since the end of the half-year are: Mr. S. Copulos Chairman (appointed 5 March 2013) Mr. R. M. Smakman Managing Director Mr. P. Stephen Executive Director Mr. J. Evans Non-executive Director Mr. D. Netherway Non-executive Director Mr. D. Archer Resigned 2 March 2013 Operating Result The Group incurred an after tax loss for the half-year ended 31 December 2012 of $4,180,399 (31 December 2011: $6,538,807). Review of operations Borborema Gold project Crusader purchased 100% of the Borborema Gold Project in Rio Grande do Norte, Brazil, during the second half of 2010, and has been drilling and conducting studies on the project since. During the period the Company progressed the Bankable Feasibility Study (BFS) into the project following a positive Preliminary Feasibility Study completed in September 2011. The BFS will be completed during 2013. At the end of the December 2012, over 85,000m of drilling had been completed. The Company now has a combined Indicated and Inferred Mineral Resource estimate at Borborema of 2.43Moz of gold at a cutoff of 0.5g/t: Borborema Gold Project Mineral Resource Estimate by Multiple Indicator Kriging (MIK) Category Tonnes (Mt) Grade (Au g/t) Contained Gold (Moz) Measured Resources 8.2 1.22 0.32 Indicated Resources 42.8 1.12 1.55 Total Measured + Indicated 50.9 1.14 1.87 Inferred Resources 17.6 1.00 0.57 Total- All Categories 68.6 1.10 2.43 Table 1: July 2012 Mineral Resources estimate Borborema Gold Project. Reported at a 0.5 g/t cut-off. Parent Block 25mE x 25mN x 5mRL. Selective Mining Unit 5mE x 6.25mN x 2.5mRL. Note, appropriate rounding has been applied, subtotals may not equal total figure. Page 3
In November 2012 the Company announced its maiden gold reserve of 1.6Moz, presented in the table below: Borborema Gold Project Maiden Ore Reserve Category Tonnes (Mt) Grade (Au g/t) Mineable Gold (koz) Proven Probable Oxide 0.65 0.80 17 Fresh 7.26 1.25 292 Oxide 1.68 0.70 38 Fresh 32.82 1.20 1,260 Total 42.41 1.18 1,610 (1.61 Moz) Table 2: Maiden Ore Reserve estimate for the Borborema Gold Project. Reported at a 0.4 g/t cut-off for oxide and 0.5g/t cut-off for fresh material. The cut-off grades have been based on the latest throughput costs, gold price of US$1350/oz, metallurgical recovery of 95% and then rounded up. Note, appropriate rounding has been applied, subtotals may not equal total figures. Posse iron project Crusader purchased 100% of the Posse Iron Project in 2009. The project is located within the northern part of the Iron Quadrilateral of Minas Gerais state, Brazil, 30km from Belo Horizonte, the capital city of Minas Gerais state. Belo Horizonte is a major city providing infrastructure to the local mining industry which is well established in the area. In December 2012 the Company received the environmental licence required for mining to commence under the trial mining licence, at a production rate of 300,000 t p.a. The plant has been constructed and commissioned and following construction of entry and exit roads and the installation of a weigh bridge, production is expected to commence during the first quarter of 2013. Crusader is submitting applications to the mines department (DNPM) and environmental department (SUPRAM) for licensing to be upgraded to a production rate of up to 1Mtpa. It is anticipated these applications will be approved during 2013. The current Posse resource is presented below: Category Posse Iron Project January 2009 Mineral Resource Estimate Tonnes Fe (%) SiO (Mt) 2 (%) Al 2 O 3 (%) Mn (%) P (%) Indicated Resources 4.83 47.39 27.56 1.82 0.25 0.020 1.38 Inferred Resources 31.18 42.89 36.17 0.61 0.17 0.026 0.73 Total 36.02 43.50 35.02 0.77 0.18 0.024 0.82 LOI* (%) Table 3: January 2009 Mineral Resource Estimate for Posse Iron Project * Loss on Ignition Page 4
Directors Report (continued) Regional Exploration Crusader has continued regional exploration activities on the large tenement package that surrounds the Borborema project. The tenement holding continues to expand and now exceeds more than 4,500km 2 and covers the extensions of the host unit and important north-east trending structures that host Borborema. The Seridó region has never been systematically explored for gold and the potential for discovering similar mineralised systems is considered high. Auditor Independence Declaration The auditor s independence declaration is included on page 16 of the half-year report. Signed in accordance with a resolution of the directors made pursuant to s.306(3) of the Corporations Act 2001. On behalf of the directors R. Smakman Managing Director Perth, 14 March 2013 Competent Person Statement The information in this report that relates to: a) Exploration Results is based on information compiled or reviewed by Mr Robert Smakman who is a full time employee of the