Annual Report 2012 - Syrah Resources Ltd

Annual 

Report 

2012

Syrah Resources Limited Annual Report 2012 

Contents 

1 Corporate directory 

2 Chairman’s letter 

4 Review of operations 

13 Directors’ report 

26 Auditor’s independence declaration 

27 Corporate Governance Statement 

Financial report 

33 Statement of comprehensive income 

34 Statement of financial position 

35 Statement of changes in equity 

36 Statement of cash flows 

37 Notes to the financial statements 

75 Directors’ declaration 

76 Independent auditor’s report to the members 

of Syrah Resources Limited 

79 Shareholder information

Corporate 

Directory 

Directors 

Paul Kehoe (Managing Director) 

Tom Eadie (Chairman) 

Michael Chester (Non-Executive Director) 

Alistair Campbell (Non-Executive Director) 

Company secretary 

Melanie Leydin 

Registered office 

Level 9 

356 Collins Street 

Melbourne Victoria 3000 

Telephone: +61 (03) 9670 7264 

Principal place of business 

Level 9 



Telephone: +61 (03) 9670 7264 

Share register 

Security Transfer Registrars Pty Ltd 

Alexandra House 

Suite 1, 770 Canning Highway 

APPLECROSS WA 6153 

Auditor 

Grant Thornton Audit Pty Ltd 

Solicitors 

Baker & McKenzie 

Level 19 

181 William Street 

Melbourne VIC 3000 

Stock exchange listing 

Syrah Resources Limited shares are listed on 

the Australian Securities Exchange 

(ASX code: SYR) 

Website address 

www.syrahresources.com.au 

1


Chairman’s 

Letter 

Figure 1 - High grade 

graphite and vanadium 

rock sample from Balama 

The 2012 financial year was an extremely exciting year for Syrah 

Resources Ltd (Syrah). In December 2011, Syrah acquired unlisted 

explorer Jacana Resources Limited. As a result of this acquisition, 

Syrah acquired a 6,000 km 2 portfolio of projects located in south east 

Africa with exposure to graphite, vanadium, mineral sands, copper, 

coal and uranium. 

In February 2012, Syrah announced that it had acquired the 

Nachingwea graphite project and eight prospecting licences focussed 

on mineral sands all of which are located in Tanzania. A further area 

prospective for mineral sands in Tanzania was acquired in June 2012. 

Syrah considers that it is very fortunate to have secured an extensive 

portfolio of highly prospective exploration prospects. 

The jewel in the crown is the Balama Graphite and Vanadium Project 

in north Mozambique. All indications are that Balama is a substantial, 

high quality graphite and vanadium deposit on a global scale. Almost 

all holes drilled to date are mineralised from top to bottom. Very wide 

zones – over 100 metres thick – of very high grade graphite and 

vanadium – >20% total graphitic carbon (TGC) and 0.5% V 2 

O 5 

– have 

been intersected in the initial drilling program on this project. The 

graphite is mainly coarse to very coarse in flake size which attracts a 

premium price in the global market. Syrah has commenced a Scoping 

Study on the project and is confident that a positive outcome will be 

achieved based upon work carried out to date. 

2

The demand for graphite is growing at approximately 

3% per year based on traditional uses which includes 

steel refractories, brake linings and lubricants. New 

markets for graphite are much more exciting with 

potentially exponential demand for graphite driven from 

sales of lithium ion batteries which hold up to 20 times 

as much graphite as lithium. The increased use of hybrid 

and electrical cars is expected to be a big driver of 

lithium ion battery demand in the years to come. Also, 

substantial quantities of graphite is used in fuel cells and 

pebble bed nuclear reactors. However at the same time, 

supply is being constrained with China, which produces 

an estimated 80% of the world’s graphite, curtailing 

exports by a variety of taxes and charges. China is facing 

dwindling resources and is concerned about supplying 

internal Chinese demand in the future. Both the European 

Union and the United States of America have designated 

graphite as a critical mineral. Syrah is confident that it can 

prove up substantial graphite deposits with potential to 

meet any shortfall over the longer term. 

Any new graphite mine will need to be able to compete 

with Chinese graphite mines on costs. The Balama 

graphite deposit possesses a number of favourable 

attributes. Syrah believes that it could supply the market 

with a very high quality product at a very low capital and 

operating cost base for the following reasons: 

1) The deposit is high grade with thick zones (100 

metres plus) of mineralisation at surface with grades 

over 20% TGC which will be available to the initial 

open pit at a negligible strip ratio 

2) The rock is relatively soft making it low cost to mine 

and crush 

3) Mineralisation is predominantly coarse flake graphite 

making it easy to process and generating a product 

that attracts premium prices 

4) The product is also very high grade with metallurgical 

tests showing the ability to produce a 97% TGC 

concentrate, potentially generating even higher 

premium pricing 

5) Infrastructure is excellent with access to power, water, 

roads and a port 

6) Capital cost of development is expected to be 

relatively low due to the simplicity of the production 

process 

7) Potential co-product or by-product credits, mostly 

from vanadium, could be significant. 

The vanadium mineralisation at Balama is definitely 

looking very interesting. Syrah has intersected very wide 

zones of vanadium mineralisation at grades comparable 

and indeed in excess of some of the world’s major 

producing vanadium mines. Early metallurgical testwork 

has shown that the roscoelite (the main host mineral 

for the vanadium) can be separated from the graphite. 

The main traditional use of vanadium is steel hardening 

which consumes the majority of the world’s vanadium. An 

emerging use is that of vanadium redox batteries which 

are used in large power storage applications or as a 

substitute for lithium ion batteries. However, the vanadium 

used for these applications needs to be purified to 99.5% 

V. This precludes most of the world’s vanadium supplies 

being used as they are derived from ferro-vanadium 

sources and it is prohibitively expensive to remove the 

iron content. Roscoelite contains no iron and thus it can 

be used in traditional applications as well as in vanadium 

redox batteries. 

Syrah’s mineral sands portfolio is also very exciting. At the 

Fungoni prospect, historical drilling data records grades 

up to 27.8% heavy minerals over 4 metres. Importantly, 

drilling did not extend below 4 metres because the auger 

was not able to penetrate below the water table. The 

composition of the heavy minerals is a very attractive mix 

comprising 25% zircon, 5% rutile and 44% ilmenite. Syrah 

believes there is a high chance of defining a mineral 

resource on one or more of these projects. 

Syrah would like to thank its staff and consultants for the 

superb job they have performed in rapidly progressing 

Balama and the Company’s other exploration projects. 

Tom Eadie 

Chairman 

Syrah Resources Limited 

3


Review of 

Operations 

Balama Graphite and 

Vanadium Project 

Location and infrastructure 

The Balama Graphite and Vanadium Project is hosted on a 106 km 2 

granted prospecting licence located within the Cabo Delgado province 

in the district of Namuno in northern Mozambique. The project is located 

approximately 265 km by road west of the port town of Pemba. The Balama 

Project site is accessible by a major sealed road which runs from Pemba to 

approximately 40 km from the project site. The last 40 km is unsealed but is 

in the process of being upgraded. This main road is located 1 km from the 

project site. 

Geology 

Balama comprises a series of hills consisting of graphitic schist which 

rise up to 250 metres from the surrounding plains. The outcropping strike 

extent of the graphite is in excess of 7 km. The outcropping width of the 

graphite mineralisation is up to 2 km. The plains are situated in an alluvial 

river valley and hence the cover is deep further away from the outcropping 

graphitic schists. 

To the east of the main Balama hills is a granite intrusion that is younger in 

age than the graphitic schists. Syrah believes that heat from this intrusion 

likely recrystallised and upgraded much of the deposit. This is one of the 

aspects that is considered to be unique about the Balama deposit. 

4

Figure 3 - Balama project from main road to Pemba Port. 

Mount Nassilala, the main host of the graphitic schists can 

be seen on the left. On the far right is Mount Coronge, the 

granite intrusion. 

Figure 2 - Balama location map 

Metallurgy 

Prior to conducting any drilling, Syrah conducted 

metallurgical testwork on a bulk sample of graphite 

mineralisation derived from trenches to determine 

whether the Balama graphite could be upgraded to 

a saleable product. The results initially showed that 

a concentrate grade in excess of 95% TGC could be 

achieved with flotation recoveries of 87%, which were 

subsequently improved to a 97% TGC concentrate 

with 94% recoveries. These results were achieved by 

conventional flotation processes using standard reagents. 

Further testwork will be conducted to optimise both the 

concentrate grade and recoveries. 

At the time that this testwork was conducted, vanadium 

was not a focus as the extent of vanadium anomalism 

was not known. However, it is clear from the testwork that 

the vanadium mineral, roscoelite, is able to be separated 

leaving a “clean” graphite concentrate. Further testwork 

will need to be conducted on whether the roscoelite can 

be separated from the other gangue minerals which are 

mostly quartz, and whether vanadium can be extracted 

economically from the roscoelite. Roscoelite has been 

used as a vanadium source in the past and in China 

vanadium is extracted from roscoelite. Vanadium can 

be leached from roscoelite by either acid or alkaline 

processes. 

Figure 4a - Crushed sample of Balama graphitic schist 

used for initial metallurgical testing. 

Figure 4b - 97%+ graphite concentrate produced from the 

crushed sample. 

5

Syrah Resources Limited Annual Report 2012 > Operations Report Continued 

Trenching 

Syrah initially dug 6 exploration trenches at Balama 

West and 2 trenches at Balama East. The program was 

designed to test the grade of graphite outcropping at 

surface in these areas. The results showed an average 

grade across all trenches of 14.5% TGC. 

Drilling 

The first ever drilling on the Project commenced at 

Balama West in May 2012 with a diamond drilling 

campaign. It became apparent after just the first hole 

(BMDD0001), that potential existed to define a deposit of 

global significance. BMDD0001 intercepted graphite and 

vanadium down its entire length of 287.5 metres, ending 

in mineralisation. A further fourteen holes were drilled 

at Balama West and all except hole 11 encountered 

graphite and vanadium down the entire length of between 

280 and 320 metres. Hole 11 encountered a 35 metre 

pegmatite at surface but otherwise was also mineralised 

down its entire length. Importantly, the very high grades 

encountered at surface (>15% TGC) in the trenches were 

also encountered down dip in the drill intercepts. 

Figure 5 - Trench 2 at Balama West area 

6 

Figure 6 - 3D view of the Balama Project showing 1) the 250 metre high hill that is composed of graphitic units 

2) the location of the two prospect areas within the large strike extent of the outcropping mineralisation, and 

3) all completed drill holes with the reported holes highlighted.

At the date of this report, the following high grade drill 

assays from the western area have been released to 

the ASX: 

BMDD0001 – 103m @ 15.9% TGC and 0.43% V 2 

O 5 

from 67m to 170m; 

BMDD0003 – 67m @ 10.3% TGC and 0.25% V 2 

O 5 


BMDD0006 – 196m @ 16.9% TGC and 0.41% 

V 2 

O 5 


BMDD0007 – 186m @ 16.7% TGC and 0.46% 

V 2 

O 5 

from 131m to 317.6m; 

BMDD0008 – 185m @ 13.1% TGC and 0.30% 

V 2 

O 5 


BMDD0009 – 58m @ 20.01% TGC and 0.36% 

V 2 

O 5 

from 4.5m to 62.5m; 

BMDD0010 – 28.75m @ 21.1% TGC and 0.32% V 2 

O 5 

from 2.2m to 30.95m and 

– 71.7m @ 21.9% TGC and 0.48% V 2 

O 5 

from 42.8m to 114.5m; 

BMDD0011 – 42m @ 15.4% TGC and 0.31% V 2 

O 5 


BMDD0012 – 79m @ 20.4% TGC and 0.42% V 2 

O 5 

from 15.4 to 94.4m; 

BMDD0013 – 58.95m @ 20.7% TGC and 0.32% V 2 

O 5 

from 8 to 70.6m. 

Drilling followed at Balama East, where approximately 

27 holes have been drilled at the date of this report. 

Assays from this drilling campaign are awaited. 

Figure 7 - Drill core from BMDD0006 taken at 161.5m depth. The sample from this section assayed 23.3% TGC and 

0.455% V 2 

O 5 

. This mineralisation also shows that the bedding is perpendicular to the core, indicating that the thickness 

of the ore is approximately true thickness. 

7


Scoping study 

After the end of the financial year, Syrah announced that 

it had finalised its Scoping Study team for the Balama 

Project. Snowden Group has been appointed as lead 

manager of the Study. MSA Group has been appointed to 

provide a JORC compliant resource estimate and George 

Annandale appointed as Consulting Metallurgist. 

Outlook for the 2013 financial year 

Syrah anticipates announcing JORC compliant 

resources for both the Balama West and Balama East 

areas before the end of December 2012. The Scoping 

Study is anticipated to be completed by the end of the 

first quarter of 2013. Subject to positive outcomes of 

the Scoping Study, Syrah anticipates commissioning a 

Definitive Feasibility Study soon thereafter. 

Ongoing drilling programs will comprise infill and 

extension drilling at Balama West and Balama East and 

scout drilling to delineate additional high grade graphite 

targets areas within the Balama Project. 

Figure 8 - Balama West map showing location of trenches and completed drill holes, including the drill 

holes with assay results: BMDD0001, 0003, 0006, 0007, 0008, 0009, 0010, 0011, 0012 and 0013. 

8

Tanzanian Heavy Mineral 

Sands Projects 

Summary 

Syrah controls a 100% interest in eight Prospecting 

Licences and one Prospecting Licence Application 

focused on mineral sands exploration in the northern and 

central coastal areas of Tanzania. This significant portfolio 

of licences covers an area of over 1,000 km 2 and strike 

extent of greater than 100 km. Most of the Tanzanian 

coast known to be prospective for heavy mineral sands 

is now secured either by a Syrah application or granted 

licence. All projects have significant mineral sands 

anomalies identified by past explorers with minimal 

exploration follow up. 

Fungoni mineral sands prospect 

An initial 3,000m drilling program utilising a Wallis drill rig 

is planned for October 2012 and will focus on the high 

grade Fungoni Prospect where historical auger drilling 

revealed the following intercepts: 

• 4m containing 27.8% heavy minerals 



The previous drilling stopped at 4m as the auger was 

not able to penetrate below the water table. These high 

heavy mineral grades are particularly interesting as 

the composition of the heavy minerals averaged 25% 

zircon, 5% rutile and 44% ilmenite. Syrah has contracted 

a drill rig which will be able to penetrate beneath the 

water table. Historical data records that the depth to the 

basement in this area is around 30 metres. Syrah believes 

that the heavy minerals are likely to extend to a much 

greater depth than the 4m previously recorded. 

Figure 9 - Tanzanian central and northern coastline 

showing Syrah licences and HM project locations 

These intersections all occur within a 300 metre by 

150 metre high grade zone at the Fungoni prospect itself 

which is depicted in Figure 8. This prospect has not been 

closed off in any direction, particularly at depth because 

of the drilling method noted above. It lies within a larger 

underexplored anomalous area which comprises two 

20 km long, arcuate belts of >1% heavy minerals. 

Figure 10 - Fungoni Project licences showing known 

high grade area and underexplored anomalous areas 

(>1% HM) 

9


Tongani to Tajiri Trend 

The coastline in this area runs uniformly north northeast 

and has several major rivers entering the Indian Ocean 

over the 50 km strike length of the licences. The 

three licences contain several zones that have been 

interpreted to be > 3% HM from surface sampling, some 

exploration pits and some limited hand auger drilling as 

shown in Figure 2. Of these anomalous zones, only Tajiri 

has been seriously followed up with further auger drilling. 

At Tajiri best intersections included: 



The average assemblage of the Tajiri heavy minerals 

contains 7% zircon, 12% rutile and 12% ilmenite. 

A magnetic and radiometric survey was flown after the 

end of the financial year. Full results of this survey are 

pending at the date of this report. 

Figure 11 - Tongani to Tajiri trend showing key prospects and anomalous areas 

10

Figure 12 - Clockwise from left: Tongani high grade zone; close up of Tongani high grade zone; result of initial panning of 

Tongani sand showing separation of black heavy minerals. 

Nachingwea Graphite Project 

At Nachingwea, which is located in southeastern 

Tanzania, graphite outcrops in a series of hills stretching 

over at least 5 km and rising 200 metres above the 

surrounding plain. Early indications suggest that 

Nachingwea has the potential to be a significant graphite 

project. These indicators include extensive outcropping 

graphite exposures over hills extending for 5 km, high 

graphite grades up to 60% reported by past explorers 

and historical metallurgical testwork showing that the 

graphite can be upgraded to a 98% concentrate from a 

single phase flotation circuit. The Project has excellent 

infrastructure with a deepwater port located only 180km 

away and with water, electricity and good roads available. 

