Page 27 - Bauxite Resources Annual Report 2013

Directors’ Report cont.
The same note shows that at 30 June 2013 the Group had $1,256,373 in Sundry Receivables outstanding (2012: $224,697). This
amount represents the total amount of cash calls unpaid by the joint venture partner in the BRJV, Yankuang Resources Pty Ltd
(“Yankuang”). $482,869 represents a debt due to the Company directly, following its decision to make one of the outstanding cash
calls to BRJV on behalf of Yankuang. The remainder is the Group’s share of the unpaid cash calls payable by Yankuang to the BRJV.
Since 30 June 2013, all unpaid cash calls, including the debt due directly to the Company, have been paid by Yankuang.
Other than this utilisation of cash to fund the Group’s activities during the year, the Group’s financial position remained relatively
unchanged and stable.
DIVIDENDS
No dividends were paid or declared during the financial year. No recommendation for payment of dividends has been made.
SHAREHOLDER RETURNS
2013 2012
Basic earnings per share (cents) (2.25) (2.90)
Diluted earnings per share (cents) (2.22) (2.70)
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Company continues to explore for additional bauxite resources within its existing tenements in its own right, and with its
two joint venture partners, Yankuang Resources Pty Ltd (“Yankuang”) and HD Mining and Investment Pty Ltd, for both export
and refinery grade bauxite.
The Company is working with Yankuang, under its Bauxite Resources and Alumina Refinery joint ventures, for development of
bauxite mining and alumina refining capacity in Western Australia.
In respect of its own tenements, following the release of its upgraded resource at the Fortuna deposit, announced on 4
September 2013, the Company believes the Fortuna resource is of sufficient scale to support development evaluation for supply
of bauxite into the international market. The Company will investigate ways of monetarising the value of this asset, taking into
account the global outlook for alumina production, over the coming financial periods. This will entail, among other things,
thorough investigations into logistical, environmental and community impacts of any potential mining operation. It will also
include analysis of potential buyers of the bauxite product, and potential partners to undertake any mining development if that is
appropriate, to maximise the value to shareholders.
In the coming 12 months, particular focus is being placed on conservation of cash reserves, to ensure the Group retains the capacity
to continue its exploration programs and grow its bauxite resource in the most economical way possible, and to ensure it remains
well placed to take advantage of opportunities for maximising the value of its existing assets for the benefit of shareholders.
The Group’s future plans are not without risk. Aside from the accepted and normal risks associated with any minerals exploration
venture, such as accurate and reliable resource identification and measurement, these include (but are not limited to):
• Commodity price risk – there is risk that the price of bauxite does not achieve or maintain levels that will support sustainable
mining or alumina refining operations. This may be the result of changes in global demand for aluminium, or changes in the
global supply chain for bauxite and alumina. The directors have considered this risk in light of predictions and commentaries
from various independent analysts and observers, and consider this risk to be low in the medium to long term.
• Environmental risk – the Group’s ability to develop mining operations or expand bauxite refining capacity are dependent
on obtaining the required environmental licences and ensuring minimal impact on the environment from any operations.
The directors have considered this risk, and consider this risk can be managed adequately by understanding the relevant
environmental guidelines and ensuring any proposed mining or refining operations demonstrate they are able to comply
with such guidelines.
• Land access risk – the Group’s ability to develop mining operations or expand bauxite refining capacity may be subject to
obtaining access by landholders. The directors have considered this risk, and consider the risk is being minimised by taking a
proactive approach in forming close and open relationships with land holders and communities that may be impacted by any
potential mining or refining operation.
• Regulatory approval risk – the Group’s ability to develop mining operations or expand bauxite refining capacity may be
subject to obtaining approvals from various regulatory or government authorities to undertake mining or refining activities.
This may include, for example, the ability to obtain mining licenses for its tenements, or permits to export bauxite. The
directors have considered this risk, and consider that the risk can be mitigated largely by working closely with the relevant
regulatory authorities through any study phases.
Annual Report 2013 Bauxite Resources 25