company; b) Borborema gold Mineral Resources is based on information compiled by Mr Lauritz Barnes and Mr Brett Gossage and independent consultants to the company; c) Borborema gold Ore Reserves is based on information complied by Mr Linton Kirk, independent consultant to the company; d) Posse Fe Mineral Resources is based on and accurately reflects, information compiled by Mr Bernardo Viana who is a full time employee of Coffey Mining Pty Ltd, and who are all Members of the Australian Institute of Mining and Metallurgy (Rob Smakman and Linton Kirk being Fellows), and who all have sufficient experience that is relevant to the type of mineralisation and type of deposit under consideration, and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Each of Mr Smakman, Mr Lauritz Barnes, Mr Kirk, Mr Viana and Mr Brett Gossage consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. Page 5
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2012 Note Consolidated Half-year ended 31 Dec 2012 31 Dec 2011 $ $ Continuing operations Other revenue 4 193,940 560,493 Administration (663,687) (541,476) Corporate expenses (986,291) (652,770) Finance costs (3,312) (21,734) Depreciation (99,982) (56,706) Employee expenses (1,723,787) (2,531,452) Exploration and evaluation (304,491) (67,341) Unrealised foreign exchange loss (406,260) (2,887,487) Other expenses (186,529) (340,334) Loss before income tax expense (4,180,399) (6,538,807) Income tax expense - - Loss for the period attributable to owners of the parent (4,180,399) (6,538,807) Other comprehensive income Items that may be reclassified subsequently to profit or loss Gain / (Loss) on available-for-sale assets taken to equity (57,000) (11,000) Exchange differences arising on translation of foreign operations (216,959) 1,446,564 Income tax relating to components of other comprehensive income - - Other comprehensive income for the period (net of tax) (273,959) 1,435,564 Total comprehensive income/(expense) for the period attributable to owners of the parent (4,454,358) (5,103,243) Loss per share Basic (cents per share) (3.44) (6.64) Diluted (cents per share) (3.44) (6.64) Notes to the condensed consolidated financial statements are included on pages 10 to 14. Page 6
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012 Note Consolidated 31 Dec 12 30 Jun 12 $ $ Current Assets Cash and cash equivalents 4,482,156 5,327,196 Trade and other receivables 249,524 91,329 Other current assets 289,437 343,189 Total Current Assets 5,021,117 5,761,714 Non current Assets Other financial assets 187,094 243,543 Mineral resources 5 18,036,544 14,716,233 Mine development properties 6 3,169,241 3,258,023 Property, plant and equipment 1,821,894 1,637,606 Total Non current Assets 23,214,773 19,855,405 Total Assets 28,235,890 25,617,119 Current Liabilities Trade and other payables 1,609,592 2,248,871 Provisions 317,131 198,520 Borrowings 99,622 88,730 Total Current Liabilities 2,026,345 2,536,121 Non current Liabilities Provisions 146,740 90,585 Borrowings 73,963 45,530 Total non current Liabilities 220,703 136,115 Total Liabilities 2,247,048 2,672,236 Net Assets 25,988,842 22,944,882 Equity Total equity attributable to equity holders of the Company Share capital 7 55,268,797 47,770,480 Reserves 6,384,352 6,658,310 Accumulated losses (35,664,307) (31,483,908) Total equity 25,988,842 22,944,882 Notes to the condensed consolidated financial statements are included on pages 10 to 14. Page 7
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2012 Consolidated Attributable to equity holders of the parent Issued capital Accumulated losses Reserves Total equity $ $ $ $ At 1 July 2011 30,409,280 (19,792,016) 4,115,244 14,732,508 Other comprehensive income for year - - 1,435,564 1,435,564 Loss for the period - (6,538,807) - (6,538,807) Total comprehensive income for year - (6,538,807) 1,435,564 (5,103,243) Shares issued for cash 17,793,200 - - 17,793,200 Shares issued upon exercise of options - - - - Share issue costs (432,000) - - (432,000) Share based payments - - 653,109 653,109 At 31 December 2011 47,770,480 (26,330,823) 6,203,917 27,643,574 At 1 July 2012 47,770,480 (31,483,908) 6,658,310 22,944,882 Other comprehensive income for year - - (273,958) (273,958) Loss for the period - (4,180,399) - (4,180,399) Total comprehensive income for year - (4,180,399) (273,958) (4,454,357) Shares issued for cash 7,919,998 - - 7,919,998 Shares issued upon exercise of options - - - - Share issue costs (421,681) - - (421,681) Share based payments - - - - At 31 December 2012 55,268,797 (35,664,307) 6,384,352 25,988,842 Notes to the condensed consolidated financial statements are included on pages 10 to 14. Page 8