Field activities commenced at the Nachingwea Graphite 

Project in Tanzania involving mapping and collection of 

samples for assays. Assay results are due to be 

reported shortly. 

Wembere Uranium 

Wembere is a calcrete hosted uranium target in 

western Tanzania. The target was identified by an 

airborne radiometric anomaly with a strike distance of 

approximately 30 km. The anomaly was subsequently 

verified on the ground by handheld spectrometer. In 

addition, extensive calcrete was observed just below 

surficial cover of up to 1 metre. An initial test pitting 

program revealed readings by handheld spectrometer of 

up to 2,300 counts per second. 

A 4,000 metre drilling program was commenced at 

Wembere in the third quarter of 2012. Results will be 

reported in the coming months. 

Other Projects 

No work was performed on any of the other projects 

in the Syrah exploration portfolio in the 30 June 2012 

financial year. 

11


Divestment of Saudi Arabian 

Subsidiary 

Syrah executed a Share Sale and Purchase Agreement 

to sell its shares in Syrah Resources (KSA) Pty Ltd to 

ANR Resources Pte Ltd. Syrah Resources (KSA) Pty 

Ltd holds shares in Syrah Resources Saudi Arabia LLC, 

which holds 25 Exploration Licence applications in Saudi 

Arabia. Consideration for the transfer is $800,000. Syrah 

has also granted ANR Resources Pte Ltd an option 

to purchase the remaining 5% of the shares in Syrah 

Resources (KSA) Pty Ltd. The exercise price for the 

option is $100,000 cash. 

The information in this report as it relates to geology, 

geochemical, geophysical and exploration results was 

compiled by Mr. Tom Eadie, FAusIMM, who is a Competent 

Person and Chairman of Syrah Resources Limited. Mr. Eadie 

has more than 20 years experience in the activities being 

reported on and has sufficient expertise which is relevant 

to the style of mineralisation and type of deposit under 

consideration. He consents to the inclusion of this information 

in the form and context in which it appears in this report. 

12


Directors' report 

30 June 2012 

The directors present their report, together with the financial statements, on the consolidated entity (referred to 

hereafter as the 'consolidated entity') consisting of Syrah Resources Limited (referred to hereafter as the 'company' or 

'parent entity') and the entities it controlled for the year ended 30 June 2012. 

Directors 

The following persons were directors of Syrah Resources Limited during the whole of the financial year and up to the 

date of this report, unless otherwise stated: 

Tom Eadie 

Paul Kehoe (appointed 15 December 2011) 

Alistair Campbell (resigned 15 December 2011, and re-appointed 15 December 2011) 

Michael Chester (appointed 15 December 2011) 

Terry Lees (resigned 15 December 2011) 

Principal activities 

During the financial year the principal continuing activities of the consolidated entity consisted of: 

● Pursuing exploration activities in Africa and Australia. 

Dividends 

There were no dividends paid or declared during the current or previous financial year. 

Review of operations 

The loss for the consolidated entity after providing for income tax amounted to $2,061,565 (30 June 2011: $985,744). 

Refer to separate detailed review of operations preceding this Director's Report. 

Financial Position 

The net assets of the Company have increased to $18,508,186 as at 30 June 2012 (30 June 2011: $1,987,974). The 

major movements were due to expenditure on exploration and evaluation of mineral projects both capitalised and 

written off. 

During the current year the Company completed two share placements raising a total of $8,237,709 before costs, 

upon issuing a total of 24,029,516 fully paid ordinary shares in relation to these placements. 

The Group's working capital at 30 June 2012, being current assets less current liabilities was $3,213,800 compared 

with working capital of $1,057,799 in 2011. 

The Directors believe the Group is in a strong position to progress its substantial exploration portfolio, particularly the 

Balama Graphite and Vandadium Project. 

Significant changes in the state of affairs 

On 4 July 2011, the company issued 1,000,000 fully paid ordinary shares upon the exercise of unlisted options. 

On 15 December 2011, the Company acquired Jacana Resources Limited. Since this acquisition the Company has 

focused predominantly on carrying out exploration on its key projects in south east Africa. 

On 21 December 2011, the Company issued 13,733,334 fully paid ordinary shares at $0.15 (15 cents) raising 

$2,060,000. 

On 28 February 2012, the Company announced the acquisition of the Nachingwea Graphite Project in Southern 

Tanzania. 

On 28 February 2012, the Company announced the acquisition of a strategic mineral sands exploration portfolio in 

Tanzania. 

13




On 29 February 2012, the Company issued 500,000 fully paid ordinary shares upon the exercise of unlisted options. 

On 24 April 2012, The Company issued 10,296,182 fully paid ordinary shares at $0.60 (60 cents) raising $6,177,709. 

There were no other significant changes in the state of affairs of the consolidated entity during the financial year. 

Matters subsequent to the end of the financial year 

On 6 July 2012, the Company issued 1,500,000 fully paid ordinary shares upon conversion of unlisted options 

exercisable at $0.25 (25 cents) on or before 31 July 2012. 

On 25 July 2012, the Company issued 500,000 employee incentive options exercisable at $2.21 on or before 16 July 

2016. 

On 25 July 2012, the Company issued 18,500 fully paid ordinary shares in relation to part consideration for the 

acquisition of HQ-P25638 located in the Muheza district in the Tanga region. 

On 30 August 2012, the Company announced the first drill hole assay from the Balama Graphite and Vanadium 

Project of 287m @ 10.1% Total Graphitic Carbon and 0.12% Vanadium. A scoping study team for Balama has also 

been selected with Snowden Group appointed as the lead consultant. The study commenced in conjunction with the 

current compilation of mineral resource calculations. 

No other matter or circumstance has arisen since 30 June 2012 that has significantly affected, or may significantly 

affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in 

future financial years. 

Likely developments and expected results of operations 

Information on likely developments in the operations of the consolidated entity and the expected results of operations 

have not been included in this report because the directors believe it would be likely to result in unreasonable 

prejudice to the consolidated entity. 

Environmental regulation 

The Company holds participating interests in a number of mining and exploration tenements. The various authorities 

granting such tenements require the tenement holder to comply with the terms of the grant of the tenement and all 

directions given to it under those terms of the tenement. There have been no known breaches of the tenement 

conditions, and no such breaches have been notified by any Government agencies during the year ended 30 June 

2012. 

14




Information on directors 

Name: 

Title: 

Qualifications: 

Experience and expertise: 

Other current directorships: 

Former directorships (in the 

last 3 years): 

Special responsibilities: 

Interests in shares: 

Interests in options: 

Name: 

Title: 



Mr Tom Eadie 

Chairman 

B.Sc. (Hons), M.Sc., F.AusIMM, SA Fin 

Tom Eadie is the Executive Chairman and Managing Director of Copper Strike, an 

ASX listed exploration company. 

Prior to this role, Tom had twenty years experience within the junior resources sector, 

including one year running Austminex NL, and at technical to senior Executive levels 

with major mining companies including Pasminco, Aberfoyle Resources and 

Cominco. At Pasminco he was Executive General Manager - Exploration & 

Technology for 11 years. At Aberfoyle, he began as Chief Geophysicist before being 

put in charge of all mineral sands and base metal exploration. He is a past board 

member of the Australasian Institute of Mining and Metallurgy and the Australian 

Mineral Industry Research Association. 

Tom has a B.Sc. (Hons) from the University of British Columbia, a M.Sc. in Physics 

(Geophysics) from the University of Toronto and a Graduate Diploma in Applied 

Finance and Investment from the Securities Institute of Australia (now the Financial 

Services Institute of Australasia). 

Copper Strike Limited 

Royalco Resources Limited (resigned 23 November 2010) 

None 

11,750,005 fully paid ordinary shares 

1,000,000 unlisted options expiring 15 December 2015 and exercisable at $0.26 (26 

cents) each. 

Mr Alistair Campbell 

Non-Executive Director 

BEng(Mining), SA Fin, MAusIMM, GradDipBus 

Alistair Campbell is a mining engineer with 29 years mining industry experience. 

Alistair was the founding Director of Austgold Mine Consulting Pty Ltd, a successful 

mining consultancy for 7 years. 

Prior to this, Alistair had 18 years of direct industry experience with Ross Mining NL, 

Barrack Mines Ltd and Western Mining Corporation Ltd across a diverse range of 

roles up to Resident Manager and General Manager level. Alistair holds Mine 

Manager Certificates for both WA and Qld. 

Alistair has broad experience across open cut and underground metalliferous mining 

projects ranging from direct management of mining operations to an extensive range 

of scoping and feasibility studies and due diligence assessments. 

Alistair has a B.Eng (Mining) from Curtin University (WA School of Mines), a 

Graduate Diploma in Applied Finance and Investment from the Securities Institute of 

Australia (now the Financial Services Institute of Australasia), and a Graduate 

Diploma in Business Administration from Curtin University. 







None 

None 

None 


725,000 unlisted options expiring 15 December 2015 and exercisable at $0.26 (26 

cents) each. 

15




Name: 

Title: 








Name: 

Title: 








Mr Paul Kehoe 

Managing Director (appointed 15 December 2011) 

Paul is both an accountant and a geologist. As a Chartered Accountant with a 

Bachelor of Business (Accounting Degree) he worked in senior management roles in 

firms such as PricewaterhouseCoopers and Grant Thornton. His area of expertise 

was corporate finance and restructuring. 

He subsequently returned to university to study geosciences and completed his first 

class honours in geology. Paul worked for a group of ASX listed resource companies 

and performed company secretarial functions, business development and geology 

roles. 

None 

None 

None 

20,145,000 fully paid ordinary shares. 


cents) each. 

Mr Mike Chester 

Non-Executive Director (appointed 15 December 2011) 

Mike Chester has 27 years experience in the areas of investment banking, mining 

company research and analysis with companies including Salomon Smith 

Barney/County Natwest and McIntosh Securities. 

Mike was a top rated mining analyst for many years prior to moving into corporate 

advisory/investment banking roles. He has originated IPO's and equity placements 

across the industrial and mining sectors for listed and unlisted entities, and has 

significant expertise in financial modelling, funds management and project analysis. 

In addition, he has provided corporate advisory and investor relations services for a 

number of industrial and resources companies. Mike is a non-executive director of 

each of the following ASX listed entities: NuCoal Resources Ltd, Guildford Coal 

Limited and Black Fire Minerals Limited. He was appointed a director of Jacana in 

September 2011. 

Black Fire Minerals Limited (Non-Executive Director since 9 September 2009) 

NuCoal Resources Ltd (Non-Executive Director since 5 February 2010) 

Guildford Coal Limited (Non-Executive Director since 7 May 2010) 

Carpentaria Exploration Ltd (Non-Executive Director between 15 January 2008 to 8 

August 2011) 

None 



cents) each. 

16




Name: 

Title: 









Mr Terry Lees 

Exploration Director (resigned on 15 December 2011) 

B.App.Sc. (Geol), M.Sc. (Geol), M. Env., FAIG 

Terry Lees has over 30 years experience in exploration and mine geology, much of 

this with a lead-zinc and copper-gold focus and exposure to diverse geological 

terrains. His expertise includes management of exploration teams and programs, 

risk analysis in exploration and development, and extensive knowledge of global 

mineral deposits. Terry spent nearly 3 years in academic research into mineral 

deposits, at Melbourne and Monash Universities, principally with the predictive 

mineral deposits Co-operative Research Centre. This involved extensive research 

on ore deposits and geology, including roles as Program Coordinator and Senior 

Research Fellow. 

Terry has an Applied Geology degree from RMIT, Masters degrees in Geology 

(University of Tasmania) and Environment (University of Melbourne), and is a Fellow 

of the Australian Institute of Geoscientists. 

None 

None 

None 

None 

None 

'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships 

in all other types of entities, unless otherwise stated. 

'Former directorships (in the last 3 years)' quoted above are directorships held in the last 3 years for listed entities only 

and excludes directorships in all other types of entities, unless otherwise stated. 

Company secretary 

Ms Leydin is a Charted Accountant and is a Registered Company Auditor. She Graduated from Swinburne University 

in 1997, became a Chartered Accountant in 1999 and since February 2000 has been the principal of chartered 

accounting firm, Leydin Freyer. 

In the course of her practice she audits listed and unlisted public companies involved in the resources industry. Her 

practice also involves outsourced company secretarial and accounting services to public companies in the resources 

sector. This involves preparation of statutory financial statements, annual reports, half year reports, stock exchange 

annoucements and quarterly ASX reporting and other statutory requirements. 

Ms Leydin has 20 years experience in the accounting profession and is a director and company secretary for a 

number of oil and gas, junior mining, and exploration entities listed on the Australian Securities Exchange. 

Meetings of directors 

The number of meetings of the company's Board of Directors and of each board committee held during the year 

ended 30 June 2012, and the number of meetings attended by each director were: 

Tom Eadie 

Paul Kehoe 

Alistair Campbell 

Michael Chester 

Terry Lees 

Full Board 

Audit Committee 

Attended Held Attended Held 

10 11 1 1 

8 8 - - 

11 11 1 1 

8 8 1 1 

3 3 - - 

Held: represents the number of meetings held during the time the director held office or was a member of the relevant 

committee. 

17




Remuneration report (audited) 

The remuneration report, which has been audited, outlines the director and executive remuneration arrangements for 

the consolidated entity and the company, in accordance with the requirements of the Corporations Act 2001 and its 

Regulations. 

The remuneration report is set out under the following main headings: 

A Principles used to determine the nature and amount of remuneration 

B Details of remuneration 

C Service agreements 

D Share-based compensation 

E Additional information 

A 

Principles used to determine the nature and amount of remuneration 

The objective of the consolidated entity's and company's executive reward framework is to ensure reward for 

performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the 

achievement of strategic objectives and the creation of value for shareholders, and conforms with the market best 

practice for delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies the 

following key criteria for good reward governance practices: 

● competitiveness and reasonableness 

● acceptability to shareholders 

● alignment of executive compensation 

● transparency 

The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives. 

The performance of the consolidated entity and company depends on the quality of its directors and executives. The 

remuneration philosophy is to attract, motivate and retain high performance and high quality personnel. 

The Board has structured an executive remuneration framework that is market competitive and complementary to the 

reward strategy of the consolidated entity and company. 

Alignment to shareholders' interests: 

● focuses on sustained growth in shareholder wealth, growth in share price, and delivering constant or 

increasing return on assets as well as focusing the executive on key non-financial drivers of value 

● attracts and retains high calibre executives 

Alignment to program participants' interests: 

● rewards capability and experience 

● reflects competitive reward for contribution to growth in shareholder wealth 

● provides a clear structure for earning rewards 

In accordance with best practice corporate governance, the structure of non-executive directors and executive 

remunerations are separate. 

Non-executive directors remuneration 

Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the 

directors. Non-executive directors' fees and payments are reviewed annually by the Board. The Chairman's fees are 

determined independently to the fees of other non-executive directors based on comparative roles in the external 

market. The Chairman is not present at any discussions relating to determination of his own remuneration. 

The limit of Non-Executive Director fees is currently set at a maximum of $200,000. 

Executive remuneration 

The consolidated entity and Company aims to reward executives with a level and mix of remuneration based on their 

position and responsibility, which is both fixed and variable. 

18




The executive remuneration and reward framework has three components: 

● base pay and non-monetary benefits 

● share-based payments 

● other remuneration such as long service leave 

The combination of these comprises the executive's total remuneration. 

Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by 

the Board, based on individual and business unit performance, the overall performance of the consolidated entity and 

comparable market remunerations. 

Executives can receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle 

benefits) where it does not create any additional costs to the consolidated entity and adds additional value to the 

executive. 

The long-term incentives ('LTI') include long service leave. 

Consolidated entity performance and link to remuneration 

The remuneration policy has been tailored to increase goal congruence between shareholders, directors and 

executives. The achievement of this aim has been through the issue of options to directors and executives to 

encourage alignment of personal and shareholder interests. The options provide an incentive to the recipients to 

remain with the Company and continue to work to enhance the Company's value. 

Voting and comments made at the company's 2011 Annual General Meeting ('AGM') 

The Company received 99.66% of 'for' votes in relation to its remuneration report for the year ended 30 June 2011. 

The Company did not receive any specific feedback at the AGM regarding its remuneration practices. 