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL HALF-YEAR ENDED 31 DECEMBER 2012 Notes Consolidated 31 Dec 12 31 Dec 11 $ $ Cash flows from operating activities Receipts from customers 16,910 33,153 Payments to suppliers and (3,443,903) (3,094,848) employees Interest paid (3,312) (21,734) Net cash used in operating activities (3,430,305) (3,083,429) Cash flows from investing activities Payments for exploration & (4,734,639) (3,834,814) evaluation Payments for plant and equipment (319,774) (135,954) Interest received 164,641 455,123 Net cash used in investing activities (4,889,772) (3,515,645) Cash flows from financing activities Proceeds from issues of equity 7,919,998 17,793,200 securities Costs of issuing securities (421,681) (432,000) Proceeds from borrowings 87,664 89,763 Repayment of borrowings (48,337) (45,703) Net cash provided by financing activities 7,537,644 17,450,260 Net increase/(decrease) in cash and cash equivalents (782,433) 10,806,186 Cash and cash equivalents at the beginning of the financial year 5,327,196 4,792,664 Effect of exchange rate fluctuations on cash held in foreign currencies (62,607) (535,539) Cash and cash equivalents at the end of the financial year 4,482,156 15,063,311 Notes to the condensed consolidated financial statements are included on pages 10 to 14. Page 9
1. GENERAL INFORMATION Notes to the Condensed Consolidated Financial Statements Crusader Resources Limited (the Company) is a listed public company incorporated in Australia and operating in Australia and Brazil. The address of the Company s registered office and principal place of business is Suite 1, Level 1, 35 Havelock Street, West Perth, Western Australia. The consolidated financial statements of the Company as at and for the half-year ended 31 December 2012 comprise the Company and its subsidiaries (together referred to as the Group ). The Group is involved primarily in the mineral exploration industry. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of preparation For the purpose of preparing the condensed consolidated financial statement the company is a for profit entity. The financial report is a general purpose financial report which has been prepared in accordance with Accounting Standards (including Interpretations) and the Corporations Act 2001. Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with the Australian Accounting Standards ensures the consolidated financial report of the Group complies with International Financial Reporting Standards (IFRSs). The financial report has also been prepared on an accrual basis and historical cost basis, except for available-for-sale investments which have been measured at fair value. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company s 2012 annual financial report for the year ended 30 June 2012, except for the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards. The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half-year. New and revised Standards and amendments thereof and Interpretations effective for the current half-year that are relevant to the Group include: Amendments to AASB 5, 7, 101, 112, 121, 132, 133 and 134 as a consequence of AASB 2011-9 Amendments to Australian Accounting Standards Presentation of Items of Other Comprehensive Income. The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Group s accounting policies and have no effect on the amounts reported for the current or prior halfyears. However, the application of AASB 2011-9 has resulted in changes to the Group s presentation of, or disclosure in, its half-year financial statements. AASB 2011-9 introduces new terminology for the statement of comprehensive income and income statement. Under the amendments to AASB 101, the statement of comprehensive income is renamed as statement of profit or loss. The amendments to AASB 101 retain the option to present profit or loss and Page 10
Notes to the Condensed Consolidated Financial Statements SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont) other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to AASB 101 require items of other comprehensive income to be grouped into two categories in the other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items other than comprehensive income is required to be allocated on the same basis the amendments do not change the option to present items of other comprehensive income either before tax or net of tax. The amendments have been applied retrospectively, and hence the representation of items of other comprehensive income has been modified to reflect the changes. Other than the above mentioned presentation changes, the application of the amendments to AASB 101 does not result in any impact on profit or loss, other comprehensive income and total comprehensive income. 