B 

Details of remuneration 

Amounts of remuneration 

Details of the remuneration of the directors, other key management personnel (defined as those who have the 

authority and responsibility for planning, directing and controlling the major activities of the consolidated entity) and 

specified executives of Syrah Resources Limited are set out in the following tables. 

19




2012 

Short-term benefits 

Postemployment 

Termination Share-based 

benefits payments payments 

Name 

Non-Executive 

Directors: 

Mr T Eadie 

Mr A Campbell * 

Mr M Chester 

Mr T Lees **** 

Executive 

Directors: 

Mr P Kehoe 

M A Campbell * 

Other Key 

Management 

Personnel: 

Ms M Leydin ** 

Mr M Ware *** 

Cash salary 

Annual 

Leave Super- Termination 

Options 

received as 

and fees Bonus payments annuation payments compensation Total 

$ $ $ $ $ $ $ 

43,200 - - 4,320 - 88,368 135,888 

20,000 - - 2,000 - 44,184 66,184 

20,000 - - 2,000 - 44,184 66,184 

15,000 - - 2,250 7,500 - 24,750 

100,000 - - 10,000 - - 110,000 

81,000 - 22,431 18,443 81,000 - 202,874 

107,500 - - - - - 107,500 

101,934 - - - - - 101,934 

488,634 - 22,431 39,013 88,500 176,736 815,314 

* 

** 

*** 

Mr A Campbell resigned as Managing Director on 15 December 2011 and was re-appointed as a Non-Executive 

Director in the Company. 

Fees paid to Leydin Freyer Corporate Pty Ltd in respect of Company Secretarial and Accounting Services. 

Mr M Ware is the Syrah Resources Saudi Arabia LLC General Manager 

**** Mr T Lees resigned on 15 December 2011. 

20




2011 Short-term benefits 

Postemployment 

Long-term Share-based 

benefits benefits payments 

Name 

Non-Executive 

Directors: 

Mr T Eadie 

Mr T Lees 

Executive 

Directors: 

Mr A Campbell 

Other Key 

Management 

Personnel: 

Mr D Ogg * 

Ms M Leydin ** 

Mr M Ware *** 

Cash salary Non- Super- Long service 

Options 

received as 

and fees Bonus monetary annuation leave compensation Total 

$ $ $ $ $ $ $ 

43,200 - - 4,320 - - 47,520 

30,000 - - 3,000 - - 33,000 

153,200 - - 25,000 - - 178,200 

50,000 - - - - - 50,000 

10,000 - - - - - 10,000 

234,253 - - - - 29,648 263,901 

520,653 - - 32,320 - 29,648 582,621 

* 

** 

*** 

C 

Mr David Ogg resigned as Company Secretary on 6 May 2011. 

Fees paid to Leydin Freyer Corporate Pty Ltd in respect of Company Secretarial and Accounting services. 

Mr M Ware is the Syrah Resources Saudi Arabia LLC General Manager 

Service agreements 

Remuneration and other terms of employment for key management personnel are formalised in service agreements. 

Details of these agreements are as follows: 

Name: 

Title: 

Agreement commenced: 

Details: 

Tom Eadie 

Chairman 

1 April 2009 

(i) Mr Eadie may resign from his position and thus terminate this contract by giving 30 

days written notice. 

(ii) The Company may terminate this employment contract by giving 3 months written 

notice. 

(iii) The Company may terminate the contract at any time without written notice if 

serious misconduct has occurred. 

(iv) On termination, Mr Eadie will be entitled to be paid those outstanding amounts 

owing to him up until the termination date. 

21




Name: 

Paul Kehoe 

Title: 

Managing Director 

Agreement commenced: 15 December 2011 

Details: (i) Mr Kehoe may resign from his position and thus terminate this contract by giving 3 

months written notice. 

(ii) The Company may terminate this employment agreement by providing 6 months 

written notice. 

(iii) The Company may terminate the contract at any time without notice if serious 

misconduct has occurred. 

(iv) On termination of the agreement, Mr Kehoe will be entitled to be paid those 

outstanding amounts owing to him up until the termination date. 

Name: 

Title: 


Details: 

Name: 

Title: 


Details: 

Mike Chester 


15 December 2011 

(i) Mr Chester may resign from his position and thus terminate this contract by giving 

30 days written notice. 


notice. 



(iv) On termination, Mr Chester will be entitled to be paid those outstanding amounts 

owing to him up until the termination date. 




(i) Mr Campbell may resign from his position and thus terminate this contract by 

giving 30 days written notice. 


notice. 



(iv) On termination, Mr Campbell will be entitled to be paid those outstanding 

amounts owing to him up until the termination date. 

Key management personnel have no entitlement to termination payments in the event of removal for misconduct. 

D 

Share-based compensation 

Issue of shares 

There were no shares issued to directors and other key management personnel as part of compensation during the 

year ended 30 June 2012. 

Options 

The terms and conditions of each grant of options affecting remuneration of directors and other key management 

personnel in this financial year or future reporting years are as follows: 

Grant date 

Vesting date and 

exercisable date 

Expiry date 

Fair value 

per option 

Exercise price at grant date 


15 December 2012 


$0.26 $0.163 

Options granted carry no dividend or voting rights. 

22




Details of options over ordinary shares issued to directors and other key management personnel as part of 

compensation during the year ended 30 June 2012 are set out below: 

Name 

M Ware 

T Eadie 

M Chester 

A Campbell 

Number of options granted Number of options vested 

during the year 

during the year 

2012 2011 2012 2011 

- 400,000 - - 

1,000,000 - - - 

500,000 - - - 

500,000 - - - 

Employee share option plan 

Syrah Resources Limited operates an ownership-based scheme for executives and senior employees of the 

consolidated entity. In accordance with the provisions of the plan, as approved by shareholders at a previous annual 

general meeting, executives and senior employees may be granted options to purchase parcels of ordinary shares at 

an exercise price determined by the Board. Each employee share option converts into one ordinary share of Syrah 

Resources Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options 

carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the 

date of their expiry. 

The number of options granted is determined by the Board. 

The purpose of the plan is to provide eligible employees with an incentive to remain with the Company and to improve 

the longer term performance of the Company and its return to shareholders. It is intended that the plan will enable the 

Company to retain and attract skilled and experienced employees and provide them with the motivation to make the 

Company more successful. 

Values of options over ordinary shares granted, exercised and lapsed for directors and other key management 

personnel during the year ended 30 June 2012 are set out below: 

Name 

T Eadie 

M Chester 

A Campbell 

M Ware 

T Lees* 

D Ogg** 

Value of Value of Value of Remuneration 

options options options consisting of 

granted exercised lapsed options 

during the during the during the for the 

year year year year 

$ $ $ % 

88,368 - - 65 

44,184 - - 67 

44,184 15,200 - 16 

- 40,278 - - 

- - 33,800 - 

- - 17,725 - 

* 

** 

Mr T Lees resigned on 15 December 2011 and his options subsequently lapsed. 

Mr D Ogg resigned as Company Secretary on 6 May 2011 and his options subsequently lapsed. 

23




E 

Additional information 

The earnings of the consolidated entity for the five years to 30 June 2012 are summarised below: 

2008 2009 2010 2011 2012 

$ $ $ $ $ 

Revenue 

Net profit/(loss) before tax 

Net profit/(loss) after tax 

209,712 117,293 68,872 48,219 133,381 

(1,295,354) (1,623,563) (1,352,909) (985,744) (2,061,565) 

(1,295,354) (1,623,563) (1,352,909) (985,744) (2,061,565) 

The factors that are considered to affect total shareholders return ('TSR') are summarised below: 

2008 2009 2010 2011 2012 

Share price at start of year 

Share price at end of year 

Basic earnings per share (cents per share) 

0.18 0.09 0.03 0.10 0.12 

0.09 0.03 0.10 0.12 2.33 

(4.99) (5.41) (4.18) (2.76) (2.51) 

This concludes the remuneration report, which has been audited. 

Shares under option 

Unissued ordinary shares of Syrah Resources Limited under option at the date of this report are as follows: 

Grant date 

Expiry date 

Exercise 

price 

Number 

under option 


16 July 2012 


16 July 2016 

$0.26 17,000,000 

$2.21 500,000 

17,500,000 

No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue 

of the company or of any other body corporate. 

Shares issued on the exercise of options 

The following ordinary shares of Syrah Resources Limited were issued during the year ended 30 June 2012 on the 

exercise of options granted: 

Date options granted 

Exercise 

price 

Number of 

shares issued 

1 November 2009 

31 October 2009 

17 January 2011 

$0.04 1,000,000 

$0.20 100,000 

$0.17 400,000 

1,500,000 

Indemnity and insurance of officers 

The Company has indemnified the directors of the Company for costs incurred, in their capacity as a director, for 

which they may be held personally liable, except where there is a lack of good faith. 

During the financial year, the Company paid a premium in respect of a contract to insure the directors of the Company 

against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure 

of the nature of liability and the amount of the premium. 

24




Indemnity and insurance of auditor 

The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify the auditor of 

the Company or any related entity against a liability incurred by the auditor. 

During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the 

Company or any related entity. 

Proceedings on behalf of the company 

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on 

behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking 

responsibility on behalf of the company for all or part of those proceedings. 

Non-audit services 

Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the 

auditor are outlined in note 25 to the financial statements. 

The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by 

another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors 

imposed by the Corporations Act 2001. 

The directors are of the opinion that the services as disclosed in note 25 to the financial statements do not 

compromise the external auditor’s independence for the following reasons: 

● all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and 

objectivity of the auditor, and 

● none of the services undermine the general principles relating to auditor independence as set out in APES 

110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical 

Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decisionmaking 

capacity for the company, acting as advocate for the company or jointly sharing economic risks and 

rewards. 

Officers of the company who are former audit partners of Grant Thornton Audit Pty Ltd 

There are no officers of the company who are former audit partners of Grant Thornton Audit Pty Ltd. 

Auditor's independence declaration 

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set 

out on the following page. 

Auditor 

Grant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001. 

This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 

2001. 

On behalf of the directors 

________________________________ 

Paul Kehoe 


28 September 2012 

Melbourne 

25


ABN 91 130 913 594 

ACN 130 913 594 

Level 2 

215 Spring Street 


GPO Box 4984 


Auditor’s Independence Declaration 

To the Directors of Syrah Resources Limited 

T +61 3 8663 6000 

F +61 3 8663 6333 

E info.vic@au.gt.com 

W www.grantthornton.com.au 

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead 

auditor for the audit of Syrah Resources Limited for the year ended 30 June 2012, I declare 

that, to the best of my knowledge and belief, there have been: 

a 

b 

no contraventions of the auditor independence requirements of the Corporations Act 

2001 in relation to the audit; and 

no contraventions of any applicable code of professional conduct in relation to the 

audit. 

GRANT THORNTON AUDIT PTY LTD 

Chartered Accountants 

B. L. Taylor 

Partner - Audit & Assurance 

Melbourne, 28 September 2012 

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together 

with its subsidiaries and related entities, delivers its services independently in Australia. 

Liability limited by a scheme approved under Professional Standards Legislation 

26


Corporate Governance Statement 


The Board of Directors (‘the Board’) of Syrah Resources Limited (the ‘company’) is responsible for the corporate 

governance of the consolidated entity. The Board guides and monitors the business and affairs of the company on 

behalf of the shareholders by whom they are elected and to whom they are accountable. 

The table below summarises the company's compliance with the ASX Corporate Governance Council's Revised 

Principles and Recommendations. 

Principles and 

Recommendations 

Compliance 

Comply 

Principle 1 – Lay solid foundations for management and oversight 

1.1 Establish the functions 

reserved to the Board and 

those delegated to manage 

and disclose those 

functions. 

1.2 Disclose the process for 

evaluating the performance 

of senior executives. 

The Board is responsible for the overall 

corporate governance of the company. 

The Board has adopted a Board charter that 

formalises its roles and responsibilities and 

defines the matters that are reserved for the 

Board and specific matters that are delegated 

to management. 

The Board has adopted a Delegations of 

Authority that sets limits of authority for senior 

executives. 

On appointment of a director, the company 

issues a letter of appointment setting out the 

terms and conditions of appointment to the 

Board. 

The Board meets annually to review the 

performance of executives. The senior 

executives’ performance is assessed against 

performance of the Company as a whole. 

Complies. 

Complies. 

1.3 Provide the information 

indicated in Guide to 

reporting on Principle 1. 

Principle 2 – Structure the Board to add value 

A Board charter has been disclosed on the 

company’s website and is summarised in this 

Corporate Governance Statement. 

A performance evaluation process is included 

in the Board Charter, which has been 

disclosed on the company’s website and is 

summarised in this Corporate Governance 

Statement. 

Complies. 

Complies. 

Complies. 

2.1 A majority of the Board 

should be independent 

directors. 

The majority of the Board’s directors are not 

independent directors of the company. 

Mr Paul Kehoe is the Managing Director. 

Mr Tom Eadie is not an independent Non- 

Executive Director, and is the Chairman. 

Mr Alistair Campbell is not an independent 

Non-Executive Director. 

Mr Michael Chester is an independent Non- 

Executive Director. 

Whilst the Board recognises 

that it is desirable for the 

majority of the Board to be an 

Independent Directors, the 

Company’s current size 

dictates that this is the most 

efficient mode of operation at 

the current time. The Board 

will review the appointment of 

further Independent Directors 

should the Company’s size 

and growth warrant this. 

2.2 The chair should be an 

independent director. 

Mr Tom Eadie is the Chairman and is not an 

independent Non-Executive Director. 

Does not comply. 

27






2.3 The roles of chair and chief 

executive officer should not 

be exercised by the same 

individual. 

2.4 The Board should establish 

a nomination committee. 

2.5 Disclose the process for 

evaluating the performance 

of the Board, its 

committees and individual 

directors. 


indicated in the Guide to 


Compliance 

Mr Tom Eadie is the Chairman and Mr Paul 

Kehoe is the Chief Executive Officer. 

The company has not established a 

Nomination and Remuneration Committee. 

The company conducts the process for 

evaluating the performance of the Board, its 

committees and individual directors as outlined 

in the Board Charter which is available on the 

company’s website. 

The Board’s induction program provides 

incoming directors with information that will 

enable them to carry out their duties in the best 

interests of the company. This includes 

supporting ongoing education of directors for 

the benefit of the company. 

This information has been disclosed (where 

applicable) in the directors’ report attached to 

this Corporate Governance Statement. 

Mr Michael Chester is an independent director 

of the company. A director is considered 

independent when he substantially satisfies the 

test for independence as set out in the ASX 

Corporate Governance Recommendations. 

Members of the Board are able to take 

independent professional advice at the 

expense of the company. 

Mr Paul Kehoe, Managing Director, was 

appointed to the Board in December 2011. 

Mr Alistair Campbell, Non-Executive Director, 

was appointed to the Board in December 2011. 

Mr Tom Eadie, Non-Executive Director, was 

appointed to the Board in September 2007. 

Mr Michael Chester, Non-Executive Director, 

was appointed to the Board in December 2011. 

Comply 

Complies. 

It is not a Company policy to 

have a nomination 

committee, given the size and 

scale of Syrah Resources 

Limited. The role of a 

nomination committee is 

carried out by the full Board. 

The full board considers the 

appointment of new 

Directors, on an informal 

basis. The Board’s policy for 

the appointment of new 

Directors to the Board can be 

accessed at 

www.syrahresources.com.au. 

Complies. 

Complies. 

The Board has undertaken a review of the mix 

of skills and experience on the Board in light of 

28






Compliance 

the company’s principal activities and direction, 

and has considered diversity in succession 

planning. The Board considers the current mix 

of skills and experience of members of the 

Board and its senior management is sufficient 

to meet the requirements of the company. 

In accordance with the information suggested 

in Guide to Reporting on Principle 2, the 

company has disclosed full details of its 

directors in the director’s report attached to this 

Corporate Governance Statement. Other 

disclosure material on the Structure of the 

Board has been made available on the 

company’s website. 

Comply 

Principle 3 – Promote ethical and responsible decision making 

3.1 Establish a code of 

conduct and disclose the 

code or a summary of the 

code. 

The Board has adopted a code of conduct. The 

code establishes a clear set of values that 

emphasise a culture encompassing strong 

corporate governance, sound business 

practices and good ethical conduct. 

Complies. 

3.2 Companies should 

establish a policy 

concerning diversity and 

disclose the policy or a 

summary of that policy. 

The policy should include 

requirements for the Board 

to establish measurable 

objectives for achieving 

gender diversity and for the 

Board to assess annually 

both the objectives and 

progress in achieving 

them. 

The code is available on the company’s 

website. 

The Board has undertaken a review of the mix 

of skills and experience on the Board in light of 

the company’s principal activities and direction. 

The Board has prepared a Diversity Policy that 

considers the benefits of diversity, ways to 

promote a culture of diversity, factors to be 

taken into account in the selection process of 

candidates for Board and senior management 

positions in the company, education programs 

to develop skills and experience in preparation 

for Board and senior management positions, 

processes to include review and appointment 

of directors, and identify key measurable 

diversity performance objectives for the Board, 

CEO and senior management. 

Complies. 

3.3 

Companies should disclose 

in each annual report the 

measurable objectives for 

achieving gender diversity 

set by the board in 

accordance with the 

diversity policy and 

progress towards achieving 

them. 

The Company will report, where appropriate, in 

each annual report the measureable objectives 

for achieving gender diversity set by the Board. 

Complies. 

3.4 

Companies should disclose 

in each annual report the 

proportion of women 

employees in the whole 

organisation, women in 

The Board currently comprises of 4 male 

Directors and one female in a senior 

management role being the Company 

Secretary. 

Complies. 

29






senior executive positions 

and women on the Board. 

Compliance 

The total proportion of females in the Company 

is 33% being 2 out of a total of 6 employees. 

Comply 

3.5 

Provide the information 



This information is available on the Company’s 

website. 

Complies. 

Principle 4 – Safeguard integrity in financial reporting 


an audit committee. 

4.2 The audit committee 

should be structured so 

that it consists of only nonexecutive 

directors, a 

majority of independent 

directors, is chaired by an 

independent chair who is 

not chair of the Board and 

have at least 3 members. 

The Board has established an audit and risk 

committee to focus on issues relevant to the 

integrity of the company’s financial reporting. 

Members of the audit and risk committee are 

Mr Alistair Campbell (Chair), Mr Tom Eadie, 

and Mr Michael Chester. Mr Alistair Campbell 

is a Non-Executive Director and is not chair of 

the Board. The committee consists of three 

non-executive directors. 

Complies. 

Complies. 

The audit committee 

should have a formal 

charter. 




The Board has not currently adopted an audit 

and risk charter, however the Company has 

plans on adopting such a charter in the near 

future. 

In accordance with the information suggested 

in Guide to Reporting on Principle 2, this has 

been disclosed in the directors’ report attached 

to this Corporate Governance Statement and is 

summarised in this Corporate Governance 

Statement. 

The members of the audit and risk committee 

are appointed by the Board and 

recommendations from the committee are 

presented to the Board for further discussion 

and resolution. 

The audit and risk committee held two meeting 

during the period to the date of the directors’ 

report and will meet at least twice per annum. 

Does not comply. 

Complies. 

Principle 5 – Make timely and balanced disclosure 

5.1 Establish written policies 

designed to ensure 

compliance with ASX 

Listing Rules disclosure 

requirements and to 

ensure accountability at a 

senior executive level for 

that compliance and 

The company has adopted a continuous 

disclosure policy, to ensure that it complies 

with the continuous disclosure regime under 

the ASX Listing Rules and the Corporations 

Act 2001. 

This policy is available on the company’s 

website. 

Complies. 

30






disclose those policies or a 

summary of those policies. 




Compliance 

The company’s continuous disclosure policy is 

available on the company’s website. 

Comply 

Complies. 

Principle 6 – Respect the rights of shareholders 

6.1 Design a communications 

policy for promoting 

effective communication 

with shareholders and 

encouraging their 

participation at general 

meetings and disclose that 

policy or a summary of that 

policy. 




The company has adopted a shareholder 

communications policy. The company uses its 

website (www.syrahresources.com.au), annual 

report, market announcements, media 

disclosures and webcasting to communicate 

with its shareholders, as well as encourages 

participation at general meetings. 

This policy is available on the company’s 

website. 

The company’s shareholder communications 

policy is available on the company’s website. 

Complies. 

Complies. 

Principle 7 – Recognise and manage risk 

7.1 Establish policies for the 

oversight and management 

of material business risks 

and disclose a summary of 

these policies. 

The Company has established policies for the 

oversight and management of material 

business risks which is 

available at the corporate governance 

statement on the Company’s website at 


under the “Corporate” tag which has the 

appropriate sub heading. 

Complies. 

7.2 The Board should require 

management to design and 

implement the risk 

management and internal 

control system to manage 

the company’s material 

business risks and report 

to it on whether those risks 

are being managed 

effectively. The Board 

should disclose that 

management has reported 

to it as to the effectiveness 

of the company’s 

management of its material 

business risks. 

7.3 The Board should disclose 

whether it has received 

assurance from the chief 

executive officer and chief 

financial officer that the 

The Board believes the risk management and 

internal control systems designed and 

implemented by the Directors and the Financial 

Officer are adequate given the size and nature 

of the Company’s activities. The Board 

informally reviews the internal control structure. 

The Board has received a statement from the 

chief executive officer and chief financial officer 

that the declaration provided in accordance 

with section 295A of the Corporations Act 2001 

is founded on a sound system of risk 

31 

Management has not formally 

reported to the Board as to 

the effectiveness of the 

Company’s management of 

its material business risks. 

Given the nature and size of 

the Company and the Board’s 

ultimate responsibility to 

manage the risks of the 

Company this is not 

considered critical. The 

Company intends to develop 

the risk reporting framework 

into a detailed policy as its 

operations continue to grow. 

Complies.






declaration provided in 

accordance with section 

295A of the Corporations 

Act is founded on a sound 

system of risk 

management and internal 

control and that the system 

is operating efficiently and 

effectively in all material 

respects in relation to the 

financial reporting risks. 




Compliance 

management and internal control and that the 

system is operating efficiently and effectively in 

all material respects in relation to the financial 

reporting risks. 

The Company has established policies for the 

oversight and management of material 

business risks which is 

available at the corporate governance 

statement on the Company’s website at 


under the “Corporate” tag which has the 

appropriate sub heading. 

Comply 

Complies. 

Principle 8 – Remunerate fairly and responsibly 


a remuneration committee. 

8.2 Clearly distinguish the 

structure of non-executive 

directors’ remuneration 

from that of executive 

directors and senior 

executives. 




The Board has not established a Nomination 

and Remuneration Committee and has not 

adopted a remuneration charter. 

The company complies with the guidelines for 

executive remuneration packages and nonexecutive 

director remuneration. 

No senior executive is involved directly in 

deciding their own remuneration. 

The information has been disclosed in the 

Annual Report. 

It is not a Company policy to 

have a nomination 

committee, given the size and 

scale of Syrah Resources 

Limited. The role of a 

nomination committee is 

carried out by the full Board. 

The full board considers the 

appointment of new 

Directors, on an informal 

basis. The Board’s policy for 

the appointment of new 

Directors to the Board can be 

accessed at 

www.syrahresources.com.au. 

Complies. 

Complies. 

Syrah Resources Limited’s corporate governance practices were in place for the financial year ended 30 June 

2012 and to the date of signing the directors’ report. 

Various corporate governance practices are discussed within this statement. For further information on corporate 

governance policies adopted by Syrah Resources Limited, refer to our website: www.syrahresources.com.au 

32


Statement of comprehensive income 

For the year ended 30 June 2012 

Consolidated 

Note 2012 2011 

$ $ 

Revenue from continuing operations 

Expenses 

Legal and consulting expense 

Administration expense 

Exploration costs written off 

Employee benefits expense 

Depreciation and amortisation expense 

Loss before income tax expense from continuing operations 

Income tax expense 

Loss after income tax expense from continuing operations 

Loss after income tax benefit from discontinued operations 

Loss after income tax expense for the year attributable to the owners of 


Other comprehensive income 

Foreign currency translation 

Other comprehensive income for the year, net of tax 

Total comprehensive income for the year attributable to the owners of 


5 133,381 48,201 

(472,362) (197,393) 

(794,184) (161,404) 

(45,652) (87,528) 

(633,241) (367,777) 

6 (25,611) (5,537) 

(1,837,669) (771,438) 

7 - - 

(1,837,669) (771,438) 

8 (223,896) (214,306) 

(2,061,565) (985,744) 

183,102 (16,578) 

183,102 (16,578) 

(1,878,463) (1,002,322) 

Cents 

Cents 

Earnings per share from continuing operations attributable to the 

owners of Syrah Resources Limited 

Basic earnings per share 

Diluted earnings per share 

Earnings per share from discontinued operations attributable to the 

owners of Syrah Resources Limited 



Earnings per share for loss attributable to the owners of Syrah 

Resources Limited 



35 (2.24) (2.16) 

35 (2.24) (2.16) 

35 (0.27) (0.60) 

35 (0.27) (0.60) 

35 (2.51) (2.76) 

35 (2.51) (2.76) 

The above statement of comprehensive income should be read in conjunction with the accompanying notes 

33


Statement of financial position 

As at 30 June 2012 

Consolidated 


$ $ 

Assets 

Current assets 

Cash and cash equivalents 

Trade and other receivables 

Other 

Assets of disposal groups classified as held for sale 

Total current assets 

Non-current assets 

Property, plant and equipment 

Intangibles 

Exploration and evaluation 

Total non-current assets 

Total assets 

9 3,897,180 1,079,337 

10 81,451 128,449 

11 28,574 - 

4,007,205 1,207,786 

12 33,466 - 

4,040,671 1,207,786 

13 549,057 5,903 

14 35,004 - 

15 14,712,566 924,272 

15,296,627 930,175 

19,337,298 2,137,961 

Liabilities 

Current liabilities 

Trade and other payables 

Borrowings 

Employee benefits 

Total current liabilities 

Non-current liabilities 


Total non-current liabilities 

Total liabilities 

Net assets 

Equity 

Issued capital 

Reserves 

Accumulated losses 

Total equity 

16 707,957 116,979 

17 118,914 - 

18 - 33,008 

826,871 149,987 

19 2,241 - 

2,241 - 

829,112 149,987 

18,508,186 1,987,974 

20 23,987,896 7,035,994 

21 1,770,175 191,825 

(7,249,885) (5,239,845) 

18,508,186 1,987,974 

The above statement of financial position should be read in conjunction with the accompanying notes 

34


Statement of changes in equity 


Consolidated 

Balance at 1 July 2010 

Loss after income tax 

expense for the year 


for the year, net of tax 

Total comprehensive income 

for the year 

Transactions with owners in 

their capacity as owners: 

Share-based payments 

Contributions of equity 

Costs of capital raising 

Balance at 30 June 2011 

Consolidated 



expense for the year 


for the year, net of tax 


for the year 

Transactions with owners in 

their capacity as owners: 


Contributions of equity 

Costs of capital raising 

Lapse of options 

Exercise of options 

Balance at 30 June 2012 

Contributed 

Retained Total 

equity Reserves profits equity 

$ $ $ $ $ $ 

6,514,354 178,755 (4,254,101) 2,439,008 

- - (985,744) (985,744) 

- - - (16,578) - (16,578) 

- - - (16,578) (985,744) (1,002,322) 

- 29,648 - 29,648 

543,375 - - 543,375 

(21,735) - - (21,735) 

- - 7,035,994 191,825 (5,239,845) 1,987,974 

Contributed 

Retained Total 

equity Reserves profits equity 

$ $ $ $ $ $ 

7,035,994 191,825 (5,239,845) 1,987,974 

- - (2,061,565) (2,061,565) 

- - - 183,102 - 183,102 

- - - 183,102 (2,061,565) (1,878,463) 

- 1,502,251 - 1,502,251 

17,365,709 - - 17,365,709 

(469,285) - - (469,285) 

- (51,525) 51,525 - 

55,478 (55,478) - - 

- - 23,987,896 1,770,175 (7,249,885) 18,508,186 

The above statement of changes in equity should be read in conjunction with the accompanying notes 

35


Statement of cash flows 


Consolidated 


$ $ 

Cash flows from operating activities 

Payments to suppliers and employees (inclusive of GST) 

Interest received 

Other revenue 

Net cashflows from discontinued operations 

Net cash used in operating activities 

Cash flows from investing activities 

Payments for property, plant and equipment 

Payments for intangibles 

Payment of unsecured loan 

Payments for exploration and evaluation 

Net cash used in investing activities 

Cash flows from financing activities 

Proceeds from issue of shares 

Share issue transaction costs 

Net cash from financing activities 

Net increase/(decrease) in cash and cash equivalents 

Cash and cash equivalents at the beginning of the financial year 

Effects of exchange rate changes on cash 

Cash and cash equivalents at the end of the financial year 

(1,486,161) (810,480) 

72,475 53,924 

53,543 - 

(331,650) - 

33 (1,691,793) (756,556) 

13 (594,353) (5,462) 

14 (39,457) - 

- (100,000) 

(2,932,655) (343,849) 

(3,566,465) (449,311) 

20 8,365,709 543,375 

(469,285) (21,735) 

7,896,424 521,640 

2,638,166 (684,227) 

1,079,337 1,780,142 

183,102 (16,578) 

9 3,900,605 1,079,337 

The above statement of cash flows should be read in conjunction with the accompanying notes 

36


Notes to the financial statements 


Note 1. General information 

The financial report covers Syrah Resources Limited as a consolidated entity consisting of Syrah Resources Limited 

and the entities it controlled. The financial report is presented in Australian dollars, which is Syrah Resources 

Limited's functional and presentation currency. 

The financial report consists of the financial statements, notes to the financial statements and the directors' 

declaration. 

Syrah Resources Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its 

registered office and principal place of business is: 

Level 9 



Telephone: (03) 9670 7264 

A description of the nature of the consolidated entity's operations and its principal activities are included in the 

directors' report, which is not part of the financial report. 

The financial report was authorised for issue, in accordance with a resolution of directors, on 28 September 2012. 

The directors have the power to amend and reissue the financial report. 

Note 2. Significant accounting policies 

The principal accounting policies adopted in the preparation of the financial statements are set out below. These 

policies have been consistently applied to all the years presented, unless otherwise stated. 

New, revised or amending Accounting Standards and Interpretations adopted 

The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations 

issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. 

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been 

early adopted. 

New Accounting Standards and Interpretations 

The following new and revised Standards and Interpretations have been adopted in the current year: 

Amendments to AASB 7‘Financial Instruments: Disclosure’ 

The amendments (part of AASB 2010-4 ‘Further Amendments to Australian Accounting Standards arising from the 

Annual Improvements Project’) clarify the required level of disclosures about credit risk and collateral held and 

provide relief from disclosures previously required regarding renegotiated loans. 

Amendments to AASB 101 ‘Presentation of Financial Statements’ 

The amendments (part of AASB 2010-4 ‘Further Amendments to Australian Accounting Standards arising from the 

Annual Improvements Project’) clarify that an entity may choose to present the required analysis of items of other 

comprehensive income either in the statement of changes in equity or in the notes to the financial statements. 

AASB 1054 ‘Australian Additional Disclosures’ and AASB 2011-1 ‘Amendments to Australian Accounting Standards 

arising from Trans-Tasman Convergence Project’ 

AASB 1054 sets out the Australian-specific disclosures for entities that have adopted Australian Accounting 

Standards. This Standard contains disclosure requirements that are in addition to IFRSs in areas such as compliance 

with Australian Accounting Standards, the nature of financial statements (general purpose or special purpose), audit 

fees, imputation (franking) credits and the reconciliation of net operating cash flow to profit (loss). 

37




AASB 2011-1 makes amendments to a range of Australian Accounting Standards and Interpretations for the purpose 

of closer alignment to IFRSs and harmonisation between Australian and New Zealand Standards. The Standard 

deletes various Australian-specific guidance and disclosures from other Standards (Australian-specific disclosures 

retained are now contained in AASB. The application of AASB 1054 and AASB 2011-1 in the current year has 

resulted in the simplification of disclosures in regards to audit fees, franking credits and capital and other expenditure 

commitments as well as an additional disclosure on whether the Group is a for-profit or not-for-profit entity. 

AASB 124 ‘Related Party Disclosures’ (revised December 2009) 

AASB 124 (revised December 2009) has been revised on the following two aspects: (a) AASB 124 (revised 

December 2009) has changed the definition of a related party and (b) AASB 124 (revised December 2009) introduces 

a partial exemption from the disclosure requirements for government-related entities. The Company and its 

subsidiaries are not government-related entities. The application of the revised definition of related party set out in 

AASB 124 (revised December 2009) in the current year has resulted in the identification of related parties that were 

not identified as related parties under the previous Standard. Specifically, associates of the ultimate holding Company 

of the Company are treated as related parties of the Group under the revised Standard whilst such entities were not 

treated as related parties of the Group under the previous Standard. The related party disclosures set out in note 28 

to the consolidated financial statements have been changed to reflect the application of the revised Standard. 