3. SEGMENT INFORMATION AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The following table presents the consolidated entity s revenue and results information analysed by mineral resource for the half year periods under review. This is the Group s primary basis of segmentation. Revenue Segment (loss) / profit Half-Year ended Half-Year ended 31/12/2012 31/12/2011 31/12/2012 31/12/2011 $ $ $ $ Mineral resource exploration Iron ore - - (15,000) (29,975) Gold - - (289,491) (125,649) Uranium - - - 88,283 (304,491) (67,341) Other revenue - - 193,940 560,493 Depreciation - - (99,982) (56,706) Interest expense - - (3,312) (21,734) Share options credit/(expense) - - - (653,109) Unrealised foreign exchange loss - - (406,260) (2,887,487) Central administration costs - - (3,560,294) (3,412,923) Consolidated segment revenue and loss for the period - - (4,180,399) (6,538,807) Segment loss represents the exploration expenditure incurred by each segment without allocation of central administration costs, interest income, rental income and unrealised foreign exchange gains and losses. Page 11
Notes to the Condensed Consolidated Financial Statements Consolidated 31/12/12 30/06/12 $ $ Segment Assets Mineral resource Iron ore 5,942,586 4,256,651 Gold 16,804,528 15,035,722 Total segment assets 22,747,114 19,292,373 Unallocated assets 5,488,776 6,324,746 Consolidated assets 28,235,890 25,617,119 Segment Liabilities Mineral resource Iron ore 468,581 402,495 Gold 446,553 1,220,019 Uranium - - Other - - Total segment liabilities 915,134 1,622,514 Unallocated liabilities 1,331,914 1,049,722 Consolidated liabilities 2,247,048 2,672,236 Consolidated 31/12/12 31/12/11 $ $ 4. OTHER REVENUE Rental income 8,332 16,053 Administrative Services income 8,578 17,156 Interest revenue: Bank interest 177,030 527,284 193,940 560,493 Consolidated 31/12/12 30/06/12 $ $ 5. MINERAL RESOURCES Exploration assets: Costs brought forward 14,716,233 5,541,689 Expenditure incurred during the year 3,735,174 10,110,972 Expenditure expensed (304,491) (310,217) Effect of foreign exchange on costs carried forward (110,372) (626,211) Costs carried forward 18,036,544 14,716,233 Page 12
Notes to the Condensed Consolidated Financial Statements Consolidated 31/12/12 30/06/12 $ $ 6. MINE DEVELOPMENT PROPERTIES Balance at the beginning of the year Cost 3,258,023 4,018,049 Effect of foreign exchange on costs carried forward (88,782) (760,026) Carrying amount at the end of the year 3,169,241 3,258,023 7. SHARE CAPITAL 31/12/12 31/12/11 Fully paid Ordinary Share Capital Number $ Number $ Balance at the start of the financial 110,146,040 47,770,480 90,416,040 30,409,280 year Shares issued for cash 16,500,001 7,919,998 13,500,000 16,200,000 Shares issued on exercise of options - - 6,230,000 1,593,200 Capital raising costs - (421,681) - (432,000) Balance at end of the financial year 126,646,041 55,268,797 110,146,040 47,770,480 Share options At the reporting date there were 3,460,000 unlisted options over unissued ordinary shares. The following options were issued to employees and officers of the Company, under the Employee Share Option Plan, during the period: No. Shares under Class of shares under Exercise price of Expiry date of options option option option $ 1,500,000 Ordinary 1.30 31 December 2013 250,000 Ordinary 0.44 1 August 2015 500,000 Ordinary 0.56 22 August 2015 1,000,000 Ordinary 0.70 22 August 2015 120,000 Ordinary 1.35 30 June 2014 90,000 Ordinary 1.35 30 June 2016 Page 13
Notes to the Condensed Consolidated Financial Statements 8. OBLIGATIONS UNDER FINANCE LEASES Finance lease liabilities Minimum lease Present value of minimum lease payments payments 31/12/12 30/06/12 31/12/12 30/06/12 $ 000 $ 000 $ 000 $ 000 Not later than one year 118,877 106,049 99,622 88,730 Later than one year and not later than five years 87,459 47,053 73,963 45,530 206,336 153,102 173,585 134,260 Less future finance charges (32,751) (18,842) - - Present value of minimum lease payments Included in the consolidated financial statements as: - current borrowings - non-current borrowings 173,585 134,260 173,585 134,260 31/12/12 30/06/12 99,622 73,963 88,730 45,530 173,585 134,260 9. DIVIDENDS No dividends have been paid or provided for in the period. 10. CONTINGENCIES AND COMMITMENTS The Group is not aware of any contingent liabilities which existed as at the end of the half-year or have arisen as at the date of this report. 11. SUBSEQUENT EVENTS There were no material events subsequent to balance sheet date. Page 14
1. The Directors declare that: DIRECTORS DECLARATION (a) in the directors opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and (b) in the directors opinion the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity; Signed in accordance with a resolution of the directors made pursuant to s303(5) of the Corporations Act 2001. On behalf of the Directors R. Smakman Managing Director Perth, 14 March 2013 Page 15