Changes have been applied retrospectively. 

38




Note 2. Significant accounting policies (continued) 

Standards and Interpretations affecting the reported results or financial position 

The following new and revised Standards and Interpretations have been adopted in these financial statements. Their 

adoption has not had any significant impact on the amounts reported in these financial statements but may affect the 

accounting for future transactions or arrangements. 

AASB 2009-14 ‘Amendments to Australian Interpretation – Prepayments of a Minimum Funding Requirement’ 

Interpretation 114 addresses when refunds or reductions in future contributions should be regarded as available in 

accordance with paragraph 58 of AASB 119; how minimum funding requirements might affect the availability of 

reductions in future contributions; and when minimum funding requirements might give rise to a liability. The 

amendments now allow recognition of an asset in the form of prepaid minimum funding contributions. The application 

of the amendments to Interpretation 114 has not had material effect on the Group’s consolidated financial statements. 

AASB 2009-12 ‘Amendments to Australian Accounting Standards’ 

The application of AASB 2009-12 makes amendments to AASB 8 ‘Operating Segments’ as a result of the issuance of 

AASB 124 ‘Related Party Disclosures’ (2009). The amendment to AASB 8 requires an entity to exercise judgement in 

assessing whether a government and entities known to be under the control of that government are considered a 

single customer for the purposes of certain operating segment disclosures. The Standard also makes numerous 

editorial amendments to a range of Australian Accounting Standards and Interpretations. The application of AASB 

2009-12 has not had any material effect on amounts reported in the Group’s consolidated financial statements. 

AASB 2010-5 ‘Amendments to Australian Accounting Standards’ 

The Standard makes numerous editorial amendments to a range of Australian Accounting Standards and 

Interpretations. The application of AASB 2010-5 has not had any material effect on amounts reported in the Group’s 

consolidated financial statements. 

AASB 2010-6 ‘Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets’ 

The application of AASB 2010-6 makes amendments to AASB 7 ‘Financial Instruments – Disclosures’ to introduce 

additional disclosure requirements for transactions involving transfer of financial assets. These amendments are 

intended to provide greater transparency around risk exposures when a financial asset is transferred and 

derecognised but the transferor retains some level of continuing exposure in the asset. To date, the Group has not 

entered into any transfer arrangements of financial assets that are derecognised but with some level of continuing 

exposure in the asset. Therefore, the application of the amendments has not had any material effect on the 

disclosures made in the consolidated financial statements. 

Basis of preparation 

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards 

and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as 

appropriate for-profit oriented entities. These financial statements also comply with International Financial Reporting 

Standards as issued by the International Accounting Standards Board ('IASB'). 

Historical cost convention 

The financial statements have been prepared under the historical cost convention, except for, where applicable, the 

revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss, 

investment properties, certain classes of property, plant and equipment and derivative financial instruments. 

Critical accounting estimates 

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires 

management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The 

areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are 

significant to the financial statements, are disclosed in note 3. 

Parent entity information 

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated 

entity only. Supplementary information about the parent entity is disclosed in note 29. 

39





Principles of consolidation 

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Syrah Resources 

Limited ('company' or 'parent entity') as at 30 June 2012 and the results of all subsidiaries for the year then ended. 

Syrah Resources Limited and its subsidiaries together are referred to in these financial statements as the 

'consolidated entity'. 

Subsidiaries are all those entities over which the consolidated entity has the power to govern the financial and 

operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The effects of 

potential exercisable voting rights are considered when assessing whether control exists. Subsidiaries are fully 

consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from 

the date that control ceases. 

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity 

are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of 

the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency 

with the policies adopted by the consolidated entity. 

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. Refer to the 'business 

combinations' accounting policy for further details. A change in ownership interest, without the loss of control, is 

accounted for as an equity transaction, where the difference between the consideration transferred and the book 

value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. 

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities 

and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. 

The consolidated entity recognises the fair value of the consideration received and the fair value of any investment 

retained together with any gain or loss in profit or loss. 

Operating segments 

Operating segments are presented using the 'management approach', where the information presented is on the 

same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is 

responsible for the allocation of resources to operating segments and assessing their performance. 


The financial report is presented in Australian dollars, which is Syrah Resources Limited's functional and presentation 

currency. 

Foreign currency transactions 

Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of 

the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the 

translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies 

are recognised in profit or loss. 

Foreign operations 

The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the 

reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the 

average exchange rates, which approximates the rate at the date of the transaction, for the period. All resulting 

foreign exchange differences are recognised in the foreign currency reserve in equity. 

The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed 

of. 

Revenue recognition 

Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the 

revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. 

40





Interest 

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating 

the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective 

interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the 

financial asset to the net carrying amount of the financial asset. 

Other revenue 

Other revenue is recognised when it is received or when the right to receive payment is established. 

All revenue is stated net of the amount of good and services tax (GST). 

Income tax 

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the 

applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable 

to temporary differences and unused tax losses and the adjustment recognised for prior periods, where applicable. 

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when 

the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, 

except for: 

● 

● 

When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or 

liability in a transaction that is not a business combination and that, at the time of the transaction, affects 

neither the accounting nor taxable profits; or 

When the taxable temporary difference is associated with investments in subsidiaries, associates or 

interests in joint ventures, and the timing of the reversal can be controlled and it is probable that the 

temporary difference will not reverse in the foreseeable future. 

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable 

that future taxable amounts will be available to utilise those temporary differences and losses. 

The carrying amount of recognised and unrecognised deferred tax assets are reviewed each reporting date. Deferred 

tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available 

for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent 

that it is probable that there are future taxable profits available to recover the asset. 

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets 

against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same 

taxable authority on either the same taxable entity or different taxable entity's which intend to settle simultaneously. 

Discontinued operations 

A discontinued operation is a component of the consolidated entity that has been disposed of or is classified as held 

for sale and that represents a separate major line of business or geographical area of operations, is part of a single 

co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively 

with a view to resale. The results of discontinued operations are presented separately on the face of the statement of 

comprehensive income. 


Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, 

highly liquid investments with original maturities of three months or less that are readily convertible to known amounts 

of cash and which are subject to an insignificant risk of changes in value. 

Trade and other receivables 

Other receivables are recognised at amortised cost, less any provision for impairment. 

41





Non-current assets or disposal groups classified as held for sale 

Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be 

recovered principally through a sale transaction rather than through continuing use. They are measured at the lower 

of their carrying amount and fair value less costs to sell. For non-current assets or assets of disposal groups to be 

classified as held for sale, they must be available for immediate sale in their present condition and their sale must be 

highly probable. 

An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of 

disposal groups to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less 

costs to sell of a non-current assets and assets of disposal groups, but not in excess of any cumulative impairment 

loss previously recognised. 

Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other 

expenses attributable to the liabilities of assets held for sale continue to be recognised. 

Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are 

presented separately on the face of the statement of financial position, in current assets. The liabilities of disposal 

groups classified as held for sale are presented separately on the face of the statement of financial position, in current 

liabilities. 

Investments and other financial assets 

Investments and other financial assets are measured at either amortised cost or fair value depending on their 

classification. Classification is determined based on the purpose of the acquisition and subsequent reclassification to 

other categories is restricted. The fair values of quoted investments are based on current bid prices. For unlisted 

investments, the consolidated entity establishes fair value by using valuation techniques. These include the use of 

recent arms length transactions, reference to other instruments that are substantially the same, discounted cash flow 

analysis, and option pricing models. 

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or 

have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. 

Loans and receivables 

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in 

an active market. They are carried at amortised cost using the effective interest rate method. Gains and losses are 

recognised in profit or loss when the asset is derecognised or impaired. 


Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost 

includes expenditure that is directly attributable to the acquisition of the items. 

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and 

equipment (excluding land) over their expected useful lives as follows: 

Plant & Equipment 

Camp Site Setup 

Motor Vehicles 

3-8 years 

3-8 years 

5 years 

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each 

reporting date. 

An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit 

to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to 

profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits. 

42





Intangible assets 

Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair 

value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Intangible 

assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in 

profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal 

proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life intangibles are 

reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by 

changing the amortisation method or period. 

Software 

Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their 

expected benefit, being their finite life of 5 years. 

Exploration and evaluation assets 

Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is 

carried forward as an asset in the statement of financial position where it is expected that the expenditure will be 

recovered through the successful development and exploitation of an area of interest, or by its sale; or exploration 

activities are continuing in an area and activities have not reached a stage which permits a reasonable estimate of the 

existence or otherwise of economically recoverable reserves. Where a project or an area of interest has been 

abandoned, the expenditure incurred thereon is written off in the year in which the decision is made. 

Farm outs 

The Group does not record any expenditure made by the farmee on its account. It also does not recognise any 

gain or loss on its exploration and evaluation farm out arrangements but redesignates any costs previously 

capitalised in relation to the whole interest as relating to the partial interest retained and any consideration 

received directly from the farmee is credited against costs previously capitalised. 

Trade and other payables 

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the 

financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not 

discounted. The amounts are unsecured and are usually paid within 30 days of recognition. 

Borrowings 

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. 

They are subsequently measured at amortised cost using the effective interest method. 

Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, 

the loans or borrowings are classified as non-current. 


Wages and salaries, annual leave and sick leave 

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave 

expected to be settled within 12 months of the reporting date are recognised in current liabilities in respect of 

employees' services up to the reporting date and are measured at the amounts expected to be paid when the 

liabilities are settled. Non-accumulating sick leave is expensed to profit or loss when incurred. 

Long service leave 

The liability for long service leave is recognised in current and non-current liabilities, depending on the unconditional 

right to defer settlement of the liability for at least 12 months after the reporting date. The liability is measured as the 

present value of expected future payments to be made in respect of services provided by employees up to the 

reporting date using the projected unit credit method. Consideration is given to expected future wage and salary 

levels, experience of employee departures and periods of service. Expected future payments are discounted using 

market yields at the reporting date on national government bonds with terms to maturity and currency that match, as 

closely as possible, the estimated future cash outflows. 

43






Equity-settled and cash-settled share-based compensation benefits are provided to employees. 

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange 

for the rendering of services. 

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently 

determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, 

the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the 

underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with 

non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the 

employees to receive payment. No account is taken of any other vesting conditions. 

The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the 

vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, 

the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The 

amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less 

amounts already recognised in previous periods. 

The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either 

the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the 

award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows: 

● 

● 

during the vesting period, the liability at each reporting date is the fair value of the award at that date 

multiplied by the expired portion of the vesting period. 

from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability 

at the reporting date. 

All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash 

paid to settle the liability. 

Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market 

conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other 

conditions are satisfied. 

If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been 

made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the 

total fair value of the share-based compensation benefit as at the date of modification. 

If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the 

condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee 

and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining 

vesting period, unless the award is forfeited. 

If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining 

expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled 

and new award is treated as if they were a modification. 


Ordinary shares are classified as equity. 

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of 

tax, from the proceeds. 

44





Earnings per share 


Basic earnings per share is calculated by dividing the profit attributable to the owners of Syrah Resources Limited, 

excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary 

shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the 

financial year. 


Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into 

account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary 

shares and the weighted average number of shares assumed to have been issued for no consideration in relation to 

dilutive potential ordinary shares. 

Goods and Services Tax ('GST') and other similar taxes 

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not 

recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as 

part of the expense. 

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST 

recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of 

financial position. 

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing 

activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows. 

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax 

authority. 

New Accounting Standards and Interpretations not yet mandatory or early adopted 

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet 

mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 

2012. The consolidated entity's assessment of the impact of these new or amended Accounting Standards and 

Interpretations, most relevant to the consolidated entity, are set out below. 

(i) Interpretation 20 Stripping Costs in the Production Phase of a Mine Issued in November 2011 Interpretation 20 

clarifies those costs of removing mine waste materials (overburden) to access ore in a surface mine must be 

capitalised as inventory under AASB 102 Inventories. This will have no impact on the Group's financial statements 

because the Group does not operate a surface mine. 

(ii) AASB 9 Financial Instruments Amendments to Australian Accounting Standards (effective from 1 January 2015) 

In December 2009 the AASB issued a revised AASB 9 Financial Instruments. It is effective for accounting periods on 

or after 1 January 2015. This amends the requirements for classification and measurement of financial assets. On 

initial analysis this standard will have no impact on the Group's financial statements. 

(iii) AASB 10: Consolidated Financial Statements In August 2011 the Australian Accounting Standards Board issued 

AASB 10 to replace parts of AASB127: Consolidated and Separate Financial Statements (March 2008 as amended) 

and Interpretation 112: Consolidation - Special Purpose Entities. AASB 10 provides a revised definition of control and 

additional application guidance so that a single control model will apply to all investees. This standard will have no 

impact on the Group's financial statements because the Group retains one hundred per cent ownership of all current 

investees. 

45





(iv) AASB 11 Joint Arrangements 

In August 2011 the Australian Accounting Standards Board issued AASB 11 to replace AASB131: Interests in Joint 

Ventures (July 2004 as amended). AASB 11 requires joint arrangements to be classified as either "joint operations" 

(whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the 

liabilities) or "joint ventures" (where the parties that have joint control of the arrangement have rights to the net assets 

of the arrangement). Joint ventures are required to adopt the equity method of accounting (proportionate 

consolidation is no longer allowed). This standard will have no impact on the Group's financial statements as at 30 of 

June 2012 as at that time the Group is not a party to any joint arrangement. 

(v) AASB 12 Disclosure of Interests in Other Entities In August 2011 the Australian Accounting Standards Board 

issued AASB 12. AASB 12 contains the disclosure requirements applicable to entities that hold an interest in a 

subsidiary, joint venture, joint operation or associate. AASB 12 also introduces the concept of a "structured entity", 

replacing the "special purpose entity" concept currently used in Interpretation 112, and requires specific disclosures in 

respect of any investments in unconsolidated structured entities. This standard will only affect disclosures and will 

have no other impact on the Group's financial statements. 

(vi) AASB 13 Fair Value Measurement and Amendments to AASB 2011-8 Amendments to Australian Accounting 

Standards arising from AASB 13 (effective 1 January 2013) In September 2011 the Australian Accounting Standards 

Board issued AASB 13, it defines fair value, sets out in a single Standard a framework for measuring fair value and 

requires disclosures about fair value measurements. On initial analysis this standard will have no impact on the 

Group's financial statements. 

Note 3. Critical accounting judgements, estimates and assumptions 

The preparation of the financial statements requires management to make judgements, estimates and assumptions 

that affect the reported amounts in the financial statements. Management continually evaluates its judgements and 

estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its 

judgements, estimates and assumptions on historical experience and on other various factors, including expectations 

of future events, management believes to be reasonable under the circumstances. The resulting accounting 

judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions 

that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the 

next financial year are discussed below. 

Share-based payment transactions 

The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value 

of the equity instruments at the date at which they are granted. The fair value is determined by using either the 

Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were 

granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no 

impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit 

or loss and equity. 

Business combinations 

As discussed in note 2, business combinations are initially accounted for on a provisional basis. The fair value of 

assets acquired, liabilities and contingent liabilities assumed are initially estimated by the consolidated entity taking 

into consideration all available information at the reporting date. Fair value adjustments on the finalisation of the 

business combination accounting is retrospective, where applicable, to the period the combination occurred and may 

have an impact on the assets and liabilities, depreciation and amortisation reported. 

In order to be considered a business combination the entity must be deemed to satisfy the requirements of carrying 

on a business at the time of acquisition. 

46




Note 3. Critical accounting judgements, estimates and assumptions (continued) 

Estimation of useful lives of assets 

The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for 

its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a 

result of technical innovations or some other event. The depreciation and amortisation charge will increase where the 

useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been 

abandoned or sold will be written off or written down. 

Long service leave provision 

As discussed in note 1, the liability for long service leave is recognised and measured at the present value of the 

estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present 

value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken 

into account. 


At each reporting period the directors review the carrying amount of each of the tenements by assessing whether any 

of the indicators of impairment outlined in AASB 6 Exploration for and Evaluation of Mineral Resources are in 

existence. 

Tax losses 

The Company has not recognised a deferred tax asset with regard to unused tax losses and other temporary 

differences, as it has not been determined whether the Company will generate sufficient taxable income against 

which the unused tax losses and other temporary differences can be utilised in the foreseeable future. 

Note 4. Operating segments 

The Company operated predominately as an explorer for minerals with exploration activities being performed 

primarily in south east Africa, but also in Australia and Saudi Arabia. 

AASB 8 requires operating segments to be identified on the basis of internal reports about the components of the 

Group that are regularly reviewed by the chief decision maker in order to allocate resources to the segment and to 

assess its performance. During the year, the Board started to review the performance of the African, Australian and 

Saudi Arabian operations separately and as such the consolidated entity now includes three operating segments: 

African exploration, Australian exploration and Saudi exploration. 

47




Note 4. Operating segments (continued) 

Operating segment information 


Revenue 

Other revenue 

Total revenue 

EBITDA 

Depreciation and amortisation 

Loss before income tax 

expense 



expense 

Assets 

Segment assets 

Total assets 

Liabilities 

Segment liabilities 


2011 

Revenue 

Other revenue 

Total revenue 

Loss before income tax 

expense 



expense 

Assets 

Segment assets 

Total assets 

Liabilities 

Segment liabilities 


African Saudi Australian Intersegment 

exploration exploration exploration eliminations/ 

unallocated Consolidated 

$ $ $ $ $ $ 

- - 50,000 - 83,381 133,381 

- - 50,000 - 83,381 133,381 

- (457,127) (216,793) - (1,354,931) (2,028,851) 

(32,714) 

(2,061,565) 

- 

(2,061,565) 

- 14,527,589 33,466 932,607 3,843,636 19,337,298 

19,337,298 

- 575,979 - - 253,133 829,112 

829,112 

Saudi Australian Intersegment 

Computer exploration exploration eliminations/ 

manufacturing 

unallocated Consolidated 

$ $ $ $ $ $ 

- - - - 48,220 48,220 

- - - - 48,220 48,220 

(985,744) 

- 

(985,744) 

- - 337,201 924,272 876,488 2,137,961 

2,137,961 

- - 484,953 - (334,966) 149,987 

149,987 

48




Note 5. Revenue 

Consolidated 

2012 2011 

$ $ 

From continuing operations 

Other revenue 

Interest revenue 

Other revenue 

Revenue from continuing operations 

60,906 48,201 

72,475 - 

- - 133,381 48,201 

Note 6. Expenses 

Consolidated 


$ $ 

Loss before income tax from continuing operations 

includes the following specific expenses: 

Depreciation 

Plant and equipment 

Motor vehicles 

Camp Site 

Total depreciation 

Amortisation 

Software 

Total depreciation and amortisation 


Post employment benefits - Defined contribution plans 

Share based payments 

Equity settled share based payments 

Charges to provisions 

Employee entitlements 

Legal expenses 

Legal expenses 

Consulting expenses 

Consulting expenses 

Operating lease payments 

Office lease 

6,233 5,537 

8,822 - 

6,103 - 

- - 21,158 5,537 

4,453 - 

- - 25,611 5,537 

39,564 32,320 

176,735 29,648 

(30,767) 8,482 

175,044 63,418 

297,317 133,975 

- 5,789 

49




Note 7. Income tax expense 

Consolidated 


$ $ 

Numerical reconciliation of income tax expense and tax at 

the statutory rate 

Loss before income tax expense from continuing 

Profit/(loss) before income tax (expense)/benefit from 

discontinued operations 

(1,837,669) (771,438) 

(223,896) (214,306) 

- - (2,061,565) (985,744) 

Tax at the statutory tax rate of 30% 

Tax effect amounts which are not deductible/(taxable) in 

calculating taxable income: 

Non-deductible expenses 


Exploration costs written off (accounting) 

Unused tax losses not recognised as deferred tax 

assets 

Net interest 

Capital raising costs 

Other deductible expenses 

Deductible exploration expenditure 

Losses incurred by controlled foreign entities 

Initial recognition of deferred tax balances 


(618,470) (295,723) 

86,513 37,836 

- 8,894 

- 32,775 

148,081 303,624 

- (935) 

- (44,197) 

- (11,558) 

- (30,716) 

201,937 - 

181,939 - 

- - - - 

Consolidated 


$ $ 

Deferred tax assets not recognised 

Deferred tax assets not recognised comprises temporary 

differences attributable to: 

Temporary differences 

Tax losses (revenue of operating losses after 

deduction of DTL) 

Total deferred tax assets not recognised 

95,776 96,277 

335,219 921,554 

- - 430,995 1,017,831 

The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been 

recognised in the statement of financial position as the recovery of this benefit is uncertain. 

50




Note 7. Income tax expense (continued) 

The taxation benefits of tax losses and temporary difference not brought to account will only be obtained if: 

(i) the consolidated entity derives future assessable income of a nature and of an amount sufficient to enable the 

benefit from the deductions for the losses to be realised; 

(ii) the consolidated entity continues to comply with the conditions for deductibility imposed by law; and 

(iii) no change in tax legislation adversely affects the consolidated entity in realising the benefits from deducting the 

losses. 

The Company has received advice that suggests that it may not be able to utilise all carried forward tax losses from 

prior periods as it is likely that the Continuity of Ownership Test ("COT") could be failed as a result of the significant 

number of share issues during the current financial year. 

Note 8. Discontinued operations 

Financial performance information 

Consolidated 


$ $ 

Other income 

Total revenue 





Total expenses 

Loss before income tax expense 


Loss after income tax expense 

Loss after income tax benefit from discontinued operations 

- 19 

- - - 19 

(73,016) (63,240) 

(143,777) (129,363) 

(7,103) - 

- (21,722) 

- - (223,896) (214,325) 

- - (223,896) (214,306) 

- - - - 

- - (223,896) (214,306) 

- - (223,896) (214,306) 

Cash flow information 

Consolidated 


$ $ 


Net decrease in cash and cash equivalents from 

discontinued operations 

(331,650) - 

- - (331,650) - 

51




Note 8. Discontinued operations (continued) 

Details of the disposal 

Refer to note 12 for details of assets/liabilities of discontinued operations. 

On 18 May 2012 a sale agreement was signed with Arabian Nubian Resources (ANR) to sell 95% of Syrah's Saudi 

Arabian subsidiary. As part of this deal a $50,000 option fee was received with a further $800,000 to be received upon 

completion. The terms of this agreement included $350,000 being placed in escrow at 30 June 2012 and the 

remaining $450,000 to be transferred at a later date. In addition, ANR has an option to purchase the remaining 5% 

equity for $100,000. 

The agreement is subject to a number of conditions which must be met before completion occurs. As at 30 June 2012 

completion of the agreement had not yet occured. Consequently, Syrah has reclassified the subsidiary as ‘held for 

sale’ and therefore is currently held at its carrying value. Under AASB5 the asset must be measured at the lower of its 

carrying amount and fair value less costs to sell. The Saudi Arabian operations are disclosed as discontinued within 

the financial report. Profits and cash flows were therefore split out and disclosed separately from the continuing 

operations of Syrah. 

Note 9. Current assets - cash and cash equivalents 

Consolidated 


$ $ 

Cash on hand 

Cash at bank 

Cash on deposit 

19,838 - 

3,815,420 685,664 

61,922 393,673 

- - 3,897,180 1,079,337 

Reconciliation to cash and cash equivalents at the end of 

the financial year 

The above figures are reconciled to cash and cash 

equivalents at the end of the financial year as shown in the 

statement of cash flows as follows: 

Balances as above 

Cash and cash equivalents - classified as held for sale 

(note 12) 

Balance as per statement of cash flows 

3,897,180 1,079,337 

3,425 - 

- - 3,900,605 1,079,337 

52




Note 10. Current assets - trade and other receivables 

Consolidated 


$ $ 

Loan to Aramis Resources Ltd 

Less: Provision for Loan to Aramis Resources Ltd 

Interest receivable 

GST receivable 

100,000 100,000 

(100,000) - 

10,478 3,115 

70,973 25,334 

- - 81,451 128,449 

As at 30 June 2012 the Loan to Aramis Resources Ltd has been fully provided for due to uncertainty about the 

amount being recovered. 

Note 11. Current assets - other 

Consolidated 


$ $ 

Prepayments 

28,574 - 

Note 12. Current assets - assets of disposal groups classified as held for sale 

Consolidated 


$ $ 



3,425 - 

30,041 - 

- - 33,466 - 

As at 30 June 2012 there were no liabilities within the disposal groups classified as held for sale. 

On 18 May 2012 a sale agreement was signed with Arabian Nubian Resources (ANR) to sell 95% of Syrah's Saudi 

Arabian subsidiary. As part of this deal a $50,000 option fee was received with a further $800,000 to be received upon 

completion. The terms of this agreement included $350,000 being placed in escrow at 30 June 2012 and the 

remaining $450,000 to be transferred at a later date. In addition, ANR has an option to purchase the remaining 5% 

equity for $100,000. 

The agreement is subject to a number of conditions which must be met before completion occurs. As at 30 June 2012 

completion of the agreement had not yet occured. Consequently, Syrah has reclassified the subsidiary as ‘held for 

sale’ and therefore is currently held at its carrying value. Under AASB5 the asset must be measured at the lower of its 

carrying amount and fair value less costs to sell. The Saudi Arabian operations are disclosed as discontinued within 

the financial report. Profits and cash flows were therefore split out and disclosed separately from the continuing 

operations of Syrah. 

53




Note 13. Non-current assets - property, plant and equipment 

Consolidated 


$ $ 

Plant and equipment - at cost 

Less: Accumulated depreciation 

Motor vehicles - at cost 


Camp Site - at cost 


76,255 15,296 

(16,804) (9,393) 

- - 59,451 5,903 

138,385 - 

(8,877) - 

- - 129,508 - 

366,201 - 

(6,103) - 

- - 360,098 - 

- - 549,057 5,903 

Reconciliations 

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set 

out below: 

Consolidated 


Additions 

Depreciation expense 


Additions 

Classified as held for sale 

Depreciation expense 


Plant & Motor Camp 

Equipment Vehicles Site Total 

$ $ $ $ $ $ 

- - 5,978 - - 5,978 

- - 5,462 - - 5,462 

- - (5,537) - - (5,537) 

- - 5,903 - - 5,903 

- - 59,781 168,371 366,201 594,353 

- - - (30,041) - (30,041) 

- - (6,233) (8,822) (6,103) (21,158) 

- - 59,451 129,508 360,098 549,057 

Note 14. Non-current assets - intangibles 

Consolidated 


$ $ 

Software - at cost 

Less: Accumulated amortisation 

48,381 8,924 

(13,377) (8,924) 

- - 35,004 - 

54




Note 14. Non-current assets - intangibles (continued) 



out below: 

Consolidated 


Amortisation expense 


Additions 

Amortisation expense 


Software Total 

$ $ $ $ $ $ 

- - - - 8,924 8,924 

- - - - (8,924) (8,924) 

- - - - - - 

- - - - 39,457 39,457 

- - - - (4,453) (4,453) 

- - - - 35,004 35,004 

Note 15. Non-current assets - exploration and evaluation 

Consolidated 


$ $ 

Exploration and evaluation assets 

14,712,566 924,272 

- - 14,712,566 924,272 

- - 14,712,566 924,272 



out below: 

Consolidated 


Additions 


Additions 


Exploration & 

evaluation Total 

$ $ $ $ $ $ 

- - - - 923,136 923,136 

1,136 1,136 

- - - - 924,272 924,272 

13,788,294 13,788,294 

- - - - 14,712,566 14,712,566 

The additions figure included $9,000,000 of shares issued and options that have been valued at $1,325,516 in the 

current period for the acquisition of Jacana Resources Limited. Subsequent to the acquisition the consolidated entity 

has capitalised a further $3.4million of exploration and evaluation expenditure. 

The exploration and evaluation asset also includes $932,607 in relation to the Lyndhurst tenements. All costs in 

relation to these tenements are being met by the company's joint venture partners. 

55




Note 16. Current liabilities - trade and other payables 

Consolidated 


$ $ 

Trade payables 

Other payables 

635,626 97,536 

72,331 19,443 

- - 707,957 116,979 

Refer to note 23 for further information on financial instruments. 

The group has financial risk management policies in place to ensure that all payables are paid within the credit terms. 

Note 17. Current liabilities - borrowings 

Consolidated 


$ $ 

Loan from director 

118,914 - 

The Loan owing to a director (Mr Paul Kehoe) was acquired as part of the Jacana acquisition on 15 December 2011. 

Note 18. Current liabilities - employee benefits 

Consolidated 


$ $ 


- 33,008 

Note 19. Non-current liabilities - employee benefits 

Consolidated 


$ $ 


2,241 - 

Note 20. Equity - issued capital 

Consolidated 

Consolidated 


Shares Shares $ $ 

Ordinary shares - fully paid 

125,204,521 39,675,005 23,987,896 7,035,994 

56




Note 20. Equity - issued capital (continued) 

Movements in ordinary share capital 

Details 

Balance 

Issue of shares 

Less costs of capital raising 

Balance 


Shares issued - Jacana acquisition * 

Share placement 



Share placement 

Costs of capital raisings 

Balance 

Date 

1 July 2010 

5 April 2011 

30 June 2011 

4 July 2011 



29 February 2012 

29 February 2012 

24 April 2012 


No of shares Issue price $ 

34,500,005 6,514,354 

5,175,000 $0.11 543,375 

- (21,735) 

39,675,005 7,035,994 

1,000,000 $0.04 55,200 

60,000,000 $0.15 9,000,000 

13,733,334 $0.15 2,060,000 

100,000 $0.20 30,630 

400,000 $0.17 97,648 

10,296,182 $0.60 6,177,709 

(469,285) 

125,204,521 23,987,896 

Ordinary shares 

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in 

proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value. 

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll 

each share shall have one vote. 

* the Company issued 60,000,000 shares on 16 December 2011 as part of the consideration to acquire Jacana 

Resources Limited. Six days later the Company issued a further a 13,733,334 shares via a share placement valued 

at $0.15 (15 cents), raising $2,060,000 (before costs). The directors have deemed that since this share placement 

was undertaken so close to the timing of the Jacana acquisition, the value of these shares provides a reasonable 

indication of the market value of the shares at this time. 

Share buy-back 

There is no current on-market share buy-back. 

Capital risk management 

The consolidated entity's objectives when managing capital are to safeguard its ability to continue as a going concern, 

so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital 

structure to reduce the cost of capital. 

In order to maintain or adjust the capital structure, the consolidated entity may, return capital to shareholders, or issue 

new shares. 

The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen 

as value adding relative to the current parent entity's share price at the time of the investment. 

57




Note 21. Equity - reserves 

Consolidated 


$ $ 

Foreign currency reserve 

Share-based payments reserve 

166,524 (16,578) 

1,603,651 208,403 

- - 1,770,175 191,825 

Consolidated 






Share based payments to 

directors/employees 

Recognition of options issued 

on Jacana acquisition 

Lapse of options 



Foreign Share based 

currency payments Total 

$ $ $ $ $ $ 

- 178,755 178,755 

(16,578) - (16,578) 

- 29,648 29,648 

- - - (16,578) 208,403 191,825 

183,102 - 183,102 

- 176,735 176,735 

- 1,325,516 1,325,516 

- (51,525) (51,525) 

- (55,478) (55,478) 

- - - 166,524 1,603,651 1,770,175 

Foreign currency reserve 

The reserve is used to recognise exchange differences arising from translation of the financial statements of foreign 

operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in 

foreign operations. 


The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their 

remuneration, and other parties as part of their compensation for services. 

Note 22. Equity - dividends 

There were no dividends paid or declared during the current or previous financial year. 

58




Note 23. Financial instruments 

Financial risk management objectives 

The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, 

price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management 

program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the 

financial performance of the consolidated entity. The consolidated entity uses different methods to measure different 

types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign 

exchange and other price risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios to 

determine market risk. 

Risk management is carried out by the Board. The policies employed to mitigate risk include identification and 

analysis of the risk exposure of the consolidated entity appropriate procedures, controls and risk limits. The Board 

identifies risk and evaluates the effectiveness of its responses. 

Market risk 

Foreign currency risk 

The consolidated entity undertakes certain transactions denominated in foreign currency and are exposed to foreign 

currency risk through foreign exchange rate fluctuations, particularly in relation to the operations of its foreign 

subsidiaries. 

Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial 

liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity 

analysis and cash flow forecasting. 

The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities 

at the reporting date was as follows: 

Consolidated 

Saudi Riyals 

Tanzanian Shilling 

Mozambique New Metical 

Assets 

Liabilities 


$ $ $ $ 

- 337,201 - - 

1,429,683 - - - 

2,251,944 - 456,861 - 

Refer to the below tables for a sensitivity analysis on the above amounts. 

3,681,627 337,201 456,861 - 

Consolidated - 2012 

AUD strengthened 

Effect on 

% change 

profit 

before tax 

Effect on 

equity 

% change 

AUD weakened 

Effect on 

profit 

before tax 

Effect on 

equity 

Tanzanian Shilling 

Mozambique New Metical 

15% - (214,452) 15% - 214,452 

15% - (269,262) 15% - 269,262 

- (483,714) - 483,714 

Consolidated - 2011 

AUD strengthened 

Effect on 

% change 

profit 

before tax 

Effect on 

equity 

% change 

AUD weakened 

Effect on 

profit 

before tax 

Effect on 

equity 

Saudi Riyals 

5% - (16,860) 5% - 16,860 

59




Note 23. Financial instruments (continued) 

The consolidated entity is no longer exposed to risk in relation to Saudi Riyals as it has entered into an agreement to 

dispose of all operations in that country. 

Price risk 

The consolidated entity is not exposed to any significant price risk. 

Interest rate risk 

The consolidated entity's only exposure to interest rate risk is in relation to deposits held. Deposits are held with 

reputable banking financial institutions. 

As at the reporting date, the consolidated entity had the following cash and deposits outstanding: 


2011 

Consolidated 

Cash on hand/deposit 

Net exposure to cash flow interest rate risk 

Weighted 

average 

interest rate Balance 

Weighted 

average 

interest rate Balance 

% $ % $ 

4.36 3,897,180 4.75 1,079,337 

3,897,180 1,079,337 

An increase/decrease in interest rates of 30% or 131 percentage basis points (2011: 143 basis points) would have a 

favourable/adverse affect on profit before tax as per the tables below. The percentage change is based on the 

expected volatility of interest rates using market data and analysts forecasts. 


Basis 

points 

change 

Basis points increase 

Effect on 

profit 

before tax 

Effect on 

equity 

Basis 

points 

change 

Basis points decrease 

Effect on 

profit 

before tax 

Effect on 

equity 


131 51,053 51,053 131 (51,053) (51,053) 


Basis 

points 

change 

Basis points increase 

Effect on 

profit 

before tax 

Effect on 

equity 

Basis 

points 

change 

Basis points decrease 

Effect on 

profit 

before tax 

Effect on 

equity 


143 15,381 15,381 143 (15,381) (15,381) 

Credit risk 

Credit risk is managed on a consolidated entity basis. Credit risk refers to the risk that a counterparty will default on its 

contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has minimal 

exposure to credit risk as its only receivables relate to security deposits, interest receivable and GST refunds due. 

60




Note 23. Financial instruments (continued) 

Liquidity risk 

Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and 

cash equivalents) to be able to pay debts as and when they become due and payable. 

The consolidated entity manages liquidity risk by maintaining adequate cash reserves by continuously monitoring 

actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities. 

As at 30 June 2012 the consolidated entity was not exposed to any significant liquidity risk due to trade and other 

receivables being mainly made up of GST and interest receivables. 

The consolidated entity's working capital, being current assets less current liabilities was $3,213,800 at 30 June 2012. 

(30 June 2011: $1,057,799). During the period the consolidated entity had positive net cash flows of $2,638,166 (30 

June 2011: negative net cash flows $684,227). Based on the information on going concern, the directors are satisfied 

that the consolidated entity will have sufficient funds to pay its debts as and when they fall due. 

Remaining contractual maturities 

The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. 

The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date 

on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows 

disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the 

statement of financial position. 


Non-derivatives 

Non-interest bearing 



Total non-derivatives 


Non-derivatives 

Non-interest bearing 



Total non-derivatives 

Weighted 

average 

interest rate 

Remaining 

contractual 

maturities 

1 year or Between 1 Between 2 

less and 2 years and 5 years Over 5 years 

% $ $ $ $ $ 

Weighted 

average 

interest rate 

- 635,626 - - - 635,626 

- 72,331 - - - 72,331 

707,957 - - - 707,957 

Remaining 

contractual 

maturities 

1 year or Between 1 Between 2 

less and 2 years and 5 years Over 5 years 

% $ $ $ $ $ 

- 97,536 - - - 97,536 

- 19,443 - - - 19,443 

116,979 - - - 116,979 

The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually 

disclosed above. 

Fair value of financial instruments 

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of 

trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature. The 

fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market 

interest rate that is available for similar financial instruments. 

61




Note 24. Key management personnel disclosures 

Directors 

The following persons were directors of Syrah Resources Limited during the financial year: 

Mr P Kehoe (appointed 15 December 2011) 

Mr T Eadie 

Mr M Chester (appointed 15 December 2011) 

Mr A Campbell (resigned 15 December 2011, and reappointed 

15 December 2011) 

Mr T Lees (resigned 15 December 2011) 

Other key management personnel 

The following person also had the authority and responsibility for planning, directing and controlling the major 

activities of the consolidated entity, directly or indirectly, during the financial year: 

Mr M Ware is the Syrah Resources Saudi Arabia LLC 

General Manager. 

Compensation 

The aggregate compensation made to directors and other members of key management personnel of the 

consolidated entity is set out below: 

Consolidated 


$ $ 

Short-term employee benefits 

Post-employment benefits 

Termination benefits 


511,065 520,653 

39,013 32,320 

88,500 - 

176,736 29,648 

- - 815,314 582,621 

The aggregate compensation includes fees paid to Leydin Freyer Corporate Pty Ltd in respect of Company 

Secretarial and Accounting Services. Ms M Leydin is director and principal of that company. 

62




Note 24. Key management personnel disclosures (continued) 

Shareholding 

The number of shares in the parent entity held during the financial year by each director and other members of key 

management personnel of the consolidated entity, including their personally related parties, is set out below: 



Mr T Eadie**** 

Mr A Campbell * 

Mr T Lees***** 

Mr P Kehoe ** 

Mr M Chester *** 

Balance at Received Balance at 

the start of as part of Disposals/ the end of 

the year remuneration Additions other the year 

9,200,005 2,050,000 - 11,250,005 

225,000 - - 1,900,000 2,125,000 

260,000 - - (260,000) - 

- - 10,000 20,135,000 20,145,000 

- - - 4,283,334 4,283,334 

9,685,005 - 2,060,000 26,058,334 37,803,339 

* 

** 

*** 

Mr A Campbell received 900,000 ordinary shares upon completion of the Jacana Resources Limited acquisition. 

In addition to that, Mr A Campbell also exercised 1,000,000 employee options during the year. 

Mr P Kehoe received 18,812,148 ordinary shares upon completion of the Jacana Resources Limited acquisition. 

In addition to this prior to becoming a director of the Company, Mr P Kehoe held 1,322,852 ordinary shares prior 

to his appointment date. Mr P Kehoe also purchased 10,000 ordinary shares through an on-market acquisition on 

2 March 2012. 

Mr M Chester received 4,283,334 ordinary shares upon completion of the Jacana Resources Limited acquisition. 

**** Mr T Eadie had an interest in the acquisition of 2,000,000 ordinary shares on 22 December 2011 held by Copper 

Strike Limited in which Mr Eadie is a director. Mr Eadie also acquired 50,000 ordinary shares through an on-market 

acquisition on 1 December 2011. 

***** Mr T Lees resigned on 15 December 2011, therefore disposing of his interest in shares in the Company. 

2011 


Mr T Eadie ** 

Mr A Campbell 

Mr T Lees 

Mr D Ogg * 

Balance at Received Balance at 

the start of as part of Disposals/ the end of 

the year remuneration Additions other the year 

10,700,005 - - (1,500,000) 9,200,005 

225,000 - - - 225,000 

260,000 - - - 260,000 

500,000 - - (500,000) - 

11,685,005 - - (2,000,000) 9,685,005 

* 

** 

Mr D Ogg resigned as Company Secretary on 6 May 2011. 

Mr T Eadie sold 1,500,000 shares during the year. 

63




Note 24. Key management personnel disclosures (continued) 

Option holding 

The number of options over ordinary shares in the parent entity held during the financial year by each director and 

other members of key management personnel of the consolidated entity, including their personally related parties, is 

set out below: 


Options over ordinary shares 

Mr T Eadie* 

Mr A Campbell** 

Mr T Lees*** 

Mr M Chester**** 

Mr M Ware***** 

Mr P Kehoe****** 

Balance at Expired/ Balance at 

the start of forfeited/ the end of 

the year Granted Exercised other the year 

500,000 1,000,000 - - 1,500,000 

2,000,000 500,000 (1,000,000) 225,000 1,725,000 

500,000 - - (500,000) - 

- 500,000 - 1,070,833 1,570,833 

500,000 - (500,000) - - 

- - - 4,703,034 4,703,034 

3,500,000 2,000,000 (1,500,000) 5,498,867 9,498,867 

* 

** 

*** 

Mr T Eadie was granted 1,000,000 unlisted options on 15 December 2011 expiring 15 December 2015 and 

exercisable at $0.26 (26 cents) each. 

Mr A Campbell was granted 500,000 unlisted options on 15 December 2011 expiring 15 December 2015 and 

exercisable at $0.26 (26 cents) each. In addition to this Mr Campbell exercised 1,000,000 options at $0.04 (4 

cents) each expiring 31 July 2014. Mr Campbell also received 225,000 unlisted options on completion of the 

Jacana Resources Limited acquisition. 

Mr T Lees resigned on 15 December 2011 and his 500,000 unlisted options were subsequently lapsed. 

**** Mr M Chester was granted 500,000 unlisted options on 15 December 2011 expiring 15 December 2015 and 

exercisable at $0.26 (26 cents) each. In addition to this Mr Chester also received 1,070,833 unlisted options on 

completion of the Jacana Resources Limited acquisition. 

***** Mr M Ware exercised 500,000 unlisted options on 29 February 2012. 

****** Mr P Kehoe received 4,703,034 unlisted options on completion of the Jacana Resources Limited acquisition. 

2011 

Options over ordinary shares 

Mr T Eadie 

Mr A Campbell 

Mr T Lees 

Mr D Ogg * 

Mr M Ware ** 


the start of forfeited/ the end of 

the year Granted Exercised other the year 

500,000 - - - 500,000 

2,000,000 - - - 2,000,000 

500,000 - - - 500,000 

250,000 - - (250,000) - 

100,000 400,000 - - 500,000 

3,350,000 400,000 - (250,000) 3,500,000 

* 

** 

Mr D Ogg resigned as Company Secretary on 6 May 2011. 

Mr M Ware was issued 400,000 options as part of his remuneration package. 

Related party transactions 

Related party transactions are set out in note 28. 

64




Note 25. Remuneration of auditors 

During the financial year the following fees were paid or payable for services provided by Grant Thornton Audit Pty 

Ltd, the auditor of the company, and unrelated firms: 

Consolidated 


$ $ 

Audit services - Grant Thornton Audit Pty Ltd 

Audit or review of the financial statements 

Other services - Grant Thornton Audit Pty Ltd 

Other Grant Thornton 

Other Auditors (Tanzania) 

43,000 19,000 

12,000 - 

5,000 - 

- - 17,000 - 

- - 60,000 19,000 

Audit services - unrelated practices 

Audit or review of the financial statements 

- 8,000 

During the prior year the amount paid to unrelated practice relates to Leydin Freyer Audit Pty Ltd, the previous auditor. 

This fee related to the 31 December 2011 review. 

Note 26. Contingent liabilities 

The consolidated entity had no contingent liabilities at 30 June 2012 and 30 June 2011. 

Note 27. Commitments 

Consolidated 


$ $ 


Committed at the reporting date but not recognised as 

liabilities, payable: 

Within one year 

One to five years 

1,794,765 - 

597,000 - 

- - 2,391,765 - 

In order to maintain current rights of tenure to exploration tenements, the Company and economic entity is required to 

outlay rentals and to meet the minimum expenditure requirements of the State Mines Departments. Minimum 

expenditure commitments may be subject to renegotiation and with approval may otherwise be avoided by sale, farm 

out or relinquishment. These obligations are not provided for in the accounts and are payable. 

The above commitments partly relate to Mount Lyndhurst and Mount Lyndhurst South in South Australia. 

commitments in relation to the lease are currently being met by a joint venture partner under a joint venture 

All 

The above commitments also include future acquisition payments on certain exploration licence areas in Africa. 

65




Note 28. Related party transactions 

Parent entity 

Syrah Resources Limited is the parent entity. 

Subsidiaries 

Interests in subsidiaries are set out in note 30. 

Key management personnel 

Disclosures relating to key management personnel are set out in note 24 and the remuneration report in the directors' 

report. 

Transactions with related parties 

The following transactions occurred with related parties: 

Consolidated 


$ $ 

Payment for goods and services: 

Rent paid to Copper Strike Limited (an entity associated 

with Tom Eadie) 

Payments made to Inkprintz Pty Ltd (an entity associated 

with the wife of Tom Eadie) 

Payments made to OptiRes Pty Ltd (an entity associated 

with Alistair Campbell) 

Payment made to Axiom Pty Ltd (an entity associated with 

Michael Chester) 

Payments made to Ernest Thomas Eadie (an entity 

associated with Tom Eadie) 

Payment for other expenses: 

Payments made to Copper Strike Limited (an entity 

associated with Tom Eadie) 

18,000 11,232 

3,900 18,079 

14,003 - 

8,000 - 

72,495 - 

54,767 - 

Receivable from and payable to related parties 

There were no trade receivables from or trade payables to related parties at the current and previous reporting date. 

Loans to/from related parties 

The following balances are outstanding at the reporting date in relation to loans with related parties: 

Consolidated 


$ $ 

Current receivables: 

Loan to Aramis Resources Limited * 

Non-current borrowings: 

Loan from Paul Kehoe ** 

100,000 - 

118,914 - 

* As at 30 June 2012 the Loan owing from Aramis Resources Limited has been fully impaired as there is significant 

uncertainty about recovering this loan. It should be noted that Mr Paul Kehoe is also a director of Aramis Resources 

Limited. 

** This loan was acquired as part of the Jacana Acquisition on 15 December 2011 and is related to a director of the 

Company, Mr Paul Kehoe. 

66




Note 28. Related party transactions (continued) 

Terms and conditions 

The loan is not accruing interest and has no fixed term of repayment. 

Note 29. Parent entity information 

Set out below is the supplementary information about the parent entity. 




Statement of financial position 

Total current assets 

Total assets 

Total current liabilities 


Equity 



Accumulated losses 

Total equity 

Parent 


$ $ 

(1,365,235) (760,346) 

(1,365,235) (760,346) 

Parent 


$ $ 

8,136,246 1,376,436 

19,517,266 2,380,679 

250,892 149,987 

253,133 149,987 

23,987,896 7,035,994 

1,603,651 208,403 

(6,327,414) (5,013,705) 

19,264,133 2,230,692 

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries 

The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2012 and 30 June 2011. 

Capital commitments - Property, plant and equipment 

Refer to Note 21 for details of capital commitments. All amounts disclosed relate to the parent entity. 

Significant accounting policies 

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2. 

67




Note 30. Subsidiaries 

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in 

accordance with the accounting policy described in note 2: 

Name of entity 

Country of 

incorporation 

Equity holding 


% % 

Syrah Resources (KSA) Pty 

Ltd 

Australia 

Syrah Resources Saudi 

Arabia LLC 

Saudi Arabia 

Jacana Resources Ltd * Australia 

Jacana Resources (Tanzania) 

Ltd ** 

Tanzania 

Jacana Resources (Zambia) 

Ltd ** 

Twigg Exploration and Mining 

Limitada *** 

Mozambique 

100.00 100.00 

100.00 100.00 

100.00 - 

100.00 - 

100.00 - 

100.00 - 

* 

** 

*** 

acquired on 15 December 2011. 

these subsidiaries were acquired as part of the acquisition of Jacana Resources Limited on 15 December 2011. 

acquired on 31 January 2012. 

Note 31. Deed of cross guarantee 

The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the 

others: 


Jacana Resources Limited 

By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare a financial 

report and directors' report under Class Order 98/1418 (as amended) issued by the Australian Securities and 

Investments Commission ('ASIC'). 

The above companies represent a 'Closed Group' for the purposes of the Class Order, and as there are no other 

parties to the Deed of Cross Guarantee that are controlled by Syrah Resources Limited, they also represent the 

'Extended Closed Group'. 

68




Note 31. Deed of cross guarantee (continued) 

Set out below is a consolidated statement of comprehensive income and statement of financial position of the 'Closed 

Group'. 


Other income 

Legal and consulting expense 





Loss before income tax expense 


Loss after income tax expense 

Other comprehensive income for the year, net of tax 

Total comprehensive income for the year 


$ $ 

133,377 - 

(385,427) - 

(520,111) - 

(22,872) - 

(581,817) - 

(10,597) - 

(1,387,447) - 

- - 

(1,387,447) - 

- - 

(1,387,447) - 

69




Note 31. Deed of cross guarantee (continued) 


Statement of financial position $ $ 

Current assets 

Cash and cash equivalents 3,713,728 - 

Trade and other receivables 88,375 - 

3,802,103 - 

Non-current assets 

Property, plant and equipment 12,326 - 

Intangibles 35,004 - 

Exploration and evaluation 932,607 - 

Financial Assets 14,832,132 - 

15,812,069 - 

Total assets 19,614,172 - 

Current liabilities 

Trade and other payables 251,095 - 

Borrowings 118,914 - 

370,009 - 

Non-current liabilities 

Employee benefits 2,241 - 

2,241 - 

Total liabilities 372,250 - 

Net assets 19,241,922 - 

Equity 

Issued capital 23,987,896 - 

Reserves 1,603,651 - 

Accumulated losses (6,349,625) - 

Total equity 19,241,922 - 

The Deed of Cross Guarantee was put in place during the 2012 financial year, there was no Deed of 

Cross Guarantee in the prior year. 

Note 32. Events after the reporting period 

On 6 July 2012, the Company issued 1,500,000 fully paid ordinary shares upon conversion of unlisted options 

exercisable at $0.25 (25 cents) on or before 31 July 2012. 

On 25 July 2012, the Company issued 500,000 employee incentive options exercisable at $2.21 on or before 16 

July 2016. 

On 25 July 2012, the Company issued 18,500 fully paid ordinary shares in relation to part consideration for the 

acquisition of HQ-P25638 located in the Muheza district in the Tanga region. 

On 30 August 2012, the Company announced the first drill hole assay from the Balama Graphite and Vanadium 

Project of 287m @ 10.1% Total Graphitic Carbon and 0.12% Vanadium. A scoping study team for Balama has 

also been selected with Snowden Group appointed as the lead consultant. The study commenced in conjunction 

with the current compilation of mineral resource calculations. 

70




Note 32. Events after the reporting period (continued) 

No other matter or circumstance has arisen since 30 June 2012 that has significantly affected, or may significantly 

affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs 

in future financial years. 

Note 33. Reconciliation of loss after income tax to net cash used in operating activities 

Consolidated 


$ $ 

Loss after income tax expense for the year 

Adjustments for: 

Depreciation and amortisation 



Bad debts written off 

Change in operating assets and liabilities: 

Increase in trade and other receivables 

Increase in prepayments 

Increase in trade and other payables 

Increase/(decrease) in employee benefits 


- - (2,061,565) (985,744) 

25,611 5,537 

176,735 29,648 

45,652 109,249 

100,000 - 

(53,002) (4,284) 

(28,574) - 

134,117 80,556 

(30,767) 8,482 

- - (1,691,793) (756,556) 

Note 34. Non-cash investing and financing activities 

On 15 December 2011, the Company acquired Jacana Resources Limited, now a 100% owned subsidiary. As 

consideration for this acquisition the Company issued 60,000,000 which were valued at $0.15 (15 cents) with a total 

value of $9,000,000. In addition it issued 15,000,000 consideration options, which have been valued at $2,443,500. 

These options have a 12 month vesting period and $1,325,516 has been recognised in the current financial year. At 

the time of acquisition Jacana Resources had negative assets of $190,356 and was yet to have been granted any 

exploration licenses, however it did have agreements in place to purchase a number of exploration licences in Africa. 

The value of the shares and options have been treated as exploration and evaluation expenditure in the statement of 

financial position as at 30 June 2012. 

The Jacana acquisition was not deemed to be a business combination as Jacana deemed to not satisfy the 

requirements of carrying on a business at the time of acquisition. 

71




Note 35. Earnings per share 

Consolidated 


$ $ 

Earnings per share from continuing operations 

Loss after income tax attributable to the owners of Syrah Resources Limited 

(1,837,669) (771,438) 

Number 

Number 

Weighted average number of ordinary shares used in calculating basic earnings per 

share 

Weighted average number of ordinary shares used in calculating diluted earnings per 

share 

82,069,092 35,722,670 

82,069,092 35,722,670 

Cents 

Cents 



(2.24) (2.16) 

(2.24) (2.16) 

Consolidated 


$ $ 

Earnings per share from discontinued operations 


(223,896) (214,306) 

Number 

Number 


share 


share 

82,069,092 35,722,670 

82,069,092 35,722,670 

Cents 

Cents 



(0.27) (0.60) 

(0.27) (0.60) 

72




Note 35. Earnings per share (continued) 

Consolidated 


$ $ 

Earnings per share for loss 


(2,061,565) (985,744) 

Number 

Number 


share 


share 

82,069,092 35,722,670 

82,069,092 35,722,670 

Cents 

Cents 



(2.51) (2.76) 

(2.51) (2.76) 

The rights to options held by option holders have not been included in the weighted average number of ordinary 

shares for the purposes of calculating diluted EPS as they do not meet the requirements for inclusion in AASB 133 

“Earnings per Share”. The rights to options are non-dilutive as the consolidated entity is loss generating. 

Note 36. Share-based payments 

A share option plan has been established by the consolidated entity and approved by shareholders at a general 

meeting, whereby the consolidated entity may, at the discretion of the Board, grant options over ordinary shares in the 

parent entity to certain key management personnel of the consolidated entity. The options are issued for nil 

consideration and are granted in accordance with performance guidelines established by the Board. 

Set out below are summaries of options granted under the plan: 


Grant date 

Expiry date 


Exercise the start of forfeited/ the end of 

price the year Granted Exercised other the year 

10/09/07 31/07/12 

31/10/09 31/07/14 

01/11/09 31/07/14 

17/01/11 17/01/15 

15/12/11 15/12/15 

$0.25 1,500,000 - - - 1,500,000 

$0.20 100,000 - (100,000) - - 

$0.04 1,000,000 - (1,000,000) - - 

$0.17 400,000 - (400,000) - - 

$0.26 - 2,000,000 - - 2,000,000 

3,000,000 2,000,000 (1,500,000) - 3,500,000 

73




Note 36. Share-based payments (continued) 

2011 

Grant date 

Expiry date 


Exercise the start of forfeited/ the end of 

price the year Granted Exercised other the year 

10/09/07 31/07/12 

31/10/09 31/07/14 

01/11/09 31/07/14 

17/01/11 17/01/15 

$0.25 1,500,000 - - - 1,500,000 

$0.20 100,000 - - - 100,000 

$0.04 1,000,000 - - - 1,000,000 

$0.17 - 400,000 - - 400,000 

2,600,000 400,000 - - 3,000,000 

For the options granted during the current financial year, the valuation model inputs used to determine the fair value 

at the grant date, are as follows: 

Grant date 

Expiry date 

Share price Exercise Expected Dividend Risk-free Fair value 

at grant date price volatility yield interest rate at grant date 

15/12/11 15/12/15 

$0.19 $0.26 150.00% 0.00% 3.90% $0.163 

These options have been valued using the Black Scholes methodology. 

On 15 December 2011, the company issued 15,000,000 options as part of the consideration for the Jacana 

acquisition and a further 2,000,000 options to directors. All options have been issued with identical terms and as a 

result have been valued identically. 

All options do not vest until 15 December 2012 and consequently the value is being recognised in the share based 

payment reserve on a straight line basis over this period. 

The following share-based payment arrangements were in existence during the current and previous financial year: 

Options series 

Exercise Fair value at 

Grant Expiry price grant date 

Number date date $ $ 

1 Series 1 

1,500,000 10/09/2007 31/07/2012 0.25 0.068 

2 Series 2 

100,000 31/10/2009 31/07/2014 0.20 0.106 

3 Series 3 

1,000,000 1/11/2009 31/07/2014 0.04 0.015 

4 Series 4 

400,000 17/01/2011 17/01/2015 0.17 0.074 

5 Series 5 

2,000,000 15/12/2011 15/12/2015 0.26 0.163 

74


Directors' declaration 

In the directors' opinion: 

● 

● 

● 

● 

● 

the attached financial statements and notes thereto comply with the Corporations Act 2001, the 

Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory 

professional reporting requirements; 

the attached financial statements and notes thereto comply with International Financial Reporting 

Standards as issued by the International Accounting Standards Board as described in note 1 to the 

financial statements; 

the attached financial statements and notes thereto give a true and fair view of the consolidated 

entity's financial position as at 30 June 2012 and of its performance for the financial year ended on 

that date; 

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 

at the date of this declaration, there are reasonable grounds to believe that the members of the 

Extended Closed Group will be able to meet any obligations or liabilities to which they are, or may 

become, subject by virtue of the deed of cross guarantee described in note 31 to the financial 

statements. 

The directors have been given the declarations required by section 295A of the Corporations Act 2001. 

Signed in accordance with a resolution of directors made pursuant to section 295(5) of the Corporations Act 2001. 

On behalf of the directors 

______________________________ 

Paul Kehoe 


28 September 2012 

Melbourne 

75


ABN 91 130 913 594 

ACN 130 913 594 

Level 2 

215 Spring Street 


GPO Box 4984 


T +61 3 8663 6000 

F +61 3 8663 6333 

E info.vic@au.gt.com 

W www.grantthornton.com.au 

Independent Auditor’s Report 

To the Members of Syrah Resources Limited 

Report on the financial report 

We have audited the accompanying financial report of Syrah Resources Limited (the 

“Company”), which comprises the consolidated statement of financial position as at 30 June 

2012, the consolidated statement of comprehensive income, consolidated statement of 

changes in equity and consolidated statement of cash flows for the year then ended, notes 

comprising a summary of significant accounting policies and other explanatory information 

and the directors’ declaration of the consolidated entity comprising the Company and the 

entities it controlled at the year’s end or from time to time during the financial year. 

Directors responsibility for the financial report 

The Directors of the Company are responsible for the preparation of the financial report 

that gives a true and fair view in accordance with Australian Accounting Standards and the 

Corporations Act 2001 and for such internal control as the Directors determines is 

necessary to enable the preparation of the financial report that gives a true and fair view and 

is free from material misstatement, whether due to fraud or error. The Directors also state, 

in the notes to the financial report, in accordance with Accounting Standard AASB 101 

Presentation of Financial Statements, the financial statements comply with International 

Financial Reporting Standards. 

Auditor’s responsibility 

Our responsibility is to express an opinion on the financial report based on our audit. We 

conducted our audit in accordance with Australian Auditing Standards. Those standards 

require us to comply with relevant ethical requirements relating to audit engagements and 

plan and perform the audit to obtain reasonable assurance whether the financial report is 

free from material misstatement. 

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together 

with its subsidiaries and related entities, delivers its services independently in Australia. 

Liability limited by a scheme approved under Professional Standards Legislation 

76

2 

An audit involves performing procedures to obtain audit evidence about the amounts and 

disclosures in the financial report. The procedures selected depend on the auditor’s 

judgement, including the assessment of the risks of material misstatement of the financial 

report, whether due to fraud or error. 

In making those risk assessments, the auditor considers internal control relevant to the 

Company’s preparation of the financial report that gives a true and fair view in order to 

design audit procedures that are appropriate in the circumstances, but not for the purpose 

of expressing an opinion on the effectiveness of the Company’s internal control. An audit 

also includes evaluating the appropriateness of accounting policies used and the 

reasonableness of accounting estimates made by the Directors, as well as evaluating the 

overall presentation of the financial report. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide 

a basis for our audit opinion. 

Independence 

In conducting our audit, we have complied with the independence requirements of the 

Corporations Act 2001. 

Auditor’s opinion 

In our opinion: 

a 

the financial report of Syrah Resources Limited is in accordance with the 

Corporations Act 2001, including: 

i 

ii 

giving a true and fair view of the consolidated entity’s financial position as at 

30 June 2012 and of its performance for the year ended on that date; and 

complying with Australian Accounting Standards and the Corporations 

Regulations 2001. 

b 

the financial report also complies with International Financial Reporting Standards as 

disclosed in the notes to the financial statements. 

77

3 

Report on the remuneration report 

We have audited the remuneration report included in pages 22 to 28 of the directors’ report 

for the year ended 30 June 2012. The Directors of the Company are responsible for the 

preparation and presentation of the remuneration report in accordance with section 300A of 

the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration 

report, based on our audit conducted in accordance with Australian Auditing Standards. 

Auditor’s opinion on the remuneration report 

In our opinion, the remuneration report of Syrah Resources Limited for the year ended 30 

June 2012, complies with section 300A of the Corporations Act 2001. 

GRANT THORNTON AUDIT PTY LTD 

Chartered Accountants 

B. L. Taylor 

Partner - Audit & Assurance 

Melbourne, 28 September 2012 

78


Shareholder information 


The shareholder information set out below was applicable as at 6 September 2012. 

Distribution of equitable securities 

Analysis of number of equitable security holders by size of holding: 

Number 

of holders 

of ordinary 

shares 

1 to 1,000 

1,001 to 5,000 

5,001 to 10,000 

10,001 to 100,000 

100,001 and over 

635 

975 

416 

513 

115 

2,654 

Holding less than a marketable parcel 

70 

Equity security holders 

Twenty largest quoted equity security holders 

The names of the twenty largest security holders of quoted equity securities are listed below: 


% of total 

shares 

Number held issued 

Basapa Pty Ltd 


Gasmere Pty Ltd 

Kitara Investments Pty Ltd 

Micjud Pty Ltd 

Finance Associates Pty Ltd 

Pabasa Pty Ltd 

Evtol Invesment Pty Ltd 

Campbell A B + K P 

McNeil Nominees Pty Ltd 

Buprestid Pty Ltd 

Equity Trustees Ltd 

Paul Brendan Kehoe 

Tolga Kumova 

Phillips Stuart L + F J 

Henry William Hernstadt 

Hawthorn Grove Investments Pty Ltd 

Paul Brendan Kehoe 


Hanlon Timothy Marcus S 

14,109,212 11.13 

11,000,005 8.68 

10,669,764 8.42 

10,213,015 8.06 

4,283,334 3.38 

2,865,000 2.26 

2,777,778 2.19 

2,777,778 2.19 

2,125,000 1.68 

2,000,000 1.58 

2,000,000 1.58 

1,963,323 1.55 

1,925,158 1.52 

1,542,542 1.22 

1,469,967 1.16 

1,380,000 1.09 

1,100,000 0.87 

1,010,000 0.80 

1,000,000 0.79 

1,000,000 0.79 

77,211,876 60.94 

79


Shareholder information 


Unquoted equity securities 

Number 

on issue 

Number 

of holders 

Options over ordinary shares issued 

17,500,000 48 

Substantial holders 

Substantial holders in the company are set out below: 


% of total 

shares 

Number held issued 

Basapa Pty Ltd 


Gasmere Pty Ltd 

Kitara Investments Pty Ltd 

14,109,212 11.13 

11,000,005 8.68 

10,669,764 8.42 

10,213,015 8.06 

Voting rights 

The voting rights attached to ordinary shares are set out below: 


On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll 

each share shall have one vote. 

There are no other classes of equity securities. 

Tenements 

Description 

Tenement number 

Interest owned 

Mount Lyndhurst South EL4791 50.00% 

Mount Lyndhurst 

EL4790 50.00% 

Balama - Mozambique 3230L 100.00% 

Wembere - Tanzania PL 6562/2010 

100.00% 

Wembere - Tanzania PL 6737/2010 100.00% 

Wembere - Tanzania PL 5738/2009 100.00% 

PL 7321/2011 - Tanzania PL 7321/2011 100.00% 

7752/2012 

7752/2012 100.00% 



100.00% 

7754/2012 7754/2012 

100.00% 

7666/2012 7666/2012 100.00% 

80


Level 9, 356 Collins Street 


Telephone: +61 (03) 9670 7264 

www.syrahresources.com.au

Annual Report 2012 - Syrah Resources Ltd

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